Document:

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                                 PROLOGIS TRUST
                          1997 LONG-TERM INCENTIVE PLAN

                       (As Amended and Restated effective
                               as of May 18, 2000)

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                                            TABLE OF CONTENTS

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<S>                                                                                                             <C>

SECTION 1.........................................................................................................1
         GENERAL..................................................................................................1
              1.1.  Purpose.......................................................................................1
              1.2.  Participation.................................................................................1

SECTION 2.........................................................................................................2
         OPTIONS..................................................................................................2
              2.1.  Definitions...................................................................................2
              2.2.  Eligibility...................................................................................2
              2.3.  Price.........................................................................................2
              2.4.  Exercise......................................................................................4
              2.5.  Post-Exercise Limitations.....................................................................4
              2.6.  Expiration Date...............................................................................4

SECTION 3.........................................................................................................6
         DIVIDEND EQUIVALENT UNITS................................................................................6
              3.1.  Award of Dividend Equivalent Units............................................................6
              3.2.  Terms and Conditions of Dividend Equivalent
                   Units..........................................................................................6

SECTION 4.........................................................................................................7
         SHARE PURCHASE PROGRAM...................................................................................7
              4.1.  Purchase of Shares............................................................................7
              4.2.  Matching Shares and Options...................................................................7
              4.3.  Restrictions on Shares........................................................................7
              4.4.  Purchase Loans................................................................................7

SECTION 5.........................................................................................................8
         SHARE AWARDS.............................................................................................8
              5.1.  Definition....................................................................................8
              5.2.  Eligibility...................................................................................9
              5.3.  Terms and Conditions of Awards................................................................9

SECTION 6........................................................................................................10
         OPERATION AND ADMINISTRATION............................................................................10
               6.1.  Effective Date..............................................................................10
               6.2.  Shares Subject to Plan......................................................................10
               6.3.  Individual Limits on Awards.................................................................10
               6.4.  Adjustments to Shares.......................................................................11
               6.5.  Change in Control...........................................................................13
               6.6.  Limit on Distribution.......................................................................14
               6.7.  Liability for Cash Payments.................................................................15
               6.8.  Performance-Based Compensation..............................................................15
               6.9.  Withholding.................................................................................16
             6.10.  Transferability..............................................................................16
             6.11.  Notices......................................................................................16
             6.12.  Form and Time of Elections...................................................................16
             6.13.  Agreement With Trust or Related Company......................................................17
             6.14.  Limitation of Implied Rights.................................................................17
             6.15.  Evidence.....................................................................................17
             6.16.  Action by Trust or Related Company...........................................................17
             6.17.  Gender and Number............................................................................17
             6.18.  Applicable Law...............................................................................18
             6.19.  Foreign Employees............................................................................18

SECTION 7........................................................................................................18
         COMMITTEES..............................................................................................18
              7.1.  Administration...............................................................................18
              7.2.  Selection of Trust Committee.................................................................18
              7.3.  Powers of Committees.........................................................................18
              7.4.  Delegation by Committee......................................................................19
              7.5.  Information to be Furnished to Committees....................................................19
              7.6.  Liability and Indemnification of Committees..................................................19

SECTION 8........................................................................................................20
         AMENDMENT AND TERMINATION...............................................................................20
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                                 PROLOGIS TRUST
                          1997 LONG-TERM INCENTIVE PLAN

                       (As Amended and Restated Effective
                               as of May 18, 2000)

                                    SECTION 1

                                     GENERAL

         1.1.  Purpose.  ProLogis  Trust  (formerly  known as  Security  Capital
Industrial  Trust),  a Maryland  real  estate  investment  trust (the  "Trust"),
established the Security Capital Industrial Trust 1997 Long-Term  Incentive Plan
effective  September  8, 1997 and renamed it the ProLogis  Trust 1997  Long-Term
Incentive Plan effective July 1, 1998 (the "Plan").  The provisions  that follow
constitute an amendment  and  restatement  of the Plan as in effect  immediately
prior to May 18, 2000, the "Effective Date" of the Plan as set forth herein. The
Plan was established by the Trust to:

         (a)      attract and retain  employees and other persons  providing
services to the Trust and the Related
                  Companies (as defined below);

         (b)      motivate Participants (as defined in subsection 1.2), by means
                  of appropriate incentives, to achieve long-range goals;

         (c)      provide   incentive   compensation   opportunities   that  are
                  competitive  with those of other  corporations and real estate
                  investment trusts; and

         (d)      further  identify  Participants'  interests  with those of the
                  Trust's other shareholders  through compensation that is based
                  on the value of the Trust's common shares;

and  thereby  promote  the  long-term  financial  interest  of the Trust and the
Related  Companies,  including  the  growth in value of the  Trust's  equity and
enhancement of long-term  shareholder  return.  The term "Related Company" means
any company during any period in which it is a "subsidiary corporation" (as that
term is defined in  section  424(f) of the  Internal  Revenue  Code of 1986,  as
amended (the  "Code")),  with respect to the Trust or any affiliate of the Trust
which is designated as a Related  Company by the Committee,  including,  without
limitation, any subsidiary of the Trust.

         1.2.  Participation.  Subject to the terms and  conditions of the Plan,
the Committees (as described in Section 7) shall  determine and designate,  from
time to time,  from among the Eligible  Individuals  (as defined  below),  those
persons who will be granted one or more  awards  under  Sections 2, 3, 4 or 5 of
the Plan (an "Award"),  and thereby  become  "Participants"  in the Plan. In the
discretion  of the granting  Committee,  and subject to the terms of the Plan, a
Participant may be granted any Award permitted under the provisions of the Plan,
and more than one Award may be granted  to a  Participant.  Except as  otherwise
agreed by the Trust and the Participant,  or except as otherwise provided in the
Plan, an Award under the Plan shall not affect any previous Award under the Plan
or an award  under  any  other  plan  maintained  by the  Trust  or the  Related
Companies.  For purposes of the Plan, the term "Eligible  Individual" shall mean
any employee of the Trust or a Related Company; provided, however, that a member
of the Board of  Trustees of the Trust (the  "Board")  who is not an employee of
the Trust or a Related Company shall not be an "Eligible Individual".

                                    SECTION 2

                                     OPTIONS

         2.1.  Definition The grant of an "Option" under this Section 2 entitles
the  Participant to purchase  common shares of beneficial  interest of the Trust
("Shares")  at a price fixed at the time the Option is  granted,  subject to the
terms  of this  Section.  Options  granted  under  this  Section  may be  either
Incentive  Share Options or  Non-Qualified  Share Options,  as determined in the
discretion of the Trust Committee. An "Incentive Share Option" is an Option that
is  intended to satisfy  the  requirements  applicable  to an  "incentive  stock
option" described in section 422 of the Code. A "Non-Qualified  Share Option" is
an Option that is not intended to be an Incentive Share Option.

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         2.2.  Eligibility.  Each Committee shall designate the  Participants to
whom Options are to be granted under this Section and shall determine the number
of Shares subject to each such Option.  If the Trust Committee  grants Incentive
Share Options, to the extent that the aggregate fair market value of Shares with
respect to which  Incentive  Share Options are exercisable for the first time by
any  individual  during any calendar  year (under all plans of the Trust and all
related  companies  within the  meaning of section  424(f) of the Code)  exceeds
$100,000,  such options shall be treated as Non-Qualified  Share Options, to the
extent required by section 422 of the Code.

         2.3.     Price.  The  determination  and  payment  of the  purchase
price of a Share  under  each  Option granted under this Section shall be
subject to the following:

         (a)      The  purchase  price  shall  be  established  by the  granting
                  Committee  at  the  time  the  Option  is  granted;  provided,
                  however,  that in no event  shall  such price be less than the
                  par value of a Share on such date;  further,  provided,  in no
                  event shall the  purchase  price of a Share under an Incentive
                  Share  Option  be less  than the Fair  Market  Value  (defined
                  below) of a Share at the time the Option is granted.

         (b)      Subject to the following  provisions of this  subsection,  the
                  full purchase price of each Share  purchased upon the exercise
                  of any Option  shall be paid at the time of such  exercise (or
                  such later date as may be permitted by the granting  Committee
                  in  the  case  of  a  cashless   exercise)  and,  as  soon  as
                  practicable   thereafter   (subject  to  an   election   under
                  subsection  2.4),  a  certificate  representing  the Shares so
                  purchased shall be delivered to the person entitled thereto.

         (c)      The  purchase  price shall be payable in cash or by  tendering
                  Shares by  actual  delivery  or  attestation  (valued  at Fair
                  Market Value as of the day of exercise) that have been held by
                  the  Participant  at least six months,  or in any  combination
                  thereof, as determined by the granting Committee.

         (d)      The "Fair  Market  Value"  of a Share as of any date  shall be
                  determined in accordance with the following rules:

                  (i)      If the Shares are at the time  listed or  admitted to
                           trading on any stock  exchange,  then the Fair Market
                           Value  shall be the average of the highest and lowest
                           sales  price per Share on such date on the  principal
                           exchange  on which  the  Shares  are then  listed  or
                           admitted  to trading  or, if no such sale is reported
                           on that date, on the last  preceding  date on which a
                           sale was so reported.

                  (ii)     If the Shares are not at the time  listed or admitted
                           to trading on a stock exchange, the Fair Market Value
                           shall be the average of the lowest reported bid price
                           and highest reported asked price of the Shares on the
                           date in question in the  over-the-counter  market, as
                           such prices are reported in a publication  of general
                           circulation  selected by the granting  Committee  and
                           regularly  reporting  the  market  price of Shares in
                           such market.

                  (iii)    If the Shares are not listed or  admitted  to trading
                           on   any   stock    exchange   or   traded   in   the
                           over-the-counter  market, the Fair Market Value shall
                           be as  determined  by the granting  Committee in good
                           faith.

                  (iv)     For purposes of determining  the Fair Market Value of
                           Shares that are sold pursuant to a cashless  exercise
                           program,  Fair  Market  Value  shall be the  price at
                           which such Shares are sold.

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         2.4. Exercise.  Except as otherwise  expressly provided in the Plan, an
Option granted under this Section shall be  exercisable  in accordance  with the
following terms of this subsection:

         (a)      The terms and  conditions  relating  to  exercise of an Option
                  shall  be  established  by the  granting  Committee,  and  may
                  include, without limitation, conditions relating to completion
                  of a specified  period of service  (subject to  paragraph  (b)
                  below), achievement of performance standards prior to exercise
                  of the Option or the achievement of Share ownership objectives
                  by the  Participant.  The  granting  Committee,  in  its  sole
                  discretion,  may  accelerate  the vesting of any Option  under
                  circumstances  designated  by it at the  time  the  Option  is
                  granted or thereafter.

         (b)      No  Option  may  be  exercised  by  a  Participant  after  the
                  Expiration  Date (as defined in subsection  2.6) applicable to
                  that Option.

         (c)   Prior to the date the Shares would  otherwise be  transferred
               pursuant to the exercise of an Option, to the extent permitted by
               the granting  Committee,  a Participant may irrevocably  elect to
               defer  receipt  of such  Shares  until  the last  date of a later
               calendar year, but in no event later than the Participant's  Date
               of Termination (as defined in subsection 2.6), provided,  that if
               the Date of  Termination  of a  Participant  who is a member of a
               select  group  of  management  or a highly  compensated  employee
               within  the  meaning  of  section   401(a)(1)   of  the  Employee
               Retirement  Income  Security Act of 1974,  as amended,  occurs by
               reason  of  Retirement  (as  defined  in  subsection   2.6),  the
               Participant  may  elect to defer  receipt  for a period up to the
               last day of the  calendar  year in  which  occurs  the  fifteenth
               anniversary of the  Participant's  Retirement.  Any such deferral
               election  shall  be made in such  form  and at such  times as the
               Committee may determine and shall be subject to such other terms,
               conditions  and  limitations  as  the  Committee  may  establish,
               provided,  however,  any  election  to  defer  payment  beyond  a
               Participant's  Retirement  which has not been on file at least 12
               months   prior   to  the   Participant's   Retirement   shall  be
               disregarded.

         2.5.  Post-Exercise   Limitations.   The  granting  Committee,  in  its
discretion,  may impose such  restrictions  on Shares  acquired  pursuant to the
exercise  of an Option as it  determines  to be  desirable,  including,  without
limitation,  restrictions  relating to  disposition of the shares and forfeiture
restrictions based on service,  performance,  Share ownership by the Participant
and such other factors as the granting Committee determines to be appropriate.

         2.6.  Expiration Date. The "Expiration  Date" with respect to an Option
means the date  established as the Expiration Date by the granting  Committee at
the time of the grant;  provided,  however,  that unless determined otherwise by
the Committee, the Expiration Date with respect to any Option shall not be later
than the earliest to occur of:
         (a)      the ten-year anniversary of the date on which the Option is
granted;

         (b)      if the Participant's  Date of Termination  occurs by reason of
                  death,  Disability or Retirement,  the one-year anniversary of
                  such Date of Termination;

         (c)      if the  Participant's  Date of Termination  occurs for reasons
                  other  than  Retirement,   death,  Disability  or  Cause,  the
                  three-month anniversary of such Date of Termination; or

         (d) if the  Participant's  Date of  Termination  occurs for  reasons of
Cause, such Date of Termination.

For purposes of the Plan, a  Participant's  "Date of  Termination"  shall be the
date on which he both  ceases to be an  employee  of the  Trust and the  Related
Companies and ceases to perform material  services for the Trust and the Related
Companies,  regardless of the reason for the cessation; provided that a "Date of
Termination" shall not be considered to have occurred during the period in which
the reason for the  cessation of services is a leave of absence  approved by the
Trust or the  Related  Company  which  was the  recipient  of the  Participant's

<PAGE>

services.  Except as otherwise provided by the granting Committee, a Participant
shall be  considered  to have a  "Disability"  during  the period in which he is
unable, by reason of a medically determinable physical or mental impairment,  to
engage in the material and substantial duties of his regular  occupation,  which
condition is expected to be permanent.  "Retirement" of a Participant shall mean
the occurrence of a Participant's  Date of Termination  after providing at least
five years of service to the Trust or the Related  Companies  and  attaining age
60. For purposes of the Plan, "Cause" shall mean, in the reasonable  judgment of
the granting  Committee (i) the willful and continued failure by the Participant
to  substantially  perform his duties  with the  Company or any Related  Company
after written  notification by the Company or Related Company,  (ii) the willful
engaging by the  Participant in conduct which is  demonstrably  injurious to the
Company or any Related Company,  monetarily or otherwise,  or (iii) the engaging
by the Participant in egregious  misconduct  involving  serious moral turpitude.
For purposes hereof, no act, or failure to act, on the Participant's  part shall
be deemed  "willful"  unless done, or omitted to be done, by the Participant not
in good faith and  without  reasonable  belief  that such action was in the best
interest of the Company or Related Company.

                                    SECTION 3

                            DIVIDEND EQUIVALENT UNITS

         3.1. Award of Dividend Equivalent Units. Unless determined otherwise by
the granting  Committee,  a Participant  who is awarded an Option under the Plan
(other  than a  matching  Option  awarded  under  subsection  4.2) shall also be
entitled to receive "Dividend  Equivalent Units" with respect to such Option, as
follows:

          (a)  Annual  crediting  of  Dividend   Equivalent  Units.  Annual
               crediting  of Dividend  Equivalent  Units.  As of the last day of
               each calendar  year, the Optionee shall be credited with a number
               of Dividend  Equivalent  Units  equal to (i) the  Trust's  annual
               dividend for such calendar year, multiplied by (ii) the number of
               Shares  underlying  the Optionee's  outstanding  Options that are
               entitled to awards under this Section 3 during such calendar year
               (reduced pro rata to reflect Shares  underlying such Options that
               were not  outstanding  on the  record  date with  respect to each
               dividend  payment date during such year) and divided by (iii) the
               Trust's average Share price for such calendar year.

         (b)      Additional  credits to reflect  dividend  payments on Dividend
                  Equivalent  Units.  As of the last day of each calendar  year,
                  each  Optionee  shall be credited  with a number of additional
                  Dividend  Equivalent  Units  equal to (i) the  Trust's  annual
                  dividend for such calendar year, multiplied by (ii) the number
                  of Dividend  Equivalent Units outstanding during such calendar
                  year (reduced pro rata to reflect  Dividend  Equivalent  Units
                  that were not outstanding on each dividend payment date during
                  such year) and  divided  by (iii) the  Trust's  average  Share
                  price for such calendar year.

         3.2.  Terms  and  Conditions  of  Dividend   Equivalent  Units.  Unless
determined otherwise by the granting Committee,  Dividend Equivalent Units shall
be subject to the following terms and conditions:

         (a)      Dividend  Equivalent  Units shall vest in accordance  with the
                  vesting  schedule  applicable  to the Option  with  respect to
                  which the Dividend Equivalent Unit was awarded.

         (b)      Each vested  Dividend  Equivalent  Unit shall  entitle the
               holder thereof to a Share on the last day of the calendar year in
               which occurs the first of (i) the date the Participant  exercises
               the Option with respect to which the Dividend Equivalent Unit was
               awarded,  or (ii) the  date  such  Option  expires  by its  terms
               (whether by reason of  termination  of employment or  otherwise);
               provided,  however,  prior to the date the Shares would otherwise
               be payable, to the extent permitted by the granting Committee,  a
               Participant may irrevocably elect to defer receipt of such Shares
               until the last  date of a later  calendar  year,  but in no event
               later than the last day of the calendar  year in which occurs the
               tenth anniversary of the grant of the underlying Option. Any such
               deferral election shall be made in such form and at such times as
               the  Committee  may  determine and shall be subject to such other
               terms, conditions and limitations as the Committee may establish.

         (c)      All  Dividend  Equivalent  Units which are not vested upon the
                  Participant's Date of Termination shall be forfeited.

         (d)      Settlement of all Dividend  Equivalent  Units shall be made in
                  the form of  whole  Shares.  Any  fractional  Shares  shall be
                  settled in cash.
<PAGE>
                                    SECTION 4

                             SHARE PURCHASE PROGRAM

         4.1.  Purchase  of  Shares.  Each  Committee  may,  from  time to time,
establish one or more  programs  under which  Participants  will be permitted to
purchase Shares under the Plan and shall designate the Participants  eligible to
participate  under such Share purchase  programs.  The purchase price for Shares
available under such programs,  and other terms and conditions of such programs,
shall be established by the Committee,  provided that the purchase price may not
be less than par value.

         4.2.  Matching  Shares and  Options.  Except as  otherwise  provided in
subsection 4.1, any Share purchase program established by a Committee under this
Section may  provide for the award of matching  Shares or Options in the amount,
if any, determined by the Committee.

         4.3.  Restrictions  on Shares.  The granting  Committee may impose such
restrictions  with respect to Shares purchased under subsection 4.1, or matching
Shares  or  Options  awarded  pursuant  to  subsection  4.2,  as  the  Committee
determines to be appropriate. Such restrictions may include, without limitation,
restrictions  of the type that may be imposed with respect to Share Awards under
Section 5.

         4.4.  Purchase  Loans.  In connection with the purchase of Shares under
this Section 4, the granting  Committee,  in its sole discretion,  may determine
that  the  Trust  or  the  Related  Company,   as  applicable,   shall,  at  the
Participant's  election,  make a loan (a "Loan") to the Participant for all or a
portion of the purchase price of the Shares purchased. The Loan may be used only
for the purpose of financing the purchase, subject to the following:
         (a)      Each Loan shall be evidenced  by a promissory  note and pledge
                  agreement  in  such  form  as  the  granting  Committee  shall
                  approve;  provided,  that  the note  shall  (i)  provide  full
                  recourse to the  Participant,  (ii)  provide for interest at a
                  rate to be  determined  by the  granting  Committee,  (iii) be
                  secured,  pursuant  to a pledge  agreement,  by the  purchased
                  Shares, and (iv) comply with all applicable laws,  regulations
                  and rules of the Board of  Governors  of the  Federal  Reserve
                  System and any other governmental agency having jurisdiction.

         (b) Each Loan shall provide for a term of no more than 10 years.

         (c) All principal and interest outstanding under a Loan with
                    respect to any Participant will automatically become due and
                    payable   (i)  90  days  after  the  date  the   Participant
                    terminates  employment with the Trust and Related  Companies
                    for any reason other than death,  Disability,  Retirement or
                    Cause,  provided  that such  termination  is not following a
                    Change in Control, (ii) 365 days after the date on which the
                    Participant's   employment   with  the  Trust  and   Related
                    Companies  terminates  by  reason of  death,  Disability  or
                    Retirement,   (iii)  180  days   after   the   Participant's
                    employment with the Trust and Related  Companies  terminates
                    following a Change in Control of the Trust for reasons other
                    than Cause,  or (iv)  immediately  upon a sale of the Shares
                    which  are  pledged  as  collateral  for the  loan or if the
                    Participant's   employment   with  the  Trust  and   Related
                    Companies is terminated for Cause.

         (d)      Each Loan shall  contain  such  other  terms,  conditions  and
                  limitations as may be determined by the granting  Committee in
                  its sole discretion.

<PAGE>
                                    SECTION 5

                                  SHARE AWARDS

         5.1.  Definition.  Subject to the terms of this Section,  a Share Award
under the Plan is a grant of Shares to a  Participant,  the earning,  vesting or
distribution  of which is subject to one or more  conditions  established by the
Trust  Committee.  Such  conditions may relate to events (such as performance or
continued  employment)  occurring  before or after  the date the Share  Award is
granted,  or the date the Shares are earned by,  vested in or  delivered  to the
Participant.  If the vesting of Share Awards is subject to conditions  occurring
after the date of grant,  the period  beginning  on the date of grant of a Share
Award and ending on the vesting or forfeiture of such Shares (as  applicable) is
referred  to as the  "Restricted  Period".  To the extent  that the vesting of a
Share Award is contingent on performance, the performance shall be measured over
a period of not less than one year. Share Awards may provide for delivery of the
shares of Shares at the time of grant or may  provide  for a  deferred  delivery
date. A Share Award may, but need not, be made in conjunction  with a cash-based
incentive compensation program maintained by the Trust and may, but need not, be
in lieu of cash otherwise awardable under such program.

         5.2. Eligibility.  The Trust Committee shall designate the Participants
to whom Share Awards are to be granted and the number of Shares that are subject
to each such Award.

         5.3.  Terms  and   Conditions  of  Awards.   Share  Awards  granted  to
Participants  under  the Plan  shall  be  subject  to the  following  terms  and
conditions:

         (a)      Beginning  on the date of grant  (or,  if  later,  the date of
                  distribution)   of  Shares   comprising  a  Share  Award,  and
                  including any applicable Restricted Period, the Participant as
                  owner of such Shares shall have the right to vote such Shares.

         (b) Payment of dividends  with respect to Share Awards shall be subject
to the following:

                  (i)      On and after the date that a Participant  has a fully
                           earned and vested  right to the Shares  comprising  a
                           Share Award and the Shares have been  distributed  to
                           the  Participant,  the  Participant  shall  have  all
                           dividend  rights (and other  rights) of a shareholder
                           with respect to such Shares.

                  (ii)     Prior  to the  date  that a  Participant  has a fully
                           earned and vested  right to the shares  comprising  a
                           Share  Award,  the  Trust  Committee,   in  its  sole
                           discretion, may award Dividend Rights with respect to
                           such shares.

                  (iii)    On and after the date that a Participant  has a fully
                           earned and vested  right to the Shares  comprising  a
                           Share   Award,   but  before  the  Shares  have  been
                           distributed to the Participant, the Participant shall
                           be entitled to Dividend  Rights with  respect to such
                           Shares, at the time and in the form determined by the
                           Trust Committee.

                  (iv)     A "Dividend Right" with respect to shares  comprising
                           a Share Award shall  entitle the  Participant,  as of
                           each dividend payment date, to an amount equal to the
                           dividends  payable with respect to a Share multiplied
                           by the number of such Shares.  Dividend  Rights shall
                           be settled in cash or in Shares valued at Fair Market
                           Value as of the date of settlement,  as determined by
                           the Trust  Committee,  shall be  payable  at the time
                           determined  by the  Committee and shall be subject to
                           such other terms and  conditions as the Committee may
                           determine.
<PAGE>

                                    SECTION 6

                          OPERATION AND ADMINISTRATION

         6.1.  Effective Date. The Plan was originally  effective as of the date
it was adopted by the Board;  provided,  however,  that Awards granted under the
Plan prior to its approval by  shareholders  were  contingent on approval of the
Plan by the Trust's  shareholders.  The Plan shall be unlimited in duration and,
in the event of Plan  termination,  shall remain in effect as long as any Shares
awarded under it are outstanding and not fully vested;  provided,  however, that
no new Awards shall be made under the Plan on or after the tenth  anniversary of
the date on which the Plan is adopted by the Board.

         6.2.  Shares  Subject to Plan.  The Shares with respect to which Awards
may be made under the Plan shall be shares currently  authorized but unissued or
currently  held or  subsequently  acquired  by the  Trust  as  treasury  shares,
including  shares  purchased  in the open  market  or in  private  transactions.
Subject to the  provisions of subsection  6.4, the number of Shares which may be
issued with respect to Awards under the Plan shall not exceed  14,600,000 Shares
in the aggregate.  Except as otherwise provided herein, any Shares subject to an
Award which for any reason expires or is terminated  without  issuance of Shares
(including  Shares that are not issued because  Shares are tendered  pursuant to
subsection 2.3(c) or 6.9) shall again be available under the Plan.

         6.3.  Individual Limits on Awards.  Notwithstanding any other provision
of the Plan to the contrary, no Participant shall receive any Award of an Option
under the Plan to the extent that the sum of:

         (a)      the number of Shares subject to such Award;

         (b)      the  number of Shares  subject  to all other  prior  Awards of
                  Options  under the Plan during the one-year  period  ending on
                  the date of the Award; and

         (c)      the number of Shares  subject to all other prior share options
                  granted to the  Participant  under other plans or arrangements
                  of the Trust during the one-year  period ending on the date of
                  the Award; would  exceed  the   Participant's   Individual
                  Limit  under  the  Plan.  The determination  made under the
                  foregoing  provisions of this subsection  shall be based on
                  the Shares  subject to the Awards at the time of grant,
                  regardless of when the Awards become exercisable. Subject to
                  the provisions of subsection 6.4, a Participant's "Individual
                  Limit" shall be 500,000 Shares.

         6.4.      Adjustments to Shares.

         (a)      If the  Trust  shall  effect  any  subdivision  or
                    consolidation  of  Shares  or  other  capital  readjustment,
                    payment  of stock  dividend,  stock  split,  combination  of
                    shares or recapitalization or other increase or reduction of
                    the   number  of  Shares   outstanding   without   receiving
                    compensation therefor in money,  services or property,  then
                    the Trust Committee shall equitably adjust (i) the number of
                    Shares  available  under the Plan; (ii) the number of shares
                    available  under any  individual or other limits;  (iii) the
                    number of Shares subject to outstanding Awards; and (iv) the
                    per-share  price under any  outstanding  Award to the extent
                    that the Participant is required to pay a purchase price per
                    share with respect to the Award.

         (b)      If the  Trust is  reorganized,  merged or  consolidated  or is
                    party  to a  plan  of  exchange  with  another  corporation,
                    pursuant to which reorganization,  merger,  consolidation or
                    plan of exchange,  the shareholders of the Trust receive any
                    shares  of stock or other  securities  or  property,  or the
                    Trust shall distribute  securities of another corporation to
                    its shareholders,  there shall be substituted for the shares
                    subject  to  outstanding  Awards  an  appropriate  number of
                    shares of each class of stock or amount of other  securities
                    or property which were  distributed to the  shareholders  of
                    the  Trust  in  respect  of  such  shares,  subject  to  the
                    following:
<PAGE>
                  (i)      If  the   Trust   Committee   determines   that   the
                           substitution   described  in   accordance   with  the
                           foregoing  provisions of this paragraph  would not be
                           fully consistent with the purposes of the Plan or the
                           purposes of the  outstanding  Awards  under the Plan,
                           the Committee may make such other  adjustments to the
                           Awards to the extent  that the  Committee  determines
                           such  adjustments are consistent with the purposes of
                           the Plan and of the affected Awards.

                   (ii)    All or any of the Awards may be cancelled by the
                    Trust  Committee on or  immediately  prior to the  effective
                    date  of  the  applicable  transaction,   but  only  if  the
                    Committee   gives   reasonable   advance   notice   of   the
                    cancellation  to  each  affected  Participant,  and  only if
                    either:  (A) the  Participant  is  permitted to exercise all
                    Awards  that will be  cancelled  (without  regard to whether
                    such Awards would otherwise be exercisable) for a reasonable
                    period prior to the effective date of the  cancellation;  or
                    (B) the Participant  receives payment or other benefits that
                    the Committee  determines to be reasonable  compensation for
                    the value of all cancelled Awards (without regard to whether
                    such Awards would otherwise be vested).

                  (iii)    Upon the occurrence of a reorganization  of the Trust
                           or any other event  described in this  paragraph (b),
                           any successor to the Trust shall be  substituted  for
                           the  Trust  to the  extent  that  the  Trust  and the
                           successor agree to such substitution.

         (c)      Upon  (or,  in  the   discretion   of  the  Trust   Committee,
                  immediately  prior to) the sale to (or exchange  with) a third
                  party  unrelated to the Trust of all or  substantially  all of
                  the assets of the Trust,  all Awards  shall be  cancelled.  If
                  Awards are cancelled under this paragraph,  then, with respect
                  to any affected Participant, either:

                  (i)      the  Participant  shall be provided  with  reasonable
                           advance   notice   of  the   cancellation,   and  the
                           Participant shall be permitted to exercise all Awards
                           that will be  cancelled  (without  regard to  whether
                           such awards  would  otherwise be  exercisable)  for a
                           reasonable  period prior to the effective date of the
                           cancellation; or

                  (ii)     the  Participant   shall  receive  payment  or  other
                           benefits   that  the   Committee   determines  to  be
                           reasonable   compensation   for  the   value  of  all
                           cancelled  Awards  (without  regard to  whether  such
                           cancelled Awards would otherwise be vested).

                  The foregoing provisions of this paragraph shall also apply to
                  the  sale of all or  substantially  all of the  assets  of the
                  Trust to a related  party,  if the Committee  determines  such
                  application  is  appropriate.  Notwithstanding  the  foregoing
                  provisions of this paragraph (c), in lieu of  cancellation  of
                  outstanding  Awards, the Committee and the purchaser of all or
                  substantially  all of the Trust's  assets may provide  that an
                  appropriate number of shares or securities of the purchaser or
                  its affiliates shall be substituted for Shares with respect to
                  outstanding   Awards  under  the  Plan,   provided  that  such
                  substituted  awards shall be  comparable  in value and contain
                  terms and conditions similar to the Awards.

         (d)      In   determining   what  action,   if  any,  is  necessary  or
                  appropriate under the foregoing provisions of this subsection,
                  the Trust  Committee  shall act in a manner that it determines
                  to be  consistent  with  the  purposes  of the Plan and of the
                  affected   Awards   and,   where   applicable   or   otherwise
                  appropriate, in a manner that it determines to be necessary to
                  preserve the benefits and  potential  benefits of the affected
                  Awards for the Participants and the Trust.

          (e)  The existence of this Plan and the Awards granted hereunder shall
               not  affect  in any way the  right or  power of the  Trust or its
               shareholders  to  make  or  authorize  any  or  all  adjustments,
               recapitalizations,   reorganizations  or  other  changes  in  the
               Trust's  capital  structure  or  its  business,   any  merger  or
               consolidation  of the  Trust,  any  issue of  bonds,  debentures,
               preferred or prior  preference  stocks ahead of or affecting  the
               Trust's  Shares  or  the  rights  thereof,   the  dissolution  or
               liquidation of the Trust, any sale or transfer of all or any part
               of  its  assets  or  business,  or  any  other  corporate  act or
               proceeding, whether of a similar character or otherwise.
<PAGE>

         (f)      Except as  expressly  provided by the terms of this Plan,  the
                  issue  by the  Trust of  shares  of  stock  of any  class,  or
                  securities  convertible into shares of stock of any class, for
                  cash or property or for labor or services,  either upon direct
                  sale,  upon the  exercise of rights or  warrants to  subscribe
                  therefor or upon  conversion of shares or  obligations  of the
                  Trust convertible into such shares or other securities,  shall
                  not affect, and no adjustment by reason thereof, shall be made
                  with respect to Awards then outstanding hereunder.

         (g)      Awards  under the Plan are  subject to  adjustment  under this
                  subsection only during the period in which they are considered
                  to be  outstanding  under  the  Plan.  For  purposes  of  this
                  subsection,  an Award is considered  "outstanding" on any date
                  if the  Participant's  ability  to obtain  all  benefits  with
                  respect to the Award is subject to limits  imposed by the Plan
                  (including any limits imposed by the Agreement  reflecting the
                  Award).  The  determination of whether an Award is outstanding
                  shall be made by the Trust Committee.

         6.5.  Change  in  Control.  In  the  event  that  (i)  a  Participant's
employment  is  terminated  by the  Trust or the  successor  to the  Trust or an
affiliated  entity  which is his or her  employer  for reasons  other than Cause
following a Change in Control of the Trust (as  defined  below) or (ii) the Plan
is  terminated  by the Trust or its  successor  following  a Change  in  Control
without  provision for the  continuation of outstanding  Awards  hereunder,  all
Options  and  related  Awards  which have not  otherwise  expired  shall  become
immediately  exercisable  and all other Awards shall  become fully  vested.  For
purposes of the Plan,  a "Change in Control"  means the  happening of any of the
following:

(a)  the  shareholders of the Trust approve a definitive  agreement to merge the
     Trust into or consolidate the Trust with another entity,  sell or otherwise
     dispose  of all or  substantially  all of its  assets  or  adopt  a plan of
     liquidation,  provided,  however,  that a Change  in  Control  shall not be
     deemed to have  occurred  by reason of a  transaction,  or a  substantially
     concurrent or otherwise related series of transactions, upon the completion
     of which 50% or more of the beneficial ownership of the voting power of the
     Trust,  the surviving  corporation  or  corporation  directly or indirectly
     controlling the Trust or the surviving corporation,  as the case may be, is
     held by the same persons (as defined  below)  (although not  necessarily in
     the same  proportion) as held the beneficial  ownership of the voting power
     of the Trust  immediately  prior to the  transaction  or the  substantially
     concurrent or otherwise  related series of  transactions,  except that upon
     the completion  thereof,  employees or employee  benefit plans of the Trust
     may be a new holder of such beneficial ownership;  provided,  further, that
     any transaction  described in this paragraph (a) with an "Affiliate" of the
     Trust (as defined in the  Securities  Exchange Act of 1934, as amended (the
     "Exchange Act")) shall not be treated as a Change in Control; or

         (b)      the "beneficial ownership" (as defined in Rule 13d-3 under the
                  Exchange  Act) of securities  representing  50% or more of the
                  combined  voting  power of the Trust is  acquired,  other than
                  from the Trust,  by any "person" as defined in Sections  13(d)
                  and 14(d) of the Exchange Act (other than any trustee or other
                  fiduciary  holding  securities  under an  employee  benefit or
                  other  similar  stock  plan of the Trust)  provided,  that any
                  purchase by Security Capital Group  Incorporated or any of its
                  affiliates  of  securities  representing  50% or  more  of the
                  combined  voting  power of the Trust shall not be treated as a
                  Change in Control; or

         (c)      at any  time  during  any  period  of two  consecutive  years,
                  individuals  who at the  beginning of such period were members
                  of the Board of  Trustees of the Trust cease for any reason to
                  constitute at least a majority  thereof  (unless the election,
                  or the nomination for election by the Trust's shareholders, of
                  each new trustee was approved by a vote of at least two-thirds
                  of the trustees  still in office at the time of such  election
                  or  nomination  who were  trustees  at the  beginning  of such
                  period).

