Document:

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                                                                    EXHIBIT 10.4

                                JOHANNSON L. YAP
                              EMPLOYMENT AGREEMENT

     This Employment Agreement (this "Agreement"), is made and entered into as
of the 26 day of July, 2000 (the "Effective Date"), by and between First
Industrial Realty Trust, Inc., a Maryland corporation (the "Employer"), and
Johannson L. Yap (the "Executive").

                                    RECITALS

     A.   The Employer desires to employ the Executive as an officer of the
Employer for a specified term.

     B.   The Executive is willing to accept such employment, upon the terms and
conditions hereinafter set forth.

     NOW, THEREFORE, in consideration of the premises and of the covenants and
agreements hereinafter contained, it is covenanted and agreed by and between the
parties hereto as follows:

                                   AGREEMENTS

     1.   POSITION AND DUTIES. The Employer hereby employs the Executive as
Chief Investment Officer of the Employer, or in such other comparable or other
capacity as shall be mutually agreed between the Employer and the Executive by
amendment of this Agreement. During the period of the Executive's employment
hereunder, the Executive shall devote his best efforts and full business time
(excluding any periods of disability, vacation, sick leave or other leave to
which the Executive is entitled), energy, skills and attention to the business
and affairs of the Employer, on an exclusive basis. The Executive's duties and
authority shall consist of and include all duties and authority customarily
performed and held by persons holding equivalent positions with real estate
investment trusts ("REIT's") similar in nature and size to the Employer, as such
duties and authority are reasonably defined, modified and delegated from time to
time by the Chief Executive Officer of the Employer (the "CEO"). The Executive
shall have the powers necessary to perform the duties assigned to him, and shall
be provided such supporting services, staff, secretarial and other assistance,
office space and accouterments as shall be reasonably necessary and appropriate
in light of such assigned duties, as determined by the CEO, but in any event
shall be no less favorable to the Executive than such supporting services,
assistance, office space and accouterments provided to other Senior Headquarters
Executives (as defined in Section 2(c) below) of the Employer.

     2.   COMPENSATION. As compensation for the services to be provided by the
Executive hereunder, the Executive shall receive the following compensation and
other benefits:

          (a)  BASE SALARY. The Executive shall receive a minimum aggregate
annual "Base Salary" at the rate of Two Hundred and Thirty-five Thousand Dollars
($235,000) per

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annum, payable in periodic installments in accordance with the regular payroll
practices of the Employer. Such Base Salary shall, during the term hereof, be
subject to discretionary increase (but not decrease), on an annual fiscal year
basis, as recommended by the CEO and approved by the Compensation Committee of
the Board of Directors of the Employer (the "Compensation Committee"), in
accordance with the Employer's compensation policies, as they may be established
from time to time. After any such increase, "Base Salary" shall refer to the
increased amount and shall not thereafter be reduced.

          (b)  PERFORMANCE BONUS. The Executive may receive an annual
"Performance Bonus," payable within sixty (60) days after the end of the fiscal
year of the Employer. The amount (if any) of and the form of the entitlements
(i.e., cash, equity-based awards, or a combination of cash and equity-based
awards) comprising any annual Performance Bonus shall be as recommended by the
CEO and approved by the Compensation Committee in its sole discretion; shall not
be subject to any minimum or guaranteed amount; and shall be generally based on
a combination of company-wide and individual performance criteria. The
Executive's "Maximum Bonus Percentages" are set forth in Exhibit A to this
Agreement. Prior to January 1 of each calendar year, the Executive shall provide
the CEO with a written "Personal Achievement Plan" that sets forth the
Executive's individual performance goals for such calendar year, which goals
shall reflect and be consistent with the Employer's then-current business plan.
Whether all or any of the individual elements of the Executive's Personal
Achievement Plan are achieved during the year shall guide, but shall not bind,
the CEO in making his recommendation of the amount of the Executive's
Performance Bonus. For purposes of this Agreement, the term "Cash Performance
Bonus" shall mean that component of the Performance Bonus paid or payable in
cash.

          (c)  BENEFITS. The Executive shall be entitled to participate in all
plans and benefits that may be from time to time accorded to all, and not simply
any one of, the Executive, the Employer's Chief Financial Officer, the
Employer's Chief Operating Officer and the President of the Employer's
affiliate, FI Development Services Corporation (collectively, the "Senior
Headquarters Executives") and shall receive supplemental life and disability
insurance coverages comparable (as a percentage of Base Salary) to those
received by the CEO, all as determined from time to time by the CEO and approved
(if necessary) by the Compensation Committee of the Board. In addition to the
foregoing perquisites, plans and benefits, commencing in fiscal 2000, the
Executive shall receive an annual allowance of two thousand five hundred dollars
($2,500) for personal financial planning and personal income tax preparation,
which allowance shall (i) be paid no later than March 30 of each year and (ii)
increase five percent (5%) per annum (on a compounded basis), commencing as of
the allowance payment due on or before March 30, 2001. If not paid as of the
date of this Agreement, payment of such allowance for fiscal 2000 shall be made
concurrent with the parties' execution of this Agreement.

          (d)  VACATIONS. The Executive shall be entitled to annual vacations in
accordance with the vacation policy of the Employer, which vacations shall be
taken at a time or times mutually agreeable to the Employer and the Executive;
provided, however, that the Executive shall be entitled to at least four (4)
weeks of paid vacations annually.

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          (e)  WITHHOLDING. The Employer shall be entitled to withhold, from
amounts payable to the Executive hereunder, any federal, state or local
withholding or other taxes or charges which, from time to time, it is required
to withhold. The Employer shall be entitled to rely upon the advice and counsel
of its independent accountants with regard to any question concerning the amount
or requirement of any such withholding.

     3.   TERM AND TERMINATION.

          (a)  TERM. The Executive's employment hereunder shall be for a
continuous and self-renewing two (2) year "evergreen" term (calculated on a day
to day basis), commencing as of the Effective Date, unless sooner terminated at
any time by either party, with or without Cause, such termination to be
effective as of thirty (30) days after written notice to that effect is
delivered to the other party. Notwithstanding the preceding provisions of this
Section 3(a), the term of this Agreement shall, if not previously terminated,
expire of its own accord, and without notice to or from either party, on the
seventieth (70th) birthday of the Executive ("Retirement Date").

          (b)  PREMATURE TERMINATION WITHOUT NOTICE. Notwithstanding
subparagraph (a) above, the Employer may terminate the Executive's employment on
an immediate basis and without notice, in an emergency circumstance, when
reasonably necessary to preserve or protect the Employer's interests; and in the
case of such an immediate termination, the Employer shall pay the Executive one
(1) month's Base Salary in addition to any other amounts then due to the
Executive as a result of the termination (it being understood that the
applicable termination-based amount then due shall be determined based on the
Section of this Agreement pursuant to which the Executive's employment is
terminated). In the event that the circumstances giving rise to an emergency
termination give rise to payment of a Severance Amount that includes a prorated
Cash Performance Bonus for the then-current year, then such Cash Performance
Bonus shall be prorated as if the Executive had remained employed by the
Employer for an additional period of thirty (30) days beyond the date of actual
immediate emergency termination of his employment as described above.

          (c)  VOLUNTARY TERMINATION BY EXECUTIVE. In the event that the
Executive voluntarily terminates his employment under this Agreement, other than
pursuant to Section 3(d) (Constructive Discharge) or 3(h) (Change in Control),
then the Employer shall only be required to pay to the Executive such Base
Salary and vacation pay for unused vacation days as shall have accrued and
remain unpaid through the effective date of the termination, and the Employer
shall not be obligated to pay any Performance Bonus for the then-current fiscal
year, or have any further obligations whatsoever to the Executive, other than
payment of any Performance Bonuses previously approved by the Compensation
Committee for any prior fiscal year(s) that remain unpaid, reimbursement of
previously approved expenses, any amounts or rights vested pursuant to the
Scheduled Benefits [as defined in Section 9(b) hereof], and any amounts or
rights vested pursuant to any "employee pension benefit plan" as such term is
defined in Section 3(2)(A) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA").

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          (d)  CONSTRUCTIVE DISCHARGE. If, at any time during the term of this
Agreement, the Executive is Constructively Discharged (as hereinafter defined),
then the Executive shall have the right, by written notice to the Employer given
within thirty (30) days after such Constructive Discharge, which notice shall
specify the grounds for such Constructive Discharge, to terminate his employment
hereunder, effective as of fifteen (15) days after such notice, and the
Executive shall have no further obligations under this Agreement except as
specified in Sections 4 and 5. The Executive shall in such event receive from
the Employer the Severance Amount and other entitlements described and defined
in subparagraph (g) of this Section 3. Notwithstanding the foregoing, if the
Executive is Constructively Discharged on or within one (1) year after the
occurrence of an event constituting a Change in Control Event [as defined in
subparagraph (h) of this Section 3], then the Executive shall receive the Change
in Control Severance Amount [as defined in subparagraph (h) of this Section 3]
in lieu of the Severance Amount that would otherwise be paid in respect of a
Constructive Discharge under this Section 3(d), and such termination shall also
be deemed a Change in Control Termination for purposes of Section 5 of this
Agreement.

          For purposes of this Agreement, the Executive shall be deemed to have
been "Constructively Discharged" upon the occurrence of any one of the following
events:

               (i)   The Executive shall be removed from the position with the
Employer set forth in Section 1 hereof, by the CEO or the Board, other than as a
result of the Executive's appointment to a position of comparable or superior
authority and responsibility, or other than for Cause, subject, however, to the
following caveats and exclusions, none of which shall constitute a Constructive
Discharge: (A) the Employer shall be permitted to broaden and expand the
Executive's responsibilities, whether in the same or different position; (B) the
Employer may, in connection with Executive's disability as described in Section
3(f), appoint Executive to the position that is both (x) related to the position
set forth in Section 1 hereof and (y) the next highest position then available
with the Employer that the Executive is physically and professionally qualified
to perform at the time of such appointment (the "Substitute Position"); and (C)
the Employer may reduce the Executive's Base Salary to a level that is not less
than the greater of (y) the minimum Base Salary established for fiscal year 1999
as set forth in Section 2(a) hereof and (z) eighty-five percent (85%) of the
Executive's then-current Base Salary, provided that such reduction occurs
generally concurrently with, and as a component of, a comprehensive reduction of
Base Salaries (or reduction in number) of the other Senior Headquarters
Executives then employed by Employer, and provided that, in the context of a
general pay reduction, Executive's Base Salary reduction is reasonably
comparable to that imposed on the other Senior Headquarters Executives; it being
specifically understood and agreed that none of the events described in (A),
(B), and (C) above shall constitute a "Constructive Discharge" hereunder; or

               (ii)  The Executive shall fail to be vested by the Employer with
the powers, authority and support services customarily attendant to said office
within the REIT industry, other than for Cause and other than due to financial
constraints applicable to the Employer resulting in a generalized reduction of
support services within the Employer; or

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               (iii) The Employer shall formally notify the Executive, in
writing, that the employment of the Executive will be terminated (other than for
Cause) or materially modified (other than for Cause) in the future, or that the
Executive will be Constructively Discharged in the future; or

               (iv)  The Employer shall change the primary employment location
of the Executive to a place that is more than fifty (50) miles from the primary
employment location as of the Effective Date of this Agreement, other than in
connection with a general relocation of the headquarters office (or staff) of
the Employer; or

               (v)   The Employer shall commit a material breach of its
obligations under this Agreement, which it shall fail to cure or commence to
cure within thirty (30) days after receipt of written notice thereof from the
Executive.

