<PAGE>   1



                 FIRST AMENDMENT TO PURCHASE AND SALE AGREEMENT

          THIS FIRST AMENDMENT TO PURCHASE AND SALE AGREEMENT (this
"AMENDMENT") made as of the 17th day of December, 1999, by and between PRIME
HOSPITALITY CORP., a Delaware corporation ("SELLER"), and MARRIOTT INTERNATIONAL
INC., its successor or assigns ("PURCHASER").

                             EXPLANATORY STATEMENT

          A.        By Purchase and Sale Agreement dated September 15, 1999
between Seller and Purchaser (the "ORIGINAL AGREEMENT"), Seller agreed to sell
to Purchaser and Purchaser agreed to buy from Seller those certain parcels of
Real Property situated in St. Thomas in the Territory of the U.S. Virgin Islands
and the Business Assets of the Resorts operating thereon (collectively, the
"SUBJECT PROPERTY"), all as more particularly described in the Original
Agreement, on to terms and conditions set forth therein.

          B.        Under the terms of the Original Agreement, it is a condition
precedent to Purchaser's obligation to close on the Subject Property for
Purchaser to obtain from the Virgin Islands Industrial Development Commission
(the "COMMISSION") a transfer of those certain Industrial Development
Certificates and any and all benefits pursuant thereto (including, without
limitation, benefits relating to income taxes, gross receipt taxes, and excise
taxes), issued by the Commission and benefiting, or intended to benefit, Seller
through March 31, 2011 as set forth in the Original Agreement (referred to in
the Original Agreement as the First Certificate and the Second Certificate, and
hereinafter collectively referred to as the "CERTIFICATES").

          C.        Purchaser and Seller have agreed to an alternative approach
to satisfy the condition precedent relating to the transfer of the Certificates
whereby Purchaser shall, as a new applicant, make application for and attempt to
obtain from the Commission a new Industrial Development Certificate (the "New
Certificate") to be issued in the name of Purchaser and to take effect on the
date of transfer of the Subject Property from Seller to Purchaser.

          D.        To memorialize the foregoing understanding and agreement,
Seller and Purchaser have agreed to amend the Original Agreement as hereinafter
set forth (the Original Agreement and this Amendment, hereafter this
"AGREEMENT").

          NOW, THEREFORE, WITNESSETH, that Seller and Purchaser, in
consideration of Explanatory Statement which is hereby incorporated by
reference, the mutual covenants herein contained and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
agree as follows:

          1.        Defined Terms. Capitalized terms used in this Amendment
shall have the meaning ascribed to them in the Original Agreement.



<PAGE>   2





          2.        Conditions Precedent to Closing. As of the effective date of
this Amendment, Section 9(a)(v) of the Original Agreement shall be amended to
read as follows:

          (v)       Industrial Development Certificate and Industrial Benefits.
                    Purchaser shall have been able either to (1) obtain a
                    transfer of those certain Industrial Development
                    Certificates as more particularly hereinafter set forth in
                    subsection (A), or (2) obtain the issuance of an Industrial
                    Development Certificate as more particularly hereinafter set
                    forth in subsection (B).

                    (A)       Transfer of Industrial Development Certificate and
                              Industrial Development Benefits. Purchaser shall
                              have been able to obtain a transfer of (i) that
                              certain Industrial Development Certificate
                              (the "First Certificate") and any and all benefits
                              including, without limitation, Industrial
                              Development benefits, pursuant to the First
                              Certificate issued by the Virgin Islands
                              Industrial Development Commission ("Commission")
                              and currently benefiting Seller until March 31,
                              2001, by virtue of that certain Transfer of
                              Certificate from Frenchman's Reef Beach Associates
                              to Seller dated March 18, 1998, and (ii) that
                              certain Industrial Development Certificate (the
                              "Second Certificate") and any and all benefits
                              including, without limitation, Industrial
                              Development benefits, pursuant to the Second
                              Certificate issued or to be issued by the
                              Commission for the benefit of Seller for a period
                              of 10 years commencing April 1, 2001. It is the
                              requirement of Purchaser that transfer of the
                              First Certificate and the Second Certificate
                              provide for the following exemptions from taxes
                              and duties through March 31, 2011:

                                        <TABLE>
                                        <S>                                    <C>
                                        - Gloss Receipt Taxes                   100% exemption
                                        - USVI Income Taxes                      90% exemption
                                        - Dividend Withholding Taxes             80% exemption
                                        - Interest Withholding Taxes            100% exemption
                                        - USVI Real Property Taxes              100% exemption
                                               on real property used for operating a hotel
                                        - Customs Duties                        Customs duty capped
                                               at 1% ad valorem assessment on certain items
                                        - Excise Taxes                          100% exemption
                                        </TABLE>



                                        Purchaser agrees to use its reasonable
                                        efforts to comply with and complete all
                                        preconditions set by the Commission for
                                        the transfer of the First and Second
                                        Certificates. Seller agrees to cooperate
                                        with Purchaser to obtain the
                                        Commission's approval to transfer the
                                        First Certificate and the Second
                                        Certificate and all of the benefits
                                        pursuant thereto (including, without
                                        limitation, benefits relating to



                                       -2-


<PAGE>   3

                                        income taxes, gross receipt taxes, and
                                        excise taxes) to Purchaser.

