<PAGE>   1
                                                                    EXHIBIT 2(g)


Frenchman's Reef

                           PURCHASE AND SALE AGREEMENT

                                  by and among

                            PRIME HOSPITALITY CORP.,
                                   as Seller,

                                       and

                          MARRIOTT INTERNATIONAL, INC.,
                                  as Purchaser

                             ----------------------



                               September 15, 1999


<PAGE>   2




                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                PAGE
                                                                                ----
<S>                                                                             <C>
1.      Agreement to Sell and Purchase Subject Property.........................

2.      Purchase Price and Terms................................................

3.      Allocation of Purchase Price............................................

4.      Transaction Taxes.......................................................

5.      Environmental...........................................................

6.      Debts and Liabilities...................................................

7.      Representations and Warranties of Seller................................

8.      Title and Survey........................................................

9.      Conditions Precedent to Closing.........................................

10.     Closing.................................................................

11.     Risk of Loss............................................................

12.     Indemnification.........................................................

13.     Inventory of Personal Property..........................................

14.     Union/Contract/Contract Employees.......................................

15.     Default.................................................................

16.     Notice .................................................................

17.     Brokers.................................................................

18.     Publicity...............................................................

19.     Purchaser's Right of Entry..............................................

20.     Assignment..............................................................
</TABLE>



                                      - i -
<PAGE>   3

<TABLE>
<S>                                                                             <C>
21.     No Third Party Beneficiaries............................................

22.     Attorney's Fees.........................................................

23.     Time....................................................................

24.     Severability............................................................

25.     Counterparts; Facsimile Signatures......................................

26.     Binding Effect, Etc.....................................................

27.     Further Assurances......................................................

28.     [Intentionally Deleted].................................................

29.     Exclusivity.............................................................
</TABLE>



                                     - ii -

<PAGE>   4


                           PURCHASE AND SALE AGREEMENT

               THIS PURCHASE AND SALE AGREEMENT (this "Agreement"), made and
entered into this _____ day of September, 1999, by and between PRIME HOSPITALITY
CORP, a Delaware corporation (hereby referred to as "Seller"), and MARRIOTT
INTERNATIONAL, INC., its successor or assigns (hereinafter referred to as
"Purchaser").

                                   WITNESSETH:

               WHEREAS, Seller desires to sell, convey, transfer, assign and
deliver to Purchaser, and Purchaser desires to purchase from Seller:

               (i)    those certain parcels of real property situated in St.
                      Thomas in the Territory of the U.S. Virgin Islands, more
                      particularly described on Exhibit A attached hereto,
                      together with all structures, improvements and fixtures
                      located thereon, and together with all hereditaments,
                      appurtenances, easements, and other rights and interests
                      belonging or incident thereto (the "Real Property"); and

               (ii)   all of the assets of the resort businesses conducted by
                      Seller on the above-described Real Property under the
                      trade names "Frenchman's Reef Beach Resort" and "Morning
                      Star Beach Resort" (collectively hereinafter referred to
                      as the "Resorts"), including without limitation the
                      rights, title, and interest to the name and trademarks
                      "Frenchman's Reef Beach Resort" and "Morning Star Beach
                      Resort;" and all registrations for such names (the
                      "Names") to the extent assignable, all goodwill of the
                      businesses, all furniture, vehicles, appliances,
                      televisions and other video equipment, furnishings, floor
                      and wall coverings, fixtures (including lighting, heating,
                      plumbing, and ventilating fixtures, and everything
                      attached in any manner to walls, ceilings or floors), all
                      fixed assets and supplies and inventories (as such terms
                      are defined in the Uniform System of Accounts for the
                      Lodging Industry, Ninth Revised Edition), appliances,
                      equipment, machinery, security and alarm and telephone and
                      sprinkler and computer systems, supplies, advance room
                      reservations and deposits, (such deposits being referred
                      to as "Room Reservation Deposits") any and all telephone
                      and telecopy numbers related to and used in the operation
                      of the Resorts, Seller's right, title and interest in all
                      leases or services contracts listed on Exhibit E hereto,
                      all permits and licenses related to the operation of the
                      Real Property and Resorts, and all other tangible and
                      intangible personal property owned by Seller and presently
                      located upon or within the Real Property or otherwise used
                      in connection with the operation of the


<PAGE>   5

                      Resorts or the operation and maintenance of the Real
                      Property, building plans and specifications, equipment
                      warranties and the like, and copies of all financial and
                      operating records of the business (other than personnel
                      files) and of the Real Property, specifically including
                      without limitation all those tangible assets to be listed
                      on Exhibit B pursuant to the terms of Section 13 hereto,
                      but specifically excluding all cash, bank accounts,
                      accounts receivable, and liabilities of any kind or
                      nature, except for the Room Reservation Deposits and
                      liabilities specifically assumed herein (said Real
                      Property and Business Assets being hereinafter
                      collectively referred to as the "Subject Property"); and

               WHEREAS, Purchaser desires to acquire the Subject Property from
Seller, all upon the terms and conditions hereinafter set forth.

               NOW, THEREFORE, for and in consideration of the premises, the
mutual covenants and agreements herein contained, and other good and valuable
considerations, the receipt and sufficiency of which are hereby acknowledged,
the parties agree as follows:

               1.     AGREEMENT TO SELL AND PURCHASE SUBJECT PROPERTY. Seller
agrees to sell to Purchaser, and Purchaser agrees to purchase from Seller all of
the above-described Subject Property, subject to the terms and conditions herein
contained. It is expressly understood that this transaction does not include any
of Seller's cash, bank accounts or accounts receivable, other than any Room
Reservation Deposits, and that, other than as expressly set forth in this
Agreement, Purchaser shall not assume nor be liable or responsible in any manner
for any of the liabilities or obligations of Seller of any kind or nature
relating to the Subject Property, the Resorts' business, or any other matter
whatsoever, existing or accrued or otherwise arising prior to the date of
Closing hereunder. Purchaser will be obligated to honor advance room
reservations, to assume Seller's yellow pages advertising contracts, and to
assume those space leases, leases on equipment, machinery and items of personal
property, and service contracts identified on Exhibit E hereto (collectively,
the "Leases and Contracts"), and to assume the other obligations as may be
expressly set forth in this Agreement.

               2.     PURCHASE PRICE AND TERMS. The purchase price for the
Subject Property shall be Seventy Five Million Dollars ($75,000,000). The total
purchase price shall be payable by Purchaser as follows:

               (a)    Earnest Money Deposit:

                      A $2,000,000 earnest money deposit (this deposit, and all
                      interest thereon, the "Earnest Money Deposit") will be
                      delivered to Chicago Title Insurance Company ("Escrow
                      Agent"), within five business days following receipt by
                      Purchaser of a fully-executed copy of this Agreement, such
                      sum to be promptly deposited by



                                      -2-
<PAGE>   6

                      Escrow Agent in an interest-bearing money market escrow
                      account at a federally insured banking institution, and to
                      be held by Escrow Agent in such account pursuant to the
                      terms of this Agreement. If Purchaser fails to deliver the
                      Earnest Money Deposit by said deadline, this Agreement
                      shall be null and void and the parties shall be relieved
                      of all further rights or responsibilities hereunder. At
                      the time of the making of such Earnest Money Deposit,
                      Seller, Purchaser and Escrow Agent shall execute an Escrow
                      Instruction Letter substantially in the form of Exhibit C
                      hereof.

               (b)    Balance:

                      The balance of the Purchase Price (subject to customary
                      closing adjustments and those adjustments set forth
                      herein) shall be delivered by Purchaser to Escrow Agent in
                      the form of wired funds at the Closing. Title company
                      escrow and closing fees shall be shared equally between
                      the parties. Any monetary lien or encumbrance on the
                      Subject Property or any part thereof shall be paid in full
                      by Seller at Closing, and shall be released/terminated of
                      record prior to or at Closing.

               (c)    Apportionments.

                      (i)    Seller shall be entitled to and responsible for all
                      income, cost and expense which accrues up to the day
                      preceding Closing with respect to the Subject Property.
                      Purchaser shall be entitled to and responsible for all
                      income, cost and expense accruing as of the date of
                      Closing and thereafter with respect to the Subject
                      Property. In accordance with the foregoing, closing
                      adjustments for the Subject Property will be made as
                      follows:

                             a.     All real estate taxes, personal property
                      taxes, gross receipt taxes, ad valorem taxes and
                      assessments and other state, county or city taxes, fees,
                      charges and assessments affecting the Subject Property
                      shall be prorated as of the Closing on an accrual basis
                      based on the most recent ascertainable amounts of or other
                      reliable information in respect to each such item of
                      income and expense. Franchise fees and all other expenses
                      due Purchaser or its affiliates (in its capacity as
                      franchisor) shall be paid by Seller based upon all
                      revenues due Seller through Closing. Any net credit due to
                      Seller as a result of such prorations shall be paid in
                      cash by Purchaser at Closing. Any net credit due to
                      Purchaser as a result of such prorations shall be credited
                      against the Purchase Price.

                             b.     The following items shall be prorated as of
                      the Closing on an accrual basis based on the most recent
                      ascertainable



                                      -3-
<PAGE>   7

                      amounts of or other reliable information in respect to
                      each such item of income and expense:

                             (i)    Utility charges.

