General terms of operating lease of hermes auto geoup limited

5.1. The maturity of the lease payments is fixed in the Instalment schedule (amortization). The Client has to pay so that by that date the payment is received on the account of HERMES, otherwise there is a delay. HERMES holds overall current account for all payments and for all contracts concluded with a same client.

5.2. The allocation of amounts received on account shall be made in accordance with Article 5.8.

5.3. HERMES has the right to unilaterally adjust the amount of the leasing fee in case the three-month EURIBOR changes compared to the time of the last adjustment of instalment, respectively date of delivery of the vehicle (if correction has not been made) by more than 25 basis points (one percent equals 100 basis points). Adjustment shall be made on the first day of the month following the calendar quarter and is analogous to the change in quarterly EURIBOR. As a basis for calculation, HERMES shall use the three-months EURIBOR on the last day of the previous month compared to the three-month EURIBOR on the day the last adjustment of installment, respectively at the time of the vehicle delivery.

5.4. Malfunctions of the vehicle, of which HERMES is responsible under Article 2.3.2 and 2.3.3, shall not constitute grounds for termination or modification of the contract. If they are subject to repair within 14 days of notification of HERMES, this does not affect the amount of the lease payment and does not lead to any extra obligations for HERMES. If the time required for repair is longer, the lease contract shall be postponed, i.e. for the duration of the repair, the Client is released from the obligation to pay leasing fees/instalments and the term of the contract shall be extended accordingly. For the duration of repairs / maintenance, which meets the customer pursuant to Articles 2.3.1 and 2.3.3, the latter has no rights under the preceding sentence.

5.5. In case of delay in payment, the Client is liable to a delay penalty at the rate of 10% per annum plus the base rate on any overdue amount for the entire period of delay.

5.6. Parties shall calculate all payments between them in euros (EUR). Payments in Bulgaria are carried out in leva (BGN). Any amount paid in BGN or another currency must be calculated in such a way that the recipient of the payment not suffered any losses from exchange rate differences of servicing banks. Payment shall be deemed timely only if it meets the conditions of the preceding sentence

5.7. The parties apply the official fixed rate of the Bulgarian national Bank.

5.8. When the Client makes a payment that does not cover all its obligations to HERMES at the time of payment, the statutory rule on the order of repayment of obligations under leasing contract shall apply and namely: expenses, penalties, principal obligation. The client cannot change that order, and it does not depend on the reason for the payment specified by the customer. If at the time of payment the Client has outstanding debts on several leasing contracts with Hermes, Hermes unilaterally determines the order of repayment, and for each of the contracts the order of the first sentence of Article 5.8 shall apply.

5.9. HERMES has the right in some cases to change the order under Article 5.8 unilaterally.

5.10. HERMES is entitled to collect from the customer a fee specified in the Tariff of fees in any case in which any change is effected in the leasing contract by a request of the client.

5.11. The client cannot justify late payment, arguing that he has not received an invoice for payment. The lack of an invoice does not release the Client for his liability for late payment

5.12. Operating lease contract contains fixed annual mileage. If it is exceeded by more than 2 500 (two thousand five hundred) kilometers, the Client owes additional leasing fee, which amounts to 30% of the cent rate (as far as the leasing fee by definition is agreed in euros) defined as follows:

a) the monthly leasing fee is divided into average monthly mileage, which in turn is determined by dividing the fixed annual mileage by 12;

b) The resulting quotient is multiplied by the difference between the actual recorded kilometers that exceed the fixed annual mileage minus 2500.

If the contract is extended after the said period based on calculations, as a base is considered the leasing fee, which is valid at the time of reaching the basis of calculation. If the preset mileage is not reached after the lease expires, HERMES is not obliged to reimburse any amounts received.

6.1. These general terms provide that during conclusion of the contract or in the course of contract implementation, the Client in some cases shall issue in favor of HERMES as a payee one or more promissory notes (with possible collateral guarantee by a third party) as a security for payments. In all cases, the issuance of promissory notes is an additional guarantee, which should be expressly agreed between HERMES and specific client.

