Document:

exv4w1

 

Exhibit 4.1

SECOND SUPPLEMENTAL INDENTURE

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

RECITALS OF THE COMPANY

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

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

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

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

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

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

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

     NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH:

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

 

 

ARTICLE ONE

RELATION TO BASE INDENTURE; DEFINITIONS

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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Receivables dated as of October 6, 2005 executed by PLD Europe Finance B.V.,
ProLogis UK Funding B.V., ProLogis UK Finding II B.V., and the Collateral Agent.,
and (iv) any other pledge or security agreement pursuant to which the Company or any
of its Subsidiaries pledges, grants and or assigns a lien or security interest in
the Pledged Collateral (or any portion thereof) or other assets, to secure, among
other things, the Security Obligations, in each case, as the same may be amended,
supplemented, restated, replaced or otherwise modified from time to time.

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

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

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

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

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

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

ARTICLE TWO

COVENANTS AND DEFAULTS

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

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

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

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

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

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

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

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

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

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

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

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

ARTICLE THREE

THE TRUSTEE

     Section 3.1. Collateral and Security Documents.

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

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

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

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

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

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

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

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

     (v) whenever the Majority Credit Parties are granted, and exercise, the right to make a
decision or determination pursuant to the Security Agency Agreement, such decision or
determination shall be made in their sole and complete discretion; the Voting Credit Parties
shall have no obligation or duty (including any implied obligation of reasonableness, good
faith or fair dealing) to any Holder of Securities except those expressly set forth in the
Security Agency Agreement, and neither the Trustee nor any Holder of Securities shall have,
and each Holder of Securities expressly (by accepting the benefit of the Security Agency
Agreement or any Security Document) waives and disclaims, and the Trustee on behalf of such
Holders is hereby directed to, and does waive and disclaim any claim or cause or action
based upon any vote, decision or determination (including the giving or withholding of any
consent) made by the Majority Credit Parties in accordance with the terms of the Security
Agency Agreement.

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

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

11

 

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

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

     Section 3.5. Authorization of Actions to Be Taken.

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

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

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

12

 

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

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

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

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

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

ARTICLE FOUR

MISCELLANEOUS PROVISIONS

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

13

 

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

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

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

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

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

[Remainder of page intentionally left blank]

14

 

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

	 	 	 	 	 	 	 
	 	 	 	 	PROLOGIS
	 
	 	 	 	 	 	 
	 

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

	 	 	 	 	 	 
	 

	 	 	 	 	 	M. Gordon Keiser, Jr.
	[SEAL]

	 	 	 	 	 	Senior Vice President
	 
	 	 	 	 	 	 
	Attest:
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	By:

	 	/s/ Edward S. Nekritz	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Edward S. Nekritz	 	 	 	 
	 

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

	 	 	 	By:
	 	/s/ Ward A. Spooner
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	Ward A. Spooner
	Attest:

	 	 	 	 	 	Vice President
	 
	 	 	 	 	 	 
	By:

	 	/s/	 	 	 	 
	 

	 	 	 	 	 	 

A-1exv4w2

 

Exhibit 4.2

THIRD SUPPLEMENTAL INDENTURE

$500,000,000 5.250% Notes due 2010

$400,000,000 5.625% Notes due 2015

THIS THIRD SUPPLEMENTAL INDENTURE, dated as of November 2, 2005 (this “Supplemental
Indenture”), by and between PROLOGIS (formerly ProLogis Trust and prior thereto Security
Capital Industry Trust), a real estate investment trust organized under the laws of the State of
Maryland having its principal office at 14100 E. 35th Place, Aurora, Colorado 80011 (the
“Company”), and U.S. BANK NATIONAL ASSOCIATION (as successor in interest to State Street
Bank and Trust Company), having a corporate trust office at Corporate Trust Services, 60 Livingston
Avenue, St. Paul, MN 55107, as successor Trustee (in such capacity, the “Trustee”) under
the Base Indenture (defined below).

RECITALS OF THE COMPANY:

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

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

     Section 901(7) of the Base Indenture provides for the Company and the Trustee to enter into an
indenture supplemental to the Base Indenture to establish the form of or terms of Securities of any
series as provided by Sections 201 and 301 of the Base Indenture without the consent of the Holders
of any Securities.

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

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

     NOW THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH:

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

 

 

ARTICLE I

     RELATION TO BASE INDENTURE; DEFINITIONS; RULES OF CONSTRUCTION

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

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

     “2010 Notes” shall have the meaning set forth in Section 2.1 of this
Supplemental Indenture.

     “2015 Notes” shall have the meaning set forth in Section 2.1 of this
Supplemental Indenture.

     “Additional Interest” means all additional interest then arising pursuant to
the Registration Agreement.

     “Agent Member” means any member of, or any participant in, DTC.

     “Applicable Procedures” means, with respect to any transfer or transaction
involving a Regulation S Global Note or beneficial interest therein, the rules and
procedures of DTC for such Global Note, Euroclear and Clearstream, in each case to the
extent applicable to such transaction and as in effect from time to time.

     “Broker-Dealer”
has the meaning set forth in the Registration Agreement.

     “Certificated Note” shall mean any definitive Note in registered form without
coupons that is not a Global Note.

     “Exchange Notes” means the Notes of the Company issued in exchange for Initial
Notes pursuant to the Base Indenture and this Supplemental Indenture in connection with the
Registered Exchange Offer.

     “Global Note” means any Security that is issued in a global form as provided in
accordance with Section 203 of the Base Indenture.

     “Global Note Legend” means the legend identified as such in Section 2.4 of this
Supplemental Indenture.

     “Initial Purchasers” mean Banc of America Securities LLC, Citigroup Global
Markets Inc. and J.P. Morgan Securities Inc., and the other initial purchasers listed on
Schedule A to the Purchase Agreement.

     “Initial Notes” means the Notes other than SEC-Registered Notes.

 

 

     “Notes” means (i) the 2010 Notes and (ii) the 2015 Notes, individually and/or
collectively, as the context requires.

     “Participant” means members of, or participants in, DTC.

     “Predecessor Note” of any particular Note means every previous Note evidencing
all or a portion of the same debt as that evidenced by such particular Note; and, for the
purposes of this definition, any Note authenticated and delivered under Section 306 of the
Base Indenture in exchange for or in lieu of a mutilated, destroyed, lost or stolen Note
shall be deemed to evidence the same debt as the mutilated, destroyed, lost or stolen Note.

     “Purchase Agreement” means the Purchase Agreement dated October 26, 2005, among
the Company and the Initial Purchasers.

     “Qualified Institutional Buyer” means a “qualified institutional buyer” as
defined in Rule 144A.

     “Registered Exchange Offer” means the offer by the Company, pursuant to the
Registration Agreement, to certain Holders of Initial Notes, to issue and deliver to such
Holders, in exchange for their Initial Notes, a like aggregate principal amount of Exchange
Notes of the same series registered under the Securities Act.

     “Registration Agreement” means the Registration Rights Agreement dated as of
November 2, 2005, among the Company and the Initial Purchasers.

     “Regulation S” means Regulation S under the Securities Act.

     “Regulation S Global Note” shall have the meaning set forth in Section 2.3(b)
of this Supplemental Indenture.

     “Regulation S Notes” means all Notes offered and sold outside the United States
in reliance on Regulation S.

     “Restricted Global Note” shall have the meaning set forth in Section 2.3(c) of
this Supplemental Indenture.

     “Restricted Note” shall have the meaning set forth in Section 2.4 of this
Supplemental Indenture.

     “Restricted Note Legend” means the legend identified as such set forth in
Section 2.4 of this Supplemental Indenture.

     “Restricted Period” with respect to any Notes means the period of 40
consecutive days beginning on and including the later of (i) the day on which such Notes are
first offered to persons other than distributors (as defined in Regulation S under the
Securities Act) in reliance on Regulation S and (ii) the Issue Date with respect to such
Notes.

     “Rule 144” means Rule 144 under the Securities Act.

 

 

     “Rule 144A” means Rule 144A under the Securities Act.

     “SEC-Registered Notes” means any Exchange Notes, Notes issued pursuant to a
Shelf Registration Statement or any other Notes that have been registered pursuant to a
registration statement filed by the Company with the Securities and Exchange Commission.

     “Shelf Registration Statement” means a registration statement, if any, filed by
the Company in connection with the offer and sale of the Initial Notes pursuant to Section 4
of the Registration Agreement.

     “Successor Note” of any particular Note means every Note issued after, and
evidencing all or a portion of the same debt as that evidenced by, such particular Note;
and, for the purposes of this definition, any Note authenticated and delivered under Section
306 of the Base Indenture in exchange for or in lieu of a mutilated, destroyed, lost or
stolen Note shall be deemed to evidence the same debt as the mutilated, destroyed, lost or
stolen Note.

     Section 1.3. Rules of Construction. For all purposes of this Supplemental
Indenture:

     (a) Capitalized terms used but not defined herein shall have the respective meanings assigned
to them in the Base Indenture;

     (b) All references herein to Articles and Sections, unless otherwise specified, refer to the
corresponding Articles and Sections of this Supplemental Indenture;

     (c) The terms “herein,” “hereof,” “hereunder” and other words of similar import refer to this
Supplemental Indenture; and

     (d) In the event of a conflict with the definition of terms in the Base Indenture, the
definitions in this Supplemental Indenture shall control.

ARTICLE II

THE SECURITIES

     Section 2.1. Title of the Notes. There shall be (i) a series of Securities
designated the “5.250 % Notes due 2010” (the “2010 Notes”) and (ii) a series of Securities
designated the “5.625% Notes due 2015” (the “2015 Notes”).

