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General Terms and Conditions for Products, 2022:1

1. SCOPE AND APPLICATION

1.1 These General Terms and Conditions (the “GTC”) apply to agreements between MClimate JSC, reg. no. 204664844 (“MClimate”) and customer (“Customer”) that purchase equipment, components, spare parts, material, hardware and other objects (tangible or intangible) excluding software services (“Products”) from MClimate. This GTCs apply to legal transactions with legal entities, public institutions and/or other businesses, hereinafter referred to as “Customer”.

1.2 The GTCs constitute an appendix and integral part of quotation or order confirmation from MClimate and/or separate written agreement concluded between MClimate and Customer. Such quotation, order confirmation or separate written agreement and their appendices are hereinafter referred to as “Agreement”.

1.3 In the event of discrepancies between these GTCs and quotation, order confirmation from MClimate or separate written agreement, the terms of the latter shall prevail.

1.4 The GTCs preclude the application of any purchasing terms or other general terms and conditions of the Customer.

2. GENERAL PROVISIONS

2.1. Our deliveries shall exclusively be governed by the conditions set forth hereunder. Customer’s general terms and conditions shall not apply (even if we have not explicitly objected to their applicability), unless we have expressly agreed to their applicability.

2.2. Oral agreements made prior to or upon execution of an agreement must be confirmed by us in writing to be valid. Changes to an agreement shall require written form. The same applies to changes made to the requirement of written form. The written form requirement is also deemed complied with if communications are sent by an electronic signature (e.g. DocuSign).

2.3. If the Customer does not accept our quotation within two (2) weeks of receipt thereof, we shall have the right to withdraw the quotation.

2.4. Cost estimates are non-binding and shall be subject to change, unless expressly agreed otherwise.

2.5. Our deliveries are valid for the agreed use which is defined in Datasheet or in the User Manual of the products or in the product description and limited to business to business (B2B) transactions. Unless explicitly agreed upon in writing, our deliveries are valid for the target market where MClimate places the MClimate product.

2.6. Pending the coming into force of new terms and conditions for supply, these General Terms and Conditions shall also apply to all future deliveries to the Customer.

3. CUSTOMER’S OBLIGATION TO COOPERATE

3.1. The Customer shall be obligated to fully inform us of any and all facts relevant to the performance of our deliveries. We shall not be obligated to verify data, information or other performances supplied to us by the Customer, with regard to completeness and correctness, unless such verification has been expressly agreed upon between the parties as being a contractual duty. In the event that information or documentation supplied by the Customer proves to be faulty, incomplete, ambiguous or objectively non-executable, the Customer shall, immediately upon notification by us, effect the required corrections and/or amendments.

3.2. To the extent that work is performed on the Customer’s premises, infrastructure such as required workstations, working materials and tools shall be provided to our personnel free of charge. In such cases, the Customer shall be responsible for taking care of all legal duties to maintain safety, unless other arrangements arise from the nature of the matter or a prior arrangement with the Customer. We shall have the right to refuse delivery if the required measures are not taken.

3.3. The Customer shall name a designated contact person, who shall be authorized to provide and receive information relevant for the contractual performance and to report complaints or deficiencies to us.

4. ORDER

All orders are subject to acceptance by MClimate and for the avoidance of doubt no obligation to supply Products shall be deemed to exist prior to an order having been duly confirmed by MClimate in writing.

5. DELIVERY, ETC.

5.1 Unless a written agreement to the contrary, Products shall be delivered Ex Works (Incoterms 2020) MClimate’s premises in Sofia, Bulgaria or such other location as provided for in the Agreement.

5.2 MClimate shall remain the owner of Products until payment in full has been received by MClimate. For the avoidance of any doubt and in accordance with Ex Works (Incoterms 2020) the Customer bares all responsibility in case of loss or damage to the product.

5.3 Provided that prepayment has not been received, MClimate is entitled to withhold performance if a well-founded reason to question the Customer’s ability to pay for Products or development services related thereto, as applicable, exists. MClimate shall at any time be entitled to postpone or cancel shipment of Products until Customer has fulfilled its payment obligations for Products previously delivered. The right to withhold performance shall not apply in the event satisfactory security has been granted by the Customer.