6.2. All issued promissory notes give HERMES the right in case of breach of the lease terms or the general conditions to execute these promissory notes for an amount, which is equal to any and all outstanding debts of the Client related to the leasing contract at the time of depositing of these promissory notes in the court, regardless of the exact amount and maturity of the promissory note and whether this promissory note is submitted for payment pro-term or not. The Client gives his explicit consent, that all issued by him promissory notes shall be used in this manner to collect any and all of his debts in connection with the lease, and regardless of maturity date, as long as they have existed at the time of deposit of the promissory note in the court and in order for the court to issue an immediate execution warrant.

6.3. Regardless of the fact if such promissory notes are issued or not, HERMES has the right to negotiate with the Client collateral guarantees such as joint and several liability, pledges, registering the contract with the Central Register for Pledges and etcetera.

7.1. If a co-debtor signs the lease agreement, a contractual solidarity arises within the meaning of Art. 121, para. 1 of the Law on Obligations and Contracts. In this case, the co-debtor is jointly liable along with the Client and under the same conditions as the Client for all obligations arising from the lease under Articles 122-126 of the Obligations and Contracts Act. HERMES is entitled to claim fulfillment of all obligations and all liabilities arising from lease directly to the co-debtor without any need to bring its claim first to the Client in the court or out-of-court. The liability of the co-debtor is not limited by any terms beyond the general limitation of liability. By signing the lease, the co-debtor declares that he is familiar with these Terms and Instalment schedule of the lease, and in particular the amount and maturity of the lease payments. The co-debtor is obliged to ensure timely execution of obligations under the lease by the Client. If the Client fails to fulfill any obligation set in the Instalment schedule, then the co-debtor is considered promptly invited to fulfill the obligation without further notice. Joint and several liability between the client and the co-debtor extends to all the consequences due to failure, including but not limited to, contractual penalties and others, legitimate interest, expenses and etcetera.

Deferment or rescheduling of leasing fees or other changes in the lease, unilaterally made by Hermes or by an agreement with the client shall have effect in respect of the co-debtor but does not result in termination of solidarity. HERMES reserves its rights against the co-debtor and the latter agrees to it pursuant to Art. 124 of the Obligations and Contracts Act. The obligation to notify the co-debtor lays on the Client. All Internal relations between the client and the co-debtor and all their grounds and content are not related to HERMES and cannot oppose him.
8. FAILURE TO COMPLY WITH DEADLINES

8.1. Along with penalties and/or interests provisioned by the leasing contract, the Client is liable administrative fee for all issuance and submittance in a proper way of all invitations for payment and all kind of notifications. The administrative fee is preset in the Tariff of fees.

8.2. The Client is obliged to repay all other expenses of HERMES, related to claims or guarantee of all payments due as per the leasing contract such as legal, administrative, for attorneys and experts, localization and / or seizure of the vehicle and etcetera, and which ability to execute is evidenced by invoices and invitations for payment thereof issued by HERMES.

8.3. The Customer undertakes to inform HERMES for any expected or already occurred delay in payment. The said notification does not result in prolongation of the time for payment.

8.4.1. If the Client is late in paying 30 day payment (the leasing fee) by more than 15 (fifteen) days, HERMES has the right to send the Client a written invitation for the first payment. If the Client does not pay within 7 (seven) days of receipt, HERMES sends the same way a second invitation for payment, by which the payment period is extended by subsequent eight (8) days, with a warning that after the expiry and if payment is not received HERMES may declare the lease terminated due to failure of the Client. In this case, it is assumed that Hermes has provided the Client a sufficient extra time and any failure after the second call for payment evidences that the Client is not willing to meet its future obligations under the lease.

8.4.2. If the customer is in late payment for more than one monthly payment or if a late fee lasts more than sixty (60) days, HERMES has the right to terminate the contract and without following the procedure under Article 8.4.1 and without giving additional time for execution

8.4.3.. Sending of invitations under Article 8.4.1 is not mandatory. At the discretion of HERMES, termination can be performed only in compliance with legal requirements. HERMES has the right at its discretion to send also other invitations and messages than those stipulated in Article 8.4.1

8.5. Immediately upon termination of the contract, HERMES has the right:

- to take advantage of all received guarantees in order to collect the full amount of all outstanding lease payments, regardless of their maturity;

- To notify the customer that the contract of lease is legally terminated early and ask for the return of the vehicle, respectively, to seize the vehicle.