                             (ii)   Income, if any, from the operation of the
                             Resorts including, but not limited to, leases and
                             concession agreements with third parties, room
                             rentals, restaurant, telephone, room service and
                             other charges due from guests or other customers
                             (Seller and Purchaser shall each be entitled to
                             receive a credit equal to one-half of the amount of
                             all transient guest revenues for the full night
                             preceding the Closing).

                             (iii)  Commission of rental agents, travel agents,
                             credit organizations and others, provided, however,
                             that commissions respecting guest room rentals for
                             the night preceding the Closing shall be treated in
                             the same fashion as guest room rentals.

                             (iv)   Seller's prepayments of purchase orders, and
                             other prepaid items.

                             (v)    Amounts paid or payable under the Leases and
                             Contracts, if any, assigned to Purchaser at the
                             Closing. All security deposits shall be transferred
                             to Purchaser.

                             (vi)   All other costs and expenses in connection
                             with operation of the Resorts, which are
                             customarily and usually apportioned on the purchase
                             or transfer of a hotel property.

                             (vii)  Laundry, valet and vending machines income.

                      (ii)   At the Closing, Purchaser shall pay to Seller for
                      all unopened items of food, beverage and operating
                      supplies which are in good and usable condition for the
                      purposes of the operation of the Resorts, as further
                      described by category on Exhibit F hereto, and which are
                      in quantities normal and customary for resorts of the
                      nature and size of the Resorts. The payment shall be in
                      the amount of Seller's cost for such items.

                      (iii)  Seller shall be entitled to all accounts receivable
                      accruing, but not realized, prior to 11:59 p.m. on the
                      night preceding Closing. Payments relating to such
                      accounts receivable realized after Closing shall be the
                      sole property of Seller and to the extent Purchaser
                      receives any such payments, it will promptly remit them



                                      -4-
<PAGE>   8

                      to Seller. Purchaser will cooperate with Seller in
                      connection with Seller's efforts to collect its account
                      receivables.

                      (iv)   Accounting: Except as otherwise expressly provided
                      herein, all apportionments and adjustments shall be made
                      on an accural basis in accordance with generally accepted
                      accounting principles. The computation of the adjustments
                      shall be jointly prepared by Seller and Purchaser, and,
                      upon the request of either Purchaser or Seller, shall be
                      reviewed by a reputable accounting firm mutually selected
                      by Seller and Purchaser (the "Accountants") and reviewed
                      by representatives of both Purchaser and Seller. To the
                      extent the exact amount of any adjustment item provided
                      for in this Agreement cannot be precisely determined on
                      the Closing, the Seller and Purchaser (or, if either
                      elects, the Accountants) shall estimate the amount
                      thereof, for purposes of computing the net amount due
                      Seller or Purchaser pursuant to this Agreement and shall
                      determine the exact amount thereof not later than sixty
                      (60) days after the Closing. The determinations made by
                      the Accountants shall be binding on both Seller and
                      Purchaser. The fees and expenses of the Accountants shall
                      be borne by the party requesting the use of the
                      Accountants.

                      (v)    The parties hereto will agree at Closing to adjust
                      and/or apportion the Purchase Price, as necessary due to
                      the assumption by Purchaser of a settlement agreement
                      reached by and between Seller and Armando and Dana
                      Santucci, as more particularly set forth in that certain
                      letter agreement dated August 3, 1999.

               3.     ALLOCATION OF PURCHASE PRICE. Set forth on Exhibit D
hereof is the agreed upon allocation of the total Purchase Price; such
allocation being made only among land, buildings, fixtures, personal property
and good will.

               The parties further agree that each of them will timely file IRS
Form 8594 with the Internal Revenue Service, reflecting the allocation set forth
above.

               4.     TRANSACTION TAXES. All documentary fees/stamps/taxes and
real property and transfer taxes shall be paid 50% by Seller and 50% by
Purchaser. Purchaser shall pay for all other recording taxes and any sales or
use taxes imposed upon the sale of any personal property.

               5.     ENVIRONMENTAL. Purchaser has delivered to Seller that
certain Phase I Environmental Site Assessment dated June, 1999 prepared by
Parsons Engineering Science, Inc. (the "Environmental Report"). Seller agrees
that prior to Closing, it shall undertake and complete, to Purchaser's
reasonable satisfaction, the items specified under Section 6.2 of the report, a
copy of which is attached hereto as Exhibit G. Purchaser will inspect Seller's
work within fifteen (15) days of Seller's written notice that



                                      -5-
<PAGE>   9

such work is complete. No later than four (4) days after the expiration of said
fifteen (15) day period Purchaser will notify Seller in writing of any
corrections it requires in order for the work to be completed in accordance with
industry standards for resorts of a similar nature. Seller shall promptly make
any such corrections. Upon Seller's final completion of the work required under
Section 5, Seller shall have no further responsibility or liability with respect
to the correction of items specified in Section 6.2 of the Environmental Report.

               6.     DEBTS AND LIABILITIES. Other than as expressly set forth
in this Agreement, it is expressly understood that Purchaser shall not assume or
pay, perform or discharge or cause to be paid, performed or discharged any
obligation or liability of Seller. Purchaser agrees to honor advance room
reservations made by Seller prior to Closing in the ordinary course of business,
to assume Seller's yellow pages advertising contracts, and to accept the
assignment of and to assume the Leases and Contracts. Other than as expressly
set forth in this Agreement, Seller agrees to pay all debts and liabilities
relating to the Subject Property and the Resorts business at or prior to the
Closing hereunder. The parties agree that Purchaser shall acquire title,
ownership and possession of the Subject Property free and clear of all claims of
any kind or nature whatsoever (excepting (a) advance room reservations, (b) Room
Reservation Deposits, (c) obligations pursuant to the leases and service
contracts set forth on Exhibit E hereto, and (d) all matters of record).

               7.     REPRESENTATIONS AND WARRANTIES OF SELLER.

               (a)    Seller hereby makes the following additional
                      representations and warranties to Purchaser as of the date
                      of this Agreement, continuing throughout the term of this
                      Agreement, and as of the date and time of Closing
                      hereunder, with the knowledge that Purchaser is acting in
                      full reliance thereon;

                      (i)    Seller possesses full power and authority to enter
                             into and perform this Agreement and the execution,
                             delivery, or performance of this Agreement will
                             not conflict with or violate the terms or
                             provisions of any loan agreement (excepting those
                             which will be discharged at the Closing
                             hereunder), contract, other agreement, court
                             order, decree, statute, rule or regulation by
                             which Seller is bound or affected. This Agreement
                             is a valid and binding obligation of Seller, and
                             is enforceable against Seller in accordance with
                             its terms. Seller is duly organized, validly
                             existing and in good standing under the laws of
                             the state of formation, has all requisite power
                             and authority under the laws of such state and by
                             proper corporate proceedings to execute and
                             consummate this Agreement and the transactions
                             contemplated hereby, and shall deliver to


                                      -6-
<PAGE>   10

                             Purchaser prior to Closing a certificate of good
                             standing and copies of such corporate
                             authorizations.

                      (ii)   Seller is the owner of, both beneficially and of
                             record, and has good and marketable title to, all
                             of the Subject Property, and at the Closing will
                             convey and assign to Purchaser good and marketable
                             title to all of the Subject Property free and
                             clear of all encumbrances, covenants, easements,
                             leases and restrictions, excepting (a) those items
                             set forth on the Title Commitment (as defined in
                             Section 8 hereof) (the "Permitted Exceptions"),
                             and (b) those rights of governmental entities
                             pursuant to the terms of the Coastal Zone Permit
                             No. C2T-1-81W and C2T-12-90W, (c) monetary liens,
                             judgments and mechanic's liens, which will be
                             satisfied and released at Closing and (d) those
                             leases and service contracts set forth on Exhibit
                             E hereto. Seller has no ownership or other direct
                             or indirect interest in any strip or
                             parcel of land which adjoins the Real Property. To
                             the best of Seller's knowledge and belief, no
                             further consent of any person or entity, and no
                             license, approval, or authorization of, or
                             registration or declaration with, any governmental
                             authority is required in connection with the
                             execution and delivery of or performance by Seller
                             of its obligations under this Agreement.

                      (iii)  Seller holds Federal Trademark No. 1,976,397 and
                             1,973,749 for the names "Frenchman's Reef Beach
                             Resort" and "Morning Star Beach Resort."

                      (iv)   Seller shall continue to be solely responsible for
                             and shall pay as and when due all of Seller's
                             obligations, debts and liabilities which are
                             associated in any way with the Subject Property
                             and/or the Resorts business accruing prior to the
                             Closing, and not otherwise expressly assumed by
                             Purchaser.

                      (v)    Within the times and in the manner prescribed by
                             law, Seller has filed all federal, state and local
                             tax returns required by law and has paid all
                             applicable sales, use, withholding, real and
                             personal property, income, FICA, employment and
                             other taxes, assessments and penalties due and
                             payable, in connection with the Subject Property
                             and the Resorts business. There are no proceedings
                             pending, or to the best of Seller's knowledge,
                             threatened with or by any taxing authorities as to
                             taxes of any nature payable by



                                      -7-
<PAGE>   11

                             Seller in connection with the Subject Property or
                             the Resorts business.

