<PAGE>

                  NEBRASKA ASSIGNMENT AND ASSUMPTION AGREEMENT

     THIS ASSIGNMENT AND ASSUMPTION AGREEMENT, dated as of June 15, 1998
(this "Agreement"), by and among Prime Retail, Inc., a Maryland corporation and
successor in interest to the entities merged into it pursuant to the hereinafter
defined Horizon/Subsidiary Merger and the Prime/Horizon Merger ("Prime"), Prime
Retail, L.P., a Delaware limited partnership ("Prime Partnership"), Nebraska
Factory Shops Limited Partnership, an Illinois limited partnership ("Nebraska
Partnership"), and Nebraska Factory Shops L.L.C., a Delaware limited liability
company ("Nebraska LLC").

                                    RECITALS

     A.   THE MERGER TRANSACTIONS.  A formerly existing entity named Prime
Retail, Inc. which was combined to form Prime ("Old Prime"), Prime Partnership,
Horizon Group, Inc., a Michigan corporation ("Horizon"), Horizon/Glen Outlet
Centers limited partnership, a Delaware limited partnership ("Horizon
Partnership"), Sky Merger, a Maryland corporation ("Sky Merger"), Horizon Group
Properties, Inc., a Maryland corporation and Horizon Group Properties, L.P., a
Delaware limited partnership have entered into an Amended and Restated Agreement
and Plan of Merger, dated as of February 1, 1998 (the "Merger Agreement"),
providing for, among other things, (i) the merger of Horizon Partnership with
and into Prime Partnership, with Prime Partnership as the surviving partnership
(the "Partnership Merger"), (ii) the reincorporation of Horizon as a Maryland
corporation through the merger of Horizon with and into Sky Merger, with Sky
Merger as the surviving corporation (the "Horizon/Subsidiary Merger"), and
(iii) the merger of Old Prime with and into Sky Merger, with Sky Merger as the
surviving corporation which subsequently changed its name to Prime Retail, Inc.
(the "Prime/Horizon Merger") (the Partnership Merger, the Horizon/Subsidiary
Merger and the Prime/Horizon Merger being, collectively, the "Mergers"). 

     B.   THE ASSIGNMENT AND ASSUMPTION.  Immediately after the consummation of
the Mergers, Nebraska Partnership shall sell and assign the Purchased Assets and
the Purchased Business (each as hereinafter defined) to Nebraska LLC and
Nebraska LLC shall assume the Assumed Liabilities (as hereinafter defined) (the
"Assignment and Assumption").

     C.   PURPOSE.  The purpose of the Assignment and Assumption is to
facilitate the transactions contemplated by the Merger Agreement by providing
for the transfer  to Nebraska LLC of certain properties, businesses and
operations.  This Agreement sets forth or provides for certain agreements among
the parties hereto in connection with such transfer.

     NOW THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein, the
parties hereto hereby agree as follows:

<PAGE>

                                   ARTICLE I

                                  DEFINITIONS

     1.1  DEFINITIONS.  As used in this Agreement, the following terms shall
have the following respective meanings (capitalized terms used but not defined
herein shall have the respective meanings ascribed thereto in the Merger
Agreement):

     "Action" shall mean any suit, claim, action, arbitration, inquiry,
proceeding or investigation by or before any court, arbitral tribunal,
administrative agency or commission or other governmental, regulatory or
administrative agency or commission.

     "Assumed Liabilities" shall mean all Liabilities of Nebraska Partnership,
other than the Retained Liabilities, arising from the ownership or operation of
the Purchased Assets and shall include, without limitation, (i) all obligations
to indemnify present and former officers and directors of Nebraska Partnership
under certificates or articles of incorporation, by-laws, partnership
agreements, employment agreements, indemnification agreements or otherwise, for
any matter occurring after the Time of Assignment and Assumption, (ii) all
Liabilities relating to the loans described on the Schedule of Debt, and  (iii)
all leases (whether as lessor, lessee, sublessee, sublessor or otherwise) and
related contracts, and service contracts, relating to the Purchased Assets.

