Government of Antigua and Barbuda

Government of Antigua and Barbuda

28th November 2014 REF: CG/PF/002/14 Paradise Found LLC c/- E Ann Henry QC

Henry & Burnette 13 Church Street St Johns ANTIGUA

Dear Sirs:

Re: Paradise Found LLC Memorandum of Agreement

I refer to the Submission titled "Paradise Found LLC Memorandum of Agreement" dated 3 November 2014. In Section 7 of your Memorandum, Paradise Found LLC ("Paradise") requested a number of permissions and concessions from the Government of Antigua and Barbuda ("GOAB"). The Submission was considered by Cabinet at its meeting on Wednesday, 5 November 2014. I have been requested by Cabinet to advise you that Cabinet has approved and ratified the following on behalf of the GOAB:

1 Leases

1..1 Cabinet consents to the current owner of the K Club, Dream Company Limited,

assigning to Paradise the existing leases for the 251-acre K Club property, to facilitate the entry into a new lease between Paradise and GOAB ("the New Lease").

1.2 Cabinet has agreed features of the New Lease are to be:

1.2.1 The land leased will comprise approximately 555 acres comprising the

existing K Club property (approximately 251 Acres), the Requested Lands (approximately 137 Acres) and the Buffer Land (approximately 167 Acres) all as shown on the plan in Exhibit A to this letter (hereafter called "the Leased Land");

1.2.2 The term will be 198 years commencing on signing of the New Lease;

1.2.3 Paradise will be entitled to quiet and non-disturbed possession of the

Leased Land;

1.2.4 The lease provisions are to be consolidated and modern. Cabinet has

agreed Paradise will prepare a draft lease for GOAB to review. Cabinet has appointed Ambassador Gilbert Boustany as liaison for Cabinet on these matters, and Ambassador Gilbert Boustany will work diligently with the Attorney-General's Chambers to agree acceptable provisions;

1.2.5 In consideration of GOAB entering into the New Lease, agreeing to enter

into the Joint Venture for the New Airport on Barbuda, and agreeing to lease to the Joint Venture an area of land for the New Airport (see paragraph 3.2 below), Paradise will pay US$5.2m to GOAB on signing of the New Lease to pre-pay and discharge all Paradise's financial obligations under the New Lease including rental for the first 99 years of the term;

1.2.6 On signing of the New Lease, Paradise will pay to GOAB a further sum of

US$1m on account of the rent to be levied in the second 99 year part of the 198 year term. In 2114 the annual rent for the land comprised in the New

Lease shall be determined at the then prevailing market rate;

1.2.7 If during the term of the New Lease freehold title is available in Barbuda,

GOAB agrees to facilitate the immediate conversion of the leasehold land under the New Lease to freehold title, The US$1 m sum referred to in paragraph 1.2.6 above shall be applied in full as the complete cost of converting the leasehold interest to freehold title;

1.2.8 Paradise, as lessee may enter into sub-leases of all or part of the land

comprised in the New Lease to effectively facilitate subdivision and sale to third parties of the leased land. If requested by Paradise, GOAB will enter into direct leases with purchasers of real estate on identical terms to the New Lease, consequential amendments excluded;

2 Land and Planning

Cabinet consents and agrees to the following:

2.1 GOAB permits Paradise to re-route the existing boundary road to the external

perimeter of the Leased Land as indicated on the plan in Exhibit A. GOAB also permits Paradise to re-route the existing 2 roads on the Requested Land to the external perimeter of the Leased Land. Paradise will pay for this new road construction, which construction will be of no lesser standard than that currently existing.

2.2 Paradise will construct and maintain a new public facility of sheltered buildings,

bathrooms, changing areas and car parking on a beach front site in the proximity of and just northwest of 'Uncle Roddys' ("the Beach Facilities"). This beach with public access and Beach Facilities will be named the Princess Diana Beach. Paradise will install 6 water moorings off the beach for public use.

2.3 Paradise will provide car parking and a walkway for public access to the beach

between the Resort and Coco Point. The car park and public access is not to

be used for commercial purposes, and specifically is not to be used for cruise ship visitors.

2. 4 GOAB will allow the construction of buildings along the current setbacks already

established at the K Club, which will also be applied along the Additional Land. Setbacks may be closer to the ocean if permitted by the applicable building code.

