Residential Building Management Agreement

Batumi 13.11.2024

Next White LLC (ID 445539855), represented by Director Koba Devadze (personal number 61001063803) hereinafter referred to as the Seller/Managing Company, from one hand and from the other hand, LUIS FERNANDO SCHULTZ XAVIER DA SILVEIRA (Passport Number: YE528452 Date of birth: 02/12/1988), hereinafter referred to as the Buyer/The Owner of the Apartment, act based on the laws of Georgia, enter into this agreement on the following:

1. Definition of terms

1.1. "Residential Building": multi-story, multipurpose building located at: Batumi, Mamuladze st. In N27, on non-agricultural purpose 1705.00 sq.m. plot of land, A multifunctional residential complex (cadastral code: 05.32.12.050).

1.2. "Managing company"- NEXT White LLC, for the purposes of this agreement carries out using of apartments in the complex "NEXT WHITE", as the apartments and manages the infrastructure of the residential building and manages the permanent service related to the maintenance and care of the infrastructure and the common areas of the residential building.

1.3. "Apartment" – the area in the residential building registered in the private ownership of the owner, that is intended for short-term and long-term accommodation of the body (including relax, recovery, business trip).

2. Subject of the agreement

2.1. The given agreement relates to the delivery of the apartment in the residential building by the owner to the real-estate "managing company" with the right of use, involvement of the residential building in the reservation network and delivery to the third bodies with the right of use for gaining certain profit. The implementation will commence in accordance with the real estate ("Apartment") purchase agreement concluded between the parties. This will occur from the moment of the actual completion of the construction, and the buyer will be notified in writing via email.

2.2. "Apartment" registration data are as follow:

• Address: Batumi, Mamuladze str. N27
• "Apartment" area: 101.48 sq.m.,
• "Apartment" floor / number: 16_11/12 ;
• Cadastral code of the "apartment": 05.32.12.050.01.16.011 / 05.32.12.050.01.16.012

3. The rules and terms for issue of the apartment with the right to use

3.1. The parties agree that, they will support each other in the process of issuance of the apartment by the "managing company" with the right of use and gaining certain economic profit during the management period and on the other hand accommodation of the owner in the apartment at different periods of time.

3.2. In the case, the owner decides to accommodate in the apartment himself/herself, he/she is obliged to send the written notice (or electronic) to the "managing company" one week earlier at the lower season and one month earlier at high season. The notice shall indicate the date of commencement and completion of use of the "apartment" by the owner, in order the managing company not to accept the reservation. The owner is entitled to extend the days of using the apartment based on previous informing of the company, if the reservation has not been accepted by the residential building for this period.

3.3. In the case, the reservation has already been accepted on the apartment for the period required by the owner, in case of possibility, the managing company will accommodate the owner in the similar type of free apartment, in this case, the income receivable the delivery of the apartment owned by the owner, to the third bodies for the same period, will be deducted.

3.4. The demand/request of the owner for temporary termination of using as per the given agreement, of the management subject by the managing company will not be satisfied, if the managing company, for the moment of receiving the notice, has issued the management subject for use as per this agreement or/and is reserved for use as per this agreement.

3.5. In the case envisaged by the section 3.4 of this agreement, the demand/request of the owner will be satisfied on the second day after completion of using the management subject or on the second day after expiry of the relevant reservation.

4. Financial settlement

4.1. The period and the conditions of renting out of the apartments are determined by the managing company unilaterally, taking into account the travel market of Batumi for certain period, requirements, competition conditions and other related factors.

4.2. The rent-out price of the apartment is determined by the managing company and subjects to changes according to year, season and load, envisaging the travel market parameters of Batumi for certain period, requirements, competition conditions and other related factors;

4.3. In exchange of delivery of the apartment to third bodies with the right to use for certain price, the owner, from the overall income received as the result of renting out of the apartment, after paying of Value added tax (VAT) and envisaging the contractual deductions, receives 60% of the remaining amount. The income taxes are born by the owner. And the remaining amount is reserved by the "Management Company" as its compensation for the management services provided by this "Agreement". The income tax is paid by the "owner", which will be withheld in accordance with the law and transferred to the "management company" in the name of the "owner" in the budget.

4.4. The parties agree, that the utility bills that include but is not limited to electricity, water, internet, cleaning costs will be remunerated from the portion payable to the owner, even during the period of the renting out.

4.5. Payment of the amount envisaged by the section 4.3 of this agreement will be made until the last day of each month.

4.6. Settlement between the parties is conducted through cashless transactions to the bank account owned by the "Owner." The details of the bank account will be sent by the "Owner" to the email of the "Management Company." The requisites of the bank account, might be attached to the agreement in the form of annex, if the owner has submitted the bank account registered beyond the borders of Georgia, the transaction commission of the account will be born from the amount remunerable to the owner.

4.7. The managing company is entitled to place the apartment in the local and global distribution networks (BOOKING.COM, TRIPADVISOR.com, AIRBNB.COM and so on).

4.8. The issues of maintenance and care of the residential building common property and infrastructure are regulated by the annex N 1, of the purchasing agreement concluded between the vendor and the apartment owner. (service conditions of the common areas). Payment of the maintenance and care services costs of the residential building common property and infrastructure will made by the owner. The managing company is entitled to deduct the mentioned amount/costs from the remuneration payable to the apartment owner under the management agreement.

