SC 13D

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                  SCHEDULE 13D

  INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO RULE 13D-1(a) AND
               AMENDMENTS THERETO FILED PURSUANT TO RULE 13D-2(a)

                    UNDER THE SECURITIES EXCHANGE ACT OF 1934
                              (AMENDMENT NO. ___)*

                             PRIME HOSPITALITY CORP.
- --------------------------------------------------------------------------------
                                (NAME OF ISSUER)

                     COMMON STOCK, PAR VALUE $ .01 PER SHARE
- --------------------------------------------------------------------------------
                         (TITLE OF CLASS OF SECURITIES)

                                    741917108
            --------------------------------------------------------
                                 (CUSIP NUMBER)


                                JONATHAN D. GRAY
                     BLACKSTONE REAL ESTATE PARTNERS IV L.P.
                                 345 PARK AVENUE
                            NEW YORK, NEW YORK 10154
                                 (212) 583-5803


                                 WITH A COPY TO:

                                BRIAN M. STADLER
                         SIMPSON THACHER & BARTLETT LLP
                              425 LEXINGTON AVENUE
                            NEW YORK, NEW YORK 10017
                                 (212) 455-3765
- --------------------------------------------------------------------------------
                  (NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON
                AUTHORIZED TO RECEIVE NOTICES AND COMMUNICATIONS)

                                 AUGUST 18, 2004
- --------------------------------------------------------------------------------
             (DATE OF EVENT WHICH REQUIRES FILING OF THIS STATEMENT)

     If the filing person has previously filed a statement on Schedule 13G to
report the acquisition that is the subject of this Schedule 13D, and is filing
this schedule because of ss.ss.240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check
the following box.  [ ]

          Note: Schedules filed in paper format shall include a signed original
     and five copies of the schedule, including all exhibits. Seess.240.13d-7
     for other parties to whom copies are to be sent.

          *The remainder of this cover page shall be filled out for a reporting
     person's initial filing on this form with respect to the subject class of
     securities, and for any subsequent amendment containing information which
     would alter disclosures provided in a prior cover page.

     The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).




                                                                    PAGE 2 OF 21
- --------------------------------------------------------------------------------
1.   NAME OF REPORTING PERSON
     S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
     BREP IV HOTELS HOLDING L.L.C.
- --------------------------------------------------------------------------------
2.   CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*                  (a)  [ ]

                                                                        (b)  [X]
- --------------------------------------------------------------------------------
3.   SEC USE ONLY
- --------------------------------------------------------------------------------
4.   SOURCES OF FUNDS*

     NOT APPLICABLE
- --------------------------------------------------------------------------------
5.   CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
     2(d) or 2(e)

- --------------------------------------------------------------------------------
6.   CITIZENSHIP OR PLACE OF ORGANIZATION

     DELAWARE
- --------------------------------------------------------------------------------
                    7.    SOLE VOTING POWER
  NUMBER OF
                          0
   SHARES           ------------------------------------------------------------
                    8.    SHARED VOTING POWER
BENEFICIALLY
                          3,584,697 (SEE ITEM 5)
  OWNED BY          ------------------------------------------------------------
                    9.    SOLE DISPOSITIVE POWER
    EACH
                          0
  REPORTING         ------------------------------------------------------------
                    10.   SHARED DISPOSITIVE POWER
   PERSON
                          0
    WITH
- --------------------------------------------------------------------------------
11.  AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON


     3,584,697 (SEE ITEM 5)
- --------------------------------------------------------------------------------
12.  CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*  [ ]


- --------------------------------------------------------------------------------
13.  PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

     8.0% (SEE ITEM 5)
- --------------------------------------------------------------------------------
14.  TYPE OF REPORTING PERSON*

     OO
- --------------------------------------------------------------------------------


                                                                    PAGE 3 OF 21

- --------------------------------------------------------------------------------
1.   NAME OF REPORTING PERSON
     S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON

     BREA IV L.L.C.
- --------------------------------------------------------------------------------
2.   CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*                   (a) [ ]

                                                                         (b) [X]
- --------------------------------------------------------------------------------
3.   SEC USE ONLY

- --------------------------------------------------------------------------------
4.   SOURCES OF FUNDS*

     NOT APPLICABLE
- --------------------------------------------------------------------------------
5.   CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
     2(d) or 2(e)                                                            [ ]

- --------------------------------------------------------------------------------
6.   CITIZENSHIP OR PLACE OF ORGANIZATION

     DELAWARE
- --------------------------------------------------------------------------------
                    7.   SOLE VOTING POWER
  NUMBER OF
                         0
   SHARES           ------------------------------------------------------------
                    8.   SHARED VOTING POWER
BENEFICIALLY
                         3,584,697 (SEE ITEM 5)
  OWNED BY          ------------------------------------------------------------
                    9.   SOLE DISPOSITIVE POWER
    EACH
                         0
  REPORTING         ------------------------------------------------------------
                    10.  SHARED DISPOSITIVE POWER
   PERSON
                         0
    WITH
- --------------------------------------------------------------------------------
11.  AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

     3,584,697 (SEE ITEM 5)
- --------------------------------------------------------------------------------
12.  CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*  [ ]

- --------------------------------------------------------------------------------
13.  PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

     8.0% (SEE ITEM 5)
- --------------------------------------------------------------------------------
14.  TYPE OF REPORTING PERSON*

     OO
- --------------------------------------------------------------------------------



                                                                    PAGE 4 OF 21

- --------------------------------------------------------------------------------
1.   NAME OF REPORTING PERSON
     S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
     BLACKSTONE REAL ESTATE MANAGEMENT ASSOCIATES IV L.P.

- --------------------------------------------------------------------------------
2.   CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*                   (a) [ ]

                                                                         (b) [X]
- --------------------------------------------------------------------------------
3.   SEC USE ONLY

- --------------------------------------------------------------------------------
4.   SOURCES OF FUNDS*

     NOT APPLICABLE
- --------------------------------------------------------------------------------
5.   CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
     2(d) or 2(e)                                                            [ ]

- --------------------------------------------------------------------------------
6.   CITIZENSHIP OR PLACE OF ORGANIZATION

     DELAWARE
- --------------------------------------------------------------------------------
                    7.   SOLE VOTING POWER
  NUMBER OF
                         0
   SHARES           ------------------------------------------------------------
                    8.   SHARED VOTING POWER
BENEFICIALLY
                         3,584,697 (SEE ITEM 5)
  OWNED BY          ------------------------------------------------------------
                    9.   SOLE DISPOSITIVE POWER
    EACH
                         0
  REPORTING         ------------------------------------------------------------
                    10.  SHARED DISPOSITIVE POWER
   PERSON
                         0
    WITH
- --------------------------------------------------------------------------------
11.  AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

     3,584,697 (SEE ITEM 5)
- --------------------------------------------------------------------------------
12.  CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*  [ ]

- --------------------------------------------------------------------------------
13.  PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

     8.0% (SEE ITEM 5)
- --------------------------------------------------------------------------------
14.  TYPE OF REPORTING PERSON*

     PN
- --------------------------------------------------------------------------------



                                                                    PAGE 5 OF 21
- --------------------------------------------------------------------------------
1.   NAME OF REPORTING PERSON
     S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
     BLACKSTONE REAL ESTATE ASSOCIATES IV L.P.
- --------------------------------------------------------------------------------
2.   CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*                   (a) [ ]

                                                                         (b) [X]
- --------------------------------------------------------------------------------
3.   SEC USE ONLY

- --------------------------------------------------------------------------------
4.   SOURCES OF FUNDS*

     NOT APPLICABLE
- --------------------------------------------------------------------------------
5.   CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
     2(d) or 2(e)                                                            [ ]

- --------------------------------------------------------------------------------
6.   CITIZENSHIP OR PLACE OF ORGANIZATION

     DELAWARE
- --------------------------------------------------------------------------------
                    7.   SOLE VOTING POWER
  NUMBER OF
                         0
   SHARES           ------------------------------------------------------------
                    8.   SHARED VOTING POWER
BENEFICIALLY
                         3,584,697 (SEE ITEM 5)
  OWNED BY          ------------------------------------------------------------
                    9.   SOLE DISPOSITIVE POWER
    EACH
                         0
  REPORTING         ------------------------------------------------------------
                    10.  SHARED DISPOSITIVE POWER
   PERSON
                         0
    WITH
- --------------------------------------------------------------------------------
11.  AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

     3,584,697 (SEE ITEM 5)
- --------------------------------------------------------------------------------
12.  CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*  [ ]

- --------------------------------------------------------------------------------
13.  PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

     8.0% (SEE ITEM 5)
- --------------------------------------------------------------------------------
14.  TYPE OF REPORTING PERSON*

     PN
- --------------------------------------------------------------------------------


                                                                    PAGE 6 OF 21
- --------------------------------------------------------------------------------
1.   NAME OF REPORTING PERSON
     S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
     BLACKSTONE REAL ESTATE PARTNERS IV L.P.
- --------------------------------------------------------------------------------
2.   CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*                   (a) [ ]

                                                                         (b) [X]
- --------------------------------------------------------------------------------
3.   SEC USE ONLY

- --------------------------------------------------------------------------------
4.   SOURCES OF FUNDS*

     NOT APPLICABLE
- --------------------------------------------------------------------------------
5.   CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
     2(d) or 2(e)                                                          [ ]

- --------------------------------------------------------------------------------
6.   CITIZENSHIP OR PLACE OF ORGANIZATION

     DELAWARE
- --------------------------------------------------------------------------------
                    7.   SOLE VOTING POWER
  NUMBER OF
                         0
   SHARES           ------------------------------------------------------------
                    8.   SHARED VOTING POWER
BENEFICIALLY
                         3,584,697 (SEE ITEM 5)
  OWNED BY          ------------------------------------------------------------
                    9.   SOLE DISPOSITIVE POWER
    EACH
                         0
  REPORTING         ------------------------------------------------------------
                    10.  SHARED DISPOSITIVE POWER
   PERSON
                         0
    WITH
- --------------------------------------------------------------------------------
11.  AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