     Section 2.2. Aggregate Principal Amount; Terms of Notes. (i) The 2010 Notes will be
initially issued in an aggregate principal amount of $500,000,000 and (ii) the 2015 notes will be
initially issued in an aggregate principal amount of $400,000,000. Pursuant to Section 301 of the
Base Indenture, the other terms of the 2010 Notes and the 2015 Notes shall be set forth in a
resolution of the Board of Trustees of the Company and the Officer’s Certificate authorized
thereunder, which is attached hereto as Schedule I and incorporated herein.

     Section 2.3. Form and Dating.

            (a) General. The 2010 Notes shall be substantially in the form of Exhibit A-1 hereto.

 

 

The 2015 Notes shall be substantially in the form of Exhibit A-2 hereto. The Notes shall be
in minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof.

     The terms and provisions contained in the Notes shall constitute, and are hereby expressly
made, a part of this Supplemental Indenture, and the Company and the Trustee, by their execution
and delivery of this Supplemental Indenture, expressly agree to such terms and provisions and to be
bound thereby.

     The Notes issued on the date hereof will be (i) offered and sold by the Company pursuant to
the Purchase Agreement and (ii) resold initially only to (A) Persons reasonably believed by an
Initial Purchaser to be Qualified Institutional Buyers in reliance on Rule 144A and (B) Persons
other than U.S. Persons (as defined in Regulation S) in reliance on Regulation S. Such Notes may
thereafter be transferred only in accordance with this Supplemental Indenture or the Base
Indenture.

     (b) Regulation S Global Notes. Notes of a series offered and sold in reliance on
Regulation S shall be issued in the form of one or more Global Notes (each a “Regulation S
Global Note”), substantially in the form set forth in Exhibit A-1 or A-2 hereto, as applicable,
in fully registered form without coupons, with such applicable legends as are provided for in
Section 201 of the Base Indenture and Section 2.4 of this Supplemental Indenture, except as
otherwise permitted herein. Such Global Notes shall be registered in the name of DTC or its
nominee, and deposited with the Trustee, at its New York offices, as Custodian, duly executed by
the Company and authenticated by the Trustee as hereinafter provided, for credit to the respective
accounts at DTC of the depositories for Euroclear and for Clearstream, for credit to the respective
accounts of holders of beneficial interests in such Notes or to such other accounts as they may
direct.

     (c) Restricted Global Notes. Notes of a series offered and sold in reliance on Rule
144A shall be issued in the form of one or more Global Notes (each, a “Restricted Global
Note”), in fully registered form without coupons, substantially in the form set forth in
Exhibit A-1 or A-2, as applicable, with such applicable legends as are provided for in Section 201
of the Base Indenture and Section 2.4 of this Supplemental Indenture, except as otherwise permitted
herein. Such Global Notes shall be registered in the name of DTC or its nominee and deposited with
the Trustee, as Custodian, duly executed by the Company and authenticated by the Trustee as
hereinafter provided, for credit to the respective accounts of holders of beneficial interests in
such Notes or to such other accounts as they may direct. The aggregate principal amount of a
Restricted Global Note of a series may be increased or decreased from time to time by adjustments
made on the records of the Trustee, as Custodian, in connection with a corresponding decrease or
increase in the aggregate principal amount of the Notes as herein provided.

     Section 2.4. Legends for Notes. Every Note that is a Restricted Global Note or a
Regulation S Global Note or a Certificated Note sold pursuant to Rule 144A or Regulation S
authenticated and delivered hereunder shall bear one or more of the appropriate legends in
substantially the following forms, as appropriate (each such Note, a “Restricted Note”):

RESTRICTED NOTE LEGEND

[If the Note is a Restricted Note, then insert:

THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT
FROM REGISTRATION UNDER SECTION 5 OF THE UNITED

 

 

STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND THE SECURITY EVIDENCED HEREBY
MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION THEREFROM. THE HOLDER OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT
OF THE COMPANY THAT (A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1)(a)
INSIDE THE UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) PURCHASING FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A UNDER THE SECURITIES ACT, (b) OUTSIDE THE UNITED STATES TO A NON-U.S.
PERSON IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR RULE 904 OF REGULATION S UNDER THE
SECURITIES ACT, (c) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY
RULE 144 THEREUNDER (IF APPLICABLE) OR (d) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO
THE COMPANY IF THE COMPANY SO REQUESTS), (2) TO THE COMPANY OR (3) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH
SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THE SECURITY EVIDENCED HEREBY OF THE
RESALE RESTRICTIONS SET FORTH IN CLAUSE (A) ABOVE. NO REPRESENTATION CAN BE MADE AS TO THE
AVAILABILITY OF THE EXEMPTION PROVIDED BY RULE 144 FOR RESALE OF THE SECURITY EVIDENCED HEREBY.]

GLOBAL NOTE LEGEND

[If the Note is a Global Note, then insert:

THIS SECURITY IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS
REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN
WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART
MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF,
EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.]

DTC LEGEND

[If the Note is a Global Note and DTC is to be depository therefor, then insert:

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE CORPORATION OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO.
OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF

 

 

DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.]

     Section 2.5. Certain Transfers and Exchanges. Notwithstanding any other provision
of the Base Indenture or the Notes, transfers and exchanges of Notes and beneficial interests in a
Global Note of the kinds specified in this Section 2.5 shall be made only in accordance with this
Section 2.5.

     (a) Limitation on Transfers of a Global Note. A Global Note of a series may not be
transferred, in whole or in part, to any Person other than DTC or a nominee thereof, and no such
transfer to any such other Person may be registered. No transfer of a Note of a series to any
Person shall be effective under the Indenture or the Notes unless and until such Note has been
registered in the name of such Person. Nothing in this Section 2.5(a) shall prohibit or render
ineffective any transfer of a beneficial interest in a Global Note effected in accordance with the
other provisions of this Section 2.5.

     (b) Restricted Global Note to Regulation S Global Note. If the holder of a beneficial
interest in a Restricted Global Note wishes at any time to transfer such interest to a Person who
wishes to take delivery thereof in the form of a beneficial interest in a Regulation S Global Note,
such transfer may be effected, subject to the Applicable Procedures, only in accordance with this
Section 2.5(b). Upon receipt by the Trustee, as Security Registrar, of (i) written instructions
given in accordance with the Applicable Procedures from an Agent Member directing the Trustee to
credit or cause to be credited to a specified Agent Member’s account a beneficial interest in a
Regulation S Global Note in a principal amount equal to that of the beneficial interest in a
Restricted Global Note to be so transferred, (ii) a written order given in accordance with the
Applicable Procedures containing information regarding the account of the Agent Member (and, if
applicable, the Euroclear or Clearstream account, as the case may be) to be credited with, and the
account of the Agent Member to be debited for, such beneficial interest and (iii) a certificate in
substantially the form set forth in Annex A hereto given by the holder of such beneficial interest,
the Trustee, as Security Registrar, shall instruct DTC to reduce the principal amount of the
applicable Restricted Global Note, and to increase the principal amount of a Regulation S Global
Note, by the principal amount of the beneficial interest in the Restricted Global Note to be so
transferred, and to credit or cause to be credited to the account of the Person specified in such
instructions a beneficial interest in a Regulation S Global Note having a principal amount equal to
the amount by which the principal amount of the Restricted Global Note was reduced upon such
transfer.

     (c) Regulation S Global Note to Restricted Global Note. If the holder of a beneficial
interest in a Regulation S Global Note wishes at any time to transfer such interest to a Person who
wishes to take delivery thereof in the form of a beneficial interest in a Restricted Global Note,
such transfer may be effected, subject to the Applicable Procedures, only in accordance with this
Section 2.5(c). Upon receipt by the Trustee, as Security Registrar, of (i) written instructions
given in accordance with the Applicable Procedures from an Agent Member directing the Trustee to
credit or cause to be credited to a specified Agent Member’s account a beneficial interest in a
Restricted Global Note in a principal amount equal to that of the beneficial interest in a
Regulation S Global Note to be so transferred, (ii) a written order given in accordance with the
Applicable Procedures containing information regarding the account of the Agent Member to be
credited with, and the account of the Agent Member (and, if applicable, the Euroclear or
Clearstream account, as the case may be) to be debited for, such beneficial interest and (iii)

 

 

a certificate in substantially the form set forth in Annex B hereto given by the holder of
such beneficial interest, the Trustee, as Security Registrar, shall instruct DTC to reduce the
principal amount of the applicable Regulation S Global Note and to increase the principal amount of
a Restricted Global Note, by the principal amount of the beneficial interest in the Regulation S
Global Note to be so transferred, and to credit or cause to be credited to the account of the
Person specified in such instructions a beneficial interest in a Restricted Global Note having a
principal amount equal to the amount by which the principal amount of the Regulation S Global Note
was reduced upon such transfer.

