<PAGE>







             8.5% Series B Cumulative Participating Preferred Stock
                    (Liquidation Preference $25.00 Per Share)

                             ARTICLES SUPPLEMENTARY

                               PRIME RETAIL, INC.

                           ___________________________

        Articles Supplementary Classifying and Designating 637,325 Shares
                              of Preferred Stock as
       8.5% Series B Cumulative Participating Convertible Preferred Stock
                 and 318,663 Shares of Excess Preferred Stock as
                         Excess Series B Preferred Stock

 <PAGE>


                               PRIME RETAIL, INC.

                                   ___________

        Articles Supplementary Classifying and Designating 637,325 Shares
                              of Preferred Stock as
       8.5% Series B Cumulative Participating Convertible Preferred Stock
                 and 318,663 Shares of Excess Preferred Stock as
                         Excess Series B Preferred Stock

                                   ___________

     Prime Retail, Inc., a Maryland corporation (the "Corporation"),  having its
principal  office  in the State of  Maryland  in the City of  Baltimore,  hereby
certifies to the State Department of Assessments and Taxation of Maryland that:

     The  Corporation's  Amended  and  Restated  Articles of  Incorporation,  as
amended  through  the  dated  hereof  (the  "Articles")  set  forth  the  terms,
preferences  and  rights  of (i) the  Corporation's  8.5%  Series  B  Cumulative
Participating Convertible Preferred Stock, $.01 par value per share (the "Series
B Preferred Stock") and (ii) the  Corporation's  Excess Series B Preferred Stock
(the "Excess Series B Preferred Stock").

     The Articles also authorize the Corporation to issue, among other shares of
capital stock, 150,000,000 shares of Common Stock, $.01 par value per share (the
"Common Stock"),  10,295,898 shares of Preferred Stock, $.01 par value per share
(the "Preferred  Stock"),  and 7,412,100 shares of Excess Preferred Stock,  $.01
par value per share (the "Excess Preferred Stock").

     Pursuant to authority conferred upon the Board of Directors by the Articles
and  Bylaws of the  Corporation,  the  Board of  Directors  adopted  resolutions
authorizing   the  issuance  of  Series  B  Preferred   Stock  as  part  of  the
consideration  related to the merger  transactions of the Corporation which were
consummated on June 15, 1998.

     In accordance  with the foregoing,  the number of shares of Preferred Stock
to be designated as Series B Preferred  Stock and the number of shares of Excess
Preferred  Stock to be  designated  as Excess  Series B Preferred  Stock and the
other terms and conditions of such shares of capital stock, as determined by the
Board of Directors, are as follows:

                  Section 1.

          (a) Designation of Additional  Shares of Series B Preferred  Stock. Of
     the  10,295,898  shares of  Preferred  Stock  authorized  by the  Articles,
     637,325 are hereby designated as Series B Preferred Stock and the number of
     shares which shall constitute such series shall be increased by 637,825.


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          (b) Other rights, terms and conditions.The preferences, rights, voting
     powers,   restrictions,   limitations  as  to  dividends,   qualifications,
     redemption rights, voting powers, dividend rate and other rights, terms and
     conditions  of the shares  hereby  designated  as Series B Preferred  Stock
     shall be as set forth in the Articles.

                  Section 2.

          (a)  Designation  of  Additional  Shares of Excess  Series B Preferred
     Stock.  Of the  7,412,100  authorized  shares  of Excess  Preferred  Stock,
     318,663 are hereby  designated as Excess  Series B Preferred  Stock and the
     number of shares which shall  constitute  such series shall be increased by
     318,663.
                 
          (b) Other rights, terms and conditions.The preferences, rights, voting
     powers,   restrictions,   limitations  as  to  dividends,   qualifications,
     redemption rights, voting powers, dividend rate and other rights, terms and
     conditions  of the shares  hereby  designated  as Excess Series B Preferred
     Stock shall be as set forth in the Articles.

                            [signature page follows]

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          IN  WITNESS  WHEREOF,   the  Corporation  has  caused  these  Articles
     Supplementary  to be signed in its name and on its behalf by its  Executive
     Vice  President,   General  Counsel  and  Secretary  and  attested  by  its
     ________________  on this  _____  day of  ____________,  1998  and its said
     Executive Vice President,  General Counsel and Secretary acknowledged under
     penalties of perjury that these  Articles  Supplementary  are the corporate
     act of said Corporation and that to the best of his knowledge,  information
     and belief, the matters and facts set forth herein are true in all material
     respects.
                                                              PRIME RETAIL, INC.


                                             By:      __________________________
                                                               C. Alan Schroeder
                                               Executive Vice President, General
                                                           Counsel and Secretary


Attest:


________________________
Name:
Title: