Lease

REINSTATEMENT & AMENDMENT TO LEASE

(Water Island Ground Lease)



This Amendment to Lease (this “Amendment”) is made this___ day of



2026 (the “Effective Date”), by the GOVERNMENT OF THE VIRGIN ISLANDS acting by

and through its Department of Property and Procurement (“Lessor”), and WATER ISLAND

DEVELOPMENT COMPANY, LLC, a U.S. Virgin Islands limited liability company

(“Lessee”) (together Lessor and Lessee are, collectively, the “Parties” and each individually, a

“Party”). Capitalized terms used herein and not otherwise defined have the meanings set forth in

the Original Lease (as defined below).



‘



i" WITNESSETH:



WHEREAS, the Parties entered into that certain Lease Agreement dated November 19,

2014 (the “Original Lease”) for certain real property located at Water Island, U.S. Virgin Islands,

therein defined as the “Premises.” The Premises is part of a total of approximately 197.82 acres on

Water Island (the “GVI Tract”) that were deeded by the United States of America, acting through

the Department of the Interior, to the Lessor. The Lease contemplates the development of the

Premises as the Water Island Hotel and Marina. In addition, it contemplates the sale by Lessor to

Lessee of approximately 55 acres of land from the GVI Tract for residential development

associated with the development of the Water Island Hotel and Marina (the “Additional Resort

Land”); and



WHEREAS, the Parties have discussed how best to integrate the Water Island Hotel and

Marina and the Additional Resort Land with the use of the remainder of the GVI Tract in light of

the following mutually shared goals for Water Island development of the Water Island Hotel and

Marina as a “high-end” (e.g., Hilton’s Waldorf Astoria brand, IHG (Kimpton), Park Hyatt,

Marriott (St. Regis), or comparable equivalent) destination resort hotel and marina with residential

for-sale opportunities and community development facilities as part of the Water Island Hotel and

Marina as further described in the Lease; and



WHEREAS, Lessee has produced a comprehensive conceptual plan for the development

of a portion of the GVI Tract, a copy of which has been provided to Lessor as of the Effective Date

and is attached hereto as Exhibit A (the “Comprehensive Plan”);



WHEREAS, in furtherance of the Comprehensive Plan, the successful implementation of

which the Government of the Virgin Islands deems to be in furtherance of the public purpose to

promote the economic development of Water Island for the benefit of the Virgin Islands as a

premier tourism destination in the Caribbean, the Parties have agreed to make certain amendments

to the Lease as hereinafter described; and



WHEREAS, the Parties desire to amend the Original Leaee to (i) restate and clarify the

mechanics of the Acquisition Option (as defined in Section 2.2 herein) and the Acquisition

Sub-Option (as defined in Section 2.2.1 herein) for disposition of Residential Units (as defined in

Section 2.1 herein), including notice, deed, escrow and closing procedures; (ii) align the Lease



SM

with Title 31, Section 205 of the Virgin Islands Code by providing that, upon the enactment of an

act of the Legislature of the Territory (the “Legislature”) approving this Amendment and the

master plan that constitutes a planned area of development (the “Approving Act”), and delegating

authority to the Commissioner of the Department of Property and Procurement (the

“Commissioner”), the Commissioner is authorized and directed, without any further legislative

act, to execute and record deeds for such Residential Unit conveyances upon satisfaction of stated

conditions and with the Governor’s written approval; and (iii) make related conforming changes,

including to Sections 2.2.1, 2.3, 2.4 and 9.2; (iv) extend certain period and time frames to align

with the current project schedule and commencing as of the Effective Date of this Amendment;

(v) add certain additional lands to the Premises; (vi) memorialize Lessor and Lessee coordination,

information sharing, and cooperation with regard to certain project prerogatives of Lessee required

for the feasibility of for Water Island development of the Water Island Hotel, and Marina including

securing access arid use of certain ancillary lands, thesubmerged lands, and obtaining certain

economic development and tax incentive programs



WHEREAS, the Parties therefore agree to amend the Lease as follows.



NOW THEREFORE, in consideration of foregoing, which are not merely precatory but

are a substantive part of this Amendment, and the mutual covenants and agreements herein set

forth, the Parties, intending to be legally bound, it is hereby agreed:



ls MODIFIED LEASED LAND. The Description of the Premises in the Original

Lease (with giving effect to this Amendment, hereinafter, the “Lease”), as of the Effective Date,

is amended to comprise all of the real property described on Exhibit B, attached hereto and made

a part hereof, including the following:



1.1 The Additional Resort Land. The “Additional Resort Land” shall consist of

the land so described on Exhibit B. The Additional Resort Land is hereby added to and made a

part of the Premises. .



1.1.1 Base Rent. Section 3.01 of the Original Lease, the first sentence, is

hereby deleted and replaced to read as follows: .



“Upon expiration of the Construction Rent Period (as defined in Section 3.02 of the Original

Lease): (a) Lessee shall pay to Lessor an annual base rent of ONE HUNDRED AND TWENTY

THOUSAND DOLLARS AND NO CENTS ($120,000.00) payable in equal monthly installments

of TEN THOUSAND DOLLARS AND NO CENTS ($10,000.00) (the “Base Rent”).



As of the tenth (10th) anniversary of the Effective Date, the Base Rent shall increase to be an

amount equal to TWO HUNDRED AND FORTY THOUSAND DOLLARS AND NO CENTS

($240,000.00) payable in equal monthly installments of TWENTY THOUSAND DOLLARS

AND NO CENTS. :



Effective as of the Twenty Fifth (25th) anniversary of the Effective Date, and every five (5)

consecutive years thereafter during the Term, the Base -Rent payable under this Lease shall be

adjusted to increase by an amount proportionate to five percent (5%). For example: on the Twenty

Fifth Anniversary the Base Rent shall increase to Two Hundred Sixty Two Thousand Five



o\

Hundred Dollars and No Cents ($262,500.00) payable in monthly installments of Twenty One

Thousand Eight Hundred Seventy Five Dollars and No Cents ($21,875.00); on the Thirtieth

Anniversary the Base Rent shall increase to Two Hundred Seventy Five Thousand Six Hundred

Twenty Five Dollars and No Cents ($275,625.00) payable in monthly installments of Twenty Two

Thousand Nine Hundred Sixty Eight Dollars and Seventy Five Cents ($22,968.75); and so on until

the expiration of the Term.”



12 The Landing Parcel. Tract E Water Island, No. 10, including the parcel of

land that has the Water Island post office located on it, all as more particularly described on Exhibit

B (collectively, the “Landing Parcel”), Lessor will work with Lessee to add to and make a non-

exclusive part of the;Premises. The Landing Parcel may be used for the purpose of supporting the

current level of public ferry operations, public access, and including provision of public parking

facilities and restrooms. Lessee agrees to build a paved public parking area on the Landing Parcel

and to construct and provide public restrooms, to be reasonably determined and identified by the

Parties in the Plan.



1.3. Lessor will use reasonable good faith efforts to assist Lessee in its efforts to

lease or otherwise obtain a lease and right of use from the Territory’s Department of Planning and

Natural Resources (“DPNR”) of certain submerged lands as described in Section 5 and Exhibit A

which will be separate and apart from this Lease and the Premises (the “Submerged Lands”).

Notwithstanding Lessee’s prior election to waive the contingency set forth in Section 2.01(b) of

the Lease for the approval by the Department of the Interior of the purchase of the Additional

Resort Land, such contingency is hereby reinstated and shall be applicable to the entire Premises,

and, as of the date hereof, such contingency shall also include DPNR approval of the Submerged

Lands being granted for use by the Lessee in conjunction with the Premises, in form and substance

to Lessee’s reasonable satisfaction.



1.4 The St. Thomas Heliport Parcel.



1.4.1 Lessor will use reasonable good faith efforts to assist Lessee in its

efforts to identify and secure one or more parcels in St. Thomas in order to facilitate: (a) the more

immediate need of barge landing, storage, and staging site and to support construction and ongoing

operations related to development and operation of the Water Island Hotel and Marina in

compliance with all Legal Requirements; and (b) the subsequent need of a convenient travel point

between the Premises, St. Thomas, St. John, and St. Croix for resort guests and residents to and

from the Water Island Hotel and Marina in compliance with all Legal Requirements, as any such

parcel(s) is/are available (each, a “St. Thomas Parcel”). If any such parcel is owned by and under

the control of Lessor, and available for use as Lessor determines, then when and if so identified

and agreed upon by the Parties, the St. Thomas Parcel shall be added to and made a part of the

Premises. The value of the St. Thomas Parcel shall be established by existing Department of

Property and Procurement appraisal procedures, and the rent shall be determined based on the

Term (i.e., 99-year lease) with a capitalization rate of five percent (5%). Such rent for the St.

Thomas Parcel shall be payable in addition to Base Rent. The St. Thomas Parcel shall be used as

a barge landing, storage, and staging site and to support construction and ongoing operations

related to development and operation of the Water Island Hotel and Marina in compliance with all

Legal Requirements.

1.4.2 Subject to receipt of the customary regulatory approvals and permits

in compliance with all Legal Requirements, Lessee shall have the right to make such reasonable

Improvements to the St. Thomas Parcel as the Lessee deems necessary to support the development

and operation of the Water Island Hotel and Marina.



1.5 Excluded Land. Notwithstanding anything to the contrary herein this

Section 1, as of the Effective Date the following real property shall be excluded from the Premises



1.5.1. Catchment Area. The area of real property depicted in Exhibit B-1

attached hereto and identified therein as the “Catchment Area” consisting of approximately 3 acres

shall be removed from the Premises and revert back to the Lessor unencumbered by the Lease.



‘ 1.5.2 Tract C. The area of real property depicted in Exhibit B-1 attached



hereto and identified therein as “Tract C,” consisting of approximately 11.9 acres, commonly

known as Honeymoon Beach shall be removed from the Premises and revert back to the Lessor

unencumbered by the Lease.



Notwithstanding the foregoing, the Lessor and Lessee acknowledge their mutual interest

in discussing the continued management and operation of a.portion of Tract C by the Lessee

following its reversion to the Lessor. Accordingly, the .parties agree to enter into good-faith

discussions regarding a potential Revocable License Agreement and/or Memorandum of

Understanding under which the Lessee may manage, maintain and operate a portion of Tract C.

The parties acknowledge that any such agreement shall be subject to the negotiation and execution

of mutually acceptable terms and conditions and that this Section does not obligate either party to

enter into any such agreement.



5: RESIDENTIAL SALES



2.1 The permitted uses of the Premises, including the Additional Resort Land

shall include the subdivision and development of certain portions of the Premises, as expressly

identified in Exhibit A, for residential or short-term rental vacation housing (including

condominiums, townhouses, and single-family lots) (collectively, “Residential Units”) and fee

simple sales thereof (“Residential Sales”) in compliance with all Legal Requirements, in addition

to the other permitted uses under the Lease. For the avoidance of doubt, as referenced in Section

1.3 hereinabove, the contingency set forth in Section 2.01(b) of the Lease for the approval by the

Department of the Interior of the purchase of the Additional Resort Land has been reinstated and

shall be applicable to the entire Premises, as aforesaid.



2.2 To facilitate the Residential Units (and resulting Residential Sales), the

Lessee is hereby granted an option (the “Acquisition Option”) to acquire such certain portions of

the Premises in fee simple under the terms hereinafter set forth.



2.2.1 . The Acquisition Option may be exercised incrementally for certain

portions of the Premises subject to the Acquisition Option (each, an “Acquisition Sub-Option’’) by

written notice from Lessee to Lessor at least fifteen (15) days (but not more than ninety (90) days)

prior to entering into a purchase agreement with a Residéntial Purchaser for the underlying fee

interest and a completed, improved and vertically constructed residence (each, a “Residential

Purchaser”), together with a plan depicting and a narrative describing by metes and bounds the



EW

portion of the Premises to be acquired, the intended use in compliance with all Legal

Requirements, and the purchase price for such option (each, an “Option Notice”), Each Acquisition

Sub-Option may be exercised only with respect to a Residential Purchaser. In connection with

each Acquisition Sub-Option, Lessee shall partially assign to the Residential Purchaser, at no cost

to Lessor, Lessee’s rights under the Acquisition Option to the extent necessary to permit the

Residential Purchaser to receive fee simple title directly from Lessor at closing. No later than

ninety (90) days prior to the scheduled closing date for each Residential Sale, Lessor shall deliver

into escrow a deed executed by the Commissioner (or designee), with the Governor’s written

approval endorsed thereon as required by Title 31, Section 205(b), to be held and released at

closing upon satisfaction of Sections 2.3.1 and 2.3.3. All such conveyances shall be subject to

recorded deed restrictions developed by Lessee and approved by Lessor, which restrictions must

be consistent with thaprovisions of the Lease, the pea Resort Approvals, and the applicable

Legal Requirements! '



2.2.2 With respect to the iaeaisitin Option set forth in 2.2.1 above, for

the construction of the condominium units by the Lessee, the Lessor shall convey the deed for the

subject parcel upon the request of the Lessee at the time the condominium units are constructed to

allow the Lessee to draft and record the condominium declaration for the condominium

development and by-laws for the condominium association. The transfer to Lessee from Lessor

shall be exempt from any transfer stamp tax, however the Léssee guarantees payment of the stamp

tax to the Lessor due upon sale of each condominium unit to a Residential Buyer as set forth in

Section 2.6 below as well as the sales commission as set forth in Section 2.5 below. Lessee shall

pay to the Lessor the amounts set forth in Sections 2.5 and 2.6 upon the sale of a condominium

unit to a Residential Buyer.



2.3 The Parties acknowledge that (a) the Governor of the Virgin Islands must

approve, on behalf of the Government of the Virgin Islands, all conveyances, leases or other

instruments relating to the disposition of government real estate, and (b) leases or subleases for

terms exceeding one (1) year and other dispositions specified in Title 31, Section 205(c) must be

approved by Act of the Legislature. Upon enactment of the Approving Act, the Commissioner is

authorized and directed, without any further act of the Legislature, to execute, acknowledge,

deliver and record deeds conveying fee simple title to those portions of the Premises identified in

the applicable Option Notice(s) to the applicable Residential Purchaser(s), upon satisfaction of the

conditions precedent set forth in this Article 2 and in the Approving Act, with the Governor’s

written approval evidenced upon each such deed as required by Title 31, Section 205(b). The

Commissioner’s deed, when recorded, shall constitute conclusive evidence in favor of bona fide

purchasers and encumbrancers for value that the conditions precedent set forth in this Section 2.3

and in the Approving Act have been satisfied.



2.3.1 Conditions Precedent. The Commissioner’s authority to convey is

conditioned on: (i) Lessee’s delivery of an Option Notice compliant with Section 2.2.1 identifying

by legal description the land underlying the Residential Unit; (ii) delivery of an ALTA title

insurance commitment showing title vested in Lessor and insurable to the Residential Purchaser

subject only to Permitted Encumbrances; (iii) Lessee’s certification that no Event of Default then

exists; and (iv) satisfaction of any appraisal, public-notice, coastal zone, historic-preservation,

earth-change and other applicable Legal Requirements.



ANN

2.3.2 Form of Deed: Approvals as to Form. Each deed shall be in the form

of special warranty deed, and shall be approved by the Commissioner and its outside counsel, as

well as approved as to legal sufficiency and form by the Attorney General of the Territory, and

shall bear the Governor’s written approval as required by Title 31, Section 205(b). Once the

conditions in Section 2.3.1 are satisfied, such approvals are deemed ministerial.



2.3.3. Escrow Mechanics. No later than ninety (90) days prior to the

scheduled closing for a Residential Sale, Lessor shall deliver into escrow an executed deed meeting

the requirements of Section 2.3.2., except as set forth in Section 2.2.2 above. Escrow is authorized

to release such deed upon receipt from the Lessee of the: (a) the purchase proceeds for such

Residential Sale and remitting the applicable Residential Sale Participation (as defined in Section

2.5 below) together with the amounts for the Transfer Stamp Tax pursuant to V.I. Code tit. 33, §

121 (2019) as set forth in section 2.6 below as if Lessee was the seller to LesSor; and (b) evidence

reasonably required by Lessor establishing satisfaction of the conditions in Section 2.3.1 for such

Residential Sale. If Lessor reasonably objects prior to release, the Parties shall resolve the

objection within ten (10) Business Days; failing resolution, either Party may seek specific

performance.



2.3.4 Savings: Consistency with Law. Nothing herein authorizes a

disposition prohibited by Title 31, Section 205(f)-(i). All conveyances shall comply with all

applicable Legal Requirements, including coastal zone and earth-change approvals where

required. ;



2.4 Lessor agrees to use reasonable efforts in compliance with all Legal

Requirements to provide Lessee such further assistance as it may reasonably require to

communicate the validity of the Acquisition Option and of conveyances of a Residential Unit to a

Residential Purchaser, as may be reasonably requested by any duly licensed and reputable title

insurance company insuring Lessee’s rights pursuant to the Acquisition Option or Residential

Purchasers’ fee simple interests in the Residential Unit, subject as aforesaid. Lessor shall execute

such ministerial certificates as a nationally recognized title insurer may reasonably require to

confirm the Approving Act’s self-executing delegation and the satisfaction (or deemed

satisfaction) of the conditions precedent in Section 2.3.1, it being the Parties’ intent that no further

legislative act is required once the Approving Act is in force.



2.5 Upon the closing of each Residential Unit to a Residential Purchaser, Lessee

shall pay Lessor the sum equal to Six percent (6%) of the gross purchase price paid by such

Residential Purchaser for the Residential Unit (each, a “Residential Sales Participation”).



2.6 Stamp Taxes. Notwithstanding any provision of the Lease or any

applicable law or custom to the contrary, Lessee shall be solely responsible for, and shall pay (or

cause to be paid) one hundred percent (100%) of, any and all stamp taxes, transfer taxes, recording

taxes, and similar governmental taxes, fees and charges imposed in connection with each

Residential Sale and the execution, delivery and recording of each deed conveying a Residential

Unit to a Residential Purchaser, regardless of whether any such tax, fee or charge is imposed by

law upon Lessor as grantor, Lessee, or the Residential Purchaser. Lessee's obligations under this

Section 2.6 are in addition to, and shall not reduce or be credited against, the Residential Sales

Participation payable to Lessor, and in no event shall Lessor bear or be liable for any portion of



AW

a



such taxes, fees or charges. This Section 2.6 shall survive the closing of each Residential Sale and

any expiration or termination of the Lease.



3: TIME EXTENSIONS.



3.1 Section 2.01 of the Original Lease is hereby amended to the following:

“Term. The initial term of this Lease shall be for a period of ninety-nine (99) years (the “Term”)

commencing on May 1, 2026, and shall be extended by up to two (2) years (i.e., for an aggregate

of 101 years) following satisfaction of the following conditions precedent:”



3.2 4 Section 3.02 of the Original Lease is hereby amended by deleting the last

sentence beginning With “As used herein” and replacing it with “As used herein, the “Construction

Rent Period” commences on the Effective Date and expires upon the earlier of: (a) Substantial

Completion of the Improvements; or (b) expiration of the Construction Period (as defined in

Section 4.04 of the Original Lease) (“Completion Date”).”



3.3. Section 4.01 of the Original Lease is hereby amended to delete and replace

*$140,000,000.00” with “$300,000,000.00.”



3.4 Section 4.02 of the Original Lease is hereby amended to extend the date by

which Lessee is required to obtain, binding commitments for financing from available public and

private sources, by deleting and replacing the “Effective Date” with the “Effective Date” as stated

in this Amendment (i.e., so such 24-month period shall run from the “Effective Date” of this

Amendment).



3.5 Section 9.06 of the Original Lease is deleted and replaced with the

following:



“Section 9.06. Subleasing. Lessee: (i) shall not sublet the Premises in whole or in part

without Lessor’s prior written consent, which consent may not be unreasonably withheld or

delayed (except to a Leasehold Mortgagee, for which any such sublease shall require at least 30

days’ prior notice to Lessor); and (ii) may sublease to Lessee’s Leasehold Mortgagee or to a

reputable and creditworthy concessionaires to sublease a portion of the Premises for retail or

service operations in the normal course of business of a resort hotel (for which any such sublease

shall require at least 10 days’ prior notice to Lessor and no consent shall be required from Lessor),

provided that any such subletting in foregoing (i) and (ii) shall be further subject to the following:



(a) Both at the time of Lessee’s request to Lessor for Lessor’s consent (or if

Lessor consent is not required, at the time of the prior notice as aforesaid) and the time when the

sublease is to commence (after Lessor’s consent has been given or its timely notice received) there

is no Event of Default (as defined below) continuing and there is no material breach which, if not

cured by the expiration of any applicable grace or cure period, would become an Event of Default;



(b) Any such sublease shall be subject to all of the terms and conditions of the

Lease, and Lessee shall be primarily responsible for any violation of the Lease caused by any

subtenants;

(c) Each sublease shall be subject and subordinate to the provisions of the Lease

(and all future amendments to the Lease). No sublease shall affect or reduce any of the obligations

of Lessee hereunder, and all such obligations shall continue in full force and effect as obligations

of a principal and not as obligations of a guarantor, as if no sublease had been made. No sublease

shall impose any additional obligations on Lessor under the Lease;



(d) Lessee shall, within ten (10) days after the execution and delivery of any

sublease, deliver a full and complete duplicate copy thereof to Lessor. Failure of Lessee to provide

an executed copy shall not constitute an Event of Default in itself and shall be subject to all notice

and cure periods provided in the Lease, and, upon Lessor’s request a copy shall be promptly

provided by Lessee;



(e) | ; As security for performance of its obligations under the Lease, Lessee

hereby collaterally assigns to Lessor all right, title and interest of Lessee in and to all subleases

now or hereafter in effect entered into for any part or all of the Premises and any and all extensions,

modifications and renewals thereof and all rents, issues and profits therefrom. Provided no Event

of Default has occurred, Lessee shall be entitled to all rents, issues and profits from such sublease,

subject to subparagraph 9.06(g) below.



(f) Lessor shall have no obligation to recognize any or to agree to not disturb

any subtenant of Lessee upon any Event of Default of Lessee under the Lease, unless Lessor shall

agree to do so in writing by separate instrument, but Lessor shall have no obligation to do so.

Lessor’s consent to any sublease shall not be construed as or imply any agreement on Lessor’s part

to recognize any subtenant. In the event of Lessee’s surrender of the Lease or the termination of

the Lease for any reason or by any circumstance, Lessor may, at its option, either terminate any or

all subtenancies or succeed to the interest of Lessee as sublandlord thereunder (except to the extent

that Lessor has entered into a non-disturbance agreement with a subtenant). During the time that

any Event of Default has occurred hereunder, whether or not Lessor has had a receiver of rents

appointed for the Premises, Lessor (or a receiver on behalf of Lessor) may collect from each

subtenant all rent payable by such subtenant pursuant to its Sublease and apply it toward Lessee’s

obligations under the Lease. ANY SUBTENANT OF THE PREMISES IS HEREBY PROVIDED

WITH NOTICE THAT SUBTENANT SHALL BE REQUIRED TO PAY ALL SUBLEASE

RENT DIRECTLY TO LESSOR (OR TO A RECEIVER ON BEHALF OF LESSOR) UPON

RECEIPT OF NOTICE FROM LESSOR OR FROM SUCH RECEIVER ON BEHALF OF

LESSOR THAT AN EVENT OF DEFAULT SHALL HAVE OCCURRED UNDER THIS

LEASE.



(g) Ifthe subtenant is engaged in the business of constructing or operating of

all or substantially all of the Water Island Hotel and Marina (but expressly excepting any

management agreements, franchise agreements, “manchise” agreements, community owner

associations, home owner associations, and the like), Lessee shall pay over to Lessor, as Additional



_ Rent, a sum equal to 15% of the gross amounts payable to Lessee (or to any affiliate of Lessee);and



(h) Ifthe subtenant is wholly owned by Lessee or is engaged in the business of

owning or operating a commercial venture (other than the. Water Island Hotel and Marina) on or

originating from the Premises in support of the operation of the Water Island Hotel and Marina,

including (but not limited to) one or more of the restaurants, marina, beach bar, retail use, general

office use, watersports activities, tourist excursions or the like, then Lessee shall not be required

to pay over to Lessor any part of the subleasing gross income from any such venture.



(i) All Additional Rent payable under this paragraph 9.06 shall be paid over to

Lessor on the next day that a payment of Base Rent is due after such Additional Rent is due from



the subtenant. A sublease of any portion of the Premises without Lessor’s consent shall be

considered a “Transfer” hereunder.”



4. FINANCING AND MISCELLANEOUS AMENDMENTS



4.1 The last sentence of Section 4.08 of the Original Lease (“Excavation and

Sorting”) is deleted qnd replaced with the following: “Lessee shall not by reason of any such

excavation or work, fave any claim against Lessor for damages or indemnity or for suspension,

diminution, abatement or reduction of rent under this Lease, except as in Section 3.02 above.”



4.2 [Intentionally Omitted].

4,3 [Intentionally Omitted].



44 Section 9.04 of the Original Lease is amended to add a new subsection (c)

that reads as follows: 4



“After the occurrence and during the continuation of any Event of Default by

Lessee, for the reliance of Lessor or any prospective mortgagee or purchaser of all

or any part of the Lessor’s interest in the Premises, within twenty (20) days after

Lessor’s request, Lessee shall deliver to Lessor: (i) complete financial statements

of the Lessee including a balance sheet, profit and loss statement, statement of

changes in financial condition and all other related schedules for the fiscal period

then ended (including interim periods following the end of the last fiscal year for

which annual statements are available); (ii) income statements for the business at

the Premises reflecting operations at the Premises and (iii) such other information

relating to the operation of the Premises as may be reasonably requested by Lessor,

including, without limitation, franchise agreements, management agreements,

market reports and STAR reports. All such financial statements shall be prepared

in accordance with generally accepted accounting principles in the United States of

America, consistently applied (“GAAP”), and shall be certified to be accurate and

complete by an officer or director of Lessee. Lessee understands that Lessor will

rely upon such financial statements and Lessee represents that such reliance is

reasonable. In the event that Lessee’s financial statements ordinarily are

consolidated with other business for financial statements purposes, such financial

statements shall be prepared on a consolidated basis. The financial statements

delivered to Lessor need not be audited, but Lessee shall deliver to Lessor copies

of any audited financial statements of the Lessee which may be prepared, promptly

after they are available. If an audited financial statement has not been prepared,

Lessee shall provide Lessor with an unaudited financial statement and/or such other

information, the type and form of which are acceptable to Lessor in Lessor’s

reasonable discretion, that fairly reflects the financial condition of Lessee and its

operations at the Premises.



4.5 Section 9.05 of the Original Lease is amended to add the following at the

end of the paragraph:



“As used herein, the term “transfer” as used above shall include any assignment,

transfer, or conveyance, pledge, mortgage or grant of security interest: (a) by

Lessee, whether voluntary or involuntary, whether by operation of law (for

example, by merger) or otherwise, of any part or all of the Lease, or of any part or

all of the leasehold estate created by the Lease, or any interest herein, or (b) of any

direct or indirect ownership, control, voting, management or other beneficial

interest in lessee, whether voluntary or inyoluntary, whether by operation of law

(for example, by merger or consolidation) or otherwise (hereinafter, a ““Transfer’).

Furthermore , the term “Transfer” shall also include: (aa) if Lessee is a partnership,

the withdrawal or change, voluntary, involuntary or by operation of law, of a

majority of the partners, or a transfer of a majority of partnership interests, within

a twelve (12) month period, or the dissolution of the partnership; (bb) if Lessee is

a closely held corporation (i.e. whose stock is not publicly held and not traded

through an exchange or over the counter) or a limited liability company, the

dissolution, merger, consolidation, division, liquidation or other reorganization of

Lessee, or within a twelve.(12) month period (i) the sale or other transfer of more

than an aggregate of 50%.of the voting securities or membership interest of Lessee

(other than to immediate family members by reason of gift or death) or (ii) the sale,

mortgage, hypothecation or pledge of more than an aggregate of 50% of Lessee’s

net assets; and (cc) any change by Lessee in the form of its legal organization under

applicable Legal Requirements (such as, for example, a change from a general

partnership to a limited partnership or from a corporation to a limited liability

company). Subject to Section 9.06 and Article 10 below, no Transfer shall occur

without the prior written consent of Lessor, which shall not be unreasonably

withheld. In determining whether to grant its consent to any Transfer, Lessor may

consider such matters as the experience and financial strength of any assignee, the

assumption by any assignee of all of Lessee’s obligations hereunder by

undertakings enforceable by Lessor, and the transfer to or procurement by the

proposed assignee of all necessary licenses and franchises in order to continue

operating the Premises for the purposes herein provided. Lessee shall provide

Lessor with at least thirty (30) days prior written notice of such proposed Transfer

accompanied by information about the proposed assignee (including financial

information of the proposed assignee), and provided further that at the time of such

Transfer no Event of Default has occurred and be continuing. At the time of any

Transfer which is approved in writing by Lessor, the assignee shall assume all of

the obligations of Lessee under the Lease pursuant to a written assumption

agreement in commercially reasonable form and substance. Any such Transfer

shall not relieve Lessee of its obligations respecting the Lease unless otherwise

expressly agreed to in writing by Lessor. Any Transfer in violation of the terms of

the Lease shall be voidable at the sole option of Lessor. Any consent to any

Transfer shall not be deemed to be a consent to any subsequent Transfer.”



10



OW,



j



————

4.6 Section 10.01(a) of the Original Lease is deleted and replaced with the

following:



“Lessee shall have the right, from time to time and at any time, in whole or in part,

subject to the prior consent of Lessor, which consent shall not be unreasonably

withheld or delayed, to hypothecate,- mortgage, pledge or alienate the Leasehold

Assets (a “Leasehold Mortgage”). Lessee shall provide a fifteen (15) day notice to

Lessor prior to the closing of any loan or other transaction in connection with which

such interest is given, identifying the name and address of the Parties obtaining an

interest in Legsee’s leasehold (the “Leasehold Mortgagee”). “Leasehold Assets”

includes Lessee’s leasehold interest in the Premises and the rights granted to Lessee

under this Lease, the Improvements and any other personal property of the

Leasehold Mortgagee on the Premises provided that in no event whatsoever shall

Lessee have the right to encumber Lessor’s fee simple interest in the Premises.”



4.7 The following phrase is added at the end of Section 10.01(c) of the Original

Lease: “...provided such default is not a failure to pay any Base Rent and any Additional Rents,

during which time Lessor shall not terminate the Lease, provided further that such Leasehold

Mortgagee shall have commenced and continues to ee prosecute such cure within said sixty

(60) day period.”



