Exhibit 10.2
AMENDED AND RESTATED SECURITY AGENCY AGREEMENT
among
BANK OF AMERICA, N.A.,
as Global Administrative Agent
under the Global Senior Credit Agreement referred to herein,
Certain other Creditors of ProLogis
and
BANK OF AMERICA, N.A.,
as Collateral Agent
Dated as of October 6, 2005

 

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TABLE OF CONTENTS

              Page  
SECTION 1. DEFINITIONS AND INTERPRETATION
    2  
SECTION 2. APPOINTMENT OF COLLATERAL AGENT
    12  
SECTION 3. DECISIONS RELATING TO ADMINISTRATION AND EXERCISE OF REMEDIES VESTED
IN THE MAJORITY CREDIT PARTIES; RESCISSION OF TRIGGER DATE
    12  
SECTION 4. APPLICATION OF PROCEEDS
    14  
SECTION 5. SHARING AND EQUALIZATION OF RECOVERIES
    17  
SECTION 6. EQUALIZATION CONSIDERATIONS
    19  
SECTION 7. INFORMATION
    20  
SECTION 8. OTHER DS DEBT; ADDITIONAL VOTING CREDIT PARTIES
    21  
SECTION 9. DISCLAIMERS, INDEMNITY, ETC
    22  
SECTION 10. INVALIDATED PAYMENTS
    26  
SECTION 11. MISCELLANEOUS
    26  
 
       
Schedule 1 Prior Credit Agreements
       
Schedule 2 Existing Other Designated Senior Debt
       
Schedule 3 Security Documents
       
Exhibit A Notice of Designated Senior Debt
       
Exhibit B Form of Acknowledgment
       
Exhibit C Form of Noteholder Notice
       

 

