exv4w1



 






Exhibit 4.1




SECOND SUPPLEMENTAL INDENTURE




     SECOND SUPPLEMENTAL INDENTURE, dated as of November 2, 2005 (this “Supplemental
Indenture”), by and between PROLOGIS (formerly ProLogis Trust and prior thereto Security
Capital Industrial Trust), a real estate investment trust organized under the laws of the State of
Maryland having its principal office at 14100 E. 35th Place, Aurora, Colorado 80011
(the “Company”), and U.S. BANK NATIONAL ASSOCIATION (as successor in interest to State
Street Bank and Trust Company), having a corporate trust office at Corporate Trust Services, 100
Wall Street, Suite 1600, New York, New York 10005, as successor Trustee (in such capacity, the
“Trustee”) under the Base Indenture (defined below).



RECITALS OF THE COMPANY




     The Company and the Trustee have heretofore entered into an Indenture, dated as of March 1,
1995, as amended by a First Supplemental Indenture dated as of February 9, 2005 (as so
supplemented, the “Base Indenture”), providing for the issuance by the Company from time to
time of its senior debt securities evidencing its unsubordinated indebtedness (the
“Securities”).



     Section 301 of the Base Indenture provides for various matters with respect to any series of
Securities issued under the Base Indenture to be established in an indenture supplemental to the
Base Indenture.



     Section 901(2) of the Base Indenture provides for the Company and the Trustee to enter into an
indenture supplemental to the Base Indenture to add covenants of the Company for the benefit of the
Holders of all or any series of Securities.



     Section 901(5) of the Base Indenture provides for the Company and the Trustee to enter into an
indenture supplemental to the Base Indenture to change or eliminate any of the provisions of the
Base Indenture, provided that any such change or elimination becomes effective only when there is
no Security Outstanding of any series created prior to the execution of such indenture supplemental
which is entitled to the benefit of such provision.



     Section 901(6) of the Base Indenture provides for the Company and the Trustee to enter into an
indenture supplemental to the Base Indenture to secure the Securities.



     The Board of Trustees of the Company has duly adopted resolutions authorizing the Company to
execute and deliver this Supplemental Indenture.



     All things necessary to make the Base Indenture, as hereby modified, a valid agreement of the
Company, in accordance with its terms, have been done.



     NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH:



     For and in consideration of the premises and of the covenants contained herein and in the Base
Indenture, the Company and the Trustee covenant and agree, for the equal and proportionate benefit
of all Holders of Securities issued on or after the date of this Supplemental Indenture, as
follows:



 









 





ARTICLE ONE

RELATION TO BASE INDENTURE; DEFINITIONS




     Section 1.1. Relation to Base Indenture. This Supplemental Indenture constitutes an
integral part of the Base Indenture.



     Section 1.2. Definitions. For all purposes of this Supplemental Indenture, except as
otherwise expressly provided for or unless the context otherwise requires:




	 	(a)	 	Capitalized terms used but not defined herein shall have the respective
meanings assigned to them in the Base Indenture.
	 
	 	(b)	 	All references herein to Articles and Sections, unless otherwise specified,
refer to the corresponding Articles and Sections of this Supplemental Indenture.
	 
	 	(c)	 	Pursuant to Section 901(2) of the Base Indenture, the following terms and
definitions are hereby added to the Base Indenture for the benefit of the Holders of
Securities issued on or after the date of this Supplemental Indenture, unless otherwise
provided in the Officers’ Certificate or supplemental indenture authorizing any series
of such Securities:






     “CDFS” means the business segment of the Company described in the
Company’s Annual Report on Form 10-K and referred to as the “corporate distribution
facilities services” or “CDFS” segment (or successor descriptions).




     “Pari Passu Debt” means any unsubordinated Debt of the Company or a
Subsidiary that is (i) unsecured, (ii) secured only by Encumbrances on property that
secure the Securities on an equal and ratable basis with such Debt or (iii) the
Securities provided such Securities are equally and ratably secured.




     “Unconsolidated Affiliate” means (i) any Person in which the Company,
directly or indirectly, holds an ownership interest, the operations and results of
which are not consolidated with those of the Company in its financial statements
included in its Annual Report on Form 10-K or Quarterly Report on Form 10-Q or (ii)
any Person in which the Company, directly or indirectly, holds a fifty (50%) or less
equity ownership interest notwithstanding that the operations and results of such
Person are consolidated with those of the Company in its financial statements
included in its Annual Report on Form 10-K or Quarterly Report on Form 10-Q.