          (e)  PAYMENTS UPON DEATH. This Agreement shall terminate upon the
death of the Executive. Upon the Executive's death and the resulting termination
of this Agreement, the Employer shall only be obligated to pay such Base Salary
and vacation pay for unused vacation days as shall have accrued and remain
unpaid through the date of death plus seventy-five percent (75%) of his Maximum
Cash Performance Bonus for the then-current year as described in Section 2(b),
such Cash Performance Bonus to be prorated through the date of death on a strict
per diem basis, and the Employer shall not have any further obligations to the
Executive (other than payment of any Performance Bonuses previously approved by
the Compensation Committee for prior fiscal year(s) that remain unpaid,
reimbursement of previously approved expenses, any amounts or rights vested
pursuant to the Scheduled Benefits), and any amounts or rights vested pursuant
to any "employee pension benefit plan" as such term is defined in Section
3(2)(A) of ERISA). The amount that the Employer shall be obligated to pay upon
the Executive's death shall be delivered to such beneficiary, designee or
fiduciary as Executive may have designated in writing or, failing such
designation, to the executor or administrator of his estate, in full settlement
and satisfaction of all claims and demands on behalf of the Executive. Such
payments shall be in addition to such other death benefits of the Employer as
shall have been made available for the benefit of the Executive, and in full
settlement and satisfaction of all payments provided for in this Agreement. The
Employer and the Executive agree that the Employer shall maintain, at all times
during the term of this Agreement, such supplemental life insurance for the
benefit of the Executive as is set forth in Section 2(c) hereof.

          (f)  PAYMENTS UPON DISABILITY.  In the event of the Executive's
"disability" (as defined below), the Employer, acting reasonably and in good
faith, may determine whether or not the basis for, or the cause of, the
Executive's disability is work-related.

               (i)   If the Employer determines that the basis for, or the cause
of, the Executive's disability is not work-related, the Employer may deliver a
written notice to the Executive advising of the Employer's election to terminate
the Employee's employment, in which case the subject of, and the basis for, the
termination shall be the Executive's disability; and upon delivery of such
termination notice, the Executive's employment shall be terminated.

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Upon the termination of the Executive's employment under this Section 3(e)(i),
the Employer shall only be obligated to pay to the Executive such Base Salary
and vacation pay for unused vacation days as shall have accrued and remain
unpaid through the effective date of termination, and the Employer shall not
have any further obligations to the Executive (other than payment of any
Performance Bonuses previously approved by the Compensation Committee for prior
fiscal year(s) that remain unpaid, reimbursement of previously approved
expenses, any amounts or rights vested pursuant to the Scheduled Benefits, and
any amounts or rights vested pursuant to any "employee pension benefit plan" as
such term is defined in Section 3(2)(A) of ERISA).

               (ii)  If the basis for, or the cause of, the Executive's
disability is "work-related" (as defined below), then the Employer shall, at the
CEO's election, either (A) terminate the Executive's employment and pay him the
Severance Amount [as defined in subparagraph (g) of this Section 3], in
thirty-six (36) equal monthly installments commencing within thirty (30) days
after the Executive's employment is terminated under this Section 3(f); or (B)
appoint and reassign the Executive to a Substitute Position, as defined in
subparagraph (d)(i) of this Section 3, with an adjustment in Base Salary (and
Performance Bonus targets) to levels then attributable to that Substitute
Position, and such appointment and reassignment shall not constitute a
Constructive Discharge under subparagraph (c) of this Section 3. In the event of
an adjustment in Performance Bonus targets due to reassignment based on
disability, the Performance Bonus for the then-expired portion of the
then-current fiscal year as of such reassignment shall be paid to Executive,
when otherwise due following the termination of such fiscal year, based on a per
diem proration of seventy-five percent (75%) of the Maximum Cash Performance
Bonus for Executive's pre-disability position, prorated through the date of
reassignment. If the Executive declines the Substitute Position, then the
Executive shall be deemed to have voluntarily terminated his employment pursuant
to subparagraph (c) of this Section 3, and he shall be entitled to no Severance
Amount or other entitlements other than those enumerated in Section 3(c) hereof.

               (iii) For purposes hereof, the Executive's "disability" shall be
deemed to be "work-related" if the disability is either (A) a result of an
accident or incident that would entitle the Executive to workers' compensation
benefits under the Illinois Workers' Compensation Act, as amended, if such
benefits were sought by the Executive; or (B) a result of an injury sustained at
and during an Employer-sponsored function or event, which function or event is
conducted for business, rather than recreational, purposes (e.g. an annual
retreat that the Executive is required to attend, and at which both business
meetings and recreational activities are conducted, with the Executive required
to participate in all such activities, rather than a company picnic to which the
Executive is invited and at which the Executive elects to participate in
Employer-sponsored recreational activities).

               (iv)  For purposes hereof, "disability" shall mean the
Executive's inability, as a result of physical or mental incapacity,
substantially to perform his duties hereunder for a period of either six (6)
consecutive months, or one hundred twenty (120) business days within a
consecutive twelve (12) month period. In the event of a dispute regarding the
Executive's "disability," or whether the basis for, or the cause of, the
disability

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is "work-related," such dispute shall be resolved through arbitration as
provided in subparagraph (d) of Section 9 hereof, except that the arbitrator
appointed by the American Arbitration Association shall be a duly licensed
medical doctor.

               (v)   The Executive shall be entitled to the compensation and
benefits provided under this Agreement during any period of incapacitation
occurring during the term of this Agreement prior to the establishment of the
Executive's "disability" and subsequent termination of his employment.

               (vi)  The Employer and the Executive agree that the Employer
shall maintain, at all times during the term of this Agreement, such
supplemental disability insurance for the benefit of the Executive as is set
forth in Section 2(c) hereof.

               (vii) During the period that the monthly payments are made under
subparagraph (ii) above, such payments shall be reduced by the amount of the
monthly disability payments made under the supplemental disability insurance
maintained by the Employer for the benefit of the Executive as is set forth in
Section 2(c) hereof.

          (g)  PAYMENTS UPON TERMINATION WITHOUT CAUSE OR THROUGH CONSTRUCTIVE
DISCHARGE. In the event of the termination of the employment of the Executive
under this Agreement: (y) by the Employer "Without Cause," meaning for any
reason other than in accordance with the provisions of subparagraph (e) (death),
subparagraph (f) (disability), subparagraph (h) (Change in Control) or
subparagraph (j) (for Cause) of this Section 3; or (z) by the Executive pursuant
to a Constructive Discharge under subparagraph (d) of this Section 3; then
notwithstanding any actual or allegedly available alternative employment or
other mitigation of damages by (or which may be available to) the Executive, the
Employer shall provide Executive with the following entitlements:

               (i)   The Employer shall pay to the Executive, subject to the
"Age-Based Adjustments" provided and defined in Section 3(i) below, a "Severance
Amount" equal to the sum of:

                     (A)  three (3) times the then-current annual amount of his
                          Base Salary; plus

                     (B)  seventy-five percent (75%) of his Maximum Cash
                          Performance Bonus for the then-current year as
                          described in Section 2(b), such Cash Performance Bonus
                          to be prorated through the date of termination on a
                          strict per diem basis.

               (ii)  The Employer shall also:

                     (A)  notwithstanding the vesting schedule otherwise
                          applicable, fully vest Executive's options, other than
                          options that may by their terms vest upon or be
                          subject to the attainment of

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                          any individual or company-wide performance criteria
                          (e.g., and without limitation, Consolidated Incentive
                          Program options), outstanding under the First
                          Industrial Realty Trust, Inc. 1994 Stock Incentive
                          Plan, the First Industrial Realty Trust 1997 Stock
                          Incentive Plan and any similar plan subsequently
                          adopted by the Employer (collectively referred to
                          herein as the "SIP Options"), and awards outstanding
                          under the First Industrial Realty Trust, Inc. Deferred
                          Income Plan ("DIP Awards"), effective as of the date
                          of termination;

                     (B)  notwithstanding the terms of the grant or award
                          documentation, release and eliminate all unexpired
                          transfer and encumbrance restrictions otherwise
                          applicable to any restricted stock owned by the
                          Executive, effective as of the date of termination;

                     (C)  allow a period of eighteen (18) months following the
                          termination of employment for the Executive to
                          exercise any such SIP Options; and

                     (D)  continue for the Executive his health insurance
                          coverage, whether single or family, so as to provide a
                          scope of coverage comparable to that which was in
                          effect as of the date of termination, for a period of
                          three (3) years following such termination or until
                          such time as substitute health insurance coverage with
                          comparable benefits is available to him at a cost
                          comparable to that borne by him under the Employer's
                          policy, by virtue of other employment or family
                          members' insurance benefits secured or made available
                          after termination.

               (iii) The entitlements described in this subparagraph (g) shall
be in addition to the payment of such Base Salary and vacation pay for unused
vacation days as shall have accrued and remain unpaid through the effective date
of termination, and the payment of any Performance Bonuses previously approved
by the Compensation Committee for prior fiscal year(s) that remain unpaid,
reimbursement of previously approved expenses, any amounts or rights vested
pursuant to the Scheduled Benefits, and any amounts or rights vested pursuant to
any "employee pension benefit plan" as such term is defined in Section 3(2)(A)
of ERISA.

               (iv)  Payment to the Executive of the Severance Amount and those
items enumerated in subparagraph (iii) above will be made in a single lump sum
within thirty (30) days after a termination effectuated by the Employer Without
Cause or by the Executive based on Constructive Discharge.

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          (h)  CHANGE IN CONTROL.

