Document:

EMPLOYMENT AGREEMENT

         THIS AGREEMENT is made and entered into this 31st day of December,
2001, by and between Business Continuity Services Group, Inc., having its
principal place of business in Bohemia, NY, hereinafter referred to as the
"Employer," and James F. Heil, hereinafter referred to as the "Employee."

1.       Employment. The Employer hereby  agrees to employ the  Employee  in the
         capacity of  president  of the Employer with  responsibilities  as
         determined  from time to time by the Board of Directors upon the terms
         and  conditions set out herein.

2.       Term. The term of this Agreement shall begin on the first day of the
         month following the date on which Employer has raised an aggregate
         cumulative total of $100,000 in debt and or equity financing, and shall
         terminate five years from such date. This Agreement shall automatically
         renew for an additional year on each contract anniversary date
         thereafter, unless either party gives sixty (60) days written notice to
         the other party of his intent not to renew for an additional period.

3.       Compensation. The Employer shall pay the Employee, as compensation for
         the services rendered by the Employee, an annual salary of $120,000 ,
         payable every two weeks. Salary payments shall be subject to
         withholding and other applicable taxes. Employer shall provide Employee
         with a medical insurance plan. If, at any time during the term of this
         agreement, the Employer has insufficient funds to pay Employee, the
         amount not paid will be accrued and paid to Employee when Employer has
         sufficient funds to do so.

4.       Expenses The Company will provide Employee with a suitable automobile
         or shall, in lieu of being furnished with a Company automobile, receive
         a monthly automobile allowance of not less than $350.00. The Company
         shall also reimburse Employee for all reasonable and necessary expenses
         incurred in carrying out his duties under this Agreement. Employee
         shall present to the Company from time to time an itemized account of
         such expenses in any form required by the Corporation. Such expenses
         shall be subject to review by the Audit Committee of the Board of
         Directors.

5.       Duties.  The Employee shall  perform,  for  the  Employer,  the  duties
         as  defined  by  the  Board  of Directors.

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6.       Extent of  Services. The Employee shall devote not less than 90 percent
         of his time, attention, and energies  to the  Employer's  business  and
         shall not, during the term of this  Agreement,  be engaged in any other
         business activity,  whether or not such  business  activity  is pursued
         for gain, profit, or other pecuniary advantage.  The  Employee  further
         agrees that he will perform all of the duties assigned to him to the
         best of his  ability and in a manner  satisfactory  to the  Employer,
         that he will truthfully and accurately  maintain all records,  preserve
         all such records,  and make all such reports as the  Employer  may
         require;  that he will  fully  account  for all money and all of the
         property  of the Employer  of which he may have  custody and will pay
         over and deliver the same whenever and however he may be directed to do
         so.

7.       Notices.  Any notice  required  or desired to be given  under this
         Agreement  shall be given in  writing, sent by certified  mail,  return
         receipt requested, to his residence in the case of the Employee,  or to
         its  principal place of business, in the case of the  Employer.

8.       Waiver of  Breach.  The waiver by the  employer  of a breach of any
         provision  of this  Agreement  by the Employee  shall not operate or be
         construed  as a waiver of any  subsequent  breach by the  Employee.  No
         waiver  shall be valid unless in writing and signed by the  Employer.

9.       Assignment.  The  Employee  acknowledges  that  the  services  to  be
         rendered by him are unique and personal.  Accordingly, the Employee may
         not assign any of his rights or delegate  any of his duties or
         obligations under this Agreement.  The rights  and  obligations  of the
         Employer under this  Agreement shall inure to the benefit  of and shall
         be binding upon the successors and assigns  of the Employer.

10.      Death during Employment. If the Employee dies during the term of
         employment, the Employer shall pay to the estate of the Employee one
         full month of compensation which would otherwise be payable to the
         Employee if the Employee were alive. In addition, the Employer shall
         allow the Estate of the Employee to maintain the ownership of any
         interest the Employee had in any and all distributorships.

11.      Vacations.  The Employee shall be entitled  each year to  vacation  and
         personal leave suitable and appropriate  to his  position.  During this
         time his  compensation shall be paid in full.