                    (B)       Industrial Development Certificate and Industrial
                              Development Benefits. The Virgin Islands
                              Industrial Development Commission (the
                              "Commission") shall approve and issue directly to
                              Purchaser, in Purchaser's name, an Industrial
                              Development Certificate (the "New IDC
                              Certificate") providing benefits and exemptions
                              equivalent to those afforded Seller pursuant to
                              the First Certificate and Second Certificate but
                              for a period from the date of Closing through the
                              ten (10) year anniversary date of Closing,
                              including, without limitation, the following
                              exemptions from taxes and duties:

                                        <TABLE>
                                        <S>                                             <C>
                                        Gross Receipt Taxes                             100% exemption
                                        USVI Income Taxes                                90% exemption
                                        Dividend Withholding Taxes                       80% exemption
                                        Interest Withholding Taxes                      100% exemption
                                        USVI Real Property Taxes                        100% exemption
                                             on real property used for operating a hotel
                                        Customs Duties                                  Customs duty capped
                                             at 1% ad valorem assessment on certain items
                                        Excise Taxes                                    100% exemption
                                        </TABLE>


                    (C)       Purchaser agrees to use its reasonable efforts to
                              comply with and complete all preconditions set by
                              the Commission either for the transfer specified
                              in Section 9(a)(v)(A) or the issuance of the New
                              IDC Certificate specified in Section 9(a)(v)(B).
                              Seller agrees to cooperate with Purchaser, if
                              necessary, to obtain the Commission's approval to
                              issue the New IDC Certificate and all of the
                              benefits pursuant thereto (including, without
                              limitation, benefits relating to income taxes,
                              gross receipt taxes, and excise taxes) to
                              Purchaser.

          3.        Purchase Price. As of the effective date of this Amendment,
Section 2 of the Original Agreement shall be amended to incorporate the
following provision, to be inserted after the first sentence of paragraph 2:

                    Notwithstanding any term or provision in this Agreement to
          the contrary, if Purchaser obtains the issuance of the New IDC
          Certificate as more particularly set forth in Section 9(a)(v)(B) of
          this Agreement but does not obtain the transfer as more particularly
          set forth in Section 9(a)(v)(A), the purchase price for the Subject
          Property shall be Seventy Three Million Dollars ($73,000,000), it
          being agreed among the parties hereto that said reduction in purchase
          price is necessary to account for the loss of benefits provided under
          the First and Second Certificates.



                                       -3-
<PAGE>   4
          4.        Closing. As of the effective date of this Amendment, Section
10 of the Original Agreement shall be amended to incorporate the following
provision, to be inserted after the second sentence of the first paragraph:

                    Notwithstanding any term or provision in this Agreement to
          the contrary, if Purchaser obtains the issuance of the New IDC
          Certificate as more particularly set forth in Section 9(a)(v)(B) of
          this Agreement but does not obtain the transfer as more particularly
          set forth in Section 9(a)(v)(A), the purchase and sale of the Subject
          Property shall close in accordance with the terms and conditions set
          forth in the Original Agreement but in no event earlier than January
          31, 2000.

          5.        No Other Amendments. In all other respects, each and every
term, covenant, agreement and condition of the Agreement shall remain in full
force and effect and binding on the parties thereto, except as amended herein.

          6.        Multiple Counterparts and Facsimile Signature. This
Amendment may be executed in a number of identical counterparts and by exchange
of facsimile signatures. If so executed, each of such facsimile executed
counterparts shall, collectively, constitute one agreement; but in making proof
of this Amendment, it shall not be necessary to produce or account for more than
one such counterpart.

          IN WITNESS WHEREOF, the duly authorized representatives of the parties
hereto have executed this Amendment, with the intention that this Amendment
constitute a sealed instrument, as of the date first above written.


                              SELLER:
                              PRIME HOSPITALITY CORP.


Dated:  12/17/99              By: /s/ DOUGLAS VICACI  [SEAL]
      -----------                --------------------
                              Name: DOUGLAS VICACI
                                   ------------------
                              Title: SVP & CFO
                                    -----------------



                                       -4-



<PAGE>   5

                                        PURCHASER:
                                        MARRIOTT INTERNATIONAL, INC.


Dated: December 17, 1999                By: /s/ WENDELL B. WARD       [SEAL]
       -----------------                   --------------------------
                                        Name: WENDELL WARD
                                             ------------------------
                                        Title: VICE PRESIDENT
                                               ----------------------


                                      -5-




<PAGE>   6



LISTING OF EXHIBITS INTENTIONALLY OMMITTED

EXHIBIT B                     BUSINESS ASSETS

EXHIBIT C                     ESCROW INSTRUCTION LETTER

EXHIBIT E                     LEASES AND SERVICE CONTRACTS TO BE ASSUMED
                              BY PURCHASER

EXHIBIT F                     CATEGORIES OF UNOPENING FOOD, BEVERAGE,
                              AND OPERATING SUPPLIES

EXHIBIT G                     ENVIRONMENTAL REPORT

EXHIBIT H                     EMPLOYMENT AGREEMENTS/DESIGNATED
                              EMPLOYEES AGREEMENTS

EXHIBIT I                     LIST OF GOVERNMENTAL PERMITS AND GRANTS

EXHIBIT J                     TITLE COMMITMENT

EXHIBIT K                     EXISTING SURVEY

EXHIBIT M                     VIOLATIONS