     "Indemnified Loss" shall mean, with respect to any claim by an Indemnified
Party for indemnification pursuant to Article III hereof, any and all losses,
Liabilities, claims, damages, obligations, payments, costs and expenses
(including, without limitation, the costs and expenses of any and all Actions,
demands, assessments, judgments, settlements and compromises relating thereto
and reasonable costs of investigation and attorneys' fees and expenses in
connection therewith) suffered by such Indemnified Party with respect to such
claim.

     "Liabilities" shall mean, with respect to any Person, except as otherwise
provided herein, any and all liabilities and obligations of such Person, whether
absolute, accrued, contingent, reflected on a balance sheet (or in the notes
thereto) or otherwise, including, without limitation, those arising under any
law, rule, regulation, Action, order or consent decree of any governmental
entity or any judgment of any court of any kind or any award of any arbitrator
of any kind, and those arising under any contract, commitment or undertaking.

     "Prime Partnership Group" shall mean, collectively, Prime, Prime
Partnership, and their Subsidiaries, including Nebraska Partnership, after
giving effect to the Assignment and Assumption.

     "Purchased Assets" shall mean, collectively, (i) all business, assets,
including cash, cash equivalents and other capital items, properties, interests
in property and rights of Nebraska Partnership primarily related to the
ownership and operation of the retail outlet center listed on Schedule 1.1(a)
hereto; and (ii) the Purchased Proprietary Name Rights (as hereinafter defined).


                                       2
<PAGE>

     "Purchased Business" shall mean all business and operations of Nebraska
Partnership  relating to the Purchased Assets.

     "Retained Liabilities" shall mean all Liabilities of the Prime Partnership
Group other than the Assumed Liabilities and shall include, without limitation,
all obligations to indemnify present and former officers and directors of Prime
Partnership Group under certificates or articles of incorporation or
organization, by-laws, partnership agreements, employment agreements,
indemnification agreements or otherwise arising for any matter occurring at or
prior to the Time of Assignment and Assumption.

     "Schedule of Debt" shall mean the Nebraska Partnership Schedule of Debt
attached as Schedule 1.1(b) hereto.

     "Time of Assignment and Assumption" shall mean the time of consummation of
the Assignment and Assumption.

                                   ARTICLE II

                           ASSIGNMENT AND ASSUMPTION

     2.1  ASSIGNMENT AND ASSUMPTION OF ASSETS.

          (a)  Subject to Section 2.1(b) and to the satisfaction or waiver of
the conditions set forth in Article IV of this Agreement, immediately subsequent
to the Mergers, Nebraska Partnership shall transfer, assign and convey to
Nebraska LLC all of its respective right, title and interest in and to the
Purchased Assets and the Purchased Business in accordance with the documents
executed pursuant to Section 2.3 hereof.

          (b)  At the Time of Assignment and Assumption, Nebraska LLC shall
issue to Nebraska Partnership, in partial consideration for the Assignment and
Assumption, one hundred percent (100%) of the membership interests in Nebraska
LLC.

     2.2  ASSUMPTION OF  LIABILITIES.  

          (a)  Subject to Section 2.2(b) and effective as of the Time of
Assignment and Assumption, Nebraska LLC, in partial consideration for the
Assignment and Assumption, hereby unconditionally assumes the Assumed
Liabilities.

          (b)  Notwithstanding Section 2.2(a), Nebraska Partnership shall
retain, and Nebraska LLC shall not assume and shall have no liability with
respect to, the Retained Liabilities.