4.8 A new subsection 10.01(d) is added of the Original Lease as follows, the

former subsection 10.01(d) of the Original Lease is renumbered as subsection 10.01(e), and the

subsections that follow are appropriately renumbered:



“Leasehold Mortgagee shall have the right, subject to the provisions of this Lease

(i) upon written notice to Lessor to assign its Leasehold Mortgage to another third

party lender, (ii) to enforce its lien and acquire title to the leasehold estate under

this Lease by any lawful means; (iii) to take possession of and operate the Premises

and to perform all obligations to be performed by Lessee under this Lease, or to

cause a receiver to be appointed to do so; and (iv) to acquire the Lessee’s leasehold

interest by foreclosure or by an assignment in lieu of foreclosure and thereafter to

assign or transfer the Leasehold Assets to a third party, provided that such third

party expressly agrees in writing to assume and comply with all obligations

imposed on Lessee under this Lease, and provided further that Leasehold

Mortgagee shall notify Lessor of any such acquisition and/or assignment. Lessor’s

consent shall not be required for any of the actions described in (i) through (iv) of

this clause (d). Further, if any of the actions described in (i) through (iv) of this

clause (d) causes the Lessee’s leasehold estate to be transferred, at the time of the

acquisition of the Lessee’s leasehold estate by Leasehold Mortgagee or any other

third party Person who acquires the interests from or on behalf of Leasehold

Mortgagee, this Lease shall remain in full force and effect.”



4.9 Subsection 10.01(e)(formerly (d) and renumbered per section 4.8 above) of

the Original Lease is deleted and replaced with the following:



cM



11

“In case of the termination of this Lease by reason of the happening of an Event of

Default or otherwise, the Lessor shall give notice thereof to any Leasehold

Mortgagee who shall have notified the Lessee of its name and address pursuant to

Section 11.01, which notice shall be sent by personal delivery or by registered or

certified mail or overnight courier service to such Leasehold Mortgagee at the

address last furnished to the Lessor pursuant to Section 11.01. If, within ninety (90)

days after the mailing of such notice, such Leasehold Mortgagee shall notify the

Lessor that such Leasehold Mortgagee desires to enter into a lease of the Premises

with the Lessor, the Lessor shall join with the Leasehold Mortgagee, or its nominee,

in executing and delivering a new lease of the Premises to such Leasehold

Mortgagee, or its nominee, for the remainder of the Term, at the Annual Rent and

upon the terms, covenants and conditions contained in this Lease. The rights of the

Leasehold Mortgagee pursuant to this clause (e)-shall survive any termination of

this Lease.”



4.10 Anew subsection 10.01(h) is added as follows:



“Any Leasehold Mortgage shall be subordinated to this Lease (unless Lessor,

Lessee, and Lessee’s lender have expressly agreed and executed a subordination,

non-disturbance and attornment agreement in form and substance acceptable to

Lessor in its reasonable discretion) and shall not affect or encumber Lessor’s fee

interest in the Premises or create any security interest or rights of the Leasehold

Mortgagee in Lessor’s fee interest in the Premises, other than as a leasehold

mortgagee of Lessee’s interest in the Lease. Upon the request of Lessee, Lessor will

execute and deliver to Lessee such customary instruments and/or documents which

may be reasonably required to be executed by the Leasehold Mortgagee in order to

facilitate the provisions of this Section 10 and to cooperate and/or participate with

Lessee, to the extent reasonably required by Lessee, provided that all reasonable

out-of-pocket costs incurred by Lessor in connection therewith are paid by Lessee

and Lessor approves any and all documentation to be signed by Lessor (such

approval not to be unreasonably withheld).”



4.11 Section 11.01 of the Original Lease shall be amended to replace the Lessee

notice address with the following:



LESSEE: Steven Miller

Water Island Development Company, LLC

c/o Dudley Newman Feuerzeig, LLP

Attn: Alex M. Moskowitz, Esq.

1000 Frederiksberg Gade

St. Thomas, USVI 00802



4.12 Section 11.02 of the Original Lease shall be amended to insert one hundred

eighty (180) days in place of ninety (90) days.



4.13. At Section 11.17 of the Original Lease, a new clause (e) is added

immediately following clause (d) as follows:



aw,



12

and (e) further in the case of a request by Lessee or Leasehold Mortgagee in

connection with a financing, (i) that Lessor has consented to the Leasehold

Mortgage to be executed in connection with such financing, (ii) that Lessor has

acknowledged receipt of the name and address of Leasehold Mortgagee, and (iii)

that to Lessor’s actual knowledge, Leasehold Mortgagee may have the rights and

benefits of a Leasehold Mortgagee under Article 10 and this Section 11.17.



4.14 The following sentence is added immediately following the second sentence

of Section 14.01 of the Original Lease:



Prior to any environmental audit, Lessor agrees to provide to Lessee all known

material dogitments in its actual possession and control relating to the operations at

the Premises and the environmental invéstigation, remediation and mitigation

efforts undertaken to address any hazardous materials or contaminant by or under

Lessor, including any written notices from any other Governmental Authority, to

the extent permitted by Legal Requirements.



55 Submerged Lands.



5.1 As provided in Section 1.3 hereinabove, the Premises is intended to be used

in conjunction with the submerged lands more particularly and generally described on Exhibit A

(the “Submerged Lands”), and Lessor will use reasonable good faith efforts to work with Lessee

to: (a) facilitate contact to secure a submerged land lease from DPNR; and (b) advance timely

permitting efforts with the Territory’s Coastal Zone Management (“CZM”), each of the foregoing

for Lessee’s use of the Submerged Lands in conjunction with this Lease as part of the Water Island

Hotel and Marina, subject to such granting by DPNR and as required by CZM and the U.S. Army

Corps of Engineers and any other applicable Legal Requirements. Development of the Submerged

Lands shall remain subject to all Legal Requirements, including, without limitation, requirements

to obtain Coastal Zone Management Act (“CZM Act”) and U.S. Army Corps of Engineers permits.

Development of the Submerged Lands for purposes consistent with the Lease and this Amendment

is deemed under the Lease to be consistent with the goals and purposes of the Coastal Zone

Management Act and in particular 12 V.I.C. § 903.



5.2 _In support of the Water Island Hotel and Marina, the Parties agree Lessee

may develop Flamingo Bay inner and outer harbor marina and Druif Bay and Flamingo Bay

mooring fields, substantially in accordance with the preliminary Submerged Lands Plan attached



hereto as Exhibit A, subject to DPNR approvals, grants, and in accordance with and subject to all

Legal Requirements.



6. Resort Development.



6.1 Infrastructure. The Lessee will construct, own, maintain and operate (during

the term of the Lease) the infrastructure required for the Water Island Hotel and Marina and the

residential development on and serving the Premises including roads, power plant (micro-grid),

underground utilities, a wastewater treatment plant, reverse osmosis plant, and solid waste disposal

facilities pursuant to the Plans (the “Infrastructure”). The Lessor agrees to cooperate with Lessee’s

efforts to obtain the issuance of permits that may be required for installation and construction of



13 a

the Infrastructure. To the extent that it may be necessary to construct portions of the Infrastructure

on portions of the GVI Tract not covered by the Lease, consistent with Section 7.02 of the Lease,

the Lessor agrees to provide non-exclusive easements to the extent necessary for such

Infrastructure to occupy said areas by the Lessee on the Remaining Property (as defined in Section

7.02 of the Original Lease), at no additional fee and at no cost to Lessee and Lessor, for the

construction of such Infrastructure, consistent with the terms of the Lease, however, that such

easements shall be located in a manner so as to cause the least possible adverse impact on the

Remaining Property. :



6.1.1 For the purposes of the Lease, the Lessee shall not be considered a

“public utility” (as that term is defined in 30 VIC§1) by reason of its ownership of the

Infrastructure or it? sale of water, electricity and other utilities produced thereby. Lessee shall

contract, in its own name, for and pay when due all charges for the connection and use of water,

power, gas, electricity, telephone, garbage collection, data, cable, internet, sewer use, and other

utility services supplied to the Premises during the Term. Lessor shall be responsible for

maintenance, repair, replacement, and installation of all on Premises utilities and lines serving the

Premises to maintain the same in compliance with all Legal Requirements. Lessee shall not be

responsible for maintenance, repair, replacement, and installation of any utility lines that are not

serving the Premises. Under no circumstances shall Lessor be responsible for any interruption,

cessation, or termination of any utility service (whether permanent or temporary), nor shall Base

Rent or any Additional Rent be abated or reduced in any manner whatsoever, even if any such

utility services become unavailable to the Premises. Lessee shall repave, grade, and maintain the

roads in and around the Premises to and from the public dock. Lessee may, and is encouraged to,

allow the residents of Water Island to connect to and receive any utility service it is providing to

the Premises including: electricity; water; wastewater treatment/sewage; and solid waste disposal

at a reasonable fee for said services. The Water Island residents outside the Premises are

responsible for the costs of connecting to said services upon approval by Lessee.



6.2 Emergency Services. To supplement public emergency services, Lessee

will provide private security, fire emergency response facilities and staffing, and emergency

medical transportation services for the Water Island Hotel and Marina. Lessee and the Persons it

designates to provide such services, in compliance with all Legal Requirements and best industry

practices, may qualify to have all of the protections of 27 V.LC. 55, providing limited immunity

to suit in cases of voluntarily rendered emergency assistance. Notwithstanding the foregoing, for

the avoidance of doubt, Lessor hereby reserves, and Lessee acknowledges and agrees, that GVI

Water Island Administrator, Virgin Islands Police Department, and Virgin Islands Fire and

Emergency Medical Services shall have designated space and improvements to service residents

on the GVI Tract, which space will be contemplated in the Plan and developed and constructed at

Lessee’s cost.



6.3. As provided in Section 1.4 hereinabove, at one or more sites to be

determined by Lessee, Lessee may seek to obtain authorization and all necessary permits or

approvals to construct and maintain a heliport in St. Thomas in order to facilitate convenient travel

between the Premises, St. Thomas, St. John, and St. Croix for resort guests and residents, as well

as to provide for fast evacuation of medical emergency patients. Lessor will use reasonable efforts

to cooperate with and assist Lessee in Lessee’s efforts to locate and pursuing authorization of use

of any such site, at no cost to Lessor. Notwithstanding the foregoing, for the avoidance of doubt,



14 ANN

Lessor hereby reserves, and Lessee acknowledges and agrees, that GVI Water Island

Administrator, Virgin Islands Police Department, Virgin Islands Fire and Emergency Medical

Services, and Virgin Islands National Guard shall have access to such heliport to service residents

on the GVI Tract for emergency services and disaster relief efforts.



6.4 Development Guidelines. The Parties agree to jointly compose, approve,

and promulgate specific development guidelines for Water Island Hotel and Marina in compliance

with all Legal Requirements (the “Development Guidelines”) consistent with the Comprehensive

Plan, providing rules and regulations that account for Water Island Hotel and Marina’s small size,

limited commercial facilities, rugged terrain and environmental sensitivity. This may include

limited road development on or to access the Premises, with provisions for golf cart type vehicle

use in lieu of standard vehicles where practical, with the corresponding reduction in width of road

and therefore a reduced need for cuts and fills and an enhanced environmental profile (but, for the

avoidance of doubt, except as may be necessary for emergency vehicles and other like access).

Upon completion of the Development Guidelines and approval of the Parties, the Development

Guidelines shall be attached to and become a part of the Lease. Oversight and enforcement of the

Development Guidelines will be as provided in the Development Guidelines. For the avoidance of

doubt, the Development Guidelines shall be subject to all Legal Requirements and any

Governmental Authority having jurisdiction over the Premises and Remaining Property.



6.5 Economic Development Incentives and Obligations



6.5.1 Economic Development Benefits. Lessor will use reasonable good

faith efforts to assist Lessee in its efforts to identify and secure the tax exemptions, benefits,

guarantees and financing assistance specified under the Virgin Islands Industrial Development

Program, Title 29 Virgin Islands Code §§ 701-746 (the “EDC Program”), the Virgin Islands Tax

Increment Financing Act, Title 29 Virgin Islands Code, Chapter 22 (the “VI TIF Act”) and the

Virgin Islands Hotel Development Program, Title 29 Virgin Islands Code, Chapter 23 (the “VI

HD Program” and, together with the EDC Program and the VI TIF Act, collectively, the “VI

Development Programs”), for the construction and operation of the Water Island Hotel and Marina.

Lessor acknowledges that Lessee has represented that Lessee’s ability to develop and construct the

Water Island Hotel and Marina is contingent upon Lessee obtaining the benefit of the VI

Development Programs. Notwithstanding Lessee’s prior election to waive the contingency set

forth in Section 2.01(b) of the Lease for the approval by the Department of the Interior of the

purchase of the Additional Resort Land, such contingency is hereby reinstated and shall be

applicable to the entire Premises, and, as of the date hereof, such contingency shall also include

Lessee obtaining the benefit of, and receiving certification for, the VI Development Programs from

the appropriate authorities for use by the Lessee in conjunction with the Premises, in form and

substance to Lessee’s reasonable satisfaction.



6.5.2 -Period of Benefits. Lessee intends to seek to enjoy the tax

exemptions and benefits undér the EDC Program for a period of twenty (20) years.



6.5.3 Extension of Benefits. Lessee intends to apply to the EDC for an

extension of benefits in accordance with applicable provisions of the EDC Program.



,

: os

6.5.4 Conditions for the Receipt of Benefits. Lessee shall comply in a

reasonable and substantive manner with: (i) all applicable provisions of the VI Development

Programs, including the rules and regulations promulgated thereunder, relating to the employment

and training of residents, non-discrimination, and the local procurement of goods and services; and

(ii) all Legal Requirements.



6.5.5 Notwithstanding Lessee’s receipt of certain benefits under the VI

Development Program, Lessee may elect to forego certain benefits in order to support tax

increment financing or related financing for portions of the construction and operation of the Water

Island Hotel and Marina.



6.64 Improvement Approval & Development. As a part of the consideration for

the Lease, contingent upon Lessee’s receipt of the Resort Approvals (as defined below), Lessee

shall achieve Substantial Completion-of the Improvements. Pursuant to the Comprehensive Plan,

and as an affirmative covenant of the Lease, subject to obtaining the Plans (as defined below) and

Resort Approvals described herein for the Improvements, Lessee shall invest at least

$300,000,000.00 in developing and constructing the Improvements.



6.7 Lessor Consent: All Improvements: (i) are subject to the prior written

consent obtained in each and every case from the Commissioner, which consent shall not be

unreasonably withheld or delayed (and, although a condition precedent to Lessee’s right to

commence the Improvements, is separate and distinct from any other Governmental Authority

with jurisdiction over any of the applicable Resort Approvals, and is in addition to whatever other

licenses or permits are deemed necessary by the applicable Governmental Authority with

jurisdictional purview over the Premises and/or the Improvements); and (ii) shall be undertaken

and completed pursuant to the ‘terms and conditions of this Lease. The consent of the

Commissioner (although a condition precedent to Lessee’s right to commence the Improvements)

shall not be deemed to affect any applicable Governmental Authority’s review, processing or

response to any application or submission by Lessee. Promptly after the Effective Date, Lessee, at

its sole cost and expense and in accordance with this Section 6 and Article 4 of the Lease, shall

use all commercially reasonable efforts to diligently and continuously prosecute all Resort

Approvals in good faith until obtained, as soon as possible within the applicable 24-month period

after the Effective Date as referenced in Section 4.03 of the Lease (the “Permitting Period”).

Notwithstanding the foregoing and Section 4.03 of the Original Lease, to the extent the Resort

Approvals are not timely obtained within the Permitting Period to the extent directly caused by

any Governmental Authority’s failure to timely approve, deny, or otherwise respond to a Lessee

submittal, application, or submission in connection with the Resort Approvals within the

applicable period proscribed under any applicable Legal Requirements, then such delay shall be

treated as an Unavoidable Delay under Section 11.02 of the Original Lease and any such

Unavoidable Delay will not be subject to the ninety (90) days maximum limit provided therein.



6.7.1. Lessor Review.

(a) Plans Review.



(i) Plans. Within ninety (90) days after the Effective

Date (“Plans Delivery Date”), Lessee shall deliver to Lessor: (a) a comprehensive development



=



16



Pai

plan, prepared by Lessee’s planner, architect, and/or engineer, containing detailed master planning,

and related specifications, elevations, building renderings, and site layouts, accurately reflecting

the Improvements boundaries and improvements that Lessee intends to make to or upon the

Premises substantially consistent with the Comprehensive Plan to facilitate development and

completion of the Improvements (subject to modifications and extensions for re-design resulting

from Governmental Authority agency review and applicable Legal Requirements); and (b) a final

development schedule detailing Lessee’s anticipated development and construction timeline from

the expiration of the Final Plans Delivery Date through the expiration of the Construction Period

identifying interim milestones/benchmarks at least every ninety (90) days during the Construction

Period and including each of the milestones set forth below in Section 7(b) herein (the “Plans”).



b (i) Lessor Plan Approval. Lessor shall have thirty (30) days from

receipt of each of Lessee’s proposed Preliminary’Plans and Plans, respectively, to approve or

disapprove the same to confirm such are substantially consistent with the Comprehensive Plan

(with any disapproval containing a reasonably detailed explanation thereof). Upon any disapproval

by Lessor, Lessor and Lessee shall meet as soon as possible to attempt in good faith to reach

agreement on such Preliminary Plans or Plans, as applicable.



(b) Application Review. Within the earlier of: (i) one hundred eighty (180)

days after the Effective Date (“Application Delivery Date”); or (ii) at least twenty (20) days prior

to any submission to the applicable Governmental Authority, Lessee shall deliver to Lessor

complete copies of all applications and/or submissions that Lessee intends to submit during the

applicable Permitting Period for any and all Resort Approvals. Lessor shall have twenty (20) days

from receipt thereof to provide to Lessee comments on the applicable application or submission.

Lessor’s comments or lack of comments shall not be deemed to affect any applicable

Governmental Authority’s review, processing or response to any application or submission by

Lessee. The development schedule included within the Plans shall identify the interim

milestones/benchmarks referenced in Section 7(b) below.



6.8 Permitting Submittal Period: As promptly as possible, but in no event later

than sixty (60) days following the Application Delivery Date (each a “Permitting Submittal

Period”), Lessee shall submit to any Governmental Authority having jurisdiction to issue permits

required for the applicable Improvements all completed applications, submissions, plans,

drawings, specifications, and other documents or information required to obtain all of the Resort

Approvals from any such Governmental Authority within the applicable Permitting Period.

“Resort Approvals” shall mean and refer to any and all final non-appealable approvals, consents,

licenses, certifications, permits, any and all land use entitlements (including, without limitation,

those required from any Governmental Authority with jurisdictional purview over the Premises

and/or the Improvements, the DPNR, including CZM permitting, the U.S. Army Corp of

Engineers, and/or the U.S. Department of Fish and Wildlife, as applicable), all building permits

and licenses, the payment of all required utility and development fees, any permanent permits for,

without limitation, excavation, grading, erosion and sediment control, other site work for the

Premises, the transportation of equipment and materials to and from the Premises, and storage of

the same upon the Premises, in connection with either the development and construction of the

Improvements or the operation of the Improvements, and other licenses and permits which may be

required for the commencement of construction of the Improvements as provided under Section

4.03 of the Original Lease for the Improvements. Thereafter, Lessee shall promptly provide to



ou



17

Lessor copies of all applications and/or submissions submitted to each applicable Governmental

Authority and copies of all responses Lessee receives from such other Governmental Authority.

Lessee shall obtain the Resort Approvals at its sole cost and expense, submit completed

applications for any Resort Approvals to the applicable Governmental Authority promptly as

provided above and thereafter shall use all commercially reasonable efforts to process the

applications and diligently and continuously prosecute all Resort Approvals in good faith until

obtained, as soon as possible within the Permitting Period for the Improvements. Lessee shall

keep Lessor reasonably apprised on a regular basis of the status of the processing of all such

applications and Lessee’s efforts to satisfy the Resort Approvals.



6.9 For the avoidance of doubt, to the extent the Resort Approvals are not timely

obtained within the Permitting Period to the extent directly caused by any Governmental

Authority’s failurd:to timely approve, deny, or otherwise respond to a Lessee submittal,

application, or submission in connection with the Resort Approvals within the applicable period

proscribed under any applicable Legal Requirements, then such delay shall be treated as an

Unavoidable Delay under Section 11.02 of the Original Lease and any such Unavoidable Delay

will not be subject to the ninety (90) days maximum limit provided therein.



6.10 Construction: Substantial Completion. ~ Pursuant to Section 4.04 of the

Original Lease, Lessee shall cause construction of the Improvements to be completed within sixty

(60) months of obtaining the Resort Approvals, subject to Unavoidable Delay (as provided in

Section 11.02) (the “Construction Period”). Lessee - shall commence construction of the

Improvements promptly but not later than sixty (60) days following the later of: (i) Lessee

obtaining the Resort Approvals; and (ii) Lessor’s written consent obtained from the Commissioner

as provided for in Section 6.7 herein. Lessee shall then cause construction of the Improvements to

be diligently pursued without unnecessary. interruption or delay (except for force majeure

exceptions specified herein at Section 11.02 of the Original Lease), and shall cause the

Improvements to achieve Substantial Completion (as defined below) and be ready for occupancy

not later than the expiration of the applicable Construction Period. Any material deviation from

the Plans or the Improvements, including, without limitation, changes to the size, height, location

or configuration of any Improvements, shall require Lessor’s prior written approval (not to be

unreasonably withheld, conditioned, or delayed), and, further, expressly excepting from such

Lessor approval non-material modifications for re-design resulting from Governmental Authority

agency review and applicable Legal Requirements.



The Performance Bond.



Within sixty (60) days of the date the Legislature approves this Amendment, Lessee

shall obtain and deliver to Lessor a performance bond in the amount of Three

Million Dollars ($3,000,000.00) issued by a financial institution approved by

Lessor, such performance bond to be in form and substance to Lessor’s satisfaction

(the “Performance Bond”).



(a) | The Performance Bond shall secure Lessee’s performance under the of pre-

development and early-stage development obligations, such as obtaining

the Resort Approvals, in accordance with the terms and conditions of the

Lease.



5"



18

(b) The Performance Bond may be reduced in phases upon achievement of the

following milestones, as determined by Lessor, pursuant to the Plans (and

the development schedule therein):



* Milestone 1 — Obtain Resort Approvals.



* Milestone 2 — Construction Commencement (Mobilization and Start of

Construction (including infrastructure and improvements) of

Improvements: Performance Bond may be reduced to $2,000,000.00, as

determined by Lessor.



bt * Milestone 3 -— Substantial Completion of the Improvements:

\: Performance Bond may be reduced to $1,000,000.00, as determined by

Lessor. ;



(c) The Performance Bond shall remain in effect and may not be reduced below

$1,000,000.00 until approval of the Plans in accordance with the terms and

conditions of the Lease. .



8. Representations and Warranties: The representations and warranties of Lessee

contained in this Section 8 are being made to induce Lessor to enter into the Amendment, and

Lessor has relied, and will continue to rely, upon such representations and warranties during the

Term. A breach of the following representations and warranties shall constitute an Event of

Default. Lessee represents and warrants to Lessor, as follows:



8.1 Lessee has been duly organized or formed, is validly existing and in good

standing under the laws of the Territory and is qualified to do business in the Territory. All

necessary action has been taken to authorize the execution, delivery and performance by Lessee

of the Lease and of the other documents, instruments and agreements provided for herein. Lessee

is not, and if Lessee is a “disregarded entity,” the owner of such disregarded entity is not, a

“nonresident alien,” “foreign corporation,” “foreign partnership,” “foreign trust,” “foreign estate,”

or any other “person” that is not a “United States Person” as those terms are defined in the Code

and the regulations promulgated thereunder. The person who has executed this Amendment on

behalf of Lessee is duly authorized to do so.



8.2 The Lease constitutes the legal, valid and binding obligation of Lessor and

Lessee, enforceable against Lessee in accordance with its terms.



8.3. There are no suits, actions, proceedings or investigations pending, or to

Lessee’s actual knowledge, threatened against or involving Lessee or the Premises before any

arbitrator or Governmental Authority, the resolution of which could have a material adverse effect

on Lessee or Lessee’s business.



8.4 To Lessee’s and Lessor’s actual knowledge, Lessee is not in default under



any document, instrument or agreement to which Lessee is.a party that affects the Premises. The

authorization, execution, delivery and performance of this Amendment and the documents,



es e\\M\

2 eeeerese tS eee



instruments and agreements provided for herein will not result in any breach of or default under

any document, instrument or agreement to which Lessee is a party that affects the Premises.



8.5 Neither Lessee, nor any individual or entity owning directly or indirectly

any interest in Lessee, is an individual or entity whose property or interests are subject to being

blocked under any of the OFAC Laws or is otherwise in violation of any of the OFAC Laws;

provided, however, that the representation contained in this sentence shall not apply to any person

to the extent such person’s interest is in or through a U.S. Publicly Traded Entity.



8.6 There is no contemplated, pending or threatened Insolvency Event or

similar proceedings, whether voluntary or involuntary, affecting Lessee.



9, Miscellaneous



9.1 Non-Liability. Section 6.04 of the Original Lease is hereby deleted and

replaced to read as follows:



“Section 6.04 Lessor shall not be responsible or liable to, Lessee for any Losses

that may be occasioned by the acts or omissions of persons occupying or using any

property or area (including, without limitation, bodies of water) adjacent to,

adjoining or nearby the Premises (including, without limitation, all utility pipes,

lines or conduits serving the Premises including those which run underwater, if

any), or any part thereof, or for any loss or damage resulting to Lessee or its

Premises from water, gas, steam, fire or the bursting, stoppage, or leaking of pipes,

provided such loss or damage is not directly and proximately caused by the

negligence of Lessor or its agents, contractors, or employees, and to the extent

permitted by law.



It is the express intention of the Parties to the Lease that neither Lessor, nor any of

Lessor Indemnified Parties shall have any personal liability for any obligation, debt,

liability, cost or expense arising from or incurred in connection with the Premises

or the Lease, the liability of Lessor and the Lessor Indemnified Parties under and

with respect to the Lease shall be limited to the interest of Lessor in the Premises.

In no event shall Lessee or anyone claiming by, through or under Lessee, seek to

recover against Lessor or any Lessor Indemnified Parties personally, and no assets

of Lessor or any Lessor Indemnified Party, except Lessor’s interest in the Premises,

shall be subject to attachment or execution of judgments. Under no circumstances

may Lessee seek or be entitled to recover any special, consequential, punitive,

speculative or indirect damages, all of which Lessee expressly and specifically

waives, from Lessor for any breach by Lessor of the covenants and/or obligations

of Lessor under the Lease. Notwithstanding any other provision of the Lease to the

contrary, nothing in the Lease nor any action taken by Lessor or any of the Lessor

Indemnified Parties pursuant to this Lease, nor any document which arises out of

this Lease, shall constitute or be construed as a waiver of either the sovereign

immunity or governmental immunity of Lessor, or of its elected and appointed

officials, officers and employees in its capacity as a Governmental Authority.”



AM

9.2 Authorization. The Lease and Lessor’s obligations hereunder are expressly

subject to Title 31, Section 205 of the Virgin Islands Code, which provides, inter alia, that (a) the

Governor of the Virgin Islands shall approve all conveyances, leases or other instruments relating

to the disposition of government real estate, and (b) leases or subleases for a term exceeding one

(1) year and other dispositions specified in Section 205(c) must be approved by Act of the

Legislature. The Parties acknowledge that an Act of the Legislature will approve this Amendment

and will authorize the Commissioner to execute and deliver deeds upon the conditions set forth

therein and in this Lease, without any further act of the Legislature.



9.3 Officials Not to Benefit: Section 11.04 of the Original Lease is included

herein by this seheneares



9.4 | Agreement made in the Vitgin Islands: The laws of the Territory shall

govern the validity, performance, and enforcement of the Lease. Any dispute between the Parties

arising out of or relating to the Lease or a breach hereof must be resolved by either the Superior

Court of the Virgin Islands or any other applicable courts of competent jurisdiction, and each of

the Parties consent to the exclusive jurisdiction of such courts, agree to accept service of process

by mail, and hereby waive any jurisdictional or venue defenses, otherwise available to it.



9.5 Demise of Premises “AS-IS”. For:the avoidance of doubt, Lessee is

acquiring its leasehold interest in the Premises and shall accept possession of the Premises in its

“AS IS”, “WHERE IS”, physical condition and “WITH ALL FAULTS AND DEFECTS”, To the

fullest extent permitted by law and with the sole exception of any express representation or

warranty provided for by Lessor herein, Lessor hereby specifically disclaims any representation

or warranty, whether express, implied or statutory, whether oral or written, with respect to the

Premises, including, but not limited to those concerning: (i) the value, physical condition,

condition of title, suitability, merchantability, development potential, or fitness for a particular use

or purpose of the Premises or the Improvements; (ii) the area, shape, size, configuration, location,

capacity, square footage, acreage, dimensions or zoning of the Premises; (iii) the soil condition,

topography, geology or drainage of the Premises; (iv) the existence of any flood plain, floodway

or flood hazard area affecting the Premises; (v) any easement, right of way, reservation, condition,

covenant, or restriction benefiting, burdening or otherwise affecting the Premises; (vi) the

availability, quantity and quality of electrical power, water, natural gas, sewer and other utilities

to the Premises or the Resort or the access to the Premises by public road or otherwise; (vii) the

nature or quality of any materials, labor, workmanship, construction, design, engineering, or

composition of any improvements to the Premises, including the Improvements; (viii) the

environmental condition of the Premises; (ix) compliance by the Premises with applicable Legal

Requirements (including without limitation, compliance with all Environmental Laws,

Accessibility Laws, and any zoning law or ordinance) affecting the Premises or the Improvements;

(x) the suitability of the Premises for any and all purposes, activities and uses that Lessee may

elect (subject to the provisions of the Lease) to conduct on the Premises; or (xi) the value of the

Premises or the price at which Lessee (subject to the provisions of the Lease) might resell its

leasehold estate in the Premises. Furthermore, by executing the Lease, Lessee acknowledges the

following: (a) except for express representations and warranties of Lessor set forth in the Lease,

Lessee is not relying upon any representation and warranty of Lessor or any manager, government

official, officer, employee, representative or agent of Lessor or any other party related to or

affiliated with Lessor; (b) the Premises may contain defects unknown to Lessee and Lessor; (c)



21

immediately prior to the Effective Date, Lessee inspected the Premises and is familiar therewith;

(d) Lessee bears the sole responsibility to inspect the Premises and review all information

pertaining to the Premises; and (e) Lessee is assuming all risks of defects and violations whether

patent, latent or otherwise concealed in the Premises. Notwithstanding the foregoing “AS IS”

clauses, Lessor agrees to cooperate with the Lessee if the Parties determine that there are certain

title defects in contravention of the foregoing, or otherwise pertaining to the removal of

inapplicable tax liens against the Premises or voided or expired third party possessory interests

that are of record and set forth in Lessee’s title commitment and/or an ALTA/NSPS survey

(provided the same are not caused or permitted by Lessee), and Lessor shall use commercially

reasonable efforts to cooperate with Lessee in the removal of the same via affirmative insurance

against the disapproved item, or causing the disapproved item to be removed or released of record,

or by other means ape to the Parties.