12.      Termination  by  Employee.   The  Employee  may  not  terminate  this
         Agreement   without  cause.  This Agreement  and the  employment of the
         Employee may be terminated by either party with stated cause upon 30
         days'  written  notice given by either  party to the other within 12
         months from the date of  commencement of employment  hereunder, or upon
         90 days' written notice with stated cause  thereafter.  Termination for
         cause shall include,  but not  necessarily be limited to (i) Employee's
         failure, refusal or inability to perform  satisfactorily  the  services
         required of him by the Board of Directors; (ii) Employee's commitment
         of an offense of moral  turpitude or offense  under  federal,  state or
         local laws;  and (iii) commission by Employee of an act of  disloyalty
         against the  Corporation  or the violation by Employee of any provision
         of this Agreement.

13.      Entire  Agreement.  This Agreement  contains the entire  understanding
         of the parties.  It may be changed only by an Agreement in writing,
         signed by the parties hereto.

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14.      Governing  Law.  This  agreement,  and  all  transactions  contemplated
         hereby, shall be governed by, construed and enforced in accordance with
         the laws of the State of New York.  The parties  herein waive trial by
         jury and agree to submit to the  personal  jurisdiction  and venue of a
         court of subject matter jurisdiction located in Suffolk  County,  State
         of New York. In the event that litigation results from or arises out of
         this  Agreement  or the  performance  thereof,  the  parties  agree  to
         reimburse the prevailing  party's  reasonable  attorney's  fees,  court
         costs, and all other expenses,  whether or not taxable  by the court as
         costs, in addition to any other  relief to which the  prevailing  party
         may be entitled.  In such event, no action shall be entertained by said
         court or any  court of competent jurisdiction  if filed  more  than one
         year subsequent to the date the cause(s) of action actually accrued
         regardless of whether damages were otherwise as of said  time
         calculable.

15.      Indemnity. The Employer shall indemnify the Employee and hold him
         harmless for any acts or decisions made by him in good faith while
         performing services for the Employer and will use its best efforts to
         obtain coverage for the Employee under any insurance policy now in
         force or hereinafter obtained during the term of this Agreement
         covering the other officers, and/or employees of the Employer against
         lawsuits. Employer shall pay all expenses, including attorney's fees,
         actually and necessarily incurred by the Employee in connection with
         any appeal thereon, including the cost of court settlements.

16.      Working  Facilities.  The Employee  shall be provided such  facilities
         and services as are suitable to his position and appropriate for the
         performance of his  duties.

17.      Contractual Procedures. Unless specifically disallowed by law, should
         litigation arise hereunder, service of process therefor may be obtained
         through certified mail, return receipt requested; the parties hereto
         waiving any and all rights they may have to object to the method by
         which service was perfected.

Business Continuity Services Group, Inc.

                                                          --------------
By:                                                        James F. Heil
   ---------------------------------------------

Its:
    ---------------------------------------------

<PAGE><PAGE>

                                                                     Exhibit 4.1

          THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING SET FORTH IN THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY
OR A NOMINEE OF A DEPOSITARY. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES
REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY
IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND, UNLESS AND UNTIL
IT IS EXCHANGED FOR SECURITIES IN DEFINITIVE FORM AS AFORESAID, MAY NOT BE
TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY
OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE
DEPOSITARY OR BY THE DEPOSITARY OR ITS NOMINEE TO A SUCCESSOR DEPOSITARY OR ITS
NOMINEE.

          UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY ("DTC"), 55 WATER STREET, NEW YORK, NEW YORK TO THE
ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
SUCH SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO., OR SUCH OTHER NAME
AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL, SINCE THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN.