     2.3  TRANSFER AND ASSUMPTION DOCUMENTATION.  In furtherance of the
Assignment and Assumption, grant, conveyance, assignment, transfer and delivery
of the Purchased Assets and the


                                       3
<PAGE>

assumption of the Assumed Liabilities set forth in this Article II, at the Time 
of Assignment and Assumption or as promptly as practicable thereafter (i) 
Nebraska Partnership shall execute and deliver such deeds, bills of sale, 
certificates of title, assignments of leases and contracts and other 
instruments of sale, grant, conveyance, assignment, transfer and delivery 
necessary to evidence such sale, grant, conveyance, assignment, transfer and 
delivery and (ii)  Nebraska LLC shall execute and deliver such instruments of 
assumption as and to the extent necessary to evidence such assumption.

     2.4  NONASSIGNABLE CONTRACTS.  Anything contained herein to the contrary
notwithstanding, this Agreement shall not constitute an agreement to assign any
lease, license agreement, contract, agreement, sale order, purchase order, open
bid or other commitment or asset if an assignment or attempted assignment of the
same without the consent of the other party or parties thereto would constitute
a breach thereof or in any way impair the rights after the Assignment and
Assumption of Prime Partnership Group or Nebraska LLC thereunder.  Prime
Partnership Group shall, prior to the Time of Assignment and Assumption, use
reasonable best efforts (it being understood that such efforts shall not include
any requirement of Prime Partnership Group to expend money or offer or grant any
financial accommodation) as requested by Nebraska LLC, and Nebraska LLC shall
cooperate in all reasonable respects with Prime Partnership Group, to obtain all
consents and waivers and to resolve all impracticalities of assignments or
transfers necessary to convey to Nebraska LLC the Purchased Assets.  If any such
consent is not obtained or if an attempted assignment would be ineffective or
would impair either group's rights under any such lease, license agreement,
contract, agreement, sale order, purchase order, open bid or other commitment or
asset so that Nebraska LLC would not receive all such rights, then Prime
Partnership Group shall use reasonable best efforts (it being understood that
such efforts shall not include any requirement of Prime Partnership Group to
expend money or offer or grant any financial accommodation) to provide or cause
to be provided to Nebraska LLC, to the extent permitted by law, the benefits of
any such lease, license agreement, contract, agreement, sale order, purchase
order, open bid or other commitment or asset.

     2.5  USE OF NAMES.  

          (a)  Prior to the Assignment and Assumption, Prime Partnership Group
and Nebraska LLC shall determine which of the names, trademarks, trade names and
other proprietary rights related to the Purchased Assets which Nebraska LLC
shall have the sole and exclusive ownership of and right to use, as between
Nebraska LLC, on the one hand, and Prime Partnership Group, on the other hand,
following the Time of Assignment and Assumption (the "Purchased Proprietary Name
Rights").  Following the Time of Assignment and Assumption, Prime  Partnership
Group shall have the sole and exclusive ownership of and right to use, as
between Nebraska LLC on the one hand, and the Prime Partnership Group on the
other hand, all names, trade marks, trade names, service marks and other
proprietary rights owned or used by Prime Partnership Group immediately prior to
the Time of Assignment and Assumption other than the Purchased Proprietary Name
Rights (the "Retained Proprietary Name Rights").

          (b)  Following the Assignment and Assumption (i)  Nebraska LLC shall
take all action necessary to cease using, and change as promptly as practicable
(including by amending any


                                       4
<PAGE>

charter documents), any corporate or other names which are the same as or 
confusingly similar to any of the Retained Proprietary Name Rights, and (ii) 
Prime shall, and shall cause its Subsidiaries and other affiliates to, take all 
action necessary to cease using, and change as promptly as practicable 
(including by amending any charter documents), any corporate or other names 
which are the same as or confusingly similar to any of the Purchased 
Proprietary Name Rights.  From and after the Closing Date, Nebraska LLC shall 
cease holding itself out as having an affiliation with Prime Partnership Group.

                                  ARTICLE III

                               CERTAIN COVENANTS

     3.1  INDEMNITY AS BETWEEN NEBRASKA LLC AND PRIME WITH RESPECT TO ASSUMED
AND RETAINED LIABILITIES.

          (a)  Effective upon the Assignment and Assumption, Nebraska LLC agrees
to indemnify and hold Prime, its affiliates, successors and assigns and the
officers, directors, employees, agents, advisors and representatives of any of
them, harmless from and against any and all Indemnified Losses arising out of or
related to the Assumed Liabilities.  