     (d) Non-Global Restricted Note to Global Note. If the Holder of a Certificated Notes
that is a Restricted Note wishes at any time to transfer all or a portion of such Note to a Person
who wishes to take delivery thereof in the form of a beneficial interest in a Restricted Global
Note, or a Regulation S Global Note, in each case, such transfer may be effected, subject to the
Applicable Procedures, only in accordance with this Section 2.5(d). Upon receipt by (i) DTC of (A)
written instructions given in accordance with the Applicable Procedures from an Agent Member
directing DTC to credit or cause to be credited to a specified Agent Member’s account a beneficial
interest in a Restricted Global Note or a Regulation S Global Note, as the case may be, in a
specified principal amount equal to the principal amount of the Restricted Note (or portion
thereof) to be so transferred, (B) a written order given in accordance with the Applicable
Procedures containing information regarding the account of the Agent Member to be credited with
such beneficial interest, and (C) (1) an appropriately completed certificate of the transferor
substantially in the form set forth in Annex C-1 hereto, if the specified account is to be credited
with a beneficial interest in a Restricted Global Note, or (2) an appropriately completed
certificate of the transferor substantially in the form set forth in Annex C-2 hereto, if the
specified account is to be credited with a beneficial interest in a Regulation S Global Note, given
by the holder of such beneficial interest, and (ii) the Trustee of (A) the Restricted Note to be so
transferred, (B) notification from DTC of the transaction described in clause (i) above, and (C)
the certificate(s) described in clause (i)(C) above, the Trustee, as Security Registrar, shall
cancel such Restricted Note (and issue a new Note in respect of any untransferred portion thereof)
as provided in Section 305 of the Base Indenture and shall instruct DTC to increase the principal
amount of the applicable Global Note by the principal amount of the Note to be so transferred, and
to credit or cause to be credited to the account of the Person specified in such instructions a
beneficial interest in the applicable Global Note in such principal amount. The Trustee shall not
be required to accept for such registration of transfer or exchange any Restricted Note unless the
Trustee and the Company are satisfied that such transfer or exchange is being effected in
compliance with the restrictions on transfer as set forth in the Indenture and in such Note.

     (e) Transfer of Beneficial Interests in the Same Global Note. Beneficial interests in
any Restricted Global Note or Regulation S Global Note may be transferred to Persons who take
delivery thereof in the form of a beneficial interest in the same Restricted Global Note or
Regulation S Global Note in accordance with the transfer restrictions set forth in the Restricted
Notes Legend; provided, however, that prior to the expiration of the Restricted Period, transfers
of beneficial interests in the Regulation S Global Note may not be made to a U.S. Person or for the
account or benefit of a U.S. Person (other than an Initial Purchaser). Beneficial interests in any
Global Note that does not bear the Restricted Notes Legend may be transferred to Persons who take
delivery thereof in the form of a beneficial interest in a Global Note that does not bear the
Restricted Notes Legend. No written orders or instructions shall be required to be delivered to
the Registrar to effect the transfers described in this Section 2.5(e).

 

 

     (f) Exchange Offer. Upon the occurrence of the Registered Exchange Offer in
accordance with the Registration Agreement, the Company will execute and issue and, upon receipt of
a Company Order in accordance with Section 303 of the Base Indenture, the Trustee will
authenticate: (1) one or more Global Notes without the Restricted Note Legend in an aggregate
principal amount equal to the principal amount of the beneficial interests in the Restricted Global
Notes and Regulation S Global Notes accepted for exchange in the Exchange Offer by Persons that
certify in the applicable letters of transmittal that (A) they are not Broker-Dealers, (B) they are
not participating in a distribution of the Exchange Notes and (C) they are not affiliates (as
defined in Rule 144) of the Company; and (2) Notes other than Global Notes not bearing the
Restricted Notes Legend in an aggregate principal amount equal to the principal amount of the Notes
other than Global Notes accepted for exchange in the Exchange Offer by Persons that certify in the
applicable letters of transmittal that (A) they are not Broker-Dealers, (B) they are not
participating in a distribution of the Exchange Notes and (C) they are not affiliates (as defined
in Rule 144) of the Company. Concurrently with the issuance of such Notes, the Trustee will cause
the aggregate principal amount of the applicable Global Notes to be reduced accordingly.

     (g) Other Transfers. (i) In the event that a Global Note or any portion thereof is
exchanged for Certificated Notes, such other Notes may in turn be exchanged (on transfer or
otherwise) for Certificated Notes or for beneficial interests in a Global Note (if any is then
outstanding) only in accordance with such procedures, which shall be substantially consistent with
the provisions of Sections 2.5(a)-(f) above (including the certification requirements intended to
insure that transfers and exchanges of beneficial interests in a Global Note comply with Rule 144A,
Rule 144 (if available) or Regulation S, as the case may be) and any Applicable Procedures, as may
be from time to time adopted by the Company and the Trustee. In addition to the foregoing, the
Trustee, as Security Registrar, shall effect and register, upon receipt of a written request from
the Company to do so, a transfer not otherwise permitted by this Section 2.5, such registration to
be done in accordance with the otherwise applicable provisions of Section 305 of the Base Indenture
and this Section 2.5, upon the furnishing by the proposed transferor or transferee of a written
opinion of counsel (which opinion and counsel are satisfactory to the Company and the Trustee) to
the effect that, and such other certifications or information as the Company or the Trustee may
require to confirm that, the proposed transfer is being made pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the Securities Act. The Company may
require such transfer to be effected by the issuance of Certificated Notes.

     (h) Securities Act Legends. Restricted Notes and their Successor Notes shall bear the
legends required by Section 201 of the Base Indenture and Section 2.4 of this Supplemental
Indenture, subject to the following: (i) subject to the following clauses of this Section 2.5(h),
a Note of a series or any portion thereof which is issued in exchange for a beneficial interest in
a Global Note of that series shall bear the Restricted Note Legends borne by such Global Note while
represented thereby; (ii) subject to the following clauses of this Section 2.5(h), a new Note of a
series which is a Certificated Note and is issued in exchange for another Note of that series or
any portion thereof or a beneficial interest in a Global Note of that series, upon transfer or
otherwise, shall bear the Restricted Note Legend borne by such other Note; (iii) SEC-Registered
Notes and Regulation S Notes after the Restricted Period shall not bear a Restricted Note Legend;
(iv) at any time after the Notes of a series may be freely transferred without registration under
the Securities Act or without being subject to transfer restrictions pursuant to the Securities
Act, a new Note of that series which does not bear a Restricted Note Legend may be issued in
exchange for or in lieu of a Note of that series (other than a Global Note) or any portion thereof
which bears such a legend if the Trustee has received a certificate in form and substance

 

 

satisfactory to the Trustee and the Company and duly executed by the Holder of such legended
Note or his attorney duly authorized in writing, and after such date and receipt of such
certificate, the Trustee shall authenticate and deliver such a new Note in exchange for or in lieu
of such other Note as provided in Article Three of the Base Indenture and this Section 2.5; (v) a
new Note of a series which does not bear a Restricted Note Legend may be issued in exchange for or
in lieu of a Note of that series (other than a Global Note) or any portion thereof which bears such
a legend if, in the Company’s judgment, placing such a legend upon such new Note is not necessary
to ensure compliance with the registration requirements of the Securities Act, and the Trustee, at
the direction of the Company, shall authenticate and deliver such a new Note as provided in Article
Three of the Base Indenture and this Section 2.5; and (vi) notwithstanding the foregoing
provisions of this Section 2.5(h), a Successor Note of a Note of a series that does not bear a
particular form of Restricted Note Legend shall not bear such form of legend unless the Company has
reasonable cause to believe that such Successor Note is a “restricted security” within the meaning
of Rule 144 under the Securities Act, in which case the Trustee, at the direction of the Company,
shall authenticate and deliver a new Note of that series bearing a Restricted Note Legend in
exchange for such Successor Note as provided in Article Three of the Base Indenture and this
Section 2.5.

     Section 2.6. U.S. Currency. All payments of the principal of (and premium, if any)
and interest on the Notes shall be made in such coin or currency of the United States of America as
at the time of payment is legal tender for payment of public and private debts.

ARTICLE III

MISCELLANEOUS PROVISIONS

     Section 3.1. This Supplemental Indenture shall be effective as of the opening of business on
the date first above written upon the execution and delivery hereof by each of the parties hereto.

     Section 3.2. Except as expressly modified or amended hereby, the Base Indenture continues in
full force and effect and is in all respects confirmed, ratified and preserved.

     Section 3.3. Except as expressly amended hereby, the Base Indenture shall continue in full
force and effect in accordance with the provisions thereof and the Base Indenture is in all
respects hereby ratified and confirmed. This Supplemental Indenture and all its provisions shall
be deemed a part of the Base Indenture in the manner and to the extent herein and therein provided.

     Section 3.4. This Supplemental Indenture shall be governed by, and construed in accordance
with, the laws of the State of New York.

     Section 3.5. This Supplemental Indenture may be executed in any number of counterparts, each
of which so executed shall be deemed to be an original, but all such counterparts shall together
constitute but one and the same instrument.

     Section 3.6. The Trustee shall have not any responsibility for the Recitals of the Company
hereto, which Recitals are made by the Company alone, or for the validity or sufficiency of this
Supplement Indenture.

[Remainder of page intentionally left blank]

 

 

     IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly
executed as of the day and year first above written.

	 	 	 	 	 	 	 
	 	 	PROLOGIS	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	M. Gordon Keiser, Jr.	 	 
	 

	 	 	 	 

M. Gordon Keiser, Jr.
	 	 
	 

	 	 	 	Senior Vice President	 	 

[SEAL]

Attest:

	 	 	 	 	 
	By:

	 	/s/ Edward S. Nekritz	 	 
	 

	 	 

Edward S. Nekritz
	 	 
	 

	 	Secretary	 	 

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

	 	By:
	 	/s/ Ward A. Spooner
	 

	 	 	 	 
	 

	 	 	 	Ward A. Spooner
	 

	 	 	 	Vice President

	 	 	 	 	 
	Attest:
	 	 	 	 
	 
	 	 	 	 
	By:

	 	/s/	 	 
	 

	 	 

	 	 

 

 

Schedule I

Chief Executive Officer’s Certificate

     The undersigned, on behalf of ProLogis (the “Company”), acting pursuant to resolutions
adopted by the Pricing Committee of the Board of Trustees (the “Board”) of the Company on
October 26, 2005, hereby establishes two series of Debt Securities by means of this Chief Executive
Officer’s Certificate. Capitalized terms used but not defined in this Chief Executive Officer’s
Certificate shall have the meanings ascribed to them in the Indenture, dated as of March 1, 1995
(as supplemented by the First Supplemental Indenture thereto, the Second Supplemental Indenture
thereto and the Third Supplemental Indenture thereto, the “Indenture”), between the Company
and U.S. Bank National Association (successor in interest to State Street Bank and Trust Company),
as trustee (the “Trustee”).