	 	(d)	 	Pursuant to Section 901(2) of the Base Indenture, the following terms and
definitions set forth in the Base Indenture are hereby amended and restated in their
entirety for the benefit of the Holders of Securities issued on or after the date of
this Supplemental Indenture, unless otherwise provided in the Officers’ Certificate or
supplemental indenture authorizing any series of such Securities:






     “Annual Service Charge” for any period means interest expense (as
recognized in the Company’s consolidated statement of earnings) on, and original



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issue discount of, Debt of the Company and its Subsidiaries and the amount of
dividends which are payable in respect of any Disqualified Stock.




     “Company Request” and “Company Order” mean, respectively, a
written request or order signed in the name of the Company by the Chairman of the
Board of Trustees, the Vice-Chairman of the Board of Trustees, the Chief Executive
Officer, the Chief Operating Officer, the Chief Financial Officer, any President,
any Managing Director or any Vice President, and by the Treasurer, any Assistant
Treasurer, the Secretary or any Assistant Secretary, of the Company, and delivered
to the Trustee.




     “Consolidated Income Available for Debt Service” for any period means
net earnings of the Company and its Subsidiaries before preferred share dividends
determined in accordance with GAAP plus (minus):




	 	(a)	 	Losses (gains) from the disposition or impairment of properties
that are not classified in the Company’s consolidated financial statements as
(i) “gains and losses on dispositions of CDFS business assets” (or successor
descriptions) (which includes dispositions of CDFS properties to property funds
in which the Company or one of its Subsidiaries maintains an interest,
dispositions to third parties under build-to-suit contracts and dispositions of
land); (ii) “discontinued operations – CDFS business assets” (or successor
descriptions) (which includes dispositions of CDFS business properties to third
parties); or (iii) gains and losses on dispositions or impairments of
investments in property funds, other Unconsolidated Affiliates or intangible
assets (including goodwill), in each case to the extent included in the net
earnings of the Company and its Subsidiaries;






	 	(b)	 	Losses (gains) resulting from (i) foreign currency exchange
effects of settlement of intercompany Debt and mark-to-market adjustments
associated with intercompany Debt between the Company and its foreign
Subsidiaries and its foreign Unconsolidated Affiliates, (ii) foreign currency
effects from the remeasurement of third party Debt of the Company’s foreign
Subsidiaries and its foreign Unconsolidated Affiliates and (iii) mark-to-market
adjustments to foreign exchange hedge contracts (or other derivatives), in each
case to the extent included in the net earnings of the Company and its
Subsidiaries;






	 	(c)	 	Losses (gains) from early extinguishment of Debt;
	 
	 	(d)	 	Excess (deficit) of redemption value over carrying value of
preferred shares redeemed;
	 
	 	(e)	 	Extraordinary losses (extraordinary gains) determined in
accordance with GAAP; and
	 
	 	(f)	 	Cumulative charges (benefits) from a change in accounting
principle;





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plus all amounts deducted in calculating net earnings in accordance with GAAP for
interest expense, income taxes, depreciation and amortization. The foregoing shall
be adjusted accordingly to take into account the Company’s interests in its
Unconsolidated Affiliates.




     “Debt” of the Company or any Subsidiary means any indebtedness of the
Company or any Subsidiary (without duplication) in respect of (i) borrowed money or
evidenced by bonds, notes, mortgages, debentures or similar instruments (excluding
any mark-to-market increase or decrease in indebtedness due to the purchase
accounting impact of corporate or portfolio acquisitions and from the remeasurement
of intercompany indebtedness of Subsidiaries or Unconsolidated Affiliates), (ii)
indebtedness secured by an Encumbrance existing on any property of the Company or
any Subsidiary, whether or not such obligation shall have been assumed by the
Company or any Subsidiary; provided that the amount of any Debt under this clause
(ii) that has not been assumed by the Company or any Subsidiary shall be equal to
the lesser of the stated amount of such Debt or the fair market value of the
property securing such Debt, (iii) the principal amount of all obligations of the
Company or any Subsidiary with respect to redemption, repayment or other repurchase
of any Disqualified Stock or (iv) any lease of property by the Company or any
Subsidiary as lessee which is reflected on the Company’s consolidated balance sheet
as a capitalized lease in accordance with GAAP, to the extent that, in the case of
items (i) and (ii), any such item would appear as a liability on the Company’s
consolidated balance sheet in accordance with GAAP, and also includes, to the extent
not otherwise included, any obligation by the Company or any Subsidiary to be liable
for, or to pay, as obligor or guarantor (other than for purposes of collection in
the ordinary course of business), Debt of another Person (other than the Company or
any Subsidiary), excluding, in each case, indemnification obligations, capital
contribution obligations and similar obligations that are not required to be
reflected on the Company’s consolidated balance sheet, in each case adjusted
accordingly to take into account the Company’s interests in its Unconsolidated
Affiliates by eliminating that portion of Debt that is not the obligation of the
Company or its Subsidiaries.