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AMENDED AND RESTATED SECURITY AGENCY AGREEMENT
     THIS AMENDED AND RESTATED SECURITY AGENCY AGREEMENT (this “Agreement”)
dated as of October 6, 2005 is among BANK OF AMERICA, N.A. (“Bank of America”),
as Global Administrative Agent (as defined below) on behalf of the Global
Lenders (as defined below), certain other creditors (or the representatives of
such creditors) of ProLogis, a Maryland real estate investment trust
(“ProLogis”), and Bank of America, as Collateral Agent (as defined below).
R E C I T A L S
     WHEREAS, ProLogis, various affiliates thereof and various financial
institutions previously entered into the Credit Agreements described on
Schedule 1 (each a “Prior Credit Agreement”);
     WHEREAS, in connection with the Prior Credit Agreements, Collateral Agent
entered into a Security Agency Agreement (the “Original Agreement”) dated as of
August 8, 2003 among Collateral Agent and representatives of certain other
creditors of ProLogis in order to secure the Prior Credit Agreements and other
“Designated Senior Debt” (as defined therein);
     WHEREAS, pursuant to the Original Agreement, the parties appointed Bank of
America as collateral agent (in such capacity, “Collateral Agent”) to act on
behalf of all Credit Parties (as defined below) regarding the Collateral (as
defined below);
     WHEREAS, concurrently herewith, the Prior Credit Agreements are being
refinanced by the Global Senior Credit Agreement dated as of the date hereof
(the “Global Credit Agreement”) among ProLogis, the Affiliate Borrowers referred
to therein (ProLogis and such Affiliate Borrowers, collectively “Borrowers”),
Bank of America, as Global Administrative Agent (in such capacity, “Global
Administrative Agent”), and the other agents, letter of credit issuers and
lenders from time to time party thereto (Global Administrative Agent and such
other agents, letter of credit issuers and lenders, “Global Lenders”);
     WHEREAS, pursuant to an Unconditional Parent Guaranty Agreement dated as of
the date hereof (the “ProLogis Global Guaranty”), ProLogis has guaranteed all
obligations of the other Borrowers under or in connection with the Global Credit
Agreement, and pursuant to one or more other guaranties (together with the
ProLogis Global Guaranty, the “ProLogis Guaranties”), ProLogis may guarantee
certain other obligations of various of its subsidiaries and affiliates;
     WHEREAS, pursuant to various guaranty agreements (each an “Affiliate
Guaranty”), various subsidiaries and affiliates of ProLogis have guaranteed, and
may from time to time hereafter guarantee, obligations of ProLogis and certain
other Borrowers under or in connection with (i) the Global Credit Agreement;
(ii) one or more ProLogis Guaranties; and (iii) certain other Designated Senior
Debt (as defined below);
     WHEREAS, pursuant to one or more pledge agreements, ProLogis and certain of
its subsidiaries have pledged, and may from time to time hereafter pledge,
intercompany notes and other indebtedness to Collateral Agent to secure the
Credit Obligations (as defined below);
     WHEREAS, ProLogis and the parties hereto have agreed that the indebtedness
evidenced by the Global Credit Agreement and all other existing and future
Designated Senior Debt shall, to the extent
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possible (and subject to the terms and provisions hereof), receive ratable
payments and other recoveries in the event of the bankruptcy of ProLogis or
certain other events specified herein; and
     WHEREAS, the parties hereto desire to amend and restate the Original
Agreement in the form of this Agreement, and such amendment and restatement has
been consented to by all necessary parties;
     NOW, THEREFORE, for good and valuable consideration, the sufficiency and
receipt of which are hereby acknowledged, the parties hereto agree as follows:
SECTION 1. DEFINITIONS AND INTERPRETATION.
     (a) As used in this Agreement, (i) the terms “Affiliate Borrower”,
“Business Day”, “Dollar Equivalent”, “Dutch Borrower”, “Exemption Regulation”,
“Foreign Currency Equivalent”, “Funding Agent”, “Loan Documents”, “Overnight
Rate”, “Person”, “Pledge Agreements”, “PMP”, “Same Day Funds”, “Subsidiary” and
“Tranche” have the respective meanings set forth in the Global Credit Agreement;
and (ii) the following terms have the respective meanings indicated below:
     “Affiliate”, as applied to any Person, means any other Person that directly
or indirectly controls, or is controlled by, or is under common control with,
such Person. For the purposes of this definition, “control,” “controlled by,”
and “under common control with” mean possession, directly or indirectly, of
power to direct (or cause the direction of) management or policies (whether
through the ownership of voting securities or other ownership interests, by
contract, or otherwise).
     “Affiliate Guaranty” is defined in the recitals.
     “Aggregate Recovery Percentage” means for all Sharing Parties as of any
date of determination, a percentage equal to 100% minus the quotient, expressed
as a percentage, of (a) the remainder, as of such date, of the aggregate
outstanding amount of all Shared Credit Obligations minus the aggregate amount
of Reserved LC Collateral divided by (b) the sum of the aggregate amount of all
Trigger Date Credit Obligations of all Sharing Parties plus all
Post-Trigger-Date Accruals on all Shared Credit Obligations.
     “Agreement” is defined in the introductory paragraph.
     “Bank of America” is defined in the introductory paragraph.
     “Bankruptcy Proceeding” means, with respect to any Person, a general
assignment by such Person for the benefit of its creditors, or the institution
by or against such Person of any proceeding seeking relief as debtor, or seeking
to adjudicate such Person as bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment or composition of such Person or its debts under any law
relating to bankruptcy, insolvency, reorganization or relief of debtors, or
seeking appointment of a receiver, trustee, custodian or other similar official
for such Person or for any substantial part of its property.
     “Borrowers” is defined in the recitals.
     “Code” means the Uniform Commercial Code as in effect from time to time in
the State of New York.
     “Collateral” means, with respect to any Obligor, all property of such
Obligor in which a Lien has been created under the Security Documents.
     “Collateral Agent” is defined in the recitals.
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     “Credit Obligations” means, collectively, (a) the Global Credit Agreement
Obligations, the Hedging Obligations and the Other DSD Obligations and (b) all
other amounts payable by any Obligor under this Agreement or any other Financing
Agreement (including the reasonable fees and reasonable expenses of Collateral
Agent in its capacity as such); and, when used with respect to any Obligor, such
term means all Credit Obligations (as defined above) for which such Obligor has
liability, directly or indirectly.
     “Credit Parties” means the holders, from time to time, of the Credit
Obligations.
     “Designated Senior Debt” means all indebtedness arising under, pursuant to
or in connection with the Loan Documents and the Other DSD Agreements.
     “Direct Obligation” means, with respect to any Obligor, any Credit
Obligation of such Obligor in the capacity as the borrower of a loan or the
issuer of a note, bond or similar evidence of debt, as account party with
respect to a Letter of Credit, as the counterparty under a Hedging Agreement or
otherwise as the primary obligor (and not a guarantor or third-party pledgor) on
such Credit Obligation.
     “Directing Party” means, with respect to any particular instruction given
to Collateral Agent, each Voting Credit Party that has given, or voted to give,
such instruction to Collateral Agent.
     “Dollar” and “$” mean lawful money of the United States.
     “Enforcement” means demand upon any Guaranty and/or foreclosure (including
judicial or non-judicial foreclosure) or similar proceedings with respect to the
Collateral or any other action to obtain payments under any Guaranty or to
realize upon any Collateral.
     “Equalization Date” means each of the following: (a) each anniversary of
the Trigger Date (or if any such day is not a Business Day, the immediately
following Business Day) that occurs prior to the Final Distribution Date;
(b) any other Business Day designated by the Majority Credit Parties upon not
less than thirty (30) Business Days’ prior written notice to Collateral Agent;
and (c) any other Business Day designated by Collateral Agent pursuant to
Section 10(b).
     “Equalization Considerations” means the sources and application of all
Recoveries, the application of Recoveries from Obligors that have Shared Credit
Obligations under multiple Financing Agreements and/or multiple Tranches of the
Global Credit Agreement, the cost of currency conversions, the effect on the
Sharing Parties of withholding and other taxes, any legal or regulatory
restrictions on the ability of a Sharing Party to hold Credit Obligations of a
particular Obligor, the possibility of any Recovery being rescinded or otherwise
being required to be returned (and the difficulty of obtaining funds from a
Sharing Party or group of Sharing Parties in the event of such rescission or
return), legal and other restrictions or risks related to purchasing or selling
publicly-traded securities and such other considerations as the Majority Credit
Parties deem relevant and appropriate in determining allocations of Recoveries
so that on the Final Distribution Date each Sharing Party will have a Recovery
Percentage that is, as nearly as possible, equal to the Aggregate Recovery
Percentage.
     “Event of Default” means an “Event of Default” or “Default” as defined in
any Financing Agreement (or any similar term describing an event or circumstance
that permits the holder or holders of the applicable Credit Obligation to
accelerate the maturity thereof (it being understood that any required notice
shall have been given and any applicable grace period shall have elapsed)).
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     “Final Aggregate Recovery Percentage” means for all Sharing Parties as of
the Final Distribution Date after giving effect to the application of Reserved
LC Collateral on such date, a percentage equal to 100% minus the quotient,
expressed as a percentage, of (a) the aggregate outstanding amount of all Shared
Credit Obligations as of the Final Distribution Date divided by (b) the sum of
the aggregate outstanding amount of all Trigger Date Credit Obligations of all
Sharing Parties plus all Post-Trigger-Date Accruals on all Shared Credit
Obligations.
     “Final Distribution Date” means the earlier of (a) the date, on or after
the date on which ProLogis becomes subject to any Bankruptcy Proceeding, on
which such Bankruptcy Proceeding is completed (i.e., the plan of reorganization
has been confirmed and the payments, Obligor Securities and other consideration
to be distributed among the Credit Parties pursuant to the plan of
reorganization have been distributed; or, if a Bankruptcy Proceeding results in
the liquidation of ProLogis, all proceeds of such liquidation have been
distributed among the creditors of ProLogis); or (b) the date on which all
Letters of Credit have expired or terminated, all commitments to create Credit
Obligations have terminated and either (i) the Majority Credit Parties have
reasonably determined that no further Recoveries are expected to be received for
application to the Credit Obligations and all claims against any Credit Party
in, or relating to, such Bankruptcy Proceeding have been finally resolved
(subject to no further rights of appeal) or (ii) all Credit Obligations have
been indefeasibly paid in full. The Final Distribution Date may be delayed, by
reasonable determination of the Majority Credit Parties or (so long as the
Majority Credit Parties have not directed otherwise in writing) Collateral Agent
in order to permit (x) the conversion to cash of non-cash Recoveries (other than
Obligor Securities), as contemplated by Section 4(a)(iv), or (y) the calculation
of Recovery Percentages (provided that any delay of the Final Distribution Date
pursuant to this clause (y) shall not exceed 90 days); provided that Collateral
Agent shall notify each Credit Party of the Final Distribution Date not later
than five (5) Business Days prior thereto.
     “Final Recovery Percentage” means, with respect to any Sharing Party as of
the Final Distribution Date, a percentage equal to 100% minus the quotient,
expressed as a percentage, of (a) the amount of all Shared Credit Obligations
held by such Sharing Party as of such date minus, if applicable, such Sharing
Party’s Recovery Reduction Amount divided by (b) the sum of the Trigger Date
Credit Obligations held by such Sharing Party as of the date of determination
plus all Post-Trigger-Date Accruals on such Shared Credit Obligations. For
purposes of clause (a) of the preceding sentence, any Shared Credit Obligations
in which a Sharing Party has purchased a participation pursuant to Section 5 or
6 shall be deemed to be owed to the Purchasing Credit Party and not the Selling
Credit Party.
     “Financing Agreements” means this Agreement, the Global Credit Agreement,
each Other DSD Agreement, each Hedging Agreement, each Security Document, each
Guaranty and any other instrument, document or agreement entered into in
connection with any Credit Obligation or Financing Agreement.
     “Global Administrative Agent” is defined in the recitals.
     “Global Credit Agreement” is defined in the recitals.
     “Global Credit Agreement Obligations” means all obligations of Borrowers
(whether joint, several or joint and several) under or in connection with the
Loan Documents, including for principal, interest, fees, reimbursement
obligations under Letters of Credit, expenses and indemnities.
     “Global Lenders” is defined in the recitals.
     “Guaranties” means, collectively, the ProLogis Guaranties and the Affiliate
Guaranties.
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     “Hedging Agreement” means any agreement or arrangement designed to protect
at least one of the parties thereto from fluctuations in interest rates,
exchange rates or forward rates applicable to such party’s assets, liabilities
or exchange transactions, including dollar-denominated or cross-currency
interest rate exchange agreements, forward currency exchange agreements,
interest rate cap, swap or collar protection agreements, forward rate currency
or interest rate options and any cancellation, buyback, reversal, termination or
assignment of the foregoing.
     “Hedging Exposure” means, on any date of determination with respect to any
Hedging Agreement with a Swap Party, the amount, as calculated in good faith and
in a commercially reasonable manner by such Swap Party, that such Swap Party
would pay to a third party (such amount being expressed as a negative number) or
receive from a third party (such amount being expressed as a positive number) in
an arm’s length transaction as consideration for such third party’s entering
into a new transaction with such Swap Party in which: (a) such Swap Party holds
the same position under such Hedging Agreement as it currently holds; (b) the
third party holds the same position as such Obligor currently holds; and (c) the
new transaction has economic and other terms and conditions identical in all
respects to such Hedging Agreement except that (i) the date of calculation shall
be deemed to be the date of commencement of the new transaction and (ii) all
period end dates shall correspond to all period end dates, if any, set forth in
such Hedging Agreement.
     “Hedging Obligations” means, with respect to any Obligor at any time, the
amount of such Obligor’s obligations (including early termination payments) then
due and payable under any Hedging Agreement with a Swap Party and all accrued
interest and fees with respect thereto, after giving effect to any netting of
payments to which such Obligor is entitled with respect to any other Hedging
Agreement with such Swap Party.
     “Indirect Obligation” means, with respect to any Obligor, any Credit
Obligation of such Obligor that is not a Direct Obligation of such Obligor.
     “Interim Recovery Cap” means, with respect to any Sharing Noteholder at any
time, the result of (a) the aggregate amount of Recoveries that such Noteholder
would have received on or after the Trigger Date in the absence of the sharing
provisions of this Agreement (i.e., assuming that such Noteholder were entitled
to a ratable share, according to the percentage which the principal amount of
its Credit Obligations is of the principal amount of all Credit Obligations, of
all payments by ProLogis applied to Credit Obligations and of all Proceeds of
Pledged Collateral) minus (b) such Noteholder’s Recovery Reduction Amount plus
(c) the aggregate amount of Recoveries applied to the Shared Credit Obligations
of such Noteholder on any Equalization Date that are in excess of the remainder
of clause (a) above minus clause (b) above on such Equalization Date minus
(d) the amount (which shall not exceed the aggregate amount of Recoveries
applied to the Shared Credit Obligations of such Noteholder pursuant to clause
(c) above) that the Majority Credit Parties from time to time determine (as
evidenced by written notice to Collateral Agent and ProLogis) is necessary or
appropriate to ensure that, after giving effect to all payments and
distributions on the Final Distribution Date, such Noteholder will not have a
Recovery Percentage greater than the Aggregate Recovery Percentage.
     “Letter of Credit” means any letter of credit, bank guaranty, bank bond or
similar instrument issued by a Global Lender or an Affiliate thereof pursuant to
a Financing Agreement.
     “Lien” means any lien, mortgage, security interest, pledge, assignment,
charge, title retention agreement or encumbrance of any kind and any other
substantially similar arrangement for a creditor’s claim to be satisfied from
assets or proceeds prior to the claims of other creditors.
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     “Majority Credit Parties” means Voting Credit Parties representing more
than fifty percent (50%) of the aggregate amount of the Voting Obligations.
     “Material Credit Obligations” means Credit Obligations in an aggregate
principal amount of more than $50,000,000 (or the equivalent thereof in any
other currency).
     “Non-Directing Party” means, with respect to any particular instruction
given to Collateral Agent, each Party (and each Credit Party represented by such
Party) that has not given or agreed with such instruction.
     “Non-Sharing Party” means any Credit Party that holds Credit Obligations
that are not Shared Credit Obligations (in its capacity as holder of such Credit
Obligations).
     “Noteholder” means the holders of (a) debt securities issued under the
Financing Agreements designated as “Note Agreements” on Schedule 2 and (b) any
other publicly-traded debt securities issued by ProLogis or an Affiliate thereof
that have been designated by ProLogis as Other DS Debt, in each case in their
capacities as holders of such securities and not in any other capacity.
     “Notice of Designated Senior Debt” means a notice to Collateral Agent
substantially in the form of Exhibit A.
     “Obligor” means (without duplication) each of (a) ProLogis, (b) each
Borrower and (c) each other Affiliate of ProLogis that is obligated to pay any
of the Credit Obligations or has granted a Lien in any property to Collateral
Agent pursuant to any Security Document.
     “Obligor Securities” means debt or equity securities (including debt
instruments issued pursuant to a plan of reorganization in a Bankruptcy
Proceeding, even if such instruments do not constitute “securities” under
applicable securities laws) issued by any Obligor to any of its creditors in
lieu of cash payments on, or in full or partial satisfaction of, such Obligor’s
obligations to such creditors.
     “Opinion of Counsel” means, with respect to any Person, a written opinion
of an attorney or firm of attorneys, which may be outside counsel engaged or
retained by such Person or internal counsel in the employ of such Person, a copy
of which opinion is furnished to the Parties.
     “Original Agreement” is defined in the recitals.
     “Other DS Debt” means (a) indebtedness arising under any Other DSD
Agreement listed on Schedule 2 and (b) any other indebtedness that ProLogis
designates as Designated Senior Debt pursuant to Section 8(a).
     “Other DSD Agreement” means (a) each indenture or other agreement listed on
Schedule 2 and (b) each other indenture or other agreement that gives rise to,
or evidences, Other DS Debt, in each case subject to Section 8(e).
     “Other DSD Obligations” means all outstanding and unpaid obligations of
every nature of any Obligor arising under any Other DSD Agreement.
     “Party” means Collateral Agent, Global Administrative Agent and any other
Person that becomes a party hereto pursuant to Section 8(b).
     “Pledged Collateral” means all Collateral granted under the Pledge
Agreements.
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     “Post-Trigger-Date Accruals” means, with respect to any Credit Obligations,
all interest, facility fees, letter of credit fees, commitment fees and similar
fees that have accrued on such Credit Obligations during the period from the
Trigger Date to the date on (or as of) which any calculation is being made
(regardless of whether such interest and fees constitute allowed claims in any
Bankruptcy Proceeding).
     “Prior Credit Agreement” is defined in the recitals.
     “Proceeds” means “proceeds” as defined in Article 9 of the Code and, in any
event, includes (a) any proceeds of any collection, sale or other disposition of
any Collateral, (b) any amount from time to time paid or payable under or in
connection with any Collateral and (c) any amount collected in respect of Credit
Obligations by any Credit Party by way of set-off, deduction or counterclaim.
     “ProLogis” is defined in the introductory paragraph.
     “ProLogis Guaranties” is defined in the recitals.
     “Purchasing Credit Party” means, as of any Equalization Date and as of the
Final Distribution Date, a Sharing Party that has a Recovery Percentage or Final
Recovery Percentage, as applicable, as of such date that exceeds the Aggregate
Recovery Percentage or Final Aggregate Recovery Percentage, as applicable, as of
such date; provided that except for Ratifying Noteholders, no Noteholder (in its
capacity as such) or Representative thereof shall be a Purchasing Credit Party.
     “Ratifying Noteholder” is defined in Section 8(f).
     “Recovery” means, without duplication, (a) any payment by a Borrower under
the Global Credit Agreement; (b) any payment by a borrower, account party or
similar direct obligor under any Other DSD Agreement; (c) any payment by
ProLogis under a ProLogis Guaranty; (d) any payment by any guarantor under an
Affiliate Guaranty; and (e) any Proceeds; provided that “Recovery” shall not
include any amount paid, or otherwise recovered, in respect of the Direct
Obligations of any Affiliate Borrower that is not a Subsidiary of ProLogis.
“Recovery” includes the receipt of consideration, in full or partial
satisfaction of Credit Obligations, in the form of Obligor Securities and other
non-cash consideration; provided that (i) pursuant to Section 4(a)(iv), all
non-cash Recoveries (other than Obligor Securities) shall be converted to cash
by Collateral Agent and the amount of Recoveries associated therewith shall be
the amount of cash received by Collateral Agent therefor; and (ii) the value of
Obligor Securities shall be the fair market value thereof, as provided in (or
determined by reference to) the plan of reorganization in the applicable
Bankruptcy Proceeding or, in the absence of a valuation in (or determined by
reference to) any such plan, by the Majority Credit Parties.
     “Recovery Currency” means, with respect to any Recovery, the currency in
which such Recovery is received by Collateral Agent or the applicable Credit
Party; provided that the currency of Recoveries in the form of Obligor
Securities issued by ProLogis in the form of equity shall be deemed to be
Dollars and the currency of other Recoveries in the form of any other Obligor
Security shall be deemed to be the currency in which such Obligor Security is
denominated.
     “Recovery Percentage” means, with respect to any Sharing Party as of any
date of determination, a percentage equal to 100% minus the quotient, expressed
as a percentage, of (a) the amount of all Shared Credit Obligations held by such
Sharing Party as of such date minus, if applicable, such Sharing Party’s
Recovery Reduction Amount minus, if applicable, the aggregate amount of Reserved
LC Collateral allocated to Shared Credit Obligations held by such Sharing Party
divided by (b) the sum of the Trigger Date Credit Obligations held by such
Sharing Party as of the date of determination plus all Post-Trigger-
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Date Accruals on such Shared Credit Obligations. For purposes of clause (a) of
the preceding sentence, any Shared Credit Obligations in which a Sharing Party
has purchased a participation pursuant to Section 5 or 6 shall be deemed to be
owed to the Purchasing Credit Party and not the Selling Credit Party.
     “Recovery Reduction Amount” means, with respect to any Noteholder that is a
Sharing Party at any time, the remainder (but not less than zero) of (a) the
aggregate amount by which the Recoveries of such Noteholder have been reduced as
the result of all applicable Recovery Reduction Events less (b) the aggregate
amount by which the Recoveries of the other Sharing Parties have been increased
as the result of the decrease in such Noteholder’s Recoveries resulting from
such Recovery Reduction Events, in each case as estimated in good faith by
Collateral Agent (or, at Collateral Agent’s request, the Majority Credit
Parties). If any Shared Credit Obligations are transferred by a Noteholder, then
a ratable portion of such Noteholder’s Recovery Reduction Amount (whether
absolute or contingent) shall be deemed to have been transferred with such
Shared Credit Obligations (regardless of any separate agreement between the
transferor and transferee of such Shared Credit Obligations).
     “Recovery Reduction Event” means, with respect to any Noteholder, any
failure of such Noteholder (or its Representative) to file a proof of claim or
other required document in any Bankruptcy Proceeding, any failure of such
Noteholder (or its Representative) to comply with any applicable Financing
Document, any action or inaction by such Noteholder (or its Representative) that
constitutes negligence or misconduct, or any other event or circumstance similar
to the foregoing that, in each case referred to above, results in the Recoveries
of such Noteholder with respect to its Shared Credit Obligations being reduced
(either directly or as a result of offset, counterclaim or defense).
     “Recovery Shortfall” means, with respect to any Sharing Party at any time,
the amount (if any) that would be required to be paid to such Sharing Party to
cause such Sharing Party’s Recovery Percentage to be equal to the highest
Recovery Percentage of any Sharing Party at such time.
     “Repayment Event” is defined in Section 10.
     “Representative” means (a) with respect to Credit Obligations arising under
the Indenture referred to in item (1) on Schedule 2, the trustee named in such
item (1) and any successor thereto as trustee under such Indenture; (b) with
respect to Credit Obligations arising under the Trust Deed referred to in item
(3) on Schedule 2, the trustee named in such item (3) and any successor thereto
as trustee under such Trust Deed; and (c) with respect to any other Credit
Obligations, the agent, trustee or other representative for the holders of such
Credit Obligations; provided that if there is no such agent, trustee or other
representative for any holder of such other Credit Obligations, then
“Representative” shall mean such holder.
     “Reserved LC Collateral” is defined in Section 4(a).
     “Security Documents” means each document listed or referred to on
Schedule 3 and such other documents that may be designated as Security Documents
by ProLogis from time to time by notice to Collateral Agent.
     “Selling Credit Party” means, as of any Equalization Date and as of the
Final Distribution Date, a Sharing Party that holds Shared Credit Obligations
(either directly or through participations) as of such date and has a Recovery
Percentage or Final Recovery Percentage, as applicable, as of such date that is
less than the Aggregate Recovery Percentage or Final Aggregate Recovery
Percentage, as applicable, as of such date; provided that except for Ratifying
Noteholders, no Noteholder (in its capacity as such) or Representative thereof
shall be a Selling Credit Party.
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     “Shared Credit Obligations” means all Credit Obligations other than Credit
Obligations of Noteholders with respect to which the relevant Representative
failed to deliver to Collateral Agent an executed Acknowledgment in the form of
Attachment 1 to Exhibit C within the time period required by Section 8(c).
     “Sharing Noteholder” means a Noteholder that is a Sharing Party.
     “Sharing Party” means any Credit Party other than a Non-Sharing Party.
     “Shortfall Application” means, with respect to any of clauses THIRD,
FOURTH, SEVENTH and EIGHTH of Section 4(a), the application by Collateral Agent
of Recoveries from an Obligor to the payment of the Shared Credit Obligations of
such Obligor under the applicable clause (the “Subject Obligations”) in the
following order: first to the applicable Sharing Party that has the lowest
Recovery Percentage (or, if more than one applicable Sharing Party has the
lowest Recovery Percentage, to all such Sharing Parties ratably according to the
amounts of the Subject Obligations owing by such Obligor to such Sharing
Parties) in an amount (which for any Sharing Party shall not exceed the Subject
Obligations owing by such Obligor to such Sharing Party) sufficient to eliminate
the difference between the lowest Recovery Percentage and the second lowest
Recovery Percentage, then to the Subject Obligations of such Obligor that are
due and owing to the applicable Sharing Parties that (after giving effect to all
prior payments made pursuant to the applicable clause) have the lowest Recovery
Percentage (ratably according to the amounts of their respective Subject
Obligations owing by such Obligor) in an amount (which for any Sharing Party
shall not exceed the Subject Obligations owing by such Obligor to such Sharing
Party) sufficient to eliminate the difference between such Recovery Percentage
and the next lowest Recovery Percentage, successively until all applicable
Sharing Parties have the same Recovery Percentage.
     “Spot Rate” means, with respect to any currency other than Dollars, the
rate determined by Collateral Agent to be the rate quoted by Collateral Agent as
the spot rate for the purchase by Collateral Agent of such currency with Dollars
through its principal foreign exchange trading office at approximately
11:00 a.m. on the date three (3) Business Days prior to the date on which the
foreign exchange computation is made; provided that if Collateral Agent does not
have as of the date of determination a spot buying rate for any such currency,
then Collateral Agent may obtain such spot rate from another financial
institution reasonably designated by Collateral Agent. Notwithstanding the
foregoing, Collateral Agent may elect (at any time and from time to time) to
determine currency exchange rates based upon quotations from any recognized
service (such as Bloomberg or Reuters) and, in such case, the Spot Rate shall be
the rate published by such service at the time and on the date on which foreign