               (i)   In the event of a Change in Control (as defined below) of
the Employer resulting in or associated with (as, when and to the extent herein
provided) the termination of the Executive's employment which is undertaken at
the initiative of either (y) the Employer under subparagraph (h)(ii)(A) below,
or (z) the Executive, under subparagraph (h)(ii)(B) below ("Change in Control
Termination"), the following entitlements shall become operative:

                     (A)  The Executive shall be entitled to receive a "Change
                          in Control Severance Amount" equal to the sum of the
                          following amounts:

                          (1)  two (2) times the then-current annual amount of
                               his Base Salary; plus

                          (2)  his Maximum Cash Performance Bonus for the
                               then-current fiscal year as described in Section
                               2(b), prorated through the date of termination on
                               a strict per diem basis; plus

                          (3)  a "Double Historical Average Cash Bonus," which
                               shall be calculated as follows: first, there will
                               be a computation of the average of the
                               percentages of his Maximum Cash Performance Bonus
                               paid (or that have been declared, but remain
                               unpaid, as of the date of a Change in Control
                               Termination) as annual Cash Performance Bonuses
                               for the two (2) immediately preceding fiscal
                               years of the Employer ("Historical Average Cash
                               Bonus Percentage"); second, the Historical
                               Average Cash Bonus Percentage will then be
                               multiplied by his Maximum Cash Performance Bonus
                               Percentage attributable to the year of his Change
                               in Control Termination, with the resulting
                               percentage thereby derived being his "Change in
                               Control Bonus Percentage"; third, the Change in
                               Control Bonus Percentage shall be multiplied by
                               his Base Salary as of the date of his Change in
                               Control Termination, with the resulting product
                               being his "Historical Average Cash Bonus"; and
                               fourth, his Historical Average Cash Bonus is
                               multiplied by two (2), with the resulting product
                               being his "Double Historical Average Cash Bonus."
                               See Example #1 on Exhibit C hereto for a

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                               mathematical example of the preceding
                               calculation. Notwithstanding the immediately
                               preceding sentence and Example #1 on Exhibit C,
                               in the event that (i) the Cash Performance Bonus
                               paid for either of the two (2) fiscal years
                               immediately preceding a Change in Control
                               Termination is less than 100% of the Maximum Cash
                               Performance Bonus Percentage for such fiscal
                               year, and (ii) an equity-based Performance Bonus
                               having a stated aggregate value as of issuance of
                               $100,000 or more was granted to the Executive in
                               respect of such years (such year in which (i) and
                               (ii) occur thereby constituting a "Deficient
                               Bonus Year"), then for purposes of calculating
                               the Double Historical Average Cash Bonus
                               component of the Change in Control Severance
                               Amount, the minimum Cash Bonus Percentage for any
                               Deficient Bonus Year (or Years) will be 100%. See
                               Example #2 on Exhibit C hereto for a mathematical
                               example of the immediately preceding calculation.
                               If, as of a Change in Control Event, the
                               Executive has not received (or had declared by
                               the Compensation Committee) two Historical Cash
                               Performance Bonuses with respect to, and while
                               holding, the position set forth in Section 1,
                               then the percentage of Maximum Cash Performance
                               Bonus used to calculate the Historical Cash Bonus
                               Percentages shall be the percentage of Maximum
                               Cash Performance Bonus paid to Executive's
                               predecessor with respect to the particular
                               position set forth in Section 1 during that
                               portion of the two (2) preceding fiscal years of
                               the Employer during which Executive did not hold
                               the requisite position, subject to a minimum
                               percentage of 100% for any Deficient Bonus Year
                               arising on the basis of his predecessor's
                               compensation history.

                     (B)  The Employer shall also provide the following
                          entitlements to the Executive:

                          (1)  notwithstanding the vesting schedule otherwise
                               applicable, the Employer shall fully vest
                               Executive's options, other than options that may
                               by their terms vest upon or be subject to the

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                               attainment of any individual or company-wide
                               performance criteria (e.g., and without
                               limitation, Consolidated Incentive Program
                               options), outstanding under the First Industrial
                               Realty Trust, Inc. 1994 Stock Incentive Plan, the
                               First Industrial Realty Trust 1997 Stock
                               Incentive Plan and any similar plan subsequently
                               adopted by the Employer (collectively referred to
                               herein as the "SIP Options"), and awards
                               outstanding under the First Industrial Realty
                               Trust, Inc. Deferred Income Plan ("DIP Awards"),
                               effective as of date of the Change in Control
                               Termination;

                          (2)  notwithstanding the terms of the grant or award
                               documentation, the Employer shall release and
                               eliminate all unexpired transfer and encumbrance
                               restrictions otherwise applicable to any
                               restricted stock owned by the Executive,
                               effective as of date of the Change in Control
                               Termination;

                          (3)  the Employer shall allow a period of eighteen
                               (18) months following the termination of
                               employment for the Executive to exercise any such
                               SIP Options; and

                          (4)  the Employer shall continue for the Executive his
                               health insurance coverage, whether single or
                               family, in effect as of the date of termination
                               for three (3) years following such termination or
                               until such time as substitute health insurance
                               with comparable benefits is available to him at a
                               cost comparable to that borne by him under the
                               Employer's policy, by virtue of other employment
                               or family members' insurance benefits secured or
                               made available after termination.

                     (C)  The Change in Control Severance Amount shall:

                          (1)  be reduced by any amount paid or otherwise
                               payable to the Executive pursuant to Sections
                               3(d) (Constructive Discharge), 3(e) (disability)
                               or 3(g) (termination by Employer without Cause);
                               and

                          (2)  be in addition to: such current Base Salary and
                               vacation pay for unused vacation days as shall
                               have accrued and remain unpaid as of the
                               effective

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                               date of termination; the payment of amounts any
                               Performance Bonuses previously approved by the
                               Compensation Committee for prior fiscal year(s)
                               that remain unpaid; reimbursement of previously
                               approved or otherwise authorized expenses; any
                               amounts or rights theretofore vested pursuant to
                               the Scheduled Benefits; and any amounts or rights
                               vested pursuant to any "employee pension benefit
                               plan" as such term is defined in Section 3(2)(A)
                               of ERISA.

                     (D)  The Change in Control Severance Amount will be paid in
                          a single lump sum, on (I) the date of the Change in
                          Control Event, if the Executive's employment is in
                          fact terminated concurrent with the Change in Control
                          Event [or was terminated by the Employer prior to the
                          Change in Control Event so as to give rise to a Change
                          in Control Severance Amount entitlement as of the
                          Change in Control Event, pursuant to subparagraph
                          (ii)(A) below]; or (II) within thirty (30) days after
                          the Executive terminates his employment following a
                          Change in Control Event under subparagraph (ii)(B)
                          below.

               (ii)  The following (and only the following) events shall
constitute a Change in Control Termination under this subparagraph (h):

                     (A)  Executive's employment is terminated by the Employer
                          (or its successor) for any reason other than for Cause
                          or due to death or disability, within either of the
                          respective three hundred sixty-five (365) day periods
                          either preceding or following the event constituting a
                          Change in Control; or

                     (B)  The Executive terminates his employment under this
                          Agreement upon and through written notice given to the
                          Employer within thirty (30) days after the occurrence
                          of a "Triggering Circumstance," as defined and
                          described below, such right of termination to exist
                          only if (x) the Triggering Circumstance described in
                          (i) or (ii) below occurs within a period of three
                          hundred sixty-five (365) days following a Change in
                          Control Event; or (y) either of the Triggering
                          Circumstances described in (iii) or (iv) below occurs
                          within a period of seven hundred thirty (730) days
                          [subject to extension for (iii) as set forth below]
                          following a Change in Control Event. The

                                       12
<PAGE>   13
                          following shall constitute "Triggering Circumstances"
                          hereunder, entitling the Executive to terminate his
                          employment following a Change in Control Event and
                          receive a Change in Control Severance Amount: (i) the
                          Change in Control Event gives rise to a change in
                          employment circumstances that would otherwise
                          constitute a Constructive Discharge; (ii) the Change
                          in Control Event results in a relocation of the
                          Executive's primary place of employment to a location
                          that is more than fifty (50) miles from his primary
                          employment location with Employer as of the Effective
                          Date of this Agreement, even if such relocation is
                          pursuant to a general merger-induced or other general
                          headquarters office relocation and would, in the
                          absence of a Change in Control Event, not constitute a
                          Constructive Discharge hereunder; (iii) the Company
                          (or its successor), following the Change in Control
                          Event, pays Cash Performance Bonuses to the Executive,
                          attributable to either of those two (2) certain fiscal
                          years respectively constituting (w) the fiscal year in
                          which the Change in Control Event occurs and (x) the
                          next succeeding fiscal year ("Post-CIC Fiscal Years"),
                          at a level that is less than the greater of (y) the
                          amount equal to the average of the percentages of Base
                          Salary paid as Cash Performance Bonuses for the two
                          (2) fiscal years preceding the Change in Control Event
                          and (z) the amount equal to one hundred percent (100%)
                          of the respective Base Salaries then in place for each
                          of the Post-CIC Fiscal Years [it being understood that
                          the seven hundred thirty (730) day period for
                          determining whether there is a deficiency in a Cash
                          Performance Bonus for the second of the two (2)
                          Post-CIC Fiscal Years shall be extended as necessary
                          to encompass the date on which the Cash Performance
                          Bonus for the second Post-CIC Fiscal Year is actually
                          paid]; or (iv) the annual Base Salary payable to the
                          Executive for either Post-CIC Fiscal Year is less than
                          the Base Salary in effect as of the occurrence of the
                          Change in Control Event. In addition to the foregoing
                          Triggering Circumstance events described in (i)
                          through (iv) above giving rise to the Executive's
                          right to effectuate a Change in Control Termination,
                          it shall also constitute a Triggering Circumstance,
                          and the Executive shall also be entitled to effectuate
                          such Change in Control Termination if, as of the
                          effective date of a Change in Control Event, the
                          successor employer/acquiring entity does not affirm,
                          in writing, its assumption of the

                                       13
<PAGE>   14
                          obligations of the Employer under this Agreement, and
                          its agreement to perform such obligations for the
                          benefit of the Executive following the Change in
                          Control Event. Any Change in Control Termination by
                          the Executive shall be effectuated by written notice
                          provided to the Employer or its successor within
                          thirty (30) days following the Executive's actual
                          knowledge of the first occurrence of a Triggering
                          Circumstance which, in the case of (iii) or (iv)
                          above, shall constitute the Executive's receipt of the
                          initial non-conforming Base Salary payment or Cash
                          Performance Bonus payment in question. The failure of
                          the Executive to give a timely notice of termination
                          as hereinabove provided following the occurrence of a
                          Triggering Circumstance shall constitute a waiver of
                          the Executive's right to initiate a Change in Control
                          Termination by reason of such Triggering Circumstance.
                          Executive shall have no right to initiate a Change in
                          Control Termination giving rise to an entitlement to a
                          Change in Control Severance Amount unless a Triggering
                          Circumstance shall have occurred and shall have been
                          acted upon by Executive on a timely basis as
                          hereinabove provided.