5.250% Notes due 2010

     1. The series shall be entitled the “5.250% due 2010” (the “2010 Notes”).

     2. The 2010 Notes initially shall be limited to an aggregate principal amount of $500,000,000
(except in each case for 2010 Notes authenticated and delivered upon registration of transfer of,
or in exchange for, or in lieu of, other 2010 Notes of or within the Series pursuant to Section
304, 305, 306, 906, 1107 or 1305 of the Indenture); provided, the Company may increase such
aggregate principal amount upon the action of the Board to do so from time to time.

     3. The 2010 Notes shall bear interest at the rate of 5.250% per annum. The interest on this
Series shall accrue from November 2, 2005 or from the most recent Interest Payment Date (as defined
below) to which interest has been paid or duly provided for. Interest on the 2010 Notes will be
payable semi-annually on May 15 and November 15 of each year (each an “Interest Payment
Date”), commencing on May 15, 2006. Interest shall be paid to persons in whose names the 2010
Notes are registered on the May 1 and November 1 preceding the Interest Payment Date (each a
“Regular Record Date”). Additional Interest, if any, will be paid on Interest Payment
Dates to Holders on a Regular Record Date.

     4. Payment of the principal of and interest, if any, on the 2010 Notes (or Make-Whole Amount,
if applicable) will be made, the 2010 Notes may be surrendered for registration of transfer or
exchange and notices or demands to or upon the Company in respect of the 2010 Notes and the
Indenture may be served, at the office or agency of the Company maintained for that purpose in the
Borough of Manhattan, City of New York and the office of the Trustee, initially located at 180 E.
Fifth Street, 4th Floor, St. Paul, Minnesota 55101, Attention: Corporate Trust Division.

     5. The 2010 Notes may be redeemed in whole at any time or in part from time to time, at the
option of the Company, upon notice of not more than 60 nor less than 30 days prior to the
Redemption Date, at a redemption price (the “Make-Whole Amount”) equal to the greater of

	 	(1)	 	100% of the principal amount of the 2010 Notes to be redeemed; or
	 
	 	(2)	 	the sum of the present values of the remaining scheduled payments of principal
and interest on the 2010 Notes to be redeemed (exclusive of interest accrued to the
Redemption Date)

 

 

discounted to the Redemption Date on a semiannual basis (assuming a 360-day year
consisting of twelve 30-day months) at the then current Treasury Rate plus 15 basis
points.

     In each case the Company will pay accrued and unpaid interest on the principal amount being
redeemed to the Redemption Date.

     The following definitions apply with respect to the Make-Whole Amount:

          “Comparable
Treasury Issue” means the United States Treasury security selected by an
Independent Investment Banker as having a maturity comparable to the
remaining term (“Remaining Life”) of the 2010 Notes to be redeemed that would be utilized, at the time of selection and in
accordance with customary financial practice, in pricing new issues of corporate debt securities of
comparable maturity to the Remaining Life.

          “Comparable Treasury Price” means, with respect to any Redemption Date, (1) the average of the
Reference Treasury Dealer Quotations for such Redemption Date, after excluding the highest and
lowest Reference Treasury Dealer Quotations, or (2) if the Trustee obtains fewer than four such
Reference Treasury Dealer Quotations, the average of all such quotations.

          “Independent Investment Banker” means one of the Reference Treasury Dealers that we appoint to
act as the Independent Investment Banker from time to time.

          “Reference Treasury Dealer” means each of Banc of America Securities LLC, Citigroup Global
Markets Inc., J.P. Morgan Securities Inc. and their successors, and one other firm that is a
primary U.S. Government securities dealers (each a ”Primary
Treasury Dealer”) which we specify
from time to time; provided, however, that if any of them ceases to be a Primary Treasury Dealer,
we will substitute another Primary Treasury Dealer.

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

          “Treasury Rate” means, with respect to any Redemption Date, the rate per year equal to: (1)
the yield, under the heading which represents the average for the
immediately preceding week, appearing in the most recently published statistical release
designated “H.15(519)” or any successor publication which is published weekly by the Board of Governors of the Federal Reserve
System and which establishes yields on actively traded United States Treasury securities adjusted
to constant maturity under the caption “Treasury Constant Maturities”, for the maturity
corresponding to the Comparable Treasury Issue; provided that, if no maturity is within three
months before or after the Remaining Life of the 2010 Notes to be redeemed, yields for the two
published maturities most closely corresponding to the Comparable Treasury Issue shall be
determined and the Treasury Rate shall be interpolated or extrapolated from those yields on a
straight line basis, rounding to the nearest month; or (2) if such release (or any successor
release) is not published during the week preceding the calculation date or does not contain such
yields, the rate per year equal to the semiannual equivalent yield to maturity of the Comparable
Treasury Issue, calculated using a price for the Comparable Treasury Issue (expressed as a
percentage of its principal amount) equal to the Comparable Treasury Price for such

 

 

Redemption Date. The Treasury Rate shall be calculated on the third business day preceding the
Redemption Date.

     6. The 2010 Notes shall not provide for any sinking fund or analogous provision. None of the
2010 Notes shall be redeemable at the option of the Holder.

     7. The 2010 Notes are issuable only in registered form without coupons in denominations of
$2,000 and any integral multiple of $1,000 in excess thereof.

     8. The Security Registrar and Paying Agent for each Series shall be the Trustee.

     9. The principal amount of the 2010 Notes shall be payable upon declaration of acceleration
pursuant to Section 502 of the Indenture.

     10. The 2010 Notes shall be denominated in and principal of or interest, including Additional
Interest, if any, on the 2010 Notes (or Make-Whole Amount, if applicable) shall be payable in such
coin or currency of the United States of America as at the time of payment is legal tender for
payment of public and private debts.

     11. Except as provided in paragraph 5 of this Chief Executive Officer’s Certificate, and
pursuant to the Registration Agreement the amount of payments of principal of or interest, or
Additional Interest, if any, on the 2010 Notes (or Make-Whole Amount, if applicable) shall not be
determined with reference to an index or formula.

     12. None of the principal of or interest on the 2010 Notes (or Make-Whole Amount, or
Additional Interest, if applicable) will be payable at the election of the Company or a Holder
thereof in a currency or currencies, currency unit or units or composite currency or currencies
other than that in which the 2010 Notes are denominated or stated to be payable.

     13. Except as set forth in the Indenture or the Trust Indenture Act of 1939, the 2010 Notes
shall not contain any provisions granting special rights to the Holders of 2010 Notes upon the
occurrence of specified events.

     14. The 2010 Notes shall not contain any deletions from, modifications of or additions to the
Events of Default or covenants of the Company contained in the Indenture.

     15. The 2010 Notes shall be issued in the form of permanent global Securities as set forth in
Section 305 of the Indenture.

     16. The 2010 Notes will not be issued in the form of Bearer Securities or temporary global
Securities.

     17. Sections 1402 and 1403 of the Indenture shall be applicable to the 2010 Notes.

     18. The 2010 Notes will not be issued upon the exercise of debt warrants.

     19. The 2010 Notes shall not provide for the payment of Additional Amounts.

 

 

     20. The other terms and conditions of the 2010 Notes shall be substantially as set forth in
the Indenture and in the Offering Memorandum dated October 26, 2005 relating to the 2010 Notes.

5.625% Notes due 2015

     1. The series shall be entitled the “5.625% due 2015” (the “2015 Notes”).

     2. The 2015 Notes initially shall be limited to an aggregate principal amount of $400,000,000
(except in each case for 2015 Notes authenticated and delivered upon registration of transfer of,
or in exchange for, or in lieu of, other 2015 Notes of or within the Series pursuant to Section
304, 305, 306, 906, 1107 or 1305 of the Indenture); provided, the Company may increase such
aggregate principal amount upon the action of the Board to do so from time to time.

     3. The 2015 Notes shall bear interest at the rate of 5.250% per annum. The interest on this
Series shall accrue from November 2, 2005 or from the most recent Interest Payment Date (as defined
below) to which interest has been paid or duly provided for. Interest on the 2015 Notes will be
payable semi-annually on May 15 and November 15 of each year (each an “Interest Payment
Date”), commencing on May 15, 2006. Interest shall be paid to persons in whose names the 2015
Notes are registered on the May 1 and November 1 preceding the Interest Payment Date (each a
“Regular Record Date”). Additional Interest, if any, will be paid on Interest Payment
Dates to Holders on a Regular Record Date.

     4. Payment of the principal of and interest, if any, on the 2015 Notes (or Make-Whole Amount,
if applicable) will be made, the 2015 Notes may be surrendered for registration of transfer or
exchange and notices or demands to or upon the Company in respect of the 2015 Notes and the
Indenture may be served, at the office or agency of the Company maintained for that purpose in the
Borough of Manhattan, City of New York and the office of the Trustee, initially located at 180 E.
Fifth Street, 4th Floor, St. Paul, Minnesota 55101, Attention: Corporate Trust Division.

     5. The 2015 Notes may be redeemed in whole at any time or in part from time to time, at the
option of the Company, upon notice of not more than 60 nor less than 30 days prior to the
Redemption Date, at a redemption price (the “Make-Whole Amount”) equal to the greater of

	 	(1)	 	100% of the principal amount of the 2015 Notes to be redeemed; or
	 
	 	(2)	 	the sum of the present values of the remaining scheduled payments of principal
and interest on the 2015 Notes to be redeemed (exclusive of interest accrued to the
Redemption Date) discounted to the Redemption Date on a semiannual basis (assuming a
360-day year consisting of twelve 30-day months) at the then current Treasury Rate plus
25 basis points.