5.4 MClimate shall subject to Article 11 (Force Majeure) without delay notify the Customer in the event that delivery of Products may be delayed.

5.5. In the event that the Customer causes shipment or delivery to be delayed (default of acceptance) or if the Customer does not comply with its obligations to cooperate culpably, we shall be entitled to claim any loss or damage resulting thereof. Without proof of any actually accrued loss or damage, we shall be entitled to claim a lump sum fee for additional expenditures in the amount 0.5 % of the price of the products concerned for each inchoate month, but not exceeding the aggregate amount of 5 % of the price for the products concerned. The parties shall, however, have the right to provide evidence for higher or lower loss or damages. Partial shipments and corresponding invoices shall be permitted, unless these should be unreasonable for the customer.

5.5 Provided an express provision in the order confirmation or separate written agreement to such effect and subject further to Section 5.6 below, the Customer may be entitled to damages due to delay.

5.6 The Customer shall in the event of delay exceeding four (4) calendar weeks be entitled to terminate the Agreement by giving written notice thereof to MClimate. In the event the Customer does not terminate the Agreement, the Customer shall in the event of delay exceeding four (4) calendar weeks be entitled to damages for by the Customer proved damage incurred after the four weeks period. Any such damages shall per week be subject to a cap of one (1) percent of the price for the Products, up to an aggregated cap of five (5) percent of the purchase price for the Products subject to delay.

5.7 Damages and termination according to Section 5.6 shall for the avoidance of doubt be the exclusive remedy for delay.

6. PRICE AND COSTS

6.1 The Customer shall pay to MClimate the price or fees agreed upon without any set-off, deduction or counterclaim.

6.2 Unless otherwise stipulated in the Agreement, a payment term of 100% prior to dispatch shall apply. Invoice shall be issued per the date on which the Product is delivered or loaded for transport to the Customer. Except as otherwise agreed upon in writing, invoices shall be due upon issuance of the invoice with an effective date as agreedIn the case of late payment, Section 6.4 applies. Our right to claim additional damages shall remain unaffected.

6.3 All prices, fees and charges are exclusive of value added tax and other additional taxes and charges.

6.4 If the Customer should fail to make payment in full to MClimate, MClimate shall be entitled to claim interest on the sum overdue at the rate of eighteen (18) per cent per annum until payment is made.

6.5 MClimate is entitled to adjust the price if, before the delivery date, there are outside MClimate’s control (i) any material and unforeseen changes of duties, taxes or other governmental charges, (ii) currency fluctuations USD/EUR/BGN, as applicable, in excess of ten percent compared to order confirmation date or (iii) increases in raw material costs which have a direct impact on the production costs for MClimate. MClimate shall inform the Customer without delay of circumstances which may give raise to price adjustments according to this Section 6.5.

6.6 If MClimate incurs additional costs due to variations by the Customer in the scope of Products ordered or circumstances for which the Customer is otherwise responsible, the Customer shall reimburse MClimate for such additional costs in accordance with the rates agreed between the parties or in the absence of such agreement, in accordance with MClimate’s from time-to-time applicable price list.

 

7. LICENSES AND TAXES

The Customer shall be responsible for obtaining any necessary import licenses, certificates of origin or other requisite documents and for paying applicable customs, duties, taxes and other levies.

8. LIABILITY AND INDEMNIFICATION

8.1 MClimate’s liability under the Agreement is limited to errors resulting from a deviation from the agreed specifications or other express requirements set forth in the Agreement and which causes a material incorrect or inadequate result or functioning (hereinafter referred to as “Defect”). Faults or shortcomings attributable to the same circumstances or substantially the same circumstances shall, for the sake of clarity, be considered attributable to one and the same Defect.

8.2 MClimate’s liability is further limited to Defects which appear within a period of twenty four (24) months from the date of delivery of Product. If the Product is used more intensely than agreed, the period shall be reduced proportionately.

8.3 Except for what has been set out in Section 8.1, all warranties (including without limitation warranties related to fitness for general or particular purpose or warranties on freedom to operate in relation to any project results, as applicable), are hereby excluded. Hence, Section 8.1 does exhaustively regulate MClimate’s liability for defects or deviations.