2.5 Subject to Development Control Authority ("DCA") approval, GOAB permits

Paradise to build a main jetty/dock from the beach in front of the Resort for the sole use of the Resort and its guests and owners.

2,6 Subject to DCA approval, GOAB permits Paradise to build small private

individual docks from the villa sites.

2.7 GOAB permits Paradise to install at Paradise's cost 12 water mooring points off the beach in front of the Resort for large yachts I super yachts for sole and exclusive use by the Resort. Mooring procedures are to be determined and implemented by Paradise.

2.8 GOAB will reserve an area of land on Barbuda for Paradise to mine sand for

use in the construction of the Resort at no cost to Paradise other than a payment to GOAB of a royalty of US$5 per cubic yard of sand used.

2.9 GOAB permits Paradise to maintain and illuminate all public access roads in the vicinity of the Resort.

2.10 GOAB requires an Environmental Impact Assessment study to be undertaken

for the Project, and Paradise agrees to undertake such study and make it available to GOAB.

3. Airports

3.1 Antigua (ANU)

Paradise has requested and the GOAB agrees to:

3.1.1 provide VIP/Fast Track immigration/customs services entering/exiting

through Antigua, for which Paradise will pay reasonable fees;

3.1.2 provide a dedicated Resort kiosk within the new terminal at Antigua;

3.1.3 permit Paradise to establish an FBO facility at ANU for the operation of a

dedicated flight and or helicopter service to the Resort;

3.1.4 provide space in the existing terminal at ANU once redeveloped after the

new terminal has opened for Paradise to establish its FBO facility;

3.1.5 permit guests arriving in Antigua by private jet to clear immigration and customs onboard, at a reasonable charge to Paradise.

3.2 Barbuda (BBQ)

32.1 Paradise is presently undertaking feasibility studies concerning the construction of a new airport on Barbuda ("the New Airport") capable of landing private and small commercial jets at a location accessible to Codrington and convenient to the Resort.

3.2.2 If the development of a New Airport is determined to be feasible, and a decision is made by Paradise to proceed, Paradise has requested and the GOAB agrees:

3.2.2.1 to undertake the development of the New Airport under a Joint Venture agreement between them;

3.2.2.2 to allocate an area of land as determined by professionals skilled in the field of airport development which could accommodate the construction of the New Airport. To facilitate the allocation process, 3 locations will be identified at this time, 1 of which will be selected over the next 6 months by the GOAB, and in default of selection by the GOAB, the selection will be made by Paradise;

3.2.2.3 the plan for the New Airport and all facilities would be determined by Paradise in consultation with GOAB;

3.2.2.4 in return for contributing the and for the New Airport to the Joint Venture by way of lease, GOAB will receive equity in the Joint Venture on a pro rata basis in line with funding provided by Paradise. For this calculation, the value of the New Airport land is agreed to be US$1m: and

3.2.2.5 the remaining terms of the Joint Venture are to be agreed between them.

3.2.3 Paradise and the GOAB both confirm and acknowledge that Paradise is not giving an undertaking nor does it have an obligation to proceed with the development of the New Airport or the funding of it.

4. Tax Concessions

GOAB agrees to provide all incentives usually granted by GOAB in a project of this type. Additionally, Paradise has requested and GOAB has agreed to the waiver or exemption, if applicable, of the following:

4.1 Purchaser's and Vendor's stamp duty on the initial asset transfer from Dream Company Limited to Paradise, subject to Dream making its own application for the same;

4.2 Stamp Duty on all transfers of land between Paradise and any of its

subsidiaries, joint venture partners and shareholders on all transfers between them and Paradise where such transfers are in connection with the Resort or the New Airport;

4 3 Stamp Duty on initial transfer of any further acquired lands by Paradise related

to the Resort or the New Airport;

4.4 Vendor's and Purchaser's stamp duty on the subsequent first sale only of properties/subleases to first time buyers;

4.5 Non-Citizens Landholding License fee on the purchase of property/leases and any additional land/property/leases acquired in Barbuda by Paradise or its affiliates;

4.6 Non-Citizens Landholding License fee on the purchase of properties (lease/sublease) by first time buyers of leases/property within the Resort;