               (iii) For purposes of this Agreement, the term "Change in Control
Event" shall mean the following events:

                     (A)  The consummation of the acquisition by any person [as
                          such term is defined in Section 13(d) or 14(d) of the
                          Securities Exchange Act of 1934, as amended (the "1934
                          Act")] of beneficial ownership (within the meaning of
                          Rule 13d-3 promulgated under the 1934 Act) of forty
                          percent (40%) or more of the combined voting power
                          embodied in the then-outstanding voting securities of
                          the Employer; or

                     (B)  The persons who, as of the date hereof, constitute the
                          Employer's Board of Directors (the "Incumbent
                          Directors") cease, in opposition to the Nominating
                          Committee of the Board and as a result of a tender
                          offer, proxy contest, merger or similar transaction or
                          event (as opposed to turnover caused by death or
                          resignation), to constitute at least a majority of the
                          Board, provided that any person becoming a director of
                          the Employer subsequent to the date hereof whose
                          election or nomination for election was approved by a
                          vote of at least

                                       14
<PAGE>   15
                          a majority of the Incumbent Directors, or by a
                          Nominating Committee duly appointed by such Incumbent
                          Directors, or by successors of either who shall have
                          become Directors other than as a result of a hostile
                          attempt to change Directors, whether through a tender
                          offer, proxy contest or similar transaction or event
                          shall be considered an Incumbent Director; or

                     (C)  The consummation of:

                          (1)  a merger or consolidation of the Employer, if the
                               stockholders of the Employer as constituted in
                               the aggregate immediately before such merger or
                               consolidation do not, as a result of and
                               following such merger or consolidation, own,
                               directly or indirectly, more than seventy-five
                               percent (75%) of the combined voting power of the
                               then outstanding voting securities of the entity
                               resulting from such merger or consolidation in
                               substantially the same proportion as was
                               represented by their ownership of the combined
                               voting power of the voting securities of the
                               Employer outstanding immediately before such
                               merger or consolidation; or

                          (2)  a liquidation, sale or other ultimate disposition
                               or transfer of all or substantially all of the
                               total assets of the Employer and its
                               subsidiaries, which shall be deemed to have
                               occurred for purposes of ascertaining when a
                               Change in Control Event has taken place when, as
                               and if the Employer shall have disposed, in a
                               single transaction or set of related
                               transactions, of more than fifty percent (50%) of
                               its and its subsidiaries' total real estate
                               portfolio, pursuant to a declared plan of
                               liquidation, such percentage of the portfolio to
                               be deemed to have been transferred at such time
                               as the Employer and its Subsidiaries shall have
                               disposed of fifty percent (50%) or more of their
                               properties in relation to overall undepreciated
                               (i.e. cost-based) book value, net operating
                               income or square footage of developed properties.

               (iv)  Notwithstanding the immediately preceding subparagraph
(iii), a Change in Control Event shall not be deemed to occur solely because
forty percent (40%) or

                                       15
<PAGE>   16

more of the combined voting power of the then-outstanding securities of the
Employer is acquired by:

                     (A)  a trustee or other fiduciary holding securities under
                          one or more employee benefit plans maintained for
                          employees of the entity; or

                     (B)  any corporation or other entity which, immediately
                          prior to such acquisition, is substantially owned
                          directly or indirectly by the Employer or by its
                          stockholders in the same proportion as their ownership
                          of stock in the Employer immediately prior to such
                          acquisition.

               (v)   If it is determined, in the opinion of the Employer's
independent accountants, in consultation, if necessary, with the Employer's
independent legal counsel, that any Change in Control Severance Amount, either
separately or in conjunction with any other payments, benefits and entitlements
received by the Executive in respect of a Change in Control Termination
hereunder or under any other plan or agreement under which the Executive
participates or to which he is a party, would constitute an "Excess Parachute
Payment" within the meaning of Section 280G of the Internal Revenue Code of
1986, as amended (the "Code"), and thereby be subject to the excise tax imposed
by Section 4999 of the Code (the "Excise Tax"), then in such event the Employer
shall pay to the Executive a "grossing-up" amount equal to the amount of such
Excise Tax, plus all federal and state income or other taxes with respect to the
payment of the amount of such Excise Tax, including all such taxes with respect
to any such grossing-up amount. If, at a later date, the Internal Revenue
Service assesses a deficiency against the Executive for the Excise Tax which is
greater than that which was determined at the time such amounts were paid, then
the Employer shall pay to the Executive the amount of such unreimbursed Excise
Tax plus any interest, penalties and reasonable professional fees or expenses
incurred by the Executive as a result of such assessment, including all such
taxes with respect to any such additional amount. The highest marginal tax rate
applicable to individuals at the time of the payment of such amounts will be
used for purposes of determining the federal and state income and other taxes
with respect thereto. Employer shall withhold from any amounts paid under this
Agreement the amount of any Excise Tax or other federal, state or local taxes
then required to be withheld. Computations of the amount of any grossing-up
supplemental compensation paid under this subparagraph shall be conclusively
made by the Employer's independent accountants, in consultation, if necessary,
with the Employer's independent legal counsel. If, after the Executive receives
any gross-up payments or other amount pursuant to this subparagraph (v), the
Executive receives any refund with respect to the Excise Tax, the Executive
shall promptly pay the Employer the amount of such refund within ten (10) days
of receipt by the Executive.

          (i)  AGE-BASED ADJUSTMENTS. It is recognized and acknowledged that
Executive intends and wishes to retire by the Retirement Date, on which date he
shall have attained the age of seventy (70), which shall be the mandatory
retirement age for senior management of the Employer. This Agreement shall
accordingly terminate, on an automatic

                                       16
<PAGE>   17

basis, as provided in Section 3(a) above, as of said Retirement Date. In
addition, it is mutually acknowledged and agreed that the Severance Amount owed
to the Executive in the event of a termination of this Agreement pursuant to
Section 3(d) or 3(g) hereof (respectively dealing with Constructive Discharge
and termination by Employer without Cause) shall be gradually reduced during the
three (3) year pre-retirement transition period preceding the Retirement Date,
by being made subject to "Age-Based Adjustments," based on the following
schedule:

          Age of Executive as of                  % of Severance Amount Due
            Date of Termination                    Per Age-Based Adjustment
          ----------------------                  -------------------------
                    67                                        75%
                    68                                        50%
                    69                                        25%
                    70                                         0%

          (i)  TERMINATION FOR CAUSE. The employment of the Executive under this
Agreement may be terminated by the Employer on the basis of "Cause," as
hereinafter defined. If the Executive's employment is terminated by the Employer
for Cause under this subparagraph (j), then the Employer shall only be obligated
to pay to the Executive such Base Salary and vacation pay for unused vacation
days as shall have accrued and remain unpaid through the effective date of
termination, but the Employer shall not be required to pay to the Executive any
Performance Bonus for the then-current fiscal year, or have any further
obligations whatsoever to the Executive, other than any Performance Bonuses
previously approved by the Compensation Committee for prior fiscal year(s) that
remain unpaid; reimbursement for previously approved expenses; and continuation
of any amounts or rights vested pursuant to the Scheduled Benefits that remain
vested upon and notwithstanding the Executive's termination for Cause, in which
event such rights to payment or continuation shall be determined pursuant to the
terms of the plans under which such Scheduled Benefits are provided, and not the
terms of this subparagraph (j) of Section 3. Termination for "Cause" shall mean
the termination of the Executive's employment on the basis or as a result of:
(i) the Executive being found guilty of a felony; (ii) the Executive's
commission of an act that disqualifies the Executive (whether under the
Employer's by-laws, or under any statute, regulation, law or rule applicable to
the Employer) from serving as an officer or director of the Employer; or (iii) a
recurring pattern of material and willful dereliction of duty of the Executive's
material responsibilities, where such recurring failure has a material adverse
effect upon the business of the Employer, as reasonably determined by the CEO,
in the CEO's good faith determination. In making such determination, it is
understood that the CEO shall interpret and apply the above-described standards
(of materiality, or willful dereliction, and of adversity) in a manner that is
normal and customary within the Employer's industry. Executive shall be entitled
to thirty (30) days' prior written notice (the "Termination Notice") of the
Employer's intention to terminate his employment for Cause, and such Termination
Notice shall: specify the grounds for such termination; afford the Executive a
reasonable opportunity to cure any conduct or act (if curable) alleged as
grounds for such termination; and a reasonable opportunity to present to the CEO
his position regarding any dispute relating to the existence of such Cause.
Notwithstanding the foregoing procedure, the Employer (through

                                       17
<PAGE>   18

the CEO) shall have the unilateral right to make the final substantive
determination as to whether the Executive (through the CEO) has properly
remedied or otherwise addressed those matters described in the Termination
Notice as grounds for termination of the Executive's employment; and in the
event that the Employer determines (as of the expiration of the
above-contemplated 30-day period), that the Executive has not appropriately
remedied or otherwise addressed those matters, then the Executive's term of
employment shall, in all events, automatically terminate as of the thirtieth
(30th) day after the Employer delivers the Termination Notice, without any
responsibility or obligation of the Employer to provide the Executive with any
further notice or explanation of the grounds for his termination. If the
Executive challenges his termination for Cause under the provisions of Section
9(d) hereof and the arbitrator finds that the Executive did not engage in
conduct which properly entitled the Employer to terminate the Executive's
employment for Cause under the criteria set forth above, then the Employer shall
pay to the Executive, within thirty (30) days of the arbitrator's decision: the
Severance Amount as if his termination of employment had been effectuated
pursuant to Section 3(g) hereunder; with interest on the Severance Amount at the
rate of eighteen percent (18%) from the date of the Termination Notice to the
date payment is ordered made of such Severance Amount to be paid thereon; plus
the amount of the Executive's reasonable attorneys' fees incurred in such
arbitration.

          (k)  RESIGNATION FROM RELATED POSITIONS. Upon the termination of the
Executive's employment with the Employer, for any reason whatsoever, the
Executive shall immediately resign from any and all officerships, directorships,
committee memberships and all other elected or appointed positions, of any
nature, that the Executive then holds with any or all of the Employer and its
affiliates.

          (l)  STOCK REDEMPTION. Upon the termination of the Executive's
employment with the Employer, for any reason whatsoever, the Executive shall
permit the Employer or its affiliate(s), as the case may be, to immediately
redeem any and all common or preferred stock (or any partnership or membership
interests, as the case may be) that the Executive then owns in any affiliate(s)
of Employer, which redemption shall occur at the same cash price (if any) as
Executive actually initially paid to acquire such stock (or partnership or
membership interests, as the case may be). In no event, however, shall the
foregoing requirement apply to any stock (common or preferred) that Executive
owns in Employer, or to any limited partnership interests (so-called "OP Units")
that the Executive owns in First Industrial, L.P., a Delaware limited
partnership in which the Employer is the general partner and which is commonly
referred to as the "Operating Partnership."

     4.   CONFIDENTIALITY AND LOYALTY. The Executive acknowledges that, during
the course of his employment prior to his entry into this Agreement, he has
produced, received and had access to, and may hereafter continue to produce,
receive and otherwise have access to, various materials, records, data, trade
secrets and information not generally available to the public, specifically
including any information concerning projects in the "Pipeline" as defined in
Section 5(a)(ii) below (collectively, "Confidential Information") regarding the
Employer and its subsidiaries and affiliates. Accordingly, during the term of
this Agreement and for the one (1) year period immediately subsequent to any
termination of this Agreement, on any

                                       18
<PAGE>   19

basis, the Executive shall hold in confidence and shall not directly or
indirectly for his own benefit or for the benefit of any other person or entity,
for economic gain or otherwise, disclose, use, copy or make lists of any such
Confidential Information, except to the extent that (a) such information is or
thereafter becomes lawfully available from public sources; or (b) such
disclosure is authorized in writing by the Employer; or (c) such disclosure is
determined by court order or official governmental ruling to be required by law
or by any competent administrative agency or judicial authority; or (d) such
disclosure is otherwise reasonably necessary or appropriate in connection with
the performance by the Executive of his duties hereunder. All records, files,
documents, computer diskettes, computer programs and other computer-generated
material, as well as all other materials or copies thereof relating to the
Employer's business, which the Executive shall prepare or use, shall be and
remain the sole property of the Employer, shall not be removed from the
Employer's premises without its written consent, and shall be promptly returned
to the Employer upon termination of the Executive's employment hereunder.