9.6 Entire Agreement. This Amendment and the Lease constitutes the entire

agreement and understanding between the Parties with respect to the subject of this Amendment

and shall supersede all prior written and oral agreements concerning this subject matter. The Lease

may not be amended, modified or otherwise changed in any respect whatsoever except by a writing

duly executed by authorized represéntatives of the Parties. Each Party acknowledges that it has

read this Amendment, fully understands all of this Amendment’s. terms and conditions, and

executes this Amendment freely, voluntarily and with full knowledge of its significance. Each

Party to this Amendment has had the opportunity to receive the advice of counsel prior to the

execution hereof.



9.7 Counterparts. This Amendment may be executed in counterparts and by

PDF, and such counterparts together shall constitute but one original of the Amendment. Each

counterpart shall be equally admissible in evidence, and each original shall fully bind each Party

who has executed it. .



9.8 Effect of Amendment. Except as modified herein, the Lease is hereby

reinstated as of the daté hereof and remains unchanged and in full force and effect. In the event of

any inconsistency between a provision of the Original Lease and a provision of this Amendment,

the provision of this Amendment shall govern and control.



9.9 Definitions. Schedule 1 attached hereto is incorporated herein by this

reference.



9.10 Lessor Consent. If Lessee shall request Lessor’s consent or approval and

Lessor shall fail or refuse to give such consent or approval, Lessee shall in no event be entitled to

and shall not make any claim, and Lessee hereby waives any claim, for damages (nor shall Lessee

claim any damages by way of set off, counterclaim or defense against any of Lessee’s obligations

under this Lease) based upon any assertion that Lessor has unreasonably withheld, or unreasonably

conditioned or unreasonably delayed any consent or approval requested by Lessee, it being

intended that Lessee’s sole’ remedy shall be an action for specific performance or injunction

pursuant to Section 9.11 below.



9.11 Dispute Resolution. The following shall apply to any Dispute (as defined

below) arising under this Lease and/or this Amendment.

9.11.1 Mutual Discussions. If a dispute or difference of any kind

whatsoever shall arise among the Parties in connection with, relating to or arising out of this Lease

or this Amendment (each, a “Dispute”), then one of such Parties shall notify in writing the other

Party of such Dispute and describe the Dispute in sufficient detail to identify the same. The Parties

will attempt to settle such Dispute in the first instance by discussions between their respective

designated representatives and the joint decision memorialized in a mutually executed writing by

the Parties shall be binding upon the Parties. If a settlement of any such Dispute or difference is

not reached pursuant to this Section 9.11.1 within 60 days after such written notice of Dispute is

delivered, then the provisions of Section 9.11.2 hereof shall apply to such Dispute.



9.11.2 Mediation. If a settlement of any such Dispute or difference is not

reached pursuant to heotion 9.11.1, then the Parties agree to submit such Dispute to mediation in

St. Thomas U.S. Virgin Islands with the American Mediation Institute or any other accredited

mediation organization or mediator. The process for mediation shall be governed by the procedures

set forth in Rule 90 of the V.I. Rules of Civil Procedure. The fees and expenses of mediation and

the mediator shall be borne equally by the Parties.



9.11.3 Binding Dispute Resolution. If the sceitiation as required in Section

9.11.2 above does not result in a settlement of the Dispute; the Parties authorized representatives

may opt to reengage in good faith discussions and evaluations regarding all potential options for

binding dispute resolution options (including, but not limited to, litigation, arbitration in

accordance with the Commercial Rules of Arbitration of the American Arbitration Association

(“AAA”) governed by the Federal Arbitration Act (the Parties conclusively agree that the Lease

and this Amendment affect and have a nexus with interstate commerce), and any other

alternatives). The Parties shall endeavor to select the most appropriate form of binding dispute

resolution based on an evaluation of the nature of the claims, the amount in controversy, the time

and cost associated with each form of binding dispute resolution, and the Parties’ respective

interests. The Commissioner shall confer and obtain the approval of the Attorney General of the

Territory regarding the most appropriate form of binding dispute resolution. The discussions shall

take place within fifteen (15) days of the completion of mediation referenced in Section 9.11.2. In

the event the Parties are unable to mutually agree on the form of binding dispute resolution, either



Party may commence litigation in the U.S. Virgin Islands as the default form of binding dispute

resolution.



9.11.4 Continued Performance. The Parties shall continue to perform their

respective obligations under this Agreement during the existence of any Dispute under this Section

9.11 or the pendency of any mediation or arbitration.



9.20 In order to satisfy and cure the Lessor's obligations relating to transfer of

land to the Virgin Islands Housing Finance Authority and veteran housing under Acts No. 6751

and 7321, the Lessee shall,-subject to the approval of the Government of the Virgin Islands

("GVI"), elect and implement the following alternative:



In lieu of conveying property, the Lessee shall, at its sole cost and expense, construct twenty (20)



condominium units on Tract K. The development shall consist of twenty (20) two-bedroom, one-

bathroom condominium units, each containing approximately 768 square feet of living space.



23 GM

a. The Lessee shall market and offer ten (10) condominium units exclusively

for sale to eligible veterans (eligibility determined solely by Lessor) for a

period of two (2) years following the issuance of the certificate of

occupancy. The purchase price for each unit shall be $250,000. The Lessee

shall pay all applicable stamp taxes associated with the conveyance, connect

the units to the utility infrastructure constructed as part of the development,

and provide utility services to veteran purchasers consistent with the

Lessee's utility service policies.



b. The Lessee shall market and offer ten (10) condominium units exclusively



for sale to eligible middle-income Virgin Islanders (eligibility determined



4 solely by Lessor) for a period of two (2) years following the issuance of the



\' certificate of occupancy. The purchase price for each unit shall be $250,000.



The Lessee shall pay all applicable stamp taxes associated with the



conveyance, connect the units to the utility infrastructure constructed as part



of the development, and provide utility services to veteran purchasers

consistent with the Lessee's utility service policies.



The parties acknowledge that, if necessary to convey the units in fee simple, the applicable

tract or portion thereof shall be subdivided into deeded lots, and any development restrictions

affecting such conveyance shall be removed or otherwise approved by the appropriate

governmental authorities, including the U.S. Department of the Interior, if required. If the deed

restrictions required to convey fee simple title are not removed after reasonable efforts, the

Lessee’s obligations to sell the above identified condominiums shall be null and void.



If, at the expiration of the two-year exclusive marketing period, any condominium units

remain unsold or are not subject to a binding contract for purchase by an eligible veteran or middle-

income Virgin Islander, the Lessee may, upon providing written notice to the GVI, sell the

remaining units on the open market or incorporate them into its employee housing program.



Upon the Lessee's performance as set forth above and as accepted by the GVI, the veteran

housing obligations and land transfers imposed under Acts No. 6751 and 7321 shall be deemed

fully satisfied and cured.



[SIGNATURES APPEAR ON THE FOLLOWING PAGE]



Sw

IN WITNESS WHEREOF, the Parties herein have hereunto set their hands and seals on

the day and year first above written.



WITNESSES: WATER ISLAND DEVELOPMENT

COMPANY, LLC

' : Ot } Pas

Rai abo idols By: _ 7 eno hoc

(Print) Name: Steven Miller

. Title: Member

\" (Sign)

Ss Adiey NM a) eh

(Print)

(Sign)

ACKNOWLEDGEMENT



Syoke of Pla ider ss:



Distictof ST THOMAS-ST_IOHUN )

lomty: Miami ~dad-<c

Before me personally appeared STEVEN MILLER, Member of WATER ISLAND

DEVELOPMENT COMPANY, LLC, to me well known, or proved to me through satisfactory

evidence to be the individual(s) described in and who executed the foregoing instrument for the

purposes therein contained.



WIENESSiinyhandonitis.  P-adayot 23 da ss AD. 2026

N LAMA ke me . :

* coe WOEZ Notary Publi >

§ Notary Public, State of Florid tary Public _

‘At Commission HH 518212 =

My comm. expires April 18, 2028



[SIGNATURES CONTINUE ON THE FOLLOWING PAGE]



25



aM

WITNESSES:



HAGpALEDE A: Hoke ue,



(Print)



yada A: Wane



(Print)

Lan



a



“(Sign) °/



Date: +/ af 2024



Date: fia Io fie.



1 lf



Date:



GOVERNMENT OF THE U.S. VIRGIN

ISLANDS



By: LZ te?

Name: Lisa M Alejandro



Title: Commissioner, Department of Property

and Procurement



Date: LE Aypedé



APPROVED AS TO LEGAL

SUFFICIENCY

Gordon C. Rhea, Esq., Attorney General



By: a ;



sistant Attorney General



APPROVED

By: CE

Honorable Atbert Bryav Jr. “S

Governor of the U.S. Virgin Islands

APPROVED

By:

Milton E. Potter

President

36" Legislature of the U.S. Virgin

Islands



26

schedule - 1

SCHEDULE 1

Definitions



As used in this Amendment and the Lease, the following terms shall have the following

meanings:



“Accessibility Laws” means any applicable provisions of the Architectural Barriers Act of 1968,

the Rehabilitation Act of 1973, the Americans with Disabilities Act of 1990, 42 U.S.C. Section

12101 et seq., as amended, the accessibility code(s), if any, of the U.S. Virgin Islands and all

regulations and guidelines promulgated thereunder.



“Acquisition Option” has the meaning set forth in Section 2.2 of this Amendment.

“Acquisition Sub-Option” has the meaning set forth in Section 2.2.1 of this Amendment.



“Additional Rent” means all amounts payable to Lessor under the Lease (other than Base Rent),

which shall be immediately due and payable except as otherwise expressly provided in the Lease.



“Approving Act” has the meaning set forth in the Recitals of this Amendment.

“Commissioner” has the meaning set forth in the Recitals of this Amendment.

“Governor” means the then Governor of the Territory.



“Environmental Laws” means any law, statute, code, regulation, rule, ordinance, order, policy

directive, judgment or decree of the Territory, and any federal and/or local authority (or judicial

or administrative body) having authority over the Premises or any portion thereof or its use

(including requirements under permits, licenses, consents and/or approvals), relating or pertaining

to pollution or protection of human health or the environment (including those that relate to

emissions, discharges, releases or threatened releases, or the generation, manufacturing,

processing, distribution, use, treatment, storage, disposal, transport, or handling of Hazardous

Materials), including, without limitation: (a) the Federal Water Pollution Control Act (33 U.S.C.

§1317 et seq.) as amended; (b) the Federal Resource Conservation and Recovery Act (42 U.S.C.

§6901 et seq.) as amended; (c) the Comprehensive Environmental Response Compensation and

Liability Act of 1980 (42 U.S.C. §9601 et seq.) as amended; (d) the Toxic Substance Control Act

(15 U.S.C. §2601 et seq.), as amended; (e) the Clean Air Act (42 U.S. §7401 et seq.), as amended,

(f) the Hazardous Materials Transportation Act, 49 U.S.C. §1801, et seq., as amended; (g) the

statutes in Title 12 of the Virgin Islands Code; and (h) regulations adopted and publications

promulgated pursuant to the aforesaid laws.



“Governmental Authority” means any governmental authority, agency, department, commission,

bureau, board, instrumentality, court or quasi-governmental authority of the United States, the

Territory, or any political subdivision thereof with authority to adopt, modify, amend, interpret,

give effect to, or enforce any federal, Territory and local laws, statutes, ordinances, rules or

regulations, including common law, or to issue court orders.



o\n\



26

“Hazardous Materials” means (a) oil, petroleum products (including any and all constituents and

additives), flammable substances, explosives, radioactive materials, hazardous wastes or

substances, toxic wastes or substances or any other materials, contaminants or pollutants, in the

case of any of the foregoing, which are defined as or included in the definition of “hazardous

substances”, “hazardous wastes”, “hazardous materials”, “toxic substances”, “contaminants”,

“pollutants”, “regulated substances” or words of similar import under any applicable

Environmental Laws; (b) any other chemical, material or substance, exposure to which is

prohibited, limited or regulated by any Environmental Law; and (c) any other substances that pose

an environmental hazard.



“Insolvency Event” means (a) a Person’s (i) failure to generally pay its debts as such debts become

due; (ii) admitting in writing its inability to pay its debts generally as they become due; or (iii)

making a general assignment for the benefit of creditors; or (b) any proceeding being instituted by

or against any Person (i) seeking to adjudicate it bankrupt or insolvent; (ii) seeking liquidation,

dissolution, winding up, reorganization, arrangement, adjustment, protection, relief, or

composition of it or its debts under any Law relating to bankruptcy, insolvency, or reorganization

or relief of debtors; or (iii) seeking the entry of an order for relief or the appointment of a receiver,

trustee, or other similar official for it or for any substantial part of its property, and in the case of

any such proceeding instituted against any Person described in the foregoing clauses (i) through

(iii) in subsection (b), either such proceeding shall remain undismissed for a period of one hundred

twenty (120) days.



“Lessor Indemnified Parties” means each of Lessor, together with Lessor’s affiliates, parent and

subsidiary entities, successors, assigns, government officials, managers, members, employees,

officers, directors, trustees, shareholders, counsel, representatives, officials and agents.



“Toss” means any and all loss, Claim(s) (as defined in Section 6.03 of the Original Lease),

judgment, liability, damage, and all costs and expenses (including without limitation attorneys’

fees and expenses and cost of litigation) loss, damage, claim, judgment, cost, expense or liability,

including reasonable attorneys’ fees, incurred or sustained.



“Legal Requirements” means requirements under any federal, Territory and local laws, statute,

ordinances, rules or regulations, including common law, or to issue court orders; and includes,

without limitation, all applicable Environmental Laws, Accessibility Laws, the Resort Approvals,

and the Restrictive Covenant.



“QFAC Laws” means Executive Order 13224 issued by the President of the United States of

America, and all regulations promulgated thereunder, including, without limitation, the Terrorism

Sanctions Regulations (31 CFR Part 595), the Terrorism List Governments Sanctions Regulations

(31 CFR Part 596), the Foreign Terrorist Organizations Sanctions Regulations (31 CFR Part 597),

and the Cuban Assets Control Regulations (31 CFR Part 515), and all other present and future

federal, Territory and local laws, ordinances, regulations, policies, lists (including, without

limitation, the Specially Designated Nationals and Blocked Persons List) and any other

requirements of any Governmental Authority (including without limitation, the U.S. Department

of the Treasury Office of Foreign Assets Control) addressing, relating to, or attempting to

eliminate, terrorist acts and acts of war, each as supplemented, amended or modified from time to

time after the Effective Date, and the present and future rules, regulations and guidance documents



27 IM,

promulgated under any of the foregoing, or under similar laws, ordinances, regulations, policies

or requirements of other states or localities.



“Option Notice” has the meaning set forth in Section 2.2.1 of this Amendment.

“Residential Units” has the meaning set forth in Section 2.1 of this Amendment.

“Residential Purchaser” has the meaning set forth in Section 2.2.1 of this Amendment.

“Residential Sales” has the meaning set forth in Section 2.1 of this Amendment.



“St. Thomas Parcel” has the meaning set forth in Section 1.4.1 of this Amendment, and “St.

Thomas Parcels” shall be construed accordingly.



“Permitted Encumbrances” has the meaning set forth in the Original Lease.



“Person” means any individual, partnership, corporation, limited liability company, trust,

unincorporated organization, Governmental Authority or any other form of entity.



“Substantial Completion” means: (a) the Improvements being substantially complete in

accordance with the laws of the Territory, and in conformity with the terms and conditions of the

Lease; and (b) Lessee furnishing to Lessor a copy of the Certificate of Use and Occupancy pursuant

to Title 29, Section 294, of the Virgin Islands Code, or its equivalent, as issued by DPNR and/or

any other Governmental Authority with jurisdiction over the same.



“Territory” means the Virgin Islands of the United States, an unincorporated and organized

territory of the United States of America.



“Unavoidable Delay” has the meaning set forth in Section 11.02 of the Original Lease, and, for

purposes of the time period for Lessee to obtain the Resort Approvals includes any delay to the

extent directly caused by any Governmental Authority’s failure to timely approve, deny, or

otherwise respond to a Lessee submittal, application, or submission in connection with the Resort

Approvals within the applicable period prescribed under any applicable Legal Requirements; but

provided, that any such Unavoidable Delay will not be subject to the ninety (90) day maximum

limit provided therein.

Exhibit A

EXHIBIT A

Description of the Premises & Ancillary Areas



(See Attached)



29

TO ST. THOMAS AIRPORT



HOTEL {QUESTS, AMENITIES, BOH)

RETAIL

WAS



ic i pe nm seeeusbnneeen to



ABRANDEO LUXURY RESORT, MARINA, AND terion 3

WATER ISLAND, ST. THOMAS, USVI

( PLOTS INCLUDED IN AMENDED LEASE



BH PLOTS IN PURCHASING PROGRAM

( PLOTS IN PROCUREMENT CONSIDERATION



Hi SITES FOR LIMITED MAINTENANCE

@ PRELIMINARY SUBMERGED LANDS PLAN



A BRANDED LUXURY RESORT, MARINA, AND RESIDENCES

WATER ISLAND, ST. THOMAS, USVI

Sed



DESIGN VISION - HOTEL



A BRANDED LUXURY RESORT, MARINA, AND RESIDENCES The hotel's design prioritizes a low-density footprint by minimizing the scale of its structures. As the development ascends the hillside,



buildings are limited to approximately 12 keys each, serviced by dedicated mechanical transport. To preserve the landscape, no structure

WATER ISLAND, ST. THOMAS, USVI exceeds two Stories above the adjacent grade, ensuring 2 subtle visual profile when viewed from the harbor and water's edge.

A BRANDED LUXURY RESORT, MARINA, AND RESIDENCES

WATER ISLAND, ST. THOMAS, USVI

* eg



DESIGN VISION - EMPLOYEE HOUSING/RETAIL



A BRANDED LUXURY RESORT, MARINA, AND RESIDENCES

WATER ISLAND, ST. THOMAS, USVI

Volumetric Modular Construction (VMC)



VMC is an offsite building method where fully enclosed 3D

modules complete with structure, MEP and finishes are

fabricated in a controlled factory and then transported for

rapid on-site assembly. Used widely in residential,

hospitality, healthcare, and student housing, it enables

highly repeatable and efficient design. VMC offers faster

build times (up to 50% quicker through parallel factory and

site work), lower and more predictable costs (reduced

labor, bulk material purchasing, and significantly less

waste), higher quality and safety through controlled

production, and greater sustainability with reduced

environmental impact. It also provides flexible,

customizable, and potentially relocatable building options.

Challenges remain in areas such as transportation logistics

and high-rise seismic design.



SPEED: way ~WASTE:

Up to 50% faster than 1] 70% reduction in

traditional construction construction waste

LN TRAFFIC: = PERFORMANCE:

90% fewer transport 30% better thermal —

vehicle trips performance sec Sei aici we eel dren



time and costs, enhance quality, and allow the project to be developed, with

TEE Ee ee ee ee



MODULAR CONSTRUCTION AND SCHEDULES



A BRANDED LUXURY RESORT, MARINA, AND RESIDENCES

WATER ISLAND, ST. THOMAS, USVI

Sy ares tern oe

ska

Private & Confidential

Fetrvary @. 2028

Bivens Mier

INNOVATION Architecture,

es ‘t. Themes,

("Proposed Hotet")

Doar Steven,

reson Ls

Trenae Use



Hon hes 2 long-stancrg hatory im the Cartoean wit ov fret Note! oats te coreental United States



in be Carboeen martet anc see Welter island at & famtantc new Sesinaton to offer i our loys! customer

base of 250 méion members



Ou involvement, shoud we reach agreement, would be on ihe bese of cw stendand banchwee oF



We look forward bel & sector in he USVI



wih you and luming ta property inio ane of Our mos! soughhatter resorts in re regun Ihrough slevaied

deen focused on enhancing gues! experence



Swcerey,



HELTON WORLOWIDE MANAGE UMITEO:



Name: Louie Journet

Tite: Development Certitean



Rammed erent = ner Males L984 Laas Ree



Re: Marriott Expresion of Interest= Water Island. St. Thomas, USVI.

Takei on fet ating ol eto’ of fi el I crn Se coed Ns ee



ronidenial offering om Waste Island

Based on the prehitunary scope shaval — mchating 4 hsury botel. brandad feskencee marine

— Mament



would be hasury deamds, The St Regis, a8 2

potential fag for the devctopennt,

Tr hather



HYALT



February 9, 2026

Via Etsctronis Mail

‘Steven Miller

Principal

INNOVATION Architectene LLC

(Coral Gables, Florida

Re Proposed Park Hyatt Hotel and Residinces in Water Island, USVI

Dear Mr, Miller:



We are following up on our rocent discussions reganting the proposed hixury resort and residences

(voteel bn be Gositeped ox Wier End, US! ty yout Sesto This letter confinns that based on



apecements.

terme ood combiiors goverteng atry potcnital collaborsmon and would be wadpxt to staretand watcrnel

agprov al, feawibility ncrmncets, vic oypectoms end dus diligence prowomes.



Marries moinanine a wrong pocecace tn U.S. Virgie tytn: we



Seeks tansbore ta take Neier wooed ik ‘could deliver meaningfal conor pact and

clevaie the destinating’s global positioning



Please acvept this letter as a nonbinding expression of tntcrest, wubject nr Martat's cusomary

ihe ret



Welk decries eal eppertunaty (w he part of this exciting aad

tran formatene



LETTERS FROM HOTEL COMPANIES



A BRANDED LUXURY RESORT, MARINA, AND RESIDENCES



WATER ISLAND, ST. THOMAS, USVI



pearance of the market and your initia! desctiption of the project, we are pleased to express

evaluating the development of a Park Hyatt Reson and Residences



Please note that this letter is only an expression of our interest to further evaluate this opportunity and

does not create any legally legally binding odtigation on Hyatt, You should aut rely on this leer, ot any

further discussions regurding this potential transaction ax an agreenient, offer or cummaltrnent by Hyatt

ty enter into any transaction With respect to this project,



We look fonwand to continumg our discussions with you



‘Sincerely,



C26.



Head of Development Latin America & the Caribbean

Hyatt International Ine.

Steven Miller, FAIA, RIBA, Principal Manager



For more than four decades, he has traveled the world as both an architect

and real estate developer, shaping the skyline of luxury hospitality across

continents. His career has taken him from the deserts of Abu Dhabi and

Dubai to the historic cities of Florence and Prague, and onward to

destinations as diverse as Riyadh, Egypt, Bali, Zanzibar, and the United

States.



Among his many achievements, he played a leading role in the early

development of several iconic properties, including the Mandarin Oriental,

Augustin, and Le Méridien hotels in Prague; the Threadneedles Hotel in

London; and the Park Hyatt in Milan. His collaborations span some of the

most prestigious brands in hospitality: Park Hyatt, St. Regis, Ritz-Carlton,

Marriott, InterContinental (IHG), and Hilton, helping to define their

standards of design excellence and guest experience.



Beyond his global practice, he shares his expertise as a Professor at the

University of Miami’s School of Architecture, where he teaches in the

Master of Real Estate program. As a lecturer and Studio Head, he guides

future leaders in the development and design of international hotels,

bridging the worlds of design, construction, and investment.



A recognized innovator in volumetric steel modular construction, he has

worked closely with Hilton, Marriott, and other major hotel groups to

advance this modern building method—enhancing quality, accelerating

project delivery, and achieving greater cost efficiency. His work continues

to push the boundaries of how great hotels are conceived, built, and

experienced around the world.



DEVELOPMENT TEAM



Terry Smith, Principal Manager



An accomplished professional with a distinguished record of strategic

leadership and financial insight, he brings decades of experience driving

organizational success across diverse business sectors. Throughout

his career, he has led multi-billion-dollar projects, guided large-scale

teams, and implemented cost-reduction strategies that have

strengthened operational performance and long-term growth.



A dynamic business development leader, he has a proven ability to

identify and seize new market opportunities, foster lasting client

relationships, and deliver sustained revenue expansion. His expertise

spans the full spectrum of real estate development—overseeing

financial performance, operations, and construction management to

ensure seamless execution from initial concept through completion.



Known for his strategic approach to partnerships and negotiations, he

has successfully structured and managed complex contracts that align

with corporate objectives and enhance organizational value. His career

reflects a consistent commitment to excellence, innovation, and

measurable results in every aspect of business leadership.



«Master planning for $2 billion USD muscat resort. 5,000 homes,

1000+ keys for 4*/5* resort hotels



* Salam Yiti, 1,120 acres of development & construction. $4.4 billion

USD



+ Dubai Pearl Mini-City $10 billion USD



A BRANDED LUXURY RESORT, MARINA, AND RESIDENCES



WATER ISLAND, ST. THOMAS, USVI

INNOVATION



ARCHITECTURE



A practicing architect with more than 60 years

of professional experience, he is now a

Principal at INNOVATION Architecture, a firm

based in Coral Gables, FL. And is a Professor

at the University of Miami School of

Architecture, Over the course of his career, he

has led work through his own practice,

Planning and Design Consultants, and has

served as a Regional Director at internationally

recognized firms including KPF, Perkins

Eastman, and FxCollaborative.



His portfolio spans international hospitality,

adaptive re-use, urban planning, modular

construction systems, residential planning,

and real estate development. He has

contributed to major projects in cities such as

London, Prague, Milan, Dubai, Riyadh, and

Bali, bringing a deep and diverse expertise to

both architectural. and real estate

professionals.



Gustavo Ribeiro, AIA



Founder and partner of Sito Arquitetur, an

award-winning practice established in Brazil,

Gustavo spent 30 years leading the design of

residential, commercial, retail, mall, mixed-

use, hospitality, cultural, and planning

projects totaling more than 10 million square

feet.



In 2024, he relocated to the United States and,

together with Steven Miller, founded

INNOVATION Architecture, a firm focused on

designing and delivering high-quality projects

with a global perspective and reach. He is also

the founder and President of AIA Latin

America and serves as an At-Large Director

for AIA International. He is alicensed architect

in Texas and Florida.



ARCHITECTURE TEAM



A BRANDED LUXURY RESORT, MARINA, AND RESIDENCES



WATER ISLAND, ST. THOMAS, USVI



Zac Cronin, AIA Assoc.



A 2024 graduate of the University of Miami's

School of Architecture, he was recognized

with the Faculty Award for Outstanding Upper-

Level Student Design for his modular city

project, which fe4magined shipping

containers as building blocks for a resilient

urban environment adaptable to rising sea

levels,



He is currently engaged in the planning and

design of hotels, resorts, and student housing,

with a focus on volumetric steel construction.



Exhibit B

EXHIBIT B

Description of all leased Land

Description of the Catchment Area and Tract C



(See Attached)



30

Exhibit B - GVI Water Island Parcels



Potal Approximate Acreage to WIDC Current Lease



SECTION ONE - Original 2014 Lease WIDC-GVI1

Tract B

B-1 0.0206}

B-2 2.317

B-3 0.88

B-4 0.51

B-5 0.10

B-6 1.14

B-7 6.339

B-8 0.255

B-9 0.339

B-10 0.138

B-11 0.999

B-12 73

B-13 3.932

B-14 6.578

B-15 0.988

B-16 0.207

B-17 0.376

B-18 0.037

Total Tract B acres 32.455

Lot 24 0.592

Lot 25 0.900

1.492

Flamingo

8 0.118

9 0.124

10 0.101

14 0.119

16 0.159

18 0.182

19 0.138

22 0.092

25 0.082

26 0.079

Total Flamingo 1,194

Tract C total acerage I

TRANSFERRED BACK TO GVI Catchment Area 2.527

TRANSFERRED BACK TO GVI

Total Tract C and Catchment 13.527



Tract E 0.33

Area W 0.518

Area X 0.575

Area I 0.84

Area L 3.278

Area N 1.5

Area M 2.5

Area M-1 1.5

AreaK & O 16.157

Area P 4.419

Tract A 36.493

Tract D 23.253

AreaR 5.23

Area S 3.472

Area T 0.322

Tract F 10.562

Plot D 0.873

Total Approximate Additional Acreage 144.167+/-_



ay

i

i

i

i

i



reene

onamans



tase)



fy cena oe mame



232 teaaeaeces:



BANANA

SPRAT BAY CLUR NC:



NDS



A



f



}



IN IS!



ae

fe

z

So

&



si.

le

=



3)



ry



&



=



S



{



‘



» STATES VIRG



{

}



UNITE



Canara y) oan e



At ee



Ears

EE este

raget ‘

wom mete sittes tants

wrk Mee =



riers rs



Cre eaten meee

sea



we “ec



Ssabeecuamaeasigiests s39ay

#



$s



FLAMMGO Suny

rrr LA a ee as ST Te

| (09 789>~ 7006) (09 1897 008) 19 tse teva) \OP OPO *Y ; SY / NX,

“ - wo - ~N

LINE & CURVE TABLES cor se 7 Lor No B-t 2 SS YS

(refer to LOT No. B-11) for Se ape! cece es be 0.198 Acres sees4's0r Fad rea CAT UERT AREA bf



(or fief Va at 1

-—— We ae oe ~~ e



. nr chee far feel °



‘ LT he 4?-4 Fn

, \(ee af wet)

LOF Ma AWS \

fave Moff No 2) S



207 No. B-13 LOT 40 3508



(29 7660 Teor)



LINE & CURVE TABLES



& CURVE TABLES (refer to R.O.W. Parcel No.B-19)| 92 se

3 =



(refer to LOT No. B-15) be i. fx, 4 OF 88-90 Fon



gay i 0 “ey hye (03-881! Poo8)



Lor S*. C84

(A) - 500-88}



LOT Xo. B-7

6.3 Aercs

J Ont Hotel Property }



LINE & CURVE TABLES.

(sefer 60 LOT No. B-13)



E Yael

was Ta) 407 No. B td

L_t56_ TT ssey | ene27o7e | 6578 Acres

85 Ter | savor |



£07 No. Bw

O999 Acres



L3162.40" 2,

WINE? EG Ta) ——_a 4g: RO, Parcel No. 819



LOT No. B-15

0.988 Acres



SF

. >

ei



‘

ii #

1 4B 5

i ov 207 No. 28

4 0.462 Acres

FLAMINGO GAY YY \y

4 LA " we

Ye cod

‘ LOT Ao. 24

OS92 Acres

REFERENCE AP 4c: +0 Brian Moseley a

Ste Shect No ' for Rehronee Mope & svwenate roar Lend Servezers hs Conmstonts ar menus, w Oate2

@ RECIR BOUNDIOST (ar noted! Fax 83 718 40R0,

O (RON APE POU VOFOST (31 noted) “

8 Sum ae ae a watarh The Remainder of TRACT "B"

Q SPROSTIPE in CONCRETE. BOUNOFOST FOUND (tnctuding LOTS No. B-6 thru B-16 and 24 & 25)

GRAPHIC SCALE © cervrenso contre rage rouse and &.0.W. Parcels No. B-S & B-19

© COPPER ROD BU NDTOST FOUND and An Un-Surveyed Portion of Water Istend

| seoretmtrt: ASPHALT OR GHAI LL BOADTAIS Waner island (Ls Providence) No. 10 Southside Quarter

<4 ertT) St. Thomas, US. Islands Paeetin 9 tt

EINE A CURVETABLES,

(refer to LOT No. B-12)

a 87.