8.6. The parties agree that all terms in these general conditions are suitable for fulfilling the obligations of the Client.

8.7. If HERMES uses the guarantees or has to use them, but later the parties reach an Agreement that the contract shall remain in force, the Client is obliged to replace those guarantees used by Hermes in their original form within 3 (three) days from the Agreement. If the Client does not fulfill this obligation on time, the agreement shall be considered terminated early by fault of the Client from the date of default.

8.8. At its discretion, HERMES may occasionally to waive compliance with any other terms or conditions upon termination of the lease, except those referred to in mandatory legislative norms.

8.9. In case of delay in payment by the Client HERMES is entitled to seize the leased vehicle and keep it until the Client repays all its obligations due under the contract.

9.1. The vehicle should be used in accordance with the requirements of the manufacturer/supplier. The leasing contract provides special restrictions.

9.2. The client is obliged to maintain the vehicle with due diligence, to conduct all necessary repairs and service inspections to ensure constant flawless, functional and environmental condition of the car in accordance with the terms of the manufacturer and with these General terms to the leasing contract. The Client is responsible for all damages arising from failure to comply with this obligation regardless of whether the damage is caused by the client or by any third parties.

9.3. The parties agree that regardless which of them is responsible for appropriate action regarding the allocation of responsibilities in Article 2.3, the maintenance and repair of motor vehicles will be carried out only in authorized workshops, which are designated in the maintenance or warranty booklet and the will use only original parts and consumables approved by the manufacturer.

9.4. The Client is obliged to use the vehicle in accordance with current laws. In the event of non-compliance, the customer is responsible for all the consequences arising therefrom and shall pay all fines to the relevant authorities. In any such case in which Hermes has paid any fines and associated administrative expenses, representation and / or legal expenses, fees, etc., HERMES is entitled to receive from the customer reimbursement of these costs and fees under the Tariff.

9.5. Any changes in vehicle design or adding additional parts and devices to it can be made only upon prior written approval by HERMES and only in authorized workshops. All added parts become property of HERMES without obligation for compensation. Changes imposed by law, shall be made by the customer at his expense. In particular, it is prohibited to use non-original parts and systems (air conditioning, spare parts, etc.) or to perform any tuning (chip-tuning, engine tuning, tuning of the body), which is not permissible according to the manufacturer / factory, even when committed by authorized workshops.

9.6. In cases, where due to use of non-original equipment such as air conditioning, spare parts, etc. or performance of any tuning of the vehicle such as chip-tuning, engine tuning, tuning of the chassis, which is not permissible according to the manufacturer / factory, any vehicle damages occur, the customer is obliged to reimburse HERMES with due value of the vehicle as it has been at the time before said damage. In these cases, HERMES has the optional right to require the Client to make a complete repair of the vehicle at the expense of the Client instead of reimbursement of costs. This repair shall ensure restoration of the original condition of the car.

9.7. In case of loss or destruction of a key or the registration certificate of the vehicle or other objects related to the vehicle, the Client shall immediately inform the competent authorities, as well as HERMES.

10.1. The Client shall immediately notify HERMES by registered mail of any changes to its headquarters, respectively residence or employment.

10.2. At the request of Hermes, the Client is obliged to provide access to the vehicle at any appropriate time. If the client by his action or inaction prevents access to the vehicle, HERMES may terminate the contract without notice (see Art. 8.8 in conjunction. With 12.2.1).

10.3. If the customer is in late payment of three consecutive monthly leasing fees, HERMES has the legal right to carry out preventive inspection of the leased vehicle. Preventive inspection represents an exceptional warranty measure in favor of HERMES to prevent further financial losses as the depreciation of the car in the absence of effective payment of the leasing fee also constitutes harm to Hermes. HERMES defines the place where tis preventive inspection will take place. This plays may be any authorized workshop of the respective automobile brand.