          (b)  Effective upon the Assignment and Assumption, Prime agrees to
indemnify and hold Nebraska LLC, its affiliates, successors and assigns and the
officers, directors, employees, agents, advisors and representatives of any of
them, harmless from and against any and all Indemnified Losses arising out of or
related to the Retained Liabilities.

     3.2  PROCEDURE FOR THIRD PARTY INDEMNIFICATION.  

          (a)  If a party entitled to be indemnified hereunder (an "Indemnified
Party") shall receive notice of the assertion by a person who is not a party to
this Agreement of any claim or of the commencement by any such person of any
Action (a "Third Party Claim") with respect to which a party hereto is obligated
to provide indemnification (an "Indemnifying Party"), such Indemnified Party
shall give such Indemnifying Party prompt notice thereof after becoming aware of
such Third Party Claim; provided that the failure of any Indemnified Party to
give notice as provided in this Section 3.2 shall not relieve the related
Indemnifying Party of its obligations under this Article III, except to the
extent that such Indemnifying Party is actually prejudiced by such failure to
give notice.  Such notice shall describe the Third Party Claim in reasonable
detail, and, if practicable, shall indicate the estimated amount of the
Indemnified Loss that has been or may be sustained by such Indemnified Party.

          (b)  An Indemnifying Party may elect to defend, at such Indemnifying
Party's own expense and by such Indemnifying Party's own counsel, any Third
Party Claim.  If an Indemnifying Party elects to defend a Third Party Claim, it
shall, within 30 days of notice of such Third Party Claim (or sooner, if the
nature of such Third Party Claim so requires), notify the related Indemnified


                                       5
<PAGE>

Party of its intent to do so and acknowledge its liability therefor, and such
Indemnified Party shall cooperate in the defense of such Third Party Claim. 
After notice from an Indemnifying Party to an Indemnified Party of its election
to assume the defense of a Third Party Claim, such Indemnifying Party shall not
be liable to such Indemnified Party under this Article III for any legal or
other expenses subsequently incurred by such Indemnified Party in connection
with the defense thereof as long as the Indemnifying Party pursues such defense
diligently and in good faith; provided that if, under applicable standards of
professional conduct (as advised by counsel to the Indemnifying Party), a
conflict on any significant issue between such Indemnified Party and such
Indemnifying Party or between any two or more Indemnified Parties may exist in
respect of such claim, then the Indemnifying Party shall pay the reasonable fees
and expenses of one such additional counsel as may be required to be retained in
light of such conflict.  If an Indemnifying Party elects not to defend against a
Third Party Claim, or fails to notify an Indemnified Party of its election as
provided in this Section 3.2 within the time period specified, or fails to
pursue the defense of a Third Party Claim diligently and in good faith, such
Indemnified Party may defend, compromise and settle such Third Party Claim. 
Notwithstanding the foregoing, (i) neither an Indemnifying Party nor an
Indemnified Party, as the party controlling the defense of a Third Party Claim,
may compromise or settle any claim or consent to the entry of any judgment for
other than monetary damages without the prior written consent of the other;
provided that (upon reasonable notice thereof) consent to compromise or
settlement or the entry of a judgment shall not be unreasonably withheld or
delayed, and (ii) no Indemnifying Party shall consent to the entry of any
judgment or enter into any compromise or settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party and all other Indemnified Parties, as the case may be, subject
to such Third Party Claim of a full and final release from all liability in
respect of such claim or Action.