Pais

tes aay Taaaoar



FLAMINGO CGAY



Se,



ey

MA. Gia

~

ta 5



La Fa,

7. 5b °

"On, Ps



PAM Ti ha

(23 7500 To.



LOT Ao. 818

0 037 Acres



whl ot PEWUVOER

eo rer}



FLAMINGO OAL



ies



OF No B12

72 Acres -



LOT No. 2-17

0.376 Acres



,

SJ 2

2IB ¢

E oly

fa

i

Lor to B 4

- 6578 Acres



REFEREE UPS

Sit Sheet Net for Aoperener tape



GRAPH SC ANE



a



oars, asematr on cause aoeowar:



LkC5O



& remseato sors:



@ FfBtR BA NOPOS: (a3 ated)



O (RON PIPE RE VOPEST 103 nated:



@ SLATES VAiL & TASMER



@ OMNIS LOC VEO FASO



© OKPIPE 1m COACRETE BOL VOROS? FoUAS

© Lerreaco CONCRITE ptagee roux



D> COPPER kon BOC VOUS? PND



ARTA VY REIWAIAOLR

cay for 4



The Remainder of TRACT "B*

(Inctading LOTS No. B-6 thru B-18 and 24 & 25)

end R.0.W. Paccets No. B-S & B-19



and An Un-Surveyed Fortion of Water Istand

Water island (La Providence) No. 10 Southside Quarter

LINE & CURVE TABLES

(fefer to R.O.W. Parcel No. B-5 )



& CURVE TABLES

(refer to LOT No. B-S)



CARIBBEAN SEA



y, (29-7969~-T007) eee “



x “or

\ Coe

LF Ne 48 2 \

isee faf Ao 2) q

ine Ta Armnants 3 ot ay Ps ay

[Lex | BEANS — Proceate “09 j ) Seeerrdat et ; ([48~808-T90)

| 60.47" |

| 57.78 | ZO oNB 6-

- I ted a

Fal “Orep,

4 , (49-S08

Yc f = o

LINE & CURVE TABLES ) / tf

a (refer t0 LOT No. B-9) - , —

ui ES f fo

}. SR * {~~ / om ‘ Fs ies sisted 1

axe 4 Ot Xe eer \ \ fr Ae eer

a } A (we Rf vo 4, : oe LOT No. BF

au - i PAE [- fi 6&7 ores +

us es \ J } ‘ PARCEL AD 2 j Old Hot <! foperty J

T 7 } Ve. / H of LOF te 59 t

tie ‘ PA of es A { (29-906 0-700?) x'

i 4 i i

aX See

mers ay oe SE

2. z { / /

Ps \



ALL AO ¢

Lor Ne SI



SS * io ae rt



AS | waseors

\ (UBE35 7003)

An, . LOT No 59 fam es



; t (28 8060 ro07) LOF Ne 60-1ste .



‘ Road > . ws



‘. (22 8825-009)

© ator ‘ yr



TRL)



Ny

f, 2?

\ ms y ~ &

4 \ j ny §

\ \ 3

Seana \ i \ ;

{ LOR \

\ f \ \

\

' ;

Jie i

- { {

\) ~ LOT 36. B-t2 a

\ 779 deres Z ol, -

Ne ae,

a a a =a

Agere ds, &  vvwsnato roInT Lend Surveyers dz Caneultents ST. THOMAS. V. 00802

to 759008 @ = REGHR. BOLNDPOST (0s noted} PHONE (340) 774-5310)

29 SROs QO (ROY PIPE BOUNDPOST (az nated} - 9) 778-4090)

i vesvoos Bw caEre we D10ST PX NC The Remainder of TRACT “B™

eles peceer see? JAP PER: CONCRETE. BOLNDIOST FAD (Including LOTS No. B-6 thru B-18 and 24 & 25)

1G 2APHIC SCALE 29-921F008 © 6677 6 concrere vie rouse and R.O.W. Parcels No. B-5 & B-19

2 . 2-4 sR008 > COR FB ROO BINDFOST POUND

(um rmr>



and An Un-Surveyed Portion of Water Island

Water Island (La Provid

Exhibit B-1

EXHIBIT B-1

Description of the Catchment Area and Tract C



(See Attached)



31

a4 vee

win



2 ened



100 ATION



DRUITF

BAY



Ir ew

we?



antly ~

a. gn a



Rrowe



GRAPINC SCALE

> #



»

; » 1-46 68 “a8 ant



wer



wn wo 70

rye ene? Tere

™ CN

oe /

~ ao ’ te oF

Pas .

a i

va ~

ye °

gy NL /

ANSE os

we cA x Soe pow

Kaden gh Ne ete mae vA

nec rt /

~~ /

se Se .. J

the NCS f

oe SON a

fe ~~ 4

sb S. .

oe ‘. ~ “ar se

yo ve ~N

.. ™ ease 408 pst

ar eae) ~ ~e,

aan ag! ae sA,

~ ~.

~Sry, —

Eye? Me,

a a) Se se

® % dt We 66

8 ane eR rAd

i . . . oN. st

8 seavawe ene t No C+ Remasmdies

= - AN —_

oe Creat Vere ° zg NFOl flores aha

3 Ith Noonse . ov, vr

v ~

47 06't g

x sane” u

/

e $ LY a LT ed

Bs 2 4 sid. Spee

° < -

€ - x me

> e JOT NO 4 ham Toe

v eh 7D Feed

ce

Las

oj : :

zr ; vor * €ean L2E080

<a “7 & cawsasto reir

ar te @ RAI NONOIeT NOE

ae tae pew © (KeN PITE RUNOFOST Nee

PUnlers mated etheries:?



3

YS



|

“! j fs “w “ :

/ t eS va oa M osrerasrs pee spipe? ANA

i 7 q cS f

! c . REEREMCE

eal, ‘ ee 17 508-18

als se 2 weak es? ~

hs 21% . : 2 7497 1006

slp a\F . \ a7 82k) Tod?

e% . 2 8254 7007

7 9-845; - TIS

a -stto. mnt

- 7 Ore fore

-

e

2a b

Xe gf ’

eS /

os re a’ ‘ { BAD 4

get Z ae ee od en

“3 pe . eo ete Pe

a wets /

Rca: /

’ .



of

me BeO™.



ga

a “

I We ad

. .

eno as s0e- yea) : 1Ot we a fm

poate foun oe .

5 a

\ ‘

\ ae)

. \ ve



2)

? het

y \ ve

7 \ oa

oe

“ae |

“a



SCRVED AU a ESHER

CONRITE HAGE FOND



1. THOMAS, We 00802

Lond Surveyors “b Comnstants on t s 7746-3310

FAX (340) r7G- 4070)



JRACT No. C-! and

TRACT No. C-Remainder

Water Istand (La Providence)

No. 10 Southside Quaster

St. Thomas, U.S. Visgin Islands

ome BLE rE C8 -25- 7 65-4

ome 2C0F o- nf

ee Pe ol - TOS

Original Lease

PREMISES:



Doc? 2014069676

# yas 38



12/29/2814 — 3:38PH

Official Records of



ST THOHAS/ST JOHN



ERICA DOVER, H.P.A.

RECORDER OF DEEDS

Fees $8.68



LEASE AGREEMENT



GOVERNMENT OF THE U.S. VIRGIN ISLANDS

DEPARTMENT OF PROPERTY AND PROCUREMENT



And



WATER ISLAND DEVELOPMENT COMPANY, LLC



Portions of Tract B consisting of approximately 33.1 U.S. Acres and

Tract C consisting of approximately 11.9 U.S. Acres, and the

Catchment Area consisting of approximately 3 U.S. Acres, Water

Island, U.S. Virgin Islands



SZ296007To2 H20G

Water Island Development Company

Tract B consisting of approximately 33.1 U.S. Acres and Tract C consisting of approximately 11.9 U.S.

Acres, and the Catchment Area consisting of approximately 3 U.S. Acres, Water Island, Virgin Islands



LEASE AGREEMENT



THIS LEASE made this__ day of 2014 (the “Lease Date”) by

and between the GOVERNMENT OF THE U.S. VIRGIN ISLANDS, acting through

its Commissioner of Property and Procurement, hereinafter “Lessor”? and WATER

ISLAND DEVELOPMENT COMPANY, LLC whose mailing address is 6501 Red

Hook Plaza, Suite 201St. Thomas, Virgin Islands 00802, hereinafter “Lessee.”



WITNESSETH:



WHEREAS, the United States of America, through the Department of the

Interior Office of Insular Affairs and the Lessor, as buyer therein, executed a Contract

For Sale of Real Property (hereinafter "Contract of Sale") on September 12, 1996 for

parcels of land located on Water Island including but not limited to the land (the

“Premises”) described in Exhibit A attached hereto and incorporated herein by reference;

and



WHEREAS, the Premises’ was designated as a hotel site because it was the

location of the former hotel and associated properties on Tract B (excluding the villas,

lots 48 through 60, and lots 24 and 25), including the catchment basin and deep water

dock; the beach and associated lands on Tract C; and the public ferry dock and associated

lands on Tract E as marked on a copy of the 1979 map of the Bureau of Land

Management. All public roads on Water Island, excluding those on the Sprat Bay

properties are included; and



WHEREAS, pursuant to section 2 of the Contract of Sale, the Lessor agrees to

use the Premises for public purposes only, and to promote the economic development of

Water Island for the benefit of the U.S. Virgin Islands, including the residents of Water

Island; and



WHEREAS, pursuant to section 2B of the Contract of Sale, the United States

government, through its Interior Office of Insular Affairs, agreed to expend up to $3.325

million for demolition and clean-up of the former hotel facilities, removal of hazardous

materials, including catchment basin remediation, and repair of the deep water dock.

Pursuant to the same clause, the Lessor agreed to repair the ferry dock, remove storm

debris, and remove debris resulting from the demolition and clean-up of the hotel

facilities. All of the foregoing has been accomplished in compliance with said section

2B; and



WHEREAS, pursuant to section 6 of the Contract of Sale, the Lessor agreed to

comply with use restrictions on the Premises as stated in Exhibit 2 attached to the

Contract of Sale (the “Restrictive Covenant”). The Restrictive Covenant includes in

pertinent part, the portion of Tract B previously developed as a hotel may be redeveloped



329669+TGe Ho0G

Water Island Development Company

Tract B consisting of approximately 33.1 U.S. Acres and Tract C consisting of approximately 11.9 U.S.

Acres, and the Catchment Area consisting of approximately 3 U.S. Acres, Water Island, Virgin Islands



for a hotel or tourist resort; the reference to Tract B excludes the villas and other privately

owned lots 48-60; Tract B nondeveloped portions; and Tract C, including Honeymoon

Beach. The Restrictive Covenant include additional restrictions, such as setback from

beachfront vegetation, in addition to outdoor lighting restriction, to minimize impacts to

sea turtles should additional development take place; and



WHEREAS, pursuant to section 3 of the Contract of Sale, the Interior, Office of

Insular Affairs conveyed the Premises to the Lessor by Quitclaim Deed dated March 29,

2005, a copy of which is attached hereto and incorporated herein by reference as Exhibit

B, and which includes as an exhibit thereto the Restrictive Covenant; and



WHEREAS, the Restrictive Covenant includes the same restrictions as are

attached to the Contract of Sale; and



WHEREAS, the Lessor desires to construct a hotel and marina as well as other

associated amenities as more particularly described herein on the Premises pursuant to

the conditions of the Contract of Sale, Quitclaim Deed and the Restrictive Covenant; and



WHEREAS, on September 19, 2013, the Lessor and Revpar International issued

an Expression of Interest (“EOI”) pursuant to which suitably qualified firms were invited

to submit proposals for the construction of a resort development on the Premises; and



WHEREAS, in RFP012-2014(P), Lessee was the successful bidder to construct a

resort development and other related and ancillary facilities on the Premises; and



WHEREAS, because Lessee will construct a resort development and other

associated amenities as more particularly described herein on the Premises, Lessor

desires to lease the Premises to Lessee. In consideration of the mutual covenants and

agreements herein set forth it is hereby agreed:



ARTICLE 1



PREMISES AND USE



1.01 Premises. The Lessor hereby leases to the Lessee and the Lessee hires and

takes from the Lessor the Premises. A map of the Premises is attached hereto and

incorporated herein by reference as Exhibit C.



1.02 Use. The Lessee shall use the Premises to construct and develop the Hotel

and Marina to include a deep water dock, hotel and other overnight lodging

accommodations, marina, infrastructure improvements necessary to operate the hotel, a

full service health spa, social center and other related hotel and marina related facilities,

as further detailed in Section 4.01 below, and for no other material purpose whatsoever.

The Water Island Hotel and Marina is further described in Water Island Development

Water Island Development Company

Tract B consisting of approximately 33.1 U.S. Acres and Tract C consisting of approximately 11.9 U.S.

Acres, and the Catchment Area consisting of approximately 3 U.S. Acres, Water Island, Virgin Islands



Company LLC response to RFP012-2014(P), entitled Water Island Expression of Interest

dated November 30, 2013, which is attached hereto and incorporated herein by reference

as Exhibit D.



ARTICLE 2



TERM



2.01 Term. The initial term of this Lease shall be for a period of ninety-nine

(99) years (the “Term”) commencing on the first day of the month following satisfaction

of the following conditions precedent:



(a) approval by the Governor and the Legislature of the Virgin Islands

of this Lease,



(b) approval by the United States Department of the Interior of the sale

to Lessee or its designee of the “Residential Land” defined in Section 4.09, below



(the “Effective Date”). In the event that condition (a) has been satisfied but condition (b)

above remains unsatisfied as of the date which is two (2) calendar years following the

date hereof, the Lessee may, at its election, terminate this Lease, whereupon neither

Lessor nor Lessee shall have further obligation to the other, except as expressly set forth

herein. If Lessee does not terminate the Lease at this time but another two (2) years pass

without condition (b) being satisfied, within thirty (30) days of such date, Lessee may

waive, in writing condition (b) and notify Lessor that it has elected to proceed under this

Lease, whereupon the Effective Date shall be the first day of the month following such

notice, failing which, the Lease will terminate without further obligations by either Party.



2.02 Holding Over. If Lessee remains in possession after expiration of the

Term with Lessor’s express consent, Lessee shall become a month to month tenant and

there shall be no renewal of this Lease by operation of law. During the period of any

such holding over, all provisions of this Lease shall be and remain in effect.

Notwithstanding the foregoing, Lessee shall pay to Lessor a sum equal to 200% of the

Base Rent in Section 3.01, payable in monthly installments, in lieu of the Base Rent set

forth in Section 3.01 in the event Lessee remains in possession after expiration of the

Term without Lessor’s express consent and without any distinct agreement between

Lessor and Lessee.



2.03 _Quiet Enjoyment. Upon payment by Lessee of the Rent and other

amounts due under this Lease and the Lessee’s construction of the hotel and marina in

conformity with designs, specifications and plans, permits and licenses, and maintenance

in accordance therewith, normal wear and tear excepted, Lessor warrants and covenants

that Lessee shall peaceably and quietly hold and enjoy the Premises for the Term without

hindrance or interruption by Lessor or any other person or persons lawfully or equitably

Water Island Development Company ;

Tract B consisting of approximately 33.1 U.S: Acres and Tract C consisting of approximately 11.9 U.S.

Acres, and the Catchment Area consisting of approximately 3 U.S. Acres, Water Island, Virgin Islands



claiming by, through or under Lessor; ‘subject, nevertheless, to the terms and conditions

of this Lease.



ARTICLE 3

RENT



3.01 Base Rent. Upon expiration of the Construction Rent Period (as defined

in Section 3.02 below), Lessee shall pay to Lessor an annual base rent (the “Base Rent”)

of FIFTY-TWO THOUSAND EIGHT HUNDRED and No/100 Dollars ($52,800.00)

payable in equal monthly installments of FOUR THOUSAND FOUR HUNDRED and

No/100 Dollars ($4,400.00) each. Payment of Base Rent shall be made in equal monthly

installments in advance on the first day of each and every month during the Term,

without any previous demand by Lessor, provided however, if possession of the Premises

is granted to the Lessee at a date after the first of the month then in such event the Base

Rent for such first month shall be prorated. The Base Rent shall be paid at Lessor’s

office at Building No. 1 Sub Base, St. Thomas, Virgin Islands 00802, together with any

other sum due as additional rent as provided herein.



3.02 Reduction in Base Rent. During the Construction Rent Period, Lessee

shall pay base rent (the “Construction Base Rent”) in an amount equal to One Thousand

and No/100 Dollars ($1,000.00) per month. The Construction Period Base Rent shall

remain in effect through the expiration of the Construction Rent Period, but upon

expiration of the Construction Rent Period, Lessee shall be obligated to pay Base Rent in

the amount provided in Section 3.01 above. As used herein, the “Construction Rent

Period” commences on the Effective Date and expires upon the earlier to occur of (i)

completion of the Improvements described on Section 4.01(ii-iii) below as evidenced by

the issuance of all required occupancy and use permits for such portion of the

Improvements or (ii) December 31, 2024 (in either case, the “Completion Date”).



3.03 Late Payment Charges. Lessee acknowledges that late payment by Lessee

to Lessor of rent and other charges provided for under this Lease will cause Lessor to

incur costs not contemplated by this Lease, such as processing and accounting charges,

the exact amount of which cannot be readily determined. Therefore, if any installment of

Base Rent or any other charge due from Lessee is not received by Lessor within ten (10)

days after the date due, Lessee shall pay, as a late charge, to Lessor an amount equal to

five percent (5%) of the delinquent monthly Base Rent payment or other delinquent

charge. The parties agree that this late charge represents a fair and reasonable estimate of

the costs that Lessor will incur by reason of the late payment by Lessee.

Water Island Development Company

Tract B consisting of approximately 33.1 U.S. Acres and Tract C consisting of approximately 11.9 U.S.

Acres, and the Catchment Area consisting of. approximately 3 U.S. Acres, Water Island, Virgin Islands



Acceptance of any late charge shall not constitute a waiver of Lessee’s

default with respect to the overdue amount, nor prevent Lessor from exercising any of the

other rights and remedies available to Lessor.



3.04 Unpaid Rent, Fees and Charges. Any additional rent, attorneys’ fees, or

other charges or money payable by Lessee to Lessor under this Lease that is not

Construction Period Base Rent or Base Rent that is not received by Lessor by the tenth

(10th) day after the day when payment is due shall bear interest at the rate of five percent

(5%) per annum (the “Default Rate”) from the date when the same was due according to

the terms of this Lease until paid by Lessee.



ARTICLE 4



IMPROVEMENTS



4.01 Improvements, As a part of the consideration for this Lease, Lessee shall

construct on the Premises, at Lessee’s own cost and expense, certain improvements

anticipated to include the items listed below (collectively referred to herein as the “Water

Island Hotel and Marina” or “Improvements”). Lessee shall have no obligation to build

any of the Improvements which are not financially feasible, in Lessee’s sole discretion, or

for which permits and approvals cannot be obtained. It is estimated that the cost of the

completed Improvements will be approximately $140,000,000.00. The initial

development of the Improvements will include, at a minimum, eighty (80) hotel rooms.

The Improvements will include:



(i) Deep water dock;

(ii) Hotel and other overnight lodging accommodations;



Gii) Marina;



(iv) Infrastructure improvements necessary to operate the hotel

and marina;



(v) Such retail and commercial improvements as may be

desired by Lessee and which are complementary to the hotel and marina facilities. Such

improvements may include, but shall not be limited to, a full service health spa, a social

center and other hotel- and marina-related facilities; and



(vi) Ferry service between the Premises and St. Thomas.



4.02 Financing Contingency. Lessee’s obligation to proceed under this Lease

is contingent on its ability to obtain financing from available public and private sources,

together with private equity which, in the aggregate, are deemed sufficient by Lessee to

pay for all pre-development, development, soft and hard construction costs, including

contingency line items, fixturing, equipping and all other costs to complete the

Water Island Development Company



Tract B consisting of approximately 33.1 U.S. Acres and Tract C consisting of approximately 11.9 U.S.

Acres, and the Catchment Area consisting of approximately 3 U.S. Acres, Water Island, Virgin Islands



Improvements. Such financing shall be obtained with binding commitments therefor

(which may include reasonable and customary conditions) by no later than 24 months

after the Effective Date, failing which the Parties shall negotiate an extension in good

faith taking into consideration the overall financial environment at that time and Lessee’s

reasonable expectations as to the amount of time required to complete financing. If the

Parties are unable to reach an agreement on an extension, after ninety (90) days, either

Party may terminate this Lease by written notice to the other Party. Lessee agrees to use

reasonable diligence in pursuing such commitments for the financing and equity

investments necessary to complete the Improvements, and upon obtaining same, will

provide proof thereof to Lessor.



4.03 Contingency for Permits and Approvals. Lessee’s obligation to proceed



under this Lease is contingent on its ability to obtain all permits, approvals and

authorizations required for the completion of the Improvements, including but not limited

to all required building and construction permits from the USVI, the Army Corps of

Engineers, the United States Coast Guard, any applicable environmental resource

department, transit department, and similar governmental authorities. Such permits, or

in the alternative, letters indicating that, but for the payment of applicable permit and

impact fees, such permits may be issued, shall be obtained by no later than 24 months

after the Effective Date, failing which Lessee may terminate this Lease by written notice

to Lessor delivered not less than thirty (30) days following the date on which Lessee has

determined that it is unable to obtain the requisite permits and approvals. If it is shown

that Lessee was not diligent in seeking the requisite permits and approvals within the time

allowed, the Lessor may terminate this Lease by written notice to Lessee delivered not

less than thirty (30) days following the expiration of the time allowed. Notwithstanding

the foregoing, the Parties shall first attempt in good faith to reach an agreement on an

extension of time within which to obtain the necessary permits and approvals before

terminating the Lease. Lessee agrees to use reasonable diligence in pursuing such

permits, and upon obtaining same, will provide proof thereof to Lessor.



4.04 Construction Schedule. Upon obtaining all permits and closing on the

construction financing for any portion of the Improvements, such portion of the

Improvements must be completed within sixty (60) months.



4.05 Title to Improvements. Subject to the rights of the Leasehold Mortgagees

(as defined in Section 9.03 of this Lease), ownership of the Improvements shall be and

remain with Lessee until the expiration or earlier termination of the Term and Lessee

shall be deemed to exclusively own the Improvements for federal tax purposes. Lessee

alone shall be entitled to all of the tax attributes of ownership thereof, including, without

limitation, the right to claim depreciation or cost recovery deductions, and Lessee shall

have the right to amortize capital costs and to claim any other federal tax benefits

attributable to the Improvements. Upon expiration or earlier termination of the Term,

title to all Improvements shall revert to Lessor.

Water Island Development Company

Tract B consisting of approximately 33.1 U.S. Acres and Tract C. consisting of approximately 11.9 U.S.

Acres, and the Catchment Area consisting of approximately 3 U.S. Acres, Water Island, Virgin Islands



4.06 Location of Improvements: Road Relocation. All of the Improvements to

be made by the Lessee shall be located on the Premises, except to the extent certain



infrastructure elements may be in easement areas pursuant to Section 7.02, below. Upon

the Lessor’s written approval and consent, Lessee shall have the right, at Lessee’s sole

expense to reroute any publicly-dedicated road to accommodate the location of the

Improvements, provided that such location results in the road remaining within publicly-

owned land and does not cause any adjoining landowner’s property to be condemned on

account thereof, or to become out of compliance with any zoning, setback or land use

laws, rules or regulations.



4.07 Real Property Tax: Upon the completion of the Improvements constructed

on the Premises, Lessee shall notify Lessor who shall notify the Tax Assessor for the

purpose of making an assessment of the value of the Improvements. Lessee hereby agrees

to pay any and all taxes, assessments, and other charges of any description levied or

assessed during the term of this Lease by the Office of the Lieutenant Governor, Tax

Assessor on or against any Improvements constructed by Lessee or other equipment or

fixtures installed by Lessee. Notwithstanding the foregoing, Lessee may be exempted

from property tax liability on or against any Improvements if approved for economic

incentives providing for such exemption.



4.08 Excavation and Sorting. If any excavation shall be made by Lessee or

contemplated to be made by Lessee for building or other purposes upon property or

streets adjacent to or nearby the Premises, Lessee either:



(a) shall afford to the person or persons causing or authorized to cause

such excavation the right to enter upon the Premises for the purpose of doing such work

as such person or persons shall consider to be necessary to preserve any of the walls or

structures of the Improvements on the Premises from injury or damage and support the

same by proper foundation, or



(b) shall, at the expense of the person or persons causing or authorized

to cause such excavation, do or cause to be done all such work as may be necessary to

preserve any of the walls or structures of the Improvements on the Premises from injury

or damages and to support the same by proper foundations.



Lessee shall not by reason of any such excavation or work, have any claim against

Lessor for damages or indemnity or for suspension, diminution, abatement or reduction

of rent under this Lease.



4.09 Contingency on Purchase and Sale of Additional Land. It is

acknowledged that there is additional real property on Water Island owned by Lessor that

is suitable for residential development, which property is more particularly described in

the Letter of Intent attached hereto as Exhibit F and made a part hereof (the “Residential

Land”). This Lease and the Lessee’s obligations thereunder are contingent on approval to

be obtained from the United States Department of the Interior, of the sale of the

Water Island Development Company



Tract B consisting of approximately 33.1 U.S. Acres and Tract C consisting of approximately 11.9 U.S.

Acres, and the Catchment Area consisting of approximately 3 U.S. Acres, Water Island, Virgin Islands



Residential Land to Lessee or its designee. Lessor will use its best efforts to obtain such

approval from the United States Department of the Interior in a timely manner. As

provided in Section 2.01 above, if such approval is not obtained within two (2) years

following the Lease Date, Lessee shall have the right to terminate this Lease.



ARTICLE §



MECHANIC’S LIEN



5.01 Mechanic’s Lien. Nothing contained in this Lease shall be deemed,

construed or interpreted to imply any consent or agreement on the part of Lessor to

subject Lessor’s interest or estate to any liability under any mechanic’s lien. Should any

notice of intention to file a lien under Title 28, Chapter 12 of the Virgin Islands Code or

any mechanics or other lien be filed against the property of the Lessor, for any work,

labor, services or materials performed at or furnished to the Premises for or on behalf of

the Lessee or anyone holding any part of Lessee’s leasehold estate in the Premises

through or under Lessee, Lessee shall promptly advise Lessor in writing of said notice

and cause the same to be canceled and discharged of record by payment, bond or order of

a court of competent jurisdiction within thirty (30) days of receipt of said notice. If

Lessee fails to so discharge said lien, then the Lessee shall forthwith reimburse the Lessor

the total out-of-pocket expenses incurred by the Lessor in discharging the said lien, as

additional rent hereunder.



ARTICLE 6



INSURANCE AND INDEMNITY



6.01 Evidence of Insurance.



(a) Lessee shall, prior to commencement of work on the Premises and

on or before June 1st of each year following such date (the “Insurance Date”), provide

Lessor with two copies of evidence of insurance as provided in Exhibit E attached hereto,

documenting that insurance coverages for the Premises are in compliance with the

specifications for insurance coverage set forth in Exhibit E. Such evidence of

insurance shall be in compliance with section 3 of Exhibit E, Evidence of Compliance

with Insurance Requirements Insurance Date, or section 4 of Exhibit E, Evidence of

Renewal or Replacement Policies, as applicable. Lessee must produce written evidence

that subcontractors have proof of insurance similar to that of Lessee, or Lessee’s policies

of insurance must cover the subcontractors.



(b) —Lessee's liability under this Lease is not limited to the amount of

insurance coverage required herein.

Water Island Development Company



Tract B consisting of approximately 33.1 U.S. Acres and Tract C consisting of approximately 11.9 U.S.

Acres, and the Catchment Area consisting of approximately 3 U.S. Acres, Water Island Virgin Islands



(c) Lessor shall have the right, at times deemed appropriate to Lessor

during the Term, to request Lessee to modify the insurance minimum limits specified in

Exhibit E in order to maintain reasonable coverage amounts consistent with then-current

industry standards and to the extent such limits are commercially available. Lessee shall

make all commercially reasonable efforts to comply with any such request.



(d) For any insurance required under Exhibit E, Lessee shall be

responsible for all deductibles, retentions, coinsurance, and the difference between any

sublimits and the limits set out in Exhibit E.



6.02 Fire and Extended Coverage by Lessee. Lessee shall keep all buildings on

the Premises insured against loss or damage by fire with the usual extended coverage

endorsements, in amounts not less than eighty percent (80%) of the full insurable value

thereof, above foundation walls. A copy of all insurance policies shall be delivered to

Lessor within twenty (20) days after completion of construction of the Improvements.



6.03 Indemnity. Lessee agrees to indemnify and save Lessor harmless from

and against any and all claims and demands for or in connection with, any accident,

injury or damage whatsoever (collectively, “Claims”) caused to any person or property

arising, directly or indirectly, out of the business conducted on the Premises or occurring

in, on or about the Premises or any adjacent area under ‘the exclusive control of the

Lessee or arising directly or indirectly, from any act or omission of Lessee or its agents,

employees, or contractors, and from and against any and all costs, expenses and liabilities

incurred in connection with any such Claim or proceeding brought thereon, except to the

extent any of the foregoing results from the negligence or willful misconduct of Lessor or

its agents, contractors or employees. Lessor agrees to indemnify and save Lessee

harmless from and against any and all claims and demands for or in connection with, any

accident, injury or damage whatsoever (collectively, “Claims”) caused to any person or

property arising, directly or indirectly, out of any conditions of the Property existing on

the Effective Date hereof unless the Lessee was made specifically aware, in writing, of

any specific conditions pertaining to the Property which might give rise to any such

Claims, except to the extent any of the foregoing results from the negligence or willful

misconduct of Lessee or its agents, contractors or employees.



6.04 Non-Liability. To the extent permitted by law, Lessor shall not be

responsible or liable to Lessee for any loss or damage that may be occasioned by the acts

or omissions of persons occupying any property adjacent to or adjoining the Premises, or

any part thereof, or for any loss or damage resulting to Lessee or its Premises from water,

gas, steam, fire or the bursting, stoppage, or leaking of pipes, provided such loss or

damage is not occasioned by the negligence or willful misconduct of Lessor or its agents,

contractors, or employees and to the extent permitted by law.



ARTICLE 7

Water Island Development Company

Tract B consisting of approximately 33.1 U.S. Acres and Tract C consisting of approximately 11.9 U.S.

Acres, and the Catchment Area consisting of approximately 3 U.S. Acres, Water Island Virgin Islands



ENTRY BY LESSOR: EASEMENTS OVER LESSOR’S REMAINING

PROPERTY



7.01 Access to Premises. Lessor or Lessor’s agents shall have the right to enter

upon the Premises at all reasonable times upon reasonable advance notice to Lessee, to

ensure compliance with the provisions of this Lease.