     3,584,697 (SEE ITEM 5)
- --------------------------------------------------------------------------------
12.  CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*  [ ]

- --------------------------------------------------------------------------------
13.  PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

     8.0% (SEE ITEM 5)
- --------------------------------------------------------------------------------
14.  TYPE OF REPORTING PERSON*

     PN
- --------------------------------------------------------------------------------



                                                                    PAGE 7 OF 21
- --------------------------------------------------------------------------------
1.   NAME OF REPORTING PERSON
     S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
     BLACKSTONE REAL ESTATE PARTNERS IV.TE.1 L.P.
- --------------------------------------------------------------------------------
2.   CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*                   (a) [ ]

                                                                         (b) [X]
- --------------------------------------------------------------------------------
3.   SEC USE ONLY

- --------------------------------------------------------------------------------
4.   SOURCES OF FUNDS*

     NOT APPLICABLE
- --------------------------------------------------------------------------------
5.   CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
     2(d) or 2(e)                                                            [ ]

- --------------------------------------------------------------------------------
6.   CITIZENSHIP OR PLACE OF ORGANIZATION

     DELAWARE
- --------------------------------------------------------------------------------
                    7.   SOLE VOTING POWER
  NUMBER OF
                         0
   SHARES           ------------------------------------------------------------
                    8.   SHARED VOTING POWER
BENEFICIALLY
                         3,584,697 (SEE ITEM 5)
  OWNED BY          ------------------------------------------------------------
                    9.   SOLE DISPOSITIVE POWER
    EACH
                         0
  REPORTING         ------------------------------------------------------------
                    10.  SHARED DISPOSITIVE POWER
   PERSON
                         0
    WITH
- --------------------------------------------------------------------------------
11.  AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

     3,584,697 (SEE ITEM 5)
- --------------------------------------------------------------------------------
12.  CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*  [ ]

- --------------------------------------------------------------------------------
13.  PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

     8.0% (SEE ITEM 5)
- --------------------------------------------------------------------------------
14.  TYPE OF REPORTING PERSON*

     PN
- --------------------------------------------------------------------------------



                                                                    PAGE 8 OF 21
- --------------------------------------------------------------------------------
1.   NAME OF REPORTING PERSON
     S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
     BLACKSTONE REAL ESTATE PARTNERS IV.TE.2 L.P.

- --------------------------------------------------------------------------------
2.   CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*                   (a) [ ]

                                                                         (b) [X]
- --------------------------------------------------------------------------------
3.   SEC USE ONLY

- --------------------------------------------------------------------------------
4.   SOURCES OF FUNDS*

     NOT APPLICABLE
- --------------------------------------------------------------------------------
5.   CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
     2(d) or 2(e)                                                            [ ]

- --------------------------------------------------------------------------------
6.   CITIZENSHIP OR PLACE OF ORGANIZATION

     DELAWARE
- --------------------------------------------------------------------------------
                    7.   SOLE VOTING POWER
  NUMBER OF
                         0
   SHARES           ------------------------------------------------------------
                    8.   SHARED VOTING POWER
BENEFICIALLY
                         3,584,697 (SEE ITEM 5)
  OWNED BY          ------------------------------------------------------------
                    9.   SOLE DISPOSITIVE POWER
    EACH
                         0
  REPORTING         ------------------------------------------------------------
                    10.  SHARED DISPOSITIVE POWER
   PERSON
                         0
    WITH
- --------------------------------------------------------------------------------
11.  AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

     3,584,697 (SEE ITEM 5)
- --------------------------------------------------------------------------------
12.  CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*  [ ]

- --------------------------------------------------------------------------------
13.  PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

     8.0% (SEE ITEM 5)
- --------------------------------------------------------------------------------
14.  TYPE OF REPORTING PERSON*

     PN
- --------------------------------------------------------------------------------



                                                                    PAGE 9 OF 21
- --------------------------------------------------------------------------------
1.   NAME OF REPORTING PERSON
     S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
     BLACKSTONE REAL ESTATE PARTNERS IV.TE.3-A L.P.

- --------------------------------------------------------------------------------
2.   CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*                   (a) [ ]

                                                                         (b) [X]
- --------------------------------------------------------------------------------
3.   SEC USE ONLY

- --------------------------------------------------------------------------------
4.   SOURCES OF FUNDS*

     NOT APPLICABLE
- --------------------------------------------------------------------------------
5.   CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
     2(d) or 2(e)                                                           [ ]

- --------------------------------------------------------------------------------
6.   CITIZENSHIP OR PLACE OF ORGANIZATION

     DELAWARE
- --------------------------------------------------------------------------------
                    7.   SOLE VOTING POWER
  NUMBER OF
                         0
   SHARES           ------------------------------------------------------------
                    8.   SHARED VOTING POWER
BENEFICIALLY
                         3,584,697 (SEE ITEM 5)
  OWNED BY          ------------------------------------------------------------
                    9.   SOLE DISPOSITIVE POWER
    EACH
                         0
  REPORTING         ------------------------------------------------------------
                    10.  SHARED DISPOSITIVE POWER
   PERSON
                         0
    WITH
- --------------------------------------------------------------------------------
11.  AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

     3,584,697 (SEE ITEM 5)
- --------------------------------------------------------------------------------
12.  CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*  [ ]

- --------------------------------------------------------------------------------
13.  PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

     8.0% (SEE ITEM 5)
- --------------------------------------------------------------------------------
14.  TYPE OF REPORTING PERSON*

     PN
- --------------------------------------------------------------------------------


                                                                   PAGE 10 OF 21
- --------------------------------------------------------------------------------
1.   NAME OF REPORTING PERSON
     S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
     BLACKSTONE REAL ESTATE PARTNERS IV.F L.P.
- --------------------------------------------------------------------------------
2.   CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*                   (a) [ ]

                                                                         (b) [X]
- --------------------------------------------------------------------------------
3.   SEC USE ONLY

- --------------------------------------------------------------------------------
4.   SOURCES OF FUNDS*

     NOT APPLICABLE
- --------------------------------------------------------------------------------
5.   CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
     2(d) or 2(e)                                                           [ ]

- --------------------------------------------------------------------------------
6.   CITIZENSHIP OR PLACE OF ORGANIZATION

     DELAWARE
- --------------------------------------------------------------------------------
                    7.   SOLE VOTING POWER
  NUMBER OF
                         0
   SHARES           ------------------------------------------------------------
                    8.   SHARED VOTING POWER
BENEFICIALLY
                         3,584,697 (SEE ITEM 5)
  OWNED BY          ------------------------------------------------------------
                    9.   SOLE DISPOSITIVE POWER
    EACH
                         0
  REPORTING         ------------------------------------------------------------
                    10.  SHARED DISPOSITIVE POWER
   PERSON
                         0
    WITH
- --------------------------------------------------------------------------------
11.  AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

     3,584,697 (SEE ITEM 5)
- --------------------------------------------------------------------------------
12.  CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*  [ ]

- --------------------------------------------------------------------------------
13.  PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

     8.0% (SEE ITEM 5)
- --------------------------------------------------------------------------------
14.  TYPE OF REPORTING PERSON*

     PN
- --------------------------------------------------------------------------------



                                                                   PAGE 11 OF 21
- --------------------------------------------------------------------------------
1.   NAME OF REPORTING PERSON
     S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
     BLACKSTONE REAL ESTATE HOLDINGS IV L.P.
- --------------------------------------------------------------------------------
2.   CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*                   (a) [ ]

                                                                         (b) [X]
- --------------------------------------------------------------------------------
3.   SEC USE ONLY

- --------------------------------------------------------------------------------
4.   SOURCES OF FUNDS*

     NOT APPLICABLE
- --------------------------------------------------------------------------------
5.   CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
     2(d) or 2(e)                                                           [ ]

- --------------------------------------------------------------------------------
6.   CITIZENSHIP OR PLACE OF ORGANIZATION

     DELAWARE
- --------------------------------------------------------------------------------
                    7.   SOLE VOTING POWER
  NUMBER OF
                         0
   SHARES           ------------------------------------------------------------
                    8.   SHARED VOTING POWER
BENEFICIALLY
                         3,584,697 (See Item 5)
  OWNED BY          ------------------------------------------------------------
                    9.   SOLE DISPOSITIVE POWER
    EACH
                         0
  REPORTING         ------------------------------------------------------------
                    10.  SHARED DISPOSITIVE POWER
   PERSON
                         0
    WITH
- --------------------------------------------------------------------------------
11.  AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

     3,584,697 (SEE ITEM 5)
- --------------------------------------------------------------------------------
12.  CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*  [ ]

- --------------------------------------------------------------------------------
13.  PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

     8.0% (SEE ITEM 5)
- --------------------------------------------------------------------------------
14.  TYPE OF REPORTING PERSON*

     PN
- --------------------------------------------------------------------------------



                                                                   PAGE 12 OF 21
- --------------------------------------------------------------------------------
1.   NAME OF REPORTING PERSON
     S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
     PETER G. PETERSON
- --------------------------------------------------------------------------------
2.   CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*                   (a) [ ]

                                                                         (b) [X]
- --------------------------------------------------------------------------------
3.   SEC USE ONLY

- --------------------------------------------------------------------------------
4.   SOURCES OF FUNDS*

     NOT APPLICABLE
- --------------------------------------------------------------------------------
5.   CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
     2(d) or 2(e)                                                            [ ]

- --------------------------------------------------------------------------------
6.   CITIZENSHIP OR PLACE OF ORGANIZATION

     UNITED STATES
- --------------------------------------------------------------------------------
                    7.   SOLE VOTING POWER
  NUMBER OF
                         0
   SHARES           ------------------------------------------------------------
                    8.   SHARED VOTING POWER
BENEFICIALLY
                         3,584,697 (SEE ITEM 5)
  OWNED BY          ------------------------------------------------------------
                    9.   SOLE DISPOSITIVE POWER
    EACH
                         0
  REPORTING         ------------------------------------------------------------
                    10.  SHARED DISPOSITIVE POWER
   PERSON
                         0
    WITH
- --------------------------------------------------------------------------------
11.  AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