     In each case the Company will pay accrued and unpaid interest on the principal amount being
redeemed to the Redemption Date.

     The following definitions apply with respect to the Make-Whole Amount:

          “Comparable Treasury Issue” means the United States Treasury security selected by an
Independent Investment Banker as having a maturity comparable to the
remaining term (“Remaining Life”) of the 2015 Notes to be redeemed that would be utilized, at the time of selection and in

 

 

accordance with customary financial practice, in pricing new issues of corporate debt
securities of comparable maturity to the Remaining Life.

          “Comparable Treasury Price” means, with respect to any Redemption Date, (1) the average of the
Reference Treasury Dealer Quotations for such Redemption Date, after excluding the highest and
lowest Reference Treasury Dealer Quotations, or (2) if the Trustee obtains fewer than four such
Reference Treasury Dealer Quotations, the average of all such quotations.

          “Independent Investment Banker” means one of the Reference Treasury Dealers that we appoint to
act as the Independent Investment Banker from time to time.

          “Reference Treasury Dealer” means each of Banc of America Securities LLC, Citigroup Global
Markets Inc., J.P. Morgan Securities Inc. and their successors, and one other firm that is a
primary U.S. Government securities dealers (each a “Primary
Treasury Dealer”) which we specify
from time to time; provided, however, that if any of them ceases to be a Primary Treasury Dealer,
we will substitute another Primary Treasury Dealer.

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

          “Treasury Rate” means, with respect to any Redemption Date, the rate per year equal to: (1)
the yield, under the heading which represents the average for the immediately preceding week,
appearing in the most recently published statistical release
designated “H.15(519)” or any
successor publication which is published weekly by the Board of Governors of the Federal Reserve
System and which establishes yields on actively traded United States Treasury securities adjusted
to constant maturity under the caption “Treasury Constant
Maturities”, for the maturity
corresponding to the Comparable Treasury Issue; provided that, if no maturity is within three
months before or after the Remaining Life of the 2015 Notes to be redeemed, yields for the two
published maturities most closely corresponding to the Comparable Treasury Issue shall be
determined and the Treasury Rate shall be interpolated or extrapolated from those yields on a
straight line basis, rounding to the nearest month; or (2) if such release (or any successor
release) is not published during the week preceding the calculation date or does not contain such
yields, the rate per year equal to the semiannual equivalent yield to maturity of the Comparable
Treasury Issue, calculated using a price for the Comparable Treasury Issue (expressed as a
percentage of its principal amount) equal to the Comparable Treasury Price for such Redemption
Date. The Treasury Rate shall be calculated on the third business day preceding the Redemption
Date.

     6. The 2015 Notes shall not provide for any sinking fund or analogous provision. None of the
2015 Notes shall be redeemable at the option of the Holder.

     7. The 2015 Notes are issuable only in registered form without coupons in denominations of
$2,000 and any integral multiple of $1,000 in excess thereof.

     8. The Security Registrar and Paying Agent for each Series shall be the Trustee.

 

 

     9. The principal amount of the 2015 Notes shall be payable upon declaration of acceleration
pursuant to Section 502 of the Indenture.

     10. The 2015 Notes shall be denominated in and principal of or interest, including Additional
Interest, if any, on the 2015 Notes (or Make-Whole Amount, if applicable) shall be payable in such
coin or currency of the United States of America as at the time of payment is legal tender for
payment of public and private debts.

     11. Except as provided in paragraph 5 of this Chief Executive Officer’s Certificate, and
pursuant to the Registration Agreement, the amount of payments of principal of or interest, or
Additional Interest, if any, on the 2015 Notes (or Make-Whole Amount, if applicable) shall not be
determined with reference to an index or formula.

     12. None of the principal of or interest on the 2015 Notes (or Make-Whole Amount, or
Additional Interest, if applicable) will be payable at the election of the Company or a Holder
thereof in a currency or currencies, currency unit or units or composite currency or currencies
other than that in which the 2015 Notes are denominated or stated to be payable.

     13. Except as set forth in the Indenture or the Trust Indenture Act of 1939, the 2015 Notes
shall not contain any provisions granting special rights to the Holders of 2015 Notes upon the
occurrence of specified events.

     14. The 2015 Notes shall not contain any deletions from, modifications of or additions to the
Events of Default or covenants of the Company contained in the Indenture.

     15. The 2015 Notes shall be issued in the form of permanent global Securities as set forth in
Section 305 of the Indenture.

     16. The 2015 Notes will not be issued in the form of Bearer Securities or temporary global
Securities.

     17. Sections 1402 and 1403 of the Indenture shall be applicable to the 2015 Notes.

     18. The 2015 Notes will not be issued upon the exercise of debt warrants.

     19. The 2015 Notes shall not provide for the payment of Additional Amounts.

     20. The other terms and conditions of the 2015 Notes shall be substantially as set forth in
the Indenture and in the Offering Memorandum dated October 26, 2005 relating to the 2015 Notes.

     The undersigned approves in all respects the terms and conditions of the Purchase Agreement,
dated October 26, 2005, entered into by and between Banc of America Securities LLC, Citigroup
Global Markets Inc. and J.P. Morgan Securities Inc., as representatives of the several initial
purchasers named in Schedule A thereto.

 

 

	 	 	 	 	 	 	 
	Dated: November 2, 2005
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	PROLOGIS	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Jeffrey H. Schwartz	 	 
	 

	 	 	 	 

Jeffrey H. Schwartz
	 	 
	 

	 	 	 	Chief Executive Officer	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Edward S. Nekritz	 	 
	 

	 	 	 	 

Edward S. Nekritz
	 	 
	 

	 	 	 	Secretary	 	 

 

 

EXHIBIT A-1

[Insert any legend as required by Section 2.4 of the Supplemental Indenture]

	 	 	 
	REGISTERED

	 	PRINCIPAL AMOUNT
	No.: [      ]

	 	$[          ]
	 
	 	 
	CUSIP No.: [          ]
	 	 

PROLOGIS

5.250% NOTE DUE 2010

     PROLOGIS, a real estate investment trust organized and existing under the laws of the State of
Maryland (hereinafter called the “Company,” which term shall include any successor under the
Indenture hereinafter referred to), for value received, hereby promises to pay to CEDE & CO., or
registered assigns, upon presentation, the principal sum of [            ] DOLLARS November 15, 2010
and to pay interest on the outstanding principal amount thereon at the rate of 5.250% per annum,
until the entire principal hereof is paid or made available for payment, and Additional Interest,
if any, payable pursuant to Section 5 of the Registration Agreement (as defined in the Indenture).
Interest and Additional Interest, if any, shall accrue from November 2, 2005 or from the most
recent Interest Payment Date to which interest has been paid or duly provided for, and be payable
semi-annually in arrears on May 15 and November 15 in each year, commencing on May 15, 2006. The
interest, and Additional Interest, if any, so payable, and punctually paid or duly provided for on
any Interest Payment Date will, as provided in the Indenture, be paid to the Person in whose name
this Security (or one or more Predecessor Securities) is registered at the close of business on the
Regular Record Date for such interest which shall be May 1 or November 1(whether or not a Business
Day), as the case may be, next preceding such Interest Payment Date. Any such interest and
Additional Interest, if any, not so punctually paid or duly provided for shall forthwith cease to
be payable to the Holder on such Regular Record Date, and may either be paid to the Person in whose
name this Security (or one or more Predecessor Securities) is registered at the close of business
on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee,
notice whereof shall be given to Holders of Securities of this series not more than 15 days and not
less than 10 days prior to such Special Record Date, or may be paid at any time in any other lawful
manner not inconsistent with the requirements of any securities exchange on which the Securities
may be listed, and upon such notice as may be required by such exchange, all as more fully provided
in the Indenture. Payment of the principal of, or Make-Whole Amount, if applicable, on, and
interest and Additional Interest, if any, on this Security will be made at the office or agency of
the Company maintained for that purpose in the Borough of Manhattan, City of New York and St. Paul,
Minnesota, or elsewhere as provided in the Indenture, in such coin or currency of the United States
of America as at the time of payment is legal tender for payment of public and private debts;
provided, however, that at the option of the Company, payment of interest and
Additional Interest, if any, may be made by (i) check mailed to the address of the Person entitled
thereto as such address shall appear in the Security Register or (ii) transfer to an account of the
Person entitled thereto located inside the United States.

 

 

     Each Security of this series is one of a duly authorized issue of securities of the Company
(herein called the “Securities”), issued and to be issued in one or more series under an Indenture,
dated as of March 1, 1995 (herein called the “Indenture”), between the Company and U.S. Bank
National Association (successor in interest to State Street Bank and Trust Company), as trustee
(herein called the “Trustee,” which term includes any successor trustee under the Indenture with
respect to the series of which this Security is a part), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective rights, limitations
of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the
Securities and of the terms upon which the Securities are, and are to be, authenticated and
delivered. This Security is one of the series designated on the first page hereof, initially
limited in aggregate principal amount to $500,000,000, subject to the Company’s right to increase
the aggregate principal amount of such series from time to time.

     Securities of this series may be redeemed at any time at the option of the Company, in whole
or in part, at a redemption price (the “Make-Whole Amount”) equal to the greater of

	 	(1)	 	100% of the principal amount of the Securities to be redeemed; or
	 
	 	(2)	 	the sum of the present values of the remaining scheduled payments of principal
and interest on the Securities to be redeemed (exclusive of interest accrued to the
date of redemption) discounted to the date of redemption on a semiannual basis
(assuming a 360-day year consisting of twelve 30-day months) at the then current
Treasury Rate plus 15 basis points.