7.02 Easement for Facilities and Utility and Other Services. Lessor shall grant



to Lessee any necessary easements for the installation, use, maintenance and repair of

water pipes, water storage tank facility, cables and wires, solar panels, power facility, or

other utility and infrastructure equipment in, on or through Lessor’s remaining property

located on Water Island (the “Remaining Property”), as and to the extent that Lessee may

or hereafter deem to be necessary or appropriate in order to provide water, waste

disposal, power, communications or other Similar services to the Improvements;

provided, however, that such easements shall be located in a manner so as to cause the

least possible adverse impact on the Remaining Property. To the extent any of the roads,

sidewalks or paths on the Remaining Property are not public rights of way, Lessor shall

provide such easements as are necessary to ensure ingress and egress to and from any of

the Improvements or the facilities and equipment described in this Section.



ARTICLE 8



CONDEMNATION



8.01 Notice of Condemnation. The party receiving any notice of the kind

specified below which involves the Premises shall promptly give the other party notice of

the receipt, contents, and date of the notice received, which shall include:



(a) Notice of Intent of Taking.



(b) Service of any legal process relating to condemnation of the

Premises or the Improvements.



(c) Notice in connection with any proceedings or negotiations with

respect to such a condemnation.



8.02 Rights of Lessor and Lessee. Lessor and Lessee shall each have the right



to represent its respective interest in each proceeding or negotiation with respect to a

taking or intended taking and to make full proof of its claims. No agreement, settlement,

sale or transfer to or with the condemning authority shall be made without the consent of



10

Water Island Development Company

Tract B consisting of approximately 33.1 U.S. Acres and Tract C consisting of approximately 11.9 U.S.

Acres, and the Catchment Area consisting of approximately 3 U.S. Acres, Water Island, Virgin Islands



both parties. Lessor and Lessee each agree to execute and deliver to the other any

instrument that may be required by the provisions of this Lease relating to the

condemnation.



8.03 aking of Leasehold. Upon a total taking, Lessee’s obligation to pay Base

Rent, additional rent and other charges hereunder shall terminate on the date of taking, or

possession given, whichever is earlier, but Lessee’s interest in the leasehold shall

continue until the taking is completed by deed, contract or final order of condemnation, at

which time this Lease and all of Lessor’s and Lessee’s obligations hereunder shall

terminate.



8.04 Total Taking. If this Lease is terminated as a result of a total taking, each

party hereto shall be entitled to prosecute claims in such condemnation proceedings for

the value of its respective interest in the Premises, as applicable, or any portion or interest

therein.



8.05 Partial Taking. Upon partial taking, all sums including damages and

interest awarded for the fee, leasehold or both shall be distributed and disbursed to Lessor

and Lessee as they may agree or, in the absence thereof, in accordance with the laws of

the U.S. Virgin Islands. Upon partial taking Lessee shall have the option of terminating

this Lease upon thirty (30) days notice to Lessor.



ARTICLE 9



DEFAULT, CANCELLATION, AND TERMINATION



9.01 Lessee Default. Lessee shall be in default under this Lease, and this Lease

shall be subject to cancellation by Lessor following all applicable notice and cure periods,

in the event Lessee shall:



(a) Be in arrears in the payment of the whole or any part of the amount

agreed upon hereunder (including the payment of Base Rent) for a period of ninety (90)

days after the due date under the Lease.



(b) File in any court a petition in bankruptcy or insolvency or for the

appointment of a receiver or trustee of all or a portion of Lessee’s property.



(c) Make any general assignment for the benefit of creditors.



(d) Abandon the construction or operation of the Premises, which

abandonment shall be deemed to have occurred only after all or substantially all of

Lessee's or its construction contractor’s or operator's personnel have failed to be present

on the Premises for more than one hundred eighty (180) consecutive days, and where



such failure is not the result of any force majeure event, as described in Section 10.02

below.



11

Water Island Development Company

Tract B consisting of approximately 33.1 U.S. Acres and Tract C consisting of approximately 11.9 U.S.

Acres, and the Catchment Area consisting of approximately 3 U.S. Acres, Water Island, Virgin Islands



(e) Default in the performance of any of the covenants and conditions

required herein (except rental payments) to be kept and performed by Lessee, and such

default continues for a period of one hundred eighty (180) days after receipt of written

notice from Lessor to cure such default, unless during such one hundred eighty (180) day

period, Lessee shall commence and thereafter diligently perform such action as may be

reasonably necessary to cure such default. If default by Lessee in the performance of its

obligations hereunder is precipitated in whole or in part by activities for which Lessor is

solely responsible, the period herein established to commence a cure for the said default

will be extended for a reasonable period to account for the effect of Lessor’s activities.



() Be adjudged a bankrupt in involuntary bankruptcy proceedings.



(g) | Be made a party to any receivership proceeding in which a receiver

is appointed for the property or affairs of Lessee where such receivership is not vacated

within ninety (90) days after the appointment of such receiver.



(nh) ‘Failure to pay the outstanding assessed real property taxes for two

(2) years, unless otherwise exempted.



(i) Failure to complete construction of Improvements constructed

upon the Premises within sixty (60) months from obtaining all permits and closing on the

construction financing for any portion of the Improvements as set forth in Sections 4.02,

4.03, and 4.04 herein.



() Failure to obtained required insurance as stated herein.



Failure of Lessor to exercise any remedy upon the default of Lessee for any of the

reasons set out above shall not operate to bar or destroy the right of Lessor to cancel this

Lease by reason of any subsequent violation by Lessee under this Lease.

Notwithstanding the foregoing, the provisions of this Section 9.01 are subject to the

rights of the Leasehold Mortgagees under Section 9.03 below.



9.02 Lessor Default. Lessor shall be in default under the Lease, and this Lease

shall be subject to cancellation by Lessee, in the event Lessor shall:



(a) File in any court a petition in bankruptcy or insolvency or for the

appointment of a receiver or trustee of all or a portion of Lessor’s property.



(b) Make any general assignment for the benefit of creditors.



(c) Default in the performance of any of the covenants and conditions

required herein relating in any way to Lessor’s providing occupancy or maintenance of

the Premises to be kept and performed by Lessor in accordance with this Lease, and such

default continues for a period of ninety (90) days after receipt of written notice from

Lessee to cure such default, unless during such ninety (90) day period, Lessor shall

commence and thereafter diligently perform such action as may be reasonably necessary



12

Water Island Development Company



Tract B consisting of approximately 33.1 U.S. Acres and Tract C consisting of approximately 11.9 U.S.

Acres, and the Catchment Area consisting of approximately 3 U.S. Acres, Water Island, Virgin Islands



to cure such default. If default by Lessor in the performance of its obligations hereunder

is precipitated in whole or in part by activities for which Lessee is solely responsible, the

period herein established to commence a cure for the said default will be extended for a

reasonable period to account for the effect of Lessee’s activities,



(d)  Beadjudgeda bankrupt in involuntary bankruptcy proceedings.



(e) Bemadea party to any receivership proceeding in which a receiver

is appointed for the property or affairs of Lessor where such receivership is not vacated

within ninety (90) days after the appointment of such receiver.



Failure of Lessee to exercise any remedy upon the default of Lessor for any of the

reasons set out above shall not operate to bar or destroy the right of Lessee to cancel this

Lease by reason of any subsequent violation by Lessor under this Lease.



9.03 Termination. This Lease shall terminate at the expiration of the Term.



9.04  Repossessing and Reletting. Subject to the provisions of Article 10

below, in the event of default by Lessee hereunder which shall remain uncured after the

required notices have been given pursuant, to this Lease, and for such time as provided

herein, Lessor may at once thereafter, or at any time subsequent during the existence of

such default:



(a) Enter into and upon the Premises or any part thereon and repossess

the same, expelling therefrom Lessee and all personal property of Lessee (which property

may be removed and stored at the cost of and for the account of Lessee), to the extent

permitted by law; or



(b) Either cancel this Lease by notice or without canceling this Lease,

relet the Premises or any part thereof upon such terms and conditions as shall appear

advisable to Lessor. If Lessor shall proceed to relet the Premises during any month or part

thereof, at less than the rent due and owing from Lessee during such month or part

thereof under the terms of this Lease, Lessee shall pay such deficiency to Lessor upon

calculation thereof, providing Lessor has exercised good faith in the terms and conditions

of reletting. Payment of any such deficiencies shall be made monthly within forty-five

(45) days after receipt of deficiency notice.



If any suit or action is brought by Lessor against Lessee to enforce any of

the provisions hereof, the Lessor, if successful on the merits, shall be entitled to collect

reasonable attorneys’ fees and expenses in the action or proceeding.



9.05 Assignment and Transfer: Lessee shall not assign or transfer this Lease or

any interest therein, without the prior written consent of Lessor which shall not be

unreasonably withheld. Any consent of any assignment shall not be deemed consent to

any subsequent assignment.



13

Water Island Development Company

Tract B consisting of approximately 33.1 U.S. Acres and Tract C consisting of approximately 11.9 U.S.

Acres, and the Catchment Area consisting of approximately 3 U.S. Acres, Water Island, Virgin Islands



9.06 Subleasing. Lessee may not sublet the Premises in whole or in part

without Lessor’s advance written consent, which consent shall not be unreasonably

withheld. Lessor’s consent must be received within fourteen (14) days from receipt of

Lessee’s request, otherwise the sublease is deemed to be approved, except that no

approval is necessary for subleases to related entities of Lessee. Lessor’s consent does

not release Lessee from any of its obligations under this Lease. In the event that Lessor

consents to subleasing of the Premises or any part thereof, the Lessee shall pay to the

Lessor an additional amount of 5% of the sublease amount received monthly per

sublease, not to exceed $6,000 per year per sublease, for subleasing income as additional

rent, in lieu of the surcharge in Act 6634. Additional rent is defined as rent which

exceeds the Initial Base Rent or the Reduction in Initial Base Rent as described in

sections 3.01 and 3.02 respectively. This additional rent shall be due and payable on the

next rent day after such subletting rent becomes due from the subtenant.



9.07 Cumulative Remedies. Notwithstanding anything to the contrary herein,

each right or remedy of Lessee under this Lease shall be cumulative of and shall be in

addition to every other right or remedy provided by law, and the exercise, or the

beginning of the exercise, by Lessee of any one or more of the rights or remedies

provided for by law shall not preclude the simultaneous or later exercise by Lessee of any

or all other rights or remedies provided for herein.



ARTICLE 10



MORTGAGES, LIENS AND ENCUMBRANCES;

ASSIGNMENT AND SUBLETTING



10.01 Leasehold Mortgages: Assignment and Sublet:



(a) Lessee shall have the right, from time to time and at any time, in

whole or in part, subject to the prior consent of Lessor, which consent shall not be

unreasonably withheld or delayed, to hypothecate, mortgage, pledge or alienate Lessee’s

leasehold interest in the Premises and/or the rights granted to Lessee under this Lease (a

“Leasehold Mortgage”). Lessee shall provide fifteen (15) days notice to Lessor prior to

the closing of any loan or other transaction in connection with which such interest is

given, identifying the name and address of the party obtaining an interest in Lessee’s

leasehold (the “Leasehold Mortgagee”). In no event whatsoever shall Lessee have the

right to encumber Lessor’s fee simple interest in the Premises.



(b) For the benefit of the holder of any Leasehold Mortgage who shall

have become entitled to notice as hereinafter provided in this Section 10.01, the Lessor

agrees not to accept a voluntary surrender of this Lease at any time while such Leasehold

Mortgage shall remain an encumbrance on the leasehold estate; and the Lessor and

Lessee further agree for the benefit of any such Leasehold Mortgagee that, so long as any

such Leasehold Mortgage shall remain an encumbrance on the leasehold estate, without

the prior written consent of such Leasehold Mortgagee, the Lessor and Lessee will not



14

Water Island Development Company

Tract B consisting of approximately 33.1 U.S. Acres and Tract C consisting of approximately 11,9 U.S.

Acres, and the Catchment Area consisting of approximately 3 U.S. Acres, Water Island Virgin Islands



subordinate this Lease to any mortgage which may hereafter be placed on the fee of the

Premises or amend or alter any terms or provisions of this Lease or consent to any

prepayment of any Annual Rent.



(c) Ifany Leasehold Mortgagee shall have given to the Lessor a notice

specifying the name and address of such Leasehold Mortgagee, the Lessor shall send by

personal delivery or by certified or registered mail or overnight courier service to such

Leasehold Mortgagee a copy of each notice of default at the same time as and whenever

any such notice of default shall thereafter be given by the Lessor to Lessee, addressed to

such Leasehold Mortgagee at the address last furnished to the Lessor. No notice of

default by the Lessor shall be deemed to have been given unless and until a copy thereof

shall have been so given to such Leasehold Mortgagee. Lessee irrevocably directs that

the Lessor accept, and the Lessor agrees to accept, performance and compliance by any

such Leasehold Mortgagee of and with any term, covenant or condition on Lessee’s part

to be kept, observed or performed under this Lease with the same force and effect as

though kept, observed or performed by Lessee. Such Leasehold Mortgagee shall have,

and be subrogated to, any and all rights of Lessee with respect to the curing of any such

default, and shall also have the right to extend the period of time for curing of any such

default for an additional period of sixty (60) days from the date contained in the notice of

default, or in the case of a default which cannot be cured within said sixty (60) day

period, for such additional period as, with all due diligence and in good faith, is necessary

to cure the default.



(d) In case of the termination of this Lease by reason of the

happening of an Event of Default, the Lessor shall give notice thereof to any Leasehold

Mortgagee who shall have notified the Lessee of its name and address pursuant to Section

10.01 (£), which notice shall be sent by personal delivery or by registered or certified mail

or overnight courier service to such Leasehold Mortgagee at the address last furnished to

the Lessor pursuant to Section 10.01 (f). If, within ninety (90) days after the mailing of

such notice, such Leasehold Mortgagee shall notify the Lessor that such Leasehold

Mortgagee desires to enter into a lease of the Premises with the Lessor, the Lessor shall

join with the Leasehold Mortgagee, or its nominee, in executing and delivering a new

lease of the Premises to such Leasehold Mortgagee, or its nominee, for the remainder of

the Term, at the Annual Rent and upon the terms, covenants and conditions contained in

this Lease.



(e) The Lessor agrees to execute such further certificates, consents,

subordination, non-disturbance and attornment agreements, estoppel certificates and other

documents as may reasonably be required by a Leasehold Mortgagee or subtenant,

provided that the Lessor is not required to pay money or incur expenses thereby, the

documents are consistent with the terms of this Lease, and the Lessor’s property rights

are not adversely affected thereby.



(f) In every case where the Leasehold Mortgagee elects to acquire

possession of the Premises or to foreclose the Leasehold Mortgage, prior to the acquiring



15

Water Island Development Company



Tract B consisting of approximately 33.1 U.S. Acres and Tract C consisting of approximately 11.9 U.S.

Acres, and the Catchment Area consisting of approximately 3 U.S. Acres, Water Island, Virgin Islands



of possession or the foreclosing of the Leasehold Mortgage, the Leasehold Mortgagee

shall give the Lessor (i) a right of first refusal to acquire the Improvements and assume

Lessee’s obligations under the Leasehold Mortgage or (ii) the right to provide a purchaser

reasonably satisfactory to the Leasehold Mortgagee for the purchase of Lessee’s interest

in this Lease, the Improvements and Lessee’s obligations under the Leasehold

Mortgage. The Lessor shall exercise the rights herein set out within one hundred twenty

(120) days from the date that the Lessor is notified in writing by the Leasehold

Mortgagee that these rights may be exercised.



ARTICLE 11

GENERAL TERMS AND CONDITIONS



11.01 Notices. All notices provided to be given under this Lease shall be given

by recognized overnight courier service or by certified or registered mail, return receipt

requested, postage fully prepaid, addressed to the proper party at:



LESSOR: Commissioner

Department of Property & Procurement

Building No. 1 Sub Base

St. Thomas, U.S. Virgin Islands 00802



LESSEE: Stephen Evans-Freke

Water Island Development Company

6501 Red Hook Plaza, Suite 201

St. Thomas, U.S. Virgin Islands 00802



The address of either party may be changed from time to time by giving

Written notice to the other party to that effect.



11.02 Unavoidable Delay: Force Majeure. If either party shall be delayed or

prevented from the performance of any act required by this Lease by the reason of acts of



God, inability to secure materials, flood, drought, earthquake, storm, fire, pestilence,

lightning, and other natural catastrophes, epidemic, war, riot, civil disturbance or

disobedience, action or inaction of government, or other proper authority, fuel supply or

material shortage, or failure, threat of failure or sabotage of facilities that have been

maintained in accordance with good engineering and operating practices, or other cause,

without fault and beyond the reasonable control of the party obligated, financial inability

excepted, performance of such act shall be excused for the period of the delay up to a

maximum of ninety days (90) commencing from the date of required notice under this

Section; and the period for the performance of any such act shall be extended for a period

equivalent to the period of such delay; provided, however, that nothing in this paragraph

shall excuse Lessee from the prompt payment of all amounts required of Lessee. The

party delayed or prevented from the performance of any act as above described shall

notify the other party of such delay or prevention within fifteen (15) days of the delayed



16

Water Island Development Company

Tract B consisting of approximately 33.1 U.S. Acres and Tract C consisting of approximately 11.9 U.S.

Acres, and the Catchment Area consisting of approximately 3 U.S. Acres, Water Island, Virgin Islands



party’s knowledge thereof, and shall thereafter keep the other party regularly informed by

written notification every thirty (30) days of the status of such delay or prevention.



11.03 Non-discrimination, Lessee in exercising any of the rights or privileges

granted by this Lease, shall not, on the grounds of race, color, creed, sex, disability as that

term is understood by the American Disabilities Act; or national origin, discriminate or

permit discrimination against any person.



11.04 Officials not to Benefit. No member of the U.S. Congress or the

Territorial Legislature, no official or officer of the United States or the U.S. Virgin

Islands Government, or any of their instrumentalities shall be admitted to any share of

this Lease or any benefit of value that may arise therefrom.



11.05 Agreement made in the U.S. Virgin Islands. The laws of the U.S. Virgin

Islands shall govern the validity, performance, and enforcement of this Lease.



11.06 Counterparts. This Lease may be executed in four (4) counterparts, each

of which shall be deemed an original.



11.07 Cumulative Rights and Remedies. All rights and remedies of Lessor here

enumerated shall be cumulative, and none shall exclude any other right or remedy

allowed by law. Likewise, the exercise by Lessor of any remedy provided for herein or

allowed by law shall not be to the exclusion of any other remedy.



11.08 Interpretation. Words of gender used in this Lease shall be held to include

the plural and vice versa unless the context otherwise requires.



11.09 Agreement made in Writing. This Lease contains all of the agreements

and conditions made between the parties hereto and may not be modified orally or in any

manner other than by agreement in writing signed by the parties hereto or their respective

successors in interest.



11.10 Paragraph Headings. The captions of the various articles and paragraphs

of this Lease are for convenience and ease of the scope, content, or intent of this Lease or

any part or parts of this Lease.



11.11 Invalidity or Ilegality of Provisions. The invalidity or illegality of any

provisions of this Lease shall not affect the remainder of this Lease.



11.12 Successors and Assigns. All of the terms, provisions, covenants, and

conditions of this Lease shall inure to the benefit of and be binding upon Lessor and

Lessee and their successors, assigns, legal representatives, heirs, executors and



11.13 Broker. Lessee covenants, warrants, and represents that there was no

broker instrumental in consummating this Lease, and that no conversations or prior



17

Water Island Development Company



Tract B consisting of approximately 33.1 U.S. Acres and Tract C consisting of approximately 11.9 U.S.

Acres, and the Catchment Area consisting of approximately 3 U.S. Acres, Water Island, Virgin Islands



negotiations were had with any broker concerning the renting of the Premises by or

through Lessee. Lessee agrees to hold Lessor harmless against any claims for brokerage

commission arising out of any conversation or negotiation had by Lessee with any

broker.



11.14 Approvals Required. This Lease shall not become effective unless

approved by the Governor and the Legislature of the U.S. Virgin Islands. If such

approval is’ obtained, Lessor shall provide written notice of such approval promptly to

Lessee in recordable form.



11.15 Cooperation by Lessor. Lessor will cooperate with Lessee in filing zoning

or rezoning applications, environmental impact reports, or any other governmental or

quasi-governmental applications, studies or declarations as may be required by any

government rules in regard to construction of the Water Island Hotel and Marina or other

improvements or for obtaining permits, licenses, or approvals to conduct activities on the

Premises. Lessor may, and if required by government rules shall, join in the application



for any required or desirable permits and authorizations.



11.16 Third Party Beneficiaries. Lessor and Lessee acknowledge that the

respective rights and remedies under this Lease are for the benefit of, and can be

exercised only by, Lessor and Lessee (and any indemnitees under any provision of this

Lease) as their interests appear; provided, however, that Lessor and Lessee agree that

Leasehold Mortgagees shall be third party beneficiaries under this Lease.



11.17 Estoppel Certificates. Lessee or Lessor, as the case may be, shall execute,

acknowledge, and deliver to the other, promptly upon request by Lessee, Lessor or any

Leasehold Mortgagee, a certificate certifying (a) that this Lease is unmodified and in full

force and effect, (or, if there have been modifications, that this Lease is in full force and

effect as modified, and stating the modifications), (b) the dates, if any, to which the rent

has been paid, (c) that there are no existing offsets or defenses against the enforcement of

any term hereof on the part of Lessee to be performed or complied with (or, if so,

specifying the same), and (d) that no notice has been given to either party of any default

that has not been cured. Any such certificate may be relied upon by any prospective

purchaser, mortgagee or beneficiary under a deed of trust of the Premises or of any

interest therein.



ARTICLE 12

CONFLICT OF INTEREST



12.01 Conflict of Interest. Lessee covenants that it has no interest and will not

acquire any interest, direct or indirect, which would conflict in any manner or degree with

the performance of its obligations under this Lease. Lessee further covenants that it

either is:



18

Water Island Development Company

Tract B consisting of approximately 33.1 U.S. Acres and Tract C consisting of approximately 11.9 U.S.

cres, and the Catchment Area consisting of approximately 3 U.S. Acres, Water Island, Virgin Islands



(a) Nota territorial officer or employee (i.e. the Governor, Lieutenant

Governor, member of the Legislature or any other elected territorial official; or an officer

or employee of the legislative, executive or judicial branch of the Government or any

agency, board, commission or independent instrumentality of the Government, whether

compensated on a salary, fee or contractual basis); or



(b) A territorial officer or employee and, as such, has:



(i) Familiarized itself with the provisions of Title 3 Chapter

37, Virgin Islands Code, pertaining to conflicts of interest, including the penalty

provisions set forth in Section 11.08 thereof;



(ii) Not made, negotiated or influenced this contract, in its

official capacity;



Gii) No financial interest in the contract as that term is defined

in Section 11.01 of said Code chapter.



12.02 Compliance with Laws. Lessee shall comply with all laws and regulations

of the U.S. Government and the Government of the U.S. Virgin Islands including but not

limited to: zoning, Coastal Zone Management, building codes, environmental laws, and

the American with Disabilities Act. Lessee shall obtain all licenses and permits to use the

Premises and to do business in the U.S. Virgin Islands as are required.



12.03 Waiver of Lease Terms. The waiver by either party of any breach of any

term, condition or covenant of this Lease, during the Term of this Lease, shall not be

deemed to be a waiver of any subsequent breach of the same or any other term, condition

or covenant of this Lease. No delay or omission to exercise any right or power shall be

construed to be a waiver of any such right or power and every right and remedy conferred

under this Lease may be exercised from time and as often as may be deemed expedient

by the holder of such right or remedy.



ARTICLE 13



DAMAGE AND DESTRUCTION



13.01 Lessee's Duty to Restore. If, at any time during the Term of this Lease,

the Improvements shall be damaged or destroyed by fire or other casualty covered within

the insurance designation of fire and extended coverage as same is customarily written in

the U.S. Virgin Islands, Lessee, at its sole cost and expense, if so requested by Lessor or

elected by Lessee, and provided that the insurance proceeds related to such casualty are

made available to Lessee in a sufficient net amount for use in connection therewith, shall

Tepair, alter, restore, replace or rebuild the same as nearly as reasonably possible to its

value, conditions and character which existed immediately prior to such damage or

destruction, subject to such changes or alterations as Lessee may elect to make in

conformity with the provisions of this Lease and modern construction techniques and



19

Water Island Development Company



Tract B consisting of approximately 33.1 U.S. Acres and Tract C consisting of approximately 11.9 U.S.

Acres, and the Catchment Area consisting of approximately 3 U.S. Acres, Water Island, Virgin Islands



methods. Provided Lessee otherwise complies with the terms of this Lease and obtains

Lessor's approval, it may construct Improvements which are larger, smaller or different in

design, function or use and which represent a use comparable to prior use or compatible

with uses of property in the immediate geographical area, to the extent such construction

and improvement are allowed by Section 1.02 of this Lease. However, in the event

insurance proceeds related to such casualty are not made available to Lessee for use in

connection therewith, or are deemed insufficient by Lessee in its reasonable discretion,

and Lessee elects not to rebuild, Lessor and Lessee shall each have the right to terminate

this Lease as to such Phase or Phases which suffered the casualty but the Base Rent shall

continue at the same amount for any remaining portions of the Premises.



13.02 Termination of Lease for Certain Destruction Occurring During Last Ten

Years of Lease Term. Notwithstanding anything to the contrary contained herein, in the



event that the Improvements or any part thereof shall be damaged or destroyed by fire or

other casualty during the last ten (10) years of the Term of this Lease, and the estimated

cost for repair and restoration exceeds an amount equal to twenty-five percent (25%) of

the then-current fair market value of the Water Island Resort Community (as determined

by an appraisal secured by the Lessee), then Lessee shall have the right to terminate this

Lease and its obligations hereunder by giving written notice to Lessor within six (6)

months after such damage or destruction. In such event, this Lease shall terminate fifteen

(15) days following Lessor’s receipt of notice of casualty, and Lessee shall not be entitled

to the return of any Base Rent. In such event, the property insurance proceeds for the

damaged Improvements, including business interruption insurance proceeds shall be paid

to Lessor and Lenders as their respective interests may appear.



ARTICLE 14



ENVIRONMENTAL MATTERS



14.01 Remediation of Prior Contamination; Inspections. It is acknowledged that

the Premises previously contained some contamination which was to have been

remediated by Lessor or its predecessor in interest. The Lessee shall have the right, prior

to commencement of construction of the Improvements, to conduct an environmental

audit of the Premises and to perform such borings, samplings and other tests as it may

desire to determine the environmental status of the Premises. Any contamination that is

revealed to be present on the Premises shall be the responsibility of the Lessor to treat,

remove or otherwise remediate, as may be required by applicable laws, codes and

ordinances, in order to permit the construction of the Improvements. Further, Lessor will

indemnify Lessee for any loss, claims or liability arising from the existence of any such

prior contamination.



14.02 Premises Reduction. In the event contamination is discovered o the

Premises and Lessor is unable or unwilling to treat, remove or otherwise remediate it as

provided in Section 14.02 above, Lessee may, at its election, (a) request that Lessor enter

into an amendment to this Lease pursuant to which any contaminated portion of the



20

Water Island Development Company



Tract B consisting of approximately 33.1 U.S. Acres and Tract C consisting of approximately 11.9 U.S.

Acres, and the Catchment Area consisting of approximately 3 U.S. Acres, Water Island, Virgin Islands



Premises is deleted from the description of the Premises, if development of the Water

Island Resort Community on the balance of the Premises is feasible, in Lessee’s sole

discretion or (b) terminate this Lease, whereupon Lessee and Lessor shall have no

further liability hereunder, except as specifically set forth herein.



SIGNATURES APPEAR ON FOLLOWING PAGES



21

Water Island Development Company

Tract B consisting of approximately 33.1 U.S. Acres and Tract C consisting of approximately 11.9 U.S.

Acres, and the Catchment Area consisting of approximately 3 U.S. Acres, Water Island, Virgin Islands



IN WITNESS WHEREOF, the parties herein have hereunto set their hands and seals

on the day and year first above written.



WITNESSES: LESSEE:

WATER ISLAND DEVELOPMENT

COMPANY, LLC

a U.S. Virgin Islands limited liability



Bel: ee

Bra na clami (ten) ceed Stephen Evatis-Freke

F ae



Title:



ACKNOWLEDGEMENT



Territory of the U.S. Virgin Islands _)

District of St. Thomas, & St. J ohn) ss:



Before me personally appeared Stephen Evans-Freke as Ya Nk: Gal. , of

Water Island Development Company LLC, well known, and knowh to be the

individual described in and who executed the foregoing instrument.



WITNESS my hand on this_/ /" dayof Veviw ber’ AD. 2014



Notary Public



VPA > fbr



22



og



Pa)

Water Island Development Company

Tract B consisting of approximately 33.1 U.S. Acres and Tract C consisting of approximately 11.9 U.S.

Acres, and the Catchment Area consisting of approximately 3 U.S. Acres, Water Island, Virgin Islands



LESSOR:

WITNESSES: GOVERNMENT OF THE U.S.



Date Vincent F. Frazer,

il Attorney General

APPROVED:

i\ia|2014 ay: REPPIN

Date | hn {P. de. r.

Goyernor .S. Virgin Islands

APPROVED:

12/20 2014 LM

Date . e President of the Legislature



of the U.S. Virgin Islands



929666¢+1G2 HI0qg



23

EXHIBIT A



LEGAL DESCRIPTION OF PREMISES



ID SUB ID DEED ACREAGE NOTE MARINE HONEYMOON CATCHMENT

UPLAND BEACH AREA

Tract B 1996

B-1 ROW

B-2 2,317 2.317

B-3 0.88 0.88

B-4 ' 0.51 0.51

B-5 ROW

B-6 1.14 1.14

B-7 6.3 6.3

B-8 0.2 0.2

B-9 0.333 0.33

B-10 0.138 0.138

B-11 0.999 0.999

B-12 7.3 7.3

B-13 3.932 3,932

B-14 6.578 6,578

B-15 0.988 0.988

B-16 0.207 0.207

B-17 0.376 0,376

B-18 0.037 0.037

Lot 24 0.592 0.592

Lot 25 0.462 0.9

Flamingo 8 0.118 0.118

Flamingo 9 0.124 0.124

Flamingo 10 0.101 0.101

Flamingo 14 0.119 0.119

Flamingo 16 0.159 0.159

Flamingo 18 0.182 0.182 |.

Flamingo 19 0.138 0.138

Flamingo 22 0.092 0.092

Flamingo 25 0.082 0.082

Flamingo 26 0.079 0.079

Tract C 1996 11 11

Catchment Area 1996 Approx. 3

Water Island Development Company



Tract B consisting of approximately 33.1 U.S. Acres and Tract C consisting of approximately 11.9 U.S.

Acres, and the Catchment Area consisting of approximately 3 U.S. Acres, Water Island, Virgin Islands



EXHIBIT B



QUITCLAIM DEED / RESTRICTIVE COVENANT



EXHIBIT B

“SENT Bitr- 6- 5 ; 3:49PM ;OFFICE OF PUBLIC REI 1 840 777 9587;# 4



QUITCLAIM DEED



THIS INDENTURE, made this_29 day of_/Maych. _, 2005, between

THE UNITED STATES OF AMERICA. by and thiough its DEPARTMENT OF

THE INTERIOR, OFFICE OF INSULAR AFFAIRS, herein called the "Grantor," and |

THE GOVERNMENT OF THE U.S. VIRGIN ISLANDS, through the Governor

herein called the "Grantee."