     3,584,697 (SEE ITEM 5)
- --------------------------------------------------------------------------------
12.  CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*  [ ]

- --------------------------------------------------------------------------------
13.  PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

     8.0% (SEE ITEM 5)
- --------------------------------------------------------------------------------
14.  TYPE OF REPORTING PERSON*

     IN
- --------------------------------------------------------------------------------



                                                                   PAGE 13 OF 21
- --------------------------------------------------------------------------------
1.   NAME OF REPORTING PERSON
     S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
     STEPHEN A. SCHWARZMAN
- --------------------------------------------------------------------------------
2.   CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*                   (a) [ ]

                                                                         (b) [X]
- --------------------------------------------------------------------------------
3.   SEC USE ONLY

- --------------------------------------------------------------------------------
4.   SOURCES OF FUNDS*

     NOT APPLICABLE
- --------------------------------------------------------------------------------
5.   CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
     2(d) or 2(e)                                                           [ ]

- --------------------------------------------------------------------------------
6.   CITIZENSHIP OR PLACE OF ORGANIZATION

     UNITED STATES
- --------------------------------------------------------------------------------
                    7.   SOLE VOTING POWER
  NUMBER OF
                         0
   SHARES           ------------------------------------------------------------
                    8.   SHARED VOTING POWER
BENEFICIALLY
                         3,584,697 (See Item 5)
  OWNED BY          ------------------------------------------------------------
                    9.   SOLE DISPOSITIVE POWER
    EACH
                         0
  REPORTING         ------------------------------------------------------------
                    10.  SHARED DISPOSITIVE POWER
   PERSON
                         0
    WITH
- --------------------------------------------------------------------------------
11.  AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

     3,584,697 (SEE ITEM 5)
- --------------------------------------------------------------------------------
12.  CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*  [ ]

- --------------------------------------------------------------------------------
13.  PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

     8.0% (SEE ITEM 5)
- --------------------------------------------------------------------------------
14.  TYPE OF REPORTING PERSON*

     IN
- --------------------------------------------------------------------------------


                                                                   PAGE 14 OF 21


ITEM 1. SECURITY AND ISSUER

     This Statement on Schedule 13D (this "Schedule 13D") relates to shares of
common stock, par value $.01 per share (the "Common Stock"), of Prime
Hospitality Corp., a Delaware corporation (the "Company"). The principal
executive offices of the Company are located at 700 Route 46 East, Fairfield,
New Jersey 07004.

ITEM 2. IDENTITY AND BACKGROUND

     This Schedule 13D is being filed jointly by the Reporting Persons. The
Reporting Persons consist of: BREP IV Hotels Holding L.L.C., a Delaware limited
liability company ("Parent"); BREA IV L.L.C., a Delaware limited liability
company ("BREA IV"); Blackstone Real Estate Management Associates IV L.P., a
Delaware limited partnership ("BREMA IV"); Blackstone Real Estate Associates IV
L.P., a Delaware limited partnership ("BRE Associates IV"); Blackstone Real
Estate Partners IV L.P., a Delaware limited partnership ("BREP IV"); Blackstone
Real Estate Partners IV.TE.1 L.P., a Delaware limited partnership; Blackstone
Real Estate Partners IV.TE.2 L.P., a Delaware limited partnership; Blackstone
Real Estate Partners IV.TE.3-A L.P., a Delaware limited partnership; Blackstone
Real Estate Partners IV.F L.P., a Delaware limited partnership; Blackstone Real
Estate Holdings IV L.P., a Delaware limited partnership ("BREH IV"); Mr. Peter
G. Peterson and Mr. Stephen A. Schwarzman. Blackstone Real Estate Partners IV
L.P., Blackstone Real Estate Partners IV.TE.1 L.P., Blackstone Real Estate
Partners IV.TE.2 L.P., Blackstone Real Estate Partners IV.TE.3-A L.P. and
Blackstone Real Estate Partners IV.F L.P. are referred to collectively as the
"BREP IV Funds."

     The BREP IV Funds and BREH IV are the sole members of the Parent. All of
the membership interests of Parent are owned by the BREP IV Funds and BREH IV.

     BREA IV is the general partner of BREMA IV, which in turn is the general
partner of BRE Associates IV. BRE Associate IV is the general partner of the
BREP IV Funds and BREH IV. Messrs. Peter G. Peterson and Stephen A. Schwarzman
are the founding members (the "Founding Members") of and control BREA IV.

     Parent was formed to effect the transactions described in Item 4 below and
has not engaged in any activities other than those incident to its formation and
such transactions. The principal business address of Parent is 345 Park Avenue,
New York, New York 10154.

     The principal business of the BREP IV Funds consists of making various real
estate related investments. The principal business of BREA IV consists of acting
as general partner of BREMA IV. The principal business of BREMA IV consists of
acting as general partner of BRE Associates IV. The principal business of BRE
Associates IV consists of performing functions of, and serving as, the general
partner of the BREP IV Funds and other investment partnerships affiliated with
the BREP IV Funds. The principal business address of each of the BREP IV Funds,
BREA IV, BREMA IV and BRE Associates IV is 345 Park Avenue, New York, New York
10154.

     The principal business of BREH IV is to be an investment vehicle for
certain partners, directors and key employees of The Blackstone Group and its
affiliates. BRE Associates IV is the sole general partner of BREH IV. The
principal business address of BREH IV is 345 Park Avenue, New York, New York
10154.

     Each of the Founding Members is a United States citizen. The principal
occupation of the Founding Members is serving as an executive of one or more of
the BREP IV Funds and their affiliates. The business address of the Founding
Members is 345 Park Avenue, New York, New York 10154.


                                                                   PAGE 15 OF 21


     During the last five years, none of the Reporting Persons have been (1)
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors) or (2) a party to any civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such proceeding
was or is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to, federal or
state securities laws or finding any violations with respect to such laws.

ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION

     As an inducement to Parent to enter into the Merger Agreement (as defined
and described in Item 4 below), A.F. Petrocelli, the Company's Chairman and
Chief Executive Officer, and United Capital Corp. ("UCC") entered into a Voting
Agreement with Parent, dated as of August 18, 2004 (the "Voting Agreement").
Parent did not pay additional consideration in connection with the execution and
delivery of the Voting Agreement.

ITEM 4. PURPOSE OF TRANSACTION

     On August 18, 2004, Parent, BREP IV Hotels Acquisition L.L.C., a Delaware
limited liability company ("Merger Sub"), and the Company entered into an
Agreement and Plan of Merger (the "Merger Agreement") providing for the merger
(the "Merger") of the Company with and into Merger Sub, with Merger Sub
continuing as the surviving entity of the Merger (the "Surviving Company").
Subject to the terms and conditions of the Merger Agreement, at the effective
time of the Merger, each share of Common Stock issued and outstanding
immediately prior to the effective time will be converted into the right to
receive $12.25 in cash (other than shares held in the treasury of the Company or
owned by Merger Sub, Parent or any wholly-owned subsidiary of Parent or the
Company and other than shares held by a stockholder who properly demands
statutory appraisal rights).

     In connection with the Merger Agreement, A.F. Petrocelli and UCC entered
into a Voting Agreement with Parent with respect to all 45,000 shares of Common
Stock directly owned by Mr. Petrocelli and all 3,539,697 shares of Common Stock
directly owned by UCC and any Common Stock acquired by Mr. Petrocelli or UCC
after the date of the Voting Agreement. Subject to the terms and conditions of
the Voting Agreement, Mr. Petrocelli and UCC have agreed to vote (or cause to be
voted) all shares of Common Stock beneficially owned by them (the "Covered
Shares") (a) in favor of the Merger and any other matters necessary for
consummation of the transactions contemplated by the Merger Agreement and (b)
against any proposal for any recapitalization, reorganization, liquidation,
merger, sale of assets or other business combination between the Company and any
other person (other than the Merger) and any other action that could reasonably
be expected to impede, interfere with, delay, postpone or adversely affect the
Merger or any transactions contemplated by the Merger Agreement or the Voting
Agreement or result in a breach in any material respect of any covenant,
representation or warranty or other obligation or agreement of the Company under
the Merger Agreement. Mr. Petrocelli and UCC irrevocably granted to and
appointed Parent and certain officers of Parent proxy and attorney-in-fact to
vote the Covered Shares as described above. Mr. Petrocelli and UCC each also
agreed to refrain from transferring their shares of Common Stock other than, in
the case of Mr. Petrocelli, to specified related persons who have agreed to be
bound by the Voting Agreement. The Voting Agreement terminates upon the earliest
to occur of the effective time, the termination of the Merger Agreement in
accordance with its terms and written notice of termination of the Voting
Agreement by Parent.

     In connection with the Merger Agreement, BREP IV entered into a Guarantee,
dated as of August 18, 2004 (the "Guarantee"), in favor of the Company pursuant
to which BREP IV agreed to guarantee the payment obligations and liabilities of
Parent and Merger Sub under the Merger Agreement up to a maximum amount of $27
million.

     If the Merger is completed as planned, the board of directors of the
Surviving Company


                                                                   PAGE 16 OF 21


will consist of the directors of Merger Sub immediately prior to the effective
time, and the officers of the Surviving Company will consist of the officers of
Merger Sub immediately prior to the effective time, in each case until their
respective successors are duly elected or appointed or until the earlier of
their death, resignation or removal.

     At the effective time, the limited liability company agreement of Merger
Sub as in effect immediately prior to the effective time will be the limited
liability company agreement of the Surviving Company.

     Following consummation of the Merger, Parent intends to convert 37 of the
Wellesley Inns & Suites currently owned by the Company to one of the Extended
Stay America brands of affiliates of Parent, which conversion may be effected
through the sale of these hotels to an affiliate of Parent. In addition, Parent
may sell other assets of the Company to third parties from time to time.

