Execution Copy

                               THIRD AMENDMENT TO
                              EMPLOYMENT AGREEMENT

     The EMPLOYMENT  AGREEMENT (the "Agreement"),  dated as of June 11, 2000, 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 Robert A. Brvenik (the "Executive"), as amended by
the first Amendment thereto, effective April 2, 2001, and further amended by the
Second  Amendment  thereto,  effective June 6, 2002, is further  amended by this
Third Amendment, effective August 12, 2002 in the following respects:

     1.     Section  2,  "Term,"  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 December 31, 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.     Subpart (B) of Section 4(a)(1) is hereby deleted in its entirety and
replaced with the following:

            (B)  if  such  termination  occurs  during   the  Original  Term,  a
            termination  payment  in  an  amount equal to the product of (x) the
            number of full and partial years remaining in the Original Term, and
            (y) the sum  of (i) Executive's then  current Base Salary and (ii) a
            bonus payment  equal to 100% of the average annual bonus (which term
            shall  exclude  awards  received  pursuant to the Prime Retail, Inc.
            2002  Long-Term Incentive Plan)  paid to  Executive for the two most
            recent  calendar  years in which he  received a bonus, or if no such
            bonus payments were  made to Executive, a bonus payment equal to 50%
            of  his  then current Base Salary (the sum of the amounts determined
            by  adding  clauses (i) and (ii)  is  in  the  aggregate hereinafter
            referred  to  as  the "One-Year Pay Equivalent"), and the product of
            (x) and  (y) shall  be  payable  within  thirty  (30)  days  of  the
            effective date of termination;

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                                   Page - (2)


     3.     The following  subpart (E) is hereby added to Section 4(a)(1) of the
Agreement:

            (E) all vested but undistributed awards under the Prime Retail, Inc.
            2002 Long-Term  Incentive Plan,  payable  to Executive in accordance
            with the provisions of that plan.

     4.     The following  subpart (D) is hereby added to Section 4(a)(2) of the
Agreement:

            (D) receive  all  vested  but  undistributed  awards under the Prime
            Retail, Inc. 2002 Long-Term  Incentive Plan, payable to Executive in
            accordance with the provisions of that plan.

     5.     The  following  subpart  (E)  is  added  to  Section  4(a)(4) of the
Agreement:

            (E) all vested but undistributed awards under the Prime Retail, Inc.
            2002 Long-Term Incentive Plan, payable to Executive in accordance
            with the provisions of that plan.

     6.     Subpart (B) of Section 4(b)(1) is hereby deleted in its entirety and
replaced with the following:

            (B) any  earned  and  unpaid  bonus(es)  otherwise payable to him in
            accordance  with  Section 3(b),  and  all  vested  but undistributed
            awards  under  the Prime Retail, Inc. 2002 Long-Term Incentive Plan,
            payable to Executive in accordance with the provisions of that plan;

     7.     The following  sentence  is hereby added at the end of Section 4(c),
"Death":

            In addition, the Executive's estate shall be entitled to receive all
            vested  but  undistributed  awards under the Prime Retail, Inc. 2002
            Long-Term  Incentive Plan,  payable to the estate in accordance with
            the provisions of that plan.

     8.     Subpart (2) of  Section 4(d), "Termination  Following  A  Change  of
Control," 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; provided, however,
            that  if  Executive  has  received a milestone bonus under the Prime
            Retail, Inc. 2002 Long-Term  Incentive Plan the vesting of which was
            accelerated pursuant to Section 5.3(a)(iv) thereof but the amount of
            which was not  reduced  pursuant to the last sentence of Section 5.4
            thereof (the "Change of Control Accelerated Award"), the termination
            payment described in this subpart (2) shall be reduced by the amount
            that  such  Change  of  Control  Accelerated  Award  would have been
            reduced  pursuant  to  the last sentence of Section 5.4 of the Prime
            Retail, Inc. 2002  Long-Term  Incentive  Plan  had  the  termination
            payment  been  due and owing under this Section 4(d) at the time the
            Change of Control Accelerated Award was distributed to Executive;

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



EXECUTIVE:


/s/ Robert A. Brvenik
------------------------------
         Robert A. Brvenik

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


By:     /s/ Glenn D. Reschke              By:     Prime Retail, Inc.
        --------------------
Name:   GLENN D. RESCHKE                  Its:    Sole General Partner
Title:  CHAIRMAN AND CEO                  By:     /s/ Glenn D. Reschke
                                                  --------------------
                                          Name:   GLENN D. RESCHKE
                                          Title:  CHAIRMAN AND CEO