exchange computations for the relevant currency and in the relevant market
customarily are made.
     “Swap Party” means a Person that is (or at the time that it entered into
the applicable Hedging Agreement with an Obligor was) a Global Lender or an
Affiliate of a Global Lender.
     “Trigger Date” means the earliest to occur of (a) the date on which the
“Obligations” under and as defined in the Global Credit Agreement, or any other
Material Credit Obligations, have been accelerated; (b) ten (10) Business Days
after the date on which any principal of the “Obligations” under and as defined
in the Global Credit Agreement, or of any other Material Credit Obligations,
becomes due and payable in accordance with the terms thereof (but only if the
same remain outstanding on such date); or (c) the date on which an Event of
Default described in Section 14.1.6 of the Global Credit Agreement occurs;
provided that the Trigger Date shall not occur as a result of such an Event of
Default if such Event of Default pertains to an Obligor other than ProLogis and,
within ten (10) Business Days of the occurrence of such Event of Default,
Required Lenders under and as defined in the Global Credit
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Agreement notify ProLogis that such Event of Default does not result in the
occurrence of the Trigger Date.
     “Trigger Date Credit Obligations” means, with respect to any Sharing Party
(regardless of whether such Person was a Sharing Party or a Credit Party on the
Trigger Date), the aggregate amount of all Shared Credit Obligations (if any)
owed to such Sharing Party as of the Trigger Date (including in such amount any
Recovery received prior to the Trigger Date that is rescinded or otherwise
required to be returned after the Trigger Date), as such amount may be deemed to
be increased or decreased pursuant to Section 1(g).
     “Voting Credit Party” means (a) each Global Lender, in each case in its
capacity as a “Lender” under the Global Credit Agreement (and not in its
capacity as a party to any Hedging Agreement or, except as provided in clause
(b) of this definition, as the holder of any Other DS Debt), and (b) each holder
of Other DS Debt (other than (i) any Noteholder or any Representative thereof
and (ii) ProLogis or any Affiliate thereof) that has been designated by ProLogis
as a Voting Credit Party pursuant to Section 8(b).
     “Voting Obligations” means the Global Credit Agreement Obligations and any
other Shared Credit Obligations that have been designated by ProLogis as Voting
Obligations pursuant to Section 8(b). For purposes of determining the amount of
Voting Obligations necessary for action to be taken by the Majority Credit
Parties, the amount of Voting Obligations shall be equal to (a) in the case of
any revolving credit facility, the aggregate amount of the commitments under
such revolving credit facility, provided that at any time that the Sharing
Parties under such revolving credit facility (or a portion of such Sharing
Parties) have the right to terminate the commitments under such revolving credit
facility, then the amount of Voting Obligations under such revolving credit
facility shall be equal to the principal amount outstanding under such revolving
credit facility (including the undrawn amount of any Letter of Credit); and
(b) in the case of any other credit facility, the principal amount outstanding
under such credit facility (including the undrawn amount of any Letter of
Credit).
     (b) The rules of interpretation set forth in Section 1.2 of the Global
Credit Agreement shall apply in interpreting this Agreement (including all
Exhibits hereto) as if such rules were fully set forth herein.
     (c) In order to calculate at any time the Aggregate Recovery Percentage,
any Recovery Percentage, the Final Aggregate Recovery Percentage, any Final
Recovery Percentage and the Majority Credit Parties, Credit Obligations
denominated in currencies other than Dollars shall be converted into the Dollar
Equivalent amount using the then applicable Spot Rate.
     (d) Any amount delivered to the Representative of any holder or group of
holders of Other DSD Obligations hereunder shall conclusively be deemed to have
been received by such holder or holders, and the delivering Credit Party shall
have no obligation to determine whether such amount is properly applied by such
Representative or any liability for any action or inaction by such
Representative.
     (e) For purposes of calculating the Recovery Percentage and the Final
Recovery Percentage of any Global Lender, the Aggregate Recovery Percentage and
the Final Aggregate Recovery Percentage, Credit Obligations shall not include
Global Credit Agreement Obligations of any Affiliate Borrower that is not a
Subsidiary of ProLogis to the extent such Global Credit Agreement Obligations
have been paid or satisfied with Recoveries from such Affiliate Borrower.
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     (f) If a Purchasing Credit Party has paid any amount and/or made any
transfer of Recoveries pursuant to Section 5(d) for the benefit of a Sharing
Noteholder (and not for the purchase of a participation from such Sharing
Noteholder), then (i) the relevant Shared Credit Obligations of such Purchasing
Credit Party shall be deemed to be increased as if such Purchasing Credit Party
had purchased from such Sharing Noteholder an absolute assignment of the
relevant Shared Credit Obligations (and all interest and other amounts payable
with respect to such Shared Credit Obligations after the date of such deemed
purchase shall be for the account of such Purchasing Credit Party) and (ii) the
relevant Shared Credit Obligations of such Sharing Noteholder shall be deemed to
be decreased as if such Sharing Noteholder had sold the relevant Shared Credit
Obligations to such Purchasing Credit Party as of the date of such deemed
purchase.
     (g) Any assignment or other transfer of Credit Obligations shall be an
assignment or transfer of an undivided percentage interest in the Direct
Obligations of a particular Obligor in a particular currency under a particular
Financing Agreement (and, in the case of the Global Credit Agreement and any
other multi-tranche Financing Agreement, under a particular tranche), and,
concurrently with or promptly after any assignment or transfer made after the
Trigger Date, the assignor and assignee or transferor and transferee shall give
Collateral Agent notice of the Direct Obligor with respect to, and the currency
of, the Credit Obligations so assigned and the Financing Agreement (and, if
applicable, the tranche) under which such Credit Obligations arose. For purposes
of determining the Recovery Percentage and the Final Recovery Percentage of any
Sharing Party that has transferred, or been the transferee of, any Shared Credit
Obligations after the Trigger Date, the Trigger Date Credit Obligations of a
transferee shall be increased by a ratable part (based on the relationship
between the amount of the relevant Shared Credit Obligations (determined in
accordance with the preceding sentence) transferred and the amount of the
relevant Shared Credit Obligations held by the transferor immediately prior to
the applicable transfer) of the relevant Trigger Date Credit Obligations of the
transferor, as the date of the applicable transfer, and the relevant Trigger
Date Credit Obligations of the transferor shall be reduced correspondingly as of
such date.
     (h) WHENEVER THE MAJORITY CREDIT PARTIES ARE GRANTED, AND EXERCISE, THE
RIGHT TO MAKE A DECISION OR DETERMINATION PURSUANT HERETO, SUCH DECISION OR
DETERMINATION SHALL BE MADE IN THEIR SOLE AND COMPLETE DISCRETION. THE VOTING
CREDIT PARTIES SHALL HAVE NO OBLIGATION OR DUTY (INCLUDING ANY IMPLIED
OBLIGATION OF REASONABLENESS, GOOD FAITH OR FAIR DEALING) TO ANY NOTEHOLDER
EXCEPT THOSE EXPRESSLY SET FORTH IN THIS AGREEMENT, AND NO NOTEHOLDER SHALL
HAVE, AND EACH NOTEHOLDER EXPRESSLY (BY ACCEPTING THE BENEFITS OF THIS AGREEMENT
OR OF ANY SECURITY DOCUMENT) WAIVES AND DISCLAIMS, ANY CLAIM OR CAUSE OF ACTION
BASED UPON ANY VOTE, DECISION OR DETERMINATION (INCLUDING THE GIVING OR
WITHHOLDING OF ANY CONSENT) MADE BY THE MAJORITY CREDIT PARTIES IN ACCORDANCE
WITH THE TERMS OF THIS AGREEMENT.
     (i) For the avoidance of doubt, a Person that holds different series of
debt or debt arising under more than one Financing Agreement may be (i) a Global
Lender with respect to some Credit Obligations, a Swap Party with respect to
other Credit Obligations, a Noteholder with respect to other Credit Obligations
and the holder of Other DS Debt with respect to other Credit Obligations and
(ii) a Ratifying Noteholder with respect to some Credit Obligations, a Sharing
Party with respect to some Credit Obligations and a Non-Sharing Party with
respect to other Credit Obligations and, in each case, for purposes of this
Agreement shall be deemed to be a separate legal entity in each such capacity.
Thus, for example, if a Person is both a Global Lender and a Noteholder,
references to the rights and duties of the
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Global Lenders shall include such Person in its capacity as a Global Lender but
shall exclude such Person in its capacity as a Noteholder.
SECTION 2. APPOINTMENT OF COLLATERAL AGENT.
     Each Credit Party (a) designates and appoints Bank of America to serve as
Collateral Agent under this Agreement, the Guaranties and the Security
Documents; (b) authorizes Collateral Agent to enforce, on behalf of the Credit
Parties (to the extent such Credit Parties are entitled to the benefits
thereof), the obligations of the Obligors under the Guaranties and the Security
Documents; (c) authorizes Collateral Agent to accept the parallel debt structure
in any pledge agreement governed by Dutch law (including the Dutch Pledge
Agreement described in item 3 on Schedule 3); and (d) authorizes Collateral
Agent to exercise such other rights, powers and privileges as are granted to
Collateral Agent by this Agreement, the Guaranties and the Security Documents,
together with such other rights, powers and privileges as are reasonably
incidental thereto.
SECTION 3. DECISIONS RELATING TO ADMINISTRATION AND EXERCISE OF REMEDIES VESTED
IN THE MAJORITY CREDIT PARTIES; RESCISSION OF TRIGGER DATE.
     (a) Except as set forth in Section 3(g), Collateral Agent agrees that it
will not release Liens on Collateral or commence Enforcement without the
direction of the Majority Credit Parties. Collateral Agent agrees to administer
the Guaranties, the Security Documents and the Collateral and to make such
demands and give such notices under the Guaranties and the Security Documents as
the Majority Credit Parties may request, and to take such action to enforce the
Guaranties and the Security Documents and to realize upon, collect and dispose
of the Collateral or any portion thereof as may be directed by the Majority
Credit Parties. Collateral Agent shall not be required to take any action that
is in the Opinion of Counsel contrary to law or to the terms of this Agreement,
any Guaranty or any Security Document, or that would in the Opinion of Counsel
subject Collateral Agent or any of its officers, employees, agents or directors
to liability, and Collateral Agent shall not be required to take any action
under this Agreement, any Guaranty or any Security Document unless and until
Collateral Agent shall be indemnified to its reasonable satisfaction by one or
more of the Credit Parties against any and all loss, cost, expense or liability
in connection therewith.
     (b) Each Credit Party agrees that Collateral Agent shall act as the
Majority Credit Parties may request (regardless of whether any individual Credit
Party agrees, disagrees or abstains with respect to such request, except for
amendments that require otherwise in accordance with Section 11(b)), that
Collateral Agent shall have no liability for acting in accordance with such
request (provided such action does not conflict with the express terms of any
Guaranty or any Security Document, it being understood that any such request by
the Majority Credit Parties that conflicts with any express term of this
Agreement shall be deemed to be a modification of this Agreement if such
modification is permitted to be made by the Majority Credit Parties pursuant to
Section 11(b)) and that no Credit Party shall have any liability to any other
Credit Party for any such request. Collateral Agent shall give prompt notice to
all Credit Parties (or, in the case of any Credit Party that is represented by a
Representative, such Representative) of action taken pursuant to the
instructions of the Majority Credit Parties to enforce any Guaranty or any
Security Document; provided that the failure to give any such notice shall not
impair the right of Collateral Agent to take any such action or the validity of
any action so taken.
     (c) Each Credit Party agrees that the only right of a Non-Directing Party
(i) with respect to the Security Documents is for the Credit Obligations held by
such Non-Directing Party to be secured pursuant to the Security Documents or, if
such Non-Directing Party is a Non-Sharing Party, pursuant to the Pledge
Agreements, and (ii) with respect to the Guaranties, is for the Credit
Obligations held by such
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Non-Directing Party to be supported by the Guaranties or secured by the
Collateral for the period and to the extent provided in this Agreement and to
share in the payments thereunder, if any, to the extent and at the times
provided in this Agreement.
     (d) Collateral Agent may at any time request directions from the Majority
Credit Parties as to any course of action or other matter relating hereto or
relating to any Guaranty or any Security Document. Except as otherwise provided
in this Agreement, directions given by the Majority Credit Parties to Collateral
Agent shall be binding on all Credit Parties, for all purposes, except for
amendments that require otherwise in accordance with Section 11(b).
     (e) Nothing contained in this Agreement shall affect the right of any
Credit Party to give ProLogis, any Affiliate thereof or any other Obligor notice
of any default or to accelerate or make demand for payment of its Credit
Obligations under any Financing Agreement. Each Credit Party agrees not to take
any action to enforce any term or provision of any Guaranty or Security Document
or to enforce any of its rights in respect of any Collateral except through
Collateral Agent in accordance with this Agreement; provided that if, after the
Trigger Date, Collateral Agent fails to commence taking any action (provided
such action is permitted both by applicable law and the applicable Guaranty or
Security Document) within thirty (30) days after the Majority Credit Parties
request in writing that Collateral Agent take such action, then the Majority
Credit Parties may take such action under such Guaranty or Security Document on
behalf of those Credit Parties entitled to the benefits thereof.
     (f) Upon receipt of a written notice from a Credit Party of the existence
of an Event of Default or if it has actual knowledge of the existence of an
Event of Default, Collateral Agent shall promptly (and in any event no later
than three Business Days after receipt of such notice in the manner provided in
Section 11(a)) give notice of such Event of Default to all Parties (in each case
to the extent Collateral Agent has received the information necessary to give
the applicable Party such notice). Collateral Agent shall not be deemed to have
actual or constructive knowledge or notice of the existence of any Event of
Default until it has received written notice thereof stating that such notice is
a “Notice of Default.”
     (g) Unless an Event of Default has occurred and is continuing, Collateral
Agent may, without the approval of any other Credit Party (and notwithstanding
any other provision hereof), (i) release any Obligor from any applicable
Affiliate Guaranty if such Obligor ceases to be an Affiliate of ProLogis
pursuant to a transaction not prohibited by, or otherwise may cease to be an
Obligor without violating, the Global Credit Agreement or any Other DSD
Agreement that gives rise to Voting Obligations (and regardless of the
provisions set forth in any other Financing Agreement); or (ii) release any
Collateral under any Security Document which the applicable Obligor is permitted
to sell or otherwise dispose of, or which otherwise may be released from the
security interest of the applicable Security Documents, without violating the
Global Credit Agreement or any Other DSD Agreement that gives rise to Voting
Obligations (and regardless of the provisions set forth in any other Financing
Agreement) and execute and deliver such releases as may be necessary to
terminate of record Collateral Agent’s security interest (for the benefit of the
Credit Parties) in such Collateral. In determining whether any such release is
permitted, Collateral Agent may rely upon (but shall not be obligated to obtain)
instructions from Global Administrative Agent (as to whether any such release is
permitted under the Global Credit Agreement) or any other Party (as to whether
any such release is permitted under the related Other DSD Agreement). In
addition, Collateral Agent may, without the approval of any other Credit Party
(and notwithstanding any other provision hereof), release any Obligor from any
applicable Affiliate Guaranty, or release any Collateral under any Security
Document, to the extent required by an order of a court of competent
jurisdiction or as otherwise required by applicable law.
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     (h) If, at any time after the occurrence of the Trigger Date and prior to
the date that any distribution is made to any Noteholder (other than a Ratifying
Noteholder) pursuant to Section 4, 5 or 6, all Events of Default, and all events
that, with the giving of notice or the passage of time or both, would become an
Event of Default, have been cured or waived (other than any such event that will
be cured upon the reallocation of funds among the Credit Parties described
below), then the Majority Credit Parties may, by notice to Collateral Agent and
all other Credit Parties that have received notice of the occurrence of the
Trigger Date pursuant to this Agreement, rescind the Trigger Date, in which case
(i) subject to any netting arrangements, all amounts applied to Credit
Obligations pursuant to Section 4, 5 or 6 during the period from the occurrence
of the Trigger Date to the date of such rescission shall be returned to
Collateral Agent by the parties that received such amounts and distributed by
Collateral Agent to the parties that would have received such amounts in the
absence of the occurrence of the Trigger Date; and (b) the provisions of this
Agreement shall continue in effect as if the Trigger Date had not occurred
(subject to the occurrence of a Trigger Date thereafter).
SECTION 4. APPLICATION OF PROCEEDS.
     (a) All Recoveries received by any Credit Party (excluding any Noteholder
or any Representative thereof, unless such Noteholder is a Ratifying Noteholder)
after the Trigger Date from any Obligor, or as Proceeds of such Obligor’s
Collateral (net of any portion of such Proceeds required to be paid to a
Non-Sharing Credit Party pursuant to clause (iii) below), shall be promptly
delivered to Collateral Agent and applied as follows:
     FIRST: To the payment of (i) the reasonable costs and expenses of such
collecting Credit Party (including Collateral Agent or the applicable Funding
Agent) in connection with making such Recoveries and/or realizing on such
Collateral and (ii) all other reasonable expenses and advances incurred or made
by such collecting Credit Party for which such Obligor has liability (including,
in each case, reasonable fees and charges of counsel);
     SECOND: To the extent such Obligor has liability therefor, to the ratable
payment to the Voting Credit Parties of all amounts paid by the Voting Credit
Parties to Collateral Agent pursuant to the indemnification provisions of
Section 9(c);
     THIRD: To make a Shortfall Application with respect to the Direct
Obligations of such Obligor that are denominated in the Recovery Currency;
     FOURTH: To make a Shortfall Application with respect to the Direct
Obligations of such Obligor that are denominated in any currency other than the
Recovery Currency;
     FIFTH: To the payment of the Direct Obligations of such Obligor that are
denominated in the Recovery Currency and are then due and owing, ratably among
the applicable Credit Parties according to the amount of such Direct Obligations
owed to such Credit Parties;
     SIXTH: To the payment of the Direct Obligations of such Obligor that are
denominated in any currency other than the Recovery Currency and are then due
and owing, ratably among the applicable Credit Parties according to the amount
of such Direct Obligations owed to such Credit Parties;
     SEVENTH: To make a Shortfall Application with respect to the Indirect
Obligations of such Obligor that are denominated in the Recovery Currency;
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     EIGHTH: To make a Shortfall Application with respect to the Indirect
Obligations of such Obligor that are denominated in any currency other than the
Recovery Currency;
     NINTH: To the payment of the Indirect Obligations of such Obligor that are
denominated in the Recovery Currency and are then due and owing, ratably among
the applicable Credit Parties according to the amount of such Indirect
Obligations owed to such Credit Parties;
     TENTH: To the payment of the Indirect Obligations of such Obligor that are
denominated in any currency other than the Recovery Currency and are then due
and owing, ratably among the applicable Credit Parties according to the amount
of such Indirect Obligations owed to such Credit Parties; and
     ELEVENTH: After payment in full of all Credit Obligations of such Obligor,
to the payment to or upon the order of such Obligor, or to whomsoever may be
lawfully entitled to receive the same or as a court of competent jurisdiction
may direct, of any surplus then remaining from such Recoveries.
Notwithstanding the foregoing or any other provision of this Agreement:
     (i) any amount payable to a Credit Party pursuant to clause THIRD through
TENTH above (and any cash collateral delivered by an Obligor to a Credit Party)
in respect of the undrawn amount of any outstanding Letter of Credit shall be
delivered to Collateral Agent to be retained as Collateral (“Reserved LC
Collateral”) for such undrawn amount and (x) if and to the extent such Letter of
Credit is drawn upon, Collateral Agent shall deliver to the Credit Party that
issued such Letter of Credit the portion of the Reserved LC Collateral which is
allocable to the amount drawn under such Letter of Credit for application to the
Credit Obligations of such Credit Party directly relating to such Letter of
Credit and (y) if and to the extent that such Letter of Credit expires or
terminates, or the amount thereof is reduced (other than as a result of a
partial drawing thereunder), the portion of the Reserved LC Collateral which is
allocable to such Letter of Credit (or to the amount of the reduction thereof),
and is not (A) applied pursuant to clause (x) or (B) required (pursuant to the
terms of the applicable Financing Agreement) to be returned to any applicable
Obligor, shall be applied, first, to the extent that one or more Credit Parties
have paid cash to purchase participations in the portion of such Letter of
Credit that will not be drawn, to repay such participations (ratably among such
Credit Parties in accordance with the amounts of their respective
participations), and, second, in accordance with clauses FIRST through ELEVENTH
above;
     (ii) no Sharing Noteholder shall be entitled to receive any amount pursuant
to this clause (a) to the extent that, after giving effect to such Noteholder’s
receipt of such amount, all Recoveries received by such Sharing Noteholder would
exceed its Interim Recovery Cap (and any such excess shall be applied in
accordance with this clause (a) to the Credit Obligations of all applicable
Credit Parties other than such Sharing Noteholder and any other Sharing
Noteholder that at the time is subject to the limitations of this clause
(a)(ii));
     (iii) no Non-Sharing Party shall be entitled to receive any amount pursuant
to this clause (a); provided that each Non-Sharing Party shall be entitled to
receive, and Collateral Agent shall, concurrently with the application of any
Proceeds of Pledged Collateral to any Shared Credit Obligations (subject to any
holdbacks, deferrals or similar actions implemented by the Majority Credit
Parties or Collateral Agent in accordance with the other provisions of this
Agreement), deliver to each Non-Sharing Party, such Non-Sharing Party’s ratable
share of the
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Proceeds of Pledged Collateral applied to pay Credit Obligations (with such
ratable share for any Non-Sharing Party (regardless of whether such Person was a
Non-Sharing Party or a Credit Party on the Trigger Date) being equal to the
percentage that (x) the aggregate amount of all Credit Obligations (if any),
other than Shared Credit Obligations, owed to such Non-Sharing Party as of the
Trigger Date (including in such amount any Recovery of such Credit Obligations
received prior to the Trigger Date that is rescinded or otherwise required to be
returned after the Trigger Date), as such amount may deemed to be increased or
decreased based upon the same principles applied to determine increases and
decreases in a Credit Party’s Shared Credit Obligations pursuant to Section 1(g)
is of (y) the aggregate amount of all Credit Obligations as of the Trigger Date
(including in such amount all Recoveries of Credit Obligations received prior to
the Trigger Date that are rescinded or otherwise required to be returned after
the Trigger Date));
     (iv) all non-cash Recoveries received by Collateral Agent (other than
Obligor Securities) shall be converted into cash by Collateral Agent (or, in the
case of promissory notes or other debt instruments not constituting Obligor
Securities, collected in accordance with their terms) in accordance with
instructions by the Majority Credit Parties and then applied as set forth above;
     (v) each Obligor agrees that Recoveries and Proceeds subject to this
Section 4 shall not, for any purpose, be deemed to have been applied to any
Credit Obligation of a Credit Party until such Credit Party receives a payment
to be applied to such Credit Obligation under this Section 4; and
     (vi) if any Recoveries are in the form of Obligor Securities, Collateral
Agent shall have no obligation to accept such Obligor Securities on behalf of
any Credit Party unless Collateral Agent has received an Opinion of Counsel that
delivery of such Obligor Securities to such Credit Party pursuant hereto will
comply with all applicable securities and “blue sky” laws and will not impose
any material liability on Collateral Agent under any such law (and, in the
absence of such an Opinion of Counsel, the applicable Credit Parties shall be
responsible for taking the actions necessary to be entitled to receive such
Obligor Securities).
     (b) Collateral Agent may (unless otherwise directed by Majority Credit
Parties) delay the application of Recoveries pursuant to Section 4(a) for a
reasonable period of time for any purpose that Collateral Agent determines, in
its sole discretion, is reasonable, including, for example, in anticipation of
the receipt of additional Recoveries (and the avoidance of multiple applications
pursuant to Section 4(a) during a short period of time), the possibility that
Recoveries will be rescinded or otherwise required to be returned, making
necessary calculations to properly apply Recoveries or holding Recoveries in
anticipation of an upcoming Equalization Date or the Final Distribution Date.
Until Recoveries are applied pursuant to Section 4(a), Collateral Agent shall
hold such Recoveries in its custody in accordance with its regular procedures
for handling deposited funds (or, in the case of non-cash Recoveries, the type
of property received) and as custodian for the benefit of the Credit Parties.
     (c) In determining the amounts and recipients of applications pursuant to
Section 4(a), Collateral Agent may rely on the most recent information provided
by the Credit Parties pursuant to Section 7, Collateral Agent’s own records of
distributions hereunder (and of the portion of such distributions that
constitute Proceeds of Pledged Collateral) and the Recovery Percentages and
Interim Recovery Caps of the various Credit Parties as of a date selected by
Collateral Agent that is not more than ten (10) Business Days prior to the date
of application (and Collateral Agent shall not be required to take account of
any assignment, currency fluctuation or other change in the identity of any
Credit Party or in the amount of outstanding Credit Obligations occurring after
such date).
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     (d) Applications of Recoveries by Collateral Agent to (i) Global Credit
Agreement Obligations shall be made, to the extent not inconsistent with the
terms of this Agreement, as directed by the Required Lenders or, in the absence
of such direction, as Global Administrative Agent shall direct; (ii) Other DSD
Obligations shall be made to or as directed by the Representative of the holders
thereof; and (iii) Hedging Obligations shall be made to or as directed by the
applicable Swap Party.
SECTION 5. SHARING AND EQUALIZATION OF RECOVERIES.
     (a) If, at any time prior to the Final Distribution Date, any Sharing Party
(other than a Noteholder or its Representative, unless such Noteholder is a
Ratifying Noteholder) shall have received for application to its Shared Credit
Obligations aggregate Recoveries in excess of the amount of Recoveries such
Credit Party would have received if all Recoveries had been applied in
accordance with Section 4(a) (after giving effect to any adjustment pursuant to
Section 6), such Credit Party shall hold such excess amount in trust for the
benefit of the other applicable Sharing Parties and shall, upon becoming aware
of such excess, promptly pay over such excess amount in the form received to
Collateral Agent for distribution to the Credit Parties pursuant to
Section 4(a).
     (b) If any Sharing Party makes any payment to Collateral Agent for the
benefit of one or more other Sharing Parties pursuant to Section 5(a), each such
other Sharing Party (other than any Noteholder or its Representative, unless
such Noteholder is a Ratifying Noteholder) shall, upon the request of the
Sharing Party that made such payment (which request shall be made through
Collateral Agent and shall apply to all other such Sharing Parties), transfer to
the Sharing Party that made such payment a participation in such other Sharing
Party’s claim against the applicable Obligor equal to the amount such other
Sharing Party received from Collateral Agent as a result of such payment (or
make other arrangements as contemplated by Section 6).
     (c) Not later than five Business Days prior to each Equalization Date,
Collateral Agent shall distribute to the Sharing Parties a schedule setting
forth in reasonable detail a calculation (based upon the most recent information
provided by the Sharing Parties pursuant to Section 7 and Collateral Agent’s own
records of distributions hereunder) of the Recovery Percentages and Interim
Recovery Caps of the various Sharing Parties as of a date not more than 30 days
prior to the date on which such schedule is distributed (a “Record Date”);
provided that Collateral Agent shall not be required to incorporate into any
such schedule the effect of any assignment, currency fluctuation or other change
in the identity of any Sharing Party or in the amount of outstanding Shared
Credit Obligations occurring after the applicable Record Date.
     (d) On each Equalization Date, each Purchasing Credit Party shall purchase,