For purposes of this subsection,  a Participant's  employment shall be deemed to
be terminated by the Trust or the successor to the Trust or an affiliated entity
if  the  Participant  terminates  employment  after  (i) a  substantial  adverse
alteration in the nature of the Participant's  status or  responsibilities  from
those in effect  immediately prior to the Change in Control,  or (ii) a material
reduction in the  Participant's  annual base salary and target bonus, if any, as
in effect  immediately  prior to the  Change in  Control.  If,  upon a Change in
Control,  awards in other shares or securities are  substituted  for outstanding
Awards pursuant to Section 6.4, and immediately  following the Change in Control
the Participant  becomes employed by the entity into which the Trust merged,  or
the purchaser of substantially all of the assets of the Trust, or a successor to
such  entity  or  purchaser,  the  Participant  shall not be  treated  as having
terminated  employment  for  purposes of this Section 6.5 until such time as the
Participant  terminates  employment  with the  merged  entity or  purchaser  (or
successor), as applicable.
<PAGE>

         6.6.     Limit on  Distribution.  Distribution  of Shares or other
amounts under the Plan shall be subject to the following:

         (a)      Notwithstanding  any other  provision  of the Plan,  the Trust
                  shall have no  liability  to deliver any Shares under the Plan
                  or make any  other  distribution  of  benefits  under the Plan
                  unless such  delivery or  distribution  would  comply with all
                  applicable  laws  and  the  applicable   requirements  of  any
                  securities exchange or similar entity.

         (b)      In the case of a  Participant  who is subject to Section 16(a)
                  and 16(b) of the Exchange Act, the Trust Committee may, at any
                  time, add such conditions and limitations to any Award to such
                  Participant,  or  any  feature  of  any  such  Award,  as  the
                  Committee,   in  its  sole  discretion,   deems  necessary  or
                  desirable to comply with Section  16(a) or 16(b) and the rules
                  and   regulations   thereunder  or  to  obtain  any  exemption
                  therefrom.

         (c)      To  the  extent  that  the  Plan   provides  for  issuance  of
                  certificates  to reflect the transfer of Shares,  the transfer
                  of such Shares may be effected on a non-certificated basis, to
                  the extent not  prohibited by  applicable  law or the rules of
                  any stock exchange.

         6.7.  Liability for Cash  Payments.  Subject to the  provisions of this
Section,  each Related Company shall be liable for payment of cash due under the
Plan with  respect to any  Participant  to the  extent  that such  benefits  are
attributable   to  the  service   rendered  for  that  Related  Company  by  the
Participant.  Any disputes  relating to liability of a Related  Company for cash
payments shall be resolved by the Trust Committee.

         6.8.  Performance-Based  Compensation.  To the  extent  that the  Trust
Committee  determines  that it is  necessary  or desirable to conform any Awards
under  the  Plan  with  the   requirements   applicable  to   "Performance-Based
Compensation",  as that term is used in Code section 162(m)(4)(C), it may, at or
prior  to the  time an Award  is  granted,  take  such  steps  and  impose  such
restrictions  with  respect to such Award as it  determines  to be  necessary to
satisfy such requirements including, without limitation:

         (a)      The  establishment of performance goals that must be satisfied
                  prior to the payment or  distribution  of benefits  under such
                  Awards.

         (b)      The  submission  of such Awards and  performance  goals to the
                  Trust's  shareholders  for  approval and making the receipt of
                  benefits  under  such  Awards  contingent  on  receipt of such
                  approval.

         (c)      Providing that no payment or  distribution  be made under such
                  Awards unless the Committee  certifies  that the goals and the
                  applicable  terms  of the Plan and  Agreement  reflecting  the
                  Awards have been satisfied.
To the extent that the  Committee  determines  that the  foregoing  requirements
relating to Performance-Based Compensation do not apply to Awards under the Plan
because the Awards constitute Options,  the Committee may, at the time the Award
is  granted,  conform  the  Awards to  alternative  methods  of  satisfying  the
requirements applicable to Performance-Based Compensation.

         6.9.  Withholding.  All  Awards and other  payments  under the Plan are
subject to withholding of all applicable taxes,  which  withholding  obligations
may be  satisfied,  with the  consent of the  granting  Committee,  through  the
surrender of Shares which the Participant already owns or to which a Participant
is otherwise entitled under the Plan; provided, however, previously-owned Shares
that have been held by the  Participant  less than six months or Shares to which
the  Participant  is  entitled  under the Plan may only be used to  satisfy  the
minimum tax withholding required by applicable law.

         6.10.  Transferability.  Awards  under  the Plan  are not  transferable
except as  designated by the  Participant  by will or by the laws of descent and
distribution or, to the extent provided by the granting Committee, pursuant to a
qualified  domestic  relations  order  (within  the  meaning  of  the  Code  and
applicable rules thereunder). To the extent that the Participant who receives an
Award  under the Plan has the right to  exercise  such  Award,  the Award may be
exercised  during  the  lifetime  of the  Participant  only by the  Participant.
Notwithstanding the foregoing  provisions of this subsection,  the Committee may
permit  Awards  under the Plan to be  transferred  to or for the  benefit of the
Participant's family (including,  without limitation,  to a trust or partnership
for the benefit of a  Participant's  family),  subject to such procedures as the
Committee  may  establish.  In no  event  shall an  Incentive  Share  Option  be
transferable  to  the  extent  that  such  transferability   would  violate  the
requirements applicable to such option under Code section 422.
<PAGE>

         6.11.  Notices.  Any  notice or  document  required  to be filed with a
Committee  under  the Plan  will be  properly  filed if  delivered  or mailed by
registered mail, postage prepaid, to the Committee,  in care of the Trust or the
Related  Company,  as  applicable,  at  its  principal  executive  offices.  The
Committee may, by advance written notice to affected persons, revise such notice
procedure  from time to time.  Any notice  required under the Plan (other than a
notice of election) may be waived by the person entitled to notice.

         6.12. Form and Time of Elections.  Unless otherwise  specified  herein,
each  election  required or  permitted  to be made by any  Participant  or other
person  entitled to benefits under the Plan, and any permitted  modification  or
revocation thereof,  shall be in writing filed with the applicable  Committee at
such times, in such form, and subject to such restrictions and limitations,  not
inconsistent with the terms of the Plan, as the Committee shall require.

         6.13.  Agreement With Trust or Related Company. At the time of an Award
to  a  Participant  under  the  Plan,  the  granting  Committee  may  require  a
Participant to enter into an agreement with the Trust or the Related Company, as
applicable  (the  "Agreement"),  in a form specified by the granting  Committee,
agreeing to the terms and  conditions of the Plan and to such  additional  terms
and conditions,  not inconsistent with the Plan, as the granting  Committee may,
in its sole discretion, prescribe.

         6.14.    Limitation of Implied Rights.

         (a) Neither a Participant  nor any other person shall, by reason of the
Plan,  acquire  any right in or title to any  assets,  funds or  property of the
Trust or any Related Company  whatsoever,  including,  without  limitation,  any
specific  funds,  assets,  or other  property  which  the  Trust or any  Related
Company,  in its sole  discretion,  may set aside in anticipation of a liability
under  the Plan.  A  Participant  shall  have  only a  contractual  right to the
amounts,  if any,  payable under the Plan,  unsecured by any assets of the Trust
and any  Related  Company.  Nothing  contained  in the Plan shall  constitute  a
guarantee by the Trust or any Related  Company that the assets of such companies
shall be sufficient to pay any benefits to any person.

         (b) The  Plan  does  not  constitute  a  contract  of  employment,  and
selection as a  Participant  will not give any employee the right to be retained
in the employ of the Trust or any Related Company, nor any right or claim to any
benefit  under the Plan,  unless  such right or claim has  specifically  accrued
under the terms of the Plan. Except as otherwise  provided in the Plan, no Award
under the Plan shall confer upon the holder  thereof any right as a  shareholder
of the Trust prior to the date on which he fulfills all service requirements and
other  conditions  for receipt of such rights and Shares are  registered  in his
name.

         6.15.  Evidence.  Evidence  required of anyone under the Plan may be by
certificate, affidavit, document or other information which the person acting on
it considers pertinent and reliable, and signed, made or presented by the proper
party or parties.

         6.16.  Action by Trust or  Related  Company.  Any  action  required  or
permitted to be taken by the Trust or any Related Company shall be by resolution
of its board of trustees or  directors,  as  applicable,  or by action of one or
more  members of the board  (including  a  committee  of the board) who are duly
authorized  to act  for  the  board  or  (except  to the  extent  prohibited  by
applicable law or the rules of any stock exchange) by a duly authorized  officer
of the Trust.

         6.17. Gender and Number.  Where the context admits, words in any gender
shall include any other gender,  words in the singular  shall include the plural
and the plural shall include the singular.
         6.18.  Applicable Law. The provisions of the Plan shall be construed in
accordance  with the laws of the State of  Maryland,  without  giving  effect to
choice of law principles.

         6.19.  Foreign  Employees.  Notwithstanding  any other provision of the
Plan to the contrary,  a Committee may grant Awards to eligible  persons who are
foreign nationals on such terms and conditions different from those specified in
the Plan as may, in the judgment of the Committee,  be necessary or desirable to
foster and promote  achievement  of the purposes of the Plan. In  furtherance of
such purposes, the Committee may make such modifications, amendments, procedures
and subplans as may be necessary or advisable to comply with  provisions of laws
in other  countries  or  jurisdictions  in which the Trust or a Related  Company
operates or has employees.

                                    SECTION 7

                                   COMMITTEES

         7.1. Administration.  The authority to control and manage the operation
and  administration  of the Plan shall be vested in the Trust  Committee and the
Related Companies' Committees (the "Committees") in accordance with this Section
7.
<PAGE>

         7.2.  Selection of Trust Committee.  So long as the Trust is subject to
Section 16 of the  Exchange  Act, the Trust  Committee  shall be selected by the
Board  and shall  consist  of not fewer  than two  members  of the Board or such
greater  number as may be required for  compliance  with Rule 16b-3 issued under
the  Exchange  Act,  none of whom shall be eligible to receive  Awards under the
Plan.

         7.3.     Powers of  Committees.  The authority to manage and control
the operation and administration of the Plan shall be vested in the Committees,
subject to the following:

         (a)      Subject  to the  provisions  of the  Plan, the Trust Committee
                  will  have the  authority  and discretion  to select  which
                  employees  of the Trust are  eligible  to  receive  Awards and
                  each Related Company Committee will have the authority and
                  discretion to select which  employees of the Related  Company
                  are eligible to receive  Awards.  Each Committee shall have
                  the authority to determine  the time or times of  receipt,  to
                  determine  the types of Awards  and the  number of shares
                  covered  by the  Awards,  to  establish the terms, conditions,
                  performance  criteria, restrictions,  and other  provisions of
                  such Awards,  and to cancel or suspend Awards.  In making
                  such Award  determinations,  the Committee may take into
                  account the nature of services  rendered by the respective
                  employee,  the individual's present and potential contribution
                  to the Trust's or the Related Company's success and such other
                  factors as the Committee deems relevant.

         (b)      Subject to the  provisions  of the Plan,  the Trust  Committee
                  will have the authority and discretion to determine the extent
                  to which Awards under the Plan will be  structured  to conform
                  to   the   requirements    applicable   to   Performance-Based
                  Compensation,   and  to  take  such  action,   establish  such
                  procedures,  and  impose  such  restrictions  at the time such
                  Awards are granted as the Committee determines to be necessary
                  or appropriate to conform to such requirements.

         (c)      Subject to the  provisions  of the Plan,  the Trust  Committee
                  will have the authority and  discretion to interpret the Plan,
                  to  establish,  amend and  rescind  any rules and  regulations
                  relating to the Plan, to determine the terms and provisions of
                  any agreements made pursuant to the Plan and to make all other
                  determinations  that may be  necessary  or  advisable  for the
                  administration of the Plan.

         (d)      Any interpretation of the Plan by a Committee and any decision
                  made by it under the Plan is final and binding on all persons.

         (e)      Except as otherwise  expressly  provided in the Plan,  where a
                  Committee is authorized to make a  determination  with respect
                  to any Award, such determination shall be made at the time the
                  Award is made,  except  that the  Committee  may  reserve  the
                  authority to have such  determination made by the Committee in
                  the future (but only if such  reservation  is made at the time
                  the Award is granted and is expressly  stated in the Agreement
                  reflecting the Award).

         7.4.  Delegation  by  Committee.  Except to the  extent  prohibited  by
applicable law or the rules of any stock exchange or NASDAQ (if appropriate),  a
Committee may allocate all or any portion of its  responsibilities and powers to
any  one or  more  of its  members  and  may  delegate  all or any  part  of its
responsibilities  and powers to any person or persons  selected  by it. Any such
allocation or delegation may be revoked by the Committee at any time.

         7.5.  Information to be Furnished to Committees.  The Trust and Related
Companies  shall  furnish each  Committee  such data and  information  as may be
required  for it to discharge  its duties.  The records of the Trust and Related
Companies as to an employee's or Participant's employment (or other provision of
services),   termination  of  employment  (or  cessation  of  the  provision  of
services),  leave of absence,  reemployment and compensation shall be conclusive
on all persons unless determined to be incorrect. Participants and other persons
entitled to benefits under the Plan must furnish the  Committees  such evidence,
data or information as the Committees  consider desirable to carry out the terms
of the Plan.
<PAGE>

         7.6.  Liability  and  Indemnification  of  Committees.   No  member  or
authorized  delegate  of any  Committee  shall be liable to any  person  for any
action taken or omitted in connection with the administration of the Plan unless
attributable to his own fraud or willful misconduct;  nor shall the Trust or any
Related Company be liable to any person for any such action unless  attributable
to fraud or willful misconduct on the part of a trustee or employee of the Trust
or Related Company. Each Committee,  the individual members thereof, and persons
acting as the  authorized  delegates of the Committee  under the Plan,  shall be
indemnified  by the Trust  against any and all  liabilities,  losses,  costs and
expenses (including legal fees and expenses) of whatsoever kind and nature which
may be imposed on, incurred by or asserted  against the Committee or its members
or authorized  delegates by reason of the performance of a Committee function if
the Committee or its members or authorized  delegates did not act dishonestly or
in willful violation of the law or regulation under which such liability,  loss,
cost or  expense  arises.  This  indemnification  shall  not  duplicate  but may
supplement any coverage available under any applicable insurance.

                                    SECTION 8

                            AMENDMENT AND TERMINATION

         Subject to obtaining  such approvals as may be required under the Code,
Federal securities law, Maryland  corporate law or stock exchange  requirements,
the Board may, at any time, amend or terminate the Plan,  provided that, subject
to subsection 6.4 (relating to certain  adjustments to shares),  no amendment or
termination  may materially  adversely  affect the rights of any  Participant or
beneficiary under any Award made under the Plan prior to the date such amendment
is adopted by the Board.<PAGE>

                                CREDIT AGREEMENT

                                      Among

                                 PROLOGIS TRUST,
                           as a Borrower and Guarantor

                    PROLOGIS LOGISTICS SERVICES INCORPORATED,
                                  as a Borrower

                   PROLOGIS DEVELOPMENT SERVICES INCORPORATED,
                                  as a Borrower

                             BANK OF AMERICA, N.A.,
                             as Administrative Agent

                COMMERZBANK AKTIENGESELLSCHAFT, NEW YORK BRANCH,
                              as Syndication Agent

                   CHASE BANK OF TEXAS, NATIONAL ASSOCIATION,
                             as Documentation Agent

                            FIRST UNION NATIONAL BANK
                                       and
                       SOCIETE GENERALE, SOUTHWEST AGENCY,
                               as Managing Agents

                                       and

                            THE LENDERS NAMED HEREIN,
                                   as Lenders

                                  $450,000,000

                                      As of

                                  June 6, 2000

                         BANC OF AMERICA SECURITIES LLC,
                       Sole Lead Arranger and Book Manager

<PAGE>

<TABLE>
<CAPTION>

                                     (viii)
Credit Agreement                                                                                        d-EXH10.WPD
                                TABLE OF CONTENTS
                                                                                                               Page
<S>      <C>      <C>                                                                                          <C>

SECTION 1         DEFINITIONS AND TERMS...........................................................................1
         1.1      Definitions.....................................................................................1
         1.2      Time References................................................................................19
         1.3      Other References...............................................................................19
         1.4      Accounting Principles..........................................................................19

SECTION 2         COMMITMENT.....................................................................................19
         2.1      Revolving Facility.............................................................................19
         2.2      Borrowing Procedure............................................................................20
         2.3      Termination....................................................................................21
         2.4      Swing Line Subfacility.........................................................................21
         2.5      Competitive Bid Subfacility....................................................................22
         2.6      Lenders; Increase in Total Commitment..........................................................25

SECTION 3         TERMS OF PAYMENT...............................................................................25
         3.1      Notes and Payments.............................................................................25
         3.2      Interest and Principal Payments................................................................26
         3.3      Interest Options...............................................................................26
         3.4      Quotation of Rates.............................................................................27
         3.5      Default Rate...................................................................................27
         3.6      Interest Recapture.............................................................................27
         3.7      Interest Calculations..........................................................................27
         3.8      Maximum Rate...................................................................................27
         3.9      Interest Periods...............................................................................28
         3.10     Conversions and Continuations..................................................................28
         3.11     Order of Application...........................................................................29
         3.12     Sharing of Payments, Etc.......................................................................29
         3.13     Offset.........................................................................................29
         3.14     Booking Borrowings.............................................................................29
         3.15     Basis Unavailable or Inadequate for the Eurodollar Rate........................................29
         3.16     Additional Costs...............................................................................30
         3.17     Change in Law..................................................................................31
         3.18     Funding Loss...................................................................................31
         3.19     Foreign Lenders................................................................................32
         3.20     Extension of Termination Date..................................................................32
         3.21     Option to Replace Lenders......................................................................32

SECTION 4         FEES...........................................................................................32
         4.1      Treatment of Fees..............................................................................32
         4.2      Administrative Agent Fees......................................................................33
         4.3      Commitment Fees................................................................................33
         4.4      Extension Fee..................................................................................33
         4.5      Competitive Bid Fee............................................................................33

SECTION 5         CONDITIONS PRECEDENT...........................................................................33

SECTION 6         REPRESENTATIONS AND WARRANTIES.................................................................34
         6.1      Purpose of Credit Facility.....................................................................34
         6.2      Corporate Existence, Good Standing, Authority and Compliance...................................34
         6.3      Affiliates.....................................................................................34
         6.4      Authorization and Contravention................................................................34
         6.5      Binding Effect.................................................................................34
         6.6      Financial Statements; Fiscal Year..............................................................34
         6.7      Litigation.....................................................................................35
         6.8      Taxes..........................................................................................35
         6.9      Environmental Matters..........................................................................35
         6.10     Pension Plans..................................................................................36
         6.11     Properties.....................................................................................36
         6.12     Locations......................................................................................36
         6.13     Government Regulations.........................................................................36
         6.14     Transactions with Affiliates...................................................................36
         6.15     Insurance......................................................................................36
         6.16     Labor Matters..................................................................................36
         6.17     Solvency.......................................................................................36
         6.18     Full Disclosure................................................................................36
         6.19     Exemption from ERISA; Plan Assets..............................................................37
         6.20     Minority Interests.............................................................................37
<PAGE>

SECTION 7         AFFIRMATIVE COVENANTS..........................................................................37
         7.1      Items to be Furnished..........................................................................37
         7.2      Use of Proceeds................................................................................38
         7.3      Books and Records..............................................................................38
         7.4      Inspections....................................................................................38
         7.5      Taxes..........................................................................................39
         7.6      Expenses.......................................................................................39
         7.7      Maintenance of Existence, Assets, and Business.................................................39
         7.8      Insurance......................................................................................39
         7.9      Preservation and Protection of Rights..........................................................40
         7.10     Environmental Laws.............................................................................40
         7.11     Indemnification................................................................................40
         7.12     REIT Status....................................................................................40
         7.13     Hedging Agreements.............................................................................40
         7.14     Subsidiary Guaranties; Intercompany Indebtedness...............................................41

SECTION 8         NEGATIVE COVENANTS.............................................................................41
         8.1      Payment of Liabilities.........................................................................41
         8.2      Employee Plans.................................................................................41
         8.3      Debt...........................................................................................41
         8.4      Transactions with Affiliates...................................................................42
         8.5      Compliance with Laws and Documents.............................................................42
         8.6      Loans, Advances, and Investments...............................................................42
         8.7      Dividends and Distributions....................................................................43
         8.8      Sale of Assets.................................................................................43
         8.9      Mergers and Dissolutions.......................................................................43
         8.10     Assignment.....................................................................................44
         8.11     Fiscal Year and Accounting Methods.............................................................44
         8.12     New Businesses.................................................................................44
         8.13     Government Regulations.........................................................................44
         8.14     Negative Pledge Agreements.....................................................................44

SECTION 9         FINANCIAL COVENANTS............................................................................44
         9.1      Leverage Ratio.................................................................................44
         9.2      Minimum Consolidated Net Worth.................................................................44
         9.3      Interest Expense Coverage Ratio................................................................44
         9.4      Fixed Charge Coverage Ratio....................................................................44
         9.5      Preferred Dividend Coverage Ratio..............................................................44
         9.6      Unencumbered Debt Service Coverage Ratio.......................................................45
         9.7      Unencumbered Property Value Ratio..............................................................45

SECTION 10        DEFAULT........................................................................................45
         10.1     Payment of Obligation..........................................................................45
         10.2     Covenants......................................................................................45
         10.3     Debtor Relief..................................................................................45
         10.4     Judgments and Attachments......................................................................45
         10.5     Government Action..............................................................................45
         10.6     Misrepresentation..............................................................................45
         10.7     Default Under Other Agreements.................................................................46
         10.8     Validity and Enforceability of Loan Documents..................................................46
         10.9     Management Changes.............................................................................46
         10.10    Plan Assets....................................................................................46

SECTION 11        RIGHTS AND REMEDIES............................................................................47
         11.1     Remedies Upon Default..........................................................................47
         11.2     Waivers.  .....................................................................................47
         11.3     Performance by Administrative Agent............................................................47
         11.4     Not in Control.................................................................................47
         11.5     Course of Dealing..............................................................................47
         11.6     Cumulative Rights..............................................................................48
         11.7     Application of Proceeds........................................................................48
         11.8     Diminution in Value of Collateral..............................................................48
         11.9     Certain Proceedings............................................................................48

SECTION 12        AGENTS AND LENDERS.............................................................................48
         12.1     Agents.........................................................................................48
         12.2     Delegation of Duties; Reliance.................................................................50
         12.3     Limitation of Agents= Liability................................................................50
         12.4     Limitation of Liability........................................................................51
         12.5     Expenses.......................................................................................51
         12.6     Proportionate Absorption of Losses.............................................................52
         12.7     Relationship of Lenders........................................................................52
         12.8     Benefits of Agreement..........................................................................52
         12.9     Approval of Lenders............................................................................52
         12.10    Default; Collateral............................................................................52
         13.1     The Guaranty...................................................................................53
         13.2     Bankruptcy.....................................................................................53
         13.3     Nature of Liability............................................................................53
         13.4     Independent Obligation.........................................................................54
         13.5     Authorization..................................................................................54
         13.6     Reliance.......................................................................................54
         13.7     Subordination..................................................................................54
         13.8     Waivers; Consents..............................................................................55
<PAGE>

SECTION 14        MISCELLANEOUS..................................................................................56
         14.1     Headings.......................................................................................56
         14.2     Nonbusiness Days; Time.........................................................................56
         14.3     Communications.................................................................................56
         14.4     Form and Number of Documents...................................................................56
         14.5     Survival.......................................................................................56
         14.6     Governing Law..................................................................................56
         14.7     Invalid Provisions.............................................................................56
         14.8     Venue; Service of Process; Jury Trial..........................................................57
         14.9     Amendments, Consents, Conflicts, and Waivers...................................................57
         14.10    Multiple Counterparts..........................................................................58
         14.11    Successors and Assigns; Participations.........................................................58
         14.12    Discharge Only Upon Payment in Full; Reinstatement in Certain Circumstances....................60
         14.13    Confidentiality................................................................................60
         14.14    Limitation of Liability of Trustees, Shareholders and Officers of ProLogis.....................61
         14.15    Entirety.......................................................................................61
         14.16    Limited Waiver.  ..............................................................................61
</TABLE>

<PAGE>

<TABLE>
<CAPTION>

                             SCHEDULES AND EXHIBITS
<S>                      <C>
Schedule 1               Parties, Addresses, Commitments and Wiring Information
Schedule 5               Closing Documents
Schedule 6.2             Jurisdictions of Incorporation, Business, and Names
Schedule 6.7             Litigation
Schedule 6.9             Environmental Matters
Schedule 6.10            Pension Plan Disclosures
Schedule 6.12            Chief Executive Office
Schedule 6.14            Affiliates Transactions
Schedule 6.20            Minority Interests
Schedule 7.14-1          Excluded Guarantors
Schedule 7.14-2          Existing Pledged Indebtedness-Unconsolidated Affiliates
Schedule 7.14-3          Unrestricted International Companies
Schedule 8.6             Permitted Minority Interests

Exhibit A-1              Form of Revolving Credit Note
Exhibit A-2              Form of Competitive Bid Note
Exhibit B-1              Borrowing Request
Exhibit B-2              Competitive Bid Request
Exhibit C                Compliance Certificate
Exhibit D                Form of Assignment and Acceptance
Exhibit E                Form of Swing Line Note
Exhibit F                Form of Competitive Bid
Exhibit G                Form of Subsidiary Guaranty
Exhibit H-1              Form of Borrower Pledge Agreement
Exhibit H-2              Form of Subsidiary Pledge Agreement

</TABLE>

<PAGE>

                                CREDIT AGREEMENT

         THIS CREDIT AGREEMENT is dated as of June 6, 2000 (the "Closing Date"),
among PROLOGIS  TRUST,  a Maryland real estate  investment  trust  ("ProLogis"),
PROLOGIS  LOGISTICS  SERVICES  INCORPORATED,  a Delaware  corporation  ("PLLS"),
PROLOGIS DEVELOPMENT SERVICES INCORPORATED, a Delaware corporation ("PLDS;" PLLS
and PLDS are individually called a "Subsidiary Borrower" and collectively called
"Subsidiary  Borrowers;"  ProLogis and  Subsidiary  Borrowers  are  individually
called a "Borrower" and collectively called  "Borrowers"),  the Lenders (defined
below),  BANK OF  AMERICA,  N.A.,  a  national  banking  association  ("Bank  of
America"),  for  itself and as  Administrative  Agent for the  Lenders  (in such
capacity,  together with its  successors and assigns,  "Administrative  Agent"),
COMMERZBANK  AKTIENGESELLSCHAFT,  NEW YORK BRANCH, for itself and as Syndication
Agent (in such capacity, together with its successors and assigns,  "Syndication
Agent"),  and CHASE  BANK OF TEXAS,  NATIONAL  ASSOCIATION,  for  itself  and as
Documentation Agent (in such capacity, together with its successors and assigns,
"Documentation Agent").

                                R E C I T A L S:

         1.  Borrowers  have  requested  that  Lenders  provide to  Borrowers  a
revolving credit and competitive bid facility.

         2.  Lenders are willing to provide  such  facility to  Borrowers on the
terms and subject to the conditions set forth in this Agreement.

         NOW, THEREFORE,  for good and valuable  consideration,  the receipt and
sufficiency  of which are  hereby  acknowledged,  the  parties  hereto  agree as
follows:

SECTION 1         DEFINITIONS AND TERMS.

         1.1      Definitions.  Unless otherwise indicated, as used in the Loan
Documents:

         "Actual Capital  Expenditures"  means any expenditures by a Person that
are properly  classified in the relevant financial  statements of such Person in
accordance  with  GAAP as a  capital  asset  for  (a)  tenant  improvements  and
capitalized  lease  commissions  on previously  leased space,  and (b) recurring
capital expenditures relating to any Property.

         "Adjusted  EBITDA"  means,  for  any  Person  for any  Period,  (a) net
earnings  determined in  accordance  with GAAP,  plus (minus) (b)  extraordinary
losses (extraordinary gains) determined in accordance with GAAP and reflected in
the  determination of net earnings,  plus (minus) (c) capital losses (gains) (in
each case exclusive of such amounts  recognized in accordance with GAAP that are
attributable  to bona  fide  sales to third  parties  (including  Unconsolidated
Affiliates,  to the extent of any  third-party  interests  therein) by ProLogis,
PLDS,  Kingspark,  and  International   Consolidated  Affiliates  of  Properties
developed by such Persons with the  intention of reselling  such  Properties  to
third parties),  plus (minus) (d) any foreign  exchange loss (gain) which is the
result  of  a  period  ending  "mark  to  market"  of  intercompany   (including
Consolidated  Affiliates and Unconsolidated  Affiliates) or third-party loans in
accordance  with GAAP,  plus (minus) (e) losses (gains)  associated with mark to
market of Hedging  Agreements,  plus (f) all amounts deducted in calculating net
earnings,  in  conformity  with GAAP,  for  interest  expense,  deferred  taxes,
depreciation,  and  amortization.  For purposes of calculating  the Fixed Charge
Coverage Ratio, the Preferred Dividend Coverage Ratio, and the Unencumbered Debt
Service Coverage Ratio,  Adjusted EBITDA shall be increased by the amount of any
operating  lease  payments  related to  transactions  in which such Person or an
Affiliate of such Person leases, as lessee, any Property or other assets that it
owned and sold,  transferred,  or  otherwise  disposed  of to the  lessor  (or a
predecessor in interest to the lessor).

<PAGE>

         "Administrative Agent" is defined in the preamble to this Agreement.

         "Affiliate"  of a Person  means any  other  individual  or  entity  who
directly or indirectly controls, or is controlled by, or is under common control
with, that Person. For 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  ownership  of  voting  securities  or  other  ownership  interests,  by
contract, or otherwise).

         "Agents"  means   Administrative   Agent,   Documentation   Agent,  and
Syndication Agent, and "Agent" means any one of the Agents.

         "Agreement" means this Credit Agreement, as amended,  supplemented,  or
restated from time to time.

         "Applicable   Facility   Fee   Percentage"   means,   at  the  time  of
determination  thereof,  the percentage per annum set forth below based upon the
Rating Requirement:
<TABLE>
<CAPTION>

------------------------------------------------------- ===================

                  Rating Requirement                        Applicable
                                                            Percentage
------------------------------------------------------- ===================
------------------- ----------------- ----------------- ===================
  <S>               <C>               <C>               <C>

  Moody's Rating      S & P Rating         Fitch
                                           Rating
------------------- ----------------- ----------------- ===================
------------------- ----------------- ----------------- ===================

Less than Baa3 or   Less than BBB-    Less than BBB-          0.30%
not rated           or not rated      or not rated
------------------- ----------------- ----------------- ===================
------------------- ----------------- ----------------- ===================

Baa3                BBB-              BBB-                    0.20%
------------------- ----------------- ----------------- ===================
------------------- ----------------- ----------------- ===================

Baa2                BBB               BBB                     0.20%
------------------- ----------------- ----------------- ===================
------------------- ----------------- ----------------- ===================

Baa1                BBB+              BBB+                    0.15%
------------------- ----------------- ----------------- ===================
------------------- ----------------- ----------------- ===================

A3                  A-                A-                      0.15%
------------------- ----------------- ----------------- ===================
------------------- ----------------- ----------------- ===================

A2 or better        A or better       A or better             0.10%
------------------- ----------------- ----------------- ===================
</TABLE>

         "Applicable  Margin" means, at the time of determination  thereof,  the
interest margin per annum over the Base Rate or the Eurodollar Rate, as the case
may be, based upon the Rating Requirement as follows:
<TABLE>
<CAPTION>
<S>                                                     <C>
------------------------------------------------------- ==========================================

                  Rating Requirement                                Applicable Margin
------------------------------------------------------- ==========================================
------------------- ----------------- ----------------- ------------------- ======================

  Moody's Rating      S & P Rating         Fitch            Base Rate            Eurodollar
                                           Rating           Borrowings           Borrowings
------------------- ----------------- ----------------- ------------------- ======================
------------------- ----------------- ----------------- ------------------- ======================

Less than Baa3 or   Less than BBB-    Less than BBB-           0.5%                 1.50%
not rated           or not rated      or not rated
------------------- ----------------- ----------------- ------------------- ======================
------------------- ----------------- ----------------- ------------------- ======================

Baa3                BBB-              BBB-                      0%                  1.00%
------------------- ----------------- ----------------- ------------------- ======================
------------------- ----------------- ----------------- ------------------- ======================

Baa2                BBB               BBB                       0%                  0.80%
------------------- ----------------- ----------------- ------------------- ======================
------------------- ----------------- ----------------- ------------------- ======================

Baa1                BBB+              BBB+                      0%                  0.75%
------------------- ----------------- ----------------- ------------------- ======================
------------------- ----------------- ----------------- ------------------- ======================

A3                  A-                A-                        0%                  0.65%
------------------- ----------------- ----------------- ------------------- ======================
------------------- ----------------- ----------------- ------------------- ======================

A2 or better        A or better       A or better               0%                  0.60%
------------------- ----------------- ----------------- ------------------- ======================
</TABLE>

If the Maximum  Leverage  Ratio is increased  from 0.55 to 0.60  pursuant to the
terms and conditions set forth in the definition of Maximum Leverage Ratio, then
the  Applicable  Margin shall be increased by 0.30% during the period of time in
which such increase in the Maximum Leverage Ratio is effective.

         "Applicable  Pension  Laws"  means,  with  respect to any  Person,  all
pension Laws applicable to such Person, including, without limitation, ERISA.

         "Bank of America" is defined in the preamble to this Agreement.

         "Base  Rate"  means,  for any day,  the  greater  of (a) the sum of the
Federal  Funds Rate plus  one-half  of one  percent  (0.5%),  and (b) the annual
interest rate most recently announced by Administrative  Agent as its prime rate
(or, if the Person then acting as  Administrative  Agent under this Agreement is
not a bank organized under the Laws of the United States or any State,  then the
rate  announced by Bank of America as its prime rate) in effect at its office in
Dallas,  Texas,  automatically  fluctuating  upward  and  downward  with  and as
specified in each announcement  without special notice to Borrowers or any other
Person (which prime rate may not  necessarily  represent the lowest or best rate
actually charged to a customer).

         "Base Rate Borrowing" means a Borrowing  bearing interest at the sum of
the Base Rate plus the Applicable Margin.

         "Borrower"  and  "Borrowers"  are  defined  in  the  preamble  to  this
Agreement.

         "Borrowing" means (without duplication) any amount disbursed by (a) any
Credit Party to or on behalf of any  Borrower  under this  Agreement  (under the
Competitive Bid Subfacility,  the Swing Line Subfacility,  or otherwise), or (b)
any Credit  Party in  accordance  with,  and to satisfy the  obligations  of any
Company under, this Agreement.

         "Borrowing  Date" means for any  Borrowing (a) the date for which funds
are  requested  by a  Borrower,  or (b) the  date  any  Borrowing  is  converted
hereunder to another Type of Borrowing.