     In each case the Company will pay accrued and unpaid interest on the principal amount being
redeemed to the date of redemption.

     The following definitions apply with respect to the Make-Whole Amount:

          “Comparable Treasury Issue” means the United States Treasury security selected by an
Independent Investment Banker as having a maturity comparable to the remaining term (“Remaining
Life”) of the Securities to be redeemed that would be utilized, at the time of selection and in
accordance with customary financial practice, in pricing new issues of corporate debt securities of
comparable maturity to the Remaining Life.

          “Comparable Treasury Price” means, with respect to any redemption date, (1) the average of the
Reference Treasury Dealer Quotations for such redemption date, after excluding the highest and
lowest Reference Treasury Dealer Quotations, or (2) if the Trustee obtains fewer than four such
Reference Treasury Dealer Quotations, the average of all such quotations.

          “Independent Investment Banker” means one of the Reference Treasury Dealers that the Company
appoints to act as the Independent Investment Banker from time to time.

          “Reference Treasury Dealer” means each of Banc of America Securities LLC, Citigroup Global
Markets Inc., J.P. Morgan Securities Inc. and their successors, and one other firm that is a
primary U.S. Government securities dealer (each a “Primary Treasury Dealer”) which the Company
specifies from time to time; provided, however, that if any of them ceases to be a Primary Treasury
Dealer, the Company will substitute another Primary Treasury Dealer.

 

 

          “Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer
and any redemption date, the average, as determined by the Trustee, of the bid and asked prices for
the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount)
quoted in writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m., New York City
time, on the third business day preceding such redemption date.

          “Treasury Rate” means, with respect to any redemption date, the rate per year equal to: (1)
the yield, under the heading which represents the average for the immediately preceding week,
appearing in the most recently published statistical release designated “H.15(519)” or any
successor publication which is published weekly by the Board of Governors of the Federal Reserve
System and which establishes yields on actively traded United States Treasury securities adjusted
to constant maturity under the caption “Treasury Constant Maturities,” for the maturity
corresponding to the Comparable Treasury Issue; provided that, if no maturity is within three
months before or after the Remaining Life of the Securities to be redeemed, yields for the two
published maturities most closely corresponding to the Comparable Treasury Issue shall be
determined and the Treasury Rate shall be interpolated or extrapolated from those yields on a
straight line basis, rounding to the nearest month; or (2) if such release (or any successor
release) is not published during the week preceding the calculation date or does not contain such
yields, the rate per year equal to the semiannual equivalent yield to maturity of the Comparable
Treasury Issue, calculated using a price for the Comparable Treasury Issue (expressed as a
percentage of its principal amount) equal to the Comparable Treasury Price for such redemption
date. The Treasury Rate shall be calculated on the third business day preceding the redemption
date.

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

     If an Event of Default with respect to Securities of this series shall occur and be
continuing, the Make-Whole Amount on the Securities of this series may be declared due and payable
in the manner and with the effect provided in the Indenture.

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

 

 

     The Indenture permits, with certain exceptions as therein provided, the amendment thereof and
the modification of the rights and obligations of the Company and the rights of the Holders of the
Securities of each series to be affected under the Indenture at any time by the Company and the
Trustee with the consent of the Holders of not less than a majority in principal amount of the
Outstanding Securities of each series of Securities then Outstanding affected thereby. The
Indenture also contains provisions permitting the Holders of specified percentages in principal
amount of the Securities of each series at the time Outstanding, on behalf of the Holders of all
Securities of such series, to waive compliance by the Company with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences. Any such consent
or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon
all future Holders of this Security and of any Security issued upon the registration of transfer
hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver
is made upon this Security.

     No reference herein to the Indenture and no provision of this Security or of the Indenture
shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay
the principal of, Make-Whole Amount, if applicable, on, and interest on this Security at the times,
place and rate, and in the coin or currency, herein prescribed.

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

     The Securities of this series are issuable only in registered form without coupons in minimum
denominations of $2,000 and any integral multiple of $1,000 in excess thereof. As provided in the
Indenture and subject to certain limitations therein set forth, Securities of this series are
exchangeable for a like aggregate principal amount of Securities of this series of a different
authorized denomination, as requested by the Holder surrendering the same.

     No service charge shall be made for any such registration of transfer or exchange, but the
Company may require payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith.

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

     No recourse under or upon any obligation, covenant or agreement contained in the Indenture or
in this Security, or because of any indebtedness evidenced thereby, shall be had against any
promoter, as such, or against any past, present or future shareholder, officer or trustee, as such,
of the Company or of any successor, either directly or through the Company or any successor, under
any rule of law, statute or constitutional provision or by the enforcement of any assessment or by
any legal or equitable proceeding

 

 

or otherwise, all such liability being expressly waived and released by the acceptance of this
Security by the Holder thereof and as part of the consideration for the issue of the Securities of
this series.

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

     THE INDENTURE AND THE SECURITIES, INCLUDING THIS SECURITY, SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK.

     Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification
Procedures, the Company has caused “CUSIP” numbers to be printed on the Securities of this series
as a convenience to the Holders of such Securities. No representation is made as to the
correctness or accuracy of such CUSIP numbers as printed on the Securities, and reliance may be
placed only on the other identification numbers printed hereon.

[This space intentionally left blank.]

 

 

     Unless the certificate of authentication hereon has been executed by or on behalf of the
Trustee by manual signature, this Security shall not be entitled to any benefit under the Indenture
or be valid or obligatory for any purpose.

     IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed by the
undersigned officer.

	 	 	 	 	 
	 	 	PROLOGIS
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Name: [ ]
	 

	 	 	 	Title:   [ ]

Attest

	 	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

Name: [ ]
	 	 
	 

	 	Title:   [ ]	 	 

Dated: [ ], 20[ ]

TRUSTEE’S CERTIFICATE OF AUTHENTICATION:

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

U.S. BANK NATIONAL ASSOCIATION,
   as successor trustee

	 	 	 	 	 
	BY:
	 	 	 	 
	 

	 	 

Authorized Officer
	 	 

 

 

ASSIGNMENT FORM

FOR VALUE RECEIVED, the undersigned hereby

sells, assigns and transfers unto

PLEASE INSERT SOCIAL

SECURITY OR OTHER IDENTIFYING

NUMBER OF ASSIGNEE

	 	 
	 	 

(Please Print or Typewrite Name and Address including

Zip Code of Assignee)

the within-mentioned Security of ProLogis and hereby does irrevocably constitute and appoint
                                                                                                                        Attorney
to transfer said Security on the books of the within-named Company with full power of substitution
in the premises.

Dated                     

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

 

 

Exhibit A-2

[Insert any legend as required by Section 2.4 of the Supplemental Indenture]

	 	 	 
	REGISTERED

	 	PRINCIPAL AMOUNT
	No.: [    ]

	 	$[          ]

CUSIP No.: [          ]

PROLOGIS

5.625% NOTE DUE 2015

     PROLOGIS, a real estate investment trust organized and existing under the laws of the State of
Maryland (hereinafter called the “Company,” which term shall include any successor under the
Indenture hereinafter referred to), for value received, hereby promises to pay to CEDE & CO., or
registered assigns, upon presentation, the principal sum of [           ] DOLLARS on November
15, 2015 and to pay interest on the outstanding principal amount thereon at the rate of 5.625% per
annum, until the entire principal hereof is paid or made available for payment, and Additional
Interest, if any, payable pursuant to Section 5 of the Registration Agreement (as defined in the
Indenture). Interest and Additional Interest, if any, shall accrue from November 2, 2005 or from
the most recent Interest Payment Date to which interest has been paid or duly provided for, and be
payable semi-annually in arrears on May 15 and November 15 in each year, commencing on May 15,
2006. The interest, and Additional Interest, if any, so payable, and punctually paid or duly
provided for on any Interest Payment Date will, as provided in the Indenture, be paid to the Person
in whose name this Security (or one or more Predecessor Securities) is registered at the close of
business on the Regular Record Date for such interest which shall be May 1 or November 1 (whether
or not a Business Day), as the case may be, next preceding such Interest Payment Date. Any such
interest and Additional Interest, if any, not so punctually paid or duly provided for shall
forthwith cease to be payable to the Holder on such Regular Record Date, and may either be paid to
the Person in whose name this Security (or one or more Predecessor Securities) is registered at the
close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed
by the Trustee, notice whereof shall be given to Holders of Securities of this series not more than
15 days and not less than 10 days prior to such Special Record Date, or may be paid at any time in
any other lawful manner not inconsistent with the requirements of any securities exchange on which
the Securities may be listed, and upon such notice as may be required by such exchange, all as more
fully provided in the Indenture. Payment of the principal of, or Make-Whole Amount, if applicable,
on, and interest and Additional Interest, if any, on this Security will be made at the office or
agency of the Company maintained for that purpose in the Borough of Manhattan, City of New York and
St. Paul Minnesota, or elsewhere as provided in the Indenture, in such coin or currency of the
United States of America as at the time of payment is legal tender for payment of public and
private debts; provided, however, that at the option of the Company, payment of
interest and Additional Interest, if any, may be made by (i) check mailed to the address of the
Person entitled thereto as such address shall appear in the Security Register or (ii) transfer to
an account of the Person entitled thereto located inside the United States.