     If consummated, the Merger will result in the Common Stock no longer being
listed on the New York Stock Exchange and no longer being registered under the
Exchange Act.

     The preceding summary of certain provisions of the Merger Agreement, the
Voting Agreement and the Guarantee is not intended to be complete and is
qualified in its entirety by reference to the full text of such agreements,
copies of which are filed as Exhibits 1, 2 and 3 hereto, and which are
incorporated herein by reference.

     Other than as described above, none of the Reporting Persons has any plans
or proposals that relate to or would result in any of the actions described in
subparagraphs (a) through (j) of Item 4 of Schedule 13D (although the Reporting
Persons reserve the right to develop such plans).

ITEM 5. INTEREST IN SECURITIES OF THE ISSUER

     As of the date hereof, Parent owns no shares of Common Stock. Parent may,
however, be deemed to have shared voting power with respect to 3,584,697 shares
of Common Stock, which are subject to the Voting Agreement described above in
Item 4.

     As the owners of all the membership interests of Parent, the BREP IV Funds
and BREH IV have the power to direct the voting of any shares of Common Stock
that may be deemed to be beneficially owned by Parent. As a result, the BREP IV
Funds and BREH IV may be deemed to beneficially own any shares of Common Stock
that may be deemed to be beneficially owned by Parent.

     BRE Associates IV, as the general partner of the BREP IV Funds and BREH IV,
has the power to direct the voting of any shares of Common Stock that may be
deemed to be beneficially owned by the BREP IV Funds and BREH IV. As a result,
BRE Associates IV may be deemed to beneficially own any shares of Common Stock
that may be deemed to be beneficially owned by the BREP IV Funds and BREH IV.

     BREMA IV, as the general partner of BRE Associates IV, has the power to
direct the voting of any shares of Common Stock that may be deemed to be
beneficially owned by BRE Associates IV. As a result, BREMA IV may be deemed to
beneficially own any shares of Common Stock that may be deemed to be
beneficially owned by BRE Associates IV.

     BREA IV, as the general partner of BREMA IV, has the power to direct the
voting of any shares of Common Stock that may be deemed to be beneficially owned
by BREMA IV. As a result, BREA IV may be deemed to beneficially own any shares
of Common Stock that may be deemed to be beneficially owned by BREMA IV.



                                                                   PAGE 17 OF 21


     The Founding Members have the power to direct the voting of any shares of
Common Stock that may be deemed to be beneficially owned by BREA IV. As a
result, the Founding Members may be deemed to beneficially own any shares of
Common Stock that may be deemed to be beneficially owned by BREA IV.

     Each of the Reporting Persons disclaims beneficial ownership of any Common
Stock. Neither the filing of this Schedule 13D nor any of its contents shall be
deemed to constitute an admission that any Reporting Person is the beneficial
owner of any Common Stock referred to herein for purposes of Section 13(d) of
the Exchange Act or for any other purpose.

     Except as disclosed in this Schedule 13D, none of the Reporting Persons
presently has power to vote or to direct the vote or to dispose or direct the
disposition of any of the shares of Common Stock.

     Except as set forth in this Schedule 13D, none of the Reporting Persons has
beneficial ownership of, or has engaged in any transaction during the past 60
days in, any shares of Common Stock.

     Mr. Petrocelli and UCC retain the right to receive dividends from and the
proceeds from the sale of any shares of Common Stock that are the subject to the
Voting Agreement and reported in this Item 5.

     Percentages set forth in this Schedule 13D were calculated based on
44,614,372 shares of Common Stock as represented by the Company in the Merger
Agreement to be outstanding as of August 17, 2004.

ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
SECURITIES OF THE ISSUER

     Except as set forth in this Schedule 13D, to the best knowledge of the
Reporting Persons, there are no contracts, arrangements, understandings or
relationships (legal or otherwise) among the persons named in Item 2 and between
such persons and any person with respect to any securities of the Company,
including but not limited to transfer or voting of any of the securities,
finder's fees, joint ventures, loan or option arrangements, puts or calls,
guarantees of profits, division of profits or loss, or the giving or withholding
of proxies, or pledge or contingency the occurrence of which would give another
person voting power or investment power over securities of the Company.

ITEM 7. MATERIAL TO BE FILED AS EXHIBITS

     1.   Agreement and Plan of Merger, dated as of August 18, 2004 among BREP
          IV Hotels Holding L.L.C., BREP IV Hotels Acquisition L.L.C. and Prime
          Hospitality Corp. (incorporated by reference to the Form 8-K of Prime
          Hospitality Corp. filed with the Securities and Exchange Commission on
          August 19, 2004).

     2.   Voting Agreement, dated as of August 18, 2004, among BREP IV Hotels
          Holding L.L.C., A.F. Petrocelli and United Capital Corp.

     3.   Guarantee, dated as of August 18, 2004, by Blackstone Real Estate
          Partners IV L.P. in favor of Prime Hospitality Corp.

     4.   Joint Filing Agreement, dated August 27, 2004, among the Reporting
          Persons relating to the filing of a joint statement on Schedule 13D.


                                                                   PAGE 18 OF 21



                                    SIGNATURE

     After reasonable inquiry and to the best of our knowledge and belief, the
undersigned certify that the information set forth in this statement is true,
complete and correct.

     Date: August 27, 2004


                       BREP IV HOTELS HOLDING L.L.C.

                       By: /s/ Jonathan D. Gray
                          ------------------------------------------------------
                          Name:  Jonathan D. Gray
                          Title: Senior Managing Director and Vice President



                       BREA IV L.L.C.

                       By: /s/ Jonathan D. Gray
                          ------------------------------------------------------
                          Name:  Jonathan D. Gray
                          Title: Senior Managing Director



                       BLACKSTONE REAL ESTATE MANAGEMENT ASSOCIATES IV L.P.

                       By: BREA IV L.L.C., its general partner

                           By: /s/ Jonathan D. Gray
                              --------------------------------------------------
                              Name:  Jonathan D. Gray
                              Title: Senior Managing Director



                       BLACKSTONE REAL ESTATE ASSOCIATES IV L.P.

                       By: Blackstone Real Estate Management Associates IV L.P.,
                           its general partner

                           By: BREA IV L.L.C., its general partner

                               By: /s/ Jonathan D. Gray
                                  ----------------------------------------------
                                  Name:  Jonathan D. Gray
                                  Title: Senior Managing Director



                                                                   PAGE 19 OF 21



                       BLACKSTONE REAL ESTATE PARTNERS IV L.P.

                       By: Blackstone Real Estate Associates IV L.P.,
                           its general partner

                           By: Blackstone Real Estate Management
                               Associates IV L.P., its general partner

                               By: BREA IV L.L.C., its general partner

                                   By: /s/ Jonathan D. Gray
                                      ------------------------------------------
                                      Name:  Jonathan D. Gray
                                      Title: Senior Managing Director



                       BLACKSTONE REAL ESTATE PARTNERS IV.TE.1 L.P.

                       By: Blackstone Real Estate Associates IV L.P.,
                           its general partner

                           By: Blackstone Real Estate Management
                               Associates IV L.P., its general partner

                               By: BREA IV L.L.C., its general partner

                                   By: /s/ Jonathan D. Gray
                                      ------------------------------------------
                                      Name:  Jonathan D. Gray
                                      Title: Senior Managing Director



                       BLACKSTONE REAL ESTATE PARTNERS IV.TE.2 L.P.

                       By: Blackstone Real Estate Associates IV L.P.,
                           its general partner

                           By: Blackstone Real Estate Management
                               Associates IV L.P., its general partner

                               By: BREA IV L.L.C., its general partner

                                   By: /s/ Jonathan D. Gray
                                      ------------------------------------------
                                      Name:  Jonathan D. Gray
                                      Title: Senior Managing Director



                                                                   PAGE 20 OF 21



                       BLACKSTONE REAL ESTATE PARTNERS IV.TE.3-A L.P.

                       By: Blackstone Real Estate Associates IV L.P.,
                           its general partner

                           By: Blackstone Real Estate Management Associates IV
                               L.P., its general partner

                               By: BREA IV L.L.C., its general partner

                                   By: /s/ Jonathan D. Gray
                                      ------------------------------------------
                                      Name:  Jonathan D. Gray
                                      Title: Senior Managing Director



                       BLACKSTONE REAL ESTATE PARTNERS IV.F L.P.

                       By: Blackstone Real Estate Associates IV L.P.,
                           its general partner

                           By: Blackstone Real Estate Management
                               Associates IV L.P., its general partner

                               By: BREA IV L.L.C., its general partner

                                   By: /s/ Jonathan D. Gray
                                      ------------------------------------------
                                      Name:  Jonathan D. Gray
                                      Title: Senior Managing Director



                       BLACKSTONE REAL ESTATE HOLDINGS IV L.P.

                       By: Blackstone Real Estate Associates IV L.P.,
                           its general partner

                           By: Blackstone Real Estate Management
                               Associates IV L.P., its general partner

                               By: BREA IV L.L.C., its general partner

                                   By: /s/ Jonathan D. Gray
                                      ------------------------------------------
                                      Name:  Jonathan D. Gray
                                      Title: Senior Managing Director



                       /s/ Peter G. Peterson
                       ---------------------------------------------------------
                       PETER G. PETERSON


                       /s/ Stephen A. Schwarzman
                       ---------------------------------------------------------
                       STEPHEN A. SCHWARZMAN



                                                                   PAGE 21 OF 21



                                INDEX OF EXHIBITS

NUMBER               DESCRIPTION

1                    Agreement and Plan of Merger, dated as of August 18, 2004
                     among BREP IV Hotels Holding L.L.C., BREP IV Hotels
                     Acquisition L.L.C. and Prime Hospitality Corp.
                     (incorporated by reference to the Form 8-K of Prime
                     Hospitality Corp. filed with the Securities and Exchange
                     Commission on August 19, 2004).

