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                                                                 Exhibit 10.4

                              EMPLOYMENT AGREEMENT


     THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into this
17th day of November, 1997 by and among Prime Group Realty Trust, a Maryland
real estate investment trust ("PGRT"), Prime Group Realty, L.P., a Delaware
limited partnership and the operating partnership for PGRT ("Prime") (Prime and
PGRT are hereinafter sometimes collectively referred to as "Employer"), and
Michael W. Reschke, an individual domiciled in the State of Illinois
("Executive").


                              W I T N E S S E T H

     A.   Employer is engaged primarily in the ownership, management,
leasing, marketing, acquisition, development and construction of office and
industrial real estate facilities throughout the United States.

     B.   Employer believes that it would benefit from the application of
Executive's particular and unique skill, experience, and background to the
development of office properties and the management thereof.

     C.   Executive wishes to commit to serve Employer in the position set
forth herein on the terms herein provided.

     D.   The parties wish by this Agreement to set forth the terms and
conditions of the employment relationship between Employer and Executive.

     NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants herein set forth, and for other good and valuable consideration,
Employer and Executive hereby agree as follows:

     1.   EMPLOYMENT AND DUTIES.  During the Employment Term (as defined in
Section 2 hereof), Employer agrees to employ Executive, and Executive agrees
to be employed by Employer, as the Chairman of the Board of Employer on the
terms and conditions provided in this Agreement.  Executive shall conduct,
operate, manage and promote the business and business concept of  Employer.
The Board of Directors of Employer may from time to time further define and
clarify Executive's duties and services hereunder as Chairman of the Board of
Employer. Executive agrees to devote Executive's sufficient time, attention,
energy and skill to perform Executive's duties as Chairman of the Board of
Employer. Executive shall have no obligation to devote full-time to
Executive's duties, it being expressly understood that Executive has other
professional and managerial duties and responsibilities to companies other
than Employer.  Further, during the Employment Term, Employer agrees to
recommend Executive to be elected as a member of the Board of Trustees of
PGRT (the "Board").

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     2.   TERM.  The initial term of this Agreement (the "Initial Term")
shall commence on November 17, 1997 and expire on November 17, 2000,
provided, however, this Agreement shall automatically extend for one year
terms following the Initial Term (each a "Renewal Term", together with the
Initial Term, the "Employment Term"), unless prior to six (6) months, in the
case of a non-renewal by Employer, or prior to thirty (30) days, in the case
of a non-renewal by Executive, before the end of the Initial Term or any
Renewal Term, as applicable, either party shall give the other written notice
of its intention to terminate this Agreement.

     3.   COMPENSATION AND RELATED MATTERS.  (a)  BASE SALARY.  As
compensation for performing the services required by this Agreement during
the Employment Term, Employer shall pay to Executive an annual salary of no
less than One Hundred Fifty Thousand Dollars ($150,000) ("Base
Compensation"), payable in accordance with the general policies and
procedures for payment of salaries to its executive personnel maintained,
from time to time, by Employer (but no less frequently than monthly), subject
to withholding for applicable federal, state, and local taxes.  Increases in
Base Compensation, if any, shall be determined by the Compensation Committee
(the "Committee") of the Board based on periodic reviews of Executive's
performance conducted on at least an annual basis.

          (b)   BONUS.  In addition to Base Compensation, the Board and the
Committee, in their sole and absolute discretion, may, but in no event shall
be obligated to, authorize the payment of a cash bonus (a "Performance Bonus
Distribution") to Executive based upon achievement of such corporate and
individual performance goals and objectives as may be established or
determined by the Board or the Committee from time to time.

          (c)  BENEFITS.  During the Employment Term and subject to the
limitations and alternative rights set forth in this Section 3(c), Executive
and Executive's eligible dependents shall have the right to participate in
the medical and dental benefit plan to be established by Employer (which may
include contributions by Executive) and in any other retirement, pension,
insurance, health or other benefit plan or program that has been or is
hereafter adopted by Employer (or in which Employer participates), as such
plans and programs may be amended or modified from time to time by Employer,
according to the terms of such plan or program with all the benefits, rights
and privileges as are enjoyed by any other executive officers of Employer.
Employer expects to have in place a life insurance program in which Executive
will be entitled to participate.  If the participation of Executive would
adversely affect the qualification of a plan intended to be qualified under
Section 401(a) of the Internal Revenue Code as the same may be amended from
time to time (the "Code"), Employer shall have the right to exclude Executive
from that plan in return for Executive's participation in (i) a nonqualified
deferred compensation plan or (ii) an arrangement providing substantially
comparable benefits under a plan that is either a qualified or nonqualified
under the Code at Employer's option.