ratably from each applicable Selling Credit Party (or make other arrangements
with any such Selling Credit Party as contemplated by Section 6), a
participation in the Shared Credit Obligations of such Selling Credit Party
and/or make transfers of Recoveries to Collateral Agent for delivery to Sharing
Noteholders in amounts such that, after giving effect to all such purchases and
transfers, the Recovery Percentage of each Sharing Party equals, as nearly as
possible, the Aggregate Recovery Percentage as of the immediately preceding
Record Date; provided that (i) the Majority Credit Parties may reduce, limit or
withhold entirely transfers to any Sharing Noteholder to ensure that, after
giving effect to all payments, distributions and transfers on the Final
Distribution Date, such Sharing Noteholder will not have a Recovery Percentage
greater than the Aggregate Recovery Percentage and (ii) no Purchasing Credit
Party shall be required to make any purchase or transfer that would reduce its
Recovery Percentage below the Aggregate Recovery Percentage.
     (e) On the Final Distribution Date, after giving effect to all applications
of Recoveries that have previously been made pursuant to Section 4, the other
provisions of this Section 5 and the provisions
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of Section 6, each Sharing Party that has a Final Recovery Percentage that
exceeds the Final Aggregate Recovery Percentage shall transfer to Collateral
Agent (or such Person or Persons as Collateral Agent shall direct) such portion
of the Recoveries of such Sharing Party (in such currencies and from such
Obligors as the Majority Credit Parties shall direct or, in the absence of such
direction, as such Sharing Party shall select), and Collateral Agent shall
distribute (or direct the distribution of) the proceeds of such transfer (and
all other transfers so received) to such Sharing Parties, so that, after giving
effect to all such transfers and distributions, each Sharing Party’s Final
Recovery Percentage equals, as nearly as possible, the Final Aggregate Recovery
Percentage; provided that no Sharing Party shall be required to make any
transfer that would reduce its Final Recovery Percentage below the Final
Aggregate Recovery Percentage. As more fully set forth in Section 6, any two or
more Sharing Parties may make alternative arrangements for sharing Recoveries
among themselves, and Collateral Agent shall take such arrangements into account
in calculating amounts to be transferred to, and distributions to be made by,
Collateral Agent on the Final Distribution Date so long as Collateral Agent
receives notice thereof in sufficient time (as determined in Collateral Agent’s
discretion) prior to the Final Distribution Date.
     (f) The Majority Credit Parties, in consultation with Collateral Agent, may
(but shall not be obligated to) direct or delay the allocation of purchases
among Purchasing Credit Parties and Selling Credit Parties and/or transfers to
Noteholders pursuant to Section 5(b), 5(d) or 5(e) in order to conform to
applicable legal and regulatory restrictions and/or to minimize taxes payable on
Recoveries and/or to avoid the purchase of participation interests in the Credit
Obligations owing by a Dutch Borrower by a Credit Party that is not a PMP.
     (g) If any Credit Party that is not a PMP is required under this Section 5
to purchase a participation interest in the Credit Obligations owing by a Dutch
Borrower or otherwise becomes (by the purchase of an assignment or otherwise)
the holder of any such Credit Obligations, then such Credit Party shall
immediately sell, assign or otherwise transfer such participation interest (for
consideration to be negotiated) to a PMP or another Person that is a PMP in
accordance with the requirements of the Exemption Regulation.
     (h) All purchases and sales of participations, and all other transfers,
pursuant to this Section 5 shall be made without recourse (except that the
Selling Credit Party shall be deemed to warrant that it has good title to the
participation interest being sold, free and clear of all Liens). To effect such
purchases and sales of participations, each Purchasing Credit Party shall
deliver immediately available funds to or as directed by Collateral Agent (which
may include delivery of funds directly to a Selling Credit Party) in an
aggregate amount equal to the amount of participations in the Shared Credit
Obligations required to be purchased by such Purchasing Credit Party pursuant to
this Section 5 and, if such funds are delivered to Collateral Agent or an agent
therefor (including any Funding Agent), Collateral Agent or such agent will
promptly deliver such funds to the applicable Selling Credit Parties. All
participation interests sold pursuant to this Section 5 shall be fully
transferable (subject to the other provisions hereof, including Section 5(g)). A
Purchasing Credit Party shall only be entitled to share in interest and fees on
a purchased participation interest accruing from the date that such Purchasing
Credit Party has paid for such participation interest.
     (i) Subject to the right of the applicable Credit Parties to agree to
alternate arrangements as contemplated by Section 6, whenever a Purchasing
Credit Party is required to purchase a participation from a Selling Credit
Party, such Purchasing Credit Party shall, first, purchase an undivided, pro
rata and pari passu participation in the Shared Credit Obligations of such
Selling Credit Party that are denominated in the same currencies as the
Recoveries received by such Purchasing Credit Party, in the inverse order of the
dates of such Purchasing Credit Party’s receipt of such Recoveries, second,
purchase an undivided, pro rata and pari passu participation in the Shared
Credit Obligations of such Selling Credit Party that are
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denominated in Dollars (based on the applicable Foreign Currency Equivalent at
the time of such purchase) and, then, purchase an undivided, pro rata and pari
passu participation in the remaining Shared Credit Obligations of such Selling
Credit Party (based on the applicable Foreign Currency Equivalents at the time
of such purchase). If more than one Purchasing Credit Party is required on any
date to purchase participations in Shared Credit Obligations of a Selling Credit
Party denominated in any applicable currency, such Purchasing Credit Parties
shall purchase such participations from such Selling Credit Party ratably in
accordance with the outstanding Shared Credit Obligations of such Purchasing
Credit Parties that are denominated in such currency.
     (j) Notwithstanding any other provision of this Agreement, unless the
Majority Credit Parties otherwise agree, no amount paid by a Credit Party to (or
for the benefit of) a Noteholder shall give rise to a participation interest in
any Credit Obligation held by such Noteholder (it being understood that any such
payment shall be made free and clear of any interest of such Credit Party as
part of the equalization of Recoveries contemplated hereby, but otherwise shall
be made without recourse or any representation or warranty).
     (k) If the Final Distribution Date occurs by operation of clause (a) of the
definition thereof and the claims of one or more Credit Parties in the
applicable Bankruptcy Proceeding have not been fully adjudicated, the Majority
Credit Parties may (i) defer the requirements of Section 5(e) until all or
substantially all claims have been adjudicated or (ii) for purposes of
determining each Sharing Party’s Final Recovery Percentage following advice of
counsel and consultation with valuation advisors, reasonably determine the Final
Recovery Percentage of each Sharing Party whose claims are subject to
adjudication, in order to satisfy the requirements of Section 5(e) on the Final
Distribution Date (or such later date determined by the Majority Credit
Parties).
SECTION 6. EQUALIZATION CONSIDERATIONS.
     Notwithstanding Sections 4 and 5:
     (a) If, not less than five Business Days prior to any Equalization Date or
the Final Distribution Date, the Majority Credit Parties, in consultation with
Collateral Agent, determine (based upon the Equalization Considerations) that
the Recoveries from an Obligor could have been (but were not) applied in a
manner that would have resulted, or would result, in (i) a greater Aggregate
Recovery Percentage or Final Aggregate Recovery Percentage or (ii) substantially
fewer and/or materially smaller Recovery Shortfalls, then (x) the Majority
Credit Parties may direct Collateral Agent to, and Collateral Agent shall,
(1) redetermine the application (but not, if relevant, the Foreign Currency
Equivalent determinations) of Recoveries from such Obligor (without regard to
the order of application specified in clauses THIRD through TENTH of
Section 4(a)) to achieve such result and (2) promptly notify each Sharing Party
(or its Representative) of the amounts (if any) and applicable currencies of all
payments required to be made by such Sharing Party to Collateral Agent for the
account of the other applicable Sharing Parties, and the amounts (if any) and
applicable currencies of all payments such Sharing Party is entitled to receive
from other applicable Sharing Parties, based upon the reapplication of
Recoveries in accordance with such recalculation, and (y) each applicable
Sharing Party shall promptly deliver such amounts to Collateral Agent; provided
that no Noteholder or Representative thereof (other than a Ratifying Noteholder
and any Representative thereof) shall be required to deliver any amount to
Collateral Agent pursuant to this Section 6(a).
     (b) If at any time the purchase by a Sharing Party of a participation in
the Shared Credit Obligations of another Sharing Party is illegal or
impractical, or will subject any Obligor or any Sharing Party to any material
tax or other material cost or expense, or is otherwise materially
disadvantageous to
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any Sharing Party, then the Majority Credit Parties may, in consultation with
Collateral Agent, determine (based upon the Equalization Considerations) that
the sharing of Recoveries shall be accomplished via other arrangements
(including by (i) requiring assignments of Shared Credit Obligations in lieu of
participations, (ii) requiring a Purchasing Credit Party to purchase
participations in Shared Credit Obligations denominated in a particular
currency, or owed by a particular Obligor, from a Selling Credit Party, rather
than in the Shared Credit Obligations otherwise indicated herein,
(iii) requiring a Purchasing Credit Party to purchase more than the amount
necessary to eliminate the Recovery Shortfall of a Selling Credit Party and
simultaneously requiring such Selling Credit Party to purchase a participation
in the Shared Credit Obligations (or particular Shared Credit Obligations) of
such Purchasing Credit Party or (iv) requiring a reapplication of payments of
the type described in clause (a) above); provided that any such other
arrangement shall achieve the same (or a better) economic effect for all
affected Sharing Parties as would have been the case without such arrangement.
     (c) Without limiting clauses (a) and (b) above, any two or more Sharing
Parties may agree upon different arrangements for sharing Recoveries hereunder
so long as (i) all of such Sharing Parties have agreed to such arrangement,
(ii) such arrangement will not adversely affect any Credit Party that has not
agreed to participate in such arrangement and (iii) unless Collateral Agent has
otherwise agreed in writing, such arrangement shall not require Collateral Agent
to make any distribution of Recoveries other than in accordance with the express
terms hereof.
     (d) To facilitate the equalization of Recoveries, each Sharing Party agrees
that it will approve the issuance of, and will use (or approve Collateral Agent
or another representative of such Sharing Party using) reasonable efforts to
cause the issuance of, any Obligor Securities (i) directly to the applicable
Sharing Parties and not to Collateral Agent for the benefit of any Sharing Party
and (ii) in proportions so that, on the Final Distribution Date, the percentage
obtained by dividing (x) a Sharing Party’s Recoveries received in the form of
Obligor Securities (and if more than one type of Obligor Securities is issued,
then of each type of Obligor Securities) by (y) such Sharing Party’s total
Recoveries shall be substantially equivalent for each Sharing Party; provided
that this Section 6(d) shall not require any Sharing Party to vote in favor of,
or vote against, any particular plan of reorganization in a Bankruptcy
Proceeding.
     (e) For the avoidance of doubt, in making any redetermination of the
application of Recoveries pursuant to Section 6(a) or directing any allocation
of participations (or other arrangements that have the economic effect thereof),
the Majority Credit Parties may determine that an amount initially applied to
pay a particular Credit Obligation of an Obligor shall be deemed to have been
applied to pay a different Credit Obligation of such Obligor. Thus, for example,
if a Recovery from an Obligor initially is applied pursuant to Section 4(a) to
pay Direct Obligations of such Obligor in its capacity as a Borrower under the
Global Credit Agreement, such Recovery subsequently may be deemed to have been
applied in whole or in part to pay Direct Obligations of such Obligor in its
capacity as a Borrower under any other Tranche of the Global Credit Agreement
and/or as a borrower under any other Financing Agreement and/or Indirect
Obligations of such Obligor in its capacity as a guarantor of the Credit
Obligations of any other Obligor, in which case the applicable Global Lenders
shall be required to return all or the relevant portion of the amount previously
received by them pursuant to Section 4(a) and Collateral Agent shall distribute
such amount to the holders of the applicable Direct Obligations of such Obligor
and/or to beneficiaries of the applicable Guaranty (or, at the option of such
Global Lenders, to purchase participations in the Credit Obligations of the
applicable Sharing Parties to achieve the same economic effect). For purposes of
implementing the foregoing, all applications of Recoveries pursuant to
Sections 4, 5 and 6 shall, as between the applicable Obligor and Collateral
Agent, be deemed to be subject to reapplication at any time in accordance with
this Agreement.
SECTION 7. INFORMATION.
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     (a) Global Administrative Agent shall promptly from time to time, upon the
written request of Collateral Agent, notify Collateral Agent of the outstanding
Global Credit Agreement Obligations as at such date as Collateral Agent may
specify. Collateral Agent shall be entitled to rely conclusively upon all
information so provided by Global Administrative Agent.
     (b) Any Representative acting on behalf of any holder of any Other DS Debt
shall promptly from time to time, upon the written request of Collateral Agent,
provide Collateral Agent with all information reasonably requested by Collateral
Agent with respect to the Other DSD Obligations arising under the applicable
Other DSD Agreement (including information regarding the amount and timing of
Recoveries) as at such date as Collateral Agent may specify. Collateral Agent
shall be entitled to rely conclusively upon all information so provided by any
Representative.
     (c) Each Swap Party shall promptly from time to time, upon the written
request of Collateral Agent, notify Collateral Agent of the Hedging Exposure of
and/or Hedging Obligations owed to such Swap Party. Collateral Agent shall be
entitled to rely conclusively upon all information so provided by any Swap
Party.
     (d) All calculations made by Collateral Agent pursuant to the terms hereof
shall be conclusive and binding upon all Obligors and all other Credit Parties,
absent manifest error.
     (e) In making any calculation of payments to be made on the Final
Distribution Date, Collateral Agent shall be entitled to rely on its records as
to the Credit Parties, Credit Obligations, Shared Credit Obligations, Recovery
Percentages and other relevant amounts as of a date (which shall not be more
than thirty (30) Business Days prior to the Final Distribution Date) selected by
Collateral Agent or the Majority Credit Parties (and Collateral Agent shall not
be required to take account of any assignment, currency fluctuation or other
change in the identity of any Credit Party or in the amount of outstanding
Credit Obligations occurring within fifteen (15) Business Days prior to the
Final Distribution Date).
SECTION 8. OTHER DS DEBT; ADDITIONAL VOTING CREDIT PARTIES.
     (a) If ProLogis incurs indebtedness that (i) is not contractually
subordinated to any other indebtedness (including indebtedness under the Global
Credit Agreement) of ProLogis, (ii) at the time of incurrence is in (or, in the
case of indebtedness arising under a revolving credit facility, at the time of
the effectiveness of such facility may be incurred from time to time by ProLogis
in) an aggregate principal amount (for all indebtedness issued or commitments
made concurrently on the same terms, regardless of whether held by multiple
parties) of $25,000,000 (or its equivalent) or more and (iii) is not, at the
time of incurrence, prohibited by the terms of the Global Credit Agreement or
any Other DSD Agreement that gives rise to Voting Obligations, then ProLogis may
designate such indebtedness as “Designated Senior Debt” in a Notice of
Designated Senior Debt.
     (b) ProLogis shall promptly notify Collateral Agent of its designation of
any indebtedness as Designated Senior Debt, specifying (i) whether the
obligations in respect of such Designated Senior Debt shall constitute Voting
Obligations, (ii) if the obligations in respect of such Designated Senior Debt
do not constitute Voting Obligations, whether such obligations constitute Credit
Obligations of Noteholders, (iii) the name, address, contact and facsimile
number of a Representative of the holders of such Designated Senior Debt, and
(iv) whether such Representative is to become a Party. If the obligations in
respect of any Designated Senior Debt are to constitute Voting Obligations under
this Agreement, then the holders of such Designated Senior Debt or a
Representative thereof shall sign an acknowledgment in the form of Exhibit B,
and promptly deliver the same to Collateral Agent, by which such Party on behalf
of the
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holders of such Designated Senior Debt agrees to be bound by the terms of this
Agreement and thereupon such Party shall be considered a Voting Credit Party.
     (c) Not later than 45 days after the Trigger Date, Collateral Agent shall
deliver a notice in the form of Exhibit C to each Representative of one or more
Noteholders. If, not later than 120 days after receipt of such notice, such
Representative delivers an acknowledgement in the form of Attachment 1 to
Exhibit C to Collateral Agent, then in addition to being entitled to the
benefits of the Pledge Agreements to the extent set forth herein, the
Noteholders that are represented by such Representative shall be Sharing Parties
and shall be entitled to the benefits of the sharing arrangements set forth
herein.
     (d) Subject to any limitation set forth in the applicable Financing
Agreement or Notice of Designated Senior Debt (and, in the case of any “Note
Agreement” listed on Schedule 2, subject to compliance with the requirements of
Section 8(e)), ProLogis may revoke the classification of Designated Senior Debt
with respect to indebtedness arising under any Financing Agreement upon delivery
of notice to Collateral Agent in the manner provided in Section 11(a).
     (e) Notwithstanding anything contained herein to the contrary, (i) ProLogis
may revoke the classification of any “Note Agreement” listed on Schedule 2 as an
Other DSD Agreement (in which case the obligations thereunder shall no longer
constitute Designated Senior Debt or Credit Obligations) and (ii) ProLogis shall
not designate any indebtedness owing to a Noteholder as Other DS Debt unless
ProLogis reserves the right, in the applicable Financing Agreement or Notice of
Designated Senior Debt, to revoke such classification, in each case not less
than 90 days after disclosing such revocation (in a footnote or otherwise) in a
Form 10-Q or 10-K filed with the United States Securities Exchange Commission.
     (f) Notwithstanding anything contained herein to the contrary, if the
Sharing Noteholders under a particular Financing Agreement (or under a separate
and distinct series of obligations issued under a Financing Agreement), or a
subset of such Sharing Noteholders on behalf of all such Sharing Noteholders
(any group of Sharing Noteholders described below, “Ratifying Noteholders”),
agree to assume and perform all of the obligations hereunder applicable to
Credit Parties other than Noteholders (including to share Recoveries with,
purchase participations from and make payments to other Sharing Credit Parties
pursuant to Sections 5 and 6, to indemnify Collateral Agent pursuant to
Section 9(c) and to return funds to Collateral Agent under circumstances
described in Section 10) and provide assurance reasonably acceptable to Majority
Credit Parties (such as a letter of credit or a guarantee from one or more
creditworthy Ratifying Noteholders) that such Ratifying Noteholders will be able
to perform (or such subset will be able to perform on behalf of all such
Ratifying Noteholders) such obligations, then such Ratifying Noteholders will
cease to be subject to an Interim Recovery Cap and shall be entitled to the
rights, and subject to the obligations, expressly specified herein to be
applicable to Ratifying Noteholders.
SECTION 9. DISCLAIMERS, INDEMNITY, ETC.
     (a) Collateral Agent shall have no duties or responsibilities except those
expressly set forth in this Agreement and the Security Documents. Although
Collateral Agent shall comply with its custodial duties in Section 4(a),
Collateral Agent shall not by reason of this Agreement, the Guaranties or the
Security Documents be a trustee or fiduciary for any other Credit Party or have
any other fiduciary obligation to, or fiduciary relationship with, any other
Credit Party (including any obligation under the Trust Indenture Act of 1939).
Collateral Agent shall not be responsible to any other Credit Party for any
recital, statement, representation or warranty contained in any Financing
Agreement or in any certificate or other document referred to or provided for
in, or received by any Credit Party under, any Financing Agreement, or for the
value, validity, effectiveness, genuineness, enforceability or sufficiency of
any
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Financing Agreement or any other document referred to or provided for therein or
any Lien under any of the Security Documents or the perfection or priority of
any such Lien or for any failure by any Obligor, any other Credit Party or any
other Person to perform any of its obligations under any Financing Agreement.
Without limiting the foregoing, Collateral Agent shall not be required to take
any action under any Guaranty or Security Document, including any action to
perfect any security interest granted in the Collateral pursuant to such
Security Document, or to administer any Collateral unless instructed to do so by
the Majority Credit Parties. Collateral Agent may employ agents and
attorneys-in-fact and shall not be responsible, except as to money or securities
received by it or its authorized agents, for the negligence or misconduct of any
such agent or attorney-in-fact selected by it with reasonable care. Neither
Collateral Agent nor any of its directors, officers, employees or agents shall
be liable or responsible for any action taken or omitted to be taken by it or
them hereunder or in connection herewith, except to the extent such action or
omission constituted gross negligence or willful misconduct of such Person. Each
Credit Party agrees that (i) each Funding Agent shall be an agent of Collateral
Agent for purposes of this Agreement, (ii) all indemnities and other protections
granted to Collateral Agent hereunder shall be equally applicable to each
Funding Agent, (iii) Collateral Agent may direct an Obligor to make payments
with respect to such Obligor’s Credit Obligations (other than Global Credit
Agreement Obligations, which shall be paid to the applicable Funding Agent in
accordance with the terms of the Global Credit Agreement) to such Funding Agent
as Collateral Agent may from time to time determine and (iv) any Recovery
received by a Funding Agent shall be deemed to have been received by Collateral
Agent.
     (b) Collateral Agent shall be entitled to rely upon any certification,
notice or other communication (including any thereof by telephone, telex,
facsimile, e-mail, telegram or cable) believed by it to be genuine and correct
and to have been signed or sent by or on behalf of the proper Person or Persons,
and upon advice and statements of independent legal counsel, independent
accountants and other experts selected by Collateral Agent. As to any matters
not expressly provided for by this Agreement, Collateral Agent shall in all
cases be fully protected in acting, or in refraining from acting, hereunder in
accordance with instructions signed by the Majority Credit Parties, and such
instructions of the Majority Credit Parties, and any action taken or failure to
act pursuant thereto, shall be binding on all Credit Parties.
     (c) By its signature hereto, ProLogis agrees that it will indemnify
Collateral Agent, in its capacity as Collateral Agent, to the extent Collateral
Agent is not reimbursed pursuant to clause FIRST of Section 4(a), for all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever that may be
imposed on, incurred by or asserted against Collateral Agent in any way relating
to or arising out of this Agreement, any Guaranty or any Security Document or
the enforcement of any of the terms of any thereof, including reasonable fees
and expenses of counsel (including the reasonable allocated cost of internal
counsel) (collectively, the “Indemnified Liabilities”); provided that ProLogis
shall not be liable for any Indemnified Liabilities to the extent such
Indemnified Liabilities are found in a final, non-appealable judgment by a court
of competent jurisdiction to have arisen from Collateral Agent’s gross
negligence or willful misconduct. To the extent ProLogis fails to reimburse
Collateral Agent for any amount that is payable pursuant to the foregoing
sentence and Collateral Agent does not receive payment thereof pursuant to
clause FIRST of Section 4(a), the Voting Credit Parties agree that they will
indemnify Collateral Agent, in its capacity as Collateral Agent, for such
amount, ratably in accordance with the amount of the Voting Obligations held by
such Voting Credit Parties. The obligations of ProLogis and the Voting Credit
Parties under this Section 9(c) shall survive the payment in full of the Credit
Obligations and the termination of this Agreement.
     (d) Except for action expressly required of Collateral Agent hereunder,
Collateral Agent shall, notwithstanding Section 9(c), in all cases be fully
justified in failing or refusing to act hereunder unless it shall be further
indemnified to its reasonable satisfaction by the Credit Parties against any and
all liability and expense that may be incurred by it by reason of taking or
continuing to take any such action.
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     (e) Collateral Agent may deem and treat the payee of any promissory note or
other evidence of indebtedness or obligation relating to any Credit Obligation
as the owner thereof for all purposes hereof unless and until a written notice
of the assignment or transfer thereof, signed by such payee and in form
reasonably satisfactory to Collateral Agent, shall have been filed with
Collateral Agent. Any request, authority or consent of any Person which at the
time of making such request or giving such authority or consent is the holder of
any such note or other evidence of indebtedness or obligation shall be
conclusive and binding on any subsequent holder, transferee or assignee of such
note or other evidence of indebtedness or obligation and of any note or notes or
other evidences of indebtedness or obligation issued in exchange therefor.
     (f) Except as expressly provided herein and in the Security Documents,
Collateral Agent shall have no duty to take any affirmative steps with respect
to the administration or collection of amounts payable in respect of the
Guaranties, the Security Documents or the Collateral. Collateral Agent shall
incur no liability (except to the extent the actions or omissions of Collateral
Agent in connection therewith constitute gross negligence or willful misconduct)
as a result of any sale of any Collateral, whether at any public or private
sale.
     (g) Collateral Agent may resign at any time by giving at least thirty
(30) days’ notice thereof to the Parties. In the event of any such resignation,
the Majority Credit Parties shall have the right (subject, so long as no Event
of Default exists, to the written consent of ProLogis, which shall not be
unreasonably withheld or delayed) to appoint a successor Collateral Agent. If no
successor Collateral Agent shall have been appointed by the Majority Credit
Parties and shall have accepted such appointment within thirty (30) days after
the notice of the intent of Collateral Agent to resign, then the retiring
Collateral Agent shall, on behalf of the other Credit Parties, use reasonable
efforts to appoint a successor Collateral Agent. Any successor Collateral Agent
appointed pursuant to this clause shall be a commercial bank or other financial
institution organized under the laws of the United States of America or any
state thereof having (1) a combined capital and surplus of at least $500,000,000
and (2) a rating upon its long-term senior unsecured indebtedness of “A-2” or
better by Moody’s Investors Service, Inc. or “A” or better by Standard & Poor’s
Corporation. If, in the case of a resignation, no successor Collateral Agent has
accepted appointment by the date that is sixty (60) days following the resigning
Collateral Agent’s notice of resignation, then the resigning Collateral Agent’s
resignation shall nevertheless thereupon become effective and the Voting Credit
Parties shall perform all of the duties of Collateral Agent hereunder until such
time, if any, as the Majority Credit Parties appoint a successor Collateral
Agent as provided for above. After any Collateral Agent’s resignation hereunder,
the provisions of Sections 3 and 9 shall continue to inure to its benefit as to
any action taken or omitted to be taken by it while it was Collateral Agent.
Successors to Global Administrative Agent shall automatically serve as
Collateral Agent hereunder, provided that Global Administrative Agent has not
made an election to the contrary.
     (h) Upon the acceptance by a successor Collateral Agent of any appointment
as Collateral Agent hereunder, such successor Collateral Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Collateral Agent, and the retiring Collateral Agent shall
thereupon be discharged from its duties and obligations hereunder. ProLogis
agrees to pay any successor Collateral Agent reasonable and customary fees for
serving as Collateral Agent hereunder (subject, so long as the Trigger Date has
not occurred, to approval of the amount of such fees by ProLogis (such approval
not to be unreasonably withheld)).
     (i) Any Person: (i) into which Collateral Agent may be merged or
consolidated or (ii) that may result from any merger, conversion or
consolidation to which Collateral Agent shall be a party shall (if Collateral
Agent is not the surviving entity) be the successor of Collateral Agent without
the execution or filing of any instrument or any further act on the part of any
of the parties hereto.
24                Amended and Restated Security Agency Agreement