     5.   NON-COMPETITION COVENANT.

          (a)  RESTRICTIVE COVENANT.

               (i)   The Employer and the Executive have jointly reviewed the
tenant lists, property submittals, logs, broker lists, and operations of the
Employer, and have agreed that as an essential ingredient of and in
consideration of this Agreement and the Employer's agreement to make the payment
of the amounts described in Sections 2 and 3 hereof when and as herein
described, the Executive hereby agrees, except with the express prior written
consent of the Employer, and subject to the limitations set forth in Section
5(c) below, that for a period of one (1) year [or in the case of a Change in
Control Termination, six (6) months] after the termination of the Executive's
employment with the Employer (the "Restrictive Period"), he will not directly or
indirectly in any manner compete with the business of the Employer, including,
but not by way of limitation, by directly or indirectly owning, managing,
operating, controlling, financing, or by directly or indirectly serving as an
employee, officer or director of or consultant to, or by soliciting or inducing,
or attempting to solicit or induce, any employee or agent of Employer to
terminate employment with Employer and become employed by the following:

                     (A)  any company listed as an industrial or mixed
                          office/industrial (but not pure office) REIT or Real
                          Estate Operating Company in the Realty Stock Review, a
                          Dow Jones & Co. Publication, (a "Peer Group Member") a
                          copy of such listing for the month prior of the
                          Effective Date hereof being attached hereto as Exhibit
                          D, or

                     (B)  any person, firm, partnership, corporation, trust or
                          other entity (including, but not limited to, Peer
                          Group Members) which, as a material component of its
                          business (other than for its own use as an owner or
                          user), invests in

                                       19
<PAGE>   20

                          industrial warehouse facilities and properties similar
                          to the Employer's investments and holdings: (1) in any
                          geographic market or territory in which the Employer
                          owns properties or has an office either as of the date
                          hereof or as of the date of termination of the
                          Executive's employment; or (2) in any market in which
                          an acquisition or other investment by the Employer or
                          any affiliate of the Employer is pending as of the
                          date of termination, as conclusively evidenced by the
                          existence of a Request for Proposal or an executed
                          Agreement of Purchase and Sale, Contribution (or
                          Merger) Agreement or Letter of Intent, Confidentiality
                          Agreement, Due Diligence Agreement, Pursuit Cost
                          Agreement, Partnership or Joint Venture Agreement, or
                          by a Post Acceptance Conference Call (PACC) memorandum
                          or Investment Committee (IC) approval in existence at
                          the time of the termination of the Executive's
                          employment.

               (ii)  In addition, during the Restrictive Period, the Executive
shall not act as a principal, investor or broker/intermediary, or serve as an
employee, officer, advisor or consultant, to any person or entity, in connection
with or concerning any investment opportunity of the Employer that is in the
"Pipeline" (as defined below) as of the effective date of the termination of the
Executive's employment. Within ten (10) business days after the Executive's
termination of employment, the CEO shall deliver to the Executive a written
statement of the investment opportunities in the Pipeline as of the effective
date of the termination of the Executive's employment (the "Pipeline
Statement"), and the Executive shall then review the Pipeline Statement for
accuracy and completeness, to the best of his knowledge, and advise the CEO of
any corrections required to the Pipeline Statement. The Executive's receipt of
any Severance Amount under Sections 3(c), (f) and (g) shall be conditioned on
his either acknowledging, in writing, the accuracy and completeness of the
Pipeline Statement, or advising the CEO, in writing, of any corrections or
revisions required to the Pipeline Statement in order to make it accurate and
complete, to the best of the Executive's knowledge. The restrictions concerning
any one individual investment opportunity in the Pipeline shall continue until
the first to occur of (i) expiration of the Restrictive Period; or (ii) the
Executive's receipt from the Employer of written notice that the Employer has
abandoned such investment opportunity, such notice not to affect the
restrictions on all other investment opportunities contained in the Pipeline
Statement during the remainder of the Restrictive Period. An investment
opportunity shall be considered in the "Pipeline" if, as of the effective date
of the termination of the Executive's employment, the investment opportunity is
pending (for example, is the subject of a letter of intent) or proposed (for
example, has been presented to, or been bid on by, the Employer in writing or
otherwise) or under consideration by the Employer, whether at the PACC, IC,
staff level(s) or otherwise, and relates to any of the following potential forms
of transaction: (A) an acquisition for cash; (B) an UPREIT transaction; (C) a
transaction under the "First Exchange" program; (D) a development project or
venture; (E) a joint venture partnership or other cooperative

                                       20
<PAGE>   21

relationship, whether through a DOWNREIT relationship or otherwise; (F) an
"Opportunity Fund" or other private investment in or co-investment with the
Employer; (G) any debt placement opportunity by or in Employer; (H) any service
or other fee-generating opportunity by the Employer; or (I) any other investment
by the Employer or an affiliate of the Employer, in or with any party or by any
party in the Employer or an affiliate of the Employer.

               (iii) The Restrictions contained in subparagraphs (i) and (ii)
above are collectively referred to as the "Restrictive Covenant." If the
Executive violates the Restrictive Covenant and the Employer brings legal action
for injunctive or other relief, the Employer shall not, as a result of the time
involved in obtaining such relief, be deprived of the benefit of the full period
of the Restrictive Covenant. Accordingly, the Restrictive Covenant shall be
deemed to have the duration specified in this subparagraph (i) computed from the
date the relief is granted, but reduced by the time between the period when the
Restrictive Period began to run and the date of the first violation of the
Restrictive Covenant by the Executive. In the event that a successor of the
Employer assumes and agrees to perform this Agreement or otherwise acquires the
Employer, this Restrictive Covenant shall continue to apply only to the primary
markets of the Employer as they existed immediately before such assumption or
acquisition, and shall not apply to any of the successor's other offices or
markets. The foregoing Restrictive Covenant shall not prohibit the Executive
from owning, directly or indirectly, capital stock or similar securities that
are listed on a securities exchange or quoted on the National Association of
Securities Dealers Automated Quotation System and that do not represent more
than five percent (5%) of the outstanding capital stock of any corporation.

          (b)  RELIEF FROM RESTRICTIVE COVENANTS. In the event the Executive
shall desire to engage in any activity that would violate the Restrictive
Covenant which he reasonably and in good faith believes would be immaterial to
the economic and proprietary interests of the Employer or any of its affiliates,
he may, prior to (but not after) engaging in such activity, submit to the CEO a
written request for relief from the Restrictive Covenant, which written request
shall set forth the scope of the proposed activity, the scope of the requested
relief and the basis upon which Executive believes such activity to be
immaterial to the interests of the Employer. Within ten (10) business days after
receipt of the Executive's written request, and subject to the specific approval
of the Board, the CEO shall advise the Executive, in writing, as to whether the
requested relief shall be granted. The parties agree that such relief shall be
granted only if the CEO reasonably determines that the reasonably anticipated
impact on the Employer of the grant of such relief is in fact immaterial to and
fully compatible with the economic and proprietary interests of the Employer
(and its separate regions, ventures, divisions, subsidiaries and affiliates), it
being specifically hereby understood and acknowledged by the Executive that a
purportedly "minor" percentage impact on company-wide revenues or expenses of
the Employer shall not be deemed to be per se immaterial.

          (c)  TERMINATION OF RESTRICTIVE COVENANT - CERTAIN CHANGE IN CONTROL
TERMINATION BY EXECUTIVE. If the Executive terminates his employment with the
successor of the Employer following a Change in Control Event in the absence of
a Triggering Circumstance, so as to effectuate a termination of his employment
without any entitlement of

                                       21
<PAGE>   22

or claim by the Executive to a Change in Control Severance Amount, then the
Restrictive Covenant set forth in this Section 5 shall not be operative with
respect to the Executive following such termination, during the Restrictive
Period or otherwise, but the obligations of the Executive set forth in Section 4
as to Confidential Information shall remain operative as therein provided.

          (d)  REMEDIES FOR BREACH OF RESTRICTIVE COVENANT. The Executive
acknowledges that the restrictions contained in Sections 4 and 5 of this
Agreement are reasonable and necessary for the protection of the legitimate
proprietary business interests of the Employer; that any violation of these
restrictions would cause substantial injury to the Employer and such interests;
that the Employer would not have entered into this Agreement with the Executive
without receiving the additional consideration offered by the Executive in
binding himself to these restrictions; and that such restrictions were a
material inducement to the Employer to enter into this Agreement. In the event
of any violation of these restrictions or statement of intent by the Executive
to violate any of these restrictions, the Employer shall automatically be
relieved of any and all further financial and other obligations to the Executive
under this Agreement, in relation to Severance Payments or otherwise, and shall
be entitled to all rights, remedies or damages available at law, in equity or
otherwise under this Agreement; and, without limitation, shall be entitled to
temporary and preliminary injunctive relief, granted by a court of competent
jurisdiction, to prevent or restrain any such violation by the Executive and any
and all persons directly or indirectly acting for or with him, as the case may
be, such injunctive relief to be available pending the outcome of the
arbitration process provided under Section 9(d) of this Agreement, which
arbitration process will entitle the arbitrator to determine that permanent
injunctive relief is to be granted to the Employer, whereupon such relief shall
be granted by a court of competent jurisdiction, based on the determination of
the arbitrator.

     6.   INTERCORPORATE TRANSFERS. If the Executive shall be transferred by the
Employer to an affiliate of the Employer, such transfer, by itself and without
any adverse financial or functional impact on the Executive, shall not be deemed
a Constructive Discharge or otherwise be deemed to terminate or modify this
Agreement, and the employing corporation or other entity to which the Executive
is transferred shall, for all purposes of this Agreement, be construed as
standing in the same place and stead as the Employer as of the effective date of
such transfer provided, however, that at all times after such transfer, First
Industrial Realty Trust, Inc. shall remain liable for all obligations of the
Employer hereunder, including the payment of all Base Salary, Performance
Bonuses or other amounts set forth herein. For purposes hereof, an affiliate of
the Employer shall mean any corporation or other entity directly or indirectly
controlling, controlled by, or under common control with, the Employer.

     7.   INTEREST IN ASSETS AND PAYMENTS. Neither the Executive nor his estate
shall acquire any rights in any funds or other assets of the Employer, otherwise
than by and through the actual payment of amounts payable hereunder; nor shall
the Executive or his estate have any power to transfer, assign, anticipate,
pledge, hypothecate or otherwise encumber any of said payments; nor shall any of
such payments be subject to seizure for the payment of any debt, judgment,
alimony, separate maintenance or be transferable by operation of law in the

                                       22
<PAGE>   23

event or as a result of any bankruptcy, insolvency or other legal proceeding
otherwise relating to the Executive.

     8.   INDEMNIFICATION.

          (a)  During the term of this Agreement and thereafter throughout all
applicable limitations periods, the Employer shall provide the Executive
(including his heirs, personal representatives, executors and administrators),
with such coverage as shall be generally available to senior officers of the
Employer under the Employer's then-current directors' and officers' liability
insurance policy, at the Employer's expense.