          (d)  EXPENSES.  Executive shall be reimbursed, subject to
Employer's receipt of invoices or similar records as Employer may reasonably
request in accordance with its policies and procedures, as such policies and
procedures may be amended or modified from time to time by Employer, for all
reasonable and necessary expenses incurred by Executive in the performance of

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Executive's duties hereunder, including expenses for business entertainment
and meals (whether in or out of town) and gas for business travel, but
excluding automobile insurance.

     4.   SHARE OPTIONS.  PGRT has established a share incentive plan (the
"Share Incentive Plan").  The Share Incentive Plan initially provides, among
other things, for the issuance from time to time to certain officers,
directors and other employees of PGRT and Employer, including Executive, of
share options. Pursuant to the Share Incentive Plan, on the date hereof, PGRT
shall grant to Executive 175,000 share options ("Options") that will have
such terms and conditions as are set forth in the Share Incentive Plan and
the Share Option Agreement to be entered into between PGRT and Executive.
Such Options granted to Executive shall vest immediately (i) upon the death
or disability of Executive or (ii) upon termination of this Agreement and
Executive's employment for any reason other than (A) a termination for cause
by Employer or (B) or if Executive terminates Executive's employment for any
reason other than pursuant to Section 5(b)(i) hereof.  In the case of a
termination for cause or if Executive terminates Executive's employment for
any reason other than pursuant to Section 5(b)(i) hereof, all unvested
Options shall be forfeited by Executive, but Executive shall have the right
to exercise within the time period provided for in the Share Incentive Plan
all Options vested prior to such termination.

     5.   TERMINATION AND TERMINATION BENEFITS.  (a)  TERMINATION BY
EMPLOYER. (i)  WITHOUT CAUSE.  Employer may terminate this Agreement and
Executive's employment at any time for any reason or for no reason at all
upon thirty (30) days' prior written notice to Executive following notice of
termination.  In connection with the termination of Executive's employment
pursuant to this Section 5(a)(i), Executive shall (A) be paid Executive's
Base Compensation in accordance with Section 3(a) hereof up to the effective
date of such termination, (B) be paid a pro rata portion of any bonus
otherwise payable to Executive for or with respect to the calendar year in
which such termination occurs in accordance with Section 3(b) hereof up to
the effective date of such termination and, to the extent not previously
paid, Executive shall be entitled to all bonuses payable to Executive in
accordance with Section 3(b) hereof for or with respect to any calendar years
prior to the calendar year in which such termination occurs, (C) be entitled
to the benefits set forth in Sections 3(c) and 3(d) hereof up to the
effective date of such termination and (D) receive the Termination
Compensation specified in Section 5(e) hereof.  For purposes of calculating
Executive's pro rata portion of any bonus pursuant to clause (B) in the
previous sentence, if the termination takes place prior to receipt by
Executive of any Performance Bonus Distribution, the Performance Bonus
Distribution, a pro rata (based on the number of days in the year) portion of
which Executive shall be entitled to receive, shall be deemed to be 50% of
Executive's then current annual Base Compensation.  For purposes of this
Agreement, the "effective date of termination" shall mean the last day on
which Executive is employed with Employer which may be later than the date of
the delivery of any applicable notice of termination.

               (ii) WITH CAUSE.  Employer may terminate this Agreement with
cause immediately upon written notice to Executive.  Employer may elect to
require Executive to continue to perform Executive's duties under this
Agreement for an additional thirty (30) days following notice of termination.
 In connection with the termination of Executive's employment pursuant to
this Section 5(a)(ii), Executive shall (A) be paid Executive's Base
Compensation in accordance with