                      (vi)   There are no outstanding judgments against Seller,
                             and there is no suit, action, claim, demand,
                             arbitration, or legal, administrative or other
                             proceedings pending or, to the best of Seller's
                             knowledge, threatened against or affecting the
                             Subject Property or the Resorts business, and
                             Seller does not know or have reasonable grounds to
                             know of any basis for any such action or claim.

                      (vii)  Other than as set forth in Exhibit M, to the best
                             of Seller's knowledge and belief, Seller has
                             complied with, and is not in violation of, any
                             applicable federal, state or local statutes, laws,
                             rules and regulations affecting the Subject
                             Property or the Resorts business.

                      (viii) Other than documents recorded in the public
                             records, the Leases and Contracts to be assigned to
                             Purchaser pursuant to the terms of this Agreement,
                             the Coastal Zone Permit No. C2T-1-81W and
                             C2T-12-90W and agreements and easements with
                             governmental bodies and utility companies which are
                             customary reasonably necessary for the development
                             and operation of the Subject Property and the
                             Resorts business (and of which true and complete
                             copies have been supplied by Seller to Purchaser),
                             Seller is not a party to or bound by any
                             agreements, contracts, employment arrangements,
                             leases, subleases or commitments relating to the
                             Subject Property or any part or portion thereof or
                             the Resorts business which will extend beyond or
                             survive the Closing hereunder.

                      (ix)   Seller has received no written notice that the
                             present development, improvement, use and
                             operation of the Subject Property and of the
                             Resorts business are not in compliance with or
                             violate any local, state or federal laws,
                             ordinances, resolutions, codes, regulations or
                             requirements of any kind or nature, including,
                             without limitation, zoning, adequacy of parking,
                             land use laws and building codes, or any private
                             covenants, restrictions, or setbacks. There are
                             presently, and at the date of Closing there will
                             be, in effect all material licenses, permits and
                             other authorizations necessary for the Seller's
                             use, occupancy and operation of the Subject
                             Property and the Resorts business as it is
                             currently being used.



                                      -8-
<PAGE>   12

                      (x)    To the best of Seller's knowledge, Seller is in
                             compliance and in good standing with all permits,
                             approvals, licenses, grants and other similar
                             items from governmental entities relating to, or
                             affecting the Property, (including, without
                             limitation, liquor licenses, coastal zone
                             management permits and industrial development
                             credit agreements) (collectively, "Governmental
                             Permits and Grants"). Set forth on Exhibit I
                             hereto is a complete list of all Governmental
                             Permits and Grants.

                      (xi)   There are no unpaid ad valorem taxes on the Real
                             Property (except to the extent current taxes are
                             not yet due and payable) or governmental or special
                             district assessments or levies for sewer, sidewalk,
                             curb, gutter, water, paving, electrical, gas, storm
                             drainage, park dedication fees, or other such
                             impositions related to the Real Property, matured
                             or unmatured, and Seller does not know of any such
                             threatened assessments or levies.

                      (xii)  Seller has not received written notice of any
                             pending or threatened condemnation proceeding,
                             proposed change of zoning, or other proposed land
                             use regulation or action affecting the Real
                             Property.

                      (xiii) All bills for work done or materials furnished with
                             respect to the Real Property have been paid in full
                             or will be paid in full and discharged by Seller at
                             or prior to Closing.

                      (xiv)  Seller is not a party to any oral or written
                             employment contracts or agreements with respect to
                             the Property other than those set forth on Exhibit
                             H hereto (the "Employment Agreements"). To the best
                             of Seller's knowledge, no party is in default under
                             any Employment Agreement.

                      (xv)   There are no property interests, buildings,
                             structures or other improvements or personal
                             property that are owned or leased by Seller which
                             are necessary for the operation of the Subject
                             Property that are not being conveyed pursuant to
                             this Agreement.

                      (xvi)  Seller has not received written notice from any
                             insurance carrier of defects or inadequacies in the
                             Subject Property which, if uncorrected, would
                             result in a termination of insurance coverage or an
                             increase in the premiums charged therefor.



                                      -9-
<PAGE>   13

                      (xvii) All space leases, leases and service contracts for
                             any space, property services or advance room
                             contracts relating to the Subject Property and/or
                             the Resort are listed on Exhibit E hereto, and
                             Seller has supplied to Purchaser true and complete
                             copies of all such documents.

                     (xviii) Exhibit H sets forth and describes in detail, as to
                             each employee, all accrued but unpaid vacation pay
                             and sick leave, a description of whether any of
                             Seller's employees are participating in a Seller
                             group health plan, and all other fringe benefits,
                             as well as a schedule of employees, showing
                             salaries and duties, with a statement of the length
                             of service of each such employee, such Exhibit to
                             be brought current to the date of Closing.

                      (xix)  Other than as set forth in Exhibit M, to the best
                             of knowledge of Seller, there are no Hazardous
                             Materials upon or in any way affecting the Real
                             Property. As used herein, "Hazardous Materials"
                             shall mean any chemical, material or substance to
                             which exposure is prohibited, limited, or regulated
                             by any federal, state, county or regional authority
                             and/or which is known to pose a hazard to the
                             health and/or safety of humans, animals or the
                             environment.

                      (xx)   Between the date of this Agreement and the Closing,
                             Seller:

                             (a)    Shall not transfer or otherwise dispose of
                             any interest in the Subject Property or any part
                             thereof and shall not create or suffer the
                             imposition of any further liens or encumbrances or
                             restrictions on the Subject Property or any
                             interest therein.

                             (b)    Shall maintain all existing policies of
                             insurance on the Subject Property.

                             (c)    Shall maintain the Subject Property and all
                             mechanical, heating, plumbing, electrical and other
                             utility systems which serve the Real Property in
                             such repair and order as existed on the date of
                             this Agreement.

                             (d)    Shall conduct the Resorts' business only in
                             the normal and ordinary course thereof, consistent
                             with past practices, and in compliance with the
                             law and shall continue to use its reasonable and
                             good faith efforts to take guest room reservations
                             and to otherwise promote the



                                      -10-
<PAGE>   14

                             business of the subject property in the same
                             manner as Seller did prior to the execution of
                             this Agreement; and shall maintain the level of
                             fixed assets and supplies and inventories as has
                             been its practice within the past one (1) year
                             from the date of this Agreement.

                             (e)    Shall not make any material alterations in
                             the Subject Property.

                             (f)    Shall not enter into any contracts,
                             agreements or leases affecting the Subject
                             Property which will survive the Closing hereunder.

                             (g)    Shall not take any actions of any kind which
                             might interfere with the performance by any party
                             hereto of the obligations and responsibilities set
                             forth herein or the enjoyment by any party hereto
                             of the rights created hereby.

                             (h)    Shall use and operate the Subject Property
                             in compliance with all applicable laws, rules,
                             regulations of any applicable governmental agency
                             and the requirements of any mortgage, operating
                             agreement or insurance policy affecting the
                             Subject Property.

                             (i)    Shall file for and obtain, at Seller's
                             expense, any federal, state or local
                             authorizations, consents, approvals, or
                             clearances, which may be required in connection
                             with Seller's conveyance of the Subject Property
                             to Purchaser.

                      (xxi)  Seller has terminated the employment of Nick
                             Pourzal and Nick Pourzal no longer has any rights
                             to live on the Subject Property.

                      (xxii) Seller has no knowledge of any impediment to the
                             issuance of the Second Certificate (as defined in
                             Section 9(a)(v) Conditions Precedent to Closing
                             hereof) other than the normal governmental
                             requirements for such issuance.

               (b)    To the best of Seller's knowledge: (i) the information
                      that has been furnished to Purchaser by Seller pursuant to
                      this Agreement does not contain any material
                      misrepresentation as to any material fact; and (ii) Seller
                      has not omitted any material fact or information which
                      would reasonably affect a prudent investor's decision to
                      purchase the Subject Property and the Resorts business in
                      the manner herein set forth.



                                      -11-
<PAGE>   15

               (c)    To Seller's "best knowledge" or similar qualification
                      means to the actual knowledge of Joseph Bernadino, General
                      Counsel; Steven Siegel, vice president - construction; and
                      Andrew HeLal, General Manager, without independent inquiry
                      other than to the internal files of Seller.

               (d)    All representations, warranties, and covenants contained
                      in this Section 7 shall survive closing for a period of
                      three (3) months from the date of Closing.

               (e)    Purchaser acknowledges that it is relying on its
                      independent investigation of the condition of the
                      Subject Property (including the physical and the
                      environmental condition of the Subject Property), that
                      it has not relied upon any statement, representation or
                      warranty, written or otherwise, of Seller, other than as
                      expressly set forth in this Agreement, or of any
                      employee or agent of Seller and that it is purchasing
                      the Subject Property "as is." Purchaser acknowledges
                      that any budgets or forecasts of financial results
                      provided to it are estimates only, that such budgets and
                      forecasts do not constitute guaranties of future
                      performance and that future performance of the Subject
                      Property may vary substantially from such budgets and
                      forecasts. Purchaser warrants and represents that it has
                      no knowledge of any fact which would render any
                      representation, warranty or covenant contained in this
                      Section 7 to be false or incorrect or cause Seller to be
                      in breach thereof.