          (b)  In addition to the insurance coverage provided for in paragraph
(a) of this Section 8, the Employer shall defend, hold harmless and indemnify
the Executive (and his heirs, executors and administrators) to the fullest
extent permitted under applicable law, and subject to each of the requirements,
limitations and specifications set forth in the Articles of Incorporation,
Bylaws and other organizational documents of the Employer, against all expenses
and liabilities reasonably incurred by him in connection with or arising out of,
any action, suit or proceeding in which the Executive may be involved by reason
of his having been an officer of the Employer (whether or not he continues to be
an officer at the time of such expenses or liabilities are incurred), such
expenses and liabilities to include, but not be limited to, judgments, court
costs and attorneys' fees and the cost of reasonable settlements.

          (c)  In the event the Executive becomes a party, or is threatened to
be made a party, to any action, suit or proceeding for which the Employer has
agreed to provide insurance coverage or indemnification under this Section 8,
the Employer shall, to the full extent permitted under applicable law, and
subject to the each of the requirements, limitations and specifications set
forth in the Articles of Incorporation, Bylaws and other organizational
documents of the Employer, advance all expenses (including the reasonable
attorneys' fees of the attorneys selected by Employer and approved by Executive
for the representation of the Executive), judgments, fines and amounts paid in
settlement (collectively "Expenses") incurred by the Executive in connection
with the investigation, defense, settlement, or appeal of any threatened,
pending or completed action, suit or proceeding, subject to receipt by the
Employer of a written undertaking from the Executive covenanting: (i) to
reimburse the Employer for the amount of all of the Expenses actually paid by
the Employer to or on behalf of the Executive in the event it shall be
ultimately determined, by the court or the arbitrator, as applicable to the
case, that the Executive is not entitled to indemnification by the Employer for
such Expenses; and (ii) to assign to the Employer all rights of the Executive to
insurance proceeds, under any policy of directors' and officers' liability
insurance or otherwise, to the extent of the amount of the Expenses actually
paid by the Employer to or on behalf of the Executive.

     9.   GENERAL PROVISIONS.

          (a)  SUCCESSORS; ASSIGNMENT. This Agreement shall be binding upon and
inure to the benefit of the Executive, the Employer, the Executive's personal
representatives, the Employer's successors and assigns, and any successor or
assign of the Employer shall be

                                       23
<PAGE>   24

deemed the "Employer" hereunder. The Executive may neither assign his duties or
obligations this Agreement, nor sell, assign, pledge, encumber, transfer or
hypothecate his entitlement hereunder, and the Employer shall have no obligation
to recognize any such purported alienation, or pay any funds to any party
claiming the benefit thereof.

          (b)  ENTIRE AGREEMENT; MODIFICATIONS. This Agreement constitutes the
entire agreement between the parties respecting the subject matter hereof, and
supersedes all prior negotiations, undertakings, agreements and arrangements
with respect thereto, whether written or oral; provided, however, that all
benefits and rights conferred by those equity-based and other compensation plans
as provided by the plans included on Exhibit B hereto (collectively, the
"Scheduled Benefits") shall be governed by those equity-based and other
compensation plans and ancillary documents, whether adopted or signed prior to
or after the Effective Date of this Agreement and as such are modified by this
Agreement. Except as otherwise explicitly provided herein, this Agreement may
not be amended or modified except by written agreement signed by the Executive
and the Employer.

          (c)  ENFORCEMENT AND GOVERNING LAW. The provisions of this Agreement
shall be regarded as divisible and separate; if any of said provisions should be
declared invalid or unenforceable by a court of competent jurisdiction, the
validity and enforceability of the remaining provisions shall not be affected
thereby. This Agreement shall be construed and the legal relations of the
parties hereto shall be determined in accordance with the laws of the State of
Illinois, as such state constitutes the situs of the headquarters office of the
Employer and the place of employment hereunder, and such laws shall apply
without reference to the rules of law regarding conflicts of law.

          (d)  ARBITRATION. Except only as otherwise provided in subparagraph
(d) of Section 5, each and every dispute, controversy and contested factual and
legal determination arising under or in connection with this Agreement or the
Executive's employment by the Employer shall be committed to and be resolved
exclusively through the arbitration process, in an arbitration proceeding,
conducted by a single arbitrator sitting in Chicago, Illinois, in accordance
with the rules of the American Arbitration Association (the "AAA") then in
effect. The arbitrator shall be selected by the parties from a list of eleven
(11) arbitrators provided by the AAA, provided that no arbitrator shall be
related to or affiliated with either of the parties. No later than ten (10) days
after the list of proposed arbitrators is received by the parties, the parties,
or their respective representatives, shall meet at a mutually convenient
location in Chicago, Illinois, or telephonically. At that meeting, the party who
sought arbitration shall eliminate one (1) proposed arbitrator and then the
other party shall eliminate one (1) proposed arbitrator. The parties shall
continue to alternatively eliminate names from the list of proposed arbitrators
in this manner until each party has eliminated five (5) proposed arbitrators.
The remaining arbitrator shall arbitrate the dispute. Each party shall submit,
in writing, the specific requested action or decision it wishes to take, or
make, with respect to the matter in dispute ("Proposed Solution"), and the
arbitrator shall be obligated to choose one (1) party's specific Proposed
Solution, without being permitted to effectuate any compromise or "new"
position; provided, however, that the arbitrator shall be authorized to award
amounts not in dispute during the pendency of any dispute or controversy arising
under or in connection with

                                       24
<PAGE>   25

this Agreement. The party whose Proposed Solution is not selected shall bear the
costs of all counsel, experts or other representatives that are retained by both
parties, together with all costs of the arbitration proceeding, including,
without limitation, the fees, costs and expenses imposed or incurred by the
arbitrator. If the arbitrator ultimately chooses the Executive's Proposed
Solution, then the Employer shall pay interest at the rate of eighteen percent
(18%) interest, per annum, on the amount the arbitrator awards to the Executive
(exclusive of attorneys' fees and costs and expenses of the arbitration), such
interest to be calculated from the date the amount payable under the Executive's
Proposed Solution would have been paid under this Agreement, but for the
dispute, through the date payment is ordered made. Judgment may be entered on
the arbitrator's award in any court having jurisdiction, including, if
applicable, entry of a permanent injunction under such subparagraph (d) of
Section 5.

          (e)  PRESS RELEASES AND PUBLIC DISCLOSURE. Any press release or other
public communication by either the Executive or the Employer with any other
person concerning the terms, conditions or circumstances of Executive's
employment, or the termination of such employment, shall be subject to prior
written approval of both the Executive and the Employer, subject to the proviso
that the Employer shall be entitled to make requisite and appropriate public
disclosure of the terms of this Agreement and any termination hereof, without
the Executive's consent or approval, as may be required under applicable
statutes, and the rules and regulations of the Securities and Exchange
Commission and New York Stock Exchange. Employer shall be entitled to rely on
the advice and counsel of its legal counsel and other professional advisors in
determining whether any such disclosure is required.

          (f)  PUT DEMAND AS TO RELEASED SECURITIES. If, pursuant to either of
Sections 3(g) or 3(h) hereof, the Employer shall have prematurely released and
eliminated all unexpired transfer and encumbrance restrictions otherwise
applicable to any restricted shares of common stock of the Employer owned by the
Executive, then the Executive shall, on a one-time basis exerciseable within
(30) days of the date of such release of restrictions, have the right to put to
the Employer, and require that the Employer purchase, such shares of restricted
stock as shall have been released as above described ("Released Securities").
Such put shall be exercised by delivery of a "Put Demand" to the Employer, given
in writing pursuant to the notice provisions hereof, which Put Demand: (i) shall
encompass all of the Released Securities owned by the Executive; and (ii) shall
in no event be applicable to or available in respect of any "Exempt Shares,"
which shall constitute those Released Securities that may otherwise be sold by
the Executive, without registration, pursuant to either or both of Rules 144 and
145 of the Securities Act of 1933, as amended, within a period of one hundred
twenty (120) days following the date of the release of the Executive's
restricted shares. Upon its receipt of a timely and otherwise proper Put Demand
from the Executive, the Employer shall thereby and thereupon become obligated,
within a period of ten (10) days following the date of delivery of the Put
Demand, to purchase, for cash, the Released Securities that were the subject of
the Put Demand in question (in all events exclusive of Exempt Shares), at a
price per share equal to the weighted average (by daily trading volume on the
New York Stock Exchange) of the closing price of the Employer's shares of common
stock for the thirty (30) trading days immediately preceding the date of
delivery of the Put Demand. The specific date on which such purchase shall be
consummated and closed shall be established pursuant to the

                                       25
<PAGE>   26

mutual agreement of the parties and, in the absence of such agreement, on the
tenth (10th) day following the date of delivery of the Put Demand (and if such
day falls on a weekend or business holiday, then on the first business day
thereafter). By his delivery of a Put Demand, the Executive shall become
irrevocably obligated to sell, at the price above specified, all of the Released
Securities that were the subject of the Put Demand. The transfer of the Released
Securities to the Employer shall be effectuated pursuant to commercially
reasonable and customary stock transfer and other related documentation prepared
at Employer's expense by counsel to the Employer.

          (g)  INTEREST. If any amount due hereunder is not paid within ten (10)
days of being due, then the Employer or the Executive, as applicable, shall pay
interest at the rate of 200 basis points above the base commercial lending rate
published in The Wall Street Journal in effect from time to time during the
period of such non-payment; provided, however, that if the interest rate set
forth above exceeds the highest legally-permissible interest rate, then the
interest rate shall be reduced to the level of the highest legally permissible
interest rate.

          (h)  WAIVER. No waiver by either party at any time of any breach by
the other party of, or compliance with, any condition or provision of this
Agreement to be performed by the other party, shall be deemed a waiver of any
similar or dissimilar provisions or conditions at the same time or any prior or
subsequent time.

          (i)  NOTICES. Notices given pursuant to this Agreement shall be in
writing, and shall be deemed given when received if personally delivered, or on
the first (1st) business day after deposit with a commercial overnight delivery
service. Notices to the Employer shall be addressed and delivered to the
principal headquarters office of the Employer, Attention: President and Chief
Executive Officer, with a copy concurrently so delivered to General Corporate
Counsel to the Employer, Barack Ferrazzano Kirschbaum Perlman & Nagelberg, 333
West Wacker Drive, Suite 2700, Chicago, Illinois 60606, to the joint attention
of Lynne D. Mapes-Riordan and Howard A. Nagelberg. Notices to the Executive
shall be sent to the address set forth below the Executive's signature on this
Agreement, or to such other address as Executive may hereafter designate in a
written notice given to the Employer and its counsel.

          (i)  COUNTERPARTS. This Agreement and any amendments thereto may be
executed in any number of counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.

                                       26
<PAGE>   27
     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.