WITNESSETH: That for and in consideration of the sum of TEN DOLLARS

($10.00) and other good and valuable consideration, receipt of which is hereby

acknowledged, the Grantor hereby grants, sells, releases, and quitclaims to the Grantee, _,

the successors and assigns of the Grantee, all of the right, title, and interest of the Grantor

in the real property including the improvements thereon described as follows:



Property located on Water Island near St. Thomas, U.S. Virgin Islands, designated

as Area I, Area J, Area K, Area L, Area M, Area M1, Area N, Area O, Area P,

Area Q, Area R, Area S, Area T, Area U, Area V, Area W, Area X, Area Y, Plot



D, Plot E, Tract A, Tract D, Tract F, Lot 7 Gincluding all structures and

improvements), Lot 25, Lot 24, Lot 87 (including all structures and



improvements), Flamingo Bay Villas (Lot 8, Lot 9, Lot 10, Lot 14, Lot 16, Lot



18, Lot 19, Lot 22, Lot 25, Lot 26, and Lot 27), and Lot 279 (Sprat Point)



as marked and shown on a copy of the 1979 map of the Department of the Interior,

Bureau of Land Management, (revised July 1996) attached hereto as Exhibit 1, and by

reference made a part hereof.



TOGETHER WITH the rights, privileges, and appurtenances, including the use

of the roads, ways, and public areas presently existing and designated for such purpose on |

said map, for use in common with other owners, for ingress and egress to said property.



TO HAVE AND TO HOLD the premises conveyed hereby in fee simple |



forever, \



SUBJECT, HOWEVER, to Virgin Islands zoning regulations, now or hereafter

in force, laws, rules, and regulations of the United States Virgin Islands, and to

covenants, restrictions, and easements of record, all of which shall run with the land and

be binding upon the owners of all lots on Water Island, and inure-to the benefit of all of

such lots and to the Grantor herein, Additionally, the following nine items are also i

included as covenants and easements of record:



1, The property is sold in as is condition with no express implied warranties other |

than those expressly stated herein and subject to Article 6 below, and Grantor’s

covenants in Exhibit 4 “Water Island Environmental Restrictive Covenants”.

‘SENT BY: © 6- ©- 5 3 8:50PM ;OFFICE OF PUBLIC RBI - 1 340 777 9587;# 5



3. The Grantee agrees not to introduce any non-native animal, with the exception

of common household Pets, such as cats, dogs, and caged birds, to Water Island,



5. The Grantee agrees to buy and the Grantor agrees to sell the property in

consideration of the following obligations to be assumed by the Grantee.



a. The Grantee agrees to use all property for public purposes only, and as

such the name of Water Island will be retained to promote economic

development of Water Island for the benefit of the U.S. Virgin Islands,



|

E

5

z

g

s

g

i

8

&

g

g

E

o

[

é



b. The Grantee agrees to assume all liability that may arise from the

Property prospectively effective as of the date of closing. i



¢. The Grantec agrees to provide the following services on Water Island:



(1) A public dock, with tegular scheduled public ferry service, and a |

deep-water dock

(2) Maintenance of roads and docks



(3) Establishment and maintenance of public recreation areas, including

the public beaches on Water Island

(4) Fire protection



(5) Public safety officers



(6) Inspection and licensing of motor vehicles

(7) Regular trash removal



i

E

2

4

E

i

&

g

;

j

&

"SENT BY: - 6- *- 5 ; 3:50PM ;OFFICE OF PUBLIC RE! - 1 340 777 9587;# 6

. |



condition of Water Island, some of the municipal services may be

provided in a location other than Water Island (such as St, Thomas).



6. As set forth more fully in Exhibit 4 “Water Island Environmental Restrictive

Covenants,” Grantor has complied with the requirements of section 120(h) of the

Comprehensive Environmental Response, Compensation, and Liability Act of

1980 (CERCLA), 42 U.S.C. § 9620(h) to the extent required with respect to the

property subject to this sale, Consistent with CERCLA section 120(h)(3), Grantor

covenants that all action currently necessary to protect human health and the

environment with respect to hazardous substances remaining on the property as of

the date of transfer has been taken.



7. The Grantee agrees to comply with the Environmental Restrictive Covenants

attached hereto as Exhibit 4, including covenants necessary to assure use of

property consistent with the environmental condition of the Flamingo Bay

Landfill. The Flamingo Bay Landfill area is described in the attached Exhibit 5,

boundary description and map, dated September 2004,



8. No member of or delegate to Congress or resident commissioner shall be

admitted to any share or part of this deed or to any benefit that may arise

herefrom, but this restriction shall not be construed to extend to this deed if made

with a corporation or company for its general benefit.



9. The Grantee hereby agrees to indemnify and hold harmless the United States,

its employees, agents and assigns from any loss or damage and from any liability |

on account of personal injury, property damage, or claims for personal injury or

death arising out of the Grantee's activities under this Deed, including any breach

of any covenant or failure to perform any obligation. In addition, subject to

Grantor’s warranty and covenants in Exhibit 4, Grantee hereby agrees to

indemnify and hold harmless the United States, its employees, agents and assigns

from any loss or damage and from any liability arising from releases of hazardous

substances caused or contributed to by Grantee, or for which Grantee is otherwise

responsible under Commonwealth or federal law.



10, The Grantee hereby releases the United States, its Departments, agencies, and



. employees from any claim for the value of possessary interests in improvements

on Water Island whether the claim is predicated upon the Water Island master

lease of 1952, any sublease, or any other basis, This release covers all and every

property interest on Water Island including the interest in any home or dwelling

as may have been constructed by the Grantee and the interest in common

properties on Water Island including by way of example roads, docks, and

beaches, The Grantee hereby agrees not to bring any claim for the value of any

alleged possessory interest against the United States, its Departments, agencies, or

employees in any judicial, administrative, arbitration, or other forum.

SENT BY:: 6- 7 & ; 8:50PM ;OFFICE OF PUBLIC RFL- 1 340 777 9587; # 7



IN WITNESS WHEREOF, the Grantor has signed this instrument as of the date!

wnitten above.

THE UNITED STATES OF AMERICA, |



DEPARTMENT OF THE INTERIOR



Pla fk. , Director |

of Insular Affairs



|

|

I

WITNE WHEREOF, the Grantee has acknowledged receipt of this

instrument as of the date first written above.



|



|



THE UNITED STATES, VIRGIN(SLANDS

OFFICE OF THE GOVERNOR 3



N.OBnans, In



WITNESSES: (two required)



Sa



, fe aF F ay of _filarehy _ , 2004 before me, personally appeared

s 6/66 €s-who acknowledged himself to be the Director, Office of Insuler

Affairs, United States Department of the Interior (Department). On behalf of the

Department, he, being authorized to do so executed the foregoing instrument on behalf of ;

the Department for the purposes therein contained by signing his name.



My commission expires ¢/36 / o7

SENT BY: G- 1- 5 5 3:56PM ;OFFICE OF PUBLIC REL- 1 340 777 9587;#36



oc tw oe trea rianm-rvrenior Ti th ‘mpany



407768864 T-487 ~—P.. 006/008 | F808

i

I

CERTIFICATION

The undersigned hereby certifies that for recording purposes, the consideration for the '

within conveyance does not exceed $

|

NOTED IN THE CADASTRAL RECORDS

sO8 Gouna Town PRUPLRIY, BOOK FOR

WATER ISLAND, NO.10 SOUTHSIDE _

4

é



a & ‘Hereby certified that cha abovws

WiBNtoned property/s which, according



fo QUITCLAIM DEED dated March 29,2005



betones tos _ THE GOVERMENT “QF THE U.S, 2



VIRGIN ESLANDS, through the Governor (GRANTFR)

Cadastral Survey /Tax Assesser Offices

SENT BY: 6- * § ; 8:51PM sOFPICE OF PUBLIC RFL- 1 340 77 9587:# 9



AFFIDAVIT



The undersigned hereby certifies 8 Vien instrument is excinpt from deed stamp tax and deed ;

recording charges pursuant to Title 33 VIC Section 128 (1) as it is a transfer from the Government of the

United States of ica. !



WITNESSES:



THE UNITED STATES OF AMERICA

Office of Insular Affairs



-



i |

DISTRICT OF COLUMBIA ) .

) 88:



On this (Uff day of April, 2003, before me, personally spear fikehs Oye,

who acknowledged himself to be the Director, Office of Insular Affairs, United States

D



epartment of the Interior (“Dep ). On behalf of the Department, he, being authorized té

do so, executed the foregong instrument on behalf of the Department for the Purposes therein

contained by signing his name.



!

In witness whereof I hereunto set my hand and official seal,

SENT. BY:

6- 1- 5 ; 8:58PM ;OFFICE OF PUBLIC REI~ 1 840 777 9587;#98



. 0818-05 14:88 PrORrremiar tisie us “uy



—



TRD-E-537



|



|



Kronprindscas Gade

GOVERNMENT OF :



‘THE VIRGIN ISLANDS OF THE UNITED STATES |

}



CHARLOTTE AMALIE, ST. THOMAS, ¥E. 00801

—Qo—



DEPARTMENT OF FINANCE

TREASURY DIVISION

TO: THE RECORDER OF DEEDS

FROM: THE TREASURY DIVISION



IN ACCORDANCE WITH Title 28, SECTION 121 AS AMEMDED, THIS IS



CERTIFICATION THAT THERE ARE NO REAL PROPERTY TAXES



OUTSTANDING FOR THE UNITED STATES GOVERNMENT |

Water Island,

-Southsids Quarter (PARCEL NO.) 5

|

|



).

TAXES RESEARCHED UP TO AND INCLUDING 2003,



RESEARCHED BY: Wane wea



TITLE: Enforcement |

DATE: August 03, 2004 ,

VERIFIED BY: ‘



TITLE: ‘



DATE: , August 03, 2004



COLLECTOR NO. 8501

ee ah ee



| SHIPILA PUB YER “Sn 209 Aq poaoxdde pu paynsuos ssoqon PIBA0} otep snp Woy zn00 heus



| ‘

i ST Yaya Jo Adoo B ‘dens IusuIeseuRyy pus'y Jo NeAING 6161 24} Uo umogs @SOU} 238 Ula1ay 0}



SJUBMIACD @ANSLQS9Ry



: PUTS] 193844,

! c HQIXA



OT#L996 LLL OFC I © WM OWMNd dO Widso! WdIs:¢ + g -, -9 7AS_INGS

7211

Y 6- I= 5 ; 3:51PM OFFICE OF PUBLIC REL- 1 340 777 858

‘SENT’ BY:



The Buyer agrees not to introduce any non-native animal, with the exception of common

household pets, such as Cats, dogs, and caged bitds, to Water Island.



equipment on any beach on Water Island and that animals will be kept off any beach on Water

Island. This restriction Shall not prohibit Buyer from usi heavy equi beach

to its conditions Prior to any major storm or natural disaster.



Owners of boats, lessees, visitors, and Clients must moor onl

Minimize impacts to the Seagrass beds. The type, n



Permanent Nondevelopment :



Tract A Fort Segarra



|



t



Tract D (excluding Privately owned lots 61, 62, 63, 86, an 87) }

Tract F (culturaj restriction*) uires signed Preservation Covenant

{



Permanent nondevelopment which will |

consist of the man © fringe and buffer zone 13 feet (4 meters) in width, beginning with the

upper limit of the wetlands,



Restricted Development Covenant



. Privately owned lots 48-60,



Tract B nondeveloped Portions

Tract C, including Honeymoon Beach, will also include restrictions, such as Setbacks from

front v tation, in addition too Shing restrictions, to impacts to sea ;

turtles should tional development take place |

- SENT BY: St 8 + S:SIPM SOFPICE OF PUBLIC REL~ 1. S40 777 9587:12



RESTRICTIVE COVENANTS ON SOUTHERN LOTS (WICA AREA) !



{

|

Permanent Nondevelopment



The following lots if not already developed:



Lots 72 and 73 (cultural restrictions*) Requires signed Preservation Covenant

Lot 112 (cultural restriction*) Requires signed Preservation Covenant



Restricted Development Covenant

The following lots if not already developed:



Lots 1, 2, 3, 4, 5, 6, 7, 8, 9, and 10 ,

Lots 20, 21, 22, 23, 24, 25, 26, 27, 28, and 29 :

Lots 61, 62, and 63

Lot 71, including lighting restriction ,

Lot 78

Lots 86 and 87



Lots 94 and 95 ;

Lot 100 .

Parcels 111, 142, and 143



RESTRICTIVE COVENANTS ON SPRAT BAY PROPERTIES



Permanent Nondevelopment

The following lots if not already developed:



Lot 201 (cultural restriction*) Requires signed Preservation Covenant

Lots 205 and 206 (cultural restriction*) Requires Signed Preservation Covenant



Lot 208 (cultural restriction*) Requires signed Preservation Covenant

Lots 209 and 210



Lot 230

Lot 234 |

Lot 270 |



Restricted Development Covenant



Lots 202, 203, and 204

t

Lot 207



Lots 211, 212, 213, 214, 215, 216, 217, 218, 219, and 220

Lots 221, 222, 223, 224, 225, 226, 227, 228, and 229 (all including lighting restrictions)

Lots 23 1, 232, and 233



Lot 268

Lot 278

"SENT .BY:



POTENTIAL HAZARDOUS SUBSTANCES AND SOLID WASTES

WATER ISLAND, U.S. VIRGI Ss



3e information in this Exhibit is required under the auth



6- 1- 5 + 8:52PM ;OFFICE OF PUBLIC REL



EXHIBIT 3



April 2004



ority of regulations



1 340 777 9587;#14



N ISLAND



promulgated under section 120(h) of the



2mprehensive Environmenta! Response, Compensation and Liability Act (CERCLA or “Superfund”) 42 U.S.C. $620(h)(1).

Potential

LOCATION RCRA/CERCLA

MATERIAL HAZARDOUS OBSERVATIONS

WASTE

dong the dirt road that |

'ads to the former A 55- gallon bung holed drum, in good condition

arehouse, adjacent to Aropol 7241 T-15 FDA and with no apparent spills, Labe! , "Aropol

ie Risk 7241 T-15 FDA

Ode (RAC) 1 area

|

AC 1 area, adjacent to RAC 1 area is fenced, and contains crap metals,

e dirt road that leads to Marine Gas Tank abandoned vehicles, and a marine gas tank with

e former warehouse, unknown contents (inaccessible),

!

mer Hotei Disposal Located in this area are household tis,

te located adjacent the appliances, several abandoned veh es, an

t road that leads to the Miscellaneous debris x abandoned tanker truck, which Is empty. Paint

Mer warehouse. cans, car batteries, old empty gas solvent

2st Area 4) cans, and ofd gas tanks,

t

|

This area is used as a transfer Station by the VI

Government and Water Island Community

Association (WICA) for focal household trash

disposal. Waste streams are ted, and

gare OME? Fort | a steries x properly stored. Palattes are used fof batteries

and fuels and solvents have seconda

containment. There is also a Closed, ed

containment. Recent investigation indicates no

hazardous waste refegse has occurred.

i

There are no apparent chemical 's at the

former Fort Segarra. However, there are several

ner Fort Segarra Physical Hazards Physical hazards such as a vertical used to

access the underground bunker and ajhole

approximately 4 feet deep ina poorly iit area.

Afong the eastern shoreline of Sprat Point, a small

t Point i ship named the “Amatie Queen" hed

Abandoned Ship ashore, The hull is breached and a dideal sheen

hae been Previously observed in the water inside

the hull,

SENT BY:



6- *- 5 ; 3:52PM +OFFICE OF PUBLIC REL~

MOSTYN nen eee NS



1 340 777 9587 5#15



Lo R Potential |

CATION MATER CRA/CERCLA

IAL HAZARDOUS OBSERVATIONS

WASTE |

Limestone Ba A compromised batt nd

y Battery x been observed approximately 26 Sthom the

i

Suspected Asbestos

Lot 87 containing Material A 2.5' x 3" piece of tar paper, Suspected of

(Class | non- friable) containing asbestos is present.

_ Unknown objects and

=lephant Bay unknown tg =n



inflatable boats,



There is a large amount of nu ae the



phant Bay includ:

outboard



destroyed

“ ) [#16

SENT BY: 6- '- 5 ; 8:52PM ;0FFICE OF PUBLIC REL 1 340 777 9587



Exhibit 4

Water Island Environmental Restrictive Covenants



1. Ia accordance with the Provisions of 42 U.S.C. § 9620(h) of the Comprehensive

Ssnvironmental Response, Compensation and Liability Act (CERCLA) and regulations of



Island, U.S. Virgin Islands (March 2004), and Site Investigation Report, Plot D and Lot

101, (March 2003) describing the hazardous substance and chemical agent investigations



of the property and the type, quantity, and storage, disposal, and release of such

materials, to the extent that such information is available.



In particular, those reports note that hazardous substances disposed of on the property for

a year or mote or stored, or released include an estimated 443,500 pounds of asbestos-

containing material (ACM), CASRN (13 2207-33-1). The Grantee has also been



:

é

8

E

E

2

5

f

g

5

5



2. In accordance with the Provisions of 42 U.S.C. § 9620(h)(3), the Grantor hereby

covenants and warrants that:



a. All remedial action necessary to protect human health and the environment has |

been taken with r



espect to any hazardous substance Temaining on the property as of the

date of transfer; and



assignees, and any Person or entity occupying the Property pursuant to an authorization

from the Grantee causes or contributes to the telease of hazardous substances at the

Property; or (iii) the remedial action is necessitated by soil excavation or disturbance at



the Flamingo Bay Landfill, which is subject to the restriction set forth below.

SENT ‘BY: 6- 1- 5 + 3:53PM OFFICE OF PUBLIC REL~ 1 340 777 9587;#17



c. The Grantor reserves a perpetual easement over and through and a rightof =

access to the property to perform any additional environmental investigation, monitoring,

sampling, testing, remedial action, corrective action, or any other action necessary for the !

Grantor to meet its environmental obligations under applicable law and as provided in ,

this Deed. This easement and right of access shall be binding on the Grantee, its

successors and assigns, and shall run with the land. This reservation includes the right to

access and use utilities on the property at reasonable cost to the Grantor. In exercising

this right of access, except in case of imminent danger to human health or the

environment, the Grantor shall give to the Grantee, or then record owner, reasonable

notice of actions to be taken on the property and shall use reasonable means to avoid

and/or minimize interference with the use of the property.



Restriction on Flamingo Bay Landfill



With respect to the closed Flamingo Bay Landfill, described in the attached

survey and report dated September 29, 2004,(map Exhibit 5) the Grantor has undertaken |

an investigation of the property and has concluded that the following covenant is i

necessary to assure use of the property consistent with its environmental condition. |



1, The Grantee, its successors and assigns, transferees, and any person or entity

occupying the property pursuant to an authorization from the Grantee, shall not conduct

or permit others to conduct (1) any excavation, digging, drilling or other disturbance of

the soil or ground below a depth of one foot without prior written approval of the United |

States.



2. Any additional remediation of the Flamingo Bay Landfill necessitated because

of Grantee’s request to conduct excavation, digging, drilling or other disturbance of the

soil or ground below a depth of one foot will be at no additional cost to the United States

and with the express written consent of the United States. Consent may be conditioned

upon such terms and conditions as the United States deems reasonable and appropriate,

including performance and payment bonds and insurance.



3. The Grantee covenants for itself, its successors and assigns, that it shall

include and otherwise make legally binding this restriction in all subsequent lease,

transfer or conveyance documents relating to the property. Notwithstanding this

provision, failure to include this restriction in subsequent conveyances does not abrogate

the status of these restrictions as binding upon the parties, their successors and assigns. |

SENT BY: 6- 1- 5 ; 3:53PM ;OFFICE OF PUBLIC REL~ 1 340 777 9587;#18



|



Indemnification



Subject to the environmental warranty granted by the United States and set fo

above, Grantee, its successors and assigns hereby covenant and warrant that it shall

indemnify, defend, and hold harmless the United States and its agencies from any inj

damage, loss, claim, liability, cost, and judgment arising from the acts or omissions of

Grantee’s employees, agents, contractors or lessecs, atising out of, or in conection wi

Grantee’s use, occupancy or operations on the property,



>



Anti-Deficiency Act



———-——



The obligation of the Grantor to conduct any remediation under this DEED is

subject to the availability of appropriated funds to the Department of the Interior, and

nothing in this Deed shall be interpreted to require obligations or payments by the

Grantor in violation of the Anti-Deficiency Act.

{I



Water Island Development Company

Tract B consisting of approximately 33.1 U.S. Acres and Tract C consisting of approximately 11.9 U.S.

Acres, and the Catchment Area consisting of approximately 3 U.S. Acres, Water Island, Virgin Islands



EXHIBIT “F”

LETTER OF INTENT

THe UNITED STATES VirGIN ISLANDS



OFFICE OF THE GOVERNOF:

GOVERNMENT HOUSE



Charlotte Amalie, V.1, 00802

340-774-0001



November 19, 2014



U.S. Mail



The Honorable Sally Jewel

Secretary of the Interior



U.S. Department of the Interior

Washington, DC 20240



Re: Sale of Properties to Water Island Development Company. LLC

Dear Secretary Jewel:



On November 19, 2014, the Government of the Virgin Islands (“Government”) approved

a lease agreement to the Water Island Development Company, LLC (“WIDC”) for the

redevelopment of the former Water Island Hotel property as a boutique resort. WIDC was

selected through an Expression of Interest (EOI) issued by the Government on September 19.

2013. (See Attached EOI) Our interest in attracting a developer of a boutique resort was to

achieve an economic activity on Water Island that would be consistent with the current

community. It would supplement the product diversification and re-branding that we are

executing to broaden our tourism offerings while providing permanent jobs and creating business

opportunities. The previous hotel on the island, Sea Cliff Hotel, was first built in 1953 as the

Water Isle Hotel and destroyed in 1989 as a consequence of Hurricane Hugo. Since that time

there has been no meaningful and contributing economic activity on Water Island.



The Government engaged REVPAR Intemational, Inc. (“REVPAR”) a hospitality

advisor and asset management firm in September 2012 to assess the viability of lodging

development on Water Island. On November 29, 2012, after conducting a market study and

financial analysis on the feasibility of the redevelopment of a hotel and marina on Water Island,

REVAR issued an assessment indicating that such a project was in fact feasible. (See Attached

Assessment)



The EOI resulted in proposals from three developers: LAURENS GmbH, WIDC and

RED Legacy, LLC After reviewing the proposed submissions, the Evaluation Committee,

which was comprised of key stakeholders including: the Office of the Governor, Department of

Tourism. Department of Property and Procurement, Virgin Islands Economic Development

Authority, and the U.S.V.I. Hotel and Tourism Association along with REVPAR in an advisory

Leuer to Secretary Jewel



Novenrber 19, 20]-4



Sale of Properties to Water Island Deveiopment Company, LLC

Page J} 2



role conducted two (2) rounds of Oral Presentations to select the developer. in this instance

WIDC.



In addition to the boutique resort, WIDC has proposed constructing residential dwellings

and villas in conjunction with a community center and commissary tu make the overall

development more attractive to creating economic redevelopment on the island. While the

Government agrees that this will foster economic growth, the Government as a general policy

only leases land for business and commercial activity and not for private residential

development. Therefore, we were and are willing to offer certain parcels and lots of land for the

residential development only to fortify the economic sustainability of the hotel and marina

development. The 1996 Contract of Sale for the transfer of Water Island obligates the

Government to:



2A. The Buyer agrees to use all property for public purposes only, and to

promote the economic development of Water Island for the benefit of the

U.S. Virgin Islands, including the residents of Water Island. For purposes of

this provision, the operation of a hotel or tourist resort on the property

operation established.



We believe that the selection of WIDC meets the requirement of the above stipulation:

however, to succeed in the current economic environment and secure a funding source and

generate the financial retums to support the operations and financing vehicles, additional

property on Water Island has been requested by WIDC. The additional acreage will to

supplement the former hotel footprint and provide an opportunity for specific residential

development as a component of the hotel project. In light of these objectives, the Government is

prepared to offer for sale specific undeveloped properties listed in Addendum 1.



As stipulated in the Contract of Sale, the Government must have the approval of the

Department of Interior to divest any property that was the subject of the 1996 transfer.

Specifically, the 1996 Contract of Sale states:



2C. The Buyer agrees that if the transferred property or any portion thereof

is sold, the proceeds shall be paid to the United States untess there is a

written agreement between the Governor of the Virgin Islands and the

Secretary in effect prior to the sale providing for a different disposition.



Since the expiration of the former master lease in 1992 and transter in 1996, we have

achieved the transfer and clear title of all public and private properties, constructed a public ferry

dock, constructed a deep water industrial dock, undertaken significant road resurfacing.

established a basic level of fire service, developed a process for public safety response, and

provided regular trash removal.



In the multiple studies performed by the U.S. Government and non-profit agencies since

1980. the best course forward to remedy the undeveloped economic potential on Water Island

tates te Secretar Jewel



November 19, 2011



Sale of Properties to Water Island Dera ment Company, LLC

Page!



and the clearly defined recommendation in the best interest of the residents and the Territory is

for resort development. In the Water Island Use Plan Study completed by the University of the

Virgin Islands in 2006, properties for potential residential locations were earmarked for moderate

income residential housing under the Virgin Islands Housing Finance Authority In addition to

DOI!'s approval to offer for sale the specific properties set forth in Addendum | (attached hereto).

the Government has started the process of identifying properties for the purpose of constructing

such moderate income housing units in partnership with the Virgin Islands Housing Finance

Authority.



The Government has started the process of resurveying and recording the identified

properties (set forth in Addendum I) through the Department of Property & Procurement. As

part of the underlying due diligence and pricing, three (3) independent appraisers will be

engaged and commissioned to perform valuations on the properties to determine the value for

purposes of negotiating a sale.



With the approval by the U.S Department of the Interior, we will offer the listed

properties to WIDC and to achieve sustainable economic activity on Water Island and create

high quality jobs for our workforce, in an effort to strengthen this valuable economic asset for

the benefit of the entire Virgin Islands.



Sincerely, \ \



> , or



John P. de Jobgh, Jr.

Governor



Enclosures

Water Island Development Company

Tract B consisting of approximately 33.1 U.S. Acres and Tract C consisting of approximately 11.9 U.S.

Acres, and the Catchment Area consisting of approximately 3 U.S. Acres, Water Island, Virgin Islands



EXHIBIT C



MAP OF PREMISES



EXHIBIT C

Water Island Development Company

Tract B consisting of approximately 33.1 U.S. Acres and Tract C consisting of approximately 11.9 U.S.

Acres, and the Catchment Area consisting of approximately 3 U.S. Acres, Water Island, Virgin Islands



EXHIBIT D



WATER ISLAND EXPRESSION OF INTEREST



EXHIBIT D



9296600"TG2e HIOG

Expression of Interest

Resort Development

Water Island, USVI



1 REVPAR Issue Date: September 19, 2013



International Closing Date: November 15, 2013: 5:00 pm EST

The Opportunity



The Government of the United States Virgin Islands (USVI) is inviting suitably qualified firms to submit an expression of interest (EOI) in

developing and subsequently operating a world-class resort, with the availability of two designated sites on Water Island in the USVI, as well as

additional adjacent land for residential development. The addition of a resort along with appropriate support services, facilities and amenities, as

well as possible residential development on the +490-acre Water Island is a priority project for the Government. The primary objective is to

increase and enhance USVI tourism through the development of a new upscale resort that generates high quality jobs for the local workforce

and creates opportunities for residents of the territory to participate in the project development and operation, all of which collectively



)



contributes to the country’s long-term economic growth.



[he intent of this EOI is to initially gauge the level of interest from the hospitality investment community to undertake the venture and identify

an appropriate development partner for the project under a long term lease agreement with the Government of the USVI. Moreover, the EOI will

allow for the Government to better understand and more clearly define any infrastructure support services and/or requirements, if any, that a

potential developer and/or operator may require in order to ultimately commit funds to the project and deliver an economically-viable world-

class resort project to Water Island and the USVI.



2

Water Island is roughly 490 acres and the youngest of the USVI. It was

purchased by the U.S. Government from the Danish East India Company in

1944 as a means to protect the submarine base on neighboring St. Thomas.

The U.S. Department of Defense relinquished and transferred control of the

island in 1950 to the U.S. Department of the Interior, which then leased it to

Water Island Inc., a partnership of two private developers. The lease was for

20 years during which time, Water Island Inc. constructed a hotel and

residences. In 1996, the Department of the Interior formally transferred

control of Water Island to the USVI Government. making it the 4th island in

the territory. During the transfer, the existing residents with subleasehold

agreements were allowed to acquire their property on a fee simple basis.



In its current state, Water Island functions as a residential or bedroom

community for a population of less than 200 people, concentrated in three

primary areas. In addition, there are a variety of rental homes, cottages, and

one campground available to overnight visitors. There is little evidence of

commercialization, and the USVI Government with assistance from the

residents, provides limited services to the island. Emergency first response is

provided by the volunteer Water Island Search and Rescue Squad



The original hotel on Water Island was 50 rooms and commenced operations

on January 1, 1954. In 1963, dredging occurred to create a new marina area,

replete with the construction of a dining room and bar. In December 1965.

Water Island Inc. sold the master lease for Water Island to Water Isle Hotel &

Beach Club under the ownership of Edward McArdle. McArdle commenced

an ambitious new hotel expansion program called The Colony Club,

increasing the number of rooms to 110 by 1970 and providing additional

recreational amenities including tennis courts and a dock. Moreover, the hotel

became a favored destination spot for many USVI-bound guests who wanted

to experience a resort in a more secluded environment. The lease was renewed

in 1972 for another 20 years. In 1977. the Colony Club shut down and

reopened as the Sugar Bird Hotel under the management of the Beach

Management Corporation. In 1989, Hurricane Hugo severely damaged the

hotel and it subsequently closed. The lease ran out three years later and was

not renewed. The remnants of the hotel and club remain.



Water Island



United States Virgin Islands



Caroling



Elephant Bay



Phillips’ Landing

Ferry Dock

Post Office Box

Pay Phone



Honeymoon

Beach



Flamingo Point

Fort Segorro



Hain Road

ide Road

Attraction

UTA Ad



SOLBERG

ers

| ae

ry University of the ‘ Merchants Mart

: Virginislands ~ Shopning Center

= CHARLOTTE ‘,

; AMALIE WEST ALTONA wectins

i Cyril E King: + veterans Dr Caasier)

; : ¥virgm

& Islands Part

Authority Park

R

CABRITABERG ay yap re)

Crown Bay

-H gh Marina

q

: Phillips Ba} f

4 di oe

Landing ‘fd GF peed

gee

7 =) £

¥ Beachfront Water Island

; . pity

4 Site @

: bain

} Ten

Upland / @ &

Marina Site *

=

F t

i got



Awd ar



| ansede



nm



LO



Liarel |



Stac|



S|



CHARLOTTE



AMALIE

Veteran |



Hassel

island



COWELL

BATTERY



Marriatt



v

Ss

3

%,

O

The Designated Sites



4

\\ Pa -

. A } Cod ee .