CUSIP NO.:  69806L AB 0                                         PRINCIPAL AMOUNT
                                                                     $55,000,000

                       PAN PACIFIC RETAIL PROPERTIES, INC.
                           5.75% SENIOR NOTE DUE 2007

          Pan Pacific Retail Properties, Inc., a Maryland corporation (the
"Company," which term shall include any successor under the Indenture
hereinafter referred to), for value received, hereby promises to pay to Cede &
Co., or registered assigns, the principal sum of Fifty-Five Million Dollars on
June 29, 2007, and to pay interest thereon from the date of issuance, or from
the most recent date to which interest has been paid or duly provided for,
semiannually in arrears on June 29 and December 29 of each year (the "Interest
Payment Dates"), commencing December 29, 2002, at the rate of 5.75% per annum,
until the entire principal amount hereof is paid or made available for payment.
The interest so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, as provided in the Indenture, be paid to the Person
in whose name this Note (or one or more Predecessor Securities) is registered in
the security register applicable to this Note at the close of business on June
15 or December 15 (the "Regular Record Dates"), as the case may be, immediately
before the Interest Payment Date regardless of whether the Regular Record Date
is a Business Day. Any such interest not so punctually paid or duly provided for
shall forthwith cease to be payable to the Holder on such Regular Record Date,
and may either be paid to the Person in whose name this Note (or one or more
Predecessor Securities) is registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest to be fixed by the
Trustee,

<PAGE>

notice whereof shall be given to Holders of Notes of this series (as defined
below) not less than 10 days prior to such Special Record Date, or may be paid
at any time in any other lawful manner not inconsistent with the requirements of
any securities exchange on which the Notes may be listed, and upon such notice
as may be required by such exchange, all as more fully provided in the
Indenture. Interest will be computed on the basis of a 360-day year of twelve
30-day months. If any principal of or premium, if any, or interest on any of the
Notes is not paid when due, then such overdue principal and, to the extent
permitted by law, such overdue premium or interest, as the case may be, shall
bear interest, until paid or until such payment is duly provided for, at the
rate of 5.75% per annum.

          Payments of principal, premium, if any, and interest in respect of
this Note will be made by the Company in Dollars by wire transfer of immediately
available funds in such coin or currency of the United States of America as at
the time of payment is legal tender for payment of public and private debt;
provided that, in the event that this Note is issued in definitive certificated
form, the Holder hereof shall have given appropriate wire transfer instructions
to the Company and, in the event that such wire transfer instructions shall not
have been given to the Company by the Holder of any Note issued in definitive
certificated form, payments of interest on such Note may be made by mailing a
check for such interest to the address of such Holder as it appears on the
Security Register by transfer to an account maintained by the payee located in
the United States. The place where the principal of, premium, if any, and
interest on this Note shall be payable, where this Note may be surrendered for
the registration of transfer or exchange and where notices or demands to or upon
the Company in respect of the Notes and the Indenture may be served shall be the
office or agency maintained by the Company for such purpose in the Borough of
Manhattan, The City of New York, which shall initially be the Corporate Trust
Office of the Trustee at 101 Barclay St., Floor 21 West, New York, New York
10286.

          This Note is one of a duly authorized issue of Securities of the
Company (herein called the "Notes"), issued as a series of Securities under an
indenture dated as of April 6, 2001 (the "Indenture"), between the Company and
The Bank of New York, as trustee (the "Trustee," which term includes any
successor trustee under the Indenture with respect to the Notes), to which
Indenture and all indentures supplemental thereto reference is hereby made for a
statement of the respective rights, limitations of rights, duties and immunities
thereunder of the Company, the Trustee and the Holders of the Notes and of the
terms upon which the Notes are, and are to be, authenticated and delivered. This
Note is one of the duly authorized series designated as the 5.75% Senior Notes
due 2007," limited (subject to exceptions provided in the Indenture) in
aggregate principal amount to $55,000,000. All terms used in this Note which are
defined in the Indenture and not defined herein shall have the meanings assigned
to them in the Indenture.

          The Indenture contains provisions for defeasance at any time of (a)
the entire indebtedness of the Company on the Notes and (b) certain restrictive
covenants and the related defaults and Events of Default applicable to the
Company, in each case, upon compliance by the Company with certain conditions
set forth in the Indenture, which provisions apply to this Note.