4.7 Property Tax charged on the Resort. Whilst Paradise understands there will be no Property Tax charged on the Resort as it is leasehold, should such tax be introduced after than at a nominal rate, then it would be waived for 25 years;

4.8 Land Tax for the Resort for 25 years;

4.9 corporate income tax for Paradise for 25 years, including the right to repatriate profits, dividends, commissions, royalties, management fees, interest, rentals, capital investment and other payments made during the exemption period free of withholding taxes;

4.10 withholding tax for 25 years;

4.11 withholding tax on the remittance of interest paid or accrued by Paradise on any debt for the Project;

4.12 fees, stamp duties or taxes related to the importation of foreign exchange into Antigua & Barbuda related to Paradise;

4.13 taxes on income derived from sources outside of Antigua & Barbuda for Paradise, property owners, shareholders, directors and joint venture partners;

4.14 import duty, Revenue Recovery Charge ("RRC") and ABST on building materials, furniture, fixtures, fittings, furnishings, appliances, machinery, equipment, and landscaping for all phases of the Resort and the New Airport;

4.15 import duty, RRC and ABST on building materials, plant, furniture, fixtures, fittings, furnishings, appliances, machinery and equipment required for maintenance and improvement purposes for 1 years after opening;

4.16 import duty, RRC and ABST on interior and exterior decorative items necessary

to fit out each phase of the Project;

4. 17 import duty, RRC and ABST related to the importation of 200 golf carts or similar vehicles, 20 motor vehicles, 2 aircraft, 2 helicopters and 2 boats related to the Project;

4.18 import duty, RRC and ABST for personal effects including 1 vehicle for each qualified shareholder, director, or representative (to a maximum of 10 persons)

for one time. Waivers to start from the approval of the Resort and extend throughout the construction phases;

4.19 corporate income tax for 25 years with the ability in respect of that period to carry forward losses for periods of seven (7) years for each tax year;

4.20 foreign exchange levy in operating foreign currency accounts (with permission);

4.21 Work Permit Fees are to be capped at a maximum of US$1,500 per employee

per annum for a period commencing from the date of this Agreement and concluding 15 years after the date of opening the Resort;

4.22 import duties for fuel to run the generators until such time as APUA can provide electricity at comparable prices to that being generated by Paradise;

4. 23 all port fees at the Barbuda dock for all imports to Barbuda by Paradise;

4.24 import duty, RRC and ABST on all food and beverage import duties for commodities shipped directly for the project;

4. 25 personal income taxes for 15 years for all persons employed on the Project if personal income tax is still imposed or re-introduced;

4. 26 duty and RRC, ABST and all other taxes on aviation fuel to be purchased in Antigua and Barbuda;

4. 27 food handling licences/certificates and liquor handling/serving licences for the restaurants and bars, and their staff, at the Resort;

4. 28 by expediting purchase of the K Club property from Dream Company Limited,

investors who will become shareholders in Paradise may not have done so by closing. Paradise is permitted to issue further shares for up to 5 years following closing without any tax charge or transfer tax charges arising therefrom, however this concession is not to be used to enable any speculation by the principals of Paradise.

5. Government Permissions

To facilitate the speedy planning, construction and completion of the Project, and for operational purposes, Paradise has requested and the GOAB agrees to:

5.1 grant a Non-Citizens Landholding License to Paradise to own the New Lease and develop the Resort, the New Airport and other properties in Barbuda;

5.2 confirm that the Resort is an eligible development for benefits under the Citizenship Investment Program ("CIP");

5.3 allow Paradise to operate and provide to the Resort and the New Airport utility services (in compliance with relevant Laws);

5.4 permit Paradise to operate a desalination or similar plant and equipment to produce potable and irrigation water for its own use and for sale to the public on favorable terms;

5.5 permit Paradise to drill for and use water located on or under the Property;

5.6 permit Paradise to operate electricity generating or similar plant and equipment to produce electricity;

5.7 permit Paradise to install renewable energy plants for the sole purpose of the Project;

5.8 permit Paradise to install and operate a sewage treatment plant, waste management plant, re-usable grey water or similar plant and equipment for the disposal, and/or reprocessing, of effluent for the sole purpose of the Project;