2                    Voting Agreement, dated as of August 18, 2004, among BREP
                     IV Hotels Holding L.L.C., A.F. Petrocelli and United
                     Capital Corp.

3                    Guarantee, dated as of August 18, 2004, by Blackstone Real
                     Estate Partners IV L.P. in favor of Prime Hospitality Corp.

4                    Joint Filing Agreement, dated August 27, 2004, among the
                     Reporting Persons relating to the filing of a joint
                     statement on Schedule 13D.

EX-2

                                VOTING AGREEMENT

         VOTING AGREEMENT, dated as of August 18, 2004 (this "Agreement"), among
BREP IV Hotels Holding L.L.C., a Delaware limited liability company ("Parent"),
A.F. Petrocelli ("Petrocelli") and United Capital Corp., a Delaware corporation
("UCC," and together with Petrocelli, the "Stockholders").

         WHEREAS, concurrently herewith, Parent, BREP IV Hotels Acquisition
L.L.C., a Delaware limited liability company and a wholly owned subsidiary of
Parent ("Merger Sub"), and Prime Hospitality Corp., a Delaware corporation (the
"Company"), are entering into an Agreement and Plan of Merger (the "Merger
Agreement"; capitalized terms used but not defined herein shall have the
meanings set forth in the Merger Agreement), pursuant to which (and subject to
the terms and conditions set forth therein) the Company will merge with and into
Merger Sub (the "Merger") and each outstanding share of common stock, par value
$0.01 per share, of the Company (the "Common Stock") will be converted into the
right to receive the Merger Consideration;

         WHEREAS, Petrocelli beneficially owns 45,000 Shares, excluding the UCC
Shares (as hereinafter defined) and Shares issuable upon conversion of employee
stock options (the "Petrocelli Shares"), and UCC beneficially owns 3,539,697
Shares (the "UCC Shares," and together with the Petrocelli Shares, the "Owned
Shares"), the Owned Shares, including any Shares acquired by either of the
Stockholders after the date hereof and prior to the termination hereof, whether
upon exercise of options, warrants, conversion of other convertible securities
or otherwise, are collectively referred to herein as the "Covered Shares";

         WHEREAS, in order to induce Parent to enter into the Merger Agreement
and proceed with the Merger, Parent and the Stockholders are entering into this
Agreement; and

         WHEREAS, each of the Stockholders acknowledges that Parent is entering
into the Merger Agreement in reliance on the representations, warranties,
covenants and other agreements of the Stockholders set forth in this Agreement
and would not enter into the Merger Agreement if the Stockholders did not enter
into this Agreement.

         NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements herein contained, and intending to be legally bound
hereby, Parent and each of the Stockholders hereby agree as follows:

         1. Agreement to Vote.

         (a) Prior to any termination of this Agreement, subject to Section 7
hereof (in the case of Petrocelli), each of the Stockholders hereby agrees that
it shall, and shall cause any other holder of record of any Covered Shares to,
at any meeting of the stockholders of the Company (whether annual or special and
whether or not an adjourned or postponed meeting), however called, (i) when a
meeting is held, appear at such meeting or otherwise cause the Covered Shares to
be counted as present thereat for the purpose of establishing a quorum, (ii)
vote (or caused to be voted) in person or by proxy all Covered Shares in favor
of the Merger and any other matters necessary for consummation of the
Transactions and (iii) vote (or cause to be voted) all Covered Shares against
(A) any proposal for any recapitalization, reorganization,






liquidation, merger, sale of assets or other business combination between the
Company and any other person (other than the Merger) and (B) any other action
that could reasonably be expected to impede, interfere with, delay, postpone or
adversely affect the Merger or any of the Transactions, any transactions
contemplated by this Agreement or result in a breach in any material respect of
any covenant, representation or warranty or other obligation or agreement of the
Company under the Merger Agreement.

         (b) EACH OF THE STOCKHOLDERS HEREBY GRANTS TO, AND APPOINTS, PARENT,
EACH SENIOR MANAGING DIRECTOR OF PARENT AND THE SECRETARY OF PARENT, IN THEIR
RESPECTIVE CAPACITIES AS OFFICERS OF PARENT, AND ANY OTHER DESIGNEE OF PARENT,
EACH OF THEM INDIVIDUALLY, SUCH STOCKHOLDER'S IRREVOCABLE (UNTIL THE TERMINATION
DATE) PROXY AND ATTORNEY-IN-FACT (WITH FULL POWER OF SUBSTITUTION) TO VOTE THE
COVERED SHARES AS INDICATED IN CLAUSE (a) OF THIS SECTION 1. EACH OF THE
STOCKHOLDERS INTENDS THIS PROXY TO BE IRREVOCABLE (UNTIL THE TERMINATION DATE)
AND COUPLED WITH AN INTEREST AND WILL TAKE SUCH FURTHER ACTION OR EXECUTE SUCH
OTHER INSTRUMENTS AS MAY BE NECESSARY TO EFFECTUATE THE INTENT OF THIS PROXY AND
HEREBY REVOKES ANY PROXY PREVIOUSLY GRANTED BY EACH STOCKHOLDER WITH RESPECT TO
THE COVERED SHARES.

         (c) Except as set forth in clause (a) of this Section 1, the
Stockholders shall not be restricted from voting in favor of, against or
abstaining with respect to any matter presented to the stockholders of the
Company. In addition, nothing in this Agreement shall give Parent the right to
vote any Covered Shares in connection with the election of directors.

         2. No Inconsistent Agreements. Each of the Stockholders hereby
covenants and agrees that, except as contemplated by this Agreement, it (a) has
not entered into, and shall not enter at any time while this Agreement remains
in effect, any voting agreement or voting trust with respect to the Covered
Shares and (b) has not granted, and shall not grant at any time while this
Agreement remains in effect, a proxy or power of attorney with respect to the
Covered Shares, in either case, which is inconsistent with its obligations
pursuant to this Agreement.

         3. Termination. This Agreement shall terminate upon the earliest of (a)
the Effective Time, (b) the termination of the Merger Agreement in accordance
with its terms and (c) written notice of termination of this Agreement by Parent
to the Stockholders, such date shall be referred to herein as the "Termination
Date".

         4. Representations and Warranties.

         (a) Representations and Warranties of Parent. Parent hereby represents
and warrants to the Stockholders as follows:

                  (i) Valid Existence. Parent is a limited liability company
         duly organized, validly existing and in good standing under the laws of
         the jurisdiction of its organization and has the requisite limited
         liability company power and authority and all necessary



                                       2



         governmental approvals to own, lease and operate its properties and to
         carry on its business as it is now being conducted.

                  (ii) Authority Relative to This Agreement. Parent has all
         necessary limited liability company power and authority to execute and
         deliver this Agreement, to perform its obligations hereunder and to
         consummate the transactions contemplated hereby. The execution,
         delivery and performance of this Agreement by Parent and the
         consummation by Parent of the transactions contemplated hereby have
         been duly and validly authorized by all necessary limited liability
         company action, and no other limited liability company proceedings on
         the part of Parent are necessary to authorize this Agreement or to
         consummate the transactions contemplated hereby. This Agreement has
         been duly and validly authorized, executed and delivered by Parent and,
         assuming due authorization, execution and delivery by each of the
         Stockholders, constitutes a legal, valid and binding obligation of
         Parent, enforceable against Parent in accordance with its terms.

                  (iii) No Conflicts. Except for the applicable requirements of
         the Exchange Act (A) no filing with, and no permit, authorization,
         consent or approval of, any state, federal or foreign governmental
         authority is necessary on the part of Parent for the execution and
         delivery of this Agreement by Parent and the consummation by Parent of
         the transactions contemplated hereby and (B) neither the execution and
         delivery of this Agreement by Parent nor the consummation by Parent of
         the transactions contemplated hereby nor compliance by Parent with any
         of the provisions hereof shall (1) conflict with or violate the
         Certificate of Formation or Limited Liability Company Agreement (or
         similar organizational document) of Parent, (2) result in any breach or
         violation of, or constitute a default (or an event which, with notice
         or lapse of time or both, would become a default) under, or give to
         others any rights of termination, amendment, acceleration or
         cancellation of, or result in the creation of a Lien on any property or
         asset of Parent pursuant to, any Contract to which Parent is a party or
         by which Parent or any property or asset of Parent is bound or affected
         or (3) violate any order, writ, injunction, decree, statute, rule or
         regulation applicable to Parent or any of its properties or assets,
         except in the case of (2) or (3) for violations, breaches or defaults
         that would not in the aggregate materially impair the ability of Parent
         to perform its obligations hereunder.

         (b) Representations and Warranties of the Stockholders. The
Stockholders hereby severally (and not jointly) represent and warrant to Parent
as follows:

                  (i) Ownership of Securities. The Stockholders are the only
         beneficial owners and record holders of the Covered Shares, free and
         clear of Liens and the Stockholders have sole voting power and sole
         power of disposition with respect to all Covered Shares, with no
         restrictions, subject to applicable federal securities laws on their
         rights of disposition pertaining thereto (other than as created by this
         Agreement). As of the date hereof, Petrocelli does not own beneficially
         or of record any equity securities of the Company other than the
         Petrocelli Shares, the UCC Shares and 4,825,000 Shares issuable upon
         the exercise of stock options, including 3,075,000 Shares issuable upon
         the exercise of currently exercisable stock options (collectively, the
         "Options") and UCC does not own beneficially or of record any equity
         securities of the Company other than the UCC




                                       3



         Shares. Neither Stockholder has appointed or granted any proxy which is
         still in effect with respect to the Covered Shares.