          In addition to the covenants of the Company contained in the
Indenture, the Company makes the following covenants with respect to, and for
the benefit of the Holders of, the Notes:

          Limitation on Incurrence of Total Debt. The Company will not, and will
not permit any Subsidiary to, incur any Debt, other than Intercompany Debt, if,
immediately after giving effect to the incurrence of such additional Debt and
the application of the proceeds therefrom on a pro forma basis, the aggregate
principal amount of all outstanding Debt of the Company and its

<PAGE>

Subsidiaries on a consolidated basis determined in accordance with GAAP is
greater than 60% of the sum of (i) the Company's Total Assets as of the end of
the latest fiscal quarter covered in the Company's Annual Report on Form 10-K or
Quarterly Report on Form 10-Q, as the case may be, most recently filed with the
Commission (or, if such filing is not required under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), with the Trustee) prior to the
incurrence of such additional Debt and (ii) the increase, if any, in Total
Assets from the end of such quarter including, without limitation, any increase
in Total Assets caused by the application of the proceeds of such additional
Debt (such increase together with the Company's Total Assets is referred to as
the "Adjusted Total Assets").

          Limitation on Incurrence of Secured Debt. The Company will not, and
will not permit any Subsidiary to, incur any Secured Debt (including, without
limitation, Acquired Debt) other than Intercompany Debt, if, immediately after
giving effect to the incurrence of such additional Secured Debt and the
application of the proceeds therefrom on a pro forma basis, the aggregate
principal amount of all outstanding Secured Debt of the Company and its
Subsidiaries on a consolidated basis determined in accordance with GAAP is
greater than 40% of the Company's Adjusted Total Assets.

          Debt Service Coverage. The Company will not, and will not permit any
Subsidiary to, incur any Debt (including, without limitation, Acquired Debt)
other than Intercompany Debt, if the ratio of Consolidated Income Available for
Debt Service to the Annual Debt Service Charge for the period consisting of the
four consecutive fiscal quarters most recently ended prior to the date on which
such additional Debt is to be incurred is less than 1.5 to 1.0, on a pro forma
basis after giving effect to the incurrence of such Debt and the application of
the proceeds therefrom, and calculated on the assumption that (i) such Debt and
any other Debt (including, without limitation, Acquired Debt) incurred by the
Company or any of its Subsidiaries since the first day of such four-quarter
period and the application of the proceeds therefrom (including to refinance
other Debt since the first day of such four-quarter period) had occurred on the
first day of such period, (ii) the repayment or retirement of any other Debt of
the Company or any of its Subsidiaries since the first day of such four-quarter
period had occurred on the first day of such period (except that, in making such
computation, the amount of Debt under any revolving credit facility, line of
credit or similar facility shall be computed based upon the average daily
balance of such Debt during such period), and (iii) in the case of any
acquisition or disposition by the Company or any Subsidiary of any asset or
group of assets since the first day of such four-quarter period, including,
without limitation, by merger, stock purchase or sale, or asset purchase or sale
or otherwise, such acquisition or disposition had occurred on the first day of
such period with the appropriate adjustments with respect to such acquisition or
disposition being included in such pro forma calculation. If the Debt giving
rise to the need to make the foregoing calculation or any other Debt incurred
after the first day of the relevant four-quarter period bears interest at a
floating rate then, for purposes of calculating the Annual Debt Service Charge,
the interest rate on such Debt shall be computed on a pro forma basis as if the
average interest rate which would have been in effect during the entire such
four-quarter period had been the applicable rate for the entire such period.

          Maintenance of Total Unencumbered Assets. The Company will maintain at
all times Total Unencumbered Assets of not less than 150% of the aggregate
outstanding principal amount of the Unsecured Debt of the Company and its
Subsidiaries, computed on a consolidated basis in accordance with GAAP.

<PAGE>

          Certain Definitions. As used herein, the following terms will have the
meanings set forth below:

          "Acquired Debt" means Debt of a Person (i) existing at the time such
     Person is merged or consolidated with or into, or becomes a Subsidiary of,
     the Company or (ii) assumed by the Company or any of its Subsidiaries in
     connection with the acquisition of assets from such Person. Acquired Debt
     shall be deemed to be incurred on the date the acquired Person is merged or
     consolidated with or into, or becomes a Subsidiary of, the Company or the
     date of the related acquisition, as the case may be.