 

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     (j) In no event shall Collateral Agent or any other Credit Party be liable
or responsible for any funds or investments of funds held by ProLogis or any
other Obligor.
     (k) With respect to its share of the Credit Obligations, Bank of America
(and any Person acting as successor Collateral Agent) and its Affiliates shall
have and may exercise the same rights and powers hereunder as, and are subject
to the same obligations and liabilities as and to the extent set forth herein
for, any other Credit Party, all as if Bank of America (or such successor) were
not Collateral Agent. The terms “Credit Parties” or “Global Lenders” or any
similar term shall, unless the context clearly otherwise indicates, include Bank
of America (and any Person acting as successor Collateral Agent) or any
Affiliate thereof in its individual capacity as a Credit Party or Global Lender.
Bank of America (and any Person acting as successor Collateral Agent) and its
Affiliates may lend money to, and generally engage in any kind of business with,
any Obligor as if Bank of America (or such successor) were not acting as
Collateral Agent and without any duty to account therefor to the Credit Parties.
Without limiting the foregoing, each Credit Party acknowledges that (i) Bank of
America is both a Global Lender and Global Administrative Agent under the Global
Credit Agreement and Collateral Agent under the Security Documents and (ii) Bank
of America (and any Person acting as successor Collateral Agent) and its
Affiliates may continue to engage in any credit decision with respect to the
Global Credit Agreement, any Hedging Agreement under which Bank of America (or
such successor) or any of its Affiliates is a counterparty or any other
Financing Agreement, without any duty to account therefor to the Credit Parties
by reason of Bank of America’s (or such successor’s) role as Collateral Agent
under this Agreement.
     (l) Each Credit Party acknowledges that it has, independently and without
reliance upon Collateral Agent or any other Credit Party and based upon such
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement and the other Financing
Agreements to which it is a party. Each Credit Party also acknowledges that it
will, independently and without reliance upon Collateral Agent or any other
Credit Party and based upon such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Financing Agreements to which it is a party.
     (m) If, with respect to any proposed action to be taken by it, Collateral
Agent shall determine in good faith that the provisions of this Agreement
relating to the functions or discretionary powers of Collateral Agent are or may
be ambiguous or inconsistent, Collateral Agent shall notify the Voting Credit
Parties, identifying the proposed action and the provisions it considers to be
ambiguous or inconsistent, and may decline either to perform such function or
responsibility or to exercise such discretionary power unless it has received
the written confirmation of the Majority Credit Parties that the Majority Credit
Parties concur that the action proposed to be taken by Collateral Agent is
consistent with the terms of this Agreement or is otherwise appropriate.
Collateral Agent shall be fully protected in acting or refraining from acting
upon the confirmation of the Majority Credit Parties in this respect, and such
confirmation shall be binding upon all Credit Parties, subject to Section 11(b).
     (n) Each Credit Party acknowledges that Collateral Agent shall not be
required to perform any obligation or duty other than those expressly set forth
in this Agreement, and shall have no implied duty or obligation to any Credit
Party. Collateral Agent shall have no liability or responsibility to any Credit
Party for any action or omission under this Agreement to the extent that such
action or omission results from the failure of any other Credit Party to
perform, in a timely manner, its obligations under this Agreement.
Notwithstanding anything to the contrary contained in this Agreement, the time
periods established for actions by Collateral Agent, including calculations and
the distribution of payments, may be extended as Collateral Agent deems
reasonably necessary to permit the making of accurate calculations and payments
in accordance with the provisions of this Agreement.
25                Amended and Restated Security Agency Agreement