               (f)    Seller agrees that if any deed, Leases and Service
                      Contracts or Governmental Permits and Grants or other
                      document to be assigned or conveyed to Purchaser is not in
                      the name of "Prime Hospitality Corp.," but instead is in
                      the name of Frenchman's Reef Beach Associates or other
                      similar name ("Beach Associates"), Seller shall undertake
                      such acts as may be necessary to assign and/or convey the
                      interest in such documents(s) to Purchaser.

               (g)    The limitations to the representations and warranties
                      contained in Sections 7(c); 7(d) and the last sentence of
                      7(e) shall apply to and be incorporated by referenced in
                      each and every warranty and representation given by Seller
                      anywhere in this Agreement.

               8.     TITLE AND SURVEY.

                      (a)    Attached hereto as Exhibit J is a current
               commitment for a title insurance policy covering the Real
               Property, issued by Escrow Agent, in the amount of the purchase
               price (the "Title Commitment"). As a condition to Closing, the
               Escrow Agent will deliver to Purchaser an endorsement to the
               title commitment which extends the effective date



                                      -12-
<PAGE>   16

               thereof to the date of Closing and which discloses no further
               exceptions to title, as well as such other endorsements as
               Purchaser may reasonably request. In addition, Seller shall
               cooperate with Purchaser's efforts to produce such agreements,
               affidavits or other documents as may be reasonably required by
               the Escrow Agent to issue the owner's title policy. Finally,
               Seller agrees that on the date of Closing it will deliver to
               Purchaser evidence reasonably satisfactory to Purchaser and
               Escrow Agent, by Certificate or otherwise, which discloses no
               unpaid taxes or assessments on the Real Property except those
               pertaining to the year of Closing, it being mutually understood
               that Seller will have paid in full all prior years' taxes and
               assessments as well as all taxes and assessments allocated to the
               date of Closing, on or before the date of Closing.

                      (b)    Attached hereto as Exhibit K is a survey of the
               Real Property (the "Existing Survey"). Within sixty (60) days
               from the date of this Agreement, Purchaser shall obtain, at its
               expense, an updated survey, certified by a licensed surveyor for
               the express benefit of Purchaser and the Escrow Agent depicting
               all property corners, improvements, fences, roads, driveways,
               parking areas, easements and rights-of-way, encroachments on or
               off the Real Property, utility lines, restrictions of record, and
               setbacks, existing upon the Real Property (the "Improvement
               Survey"). The Improvement Survey shall be in form and content
               sufficient to cause the Escrow Agent as title company to issue an
               endorsement to its title commitment agreeing to delete from
               Schedule B, Section 2, of its to-be-issued title policy, the
               standard printed exceptions (including exceptions 2 and 3) and
               the exception for parties in possession (exception 1). If the
               Improvement Survey depicts any condition different than the
               conditions shown on the Existing Survey which causes the Escrow
               Agent as title company to add any additional exceptions or
               conditions to its Title Commitment that substantially, adversely
               affect the utility of the Subject Property as currently used, or
               substantially diminishes its value, Purchaser shall have the
               option in its sole discretion of (i) terminating this Agreement
               by written notice to Seller and receiving a prompt refund of the
               Earnest Money Deposit, in which case the parties shall be deemed
               relieved of all further rights or responsibilities hereunder, or
               (ii) waiving such right to terminate and proceeding to Closing in
               accordance with the terms and provisions of this Agreement.

               9.     CONDITIONS PRECEDENT TO CLOSING

               (a)    It shall be an express condition to Purchaser's obligation
                      to purchase the Subject Property that each and every one
                      of the following conditions shall have been satisfied as
                      of the date of Closing (or waived by Purchaser):



                                      -13-
<PAGE>   17

                      (i)    Representations and Warranties. Each of Seller's
                             representations and warranties shall be true and
                             accurate, in all material respects, as if made on
                             and as of the Closing.

                      (ii)   Covenants of Seller. All actions Seller covenants
                             herein to take shall have been completed in all
                             material respects, including those obligations set
                             forth in Section 5. Environmental hereto.

                      (iii)  Permits; No Impediments.  Purchaser shall have been
                             able to obtain all Governmental Permits and Grants
                             (including a liquor license) necessary to operate
                             the Subject Property on and subsequent to the
                             Closing, or such permits shall have been applied
                             for and Purchaser is satisfied will be issued in
                             the normal course and the absence thereof as of
                             Closing will not interfere with the operation of
                             the Subject Property immediately subsequent to the
                             Closing, in all material respects. There shall be
                             no impediments to reissuance to Purchaser of any
                             Permits required for the ongoing uninterrupted
                             operation of the Subject Property immediately
                             following the Closing, if transfer of such Permits
                             is not allowed.

                      (iv)   Title and Survey. Purchaser shall be able to obtain
                             a policy of title insurance in conformance with the
                             provisions of Section 8 hereof, and shall obtain an
                             Improvement Survey in conformance of the provisions
                             of Section 8 hereof.

                      (v)    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



                                      -14-
<PAGE>   18

                             Second Certificate provide for the following
                             exemptions from taxes and duties through March 31,
                             2011:

                             - 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

                             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 income taxes, gross receipt taxes, and
                             excise taxes) to Purchaser. In addition, Seller
                             agrees to use its reasonable efforts to obtain the
                             issuance of the Second Certificate.

                      (vi)   Environmental. Seller shall have completed the work
                             required to be completed pursuant to Section 5
                             hereof.

                      (vii)  Documents/Agreements. Seller shall have delivered
                             at Closing all of the documents, agreements and
                             instruments required under Section 10 hereof.

               (b)    Failure of Condition.  In the event of the failure of any
                      condition precedent set forth above, Purchaser, at its
                      sole election, may (a) terminate this Agreement (and
                      receive a return of the Earnest Money Deposit); (b)
                      waive the condition and proceed to Closing; (c) extend
                      the date of Closing for an additional period of thirty
                      (30) days to allow Purchaser to remedy such failure;
                      and/or (d) if such failure arises from Seller's breach
                      of this Agreement, avail itself of any remedies provided
                      in herein.

               10. CLOSING. The purchase and sale of the Subject Property shall
close on the date which Seller and Purchaser shall mutually agree upon and
designate in writing, but in no event later than the earlier of (a) fifteen (15)
days from the date on which all of the conditions precedent set forth in Section
9 hereinabove have been satisfied or (b) one hundred twenty (120) days from the
date of this Agreement (the "Closing"), provided, however, if Closing would
otherwise occur during the period of



                                      -15-
<PAGE>   19

December 24, 1999 to and including January 3, 2000, the Closing shall occur on
January 4, 2000. The Closing shall be held at 10:00 a.m., at the offices of
Escrow Agent on St. Thomas or at such other location, time and date as may be
mutually agreed upon by the parties. At the Closing the following shall occur:

               (a)    Seller shall deliver to Purchaser a duly executed and
                      acknowledged Special Warranty Deed, or its local
                      equivalent in proper statutory form for recording,
                      covering the Real Property free and clear of all taxes,
                      liens, encumbrances, restrictions or claims of any kind or
                      nature except the Permitted Exceptions.

               (b)    Seller shall deliver to Purchaser a duly executed and
                      acknowledged Bill of Sale with full warranty of title
                      covering the Business Assets (to the extent the same are
                      not leased) and all architectural and other plans,
                      specifications, studies, reports and other materials
                      owned by Seller pertaining in any way to the existing or
                      potential use, development, expansion or alteration of
                      the Real Property or any part thereof, free and clear of
                      all taxes, liens, encumbrances, restrictions or claims
                      of any kind or nature except the Permitted Exceptions.
                      Seller and Purchaser shall each execute and deliver to
                      the other, assignments and assumptions in form and
                      content set forth in Exhibit L wherein Seller assigns
                      and Purchaser assumes the Leases and Contracts.

               (c)    Seller shall deliver to Purchaser such documentation as
                      Purchaser may reasonably request to evidence the sale and
                      transfer of the Federal Trademarks for the names
                      "Frenchman's Reef Beach Resort" and "Morning Star Beach
                      Resort."

               (d)    Seller shall deliver to Purchaser a duly executed and
                      acknowledged Assignment covering all warranties which
                      Seller may have on the equipment, appliances, fixtures or
                      other of the Business Assets being conveyed to Purchaser.

               (e)    Seller shall deliver to the Escrow Agent a duly executed
                      and acknowledged Mechanic's Lien Affidavit and Indemnity
                      Agreement indemnifying Purchaser and Escrow Agent against
                      any claims or demands for work performed or materials
                      furnished for the benefit of the Real Property.

               (f)    Seller shall execute and deliver to Purchaser and Escrow
                      Agent a FIRPTA Non-Withholding Certificate in the name of
                      the Seller from the Virgin Islands Internal Revenue
                      Bureau, in form and content reasonably acceptable to
                      Purchaser.