     “GAAP” means generally accepted accounting principles as in effect from
time to time in the United States; provided that if the cumulative effect of
changes in generally accepted accounting principles after December 31, 2004 would
result in the Company failing to be in compliance with any of the financial
covenants contained in this Indenture, but the Company would have been in compliance
with any such financial covenant calculated in accordance with generally accepted
accounting principles as applied in the preparation of the Company’s audited
financial statements as at December 31, 2004 (“2004 GAAP”), then, solely for
purposes of calculating such financial covenant, “GAAP” shall mean 2004 GAAP. In
the event that the Company is required to make any such adjustments in order to so
comply with any of the financial covenants contained in this Indentures, the Company
shall, concurrently with delivery by the Company to the Trustee of any certificate
required by this Indenture as to the Company’s



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compliance with all conditions and covenants under this Indenture, including
Section 1010 of the Base Indenture, deliver to the Trustee a summary in reasonable
detail of the adjustments made to its publicly filed financial statements in order
to calculate such financial covenant in accordance with 2004 GAAP. Upon request of
a Holder, the Trustee shall supply a copy of such summary to such Holder.




     “Permitted Encumbrances” means (a) pledges or deposits made to secure
payment of worker’s compensation (or to participate in any fund in connection with
worker’s compensation insurance), unemployment insurance, pensions, or social
security programs, (b) Encumbrances consisting of zoning restrictions, easements, or
other restrictions on the use of real property, provided that such items do
not materially impair the use of such property for the purposes intended and none of
which is violated in any material respect by existing or proposed structures or land
use, (c) Encumbrances imposed by mandatory provisions of law such as for
materialmen’s, mechanic’s, warehousemen’s, and other like Encumbrances arising in
the ordinary course of business, securing payment of any liability whose payment is
not yet due, (d) Encumbrances for taxes not yet due and payable or for taxes,
assessments, and governmental charges or assessments that are being contested in
good faith by appropriate proceedings diligently conducted, (e) Encumbrances on
properties where the Company or the applicable Subsidiary is insured against such
Encumbrances by title insurance or other similar arrangements, (f) Encumbrances
securing assessments or charges payable to a property owner association or similar
entity, which assessments are not yet due and payable or are being contested in good
faith by appropriate proceedings diligently conducted, (g) Encumbrances securing
assessment bonds and similar facilities district bonds so long as the Company or the
applicable Subsidiary is not in material default under the terms thereof, (h)
Encumbrances granted to the Company by any Subsidiary or by any Subsidiary to any
other Subsidiary, (i) leases to tenants of space in properties that are entered into
in the ordinary course of business, (j) any netting or set-off arrangement entered
into by the Company or any Subsidiary in the normal course of its banking
arrangements for the purpose of netting debit and credit balances, or any set-off
arrangement which arises by operation of law as a result of the Company or any
Subsidiary opening a bank account, (k) any title transfer or retention of title
arrangement entered into by the Company or any Subsidiary in the normal course of
its trading activities on the counterparty’s standard or usual terms, (l)
Encumbrances over goods and documents of title to goods arising out of letter of
credit transactions entered into in the ordinary course of business, and (m) any
Encumbrance which secures the Pari Pasu Debt.




     “Total Assets” as of any date means the sum of (i) total assets, before
accumulated depreciation and amortization, as reflected on the Company’s
consolidated balance sheet for such date, adjusted accordingly to take into account
the Company’s interests in its Unconsolidated Affiliates by eliminating that portion
of assets that are not the assets of the Company or its Subsidiaries and (ii) the
quotient of (A) “property management and other property fund fees” (or



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successor descriptions) set forth in the Company’s most recent consolidated
financial statements for the four fiscal quarters immediately preceding such
determination divided by (B) 0.08.




     “Total Unencumbered Assets” means Total Assets, determined on a basis
excluding any assets that are subject to an Encumbrance.




     “Unsecured Debt” means Debt (including Pari Passu Debt) which is not
otherwise secured by an Encumbrance upon any of the properties of the Company or any
Subsidiary.




	 	(e)	 	Pursuant to Section 901(6) of the Base Indenture, the following terms and
definitions are hereby added to the Base Indenture:






     “Collateral Agent” has the meaning ascribed to such term in the
Security Agency Agreement.