8.4 Subject to Section 8.5, in the event of a Defect proven by the Customer, MClimate shall, at its own discretion either: (i) deliver new Product, or (ii) perform remedial actions. Such remedial actions shall be performed within a reasonable period (including time necessary to investigate complaints and alleged faults or shortcomings). Remedial actions shall be performed at MClimate’s premises in Sofia or Veliko Tarnovo in Bulgaria, or at any other location which MClimate may choose. Transportation costs shall be borne by the Customer.

8.5 In the event of an erroneous complaint, the Customer shall pay compensation to MClimate for work performed and costs incurred.

8.6 MClimate shall not be liable towards the Customer for any damage to person or property or for any consequential or indirect damage or loss, including but not limited to loss of profit, loss of revenue, loss of data, loss of goodwill or loss of other economic advantage. MClimate shall neither be liable for any cost, loss or damage which is the result of any material provided by the Customer or a consequence of MClimate having performed work in accordance with the Agreement or the Customer’s instructions.

8.7 MClimate shall be liable to pay damages for damage incurred only if caused by gross negligence or intent by MClimate. MClimate’s liability for damages whether arising in contract, tort, by negligence or otherwise shall be limited to a maximum amount equivalent to fifteen (15) per cent of the purchase price for the defective Product.

8.8 MClimate is not responsible for failure to meet a requirement, if the failure is caused by: (i) any modification by Customer without MClimate’s written consent; (ii) circumstances outside MClimate’s area of responsibility such as failure of communications or circumstances which relate to network and infrastructure or other products or services from third parties which are procured directly from a third party by Customer; (iii) normal wear and tear; (iv) faulty maintenance or incorrect installation on the part of the Customer; (v) any circumstance referred to as Force Majeure; or (vi) other use by the Customer contrary to the Agreement (including instructions set forth in operation manuals, etc.).

8.9 If the Customer becomes aware or should reasonably have become aware of a breach of the Agreement which may result in a claim, it shall inform MClimate in writing within thirty (30) days. If the Customer does not inform MClimate within the stipulated period, it shall lose its right to claim compensation or assert any other remedy for that particular breach.

8.10 If components or software from a third party are included in MClimate’s delivery, the third party’s special provisions with respect to such products or software shall take precedence, as applicable. MClimate shall have no liability due to the Customer’s use contrary to the third party’s special provisions.

8.11 The Customer hereby agrees to indemnify, defend and hold harmless MClimate, from all cost, loss or damage arising out of or related to any breach of this Agreement by the Customer or resulting from any suit or action of any third party against MClimate resulting from MClimate having performed work in accordance with the Customer’s instructions.

8.12 This Article 8 does exhaustively regulate MClimate’s liability and Customer’s remedies related to Defect.

9. SECRECY AND NON-USE

9.1 During the term of this Agreement and thereafter, any technical, commercial or other information of a confidential nature disclosed by either Party to the other Party or matters arising out of this Agreement, including the content of the Agreement and also including possible arbitral proceedings and information disclosed during the course of such proceedings, shall be treated as strictly confidential and the Parties shall use such information solely for the purposes of this Agreement and shall not, without the prior written consent of the other Party, which may be withheld for any reason, pass it on to any person except to those of the Party’s employees, consultants, subcontractors or other intermediaries, as the case may be, who are themselves bound by equivalent obligations of secrecy and non-use in respect thereof. The Parties shall take all necessary precautions to prevent an unauthorized disclosure of technical, commercial or other information of a confidential nature by employees, consultants, subcontractors or other intermediaries.

9.2 The secrecy undertakings according to Section 9.1 shall not apply to information which a party is able to demonstrate is public or becomes public in integrated form other than through breach of the Agreement by the party.

10. IPR, ETC.

10.1 The Customer recognizes MClimate’s exclusive rights and ownership to MClimate’s intellectual property rights (whether or not protected, registered or unregistered now existing or hereafter filed, issued, or acquired) and know-how and any variations or derivatives therefrom including but not limited to any developments, improvements, changes, amendments or inventions, including results generated under the Agreement, regardless of whether it may be protected under intellectual property law or not. MClimate shall have the exclusive right (but no obligation) to apply for registration or protection in relation to any such development, improvement, change, amendment, invention or result. To the extent required, the Customer shall assist MClimate as may be reasonably required in filings and prosecuting of any intellectual property right in order to assign and convey to MClimate the sole and exclusive rights, title and interest according to this Section 10.1.

