IN THE TERRITORIAL COURT OF THE VIRGIN ISLANDS,
DIVISION OF ST. CROIX

GOVERNMENT OF THE VIRGIN ISLANDS, Plaintiff

v.

LEGEND RESORTS, L.P., Defendant

CIVIL NO. 612/1996

ACTION FOR DEBT AND EVICTION

STIPULATED SETTLEMENT

WHEREAS, Plaintiff Government of the Virgin Islands (hereinafter referred to as "the government"), and Intervener Hotel on the Cay Time-Sharing Association, Inc. (hereinafter referred to as "the Association"), are parties to the above-captioned Civil Action Case No. 612/1996presently pending in the Territorial Court of the Virgin Islands, Division of St. Croix (hereinafter referred to as the "Civil Action"), and

WHEREAS, the undersigned parties to the Civil Action are desirous of avoiding the time and expense associated with the further prosecution and defense of the Civil Action, and

WHEREAS, said parties are desirous of being released of any and all claims with respect to the Civil Action:

NOW THEREFORE, in consideration of the releases and covenants contained herein,Plaintiff and defendant agree as follows:

• 1. Except with respect to the obligations under this Agreement the Government hereby forever and fully releases and discharges the Association from all liabilities, losses, cost, expenses (including, without limitation, attorney's fees), and damages related to all or any part of the subject matter of the Civil Action, or the prosecution or defense thereof.
  
  
• 2. Except with respect to the obligations under this Agreement the Association hereby forever and fully releases and discharges the Government from all liabilities, losses, cost, expenses (including, without limitation, attorney's fees), and damages related to all or any part of the subject matter of the Civil Action, or the prosecution or defense thereof.
  
  
• 3. In consideration of the Association withdrawing its pleading in Civil No. 612/1996 the parties agree as follows:
  
  
  • a. Notwithstanding the defaults of Legends Resorts, LP, Participation Services Corp.,Participation Management Corp., Pantheon Enterprises, Inc., and any other party to the above entitled action and the outcome of the above-entitled action, starting June 1, 1998, the Government shall recognize the Association as the lessee of that portion of property as shown on the Declaration of Partial Leasehold Ownership Plan establishing the Hotel on the Cay, a Time-Sharing Vacation ownership Plan, recorded against the real property known as Protestant Cay, Christiansted, St. Croix on August 5, 1980 as Document No. 1890/80 (hereinafter referred to as "the Declaration"),together with all easements and other rights set forth in said Declaration, free and clear from any and all obligations and defaults of Legend Resorts, L.P., Participation Services, Corp., Participation Management Corp., Pantheon Enterprises, Inc. and/or all other prior lessees. The leasehold estate held by the Association expires on December 31, 2039.
    
    
  • b. The Association shall pay Government the sum of Three Thousand Five Hundred Dollars($3,500.00) rent per month commencing on June 1, 1998 and continuing on the first day of each and every month thereafter for the leasehold estate in the portion of the land and improvements submitted to the time-sharing vacation ownership plan which represents a pro-rata share of the lease payment due under Amendment No. II to the original Lease Agreement by and between Hotel on the Cay, Inc. and the Government of the Virgin Islands entered into August 24, 1964 for area and easements. Said sum is effective until such time as the Government enters into a new lease with the association for the premises described in the Declaration, together with all easements and rights set forth therein from the date of the new lease to December 31, 2039, subject to the Government being adjudged the prevailing party in the above entitled action.
    
    
  • c. Beginning June 1, 1998 the Association shall pay hotel room taxes, its pro rata share of real estate taxes, and all other obligations to the Government as they become due and payable.
    
    
  • d. It is mutually agreed by the undersigned parties that the Association is not deemed to be a successor owner to Legend Resorts, , L.P., Participation Services, Corp., Participation Management Corp., or Pantheon Enterprises, Inc and as such is not responsible for any and all debts and/or obligations including but not limited to, taxes to the Government of the Virgin Islands or its agencies and departments.
    
    
  • e. The Association shall hire and enter into new employment contracts with existing employees excluding management personnel unless the Association in its sole discretion decides to hire such managers. The Association shall recognize and negotiate the employment contracts with the Virgin Islands Workers Union of the Hotel Employees and Restaurant Employees International Union (AFL-CIO).
    
    
  • f. The Association shall in good faith cooperate with the Government and any new lessee for the development of Protestant Cay, Christiansted, St. Croix, including but not limited to the construction of a hotel/casino. Government and the new lessee shall honor the terms of the declarant and the quiet enjoyment thereof by the Association.
    
    
• 4. In the event that the Defendants and/or other Interveners in the above-entitled action shall prevail in the above-entitled action and the Defendants' lease is re-instated, the Government shall give credit to said Defendants for all rent payments that the Association makes under the terms of this stipulation for that time during which the Association shall have made such payments.
  
  
• 5. This Agreement shall be interpreted in accordance with the laws of the Unite States VirginIslands.

This Stipulated Settlement may be signed in separate counterparts, each of which shall constitute a fully executed and integrated document. Facsimile signatures shall be acceptable. If any party shall sign by facsimile, he or she shall deliver the original signature page for filing with the court.Failure to deliver the original signature page to the court shall not invalidate this agreement.

IN WITNESS WHEREOF, the parties hereby have each approved and executed this agreement on the dates set forth opposite their signatures.

GOVERNMENT OF THE VIRGIN ISLANDS
Roy L. Schnieder, M.D., Governor
Dated: 5/22/1998

IN WITNESS WHEREOF, the parties hereby have each approved and executed this agreement on the dates set forth opposite their signatures.

Department of Property and Procurement
Dean F. Luke, Commissioner
Samuel J. Baptiste, Assistant Commissioner
Dated: 22 May, 98

IN WITNESS WHEREOF, the parties hereby have each approved and executed this agreement on the dates set forth opposite their signatures.

Hotel on the Cay Time-Sharing Association, Inc.
Francis X. Mina
Dated: 5/22/98

Respectively submitted,

V.I. Department of Justice

Julio A. Brady
Attorney General

By:
Ernest F. Batenga
Counsel to the Attorney General
Office of the Attorney General
6040 Castel Coakley
Christiansted, St. Croix, V.I. 00820
Tel: (340) 773-0295/Fax: (340) 773-1425

Hotel on the Cay Time-Sharing Association, Inc.
Ellen G. Donovan
Attorney for the Association
2116(53-B) Company Street
Christiansted, VI 00820
(340) 773-0464

CERTIFICATE OF SERVICE

It is hereby certified that on the 28th day of May, 1998, I caused a true and correct copy of the foregoing Stipulated Settlement to bed placed within an envelope, first class postage pre-paid, and served to the following addressee: Attorney for Potential Intervener, Participation Services corporation, H.A. Curt Otto, Esq., 2118 (53A) Company Street, Christiansted, St. Croix, U.S.V.I. 00820-4945 by placing the same in an official depository/with an official custodian of the United States Postal Service.