                                      -16-
<PAGE>   20

               (g)    Purchaser shall deliver to Escrow Agent the balance of the
                      Purchase Price (subject to any contract credits and
                      closing adjustments) in the form of wired funds.

               (h)    Purchaser and Seller shall execute Statements of
                      Settlement prepared by Escrow Agent which reflect the
                      purchase price and all credits and other adjustments
                      thereto.

               (i)    Seller and Purchaser shall execute and deliver such other
                      documents as may be necessary or appropriate to effectuate
                      the intent and purpose of this Agreement and the
                      transactions contemplated hereby.

               (j)    Seller shall cause possession and management of the
                      Subject Property and of the Resorts business to be
                      delivered to Purchaser, in a clean condition and free
                      and clear of any leases or tenancies other than the
                      Leases and Contracts, and the advance room reservations
                      taken by Seller in the ordinary course of business; and
                      the Subject Property shall contain and include all fixed
                      assets and supplies and inventory as are designated on
                      Exhibit B hereto (as amended pursuant to Section 13
                      hereof) all in the same condition and repair as they are
                      on the date of this Agreement, reasonable wear and tear
                      accepted.

               (k)    Any franchise agreements for the Resorts between Seller
                      and Purchaser, or Purchaser's affiliates, will be
                      terminated without payment of any penalty or termination
                      fee, provided that payment of all fees under such
                      franchise agreements, other than any penalty or
                      termination fees, have been paid in full by Seller prior
                      to Closing.

               11.    RISK OF LOSS. The risk of loss to the Subject Property or
any part or portion thereof shall remain with Seller until the Closing hereunder
has been completed, and Purchaser shall have the option to either cancel this
Agreement without further obligation (and receive a prompt refund of all Earnest
Money Deposit) or to close without adjustment in price and to receive from
Seller an assignment of all property loss insurance other than business
interruption insurance or similar coverage or other proceeds or awards in the
event of any material loss, destruction, damage or taking to or of the Subject
Property or any part or portion thereof by reason of fire, other casualty or
condemnation prior to Closing. As used in this Paragraph 11, the term "material"
shall mean any damage or destruction to the Subject Property which cannot be
fully repaired by Seller prior to the Closing, or the commencement of a
condemnation proceeding involving any part of the Property. Such option must be
exercised by Purchaser by written notice given to Seller no later than thirty
(30) days following the occurrence of the event which causes the loss, damage or
taking. If no such notice is timely given, Purchaser shall be deemed to have
elected to close without adjustment in price and to



                                      -17-
<PAGE>   21

receive an assignment of all proceeds or awards. If the Closing falls within the
said thirty (30) day notice period, the Closing shall be extended to the fifth
business day following the expiration of said thirty (30) day period.

               12.    INDEMNIFICATION. Seller agrees to and does hereby
indemnify, defend (including reasonable attorneys' fees), save and hold harmless
Purchaser against and in respect of any and all claims, demands, losses, costs,
expenses, injuries, liabilities, obligations or damages which may be asserted
against, incurred or suffered by Purchaser ("Purchaser's Loss") caused by or
arising out of Seller's ownership and/or operation of the Subject Property prior
to the date of Closing, including losses caused by liability to third parties
for personal injuries occurring prior to the date of Closing, but excluding any
loss caused by or arising out of any physical, environmental or other condition
of the Subject Property existing prior to the date of Closing, except with
respect to personal injuries if such injuries occurred prior to the date of
Closing. The foregoing indemnity shall include all attorneys' fees incurred by
Purchaser in prosecuting or defending any claim, cause of action, or lawsuit
within the scope of the indemnity, including any suit that may be necessary to
enforce the indemnity, and shall survive the Closing hereunder and remain in
full force and effect.

                      In addition to the indemnifications set forth in the
immediately preceding paragraph, Seller agrees to and does hereby indemnify,
defend (including reasonable attorneys' fees), save and hold harmless Purchaser
against and in respect to any claims, demands, losses, costs, expenses,
injuries, liabilities, obligations or damages which may be asserted against,
incurred by or suffered by Purchaser or the Subject Property, which relate to
any rights, title, interest or other claims, of any type or nature (including
any right, title or interest or other claim relating to the Subject Property) by
Nick Pourzal and/or his spouse (collectively and individually, the "Pourzals")
or any business entity in which the Pourzals have an interest (collectively,
"Pourzals' Claims") to the extent and only to the extent, such Pourzals' Claims
relate to conditions, facts or events alleged or existing prior to the date of
Closing and arise from acts or omissions by Seller or any predecessor in
interest to Seller of the Subject Property. The foregoing indemnity shall
include all attorneys' fees incurred by Purchaser in any suit that may be
necessary to enforce the indemnity, and shall survive the Closing hereunder and
remain in full force and effect. Purchaser agrees that Seller may (a) retain
counsel on behalf of Purchaser, such counsel to be reasonably acceptable to
Purchaser, and (b) direct the course of any litigation, and negotiate any
settlement, provided such course and negotiations are consistent with the
reasonable goals of MI and provided that the cost of such counsel, litigation
and settlement shall be borne solely by Seller.

                      Purchaser agrees to and does hereby indemnify, defend
(including reasonable attorneys' fees), save and hold harmless Seller against
and in respect of any and all claims, demands, losses, costs, expenses,
injuries, liabilities, obligations or damages which may be asserted against,
incurred or suffered by Seller, caused by or arising out of Purchaser's
ownership or operation of the Real Property and Resorts after the date of
Closing. In addition, except for any rights it may have (i) for breach of any
representation or warranty contained in this Agreement and (ii) related to the
work to be



                                      -18-
<PAGE>   22

performed by Seller pursuant to Section 5 hereof, Purchaser agrees to and does
hereby waive and release Seller from any claim Purchaser may have against Seller
relating to or caused by any physical, environmental or other conditions of the
Subject Property existing prior to the date of Closing, including any liability
arising from any claim of a third party against Purchaser with respect to any
such physical, environmental or other condition of the Subject Property. The
foregoing indemnity shall include all attorneys' fees incurred by Seller in
prosecuting or defending any claim, cause of action, or lawsuit within the scope
of the indemnity, including any suit that may be necessary to enforce the
indemnity. This paragraph shall survive the Closing hereunder and remain in full
force and effect. The rights which Purchaser may have for breach of any
representation or warranty contained in this Agreement are subject to the terms
of Section 7(d) of this Agreement, relating to the period of survival of the
representations and warranties. The rights of Purchaser relating to the work to
be performed by Seller pursuant to Section 5 hereof are subject to Seller's
release of liability for such work upon final completion of the work, as set
forth in the last sentence of Section 5 hereto.

               13.    INVENTORY OF PERSONAL PROPERTY. An inventory of the
personal property, including fixed supplies, supplies and inventory, located on
the Real Property and Resorts shall be performed by Seller and Purchaser within
thirty (30) days of the date of the execution of this Agreement and attached
hereto as Exhibit B hereto. Purchaser and Seller will amend Exhibit B to reflect
such inventory as of the date of Closing.

               14.    UNION CONTRACT/CONTRACT EMPLOYEES.

               (a)    Union Employees.  On the date of Closing, Purchaser agrees
                      to assume the collective Bargaining Agreement dated June
                      27, 1997 between Seller and United States of America
                      AFL-CIO ("Union") ("Union Contract"). Seller shall
                      reasonably cooperate with Purchaser to assist Purchaser
                      in making such modifications to the Union Contract as
                      may be reasonably necessary to provide equivalent
                      benefits thereunder (i.e., to account for the fact that
                      Purchaser may be unable to duplicate Prime's benefits
                      but can provide equivalent Marriott benefits), provided
                      that no such modification shall be a condition to
                      Closing. Seller represents that it is not a party to any
                      union or other collective bargaining agreement with
                      employees employed in connection with the Subject
                      Property, other than the Union Contract, and that there
                      are no amendments to or modifications of the Union
                      Contract and that the copy of the Union Contract
                      provided to Purchaser is true, correct and complete in
                      all respects. Seller represents that, to its knowledge
                      and except as provided on Exhibit H, there are no
                      grievances or similar claims pending or threatened
                      pursuant to the Union Contract. Purchaser assumes all
                      liability and agrees to indemnify Seller against any
                      liability, including any severance costs and liabilities
                      imposed by law, arising out of Purchaser's



                                      -19-
<PAGE>   23

                      failure to hire any union employee at closing or
                      termination of any union employee subsequent to the
                      closing date.

               (b)    Non-Union Employees.  Purchaser will hire all employees
                      not subject to the Union Contract, subject to
                      Purchaser's standard ninety-day probationary period for
                      new employees, provided that Purchaser assumes all
                      liability and agrees to indemnify Seller against all
                      liability, including any severance costs and liabilities
                      imposed by law arising out of Purchaser's failure to
                      hire any employee at closing or termination of any
                      employee within the ninety (90) day probationary period
                      for new employees, and further provided that the
                      employment of the individuals identified on Exhibit H is
                      provided for in subsection (f) below.