                  (ii) Existence, Power; Binding Agreement. UCC is a corporation
         duly incorporated, validly existing and in good standing under the laws
         of the jurisdiction of its incorporation and has all requisite
         corporate power and authority to execute and deliver this Agreement, to
         perform its obligations hereunder and to consummate the transactions
         contemplated hereby. Petrocelli has full power and authority to execute
         and deliver this Agreement, to perform his obligations hereunder and to
         consummate the transactions contemplated hereby. This Agreement has
         been duly and validly executed and delivered by each of the
         Stockholders and, assuming due authorization, execution and delivery by
         Parent, constitutes a legal, valid and binding obligation of each of
         the Stockholders, enforceable against each of Stockholders in
         accordance with its terms. If Petrocelli is married, and any of the
         Covered Shares constitute community property or otherwise need spousal
         or other approval for this Agreement to be legal, valid and binding,
         this Agreement has been duly authorized, executed and delivered by, and
         constitutes the legal, valid and binding obligation of, Petrocelli's
         spouse, enforceable in accordance with its terms.

                  (iii) No Conflicts. Except for the applicable requirements of
         the Exchange Act (A) no filing with, and no permit, authorization,
         consent or approval of, any state, federal or foreign governmental
         authority is necessary on the part of either of the Stockholders for
         the execution and delivery of this Agreement by either of the
         Stockholders and the consummation by either of the Stockholders of the
         transactions contemplated hereby and (B) the execution and delivery of
         this Agreement by the Stockholders or the consummation by the
         Stockholders of the transactions contemplated hereby or compliance by
         the Stockholders with any of the provisions hereof shall not (1) in
         case of UCC, violate any provision of its certificate of incorporation,
         bylaws or similar organizational documents, (2) result in any breach or
         violation of, or constitute a default (or an event which, with notice
         or lapse of time or both, would become a default) under, or give to
         others any rights of termination, amendment, acceleration or
         cancellation of, or result in the creation of a Lien on any property or
         asset of either of the Stockholders pursuant to any Contract to which
         either of the Stockholders is a party or by which either of the
         Stockholders or any property or asset of either of the Stockholders is
         bound or affected or (3) violate any order, writ, injunction, decree,
         statute, rule or regulation applicable to either of the Stockholders or
         any of its properties or assets, except in the case of (2) or (3) for
         violations, breaches or defaults that would not in the aggregate
         materially impair the ability of either of the Stockholders to perform
         its obligations hereunder.

                  (iv) Accredited Investor. Each of the Stockholders is an
         "accredited investor" (as defined under the Securities Act) and a
         sophisticated investor, is capable of evaluating the merits and risks
         of its investments and has the capacity to protect its own interests.

         5. Certain Covenants of the Stockholders. Except in accordance with the
terms of this Agreement, each of the Stockholders hereby severally (and not
jointly) covenants and agrees as follows:



                                       4



         (a) No Solicitation. Prior to any termination of this Agreement,
subject to Section 7 hereof (with respect to Petrocelli), each of the
Stockholders agrees that neither it nor any of its Representatives shall,
directly or indirectly, solicit (including by way of furnishing information) any
inquiries or the making of any proposal by any person or entity (other than
Parent or any affiliate of Parent) which constitutes, or could reasonably be
expected to lead to, an Acquisition Proposal. If either of the Stockholders
receives a bona fide inquiry or proposal with respect to the sale of Shares,
then such Stockholder shall promptly inform Parent of the terms and conditions,
if any, of such inquiry or proposal and the identity of the person making it.
Each of the Stockholders will immediately cease and cause to be terminated any
existing activities, discussions or negotiations with any parties conducted
prior to the date of this Agreement with respect to any of the foregoing.

         (b) Restriction on Transfer, Proxies and Non-Interference. Except as
set forth in Section 8 hereof (in the case of Petrocelli), each of the
Stockholders hereby agrees, while this Agreement is in effect, and except as
contemplated hereby, not to (i) sell, transfer, pledge, encumber, assign or
otherwise dispose of, or enter into any Contract, option or other arrangement or
understanding with respect to the sale, transfer, pledge, encumbrance,
assignment or other disposition of, any of the Covered Shares or Options, (ii)
grant any proxies or powers of attorney, deposit any Covered Shares into a
voting trust or enter into a voting agreement with respect to any Covered Shares
or (iii) knowingly take any action that would make any representation or
warranty of either of the Stockholders contained herein untrue or incorrect or
have the effect of preventing or disabling either of the Stockholders from
performing its obligations under this Agreement.

         (c) Each of the Stockholders agrees, while this Agreement is in effect,
to promptly notify Parent of the number of any new Shares acquired by such
Stockholder, if any, after the date hereof (including, upon exercise of
Options).

         6. Further Assurances. From time to time, at the other party's request
and without further consideration, each party hereto shall take such reasonable
further action as may reasonably be necessary or desirable to consummate and
make effective the transactions contemplated by this Agreement.

         7. Fiduciary Duties. Notwithstanding anything in this Agreement to the
contrary: (a) Petrocelli makes no agreement or understanding herein in any
capacity other than in Petrocelli's capacity as a record holder and beneficial
owner of Covered Shares, (b) nothing herein shall be construed to limit or
affect any action or inaction by Petrocelli acting in his capacity as a director
of the Company and in compliance with Section 6.04 of the Merger Agreement and
(c) Petrocelli shall have no liability to Parent or any of its affiliates under
this Agreement or otherwise as a result of any action or inaction by Petrocelli
in his capacity as a director of the Company and in compliance with Section 6.04
of the Merger Agreement.

         8. Permitted Transfers. Notwithstanding anything in this Agreement to
the contrary, Petrocelli may transfer any or all of the Petrocelli Shares, in
accordance with provisions of applicable Law, to Petrocelli's spouse, ancestors,
descendants or any trust (controlled by Petrocelli) for any of their benefit or
to a charitable trust (controlled by Petrocelli); provided, however, that, prior
to and as a condition to the effectiveness of such transfer, each person to




                                       5



which any of such Petrocelli Shares or any interest in any of such Petrocelli
Shares is or may be transferred shall have executed and delivered to Parent a
counterpart of this Agreement pursuant to which such person shall be bound by
all of the terms and provisions of this Agreement, and shall have agreed in
writing with Parent to hold such Petrocelli Shares or interest in such
Petrocelli Shares subject to all of the terms and provisions of this Agreement.

         9. No Control. Nothing contained in this Agreement shall give Parent
the right to control or direct the Company or the Company's operations.

         10. Amendment. This Agreement may be amended by the parties hereto;
provided, however, that after the adoption of this Agreement and the
Transactions by the stockholders of the Company no amendment shall be made
except as allowed under applicable Law. This Agreement may not be amended except
by an instrument in writing signed by each of the parties hereto.

         11. Non-survival of Representations and Warranties. The respective
representations and warranties of the Stockholders and Parent contained herein
shall not survive the closing of the transactions contemplated hereby and by the
Merger Agreement.

         12. Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing in the English language and shall
be deemed duly given (a) on the date of delivery if delivered personally, (b) on
the first business day following the date of dispatch if delivered by a
nationally recognized next-day courier service, (c) on the fifth business day
following the date of mailing if delivered by registered or certified mail
(postage prepaid, return receipt requested) or (d) if sent by facsimile
transmission, when transmitted and receipt is confirmed. All notices hereunder
shall be delivered to the respective parties at the following addresses (or at
such other address for a party as shall be specified in a notice given in
accordance with this Section 12):

         if to Parent:

                  c/o Blackstone Real Estate Partners IV L.P.
                  345 Park Avenue
                  New York, NY  10154
                  Facsimile No.:  (212) 583-5573
                  Attention: Jonathan D. Gray

         with a copy to:

                  Simpson Thacher & Bartlett LLP
                  425 Lexington Avenue
                  New York, New York  10017
                  Facsimile No.:  (212) 455-2502
                  Attention:  Brian M. Stadler





                                       6



         if to Petrocelli:

                  c/o United Capital Corp.
                  9 Park Place
                  Great Neck, New York 11021
                  Facsimile No.: (516) 829-4301
                  Attention: A.F. Petrocelli

         if to UCC:

                  United Capital Corp.
                  9 Park Place
                  Great Neck, New York 11021
                  Facsimile No:  (516) 829-4301
                  Attention:  Anthony J. Miceli

         13. Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of Law or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any manner materially
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in a mutually acceptable manner in
order that the transactions contemplated hereby be consummated as originally
contemplated to the fullest extent possible.

         14. Entire Agreement; Assignment. This Agreement (a) constitutes the
entire agreement among the parties hereto with respect to the subject matter
hereof and supersedes all prior agreements and undertakings, both written and
oral, among the parties hereto with respect to the subject matter hereof and (b)
shall not be assigned by operation of law or otherwise, except that Parent may
assign all or any of its rights and obligations hereunder to any direct or
indirect wholly owned subsidiary of Parent; provided, however, that no such
assignment shall relieve the assigning party of its obligations hereunder if
such assignee does not perform such obligations.

         15. Specific Performance. The parties hereto agree that irreparable
damage would occur in the event any provision of this Agreement were not
performed in accordance with the terms hereof and that the parties hereto shall
be entitled to specific performance of the terms hereof, in addition to any
other remedy at law or equity.

         16. Governing Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of Delaware applicable to contracts
executed in and to be performed in that State. All Actions arising out of or
relating to this Agreement shall be heard and determined exclusively in the
Delaware Court of Chancery. The parties hereto hereby (a) submit to the
exclusive jurisdiction of the Delaware Court of Chancery for the purpose of any
Action arising out of or relating to this Agreement brought by any party hereto,
and




                                       7



(b) irrevocably waive, and agree not to assert by way of motion, defense, or
otherwise, in any such Action, any claim that it is not subject personally to
the jurisdiction of the above-named court, that its property is exempt or immune
from attachment or execution, that the Action is brought in an inconvenient
forum, that the venue of the Action is improper, or that this Agreement or the
transactions contemplated hereby may not be enforced in or by the above-named
court. This Agreement does not involve less than $100,000, and the parties
intend that 6 Del.C. ss.2708 shall apply to this Agreement.

         17. Headings. The descriptive headings contained in this Agreement are
included for convenience of reference only and shall not affect in any way the
meaning or interpretation of this Agreement.