          "Annual Debt Service Charge" as of any date means the amount which is
     expensed in any 12-month period for interest on Debt of the Company and its
     Subsidiaries.

          "Consolidated Income Available for Debt Service" for any period means
     Consolidated Net Income plus, without duplication, amounts which have been
     deducted in determining Consolidated Net Income during such period for (i)
     Consolidated Interest Expense, (ii) provisions for taxes of the Company and
     its Subsidiaries based on income, (iii) amortization (other than
     amortization of debt discount) and depreciation, (iv) provisions for losses
     from sales or joint ventures, (v) provisions for impairment losses, (vi)
     increases in deferred taxes and other non-cash charges, (vii) charges
     resulting from a change in accounting principles, and (viii) charges for
     early extinguishment of debt, and less, without duplication, amounts which
     have been added in determining Consolidated Net Income during such period
     for (a) provisions for gains from sales or joint ventures, and (b)
     decreases in deferred taxes and other non-cash items.

          "Consolidated Interest Expense" for any period, and without
     duplication, means all interest (including the interest component of
     rentals on capitalized leases, letter of credit fees, commitment fees and
     other like financial charges) and all amortization of debt discount on all
     Debt (including, without limitation, payment-in-kind, zero coupon and other
     like securities) but excluding legal fees, title insurance charges, other
     out-of-pocket fees and expenses incurred in connection with the issuance of
     Debt and the amortization of any such debt issuance costs that are
     capitalized, all determined for the Company and its Subsidiaries on a
     consolidated basis in accordance with GAAP.

          "Consolidated Net Income" for any period means the amount of
     consolidated net income (or loss) of the Company and its Subsidiaries for
     such period determined on a consolidated basis in accordance with GAAP.

          "Debt" means any indebtedness of the Company or any Subsidiary,
     whether or not contingent, in respect of (i) money borrowed or evidenced by
     bonds, notes, debentures or similar instruments, (ii) indebtedness secured
     by any mortgage, pledge, lien, charge, encumbrance, trust deed, deed of
     trust, deed to secure debt, security agreement or any security interest
     existing on property owned by the Company or any Subsidiary, (iii) letters
     of credit or amounts representing the balance deferred and unpaid of the
     purchase price of any property except any such balance that constitutes an
     accrued expense or trade payable or (iv) any lease of property by the
     Company or any Subsidiary as lessee that is required to be reflected on the
     Company's consolidated balance sheet as a capitalized lease in accordance
     with GAAP, in the case of items of indebtedness under (i) through (iii)
     above to the extent that any such items (other than letters of credit)
     would appear as liabilities on the Company's

<PAGE>

     consolidated balance sheet in accordance with GAAP, and also includes, to
     the extent not otherwise included, any obligation of the Company or any
     Subsidiary to be liable for, or to pay, as obligor, guarantor or otherwise
     (other than for purposes of collection in the ordinary course of business),
     indebtedness of another person (other than the Company or any Subsidiary)
     of the type referred to in (i), (ii), (iii) or (iv) above (it being
     understood that Debt shall be deemed to be incurred by the Company or any
     Subsidiary whenever the Company or such Subsidiary shall create, assume,
     guarantee or otherwise become liable in respect thereof).

          "GAAP" means generally accepted accounting principles, as in effect
     from time to time, as used in the United States applied on a consistent
     basis.

          "Intercompany Debt" means indebtedness owed by the Company or any
     Subsidiary solely to the Company or any Subsidiary.

          "Secured Debt" means Debt secured by any mortgage, lien, charge,
     encumbrance, trust deed, deed of trust, deed to secure debt, security
     agreement, pledge, conditional sale or other title retention agreement,
     capitalized lease or other security interest or agreement granting or
     conveying security title to or a security interest in real property or
     other tangible assets.