Ka / :} “ af . Vote »

. | eae ’ pee

Le a opt -¥ So

nt \

Gane f a _ .

© oe di i

Ul 7

“y mr ot. £ nn

\ = » x Pree eS

3 Ks 3. 7 S

Sm > ' ~~

- <a “Set u TEP IP OLE

) SAS ="

r



al

\\

\

.

\

FF 3

ta

1"

Bd

i



(eros

o- a, ai

~ ” , 7

r a“ ee

a ee - - —_

——

a



Beachfront Site



Upland/Marina Site

St



are approximate,



ey



coal

dibs -

ae

Beachfront Site



Upland/Mar



Highlighted areas are not to scale and are approximate.

te Bd wn z = * T

lfourism in the USVI



The USVI are a popular destination by travelers throughout the world: a large contingent of whom originate from the United States, in part aided by United

States citizens not having to carry a U.S. passport to gain entry to the destination. This is a unique selling proposition as many U.S. travelers do not want to



have to experience the burden of customs and immigration procedures, and increasingly seek safe destinations to vacation given the current state of affairs

throughout the world. U.S. visitation is most significant from the affluent cities of New York City, Miami, Washington, D.C., Chicago, and Boston.



Consistent with that, there is non-stop air service to St. Thomas by the major airlines from 10 U.S. metropolitan areas.



The USVI accommodates roughly 2.6 million visitors annually, who spend in excess of one billion dollars annually throughout the territory. When divided

across the total hotel guestrooms in the country, this annual spend equates to more than $700 per available room night. The country’s many attractions. much

of which is centered on maritime pursuits, have made the area a strong leisure destination and corporate incentive group venue. Several world-class. upscale

resorts can be found on the neighboring islands of St. Thomas and St. John, which are supported by a robust transportation infrastructure and Cyril E. King



Airport, which serves over 500,000 passengers annually.

8

Indian Company Dock in Havensight



USVI Lodging Market



As of year-end 20n, there were 47 hotels with 3,759 rooms in the USVI based on the latest figures available from the USVI Bureau of Economic

Research. This includes large resorts like the Marriott Frenchman's Reef, small inns, and even the Maho Bay Tent Camp. Separately, the USVI

had a total of 1,130 condominium, guesthouse and timeshare units (rooms) as of year-end 20u that were rented ona daily or weekly basis. The



total lodging inventory for the territory is 4,889 units; however, this number includes only those units registered with the government and



excludes those used by owners and/or rented out on a casual or indirect basis.

As the following graph illustrates, the occupancy for the entire USVI has

fluctuated over the last six years, with performance in 20n slightly down

in part due to Marriott Frenchman’s Reef renovation during this time.

At less than 150 square miles, the USVI is relatively small in size in

comparison to other Caribbean destinations and does not possess a high

degree of undeveloped land deemed suitable for development. Real

estate, especially prime beachfront property such as the sites for offer

on Water Island, is very limited and therefore carries a premium. The

scarcity of a critical mass of land that would enable a world-class resort

to be developed results in high barriers to entry, preventing an over-

supply in the market. As such, the USVI is a stable market with

significant upside potential.



As illustrated on the next page, branded supply is now in full recovery in



the St. Thomas and St. John markets, which bodes well for any new

development located in the vicinity.



Occupancy USVI vs. St. Thomas & St. John



70%



ie aN

650i of



60%



aN



eo__— ®



LC -



TF

2006 2007 2008 2009 2010 2011

Entire USVI  -®=<St. Thomas & St. John



* Honeymoon Beach

Flamingo Bay



7 CV ] Ton ‘ Marlcat

According to Smith Travel Research (STR), as of



April 2013, there are 78



lodging facilities with 4,884 rooms in the USVI market, with 30.9 percent of



the room supply contributing data to STR. The vast majority of this supply

consists of upscale and luxury properties which would be deemed competitive

to varying degrees to any new resort on Water Island. These competitors

include the Ritz-Carlton St. Thomas, Marriott Frenchman’s Reef & Morning

Star Beach Resort, Bolongo Bay Beach Resort, Westin St. John Resort,

Rosewood Caneel Bay Resort, Renaissance St. Croix, and Carambola Beach

Resort & Spa, to name a few.



As evident in the adjacent table, the reporting supply of hotels has

outperformed the overall market considerably over the reporting period, with

overall increases in occupancy and average daily rate resulting in RevPAR

levels exceeding $200 in 2012. As of year-to-date 2013 through April, lodging

demand and average daily rates continue to increase at roughly equate rates,

allowing RevPAR growth to reach 6.4 percent over the same period in the prior

year.



Historical Operating Performance



the USVI Lodging



Supply



Occ.



ADR % Chg RevPAR | % Chg



2009



65.7%



$169.48



2010



67.0%



$180.36



2011



61.2%



$178.13



2012



68.4%



$206.40



rik



2012



76.6%



$373:17



2013



79.4%



$383.19



$304.13 6.4%



Source: Smith Travel Research; compile



d by REVPAR International

Project Information



The two resort sites are owned by the Government of

the USVI. As such, they intend to lease them to the

successful bidder under a development and long

term lease agreement. The intent is for the successful

developer/operator to design, develop, construct,

operate and maintain the upscale resort for the

duration of the lease term, The Government of the

USVI is open to extending a lease up to 99 years. The

bidder may mortgage its leasehold interest subject to

the requirements and limitations set forth in the

lease agreement (provided the land remains

unencumbered), to be negotiated between the

Government and the successful bidder. The specific

terms of the development and ground lease

agreements will be negotiated with the successful

bidder. For the land lease, it is anticipated that the

Government will seek to establish a minimum base

rent with a percentage above a certain revenue

threshold.



Utilities



Utilities are in place and available on Water Island

including electricity and telephone service via Virgin

Islands Water and Power Authority and Innovative

Communication, respectively. Meanwhile, there is

currently no potable water or public sewage system

on the island, with the only fresh water source

consisting of rainwater collected in cisterns. As such,

it is likely that a reverse osmosis desalination water

plant, as well as a wastewater treatment plant, would

need to be installed, or direct water and sewer lines

connecting to St. Thomas be established for the

resort. Along with the rest of the USVI, Water Island



will soon be able to boast a world class, open access,

high speed, fiber optic broadband network which will

connect it to the rest of the world; the infrastructure

for which is being installed now.

r



The Government is encouraging bidders to be

innovative and creative in their approach to

developing the Water Island sites into a unique

world-class resort. At a minimum, the resort should

be self-sufficient and of an upper upscale nature,

providing a full range of facilities and amenities

commensurate with industry standards for this level

of self-sufficient operation. Specific amenities and

features set forth in the bidder's EO! will be

incorporated into the final development/lease

agreement. Any ancillary facilities that are required

should be set forth clearly in the EOI, as well.



The EOI should consider that the Government of

the USVI is desirous of the following in relation to

the resort project:



1) A turnkey approach (developing, financing and

operating the resort).



World-class upper upscale resort, with

recognizable and consistently high standards in

services and amenities which will enhance the

USVI’s reputation as a pre-eminent leisure

tourism destination.



Environmentally friendly/LEED Certification is

preferred.



Current or proposed affiliation with a successful

internationally known brand.



Target guests comprising both leisure transient

and group travelers.



The proposed development should complement

the attributes of the surrounding area and the

uniqueness of the USVI.

overnment of the USVI will:

grant a term lease to the developer on

mutually agreeable terms, on the land(s)

which would comprise the resort site(s);

the renewal of which will not be

unreasonably withheld.



2) expeditiously facilitate, subject to the laws

of the USVI. the requisite permissions

required to proceed with this investment

including USVI Coastal Zone

Management (CZM) permitting. A CZM

permit is required for any development

activity in the first tier of the coastal zone.

consider the grant of additional incentives

available under the laws of the USVI,

subject to appropriate qualification or

conditions.

consider the lease of additional parcels

owned by the Government of the USVI

under the deed restrictions implemented

by the Department of the Interior.



The USVI offers very unique tax incentive

programs for qualified businesses relocating to

their shores through the Economic

Development Commission. Benefits for

businesses in the EDC program can include up

to 90% reduction in corporate income tax,

90% reduction in personal income tax, and

100% exemption on business property tax.

Additionally, the EDC Hotel Development

Program under 29 VIC 1301 provides

additional tax incentives for a limited time

period for specific Hotel Development

initiatives.

Flamingo Bay



It is our intent to use a two-step process in the solicitation, evaluation and award of the project. The first step will be for the bidder to submit a

proposal for evaluation by both REVPAR International and the Government of the USVI. After evaluation of all proposals, a short list of up to 3

firms will be made. These firms will be required to make a formal presentation to REVPAR International and the Government of the USVI at a

mutually agreeable place and time. Based on the presentation, along with any additional information or clarification requested, we will begin

negotiations with the bidder that best fulfills the stated requirements and objectives of the Government of the USVI. Pending the outcome of

those negotiations, we will either consummate an agreement with that bidder or commence negotiations with the next bidder.



i)

Pre-Proposa



Briefing & Tour



In order to facilitate your understanding of the

objectives of the Government of the USVI, the

sites, the desired facilities to be developed, as

well as provide you any other information

pertinent to providing us with the most

complete and competitive EOI submission, we

have arranged two site visits and briefings as

follows:



1. October, 29, 2013 at 10:00 am



2. October 30, 2013 at 10:00 am



The site visit will include a briefing from

REVPAR International and the Government of

the USVI representatives, a tour of the subject

site and an outbrief to answer any questions

that arise during the course of the day. We

estimate each site visit will take three to four

hours.



Please RSVP for the site visit no later than

October 1, 2013 at 5:00 pm EST by emailing

Mr, Cylke at c.cylke@revparintl.com.



Additional Photography of

Water Island



1

Required EOI Content



The following should be submitted by interested parties:



1) Letter of Interest.



2) Full contact details and corporate profile of the developer.



3) Where the investor will not be the developer or operator of the resort, details of the key entities that will be involved in the

proposed development (developer, managers and operators).



4) Summary and evidence of a proven track record, solid reputation, success, and qualifications and experience in the hotel industry.



5) Schematic design and/or conceptual rendering illustrating the proposed development; as well as key elements of the resort project

including services and amenities.



6) Preliminary Business plan that includes:



a) Narrative description of the proposed development, which takes into account the matters outlined in the project scope above.



b) Estimate of the project development budget, and evidence of the developer's financial ability to undertake such a project.

Detailed financing/funding models, budgeting, and assumptions will also be required at later stages in the process.



c) Details of the proposed developmental time line.



d) Any additional information that the person(s) considers appropriate to assist the Government of the USVI with a better

understanding of its proposal.



7) Any additional consideration either in the form of incentives or in the form of additional land development rights.



Please note that, if the EOI is from a consortia or joint venture, information on all entities comprising the consortia must be provided. It

must clearly indicate which person is the lead entity of the consortia. The nature of the consortia should be specified, and evidenced by

letter or agreement signed by all participating entities.



Evaluation Criteria



At this juncture, there is no specific evaluation criteria, though only formalized responses adhering to the Required EOI Content as outlined

above will be considered.



1g REVPAR

© International

Submittal Details



Please submit three (3) hard copies and one (1) electronic copy no later than November 15, 2013 at 5:00 pm EST to the following address:



REVPAR International, Inc.

Attention: Mr. Christopher Cylke

1020 N. Fairfax Street, Suite 320, Alexandria, VA 22314



Telephone: 954-376-4754

Email: c.cylkeqrevparintl.com



° Any submittal received after the deadline will be returned to the sender.



° EOI must be in a sealed envelope, which is clearly marked “EOI for Resort Development, Water Island.”



¢ No faxed proposals are permitted.



¢ The Government of the USVI and REVPAR International shall not be responsible for the loss or non-receipt or delay in the receipt of

any EOI sent by post or courier to REVPAR International, Inc.



° Any and all costs associated with your company’s submission of the EOI including any costs associated with any requested or

independent site visits will be borne by you. Nothing in this letter or solicitation should be construed as obligating the Government of

the USVI or REVPAR International, Inc. to reimburse you for any costs associated with your submission(s) for this endeavor.



° It is the responsibility of each company to clearly mark any part of the submission considered to be of a proprietary or confidential

nature.



Correspondence



All questions, inquiries, and correspondence associated with this solicitation should be emailed to Mr. Cylke at c.cylke@reyparintlcom.

Please provide “EOI Water Island Resort” in the subject line. Any information given to a prospective firm concerning this EOI will be

furnished to all known prospective firms an as amendment to this EOI, if, in the opinion of REVPAR International, such information is

necessary in submitting responses to this EOI. Oral instructions given prior to award are not binding.



Under no circumstances should you contact the Government of the USVI during the course of this process. Nothing in this letter or

solicitation obligates the Government of the USVI to enter into a development or management agreement with any party. This solicitation

may be cancelled at any time without notice.



y) REVPAR

: International

2



Water Island Development Company



Tract B consisting of approximately 33.1 U.S. Acres and Tract C consisting of approximately 11.9 U.S.

Acres, and the Catchment Area consisting of approximately 3 U.S. Acres, Water Island, Virgin Islands



EXHIBIT E

INSURANCE REQUIREMENTS



A. |Liability and Workers Compensation Insurance Requirements



During construction, Lessee and/or its general contractor are to carry the liability and workers'

compensation insurances set out below. Subcontractors are to carry the same coverages but

required limits will be amended for subcontractors to reflect the size of their contracts.



Once operations have begun, Lessee shall have in place and at all times maintain the below

liability and workers' compensation insurances.



Coverage Type Minimum Limit Maximum Deductible

or Retentions

1.| Commercial $11,000,000 | Combined single limit per | $100,000 | Per

General Liability | * occurrence and in the occurrenc

aggregate where fe

applicable

2.| Automobile $11,000,000 | Combined single limit per | $100,000 | Per

Liability + accident accident

3.] Employers $11,000,000 | Each accident for bodily | $100,000 {| Each

Liability * injury by accident accident

Each employee and or

policy limit for bodily employee

injury by disease (for

disease)

4.) Workers Statutory Per occurrence N.A. N.A.

Compensation requirements |

* Combination of primary and excess or umbrella liability policies. Any combination of

primary and excess limits is acceptable if the total equals or exceeds the specified amount.

Liability Insurance Terms and Conditions

a. | Additional The General Liability policy and any Excess or Umbrella Liability

Insured policy shall be endorsed to name Lessor as an additional insured.

Any such policy shall contain language that "Such insurance as |

afforded by this policy for the benefit of Lessor shall be primary as

respects any claims, losses, damages, expenses, or liabilities arising

out of this Lease, and insured hereunder, and any insurance carried

by Lessor shall be excess of and noncontributing with insurance

afforded by this policy".

b. | Completed The General Liability coverage in place during construction shall |

Operations include Completed Operations coverage, which coverage is to

continue for a minimum of two years following completion of

construction and acceptance by Lessee.

Water Island Development Company



Tract B consisting of approximately 33.1 U.S. Acres and Tract C consisting of approximately 11.9 U.S.

Acres, and the Catchment Area consisting of approximately 3



U.S. Acres, Water Island, Virgin Islands



B.



Property Insurance Requirements



Prop



Boiler and machinery coverage on a breakdown basis is to be included in the All Risk policy or



erty policy(ies) shall cover all risks of direct

coverage for coll



physical loss to the Premises, including

apse and transit (with respect to property in transit that will become a part of



buildings or structures under construction).



provided in a separate policy. Testing of any equipment is to be included.



There shall be no exclusion for the perils of explosion, collapse or underground damage.



1.



Builder's Risk Property Insurance

final testing and acceptance at which time



property insurance program (see B.2.),



(to be in place from inception of construction through

property insurance converts to the permanent



Coverage Type Minimum Limit Maximum Deductible

or Retentions



Earth Movement Annual 5% of Per



including Aggregat | Replacement |Occurr



earthquake e Value ence



Volcanic Activity



and Subsidence. To be determined based on



Hurricane/ values, exposure to loss and | Annual 5% of Per



Windstorm insurance market conditions. | Aggregat | Replacement |Occurre|



e Value nce



Flood including Annual 5% of Per



Tsunamis Aggregat | Replacement |Occurrel|



e Value nce

Debris Removal _ {$2,000,000 Per Included

occurrence

Ordinance or Law [$5,000,000 Per Included

occurrence



Expediting $2,000,000 Per Included



Expense occurrence



All Other Perils | Replacement Value of Per $500,000 Per



(including boiler | Insurable Real and Personal loccurrence Occurre



and machinery | Property nce



perils where



applicable)



Soft Costs 100% of costs which would be incurred | 45 Days Per

again following a total loss at the end of Occurre

construction. nce



2.| Property Insurance (Permanent program to be in place simultaneously with the expiration

or cancellation of the Builders’ Risk coverage (see B. 1.))

Water Island Development Company

Tract B consisting of



approximately 33.1 U.S. Acres and Tract C consisting of approximately 11.9 U.S.

Acres, and the Catchment Area consisting of approximately 3 U.S. Acres, Water Island, Virgin Islands



output of the Water Island Resort

Community, such amount to be determined



Coverage Type Minimum Limit Maximum Deductible

or Retentions

Earth Movement Annual 5% of Per

including Aggregate |Replacemen |Occurre

Earthquake t Value nce

Volcanic Activity

and Subsidence. | To be determined based on

Hurricane/ values, exposure to loss and | Annual 5% of Per

Windstorm insurance market conditions. | Aggregate Replacemen |Occurre

t Value nce

Flood including Annual 5% of Per

Tsunamis Aggregate |Replacemen |Occurre

t Value nce

Debris Removal _| $2,000,000 Per Included

occurrence

Ordinance or Law | $5,000,000 Per Included

Occurrence

All Other Perils | Replacement Value of Per $500,000 Per

(including boiler | Insurable Real and Personal |Occurrence Occurre

and machinery | Property nce

perils where

applicable)

Extra Expense/ _| $2,000,000 Per Included

Expediting Occurrenc

Expense e

Combined

Replacement To the extent coverage is reasonably | 45 Days Per

Power Extra available, 100% of incremental expense Occurre

Expense that Lessor incurs to replace the annual nce



with Lessor each year.

Property Insurance Terms and Conditions

a.| Coinsurance | No property policy may contain a coinsurance clause.

b.| Ordinance or | Each property policy is to cover the costs incurred in repairing or

Law replacing the damaged property to meet current building codes.

Coverage is to be provided for:

e Loss to the Undamaged Portion of the Building

° Demolition Cost

@ Increased Cost of Construction

c. | Terrorism Terrorism coverage is not required.

Water Island Development Company



Tract B consisting of approximately 33.1 U.S. Acres and Tract C consisting of approximately 11.9 U.S.

Acres, and the Catchment Area consisting of approximately 3 U.S. Acres, Water Island Virgin Islands



C. | Requirements Applicable to All Insurance Policies



1. | Insurance All insurance companies shall be rated A- or better by A.M. Best's.

Company Should an insurance company's rating fall below A- Lessee (or its general

Rating contractor) shall replace that insurance company with a qualifying



insurance company within 60 days.



2 | Notice of | Each insurance company shall provide written notification to Lessor

Cancellation | 60 days prior to the effective date of any cancellation, non-renewal



or material change.



3. | Evidence of | Evidence is to consist of an original certificate of insurance signed

Compliance | by an approved officer of the insurance company or its authorized

with representative. The certificate shall show:



Insurance e The name of the insurance company

Requirement : .

5 at e The policy period

Insurance © The policy number

Date e The description of the property

e The name of the Lessee/Policyholder

e Lessor as an additional insured (General Liability and Excess

or Umbrella Liability only)

° Lessor as loss payee (Builders Risk Property Insurance and

Property Insurance including Replacement Power Extra

Expense)

e The 60 days cancellation notice

Liability insurance certificates are to be on ACORD form 28 or its

equivalent for property insurance and ACORD form 25 or its

equivalent for liability insurance. Evidence of workers'

compensation insurance shall be issued by the appropriate Workers’

Compensation Administration bureau of the Government of the

Virgin Islands.



4, | Evidence of | Lessee shall advise Lessor of any renewals or replacements of the

Renewal or | required insurances by providing the same documentation required

Replacement | in C.3 above. Such evidence shall be provided prior to the

Policies expiration date of the policy that is being renewed or replaced.

Water Island Development Company



Tract B consisting of approximately 33.1 U.S. Acres and Tract C consisting of approximately 11.9 U.S.

Acres, and the Catchment Area consisting of approximately 3 U.S. Acres, Water Island, Virgin Islands



EXHIBIT “F”



LETTER OF INTENT

THE Unirep States Vircin Is_anps



OFFICE OF THE GOVERNOR

GOVERNMENT HOUSE



Charlotte Amalie, V.I. 00802

340-774-0001



November 19, 2014



U.S. Mail



The Honorable Sally Jewel

Secretary of the Interior



U.S. Department of the Interior

Washington, DC 20240



Re: Sale of Properties to Water Island Development Company, LLC

Dear Secretary Jewel:



On November 19, 2014, the Government of the Virgin Islands (“Government”) approved

a lease agreement to the Water Island Development Company, LLC (“WIDC”) for the

redevelopment of the former Water Island Hotel property as a boutique resort. WIDC was

selected through an Expression of Interest (EOI) issued by the Government on September 19,

2013. (See Attached EOI) Our interest in attracting a developer of a boutique resort was to

achieve an economic activity on Water Island that would be consistent with the current

community. It would supplement the product diversification and re-branding that we are

executing to broaden our tourism offerings while providing permanent jobs and creating business

opportunities. The previous hotel on the island, Sea Cliff Hotel, was first built in 1953 as the

Water Isle Hotel and destroyed in 1989 as a consequence of Hurricane Hugo. Since that time

there has been no meaningful and contributing economic activity on Water Island.



The Government engaged REVPAR International, Inc. (“REVPAR”) a hospitality

advisor and asset management firm in September 2012 to assess the viability of lodging

development on Water Island. On November 29, 2012, after conducting a market study and

financial analysis on the feasibility of the redevelopment of a hotel and marina on Water Island,

REVAR issued an assessment indicating that such a project was in fact feasible. (See Attached

Assessment)



The EOI resulted in proposals from three developers: LAURENS GmbH, WIDC and

RED Legacy, LLC. After reviewing the proposed submissions, the Evaluation Committee,

which was comprised of key stakeholders including: the Office of the Governor, Department of

Tourism, Department of Property and Procurement, Virgin Islands Economic Development

Authority, and the U.S.V.L Hotel and Tourism Association along with REVPAR in an advisory

Letter to Secretary Jewel

November 19, 2014



Sale of Properties to Water Island Development Company, LLC

Page [2



role conducted two (2) rounds of Oral Presentations to select the developer, in this instance

WIDC.



In addition to the boutique resort, WIDC has proposed constructing residential dwellings

and villas in conjunction with a community center and commissary to make the overall

development more attractive to creating economic redevelopment on the island. While the

Government agrees that this will foster economic growth, the Government as a general policy

only leases land for business and commercial activity and not for private residential

development. Therefore, we were and are willing to offer certain parcels and lots of land for the

residential development only to fortify the economic sustainability of the hotel and marina

development. The 1996 Contract of Sale for the transfer of Water Island obligates the

Government to:



2A. The Buyer agrees to use all property for public purposes only, and to

promote the economic development of Water Island for the benefit of the

US. Virgin Islands, including the residents of Water Island. For purposes of

this provision, the operation of a hotel or tourist resort on the property

operation established.



We believe that the selection of WIDC meets the requirement of the above stipulation;

however, to succeed in the current economic environment and secure a funding source and

generate the financial returns to support the operations and financing vehicles, additional

Property on Water Island has been requested by WIDC. The additional acreage will to

supplement the former hotel footprint and provide an opportunity for specific residential

development as a component of the hotel project. In light of these objectives, the Government is

prepared to offer for sale specific undeveloped properties listed in Addendum I.



As stipulated in the Contract of Sale, the Government must have the approval of the

Department of Interior to divest any property that was the subject of the 1996 transfer.

Specifically, the 1996 Contract of Sale states:



2C. The Buyer agrees that if the transferred property or any portion thereof

is sold, the proceeds shall be paid to the United States unless there is a

written agreement between the Governor of the Virgin Islands and the

Secretary in effect prior to the sale providing for a different disposition.



Since the expiration of the former master lease in 1992 and transfer in 1996, we have

achieved the transfer and clear title of all public and private properties, constructed a public ferry

dock, constructed a deep water industrial dock, undertaken significant road resurfacing,

established a basic level of fire service, developed a process for public safety response, and

provided regular trash removal.



In the multiple studies performed by the U.S. Government and non-profit agencies since

1980, the best course forward to remedy the undeveloped economic potential on Water Island

Letter to Secretary Jewel

November 19, 2014



Sale of Properties to Water Island Development Company, LLC

Page / 3



and the clearly defined recommendation in the best interest of thé residents and the Territory is

for resort development. In the Water Island Use Plan Study completed by the University of the

Virgin Islands in 2006, properties for potential residential locations were earmarked for moderate

income residential housing under the Virgin Islands Housing Finance Authority. In addition to

DOI’s approval to offer for sale the specific properties set forth in Addendum I (attached hereto),

the Government has started the process of identifying properties for the purpose of constructing

such moderate income housing units in partnership with the Virgin Islands Housing Finance

Authority.



The Government has started the process of resurveying and recording the identified

properties (set forth in Addendum I) through the Department of Property & Procurement. As

part of the underlying due diligence and pricing, three (3) independent appraisers will be

engaged and commissioned to perform valuations on the properties to determine the value for

purposes of negotiating a sale.



With the approval by the U.S Department of the Interior, we will offer the listed



_ properties to WIDC and to achieve sustainable economic activity on Water Island and create



high quality jobs for our workforce, in an effort to strengthen this valuable economic asset for

the benefit of the entire Virgin Islands.



Sincerely, rs



a,

Johi P. ‘de Jongh, Jr.

Governor



Enclosures

GVI Proof of

Ownership

SENT GY: 6- 5 : 8:49PM OFFICE OP PLRLIC RB 1 340 777 958732 4

a



QUITCLAIM DEED



heréin called the "Grantee."



WITNESSETH: That for and in consideration of the sum ‘of TEN DOLLARS

($10.00) and other good and valuable consideration, receipt of which is hereby

acknowledged, the Grantor hereby grants, sells, releases, and quitclaims-to the Grantee,

the successors. and assigtis of the Grantee, all of the tight, title, and ititerest of the Grantor

in the real property including the.improvements thereon described as follows: }



as Area I, Area J, Area K, Area L, Aren M, Area Mi, Area N, Area.O, Area P,

Area:Q, Area R, Area §, Area T, Aréa U, Area V, Area W, Area X, Area Y, Plot.



D, Plot E, Tract.A, Tract D, Tract F, Lot 7 Gneluding all structures and F

improvements), Lot 25, Lot 24, Lot 87 (including all stractures and ;

improvements), Flathingo Bay Villas (Lot.8, Lot.9, Lot 10, Let 14, Lot 16, Lot



18; Lot 19, Lot 22, Lot 25, Lot 26, and Lot 27), and Lot 279 (Sprat Pointy



as marked and shown on a.copy of the 1979 map of the Department of the Interior,

Bureau of Land Management, (revised July 1996) attached hereto as Exhibit l, and by

reference made 4 pait hereof.



TOGETHER WITH the rights, privileges, and appurtenancés, including the use

of the roads, ways, and public areas presently existing and: designated for such purpose on ;

said map, for use in comnion with other owners, for ingress and egress to said property.



TO.HAVE AND TO HOLD tiie Premises conyeyed heréby in fee. simple

forever. ;

; SUBJECT, HOWEVER, t6 Virgin Islands zoning regulations, now or hereafter

ca yonat lave, rales, sad regulations of the United States Virgin Islands, aind to

6- *--5 + S'50PM OFFICE OF PUBLIC REI i 840 777 .9587;# 5



3, The Grantee agrees not to introtiueé:any non-native aniinal, with the exception

of common household pets, Such as cats,.doys, and caged birds, to Water Island,



‘4, The Grantee agrees not to use as a matter of course, off-road vehicles cr heavy

‘duty, mechanical beach cleaning equipment on any beach'on Water Island and |

agrees further to keep enimals off any beach of Water Island. This restriction }

shall not prohibit Grantee from usitig heavy duty equipment to retien the beach-to ;

its condition prior-to any major-stom or natural disaster,



5. The Grantee agrecs to buy and the Grantor agrees io sell the proparty in |

consideration of the following obligations to be assumed by the Grantee,



a. The Grantee agrees to uiee all property for public purposes. only, andas

such the name of Water Island will be retained to promote economic

development of Water Island for the benefit cf the US: Virgin islands,



b. The Grantée agrees to assume ‘all liability that may atise trom the

‘Property prospectively effective as of the date of closing,



¢, Thé Grantee agrees to provide. the following services on Water Island:



€l) A public dock, with tegular scheduled public ferry service, and j

deep-water dock , i



(4). Fire'protection



GG) Public safety officers



(6) Inspection and licensing of motor vehicles

(7) Regular trash removal



Shere rete



:

|

:

A

E

k

é

4



public health, education, and municipal services on the same’ basis as othsr

Tesidents of the Virgin Islands: j is understood that, due ta the unique

"SENT BY: 6- *--5 3 3:50PM sOFFICE OF PUBLIC RET - - 1 340 777 S587;# 6

I



condition of Water Island, some of the municipal services may be

provided in a iécation other than Water Island (such as St; Thomas). ‘



6. As set forth nore fully in Bxhibit 4 “Water Istand Environmental Restrictive

Covenants,” Grantor has complied with the requirements of section 120(K) of the -

Comnipreheiisive. Environmental Response, Compensation, and Liability Act.of



1980 (CERCLA), 42 U,8.C, § 9620(h) to the extent required with respect to the

Property subject to this sale, Consistent with CERCLA section 120(h)(3), Grantor

covenants that all action currently necessary to protect human health-and the

environment with respect to hemardous substances remaining on the property as of



7, ‘The Grantee agresé to coinply with the Environmental Restrictive Covenants

attached hereto as Exhibit 4, incliding covenants necessary to-assure use of

property consistent with the environmental condition of the Flamingo Bay

Landfill. The Flamingo Bay Landfijj: area is described in the attached Exhibit 5,



8. No member of or delegate to Congress orresident commissioner shall be:

admitted to any share or part of this deed or 'to.any benefit that inay: arise .

Kerefrom, but this restriction shall. not be construed to extend to this deed if made

with, a corporation or company for its. general benefit.



9. The Grantee bereby agrees jo: indemnify and hold harmless the United: States,

ifs employees, agents and assigns from any loss or damage and from any liability

on. account of personal injury, property. damage, or claims for personal injury or

death arising out of thé Grantec's activities under this.Deed, including any breach

of any.covenant or failure to perform:any obligation, In addition, subject to



anes Aimee treme ene ee



substatices caused or contributed to by Grantee, or for which Grantes ie otherror™

responsible:under. Commonwealth or federal law.