         "Borrowing  Request"  means  a  request  substantially  in the  form of
Exhibit B-1.

         "Business Day" means (a) for all purposes, any day other than Saturday,
Sunday,  and any other day that  commercial  banks are  authorized  by Law to be
closed in Texas or New York, and (b) for purposes of any Eurodollar Borrowing, a
day that satisfies the  requirements  of clause (a) and is a day when commercial
banks are open for domestic or international business in London.

         "Capital  Expenditures"  means an amount equal to the sum of (a) in the
case of Properties that are not Refrigerated  Warehouse Properties,  the greater
of (i) Actual Capital  Expenditures  with respect to such Properties  during the
four (4)  fiscal  quarters  ending  on the date of  determination,  and (ii) the
product of (A) the sum of the total square footage with respect to all completed
industrial  space  in all  such  Properties  as of the  last  day of each of the
immediately  preceding five (5) calendar quarters,  divided by five (5), and (B)
$0.15,  and (b) in the  case  of  Properties  that  are  Refrigerated  Warehouse
Properties,  the greater of (i) Actual Capital Expenditures with respect to such
Properties   during  the  four  (4)  fiscal  quarters  ending  on  the  date  of
determination,  and (ii) the product of (A) the sum of the total  cubic  footage
with respect to all completed space in all such Properties as of the last day of
each of the immediately  preceding five (5) calendar  quarters,  divided by five
(5), and (B) $0.10.
<PAGE>

         "Capital  Lease" means any capital  lease or sublease that has been (or
under GAAP should be) capitalized on a balance sheet.

         "Cash  Equivalents" means (a) investments and direct obligations of the
United States of America or any agency thereof,  or obligations fully guaranteed
by the  United  States of  America or any  agency  thereof,  provided  that such
obligations mature within one (1) year of the date of acquisition  thereof,  (b)
commercial  paper  rated  "A-1"  (or  higher)  according  to S & P, or "P-1" (or
higher) according to Moody's and maturing not more than one hundred eighty (180)
days  from  the  date of  acquisition  thereof,  (c)  time  deposits  with,  and
certificates  of deposit  and  bankers'  acceptances  issued by,  Administrative
Agent,  any  Lender,  or any United  States  bank  having  capital  surplus  and
undivided  profits  aggregating  at least  $1,000,000,000,  and (d) mutual funds
whose investments are substantially limited to the foregoing.

         "Change in Control"  means,  with respect to ProLogis,  the transfer of
beneficial  ownership of the outstanding  Stock of ProLogis such that any Person
other than  Security  Capital Group  Incorporated  and/or its  Affiliates  owns,
directly or  indirectly,  more than (a) twenty percent (20%) of the Stock (other
than non-voting  preferred Stock) of ProLogis,  and (b) the percent of the Stock
(other than non-voting  preferred  Stock) of ProLogis owned by Security  Capital
Group Incorporated and/or its Affiliates.

         "Closing Date" is defined in the preamble to this Agreement.

         "Code" means the Internal  Revenue  Code of 1986,  as amended,  and the
rules and regulations promulgated thereunder.

         "Commitment"  means,  for a Lender,  the  amount  (which is  subject to
reduction and  cancellation  as provided in this  Agreement)  stated beside such
Lender=s name on Schedule 1 as most recently amended under this Agreement.

         "Companies"  means,  without  duplication,  ProLogis  and  each  of its
Consolidated Affiliates, and ACompany" means any one of the Companies.

         "Competitive  Bid" means an offer by a Lender to fund a Borrowing under
the Competitive Bid Subfacility pursuant to Section 2.5.

         "Competitive Bid Notes" means one of the promissory notes substantially
in the  form of  Exhibit  A-2,  and  all  renewals,  extensions,  modifications,
rearrangements, and replacements thereof and any and all substitutions therefor,
and "Competitive Bid Note" means any one of the Competitive Bid Notes.

         "Competitive  Bid  Rate"  means,  as to any  Competitive  Bid made by a
Lender pursuant to Section 2.5, (a) in the case of a Eurodollar  Borrowing,  the
margin  (which  margin shall be adjusted by such Lender to reflect such Lender's
Reserve  Requirement,  if any, in effect for such  Eurodollar  Borrowing)  which
shall be added to or subtracted from the Eurodollar Rate, and (b) in the case of
a Fixed Rate Borrowing, the fixed rate of interest, in each case, offered by the
Lender making such Competitive Bid.

         "Competitive  Bid Request"  means a request for  Competitive  Bids made
pursuant to Section 2.5(b) substantially in the form of Exhibit B-2.

         "Competitive  Bid  Subfacility"  means  the  subfacility  of the  Total
Commitment as described in, and subject to the limitations of, Section 2.5.

         "Competitive  Borrowing"  means any Borrowing under the Competitive Bid
Subfacility.

         "Compliance Certificate" means a certificate  substantially in the form
of Exhibit C and signed by a Responsible Officer.

         "Consolidated  Affiliate"  means,  in  respect  of any  Person  (herein
referred to as the  "Parent"),  any other Person in whom such Parent holds Stock
and whose financial results would be consolidated  under GAAP with the financial
results of such Parent on the consolidated  financial  statements of such Parent
prepared in accordance with GAAP.

         "Consolidated  Net Worth"  means,  for any  Person as of any date,  (a)
Total Assets,  minus (b) all  Liabilities  of such Person,  minus (c) the amount
determined in accordance  with GAAP  attributable  to any minority  interests in
Consolidated Affiliates of such Person.

         "Constituent Documents" means, with respect to any Person, its articles
or  certificate  of  incorporation,  charter,  bylaws,  certificates  of limited
partnership,  partnership  agreements,  limited  liability  company  agreements,
declaration of trust,  organizational documents, and such other documents as may
govern such Person's formation or organization.

         "Credit Parties" means Agents and Lenders, and ACredit Party" means any
one of the Credit Parties.
<PAGE>

         "Current  Financials"  means, at any time, the  consolidated  Financial
Statements of the  Companies  most recently  delivered to  Administrative  Agent
under Section 7.1(a) or 7.1(b), as the case may be (or, prior to delivery of any
such  Financial  Statements,   the  consolidated  Financial  Statements  of  the
Companies dated as of March 31, 2000).

         "Customary Recourse Exceptions" means, with respect to any Non-Recourse
Debt,   exclusions  from  the  exculpation   provisions  with  respect  to  such
Non-Recourse Debt for fraud,  misapplication of cash,  environmental claims, and
other  circumstances   customarily   excluded  by  institutional   lenders  from
exculpation provisions and/or included in separate indemnification agreements in
non-recourse financings of real estate.

         "Debt  Service"  means,  for any Person for any period,  the sum of (a)
Interest  Expense,  plus  (b) any  regularly  scheduled  principal  payments  on
Indebtedness,  plus (c) any operating lease payments  related to transactions in
which such Person or an Affiliate of such Person leases, as lessee, any Property
or other assets that it owned and sold, transferred, or otherwise disposed of to
the lessor (or a  predecessor  in interest to the  lessor);  provided  that Debt
Service shall not include Excluded Debt Service.

         "Debtor  Relief Laws" means Title 11 of the United  States Code and all
other  applicable  state or federal  liquidation,  conservatorship,  bankruptcy,
moratorium, rearrangement,  receivership, insolvency, reorganization, suspension
of payments,  or similar Laws affecting creditors' Rights in effect from time to
time.

         "Dedicated Contracts" means a contract pursuant to which a wholly-owned
Subsidiary of PLLS agrees to manage the  distribution  operations  for customers
consisting  of major  manufacturers,  retailers,  wholesalers,  and food service
companies and agrees to manage a  customer-owned  facility using  customer-owned
assets for which the PLLS Subsidiary earns a management fee.

         "Default" is defined in Section 10.

         "Defaulting  Lender"  means,  as of  any  date,  any  Lender  that  has
defaulted on any of its obligations under this Agreement,  which default has not
been cured or waived as of such date.

         "Default  Rate" means an annual rate of interest  equal from day to day
to the lesser of (a) the then-existing Base Rate plus four percent (4%), and (b)
the Maximum Rate.

         "Disqualified  Stock" means any Company's  Stock which by its terms (or
by the  terms of any  Stock  into  which it is  convertible  or for  which it is
exchangeable or exercisable) (a) matures or is subject to mandatory  redemption,
pursuant to a sinking fund obligation or otherwise,  (b) is convertible  into or
exchangeable  or exercisable  for a Liability or  Disqualified  Stock during the
term of this Agreement,  (c) is redeemable  during the term of this Agreement at
the option of the holder of such Stock, or (d) otherwise  requires any mandatory
payments  by any  Company,  in each  case on or  before  the  Termination  Date;
provided that "Disqualified  Stock" shall not include any preferred Stock solely
because such Stock  requires the payment of  Distributions  with respect to such
Stock prior to the payment of  Distributions  with respect to any other class of
Stock.

         "Distribution"  means, with respect to any Stock of any Person, (a) the
payment of any dividend on or with respect to such Stock by such Person, (b) any
loan or advance by that  Person to, or other  investment  by that Person in, the
holder of any of such  Stock,  and (c) any other  payment  by that  Person  with
respect to such Stock (other than a Redemption).

         "Documentation Agent" is defined in the preamble to this Agreement.

         "Dollars"  and the symbol "$" mean lawful money of the United States of
America.

         "Eligible  Institution"  means a commercial bank or a finance  company,
insurance company,  or other financial  institution that is regularly engaged in
making,  purchasing,  or  investing  in loans,  but shall not include any Person
which is an Affiliate of any Borrower.
<PAGE>

         "Encumbered  Properties"  means, any Properties that are subject to any
Liens (other than Permitted Liens) securing any Liabilities.

         "Environmental  Law"  means any Law that  relates to the  pollution  or
protection of the environment or to Hazardous Substances.

         "Equity  Issuance"  means the  issuance or sale by any Person of any of
its Stock.

         "ERISA" means the Employee  Retirement  Income Security Act of 1974, as
amended, and the rules and regulations promulgated thereunder.

         "ERISA   Affiliate"  means  any  trade  or  business  (whether  or  not
incorporated)  which,  together with ProLogis,  are treated as a single employer
under Section  414(b) or (c) of the Code (and Section  414(m) or (o) of the Code
for purposes of provisions related to Section 412 of the Code).

         "Eurodollar  Borrowing"  means  either (a) a  Borrowing  (other  than a
Competitive  Borrowing)  bearing interest at the sum of the Eurodollar Rate plus
the Applicable  Margin,  or (b) a Competitive  Borrowing bearing interest at the
sum of the  Eurodollar  Rate  plus  or  minus  the  margin  indicated  for  such
Competitive Borrowing in the related Competitive Bid.

         "Eurodollar Rate" means, for any Eurodollar  Borrowing for any Interest
Period  therefor,  the rate per annum  (rounded  upwards,  if necessary,  to the
nearest  1/10,000  of 1%)  appearing  on Dow  Jones  Markets  Page  3750 (or any
successor page) as the London interbank  offered rate  (Eurodollar) for deposits
in Dollars at approximately 11:00 a.m. (London time) two (2) Business Days prior
to the first (1st) day of such  Interest  Period for a term  comparable  to such
Interest  Period.  If for any reason such rate is not  available,  then the term
"Eurodollar  Rate" shall mean,  for any  Eurodollar  Borrowing  for any Interest
Period  therefor,  the rate per annum  (rounded  upwards,  if necessary,  to the
nearest  1/10,000  of 1%)  appearing  on Reuters  Screen LIBO Page as the London
interbank  offered  rate for  deposits  in Dollars at  approximately  11:00 a.m.
(London  time)  two (2)  Business  Days  prior to the  first  (1st)  day of such
Interest  Period  for a term  comparable  to  such  Interest  Period;  provided,
however,  if more than one (1) rate is  specified  on Reuters  Screen LIBO Page,
then the applicable rate shall be the arithmetic mean of all such rates (rounded
upwards, if necessary, to the nearest 1/10,000 of 1%).

         "Excluded Debt Service" means, for any period, any regularly  scheduled
principal payments on (a) any Indebtedness which pays such Indebtedness in full,
but only to the extent that the amount of such final payment is greater than the
scheduled  principal payment immediately  preceding such final payment,  and (b)
any Indebtedness that is rated at least Baa3 and BBB-, as the case may be, by at
least two (2) of Moody's, S & P, and Fitch and issued prior to March 31, 2000.

         "Existing  Credit  Agreement" means that certain Credit Agreement dated
as of March 29, 1999, executed by ProLogis, NationsBank, N.A., as Administrative
Agent, the Syndication Agent defined therein,  the  Documentation  Agent defined
therein, and the Lenders defined therein.

         "Extension Request" is defined in Section 3.20.

         "Federal  Funds  Rate"  means,  on any day,  the annual  rate  (rounded
upwards, if necessary,  to the nearest 0.01%) determined by Administrative Agent
(which  determination  is conclusive and binding,  absent  manifest error) to be
equal  to  the  weighted  average  of  the  rates  on  overnight  federal  funds
transactions with member banks of the Federal Reserve System arranged by federal
funds  brokers as published by the Federal  Reserve Bank of New York on the next
successive Business Day; provided,  however, that (a) if such determination date
is not a Business  Day,  then the  Federal  Funds Rate for such day shall be the
rate for such  transactions  on the next preceding  Business Day as published on
the next  successive  Business Day, and (b) if those rates are not published for
any  Business  Day,  then the  Federal  Funds Rate  shall be the  average of the
quotations  at  approximately  10:00  a.m.  on such  Business  Day  received  by
Administrative Agent from three (3) federal funds brokers of recognized standing
selected by Administrative Agent in its sole discretion.

         "Financial  Statements" of a Person means balance sheets and statements
of earnings, shareholders' equity, and cash flow prepared (a) according to GAAP,
(b) except as stated in  Section  1.4,  in  comparative  form to prior  year-end
figures or  corresponding  periods of the preceding  fiscal year, as applicable,
and (c) on a consolidated  basis if that Person had any Consolidated  Affiliates
during the applicable period;  provided that Financial Statements for any fiscal
quarter may omit footnotes and shall be subject to normal audit adjustments.

<PAGE>

         "Fitch" means Fitch, The International  Rating Agency (or any successor
thereof) or, if Fitch no longer publishes  ratings,  then another ratings agency
selected by ProLogis and acceptable to Administrative Agent.

         "Fitch  Rating" means the most  recently-announced  rating from time to
time of Fitch  assigned to any class of long-term  senior,  unsecured  Liability
securities  issued by ProLogis,  as to which no letter of credit,  guaranty,  or
third party credit support is in place, regardless of whether all or any part of
such Liability has been issued at the time such rating was issued.

         "Fixed Charge  Coverage  Ratio" means, as of any date, the ratio of (a)
(i) Adjusted  EBITDA,  minus (ii) Capital  Expenditures,  to (b) Debt Service in
respect of all  Indebtedness,  in each case for the Companies on a  consolidated
basis  (and   including  the   Companies'   Share  of  such  amounts  for  their
Unconsolidated  Affiliates)  and for the four (4) fiscal  quarters ending on the
date of determination.

         "Fixed Rate  Borrowing"  means any  Competitive  Borrowing  made from a
Lender  pursuant to Section 2.5 based upon an actual  percentage  rate per annum
offered by such Lender, expressed as a decimal (to no more than four (4) decimal
places) and accepted by ProLogis.

         "Frigoscandia"  means  Frigoscandia  SA, an entity  organized under the
laws  of  Luxembourg,   and  its  Consolidated   Affiliates  and  Unconsolidated
Affiliates.

         "Funding Loss" means, without  duplication,  any loss, expense, or cost
incurred by any Lender (including any loss,  expense, or cost incurred by reason
of the  liquidation or  reemployment of deposits or other funds acquired by such
Lender  to make  or  maintain  any  portion  of any  Borrowing  as a  Eurodollar
Borrowing or a Fixed Rate Borrowing,  but excluding loss of anticipated  profit)
when (a) any  Borrower  fails or refuses (for any reason other than any Lender's
failure  to  comply  with  this  Agreement)  to take any  Borrowing  that it has
requested under this Agreement,  (b) any Borrower  prepays or pays any Borrowing
or converts any Borrowing to a Borrowing of another  Type, in each case,  before
the  last day of the  applicable  Interest  Period,  (c) any  Borrower  fails or
refuses to prepay a Eurodollar  Borrowing on the date specified in any notice of
prepayment, (d) any Borrower fails or refuses to continue a Eurodollar Borrowing
on the date  specified  in a Borrowing  Request,  or (e) any  Borrower  fails or
refuses to convert a Base Rate  Borrowing to a Eurodollar  Borrowing on the date
specified in a Borrowing Request.

         "Funds  from  Operations"  means,  for  ProLogis  for any  period,  net
earnings (before  Distributions in respect of preferred Stock) plus depreciation
and  amortization  (exclusive  of  amortization  of  financing  costs),  all  as
determined in accordance with GAAP; provided that there shall not be included in
such  calculation (a) any proceeds of any insurance  policy other than rental or
business  interruption  insurance  received by such Person, (b) any gain or loss
which is classified as  "extraordinary" in accordance with GAAP, (c) any capital
gains  and  taxes on  capital  gains (in each  case  exclusive  of such  amounts
recognized in accordance  with GAAP that are  attributable to bona fide sales to
third  parties  (including  Unconsolidated  Affiliates,  to  the  extent  of any
third-party interests therein) by ProLogis,  PLDS, Kingspark,  and International
Consolidated  Affiliates  of  Properties  developed  by such  Persons  with  the
intention of reselling such Properties to third parties),  (d) any non-recurring
and  non-cash  event  that  is  excluded  from  ProLogis'  reported  Funds  from
Operations in its quarterly 10-Q and annual 10-K Financial  Statements,  (e) any
tax expense which is classified as Adeferred" in accordance  with GAAP,  (f) any
tax income which is classified as a tax benefit in accordance with GAAP, (g) any
foreign  exchange  gain or loss which is the result of a period  ending "mark to
market" of intercompany  (including  Consolidated  Affiliates and Unconsolidated
Affiliates)  or third-party  loans in accordance  with GAAP, (h) gains or losses
associated with "mark to market" of Hedging Agreements,  and (i) gains or losses
from sales of depreciated  Properties.  The Funds from  Operations  contribution
from  Unconsolidated  Affiliates  shall be (i) included  only to the extent that
such amounts have been, or are not  prohibited on the last day of the applicable
period of determination  from being,  distributed  (directly or indirectly) to a
Company,  and (ii) calculated on the same basis as this  definition.  Funds from
Operations  shall be  calculated  as if all minority  interests in  Consolidated
Affiliates have been converted into Stock of ProLogis.
<PAGE>

         "GAAP" means generally accepted accounting principles of the Accounting
Principles Board of the American  Institute of Certified Public  Accountants and
the Financial Accounting Standards Board that are applicable on the date of this
Agreement, subject to changes permitted by Section 1.4.

         "Garonor"  means Garonor S.A.,  an entity  organized  under the laws of
Luxembourg, and its Consolidated Affiliates.

         "Hazardous  Substance"  means any  substance  (a) the presence of which
requires removal,  remediation, or investigation under any Environmental Law, or
(b) that is defined or  classified  as a hazardous  waste,  hazardous  material,
pollutant,  contaminant, or toxic or hazardous substance under any Environmental
Law.

         "Hedging  Agreements"  means  any  and  all  agreements,   devices,  or
arrangements  designed  to  protect  at least one of the  parties  thereto  from
fluctuations of interest rates,  exchange rates, or forward rates  applicable to
such party's assets, liabilities, or exchange transactions,  including,  without
limitation,   dollar-denominated   or  cross-currency   interest  rate  exchange
agreements,  forward currency exchange  agreements,  interest rate cap, swap, or
collar  protection  agreements,  and forward  rate  currency  or  interest  rate
options, as the same may be amended or modified and in effect from time to time,
and any and all cancellations, buybacks, reversals, terminations, or assignments
of the foregoing.

         "Indebtedness"   means,  for  any  Person,  all  Liabilities   (without
duplication)  of such Person that are (a) Liabilities for borrowed money of such
Person,  (b) evidenced by bonds,  debentures,  notes, or similar  instruments of
such  Person,  (c)  obligations  to pay the deferred  purchase  price of assets,
services,  or Stock, except (i) accounts payables,  (ii) obligations incurred in
the ordinary  course of business to pay the  purchase  price of Stock so long as
such  obligations  are  paid  within  customary   settlement  terms,  and  (iii)
obligations  to  purchase  Stock  (other  than Stock of  ProLogis  or any of its
Affiliates,  Consolidated Affiliates, or Unconsolidated  Affiliates) pursuant to
subscription  or Stock purchase  agreements in the ordinary  course of business,
(d) secured by a Lien existing on any Property of such Person or any interest of
such Person  therein,  whether or not such Liability  shall have been assumed by
such  Person,  (e)  Capital  Leases,  (f)  a  guaranty,  endorsement,  or  other
contingent  obligation  of such  Person  (other  than  (i)  endorsements  in the
ordinary  course of business of negotiable  instruments or documents for deposit
or  collection,   and  (ii)  indemnification   obligations  and  purchase  price
adjustments  pursuant to  acquisition  agreements  entered  into in the ordinary
course of business), and (g) accounts payable, accrued expenses, net obligations
arising  under Hedging  Agreements,  and other  Liabilities  not included in the
calculation  of (a) through (f) above  which in the  aggregate  are in excess of
five percent  (5%) of the amount of Total Assets of such Person,  as of the date
of determination.

         "Industrial   Properties"   means   Properties   that   are   used  for
manufacturing,   processing,  or  warehousing,  including,  without  limitation,
Refrigerated Warehouse Properties.

         "Interest  Expense"  means,  for any  Person  for any  period  (without
duplication),  (a) all interest expense on such Person's  Indebtedness  (whether
direct,  indirect,  or  contingent,  and including  interest on all  convertible
Liabilities)  determined in accordance with GAAP, plus (b) capitalized  interest
paid in cash that is not  funded  from  construction  loan  proceeds,  minus (c)
amortized  loan  fees  to  the  extent   previously   paid  in  cash,  plus  (d)
Distributions  of any kind or character or other  proceeds  paid or payable with
respect to any Disqualified Stock.

         "Interest  Expense  Coverage Ratio" means, as of any date, the ratio of
(a) Adjusted EBITDA, to (b) Interest Expense,  in each case for the Companies on
a consolidated  basis (and  including the  Companies'  Share of such amounts for
their Unconsolidated  Affiliates) and for the four (4) fiscal quarters ending on
the date of determination.
<PAGE>
         "Interest Period" has the meaning set forth in Section 3.9.

         "International  Properties"  means each  Property  located  outside the
United States, and  AInternational  Property" means any one of the International
Properties.

         "International   Consolidated   Affiliates"   means  each  Consolidated
Affiliate of ProLogis that is not organized under the laws of a state located in
the United States, and "International  Consolidated  Affiliate" means any one of
the International Consolidated Affiliates.

         "International  Holding Companies" mean each Consolidated  Affiliate of
ProLogis  that owns no assets  other  than Stock of  International  Consolidated
Affiliates,   and   "International   Holding  Company"  means  any  one  of  the
International Holding Companies.

         "Investment"  in any Person means any  investment,  whether by means of
Stock purchase,  loan, advance,  extension of credit,  capital contribution,  or
otherwise, in or to such Person, the guaranty of any Liabilities of such Person,
or the  subordination  of any claim against such Person to other  Liabilities of
such Person.

         "Kingspark" means Kingspark Holding S.A., an entity organized under the
laws  of  Luxembourg,   and  its  Consolidated   Affiliates  and  Unconsolidated
Affiliates.

         "Laws"  means all  applicable  statutes,  laws,  treaties,  ordinances,
rules, regulations,  orders, writs, injunctions,  decrees, judgments,  opinions,
and interpretations of any Tribunal.

         "Lenders"  means the financial  institutions  named on Schedule 1 or on
the most recently amended Schedule 1, if any, delivered by Administrative  Agent
under  this  Agreement,  and,  subject  to  this  Agreement,   their  respective
successors and assigns (but not any  Participant who is not otherwise a party to
this Agreement).

         "Leverage Ratio" means, as of any date, the ratio of (a) the sum of (i)
all  Liabilities  of the  Companies,  on a  consolidated  basis,  plus  (ii) the
Companies'  Share  of  all  Liabilities  of  Unconsolidated  Affiliates  of  the
Companies, to (b) Total Asset Value.

         "Liabilities"  means  (without  duplication),  for any Person,  (a) any
obligations  required by GAAP to be classified upon such Person's  balance sheet
as  liabilities,  (b) any  liabilities  secured  (or for which the holder of the
Liability has an existing Right,  contingent or otherwise,  to be so secured) by
any  Lien  existing  on  property  owned or  acquired  by that  Person,  (c) any
obligations  that have been (or under GAAP should be)  capitalized for financial
reporting purposes, and (d) any guaranties,  endorsements,  and other contingent
obligations   with  respect  to  Liabilities  or  obligations  of  others,   and
"Liability"  means  any of the  Liabilities;  provided  that  "Liabilities"  and
"Liability" shall not include any Purchase Liabilities.

         "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 or the owners.

         "Litigation" means any action by or before any Tribunal.

         "Loan Documents"  means (a) this Agreement  (including the exhibits and
schedules to this Agreement),  (b) the Notes, (c) the Subsidiary Guaranties, (d)
the Pledge  Agreements,  (e) any Hedging  Agreements with any Lender relating to
the Obligation, (f) all other agreements, documents, and instruments in favor of
any Credit Party (or any Agent on behalf of the Credit  Parties) ever  delivered
in connection with or under this Agreement or otherwise  delivered in connection
with all or any part of the Obligation,  and (g) all renewals,  extensions,  and
restatements of, and amendments and supplements to, any of the foregoing.

         "Managing Agents" means First Union National Bank and Societe Generale,
Southwest Agency.

         "Material   Adverse  Event"  means  any  circumstance  or  event  that,
individually or collectively with other  circumstances or events,  reasonably is
expected to result in any (a) material  impairment of the ability of ProLogis to
perform  any of its  payment  or  other  material  obligations  under  any  Loan
Document,  (b) material impairment of the ability of any Credit Party to enforce
(i) any of the material obligations of ProLogis under this Agreement or (ii) any
of its respective  Rights under the Loan Documents,  and, in the case of (i) and
(ii), such impairment shall substantially  interfere with the realization of the
principal  legal  benefits  provided  by  this  Agreement  and  the  other  Loan
Documents,  taken as a whole,  (c) material and adverse  effect on the financial
condition of the Companies as a whole as  represented  to Lenders in the Current
Financials, or (d) Default.
<PAGE>
         "Maximum  Amount" and "Maximum Rate"  respectively  mean, for a Lender,
the maximum  non-usurious  amount and the maximum  non-usurious rate of interest
that,  under  applicable Law, such Lender is permitted to contract for,  charge,
take, reserve, or receive on the Obligation.

         "Maximum  Leverage Ratio" means 0.55 to 1.0;  provided that the Maximum
Leverage  Ratio may be increased  to up to 0.60 to 1.0 subject to the  following
conditions: (a) such increase is at the request of ProLogis by written notice to
Administrative  Agent and is a result of  Liabilities  incurred by ProLogis  and
identified in writing to Administrative Agent to make an acquisition of Stock or
assets of a third party otherwise permitted  hereunder;  (b) such increase shall
not occur more than two (2) times during the term of this Agreement; and (c) all
such  increases  shall be in  effect  on the last day of not more  than four (4)
fiscal quarters.

         "Money  Market  Rate"  means,  as to any  Swing  Line  Loan  made  from
Administrative  Agent  pursuant  to Section  2.4, a rate per annum that shall be
determined  for  each  Swing  Line  Loan  by  agreement   between  ProLogis  and
Administrative Agent (but in no event to exceed the Base Rate).

         "Moody's"  means  Moody's  Investors  Service,  Inc. (or any  successor
thereof) or, if Moody's no longer  publishes  ratings,  another  ratings  agency
selected by ProLogis and acceptable to Administrative Agent.

         "Moody's Rating" means the most recently-announced  rating from time to
time of Moody's assigned to any class of long-term senior,  unsecured  Liability
securities  issued by ProLogis,  as to which no letter of credit,  guaranty,  or
third party credit support is in place, regardless of whether all or any part of
such Liability has been issued at the time such rating was issued.

         "Net  Proceeds"  means,  with  respect  to any Equity  Issuance  by any
Person,  the amount of cash  received  by such  Person in  connection  with such
transaction after deducting therefrom the aggregate, without duplication, of the
following amounts to the extent properly  attributable to such transaction:  (a)
reasonable  brokerage  commissions,  attorneys' fees,  finder's fees,  financial
advisory fees, accounting fees,  underwriting fees, investment banking fees, and
other similar  commissions and fees and expenses and disbursements of any of the
foregoing,  in each case to the  extent  paid or  payable  by such  Person;  (b)
printing and related  expenses of filing and recording or  registration  fees or
charges or similar fees or charges  paid by such  Person;  and (c) taxes paid or
payable by such Person to any Tribunal as a result of such transaction.

         "New  Ventures"  means  corporations,   limited  liability   companies,
partnerships,  joint ventures,  and similar entities that are in the business of
providing  logistics,  distribution,  or  related  services,  but whose  primary
business is not the ownership of Industrial Properties.

         "NOI" means,  for any period and any Property,  the difference  between
(a) any rentals, proceeds, expense reimbursements,  or income received from such
Property  (but  excluding  security or other  deposits,  late fees,  early lease
termination,  or other penalties of a non-recurring  nature), less (b) all costs
and expenses  (including  interest on assessment bonds) incurred as a result of,
or in connection with, the development,  operation, or leasing of such Property,
in each case determined in accordance with GAAP.

         "Non-Industrial  Properties"  means  Properties that are not Industrial
Properties.

         "Non-Recourse  Debt" means,  for any Person,  any  Indebtedness of such
Person in which  the  holder of such  Indebtedness  may not look to such  Person
personally for repayment,  other than to the extent of any security  therefor or
pursuant to Customary Recourse Exceptions.

         "Notes" means the Revolving Credit Notes, the Swing Line Notes, and the
Competitive Bid Notes, and "Note" means any one of the Notes.

         "Obligation" means all present and future indebtedness and obligations,
and all renewals, increases, and extensions thereof, or any part thereof, now or
hereafter  owed to any  Credit  Party by any  Company  under any Loan  Document,
together  with  all  interest  accruing  thereon,   fees,  costs,  and  expenses
(including  all  reasonable   attorneys'  fees  and  expenses  incurred  in  the
enforcement  or  collection  thereof)  payable  under the Loan  Documents  or in
connection with the protection of Rights under the Loan Documents.

<PAGE>

         "Parent  Guaranty" means (a) the guaranty provided by ProLogis pursuant
to  Section  13 of  this  Agreement,  and  (b)  any  amendments,  modifications,
supplements,  restatements,  ratifications,  or  reaffirmations  thereof made in
accordance with the Loan Documents.

         "Participant" is defined in Section 14.11(b).

         "Pension  Plan" means an employee  pension or benefit  plan  covered by
Title  IV of ERISA or any  other  Applicable  Pension  Laws and  established  or
maintained by ProLogis or any ERISA Affiliate.

         "Permitted  Distributions"  means,  for ProLogis for any fiscal year of
ProLogis,  an amount not to exceed the greater of (a) ninety-five  percent (95%)
of  Funds  from  Operations  for  such  fiscal  year,  and  (b)  the  amount  of
Distributions  required to be paid by ProLogis in order for  ProLogis to qualify
as a REIT.

         "Permitted  Liens"  means (a) Liens  granted to any Agent to secure the
Obligation,  (b)  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,  (c) 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, (d) the following:  (i) Liens for taxes not yet due and payable or are
being contested in good faith by appropriate  proceedings  diligently conducted,
and  for  which  reserves  in  accordance  with  GAAP  or  otherwise  reasonably
acceptable to Administrative Agent have been provided;  or (ii) Liens imposed by
mandatory   provisions   of  law   such   as  for   materialmen's,   mechanic's,
warehousemen's, and other like Liens arising in the ordinary course of business,
securing  payment of any  Liability  whose payment is not yet due, (e) Liens for
taxes,  assessments,  and  governmental  charges or  assessments  that are being
contested in good faith by appropriate proceedings diligently conducted, and for
which  reserves in accordance  with GAAP or otherwise  reasonably  acceptable to
Administrative  Agent  have been  provided,  (f) Liens on  Properties  where the
applicable Company or Unconsolidated  Affiliate is insured against such Liens by
title insurance or other similar  arrangements  satisfactory  to  Administrative
Agent,  (g) Liens 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,  and  for  which  reserves  in  accordance  with  GAAP  or  otherwise
reasonably  acceptable to  Administrative  Agent have been  provided,  (h) Liens
securing  assessment  bonds, so long as no Company is in material  default under
the terms  thereof,  (i) Liens  granted to ProLogis  by any other  Company or an
Unconsolidated  Affiliate  of  ProLogis,  and (j)  leases to tenants of space in
Properties that are entered into in the ordinary course of business.

         "Permitted  Redemptions"  means the  Redemption  by ProLogis of its (a)
Series A Preferred  Stock,  (b) Series E Preferred  Stock,  and (c) common Stock
provided that the  aggregate  amount of common Stock  redeemed  shall not exceed
$100,000,000 in the aggregate during the term of this Agreement.

         "Person" means any individual, entity, or Tribunal.

         "PLDS" is defined in the preamble to this Agreement.

         "PLLS" is defined in the preamble to this Agreement.

<PAGE>

         "Pledge Agreements" means (a) the ProLogis Pledge Agreement executed by
ProLogis in substantially the form of Exhibit H-1, and (b) the Subsidiary Pledge
Agreement  executed by ProLogis's  Consolidated  Affiliates in substantially the
form of  Exhibit  H-2,  and  "Pledge  Agreement"  means  any  one of the  Pledge
Agreements.

         "Potential  Default" means the occurrence of any event or the existence
of any circumstance  that would,  upon notice or lapse of time or both, become a
Default.

         "Preferred Dividend Coverage Ratio" means, as of any date, the ratio of
(a) (i)  Adjusted  EBITDA,  minus (ii) Capital  Expenditures,  to (b) the sum of
(without duplication) (i) Debt Service in respect of all Indebtedness, plus (ii)
Preferred Dividends, in each case for the Companies on a consolidated basis (and
including  the  Companies'  Share  of  such  amounts  for  their  Unconsolidated
Affiliates)  and  for  the  four  (4)  fiscal  quarters  ending  on the  date of
determination.

         "Preferred   Dividends"   means,   for  any  Person  for  any   period,
Distributions  of any kind or character or other  proceeds  paid or payable with
respect to any Stock except for common Stock.

         "Principal Debt" means,  with respect to any Borrowing or any Note, the
unpaid principal balance of such Borrowing or such Note, as the case may be.

         "Properties"  means real estate properties  (including land) owned by a
Company or an Unconsolidated Affiliate of ProLogis, and AProperty" means any one
of the Properties.

         "Pro Rata" and "Pro Rata Part" means,  when  determined for any Lender,
the proportion  (stated as a percentage) that such Lender's  Commitment bears to
the Total  Commitment,  or, if the Total  Commitment shall have been terminated,
then the proportion  (stated as a percentage) that the sum of the Principal Debt
owed to such Lender bears to the Total Principal Debt owed to all Lenders.