FIRST INDUSTRIAL REALTY TRUST,                    JOHANNSON L. YAP
INC., a Maryland corporation

By:        /s/ Michael W. Brennan                      /s/ Johannson L. Yap
     ------------------------------------         ------------------------------
     Michael W. Brennan                           Address of Executive:
     President and Chief Executive Officer
                                                  404 Shadow Creek Lane
                                                  Riverwoods, Il 60015

                                       27
<PAGE>   28
                                JOHANNSON L. YAP

                     EMPLOYMENT AGREEMENT (THE "AGREEMENT")

                                    EXHIBIT A

     The Executive's Maximum Performance Bonus under Section 2(b) of the
Agreement shall be equal to the sum of the following percentages of his Base
Salary, as such percentages are modified from time to time by the Compensation
Committee of the Board in accordance with its procedures governing the review
and modification of executive compensation for the Employer:

         --------------------------------------------------------------
           BONUS COMPONENTS                           MAXIMUM
           ----------------                           -------

         --------------------------------------------------------------
           Cash Bonus                                   200%

         --------------------------------------------------------------
           Equity-Based Bonus                           140%

         --------------------------------------------------------------

                                      A-1
<PAGE>   29

                                JOHANNSON L. YAP

                     EMPLOYMENT AGREEMENT (THE "AGREEMENT")

                                    EXHIBIT B

     The Executive's Scheduled Benefits are those provided according to the
following plans:

     A.   First Industrial Realty Trust, Inc. 1994 Stock Incentive Plan and
          related awards and grant agreements thereunder.

     B.   First Industrial Realty Trust, Inc. 1997 Stock Incentive Plan and
          related awards and grant agreements thereunder.

     C.   First Industrial Realty Trust, Inc. Deferred Income Plan.

                                      B-1
<PAGE>   30
                                JOHANNSON L. YAP

                     EMPLOYMENT AGREEMENT (THE "AGREEMENT")

                                    EXHIBIT C

                                   EXAMPLE #1

        CALCULATION OF HYPOTHETICAL DOUBLE HISTORICAL AVERAGE CASH BONUS
                WITH NO IMPACT OF DEFICIENT BONUS YEAR ADJUSTMENT

The first example below is a calculation that would be performed pursuant to
Section 3(h)(i)(A)(3) of the Agreement.

     Assume the following:

     -    Change in Control Termination is February 1, 2000.

     -    Base Salary during 1998, 1999 was $100,000.

     -    Base Salary as of Change in Control Termination is $150,000.

     -    For 1998 and 1999 the Maximum Cash Performance Bonus Percentage was
          150%.

     -    For 2000 the Maximum Cash Performance Bonus Percentage is 180%.

     -    Cash Performance Bonus for 1998 was $150,000 (or 100% of Maximum Cash
          Performance Bonus).

     -    Cash Performance Bonus for 1999 was $75,000 (or 50% of Maximum Cash
          Performance Bonus).

     -    Equity-Based Performance Bonus value for 1999 was not more than
          $100,000 (See below for example of year in which such value was
          $100,000 or more).

     Step 1 -   Determine Historical Average Cash Bonus Percentage

                1998 Cash Bonus Percentage
                (as a Percentage of the Maximum Cash Bonus Percentage)      100%
                1999 Cash Bonus Percentage
                (as a Percentage of the Maximum Cash Bonus Percentage)       50%
                                                                           ----
                Average of above percentages is the
                Historical Average Cash Bonus Percentage                     75%
                                                                           ====

     Step 2 -   Determine Change in Control Bonus Percentage

                Historical Prior Average Cash Bonus Percentage               75%
                Multiplied by Maximum Cash Performance Bonus
                Percentage for year of Change in Control Termination    x   180%
                                                                           ----
                Change in Control Bonus Percentage is:                      135%
                                                                           ====

                                      C-1

<PAGE>   31
     Step 3 -   Determine Historical Average Cash Bonus

                Change in Control Bonus Percentage                          135%
                Multiplied by Base Salary as of Change
                in Control Termination                              x  $150,000
                                                                       --------
                Historical Average Cash Bonus is:                      $202,500
                                                                       ========

     Step 4 -   Determine Double Historical Average Cash Bonus

                Historical Average Cash Bonus                          $202,500
                Multiplied by 2                                     x         2
                                                                       --------
                Double Historical Average Cash Bonus is:               $405,000
                                                                       ========

                                   EXAMPLE #2

        CALCULATION OF HYPOTHETICAL DOUBLE HISTORICAL AVERAGE CASH BONUS
                      WITH DEFICIENT BONUS YEAR ADJUSTMENT

The second example assumes that the 1999 Cash Performance Bonus triggers a
Deficient Bonus Year.

     Assume the following:

     -    The facts presented in Example #1 remain static

     -    Equity-based Performance Bonus value for 1999 was $100,000 (contrary
          to Example #1)

     Step 1 -   Determine Historical Average Cash Bonus Percentage

                1998 Cash Bonus Percentage
                (as a Percentage of the Maximum Cash Bonus Percentage)      100%
                1999 Cash Bonus Percentage
                (as a Percentage of the Maximum Cash Bonus Percentage)       50%
                                                                            ----
                Average of above percentages is the Historical Average
                Cash Bonus Percentage                                        75%
                                                                            ====

     Step 2 -   Determine whether 1998 or 1999 was a "Deficient Bonus Year"

                -     1998 was not a Deficient Bonus Year,  because the Cash
                      Performance  Bonus Percentage paid was 100% of the Maximum
                      Cash Performance Bonus.

                                      C-2
<PAGE>   32
                -     1999 was a Deficient Bonus Year, because the Cash Bonus
                      Percentage was 75%, which is less than 100%, and the value
                      of the equity-based performance bonus was $100,000 or more
                      (contrary to Example #1). Because 1999 is a Deficient
                      Bonus Year, the 1999 75% Cash Bonus Percentage is deemed
                      to be 100% for purposes of the calculation of the Double
                      Historical Average Cash Bonus.

     Step 3 -   Determine Historical Average Cash Bonus Percentage using 100%
                for 1999

                1998 Cash Bonus Percentage                                  100%
                1999 Deemed Cash Bonus Percentage                           100%
                                                                           ----
                Average of above percentages is Historical Average
                Cash Bonus Percentage                                       100%
                                                                           ====

     Step 4 -   Determine Change in Control Bonus Percentage

                Historical Average Cash Bonus Percentage                    100%
                Multiplied by Maximum Cash Performance
                Bonus Percentage for year of Change in
                Control Termination                                     x   180%
                                                                           ----
                Change in Control Bonus Percentage is:                      180%
                                                                           ====

     Step 5 -   Determine Historical Average Cash Bonus

                Change in Control Bonus Percentage                          180%
                Multiplied by Base Salary as of Change
                in Control Termination                              x  $150,000
                                                                       --------
                Historical Average Cash Bonus is:                      $270,000
                                                                       ========

     Step 6 -   Determine Double Historical Average Cash Bonus

                Historical Average Cash Bonus                          $270,000
                Multiplied by 2                                     x         2
                                                                       --------
                Double Historical Average Cash Bonus is:               $540,000
                                                                       ========

                                      C-3
<PAGE>   33
                                JOHANNSON L. YAP

                     EMPLOYMENT AGREEMENT (THE "AGREEMENT")

                                    EXHIBIT D

A copy of the list of industrial and mixed office/industrial REIT and Real
Estate Operating Companies as published in the Realty Stock Review, a Dow Jones
& Co. publication, for the month prior to the Effective Date of the Agreement is
attached hereto.

                                      D-1<PAGE>   1
                                                            EXHIBIT 4.(ii)(d)(1)
                                                           Contract No. MA-13579

                       COMMITMENT TO GUARANTEE OBLIGATIONS

                                       by

                          THE UNITED STATES OF AMERICA

                                   Accepted by

                          PROJECT AMERICA SHIP I, INC.,
                                                   Shipowner

                   (Under Title XI, Merchant Marine Act, 1936,
                        as amended, and in effect on the
                       date of this Guarantee Commitment)

                             Dated February 10, 2000

<PAGE>   2

                                TABLE OF CONTENTS

                       COMMITMENT TO GUARANTEE OBLIGATIONS

<TABLE>
<CAPTION>
ARTICLE                                        HEADINGS                                                  PAGE
<S>                                                                                                       <C>
RECITALS...................................................................................................1

ARTICLE I     FINDINGS  AND DETERMINATIONS OF SECRETARY....................................................2

ARTICLE II    COMMITMENT TO GUARANTEE OBLIGATIONS..........................................................2

ARTICLE III   THE OBLIGATIONS..............................................................................2

ARTICLE IV    CONDITIONS TO EXECUTION AND DELIVERY OF THE GUARANTEE........................................3

ARTICLE V     VARIATION OF GUARANTEE COMMITMENT ...........................................................5

ARTICLE VI    TERMINATION OR ASSIGNMENT OF GUARANTEE COMMITMENT............................................5

ARTICLE VII   MISCELLANEOUS................................................................................6
</TABLE>

<PAGE>   3

                       COMMITMENT TO GUARANTEE OBLIGATIONS

         THIS COMMITMENT TO GUARANTEE OBLIGATIONS, dated February 10, 2000 (the
"Guarantee Commitment"), made and entered into by the UNITED STATES OF AMERICA
(the "United States"), represented by the SECRETARY OF TRANSPORTATION, acting by
and through the MARITIME ADMINISTRATOR (the "Secretary"), and accepted on said
date by Project America Ship I, Inc., a Delaware corporation (the "Shipowner").

                                    RECITALS:

         A. The Shipowner is the sole owner of Hull No. 7671, an 840' passenger
vessel (the "Vessel") being constructed pursuant to the Construction Contract
between Ingalls Shipbuilding, Inc. (the "Shipyard") and Project America, Inc.
(the "Guarantor"), dated March 9, 1999, and subsequently assigned to the
Shipowner.

         B. To aid in financing the Construction of the Vessel, the Shipowner
will borrow an aggregate principal amount in Obligations not to exceed 87.5% of
the Depreciated Actual Cost or Actual Cost of the Vessel, as the case may be, as
of the Closing Dates. To accomplish such financing, the Shipowner has accepted
this Guarantee Commitment subject to the terms and conditions set forth herein.

         C. The Shipowner has entered into the Note Purchase Agreement providing
for the sale and delivery, on the Note Closing Date, of notes in the aggregate
principal amount of $250,000,000, to be designated "United States Government
Guaranteed Ship Financing Notes" (the "Notes") having the maturity dates and
interest rates set forth in the Notes.

         D. As security for the Guarantees and the Secretary's Note, (i) the
Shipowner will execute and deliver the Security Agreement, Contract No.
MA-13581, the Indenture, the Authorization Agreement, Contract No. MA-13580, the
Secretary's Note, the Financial Agreement, Contract MA-13583, and the Depository
Agreement, Contract No. MA-13584 and (ii) the Guarantor shall execute and
deliver the Parent Guarantee.

         E. On the Bond Closing Date, the Shipowner will execute and deliver the
Bond Purchase Agreement providing for the sale and delivery, on the Bond Closing
Date, of bonds to be designated "United States Government Guaranteed Ship
Financing Bonds" (the "Bonds" and together with the Notes, the "Obligations") in
an aggregate principal amount, together with any Outstanding Notes, not to
exceed $534,447,000 having the maturity dates and interest rates set forth in
the Bond Purchase Agreement, the Indenture, and the Bonds.

