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Marvin Traub Associates, Inc.
July 3, 1996
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                                  July 3, 1996

Marvin Traub Associates, Inc.
535 Madison Avenue
3rd Floor
New York, New York  10022

    RE:  Consulting Agreement 

Gentlemen:

    On November 1, 1993, The Prime Group, Inc. (the "Company") and Marvin 
Traub Associates, Inc. ("MTA") entered into a letter agreement of that date 
pursuant to which MTA agreed to provide certain consulting and advisory 
services on behalf of the Company in connection with the Company's general 
marketing concepts, shopping center development activities and retail tenant 
relations (the "1993 Agreement").  Since the date of the 1993 Agreement, the 
retail division of the Company formed Prime Retail, L.P. ("Prime"), a 
separate public entity, to engage in retail development activities. The 
purpose of this letter is to confirm that all of the Company's rights and 
obligations under the 1993 Agreement have been assigned to Prime, and that 
the services currently provided by MTA pursuant to the 1993 Agreement are 
provided on behalf of Prime and shall continue to be provided on behalf of 
Prime pursuant to the following terms and conditions specified herein.  Upon 
full execution of this letter agreement by Prime and MTA, this letter 
agreement shall supersede the 1993 Agreement in its entirety.

    1.  Engagement.  Prime retains MTA to perform, and MTA hereby agrees to 
perform, consulting and advisory services for Prime during the Term (as 
hereinafter defined) in connection with Prime's general marketing concepts, 
shopping center development activities and retail tenant relations.  In 
addition to the foregoing, Prime may seek to engage MTA on behalf of itself 
and its affiliates in respect of additional real estate activities both in 
the United States and abroad on such terms and conditions as the parties 
shall mutually agree.

    Such consulting and advisory services shall be performed at such times 
(to be consistent with other contractual commitments of MTA) and at such 
locations as shall be mutually satisfactory to MTA and Prime.  MTA is being 
engaged as an independent contractor and will not be an agent of Prime, and, 
except as provided in Paragraph 5 hereof, directors, officers and employees 
of MTA shall act solely on behalf of MTA and shall not be directors, 
officers, employees or agents of Prime.

    The services to be performed by MTA hereunder shall be performed by 
Marvin S. Traub.

    2.  Cash Compensation and Expenses.  Prime shall pay to MTA $5,000 per 
month for its services during the Term.  Prime will not withhold any wage or 
employment taxes in respect to such compensation, but will issue MTA 
information reports relating thereto, as required by applicable law and 
regulations.

    MTA also will be reimbursed by Prime for all reasonable business and 
travel expenses incurred or paid by MTA during the Term in the course of 
MTA's performance of services for Prime hereunder, promptly following 
submission of customary documentation therefor.

    3.  Stock Options.  Upon Marvin S. Traub's initial election as a director 
of Prime Retail, Inc., Prime Retail, Inc. granted to MTA options to acquire 
15,000 shares of common stock of Prime Retail, Inc. at a per share exercise 
price equal to the initial public offering price of shares of Prime Retail 
Inc.'s common stock (the "First Grant").  The options granted pursuant to the 
First Grant are exercisable at any time or from time to time from the date of 
grant until ninety (90) days after Marvin S. Traub ceases to be a director of 
Prime Retail, Inc.  In addition to the foregoing, Prime Retail, Inc. shall 
grant to MTA options to acquire an additional 30,000 shares of common stock 
of Prime Retail, Inc. at the close of business on July 3, 1996 at a per share 
exercise price equal to the "Fair Market Value" per share of common stock of 
Prime Retail, Inc. as determined in accordance with Section 2.13(b) of the 
Prime Retail, Inc. 1995 Stock Incentive Plan (the "Second Grant").  The 
options granted pursuant to the Second Grant shall be exercisable at any time 
or from time to time from the date of grant until ninety (90) days after 
Marvin S. Traub ceases to be a director of Prime Retail, Inc.

    4.  Term.  The term (the "Term") of MTA's consultancy hereunder shall 
commence on the date hereof and shall end at such time as Marvin S. Traub 
shall cease to serve as a director of Prime Retail, Inc. 

    5.  Directorship.  Marvin S. Traub agrees to continue to serve as a 
member of the board of directors of Prime Retail, Inc.
 

    6.  Confidential Information.  During the Term, MTA shall, and shall 
cause its directors, officers and employees to, keep secret and retain in 
strictest confidence, and shall not use for its benefit or the benefit of 
others, nor permit its directors, officers or employees to use for their 
benefit or the benefit of others, any and all confidential information 
relating to Prime disclosed to MTA in the course of its consultancy, 
including, without limitation, trade secrets, customer lists and other secret 
or confidential aspects of Prime's business, and 

MTA shall not disclose such information, nor permit its directors, officers 
or employees to disclose such information to anyone outside Prime or any of 
its affiliates, except in the performance by MTA of its services hereunder or 
as required by law in connection with any judicial or administrative 
proceeding or inquiry (provided prior written notice thereof is given by MTA 
to Prime) or with Prime's prior written consent, unless such information is 
known generally to the public or the trade through sources other than MTA's 
(or its directors', officers' or employees') unauthorized disclosure.

    7.  Entire Agreement.  This Agreement contains the entire Agreement 
between the parties hereto with respect to the subject matter hereof and 
supersedes all other agreements (including the 1993 Agreement) and 
understandings with respect thereto, oral or otherwise.

    8.  Amendment.  No amendment, modification or waiver of this agreement or 
any of its provisions shall be binding unless made in writing and signed by 
both parties hereto, except in the case of a waiver or consent, which shall 
be signed by the party against which enforcement is sought.

    9.  Governing Law.  This Agreement shall be governed by and construed in 
accordance with the laws of the State of New York applicable to agreements 
made and to be performed entirely within such state.

    10.  Counterparts.  This Agreement may be executed in one or more 
counterparts, each of when which when taken together shall constitute one and 
the same instrument.

 


    If the foregoing accurately reflects the agreement between us, please 
confirm your approval and acceptance of the terms and conditions of the 
agreement set forth herein by signing the enclosed copy of this letter and 
returning it to the undersigned.

                             Very truly yours,

                             PRIME RETAIL, L.P.

                             By:  Prime Retail, Inc.


                                  By:  /s/ C. Alan Schroeder
                                       --------------------------------
                                       C. Alan Schroeder
                                       Senior Vice President -
                                       General Counsel and Secretary

Agreed and Accepted as of
the Date Written Above:


MARVIN TRAUB ASSOCIATES, INC.



By:   /s/ Marvin S. Traub
      -----------------------------------
      Marvin S. Traub
      Chairman

      /s/ Marvin S. Traub
------------------------------------------
      Marvin S. Traub