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FIRST AMENDMENT TO PURCHASE AND SALE AGREEMENT
THIS FIRST AMENDMENT TO PURCHASE AND SALE AGREEMENT (this
"AMENDMENT") made as of the 17th day of December, 1999, by and between PRIME
HOSPITALITY CORP., a Delaware corporation ("SELLER"), and MARRIOTT INTERNATIONAL
INC., its successor or assigns ("PURCHASER").
EXPLANATORY STATEMENT
A. By Purchase and Sale Agreement dated September 15, 1999
between Seller and Purchaser (the "ORIGINAL AGREEMENT"), Seller agreed to sell
to Purchaser and Purchaser agreed to buy from Seller those certain parcels of
Real Property situated in St. Xxxxxx in the Territory of the U.S. Virgin Islands
and the Business Assets of the Resorts operating thereon (collectively, the
"SUBJECT PROPERTY"), all as more particularly described in the Original
Agreement, on to terms and conditions set forth therein.
B. Under the terms of the Original Agreement, it is a condition
precedent to Purchaser's obligation to close on the Subject Property for
Purchaser to obtain from the Virgin Islands Industrial Development Commission
(the "COMMISSION") a transfer of those certain Industrial Development
Certificates and any and all benefits pursuant thereto (including, without
limitation, benefits relating to income taxes, gross receipt taxes, and excise
taxes), issued by the Commission and benefiting, or intended to benefit, Seller
through March 31, 2011 as set forth in the Original Agreement (referred to in
the Original Agreement as the First Certificate and the Second Certificate, and
hereinafter collectively referred to as the "CERTIFICATES").
C. Purchaser and Seller have agreed to an alternative approach
to satisfy the condition precedent relating to the transfer of the Certificates
whereby Purchaser shall, as a new applicant, make application for and attempt to
obtain from the Commission a new Industrial Development Certificate (the "New
Certificate") to be issued in the name of Purchaser and to take effect on the
date of transfer of the Subject Property from Seller to Purchaser.
D. To memorialize the foregoing understanding and agreement,
Seller and Purchaser have agreed to amend the Original Agreement as hereinafter
set forth (the Original Agreement and this Amendment, hereafter this
"AGREEMENT").
NOW, THEREFORE, WITNESSETH, that Seller and Purchaser, in
consideration of Explanatory Statement which is hereby incorporated by
reference, the mutual covenants herein contained and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
agree as follows:
1. Defined Terms. Capitalized terms used in this Amendment
shall have the meaning ascribed to them in the Original Agreement.
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2. Conditions Precedent to Closing. As of the effective date of
this Amendment, Section 9(a)(v) of the Original Agreement shall be amended to
read as follows:
(v) Industrial Development Certificate and Industrial Benefits.
Purchaser shall have been able either to (1) obtain a
transfer of those certain Industrial Development
Certificates as more particularly hereinafter set forth in
subsection (A), or (2) obtain the issuance of an Industrial
Development Certificate as more particularly hereinafter set
forth in subsection (B).
(A) Transfer of Industrial Development Certificate and
Industrial Development Benefits. Purchaser shall
have been able to obtain a transfer of (i) that
certain Industrial Development Certificate
(the "First Certificate") and any and all benefits
including, without limitation, Industrial
Development benefits, pursuant to the First
Certificate issued by the Virgin Islands
Industrial Development Commission ("Commission")
and currently benefiting Seller until March 31,
2001, by virtue of that certain Transfer of
Certificate from Frenchman's Reef Beach Associates
to Seller dated March 18, 1998, and (ii) that
certain Industrial Development Certificate (the
"Second Certificate") and any and all benefits
including, without limitation, Industrial
Development benefits, pursuant to the Second
Certificate issued or to be issued by the
Commission for the benefit of Seller for a period
of 10 years commencing April 1, 2001. It is the
requirement of Purchaser that transfer of the
First Certificate and the Second Certificate
provide for the following exemptions from taxes
and duties through March 31, 2011:
- Gloss Receipt Taxes 100% exemption
- USVI Income Taxes 90% exemption
- Dividend Withholding Taxes 80% exemption
- Interest Withholding Taxes 100% exemption
- USVI Real Property Taxes 100% exemption
on real property used for operating a hotel
- Customs Duties Customs duty capped
at 1% ad valorem assessment on certain items
- Excise Taxes 100% exemption
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
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income taxes, gross receipt taxes, and
excise taxes) to Purchaser.