         "Purchase  Liabilities" means obligations of a wholly-owned  Subsidiary
of  PLLS  incurred  in  connection  with  Dedicated  Contracts  where  (a)  such
Subsidiary has purchased a portion of a customer's  assets,  (b) such Subsidiary
has financed the entire  purchase  price pursuant to a long-term note payable to
the customer (or an Affiliate of the customer)  secured by the assets purchased,
(c) debt  service  on such note is  reimbursed  by the  customer  as part of the
pass-through of operating expenses,  and (d) in the event of a default under the
terms of such note or termination  of such Dedicated  Contracts by either party,
the customer's only recourse is to the assets purchased.

         "Purchaser" is defined in Section 14.11(c).

         "Rating Requirement" means, as of any date of determination,  the lower
of the two (2) highest ratings of the Moody's Rating,  the S & P Rating, and the
Fitch Rating.  For purposes  hereof,  the correlation of the levels or grades of
the Moody's Rating, the S & P Rating, and the Fitch Rating shall be as set forth
in the table included  herein in the  definition of  "Applicable  Margin" in the
column labeled "Rating Requirement." Each change in the Rating Requirement shall
be effective commencing on the fifth (5th) Business Day following the earlier to
occur of (a) Administrative Agent's receipt of notice from ProLogis, as required
in Section  7.1(k),  of an applicable  change in the Moody's  Rating,  the S & P
Rating, or the Fitch Rating and (b)  Administrative  Agent's actual knowledge of
an  applicable  change in the  Moody's  Rating,  the S & P Rating,  or the Fitch
Rating.

<PAGE>

         "Recourse Debt" means all Indebtedness  that is not Non-Recourse  Debt;
provided that "Recourse Debt" shall not include Recourse Debt of  Unconsolidated
Affiliates  of such Person  unless the holder of such Recourse Debt has recourse
against  such  Person for the  payment of such  Recourse  Debt other than to the
extent  of  any  security  therefor  or  pursuant  to  any  Customary   Recourse
Exceptions.

         "Redemption"  means, with respect to any Stock issued by a Person,  the
retirement, redemption, purchase, tender, or other acquisition for value of such
Stock by such Person.

         "Refrigerated  Warehouse  Properties"  means  each  Property  that is a
temperature-controlled facility, and "Refrigerated Warehouse Property" means any
one of the Refrigerated Warehouse Properties.

         "REIT" means a "real estate investment trust" for purposes of the Code.

         "Representatives"   means   representatives,    officers,    directors,
employees, attorneys, and agents.

         "Required  Lenders" means (a) as of any date of determination  prior to
the  termination  of  the  Total  Commitment,  those  Lenders  (other  than  any
Defaulting  Lenders) holding sixty-six and two-thirds  percent (66-2/3%) or more
of the Total Commitment  (excluding the Commitments of any Defaulting  Lenders),
and (b) on any date of  determination  occurring after the Total  Commitment has
terminated,  those Lenders (other than any Defaulting Lenders) holding sixty-six
and  two-thirds  percent  (66-2/3%) or more of the  outstanding  Principal  Debt
(excluding the Principal Debt of any Defaulting Lenders).

         "Reserve  Requirement" means, with respect to any Eurodollar  Borrowing
for the relevant  Interest  Period,  the actual aggregate  reserve  requirements
(including all basic,  supplemental,  emergency,  special,  marginal,  and other
reserves  required by applicable Law) applicable to a member bank of the Federal
Reserve System for eurocurrency fundings or liabilities.

         "Responsible  Officer"  means,  with  respect  to  any  Borrower,   any
chairman,   president,   chief  executive  officer,   chief  financial  officer,
controller,  secretary,  senior  vice  president,  or  vice  president  of  such
Borrower.

         "Revolving   Credit   Notes"   means  one  of  the   promissory   notes
substantially  in the  form  of  Exhibit  A-1,  and  all  renewals,  extensions,
modifications,   rearrangements,  and  replacements  thereof  and  any  and  all
substitutions  therefor,  and  "Revolving  Credit  Note"  means  any  one of the
Revolving Credit Notes.

         "Rights" means rights, remedies, powers, privileges, and benefits.

         "Secured  Debt"  means,  for any  Person,  Indebtedness  of such Person
secured  by any Liens  (other  than  Permitted  Liens)  in any of such  Person's
Properties or other assets.

         "Share"  means,  for any  Person,  such  Person's  share of the assets,
liabilities,   revenues,  income,  losses,  or  expenses  of  an  Unconsolidated
Affiliate  based  upon  such  Person's  percentage  ownership  of  Stock of such
Unconsolidated Affiliate.

         "Solvent"  means,  as to a Person,  that (a) the aggregate  fair market
value of its assets exceeds its liabilities,  (b) it has sufficient cash flow to
enable  it to pay its  Liabilities  as they  mature,  and (c) it does  not  have
unreasonably small capital to conduct its businesses.

         "S & P" means  Standard & Poor's  Rating  Group,  a division  of McGraw
Hill, Inc., a New York corporation (or any successor  thereof),  or, if S & P no
longer publishes  ratings,  then another ratings agency selected by ProLogis and
acceptable to Administrative Agent.

<PAGE>

         "S & P Rating"  means the most  recently-announced  rating from time to
time of S & P assigned to any class of  long-term  senior,  unsecured  Liability
securities  issued by ProLogis,  as to which no letter of credit,  guaranty,  or
third party credit support is in place, regardless of whether all or any part of
such Liability has been issued at the time such rating was issued.

         "Stock"  means  all  shares,  options,  warrants,  general  or  limited
partnership  interests,  membership  interests,  or  other  ownership  interests
(regardless  of how  designated) of or in a  corporation,  partnership,  limited
liability  company,  trust,  or  other  entity,  whether  voting  or  nonvoting,
including common stock, preferred stock, or any other Aequity security" (as such
term is defined in Rule 3a11-1 of the General Rules and Regulations  promulgated
by the Securities and Exchange  Commission under the Securities  Exchange Act of
1934, as amended).

         "Subsidiary  Borrower" and  "Subsidiary  Borrowers"  are defined in the
preamble to this Agreement.

         "Subsidiary  Guaranties" means (a) any Unconditional Guaranty Agreement
in  substantially  the form of Exhibit G, executed by a  Consolidated  Affiliate
(other than  International  Consolidated  Affiliates)  of  ProLogis  pursuant to
Section 7.14, and (b) any Unconditional  Guaranty Agreement in substantially the
form of Exhibit G and modified to the extent  required  under  applicable  Laws,
executed by an  International  Consolidated  Affiliate  of ProLogis  pursuant to
Section 7.14, in each case as modified,  amended,  and supplemented from time to
time, and "Subsidiary Guaranty" means any one of the Subsidiary Guaranties.

         "Subsidiary  Guarantors"  means each  Consolidated  Affiliate  and each
Unconsolidated Affiliate of ProLogis executing a Subsidiary Guaranty.

         "Swing Line Loan" means a Borrowing made pursuant to Section 2.4.

         "Swing Line Notes" means those  certain  promissory  notes  executed by
each  Borrower  and  payable  to the order of Bank of  America  in the  original
principal amount of $75,000,000  substantially in the form of Exhibit E, and all
renewals, extensions,  modifications,  rearrangements,  and replacements thereof
and any and all substitutions  therefor,  and "Swing Line Note" means any one of
the Swing Line Notes.

         "Swing  Line  Subfacility"   means  the  subfacility  under  the  Total
Commitment as described in, and subject to the limitations of, Section 2.4.

         "Syndication Agent" is defined in the preamble to this Agreement.

         "Taxes"  means,   for  any  Person,   taxes,   assessments,   or  other
governmental  charges  or levies  imposed  upon it,  its  income,  or any of its
properties, franchises, or assets.

         "Termination  Date" means the  earlier of (a) June 6, 2003  (subject to
any  extension  pursuant  to  Section  3.20),  and (b) the  effective  date that
Lenders'  commitments to lend hereunder are otherwise  canceled or terminated in
accordance with this Agreement.

         "Total Assets" means,  for any Person as of any date, (a) such Person's
total  assets   determined  in  accordance   with  GAAP,  plus  (b)  accumulated
depreciation with respect to such assets.

<PAGE>

         "Total  Asset  Value"  means,  as of any  date for the  Companies  on a
consolidated  basis (and including the Companies' Share of the following amounts
for their Unconsolidated Affiliates), (a) the sum of (without duplication):  (i)
the  quotient  of (A) the most  recent  fiscal  quarter's  NOI  from  Industrial
Properties (other than  Refrigerated  Warehouse  Properties)  multiplied by four
(4), plus  management  fee income from the most recent four (4) fiscal  quarters
(not to exceed five percent (5%) of the total amount in (i)(A)),  divided by (B)
nine  percent  (9.0%);  plus  (ii)  the  amount  of  Investments  determined  in
accordance  with GAAP in  Properties  owned  less  than  three  (3)  months  and
Properties  under  construction;  plus  (iii)  the  amount  of any cash and Cash
Equivalents (excluding tenant security and other restricted deposits); plus (iv)
the amount of  Investments  determined in accordance  with GAAP in  Refrigerated
Warehouse  Properties  and  Kingspark;   plus  (v)  the  amount  of  Investments
determined  in  accordance  with GAAP in all other assets not  described in (i),
(ii),  (iii), or (iv) above,  less (b) the amount  determined in accordance with
GAAP of all assets  included in the  calculation  of (a)(v)  above that would be
treated as intangible assets under GAAP (including goodwill,  trademarks,  trade
names, copyrights,  patents, deferred charges, and unamortized debt discount and
expense),  less (c) the amount of Investments determined in accordance with GAAP
in Unconsolidated Affiliates.

         "Total  Commitment"  means,  at any time, the sum of the Commitments of
all of the Lenders.

         "Total  Principal  Debt" means,  at any time,  the sum of the Principal
Debt of all Borrowings of the Lenders.

         "Tribunal" means any (a) local, state, or federal judicial,  executive,
or legislative  instrumentality,  (b) private arbitration board or panel, or (c)
central bank.

         "Type"  means any type of  Borrowing  determined  with  respect  to the
applicable interest option.

         "Unconsolidated  Affiliate" means, in respect of any Person,  any other
Person in whom such Person holds Stock and whose financial  results would not be
consolidated  under  GAAP  with the  financial  results  of such  Person  on the
consolidated financial statements of such Person.

         "Unencumbered  Companies"  means  Consolidated  Affiliates  of ProLogis
(other than Subsidiary Guarantors and Unrestricted  International Companies) (a)
that have no Liabilities or Purchase  Liabilities  other than (i) trade payables
incurred in the ordinary course of business,  (ii)  intercompany  Liabilities to
ProLogis or its Affiliates  and, to the extent  required  hereunder,  pledged to
Administrative  Agent, for the benefit of the Credit Parties,  (iii) in the case
of  ProLogis   Developments   Ltd.,   contingent   Liabilities   consisting   of
reimbursement  obligations  under  undrawn  letters of credit or similar  surety
instruments (but only if such  Liabilities are contingent and not  outstanding),
and (iv) in the case of a  Subsidiary  Borrower,  Liabilities  in respect of the
Obligation, and (b) whose Stock is not subject to any Lien (other than Permitted
Liens);   provided  that  (x)  Unencumbered  Companies  shall  not  include  any
Consolidated  Affiliates  of ProLogis  if any direct or  indirect  holder of its
Stock (other than ProLogis) is not an Unencumbered Company, and (y) Unencumbered
Companies shall include Consolidated  Affiliates of ProLogis that otherwise meet
the  requirements  of  this  definition  even  though  one  (1) or  more  of its
Consolidated Affiliates do not meet the requirements of this definition.

         "Unencumbered  Debt Service" means, for any period, all Debt Service in
respect of (a) all Unsecured Debt of the Companies (excluding any Unsecured Debt
of any Consolidated  Affiliate of ProLogis that is not a Subsidiary Guarantor or
an Unencumbered Company so long as neither ProLogis,  any Subsidiary  Guarantor,
or any Unencumbered Company is obligated to pay (as guarantor or otherwise) such
Unsecured  Debt),  and  (b)  all  other  Indebtedness  in  which  ProLogis,  any
Subsidiary  Guarantor,  or any  Unencumbered  Subsidiary is obligated to pay (as
guarantor or otherwise).

<PAGE>

         "Unencumbered  Debt Service  Coverage Ratio" means, as of any date, the
ratio of (a) Unencumbered EBITDA, to (b) Unencumbered Debt Service, in each case
for the four (4) fiscal quarters ending on the date of determination.

         "Unencumbered  EBITDA"  means,  for  any  period,  Adjusted  EBITDA  of
ProLogis, Subsidiary Guarantors, and Unencumbered Companies (other than Adjusted
EBITDA attributable to any Encumbered Properties owned by ProLogis, a Subsidiary
Guarantor,  or an Unencumbered  Company)  during such period;  provided that (a)
there shall not be included in  Unencumbered  EBITDA any Adjusted EBITDA subject
to any Lien (other than Permitted Liens),  (b) Adjusted EBITDA shall be adjusted
for a capital  reserve  of  either  (i)  $0.20  per  square  foot in the case of
Properties that are not  Refrigerated  Warehouse  Properties,  or (ii) $0.10 per
cubic foot in the case of Properties that are Refrigerated Warehouse Properties,
(c)  Unencumbered  EBITDA  attributable to  Consolidated  Affiliates of ProLogis
(other  than  PLDS  and  Kingspark)  that  are  not  Wholly-owned,  directly  or
indirectly,  by ProLogis  shall be limited to ten percent (10%) of  Unencumbered
EBITDA, and (d) Unencumbered EBITDA  attributable to International  Consolidated
Affiliates of ProLogis and other assets,  properties, or operations located in a
jurisdiction other than a state of the United States of America shall be limited
to thirty-five percent (35%) of Unencumbered EBITDA.

         "Unencumbered Property Value" means, as of any date the sum of (without
duplication):  (a) the  quotient  of (i) the  most  recent  quarter's  NOI  from
Industrial   Properties  (other  than  Refrigerated   Warehouse  Properties  and
Encumbered  Properties)  owned  by  ProLogis,  a  Subsidiary  Guarantor,  or  an
Unencumbered Company multiplied by four (4), plus management fee income from the
most recent four (4) quarters (not to exceed seven and one-half  percent  (7.5%)
of the total amount in clause (a)(i)), divided by (ii) nine percent (9.0%); plus
(b) the amount of Investments  determined in accordance  with GAAP in Properties
(other than Encumbered Properties) owned by ProLogis, a Subsidiary Guarantor, or
an  Unencumbered  Company  less than  three (3)  months;  plus (c) the amount of
Investments  determined  in  accordance  with  GAAP in  Properties  (other  than
Encumbered  Properties)  owned  by  ProLogis,  a  Subsidiary  Guarantor,  or  an
Unencumbered   Company  consisting  of  raw  land  and  Properties  (other  than
Encumbered Properties) under construction not to exceed fifteen percent (15%) of
Unencumbered  Property Value;  plus (d) the amount of Investments  determined in
accordance with GAAP in Refrigerated Warehouse Properties (other than Encumbered
Properties)  owned by  ProLogis,  a  Subsidiary  Guarantor,  or an  Unencumbered
Company.

         "Unencumbered Property Value Ratio" means, as of any date, the ratio of
(a)  Unencumbered  Property  Value to (b) Recourse Debt of ProLogis,  Subsidiary
Guarantors, and Unencumbered Companies.

         "Unrestricted   International   Companies"   means  the   International
Consolidated  Affiliates  that may be required to execute a Subsidiary  Guaranty
pursuant to Section 7.14,  but that ProLogis has designated in writing by notice
to  Administrative   Agent  as  "Unrestricted   International   Companies,"  and
"Unrestricted   International   Company"  means  any  one  of  the  Unrestricted
International  Companies.  ProLogis  may,  by written  notice to  Administrative
Agent,  redesignate any International  Consolidated Affiliate as no longer being
an Unrestricted International Company so long as such International Consolidated
Affiliate  complies with Section 7.14.  The initial  Unrestricted  International
Companies are listed on Schedule 7.14-3.

         "Unsecured  Debt" means,  for any Person,  Indebtedness  of such Person
that is not Secured Debt.

         "Unused  Commitment" means, at any time, (a) the Total Commitment minus
(b) the Total Principal Debt.

<PAGE>
         "Wholly-owned" when used in connection with any Consolidated  Affiliate
of any Person shall mean a Consolidated Affiliate of which all of the issued and
outstanding  shares of Stock shall be owned by such Person or one or more of its
Wholly-owned Consolidated Affiliates.

        1.2 Time References.  Unless otherwise specified in the Loan Documents
(a) time  references  are to time in Dallas,  Texas,  and (b) in  calculating  a
period from one date to another,  the word "from" means "from and including" and
the word "to" or "until" means "to but excluding."

        1.3 Other References.  Unless otherwise specified in the Loan Documents
(a) where  appropriate,  the singular  includes  the plural and vice versa,  and
words of any  gender  include  each  other  gender,  (b)  headings  and  caption
references  may  not be  construed  in  interpreting  provisions,  (c)  monetary
references  are to  currency  of the  United  States of  America,  (d)  section,
paragraph,   annex,  schedule,  exhibit,  and  similar  references  are  to  the
particular  Loan Document in which they are used,  (e) references to "telecopy,"
"facsimile," "fax," or similar terms are to facsimile or telecopy transmissions,
(f) references to "including" mean including  without limiting the generality of
any  description  preceding  that  word,  (g)  the  rule  of  construction  that
references to general items that follow references to specific items are limited
to the same type or character of those  specific  items is not applicable in the
Loan  Documents,  (h)  references  to any Person  include that  Person's  heirs,
personal  representatives,   successors,   trustees,  receivers,  and  permitted
assigns,  (i) references to any Law include every amendment or supplement to it,
rule and regulation  adopted under it, and successor or replacement  for it, and
(j) references to any Loan Document or other document  include every renewal and
extension of it, amendment and supplement to it, and replacement or substitution
for it.

         1.4  Accounting Principles.  Under the Loan Documents, unless otherwise
stated,  (a) GAAP  determines all accounting and financial  terms and compliance
with financial covenants,  (b) otherwise, all accounting principles applied in a
current  period must be  comparable  in all material  respects to those  applied
during  the  preceding  comparable  period,  and  (c)  while  ProLogis  has  any
Consolidated Affiliates,  all accounting and financial terms and compliance with
financial covenants must be on a consolidated basis, as applicable.  If there is
a change in GAAP after the date hereof, the Compliance Certificate shall include
calculations  setting forth the adjustments from the relevant financial items as
shown  in the  Current  Financials,  based  on  the  then-current  GAAP,  to the
corresponding  financial  items based on GAAP as used in the Current  Financials
delivered to Administrative Agent and Lenders on or prior to the date hereof, so
as to demonstrate  how such financial  covenant  compliance was derived from the
Current Financials;  provided that Administrative  Agent or ProLogis may request
the other to,  whereupon  the other party  shall,  negotiate in good faith for a
period for not more than thirty (30) days  regarding  amendments to any affected
covenants to make such covenants  consistent  with the prior covenants and GAAP,
as then in  effect,  and,  after  any such  revision  as shall be  agreed  to by
ProLogis  and  Administrative   Agent,  this  Agreement  will  be  construed  in
accordance with GAAP as then in effect.

SECTION 2  COMMITMENT.

         2.1   Revolving Facility. Subject to the provisions of this  Agreement,
each Lender  severally  and not jointly  agrees to lend to each  Borrower one or
more  Borrowings  (except  for  Competitive  Borrowings  and Swing  Line  Loans)
hereunder  which each  Borrower  may  borrow,  repay,  and  reborrow  under this
Agreement, subject to the following conditions:

         (a) each  Borrowing  requested by a Borrower  hereunder must occur on a
Business  Day and no later  than the  Business  Day  immediately  preceding  the
Termination Date;

<PAGE>

         (b) each  Borrowing  requested  by a Borrower  must be in an amount not
less than $1,000,000 or a greater integral multiple of $100,000 or, if less, the
Unused Commitment less the Principal Debt of any Swing Line Loans;

         (c) the Total Principal Debt may not exceed the Total Commitment;

         (d) no Lender's  Principal  Debt (other than the Principal Debt of such
Lender=s Competitive Borrowings) may exceed such Lender's Commitment;

         (e) no Subsidiary Borrower may request any Borrowings  hereunder unless
such Subsidiary Borrower is a Consolidated Affiliate of ProLogis;

         (f) the aggregate  Principal  Debt of all  Borrowings to PLLS shall not
exceed the lesser of (i) $235,000,000, and (ii) the Total Commitment; and

         (g) the aggregate  Principal  Debt of all  Borrowings to PLDS shall not
exceed the lesser of (i) $250,000,000, and (ii) the Total Commitment.

         2.2   Borrowing Procedure. The following procedures apply to Borrowings
(other than Competitive Borrowings and Swing Line Loans):

         (a)  Any   Borrower   may  request  a  Borrowing   by   submitting   to
Administrative Agent a Borrowing Request. The Borrowing Request must be received
by Administrative Agent no later than 11:00 a.m. on (i) the third (3rd) Business
Day  preceding  the  Borrowing  Date for any  Eurodollar  Borrowing  or (ii) the
Business  Day  preceding  the  Borrowing  Date  for  any  Base  Rate  Borrowing.
Administrative  Agent  shall  promptly  notify each Lender of its receipt of any
Borrowing  Request and its  contents.  A Borrowing  Request is  irrevocable  and
binding on the requesting Borrower.

         (b) By 11:00 a.m. on the applicable  Borrowing  Date, each Lender shall
remit  its Pro  Rata  Part of  each  requested  Borrowing  by wire  transfer  to
Administrative   Agent   pursuant  to   Administrative   Agent's  wire  transfer
instructions on Schedule 1 (or as otherwise directed by Administrative Agent) in
funds that are available for immediate use by Administrative  Agent.  Subject to
receipt of such funds,  Administrative  Agent shall make such funds available to
the  requesting  Borrower in Dallas,  Texas at 12:00 noon on such Borrowing Date
(unless it has actual knowledge that any applicable  condition precedent has not
been satisfied by Borrowers).

<PAGE>

         (c) Absent contrary written notice from a Lender,  Administrative Agent
may  assume  that  each  Lender  has  made its Pro  Rata  Part of the  requested
Borrowing  available to Administrative  Agent on the applicable  Borrowing Date,
and  Administrative  Agent may, in  reliance  upon such  assumption  (but is not
required to), make available to the requesting Borrower a corresponding  amount.
If a Lender fails to make its Pro Rata Part of any requested Borrowing available
to Administrative Agent on the applicable  Borrowing Date,  Administrative Agent
may recover the applicable amount on demand (i) from such Lender,  together with
interest at the  Federal  Funds Rate for the period  commencing  on the date the
amount was made available to the requesting Borrower by Administrative Agent and
ending on (but excluding) the date Administrative Agent recovers the amount from
such Lender,  or (ii) if such Lender  fails to pay its amount upon demand,  then
from the requesting Borrower,  together with interest at an annual interest rate
equal  to the  rate  applicable  to  the  requested  Borrowing  for  the  period
commencing  on the  Borrowing  Date  and  ending  on (but  excluding)  the  date
Administrative Agent recovers the amount from the requesting Borrower. No Lender
is responsible  for the failure of any other Lender to make its Pro Rata Part of
any Borrowing.

         2.3  Termination. Without premium or penalty, and upon  giving at least
three (3) Business Days prior written and  irrevocable  notice to Administrative
Agent, ProLogis may terminate all or part of the unused  portion  of  the  Total
Commitment,  provided  that  ProLogis  may not  partially  terminate  the unused
portion  of the Total  Commitment  such that the Total  Commitment  is less than
$300,000,000. Each partial termination (a) must be in an amount of not less than
$1,000,000 or a greater  integral  multiple of $1,000,000,  and (b) shall be Pro
Rata among all Lenders. Once terminated, the Total Commitment may not be
increased or reinstated.

         2.4  Swing Line Subfacility.

         (a) Subject to the terms and  conditions  hereof,  if necessary to meet
any  Borrower's  funding  deadlines,  Bank of America  agrees to make Swing Line
Loans to  Borrowers  at any time on or prior  to the  Termination  Date,  not to
exceed an amount in the aggregate for all Borrowers at any one time  outstanding
equal to the lesser of (i)  $75,000,000,  and (ii) the  difference  between  the
Total Commitment and the Total Principal Debt. Swing Line Loans shall constitute
"Borrowings" for all purposes hereunder,  except that Swing Line Loans shall not
be  considered a utilization  of any Lender's  Commitment.  Notwithstanding  the
foregoing,  the Total Principal Debt (including,  without limitation,  all Swing
Line Loans) shall not at any time exceed the Total Commitment.

         (b) Each  request for a Swing Line Loan shall be in an amount  equal to
$1,000,000 or a greater integral  multiple of $50,000.  A Borrower may request a
Swing Line Loan by submitting a Borrowing  Request to  Administrative  Agent and
Bank of America. Such Borrowing Request must be received by Administrative Agent
and Bank of America no later than  11:00  a.m.  on the  Borrowing  Date for such
Swing Line Loan,  provided  that the  requesting  Borrower  shall have  provided
telephonic  notice to  Administrative  Agent and Bank of  America  no later than
11:00 a.m. on the Borrowing Date for such Swing Line Loan. Bank of America shall
make such Swing Line Loan available to the requesting Borrower in Dallas,  Texas
at 1:00 p.m. on such Borrowing Date.

<PAGE>

         (c) Upon the  occurrence  of a Default  or in the event  that any Swing
Line  Loan  shall  be  outstanding   for  more  than  five  (5)  Business  Days,
Administrative  Agent shall, on behalf of the applicable  Borrower (which hereby
irrevocably directs and authorizes  Administrative  Agent to act on its behalf),
request a Base Rate  Borrowing  from Lenders (and each Lender shall fund its Pro
Rata  Part  thereof)  in an  amount  sufficient  to  repay  the  Principal  Debt
outstanding  under such Swing Line Loan;  provided that such Borrowing  shall be
made  notwithstanding  any  noncompliance  with  Section 5. The proceeds of such
Borrowing  shall be  immediately  applied to repay such Swing Line Loan.  If any
Lender does not  promptly  pay such amount upon  Administrative  Agent's  demand
therefor, and until such time as such Lender makes the required Borrowing,  Bank
of America shall be deemed to continue to have  outstanding  its Swing Line Loan
in the amount of such unpaid  obligation.  If, for any reason (including but not
limited to the filing of a petition in bankruptcy with respect to any Borrower),
a  Borrowing  may not be (as  determined  by  Administrative  Agent  in its sole
discretion),  or is not, made pursuant to this Section 2.4(c) to repay any Swing
Line Loan as required hereby,  then,  effective on the date such Borrowing would
otherwise  have  been  made,  each  Lender   severally,   unconditionally,   and
irrevocably  agrees  that it shall be  deemed  to have  purchased  an  undivided
participating  interest  in such  Swing  Line Loan (an  "Unrefunded  Swing  Line
Borrowing")  to the extent of such Lender=s Pro Rata Part  thereof.  Each Lender
shall  fund  a  Borrowing  or a  participation  in  the  Unrefunded  Swing  Line
Borrowings  no later  than the  close of  business  on the date  notice  of such
funding  requirement is given by  Administrative  Agent if such notice was given
prior to 11:00 a.m. on any  Business  Day, or if made at any other time,  on the
next Business Day following the date of such notice. All such amounts payable by
any Lender under this Section  2.3(c) shall  include  interest  thereon from the
date on which such payment is payable by such Lender to, but not including,  the
date such amount is paid by such Lender to Administrative  Agent, at the Federal
Funds Rate. Each payment by a Borrower of all or any part of any Swing Line Loan
to such Borrower shall be paid to  Administrative  Agent for the benefit of Bank
of America and those Lenders who hold funded  participations  in such Swing Line
Loan  under  this  Section  2.4(c);  provided  that  with  respect  to any  such
participation,  all  interest on the  Principal  Debt of such Swing Line Loan to
which such  participation  relates  accruing  prior to the date of funding  such
participation,  shall be payable solely to Administrative  Agent for the account
of Bank of  America  (and  all  Lenders  holding  funded  participations  in any
Unrefunded  Swing Line  Borrowing  prior to such  date).  Any  Lender  holding a
participation  in any  Unrefunded  Swing Line Borrowing may exercise any and all
Rights of banker's lien,  setoff,  or  counterclaim  with respect to any and all
moneys  owing by the  applicable  Borrower to such  Lender by reason  thereof as
fully as if such Lender had extended such Borrowing directly to such Borrower in
the amount of such  participation.  Whenever,  at any time after Bank of America
has received from any Lender such Lender's  participating  interest in any Swing
Line Loan,  Bank of America  receives  any payment on account  thereof,  Bank of
America will promptly  distribute to such Lender its  participating  interest in
such  amount  (appropriately  adjusted,  in the case of  interest  payments,  to
reflect the period of time during which such Lender's participating interest was
outstanding and funded); provided,  however, that in the event that such payment
received by Bank of America is required to be returned,  such Lender will return
to Bank of America any portion thereof previously distributed by Bank of America
to it.

         (d) Unless  Administrative  Agent  knew when Bank of  America  funded a
Swing  Line  Loan  that  Borrowers  had not  satisfied  the  conditions  in this
Agreement to obtain a Borrowing, each Lender=s obligation to make a Borrowing to
refund,  or to purchase a  participation  interest  in, its Pro Rata Part of all
Swing  Line  Loans  as  provided  in  Section   2.4(c)  shall  be  absolute  and
unconditional and shall not be affected by any circumstance,  including, without
limitation (i) any set-off,  counterclaim,  recoupment,  defense, or other right
which such Lender or any other  Person may have  against  Bank of America or any
other Person for any reason whatsoever,  (ii) the occurrence or continuance of a
Potential  Default or Default or the  termination  of any  Lender's  Commitment,
(iii) the  occurrence  of any Material  Adverse  Event,  (iv) any breach of this
Agreement or any other Loan  Document by any  Borrower,  any of its  Affiliates,
Administrative  Agent,  or any  other  Lender,  or (v) any  other  circumstance,
happening, or event whatsoever,  whether or not similar to any of the foregoing.
Any portion of a Swing Line Loan which has not been  refunded by a Borrowing may
be  treated  by Bank of  America  as a  Borrowing  which  was not  funded by the
non-purchasing Lenders as contemplated in Section 2.2(c) of this Agreement,  and
as a funding by Bank of America under the Total  Commitment in excess of Bank of
America's  Commitment.  Each Swing Line Loan refunded by a Borrowing shall cease
to be a Swing  Line  Loan for the  purposes  of this  Agreement,  but shall be a
Borrowing made under the Total Commitment and each Lender's Commitment.

         2.5    Competitive Bid Subfacility

<PAGE>

         (a) In addition  to  Borrowings  otherwise  provided  for  herein,  but
subject to the terms and conditions of the Loan Documents, each Borrower may, as
set  forth  in  this  Section  2.5,  request  Lenders  to  make  offers  to make
Competitive Borrowings to such Borrower under the Total Commitment. Lenders may,
but shall have no  obligation  to, make any such offers,  and such Borrower may,
but shall  have no  obligation  to,  accept  any such  offers.  Any  Competitive
Borrowings made available to a Borrower hereunder shall be subject,  however, to
the conditions  that on the Borrowing  Date therefor:  (i) the Moody's Rating is
Baa3 or  better  and the S & P Rating  is BBB- or  better;  (ii)  the  aggregate
principal  outstanding  under all Competitive  Borrowings made by all Lenders to
all Borrowers shall not exceed  thirty-three and one-third  percent (33-1/3%) of
the Total  Commitment;  and (iii) the Principal Debt of all Borrowings  (whether
under the Competitive Bid Subfacility, the Swing Line Subfacility, or otherwise)
shall not exceed the Total Commitment.  Each Borrowing under the Competitive Bid
Subfacility  must  occur  on a  Business  Day  and  prior  to the  Business  Day
immediately preceding the Termination Date.

         (b) In order to request  Competitive  Bids, a Borrower  shall deliver a
Competitive  Bid  Request to  Administrative  Agent no later than (i) 10:00 a.m.
Dallas,  Texas time on the fifth (5th) Business Day preceding the Borrowing Date
for any  requested  Competitive  Borrowing  that will be comprised of Eurodollar
Borrowings, or (ii) 9:00 a.m. Dallas, Texas time one (1) Business Day before the
Borrowing Date for any requested Competitive Borrowing that will be comprised of
Fixed  Rate  Borrowings.  A  Competitive  Bid  Request  that  does  not  conform
substantially  to the format of Exhibit B-2 may be  rejected  by  Administrative
Agent, and Administrative Agent shall promptly notify the requesting Borrower of
such rejection.  Each  Competitive Bid Request shall refer to this Agreement and
shall specify (i) whether the Competitive Borrowing then being requested will be
comprised of Eurodollar Borrowings or Fixed Rate Borrowings,  (ii) the Borrowing
Date of such  Competitive  Borrowing  (which  shall be a  Business  Day) and the
aggregate  principal  amount  thereof  (which shall be  $10,000,000 or a greater
integral  multiple of  $1,000,000),  and (iii) the Interest  Period with respect
thereto  (which  may not be more than six (6)  months  and which may not  extend
beyond the  Termination  Date).  Promptly after its receipt of a Competitive Bid
Request that is not  rejected as  aforesaid,  Administrative  Agent shall notify
Lenders  of the  Competitive  Bid  Request  on a form  substantially  similar to
Exhibit B-2,  pursuant to which Lenders are invited to bid, subject to the terms
and conditions of this Agreement,  to make  Competitive  Borrowings  pursuant to
such  Competitive  Bid Request.  Notwithstanding  the foregoing,  Administrative
Agent shall have no obligation  to invite any Lender to make a  Competitive  Bid
pursuant  to this  Section  2.5 until such  Lender  has  delivered  a  completed
administrative questionnaire to Administrative Agent.

         (c)  Each  Lender  may  make  one (1) or more  Competitive  Bids to the
requesting Borrower responsive to each respective  Competitive Bid Request. Each
Competitive Bid by a Lender must be  substantially  in the form of Exhibit F and
must be received by  Administrative  Agent (i) no later than 11:00 a.m.  Dallas,
Texas time on the fourth (4th) Business Day preceding the Borrowing Date for any
requested Competitive Borrowing that will be comprised of Eurodollar Borrowings,
or (ii)  prior to 9:00 a.m.  Dallas,  Texas time on the  Borrowing  Date for any
requested Competitive Borrowing that will be comprised of Fixed Rate Borrowings.
Competitive  Bids that do not conform  substantially  to the format of Exhibit F
may be rejected by  Administrative  Agent after  conferring  with,  and upon the
instruction of, the requesting  Borrower,  and Administrative Agent shall notify
the  appropriate  Lender  of  such  rejection  as  soon  as  practicable.   Each
Competitive  Bid  shall  refer to this  Agreement  and  shall  (x)  specify  the
principal  amount (which shall be $5,000,000 or a greater  integral  multiple of
$1,000,000 and which may equal the entire  principal  amount of the  Competitive
Borrowing  requested by the  requesting  Borrower  and may exceed such  Lender's
Commitment,  subject  to the  limitations  set forth in  Section  2.5(a)) of the
Competitive Borrowing such Lender is willing to make to the requesting Borrower,
(y)  specify the  Competitive  Bid Rate at which such Lender is prepared to make
its  Competitive  Borrowing,  and (z) confirm the  Interest  Period with respect
thereto specified by the requesting  Borrower in its Competitive Bid Request.  A
Competitive  Bid submitted by a Lender  pursuant to this Section 2.5(c) shall be
irrevocable.