     “Credit Obligations” has the meaning ascribed to such term in the
Security Agency Agreement.




     “Credit Parties” has the meaning ascribed to such term in the Security
Agency Agreement.




     “Lien” means any lien, pledge, security interest, mortgage, encumbrance
or charge of any kind.




     “Majority Credit Parties” has the meaning ascribed to such term in the
Security Agency Agreement.




     “Non-Sharing Parties” has the meaning ascribed to such term in the
Security Agency Agreement.




     “Pledged Collateral” has the meaning ascribed to such term in the
Security Agency Agreement.




     “Pledgors” means the Company and each Subsidiary of the Company that
has entered into a Pledge Agreement.




     “Pledge Agreement” means each of the following (i) Second Amended and
Restated Borrower Pledge Agreement dated as of October 6, 2005 executed by ProLogis
and Collateral Agent; (ii) Separate Subsidiary Pledge Agreements dated as of October
6, 2005 executed by the Collateral Agent and each of ProLogis Japan Finance
Incorporated, ProLogis Japan Incorporated, ProLogis Development Services
Incorporated, ProLogis Management Incorporated, ProLogis-North Carolina (2)
Incorporated, Tijuana Mexico Investment I LLC, ProLogis-Monterrey (1) LLC,
ProLogis-Monterrey (2) LLC, ProLogis-Reynosa (1) LLC, ProLogis-Reynosa (2) LLC,
Tijuana-Mexico Investment I LLC, ProLogis KK, ProLogis China Holding II Srl.; (iii)
Pledge of Intercompany



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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 the Collateral Agent.,
and (iv) any other pledge or security agreement pursuant to which the Company or any
of its Subsidiaries pledges, grants and or assigns a lien or security interest in
the Pledged Collateral (or any portion thereof) or other assets, to secure, among
other things, the Security Obligations, in each case, as the same may be amended,
supplemented, restated, replaced or otherwise modified from time to time.




     “Recoveries” has the meaning ascribed to such term in the Security
Agency Agreement.




     “Security Agency Agreement” means the Amended and Restated Security
Agency Agreement, dated as of October 6, 2005, among the Company, Bank of America,
N.A., as Collateral Agent, Bank of America, N.A., as global administrative agent
under the Company’s global senior credit agreement, and certain other creditors of
the Company party thereto, as the same may be amended, amended and restated,
extended, renewed, supplemented, replaced or otherwise modified from time to time.




     “Security Documents” means the Security Agency Agreement and the Pledge
Agreements and all other mortgages, deeds of trust, pledge agreements, collateral
assignments, security agreements, fiduciary transfers, debentures or other
instruments evidencing or creating any security interests in favor of the Holders of
Securities (or the Collateral Agent or the Trustee for the benefit of the Holders of
Securities) in all or any portion of the Pledged Collateral, in each case, as
amended, amended and restated, extended, renewed, supplemented, replaced or
otherwise modified from time to time.




     “Security Liens” means, to the extent securing the Security
Obligations, any Lien granted on any Pledged Collateral pursuant to a Security
Document as security for the Security Obligations.




     “Security Obligations” means all obligations of the Company owing to
the Holders of the Securities and the Trustee under the Securities, the Indenture
and the Security Documents.




     “Voting Credit Parties” has the meaning ascribed to such term in the
Security Agency Agreement.



ARTICLE TWO

COVENANTS AND DEFAULTS




     Section 2.1. Limitations on Incurrence of Debt. In addition to the covenants set
forth in Article TEN of the Base Indenture, there are established pursuant to Section 901(2) of the
Base Indenture the following covenants for the benefit of the Holders of Securities issued on or
after the date of this Supplemental Indenture, unless otherwise provided in the Officers’
Certificate or supplemental indenture authorizing any series of such Securities; provided,



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however, that the covenants set forth in Section 1004 of the Base Indenture, as not
amended (including the definitions set forth in Section 101 of the Base Indenture of any
capitalized terms used in Section 1004 of the Base Indenture), shall apply to Securities issued on
or after the date hereof only for so long as any Securities issued pursuant to the Base Indenture
prior to the date of this Supplemental Indenture remain outstanding:





     (a) The Company will not, and will not permit any Subsidiary to, incur any Debt if,
immediately after giving effect to the incurrence of such additional Debt and the
application of the net proceeds thereof, the aggregate principal amount of all outstanding
Debt of the Company and its Subsidiaries on a consolidated basis determined in accordance
with GAAP is greater than 65% of the sum of (without duplication) (i) the Company’s Total
Assets as of the end of the calendar quarter covered in the Company’s Annual Report on Form
10-K or Quarterly Report on Form 10-Q, as the case may be, most recently filed with the
Commission (or, if such filing is not permitted under the Exchange Act, with the Trustee)
prior to the incurrence of such additional Debt and (ii) the purchase price of any assets or
mortgages receivable acquired, and the amount of any securities offering proceeds received
(to the extent such proceeds were not used to acquire assets or mortgages receivable or used
to reduce Debt), by the Company or any Subsidiary since the end of such calendar quarter,
including those proceeds obtained in connection with the incurrence of such additional Debt.