(B) Industrial Development Certificate and Industrial
Development Benefits. The Virgin Islands
Industrial Development Commission (the
"Commission") shall approve and issue directly to
Purchaser, in Purchaser's name, an Industrial
Development Certificate (the "New IDC
Certificate") providing benefits and exemptions
equivalent to those afforded Seller pursuant to
the First Certificate and Second Certificate but
for a period from the date of Closing through the
ten (10) year anniversary date of Closing,
including, without limitation, the following
exemptions from taxes and duties:
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
(C) Purchaser agrees to use its reasonable efforts to
comply with and complete all preconditions set by
the Commission either for the transfer specified
in Section 9(a)(v)(A) or the issuance of the New
IDC Certificate specified in Section 9(a)(v)(B).
Seller agrees to cooperate with Purchaser, if
necessary, to obtain the Commission's approval to
issue the New IDC Certificate and all of the
benefits pursuant thereto (including, without
limitation, benefits relating to income taxes,
gross receipt taxes, and excise taxes) to
Purchaser.
3. Purchase Price. As of the effective date of this Amendment,
Section 2 of the Original Agreement shall be amended to incorporate the
following provision, to be inserted after the first sentence of paragraph 2:
Notwithstanding any term or provision in this Agreement to
the contrary, if Purchaser obtains the issuance of the New IDC
Certificate as more particularly set forth in Section 9(a)(v)(B) of
this Agreement but does not obtain the transfer as more particularly
set forth in Section 9(a)(v)(A), the purchase price for the Subject
Property shall be Seventy Three Million Dollars ($73,000,000), it
being agreed among the parties hereto that said reduction in purchase
price is necessary to account for the loss of benefits provided under
the First and Second Certificates.
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4. Closing. As of the effective date of this Amendment, Section
10 of the Original Agreement shall be amended to incorporate the following
provision, to be inserted after the second sentence of the first paragraph:
Notwithstanding any term or provision in this Agreement to
the contrary, if Purchaser obtains the issuance of the New IDC
Certificate as more particularly set forth in Section 9(a)(v)(B) of
this Agreement but does not obtain the transfer as more particularly
set forth in Section 9(a)(v)(A), the purchase and sale of the Subject
Property shall close in accordance with the terms and conditions set
forth in the Original Agreement but in no event earlier than January
31, 2000.
5. No Other Amendments. In all other respects, each and every
term, covenant, agreement and condition of the Agreement shall remain in full
force and effect and binding on the parties thereto, except as amended herein.
6. Multiple Counterparts and Facsimile Signature. This
Amendment may be executed in a number of identical counterparts and by exchange
of facsimile signatures. If so executed, each of such facsimile executed
counterparts shall, collectively, constitute one agreement; but in making proof
of this Amendment, it shall not be necessary to produce or account for more than
one such counterpart.
IN WITNESS WHEREOF, the duly authorized representatives of the parties
hereto have executed this Amendment, with the intention that this Amendment
constitute a sealed instrument, as of the date first above written.
SELLER:
PRIME HOSPITALITY CORP.
Dated: 12/17/99 By: /s/ XXXXXXX VICACI [SEAL]
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Name: XXXXXXX VICACI
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Title: SVP & CFO
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PURCHASER:
MARRIOTT INTERNATIONAL, INC.
Dated: December 17, 1999 By: /s/ XXXXXXX X. XXXX [SEAL]
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Name: XXXXXXX XXXX
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Title: VICE PRESIDENT
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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