          "Total Assets" as of any date means the sum of (i) Undepreciated Real
     Estate Assets and (ii) all other assets of the Company and its Subsidiaries
     determined on a consolidated basis in accordance with GAAP (but excluding
     accounts receivable and intangibles).

          "Total Unencumbered Assets" as of any date means Total Assets minus
     the value of any properties of the Company and its Subsidiaries that are
     encumbered by any mortgage, charge, pledge, lien, security interest, trust
     deed, deed of trust, deed to secure debt, security agreement or other
     encumbrance of any kind (other than those relating to Intercompany Debt),
     including the value of any stock of any Subsidiary that is so encumbered
     determined on a consolidated basis in accordance with GAAP. For purposes of
     this definition, the value of each property shall be equal to the purchase
     price or cost of each such property and the value of any stock subject to
     any encumbrance shall be determined by reference to the value of the
     properties owned by the issuer of such stock as aforesaid.

          "Undepreciated Real Estate Assets" as of any date means the amount of
     real estate assets of the Company and its Subsidiaries on such date, before
     depreciation and amortization, determined on a consolidated basis in
     accordance with GAAP.

          "Unsecured Debt" means Debt of the Company or any Subsidiary that is
     not Secured Debt.

          The Notes may be redeemed at any time at the option of the Company, in
whole or from time to time in part, at a redemption price equal to the sum of
(i) the principal amount of the Notes being redeemed plus accrued interest
thereon to the redemption date and (ii) the Make-Whole Amount (as defined
below), if any, with respect to such Notes (the "Redemption Price"); provided
that installments of interest on Notes which are payable on Interest Payment
Dates falling on or prior to the relevant redemption dates shall be payable to
the Holders of such Notes (or one or more predecessor Notes) registered as such
at the close of business on the relevant Regular Record Dates.

<PAGE>

          If notice has been given as provided in the Indenture and funds for
the redemption of any Notes called for redemption shall have been made available
on the redemption date referred to in such notice, such Notes will cease to bear
interest on the date fixed for such redemption specified in such notice and the
only right of the Holders of the Notes will be to receive payment of the
Redemption Price.

          Notice of any optional redemption of any Notes will be given to
Holders at their addresses, as shown in the security register for the Notes, not
more than 60 nor less than 30 days prior to the date fixed for redemption. The
notice of redemption will specify, among other items, the Redemption Price and
the principal amount of the Notes held by such Holder to be redeemed.

          If less than all the Notes are to be redeemed at the option of the
Company, the Company will notify the Trustee at least 45 days prior to giving
notice of redemption (or such shorter notice period as is satisfactory to the
Trustee) of the aggregate principal amount of Notes to be redeemed and their
redemption date. The Trustee shall select, in such manner as it shall deem fair
and appropriate, Notes to be redeemed in whole or in part.

          Certain Definitions: As used herein, the following terms will have the
meanings set forth below:

          "Comparable Treasury Price" means with respect to any Redemption Date
     for the Notes (i) the average of four Reference Treasury Dealer Quotations
     for such Redemption Date, after excluding the highest and lowest such
     Reference Treasury Dealer Quotations, or (ii) if the Trustee obtains fewer
     than four such Reference Treasury Dealer Quotations, the average of all
     such quotations.

          "Make-Whole Amount" means, in connection with any optional redemption
     of any Notes, the excess, if any, of (i) the aggregate present value as of
     the date of such redemption of each dollar of principal being redeemed and
     the amount of interest (exclusive of interest accrued to the date of
     redemption) that would have been payable in respect of each such dollar if
     such redemption had not been made, determined by discounting, on a
     semi-annual basis, such principal and interest at the Reinvestment Rate
     (determined on the third Business Day preceding the date such notice of
     redemption is given) from the respective dates on which such principal and
     interest would have been payable if such redemption had not been made to
     the date of redemption over (ii) the aggregate principal amount of the
     Notes being redeemed. For purposes of the Indenture, all references to
     "premium, if any" on the Notes shall be deemed to refer to the Make-Whole
     Amount, if any.