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Section 3(a) hereof up to the effective date of such termination, and, to the
extent not previously paid, Executive shall be entitled to any bonuses
payable to Executive in accordance with Section 3(b) hereof for or with
respect to any calendar years prior to the calendar year in which such
termination occurs and (B) be entitled to the benefits set forth in Sections
3(c) and 3(d) hereof up to the effective date of such termination.  For
purposes of this Section 5(a)(ii), "cause" shall mean (1) a finding by the
Board that Executive has materially harmed Employer, its business, assets or
employees through an act of dishonesty, material conflict of interest, gross
misconduct or willful malfeasance, (2) Executive's conviction of (or pleading
nolo contendere to) a felony, (3) Executive's failure to perform (which shall
not include inability to perform due to disability) in any material respects
Executive's material duties under this Agreement after written notice
specifying the failure and a reasonable opportunity to cure (it being
understood that if Executive's failure to perform is not of a type requiring
a single action to fully cure, then Executive may commence the cure promptly
after such written notice and thereafter diligently prosecute such cure to
completion), (4) the breach by Executive of any of Executive's material
obligations hereunder (other than those covered by clause (3) above) and the
failure of Executive to cure such breach within thirty (30) days after
receipt by Executive of a written notice of Employer specifying in reasonable
detail the nature of the breach, or (5) Executive's sanction (including
restrictions, prohibitions and limitations agreed to under a consent decree
or agreed order) under, or conviction for violation of, any federal or state
securities law, rule or regulation (provided that in the case of a sanction,
such sanction materially impedes or impairs the ability of Executive to
perform Executive's duties and exercise Executive's responsibilities
hereunder in a satisfactory manner).

               (iii)     DISABILITY.  If due to illness, physical or mental
disability, or other incapacity, Executive shall fail during any four (4)
consecutive months to perform the duties required by this Agreement, Employer
may, upon thirty (30) days' written notice to Executive, either terminate
this Agreement or suspend Executive's right to any Base Compensation or
Performance Bonus Distributions without terminating this Agreement.  In any
such event, Executive shall (A) be paid Executive's Base Compensation in
accordance with Section 3(a) hereof up to the effective date of such
termination, (B) be paid a pro rata portion of any bonus otherwise payable to
Executive for or with respect to the calendar year in which such termination
occurs in accordance with Section 3(b) hereof up to the first day of such
four (4) month period and, to the extent not previously paid, Executive shall
be entitled to all bonuses payable to Executive in accordance with Section
3(b) hereof for or with respect to any calendar years prior to the calendar
year in which such termination occurs and (C) be entitled to the benefits set
forth in Sections 3(c) (or the after-tax cash equivalent) and 3(d) hereof up
to the effective date of such termination. For purposes of calculating
Executive's pro rata portion of any bonus pursuant to clause (B) in the
previous sentence, if the termination takes place prior to receipt by
Executive of any Performance Bonus Distribution, the Performance Bonus
Distribution, a pro rata portion of which Executive shall be entitled to
receive, shall be deemed to be 50% of Executive's then current annual Base
Compensation.  In the event Employer elects to suspend Executive's right to
Base Compensation and Performance Bonus Distributions, at such time as
Executive is able to resume the duties required under this Agreement,
Executive shall be entitled to receive Base Compensation and Performance
Bonus Distributions from the date Executive commences the performance of such
duties following the disability in accordance with the terms and provisions
of this Agreement.  This Section 5(a)(iii) shall not limit the entitlement of
Executive,


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Executive's estate or beneficiaries to any disability or other benefits
available to Executive under any disability insurance or other benefits plan
or policy which is maintained by Employer for Executive's benefit.  For
purposes of this Agreement, the "date of disability" shall mean the first day
of the consecutive period during which Executive fails to perform the duties
required by this Agreement due to illness, physical or mental disability or
other incapacity.

          (b)  TERMINATION BY EXECUTIVE.  (i)  AFTER CHANGE OF CONTROL.
Executive may terminate this Agreement upon thirty (30) days' written notice
to Employer following any "change of control" of Employer and a resulting
"diminution event", each as defined below, but in no event later than two
years after the change of control event.  Executive shall continue to
perform, at the election of Employer, Executive's duties under this Agreement
for an additional thirty (30) days following notice of termination.  In such
event, Executive shall (A) be paid Executive's Base Compensation up to the
effective date of such termination, (B) be paid a pro rata portion of any
bonus otherwise payable to Executive for or with respect to the calendar year
in which such termination occurs in accordance with Section 3(b) hereof up to
the effective date of such termination and, to the extent not previously
paid, Executive shall be entitled to all bonuses payable to Executive in
accordance with Section 3(b) hereof for or with respect to any calendar years
prior to the calendar year in which such termination occurs, (C) be entitled
to the benefits set forth in Sections 3(c) and 3(d) hereof up to the
effective date of such termination and (D) receive the Termination
Compensation specified in Section 5(e) hereof.  For purposes of calculating
Executive's pro rata portion of any bonus pursuant to clause (B) in the
previous sentence, if the termination takes place prior to receipt by
Executive of any Performance Bonus Distribution, the Performance Bonus
Distribution, a pro rata portion of which Executive shall be entitled to
receive, shall be deemed to be 50% of Executive's then current annual Base
Compensation.  For purposes of this Agreement, in the event Employer defaults
in its obligation under Section 9 hereof and, as a consequence thereof,
Executive's employment with Employer (or Employer's successor or assign)
terminates, such termination shall be deemed to be a termination under this
Section 5(b)(i).