10; The Grantee hereby releases the United States, its Departments, agencies, and !

employees from any. claim for the value of possessory interests in improvements

on Water Island whether the claim is' predicated upon the Water Island master



lease.of 1952, any sublease, or any other basis. This release covers all and every

property interest on Water-Island inchiding the interest in any:]



bn}

E

FS

F



alloged possessory intorest against the United States, its Departments, agencies, or |

employees in any judicial, admiristrative, arbitration, of other forum. i



eS ee

Ou : - “| { _ ‘ 77. 95 #7

“SENT BY: 6-7 8 + S:60PM FORFICE OF PUBLIC REL- 1 B40. 777. 8587:#



i



THE UNITED STATES OF AMERICA,

DEPARTMENT OF. THE INTERIOR



nee we eee teens cememec corners



THE UNITED STATES, VIRGINSLANDS

O: VERNOR °



s00 mmom ends Greet vee web,



FEICE OF THE GO



p

i

CG

3



saree

7



— ee



4WhO acknowle. ‘himself to. be the Director, ‘Office. of Insular



Vir tates Department of the Interior (Department). On behalf of the



Department, he, being authorized to do so exeouted the freeci: } instrument on behalf of

Depertment for the purposes therein contained by sighing hisname. -



8 te eee ete nee



In witness whee ER hepesing sot my hand anid official seal.



cm tee cee

‘SENT BY? §- es a ; 8!58PM ;OFFICE OF PUBLIC REL~ 1 340 777 °9587:#36:



os wt oe Veouy Fremrrenior rth B4n77eBb64 T-457 —P, Obevoo8 rpg’

CERTIFICATION

|

The undersigned hereby certifies that for recording: purposts, the veneideretion for the »

within conveyance doég not exceed $ —— '

NOTED IR THE CADASTRAL RECORDS |



gee Gountey sown PRUPLRTY, BOOK FOR



NMTER ISLAND, NO.10 SOUTHSIDR



s

‘ne



ene ene me me



SES:

ae Heraby certified certified that ete ato

Denton’ prosey 6 which, sceutine



, = STE CLATM 4 DEED dated Harch..29,2005'



SHRM Seine Soe che eeee oe pean



Cadastral Survey Taix Assessor Of

SENT BY: 6-1 5 + 8:51PM VOFPICE OF PUBLIC: REL~ 1 840 777 9587: 9



i

i

AFFIDAVIT :



DISTRICT OF COLUMBIA }. .

) SS:



On this Lepth. p day of April, 2003; before me, petsonally appeared

who acknowledged himself to be the Director, Office of lasulat Affairs, Uni S *

Department tof the *arerior Depattment”). On belialf of the Departme -he, being authorized to

O 80, execy oregong instrument on behalf of the the} ain

contained by sighing mene Department for ‘Purposes therein



In witness whereof I hereunto set my hand and official seal.



08 tee one taenes me

arise. 14286 promevranisr rape ee aS 8 ; 8:58PM OFFICE OF PUBLIC’ REI = 1 340 777 9687; #58



|



Kronprindsens. Gade TRD-E-S



. GOVERNMENT OF . |



HE VIRGIN ISLANDS OF THE UNITED STATES



CHARLGITE AMALIE, ST. THOMAS, V-E. o0s01 L

—



DEPARTMENT OF EINANCE

TREASURY DIVISION



TO: THE RECORDER OF DEEDS



FROM: THE TREASURY DIVISION



IN ACCORDANCE ‘WITH Titis 28, SECTION 121 AS AMEMDED, THIS IS:



CERTIFICATION THAT THERE ARE NO REAL PROPERTY TAXES |

{



‘THE UNITED STATES GOVERNMENT _ |



OUTSTANDING FOR __.



Water Island a



TAXES RESEARCHED UP TO AND INCLUDING 2003.



VERIFIED BY::

COLLECTOR NO.



+ ee os,

~ SENT’ BY: 6- *- 5 3 S!SIPM SOFFICE OF PUBLIC REL~ 1 340 777 9587°¢10



Exhibit2



Restrictive Covenants



The restrictive covenants specified are necessary to. maintain.a no jeopardy opinion by the:U.s{

Fish and Wildlife Service in cétapliance with the Endangered Species Act and. to protect cultural

resources in compliance with the National Historic Preservation Act. All lots and tracts referred.



to herein arc-thase shown on the 1979: Bureau of Land Management map, a copy: of wiiich is



attached as Exhibit J to all contracts.



‘DEFINITIONS OF TERMS



For purposes of these restrictive éovenants all fots, parcels, villas, and areas of Water Island

which hayeé restrictions and-are identified below, will be defined as either permanent



Permanent wondevelopment (if not already developed) means thst to prevent erosion and othe

disturbances to endangered Spécies, no. additional. developinent or-removel Of vegetation cover ¢-

may occur from this date forward: unless consulted and approved by 4 e U.S, Fish and Wildlife |

Service-and Virgin Islands Division of Fish and Wildlife; in addition with the Virgin Islands;

State Historic Preservation Officer for those few lots identified with an asterisk (*) below which

‘have cultural restrictions. Those lots identified with an asterisk will also bs provided a copy of;

the Preservation Covenant.



Fish and Wildlife Service and Bureat of Reclamation that should a building be constricted, only

the- vegetation within the footprint of the building: associated patio, and driveway is-to be

disturbed, This would help to tedice erosion into.sensitive adjacent marine enviroumenis whers



Restricted developnient covenant Gf not already developed) is.a covenant agreed to by the. U.S:



tO fre eee

1 840 777 9587211



G- 1~ 5%, S!S1PM sOFPICE OF PUBLIC REL*

SENT’ BY:



RESTRICTIVE COVENANTS ON ALL WATER ISLAND AREAS



The Buyer agtecs not to introducé any hon-native-animai, ‘With. the exception of common ;

household pets, such as ‘cats, dogs, and caged birds, to Water Island.



The Buyer further agrees not to use off-road vehicles or heayy duty, méchsinical beach cledning

equipnient on any beech on Water Island and that animals wil] be kept off any. beach on Water

Islan is testriction shall not. prohibit Biyer from using heavy equipment to retuni the-bpach

to its conditions prior to any major storm or natiiral disaster:



RESTRICTIVE COVENANTS ON PUBLIC COMMON AREAS

Permanent Nond evelopment



Tract A Fort Segarra

Tract D (excluding priva ly owned lots 61, 62, 63, 86, an 87) ,

Tract F (culturaj restriction?) Reguires signed Preservation Covenani

Area J (cultiiral-restriction®) Requites signed Preservation Covenant ;

]



Lot 279 (cultural restriction*) Reqhires signed Preservation Covenant



|

Marina Basin off F laniidgo Bay wilt be maintained ag permanent nondevelopiment which will |

cousist of the mangrove fringe and buffer zone 13 feat (4 meters) in width, beginning with the ‘

upper limit of the wetlands, t



Restricted Development Covenant



Tract-B previonsly developed portions may be redevéloped for a hotel of tourist resort; This |



udés the villas arid Privately. owned lots 48-60.

Tract B nondeveloped portions



turtles should additional development take place



mm D- fe. Saad

SENT BY: 6- 4- 5 + 8:51PM s0FFICE OF PUBLIC REL+ 1 840777 98675#12



—



RESTRICTIVE COVENANTS ON SOUTHERN LOTS (WICA AREA)

‘Permanent Noudevelopment



The following Joté if not already developed:

Lots.72 and 73 (cultural restrictions*) Requires signed Preservation Covenant

Lot 112-(cultural ‘restriction*) Requires signed Preservation Covenant.

Restricted Development Covenant



The following lots if not already developed:



te eee



Lots 1, 2, 3, 4, 5, 6; 7, & 9, and. 10

Lots 20, 21, 22, 23, 24, 35, 26 27, 28; and 29



Lots 61, 62; and 63



Lot 71, including’ lighting restriction

Lot 78



Lots 86-and-87



Lots 94 and 95



Lot 100



Parcels 111, 142, and 143



we



TTR meen meeps creme ote reno wae



RESTRICTIVE. COVENANTS ON SPRAT BAY PROPERTIES

Permanent Nondevelopment



The following lots if not already developed:



vee ke eee ee te



Lot 239

Lot 234

Lot 270 4



Restricted Development Covenant

Lots 202; 203, and 204 :

6- i- 5 ¢ 3:52PM ;OPFICE OF PLBLIC REL? 1 340 7 9687 a

SENT -BY :



) i

Lot 207



Lots 211, 212, 213, 214, 235, 216, 217, 218, 229, and 220

Lots. 221, 222, 223, 294. 225, 226, 227, 228, and 299 (all including Lighting restrictions) |

‘Lots 231, 232, and 233

Lot 268

Lot 278 j



eat ete crrees mee



ra

B6/25/2R82 12:22:22 Pe

Filed & Recorded in

Grhacial Records af



"To

W &.

QUITCLAIM DEED



THIS INDENTURE,; made this 12th day of December, 1996, between THE UNITED

STATES OF AMERICA, by and througli its DEPARTMENT OF THE INTERIOR,

OFFICE OF INSULAR AFFAIRS, herein called the “Grantor,” and. THE GOVERNMENT



OF THE U.S; VIRGIN ISLANDS, hetein called the."Grantee.”

WITNESSETH: That for and ini consideration. of the sum of TEN DOLLARS



($10.00) and other good and valuable consideration, receipt of which is hereby acknowledged,

‘the. Grantor’ hereby. grants, sells, releases, and quitcldims to thé Grantee, the successors and



assigns of the. Grantee, all of the right, title, and interest,of the Graritor in the real property



including the improvements ‘thereon described as follows:



Property located on Water Island near St. Thomas,

United.States: Virgin Islands, designated as the hotel. site.

and associated properties on Tract B (excluding the. villas,

lots: 48 through 60, and lots 24 and‘25), including the

catchment basiti and deep water dock; the. beach and

associated lands on Tract C; and the public ferry dock

‘and associated: lands on Tract E as marked. and ‘shown on:

a-copy of the 1979 map of tlie Department of the Interior,

Bureau of Land. ‘Management, (revised uly: 1996) attached

hereto as Exhibit 1, and containing according to said



map approximately 50 acres, more‘or less and by reference

maile a part hereof. All public roads on Water Island,

excluding those on the Sprat Bay properties,.are also included,



TOGETHER WITH the rights, privileges, arid appurtenances, including the use of the

roads, ways, and:public areas presently existing. arid: designated for such purpose on said map,

for usein common with‘othér owners, for ingress and egréss to said property.



TO HAVE AND TO HOLD the premises conveyed hereby in fee simple forever,



Page 1 of 5



SSFERezeRT HOUT

eeememensen ee acits etme



?



SUBJECT, HOWEVER, to. Virgin Islands zoning regulations, now or hereafter in

force, laws,.rules, and regulations: of the United States Virgin Islands, and to covenants,

restrictions, and easements-of record, all of which shall run: with the latid and ‘be binding upd

the owners of all lots on Water Island, and inure-to the benefit of all of such, Iots and, to the:

Graritor herein. Additionally, the following: nine items are also included as covenants arid



easements of record:.



1. The property is sold in as-is.condition with no express implied warranties other than

those expréssly stated herein and subject to Article 6 ‘below.



2. Thé. Grantee agrees to comply with use. restrictions dn.the property set forth in the list of

Restrictive Covenants attached hereto as Exhibit 2, and by this reférence niade“a part héreof

-which shall run-with the land and be binding upon the owners from time-to-time. of all lots on.

Water Island: Said list complies with the United States Fish and Wildlife Service Biological

Opinion (no jeopardy) to. protect. endangered species and the National. Historic Preservation

Act to protect-cultural and archaeological resourcés, Spécific restrictions are addréssed by:

tract and location.



3. ‘The Grantee agrees not to.introduce any non-native animal, with the exception of

conimon household pets, such as cats, dogs, and caged birds, to. Water Island.



4.. The Grantee agrees not to: use as a maiter of course, off-road vehicles or heavy duty,

mechanical beach cleaning equipment on any beach on Water Island and agrees further to

keep animals off any beach on Water Island. This restriction shall not prohibit Grantee fronr

using heavy duty equipment to return beach to ‘its condition prior. to any major storm or:

matural disaster,



5: Thé Grantee. agrees'to buy and the Grantor agrees to sell the property in consideration of

the following obligations to be assumed by the Grantee.



a. The Grantee agiecés to use all property for public purposes only, and as such the

name-of Waiter Island ‘will be retained to promote economic development of Water Island ‘for

the benefit of the U.S. Virgin Islands, including the residents of Water Island. For purposes

of this provision, the operation of.a hotel’.or tourist resort on the property. shall be deemed a



public: ‘purpose, ard the Grantee agrees to make a reasonable effort to have such an operation

established.



b. The Grantee agrees that if the above idéntified property or any portion thereof is

sold, the proceeds shall be _paid to the United States Department of the Interior unless-there is

a written d4greement between the Governor of the Virgin Islantis and the Secretary of the

Interior in effect prior to the sale providing for.a different. disposition.



c. The Grantee agfees to assume.all liability that may arise from ‘he property:

prospectively effective as of the date of closing.



Page 2 of 5

d. The Graiitee agrees to.provide the following services.on Water Island;



(1). A public dock, with régular scheduled. public ferry service,

and a deep-water dock



(2) Maintenance of roads and decks



(3) Establishment and maintenance of public recreation areas,

incliding the public beaches on Water Island



(4). Fire. protection



(5) Public safety officers



(6). Inspection and licensing of motor vehicles



(7) Regular trash removal:



e. The Grantee agrees that, Water Island residents. will have access-to public. health,

education, and. municipal services on the same basis as other residents.of the Virgin Islands,

It.is understood that, due to the'unique condition of Water Island, some’ of the municipal

services mnay be provided in a location: other’than Water Island (such @s St. Thomas).



‘6. The Grantor will comply with the requirements of Section 9620 of the-Comprehensive

Environmental. ‘Response, Compensation, and Liability Act of: 1981 (CERCLA), 42 U.S.C.

$620, to the-extent required with réspect'to the property subject to. this sale. Grantor agrees

to reinove asbéstos materials in the catchment basin. A. list of suspected additional hazardous’

materials Grantor believes to be stored on the site is attached as Exhibit.3, Potential

Hazardous Substarices.and Solid Wastés on Water Island, U.S. Virgin Islarids (March 1994),

to this quitclaim deed. The Grantor hereby agrees that any response action of corrective

action with. respect to these or other possible hazardous materials that may currently be

‘present on the transferred property shall be.the responsibility of the Grantor. The Grantor

may-seek to secure contribution from. other- potentially responsible parties under CERCLA.

The Graritee hereby’ agrees to grant the Grantor access to ‘the transferred property to: the full

extent necessary, in the judgment of the Grantor, to perform its responsibilities under

CERCLA, —



7. No thember of or delegate to Conigréss or tesident commissioner’shall be admitted to any:

share-or part of this deed Gr to any benefit that may afise herefrom, but this restriction shall

not be constried to extend to this deed if made: with a corporation or. compatiy for its-geriéral

benefit.



8: The Grantee hereby: agrees to. indemnify and hold harmless the United ‘Statés, its

employees, agents, and assigns from any Joss or damage and from any liability on account of

personal injury, property damage, or claims for personal injury ot death arising out of'the

Grafitee’s activities under this deed:



Page 3 of 5

9. The Grantee hereby releases the United States, its Departments, agericies, and employees

from any claim for the value of possessory interests.in improvements on Water Island whether

tlie claim is predicated upon the Water Island master lease of 1952, any sublease, or any

other basis. This release covers all and every property interest on Water. Island including the

interest in.-any home or dwelling as may-have been constructed by the Grantee and :the interest

in common properties on Water Island including by way-of example.roads, docks, and

beaches. The Grantee hereby agrees not fo bring any claim for the value of any alleged

possessory interest against the: United States, its: Departments, agencies, or employees in any

judicial, administrative, atbitration, or other forum. )



Page 4 of 5.



8 me be rare eet tp men ones

IN WITNESS WHEREOF, the Grantor has. signed this instrument as‘of the dite first

written: above:



THE UNITED STATES.OF AMERICA,

DEPARTMENT OF THE INTERIOR



Aller P. ‘Stayman, Director

Office of Insular Affairs.



IN ‘WITNESS WHEREOF, the Grantee has acknoviledged eceipt/of this instrument:



as of the: date. first written above.



THE UNITED STATES, VIRGIN ISLANDS:

OFFICE OF THE GOVERNOR



On this j2 Ge day of Pmibee, 1996, before me, personally appeared Allen P. Stayman, who

‘acknowledged himself to be the Director, Office of Insular Affairs, United States Department



of the Tnteridr (Department). On behalf of the:Department, ‘he, being authorized to do so

executed the foregoing’ instrument ‘on behalf of the Department-for the purposes’ therein



contained by signing his name.



In wityess whereof I hereunto set my hand -and official seal:



Notary Public ©

‘My. commission expires



The undersigned hereby certifies that for recording purposes, the consideration for the within

conveyance does not exceed. 8.

Page 5 of 5



~ r



SBElTegzgge. yood

G6 /e5/802 iBiBereb py

Filed & Recorded in



ficial Records p

st at

+ iy

ATTEST:s °



it. Is hereby certified that the above

mentioned property/s which, according



hore IN THE CADASTRAL RECORDS. - ¥o QUITCLATH DEED dated Decenber 12,1996 ,

FOR COUNTRY/TOWN. PROPERTY, BOOK FOR belongs to; THE GOVERNMENT OF THE U.S.

@WATER ISLAND,NO.10 SOUTHSIDE QUARTER VIRGIN ISLANDS. |

Gol THOMAS, VIRGIN ISLANDS. Cadastral ) Survey/Tax Assessor Offices



a ‘StFomas, A-\. Dated: _pebriary 14.1997

" Vetne X. Callw Tax &

Gifice df the Heutenant Zc



8+ miqsensenas



‘G8feoadRaZ H50G

Miscellaneous Items

Department of Property and Procurement



8201 Sub Base, 3rd Floor, St. Thomas, U.S. Virgin Islands 00802

3274 Estate Richmond, Christiansted, U.S. Virgin Islands 00820



GOVERNMENT OF THE VIRGIN ISLANDS OF THE UNITED STATES |



St. Thomas: St. Croix:

Main Office: (340) 774-0828 | Main Office: (340) 773-1561

Fax: (340) 777-9587 www.dpp.vi.gov



June 24, 2026



Via Email: stephen@evansfreke.com

Water Island Development Company, LLC



c/o Stephen Evans-Freke, President

6501 Red Hook Plaza, Suite 201

St. Thomas, U.S. Virgin Islands 00802



Re: Statement of Confirmation on the Rescission of Termination of Lease Agreement for

Portions of Tract B consisting of approximately 33.1 U.S. Acres and Tract C

consisting of approximately 11.9 U.S. Acres, and the Catchment Area consisting of

approximately 3 U.S. Acres, located at Water Island, U.S. Virgin Islands.



Dear Mr. Evans-Freke:



By letter dated November 20, 2025, the Government of the Virgin Islands acting through its

Department of Property and Procurement (“DPP”) formally rescinded its April 11, 2025,

termination of the Lease Agreement for the “Premises” described as Portions of Tract B

consisting of approximately 33.1 U.S. Acres and Tract C consisting of approximately 11.9 U.S.

Acres, and the Catchment Area consisting of approximately 3 U.S. Acres, located at Water

Island, U.S. Virgin Islands.



Prior to the November 20, 2025, letter from DPP, the Government, acting through the Governor,

confirmed to Water Island Development Company, LLC, within the cure period of 180 days

outlined in the Lease, that the Government rescinded its termination via communication on July

10, 2025.



This letter confirms that the Government rescinded its termination during the cure period.

Accordingly, the termination was withdrawn, and thereafter, the parties engaged in good-faith

negotiations regarding the reinstatement and amendment of the aforementioned Lease to facilitate

the contemplated hotel, residential, and marina development, which would be subject to

ratification by the Legislature of the Virgin Islands.



Please confirm this is your understanding of the recession by signing the acknowledgment

below.

Department of Property and Procurement

Should you have any questions, please contact Vincent Richards, Assistant Commissioner of

Property and Procurement, via email at vincent.richards(@dpp.vi.gov or (340) 774-0828 ext. 4329.

Respectfully,

Lisa M*Al¢jandro

ane? Sey

Commissioner



LMA/vr



Acknowledgment:



StepherrEvans-Freke

WIDC



Date: June 26, 2026



Ge: File No. BCT-383



WIDC — Confirmation of Rescission in Cure Period

Page 2

Department of Property and Procurement



8201 Sub Base, 3rd Floor, St. Thomas, U.S. Virgin Islands 00802

3274 Estate Richmond, Christiansted, U.S. Virgin Islands 00820



| GOVERNMENT OF THE VIRGIN ISLANDS OF THE UNITED STATES |



St. Thomas: St. Croix:

Main Office: (340) 774-0628 Main Office: (340) 773-1561

Fax: (340) 777-9587 ! www.dpp.vigov



November 20, 2025



Via Email: stephen@evansfreke.com

Water Island Development Company, LLC



c/o Stephen Evans-Freke, President

6501 Red Hook Plaza, Suite 201

St. Thomas, U.S. Virgin Islands 00802



Re: _Rescission of Termination of Lease Agreement for Portions of Tract B consisting of

approximately 33.1 U.S. Acres and Tract C consisting of approximately 11.9 U.S.

Acres, and the Catchment Area consisting of approximately 3 U.S. Acres, located at

Water Island, U.S. Virgin Islands.



Dear Mr. Freke:



This letter formally notifies the Water Island Development Company, LLC (“WIDC”) of the

Government of the Virgin Islands’ (“GVI” or “Government”) decision to rescind its April 11,

2025, termination of the Lease Agreement ratified by the Legislature of the Virgin Islands on

December 22, 2014, for the “Premises” described as Portions of Tract B consisting of

approximately 33.1 U.S. Acres and Tract C consisting of approximately 11.9 U.S. Acres, and the

Catchment Area consisting of approximately 3 U.S. Acres, located at Water Island, U.S. Virgin

Islands.



With this rescission, the Government confirms that it does not intend to declare WIDC in breach

or default under the Lease while the parties are negotiating the amendment and WIDC continues

to comply with the terms of the Lease and the commitments and acknowledgements in this letter.

The Government agrees to negotiate an amendment to the Lease to facilitate the hotel, residential,

and marina development, which is subject to ratification by the Legislature of the Virgin Islands.

To facilitate negotiation of the amendment and subsequent development, the following

commitments and acknowledgements are required:



1. Performance Bond.

(a) Within sixty (60) days of WIDC’s acceptance of this Letter, WIDC shall obtain and

deliver to GVI a performance bond or irrevocable letter of credit in the amount of Three

Million Dollars ($3,000,000.00) issued by a financial institution acceptable to GVI.



(b) The performance bond shall secure WIDC’s performance of pre-development and

early-stage development obligations.

GOVERNMENT OF THE VIRGIN ISLANDS OF THE UNITED STATES



Department of Property and Procurement



(c) The bond shall be reduced in phases upon achievement of the following milestones, as



certified by GVI:



° Milestone 1 — Completion of Updated Development Plan and Feasibility

Submissions.



° Milestone 2 — Completion of environmental, coastal zone, and engineering

studies.



° Milestone 3 — Submission of complete permit packages and required pre-



construction approvals.

° Milestone 4 — Secure Project Funding of $300,000,000.00.

° Milestone 5 — Secure a 5 Star Resorts Branding agreement.



° Milestone 6 — Submission of complete permit packages and required pre-

construction approvals.



° Milestone 7 — Groundbreaking (Official Commencement of Site Work).



° Milestone 8 — Construction Commencement (Mobilization and Start of Vertical

Construction): Bond may be reduced to $2,000,000.00.



. Milestone 9 — Submission of Complete Permit Packages and Pre-Construction

Approvals: Bond may be reduced to $1,000,000.00.



(d) The bond shall remain in effect and may not be reduced below $1,000,000.00 until

approval of final development plans.



2. The parties shall negotiate and process the Lease Amendment to the Legislature for

approval immediately upon WIDC’s satisfaction of the performance bond requirement.



3. The GVI shall, upon payment of the performance bond, submit the necessary documents

and requests to the U.S. Department of the Interior to allow the GVI to divest the property

subject to the 1996 transfer.



Page 2

Department of Property and Procurement



Should you have any questions, please contact Vincent Richards, Assistant Commissioner of

Property and Procurement, via email at vincent.ricards@dpp.vi.gov or (340) 774-0828 ext. 4329.



Respectfully,



Lisa M. Alejandro

unpo” Commissioner



LMA/vr



Acknowledged & Accepted:



Date:



Stephen Evans-Freke

President, WIDC



Co: File No. BCT-383



WIDC — Pre-Negotiation (Lease Amendment)

Page 3

eee ke



Depart: of Property =?



Should you have any questions, please contact Vincent Richards, Assistant Commissioner of

é bL

Property and Procurement, via email at yincent meards @dpp vigoy or (340) 774-0828 ext. 4329



Respectfully,

2

Seth ¥7~-t44

Lisa M. Alejandro

wow Commissioner



LMA/vr



Acknowledged & Accepted:



NO >< Date: | | 2 )202

Stephen Evtins-Freke



President, WIDC



Cc: File No. BCT-383

GOVERNMENT OF THE VIRGIN ISLANDS OF THE UNITED STATES

Department of Property and Procurement



8201 Sub Base, 3rd Floor, St. Thomas, U.S. Virgin Islands 00802

3274 Estate Richmond, Christiansted, U.S. Virgin Islands 00820

St. Croix:



Main Office: (340) 773-1561

www.dpp.vi.gov



St. Thomas:

Main Office: (340) 774-0828

Fax: (340) 777-9587



April 11, 2025



Via Certified Mail/Return Receipt Requested

Via Email: stephen.evansfreke@auventx.com

Water Island Development Company, LLC



c/o Stephen Evans-Freke



6501 Red Hook Plaza, Suite 201



St. Thomas, U.S. Virgin Islands 00802



Re: Termination of Lease Agreement for Portions of Tract B consisting of

approximately 33.1 U.S. Acres and Tract C consisting of approximately 11.9 U.S.

Acres, and the Catchment Area consisting of approximately 3 U.S. Acres, located

at Water Island, U.S. Virgin Islands.



Dear Mr. Freke:



This letter formally notifies the Water Island Development Company, LLC (“WIDC”) of

the Government of the Virgin Islands’ (“GVI’) decision to terminate the Lease Agreement

ratified by the Legislature of the Virgin Islands on December 22, 2014, for the “Premises”

described as Portions of Tract B consisting of approximately 33.1 U.S. Acres and Tract

C consisting of approximately 11.9 U.S. Acres, and the Catchment Area consisting of

approximately 3 U.S. Acres, located at Water Island, U.S. Virgin Islands, due to WIDC’s

lack of performance under the Lease Agreement.



The Lease Agreement is hereby terminated, as of the date of this letter, in accordance with

the provisions within Article IV, Paragraphs 4.02 (Financing Contingency), 4.03

(Contingency for Permits and Approvals) and Article IX, Paragraph 9.01 (d)

(Abandonment) of the fully executed Lease Agreement.



The Premises was leased to the WIDC for the express purpose outlined in Article 1,

Paragraph 1.02 of the Lease Agreement as follows:



1.02 Use: The Lessee shall use the Premises to construct and develop the Hotel and

Marina to include a deep-water dock, hotel, and overnight lodging accommodations,

marina, infrastructure improvements necessary to operate the hotel, a full-service

health spa, social center, and other related hotel and marina related facilities as

further detail in Section 4.01 of the lease, and for no other material purpose

whatsoever.

Department of Property and Procurement



WIDC’s obligations were contingent upon its ability to obtain financing within twenty-four (24)

months of the effective date of the Lease Agreement, as well as its ability to obtain the necessary

permits and approvals for construction within twenty-four (24) months of the effective date of the

Lease Agreement. WIDC did not obtain the necessary financing and permits within twenty-four

(24) months of the effective date of the Lease Agreement. Following the expiration of this twenty-

four (24) month period, notwithstanding the Government’s extensions and considerations to enable

Lessee to comply with the Lease Agreement’s terms, Lessee has failed to make progress under the

Lease to justify the continuation of this Lease Agreement.



As no development or improvements have occurred on the Premises to date, and the

Construction Period expired on December 31, 2024, as outlined in Article III, Paragraph

3.02, the GVI is taking the necessary steps to repossess the Premises. As a result of these

breaches, the GVI has determined that the Lease Agreement can no longer be upheld. The

termination of the Lease Agreement has been determined to be in accordance with the best

interests of the Virgin Islands community.



If you have any questions regarding this termination please contact Vincent Richards,

Assistant Commissioner of Property and Procurement via email at

vincent.ricards@dpp.vi.gov or (340) 774-0828 ext. 4329.



Respectfully,



Lisa M. Aléjandr

Commissioner



LMA/Vr/rac



Ce: File BCT-383

GOVERNMENT OF THE

VIRGIN ISLANDS OF THE UNITED STATES

----()----



Department of Property and Procurement



Date: April 11, 2025

Lease No.: BCT-383

Executed: December 23", 2014

Effective: January 1, 2015

NOTICE OF TERMINATION

LESSEE DESCRIPTION OF PROPERTY

Mr. Steven Evans-Freke Portions of Tract B consisting of approximately 33.1 U.S.

Water Island Development Acres and Tract C consisting of approximately 11.9 U.S.

Company, LLC Acres, and the Catchment Area consisting of approximately

6501 Red Hook Plaza Suite 201 3 U.S. Acres, located at Water Island, U.S. Virgin Islands.



St. Thomas, U.S. V.I. 00802

rae ANNUAL RENT: Fifty-Two Thousand Eight Hundred



Dollars and Zero Cents ($52,800.00).



MONTHLY RENT: Four Thousand Four Hundred Dollars

and Zero Cents ($4,400.00)



NOTICE is hereby given that the Government of the Virgin Islands (GVI) through its Department of

Property and Procurement, (“Lessor”), hereby terminates the above-referenced Lease Agreement

effective April 11, 2025. Lessor demands Lessee to quit and vacate the above-referenced Premises on or

before May 31, 2025.



Lessee agrees to return the Premises, in a clean, tenantable condition. In the event, that Lessee refuses or

neglects to return the Premises, in a clean, tenantable condition or make any repair for which it is

responsible, then the Lessor may clean and may make such repairs. The cost of such cleaning and repairs

by Lessor, together with interest shall be paid by the Lessee.



Lessee acknowledges that termination of the Lease Agreement and vacating by May 31, 2025, does not,

relieve the Lessee from its obligation to pay all outstanding rent through the date it vacates, and any

additional charges as described above. If Lessee fails to vacate or surrender by May 31, 2025, Lessee

understands, the Lessor will pursue legal action to recover the outstanding amount and remove Lessee

from the Premises.



C2 ae Date: 04/11/2025

Lisa M. Atejandro



4vCommissioner

Department of Property and Procurement