          "Reference Treasury Dealer" means Credit Suisse First Boston and its
     successor; provided, however, that if any of the foregoing shall cease to
     be a primary U.S. Government Securities dealer in New York City (a "Primary
     Treasury Dealer"), the Company will substitute therefor another Primary
     Treasury Dealer.

          "Reference Treasury Dealer Quotations" means, with respect to each
     Reference Treasury Dealer and any Redemption Date, the average, as
     determined by the Trustee, of the bid and asked prices for the comparable
     treasury issue (expressed in each case as a percentage of its principal
     amount) quoted in writing to the Trustee by such Reference Treasury Dealer
     at 5:00 p.m., New York City time, on the third Business Day preceding such
     Redemption Date.

<PAGE>

          "Reinvestment Rate" means .25% plus the arithmetic mean of the yields
     under the heading "Week Ending" published in the most recent Statistical
     Release under the caption "Treasury Constant Maturities" for the maturity
     (rounded to the nearest month) corresponding to the remaining life to
     maturity of the Notes, as of the payment date of the principal being
     redeemed. If no maturity exactly corresponds to such maturity, yields for
     the two published maturities most closely corresponding to such maturity
     shall be calculated pursuant to the immediately preceding sentence and the
     Reinvestment Rate shall be interpolated or extrapolated from such yields on
     a straight-line basis, rounding in each of such relevant periods to the
     nearest month. For the purposes of calculating the Reinvestment Rate, the
     most recent Statistical Release published prior to the date of
     determination of the Make-Whole Amount shall be used. If the Statistical
     Release (or successor release) is not published during the week preceding
     the calculation date or does not contain the aforementioned yields, the
     Reinvestment Rate shall mean the rate per annum equal to the semi-annual
     equivalent yield to maturity of the comparable treasury issue, calculated
     using a price for the comparable treasury issue (expressed as a percentage
     of its principal amount ) equal to the Comparable Treasury Price for such
     Redemption Date.

          "Statistical Release" means the statistical release designated
     "H.15(519)" or any successor publication which is published weekly by the
     Federal Reserve System and which reports yields on actively traded U.S.
     government securities adjusted to constant maturities, or, if such
     statistical release is not published at the time of any determination under
     the Indenture, then such other reasonably comparable index which shall be
     designated by the Company.

          If an Event of Default with respect to the Notes shall occur and be
continuing, the principal of the Notes may be declared due and payable in the
manner and with the effect provided in the Indenture.

          As provided in and subject to the provisions of the Indenture, the
Holder of this Note shall not have the right to institute any proceeding with
respect to the Indenture or for the appointment of a receiver or trustee or for
any other remedy thereunder, unless such Holder shall have previously given the
Trustee written notice of a continuing Event of Default with respect to the
Notes, the Holders of not less than 25% in principal amount of the Notes at the
time Outstanding shall have made written request to the Trustee to institute
proceedings in respect of such Event of Default as Trustee and offered the
Trustee reasonable indemnity and the Trustee shall not have received from the
Holders of a majority in principal amount of the Notes at the time Outstanding a
direction inconsistent with such request, and shall have failed to institute any
such proceeding, for 60 days after receipt of such notice, request and offer of
indemnity. The foregoing shall not apply to any suit instituted by the Holder of
this Note for the enforcement of any payment of principal of, or premium, if
any, or interest on, this Note on or after the respective due dates therefor.

          The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Notes under the Indenture at any
time by the Company and the Trustee with the consent of the Holders of not less
than a majority in aggregate principal amount of the Outstanding Notes. The
Indenture also contains provisions permitting the Holders of not less than a
majority in principal amount of the Notes at the time Outstanding, on behalf of
the Holders of all Notes, to waive compliance by the Company with certain
provisions of the Indenture. Furthermore, provisions in the Indenture permit the
Holders of not less than a majority of the aggregate principal amount of the

<PAGE>

Outstanding Notes to waive, in certain circumstances, on behalf of all Holders
of the Notes, certain past defaults under the Indenture and their consequences.
Any such consent or waiver by the Holder of this Note shall be conclusive and
binding upon such Holder and upon all future Holders of this Note and of any
Note issued upon the registration of transfer hereof or in exchange herefor or
in lieu hereof, whether or not notation of such consent or waiver is made upon
this Note.

