>What I think happens is as follows:
>at the top of the application (in main.prg) there is a code
>

>set procedure to password additive
>

>
>Then something (maybe CLEAR EVENTS ??) closes all procedures. So the SET PROCEDURE TO PASSWORD is not longer part of the current code. And the application needs to call some method in this .PRG (the file password.prg Defines a class with properties and methods). So, when the application - after the procedure PASSWORD is closed - calls one of the methods, it bombs with the above error code.

You don't pipe Set("proc") into the error log ? Even if proc file is not open, it should be read...
I don't think the vfp exe is copied totally into memory - not for included tables for certain! - but have not checked.