     3.3  ADJUSTMENT FOR INSURANCE AND TAXES.  The amount which either Nebraska
LLC or Prime Partnership Group is required to pay to, for or on behalf of the
other pursuant to Sections 3.1 and 3.2, shall be adjusted (including, without
limitation, retroactively) (i) by any insurance proceeds actually recovered by
or on behalf of Nebraska LLC, Prime Partnership Group or the Indemnified Party,
as the case may be, in reduction of the related Indemnified Loss or Third Party
Claim and (ii) reduced by the net difference between (A) the present value of
the amount of any tax savings resulting from any tax benefit to Nebraska LLC,
Prime Partnership Group or the Indemnified Party, as the case may be, as a
result of the Indemnified Loss or Third Party Claim, and (B) the present value
of the amount of any tax due with respect to the receipt of the indemnification
payment itself.  Amounts required to be paid, as so adjusted, are hereafter
sometimes called an "Indemnified Payment."  If Nebraska LLC, Prime Partnership
Group or the Indemnified Party, as the case may be, shall have received or shall
have had paid on its behalf an Indemnified Payment in respect of an Indemnified
Loss or Third Party Claim and shall subsequently receive insurance proceeds in
respect of such Indemnified Loss or Third Party Claim, or realize any net tax
benefit (as computed in clause (ii) above) as a result of such Indemnified Loss
or Third Party Claim, then Nebraska LLC, Prime Partnership Group or the
Indemnified Party, as the case may be, shall pay to Nebraska LLC, Prime
Partnership or the Indemnified Party, as the case may be, the amount of such
insurance proceeds or net tax benefit, or if less, the amount of the Indemnified
Payment.


                                       6
<PAGE>

     3.4  RISK OF PURCHASED ASSETS.     Each party understands and agrees that,
except as otherwise specifically provided herein, no party nor any of its
Affiliates is, in this Agreement or any other agreement or document,
representing or warranting to such party in any way as to the assets, business
or Liabilities transferred, retained or assumed as contemplated hereby or as to
any consents or approvals required in connection with the consummation of the
transactions contemplated by this Agreement, it being agreed and understood that
each party shall take or keep all of its assets "AS IS", "WHERE IS" and that it
shall bear the economic and legal risk that conveyance of such assets shall
prove to be insufficient or that the title to any assets shall be other than
good and marketable and free from encumbrances.  ALL IMPLIED WARRANTIES,
INCLUDING WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE,
ARE HEREBY EXPRESSLY DISCLAIMED.

     3.5  TRANSFER OF EMPLOYEES.  Effective as of the Partnership Merger
Effective Time, Nebraska Partnership and Nebraska LLC shall cooperate to
transfer to the employ of Nebraska LLC, each person employed by Nebraska
Partnership, (such employees and other persons who become employees of Nebraska
LLC after the Partnership Merger Effective Time in accordance with this Section
3.5 shall be hereinafter referred to as the "Transferred Employees").  With
respect to the Transferred Employees, Nebraska LLC shall assume the liabilities
and obligations with respect to, and continue to be responsible for all
liabilities and obligations whatsoever in connection with, claims made by or on
behalf of such persons in respect of salary, wages, benefits, severance pay,
salary continuation, COBRA continuation and similar obligations relating to the
continued employment, or the termination or alleged termination of such persons'
employment with Nebraska LLC by reason of consummation of the transactions
contemplated in this Agreement or the Merger Agreement or otherwise and Nebraska
Partnership shall have no such liability.

     3.6  INSURANCE.  The parties agree to cooperate with each other with
respect to the processing of any claims which are covered by any insurance
policy in existence prior to the Partnership Merger Effective Time.  Without
limiting the generality of the foregoing, Nebraska Partnership or Prime
Partnership Group shall have the right to process and pursue any claim for
insurance (including negotiating with the company issuing the insurance policy)
in connection with any liability of Prime Partnership Group, regardless of
whether the insurance policy under which such claim is made is transferred to
Nebraska LLC pursuant to Section 2.1(a), and Nebraska LLC shall have the right
to process and pursue any claim for insurance (including negotiating with the
company issuing the insurance policy) in connection with any liability of
Nebraska LLC or any of its Affiliates, regardless of whether the insurance
policy under which such claim is made is retained by Nebraska Partnership
pursuant to Section 2.1(b).