         18. Counterparts. This Agreement may be executed and delivered
(including by facsimile transmission) in one or more counterpart, and by the
different parties hereto in separate counterparts, each of which when executed
shall be deemed to be an original but all of which taken together shall
constitute one and the same.


                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]








                                       8



         IN WITNESS WHEREOF, Parent and each Stockholder have caused to be
executed or executed this Agreement as of the date first written above.


                                             BREP IV Hotels Holding L.L.C.



                                              /s/ Jonathan D. Gray
                                             -----------------------------------
                                             Name:  Jonathan D. Gray
                                             Title: Senior Managing Director and
                                                    Vice President



                                             A.F. Petrocelli

                                              /s/ A.F. Petrocelli
                                             -----------------------------------
                                             A.F. Petrocelli



                                             UNITED CAPITAL CORP.

                                              /s/ Anthony J. Miceli
                                             -----------------------------------
                                             Name:  Anthony J. Miceli
                                             Title: Vice President

EX-3

                                    GUARANTEE
                                       OF
                     BLACKSTONE REAL ESTATE PARTNERS IV L.P.

         Guarantee, dated as of August 18, 2004, by Blackstone Real Estate
Partners IV L.P. (the "Guarantor"), in favor of Prime Hospitality Corp. (the
"Guaranteed Party").

         1. GUARANTEE. To induce the Guaranteed Party to enter into an Agreement
and Plan of Merger, dated as of August 18, 2004 (as amended, amended and
restated, supplemented or otherwise modified from time to time, the "Merger
Agreement"), among BREP IV Hotels Holding L.L.C., a Delaware-limited liability
company and an affiliate of the Guarantor ("Parent"), BREP IV Hotels
Acquisition, a Delaware limited liability company and a wholly-owned subsidiary
of Parent ("Merger Sub"), and the Guaranteed Party, where the Guaranteed Party
will merge with and into Merger Sub, Guarantor absolutely, unconditionally and
irrevocably guarantees to the Guaranteed Party, the due and punctual observance,
performance and discharge of all of the payment obligations and liabilities of
Parent and Merger Sub under the Merger Agreement (the "Obligations"); provided
the maximum amount payable by Guarantor hereunder shall not exceed $27,000,000
(the "Cap").

         2. NATURE OF GUARANTEE. The Guaranteed Party shall not be obligated to
file any claim relating to the Obligations in the event that Parent or Merger
Sub becomes subject to a bankruptcy, reorganization or similar proceeding, and
the failure of the Guaranteed Party to so file shall not affect the Guarantor's
obligations hereunder. In the event that any payment to the Guaranteed Party in
respect of any Obligations is rescinded or must otherwise be returned for any
reason whatsoever, the Guarantor shall remain liable hereunder with respect to
such Obligations as if such payment had not been made. This is an unconditional
guarantee of payment and not of collectibility.

         3. CHANGES IN OBLIGATIONS; CERTAIN WAIVERS. The Guarantor agrees that
the Guaranteed Party may at any time and from time to time, without notice to or
further consent of the Guarantor, extend the time of payment of or renew any of
the Obligations, and may also make any agreement with Parent or Merger Sub or
with any other party to, or person liable on any of, the Obligations or
interested therein, for the extension, renewal, payment, compromise, discharge
or release thereof, in whole or in part, or for any modification of the terms
thereof or of any agreement between the Guaranteed Party and Parent or Merger
Sub or any such other party or person without in any way impairing or affecting
this Guarantee. The Guarantor agrees that the obligations of the Guarantor
hereunder shall not be released or discharged, in whole or in part, or otherwise
affected by (a) the failure of the Guaranteed Party to assert any claim or
demand or to enforce any right or remedy against Parent or Merger Sub or any
other entity or other person primarily or secondarily liable with respect to any
of the Obligations; (b) any change in the time, place or manner of payment of
any of the Obligations or any rescission, waiver, compromise, consolidation or
other amendment or modification of any of the terms or provisions of the Merger
Agreement or any other agreement evidencing, securing or otherwise executed in
connection with any of the Obligations, (c) the addition, substitution or
release of any entity or other person primarily or secondarily liable for any
Obligation; (d) any






change in the corporate existence, structure or ownership of Parent or Merger
Sub or any other entity or person liable with respect to any of the Obligations;
(e) any insolvency, bankruptcy, reorganization or other similar proceeding
affecting Parent or Merger Sub or any other entity or person liable with respect
to any of the Obligations; (f) any lack of validity or enforceability of the
Merger Agreement or any agreement or instrument relating thereto; (g) the
existence of any claim, set-off or other rights which the Guarantor may have at
any time against Parent, Merger Sub or the Guaranteed Party, whether in
connection with the Obligations or otherwise; (h) the adequacy of any other
means the Guaranteed Party may have of obtaining repayment of any of the
Obligations; (i) the taking, exchange, release, non-perfection or impairment of
any collateral securing any of the Obligations; (j) any other act or omission
which might in any manner or to any extent vary the risk of the Guarantor or
otherwise operate as a release or discharge of the Guarantor, all of which may
be done without notice to the Guarantor; or (k) any other event or
circumstances, whether similar or dissimilar to the foregoing (other than final
payment in full of the Obligations). To the fullest extent permitted by law, the
Guarantor hereby expressly waives any and all rights or defenses arising by
reason of any law which would otherwise require any election of remedies by the
Guaranteed Party. The Guarantor waives promptness, diligence, notice of the
acceptance of this Guarantee and of the Obligations, presentment, demand for
payment, notice of non-performance, default, dishonor and protest, notice of any
Obligations incurred and all other notices of any kind, all defenses which may
be available by virtue of any valuation, stay, moratorium law or other similar
law now or hereafter in effect, any right to require the marshalling of assets
of the Parent or Merger Sub or any other entity or other person primarily or
secondarily liable with respect to any of the Obligations, and all suretyship
defenses generally. The Guarantor hereby unconditionally and irrevocably waives
any duty on the part of the Guaranteed Party to disclose to the Guarantor any
matter, fact or thing relating to the business, condition (financial or
otherwise), operations, performance, properties or prospects of Parent, Merger
Sub or any of their affiliates now or hereafter known by the Guaranteed Party.
The Guarantor acknowledges that it will receive substantial direct and indirect
benefits from the transactions contemplated by the Merger Agreement and that the
waivers set forth in this Guarantee are knowingly made in contemplation of such
benefits.

The Guarantor hereby unconditionally and irrevocably agrees not to exercise any
rights that it may now have or hereafter acquire against Parent, Merger Sub or
any other entity or person liable with respect to any of the Obligations that
arise from the existence, payment, performance, or enforcement of the
Guarantor's Obligations under or in respect of this Guarantee or any other
agreement in connection therewith, including, without limitation, any right of
subrogation, reimbursement, exoneration, contribution or indemnification and any
right to participate in any claim or remedy of the Guaranteed Party against
Parent, Merger Sub or any other entity or person liable with respect to any of
the Obligations, whether or not such claim, remedy or right arises in equity or
under contract, statue or common law, including, without limitation, the right
to take or receive from Parent, Merger Sub or any other entity or person liable
with respect to any of the Obligations, directly or indirectly, in cash or other
property or by set-off or in any other manner, payment or security on account of
such claim, remedy or right, unless and until all of the Obligations and all
other amounts payable under this Guarantee shall have been paid in full in cash.
If any amount shall be paid to the Guarantor in violation of the immediately
preceding sentence at any time prior to the payment in full in cash of the
Obligations and all other amounts payable under this Guarantee, such amount
shall be received and held in trust for the benefit of the Guaranteed Party,
shall be segregated from other property and funds of the






Guarantor and shall forthwith be paid or delivered to the Guaranteed Party in
the same form as so received (with any necessary endorsement or assignment) to
be credited and applied to the Obligations and all other amounts payable under
this Guarantee, in accordance with the terms of the Merger Agreement, whether
matured or unmatured, or to be held as collateral for any Obligations or other
amounts payable under this Guarantee thereafter arising.

         4. EXPENSES. The Guarantor agrees to pay on demand all reasonable fees
and out of pocket expenses (including the reasonable fees and expenses of the
Guaranteed Party's counsel) in any way relating to the enforcement or protection
of the rights of the Guaranteed Party hereunder; provided, that such fees and
expenses shall not be subject to the Cap; and provided further, that the
Guarantor shall not be liable for any expenses of the Guaranteed Party if no
payment under this Guarantee is due.

         5. NO WAIVER; CUMULATIVE RIGHTS. No failure on the part of the
Guaranteed Party to exercise, and no delay in exercising, any right, remedy or
power hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise by the Guaranteed Party of any right, remedy or power hereunder
preclude any other or future exercise of any right, remedy or power. Each and
every right, remedy and power hereby granted to the Guaranteed Party or allowed
it by law or other agreement shall be cumulative and not exclusive of any other,
and may be exercised by the Guaranteed Party at any time or from time to time.

         6. REPRESENTATIONS AND WARRANTIES. The Guarantor hereby represents and
warrants that:

                  (a) the execution, delivery and performance of this Guarantee
         have been duly authorized by all necessary partnership action and do
         not contravene any provision of the Guarantor's charter, partnership
         agreement, operating agreement or similar organizational documents or
         any law, regulation, rule, decree, order, judgment or contractual
         restriction binding on the Guarantor or its assets;

                  (b) all consents, approvals, authorizations, permits of,
         filings with and notifications to, any governmental authority necessary
         for the due execution, delivery and performance of this Guarantee by
         the Guarantor have been obtained or made and all conditions thereof
         have been duly complied with, and no other action by, and no notice to
         or filing with, any governmental authority or regulatory body is
         required in connection with the execution, delivery or performance of
         this Guarantee;

                  (c) this Guarantee constitutes a legal, valid and binding
         obligation of the Guarantor enforceable against the Guarantor in
         accordance with its terms, subject to (i) the effects of bankruptcy,
         insolvency, fraudulent conveyance, reorganization, moratorium or other
         similar laws affecting creditors' rights generally, and (ii) general
         equitable principals (whether considered in a proceeding in equity or
         at law);

                  (d) Guarantor has the financial capacity to pay and perform
         its obligations under this Guarantee, and all funds necessary for
         Guarantor to fulfill its Obligations under this Guarantee shall be
         available to Guarantor for so long as this Guarantee shall remain in
         effect in accordance with Section 9 hereof.