         (d) Administrative  Agent shall promptly notify the requesting Borrower
of all  Competitive  Bids made and the  Competitive  Bid Rate and the  principal
amount of each  Competitive  Borrowing in respect of which a Competitive Bid was
made and the identity of the Lender that made each bid.

<PAGE>

         (e) The requesting Borrower may, subject only to the provisions of this
Section 2.5(e),  accept or reject any or all of the Competitive Bids referred to
in  Section  2.5(c);  provided,  however,  that  the  aggregate  amount  of  the
Competitive  Bids so  accepted  by the  requesting  Borrower  may not exceed the
principal  amount  of the  Competitive  Borrowing  requested  by the  requesting
Borrower (subject to the further limitations of Section 2.5(a)).  The requesting
Borrower  shall notify  Administrative  Agent  whether and to what extent it has
decided to accept or reject any or all of the bids referred to in Section 2.5(c)
(i) not later than 10:00 a.m. Dallas,  Texas time three (3) Business Days before
the Borrowing Date specified for a proposed Competitive Borrowing that is deemed
a Eurodollar  Borrowing or (ii) not later than 10:00 a.m., Dallas, Texas time on
the day specified for a proposed  Competitive  Borrowing  that is deemed a Fixed
Rate  Borrowing;  provided,  however,  that (A) the  failure  by the  requesting
Borrower to give such notice  shall be deemed to be a rejection  of all the bids
referred to in Section  2.5(c),  (B) the requesting  Borrower shall not accept a
bid in the same or lower principal  amount made at a particular  Competitive Bid
Rate if the  requesting  Borrower  has  decided  to reject a bid made at a lower
Competitive Bid Rate, (C) if the requesting Borrower shall accept bids made at a
particular  Competitive  Bid Rate but shall be  restricted  by other  conditions
hereof from  borrowing  the  principal  amount of the  Competitive  Borrowing in
respect of which  bids at such  Competitive  Bid Rate have been  made,  then the
requesting  Borrower  shall  accept a ratable  portion  of each bid made at such
Competitive  Bid Rate based as nearly as  possible on the  respective  principal
amounts of the  Competitive  Borrowing for which such bids were made, and (D) no
bid shall be accepted for a Competitive Borrowing unless the aggregate principal
amount  to be funded  pursuant  to all  accepted  bids  hereunder  shall be in a
minimum amount of  $10,000,000  and the amount to be funded by each Lender whose
bid is accepted is  $5,000,000  or a greater  integral  multiple of  $1,000,000.
Notwithstanding the foregoing, if it is necessary for the requesting Borrower to
accept a ratable  allocation of the bids made in response to a  Competitive  Bid
Request  (whether  pursuant  to the  events  specified  in  clause  (C) above or
otherwise) and the available principal amount of the Competitive Borrowing to be
allocated  among the Lenders  submitting  Competitive  Bids is not sufficient to
enable  Competitive  Borrowings to be allocated to each such Lender in a minimum
principal  amount of $5,000,000 or a greater  integral  multiple of  $1,000,000,
then the  requesting  Borrower  shall  select the Lenders to be  allocated  such
Competitive Borrowings and shall round allocations up or down to the next higher
or lower  multiple of $500,000 as it shall deem  appropriate.  A notice given by
the requesting Borrower pursuant to this Section 2.5(e) shall be irrevocable.

         (f)  Administrative  Agent shall  promptly  notify each bidding  Lender
whether  or not its  Competitive  Bid has been  accepted  (which  notice to such
Lenders whose  Competitive  Bids have been accepted will be given within one (1)
hour  (except  in the case of Fixed  Rate  Borrowings,  in which case as soon as
possible)  from the time such bid was  accepted by the  requesting  Borrower and
shall further  indicate in what amount and at what  Competitive  Bid Rate),  and
each  successful  bidder  will be  obligated,  subject  to the other  applicable
conditions hereof, to advance the Competitive  Borrowing in respect of which its
bid has been accepted.  After  completing the  notifications  referred to in the
immediately  preceding sentence,  Administrative Agent shall notify each bidding
Lender of the aggregate  principal  amount of all Competitive  Bids accepted for
and the  range of  Competitive  Bid  Rates  submitted  in  connection  with that
Competitive Borrowing.

         (g) If  Administrative  Agent  shall  at any  time  elect  to  submit a
Competitive  Bid in its  capacity  as a Lender,  then it shall  submit  such bid
directly to the requesting  Borrower  one-half hour earlier than the latest time
at which the other  Lenders are required to submit their bids to  Administrative
Agent pursuant to Section 2.5(c).

<PAGE>

         (h) The  Principal  Debt of each  Competitive  Borrowing and all unpaid
interest  thereon  shall be due and  payable  on the last day of the  applicable
Interest  Period;  provided that if the  requesting  Borrower fails to repay any
Competitive  Borrowing on such day, then the requesting Borrower shall be deemed
to have  given a Notice of  Borrowing  requesting  Lenders  to make a  Borrowing
hereunder in the amount of such Competitive  Borrowing,  subject to satisfaction
of the  conditions  specified in Section 5;  provided that failure to repay such
Competitive  Borrowing on the last day of the applicable  Interest  Period shall
not constitute a failure to satisfy such conditions.

         2.6      Lenders; Increase in Total Commitment.

         (a)      The Lenders on the Closing Date shall be the Lenders set forth
on Schedule 1.1 on the Closing Date.

         (b) After the Closing Date until March 31, 2001,  Administrative  Agent
may, from time to time at the request of Borrower, increase the Total Commitment
by (i) admitting additional Lenders hereunder (each a "Subsequent  Lender"),  or
(ii)  increasing  the  Commitment of any Lender (each an  "Increasing  Lender"),
subject to the following conditions:

                  (A) each Subsequent Lender is an Eligible Assignee;

                  (B) each Borrower executes (A) a new Note payable to the order
         of a Subsequent  Lender, or (B) a replacement Note payable to the order
         of an Increasing Lender;

                  (C) each  Subsequent  Lender executes a signature page to this
         Agreement;

                  (D) after giving  effect to the  admission  of any  Subsequent
         Lender or the increase in the Commitment of any Increasing  Lender, the
         aggregate of the Total Commitment does not exceed $500,000,000;

                  (E) each  increase  in the  Total  Commitment  shall be in the
         minimum  amount  of  $10,000,000  or a  greater  integral  multiple  of
         $1,000,000;

                  (F) no admission of any  Subsequent  Lender shall increase the
         Commitment of any existing  Lender without the written  consent of such
         Lender;

                  (G) no  Lender  shall  be an  Increasing  Lender  without  the
         written consent of such Lender;

                  (H)      no Potential Default or Default exists;

                  (I)  the  amount  of all  increases  in the  Total  Commitment
         pursuant  to this  Section  2.6 shall  not  exceed  $50,000,000  in the
         aggregate; and

                  (J)  Borrowers  shall  pay to  Administrative  Agent,  for the
         account  of  the  applicable  Credit  Parties,   all  fees  payable  in
         connection with an increase in the Total Commitment  required  pursuant
         to any letter agreement between Administrative Agent and Borrowers.

After the admission of any  Subsequent  Lender or the increase in the Commitment
of any Increasing  Lender,  Administrative  Agent shall promptly provide to each
Lender a new Schedule 1.1 to this Agreement.

SECTION 3    TERMS OF PAYMENT.

         3.1 Notes and Payments.

<PAGE>

         (a) The Total  Principal  Debt (other than  Competitive  Borrowings and
Swing Line Loans) shall be evidenced by the Revolving  Credit Notes, one payable
to each Lender in the stated principal  amount of its Commitment;  provided that
the Revolving  Credit Notes  executed by a Subsidiary  Borrower shall not exceed
the  aggregate  amount  of the Total  Commitment  available  to such  Subsidiary
Borrower  under Section 2.1. The Principal  Debt of all  Competitive  Borrowings
shall be evidenced by the Competitive Bid Notes. The Principal Debt of all Swing
Line Loans shall be evidenced by the Swing Line Notes.

         (b) Borrowers must make each payment and prepayment on the  Obligation,
without offset, counterclaim,  or deduction, to Administrative Agent's principal
office in Dallas,  Texas,  in funds that will be available  for immediate use by
Administrative  Agent by 12:00 noon on the day due. Payments received after such
time shall be deemed  received on the next  Business Day.  Administrative  Agent
shall pay to each  Lender any  payment to which such  Lender is  entitled on the
same  day   Administrative   Agent   receives  the  funds  from  a  Borrower  if
Administrative  Agent  receives  the payment  before 12:00 noon,  and  otherwise
before  12:00 noon on the  following  Business  Day.  If and to the extent  that
Administrative  Agent does not make  payments to Lenders  when due,  then unpaid
amounts shall accrue  interest at the Federal Funds Rate from the due date until
(but not including) the payment date.

         3.2 Interest and Principal Payments.

         (a) Interest  Payments.  Accrued interest on each Borrowing (other than
Competitive  Borrowings)  is due and payable  monthly as it accrues on the first
(1st) day of each month during the term hereof  (commencing on July 1, 2000) and
on the Termination Date.  Accrued interest on each Competitive  Borrowing is due
and payable on the last day of its respective Interest Period;  provided that if
any such Interest Period is a period greater than three (3) months, then accrued
interest on such Competitive Borrowing shall also be due and payable on the date
ending  each three (3) month  period  after the  commencement  of such  Interest
Period.

         (b) Principal Payments.  The Total Principal Debt is due and payable on
the Termination Date.

         (c) Voluntary  Prepayment.  Any Borrower may voluntarily  prepay all or
any part of the Total  Principal  Debt at any time  without  premium or penalty,
subject to the following conditions:

                  (i) Administrative  Agent must receive such Borrower's written
         prepayment  notice by 11:00 a.m. on the Business Day preceding the date
         of prepayment, which notice shall specify the payment date and the Type
         and amount of the  Borrowing(s) to be paid, and which shall  constitute
         an  irrevocable  and  binding  obligation  of such  Borrower  to make a
         prepayment on the designated date;

                  (ii)  each  partial  prepayment  must  be  in  the  amount  of
         $1,000,000 or a greater integral multiple of $100,000, or, if less, the
         Total Principal Debt; and

                  (iii) such  Borrower  shall pay any related  Funding Loss upon
         demand.

Notwithstanding  anything  contained  herein to the contrary,  no Borrower shall
voluntarily prepay any Competitive  Borrowing to such Borrower prior to the last
day of the Interest Period therefor.

<PAGE>

         3.3 Interest Options. Except as specifically  otherwise  provided,
Borrowings  (other than Competitive  Borrowings and Swing Line Loans) shall bear
interest  at an annual  rate  equal to the  lesser of (a) the Base Rate plus the
Applicable  Margin,  or the Eurodollar Rate plus the Applicable  Margin (in each
case as designated or deemed  designated by the requesting  Borrower and, in the
case  of  Eurodollar  Borrowings,  for the  Interest  Period  designated  by the
requesting Borrower), and (b) the Maximum Rate. Except as specifically otherwise
provided,  Competitive  Borrowings  shall  bear  interest  at an annual  rate of
interest  equal to the  lesser of (i) the  Competitive  Bid  Rate,  and (ii) the
Maximum Rate. Except as specifically otherwise provided,  Swing Line Loans shall
bear interest at an annual rate equal to the lesser of (A) the Money Market Rate
plus the Applicable  Margin,  and (B) the Maximum Rate.  Each change in the Base
Rate,  Money  Market  Rate,  or Maximum  Rate is  effective,  without  notice to
Borrowers or any other Person, upon the effective date of such change.

         3.4 Quotation of Rates. A Representative  of  any  Borrower  may  call
Administrative  Agent  before  delivering  a  Borrowing  Request  to  receive an
indication of the interest rates then in effect,  but the indicated rates do not
bind any Credit  Party or affect the  interest  rate that is  actually in effect
when such Borrower delivers its Borrowing Request or on the Borrowing Date.

         3.5 Default Rate. If permitted  by Law,  all  past-due  Principal  Debt
and  past-due  interest  shall  bear  interest  from the date due  (stated or by
acceleration) at the Default Rate until paid, regardless whether payment is made
before or after entry of a judgment.

         3.6 Interest Recapture. If the designated  interest rate applicable to
any Borrowing exceeds the Maximum Rate, then the interest rate on that Borrowing
is limited to the Maximum Rate, but any subsequent  reductions in the designated
rate shall not reduce the interest rate thereon below the Maximum Rate until the
total amount of accrued  interest  equals the amount of interest that would have
accrued if the designated rate had always been in effect. If at maturity (stated
or by  acceleration),  or at final payment of the Notes, the total interest paid
or accrued is less than the interest  that would have accrued if the  designated
rates had always been in effect,  then, at that time and to the extent permitted
by  applicable  Law, the  applicable  Borrower  shall pay an amount equal to the
difference  between  (a) the  lesser of the amount of  interest  that would have
accrued  if the  designated  rates had  always  been in effect and the amount of
interest  that would have accrued if the Maximum Rate had always been in effect,
and (b) the amount of interest actually paid or accrued on the Notes.

         3.7 Interest Calculations.

         (a) Interest  will be  calculated on the basis of actual number of days
elapsed  (including the first day but excluding the last day) but computed as if
each calendar year  consisted of 360 days in the case of all  Borrowings  (other
than Base Rate Borrowings)  (unless the calculation  would result in an interest
rate greater than the Maximum Rate,  in which event  interest will be calculated
on the basis of a year of 365 or 366 days,  as the case may be),  and 365 or 366
days, as the case may be, in the case of Base Rate Borrowings. All interest rate
determinations  and  calculations  by  Administrative  Agent are  conclusive and
binding absent manifest error.

         (b) The  provisions of this  Agreement  relating to  calculation of the
Base Rate, the Eurodollar  Rate, and the  Competitive Bid Rate are included only
for the purpose of determining  the rate of interest or other amounts to be paid
under this Agreement  that are based upon those rates.  Each Lender may fund and
maintain its funding of all or any part of each Borrowing as it selects.

<PAGE>

         3.8 Maximum Rate.  Regardless  of any  provision  contained in any Loan
Document or any  document  related  thereto,  it is the intent of the parties to
this  Agreement  that no Credit  Party  contract  for,  charge,  take,  reserve,
receive,  or apply,  as interest on all or any part of the Obligation any amount
in excess of the  Maximum  Rate or the Maximum  Amount or receive  any  unearned
interest in violation of any  applicable  Law,  and, if Lenders ever do so, then
any excess shall be treated as a partial  repayment or  prepayment  of principal
and any  remaining  excess  shall be refunded  to the  applicable  Borrower.  In
determining  if the  interest  paid or payable  exceeds the Maximum  Rate,  each
Borrower and Lenders shall,  to the maximum extent  permitted  under  applicable
Law, (a) treat all  Borrowings as but a single  extension of credit (and Lenders
and each  Borrower  agree  that  this is the case  and  that  provision  in this
Agreement for multiple Borrowings is for convenience only), (b) characterize any
non-principal  payment as an expense,  fee, or premium  rather than as interest,
(c) exclude  voluntary  repayments or  prepayments  and their  effects,  and (d)
amortize,  prorate, allocate, and spread the total amount of interest throughout
the entire  contemplated term of the Obligation.  However,  if the Obligation is
paid in full before the end of its full  contemplated  term, and if the interest
received for its actual  period of existence  exceeds the Maximum  Amount,  then
Lenders shall refund any excess (and Lenders may not, to the extent permitted by
Law,  be subject to any  penalties  provided  by any Laws for  contracting  for,
charging,  taking,  reserving  or  receiving  interest  in excess of the Maximum
Amount).  If the Laws of the  State of Texas  are  applicable  for  purposes  of
determining  the "Maximum  Rate" or the "Maximum  Amount," then those terms mean
the "weekly  ceiling"  from time to time in effect  under Texas  Finance  Code '
303.001, as amended,  as limited by Texas Finance Code ' 303.305.  Each Borrower
agrees that Chapter 346 of the Texas Finance Code, as amended  (which  regulates
certain revolving credit loan accounts and revolving tri-party  accounts),  does
not apply to the Obligation.

         3.9 Interest Periods.  When  any  Borrower  requests  any  Eurodollar
Borrowing or a Fixed Rate  Borrowing,  such  Borrower  may elect the  applicable
interest  period (each an "Interest  Period"),  which may be, at such Borrower's
option, one (1), two (2), three (3) or six (6) months for Eurodollar  Borrowings
and any period of up to six (6) months (for Fixed Rate  Borrowings),  subject to
the  following  conditions:  (a) the initial  Interest  Period for a  Eurodollar
Borrowing  commences on the applicable  Borrowing  Date or conversion  date, and
each subsequent  Interest Period  applicable to such Borrowing  commences on the
day when the next  preceding  applicable  Interest  Period  expires;  (b) if any
Interest  Period  for a  Eurodollar  Borrowing  begins on a day for which  there
exists no  numerically  corresponding  Business Day in the calendar month at the
end of the Interest Period ("Ending Calendar  Month"),  then the Interest Period
ends on the next succeeding  Business Day of the Ending  Calendar Month,  unless
there is no succeeding  Business Day in the Ending  Calendar Month in which case
the  Interest  Period  ends on the next  preceding  Business  Day of the  Ending
Calendar Month;  (c) no Interest Period may extend beyond the Termination  Date;
and (d)  there  may not be in  effect  at any one time  more  than  twelve  (12)
Interest  Periods   (including,   without   limitation,   Interest  Periods  for
Competitive Borrowings). Notwithstanding the foregoing, subject to the foregoing
conditions  and the  consent  of  Administrative  Agent  (such  consent to be in
Administrative Agent's reasonable discretion), any Borrower may, in anticipation
of such  Borrower's  prepayment of Borrowings  from equity or debt  offerings or
financings or asset sales,  elect Interest  Periods of seven (7) days,  fourteen
(14) days, or twenty-one (21) days.

<PAGE>

         3.10 Conversions and Continuations. Any  Borrower  may (a) on the last
day of the  applicable  Interest  Period  convert  all or part  of a  Eurodollar
Borrowing of such Borrower to a Base Rate Borrowing, (b) at any time convert all
or part of a Base Rate Borrowing of such Borrower to a Eurodollar Borrowing, and
(c) on the last day of an Interest  Period,  elect a new  Interest  Period for a
Eurodollar  Borrowing  of such  Borrower;  provided  that no  conversions  to or
elections  of new  Interest  Periods  for any  Eurodollar  Borrowings  shall  be
permitted while a Default exists unless Required  Lenders  otherwise  consent in
writing.  Any such conversion is subject to the dollar limits and  denominations
of Section 2.1 and may be  accomplished  by  delivering  a Borrowing  Request to
Administrative  Agent no later than 11:00 a.m.  (i) on the third (3rd)  Business
Day before (A) the conversion date for conversion to a Eurodollar  Borrowing and
(B) the last day of the  Interest  Period,  for the  election of a new  Interest
Period, and (ii) one (1) Business Day before the last day of the Interest Period
for conversion to a Base Rate Borrowing. Absent the applicable Borrower's notice
of conversion or election of a new Interest  Period,  a Eurodollar  Borrowing of
such Borrower  shall be converted to a Base Rate  Borrowing  when the applicable
Interest Period expires.

         3.11 Order of Application.

         (a)  If no  Default  exists,  any  payment  shall  be  applied  to  the
Obligation in the order and manner specified by the applicable Borrower.

         (b) If a Default  exists,  any  payment  (including  proceeds  from the
exercise of any Rights) shall be applied in the following order: (i) to all fees
and expenses for which the Credit  Parties have not been paid or  reimbursed  in
accordance  with the Loan Documents (and if such payment is less than all unpaid
or unreimbursed fees and expenses, then the payment shall be paid against unpaid
and unreimbursed fees and expenses in the order of incurrence or due date); (ii)
to accrued  interest on the Principal  Debt;  (iii) to the Principal Debt of any
Swing Line Loans;  and (iv) to the remaining  Obligation in the order and manner
as Administrative Agent deems appropriate.

All payments to or for the account of Lenders shall be shared by such Lenders on
a Pro Rata basis.

         3.12 Sharing of Payments, Etc. If any Lender obtains any amount(whether
voluntary,  involuntary  or otherwise,  including as a result of exercising  its
Rights  under  Section  3.13) that  exceeds the part of that  payment  that such
Lender is then  entitled to receive under the Loan  Documents,  then such Lender
shall  purchase  from the  other  Lenders  participations  that  will  cause the
purchasing  Lender to share the excess amount ratably with each other Lender. If
all or any  portion  of any excess  amount is  subsequently  recovered  from the
purchasing  Lender,  then the purchase shall be rescinded and the purchase price
restored to the extent of the  recovery.  Each  Borrower  agrees that any Lender
purchasing a  participation  from another Lender under this Section 3.12 may, to
the  fullest  extent  permitted  by Law,  exercise  all of its Rights of payment
(including the Right of offset) with respect to that  participation  as fully as
if such Lender were the direct  creditor of such  Borrower in the amount of that
participation.

         3.13 Offset. If a  Default exists, then each Lender  is  entitled,  but
is not obligated, to exercise (for the benefit of all Lenders in accordance with
Section  3.12) the Rights of offset and  banker's  Lien  against  each and every
account and other property,  or any interest therein, that each Borrower may now
or hereafter  have with, or which is now or hereafter in the possession of, that
Lender to the extent of the full amount of the Obligation of such Borrower.

         3.14 Booking Borrowings. To the extent  permitted  by Law,  any  Lender
may make,  carry or transfer its Borrowings at, to, or for the account of any of
its branch offices or the office of any of its Affiliates. However, no Affiliate
is  entitled  to receive  any  greater  payment  under this  Agreement  than the
transferor  Lender  would have been  entitled to receive  with  respect to those
Borrowings.

<PAGE>

         3.15 Basis Unavailable or Inadequate for the Eurodollar Rate. If  prior
to the  first  (1st)  day of  any  Interest  Period,  (a)  Administrative  Agent
determines  that the basis for determining the applicable rate is not available,
or (b)  Lenders  holding  fifty  percent  (50%) of the Total  Commitment  notify
Administrative  Agent that such Lenders have determined that the rate determined
by Administrative  Agent as the Eurodollar Rate for any Interest Period does not
accurately  reflect the cost to such Lenders of making or converting  Borrowings
at that rate for such Interest Period, then Administrative  Agent shall promptly
notify  Borrowers and Lenders of that  determination  (which is  conclusive  and
binding on Borrowers absent manifest error),  and all affected  Borrowings shall
bear  interest  at the sum of the Base Rate plus the  Applicable  Margin.  Until
Administrative Agent notifies Borrowers that such circumstances no longer exist,
Lenders'  commitments  under this Agreement to make, or to convert to,  affected
Borrowings will be suspended.

         3.16 Additional Costs. With respect to any Law,  requirement,  request,
directive,  or change affecting  banking  institutions generally:

         (a)  Eurocurrency  Reserves.  If any Lender shall be required under any
Reserve  Requirement  (other than a Reserve  Requirement  in effect on the first
(1st) day of the  respective  Interest  Period with  respect to any  Competitive
Borrowings)  to  maintain   reserves  with  respect  to  liabilities  or  assets
consisting  of or  including  Eurocurrency  Liabilities,  then (i)  such  Lender
(through  Administrative  Agent) shall,  within sixty (60) days after the end of
any Interest Period with respect to any Eurodollar  Borrowing  during which such
Lender was so required to maintain reserves,  deliver to the applicable Borrower
a certificate stating (A) that such Lender was required to maintain reserves and
as a result such Lender incurred additional costs in connection with making such
Eurodollar Borrowing and (B) in reasonable detail, such Lender=s computations of
the amount of  additional  interest  payable by such  Borrower,  pursuant to the
provisions  below,  and (ii) such  Borrower  shall,  within  ten (10) days after
receipt of any such certificate, pay to Administrative Agent, for the account of
such  Lender,  additional  interest  on the  unpaid  principal  amount  of  such
Eurodollar  Borrowing of such Lender made to it outstanding  during the Interest
Period with respect to which the  above-referenced  certificate was delivered to
Administrative  Agent,  at a rate per annum equal to the difference  obtained by
subtracting  (x) the Eurodollar  Rate for such Interest Period from (y) the rate
obtained by dividing such  Eurodollar  Rate by a percentage  equal to 100% minus
the Reserve  Requirement of such Lender for such Interest Period.  The amount of
interest  payable by any  Borrower  to any  Lender as stated in any  certificate
delivered to  Administrative  Agent  pursuant to the  provisions of this Section
3.16(a) shall be conclusive and binding for all purposes, absent manifest error.
The  provisions of this Section  3.16(a) shall survive the  termination  of this
Agreement.

         (b)  Reserves.  With respect to any  Eurodollar  Borrowing or any Fixed
Rate  Borrowing,   if  (i)  any  change  in  present  Law,  any  change  in  the
interpretation  or  application  of any present  Law, or any future Law imposes,
modifies,  or deems  applicable  (or if  compliance  by any Lender with any such
requirement  of any  Tribunal  results  in) any  requirement  that any  reserves
(including  any  marginal,  emergency,  supplemental  or  special  reserves)  be
maintained,  and (ii) those reserves  reduce any sums  receivable by such Lender
under this  Agreement or increase the costs incurred by such Lender in advancing
or  maintaining  any  portion  of any  Eurodollar  Borrowing  or any Fixed  Rate
Borrowing,  then (unless the effect is already reflected in the rate of interest
then applicable under this Agreement) such Lender (through Administrative Agent)
shall  deliver  to the  applicable  Borrower  a  certificate  setting  forth  in
reasonable  detail the calculation of the amount  necessary to compensate it for
such reduction or increase  (which  certificate is conclusive and binding absent
manifest  error),  and such Borrower shall within ten (10) days after receipt of
such  certificate pay that amount to  Administrative  Agent,  for the account of
such Lender. Such Lender shall notify  Administrative Agent and such Borrower of
any such determination as soon as practicable (but in any event within 120 days)
after such Lender obtains actual  knowledge of the event or condition  prompting
such Lender to make such  determination,  and such Borrower  shall not be liable
for any such amount or amounts that accrue between the date such notification is
required to be given and the date notice was actually  given.  The provisions of
and  undertakings  and  indemnification  set forth in this Section 3.13(b) shall
survive the  satisfaction  and payment of the Obligation and termination of this
Agreement.

<PAGE>

         (c) Capital Adequacy.  With respect to any Borrowing,  if any change in
present Law or any future Law  regarding  capital  adequacy or compliance by any
Credit  Party with any  request,  directive,  or  requirement  now  existing  or
hereafter imposed by any Tribunal  regarding capital adequacy,  or any change in
its written  policies or in the risk category of this  transaction,  reduces the
rate of return on its capital as a  consequence  of its  obligations  under this
Agreement to a level below that which it otherwise  could have achieved  (taking
into  consideration  its policies with respect to capital adequacy) by an amount
deemed  by it to be  material  (and it  may,  in  determining  the  amount,  use
reasonable  assumptions  and  allocations  of  costs  and  expenses  and use any
reasonable averaging or attribution method),  then (unless the effect is already
reflected in the rate of interest then  applicable  under this  Agreement)  such
Credit Party (through Administrative Agent) shall notify the applicable Borrower
and deliver to such  Borrower a certificate  setting forth in reasonable  detail
the calculation of the amount  necessary to compensate it (which  certificate is
conclusive and binding absent  manifest  error),  and such Borrower shall within
ten  (10)  days  after   receipt  of  such   certificate   pay  that  amount  to
Administrative  Agent,  for the account of such Credit Party.  Such Credit Party
shall notify Administrative Agent and such Borrower of any such determination as
soon as  practicable  (but in any event within 120 days) after such Credit Party
obtains actual knowledge of the event or condition prompting such Lender to make
such determination, and such Borrower shall not be liable for any such amount or
amounts that accrue between the date such  notification  is required to be given
and the date notice was actually given.  The provisions of and  undertakings and
indemnification set forth in this Section 3.13(c) shall survive the satisfaction
and payment of the Obligation and termination of this Agreement.

         (d)  Taxes.  Any  Taxes  payable  by any  Credit  Party or ruled  (by a
Tribunal)  payable by any Credit Party in respect of this Agreement or any other
Loan Document  shall,  if permitted by Law, be paid by Borrowers,  together with
interest and penalties,  if any (except for (i) (1) Taxes imposed on or measured
by the overall net income of such Credit  Party,  (2) franchise or similar taxes
of such  Credit  Party,  and (3)  amounts  requested  to be  withheld  for Taxes
pursuant  to the last  sentence  of Section  3.19,  and (ii) such  interest  and
penalties  incurred as a result of the gross negligence or willful misconduct of
any Credit Party). Such Credit Party (through Administrative Agent) shall notify
Borrowers  and deliver to Borrowers a  certificate  setting  forth in reasonable
detail the  calculation  of the amount of payable  Taxes,  which  certificate is
conclusive and binding (absent manifest  error),  and Borrowers shall within ten
(10) days after receipt of such  certificate  pay that amount to  Administrative
Agent for its account or the account of such Credit  Party,  as the case may be.
If such Credit Party  subsequently  receives a refund of the Taxes paid to it by
Borrowers, then the recipient shall promptly pay the refund to Borrowers.

         3.17  Change in Law. If any Law  makes it  unlawful  for any  Lender
to make or  maintain  Eurodollar  Borrowings,  then such Lender  shall  promptly
notify  Borrowers and  Administrative  Agent,  and with respect to such Lender's
Borrowings (a) as to undisbursed  funds, that requested  Borrowing shall be made
as a Base  Rate  Borrowing,  and  (b) as to any  outstanding  Borrowing,  (i) if
maintaining the Borrowing  until the last day of the applicable  Interest Period
is unlawful, the Borrowing shall be converted to a Base Rate Borrowing as of the
date of notice, and the applicable  Borrower shall pay any related Funding Loss,
or (ii) if not  prohibited  by Law, the  Borrowing  shall be converted to a Base
Rate Borrowing as of the last day of the applicable Interest Period, or (iii) if
any conversion will not resolve the unlawfulness,  then the applicable  Borrower
shall promptly prepay the Borrowing,  without penalty, together with any related
Funding Loss.

<PAGE>

        3.18  Funding Loss.  EACH BORROWER  AGREES TO INDEMNIFY  EACH LENDER
AGAINST,  AND PAY TO EACH LENDER WITHIN TEN (10) DAYS AFTER DEMAND,  ANY FUNDING
LOSS OF SUCH LENDER WITH  RESPECT TO ANY  BORROWING OF SUCH  BORROWER.  When any
Lender demands that any Borrower pay any Funding Loss, such Lender shall deliver
to such  Borrower  and  Administrative  Agent a  certificate  setting  forth  in
reasonable  detail the basis for such  Funding Loss and the  calculation  of the
amount,  which  calculation is conclusive and binding absent manifest error. The
provisions of and  undertakings  and  indemnification  set forth in this Section
3.18  shall  survive  the   satisfaction  and  payment  of  the  Obligation  and
termination of this Agreement.

         3.19  Foreign Lenders. Each  Lender  that is  organized  under the Laws
of any jurisdiction other than the United States of America or any State thereof
(a)  represents  to  Administrative  Agent and  Borrowers  that (i) no Taxes are
required to be withheld by Administrative Agent or Borrowers with respect to any
payments  to be  made  to it in  respect  of the  Obligation,  and  (ii)  it has
furnished to  Administrative  Agent and Borrowers two duly  completed  copies of
U.S.  Internal Revenue Service Form W-8 BEN, Form W-8 ECI, or any other tax form
acceptable to  Administrative  Agent (wherein it claims  entitlement to complete
exemption from U.S. federal  withholding tax on all interest  payments under the
Loan  Documents),  and (b)  covenants  to (i) provide  Administrative  Agent and
Borrowers a new tax form upon the expiration or  obsolescence  of any previously
delivered  form  according to Law,  duly  executed and completed by it, and (ii)
comply  from  time to time  with all Laws with  regard  to the  withholding  tax
exemption.  If any of the foregoing is not true or the applicable  forms are not
provided,  then  Borrowers or  Administrative  Agent (without  duplication)  may
deduct and withhold  from  interest  payments  under the Loan  Documents  United
States federal income tax at the full rate applicable under the Code.

         3.20  Extension of Termination Date.   ProLogis may request a one-year
extension  of the  Termination  Date to June 6, 2004 by making  such  request in
writing (an "Extension  Request") to Administrative Agent between sixty (60) and
ninety  (90)  days  prior  to  June 6,  2003.  The  Termination  Date  shall  be
automatically  extended  to June  6,  2004 if at the  time of such  request  (a)
Borrowers  pay to  Administrative  Agent the  extension fee set forth in Section
4.4, and (b) no Default or Potential Default exists.

         3.21  Option to Replace Lenders. If any Lender shall make demand for
payment or  reimbursement  pursuant to Section 3.16, or notify  Borrowers of the
occurrence of the circumstances  described in Section 3.17, then,  provided that
(a) no  Default  has  occurred  and is  continuing,  and (b)  the  circumstances
resulting in such demand for payment or reimbursement  are not applicable to all
Lenders, Borrowers may terminate the Commitment of such Lender, in whole but not
in part, by either (i) (A) giving such Lender and Administrative  Agent not less
than five (5)  Business  Days'  written  notice  thereof,  which notice shall be
irrevocable  and  effective  only  upon  receipt  thereof  by  such  Lender  and
Administrative  Agent and shall  specify the date of such  termination,  and (B)
paying such Lender  (and there  shall  become due and  payable) on such date the
outstanding  Principal Debt of all Borrowings made by such Lender,  all interest
thereon,  and any other Obligation owed to such Lender  (including under Section
3.18),  if any,  and/or  (ii)  pursuant  to the  provisions  of  Section  14.11,
proposing the introduction of a replacement  Lender  reasonably  satisfactory to
Administrative  Agent,  or  obtaining  the  agreement  of one or  more  existing
Lenders,  to assume  all or a portion  of the  Commitment  of the  Lender  whose
Commitment is being terminated, on the effective date of such termination.  Upon
the satisfaction of all of the foregoing  conditions,  such Lender that is being
terminated shall cease to be a "Lender" for purposes of this Agreement, provided
that Borrowers  shall continue to be obligated to such Lender under Section 7.12
with respect to  Indemnified  Liabilities  (as defined in Section  7.12) arising
prior to such termination.

SECTION 4   FEES.

<PAGE>

         4.1  Treatment of Fees.   The fees described in this Section 4 (a) are
not  compensation  for the use,  detention,  or forbearance of money, (b) are in
addition to, and not in lieu of,  interest and expenses  otherwise  described in
this  Agreement,  (c) are payable in  accordance  with Section  3.1(b),  (d) are
non-refundable,  (e) to the fullest extent  permitted by Law, bear interest,  if
not paid when due, at the Default Rate,  and (f) are  calculated on the basis of
actual  number of days  (including  the first  day but  excluding  the last day)
elapsed,  but computed as if each  calendar year  consisted of 360 days,  unless
computation  would  result in an interest  rate in excess of the Maximum Rate in
which event the  computation  is made on the basis of a year of 365 or 366 days,
as the case may be.  The fees  described  in this  Section  4 are in all  events
subject to the provisions of Section 3.8.

         4.2  Administrative Agent Fees.  Borrowers  shall pay to Administrative
Agent,  solely for its own account,  the fees described in the letter  agreement
between Borrowers and Administrative Agent dated of even date herewith.

         4.3  Commitment Fees.

         (a) Borrowers shall pay to  Administrative  Agent the fees specified in
the letter agreement between Administrative Agent and Borrowers, which fee shall
be for the  account of  Administrative  Agent and for the  account of Lenders as
shall be agreed to between Administrative Agent and each Lender.