10.3.1. Since the preventive inspection is always a consequence of the default of the Client, all costs of any preventive inspection are paid by the Client and cover both inspection fee and other expenses arising in connection with it the said inspection. The fee for the preventive inspection is due by the Client immediately after the inspection commences.

10.3.2. At the maturity date of a third consecutive monthly lease payment that has not been paid, the Client is obliged to provide the leased vehicle to HERMES in order to conduct preventive inspection. For this purpose, the Client is obliged to deliver the vehicle within two weeks of the maturity date of the previous sentence to any address specified by HERMES.

10.3.3. If the Client fails to deliver the vehicle within the period of the preceding sentence, or if the Client cannot be found on the last indicated address, HEMRES has the legal right immediately and with its own resources to locate, seize and transport the respective vehicle to the place for preventive inspection. In this case, the Client owes separate reimbursement of all additional expenses made by HEMRES to locate the vehicle and to transport it to the place of inspection, including all costs made to hire specialized companies for that purpose. These costs are defined in the Tariff and are due by the Client immediately after Hermes has made them.

10.3.4. The Client is obliged to pay all monthly leasing fees during the whole period of the preventive inspection.

10.3.5. When HERMES exercises its rights under Article 90 of the Law on Obligations and Contracts, the Client shall pay to HERMES parking fee according to the Tariff of fees during the whole period needed to exercise these rights.

10.3.6. In all cases under Article 10.3.3, the Client is obliged to cooperate fully with HERMES or with all persons authorized by HERMES in order to locate or recall the lease vehicle. The Client is obliged to show those persons whereabouts of the vehicle and provide them with full and free access to it for the purpose of the preventive inspection.

11.1. The Client is informed that HERMES is the insured party under the Casco insurance. Upon occurrence of any road accident, the Client is obliged to take all necessary measures at the place of the accident in order to record the accident and in particular to ensure the receipt of all necessary documents such as accident protocol issued by traffic police and all other documents provisioned by law or the insurance contract. Immediately thereafter, the Client is obliged to register with the respective insurer as required by insurance and notify HERMES in written for the damage. All necessary repairs are allowed only in workshops of the official importer or in authorized workshops of the respective automobile brand. The Client shall take all necessary measures and actions defined or given by the insurance company in order to be able to fully cover all damages. The same obligations are applicable to Client in case of damages of unknown origin such as these that occurred on parking lots and etcetera.

11.1.1. If the insurer estimates the damage as a partial damage (i.e. can be repaired), the lease agreement is not modified in any way and the Client is obliged to pay the monthly lease payments and other amounts due under the contract according to the repayment schedule, regardless of the duration of the repair. HERMES will not give its consent to repair respectively HEMES will not give the order to repair the damage to the vehicle until the Client does not fulfill all its current contractual obligations to Hermes. The Client has no right of objection to HERMES on the assessment of damages given by the insurer.

11.1.2. In the event that the insurer evaluates the damage as a total damage, the lease shall be terminated from the date of the said damage. In this case, the Client shall pay HERMES all unpaid amounts under the contract prior to the date of termination.

11.1.3. In case of partial damage, the provisions of Art. 2.3.3 shall apply.

11.1.4. In case of total damage and if the insurer refuses to pay insurance compensation due to the fault (action or inaction) of the Client, incl. failure on his part to recommendations made by the insurer or failure to comply with the general conditions of Casco insurance, the Client must pay HERMES:

- All due fees prior the time of termination of the lease and all other payments due under the contract; and

- Compensation, which is equal to the amount of the book value of the vehicle at the time of the damage.

11.2. In case of theft, the Client must immediately report the theft to the nearest police station and inform the insurance company that issued Casco insurance and Hermes as well. In this case, upon expiration of fifteen (15) days of notification of the theft, the contract shall be suspended until the vehicle is found and handed back or until the insurer gives its consent or refusal to pay the damage, respectively whichever occurs earlier. By "suspended" the Parties understand postponement of the maturity dates of the obligations of the Client as stipulated in the previous sentence.