         7. ASSIGNMENT. Neither the Guarantor nor the Guaranteed Party may
assign its rights, interests or obligations hereunder to any other person
(except by operation of law) without the prior written consent of the Guaranteed
Party or the Guarantor, as the case may be.

         8. NOTICES. All notices and other communications hereunder shall be in
writing in the English language and shall be given (a) on the date of delivery
if delivered personally, (b) on the first business day following the date of
dispatch if delivered by a nationally recognized next-day courier service, (c)
on the fifth business day following the date of mailing if delivered by
registered or certified mail (postage prepaid, return receipt requested) or (d)
if sent by facsimile transmission, when transmitted and receipt is confirmed.
All notices to the Guarantor hereunder shall be delivered as set forth below:

         Blackstone Real Estate Partners IV L.P.
         345 Park Avenue
         New York, NY 10154
         Facsimile No: (212) 583-5573
         Attention: Jonathan D. Gray

         with a copy to:

         Simpson Thacher & Bartlett LLP
         425 Lexington Avenue
         New York, NY 10017
         Tel: 212-455-2000
         Fax: 212-455-2502
         Attention: Brian M. Stadler, Esq.

or to such other address or facsimile number as the Guarantor shall have
notified the Guaranteed Party in a written notice delivered to the Guaranteed
Party in accordance with the Merger Agreement.

         9. CONTINUING GUARANTEE. This Guarantee shall remain in full force and
effect and shall be binding on the Guarantor, its successors and assigns until
all of the Obligations and all amounts payable under this Guarantee have been
indefeasibly paid, observed, performed or satisfied in full. Notwithstanding the
foregoing, this Guarantee shall terminate and the Guarantor shall have no
further obligations under this Guarantee as of (i) the Effective Time (as
defined in the Merger Agreement) or (ii) the second year anniversary of any
termination of the Merger Agreement in accordance with its terms (other than
under circumstances where the Parent Termination Fee is payable under Section
8.03 of the Merger Agreement).

         10. NO RECOURSE. The Guaranteed Party by its acceptance of the benefits
hereof, covenants, agrees and acknowledges that no person other than the
Guarantor shall have any obligation hereunder and that no recourse hereunder or
under any documents or instruments delivered in connection herewith shall be had
against any current or future officer, agent or employee of the Guarantor,
against any current or future general or limited partner of the Guarantor or any
current or future director, officer, employee, general or limited partner,






member, affiliate or assignee of any of the foregoing whether by the enforcement
of any assessment or by any legal or equitable proceeding, or by virtue of any
statute, regulation or other applicable law, it being expressly agreed and
acknowledged that no personal liability whatsoever shall attach to, be imposed
on or otherwise be incurred by any current or future officer, agent or employee
of the Guarantor or any current or future general or limited partner of the
Guarantor or any current or future director, officer, employee, general or
limited partner, member, affiliate or assignee of any of the foregoing, as such,
for any obligations of the Guarantor under this Guarantee or any documents or
instruments delivered in connection herewith or for any claim based on, in
respect of or by reason of such obligations or their creations.

         11. GOVERNING LAW. This Guarantee shall be governed and construed in
accordance with the laws of the State of New York applicable to contracts
executed in and to be performed in that State. All actions arising out of or
relating to this Guarantee shall be heard and determined exclusively in the
Delaware Court of Chancery. The parties hereto hereby (a) submit to the
exclusive jurisdiction of the Delaware Court of Chancery for the purpose of any
action arising out of or relating to this Guarantee brought by any party hereto,
and (b) irrevocably waive, and agree not to assert by way of motion, defense, or
otherwise, in any such action, any claim that it is not subject personally to
the jurisdiction of the above-named court, that its property is exempt or immune
from attachment or execution, that the action is brought in an inconvenient
forum, that the venue of the action is improper, or that this Guarantee or the
transactions contemplated hereby may not be enforced in or by the above-named
court.

         12. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY WAIVES TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY WITH RESPECT TO ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS GUARANTEE OR ANY OF THE TRANSACTIONS
CONTEMPLATED HEREBY.







         IN WITNESS WHEREOF, this Guarantee has been duly executed and delivered
by the Guarantor to the Guaranteed Party as of the date first above written.

                            BLACKSTONE REAL ESTATE PARTNERS IV L.P.

                               By: Blackstone Real Estate Associates IV L.P.,
                                   a Delaware limited partnership, its general
                                   partner


                                      By: Blackstone Real Estate Management
                                          Associates IV L.P., a Delaware
                                          limited partnership, its general
                                          partner


                                             By: BREA IV L.L.C., a Delaware
                                                 limited liability company, its
                                                 general partner

                                                 By: /s/ Jonathan D. Gray
                                                    ----------------------------
                                                     Name: Jonathan D. Gray
                                                     Title: Senior Managing
                                                            Director

EX-4

                             JOINT FILING AGREEMENT


         In accordance with Rule 13d-1(k) promulgated under the Securities
Exchange Act of 1934, as amended, the undersigned hereby agree to the joint
filing with all other Reporting Persons (as such term is defined in the Schedule
13D referred to below) on behalf of each of them of a Statement on Schedule 13D
(including amendments thereto) with respect to the Common Stock, par value $0.01
per share, of Prime Hospitality Corp., a Delaware corporation, and that this
Agreement may be included as an Exhibit to such joint filing. This Agreement may
be executed in any number of counterparts, all of which together shall
constitute one and the same instrument.


         IN WITNESS WHEREOF, the undersigned hereby execute this Agreement as of
the 27th day of August, 2004.


                            BREP IV HOTELS HOLDING L.L.C.,

                            By: /s/ Jonathan D. Gray
                                ----------------------------------------------
                                Name: Jonathan D. Gray
                                Title: Senior Managing Director and
                                       Vice President


                            BREA IV L.L.C.

                            By: /s/ Jonathan D. Gray
                                ----------------------------------------------
                                Name: Jonathan D. Gray
                                Title: Senior Managing Director


                            BLACKSTONE REAL ESTATE MANAGEMENT ASSOCIATES IV L.P.

                            By: BREA IV L.L.C., its general partner

                                By: /s/ Jonathan D. Gray
                                    ------------------------------------------
                                    Name: Jonathan D. Gray
                                    Title: Senior Managing Director








                            BLACKSTONE REAL ESTATE ASSOCIATES IV L.P.

                            By: Blackstone Real Estate Management
                                Associates IV L.P., its general partner

                                    By:  BREA IV L.L.C., its general partner

                                         By:  /s/ Jonathan D. Gray
                                             -----------------------------------
                                             Name: Jonathan D. Gray
                                             Title: Senior Managing Director



                            BLACKSTONE REAL ESTATE PARTNERS IV L.P.


                            By:  Blackstone Real Estate Associates IV L.P., its
                                 general partner


                                 By: Blackstone Real Estate Management
                                     Associates IV L.P., its general partner


                                     By: BREA IV L.L.C., its general partner


                                         By:  /s/ Jonathan D. Gray
                                             -----------------------------------
                                             Name: Jonathan D. Gray
                                             Title: Senior Managing Director


                            BLACKSTONE REAL ESTATE PARTNERS IV.TE.1 L.P.


                            By: Blackstone Real Estate Associates IV L.P., its
                                general partner


                                By: Blackstone Real Estate Management Associates
                                    IV L.P., its general partner


                                    By: BREA IV L.L.C., its general partner


                                        By:  /s/ Jonathan D. Gray
                                            ------------------------------------
                                            Name: Jonathan D. Gray
                                            Title: Senior Managing Director









                            BLACKSTONE REAL ESTATE PARTNERS  IV.TE.2 L.P.


                            By: Blackstone Real Estate Associates IV L.P., its
                                general partner


                                By: Blackstone Real Estate Management Associates
                                    IV L.P., its general partner


                                    By: BREA IV L.L.C., its general partner

                                        By:  /s/ Jonathan D. Gray
                                            ------------------------------------
                                            Name: Jonathan D. Gray
                                            Title: Senior Managing Director



                            BLACKSTONE REAL ESTATE PARTNERS IV.TE.3-A L.P.


                            By: Blackstone Real Estate Associates IV L.P., its
                                general partner


                                By: Blackstone Real Estate Management Associates
                                    IV L.P., its general partner


                                     By: BREA IV L.L.C., its general partner


                                         By:  /s/ Jonathan D. Gray
                                             -----------------------------------
                                             Name: Jonathan D. Gray
                                             Title: Senior Managing Director


                            BLACKSTONE REAL ESTATE PARTNERS IV.F L.P.


                            By: Blackstone Real Estate Associates IV L.P., its
                                general partner


                                By: Blackstone Real Estate Management Associates
                                    IV L.P., its general partner


                                    By: BREA IV L.L.C., its general partner


                                        By:  /s/ Jonathan D. Gray
                                            ------------------------------------
                                            Name: Jonathan D. Gray
                                            Title: Senior Managing Director









                            BLACKSTONE REAL ESTATE HOLDINGS IV L.P.


                            By: Blackstone Real Estate Associates IV L.P., its
                                general partner


                                By: Blackstone Real Estate Management Associates IV
                                    L.P., its general partner


                                    By: BREA IV L.L.C., its general partner

                                        By:  /s/ Jonathan D. Gray
                                            ------------------------------------
                                            Name: Jonathan D. Gray
                                            Title: Senior Managing Director


                             /s/ Peter G. Peterson
                            ----------------------------------------------------
                            PETER G. PETERSON


                             /s/ Stephen A. Schwarzman
                            ----------------------------------------------------
                            STEPHEN A. SCHWARZMAN