         (b)  Borrowers  shall  pay to  Administrative  Agent,  for the  ratable
account of each  Lender,  a facility fee equal to the product of (i) the average
daily amount of the Total  Commitment  (regardless of usage) for the period from
and including the Closing Date up to but excluding the Termination  Date,  times
(ii) a rate per annum equal to the  Applicable  Facility  Fee  Percentage.  Such
facility  fee shall be payable  quarterly  in arrears on the first  (1st) day of
each January,  April,  July, and October  during the term hereof,  commencing on
July 1, 2000.

         4.4  Extension Fee.  Upon the  extension of the  Termination  Date, as
provided in Section 3.20,  Borrowers  agree to pay  Administrative  Agent, on or
before June 6, 2003, for the ratable account of Lenders,  an extension fee equal
to one-quarter of one percent (.25%) of the Commitments of Lenders.

         4.5  Competitive Bid Fee.   Each  Competitive  Bid Request  hereunder
submitted  by a Borrower  to  Administrative  Agent  shall be  accompanied  by a
competitive bid fee of $2,500 (payable  solely to  Administrative  Agent for its
own account) and shall only request bids for a single Borrowing Date.

<PAGE>

SECTION F     CONDITIONS PRECEDENT.  Administrative  Agent will not be obligated
to fund the  initial  Borrowing  unless:  (a)  Administrative  Agent has  timely
received a Borrowing  Request and all of the items  described on Schedule 5; and
(b)  prior  to,  or   contemporaneously   with,  such  initial  Borrowing,   all
Indebtedness  under  the  Existing  Credit  Agreement  is paid  in full  and all
commitments  thereunder are terminated.  In addition,  Administrative Agent will
not be obligated to make any Borrowing  (including any  Competitive  Borrowing),
unless  on the  applicable  Borrowing  Date  (and  after  giving  effect  to the
requested  Borrowing):  (i)  Administrative  Agent shall have timely  received a
Borrowing  Request  or  Competitive  Bid  Request,  as the  case  may  be;  (ii)
Administrative  Agent shall have received any applicable  fees; (iii) all of the
representations  and  warranties of Borrowers in the Loan Documents are true and
correct in all material  respects  (unless they speak to a specific  date or are
based on facts which have changed by  transactions  contemplated or permitted by
this  Agreement);  (iv) no  Default or  Potential  Default  exists;  and (v) the
funding of the  Borrowing  is  permitted  by Law.  Upon  Administrative  Agent's
request,   each  Borrower  shall  deliver  to   Administrative   Agent  evidence
substantiating  any of the matters in the Loan  Documents  that are necessary to
enable such Borrower to qualify for the Borrowing.  Each condition  precedent in
this Agreement  (including  those on Schedule 5) is material to the transactions
contemplated by this Agreement,  and time is of the essence with respect to each
condition precedent. Lenders may fund any Borrowing without all conditions being
satisfied,  but, to the extent permitted by Law, that funding and issuance shall
not be deemed to be a waiver of the requirement that each condition precedent be
satisfied as a  prerequisite  for any  subsequent  funding or  issuance,  unless
Lenders specifically waive each item in writing.

SECTION 6    REPRESENTATIONS AND WARRANTIES.  Each Borrower represents and
warrants to the Credit Parties as follows:

         6.1  Purpose of Credit Facility.   Borrowers will use proceeds of the
Borrowings  hereunder for working capital and general  business  purposes of the
Companies  and  their   Unconsolidated   Affiliates.   No  Borrower  is  engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose of purchasing  or carrying any "margin  stock" within the
meaning of Regulation U of the Board of Governors of the Federal Reserve System,
as amended.  No part of the proceeds of any Borrowing will be used,  directly or
indirectly,  for a purpose that violates any Law,  including  the  provisions of
Regulation U.

         6.2  Corporate Existence, Good Standing, Authority and Compliance. Each
Company is duly formed, validly existing, and in good standing under the Laws of
the jurisdiction in which it is incorporated or formed as identified on Schedule
6.2 (as supplemented  from time to time).  Each Company (a) is duly qualified to
transact  business  and is in good  standing  as a foreign  trust,  corporation,
partnership,  limited  liability  company,  or other entity in each jurisdiction
where  the  nature  and  extent  of its  business  and  properties  require  due
qualification and good standing, (b) possesses all requisite authority, permits,
and power to conduct its business as is now being,  or is  contemplated  by this
Agreement to be,  conducted,  and (c) is in compliance with all applicable Laws,
except in any such case where violation of the foregoing could not reasonably be
expected to result in a Material Adverse Event.

         6.3  Affiliates.   As of the  date  of  this  Agreement,  ProLogis  has
no Consolidated  Affiliates or Unconsolidated  Affiliates except as disclosed on
Schedule 6.2 (as  supplemented  from time to time to reflect changes as a result
of transactions permitted by this Agreement).

         6.4  Authorization and Contravention.  The  execution and delivery by
each Borrower of each Loan  Document or related  document to which it is a party
and the  performance  by it of its  obligations  thereunder  (a) are  within its
trust, corporate,  partnership,  or limited liability company power, as the case
may be,  (b) have  been  duly  authorized  by all  necessary  trust,  corporate,
partnership,  or  limited  liability  company  action,  as the case may be,  (c)
require  no action by or filing  with any  Tribunal  (other  than any  action or
filing that has been taken or made on or before the date of this Agreement), (d)
do not violate any provision of its  Constituent  Documents,  (e) do not violate
any  provision  of Law or order of any  Tribunal  applicable  to it,  (f) do not
violate any material  agreements to which it is a party, or (g) do not result in
the creation or  imposition  of any Lien on any asset of any Company,  except in
such case where failure to do so could not reasonably be expected to result in a
Material Adverse Event.

         6.5  Binding Effect.   Upon  execution  and  delivery  by all  parties
thereto,  each Loan Document to which it is a party will  constitute a legal and
binding obligation of each Borrower,  enforceable  against it in accordance with
its terms,  subject to applicable  Debtor Relief Laws and general  principles of
equity.

<PAGE>

         6.6  Financial Statements; Fiscal Year.   The Current  Financials were
prepared in accordance with GAAP (except that quarterly Financial Statements may
omit footnotes  required by GAAP) and present fairly, in all material  respects,
the consolidated financial condition,  results of operations,  and cash flows of
the  Companies as of, and for the portion of the fiscal year ending on, the date
or dates  thereof  (subject  only to normal  audit  adjustments).  All  material
liabilities  of the Companies as of the date or dates of the Current  Financials
are reflected therein or in the notes thereto.  Except for transactions directly
related to, or specifically  contemplated by, the Loan Documents or disclosed in
the Current Financials,  no subsequent material adverse changes have occurred in
the  consolidated  financial  condition of the Companies  from that shown in the
Current  Financials,  nor has  any  Company  incurred  any  subsequent  material
liability. The fiscal year of the Companies ends on December 31.

         6.7  Litigation.  Except as  disclosed  on  Schedule  6.7 and as
otherwise disclosed pursuant to Section 7.1(d)(i),  no Company is subject to, or
aware  of the  threat  of,  any  Litigation  that  is  reasonably  likely  to be
determined adversely to such Company and which, if so adversely  determined,  is
reasonably  likely to result in a Material  Adverse  Event.  Except as permitted
under Section  10.4, no  outstanding  and unpaid  judgments  against any Company
exist.

         6.8  Taxes.

         (a) All Tax  returns of the  Companies  required  to be filed have been
filed (or extensions have been granted) before  delinquency,  except for returns
for which the  failure to file could not  reasonably  be expected to result in a
Material  Adverse  Event,  and all Taxes imposed upon the Companies that are due
and payable  have been paid before  delinquency  or are being  contested in good
faith by appropriate  proceedings diligently conducted and for which reserves in
accordance with GAAP or otherwise reasonably  acceptable to Administrative Agent
have been provided.

         (b) As of the date hereof,  no United States federal income tax returns
of the  "affiliated  group" (as defined in the Code) of which any  Borrower is a
member have been examined and closed.  The members of such affiliated group have
filed all United States  Federal  income tax returns and all other  material tax
returns  which  are  required  to be filed by them and have  paid all  taxes due
pursuant to such  returns or pursuant  to any  assessment  received by or any of
them.  The  charges,  accruals,  and  reserves on the books of each  Borrower in
respect of taxes or other governmental charges are, in the opinion of Borrowers,
adequate.

         (c) ProLogis qualifies as a REIT.

         6.9  Environmental Matters.   Except as  disclosed  on  Schedule  6.9,
and except for any of the  following  which could not  reasonably be expected to
result  in  a  Material  Adverse  Event,  (a)  no  environmental   condition  or
circumstance   exists  that  adversely  affects  any  Company's   properties  or
operations, (b) no Company has received any report of any Company's violation of
any  Environmental  Law,  (c) no  Company  knows  that any  Company is under any
obligation to remedy any violation of any Environmental  Law, or (d) no facility
of any  Company is used for,  or to the  knowledge  of any Company has been used
for, storage,  treatment, or disposal of any Hazardous Substance, except for (i)
the storage and use of cleaning and  maintenance  materials,  used and stored in
commercially   reasonable   quantities   and  in  compliance   with   applicable
Environmental Laws, and (ii) light manufacturing and distribution  activities of
tenants,  in compliance with applicable  Environmental  Laws, provided that such
tenants are not primarily  engaged in the  treatment,  processing,  recycling or
disposal of any  Hazardous  Substance or in any other  activity  that would give
rise to the release of any Hazardous  Substance on such  facility.  Each Company
has taken prudent steps to determine  that its  properties and operations do not
violate any  Environmental  Law, other than violations that,  individually or in
the aggregate,  could not reasonably be expected to result in a Material Adverse
Event.

<PAGE>

         6.10  Pension Plans.   Except as disclosed on the Financial  Statements
of ProLogis  dated as of December  31,  1999,  and except to the extent that any
such termination,  liability, penalty, or fine would not (either individually or
in the aggregate)  reasonably be expected to have a Material  Adverse Event, (a)
no steps have been taken to  terminate  any Pension  Plan,  and no  contribution
failure has occurred with respect to any Pension Plan sufficient to give rise to
a Lien under any Applicable  Pension Laws,  (b) no condition  exists or event or
transaction has occurred with respect to any Pension Plan which could reasonably
be expected to result in the  incurrence by any Borrower or any ERISA  Affiliate
of any material  liability with respect to any  contribution  thereto,  fine, or
penalty,  and (c) neither any Borrower nor any ERISA  Affiliate has any material
contingent liability with respect to any post-retirement benefit under a Pension
Plan.

         6.11  Properties.  Each  Company  has  good  title to all its  property
reflected on the Current  Financials  (except for  property  that is obsolete or
that has been disposed in the ordinary  course of business or, after the date of
this Agreement, as otherwise permitted by Section 8.8 or Section 8.9).

         6.12  Locations.   Each Borrower's  chief executive  office is located
at the  address  on  Schedule  6.12 (as  supplemented  from time to time).  Each
Borrower's books and records are located at its chief executive office.

         6.13  Government Regulations.   No Company is subject to regulation
under the  Investment  Company Act of 1940,  as amended,  or the Public  Utility
Holding Company Act of 1935, as amended.

         6.14  Transactions with Affiliates.   Except  as  disclosed on Schedule
6.14 (as  supplemented  from time to time) (if the  disclosures  are approved by
Administrative Agent) or as permitted by Section 8.4, no Company is a party to a
material transaction with any of its Affiliates,  other than transactions in the
ordinary  course of business and upon fair and  reasonable  terms not materially
less  favorable  than  it  could  obtain  or  could  become  entitled  to  in an
arm=s-length transaction with a Person that was not its Affiliate.

         6.15  Insurance.   Each Company  maintains  with  financially  sound,
responsible,  and  reputable  insurance  companies  or  associations  (or, as to
workers=  compensation  or  similar  insurance,  with  an  insurance  fund or by
self-insurance  authorized by the jurisdictions in which it operates)  insurance
concerning its properties and businesses  against  casualties and  contingencies
and of types  and in  amounts  (and with  co-insurance  and  deductibles)  as is
customary in the case of similar businesses.

         6.16  Labor Matters.  No actual or, to any Borrower's knowledge,
threatened strikes,  labor disputes,  slow downs,  walkouts,  or other concerted
interruptions  of  operations  by  the  employees  of  any  Company  that  could
reasonably be expected to result in a Material Adverse Event exist. All payments
due from each Company for employee  health and welfare  insurance have been paid
or accrued as a liability on its books,  other than  non-payments  that are not,
individually  or  collectively,  reasonably  expected  to result  in a  Material
Adverse Event.

         6.17  Solvency.   On each Borrowing  Date, each Borrower is, and after
giving effect to the requested Borrowing will be, Solvent.

<PAGE>

         6.18  Full Disclosure. Each material fact or condition  relating to the
financial  condition  or  business  of any Company  which  could  reasonably  be
expected  to  result  in  a  Material   Adverse  Event  has  been  disclosed  to
Administrative  Agent. All information  previously  furnished,  furnished on the
date  of  this  Agreement,  and  furnished  in the  future,  by any  Company  to
Administrative Agent in connection with the Loan Documents (a) was, is, and will
be, true and accurate in all material  respects or based on good faith estimates
on the date the  information is stated or certified,  and (b) did not, does not,
and will not,  fail to state  any  material  fact the  omission  of which  would
otherwise make any such information materially misleading, in each case taken as
a whole.

         6.19  Exemption from ERISA; Plan Assets.   The assets of each Borrower
are not "plan  assets" as defined in 29 C.F.R.Section 2510.3-101(a)(1)  (or any
successor regulation) of any Pension Plan.

         6.20  Minority Interests.   All Consolidated Affiliates of ProLogis
having minority  interests are set forth on Schedule 6.20 (as supplemented  from
time to time).

SECTION 7   AFFIRMATIVE CONVENANTS.   So long as Lenders are committed to fund
any  Borrowings  under this  Agreement and until the Obligation is paid in full,
each  Borrower  covenants and agrees that,  unless  Required  Lenders  otherwise
consent in writing  (except as provided in Section  14.9 with respect to matters
requiring consent or approval of all Lenders):

         7.1  Items to be Furnished.  ProLogis  shall cause the  following to be
furnished to  Administrative  Agent (with  sufficient  copies for each Lender):

         (a) Promptly  after  preparation,  and no later than one hundred  (100)
days after the last day of each fiscal year of  ProLogis,  Financial  Statements
showing the  consolidated  financial  condition and results of operations of the
Companies as of, and for the year ended on, that last day, accompanied by:

                  (i) the  unqualified  opinion of the firm of Arthur Andersen &
         Co. or  another  firm of  nationally-recognized  independent  certified
         public accountants, based on an audit using generally accepted auditing
         standards,  that the Financial  Statements  were prepared in accordance
         with  GAAP  and  present  fairly,   in  all  material   respects,   the
         consolidated  financial  condition  and  results of  operations  of the
         Companies;

                  (ii) any management  letter  prepared by the  accounting  firm
         delivered in connection with its audit;

                  (iii) a certificate from the accounting firm to Administrative
         Agent  indicating that during its audit it obtained no knowledge of any
         Default or Potential Default or, if it obtained  knowledge,  the nature
         and period of existence thereof; and

                  (iv) a Compliance  Certificate  with respect to the  Financial
         Statements.

         (b) Promptly after preparation, and no later than fifty (50) days after
the last day of each fiscal quarter (except the last) of ProLogis, (i) Financial
Statements  showing  the  consolidated   financial   condition  and  results  of
operations of the  Companies for the fiscal  quarter and for the period from the
beginning of the current fiscal year to the last day of the fiscal quarter,  and
(ii) a Compliance Certificate with respect to the Financial Statements.

         (c) Promptly  after  receipt,  a copy of each interim or special  audit
report and management  letter issued by independent  accountants with respect to
any Company or its financial records.

<PAGE>

         (d) Notice,  promptly after a Responsible Officer of any Borrower knows
of (i) the existence and status of any Litigation that, if determined  adversely
to any Company,  could  reasonably  be expected to result in a Material  Adverse
Event,  (ii) any change in any  material  fact or  circumstance  represented  or
warranted by any Company in any Loan Document,  (iii) the receipt by any Company
of notice of any violation or alleged violation of any Applicable Pension Law or
any Environmental  Law which  individually or collectively with other violations
or  allegations  could  reasonably  be expected to result in a Material  Adverse
Event, or (iv) a Default or Potential Default, specifying the nature thereof and
what action such Borrower has taken, is taking, or proposes to take with respect
thereto.

         (e) Promptly after filing,  true,  correct,  and complete copies of all
material  reports  or  filings  filed by or on  behalf of any  Company  with any
Tribunal  (including  copies of each Form 10-K, Form 10-Q, and Form S-8 filed by
or on behalf of any Company with the Securities and Exchange Commission).

         (f)  Promptly  after the  mailing or  delivery  thereof,  copies of all
material reports or other information from ProLogis  generally to the holders of
its common or preferred Stock.

         (g) Promptly upon the consummation thereof, a description in reasonable
detail  of  any  acquisition  of  material  assets  other  than  investments  in
Industrial Properties.

         (h) Promptly upon any Change in Control,  notice of such event together
with a description of the transaction giving rise thereto.

         (i) Promptly upon written  request by  Administrative  Agent and to the
extent available after reasonable inquiry by ProLogis,  a list of all registered
major holders of Stock of ProLogis.

         (j) Promptly  upon the filing  thereof,  the annual  report of ProLogis
filed with the Maryland Department of Corporations.

         (k)  Promptly  upon the  receipt  of notice  thereof,  and in any event
within five (5) Business Days after any change in the Moody's Rating,  the S & P
Rating or the Fitch Rating, notice of such change.

         (l)  Promptly  upon  reasonable   request  by   Administrative   Agent,
information  (not otherwise  required to be furnished  under the Loan Documents)
respecting the business affairs, assets, and liabilities of the Companies.

         7.2  Use of Proceeds.   Each  Borrower  shall  use  the  proceeds  of
Borrowings  only  for the  purposes  represented  in this Agreement.

         7.3  Books and Records.   Each Borrower shall,  and shall cause each of
the other  Companies to,  maintain  books,  records,  and accounts  necessary to
prepare financial statements in accordance with GAAP.

<PAGE>

         7.4  Inspections.   Upon reasonable request,  and subject to Section
14.13,  each  Borrower  shall,  and shall cause each of the other  Companies to,
allow  Administrative  Agent (or its  Representatives  who may be accompanied by
Representatives of one (1) or more Lenders) to inspect any of its properties, to
review reports,  files,  and other records and to make and take away copies,  to
conduct tests or investigations,  and to discuss (provided that such Borrower is
given the opportunity to be present for such  discussions),  any of its affairs,
conditions,  and  finances  with  its  other  creditors,   directors,  officers,
employees,  or  representatives  from time to time, during  reasonable  business
hours.

          7.5  Taxes.  Each Borrower shall,  and shall cause each of the other
Companies  to, (a) promptly pay when due any and all Taxes (other than  property
and  franchise  Taxes),  and (b) promptly pay any and all property and franchise
Taxes when due or (in circumstances  where there is no material risk of any levy
or  execution  of any Lien on the assets or  revenues  in relation to which such
property or franchise  Taxes are imposed  prior to or during the thirty (30) day
period  referred to below and no material risk of attachment or similar  process
in relation  to such  assets or revenues  prior to or during the thirty (30) day
period referred to below and provided that in such  circumstances  the aggregate
amount of such property or franchise Taxes does not exceed  $10,000,000)  within
thirty (30) days of receipt of notice by the  relevant  Company  that such Taxes
are due and  payable.  This Section 7.5 shall not apply to Taxes which are being
contested  in good faith by lawful  proceedings  diligently  conducted,  against
which reserve or other provision  required by GAAP has been made, and in respect
of which levy and execution of any Lien have been and continue to be stayed.

         7.6  Expenses.   Each  Borrower  shall  promptly  pay upon  reasonable
notice (a) all costs,  fees,  and  expenses  paid or incurred by  Administrative
Agent in connection with the  arrangement,  syndication,  and negotiation of the
loan  evidenced  by  this  Agreement  and  the  other  Loan  Documents  and  the
negotiation,  preparation, delivery, and execution of the Loan Documents and any
related  amendment,  waiver,  or consent  (including in each case the reasonable
fees and expenses of Administrative  Agent's counsel),  and (b) all costs, fees,
and expenses of  Administrative  Agent and,  after the occurrence and during the
continuance  of a Default,  each Credit  Party  incurred by each Credit Party in
connection  with the enforcement of the obligations of any Borrower or Borrowers
arising under the Loan Documents or the exercise of any Rights arising under the
Loan Documents (including reasonable  attorneys= fees, expenses,  and costs paid
or incurred in connection  with any workout or restructure  and any action taken
in connection with any Debtor Relief Laws),  all of which shall be a part of the
Obligation  and shall  bear  interest,  if not paid  within  ten (10) days after
Borrowers= receipt of an invoice in reasonable detail, at the Default Rate until
repaid.

         7.7  Maintenance of Existence, Assets, and Business.   Except as
otherwise  permitted by Section 8.09, each Borrower shall,  and shall cause each
of the other  Companies  to,  continue to engage in business of the same general
type as now conducted by such Company,  and will  preserve,  renew,  and keep in
full force and effect, and will cause each other Company to preserve, renew, and
keep in full force and effect, their respective trust or corporate existence and
their respective rights, privileges and franchises necessary or desirable in the
normal conduct of business, except in any such case where failure to do so would
not reasonably be expected to result in a Material Adverse Event.

         7.8  Insurance.   Each Borrower shall,  and shall cause each of the
other Companies to, maintain with financially sound, responsible,  and reputable
insurance companies or associations (or, as to workers'  compensation or similar
insurance,  with  an  insurance  fund  or by  self-insurance  authorized  by the
jurisdictions  in which it operates)  insurance  concerning  its  properties and
businesses against casualties and contingencies and of types and in amounts (and
with  co-insurance  and  deductibles)  as is  customary  in the case of  similar
businesses.   Each  Borrower  shall  deliver  to  Administrative  Agent  (i)  at
Administrative  Agent's  request from time to time,  full  information as to the
insurance  carried,  (ii)  within  five (5) days of receipt  of notice  from any
insurer,  a copy of any notice of  cancellation  or material  change in coverage
from that existing on the date of this Agreement, and (iii) forthwith, notice of
any cancellation or non-renewal of coverage by such Borrower.  At Administrative
Agent=s  request,  each  Borrower  shall,  and  shall  cause  each of the  other
Companies to,  deliver to  Administrative  Agent  evidence of insurance for each
policy of insurance and evidence of payment of all premiums.

<PAGE>

         7.9  Preservation and Protection of Rights.   Each Borrower shall,
and  shall  cause  each of the other  Companies  to,  perform  the acts and duly
authorize,  execute,  acknowledge,  deliver,  file,  and record  any  additional
writings as Administrative Agent may reasonably deem necessary or appropriate to
preserve and protect the Rights of  Administrative  Agent and Lenders  under any
Loan Document.

         7.10  Environmental Laws.   Each Borrower  shall,  and shall cause each
of the other  Companies  to (a)  conduct  its  business so as to comply with all
applicable  Environmental  Laws and shall  promptly  take  corrective  action to
remedy any  non-compliance  with any Environmental  Law, except where failure to
comply or take action could not  reasonably  be expected to result in a Material
Adverse Event,  and (b) establish and maintain a management  system  designed to
ensure compliance with applicable  Environmental Laws and minimize financial and
other risks to the Companies arising under applicable  Environmental  Laws or as
the result of  environmentally  related  injuries to Persons or  property.  Each
Borrower  shall deliver  reasonable  evidence of  compliance  with the foregoing
covenant to Administrative  Agent within thirty (30) days after any request from
Administrative Agent.

         7.11  Indemnification.  EACH  BORROWER  SHALL,  AND  SHALL  CAUSE  EACH
OF THE SUBSIDIARY GUARANTORS TO INDEMNIFY,  PROTECT, AND HOLD THE CREDIT PARTIES
AND THEIR RESPECTIVE  REPRESENTATIVES,  SUCCESSORS,  AND ASSIGNS  (INCLUDING ALL
OFFICERS,  DIRECTORS,  EMPLOYEES,  AND AGENTS)  (COLLECTIVELY,  THE "INDEMNIFIED
PARTIES")  HARMLESS  FROM  AND  AGAINST  ANY AND ALL  LIABILITIES,  OBLIGATIONS,
LOSSES, DAMAGES,  PENALTIES,  ACTIONS, JUDGMENTS, SUITS, CLAIMS, AND PROCEEDINGS
AND ALL COSTS,  EXPENSES  (INCLUDING  ALL REASONABLE  ATTORNEYS'  FEES AND LEGAL
EXPENSES WHETHER OR NOT SUIT IS BROUGHT) AND DISBURSEMENTS OF ANY KIND OR NATURE
(THE "INDEMNIFIED  LIABILITIES") THAT MAY AT ANY TIME BE IMPOSED ON, INCURRED BY
OR ASSERTED AGAINST THE INDEMNIFIED  PARTIES,  IN ANY WAY RELATING TO OR ARISING
OUT OF (A) THE DIRECT OR INDIRECT  RESULT OF THE VIOLATION BY ANY COMPANY OF ANY
ENVIRONMENTAL  LAW,  (B)  ANY  COMPANY'S  GENERATION,  MANUFACTURE,  PRODUCTION,
STORAGE,  RELEASE,  THREATENED  RELEASE,  DISCHARGE,  DISPOSAL,  OR  PRESENCE IN
CONNECTION  WITH ITS  PROPERTIES  OF A HAZARDOUS  SUBSTANCE  (INCLUDING  (I) ALL
DAMAGES  OF ANY USE,  GENERATION,  MANUFACTURE,  PRODUCTION,  STORAGE,  RELEASE,
THREATENED RELEASE,  DISCHARGE,  DISPOSAL, OR PRESENCE, OR (II) THE COSTS OF ANY
ENVIRONMENTAL INVESTIGATION,  MONITORING, REPAIR, CLEANUP, OR DETOXIFICATION AND
THE PREPARATION AND IMPLEMENTATION OF ANY CLOSURE, REMEDIAL, OR OTHER PLANS), OR
(C) THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN. ALTHOUGH
EACH INDEMNIFIED  PARTY HAS THE RIGHT TO BE INDEMNIFIED UNDER THE LOAN DOCUMENTS
FOR ITS OWN  ORDINARY  NEGLIGENCE,  NO  INDEMNIFIED  PARTY  HAS THE  RIGHT TO BE
INDEMNIFIED  UNDER THE LOAN DOCUMENTS FOR ITS OWN FRAUD,  GROSS  NEGLIGENCE,  OR
WILLFUL  MISCONDUCT.  THE PROVISIONS OF AND UNDERTAKINGS AND INDEMNIFICATION SET
FORTH IN THIS SECTION  7.12 SHALL  SURVIVE THE  SATISFACTION  AND PAYMENT OF THE
OBLIGATION AND TERMINATION OF THIS AGREEMENT.

         7.12  REIT Status.   At all times, ProLogis (including its organization
and method of operations and those of its subsidiaries) shall qualify as a REIT.

         7.13  Each Borrower shall,  promptly after the date hereof,  enter into
such Hedging  Agreements in respect of interest  rate and currency  risks as are
reasonably acceptable to Administrative Agent.

<PAGE>

         7.14   Subsidiary Guaranties; Intercompany Indebtedness.

         (a) ProLogis  shall cause each of its  Consolidated  Affiliates  (other
than  Subsidiary  Borrowers,   International  Holding  Companies,  International
Consolidated  Affiliates,  and the  Consolidated  Affiliates  listed on Schedule
7.14-1) to execute a Subsidiary Guaranty.  To the fullest extent permitted under
applicable  Laws,  ProLogis shall cause each of its  International  Consolidated
Affiliates  (other than  Frigoscandia  and  Kingspark  if either is or becomes a
Consolidated  Affiliate) and its  International  Holding  Companies to execute a
Subsidiary  Guaranty,  except to the extent that the  execution  of a Subsidiary
Guaranty would result in material adverse tax Liabilities to any Borrower in the
United States.

         (b) Pursuant to the Pledge Agreements,  ProLogis shall, and shall cause
each of its Consolidated  Affiliates to, grant to Administrative  Agent, for the
benefit of the Credit Parties, a first-priority  Lien in all Indebtedness of (i)
each Consolidated Affiliate of ProLogis that is not a Subsidiary Guarantor,  and
(ii) each  Unconsolidated  Affiliate  (and its  Consolidated  Affiliates) to any
Company if the aggregate amount of Indebtedness of such Unconsolidated Affiliate
(and its Consolidated  Affiliates) to any Company or Companies equals or exceeds
$10,000,000,  including, without limitation, the existing Indebtedness listed on
Schedule  7.14-2,  except to the  extent  that the  granting  of such Lien would
result in material adverse tax Liabilities to any Borrower in the United States.

SECTION I     NEGATIVE COVENANTS.  So long as Lenders are committed to fund
Borrowings and until the Obligation is paid in full, each Borrower covenants and
agrees that,  unless Required  Lenders  otherwise  consent in writing (except as
provided in Section 14.9 with respect to matters  requiring  consent or approval
of all Lenders):

         8.1  Payment of Liabilities.   Borrowers  shall  not,  and  shall  not
permit any other Company to,  voluntarily  prepay  principal of, or interest on,
any  Liabilities  other than the Obligation,  if a Default or Potential  Default
exists.

         8.2  Employee Plans. Except  where a Material  Adverse  Event would not
result, Borrowers shall not, and shall not permit any ERISA Affiliate to, permit
any of the events or circumstances described in Section 6.10 to exist or occur.

         8.3   Debt.

         (a) Secured Debt.  Borrowers  shall not, and shall not permit any other
Company to, as of any date during the term hereof,  create,  incur, or suffer to
exist any Secured Debt, other than Secured Debt that is either:

                  (i)  on-Recourse  Debt not to exceed in the  aggregate at any
         time outstanding twenty-five percent (25%) of Total Asset Value; and

                  (ii) Recourse Debt secured by International  Properties not to
         exceed $300,000,000 in the aggregate at any time outstanding.

<PAGE>

         (b) Recourse Debt.  Borrowers shall not, and shall not permit any other
Company to, become  obligated  (as  guarantor or otherwise)  with respect to any
Indebtedness  of any  Unconsolidated  Affiliate  other than  Indebtedness of (i)
Unconsolidated  Affiliates that guarantee the Obligation  pursuant to a guaranty
agreement in form and substance acceptable to Administrative Agent, (ii) Garonor
not to  exceed  200,000,000  French  Francs,  (iii)  Frigoscandia  not to exceed
180,000,000  Deutsche Marks, and (iv) Kingspark not to exceed 15,000,000 British
Pound Sterling.

         8.4  Transactions with Affiliates.   Except as disclosed on Schedule
6.14 (as  supplemented  from  time to time to  reflect  changes  as a result  of
transactions  permitted  by this  Agreement  or approved  by Required  Lenders),
Borrowers  shall not, and shall not permit any other  Company to, enter into any
material  transaction  with any of its Affiliates,  other than (a)  transactions
with  existing  shareholders  of  Consolidated   Affiliates  and  Unconsolidated
Affiliates,  (b)  transactions  in the ordinary course of business and upon fair
and reasonable terms not materially less favorable than it could obtain or could
become entitled to in an arm's-length transaction with a Person that was not its
Affiliate or that comply with the  requirements  of the North  America  Security
Administrators  Association's  Statement  of  Policy of Real  Estate  Investment
Trusts, (c) payments to or from such Affiliates under leases of commercial space
on market terms, (d) payment of fees under property management  agreements under
terms  and  conditions  available  from  qualified  management  companies,   (e)
intercompany  Liabilities  and other  Investments  between  any  Company and its
Consolidated  Affiliates  and  Unconsolidated   Affiliates  otherwise  permitted
pursuant  to  this  Agreement,  (f)  transactions  between  Companies,  and  (g)
transactions otherwise permitted hereunder.

         8.5  Compliance with Laws and Documents.   Borrowers  shall not, and
shall not permit any other  Company to, (a) violate the  provisions  of any Laws
applicable  to it or of any  material  agreement  to which it is a party if that
violation alone, or when aggregated with all other violations,  could reasonably
be expected to result in Material  Adverse Event,  (b) violate the provisions of
its charter or bylaws,  or (c)  repeal,  replace or amend any  provision  of its
charter or bylaws if that  action  could  reasonably  be expected to result in a
Material Adverse Event.

         8.6  Loans, Advances, and Investments.    ProLogis  shall not  permit,
as of any date, any Company or the Companies,  on a consolidated  basis, to have
or make any direct or indirect Investments in:

         (a) Raw  land  (other  than  land  under  development  or  planned  for
commencement  of development  within twelve (12) months  following the date such
land was  acquired)  exceeding in the aggregate ten percent (10%) of Total Asset
Value;

         (b)  Non-Industrial  Properties  and  New  Ventures  exceeding  in  the
aggregate ten percent (10%) of Total Asset Value;

         (c) Refrigerated  Warehouse Properties  (including  Investments through
Unconsolidated  Affiliates)  exceeding in the aggregate  twenty percent (20%) of
Total Asset Value;

         (d) International Properties, Consolidated Affiliates domiciled outside
of the United States,  Unconsolidated Affiliates domiciled outside of the United
States,  and loans or advances to  Consolidated  Affiliates  and  Unconsolidated
Affiliates for international  purposes  exceeding in the aggregate forty percent
(40%) of Total Asset Value;

         (e) The Stock of any Person (other than Consolidated Affiliates) not to
exceed (i) from the Closing Date through December 31, 2000, thirty percent (30%)
of Total Asset Value,  and (ii) thereafter,  twenty-five  percent (25%) of Total
Asset Value; and

<PAGE>

         (f) Loans, advances, and extensions of credit to Persons other than (i)
loans,  advances,  and  extensions  of credit  to  Consolidated  Affiliates  and
Unconsolidated  Affiliates  to  the  extent  permitted  hereunder,  (ii)  loans,
advances,  and extensions of credit to Persons  secured by valid and enforceable
first  priority liens on real estate for the purpose of acquiring and developing
such property for eventual  ownership by, or to be acquired by, a Borrower prior
to, or within a reasonable  period of time  consistent  with a business  purpose
after,  the completion of  construction  or development of such property,  (iii)
loans and advances to directors,  officers,  and employees pursuant to ProLogis'
existing   long-term   incentive   plan  or   similar   incentive   compensation
arrangements,  and (iv) travel and similar advances to officers and employees in
the ordinary course of business.

ProLogis shall not permit,  as of any date, the Companies=  aggregate direct and
indirect  Investments of the types  described in (a), (b), (c), and (d) above to
exceed in the aggregate fifty percent (50%) of Total Asset Value.

For purposes of the foregoing, (i) the amount of any Investment held by ProLogis
and its  Consolidated  Affiliates  shall be  calculated  as the  amount  of such
Investment determined in accordance with GAAP plus accumulated depreciation with
respect to such  Investment,  and (ii) the amount of  Investments  held  through
Unconsolidated  Affiliates shall be calculated using the Companies= Share of the
amount of the  underlying  Properties  or other  assets  of such  Unconsolidated
Affiliates determined in accordance with GAAP plus accumulated depreciation with
respect to such Properties or other assets.

