AMENDMENT TO
                              EMPLOYMENT AGREEMENT


     The EMPLOYMENT  AGREEMENT (the "Agreement"),  dated as of January 10, 2002,
by and between Prime Retail,  Inc., a Maryland  corporation  ("Prime"),  and the
sole general partner of Prime Retail,  L.P., a Delaware limited partnership (the
"Operating Partnership"), and David G. Phillips (the "Executive"), is amended by
this  Amendment,  effective June 6, 2002 (unless  otherwise noted herein) in the
following respects:

     1.  Section  2 of the  Agreement  is hereby  deleted  in its  entirety  and
replaced with the following:

                  2.       Term.
                           ----

                  The  term  of  this  Agreement,  unless  earlier terminated in
                  accordance  with  the terms of this Agreement,  will extend to
                  June 6, 2005 (the "Original Term"); provided, however, that if
                  this  Agreement  is  not  affirmatively  terminated  by either
                  party,  or  extended  or  renewed  for  a specific duration in
                  writing by agreement of the parties, prior to the  last day of
                  the  Original  Term,   this   Agreement  will  continue  on  a
                  month-to-month  basis  thereafter  (the  "Extended Term"). The
                  parties  agree  to  cooperate  and discuss in good faith their
                  intentions  with  regard  to  this  Agreement's  extension  or
                  renewal  12  months  prior  to  the  end of the Original Term.
                  Notwithstanding  the  foregoing, the Company agrees to provide
                  Executive with a minimum of six months' advance written notice
                  of its intent to terminate  this Agreement during the Original
                  Term or the Extended  Term for any reason other than Cause, in
                  which   case   the   Company  shall  comply  with  the  notice
                  requirements of Sections 4(a)(2) and (3) hereof, and Executive
                  agrees  to  provide  the  Company  with a  minimum of 60 days'
                  advance  written  notice  of  his  intent  to  terminate  this
                  Agreement  during  the  Original Term or the Extended Term for
                  any  reason  other  than  Good Reason, in which case Executive
                  shall  comply   with   the   notice  requirements  of  Section
                  4(b)(1)(E) hereof.  The Original Term and any Extended Term of
                  this Agreement shall end only following termination by written
                  notice by the Company  or  Executive  in  accordance with this
                  Section.  For purposes of this Agreement,  the terms "Original
                  Term"  and   "Extended  Term"  shall  herein  be  collectively
                  referred to as the "Term."

     2.  Section  3(a) of the  Agreement  is hereby  deleted in its entirety and
replaced with the following:

                  (a) Base Salary.  For  the  period beginning June 10, 2002 and
                  extending throughout the Term of this Agreement, the Operating
                  Partnership  agrees  to  pay  to Executive a base salary in an
                  aggregate  amount of  $300,000  per calendar year,  payable in
                  accordance  with  the  general  policies  and  procedures  for
                  payment  of  salaries  to any other executive personnel of the
                  Company but in all  events  payable  no  less  frequently than
                  monthly. The then applicable  amount  of  yearly  base  salary
                  payable  to  Executive  pursuant  to  the  provisions  of this
                  Section 3(a) shall herein be referred to as the "Base Salary."
                  The Base Salary payable to Executive pursuant to the

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                  provisions  of  this Section 3(a) shall be subject to periodic
                  review by the Compensation Committee of the Board of Directors
                  of Prime  (the "Committee")  based  upon  periodic  review  of
                  Executive's  performance conducted on at least an annual basis
                  and  may  be  periodically  increased  as  a  result  thereof;
                  provided,  however,  that the Base Salary payable to Executive
                  pursuant  to  the  provisions of this Section 3(a) shall in no
                  event be less than the aggregate amount set forth in the first
                  sentence  of this paragraph.  In no event may Executive's Base
                  Salary be  reduced during the Term without his express written
                  consent.

     3. The last  sentence  of  subsection  (1) in  Section  3(b),  "Performance
Bonus," is hereby deleted in its entirety and replaced with the following:

                  Any  amount  of  Performance  Bonus  required  to  be  paid to
                  Executive  for  a  calendar  year  during  the  Term  of  this
                  Agreement  shall  be  paid  by the Company to Executive on the
                  earlier  of  (x) the  pay  period  of  the  Company  following
                  finalization  of  the  audit  for such calendar year and final
                  review and  approval of the bonus calculation by the Committee
                  or (y)  February 28  (or  the next business day) of  the  year
                  immediately following the end of  the calendar  year for which
                  such Performance Bonus is attributable.

     4. The  following  paragraph  is hereby  added at the end of Section  3(g),
"Stock Options":

                  As   additional   consideration   for  Executive's  employment
                  hereunder,  as  of  June 6, 2002  (the "Date of Grant"), Prime
                  granted Executive an option (the "Option") to purchase 300,000
                  shares of Prime's common stock, par value $0.01 per share (the
                  "Common Stock").  The purchase price per share was $0.11  (the
                  "Exercise Price").  The  Option  is  subject  to the terms and
                  conditions contained in the Stock Award Agreement entered into
                  between  Prime  and  Executive,  which terms include:  (i) the
                  Option will have a term of ten years measured from the date of
                  grant;   (ii)  the  greatest  portion  of  the  Option  shares
                  allowable  will  be  issued  as  incentive  stock  options (as
                  determined  on  a  prorated basis for all recipients of option
                  awards on June 6, 2002); (iii) the Option shares will vest and
                  become  exercisable  as follows:  1/3 will vest upon the first
                  anniversary  of  the  Date  of  Grant,  1/3 will vest upon the
                  second  anniversary  of  the  Date of Grant, and 1/3 will vest
                  upon  the  third  anniversary  of  the Date of Grant, assuming
                  Executive's  employment  with  Prime  continues  through  such
                  dates;  (iv)  the  Option  will remain exercisable for 30 days
                  following termination of Executive for Cause, and in the event
                  of Executive's  termination of employment for any other reason
                  the Option will remain  exercisable for  90 days; and (v) upon
                  Executive's resignation for Good Reason or termination without
                  Cause (each as herein defined  and without regard to whether a
                  Change  of  Control  has  occurred)  during  the Term  of this
                  Agreement,  the   entire  Option,  in  addition  to all  other
                  outstanding options awarded by Prime to Executive, will become
                  fully  vested  and exercisable,  to the  extent not previously
                  exercised. Prime will take all steps necessary to  ensure that
                  all options held by Executive survive any Change of Control.

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     5. Subparagraph  4(d)(2) of the Agreement is hereby deleted in its entirety
and replaced with the following:

                  (2) a termination payment  in an amount equal to two times the
                  One-Year Pay Equivalent,  which amount shall be payable within
                  thirty (30) days of the effective date of termination;

     6. The following sentence is hereby added at the end of Section 4(d):

                  The termination benefits pursuant to subsections (a) to (d) of
                  this Section 4 are mutually exclusive, and Executive shall not
                  be entitled  to seek  termination benefits under more than one
                  such subsection (other than as described in the last paragraph
                  of Section 4(a)(1)).

     7. This Amendment may be executed in one or more  counterparts  which taken
together shall constitute one and the same instrument.


EXECUTIVE:

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         David G. Phillips


PRIME  RETAIL,  INC.,  a Maryland  corporation  PRIME  RETAIL,  L.P., a Delaware
limited partnership



By:___________________________              By:      Prime Retail, Inc.
Name:_________________________              Its:     Sole General Partner
Title:________________________              By:____________________________
                                            Name:__________________________
                                            Title:_________________________