     3.7  TRANSFER AND GAINS TAXES.  Nebraska LLC shall pay or cause to be paid
the Transfer and Gains Taxes imposed in connection with or as a result of the
Assignment and Assumption.


                                       7
<PAGE>

                                   ARTICLE IV

                                   CONDITIONS

     The obligations of the parties to consummate the Assignment and Assumption
shall be subject to the closing of the Mergers in accordance with the Merger
Agreement.

                                   ARTICLE V

                       ACCESS TO INFORMATION AND SERVICES

     5.1  PROVISION OF CORPORATE RECORDS.  At the Time of Assignment and 
Assumption, Prime Partnership Group shall deliver, or cause to be delivered, 
to Nebraska LLC all books and records which relate primarily to the Purchased 
Assets, Purchased Business or the Assumed Liabilities, including, without 
limitation, all active agreements, active litigation files and government 
filings.  From and after the Time of Assignment and Assumption, all such 
books, records and copies shall be the property of Nebraska LLC.

     5.2  ACCESS TO INFORMATION.  From and after the Time of Assignment and
Assumption (i) Prime  Partnership Group shall afford to Nebraska LLC and its
authorized accountants, counsel and other designated representatives reasonable
access (including, without limitation, using reasonable efforts to give access
to persons or firms possessing Information (as defined below)) and duplicating
rights during normal business hours to all records, books, contracts,
instruments, computer data and other data and information (collectively,
"Information") within Prime Partnership Group's possession relating to Nebraska
LLC, the Purchased Assets, the Purchased Businesses or the Assumed Liabilities,
insofar as such access is reasonably required by Nebraska LLC, and (ii) Nebraska
LLC shall afford to Prime Partnership Group and its authorized accountants,
counsel and other designated representatives reasonable access (including,
without limitation, using reasonable efforts to give access to persons or firms
possessing Information) and duplicating rights during normal business hours to
all Information within Nebraska LLC's possession relating to the Purchased
Assets, the Purchased Businesses or the Assumed Liabilities, insofar as such
access is reasonably required by Prime Partnership Group.  Information may be
requested under this Section 5.2 for, without limitation, audit, accounting,
claims, litigation and tax purposes, as well as for purposes of fulfilling
disclosure and reporting obligations.

     5.3  PRODUCTION OF WITNESSES.  From and after the Time of Assignment and
Assumption, each party shall use reasonable efforts to make available to the
other party, upon written request, its officers, directors, employees and agents
as witnesses to the extent that any such person may reasonably be required in
connection with any legal, administrative or other proceedings in which the
requesting party may from time to time be involved.

     5.4  RETENTION OF RECORDS.  Except as otherwise required by law or agreed
to in writing,  Prime shall cause Prime Partnership Group to, and Nebraska LLC
shall, retain for a period of at least


                                       8
<PAGE>

five years following the Time of Assignment and Assumption, all significant or 
mutual Information relating to the Purchased Assets, Assumed Liabilities, 
Retained Liabilities or Purchased Business.  Notwithstanding the foregoing, 
either Prime Partnership Group or Nebraska LLC may destroy or otherwise dispose 
of any of such Information at any time, provided that, prior to such 
destruction or disposal (a) Prime Partnership Group or Nebraska LLC, as the 
case may be, shall cause the Person seeking to destroy or otherwise dispose of 
any Information to provide no less than 90 days' or more than 120 days' prior 
written notice to the parties hereto, specifying the Information proposed to be 
destroyed or disposed of and (b) if any party shall request in writing prior to 
the scheduled date for such destruction or disposal that any of the Information 
proposed to be destroyed or disposed of be delivered to the other party, such 
Person shall promptly arrange for the delivery of such of the Information as 
was requested, at the expense of the requesting party.