               (c)    Benefits. With respect to all Union employees and all
                      non-union employees, Seller shall pay to Purchaser at
                      Closing all costs and expenses associated with accrued but
                      unpaid or unearned costs associated with the following,
                      calculated through the date of Closing: salary, vacation
                      leave, sick leave, medical, pension, and welfare benefits
                      and employee fringe benefits (collectively, the "Employee
                      Plans"). Purchaser agrees to promptly pay when due all
                      amounts due to employees under the Employee Plans.

               (d)    Mutual Indemnity.  Seller shall indemnify and hold
                      harmless Purchaser, from and against any and all claims,
                      causes of action, proceedings, judgments, damages,
                      penalties and liabilities made, assessed or rendered
                      against Purchaser or its affiliates and any and all
                      costs and expenses (including reasonable attorneys fees
                      and expenses) incurred by Purchaser or its affiliates
                      with respect to (i) any termination of any employee
                      prior to the Closing Date, (ii) any grievances, claims,
                      or actions of any employees of the Property occurring or
                      relating to periods on or prior to Closing, any employee
                      benefits pursuant to any Employee Plans accrued or
                      earned as of the Closing Date, payment for which Seller
                      has failed to make to Purchaser pursuant to subsection
                      (c) above. Purchaser shall indemnify and hold harmless
                      Seller, from and against any and all claims, causes of
                      action, proceedings, judgments, damages, penalties and
                      liabilities made, assessed or rendered against Seller or
                      its affiliates and any and all costs and expenses
                      (including reasonable attorneys fees and expenses)
                      incurred by Seller or its affiliates (i) with respect to
                      any employee benefits pursuant to any Employee Plans
                      accrued or earned after the Closing Date, (ii) with
                      respect to any employee benefits pursuant to any
                      Employee Plans for which Seller has made payment to
                      Purchaser pursuant to subsection (c) above, and (iii)
                      the termination of any employee after the Closing Date
                      (other than with respect to the employees



                                      -20-
<PAGE>   24

                      identified on Exhibit H, which are provided for in
                      subsection (f) below).

               (e)    Access to Employees.  Seller will cooperate reasonably in
                      connection with Purchaser's interviewing of employees at
                      the Hotel and, upon Purchaser's request, provide
                      Purchaser with access to wage and benefits information.
                      Purchaser shall indemnify and hold harmless Seller, from
                      and against any and all claims, causes of action,
                      proceedings, judgments, damages, penalties and
                      liabilities made, assessed or rendered against Seller or
                      its affiliates and any and all costs and expenses
                      (including reasonable attorneys fees and expenses)
                      incurred by Seller or its affiliates with respect to its
                      interviewing employees or with respect to any employment
                      decisions made with respect to such interviews. Seller
                      agrees that it will not make any promise, commitment or
                      representation to any non-Union employee regarding
                      possible employment with Purchaser, other than the
                      employees listed on Exhibit H.

               (f)    Designated Employees. Purchaser agrees to assume the
                      Employment Agreements for those six (6) employees
                      identified as "Designated Employees," which employees and
                      agreements are described on Exhibit H ("Designated
                      Employees' Agreements"). Each Designated Employee has
                      consented to this assumption pursuant to the executed
                      Consents attached hereto as Exhibit H-2 (such consents
                      being known as the "Designated Employee's Consent").

               (g)    Purchaser's/Seller's Obligations. Purchaser's assumption
                      of the Designated Employees' Agreement shall be subject to
                      the following terms:

                      (i)    If Purchaser notifies Seller of Purchaser's
                             election to terminate the employment of any
                             Designated Employee between the 180th day and the
                             210th day after the date of Closing (the
                             "Termination Period"), Seller shall conclusively
                             be deemed to have accepted a reassignment and
                             reassumption of such Designated Employee
                             Agreement. In the event that any Designated
                             Employee receives a bonus for the calendar year of
                             the reassignment pursuant to the terms of the
                             Designated Employee Agreement, Purchaser shall
                             reimburse Seller for a portion of such bonus equal
                             to the portion of such year which expired prior to
                             the date of reassignment. Purchaser may not
                             reassign a Designated Employee Agreement before
                             the 180th day after the date of Closing.



                                      -21-
<PAGE>   25

                      (ii)   If Purchaser reassigns the Designated Employee
                             Agreement of any Designated Employee to Seller
                             during the Termination Period, and as a result of
                             such reassignment or subsequent termination by
                             Seller Designated Employee has any claim or cause
                             of action against Purchaser or is entitled to any
                             payment under the Designated Employee's Agreement
                             or pursuant to law (including any payment required
                             pursuant to the U.S. Virgin Islands Wrongful
                             Discharge Act), Seller agrees to indemnify and
                             hold Purchaser harmless form any such claims,
                             damages or expenses, including all reasonable
                             legal fees incurred by Purchaser. Seller's
                             foregoing indemnification shall not extend to any
                             claim or cause of action resulting from any act or
                             omission taken by Purchaser during the course of
                             Purchaser's employment of the Designated Employee.

                      (iii)  If Purchaser terminates the employment of any
                             Designated Employee at any time or attempts to
                             reassign the Designated Employee Agreement to
                             Seller before or after the Termination Period, and
                             as a result of such termination or attempted
                             reassignment by Purchaser, Designated Employee has
                             any claim or cause of action against Seller or is
                             entitled to any payment under the Designated
                             Employees' Agreement or pursuant to law (including
                             any payment required pursuant to the U.S. Virgin
                             Island Wrongful Discharge Act), Purchaser agrees
                             to indemnify and hold Seller harmless from any
                             such claims, damages or expenses, including all
                             reasonable legal fees incurred by Seller.
                             Purchaser agrees to defend and indemnify Seller
                             against, and agrees to hold it harmless from, any
                             and all claims or losses incurred to suffered by
                             Seller as a result of (i) any breach or claims of
                             breach of any Designated Employee Agreement by
                             Purchaser and (ii) any claim by the Designated
                             Employee resulting from or relating to any actions
                             or omissions of Purchaser and its employees or
                             agents, including without limitation, any claim of
                             discrimination, unfair labor practices, or
                             violation of labor or employment laws or
                             regulations. Purchaser's foregoing
                             indemnifications shall not extend to any claim or
                             cause of action resulting from any act or omission
                             taken by Seller during the course of Seller's
                             employment of the Designated Employee.

                      (iv)   Purchaser shall pay to Seller all sums which seller
                             had previously paid to Purchaser pursuant to the
                             terms of this subsection for any Designated
                             Employee whose Designated



                                      -22-
<PAGE>   26


                             Employee Agreement the Purchaser reassigned to
                             Seller or who is otherwise terminated at any time
                             by Purchaser and thereafter prior to the
                             expiration of the stated term of the Designated
                             Employee Agreement either Purchaser (or any
                             subsidiary in which Purchaser owns all or
                             substantially all of the voting interests) hires
                             or otherwise retains the services of such
                             Designated Employee in connection with the
                             management, ownership or operation of any hotel in
                             the U.S. Virgin Islands.

               15.    DEFAULT. If Purchaser fails or refuses to perform or
tender any of its closing obligations hereunder, which default Seller elects not
to waive, the Earnest Money Deposit and accrued interest shall be forfeited by
Purchaser and retained by Seller and both parties shall thereafter be released
from all obligations and responsibilities hereunder. It is agreed that such
forfeited earnest monies and interest are liquidated damages and are Seller's
sole and only remedy for Purchaser's failure to perform or tender its closing
obligations under this Agreement. Seller expressly waives the remedies of
specific performance and additional damages.

               In the event that during the term of this Agreement (i) any of
Seller's representations or warranties are (or become prior to Closing) untrue
or incapable of performance, or (ii) Seller shall fail or refuse to perform any
of its obligations hereunder, which default Purchaser elects not to waive,
Purchaser shall have the option of (aa) declaring this Agreement terminated, in
which event Purchaser shall be entitled to a prompt refund of the Earnest Money
Deposit and the parties shall be deemed discharged from any further rights or
responsibilities hereunder, or (bb) treating this Agreement as being in full
force and effect and suing for the specific performance hereof, or damages, or
both. Such option shall be exercised by written notice provided by Purchaser to
Seller.

               16.    NOTICE. All notices provided for herein shall be in
writing and shall either be delivered personally or sent by facsimile
transmission, by Federal Express, or by certified mail, return receipt
requested, postage prepaid, addressed to the party for whom intended at the
address set forth below. Any party may change its address by written notice to
the other party.

                      To the Seller:            Prime Hospitality Corp
                                                700 Route 46 East
                                                Fairfield, New Jersey  07004
                                                Attn:  President

                      With a copy to:           Joseph Bernadino, Esquire
                      (which shall not          700 Route 46 East
                      constitute notice)        Fairfield, New Jersey  07004
                                                Attn:  General Counsel



                                      -23-
<PAGE>   27

                      To the Purchaser:         Marriott International, Inc.
                                                10400 Fernwood Road
                                                Lodging Development
                                                Bethesda, Maryland  20817
                                                Attn:  Wendell Ward
                                                Fax:  (301) 530-2918

                      With a copy to:           James D. Wright, Esquire
                      (which shall not          Venable, Baetjer and Howard, LLP
                      constitute notice)        Two Hopkins Plaza, Suite 1800
                                                Baltimore, Maryland  21201
                                                Fax No. (410) 244-7742

               Each such notice shall be deemed given on the date personally
delivered or faxed, on the date following the date of delivery to Federal
Express, or two days after mailing by certified mail, return receipt requested.