     For purposes of this Section 5(b)(i), (A) a "change of control" of
Employer shall be deemed to have occurred if: (1) any person (as such term is
used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")), including a "group" as defined in Section
13(d)(3) of the Exchange Act (but excluding The Prime Group, Inc. or any of
its affiliates or any group in which The Prime Group, Inc. or any of its
affiliates has a significant interest and excluding a trustee or other
fiduciary holding securities under an employee benefit plan of Employer),
becomes the beneficial owner of shares of beneficial interests or limited
partnership interests, as applicable, of Employer having at least fifty
percent (50%) of the total number of votes that may be cast for the election
of directors of Employer; (2) the merger or other business combination of
Employer, sale of all or substantially all of Employer's assets or
combination of the foregoing transactions (a "Transaction"), other than a
Transaction immediately following which the shareholders of Employer
immediately prior to the Transaction continue to have a majority of the
voting power in the resulting entity (excluding for this purpose any
shareholder, other than The Prime Group, Inc. and its affiliates, owning
directly or indirectly more than ten percent (10%) of the shares of the other
company involved in the Transaction); or (3) within any twenty-four (24)
month period beginning on or after the date hereof, the persons who were
directors of Employer immediately before the beginning of


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such period (the "Incumbent Directors") shall cease to constitute at least a
majority of the Board or a majority of the board of directors of any
successor to Employer, provided that, any director who was not a director as
of the date hereof shall be deemed to be an Incumbent Director if such
director was elected to the Board by, or on the recommendation of or with the
approval of, at least two-thirds of the directors who then qualified as
Incumbent Directors either actually or by prior operation of this provision,
unless such election, recommendation or approval was the result of an actual
or threatened election contest of the type contemplated by Regulation 14a-11
promulgated under the Exchange Act or any successor provision; and (B) a
"diminution event" shall mean any material diminution in (1) the duties and
responsibilities of Executive (other than a mere title change unless the new
title is not Chairman of the Board) or (2) the compensation package for
Executive.

               (ii)  WITHOUT GOOD REASON.  Executive may terminate this
Agreement and Executive's employment at any time for any reason or for no
reason at all upon thirty (30) days' written notice to Employer, during which
period Executive shall continue to perform Executive's duties under this
Agreement if Employer so elects.  In connection with the termination of
Executive's employment pursuant to this Section 5(b)(ii), Executive shall (A)
be paid Executive's Base Compensation in accordance with Section 3(a) hereof
up to the effective date of such termination, and, to the extent not
previously paid, Executive shall be entitled to all bonuses payable to
Executive in accordance with Section 3(b) hereof for or with respect to any
calendar years prior to the calendar year in which such termination occurs
and (B) be entitled to the benefits set forth in Sections 3(c) and 3(d)
hereof up to the effective date of such termination.

          (c)  DEATH.  Notwithstanding any other provision of this Agreement,
this Agreement shall terminate on the date of Executive's death.  In such
event, Executive shall (A) be paid Executive's Base Compensation in
accordance with Section 3(a) hereof up to the date of such death, (B) be paid
a pro rata portion of any bonus otherwise payable to Executive for or with
respect to the calendar year in which such death occurs in accordance with
Section 3(b) hereof up to the effective date of such death and, to the extent
not previously paid, Executive shall be entitled to all bonuses payable to
Executive in accordance with Section 3(b) hereof for or with respect to any
calendar years prior to the calendar year in which such death occurs and (C)
be entitled to the benefits set forth in Sections 3(c)  (or the after-tax
cash equivalent) and 3(d) hereof up to the date of such death.  This Section
5(c) shall not limit the entitlement of Executive, Executive's estate or
beneficiaries under any insurance or other benefits plan or policy which is
maintained by Employer for Executive's benefit.  For purposes of calculating
Executive's pro rata portion of any bonus pursuant to clause (B) in the
previous sentence, if the termination takes place prior to receipt by
Executive of any Performance Bonus Distribution, the Performance Bonus
Distribution, a pro rata portion of which Executive shall be entitled to
receive, shall be deemed to be 50% of Executive's then current annual Base
Compensation.