5. Cooperation conditions

5.1. Since the apartment, under the given agreement, will be delivered to the managing company with the right of use during the whole contractual period, the parties agree that the managing company is exclusively entitled to transfer the apartment to any third bodies in temporary use for receiving certain incomes.

5.2. The parties agree, that accommodation of the apartment owner or the guest without check in and check out is not allowed.

5.3. The number of the guests accommodated in the apartment shall not exceed:

1-bedroom apartment: 2 persons

2-bedroom apartment: 4 persons

3- bedroom apartment: 6 persons

Note: these limitations do not apply to the children under 12 years.

5.4. All those services will be applied to the apartment that the residential building offers to the customers for ensuring the comfortable rest.

5.5. The residential building will involve the apartment in all advertisement actions, PR and promotion of the residential building, the mentioned is included in the price envisaged by the agreement.

5.6. The benefit envisaged by the given agreement will be calculated by the recalculation of the percentage agreed between the parties, from the income received as the result of transferring/delivery of the apartment into temporary use, accordingly it does not include any provisions concerning giving monthly guaranteed incomes to the owner.

5.7. After accommodation of the guest in the apartment, any additional service received in the complex by the guest represents an income that belongs only to the managing company and it does not subject to the distribution between the parties.

5.8. The owner is obliged to inform the managing company concerning the alienation of the apartment in advance, in addition to this, to introduce all the rights and obligations envisaged by this agreement to the vendee. All the rights and obligations that the owner had in relation to the apartment, will be transferred to the new owner.

5.9. The managing company is entitled to transfer the rights and obligations under this agreement in relation to the apartment management, to any third party- other managing company, wholly or partially, to whom all the obligations and rights of the current managing company under this agreement, will be transferred fully (transfer of rights and obligations). Transfer of rights and obligations does not require any expressed consent of the owner and by signing this agreement, such consent is deemed as issued.

5.10. From the moment of the actual implementation of management, an individual cabinet will be opened for the 'Owner' on this website https://myportal.nextgroup.ge/. The cabinet will display information about the current and future bookings of the 'Apartment', the number of days the 'Apartment' is rented, and the corresponding payment details, including financial analysis.

6. Insurance, current and general repairment

6.1. The managing company is entitled to insure the apartment, the insurance cost will be born by the managing company;

6.2. The managing company, with the agreement of the owner, will from time to time will carry out the repairment works (that means the renovation works for the natural wear and tear as the result of using the apartment, in avoid all doubts, the parties agree that, the managing company is responsible for all the damages incurred to the apartment as the result of renting out it to the third bodies, and such works are not included in current repairment works), the responsibility to remunerate lies to the owner, based on the invoice issued by the "hotel manager". The managing company is entitled to deduct the mentioned amount from the incomes received as the result of renting out of the apartment.

6.3. The owner is obliged to carry out general repairment of the apartment after 5-7 years, if necessary. If the owner is not able to carry out such repairment works, then the works may be carried out by the managing company and in that case the costs related will be deducted from the amounts payable to the owner. In any case, the parties shall agree on fair cost estimate of the repairment works according to the standards.

7. Notification, communication, informing

7.1. The official notifications between the parties shall be carried out in written form, via phone, E-mail or via other communication means, as agreed by the parties. The notice is effective from the moment the notice is sent. Any notification sent to the party shall be in Georgian, English or Russian language. The written notification will be deemed as received even in the cases, if the notification sent will be returned back to the sender due nonexistence of the recipient's location, or the recipient refuses to receive the notification, or avoids to receive it.

8. Agreement duration and regulatory legislation

8.1. The given agreement is regulated as per the applicable laws of Georgia and is interpreted as the lease relationship. The parties will settle the disputable relationships via Georgian courts.

8.2. The agreement comes into force, from the moment of signing on it and is valid for 5 years.

8.3. If the parties do not make the statement on agreement termination, the agreement will be continued for the same period and with the same conditions. After extension of contract term, the managing company is entitled to demand/request to make changes in the calculation rules of the incomes received from renting out of the apartment, according to the conditions existing at the market.

8.4. Early termination of the agreement might be carried out based on the mutual agreement of the parties, or by the initiative of the managing company, upon 30 days prior written notice to the party.

8.5. The invalidity or illegality of any part or provision of this 'Agreement' shall not affect the legality or validity of individual provisions of the 'Agreement' or the 'Agreement' as a whole. Furthermore, for the purpose of ensuring the continuity of the 'Agreement,' the 'Parties' agree to take all necessary measures to replace the invalid provision with a valid one.

8.6. The 'Parties' are exempt from fulfilling their obligations in the case of force majeure, under the same terms and conditions as stipulated in the real estate ('Apartment') purchase agreement concluded between the 'Parties'.

8.7. The agreement is composed in Georgian and English languages, in two (2) copies having the same legal force, from which each copy will be delivered to each party;

9. Signatures of the contractual parties

Seller/Managing Company

Next White LLC

ID: 445539855

Tel: +995 514 111 111

E-mail: White@nexthotels.ge

Director – Koba Devadze

Buyer/Owner

ლუის ფერნანდო სჩულტზ ხავიერ და სილვეირა / LUIS FERNANDO SCHULTZ XAVIER DA SILVEIRA

ტელ/Mobile number: +995 597 04 90 28

ელ. ფოსტა / E-mail: lfsxs@mailbox.org