 

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SECTION 10. INVALIDATED PAYMENTS.
     If Collateral Agent or any other Credit Party receives any amount pursuant
to this Agreement that is subsequently required to be returned or repaid by
Collateral Agent or such other Credit Party to any Obligor or any Obligor’s
representatives or successors in interest, whether by court order, settlement of
a claim or action seeking return or repayment of any such amount or otherwise (a
“Repayment Event”), then:
     (a) if such Repayment Event results in Collateral Agent being required to
return or repay any amount distributed by it to the other Credit Parties under
this Agreement, each Credit Party to which such amount was distributed shall,
forthwith upon its receipt of a notice thereof from Collateral Agent, pay
Collateral Agent an amount equal to such Credit Party’s ratable share (based on
the amount distributed to such Credit Party) of the amount required to be
returned or repaid relating to such Repayment Event; and, if Collateral Agent’s
repayment obligation includes any amount of interest accrued on the amount
distributed by it under this Agreement, then the payment obligations of each
such Credit Party shall include a ratable share of such interest (adjusted, if
necessary, to account for the period of time such Credit Party had the proceeds
of the amount required to be returned or repaid); and
     (b) if such Repayment Event results in any Credit Party being required to
return or repay, and such Credit Party returns or repays, any material amount
received by it (whether from an Obligor, through Collateral Agent or otherwise)
for its own account under this Agreement, then Collateral Agent shall designate
a date (occurring not more than 45 days after such Repayment Event) as an
Equalization Date.
SECTION 11. MISCELLANEOUS.
     (a) All notices and other communications provided for herein shall be in
writing and may be sent by overnight air courier, facsimile communication,
e-mail or mail and shall be deemed to have been given when delivered by
overnight air courier, when delivered by facsimile communication or e-mail with
electronic confirmation of receipt or five (5) Business Days after deposit in
the mail, registered or certified, with postage prepaid and properly addressed.
For the purposes hereof, the address of each Party (until notice of a change
thereof is delivered as provided in this Section 11(a)) shall be set forth under
such Party’s name on the signature pages (including acknowledgments) hereof. Any
notice to a Representative of any Credit Party shall constitute notice to such
Credit Party.
     (b) This Agreement may be amended, modified or waived only by an instrument
or instruments in writing signed by ProLogis (unless such amendment or
modification does not adversely affect the rights, interests or obligations of
any Obligor or any Noteholder; provided that after the Trigger Date, ProLogis’
agreement to an amendment or modification shall not be required unless such
amendment or modification would adversely affect the economic, or material
legal, rights, interests or obligations of the Obligors or the Noteholders),
Collateral Agent and the Majority Credit Parties; provided that (i) subject to
clause (iii) below, any amendment, modification or waiver of Section 4(a) or
(b), Section 5(a), (b), (d) or (e) or Section 6(a) or (b) must be signed by each
holder (or the Representative thereof) of Voting Obligations that is affected
thereby; (ii) any amendment, modification or waiver that would affect the rights
and obligations of Collateral Agent must be signed by Collateral Agent; and
(iii) prior to the date that ProLogis files its Form 10-Q with the Securities
and Exchange Commission for the fiscal quarter ended September 30, 2005,
ProLogis, Collateral Agent and Global Administrative Agent may, without the
consent of any other Credit Party (but with prompt notice to all Credit Parties
other than Noteholders), amend any provision hereof to clarify or correct such
provision so long as the essential agreements set
26                Amended and Restated Security Agency Agreement