         8.7  Dividends and Distributions. ProLogis shall not, on a consolidated
basis,  declare,  make, or pay any Distributions or Redemptions,  other than (a)
Permitted  Distributions,  (b)  Permitted  Redemptions,  and  (c)  Distributions
declared,  made,  or paid by (i) ProLogis  wholly in the form of its Stock,  and
(ii) to the extent it can do so, any  Consolidated  Affiliate to ProLogis or any
other  Company.  ProLogis  shall not, and shall not permit any other Company to,
enter into or permit to exist any  arrangement  or  agreement  (other  than this
Agreement,  restrictions  similar to those contained in this Agreement contained
in that certain Multicurrency Revolving Credit Facility Agreement dated December
17, 1999, executed by ProLogis, as Guarantor,  PLD Europe Financial B.V. and PLD
UK Finance B.V., as Borrowers,  ABN Amro Bank N.V., as Arranger,  Agent, and L/C
Issuing Bank, and the Banks defined therein, and customary  restrictions in loan
documents evidencing  Indebtedness of PLLS and Frigoscandia  otherwise permitted
hereunder)  that  prohibits it from paying  Distributions  to the holders of its
Stock.

         8.8  Sale of Assets.   Borrowers  shall not, and  shall  not permit any
other Company to, sell, assign, lease,  transfer, or otherwise dispose of any of
its  assets,  other than to a Company,  and  except  for (a)  occasional  sales,
leases,  or other  dispositions of immaterial  assets for consideration not less
than fair market value, (b) sales,  leases, or other dispositions of assets that
are obsolete or have negligible fair market value,  (c) sales of equipment for a
fair and adequate  consideration (but if replacement  equipment is necessary for
the proper  operation  of the business of the seller,  the seller must  promptly
replace the sold  equipment),  and (d) sales or other  transfers  of  Properties
during any twelve (12) month period  having a fair market value of not more than
twenty percent (20%) of the fair market value of all Properties of the Companies
prior to such sale or transfer.

         8.9  Mergers and Dissolutions.   Borrowers  shall  not, and  shall  not
permit any other  Company  to,  merge or  consolidate  with any other  Person or
liquidate,  wind up or  dissolve  (or suffer any  liquidation  or  dissolution);
provided,  however,  that the foregoing shall not operate to prevent (a) mergers
or consolidations of any Consolidated Affiliate of a Borrower into such Borrower
or any  Consolidated  Affiliate of such Borrower (if such  transaction  does not
reduce the net worth of such Borrower determined in accordance with GAAP, except
for minor transaction costs related to such merger or  consolidation),  or (b) a
merger  or  consolidation  in which a  Borrower  is the  surviving  entity  and,
immediately  after giving effect to such merger or  consolidation,  no Change in
Control has occurred.

<PAGE>

         8.10  Assignment.    Borrowers  shall not,  and  shall not permit  any
other Company to, assign or transfer any of its Rights,  duties,  or obligations
under any of the Loan Documents.

         8.11  Fiscal Year and Accounting Methods.   No  Borrower  shall  change
its fiscal year or its method of accounting  (other than  immaterial  changes in
methods or as required by GAAP).

         8.12  New Businesses.    Borrowers  shall not,  and shall not permit
any other Company to, engage in any business  except (a) the businesses in which
they are presently engaged and any other reasonably related business  (including
distribution  and  logistics  services),  and (b) New  Ventures  (so long as the
Investment in such New Ventures is otherwise permitted by Section 8.6).

         8.13  Government Regulations.    Borrowers  shall not,  and shall not
permit any other  Company  to,  conduct  its  business  in a way that it becomes
regulated  under the Investment  Company Act of 1940, as amended,  or the Public
Utility Holding Company Act of 1935, as amended.

         8.14  Negative Pledge Agreements.   Borrowers shall not, and shall  not
permit any other Company to, enter into any negative  pledge or other  agreement
with any other  Person  such that  ProLogis,  any  Subsidiary  Borrower,  or any
Unencumbered Company shall be prohibited from granting to Administrative  Agent,
for the benefit of the Credit Parties, a first priority Lien in any Unencumbered
Property whose Adjusted EBITDA is used in the  calculation of Unencumbered  Debt
Service Coverage Ratio. Nothing herein should be construed as creating a Lien.

SECTION 9      FINANCIAL COVENANTS.  So long as Lenders are committed to fund
Borrowings  under this  Agreement and until the Obligation is paid and performed
in full,  ProLogis  covenants  and agrees with the Credit  Parties that ProLogis
will not directly or indirectly permit:

         9.1  Leverage Ratio.  The Leverage Ratio, as of any date, to exceed the
Maximum Leverage Ratio.

          9.2  Minimum Consoldiated Net Worth.   Consolidated  Net Worth of the
Companies on a  consolidated  basis,  as of any date, to be less than the sum of
(a) $2,500,000,000, plus (b) seventy percent (70%) of the amount of Net Proceeds
of any Equity  Issuances  (other  than the Net  Proceeds  from the  issuance  of
preferred  Stock in  substitution  and replacement of other preferred Stock that
ProLogis redeemed or otherwise  acquired  pursuant to a Permitted  Redemption to
the  extent  such Net  Proceeds  do not  exceed  the  amount  of such  Permitted
Redemption) by ProLogis or any other Company  (except for Equity Issuance to any
other Company) subsequent to the Closing Date.

         9.3  Interest Expense Coverage Ratio.  The  Interest  Expense  Coverage
Ratio,  as of the last day of each fiscal quarter during the term hereof,  to be
less than 2.0 to 1.0.

         9.4  Fixed Charge Coverage Ratio.   The Fixed Charge  Coverage  Ratio,
as of the last day of each fiscal  quarter  during the term  hereof,  to be less
than 1.75 to 1.0.

         9.5  Preferred Dividend Coverage Ratio.   The  Preferred  Dividend
Coverage  Ratio,  as of the  last day of each  fiscal  quarter  during  the term
hereof, to be less than 1.5 to 1.0.

<PAGE>

         9.6  Unemcumbered Debt Service Coverage Ratio.   The Unencumbered  Debt
Service  Coverage  Ratio,  as of the last day of each fiscal  quarter during the
term hereof, to be less than 1.75 to 1.0.

         9.7  Unencumbered Property Value Ratio.    The Unencumbered Property
Value Ratio, as of any date, to be less than 1.50 to 1.0.

SECTION 10    DEFAULT.  The term "Default" means the occurrence of any one or
more of the following events:

         10.1  Payment of Obligation.  The  failure of any  Borrower  (a) to pay
any part of the Obligation (other than the Principal Debt or any other principal
of the Obligation)  within three (3) days after it becomes due and payable under
the Loan Documents,  and (b) to pay any Principal Debt or any other principal of
the Obligation when it becomes due and payable under the Loan Documents.

         10.2  Covenents.   The  failure  of  any  Borrower (and, if applicable,
any other Company) to punctually and properly perform, observe and comply with:

         (a)   Any applicable covenant or agreement contained in Sections 7.15,
8.3, 8.7, 8.14, and 9; or

         (b)   Any other covenant or agreement  contained  in any Loan  Document
(other than the covenants to pay the  Obligation and the covenants in clause (a)
preceding),  and such failure  continues for thirty (30) days after the first to
occur of (i) a Responsible  Officer of any Borrower obtaining  knowledge or (ii)
Borrowers' receipt of notice from Administrative Agent, of such failure.

         10.3  Debtor Relief.   Any Company (a) is not Solvent, (b) fails to pay
its Liabilities  generally as they become due, (c) voluntarily  seeks,  consents
to, or  acquiesces  in the  benefit of any Debtor  Relief  Law, or (d) becomes a
party to or is made the  subject of any  proceeding  provided  for by any Debtor
Relief  Law,  other  than as a  creditor  or  claimant,  that  could  suspend or
otherwise  adversely  affect the Rights of any Credit Party  granted in the Loan
Documents (unless, if the proceeding is involuntary,  the applicable petition is
dismissed within ninety (90) days after its filing).

         10.4  Judgments and Attachments.   Any Company fails, within sixty (60)
days after entry, to pay, bond or otherwise  discharge any judgment or order for
the payment of money in excess of $5,000,000  (individually  or collectively) or
any  warrant of  attachment,  sequestration  or similar  proceeding  against any
Company's  assets having a value  (individually  or  collectively)  in excess of
$5,000,000 which is neither (a) stayed on appeal nor (b) diligently contested in
good faith by appropriate  proceedings and for which adequate reserves have been
set aside on its books in accordance with GAAP.

         10.5  Government Action.  (a) A final non-appealable order is issued by
any Tribunal  (including  the United States  Justice  Department)  requiring any
Company  to  divest  all or a  substantial  portion  of  its  assets  under  any
antitrust,  restraint  of trade,  unfair  competition,  industry  regulation  or
similar Laws, or (b) any Tribunal condemns,  seizes, or otherwise  appropriates,
or takes custody or control of all or any  substantial  portion of the assets of
the Companies, taken as a whole.

         10.6  Misrepresentation.   Any material representation or warranty made
by any Borrower or any Subsidiary Guarantor contained in any Loan Document or in
any  certificate or report  delivered under this Agreement at any time proves to
have been incorrect in any material respect when made.

<PAGE>

         10.7  Default Under Other Agreements.

         (a) Any  Company  shall  fail to make any  payment  in  respect  of any
Liability  when due or within any  applicable  grace  period;  provided that the
failure of any  Company to make any  payment  when due or within any  applicable
grace period in respect of (i) any Recourse  Debt arising in one or more related
or  unrelated  transactions  in an  aggregate  principal  amount  not  exceeding
$10,000,000,  and  (ii)  any  non-recourse  Liabilities  arising  in one or more
related or unrelated transactions in an aggregate principal amount not exceeding
$50,000,000, shall not constitute a Default hereunder; or

         (b) the  acceleration of the maturity of any Liabilities of any Company
or default  shall occur in the payment of any  Liabilities  of any Company or in
respect of any note or credit  agreement  relating to any such  Liabilities  and
such default shall continue for more than the period of grace, if any, specified
therein  or  otherwise  granted  by  the  lender  thereof;   provided  that  the
acceleration  of the  maturity of (i) any  Recourse  Debt arising in one or more
related or unrelated transactions in an aggregate principal amount not exceeding
$10,000,000,  and  (ii)  any  non-recourse  Liabilities  arising  in one or more
related or unrelated transactions in an aggregate principal amount not exceeding
$50,000,000 shall not constitute a Default hereunder;

         10.8  Validity and Enforceability of Loan Documents.  Except  in
accordance with its terms or as otherwise expressly permitted by this Agreement,
any Loan Document at any time after its  execution and delivery  ceases to be in
full force and effect in any material respect or is declared by a Tribunal to be
null and void or its validity or  enforceability  is contested by any Company or
any Company denies that it has any further  liability or  obligations  under any
Loan Document to which it is a party (including the termination or revocation of
any guaranty of the  Obligation  other than as a result of a sale or dissolution
of any Subsidiary Guarantor otherwise permitted hereunder).

         10.9  Management Changes.

         (a) During  any  period of twelve  (12)  consecutive  calendar  months,
individuals  who were directors or trustees of ProLogis on the first day of such
period  shall  cease to  constitute  a  majority  of the board of  directors  or
trustees of  ProLogis;  provided,  however,  that the  directors  or trustees of
ProLogis  may  include  new  directors  or  trustees  that (i) are an officer or
employee  of an  Affiliate,  or (ii) that are  required in order (as a practical
matter) for the majority of the board of directors or trustees of ProLogis to be
independent directors or trustees.

         (b) Any Borrower shall change its present executive  management,  which
change could result in a Material Adverse Event.

         (c) ProLogis  shall cease to own more than fifty  percent  (50%) of the
issued  and  outstanding  voting  Stock of any  Subsidiary  Borrower  unless all
Borrowings of such Subsidiary Borrower have been paid in full.

         10.10  Plan Assets.  The assets of any Borrower at any time  constitute
"plan assets" as defined in 29 C.F.R. Section 2510.3-101(a)(1) (or any successor
regulation).

<PAGE>

SECTION 11     RIGHTS AND REMEDIES.

         11.1  Remedies Upon Default.

         (a) If a Default (i) occurs under Section 10.3(c) or (ii) occurs and is
continuing  under Section  10.3(a),  (b) or (d), the commitment to extend credit
under this Agreement  automatically  terminates and the entire unpaid balance of
the Obligation  automatically  becomes due and payable without any action of any
kind whatsoever.

         (b) If a Default  occurs  and is  continuing,  subject  to the terms of
Section  12.3(b)  and  Section  12.10,  Administrative  Agent may,  and upon the
request of Required  Lenders shall, do any one or more of the following:  (i) if
the maturity of the  Obligation has not already been  accelerated  under Section
11.1(a),  declare the entire unpaid balance of all or any part of the Obligation
immediately due and payable, whereupon it is due and payable; (ii) terminate the
commitments of Lenders to extend credit under this  Agreement;  (iii) reduce any
claim to judgment;  (iv) to the extent  permitted  by Law,  exercise (or request
each Lender to, and each Lender is entitled to,  exercise)  the Rights of offset
or banker=s  Lien against the  interest of each Company in and to every  account
and other  property of such  Company  that are in the  possession  of any Credit
Party to the  extent of the full  amount of the  Obligation  (and to the  extent
permitted by Law, each Company is deemed directly obligated to each Credit Party
in the full amount of the Obligation for this purpose); and (v) exercise any and
all other legal or equitable Rights afforded by the Loan Documents,  the Laws of
the State of Texas, or any other applicable jurisdiction.

         11.2  Waivers.  To the extent  permitted by Law, each Borrower  waives
presentment and demand for payment,  protest, notice of intention to accelerate,
notice of  acceleration,  and notice of protest and nonpayment,  and agrees that
its liability  with respect to all or any part of the Obligation is not affected
by any  renewal  or  extension  in the time of payment of all or any part of the
Obligation,  by any indulgence,  or by any release or change in any security for
the payment of all or any part of the Obligation.

         11.3  Performance by Administrative Agent.   If  any  covenant,  duty,
or agreement of any Company is not performed in accordance with the terms of the
Loan Documents,  then  Administrative  Agent may, while a Default exists, at its
option, perform or attempt to perform that covenant, duty or agreement on behalf
of such  Company  (and  any  amount  expended  by  Administrative  Agent  in its
performance or attempted  performance is payable by Borrowers to  Administrative
Agent on demand,  becomes  part of the  Obligation,  and bears  interest  at the
Default Rate from the date of  Administrative  Agent=s  expenditure until paid).
However,  no Credit Party assumes or shall have,  except by its express  written
consent,  any liability or  responsibility  for the performance of any covenant,
duty, or agreement of any Company.

         11.4  Not in Control.   None of the  covenants  or  other  provisions
contained  in any Loan  Document  shall,  or shall be deemed to, give any Credit
Party the Right to exercise  control over the assets  (including real property),
affairs, or management of any Company; the power of each Credit Party is limited
to the Right to exercise the remedies provided in this Section 11.

<PAGE>

         11.5  Course of Dealing.   The  acceptance  by any Credit  Party of any
partial  payment  on the  Obligation  shall  not be deemed to be a waiver of any
Default then  existing.  No waiver by any Credit  Party of any Default  shall be
deemed to be a waiver of any other then-existing or subsequent Default. No delay
or omission by any Credit Party in exercising any Right under the Loan Documents
will impair that Right or be construed as a waiver  thereof or any  acquiescence
therein,  nor will any single or partial exercise of any Right preclude other or
further  exercise  thereof or the  exercise  of any other  Right  under the Loan
Documents or otherwise.

         11.6  Cumulative Rights.   All Rights  available to the Credit  Parties
under the Loan  Documents are  cumulative of and in addition to all other Rights
granted to the Credit Parties at law or in equity, whether or not the Obligation
is due and payable and whether or not any Credit Party has  instituted  any suit
for  collection,  foreclosure,  or  other  action  in  connection  with the Loan
Documents.

         11.7  Application of Proceeds.   Any and all  proceeds  ever  received
by any Credit Party from the exercise of any Rights pertaining to the Obligation
shall be applied to the Obligation according to Section 3.11.

         11.8  Diminution in Value of Collateral.   No  Credit  Party  has  any
liability or responsibility whatsoever for any diminution in or loss of value of
any  collateral now or hereafter  securing  payment or performance of all or any
part of the Obligation  (other than diminution in or loss of value caused by its
gross negligence or willful misconduct).

         11.9  Certain Proceedings.   Each  Borrower  will  promptly  execute
and  deliver,  or  cause  the  execution  and  delivery  of,  all  applications,
certificates,  instruments, registration statements, and all other documents and
papers any Credit Party reasonably  requests in connection with the obtaining of
any  consent,  approval,  registration,   qualification,   permit,  license,  or
authorization  of any Tribunal or other Person  necessary or appropriate for the
effective exercise of any Rights under the Loan Documents. Because each Borrower
agrees that the Credit  Parties'  remedies at Law for failure of any Borrower to
comply  with the  provisions  of this  paragraph  would be  inadequate  and that
failure would not be adequately  compensable  in damages,  each Borrower  agrees
that the covenants of this Section 11.9 may be specifically enforced.

SECTION 12     AGENTS AND LENDERS.

         12.1     Agents.

         (a)  Appointment.   Each  Lender  appoints  Administrative  Agent  (and
Administrative  Agent accepts appointment) as its nominee and agent, in its name
and on its behalf:  (i) to act as its nominee and on its behalf in and under all
Loan  Documents;  (ii) to  arrange  the means  whereby  its funds are to be made
available to Borrowers under the Loan  Documents;  (iii) to take any action that
it properly  requests  under the Loan Documents  (subject to the  concurrence of
other Lenders as may be required under the Loan Documents);  (iv) to receive all
documents  and items to be furnished to it under the Loan  Documents;  (v) to be
the secured  party,  mortgagee,  beneficiary,  recipient,  and similar  party in
respect of any collateral,  if any, for the benefit of Lenders; (vi) to promptly
distribute to it all Financial Statements, notices received hereunder, and other
items  specifically  required to be delivered to it hereunder and, upon request,
such other material information,  requests,  documents,  and items received from
any Borrower under the Loan  Documents;  (vii) to promptly  distribute to it its
ratable part of each payment or prepayment  (whether  voluntary,  as proceeds of
collateral  upon or after  foreclosure,  as proceeds of  insurance  thereon,  or
otherwise) in accordance with the terms of the Loan Documents; (viii) to deliver
to the appropriate Persons requests,  demands,  approvals, and consents received
from it; and (ix) to arrange for inspections  pursuant to Section 7.4.  However,
Administrative  Agent may not be required to take any action that  exposes it to
personal liability or that is contrary to any Loan Document or applicable Law.

<PAGE>

         (b)  Successor.  Administrative  Agent may assign all of its Rights and
obligations  as  Administrative  Agent  under the Loan  Documents  to any of its
Affiliates,  which  Affiliate shall then be the successor  Administrative  Agent
under the Loan Documents.  Administrative  Agent may also voluntarily  resign by
giving  thirty (30) days' prior  written  notice to Borrowers  and Lenders,  and
shall  resign  upon  the  request  of the  Required  Lenders  for  cause  (i.e.,
Administrative  Agent is continuing to fail to perform its  responsibilities  as
Administrative Agent under the Loan Documents).  If the initial or any successor
Administrative  Agent  ever  ceases  to be a party to this  Agreement  or if the
initial or any successor  Administrative Agent ever resigns (whether voluntarily
or at the request of the  Required  Lenders),  then the Required  Lenders  shall
(which,  if no Default or Potential  Default  exists,  is subject to  Borrowers'
approval  that  may  not  be  unreasonably   withheld)   appoint  the  successor
Administrative Agent from among Lenders (other than the resigning Administrative
Agent). If the Required Lenders fail to appoint a successor Administrative Agent
within  thirty  (30) days  after the  resigning  Administrative  Agent has given
notice of  resignation  or the  Required  Lenders  have  removed  the  resigning
Administrative Agent, then the resigning  Administrative Agent may, on behalf of
Lenders,  appoint a  successor  Administrative  Agent  (which,  if no Default or
Potential  Default  exists,  is subject to  Borrowers'  approval that may not be
unreasonably  withheld),  which  must be a  commercial  bank  having a  combined
capital and surplus of at least  $10,000,000,000  (as shown on its most recently
published  statement of condition) and whose debt obligations (or whose parent's
debt  obligations)  are rated not less than Baa1 by Moody's or BBB+ by S & P. If
no successor  Administrative Agent has been appointed by the Required Lenders or
Administrative  Agent,  as  provided  above,  then the  retiring  Administrative
Agent's  resignation shall  nevertheless  become effective  forty-five (45) days
after the retiring Administrative Agent's notice of resignation and the Required
Lenders  shall  thereafter  perform  all of the duties of  Administrative  Agent
hereunder  and/or under any other Loan Documents until such time, if any, as the
Required Lenders appoint a successor  Administrative  Agent, as provided in this
Section 12.1(b). Upon its acceptance of appointment as successor  Administrative
Agent,  the successor  Administrative  Agent succeeds to and becomes vested with
all  of  the  Rights  of  the  prior   Administrative   Agent,   and  the  prior
Administrative   Agent  is  discharged   from  its  duties  and  obligations  as
Administrative Agent under the Loan Documents, and each Lender shall execute the
documents that any Lender, the resigning or removed Administrative Agent, or the
successor  Administrative Agent reasonably requests to reflect the change. After
any Administrative  Agent=s resignation or removal as Administrative Agent under
the Loan  Documents,  the  provisions of this Section inure to its benefit as to
any actions taken or not taken by it while it was Administrative Agent under the
Loan Documents.  If any Borrower fails to respond to any written request for any
consent  required in this  Section  12.1(b)  within ten (10) days after the date
that Borrower receives such request,  then such Borrower shall be deemed to have
given its consent to such request.

         (c) Syndication Agent.  Syndication Agent, in such capacity, shall have
no rights, duties, or obligations hereunder,  except as specifically provided in
this  Agreement.  Syndication  Agent  (i) may  voluntarily  resign  by notice to
Administrative  Agent,  Lenders,  and Borrowers,  and (ii) shall resign upon the
request of the Required  Lenders for cause.  Upon the resignation of Syndication
Agent, Administrative Agent may elect to designate a successor Syndication Agent
(which,  if no Default or Potential  Default  exists,  is subject to  Borrowers'
approval that may not be unreasonably withheld), which must be a Lender who is a
commercial   bank   having  a  combined   capital   and   surplus  of  at  least
$10,000,000,000 (as shown on its most recently published statement of condition)
and whose debt  obligations (or whose parent's debt  obligations)  are rated not
less than Baa1 by Moody's or BBB+ by S & P.

<PAGE>

         (d) Documentation Agent.  Documentation Agent, in such capacity,  shall
have no  rights,  duties,  or  obligations  hereunder,  except  as  specifically
provided in this Agreement.  Documentation  Agent (i) may voluntarily  resign by
notice to Administrative  Agent,  Lenders, and Borrowers,  and (ii) shall resign
upon the request of the  Required  Lenders for cause.  Upon the  resignation  of
Documentation  Agent,  Administrative  Agent may elect to  designate a successor
Documentation  Agent  (which,  if no Default or  Potential  Default  exists,  is
subject to Borrowers'  approval that may not be  unreasonably  withheld),  which
must be a Lender who is a commercial bank having a combined  capital and surplus
of at least  $10,000,000,000  (as shown on its most recently published statement
of condition) and whose debt  obligations  (or whose parent's debt  obligations)
are rated not less than Baa1 by Moody's or BBB+ by S & P.

         (e) Managing Agents.  Managing Agents, in such capacity,  shall have no
rights,  duties, or obligations  hereunder,  except as specifically  provided in
this Agreement.

         12.2  Delegation of Duties; Reliance.   Lenders  may  perform  any  of
their  duties or exercise  any of their  Rights  under the Loan  Documents by or
through  Administrative  Agent, and Lenders and Administrative Agent may perform
any of their duties or exercise any of their Rights under the Loan  Documents by
or  through  their  respective  Representatives.  The Credit  Parties  and their
respective Representatives (a) are entitled to rely upon (and shall be protected
in relying  upon) any  written or oral  statement  believed  by it or them to be
genuine and  correct  and to have been signed or made by the proper  Person and,
with  respect  to  legal   matters,   upon   opinion  of  counsel   selected  by
Administrative  Agent or any  Lender  (but  nothing in this  clause (a)  permits
Administrative  Agent to rely on (i) oral statements if a writing is required by
this  Agreement  or any  other  Loan  Document  or (ii) any other  writing  if a
specific writing is required by this Agreement or any other Loan Document),  (b)
are  entitled  to deem and treat  each  Lender  as the  owner and  holder of its
portion  of  the  Obligation  for  all  purposes  until  written  notice  of the
assignment or transfer is given to and received by Administrative Agent (and any
request,  authorization,  consent,  or approval of any Lender is conclusive  and
binding on each  subsequent  holder,  assignee,  or  transferee of such Lender=s
portion of the Obligation until that notice is given and received),  (c) are not
deemed  to have  notice of the  occurrence  of a  Default  unless a  responsible
officer of  Administrative  Agent, who handles matters  associated with the Loan
Documents and transactions  thereunder,  has actual knowledge or  Administrative
Agent has been  notified  by a Lender or a  Borrower,  and (d) are  entitled  to
consult  with legal  counsel  (including  counsel  for  Borrowers),  independent
accountants,  and other  experts  selected by  Administrative  Agent and are not
liable for any action taken or not taken in good faith by it in accordance  with
the advice of counsel, accountants, or experts.

         12.3 Limitation of Agents' Liability.

         (a)  Exculpation.   Neither   Administrative   Agent  nor  any  of  its
Representatives will be liable for any action taken or omitted to be taken by it
or them under the Loan  Documents in good faith and believed by it or them to be
within the  discretion or power  conferred upon it or them by the Loan Documents
or be  responsible  for the  consequences  of any error of judgment  (except for
fraud,  gross negligence,  or willful  misconduct),  and neither  Administrative
Agent  nor any of its  Representatives  has a  fiduciary  relationship  with any
Lender by virtue of the Loan Documents  (but nothing in this  Agreement  negates
the obligation of  Administrative  Agent to account for funds received by it for
the account of any Lender).

<PAGE>

         (b) Indemnity.  Unless  indemnified to its  satisfaction  against loss,
cost,  liability,  and expense,  Administrative Agent may not be compelled to do
any act under the Loan  Documents or to take any action  toward the execution or
enforcement of the powers thereby  created or to prosecute or defend any suit in
respect of the Loan Documents.  If  Administrative  Agent requests  instructions
from  Lenders,  with  respect to any act or action in  connection  with any Loan
Document,  then  Administrative  Agent is entitled to refrain (without incurring
any liability to any Person by so refraining) from that act or action unless and
until it has received  instructions.  In no event,  however,  may Administrative
Agent or any of its  Representatives  be  required to take any action that it or
they determine  could incur for it or them criminal or onerous civil  liability.
Without  limiting the  generality of the  foregoing,  no Lender has any right of
action against Administrative Agent as a result of Administrative Agent's acting
or refraining from acting under this Agreement in accordance  with  instructions
of Required Lenders.

         (c) Reliance.  No Agent is responsible to any Lender or any Participant
for, and each Lender  represents  and  warrants  that it has not relied upon any
Agent in  respect  of, (i) the  creditworthiness  of any  Company  and the risks
involved to such Lender,  (ii) the effectiveness,  enforceability,  genuineness,
validity,  or due execution of any Loan Document  (except by such Agent),  (iii)
any representation,  warranty, document, certificate,  report, or statement made
therein  (except  by  such  Agent)  or  furnished  thereunder  or in  connection
therewith,  (iv) the adequacy of any  collateral  now or hereafter  securing the
Obligation  or  the  existence,  priority,  or  perfection  of any  Lien  now or
hereafter  granted or purported to be granted on the  collateral  under any Loan
Document, or (v) observation of or compliance with any of the terms,  covenants,
or conditions of any Loan Document on the part of any Company.

         (d)  Indemnification.  EACH LENDER  AGREES TO INDEMNIFY  ADMINISTRATIVE
AGENT AND ITS  REPRESENTATIVES  AND HOLD THEM  HARMLESS  FROM AND  AGAINST  (BUT
LIMITED TO SUCH LENDER'S PRO RATA PART OF) ANY AND ALL LIABILITIES, OBLIGATIONS,
LOSSES,  DAMAGES,  PENALTIES,   ACTIONS,  JUDGMENTS,  SUITS,  COSTS,  REASONABLE
EXPENSES, AND REASONABLE DISBURSEMENTS OF ANY KIND OR NATURE WHATSOEVER THAT MAY
BE IMPOSED ON, ASSERTED  AGAINST,  OR INCURRED BY THEM IN ANY WAY RELATING TO OR
ARISING OUT OF THE LOAN  DOCUMENTS  OR ANY ACTION TAKEN OR OMITTED BY THEM UNDER
THE LOAN  DOCUMENTS  IF  ADMINISTRATIVE  AGENT AND ITS  REPRESENTATIVES  ARE NOT
REIMBURSED FOR SUCH AMOUNTS BY BORROWERS.  ALTHOUGH ADMINISTRATIVE AGENT AND ITS
REPRESENTATIVES HAVE THE RIGHT TO BE INDEMNIFIED UNDER THIS AGREEMENT FOR ITS OR
THEIR OWN ORDINARY  NEGLIGENCE,  ADMINISTRATIVE AGENT AND ITS REPRESENTATIVES DO
NOT HAVE THE RIGHT TO BE  INDEMNIFIED  UNDER THIS AGREEMENT FOR ITS OR THEIR OWN
FRAUD, GROSS NEGLIGENCE, OR WILLFUL MISCONDUCT.

         12.4  Limitation of Liability.   No  Lender  or  any  Participant  will
incur any  liability  to any  other  Lender or  Participant  except  for acts or
omissions  in bad  faith,  and  neither  Administrative  Agent nor any Lender or
Participant will incur any liability to any other Person for any act or omission
of any other Lender or any Participant.

         12.5  Expenses.  Should Administrative  Agent  commence any  proceeding
or in any way seek to enforce its Rights under the Loan Documents,  each Lender,
upon demand therefor from time to time, shall contribute its share (based on its
Pro Rata Part) of the reasonable costs and/or expenses of any such  enforcement,
including, but not limited to, fees of receivers or trustees, court costs, title
company  charges,  filing  and  recording  fees,  appraisers'  fees and fees and
expenses of  attorneys  to the extent not  otherwise  reimbursed  by  Borrowers.
Without  limiting the generality of the foregoing,  each Lender shall contribute
its share  (based on its Pro Rata  Part) of all  reasonable  costs and  expenses
incurred by  Administrative  Agent  (including  reasonable  attorneys'  fees and
expenses)  if   Administrative   Agent  employs  counsel  for  advice  or  other
representation (whether or not any suit has been or shall be filed) with respect
to any of the Loan Documents,  or to enforce any rights of Administrative  Agent
or any of Borrowers' or any other  Company's  obligations  under any of the Loan
Documents,  but not with respect to any dispute between Administrative Agent and
any other  Lender(s).  Any loss of  principal  and interest  resulting  from any
Default shall be shared by Lenders in accordance with their  respective Pro Rata
Parts. It is understood and agreed that if Administrative  Agent determines that
it is necessary to engage counsel for Lenders from and after the occurrence of a
Potential   Default  or  Default,   then  said  counsel  shall  be  selected  by
Administrative  Agent and  written  notice  of the same  shall be  delivered  to
Lenders.  Administrative Agent shall exercise commercially reasonable efforts to
collect the cost and expenses described above from Borrowers.

<PAGE>

         12.6  Proportionate Absorption of Losses.  Except as otherwise provided
in the Loan  Documents,  nothing  in the Loan  Documents  gives any  Lender  any
advantage  over any other  Lender  insofar as the  Obligation  is  concerned  or
relieves any Lender from ratably  absorbing any losses sustained with respect to
the  Obligation  (except to the extent  unilateral  actions or  inactions by any
Lender result in any Borrower or any other obligor on the Obligation  having any
credit,  allowance,  setoff, defense, or counterclaim solely with respect to all
or any part of such Lender's Pro Rata Part of the Obligation).

         12.7  Relationship of Lenders.  The  Loan  Documents  do  not  create a
partnership  or joint  venture among  Administrative  Agent and Lenders or among
Lenders.

         12.8  Benefits of Agreement.    None of the provisions of this  Section
inure to the benefit of any Company or any other  Person  except  Administrative
Agent and Lenders.  Therefore, no Company nor any other Person is responsible or
liable for,  entitled to rely upon,  or entitled to raise as a defense -- in any
manner  whatsoever  -- the  failure  of any  Credit  Party to comply  with these
provisions.

         12.9  Approval of Lenders.

         (a)  All  communications  from  Administrative   Agent  to  any  Lender
requesting such Lender's  determination,  consent,  approval, or disapproval (i)
shall be given in the form of a written  notice to each  Lender,  (ii)  shall be
accompanied  by  a  description  of  the  matter  or  thing  as  to  which  such
determination,  approval,  consent, or disapproval is requested, or shall advise
each Lender  where such  matter or thing may be  inspected,  or shall  otherwise
describe the matter or issue to be resolved,  (iii) shall include, if reasonably
requested by a Lender and to the extent not previously  provided to such Lender,
written   materials  and  a  summary  of  all  oral   information   provided  to
Administrative  Agent by  Borrowers  in  respect  of the  matter  or issue to be
resolved,  and (iv) shall include  Administrative  Agent's recommended course of
action or determination  in respect  thereof.  Each Lender shall reply promptly,
but in any event (x) within  thirty (30) days (or such  lesser  period as may be
required under the Loan Documents for Administrative Agent to respond) for those
matters  requiring  the  consent by all  Lenders,  and (y) within  fifteen  (15)
Business Days (or such lesser period as may be required under the Loan Documents
for Administrative  Agent to respond) for those matters requiring the consent by
the Required Lenders, in each instance, after receipt of the request therefor by
Administrative Agent (in either event, the "Lender Reply Period").

         (b) Unless a Lender shall give written notice to  Administrative  Agent
that it objects to the  recommendation or determination of Administrative  Agent
(together  with a written  explanation  of the reasons  behind  such  objection)
within the Lender Reply Period,  such Lender shall be deemed to have approved of
or consented to such recommendation or determination.

<PAGE>

         12.10  Default; Collateral.   Upon  the  occurrence  and  during  the
continuance of a Default,  the Credit Parties agree to promptly  confer in order
that Required Lenders or Lenders, as the case may be, may agree upon a course of
action  for  the  enforcement  of  the  Rights  of  the  Credit   Parties;   and
Administrative  Agent  shall be  entitled  to  refrain  from  taking  any action
(without  incurring  any liability to any Person for so  refraining)  unless and
until  Administrative  Agent  shall have  received  instructions  from  Required
Lenders  or  Lenders,  as the case may be.  All  rights  of  action  under  this
Agreement  and  under  the  Notes  and all  rights  to any  collateral,  if any,
hereunder  may be enforced by  Administrative  Agent and any suit or  proceeding
instituted by  Administrative  Agent in furtherance of such enforcement shall be
brought in its respective name as Administrative  Agent without the necessity of
joining as plaintiffs or defendants any other Credit Party,  and the recovery of
any  judgment  shall be for the  benefit  of the Credit  Parties  subject to the
expenses of Administrative Agent. In actions with respect to any property of any
Company,  Administrative  Agent is acting for the ratable benefit of each Credit
Party.

SECTION 13  GUARANTY.