     5.5  CONFIDENTIALITY.  Each party shall hold, and shall cause its officers,
directors, employees, agents, consultants and advisors to hold, in strict
confidence, unless compelled to disclose by judicial or administrative process
or by other requirements of law or in order to comply with the requirements of a
binding stock exchange listing application or agreement or applicable stock
exchange rules, all non-public Information concerning the other party furnished
it by such other party or its representatives or otherwise in its possession
(except to the extent that such Information can be shown to have been (a)
available to such party on a nonconfidential basis prior to its disclosure by
the other party, (b) in the public domain through no fault of such party or (c)
later lawfully acquired from other sources by the party to which it was
furnished), and each party shall not release or disclose such Information to any
other person, except its auditors, attorneys, financial advisors, bankers and
other consultants and advisors who have a need to know such Information and who
agree to be bound by the provisions of this Section 5.5.

                                      ARTICLE VI

                              MISCELLANEOUS AND GENERAL

     6.1  MODIFICATION OR AMENDMENT.  The parties hereto may modify or amend
this Agreement by written agreement executed and delivered by authorized
officers of the respective parties. 

     6.2  COUNTERPARTS.  For the convenience of the parties hereto, this
Agreement may be executed in separate counterparts, each such counterpart being
deemed to be an original instrument, and which counterparts shall together
constitute the same agreement.

     6.3  GOVERNING LAW.  This Agreement shall be governed by and construed in
accordance with the laws of the State of Illinois, without reference to its
conflicts of law principles.

     6.4  NOTICES.  Any notice, request, instruction or other document to be
given hereunder by any party to the other shall be in writing and shall be
deemed to have been duly given (i) on the date of delivery if delivered by
facsimile (upon confirmation of receipt) or personally, (ii) on the first


                                       9
<PAGE>

business day following the date of dispatch if delivered by Federal Express or
other reputable next-day courier service or (iii) on the third business day
following the date of mailing if delivered by registered or certified mail,
return receipt requested, postage prepaid.  All notices hereunder shall be
delivered as set forth below, or pursuant to such other instructions as may be
designated in writing by the party to receive such notice.

                    If to Nebraska LLC:

                    Horizon Group Properties, Inc.
                    5000 Hakes Drive
                    Norton Shores, MI 49441
                    Attention:   Gary J. Skoien
                    Fax: No.:    (616) 798-5100

                    with a copy to:

                    Winston & Strawn
                    35 West Wacker Drive
                    Chicago, IL 60601
                    Attention:   Wayne D. Boberg, Esq.
                    Fax No.:     (312) 558-5700

                    If to Prime, Prime Partnership, or Nebraska Partnership

                    Prime Retail, Inc.
                    100 East Pratt Street
                    19th Floor
                    Baltimore, Maryland 21202
                    Attention:   Michael W. Reschke
                                 C. Alan Schroeder
                    Fax No.:     (410) 234-1703

                    With a copy to:

                    Winston & Strawn
                    35 W. Wacker Drive
                    Chicago, Illinois 60601
                    Attention:   Wayne D. Boberg
                                 Steven J. Gavin
                    Fax No.:     (312) 558-5700


                                     10
<PAGE>

     6.5  CAPTIONS.  All Article, Section and paragraph captions herein are for
convenience of reference only, do not constitute part of this Agreement and
shall not be deemed to limit or otherwise affect any of the provisions hereof.

     6.6  ASSIGNMENT.  Nothing contained in this Agreement or the agreements
referred to herein (except as otherwise expressly set forth therein) is intended
to confer on any person or entity other than the parties hereto and their
respective successors and permitted assigns any benefit, rights or remedies
under or by reason of this Agreement and such other agreements, except that the
provisions of Section 3.1 and 3.2 hereof shall inure to the benefit of the
Persons referred to therein.