     (b) In addition to the limitations set forth in subsection (a) of this Section 1004,
the Company will not, and will not permit any Subsidiary to, incur any additional Debt if
the ratio of Consolidated Income Available for Debt Service to the Annual Service Charge for
the four consecutive fiscal quarters most recently ended prior to the date on which such
additional Debt is to be incurred shall have been less than 1.5 to 1.0 on a pro forma basis
after giving effect thereto and to the application of the net proceeds therefrom, and
calculated on the assumption that (i) such additional Debt had been incurred at the
beginning of such period; and (ii) any assets acquired, or to be acquired, with such
additional Debt and projected income therefrom had been acquired at the beginning of such
period.




     (c) In addition to the limitations set forth in subsections (a) and (b) of this Section
1004, the Company and its Subsidiaries may not at any time own Total Unencumbered Assets
equal to less than 125% of the aggregate outstanding principal amount of the Unsecured Debt
of the Company and its Subsidiaries determined on a consolidated basis.




     (d) In addition to the limitations set forth in subsections (a), (b) and (c) of this
Section 1004, the Company will not, and will not permit any Subsidiary to, incur any Debt
secured by any Encumbrance upon any of the property of the Company or any Subsidiary
(excluding Pari Passu Debt), whether owned at the date hereof or hereafter acquired, if,
immediately after giving effect to the incurrence of such additional Debt and the
application of the net proceeds thereof, the aggregate principal amount of all outstanding
Debt of the Company and its Subsidiaries on a consolidated basis which is secured by any
Encumbrance on property of the Company or any Subsidiary (excluding Pari Passu Debt) is
greater than 40% of the sum (without duplication) of (i) the



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Company’s Total Assets as of the end of the calendar quarter covered in the Company’s
Annual Report on Form 10-K or Quarterly Report on Form 10-Q, as the case may be, most
recently filed with the Commission (or, if such filing is not permitted under the Exchange
Act, with the Trustee) prior to the incurrence of such additional Debt and (ii) the purchase
price of any real estate assets or mortgages receivable acquired, and the amount of any
securities offering proceeds received (to the extent that such proceeds were not used to
acquire real estate assets or mortgages receivable or used to reduce Debt), by the Company
or any Subsidiary since the end of such calendar quarter, including those proceeds obtained
in connection with the incurrence of such additional Debt.




     (e) For purposes of this Section 1004 Debt shall be deemed to be “incurred” by the
Company or a Subsidiary whenever the Company or such Subsidiary shall create, assume,
guarantee or otherwise become liable in respect thereof.



     Section 2.2 Provision of Financial Information. In addition to the covenants set
forth in Article TEN of the Base Indenture, there are established pursuant to Section 901(2) of the
Base Indenture the following covenants for the benefit of the Holders of Securities issued on or
after the date of this Supplemental Indenture, unless otherwise provided in the Officers’
Certificate or supplemental indenture authorizing any series of such Securities; provided,
however, that the covenants set forth in Section 1009 of the Base Indenture (as not
amended) shall apply to Securities issued on or after the date hereof only for so long as any
Securities issued pursuant to the Base Indenture prior to the date of this Supplemental Indenture
remain outstanding:




     Whether or not the Company is subject to Section 13 or 15(d) of the Exchange Act, the
Company will, to the extent permitted under the Exchange Act, file with the Commission the
annual reports, quarterly reports and other documents which the Company would have been
required to file with the Commission pursuant to such Section 13 or 15(d) (the “Financial
Statements”) if the Company were so subject, such documents to be filed with the Commission
on or prior to the respective dates (the “Required Filing Dates”) by which the Company would
have been required so to file such documents if the Company were so subject.