               17.    BROKERS. Seller agrees to indemnify and hold harmless
Purchaser with respect to all commissions and fees due to or claims by CIBC
Oppenheimer and any other brokers employed by Seller who may claim a commission,
in connection with this transaction. Purchaser represents and warrants to the
other that it has not employed or used the services of any broker or finder in
connection with this transaction. Each of said parties agrees to and does hereby
indemnify, defend (including attorney's fees), save and hold harmless the other
from and against any and all claims, demands, costs, expenses and liability
arising out of any claims for a brokerage commission or other compensation made
by any broker or brokers (other than those identified above) purporting to
represent the indemnifying party or claiming by, through or under the
indemnifying party in connection with this transaction.

               18.    PUBLICITY. The parties agree that no party shall, with
respect to this Agreement and the transactions contemplated hereby, contact or
conduct negotiations with public officials, make any public pronouncements,
issue press releases or otherwise furnish information regarding this Agreement
or the transactions contemplated hereby to any third party without the consent
of the other parties, except as may be required by law or as may be reasonably
necessary, on a confidential basis, to inform any rating agencies, potential
sources of financing, financial analysts, or to entities involved with a sale of
a controlling interest in the Seller, the Purchaser or any of their affiliates
or to receive legal, accounting and/or tax advice; provided, however, that, if
such information is required to be disclosed by law, the party so disclosing the
information will use reasonable efforts to give notice to the other parties as
soon as such party learns that is must make such disclosure.

               19.    PURCHASER'S RIGHT OF ENTRY. Throughout the term of this
Agreement Purchaser and Purchaser's authorized representatives shall have the
right, upon the giving of reasonable notice to Seller, to enter upon the Real
Property and to undertake such activities to prepare to operate the Resorts on
and after the Closing;



                                      -24-
<PAGE>   28

provided that no activity of Purchaser or its authorized representative on the
Real Property will unreasonably interfere with the normal operation of business
by Seller.

               20.    ASSIGNMENT. Purchaser may assign or transfer its interest
in this Agreement to any other person or entity which assumes Purchaser's rights
and obligations hereunder, without the consent of the Seller being required.

               21.    NO THIRD PARTY BENEFICIARIES. None of the terms,
covenants, obligations or rights contained in this Agreement is or shall be
deemed to be for the benefit of any person or entity not a party hereto.

               22.    ATTORNEY'S FEES. In the event of any litigation between
Seller and Purchaser involving the interpretation and/or enforcement of this
Agreement or any provisions hereof or any other element of this transaction,
including the indemnification contained in Paragraph 11 above, the prevailing
party shall be entitled to an award of its costs and expenses (including
reasonable costs and attorney's fees) incurred therein as a part of the judgment
or stipulated settlement entered in such litigation.

               23.    TIME. Time is of the essence hereof. In the event the day
or last day specified or permitted for the performance of any act required or
allowed under this Agreement falls on a Saturday, Sunday, or legal holiday, the
time for such performance shall be extended to the next succeeding business day.

               24.    SEVERABILITY. If any provisions of this Agreement shall be
invalid, illegal or unenforceable, it shall not affect or impair the validity,
legality or enforceability of this Agreement itself or of any other provisions
hereof, and there shall be substituted for the affected provision, a valid and
enforceable provision as similar as possible to the affected provision. For
purposes of avoiding the rule against perpetuities, no provision of this
Agreement shall be effective, and no closing or conveyance shall occur, after 20
years from the date of this Agreement.

               25.    COUNTERPARTS; FACSIMILE SIGNATURES. This Agreement may be
executed in one instrument, signed by all parties, or in counterparts, in which
case all such counterparts together shall constitute one and the same instrument
and Agreement, binding on all of the parties thereto, notwithstanding that all
of the parties are not signatory to the original or the same counterpart.
Facsimile signatures shall be treated as original signatures hereon, but not on
closing documents.

               26.    BINDING EFFECT, ETC. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective heirs,
personal representatives, successors and assigns, and shall be construed in
accordance with and governed by the laws of the Territory of the U.S. Virgin
Islands. This Agreement contains the entire agreement between the parties
pertaining to the subject matter hereof and supersedes all prior arrangements,
writings, representations, and negotiations relating thereto. Finally, this
Agreement may not be amended or modified except by an instrument in writing
signed by all of the parties.



                                      -25-
<PAGE>   29




               27. FURTHER ASSURANCES. Each party hereto shall from time to time
execute and deliver such additional instruments or do such additional acts as
the other party may reasonably request in order to effectuate the full intent of
this Agreement.

               28. ACCEPTANCE DEADLINE. In the event this Agreement has not been
fully executed and copies thereof delivered to Purchaser by __________________
the offer of Purchaser represented by this Agreement shall be deemed withdrawn
at that time, and this Agreement shall no longer be capable of acceptance by
Seller.

               29. EXCLUSIVITY. During the pendency of this Agreement, Seller
agrees not to seek, negotiate or accept any other offers or agreements for the
sale of the Subject Project, or any portion thereof, with any prospective
purchaser(s) other than the Purchaser under this Agreement.

               IN WITNESS WHEREOF, the parties have executed this Agreement as
of the day and year first above written.

                                    SELLER:

                                    PRIME HOSPITALITY CORP

                                      By: /s/ DOUGLAS VICARI,
                                         -----------------------------------
                                      Its:    Douglas Vicari, Sr. V.P.
                                          ----------------------------------


                                      PURCHASER:

                                      MARRIOTT INTERNATIONAL, INC.

                                      By: /s/ JAMES M. SULLUS
                                         -----------------------------------
                                      Its:    Executive Vice President
                                          ----------------------------------



                                      -26-
<PAGE>   30



                                LIST OF EXHIBITS

        A        Description of Real Property
        B        Business Assets
        C        Escrow Instruction Letter
        D        Allocation of Total Purchase Price
        E        Leases and Service Contracts To Be Assumed by Purchaser
        F        Categories of Unopened Food, Beverage and Operating Supplies
        G        Environmental Report
        H        Employment Agreements/Designated Employees Agreements
        I        List of Governmental Permits and Grants
        J        Title Commitment
        K        Existing Survey
        L        Form of Assignment and Assumption Agreement of Leases and
                 Service Contracts



<PAGE>   31
                                    EXHIBIT A

                          DESCRIPTION OF REAL PROPERTY

     Property A:   Parcel of P1 Bakkero (a/k/a "East Point" "The Quarantine
                   Station" and "Muhlenfeldt Point")
                   No. 5a Frenchman's Bay Quarter
                   St. Thomas Virgin Islands as shown on PWD D9-167-T48

     Property B:   Muhlenfeldt Point Light Station Estate Bakkero
                   No. 5 Frenchman's Bay Quarter
                   St. Thomas, Virgin Islands as shown on PWD D3-30-T34

     Property C:   Parcel No. 2K Estate Bakkero and Elisenlund
                   No. 3 Frenchman's Bay Quarter
                   St. Thomas, Virgin Islands as shown on PWD G9-554-T60

     Property D:   Parcel No. 4B Estate Bakkero
                   No. 5 Frenchman's Bay Quarter
                   St. Thomas, Virgin Islands as shown on PWD F9-3593-T78

     Property E:   Parcel No. 4 Remainder Estate Bakkero
                   No. 5 Frenchman's Bay Quarter
                   St. Thomas, Virgin Islands as shown on PWD D9-1418-T78,

                   excluding the following parcels:

                   (1)    Parcel No. 4A Estate Bakkero
                          No.5 Frenchman's Bay Quarter
                          St. Thomas, Virgin Islands as shown on PWD No.
                          F3-33-T75

                   (2)    Parcel No. 4B Estate Bakkero
                          No. 5 Frenchman's Bay Quarter
                          St Thomas, Virgin Islands as shown on PWD No.
                          F9-3593-T78

                   (3)    Parcel No. 4C Remainder Estate Bakkero
                          No. 5 Frenchman's Bay Quarter
                          St. Thomas, Virgin Islands as shown on PWD No.
                          F9-3594-T78

                          excluding:    Parcel No. 4C-1 Estate Bakkero
                                        No. 5 Frenchman's Bay Quarter
                                        St. Thomas, Virgin Islands as shown on
                                        PWD No. D9-3040-T85


<PAGE>   32


     Property F:   Parcel No. 4C Remainder Estate Bakkero
                   No. 5 Frenchman's Bay Quarter
                   St. Thomas, Virgin Islands as shown on PWD No. F9-3594-T78

                   excluding:    Parcel No. 4C Remainder Estate Bakkero
                                 No. 5 Frenchman's Bay Quarter
                                 St. Thomas, Virgin Islands as shown
                                 on PWD No. D9-3040-T85

     Property G:   Parcel No. 1-42 Estate Bakkero
                   Section AA No. 5 Frenchman's Bay Quarter
                   St. Thomas, Virgin Islands as shown on PWD A9-88-T68

     Property H:   Parcel No. 4C-1 Estate Bakkero
                   No. 5 Frenchman's Bay Quarter
                   St. Thomas, Virgin Islands as shown on PWD D9-3040-T85


<PAGE>   33




                                    EXHIBIT D

                      ALLOCATION OF TOTAL PURCHASE PRICE



                Land                            $ 4,700,000
                                                -----------
                Buildings                        61,000,000
                                                -----------
                Fixtures                          7,300,000
                                                -----------
                Personal Property                     --
                                                -----------
                Good Will                             --
                -----------------------         -----------
                TOTAL                           $73,000,000
                                                ===========
<PAGE>   34
                                    EXHIBIT L

                   FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
                         OF LEASES AND SERVICE CONTRACTS

     THIS ASSIGNMENT OF LEASES AND SERVICE CONTRACTS ("this Assignment") made
the ___ day of_____________ , ____, by and between PRIME HOSPITALITY CORP, a
Delaware corporation (hereby referred to as "Assignor"), and MARRIOTT
INTERNATIONAL, INC., its successor or assigns (hereinafter referred to as
"Assignee").