     6.7  FURTHER ASSURANCES.  Subject to the terms and conditions hereof and,
as applicable, of the Merger Agreement, the parties will, and will cause their
respective affiliates to, do such additional things as are necessary or proper
to carry out and effectuate the intent of this Agreement or any part hereof or
the transactions contemplated hereby.  The parties agree that if, after the Time
of Assignment and Assumption, either party holds assets or Liabilities which by
the terms hereof or of the Merger Agreement were intended to be assigned and
transferred to, or retained by, the other party, such party shall promptly
assign and transfer or cause to be assigned and transferred such assets or
Liabilities to the applicable party.

     6.8  ATTORNEY-CLIENT PRIVILEGE; WORK PRODUCT.  Anything herein or in the
Merger Agreement notwithstanding, the transactions contemplated hereby and by
the Merger Agreement shall not be deemed to transfer to or vest in Nebraska LLC
any right to waive, nor shall they be deemed to waive, any attorney-client
privilege between Prime Partnership Group and its legal counsel, with respect to
legal advice concerning the business or operations of Prime Partnership Group
including, without limitation, the Retained Liabilities or the transactions
contemplated hereby and by the Merger Agreement, in either case, concerning
privileged communications (or work product related thereto) at any time prior to
the Closing Date (as defined in the Merger Agreement).  Prime shall assign to
Nebraska LLC, and cause each member of Prime Partnership Group to assign to
Nebraska LLC, its rights (if any) to any attorney-client privilege with respect
to legal advice concerning the business or operations of Nebraska LLC including,
without limitation, the Assumed Liabilities or the transactions contemplated
hereby concerning privileged communications (or work product related thereto) at
any time prior the Closing Date.  Prime Partnership Group and their successors
and assigns shall not be entitled to waive or have access, nor shall they
attempt to waive or seek access, to any privileged communications (or work
product related thereto) between Nebraska LLC and its legal counsel with respect
to legal advice concerning the business or operations of the Nebraska LLC,
including the Assumed Liabilities or the transactions contemplated hereby.

     6.9  NO THIRD-PARTY BENEFICIARIES.  Except as provided in Section 3.1 and
3.2 hereof, this Agreement, is not intended to confer upon any person other than
the parties hereto and their Affiliates any rights or remedies hereunder.

                            [SIGNATURE PAGE FOLLOWS]


                                      11
<PAGE>

     IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by
the duly authorized officers of the parties hereto as of the date first
hereinabove written.


                              PRIME RETAIL, INC.

                              By:  /s/William H. Carpenter, Jr. 
                                   -------------------------------
                                   Name:  William H. Carpenter, Jr.
                                   Title: President


                              PRIME RETAIL, L.P.
                              By: Prime Retail, Inc., its general partner

                              By:  /s/William H. Carpenter, Jr. 
                                   -------------------------------
                                   Name:  William H. Carpenter, Jr.
                                   Title: President

                              
                              NEBRASKA CROSSING FACTORY SHOPS LIMITED 
                              PARTNERSHIP
                              By:  Prime Retail Finance Inc., its general
                                   partner

                              By:  /s/William H. Carpenter, Jr. 
                                   -------------------------------
                                   Name:  William H. Carpenter, Jr.
                                   Title: President


                              NEBRASKA CROSSING FACTORY SHOPS, L.L.C.
                              By: Nebraska Crossing Factory Shops Limited
                                       Partnership, its sole member


                              By:  /s/William H. Carpenter, Jr. 
                                   -------------------------------
                                   Name:  William H. Carpenter, Jr.
                                   Title: President


                                      12
<PAGE>

                                SCHEDULE 1.1(a)
                                      TO
                  NEBRASKA ASSIGNMENT AND ASSUMPTION AGREEMENT

     The Purchased Assets include, without limitation, the assets and business
of the retail outlet center located in Nebraska Crossing, Nebraska and known as
Nebraska Crossing Factory Shops.


                                      13
<PAGE>

                                SCHEDULE 1.1(b)
                                      TO
                  NEBRASKA ASSIGNMENT AND ASSUMPTION AGREEMENT


                                SCHEDULE OF DEBT

                                     None.


                                      14