          No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of, and premium, if any, and
interest on, this Note at the times, places and rate, and in the coin or
currency, herein prescribed.

          As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Note is registrable in the Security
Register, upon surrender of this Note for registration of transfer at the office
or agency of the Company in any Place of Payment for the Notes, duly endorsed
by, or accompanied by a written instrument of transfer in form satisfactory to
the Company and the Security Registrar for the Notes duly executed by, the
Holder hereof or his or her attorney duly authorized in writing, and thereupon
one or more new Notes of authorized denominations and for the same aggregate
principal amount will be issued to the designated transferee or transferees.

          As provided in the Indenture and subject to certain limitations
therein set forth, Notes of this series are exchangeable for a like aggregate
principal amount of Notes of this series of different authorized denominations,
as requested by the Holder surrendering the same.

          The Notes of this series are issuable only in registered form without
coupons in denominations of $1000 and any integral multiple thereof. No service
charge shall be made for any such registration of transfer or exchange, but the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith.

          Prior to due presentment of this Note for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name this Note is registered as the owner hereof for all
purposes, whether or not this Note be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.

          No recourse shall be had for the payment of the principal of, or
premium, if any, or the interest on this Note, or for any claim based hereon, or
otherwise in respect hereof, or based on or in respect of the Indenture or any
indenture supplemental thereto, against any past, present or future stockholder,
employee, officer or director, as such, of the Company or of any successor,
either directly or through the Company or any successor, whether by virtue of
any constitution, statute or rule of law or by the enforcement of any assessment
or penalty or otherwise, all such liability being, by the acceptance hereof and
as part of the consideration for the issue hereof, expressly waived and
released.

          THE INDENTURE AND THE NOTES, INCLUDING THIS NOTE, SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

          Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused CUSIP numbers to be
printed on the Notes as a

<PAGE>

convenience to the Holders of the Notes. No representation is made as to the
correctness or accuracy of such CUSIP numbers as printed on the Notes, and
reliance may be placed only on the other identification numbers printed hereon.

          Unless the certificate of authentication hereon has been executed by
the Trustee by manual signature of one of its authorized signatories, this Note
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.

          All terms used in this security which are defined in the Indenture
shall have the meaning assigned to them in the Indenture.

          The headings included in this Note are for convenience only and shall
not affect the construction hereof.

<PAGE>

          IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.

                                             PAN PACIFIC RETAIL PROPERTIES, INC.

[SEAL]                                       By:________________________________
                                                Joseph B. Tyson
                                                Executive Vice President, Chief
                                                Financial Officer, Treasurer and
                                                Secretary

Attest:

By: ___________________________________
    Laurie A. Sneve
    Vice President and Controller

<PAGE>

TRUSTEE'S CERTIFICATE OF AUTHENTICATION:

          This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.

THE BANK OF NEW YORK, as Trustee

By:_____________________________________
       Authorized Signatory

                             Dated: ______________ , ____

<PAGE>

                                 ASSIGNMENT FORM

                   FOR VALUE RECEIVED, the undersigned hereby
                         sells, assigns and transfers to

PLEASE INSERT SOCIAL
SECURITY OR OTHER IDENTIFYING
NUMBER OF ASSIGNEE

________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________

                   (Please Print or Typewrite Name and Address
                         including Zip Code of Assignee)

the within Note of PAN PACIFIC RETAIL PROPERTIES, INC., and
_______________________________
hereby does irrevocably constitute and appoint
________________________________________________________________________________

Attorney to transfer said Note on the books of the within-named Company with
full power of substitution in the premises.

Dated:________________________           _______________________________________

                                         _______________________________________

NOTICE: The signature to this assignment must correspond with the name as it
appears on the first page of the within Note in every particular, without
alteration or enlargement or any change whatever.

Signature Guaranty   ______________________________________________
                     (Signature must be guaranteed by
                     a participant in a signature
                     guarantee medallion program)

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