 

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forth herein to share the Proceeds of Pledged Collateral ratably (to the extent
possible) among all Credit Parties and to share Recoveries (subject to the
limitations set forth herein) ratably (to the extent possible) among all Sharing
Parties are not affected.
     (c) This Agreement shall be binding upon and inure to the benefit of
(i) Collateral Agent; (ii) each other creditor of ProLogis that (A) is eligible
to become a Credit Party in accordance with the terms hereof and (B) agrees to
become a Credit Party by (I) executing and delivering a counterpart hereof or an
acknowledgment in the form of Exhibit B, (II) the execution and delivery hereof,
or of an acknowledgment in the form of Exhibit B, by a Representative thereof,
or (III) accepting any of the benefits hereof or of any Security Document; and
(iii) the respective successors and assigns of the foregoing (in each case with
respect to the obligations owed to such Credit Party that constitute Designated
Senior Debt in accordance with the terms hereof). Each transferee of any Credit
Obligation shall take such Credit Obligation subject to the provisions of this
Agreement and to any waiver or consent given or other action taken or authorized
hereunder by each previous holder of such Credit Obligation prior to the receipt
by Collateral Agent of written notice of such transfer; and, except as expressly
otherwise provided in such notice, Collateral Agent shall be entitled to assume
conclusively that the transferee named in such notice shall thereafter be vested
with all rights, powers and obligations as a Credit Party under this Agreement
with respect to the portion of the Credit Obligations transferred to such
transferee. Without limiting the foregoing, if any Credit Party transfers Credit
Obligations to a transferee, such transferee shall automatically assume all
obligations (contingent or otherwise) hereunder of the transferring Credit Party
(and any predecessor thereof) to repay amounts paid to such transferring Credit
Party (or any such predecessor) prior to the date of such transfer, or to buy
participations or enter into other arrangements to equalize Recoveries pursuant
to Sections 5 and 6, in each case with respect to a ratable portion of the
specific Credit Obligations so assigned; provided that unless Collateral Agent
consents in writing to a transfer of Credit Obligations (which consent will not
be unreasonably withheld), the transferring Credit Party shall also be obligated
for such obligations. Upon the written request of any Credit Party, Collateral
Agent will provide such Credit Party with copies of any written notices of
transfer received pursuant hereto.
     (d) This Agreement shall continue to be effective among the Credit Parties
even though a case or proceeding under any bankruptcy or insolvency law or any
proceeding in the nature of a receivership, whether or not under any bankruptcy
or insolvency law, shall be instituted with respect to any Obligor, or any
portion of the property or assets of any Obligor, and all actions taken by the
Credit Parties with regard to such proceeding shall be by the Majority Credit
Parties; provided that nothing herein shall be interpreted to preclude any
Credit Party from filing a proof of claim with respect to its Credit Obligations
or from casting its vote, or abstaining from voting, for or against confirmation
of a plan of reorganization in a case of bankruptcy, insolvency or similar law
in its sole discretion.
     (e) Each Credit Party agrees to do such further acts and things and to
execute and deliver such additional agreements (including participation
agreements), powers and instruments as any other Credit Party may reasonably
request to carry into effect the terms, provisions and purposes of this
Agreement or to better assure and confirm unto such other Credit Party hereto
its respective rights, powers and remedies hereunder; provided that the failure
of any Credit Party to execute or deliver any such agreement, power or
instrument shall not affect the validity or effectiveness of any provision of
this Agreement.
     (f) This Agreement may be executed in any number of counterparts, all of
which taken together shall constitute one and the same instrument, and any of
the parties hereto may execute this Agreement by signing any such counterpart.
Electronic submission of the signature of any party on any counterpart shall be
effective as the signature of such party for purposes of the effectiveness of
this Agreement.
27                Amended and Restated Security Agency Agreement

 

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     (g) If any Credit Party fails to make available to Collateral Agent (or, if
applicable, any Selling Credit Party) any amount payable by such Credit Party on
the date such amount is due hereunder, then interest shall accrue on such amount
at the Overnight Rate from such due date to the date on which (i) such Credit
Party pays such amount and all such accrued and unpaid interest thereon to
Collateral Agent (or the applicable Selling Credit Party) and/or (ii) Collateral
Agent (individually or on behalf of the applicable Selling Credit Party) makes a
payment to such Credit Party pursuant to Section 4, 5 or 6 that is net of such
amount and all such accrued and unpaid interest thereon. Without limiting the
foregoing, (x) if any Credit Party fails to promptly pay to Collateral Agent any
amount that is payable by such Credit Party to Collateral Agent under this
Agreement, Collateral Agent may deduct such amount from any amount payable
thereafter to such Credit Party under this Agreement, and (y) if any Credit
Party fails to make any payment or purchase any participation required to be
made or purchased by such Credit Party hereunder, including payments and
purchases required under Section 4 or 5, then no other Credit Party shall have
any liability, obligation or responsibility with respect to such non-payment.
     (h) Notwithstanding any other provision of this Agreement, no Credit Party
that contests, directly or indirectly, the validity or enforceability of this
Agreement or any provision hereof shall be entitled to receive any payment or
other distribution pursuant to Section 4, 5 or 6 or to receive any other benefit
hereunder (and the Credit Obligations of such Credit Party shall be excluded
from all calculations hereunder).
     (i) This Agreement shall become effective immediately upon execution by the
initial parties hereto and shall continue in full force and effect until one
year following the date upon which all Credit Obligations are irrevocably paid
in full and all commitments to create Credit Obligations have been terminated.
     (j) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE
PERFORMED ENTIRELY WITHIN SUCH STATE.
     (k) Headings of sections of this Agreement have been included herein for
convenience only and should not be considered in interpreting this Agreement.
     (l) Nothing in this Agreement, the Guaranties or the Security Documents,
expressed or implied, is intended or shall be construed to confer upon or give
to any Person, other than the Credit Parties and, to the extent expressly set
forth herein, ProLogis, any right, remedy or claim under or by reason of any
such agreement or any covenant, condition or stipulation herein or therein
contained.
     (m) If any provision in or obligation under this Agreement shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
     (n) ProLogis agrees to promptly deliver to Collateral Agent any amendment,
modification or supplement to any Financing Agreement.
     (o) This Agreement amends and restates in its entirety the Original
Agreement.
     (p) EACH PARTY (AND, BY ACCEPTING THE BENEFITS HEREOF, EACH OTHER CREDIT
PARTY) IRREVOCABLY AND UNCONDITIONALLY (I) SUBMITS, FOR ITSELF AND ITS PROPERTY,
TO THE NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF
28                Amended and Restated Security Agency Agreement

 

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NEW YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT OF
THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, IN
ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR FOR
RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT IN SUCH ACTION OR PROCEEDING;
(II) AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE
HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT, (III) WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER
HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT IN ANY COURT REFERRED TO ABOVE, (IV) WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM
TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT AND (V) AGREES
THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND
MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER
MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT SHALL AFFECT ANY RIGHT THAT A
CREDIT PARTY MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO
THE CREDIT OBLIGATIONS AGAINST ANY BORROWER, ANY GUARANTOR UNDER A GUARANTY, OR
ANY OTHER PERSON TO COLLECT, PRESERVE, OR ENFORCE CREDIT OBLIGATIONS, OR AGAINST
ITS OR THEIR PROPERTIES, IN THE COURTS OF ANY JURISDICTION.
     (q) EACH PARTY (AND, BY ACCEPTING THE BENEFITS HEREOF, EACH OTHER CREDIT
PARTY) IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL
PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT
OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY
OTHER THEORY). EACH PARTY (i) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (ii) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HAVE BEEN
INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS
AND CERTIFICATIONS IN THIS CLAUSE (q).
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
29                Amended and Restated Security Agency Agreement

 

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     IN WITNESS WHEREOF, the undersigned have caused this Agreement to be duly
executed and delivered by their respective officers thereunto duly authorized as
of the date first above written.