     Each Security of this series is one of a duly authorized issue of securities of the Company
(herein called the “Securities”), issued and to be issued in one or more series under an Indenture,
dated as of

 

 

March 1, 1995 (herein called the “Indenture”), between the Company and U.S. Bank National
Association (successor in interest to State Street Bank and Trust Company), as trustee (herein
called the “Trustee,” which term includes any successor trustee under the Indenture with respect to
the series of which this Security is a part), to which Indenture and all indentures supplemental
thereto reference is hereby made for a statement of the respective rights, limitations of rights,
duties and immunities thereunder of the Company, the Trustee and the Holders of the Securities and
of the terms upon which the Securities are, and are to be, authenticated and delivered. This
Security is one of the series designated on the first page hereof, initially limited in aggregate
principal amount to $400,000,000, subject to the Company’s right to increase the aggregate
principal amount of such series from time to time.

     Securities of this series may be redeemed at any time at the option of the Company, in whole
or in part, at a redemption price (the “Make-Whole Amount”) equal to the greater of

	 	(1)	 	100% of the principal amount of the Securities to be redeemed; or
	 
	 	(2)	 	the sum of the present values of the remaining scheduled payments of principal
and interest on the Securities to be redeemed (exclusive of interest accrued to the
date of redemption) discounted to the date of redemption on a semiannual basis
(assuming a 360-day year consisting of twelve 30-day months) at the then current
Treasury Rate plus 25 basis points.

     In each case the Company will pay accrued and unpaid interest on the principal amount being
redeemed to the date of redemption.

     The following definitions apply with respect to the Make-Whole Amount:

          “Comparable Treasury Issue” means the United States Treasury security selected by an
Independent Investment Banker as having a maturity comparable to the remaining term (“Remaining
Life”) of the Securities to be redeemed that would be utilized, at the time of selection and in
accordance with customary financial practice, in pricing new issues of corporate debt securities of
comparable maturity to the Remaining Life.

          “Comparable Treasury Price” means, with respect to any redemption date, (1) the average of the
Reference Treasury Dealer Quotations for such redemption date, after excluding the highest and
lowest Reference Treasury Dealer Quotations, or (2) if the Trustee obtains fewer than four such
Reference Treasury Dealer Quotations, the average of all such quotations.

          “Independent Investment Banker” means one of the Reference Treasury Dealers that the Company
appoints to act as the Independent Investment Banker from time to time.

          “Reference Treasury Dealer” means each of Banc of America Securities LLC, Citigroup Global
Markets Inc., J.P. Morgan Securities Inc. and their successors, and one other firm that is primary
U.S. Government securities dealer (each a “Primary Treasury Dealer”) which the Company specifies
from time to time; provided, however, that if any of them ceases to be a Primary Treasury Dealer,
the Company will substitute another Primary Treasury Dealer.

          “Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer
and any redemption date, the average, as determined by the Trustee, of the bid and asked prices

 

 

for the Comparable Treasury Issue (expressed in each case as a percentage of its principal
amount) quoted in writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m., New York
City time, on the third business day preceding such redemption date.

          “Treasury Rate” means, with respect to any redemption date, the rate per year equal to: (1)
the yield, under the heading which represents the average for the immediately preceding week,
appearing in the most recently published statistical release designated “H.15(519)” or any
successor publication which is published weekly by the Board of Governors of the Federal Reserve
System and which establishes yields on actively traded United States Treasury securities adjusted
to constant maturity under the caption “Treasury Constant Maturities,” for the maturity
corresponding to the Comparable Treasury Issue; provided that, if no maturity is within three
months before or after the Remaining Life of the Securities to be redeemed, yields for the two
published maturities most closely corresponding to the Comparable Treasury Issue shall be
determined and the Treasury Rate shall be interpolated or extrapolated from those yields on a
straight line basis, rounding to the nearest month; or (2) if such release (or any successor
release) is not published during the week preceding the calculation date or does not contain such
yields, the rate per year equal to the semiannual equivalent yield to maturity of the Comparable
Treasury Issue, calculated using a price for the Comparable Treasury Issue (expressed as a
percentage of its principal amount) equal to the Comparable Treasury Price for such redemption
date. The Treasury Rate shall be calculated on the third business day preceding the redemption
date.

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

     If an Event of Default with respect to Securities of this series shall occur and be
continuing, the Make-Whole Amount on the Securities of this series may be declared due and payable
in the manner and with the effect provided in the Indenture.

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

     The Indenture permits, with certain exceptions as therein provided, the amendment thereof and
the modification of the rights and obligations of the Company and the rights of the Holders of the

 

 

Securities of each series to be affected under the Indenture at any time by the Company and
the Trustee with the consent of the Holders of not less than a majority in principal amount of the
Outstanding Securities of each series of Securities then Outstanding affected thereby. The
Indenture also contains provisions permitting the Holders of specified percentages in principal
amount of the Securities of each series at the time Outstanding, on behalf of the Holders of all
Securities of such series, to waive compliance by the Company with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences. Any such consent
or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon
all future Holders of this Security and of any Security issued upon the registration of transfer
hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver
is made upon this Security.

     No reference herein to the Indenture and no provision of this Security or of the Indenture
shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay
the principal of, Make-Whole Amount, if applicable, on, and interest on this Security at the times,
place and rate, and in the coin or currency, herein prescribed.

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

     The Securities of this series are issuable only in registered form without coupons in minimum
denominations of $2,000 and any integral multiple of $1,000 in excess thereof. As provided in the
Indenture and subject to certain limitations therein set forth, Securities of this series are
exchangeable for a like aggregate principal amount of Securities of this series of a different
authorized denomination, as requested by the Holder surrendering the same.

     No service charge shall be made for any such registration of transfer or exchange, but the
Company may require payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith.

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

     No recourse under or upon any obligation, covenant or agreement contained in the Indenture or
in this Security, or because of any indebtedness evidenced thereby, shall be had against any
promoter, as such, or against any past, present or future shareholder, officer or trustee, as such,
of the Company or of any successor, either directly or through the Company or any successor, under
any rule of law, statute or constitutional provision or by the enforcement of any assessment or by
any legal or equitable proceeding or otherwise, all such liability being expressly waived and
released by the acceptance of this Security by the Holder thereof and as part of the consideration
for the issue of the Securities of this series.

 

 

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

     THE INDENTURE AND THE SECURITIES, INCLUDING THIS SECURITY, SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK.

     Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification
Procedures, the Company has caused “CUSIP” numbers to be printed on the Securities of this series
as a convenience to the Holders of such Securities. No representation is made as to the
correctness or accuracy of such CUSIP numbers as printed on the Securities, and reliance may be
placed only on the other identification numbers printed hereon.

[This space intentionally left blank.]

 

 

     Unless the certificate of authentication hereon has been executed by or on behalf of the
Trustee by manual signature, this Security shall not be entitled to any benefit under the Indenture
or be valid or obligatory for any purpose.

     IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed by the
undersigned officer.

	 	 	 	 	 
	 	 	PROLOGIS
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Name: [ ]
	 

	 	 	 	Title:   [ ]

Attest

	 	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

Name: [ ]
	 	 
	 

	 	Title:   [ ]	 	 

Dated: [ ], 20[ ]

TRUSTEE’S CERTIFICATE OF AUTHENTICATION:

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

U.S. BANK NATIONAL ASSOCIATION,
   as successor trustee

	 	 	 	 	 
	BY:
	 	 	 	 
	 

	 	 

Authorized Officer
	 	 

 

 

ASSIGNMENT FORM

FOR VALUE RECEIVED, the undersigned hereby

sells, assigns and transfers unto

PLEASE INSERT SOCIAL

SECURITY OR OTHER IDENTIFYING

NUMBER OF ASSIGNEE

	 	 
	 	 

(Please Print or Typewrite Name and Address including

Zip Code of Assignee)

the within-mentioned Security of ProLogis and hereby does irrevocably constitute and appoint

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

Dated                     

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

 

 

ANNEX A

FORM OF TRANSFER CERTIFICATE -

RESTRICTED GLOBAL NOTE TO

REGULATION S GLOBAL NOTE

REGULATION S GLOBAL NOTE CERTIFICATE

(FOR TRANSFERS PURSUANT TO SECTION 2.5(b) OF THE INDENTURE)

U.S. Bank National Association, as Trustee

60 Livingston Avenue

St. Paul, MN 55107

Attn: Specialized Finance

Re: [title of series] of ProLogis (the “Notes”)

Reference is hereby made to the Indenture, dated as of March 1, 1995, as amended by a First
Supplemental Indenture dated as of February 9, 2005, a Second Supplemental Indenture dated as of
November 2, 2005, and a Third Supplemental Indenture dated as of November 2, 2005 (as so
supplemented, the “Indenture”), among ProLogis (formerly ProLogis Trust and prior thereto Security
Capital Industry Trust (the “Company”), and U.S. Bank National Association (as successor in
interest to the State Street Bank and Trust Company), as Trustee. Capitalized terms used but not
defined herein shall have the meanings given to them in the Indenture.

This certificate relates to U.S. $       aggregate principal amount of Notes which are evidenced by
the Restricted Global Note (CUSIP No.       ) and held with the Depository in the name of [insert
name of transferor] (the “Transferor”). The Transferor has requested a transfer of such beneficial
interest in the Notes to a Person who will take delivery thereof in the form of an equal aggregate
principal amount of Notes evidenced by the Regulation S Global Note (CUSIP No.       ).

In connection with such request and in respect of such Notes, the Transferor does hereby certify
that such transfer has been effected pursuant to and in accordance with Rule 903 or Rule 904 under
the Securities Act of 1933, as amended (the “Securities Act”) accordingly the Transferor does
hereby further certify that:

(a) the offer of the Notes was not made to a person in the United States;

(b) either:

(i) at the time the buy order was originated, the transferee was outside the United States or the
Transferor and any person acting on its behalf reasonably believed that the transferee was outside
the United States, or

(ii) the transaction was executed in, on or through the facilities of a designated offshore
securities market and neither the Transferor nor any person acting on its behalf knows that the
transaction was prearranged with a buyer in the United States;

Annex A-1

 

 

(c) no directed selling efforts have been made in contravention of the requirements of Rule 903(b)
or 904(a) of Regulation S under the Securities Act (“Regulation S”), as applicable; and

(d) the transaction is not part of a plan or scheme to evade the registration requirements of the
Securities Act.