     The Company will also in any event (x) within 15 days of each Required Filing Date (i)
transmit by mail or electronic transmittal to all Holders, as their names and addresses
appear in the Security Register, without cost to such Holders, copies of the annual reports
and quarterly reports which the Company is required to file or would have been required to
file with the Commission pursuant to Section 13 or 15(d) of the Exchange Act if the Company
were subject to such Sections, and (ii) file with the Trustee copies of annual reports,
quarterly reports and other documents which the Company would have been required to file
with the Commission pursuant to Section 13 or 15(d) of the Exchange Act if the Company were
subject to such Sections and (y) if filing such documents by the Company with the Commission
is not permitted under the Exchange Act, promptly upon written request and payment of the
reasonable cost of duplication and delivery, supply copies of such documents to any
prospective Holder.



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     Section 2.3 Events of Default. Pursuant to Section 901(5) of the Base Indenture,
clauses (5) and (6) of Section 501 of the Base Indenture are hereby amended for the benefit of the
Holders of Securities issued on or after the date of this Supplemental Indenture, unless otherwise
provided in the Officers’ Certificate or supplemental indenture authorizing any series of such
Securities, to provide that references to $10,000,000 contained in clauses (5) and (6) of Section
501 of the Indenture are amended to be $50,000,000; provided, however, that the
provisions of this Section 2.3 shall become effective only when there are no Securities Outstanding
of any series created prior to the execution of this Supplemental Indenture.



ARTICLE THREE

THE TRUSTEE




     Section 3.1. Collateral and Security Documents.



     (a) The Pledgors pledged the Pledged Collateral to the Collateral Agent for the benefit of all
Credit Parties. In addition, the Company, together with the Collateral Agent and other creditors
of the Company, has entered into the Security Agency Agreement which provides, among other things,
that upon the occurrence of a Trigger Date (as defined in the Security Agency Agreement) the Credit
Parties (other than Non-Sharing Parties) will, subject to certain exceptions and limitations, share
payments and other recoveries received from the Company and/or its Subsidiaries in such a manner
that all Credit Parties are intended to receive payment of substantially the same percentage of
their respective Credit Obligations. In the event of a conflict between the terms of this
Indenture and the Security Documents, the Security Documents shall control. The Trustee shall not
be responsible for any of the agreements referred to or described in the Security Documents (or the
sufficiency or adequacy thereof) or for determining or compelling compliance therewith, except to
the extent expressly provided herein.



     (b) The Company shall comply, and shall cause the other Pledgors to comply, with all covenants
and agreements contained in the Security Documents the failure to comply with which would have a
material and adverse effect on the Security Liens purported to be created thereby.



     (c) Each Holder of each Security by its acceptance of that Security acknowledges and agrees
that:




     (i) this Indenture, as originally executed and delivered by the parties hereto, does
not create any Lien on any Pledged Collateral which secures the Security Obligations under
this Indenture;




     (ii) the Security Documents provide that the Security Liens created by the Security
Documents automatically will be released and extinguished with respect to any Pledged
Collateral that is transferred or otherwise disposed of in accordance with the terms of the
Security Documents;




     (iii) the Security Documents may be amended, modified, supplemented or terminated, as
provided therein, without the necessity of any consent of or notice to the Trustee or any
Holder of the Securities and, in accordance with the Security Agency Agreement, the Company,
in its sole discretion and without the consent of any Holder or the Trustee, may revoke the
designation of the Securities, or any series of Securities, as



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“Other DS Debt”, which action will result in the Securities, or any series of the
Securities, not being secured by the Security Liens and not being entitled to any security
or sharing arrangements under the Security Agency Agreement or other Security Documents.
The Company shall file with the Trustee notice in accordance with Section 105 of the Base
Indenture and provide notice to the Holders (through the inclusion of information with
respect any of the actions described in the following clauses (x) and (y) in any report
filed by the Company pursuant Section 13 or 15(d) of the Exchange Act or through notice
otherwise provided to the Holders) of (x) any revocation of the designation of the
Securities as Designated Senior Debt or “Other DS Debt” in accordance with the Security
Agency Agreement or (y) any amendment, supplement, restatement, amendment and restatement,
other modification or replacement of the Security Agency Agreement or any other Security
Document;




     (iv) the Collateral Agent and the Voting Credit Parties will have the sole ability to
control and obtain remedies with respect to all Pledged Collateral (including on sale or
liquidation of any Pledged Collateral after acceleration of the Credit Obligations) without
the necessity of any consent of or notice to the Trustee or any Holder of the Securities;
and




     (v) whenever the Majority Credit Parties are granted, and exercise, the right to make a
decision or determination pursuant to the Security Agency Agreement, 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 Holder of Securities except those expressly set forth in the
Security Agency Agreement, and neither the Trustee nor any Holder of Securities shall have,
and each Holder of Securities expressly (by accepting the benefit of the Security Agency
Agreement or any Security Document) waives and disclaims, and the Trustee on behalf of such
Holders is hereby directed to, and does waive and disclaim any claim or cause or 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 the Security
Agency Agreement.