                                   WITNESSETH

         That under the provisions of Title XI of the Merchant Marine Act, 1936,
as amended and in consideration of (i) the covenants of the Shipowner contained
herein and (ii) other good and

<PAGE>   4

valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Secretary hereby commits itself as herein provided.

                                    ARTICLE I
                  FINDINGS AND DETERMINATIONS OF THE SECRETARY

         Pursuant to Section 1104A(b)(1) of Title XI, the Secretary has approved
the Shipowner as responsible and possessing the ability, experience, financial
resources and other qualifications necessary to the adequate operation and
maintenance of the Vessel.

         Pursuant to Section 1104A(b)(2) of Title XI, the Secretary has
determined that the Depreciated Cost or Actual Cost of the Vessel, as the case
may be, is $610,797,578. Prior to the Closing Dates, the Secretary, in its
discretion, may redetermine the Depreciated Actual Cost or Actual Cost of the
Vessel. On the Closing Dates, the aggregate principal amount of the Outstanding
Obligations will not exceed 87.5% of the Depreciated Actual Cost or the Actual
Cost, as the case may be.

          Pursuant to Sections 1104A(b)(3), 1104A(b)(4) and 1104A(b)(5) of Title
XI, the Secretary has determined or will determine that: (1) the maturity dates
of the Obligations are satisfactory, (2) payments of principal required by the
Obligations are satisfactory and (3) the interest rates to be borne by the
Obligations to be issued on the Closing Dates are reasonable.

         Pursuant to Section 1104A(d) of Title XI, the Secretary has found that
the Shipowner's proposed use of the Vessel will be economically sound.

                                   ARTICLE II
                       COMMITMENT TO GUARANTEE OBLIGATIONS

         The United States, represented by the Secretary, hereby commits itself
to guarantee the payment of the unpaid interest on, and the unpaid balance of
the principal of, the Obligations, including interest accruing between the date
of default under the Obligations and the payment in full of the Guarantees, and,
to effect this Guarantee Commitment, hereby commits itself to execute and
deliver, the Security Agreement, the Financial Agreement, the Authorization
Agreement and the Depository Agreement on the Note Closing Date, and the
Mortgage on the Delivery Date pursuant to the terms of the Guarantee Commitment.

                                   ARTICLE III
                                 THE OBLIGATIONS

         The Obligations shall be issued as a series of Notes and Bonds as
provided in the Indenture and in the form of the Note and the Bond, annexed to
the Indenture as Exhibit 2A and Exhibit 2B, respectively. The Obligations shall
be subject to all of the terms and conditions set forth in the Indenture.

                                       2
<PAGE>   5

                                   ARTICLE IV
              CONDITIONS TO EXECUTION AND DELIVERY OF THE GUARANTEE

A. The obligation of the Secretary to execute and deliver the Guarantee on a
Note Closing Date and a Bond Closing Date shall be subject to the following
conditions unless waived in writing by the Secretary:

         (a) the first Note Closing Date shall occur on or prior to April 8,
2000 and the final Bond Closing Date shall occur on or prior to one year from
the Delivery Date;

         (b) the Shipowner and the Shipyard shall have executed and delivered to
the Secretary a copy of the Construction Contract and the Shipyard shall have
executed the Consent of Shipyard;

         (c) the Shipowner shall have executed and delivered the following
documents in the form attached hereto: the Security Agreement, the Financial
Agreement, the Indenture, the Note Purchase Agreement, the Secretary's Note, the
Depository Agreement, the Authorization Agreement and the Notes;

         (d) the Indenture Trustee shall have executed, in the form attached
hereto, the Indenture and the Authorization Agreement and the Depository shall
have executed the Depository Agreement;

         (e) The Note purchaser shall have executed the Note Purchase Agreement;

         (f) the Guarantor shall have executed and delivered, in the form
attached hereto, the Parent Guaranty;

         (g) the following documents shall have been delivered to the Secretary:
(i) two executed counterparts of the Indenture, (ii) two specimen copies of the
Notes; (iii) two executed originals of the legal opinion issued under section
(l) of this Article; (iv) two copies of the legal opinion delivered to the
Obligees pursuant to the Note Purchase Agreement; and (v) two originals of all
other documents delivered by the Shipowner, the Guarantor, the Indenture Trustee
or the Depository in connection with this Closing.

         (h) if the Shipowner intends to operate the Vessel in the U.S. domestic
trade, the Shipowner and any bareboat charterers of such Vessel shall have
furnished to the Secretary on the Note Closing Date an affidavit complying with
the requirements of 46 CFR Section 355, demonstrating U.S. citizenship;

         (i)      the Shipowner shall have executed an Officer's Certificate
representing and warranting the truth of the following statements as of the Note
Closing Date:

                  (i) each of the representations and warranties set out at
         Section 2.01 of the General Provisions of the Security Agreement in
         Appendix III; and

                                        3
<PAGE>   6

                  (ii) the Shipowner is not in violation of any Federal laws
         having a substantial adverse effect on the interests of the United
         States of America and that the consummation of the Commitment complies
         with non-Title XI Federal law.

         (j) At the Closing of each Note or Bond, the Secretary shall receive
the Guarantee Fee based upon the principal amount and maturity of each
Obligation to be issued, set at three-eighths of one percent for each Note
issued during the construction of the Vessel, and three-quarters of one percent
(i) for each Note issued after the Delivery Date, and (ii) for each Bond, and
paid at the Closing of each Note or Bond;

         (k) the Shipowner shall have complied in all material respects with its
agreements under this Guarantee Commitment;

         (l) there shall not have occurred any event which constitutes (or after
any period of time or any notice, or both, would constitute) a "Default" under
the Security Agreement;

         (m) there shall have been delivered to the Secretary by the Shipowner
an opinion of counsel acceptable to the Secretary, in the form annexed hereto as
Schedule 1 which shall include, among other things, an opinion to the effect
that: (i) by the terms of the Security Agreement, the Shipowner has granted to
the Secretary a fully perfected, first priority security interest in each of the
assets which constitutes the Security; and (ii) all filings, recordings, notices
and other actions required to perfect the Secretary's interests in the Security
and to render such security interests valid and enforceable under applicable
State law have been duly effected;

         (n) the Secretary shall have received a letter agreement from the
Shipowner to provide the Secretary within a reasonable time after the Note
Closing Date, with five conformed copies of the Guarantee Commitment and each of
the Appendices and Exhibits thereto executed on or prior to such date;

         (o) on the Note Closing Date, the qualifying requirements set forth in
Section 11 of the Financial Agreement shall have been complied with and
certified to as required therein; and

         (p) at least ten days prior to the Note Closing Date, there shall have
been delivered to the Secretary, pro forma balance sheets for the Shipowner as
of the Note Closing Date, certified by an officer of the Shipowner showing,
among other things, all non-Title XI debt of the Shipowner;

         (q) on the Note Closing Date, the Shipowner shall certify that all
non-Title XI loans to the Shipowner relating to the Vessel have been discharged
or subordinated satisfactorily to the Secretary;

         (r) at least ten days prior to the Note Closing Date, the Shipowner
shall have provided the Secretary with satisfactory evidence of insurance as
required by the Security Agreement;

                                       4
<PAGE>   7

         (s) the Guarantor shall have executed and delivered the Parent
Guarantee, and;

         (t) on the Note Closing Date the Shipowner shall execute a declaration,
in conformance with 31 USC 1352, disclosing all lobbying activities.

B. The obligation of the Secretary to execute and deliver a Secretary's
Determination on any subsequent Note Closing or the Bond Closing Date shall be
subject to the following conditions unless waived in writing by the Secretary:

         (a) the Shipowner shall have executed and delivered the following
documents in the form attached hereto: the Notes and the Note Purchase Agreement
or the Bonds and the Bond Purchase Agreement, as the case may be;

         (b) the Note purchaser or the Bond purchaser, as the case may be shall
have executed the Note Purchase Agreement or the Bond Purchase Agreement, as
applicable;

         (c) the following documents shall have been delivered to the Secretary:
(i) one executed counterpart and one copy of the Note Purchase Agreement or Bond
Purchase Agreement and two conformed copies of the Offering Circular; (ii) two
specimen copies of the Notes or Bonds; (iii) two executed originals of the legal
opinion issued under section (k) of this Article; (iv) two copies of the legal
opinion delivered to the Obligees pursuant to the Note Purchase Agreement or
Bond Purchase Agreement, and (v) two originals of all other documents delivered
by the Shipowner, Indenture Trustee or the Depository in connection with the
Note Closing or Bond Closing;

                                    ARTICLE V
                        VARIATION OF GUARANTEE COMMITMENT

         No variation from the terms and conditions hereof shall be permitted
except pursuant to an amendment executed by the Secretary and the Shipowner.

                                   ARTICLE VI
                TERMINATION OR ASSIGNMENT OF GUARANTEE COMMITMENT

         This Guarantee Commitment may be terminated and the parties hereto
shall have no further rights or obligations hereunder, upon written notice by
the Secretary of the termination of the obligations of the United States
pursuant to the Shipowner's failure to satisfy one or more conditions set forth
in Article IV hereof or upon the Secretary's determination, at or before the
Note Closing Date, that (i) the Shipowner is in violation of Federal law and
such violation would have a substantial, adverse affect on the interests of the
United States of America or (ii) the consummation of the Commitment would
violate non-Title XI Federal law. The Shipowner's warranties and representations
shall survive the termination of this Agreement and the Secretary's issuance of
the Guarantees. This Guarantee Commitment may not be assigned by the Shipowner
without the prior written approval of the Secretary and any attempt to do so
shall be null and void ab initio.

                                        5
<PAGE>   8

                                   ARTICLE VII
                                  MISCELLANEOUS

         (a) The table of contents and the titles of the Articles are inserted
as a matter of convenient reference and shall not be construed as a part of this
Guarantee Commitment. This Guarantee Commitment may be executed in any number of
counterparts, each of which shall be an original, but such counterparts shall
together constitute but one and the same instrument.

         (b) For all purposes of this Guarantee Commitment, unless otherwise
expressly provided or unless the context shall otherwise require, capitalized
terms used herein shall have the meaning given in Schedule X to the Security
Agreement.

                                       6

<PAGE>   9

         IN WITNESS WHEREOF, this Commitment to Guarantee Obligations has been
executed by the United States and accepted by the Shipowner, all as of the day
and year first above written.

                                             UNITED STATES OF AMERICA,
                                             SECRETARY OF TRANSPORTATION

                                             BY:  MARITIME ADMINISTRATOR
(SEAL)

                                                      /s/ Joel C. Richard
                                             ----------------------------
                                             Secretary

ATTEST:

/s/ Sarah J. Washington
-----------------------
Assistant Secretary

<PAGE>   10

SHIPOWNER:                                   PROJECT AMERICA SHIP I, INC.

(SEAL)   .........                           By       /s/ Jordan B. Allen
                                                 ------------------------
                                                 Its Executive Vice President

ATTEST:

By      /s/ Pam Stringer
   -----------------------
   Its Assistant Secretary

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