          (d)  REMOVAL AS DIRECTOR.  Notwithstanding any other provision of
this Agreement, if Executive shall be removed from office as a director of
Employer at any time during the Employment Term, then Executive may notify
Employer in writing of Executive's election to terminate this Agreement with
good reason upon written notice to Employer and such notice shall be
effective immediately upon receipt by Employer.  In such event, Executive
shall (A) be paid


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Executive's Base Compensation in accordance with Section 3(a) hereof up to
the effective date of such termination, (B) be paid a pro rata portion of any
bonus otherwise payable to Executive for or with respect to the calendar year
in which such termination occurs in accordance with Section 3(b) hereof up to
the effective date of such termination and, to the extent not previously
paid, Executive shall be entitled to all bonuses payable to Executive in
accordance with Section 3(b) hereof for or with respect to any calendar years
prior to the calendar year in which such termination occurs, (B) be entitled
to the benefits set forth in Sections 3(c) (or the after-tax cash equivalent)
and 3(d) hereof up to the effective date of such termination and (C) be
entitled to the Termination Compensation specified in Section 5(e) hereof.

          (e)  TERMINATION COMPENSATION.  In the event of a termination of
this Agreement pursuant to Section 5(a)(i), 5(b)(i) or 5(d) hereof, Employer
shall pay to Executive, within thirty (30) days of termination, an amount in
one lump sum ("Termination Compensation") equal to (i) in the case of a
termination pursuant to Section 5(a)(i) or 5(d) hereof, Executive's annual
Base Compensation as of the effective date of such termination, or (ii) in
the case of a termination pursuant to Section 5(b)(i) hereof, two times (A)
the average annual Base Compensation paid or payable to Executive for or with
respect to the two full calendar years immediately preceding the calendar
year in which the date of termination occurs, plus (B) the average annual
Performance Bonus Distribution paid or payable to Executive for or with
respect to the two full calendar years immediately preceding the calendar
year in which the date of termination occurs. For purposes of calculating
Employee's Termination Compensation pursuant to clause (ii) above, if the
termination takes place prior to December 31, 1999, the Termination
Compensation for any applicable calendar year in which the termination takes
place shall be determined as follows:

               (1)  if the termination takes place on or prior to December
31, 1998, the full Termination Compensation described in clause (d)(ii) above
shall be deemed to be 350% of Executive's Base Compensation for the 1998
calendar year; or

               (2)  if the termination takes place after December 31, 1998
but on or prior to December 31, 1999, the Performance Bonus Distribution
component of the Termination Compensation calculation described in clause
(d)(ii) above shall be deemed to be two times the average of (A) the amount
of the Performance Bonus Distribution paid to Executive or to which Executive
is entitled for the 1998 calendar year pursuant to Section 3(b) hereof and
(B) the greater of (1) 75% of Executive's Base Compensation for the 1998
calendar year or (2) 133% of the Performance Bonus Distribution paid to
Executive or to which Executive is entitled for the 1998 calendar year
pursuant to Section 3(b) hereof.

     6.   PRIOR AGREEMENTS.  This Agreement, together with the Stock
Incentive Plan, supersedes and is in lieu of any and all other employment
arrangements between Executive and Employer or its predecessor or any
subsidiary and any and all such employment agreements and arrangements are
hereby terminated and deemed of no further force or effect.

     7.   ASSIGNMENT.  Neither this Agreement nor any rights or duties of
Executive hereunder shall be assignable by Executive and any such purported
assignment by him shall be void.  Employer


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may assign all or any of its rights hereunder provided that substantially all
of the assets of Employer are also transferred to the same party.

     8.   SUCCESSOR TO EMPLOYER.  Employer will require any successor or
assign (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all the business and/or assets of
Employer, as the case may be, by agreement in form and substance reasonably
satisfactory to Executive, expressly, absolutely and unconditionally to
assume and agree to perform this Agreement in the same manner and to the same
extent that Employer would be required to perform it if no such succession or
assignment had taken place.  Any failure of Employer to obtain such agreement
prior to the effectiveness of any such succession or assignment shall be a
material breach of this Agreement giving Executive the right to terminate
this Agreement, in which case Executive shall be entitled to receive the
compensation specified in Section 5(b)(i) hereof.  This Agreement shall inure
to the benefit of and be enforceable by Executive's personal and legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees.  If Executive should die while any amounts are still
payable to Executive hereunder, all such amounts, unless otherwise provided
herein, shall be paid in accordance with the terms of this Agreement to
Executive's devisee, legatee or other designee or, if there be no such
designee, to Executive's estate.