              BANK OF AMERICA, N.A., as Global Administrative Agent
 
       
 
  By:   /s/ Will T. Bowers, Jr.
 
       
 
      Will T. Bowers, Jr.
 
      Principal

     
 
  Bank of America, N.A.
 
  901 Main Street, 64th Floor
 
  P.O. Box 831000
 
  Dallas, Texas 75283-1000
 
  Attention: Will T. Bowers, Jr.
 
  Facsimile: (214) 209-0085

              BANK OF AMERICA, N.A., as Collateral Agent
 
       
 
  By:   /s/ Will T. Bowers, Jr.
 
       
 
      Will T. Bowers, Jr.
 
      Principal

     
 
  Bank of America, N.A.
 
  901 Main Street, 64th Floor
 
  P.O. Box 831000
 
  Dallas, Texas 75283-1000
 
  Attention: Will T. Bowers, Jr.
 
  Facsimile: (214) 209-0085

Signature Page to Amended and Restated Security Agency Agreement

 

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Acknowledged and agreed:
PROLOGIS, a Maryland real estate investment trust

       
By:
  /s/ M. Gordon Keiser, Jr.  
 
  M. Gordon Keiser, Jr.  
 
  Senior Vice President and Treasurer  

14100 East 35th Place
Aurora, Colorado 80011
Attention:       Mr. M. Gordon Keiser, Jr.
Facsimile:       (303) 375-8581
Signature Page to Amended and Restated Security Agency Agreement

 

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SCHEDULE 1
CREDIT AGREEMENTS
     The Multi-Currency Revolving Facility Agreement dated August 7, 2003 by and
among PLD Europe Finance B.V. and ProLogis UK Funding B.V., as original
borrower, ProLogis, as Parent, the guarantors named therein, ABN AMRO Bank N.V.,
as Facility Agent, and various lenders.
     The Revolving Credit Facility Agreement dated August 5, 2003 by and among
ProLogis Japan Finance Incorporated, as original borrower, certain additional
borrowers, ProLogis, as guarantor, Sumitomo Mitsui Banking Corporation, as
Agent, and various lenders.
     The Credit Agreement dated November 18, 2004 by and among the borrowers
named therein, ProLogis, as guarantor, Bank of America, acting through its
Canadian branch, as Administrative Agent, and various lenders named therein.
     The Credit Agreement (Multi-Year) dated November 8, 2002 by and among
ProLogis, as a borrower and guarantor, the other borrowers named therein, Bank
of America, as Administrative Agent, and various lenders.
     The Credit Agreement (364-Day) dated November 8, 2002 by and among
ProLogis, as borrower and guarantor, the other borrowers named therein, Bank of
America, as Administrative Agent, and various lenders.
     The Credit Agreement dated June 29, 2005 by and among ProLogis Macquarie
Fund, as borrower, ProLogis, as guarantor, Bank of America, as Administrative
Agent, and various lenders.

 

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SCHEDULE 2
EXISTING OTHER DESIGNATED SENIOR DEBT
     (1) Indebtedness of ProLogis under the Indenture dated as of March 1, 1995
between ProLogis (then known as Security Capital Industrial Trust) and US Bank
Trust National Association (as successor to State Street Bank and Trust
Company), as trustee.*
     (2) Indebtedness of ProLogis under the Note Purchase Agreement dated as of
November 15, 1997 between ProLogis (as successor by merger to Meridian
Industrial Trust, Inc.) and each of the Holders referred to therein.
     (3) Indebtedness of ProLogis under the Trust Deed dated as of April 13,
2004 among PLD International Finance LLC, ProLogis and ABN AMRO Trustees
Limited, as Trustee, pursuant to which PLD International Finance LLC issued
€350,000,000 of 4.375% Notes due 2011.*
     (4) Indebtedness of ProLogis under a guaranty of the obligations of
ProLogis UK Financial Services Limited under the Agreement dated July 15, 2005
between The Royal Bank of Scotland plc and ProLogis UK Financial Services
Limited relating to a credit facility in the original principal amount of
£75,500,000 for the issuance of bonds in connection with the development known
as Dartford Bridge in Dartford, England.
     (5) Indebtedness of ProLogis under a guaranty of the obligations of
ProLogis UK Financial Services Limited under the Agreement dated March 31, 2005
between The Royal Bank of Scotland plc and ProLogis UK Financial Services
Limited relating to certain performance bonds and other credit extensions.
* Indicates that such Financing Agreement is a Note Agreement.

 

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SCHEDULE 3
SECURITY DOCUMENTS
1. Second Amended and Restated Borrower Pledge Agreement dated as of October 6,
2005 executed by ProLogis and Collateral Agent.
2. Separate Subsidiary Pledge Agreements dated as of October 6, 2005 executed by
Collateral Agent and each of ProLogis Japan Finance Incorporated, ProLogis Japan
Incorporated, ProLogis Development Services Incorporated, ProLogis Management
Incorporated, ProLogis-North Carolina (2) Incorporated, ProLogis-Monterrey
(1) LLC, ProLogis-Monterrey (2) LLC, ProLogis-Reynosa (1) LLC, ProLogis-Reynosa
(2) LLC, ProLogis KK and ProLogis China Holding II Srl.
3. Pledge of Intercompany Receivables dated as of October 6, 2005 executed by
PLD Europe Finance B.V., ProLogis UK Funding B.V., ProLogis UK Finding II B.V.,
and Collateral Agent.

 

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EXHIBIT A
NOTICE OF DESIGNATED SENIOR DEBT
Date:                                         ,                     
     Please refer to the Amended and Restated Security Agency Agreement dated as
of October 6, 2005 (the “Security Agency Agreement”; capitalized terms used but
not defined herein have the respective meanings set forth in the Security Agency
Agreement) among Bank of America, N.A., as Global Administrative Agent, certain
other creditors of ProLogis (or their representatives) and Bank of America,
N.A., as Collateral Agent.
     By executing and delivering this Notice of Designated Senior Debt pursuant
to Section 8(a) of the Security Agency Agreement, ProLogis designates the
agreement described below as Other DS Debt (the “Additional DS Debt”).
     AGREEMENT:
     The Additional DS Debt shall be subject to the terms and provisions of the
Security Agency Agreement until [SPECIFY CIRCUMSTANCES UNDER WHICH PROLOGIS MAY
REVOKE DESIGNATION DESCRIBED ABOVE]. The obligations in respect of the
Additional DS Debt [do not] constitute Voting Obligations under the Security
Agency Agreement. The holders of the Additional DS Debt are [not] Noteholders.
The Representative of such holders, which shall [not] become a Party, is
[                    ] and the administrative details for such Representative
are as follows:

         
 
            [Name]    
 
  [Address]    
 
  Attention:   [                    ]
 
  Facsimile: [                    ]    

Exhibit A to Amended and Restated Security Agency Agreement

 

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EXHIBIT B
ACKNOWLEDGEMENT
Date:                                         ,                     
     Please refer to the Amended and Restated Security Agency Agreement dated as
of October 6, 2005 (the “Security Agency Agreement;” capitalized terms used but
not defined herein have the respective meanings set forth in the Security Agency
Agreement) among Bank of America, N.A., as Global Administrative Agent, certain
other creditors of ProLogis (or their representatives) and Bank of America,
N.A., as Collateral Agent.
     By executing and delivering this Acknowledgment, the undersigned[, as
[agent/trustee/representative] for the holders] [the holder] of the Other DS
Debt described on Attachment 1 hereto, agrees[, on its behalf and on behalf of
such holders,] to be bound by all the terms and provisions of the Security
Agency Agreement and acknowledges that (a) the obligations in respect to Other
DS Debt shall constitute Voting Obligations under the Security Agency Agreement
and (b) the undersigned in its capacity as agent/trustee/representative] shall
become a Party to the Security Agency Agreement and shall be [the Representative
of the holders of such Other DS Debt] [its own Representative]. The address set
out under the signature of the undersigned below shall constitute its address
for the purposes of Section II(a) of the Security Agency Agreement until changed
in accordance therewith.
     This Acknowledgment shall be construed in accordance with and governed by
the laws of the State of New York applicable to contracts made and to be
performed entirely within such State.

              [NAME][, as Agent] [Trustee] [duly authorized
representative]
 
       
 
  By:    
 
       
 
     
Name:                                                                                
 
     
Title:                                                                                

         
 
  Address:    
 
       
 
 
 
   
 
 
 
   
 
 
 
   
 
  Facsimile:                                                                

Exhibit B to Amended and Restated Security Agency Agreement

 

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EXHIBIT C
NOTEHOLDER REPRESENTATIVE NOTICE
[DATE]

     
TO:
  The financial institutions party to the
 
  [DESCRIBE OTHER DSD
 
  AGREEMENT] (each a “Holder”)
 
  [C/O [REPRESENTATIVE NAME]]
 
  [REPRESENTATIVE ADDRESS]

     Please refer to Section 8(c) of the Amended and Restated Security Agency
Agreement dated as of October 6, 2005 (as amended or otherwise modified, the
“Security Agency Agreement”) among Bank of America, N.A., as Global
Administrative Agent, certain other creditors of ProLogis and Bank of America,
N.A., as Collateral Agent. Capitalized terms used but not defined herein have
the respective meanings set forth in the Security Agency Agreement.
     Collateral Agent notifies you that (a) the Trigger Date occurred on ___,
20{___] and (b) unless Collateral Agent receives an executed acknowledgment from
you in the form attached hereto as Attachment 1 (with appropriate insertions) on
or prior to ___, 20{___] [120 DAYS AFTER DATE OF NOTICE], (a) the obligations
owing to the Holders shall not be Shared Credit Obligations and (b) the Holders
shall be Non-Sharing Credit Parties.

     
 
  BANK OF AMERICA, N.A., as Collateral Agent
 
   
 
 
By:                                                                                                    
 
 
Name:                                                                                                    
 
 
Title:                                                                                                    

Exhibit C to Amended and Restated Security Agency Agreement

 

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ATTACHMENT 1
TO EXHIBIT C
FORM OF REPRESENTATIVE ACKNOWLEDGMENT
[DATE]

     
TO:
  Bank of America, N.A., as Collateral Agent
 
  [Address]
 
  Attention:                                         
 
  Facsimile:                                         

     Please refer to Section 8(c) of the Amended and Restated Security Agency
Agreement dated as of October 6, 2005 (as amended or otherwise modified, the
“Security Agency Agreement”) among Bank of America, N.A., as Global
Administrative Agent, certain other creditors of ProLogis and Bank of America,
N.A., as Collateral Agent. Capitalized terms used but not defined herein have
the respective meanings set forth in the Security Agency Agreement.
     The undersigned acting in its capacity as the Representative of the holders
(the “Holders”) of the Other DS Debt arising under the [DESCRIBE AGREEMENT] (the
“Other DSD Agreement”), agrees as follows:
     [(a) to become a Noteholder on the date hereof;
     (b) to be subject to all obligations applicable to Credit Parties under the
Security Agency Agreement (including Sections 2, 5, 6 and 9 thereof, provided
that [the] [such] Holder shall only be obligated to indemnify Collateral Agent
pursuant to Section 9(c) of the Security Agency Agreement for losses, costs,
expenses and liabilities of Collateral Agent arising on or after the Trigger
Date); and
     (c) to receive payments of Proceeds arising [on and] after the Trigger Date
pursuant to Section 4 of the Security Agency Agreement and to immediately
deliver all Proceeds received by [such] [the] Holder after the Trigger Date to
Collateral Agent to be distributed by Collateral Agent in accordance with the
terms of the Security Agency Agreement].

     
 
 
[                                                                                ],
as
[                                        ]
 
   
 
 
By:                                                                                                    
 
 
Name:                                                                                                    
 
 
Title:                                                                                                    

Attachment 1 to Exhibit C to Amended and
Restated Security Agency Agreement