         13.1  The Guaranty.   In order to induce  the Credit  Parties to enter
into this  Agreement and to extend credit  hereunder and in  recognition  of the
direct  benefits to be received by ProLogis from the proceeds of the  Borrowings
made to Subsidiary  Borrowers  hereunder,  ProLogis hereby,  unconditionally and
irrevocably,  guarantees  the full and prompt  payment  when due,  whether  upon
maturity, by acceleration or otherwise, of any and all of the Obligation of each
Subsidiary  Borrower (the  "Guaranteed  Debt").  If any or all of the Guaranteed
Debt  becomes due and  payable,  ProLogis  unconditionally  promises to pay such
Guaranteed  Debt to the Credit  Parties,  on demand,  together  with any and all
expenses  which may be incurred by each Credit  Party in  collecting  any of the
Guaranteed  Debt. The word  "Guaranteed  Debt" is used in this Section 13 in its
most comprehensive sense and includes any and all advances,  debts,  obligations
(including obligations which, but for any automatic stay under Section 362(a) of
the  Bankruptcy  Code,  would become due), and  obligations  of each  Subsidiary
Borrower  arising in connection  with this Agreement or any other Loan Document,
in each case, heretofore,  now, or hereafter made, incurred, or created, whether
voluntarily   or   involuntarily,   absolute  or   contingent,   liquidated   or
unliquidated,  determined or undetermined,  whether or not such  indebtedness is
from time to time reduced, or extinguished and thereafter increased or incurred,
whether any  Subsidiary  Borrower  may be liable  individually  or jointly  with
others,  whether or not  recovery  upon such  indebtedness  may be or  hereafter
become  barred  by  any  statute  of  limitations,   and  whether  or  not  such
indebtedness may be or hereafter become otherwise unenforceable.

         13.2  Bankruptcy.   Additionally,  ProLogis  unconditionally  and
irrevocably guarantees the payment of any and all indebtedness of any Subsidiary
Borrower to the Credit Parties  whether or not due or payable by such Subsidiary
Borrower upon the  occurrence in respect of such  Subsidiary  Borrower of any of
the events specified in Section 10.3, and  unconditionally  promises to pay such
indebtedness  to the Credit  Parties,  on demand,  in lawful money of the United
States.

<PAGE>

         13.3  Nature of Liability.   The  liability  of ProLogis  hereunder is
exclusive  and  independent  of  any  security  for  or  other  guaranty  of the
indebtedness of any Subsidiary Borrower whether executed by ProLogis,  any other
guarantor,  or by any other party, and the liability of ProLogis hereunder shall
not be affected or impaired by (a) any direction as to application of payment by
any Subsidiary  Borrower,  or by any other party, or (b) any other continuing or
other guaranty, undertaking, or maximum liability of a guarantor or of any other
party as to the indebtedness of any Subsidiary  Borrower,  or (c) any payment on
or in  reduction  of  any  such  other  guaranty  or  undertaking,  or  (d)  any
dissolution  of any Subsidiary  Borrower,  or (e) any payment made to any Credit
Party on the indebtedness which such Credit Party repays any Subsidiary Borrower
pursuant  to  court  order  in  any  bankruptcy,  reorganization,   arrangement,
moratorium, or other debtor relief proceeding,  and ProLogis waives any right to
the deferral or modification of its obligations  hereunder by reason of any such
proceeding.  This Parent  Guaranty is intended to be an  irrevocable,  absolute,
continuing guaranty of payment and is not a guaranty of collection.  This Parent
Guaranty may not be revoked by ProLogis;  provided,  however,  if,  according to
applicable  Law, it shall ever be  determined  or held that a guarantor  under a
continuing  guaranty such as this Parent Guaranty shall have the absolute right,
notwithstanding the express agreement of such a guarantor  otherwise,  to revoke
such  guaranty as to any  Guaranteed  Debt which has then not yet  arisen,  then
ProLogis may deliver to  Administrative  Agent written notice that ProLogis will
not be liable  hereunder for any of the Guaranteed  Debt created,  incurred,  or
arising after the giving of such notice, and such notice will be effective as to
ProLogis  from and after (but not before) such times as said  written  notice is
actually  delivered  to  and  received  by  and  receipted  for  in  writing  by
Administrative  Agent;  provided  that such notice shall not in anywise  affect,
impair, or limit the liability and  responsibility of any other person or entity
with respect to any of the Guaranteed  Debt  theretofore  existing or thereafter
existing, arising, renewed, extended, or modified;  provided, further, that such
notice shall not affect,  impair, or release the liability and responsibility of
ProLogis  with  respect to any of the  Guaranteed  Debt  created,  incurred,  or
arising  prior  to the  receipt  of  such  notice  by  Administrative  Agent  as
aforesaid, or in respect of any renewals,  extensions,  or modifications of such
Guaranteed  Debt,  or in respect of interest or costs of  collection  thereafter
incurred  on or with  respect  to such  Guaranteed  Debt,  or  with  respect  to
attorneys'  fees  thereafter  becoming  payable  hereunder  with respect to such
Guaranteed  Debt,  and  shall  continue  to be  effective  with  respect  to any
Guaranteed Debt arising or created after any attempted revocation by ProLogis to
the extent such  Guaranteed  Debt arises  under any  commitments  existing at or
prior to such revocation.

         13.4  Independent Obligation.   The obligations of  ProLogis  hereunder
are  independent  of the  obligations  of any other  guarantor or any Subsidiary
Borrower, and a separate action or actions may be brought and prosecuted against
ProLogis  whether or not action is brought  against any other  guarantor  or any
Subsidiary  Borrower and whether or not any other  guarantor  or any  Subsidiary
Borrower  be  joined in any such  action or  actions.  ProLogis  waives,  to the
fullest  extent  permitted  by Law,  the benefit of any  statute of  limitations
affecting its liability hereunder or the enforcement thereof. Any payment by any
Subsidiary  Borrower or other circumstance which operates to toll any statute of
limitations as to any  Subsidiary  Borrower shall operate to toll the statute of
limitations as to ProLogis.

         13.5  Authorization.   ProLogis authorizes the Credit  Parties  without
notice or demand  (except as shall be required by  applicable  Law and cannot be
waived), and without affecting or impairing its liability  hereunder,  from time
to time to (a) renew,  compromise,  extend, increase,  accelerate,  or otherwise
change the time for payment of, or otherwise change the terms of, the Guaranteed
Debt or any part thereof in accordance with this Parent Guaranty,  including any
increase or decrease of the rate of interest thereon, (b) take and hold security
from any guarantor or any other party for the payment of the Guaranteed Debt and
exchange, enforce, waive, and release any such security, (c) apply such security
and direct the order or manner of sale thereof as  Administrative  Agent, at the
direction of the Required Lenders in their  discretion,  may determine,  and (d)
release  or  substitute  any  one  or  more  endorsers,  guarantors,  Subsidiary
Borrowers, or other obligors.

         13.6  Reliance.   It  is  not necessary for any Credit Party to inquire
into the capacity or powers of any Company or the officers, directors, partners,
or agents acting or purporting to act on its behalf,  and any indebtedness  made
or created in reliance  upon the  professed  exercise  of such  powers  shall be
guaranteed hereunder.

         13.7  Subordination.   Any indebtedness of any Subsidiary  Borrower now
or hereafter held by ProLogis is hereby subordinated to the indebtedness of such
Subsidiary  Borrower  to the  Credit  Parties;  and  such  indebtedness  of such
Subsidiary  Borrower  to  ProLogis,  if  Administrative  Agent,  while a Default
exists, so requests,  shall be collected,  enforced, and received by ProLogis as
trustee for the Credit Parties and be paid over to Administrative Agent, for the
ratable  benefit of the Credit Parties,  on account of the  indebtedness of such
Subsidiary Borrower to the Credit Parties, but without affecting or impairing in
any manner the liability of ProLogis  under the other  provisions of this Parent
Guaranty. Prior to the transfer by ProLogis of any note or negotiable instrument
evidencing any  indebtedness  of any Subsidiary  Borrower to ProLogis,  ProLogis
shall mark such note or  negotiable  instrument  with a legend  that the same is
subject to this subordination.  Notwithstanding the foregoing, ProLogis does not
waive  or  release   (expressly  or  impliedly)   any  rights  of   subrogation,
reimbursement,  or contribution  which it may have, after payment in full of the
Guaranteed Debt, against others liable on the Guaranteed Debt;  ProLogis' rights
of subrogation,  reimbursement, or contribution are, however, subordinate to the
rights and claims of the Credit Parties.

<PAGE>

         13.8  Waivers; Consents.

         (a)  ProLogis  waives  any  right  (except  as  shall  be  required  by
applicable  Law and cannot be waived) to require any Credit Party to (i) proceed
against any Subsidiary Borrower,  any other guarantor,  or any other party, (ii)
proceed against or exhaust any security held from any Subsidiary  Borrower,  any
other  guarantor,  or any other  party,  or (iii) pursue any other remedy in any
Credit Party=s power whatsoever. ProLogis waives any defense based on or arising
out of any defense of any Subsidiary Borrower, any other guarantor, or any other
party  other  than  payment  in full  of the  indebtedness,  including,  without
limitation,  any  defense  based  on or  arising  out of the  disability  of any
Subsidiary  Borrower,   any  other  guarantor,   or  any  other  party,  or  the
unenforceability  of the indebtedness or any part thereof from any cause, or the
cessation from any cause of the liability of any Subsidiary  Borrower other than
payment in full of the indebtedness.  The Credit Parties may, at their election,
foreclose  on any security  held by any Credit Party by one or more  judicial or
nonjudicial  sales,  or exercise  any other right or remedy any Credit Party may
have  against any  Subsidiary  Borrower  or any other  party,  or any  security,
without  affecting or impairing in any way the  liability of ProLogis  hereunder
except to the extent the indebtedness has been paid. ProLogis waives any defense
arising  out of any such  election  by the  Credit  Parties,  even  though  such
election  operates  to  impair  or  extinguish  any  right of  reimbursement  or
subrogation or other right or remedy of ProLogis against any Subsidiary Borrower
or any other party or any security.

         (b)  ProLogis  waives  all   presentments,   demands  for  performance,
protests,  and notices,  including without limitation notices of nonperformance,
notices of protest,  notices of dishonor,  notices of  acceptance of this Parent
Guaranty,  and  notices  of the  existence,  creation,  or  incurring  of new or
additional  indebtedness.  ProLogis  assumes  all  responsibility  for being and
keeping itself informed of each Subsidiary  Borrower=s  financial  condition and
assets,  and of all other  circumstances  bearing upon the risk of nonpayment of
the indebtedness  and the nature,  scope, and extent of the risks which ProLogis
assumes and incurs  hereunder,  and agrees that the Credit Parties shall have no
duty  to  advise   ProLogis  of   information   known  to  them  regarding  such
circumstances or risks.

<PAGE>

         (c) Any Credit  Party may at any time and from time to time without the
consent  of,  or  notice  to,  ProLogis,  without  incurring  responsibility  to
ProLogis,  without impairing or releasing the obligations of ProLogis hereunder,
upon or without any terms or conditions  and in whole or in part: (i) change the
manner,  place,  or terms of  payment  of,  and/or  change or extend the time of
payment of, renew, or alter, any of the Guaranteed Debt, any security  therefor,
or any liability  incurred  directly or indirectly in respect  thereof,  and the
guaranty herein made shall apply to the Guaranteed Debt as so changed, extended,
renewed, or altered; (ii) sell, exchange, release,  surrender,  realize upon, or
otherwise deal with in any manner and in any order any property by whomsoever at
any time pledged or mortgaged to secure, or howsoever  securing,  the Guaranteed
Debt or any liabilities  (including any of those hereunder) incurred directly or
indirectly in respect thereof or hereof, and/or any offset there against;  (iii)
exercise or refrain from exercising any rights against any Subsidiary  Borrower,
any other  guarantor,  or others or otherwise  act or refrain from acting;  (iv)
settle or compromise any of the Guaranteed Debt, any security  therefor,  or any
liability  (including any of those hereunder) incurred directly or indirectly in
respect  thereof or hereof,  and may  subordinate the payment of all or any part
thereof to the payment of any liability  (whether due or not) of any  Subsidiary
Borrower  to  creditors  of any  Subsidiary  Borrower  (other  than  the  Credit
Parties);  (v) apply any sums by  whomsoever  paid or howsoever  realized to any
liability  or  liabilities  of any  Subsidiary  Borrower  to the Credit  Parties
regardless of what liabilities of such Subsidiary  Borrower remain unpaid;  (vi)
consent to or waive any breach of, or any act,  omission,  or default under, any
of the Loan  Documents,  or any of the  instruments  or  agreements  referred to
therein, or otherwise amend,  modify, or supplement any of the Loan Documents or
any of such other instruments or agreements;  and/or (vii) act or fail to act in
any manner referred to in this Parent Guaranty which may deprive ProLogis of its
right to subrogation  against any Subsidiary  Borrower to recover full indemnity
for any payments made pursuant to this Parent Guaranty.

SECTION 14   MISCELLANEOUS.

         14.1  Headings.   The  headings,  captions,  and  arrangements  used in
any of the Loan Documents are, unless specified otherwise,  for convenience only
and  shall not be deemed  to  limit,  amplify,  or modify  the terms of the Loan
Documents, nor affect the meaning thereof.

         14.2  Nonbusiness Days; Time.   Any  payment  or  action  that is due
under  any  Loan  Document  on a  non-Business  Day  may be  delayed  until  the
next-succeeding  Business  Day (but  interest  shall  continue  to accrue on any
applicable  payment until payment is in fact made) unless the payment concerns a
Eurodollar  Borrowing,  in which case if the next-succeeding  Business Day is in
the next calendar month,  then such payment shall be made on the  next-preceding
Business Day.

         14.3  Communications.  Unless otherwise specifically provided, whenever
any Loan Document requires or permits any consent,  approval,  notice,  request,
demand, or other communication from one party to another,  communication must be
in writing  (which may be by telex or  telecopy)  to be  effective  and shall be
deemed to have been given (a) if by telex,  when  transmitted to the appropriate
telex number and the  appropriate  answerback  is received,  (b) if by telecopy,
when transmitted to the appropriate telecopy number (and all communications sent
by  telecopy  must  be  confirmed  promptly  thereafter  by  telephone;  but any
requirement  in this  parenthetical  shall not affect the date when the telecopy
shall be deemed  to have been  delivered),  (c) if by mail,  on the fifth  (5th)
Business  Day  after it is  enclosed  in an  envelope  and  properly  addressed,
stamped,  sealed, certified mail, return receipt requested, and deposited in the
appropriate official postal service, or (d) if by any other means, when actually
delivered.  Until changed by notice pursuant to this Agreement, the address (and
telecopy number) for each party to this Agreement is set forth on Schedule 1.

         14.4  Form and Number of Documents.  The form, substance, and number of
counterparts  of each  writing  to be  furnished  under this  Agreement  must be
satisfactory to Administrative Agent and its counsel.

         14.5  Survival.   All covenants, agreements, undertakings,  representa-
tions,  and warranties  made in any of the Loan  Documents  survive all closings
under the Loan Documents and, except as otherwise indicated, are not affected by
any investigation made by any party.

         14.6  Governing Law.   EXCEPT AS EXPRESSLY PROVIDED IN A LOAN DOCUMENT,
THE LAWS (OTHER THAN  CONFLICT-OF-LAWS  PROVISIONS) OF THE STATE OF TEXAS AND OF
THE UNITED STATES OF AMERICA  GOVERN THE RIGHTS AND DUTIES OF THE PARTIES TO THE
LOAN DOCUMENTS AND THE VALIDITY,  CONSTRUCTION,  ENFORCEMENT, AND INTERPRETATION
OF THE LOAN DOCUMENTS.

<PAGE>

         14.7  Invalid Provisions.   Any provision in any Loan  Document held to
be illegal,  invalid or unenforceable  is fully severable;  the appropriate Loan
Document  shall be construed  and enforced as if that  provision  had never been
included; and the remaining provisions shall remain in full force and effect and
shall not be affected by the severed provision. The Credit Parties and Borrowers
agree to  negotiate,  in good faith,  the terms of a  replacement  provision  as
similar to the  severed  provision  as may be possible  and be legal,  valid and
enforceable.   However,  if  the  provision  held  to  be  illegal,  invalid  or
unenforceable  is a material part of this  Agreement,  such invalid,  illegal or
unenforceable  provision shall be, to the extent permitted by Law, replaced by a
clause or provision  judicially  construed and  interpreted  to be as similar in
substance  and  content  to the  original  terms  of such  illegal,  invalid  or
unenforceable clause or provision as the context thereof would reasonably allow,
so  that  such  clause  or  provision  would  thereafter  be  legal,  valid  and
enforceable.

         14.8  Venue; Service of Process; Jury Trial.   EACH  PARTY TO ANY  LOAN
DOCUMENT,  IN EACH CASE FOR ITSELF,  ITS SUCCESSORS AND ASSIGNS (AND IN THE CASE
OF BORROWERS,  FOR EACH OF THE OTHER COMPANIES),  (a) IRREVOCABLY SUBMITS TO THE
NONEXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS OF THE STATE OF TEXAS,
(b) IRREVOCABLY  WAIVES,  TO THE FULLEST EXTENT  PERMITTED BY LAW, ANY OBJECTION
THAT IT MAY NOW OR  HEREAFTER  HAVE TO THE  LAYING  OF VENUE  OF ANY  LITIGATION
ARISING  OUT OF OR IN  CONNECTION  WITH THE LOAN  DOCUMENTS  AND THE  OBLIGATION
BROUGHT IN DISTRICT  COURTS OF DALLAS OR HARRIS COUNTY,  TEXAS, OR IN THE UNITED
STATES DISTRICT COURT FOR THE NORTHERN OR SOUTHERN DISTRICT OF TEXAS,  DALLAS OR
HOUSTON DIVISION,  (c) IRREVOCABLY WAIVES ANY CLAIMS THAT ANY LITIGATION BROUGHT
IN ANY OF THE AFOREMENTIONED  COURTS HAS BEEN BROUGHT IN AN INCONVENIENT  FORUM,
(d) IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THOSE COURTS IN
ANY  LITIGATION  BY THE  MAILING OF COPIES  THEREOF BY  CERTIFIED  MAIL,  RETURN
RECEIPT  REQUESTED,  POSTAGE  PREPAID,  BY  HAND-DELIVERY,  OR BY  DELIVERY BY A
NATIONALLY RECOGNIZED COURIER SERVICE, AND SERVICE SHALL BE DEEMED COMPLETE UPON
DELIVERY OF THE LEGAL  PROCESS AT ITS ADDRESS SET FORTH IN THIS  AGREEMENT,  (e)
IRREVOCABLY  AGREES  THAT ANY  LEGAL  PROCEEDING  AGAINST  ANY PARTY TO ANY LOAN
DOCUMENT  ARISING  OUT  OF OR IN  CONNECTION  WITH  THE  LOAN  DOCUMENTS  OR THE
OBLIGATION  MAY  BE  BROUGHT  IN  ONE  OF THE  AFOREMENTIONED  COURTS,  AND  (f)
IRREVOCABLY WAIVES TO THE FULLEST EXTENT PERMITTED BY LAW, ITS RESPECTIVE RIGHTS
TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF ANY
LOAN  DOCUMENT.  The scope of each of the  foregoing  waivers is  intended to be
all-encompassing of any and all disputes that may be filed in any court and that
relate to the subject matter of this  transaction,  including  contract  claims,
tort  claims,  breach of duty  claims,  and all other  common law and  statutory
claims.  Each Borrower (for itself and on behalf of each of the other Companies)
acknowledges that these waivers are a material inducement to each Credit Party's
agreement  to enter into a business  relationship,  that each  Credit  Party has
already relied on these waivers in entering into this  Agreement,  and that each
Agent and each Lender will  continue to rely on each of these waivers in related
future dealings.  Each Borrower (for itself and on behalf of each other Company)
further  warrants and  represents  that it has reviewed  these  waivers with its
legal  counsel,  and that it  knowingly  and  voluntarily  agrees to each waiver
following  consultation with legal counsel. THE WAIVERS IN THIS SECTION 14.8 ARE
IRREVOCABLE,  MEANING THAT THEY MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING,
AND THESE  WAIVERS SHALL APPLY TO ANY  SUBSEQUENT  AMENDMENTS,  SUPPLEMENTS,  OR
REPLACEMENTS  TO OR OF  THIS  OR  ANY  OTHER  LOAN  DOCUMENT.  In the  event  of
Litigation,  this Agreement may be filed as a written  consent to a trial by the
court.

         14.9  Amendments, Consents, Conflicts, and Waivers.

         (a)  Required  Lenders.  Unless  otherwise  specifically  provided  the
provisions  of this  Agreement  may be amended,  modified,  or waived only by an
instrument  in writing  executed by each  Borrower and the Required  Lenders and
supplemented  only by documents  delivered or to be delivered in accordance with
the express terms of this Agreement.

<PAGE>

         (b) All  Lenders.  Except as  specifically  otherwise  provided in this
Section 14.9,  any amendment to or consent or waiver under this Agreement or any
Loan Document that  purports to  accomplish  any of the following  must be by an
instrument in writing  executed by each  Borrower and executed (or approved,  as
the  case  may be) by  Administrative  Agent  and each  Lender  (other  than any
Defaulting  Lender):  (i) extends the  Termination  Date (except as set forth in
Section  3.20);  (ii)  extends  the due  date or  decreases  the  amount  of any
scheduled payment or amortization of the Obligation beyond the date specified in
the Loan  Documents;  (iii)  decreases  any rate or  amount of  interest,  fees,
principal,  or other  sums  payable  to any Credit  Party  under this  Agreement
(except such reductions as are contemplated by this Agreement); (iv) changes the
definition of "Commitment," "Pro Rata," "Pro Rata Part," "Required  Lenders," or
"Total  Commitment;" (v) waives the requirement of, compliance with,  amends, or
fully or partially releases any guaranty  (including the Parent Guaranty) or any
substantial part of any collateral, if any (except as expressly permitted by the
terms of the Loan  Documents);  (vi)  permits any  Borrower to assign any of its
rights  hereunder;  or  (vii)  changes  this  clause  (b)  or any  other  matter
specifically requiring the consent of all Lenders under this Agreement.

         (c) Administrative Agent. No amendment, modification, consent or waiver
which  modifies  the  rights,  duties,  or  obligations  of any  Agent  shall be
effective without the consent of such Agent.

         (d)  Conflicts.  Any  conflict  or  ambiguity  between  the  terms  and
provisions of this Agreement and terms and provisions in any other Loan Document
is controlled by the terms and provisions of this Agreement.

         (e) Course of Dealing.  No course of dealing or any failure or delay by
any  Credit  Party or any of its  respective  Representatives  with  respect  to
exercising  any Right of such Credit  Party under this  Agreement  operates as a
waiver thereof.  Any waiver will be effective only in the specific  instance and
for the specific purpose for which it is given.

         14.10  Multiple Counterparts.   Any  Loan  Document  may  be  executed
in a number of identical counterparts, each of which shall be deemed an original
for all purposes and all of which constitute,  collectively, one agreement; but,
in making  proof  thereof,  it shall not be  necessary to produce or account for
more than one counterpart.  Each Lender need not execute the same counterpart of
this Agreement so long as identical  counterparts are executed by each Borrower,
each  Lender,  and each  Agent.  This  Agreement  shall  become  effective  when
counterparts   of  this   Agreement   have  been   executed  and   delivered  to
Administrative  Agent by each Lender, each Agent, and each Borrower,  or, in the
case  only  of the  Credit  Parties,  when  Administrative  Agent  has  received
telecopied, telexed, or other evidence satisfactory to it that each Credit Party
has executed and is delivering  to  Administrative  Agent a counterpart  of this
Agreement.

         14.11  Successors and Assigns; Participations.

         (a) Each Loan  Document  binds and inures to the benefit of the parties
thereto,  any  intended  beneficiary  thereof,  and  each  of  their  respective
successors  and  permitted  assigns.  No Lender may,  without the prior  written
consent of  Administrative  Agent and, so long as no Default has occurred and is
continuing,  Borrowers,  transfer, pledge, assign, sell any participation in, or
otherwise  encumber  its  portion  of the  Obligation,  except  as  specifically
permitted by this Section 14.11.

<PAGE>

         (b) Subject to the  provisions  of this Section 14.11 and in accordance
with  applicable  Law, any Lender  having a Commitment  equal to or greater than
$25,000,000,  or if the Total Commitment has been terminated,  then Notes having
outstanding  Principal  Debt equal to or greater than  $25,000,000,  may, in the
ordinary course of its commercial  banking business,  at any time sell to one or
more Persons (each a  "Participant")  participating  interests in its portion of
the  Obligation;  provided  that (i) each  such  participation  is not less than
$10,000,000, (ii) except in the case of participations of Competitive Borrowings
or to any of such Lender's  Affiliates,  the Lender granting such  participation
shall  have   provided   written   notice  to   Administrative   Agent  of  such
participation,  and (iii) after giving effect to such participation,  the Lender
granting such  participation  shall retain a Commitment of at least $15,000,000,
or if the Total  Commitment has been terminated,  then Notes having  outstanding
Principal  Debt of at least  $15,000,000.  The  selling  Lender  shall  remain a
"Lender"  under this  Agreement  (and the  Participant  shall not  constitute  a
"Lender" under this  Agreement) and its  obligations  under this Agreement shall
remain  unchanged.  The selling Lender shall remain solely  responsible  for the
performance  of its  obligations  under the Loan  Documents and shall remain the
holder of its share of the Principal Debt for all purposes under this Agreement.
Borrowers and  Administrative  Agent shall  continue to deal solely and directly
with the selling Lender in connection  with such Lender's Rights and obligations
under the Loan Documents.  Participants have no Rights under the Loan Documents,
other than certain  voting Rights as provided  below.  Subject to the following,
each Lender may obtain (on behalf of its Participants) the benefits of Section 3
with respect to all  participations  in its part of the  Obligation  outstanding
from  time to time so long as no  Borrower  is  obligated  to pay any  amount in
excess of the amount that would be due to such Lender under Section 3 calculated
as though no participations have been made. No Lender may sell any participating
interest  under which the  Participant  has any Rights to approve any amendment,
modification or waiver of any Loan Document, except to the extent the amendment,
modification  or  waiver  extends  the due date for  payment  of any  principal,
interest or fees due under the Loan Documents,  reduces the interest rate or the
amount of principal or fees  applicable  to the  Obligation  (except  reductions
contemplated  by this  Agreement),  or releases any guaranty or any  substantial
part of the collateral, if any, for the Obligation. However, if a Participant is
entitled  to  the  benefits  of  Section  3 or a  Lender  grants  Rights  to its
Participants  to  approve  amendments  to  or  waivers  of  the  Loan  Documents
respecting the matters described in the previous sentence, then such Lender must
include a voting  mechanism in the relevant  participation  agreement  whereby a
majority of its portion of the Obligation  (whether held by it or  participated)
shall control the vote for all of such Lender's portion of the Obligation.

<PAGE>

         (c) Subject to the provisions of this Section 14.11,  any Lender may at
any time, in the ordinary course of its commercial banking business, (i) without
the consent of any Borrower or Administrative  Agent,  assign all or any part of
its Rights and obligations  under the Loan Documents to any of its Affiliates so
long as such Affiliate is an Eligible  Institution (each a "Purchaser") and (ii)
upon the  prior  written  consent  of  Administrative  Agent,  and so long as no
Default  has  occurred  and is  continuing,  each  Borrower,  such  consents  by
Administrative  Agent  and each  Borrower  not to be  unreasonably  withheld  or
delayed,  assign  to any  other  Eligible  Institution  (each of which is also a
"Purchaser") a  proportionate  part (not less than  $10,000,000  and an integral
multiple of $1,000,000, or if less, all of the assigning Lender's Commitment or,
if the Total Commitment has been  terminated,  Principal Debt) of its Rights and
obligations  under the Loan  Documents;  provided that (x) each such  assignment
shall exclude Competitive Borrowings, unless the assigning Lender is selling all
of its Rights and  obligations  under the Loan  Documents,  and (y) after giving
effect to such  assignment,  unless the assigning Lender is assigning all of its
Rights and Commitments  hereunder,  the Lender  granting such  assignment  shall
retain a Commitment of at least $15,000,000, or if the Total Commitment has been
terminated,   then  Notes  having   outstanding   Principal  Debt  of  at  least
$15,000,000. Notwithstanding the foregoing, each Agent shall, at all times prior
to its  resignation  or  replacement  as an Agent  hereunder,  retain a  minimum
Commitment of at least the lesser of (x) $15,000,000, and (y) three percent (3%)
of the Total  Commitment,  or if the Total Commitment has been terminated,  then
Notes having  outstanding  Principal Debt of the lesser of (x) $15,000,000,  and
(y) three percent (3%) of the Total  Principal Debt. In each case, the Purchaser
shall  assume  those  Rights  and  obligations  under  an  assignment  agreement
substantially in the form of Exhibit D. Upon (i) delivery of an executed copy of
the assignment  agreement to Borrowers and Administrative Agent and (ii) payment
of a fee of $3,500 from the transferor to  Administrative  Agent, from and after
the assignment=s effective date (which shall be after the date of delivery), the
Purchaser  shall for all purposes be a Lender party to this  Agreement and shall
have all the Rights and obligations of a Lender under this Agreement to the same
extent as if it were an original party to this Agreement with commitments as set
forth in the assignment  agreement,  and the transferor Lender shall be released
from its obligations under this Agreement to a corresponding extent, and, except
as  provided  in the  following  sentence,  no  further  consent  or  action  by
Borrowers, Lenders, or any Agent shall be required. Upon the consummation of any
transfer to a Purchaser  under this clause  (c),  the  then-existing  Schedule 1
shall  automatically be deemed to reflect the name,  address,  and Commitment of
such Purchaser,  Administrative  Agent shall deliver to Borrowers and Lenders an
amended Schedule 1 reflecting those changes, Borrowers shall execute and deliver
to each of the transferor Lender and the Purchaser  substitute  Revolving Credit
Notes in the face amount of its respective  Commitment following transfer,  and,
upon receipt of its new Revolving  Credit  Notes,  the  transferor  Lender shall
return to Borrower the Revolving Credit Notes  previously  delivered to it under
this Agreement.  A Purchaser is subject to all the provisions in this Section as
if it  were a  Lender  signatory  to  this  Agreement  as of the  date  of  this
Agreement.

         (d) Any Lender may at any time,  without the consent of any Borrower or
Administrative  Agent,  assign  all or any  part of its  Rights  under  the Loan
Documents to a Federal Reserve Bank without releasing the transferor Lender from
its obligations thereunder.

         (e) Notwithstanding any contrary provision in this Agreement,  a Lender
may not sell or  participate  any of its  interests  for a purchase  price that,
directly  or  indirectly,  reflects a discount  from face value,  without  first
offering  the sale or  participation  to the other  Lenders  on a Pro Rata basis
(which  must be accepted or  rejected  within five (5)  Business  Days after the
offer).

         (f) Each  Borrower  is  entitled  to deem and treat each  Lender as the
owner and holder of its portion of the Obligation for all purposes until written
notice of the  assignment  pursuant  to this  Section  14.11 is received by such
Borrower.

         14.12  Discharge Only Upon Payment in Full; Reinstatement in Certain
Circumstances.  Each Borrower's  obligations  under the Loan Documents remain in
full  force  and  effect  until  the  Total  Commitment  is  terminated  and the
Obligation is paid in full (except for provisions under the Loan Documents which
by their terms  expressly  survive  payment of the Obligation and termination of
the Loan Documents).  If at any time any payment of the principal of or interest
on any Note or any other amount  payable by any Borrower or any other obligor on
the  Obligation  under any Loan  Document  is  rescinded  or must be restored or
returned upon the insolvency,  bankruptcy, or reorganization of such Borrower or
otherwise,  the  obligations  of such  Borrower  under the Loan  Documents  with
respect to that payment  shall be  reinstated as though the payment had been due
but not made at that time.

<PAGE>

         14.13  Confidentiality.   Each  Lender  agrees to hold any confidential
information  which  (a) it has  received  prior  to the  Closing  Date  from any
Borrower which is confidential and is not otherwise publicly available,  and (b)
it may receive from any Borrower  pursuant to this  Agreement  after the Closing
Date which such Borrower has marked "confidential" and is not otherwise publicly
available,  in confidence,  except (i) to other Lenders,  (ii) to legal counsel,
accountants,  and other  professional  advisors  to such  Lender who agree to be
bound by the terms of this Section,  (iii) to regulatory officials,  but only to
the extent required by such  officials,  (iv) if legally  permitted,  upon prior
notice to such Borrower  (which  Lenders agree shall be delivered as promptly as
practicable),  in connection  with or response to compliance  with any Law or at
the  request of any  Tribunal,  but only to the extent  required  by such Law or
Tribunal,  (v) if legally  permitted,  upon prior notice to such Borrower (which
Lenders agree shall be delivered as promptly as practicable), in connection with
any legal  proceedings  to which such Lender is a party,  but only to the extent
required by such proceedings, and (vi) to prospective Participants or Purchasers
who agree to be bound by the terms of this Section.

         14.14  Limitation of Liability of Trustees, Shareholders and Officers
of ProLogis.  ANY OBLIGATION OR LIABILITY WHATSOEVER OF PROLOGIS WHICH MAY ARISE
AT ANY TIME UNDER THIS  AGREEMENT OR ANY  OBLIGATION  OR LIABILITY  WHICH MAY BE
INCURRED  BY  PROLOGIS  PURSUANT  TO  ANY  OTHER  INSTRUMENT,   TRANSACTION,  OR
UNDERTAKING CONTEMPLATED HEREBY SHALL BE SATISFIED OUT OF PROLOGIS' ASSETS ONLY.
NO SUCH  OBLIGATION  OR LIABILITY  SHALL BE PERSONALLY  BINDING UPON,  NOR SHALL
RESORT FOR THE  ENFORCEMENT  THEREOF BE HAD TO, THE PROPERTY OF ANY OF PROLOGIS'
TRUSTEES,  SHAREHOLDERS,  OFFICERS,  EMPLOYEES, OR AGENTS, REGARDLESS OF WHETHER
SUCH OBLIGATION OR LIABILITY IS IN THE NATURE OF CONTRACT, TORT, OR OTHERWISE.

         14.15  Entirety.   THIS AGREEMENT AND THE OTHER WRITTEN LOAN DOCUMENTS
(EACH AS AMENDED IN WRITING FROM  TIME-TO-TIME)  EXECUTED BY ANY BORROWER OR ANY
CREDIT  PARTY  REPRESENT  THE FINAL  AGREEMENT  AMONG  BORROWERS  AND THE CREDIT
PARTIES AND MAY NOT BE  CONTRADICTED  BY EVIDENCE OF PRIOR,  CONTEMPORANEOUS  OR
SUBSEQUENT  ORAL  AGREEMENTS  BY  THE  PARTIES.  THERE  ARE  NO  UNWRITTEN  ORAL
AGREEMENTS AMONG THE PARTIES.

         14.16  Limited Waiver.  Each of the Lenders hereunder  that is a Lender
under the Existing Credit  Agreement  hereby waives the requirement set forth in
Section 2.3 of the Existing  Credit  Agreement  that Borrower  provide three (3)
Business Days prior notice of the termination of the commitments thereunder. The
waiver set forth herein is limited as provided herein and shall not be deemed to
be a waiver or consent to any deviation  from the terms of this Agreement or the
other Loan Documents.

     [Remainder of Page Intentionally Left Blank; Signature Pages to Follow]

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00013-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00013-of-00352.parquet"}]]