                              EXPLANATORY STATEMENT

          A.        Assignor is the owner of those certain parcels of real
property situated in St. Thomas in the Territory of the U.S. Virgin Islands,
more particularly described on Schedule A attached hereto (the "Property"), a
portion of which Property is improved by two (2) resorts operating under the
trade names "Frenchman's Reef Beach Resort" and "Morning Star Beach Resort"
(collectively, the "Resorts").

          B.        Pursuant to a Purchase and Sale Agreement dated __________,
______________ by and between Assignor and Assignee (the "Agreement"), Assignee
has contracted to purchase the Property from Assignor.

          C.        Pursuant to the terms of the Agreement, Assignor has agreed
to assign, transfer, sell, and convey unto Assignee, all of Assignor's right,
title, and interest in, to, and under a variety of leases and service contracts
to which Assignor is a party, which leases and service contracts are required or
desirable for the orderly operation and maintenance of the Property and the
Resorts.

          NOW, THEREFORE, in consideration of the foregoing Explanatory
Statement, the covenants and agreements set forth below and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

          1.        Explanatory Statement. The Explanatory Statement portion of
this Assignment forms an integral part of this Assignment and is hereby
incorporated by reference. All terms used herein shall be given the meaning
assigned to them in the Agreement, unless expressly assigned a different meaning
in this Assignment.

          2.        Assignment. Assignor does hereby assign, transfer, sell, and
convey unto Assignee and does hereby confirm the assignment, transfer, sale, and
conveyance unto Assignee of all of Assignor's right, title, and interest in, to,
and under those leases and service contracts set forth and described on Schedule
B attached hereto (collectively, the "Leases and Service Contracts") Assignor
acknowledges and agrees that its obligations


<PAGE>   35




          3.        Assumption. By execution hereof, Assignee does hereby, from
and after the date of this Assignment, assume and agree to perform all duties,
obligations, and responsibilities of Assignor under the Leases and Service
Contracts.

          4.        Indemnification. Assignee does hereby agree to defend,
indemnify, and hold Assignor harmless from and against any and all causes,
claims, demands, losses, liabilities, costs, damages, expenses, and fees
(including, but not limited to, reasonable attorneys' fees) incurred or suffered
by Assignor as a result of Assignee's failure to perform, after the date of this
Assignment, any or all of Assignee's obligations under the Leases and Service
Contracts. Assignor does hereby agree to defend, indemnify, and hold Assignee
harmless from and against any and all causes, claims, demands, losses,
liabilities, costs, damages, expenses, and fees (including, but not limited to,
reasonable attorneys' fees) incurred or suffered by Assignee as a result of
Assignor's failure to perform, prior to and through the date of this Assignment,
any or all of Assignor's obligations under the Leases and Service Contacts.

          5.        Representations by Assignor.

                    5.1       Assignor, for itself and its legal
representatives, successors, and assigns, covenants and represents to Assignee
and agrees that (a) Assignor has full right, authority, and power to assign its
rights and interests in and under the Leases and Service Contracts, subject to
any consents which may be required pursuant to the terms of such Leases or
Service Contracts, (b) no other assignment of the Leases and Service Contracts
has been made by Assignor, and the rights and interests of Assignor in and under
the Leases and Service Contracts are now and will, on the date hereof, be free
and clear of any liens and encumbrances made by Assignor, and (c) as of the date
hereof, to its best knowledge, there exist no outstanding material defaults
under the Leases and Service Contracts. The limitation contained in Section
7(c), 7(d), and the last sentence of Section 7(e) of the Agreement shall apply
to and is incorporated into this Section 5.

                    5.2       Notwithstanding any term herein to the contrary,
Assignee hereby waives any and all rights, claims, causes or demands
(collectively, the "CLAIMS") against Assignor as the grantor of the Special
Warranty Deed (the "DEED") to be executed and delivered by Assignee in
connection with the consummation of the sale of the Property from Assignor to
Assignee pursuant to the terms of the Agreement, to the extent the Claims relate
to the Leases and Service Contracts.

                    5.3       Notwithstanding any term herein to the contrary,
Assignee hereby waives any and all Claims against Assignor as the grantor of the
Deed to the extent the Claims related to any and all matters, encroachments, and
conditions set forth on that certain Survey of the Property revised as of
January 1, 2000 as prepared by William H. Byam.

          6.        Representations by Assignee. Assignee, for itself and its
legal representatives, successors and assigns, covenants and represents to
Assignor and agrees


                                      -2-
<PAGE>   36


under the Leases and Service Contracts arising before the date of this
Assignment shall remain the sole responsibility of Assignor.

          3.        Assumption. By execution hereof, Assignee does hereby, from
and after the date of this Assignment, assume and agree to perform all duties,
obligations, and responsibilities of Assignor under the Leases and Service
Contracts.

          4.        Indemnification. Assignee does hereby agree to defend,
indemnify, and hold Assignor harmless from and against any and all causes,
claims, demands, losses, liabilities, costs, damages, expenses, and fees
(including, but not limited to, reasonable attorneys' fees) incurred or suffered
by Assignor as a result of Assignee's failure to perform, after the date of this
Assignment, any or all of Assignee's obligations under the Leases and Service
Contracts. Assignor does hereby agree to defend, indemnify, and hold Assignee
harmless from and against any and all cases, claims, demands, losses,
liabilities, costs, damages, expenses, and fees (including, but not limited to,
reasonable attorneys' fees) incurred or suffered by Assignee as a result of
Assignor's failure to perform, prior to and through the date of this Assignment,
any or all of Assignor's obligations under the Leases and Service Contracts.

          5.        Representations by Assignor. Assignor, for itself and its
legal representatives, successors, and assigns, covenants and represents to
Assignee and agrees that (a) Assignor has full right, authority, and power to
assign its rights and interests in and under the Leases and Service Contracts,
subject to any consents which may be required pursuant to the terms of such
Leases or Service Contracts, (b) no other assignment of the Leases and Service
Contracts has been made by Assignor, and the rights and interests of Assignor in
and under the Leases and Service Contracts are now and will, on the date hereof,
be free and clear of any liens and encumbrances made by Assignor, and (c) as of
the date hereof, to its best knowledge, there exist no outstanding material
defaults under the Leases and Service Contracts. The limitation contained in
Section 7(c), 7(d), and the last sentence of Section 7(e) of the Agreement shall
apply to and is incorporated into this Section 5.

          6.        Representations by Assignee. Assignee, for itself and its
legal representatives, successors and assigns, covenants and represents to
Assignor and agrees that all payments required by the terms of the Leases and
Service Contracts, which become due and payable on and after the date hereof,
shall be made by Assignee in accordance with the terms of the respective Leases
and Service Contracts and sent directly to the respective named contractor
thereunder or as otherwise directed in writing by such contractor.

          7.        Governing Law. This Assignment shall be construed,
interpreted and enforced in accordance with and governed by the laws of the
Territory of the U.S. Virgin Islands, without regard to principles of conflict
of laws.



<PAGE>   37



          8.        No Partnership. Nothing in this Assignment shall be deemed
in any way to create between the parties hereto any relationship of partnership,
joint venture, or association, and the parties hereto hereby disclaim the
existence of any such relationship.

          IN WITNESS WHEREOF, the parties hereto have each caused this
Assignment to be executed on its behalf by its duly authorized representative
with the specific intention of creating a document under seal.


WITNESS:                                           ASSIGNOR:

                                                   PRIME HOSPITALITY CORP.

------------------------                           By:                   (SEAL)
                                                      -------------------
                                                   Name:
                                                        ------------------------
                                                   Title:
                                                         -----------------------



WITNESS:


                                                   ASSIGNEE:

                                                   MARRIOTT INTERNATIONAL, INC.

------------------------                           By:                    (SEAL)
                                                      --------------------
                                                   Name:
                                                        ------------------------
                                                   Title:
                                                        ------------------------
<PAGE>   38


                                   SCHEDULE A

                            DESCRIPTION OF PROPERTY



<PAGE>   39





                                   SCHEDULE B

                      LIST OF LEASES AND SERVICE CONTRACTS




<PAGE>   40


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