11.2.1. If the vehicle is found and returned back to HERMES, then HERMES is obliged to deliver again the vehicle to the Client in such condition, which is suitable for use as intended. From the moment the vehicle is delivered back to the client, the suspension of the contract shall be terminated and the Client shall pay a leasing fee and any other contract payments in the future as if the contract had not been suspended and the lease term shall be extended accordingly to the period of the suspension.

11.2.2. If the vehicle cannot be found and the insurer pays compensation for theft, the contract shall be terminated with effect from the beginning of the suspension. The Client shall pay all leasing fees and all other payments due under the contract prior to such termination.

11.2.3. If the insurer refuses to pay the insurance indemnity, then provisions of Article 2.3 in conjunction with Article 11.1.4 shall apply

12.1. The parties conclude this lease contract for a fixed term specified in it. The lease contract ends upon expiry of the agreed term. The deadline may be extended only in writing form signed by both parties.

12.2. Except under the provisions of Articles 8.4, 11.1.2 and 11.2.2 hereof, the lease agreement may be terminated:

12.2.1. By HERMES due to failure of the Client when:

- As a result of its use by the Client, the vehicle is in a such condition that impedes normal use or reduces its market value (beyond normal amortization) or as a result of failing the requirements of the vehicle manufacturer for regular vehicle maintenance (the vehicle did not pass periodic inspections at authorized workshops upon reaching specified mileage or the preset time or the Client did not removed in due time any vehicle damages that may occur) or parts and elements of interior of the vehicle are damaged or the exterior is damaged (exterior paint, surfaces, glass, headlights, tires, wheels, locks, exhaust pipes, signs, exterior accessories, etc.) and these damages are not removed in a timely manner;

- The Client changes residence or moves outside the European Union without notifying HERMES;

- Endanger of the property;

- The Client or the co-debtor give or have given false information about their income and assets and / or if HERMES discovers that the property status of the Client differs significantly from the information submitted, so that there was no basis for the conclusion of the contract;

- The Client or one of the applicants die or any third party initiates bankruptcy proceedings against the Client or its applicants, or when due to insufficient property the court has rejected an application for bankruptcy or when the said the property is subject to enforcement;

- In case of insurance fraud (or an attempt of fraud);

- The handover of the vehicle as per Article. 3.2 has not been made;

- If any collateral contractual security becomes invalid prematurely;

- If total damage of the vehicle occurs, or if destruction or theft or loss of the vehicle occur.

- If the Client does not use the vehicle under the contract terms and / or does not maintain the vehicle so as to be in good condition;

- In exceptional conditions and force majeure circumstances, which by HERMES’s decision threaten or delay the implementation of contractual obligations, or the Client cannot fulfill its contractual obligations;

- The Client systematically falls into payment delay under the contract terms, regardless of the delay of the execution of these terms. Within the meaning of these terms and conditions "systematically" means two or more late payments;

- Any breach of the obligations of the Client arising from the contract or the general conditions for leasing.

12.2.2. By mutual agreement of the parties set in writing.

12.2.3. The Client may also terminate the contact, but only upon expiration of the 12th 30 day period (i.e. 360 days) from the date of the receipt of the leased vehicle by the Client and after the Client pays HERMES a penalty, the amount of which is determined depending on the month of termination, counted from the date of the handover of the leased vehicle as follows:

- Termination during the 13th to 24th 30 day period including: a penalty of 12 gross monthly leasing fees;

- Termination during the 25th to 36th 30 day period including: a penalty of 8 gross monthly leasing fees;

- Termination during the 37 th to 48 th 30-day period including: a penalty of 6 gross monthly leasing fees.

The Client is obliged to deliver back to HERMES the vehicle in the day after the last day of expiration of the contract. The provisions of paragraph 14 shall apply correspondingly.

12.3. The Client is obliged to deliver back to HERMES the vehicle in the day after the last day of expiration of the contract. The provisions of paragraph 14 shall apply correspondingly. HERMES has the right upon expiration of the contract seize the vehicle without prior notice to the Client.

12.4. In the event of seizure of the vehicle and in case of termination of the contract, the Client is obliged to provide HERMES or a person authorized by HERMES free access to Client’s premises and not to hinder the process of returning the vehicle back. The Client is not entitled to compensation for the seizure of the vehicle.