     Section 3.2. Application of Proceeds of Pledged Collateral. Upon the receipt of
Recoveries or any other cash, securities or other property under the Security Agency Agreement or
any other Security Document, including the receipt of any proceeds from the realization or
foreclosure of the Pledged Collateral pursuant to any Security Document, such cash, securities or
other property shall be held by the Trustee in trust and be applied by the Trustee in accordance
with Section 506 of the Indenture.



     Section 3.3. Opinion of Counsel; Certificates of the Company. The Company shall
furnish to the Trustee (i) promptly after the execution and delivery of this Second Supplemental
Indenture, an Opinion of Counsel required by TIA Section 314(b)(1) and (ii) annually within 120
days after the end of the Company’s fiscal year, an Opinion of Counsel in accordance with TIA
Section 314(b)(2). In addition, to the extent applicable, the Company shall comply with TIA
Section 314(d), relating to the release of property or securities from the Security Liens or
relating to the substitution therefor of any property or securities to be subjected to the Security
Liens. Any certificate or opinion required by TIA Section 314(d) may be made by an Officer of



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the Company, except in cases where TIA Section 314(d) requires that such certificate or
opinion be made by an independent Person, which Person will be an independent engineer, appraiser
or other expert reasonably satisfactory to the Trustee. Notwithstanding anything to the contrary
in this Article 3, the Company shall not be required to comply with all or any portion of TIA
Section 314(d) if it determines, in good faith based on advice of counsel, that under the terms of
TIA Section 314(d) and/or any interpretation or guidance as to the meaning thereof of the
Commission or its staff, including “no action”’ letters or exemptive orders, all or any portion of
TIA Section 314(d) is inapplicable to all or any portion of released Pledged Collateral. Any such
determination shall be evidenced to the Trustee by delivery of an Officer’s Certificate of the
Company on which the Trustee may conclusively rely.




     Section 3.4. Trust Indenture Act Requirements. Notwithstanding Section 3.3, the
release of any Pledged Collateral from the Security Liens or the release of, in whole or in part,
the Security Liens created by any of the Security Documents (including any release of the Security
Liens as a result of the Company revoking the designation of the Securities, or any series of
Securities, as “Other DS Debt” after disclosing such revocation as provided in the Security Agency
Agreement) will not be deemed to impair or release the Security Liens in contravention of the
provisions hereof if and to the extent the Pledged Collateral or the Security Liens are released
pursuant to the terms of the Security Agency Agreement or the applicable Security Document. Each
of the Holders of the Securities acknowledges that a release of Pledged Collateral or Security
Liens in accordance with the terms of the Security Agency Agreement, the Security Documents and
this Indenture will not be deemed for any purpose to be an impairment of the Security Documents or
otherwise contrary to the terms of this Indenture.



     Section 3.5. Authorization of Actions to Be Taken.



     (a) Each Holder of Securities, by its acceptance thereof, consents and agrees to the terms of
each Security Document, in each case, as originally in effect and as amended, amended and restated,
extended, renewed, supplemented, replaced or otherwise modified from time to time in accordance
with its terms.



     (b) As promptly as practicable, but in any event within 90 days after receiving any notice
from the Collateral Agent which notice so states that it is being delivered pursuant to Section
8(c) of the Security Agency Agreement, the Trustee shall (x) forward such notice to Holders, (y)
execute and deliver, on behalf of the Holders, the acknowledgment provided for in Attachment 1 to
Exhibit C to the Security Agency Agreement (a copy of which is attached thereto as Annex A) and (z)
take such further actions as a majority of the Holders (voting as a single class) shall request in
writing with respect thereto and with respect to any rights such Holders or the Trustee may have
under the Security Agency Agreement; provided that in the case of this clause (z) such
Holders shall have offered the Trustee reasonable security or indemnity against the costs, expenses
and liabilities which might be incurred by it in compliance with such request or direction.



     (c) The Trustee is authorized and empowered to receive for the benefit of the Holders of
Securities any Recoveries or any other cash, security or other property collected or distributed
under the Security Documents and hold all such cash, security or other property in trust as may



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be delivered to it and distribute the same to the Holders of Securities (or to the Trustee)
in accordance with Section 502 of Indenture.