10.2 The Customer agrees that it shall at no time itself or through other party, use, copy or reproduce any of MClimate’s intellectual property rights or know-how other than as expressly permitted according to the Agreement. The Customer agrees and undertakes that all employees or other third parties will become familiar with and will strictly comply with the aforementioned and other provisions in this Article 10 in order to protect MClimate’s intellectual property rights or know-how.

10.3 Except as expressly set out in the Agreement, no licences are granted to the Customer. Any license granted is non-exclusive, limited to the Customer’s own use in conjunction with delivered Product, non-transferrable, limited to the term specified in the Agreement and granted on an “as is” basis. No obligations for MClimate to provide updates or upgrades shall apply unless otherwise agreed in writing.

10.4 The Customer will promptly advise MClimate in writing of any notice or claim of infringement of any third-party intellectual property rights related to the Products. The Customer shall not make any admission of liability, agreement or compromise in relation to the claim without MClimate’s prior written consent.

11. FORCE MAJEURE

11.1 MClimate shall be exempt from liability for failure to fulfil an obligation where such failure is the result of circumstances beyond the reasonable control of MClimate, which prevent or impede performance (“Force Majeure”), until such obstacle has been removed.

11.2 Circumstances constituting Force Majeure shall include, but not be limited to, shortage, difficulties and disruptions on the labour market (including conflict measures such as strike or lockout), disruption to communications or networks, failure or breakdown of equipment, new or amended legislation, acts of authorities, request or injunction from a public authority after the conclusion of the Agreement, epidemics or pandemics, act of war, terrorism, sabotage, trade sanction, fault or delay in deliveries from subcontractors or subsuppliers caused by any of the aforementioned circumstances or other circumstance or conditions that are beyond the reasonable control of MClimate.

11.3 Notice of a Force Majeure event and the cessation of such event shall be given without delay.

11.4 The party affected by a Force Majeure event shall exercise all reasonable efforts to mitigate or limit the consequences of non-performance due to such event.

12. MISCELLANEOUS

12.1 Customer may not transfer or assign, in whole or in part, its rights or obligations under the Agreement without the prior written consent of MClimate. MClimate shall be entitled to assign the Agreement to an affiliate or a third party or transfer or pledge the right to receive payment under the Agreement.

12.2 No modifications, amendments or alterations of the Agreement will be valid or binding for a party, except if made in writing (containing a specific reference to the Agreement) and signed on behalf of such party.

12.3 The Agreement sets out the entire understanding of the parties with respect to the subject matter of the Agreement.

12.4. In the event that any provision of these GTCs is determined by a competent authority to be invalid, illegal or unenforceable, it will be severed from the remaining terms, conditions and provisions, which will continue in effect to the fullest extent permitted of applicable law.

13. GOVERNING LAW AND DISPUTE RESOLUTION

13.1 The Agreement shall be governed by and construed in accordance with the substantive laws of the Republic of Bulgaria.

13.2 Any dispute, controversy or claim arising out of or in connection with the Agreement, or the breach, termination or invalidity thereof, shall be finally settled by arbitration administered by the Arbitration Court of Bulgarian Chamber of Commerce (the “BCCI”).

13.3 The Rules for Expedited Arbitrations shall apply, unless the BCCI in its discretion determines, taking into account the complexity of the case, the amount in dispute and other circumstances, that the Arbitration Rules shall apply. In the latter case, the BCCI shall also decide whether the Arbitral Tribunal shall be composed of one or three arbitrators. The seat of arbitration shall be Sofia, Bulgaria. The language to be used in the arbitral proceedings shall be English.

13.4 Notwithstanding Section 13.2 and 13.3, MClimate may in relation to a claim for payment which have arisen, or which may arise out of or in connection with the Agreement, take legal actions at the District Court of Sofia or, in relation to uncontested claims, submit an application to the relevant enforcement agency.

14. FINAL PROVISIONS

14.1. These General Terms and Conditions enter into force on 31.01.2023.

14.2. These General Terms and Conditions may be amended due to updates to applicable law or for other reasons.