We understand that this certificate is required in connection with certain securities laws of the
United States. In connection therewith, if administrative or legal proceedings are commenced or
threatened in connection with which this certificate is or would be relevant, we irrevocably
authorize you to produce this certificate to any interested party in such proceeding. This
certificate and the statements contained herein are made for your benefit and the benefit of the
Company and Initial Purchasers of the Notes under the Purchase Agreement, dated October 26, 2005,
with the Company relating to the Notes. Terms used in this certificate and not otherwise defined in
the Indenture have the meanings set forth in Regulation S.

	 	 	 	 	 	 
	Dated:

	 	 	 	[Insert Name of Transferor]
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Name:
	 

	 	 	 	Title:

Annex A-2

 

 

ANNEX B

FORM OF TRANSFER CERTIFICATE -

REGULATION S GLOBAL NOTE TO RESTRICTED

GLOBAL NOTE

RESTRICTED GLOBAL NOTE CERTIFICATE

(FOR TRANSFERS PURSUANT TO SECTION 2.5(c) OF THE INDENTURE)

U.S. Bank National Association, as Trustee

60 Livingston Avenue

St. Paul, MN 55107

Attn: Specialized Finance

Re: [title of series] of ProLogis (the “Notes”)

Reference is hereby made to the Indenture, dated as of March 1, 1995, as amended by a First
Supplemental Indenture dated as of February 9, 2005, a Second Supplemental Indenture dated as of
November 2, 2005, and a Third Supplemental Indenture dated as of November 2, 2005 (as so
supplemented, the “Indenture”), among ProLogis (formerly ProLogis Trust and prior thereto Security
Capital Industry Trust (the “Company”), and U.S. Bank National Association (as successor in
interest to the State Street Bank and Trust Company), as Trustee. Capitalized terms used but not
defined herein shall have the meanings given to them in the Indenture.

This certificate relates to U.S. $       aggregate principal amount of Notes which are evidenced
by the Regulation S Global Note (CUSIP No       ) and held with the Depository in the name of
[insert name of transferor] (the “Transferor”). The Transferor has requested a transfer of such
beneficial interest in the Notes to a Person that will take delivery thereof in the form of an
equal principal amount of Notes evidenced by the Restricted Global Note (CUSIP No.      ).

In connection with such request and in respect of such Notes, the Transferor does hereby certify
that such transfer has been effected pursuant to and in accordance with Rule 144A under the
Securities Act of 1933, as amended (the “Securities Act”), and accordingly the Transferor does
hereby further certify that the Notes are being transferred to a person that the Transferor
reasonably believes is purchasing the Notes for its own account, or for one or more accounts with
respect to which such Person exercises sole investment discretion, and such Person and each such
account is a “qualified institutional buyer” within the meaning of Rule 144A under the Securities
Act and the Notes have been transferred in a transaction meeting the requirements of Rule 144A and
in accordance with any applicable securities laws of any state of the United States.

Annex B-1

 

 

We understand that this certificate is required in connection with certain securities laws of the
United States. In connection therewith, if administrative or legal proceedings are commenced or
threatened in connection with which this certificate is or would be relevant, we irrevocably
authorize you to produce
this certificate to any interested party in such proceeding. This certificate and the statements
contained herein are made for your benefit and the benefit of the Company, and the Initial
Purchasers of the Notes under the Purchase Agreement, dated October 26, 2005, with the Company
relating to the Notes.

	 	 	 	 	 	 
	Dated:

	 	 	 	[Insert Name of Transferor]
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Name:
	 

	 	 	 	Title:

(If the Transferor owner is a corporation, partnership or fiduciary, the title of the Person
signing on behalf of such registered owner must be stated.)

Annex B-2

 

 

ANNEX C-1

FORM OF TRANSFER CERTIFICATE — NON-GLOBAL

RESTRICTED NOTE TO RESTRICTED GLOBAL NOTE

RESTRICTED GLOBAL NOTE CERTIFICATE

(FOR TRANSFERS PURSUANT TO SECTION 2.5(d) OF THE INDENTURE)

U.S. Bank National Association, as Trustee

60 Livingston Avenue

St. Paul, MN 55107

Attn: Specialized Finance

Re: [title of series] of ProLogis (the “Notes”)

Reference is hereby made to the Indenture, dated as of March 1, 1995, as amended by a First
Supplemental Indenture dated as of February 9, 2005, a Second Supplemental Indenture dated as of
November 2, 2005, and a Third Supplemental Indenture dated as of November 2, 2005 (as so
supplemented, the “Indenture”), among ProLogis (formerly ProLogis Trust and prior thereto Security
Capital Industry Trust (the “Company”), and U.S. Bank National Association (as successor in
interest to the State Street Bank and Trust Company), as Trustee. Capitalized terms used but not
defined herein shall have the meanings given to them in the Indenture.

This certificate relates to U.S. $        aggregate principal amount of Notes held in certificated
form (CUSIP No.     ) by [insert name of transferor] (the “Transferor”). The Transferor has
requested a transfer of such Notes to a Person that will take delivery in the form of an equal
principal amount of Notes evidenced by the Restricted Global Note
(CUSIP No.     ).

In connection with such request and in respect of such Notes, the Transferor does hereby certify
that such transfer has been effected pursuant to and in accordance with Rule 144A under the United
States Securities Act of 1933, as amended, and accordingly the Transferor does hereby further
certify that the Notes are being transferred to a person that the Transferor reasonably believes is
purchasing the Notes for its own account, or for one or more accounts with respect to which such
Person exercises sole investment discretion, and such Person and each such account is a “qualified
institutional buyer” within the meaning of Rule 144A and the Notes have been transferred in a
transaction meeting the requirements of Rule 144A and in accordance with any applicable securities
laws of any state of the United States.

Annex C-1-1

 

 

We understand that this certificate is required in connection with certain securities laws of the
United States. In connection therewith, if administrative or legal proceedings are commenced or
threatened in connection with which this certificate is or would be relevant, we irrevocably
authorize you to produce this certificate to any interested party in such proceeding. This
certificate and the statements contained herein are made for your benefit and the benefit of the
Company and the Initial Purchasers of the Notes under the Purchase Agreement, dated October 26,
2005, with the Company relating to the Notes.

	 	 	 	 	 	 
	Dated:

	 	 	 	[Insert Name of Transferor]
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Name:
	 

	 	 	 	Title:

Annex C-1-2

 

 

ANNEX C-2

FORM OF TRANSFER CERTIFICATE — NON-GLOBAL

RESTRICTED NOTE TO REGULATION S GLOBAL NOTE

REGULATION S GLOBAL NOTE CERTIFICATE

(FOR TRANSFERS PURSUANT TO SECTION 2.5(d) OF THE INDENTURE)

U.S. Bank National Association, as Trustee

60 Livingston Avenue

St. Paul, MN 55107

Attn: Specialized Finance

Re: [title of series] of ProLogis (the “Notes”)

Reference is hereby made to the Indenture, dated as of March 1, 1995, as amended by a First
Supplemental Indenture dated as of February 9, 2005, a Second Supplemental Indenture dated as of
November 2, 2005, and a Third Supplemental Indenture dated as of November 2, 2005 (as so
supplemented, the “Indenture”), among ProLogis (formerly ProLogis Trust and prior thereto Security
Capital Industry Trust (the “Company”), and U.S. Bank National Association (as successor in
interest to the State Street Bank and Trust Company), as Trustee. Capitalized terms used but not
defined herein shall have the meanings given to them in the Indenture.

This certificate relates to U.S. $     aggregate principal amount of Notes held in certificated
form (CUSIP No.      ) by [insert name of transferor] (the “Transferor”). The Transferor has
requested an exchange or transfer of such Notes to a Person that will take delivery in the form of
an equal principal amount of Notes evidenced by the Regulation S Global Note or the Temporary
Regulation S Global Note (CUSIP No.      ).

In connection with such request and in respect of such Notes, the Transferor does hereby certify
that such transfer has been effected pursuant to and in accordance with Rule 903 or Rule 904 under
the Securities Act of 1933, as amended (the “Securities Act”), accordingly the Transferor does
hereby further certify that:

(a) the offer of the Notes was not made to a person in the United States;

(b) either:

(i) at the time the buy order was originated,

United States or the Transferor and any person acting on its behalf reasonably believed that the
transferee was outside the United States, or

(ii) the transaction was executed in, on or through the facilities of a designated offshore
securities market and neither the Transferor nor any person acting on its behalf knows that the
transaction was prearranged with a buyer in the United States;

Annex
C-2-1

 

 

(c) no directed selling efforts have been made in contravention of the requirements of Rule 903(b)
or 904(b) of Regulation S under the Securities Act, as applicable; and

(d) the transaction is not part of a plan or scheme to evade the registration requirements of the
Act.

We understand that this certificate is required in connection with certain securities laws of the
United States. In connection therewith, if administrative or legal proceedings are commenced or
threatened in connection with which this certificate is or would be relevant, we irrevocably
authorize you to produce this certificate to any interested party in such proceeding. This
certificate and the statements contained herein are made for your benefit and the benefit of the
Company and the Initial Purchasers of the Notes under the Purchase Agreement, dated October 26,
2005, with the Company relating to the Notes.

	 	 	 	 	 	 
	Dated:

	 	 	 	[Insert Name of Transferor]
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Name:
	 

	 	 	 	Title:

Annex
C-2-2

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