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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, 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. 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: 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. ~ 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 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. 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) 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