     (d) The Trustee is authorized and empowered to institute and maintain such suits and
proceedings as directed by a majority of the Holders (voting as a single class) to protect or
enforce the Security Liens or the Security Documents or to prevent any impairment of Pledged
Collateral by any acts that may be unlawful or in violation of the Security Documents or this
Indenture, and such suits and proceedings as directed by a majority of the Holders (voting as a
single class) to preserve or protect its interests and the interests of the Holders of Securities
in the Pledged Collateral; provided that prior to taking any such action the Holders shall
have offered the Trustee reasonable security or indemnity against the costs, expenses and
liabilities which might be incurred by it in compliance with such request or direction.



     Section 3.6. Rights of the Trustee. Neither the Trustee nor any of its respective
officers, directors, employees, attorneys or agents will be responsible for the existence,
genuineness, value or protection of any Pledged Collateral, for the legality, enforceability,
effectiveness or sufficiency of the Security Documents, for the creation, perfection, priority,
sufficiency or protection of any Security Lien, or for any failure to demand, collect, foreclose or
realize upon or otherwise enforce any of the Security Liens or Security Documents or for any delay
in doing so. The Trustee shall not be liable for the actions or omissions of the Collateral Agent
and shall have no obligation to monitor, evaluate or verify compliance by the Collateral Agent with
the terms of the Security Documents with respect to the Pledged Collateral or otherwise. The
Trustee shall not be required to take any action with respect to the Pledged Collateral or the
Security Documents, including to perfect any security interest granted in the Pledged Collateral
pursuant to the Security Documents, unless instructed to do so by a majority of the Holders
pursuant to Section 3.5.



     Section 3.7. Release upon Termination of Security Obligations. In the event that the
Company delivers an Officers’ Certificate and Opinion of Counsel certifying that its obligations
under this Indenture have been satisfied and discharged by complying with the provisions of Article
Four of the Base Indenture, the Trustee shall (i) execute and deliver such releases, termination
statements and other instruments (in recordable form, where appropriate) as the Company may
reasonably request to evidence the termination of the Security Liens and (ii) not be deemed to hold
the Security Liens for its benefit and the benefit of the Holders of the Securities.



     Section 3.8. Notice of Trigger Date. Upon the occurrence of a Trigger Date (as
defined in the Security Agency Agreement), the Company promptly and in any event within 5 Business
Days after the Company becomes aware that such Trigger Date has occurred, will deliver written
notice of such Trigger Date to the Collateral Agent and the Trustee.



ARTICLE FOUR

MISCELLANEOUS PROVISIONS




     Section 4.1. This Supplemental Indenture shall be effective as of the opening of business on
the date first above written upon the execution and delivery hereof by each of the parties hereto.



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     Section 4.2. Except as expressly modified or amended hereby, the Base Indenture continues in
full force and effect and is in all respects confirmed, ratified and preserved.



     Section 4.3. This Supplemental Indenture and all its provisions shall be deemed a part of the
Base Indenture in the manner and to the extent herein and therein provided.



     Section 4.4. This Supplemental Indenture shall be governed by, and construed in accordance
with, the laws of the State of New York.



     Section 4.5. This Supplemental Indenture may be executed in any number of counterparts, each
of which so executed shall be deemed to be an original, but all such counterparts shall together
constitute but one and the same instrument.



     Section 4.6. The Trustee shall have not any responsibility for the Recitals of the Company
hereto, which Recitals are made by the Company alone, or for the validity or sufficiency of this
Supplement Indenture.



[Remainder of page intentionally left blank]




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     IN WITNESS WHEREOF, the parties hereto have caused this Second Supplemental Indenture to be
duly executed and the Company has caused its seal to be hereunto affixed and attested, all as of
the day and year first above written.



	 	 	 	 	 	 	 
	 	 	 	 	PROLOGIS
	 
	 	 	 	 	 	 
	 

	 	 	 	By:
	 	/s/ M. Gordon Keiser, Jr.
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	M. Gordon Keiser, Jr.
	[SEAL]

	 	 	 	 	 	Senior Vice President
	 
	 	 	 	 	 	 
	Attest:
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	By:

	 	/s/ Edward S. Nekritz	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Edward S. Nekritz	 	 	 	 
	 

	 	Secretary	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	U.S. BANK NATIONAL ASSOCIATION, as
 Trustee as
aforesaid
	 
	 	 	 	 	 	 
	 

	 	 	 	By:
	 	/s/ Ward A. Spooner
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	Ward A. Spooner
	Attest:

	 	 	 	 	 	Vice President
	 
	 	 	 	 	 	 
	By:

	 	/s/	 	 	 	 
	 

	 	 	 	 	 	 






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