     9.   NOTICES.  Any notice required or permitted to be given under this
Agreement shall be sufficient if in writing and if personally delivered, sent
by courier or by certified mail, postage or delivery charges prepaid, to the
following addresses:

     (a)  if to Executive, to:

          Michael W. Reschke
          c/o Prime Group Realty Trust
          77 W. Wacker Drive
          Suite 3900
          Chicago, IL 60601

     (b)  if to Employer, to:

          Prime Group Realty Trust
          Suite 3900
          77 West Wacker Drive
          Chicago, IL 60601
          Attn: Chief Executive Officer

          WITH A COPY TO:

          Prime Group Realty Trust
          Suite 3900
          77 West Wacker Drive
          Chicago, IL 60601


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          Attn: General Counsel

          AND TO:

          Winston & Strawn
          35 West Wacker Drive
          Chicago, IL  60601
          Attn:  Wayne D. Boberg

Any notice, claim, demand, request or other communication given as provided
in this Section 9, if delivered personally, shall be effective upon delivery;
and if given by courier, shall be effective one (1) business day after
deposit with the courier if next day delivery is guaranteed; and if given by
certified mail, shall be effective three (3) business days after deposit in
the mail.  Either party may change the address at which it is to be given
notice by giving written notice to the other party as provided in this
Section 9.

     10.  AMENDMENT.  This Agreement may not be changed, modified or amended
except in writing signed by both parties hereto.

     11.  WAIVER OF BREACH.  The waiver by either party of the breach of any
provision of this Agreement shall not operate or be construed as a waiver of
any subsequent breach by either party.

     12.  SEVERABILITY.  Employer and Executive each expressly agree and
contract that it is not the intention of either party to violate any public
policy, statutory or common law, and that if any covenant, sentence,
paragraph, clause or combination of the same of this Agreement (a
"Contractual Provision") is in violation of the law of any state where
applicable, such Contractual Provision shall be void in the jurisdictions
where it is unlawful, and the remainder of such Contractual Provision, if
any, and the remainder of this Agreement shall remain binding on the parties
such that such Contractual Provision shall be binding only to the extent that
such Contractual Provision is lawful or may be lawfully performed under then
applicable laws.  In the event that any part of any Contractual Provision of
this Agreement is determined by a court of competent jurisdiction to be
overly broad thereby making the Contractual Provision unenforceable, the
parties hereto agree, and it is their desire, that such court shall
substitute a judicially enforceable limitation in its place, and that the
Contractual Provision, as so modified, shall be binding upon the parties as
if originally set forth herein.

     13.  INDEMNIFICATION BY EXECUTIVE.  Executive shall indemnify Employer
for any and all damages, costs and expenses resulting from any material harm
to Employer, its business, assets or employees through an act of dishonesty,
material conflict of interest, gross misconduct or willful malfeasance by
Executive.  Executive also shall indemnify Employer for any and all damages,
costs and expenses resulting from Executive's acts of omission constituting
reckless disregard of Executive's duties to Employer following notice thereof
by Employer after it becomes aware of such conduct and Executive's failure to
so cure within thirty (30) days.


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<PAGE>

     14.  GOVERNING LAW.  This Agreement shall be governed by, and construed,
interpreted and enforced in accordance with the laws of the State of
Illinois, exclusive of the conflict of laws provisions of the State of
Illinois.

                               [signature page follows]


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<PAGE>

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.

                                   EMPLOYER:

                                   PRIME GROUP REALTY TRUST


                                   By:   /s/ Richard S. Curto
                                         -------------------------------

                                   Title:  President
                                         -------------------------------


                                   PRIME GROUP REALTY, L.P.

                                   By:  Prime Group Realty Trust,
                                        its General Partner

                                        By:   /s/ Richard S. Curto
                                              --------------------------

                                        Title:  President
                                              --------------------------

                                   EXECUTIVE:

                                   /s/ Michael W. Reschke
                                   -------------------------------------
                                   Michael W. Reschke


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