Exhibit 10.1

EXCHANGE AGREEMENT

     EXCHANGE AGREEMENT dated as of July 8, 2005 (the “Agreement”), entered into
by and between AMB Property, L.P., a Delaware limited partnership (the
“Operating Partnership”), and Teachers Insurance and Annuity Association of
America, a New York corporation (the “Holder”).

R E C I T A L S

     WHEREAS, on June 30, 1998, the Operating Partnership issued $100,000,000
aggregate principal amount of 6.90% Reset Put Securities Due June 30, 2015 –
Putable/Callable 2005 (the “Notes”) pursuant an Indenture dated as of June 30,
1998, by and among the Operating Partnership, AMB Property Corporation, a
Maryland corporation (the “Parent Corporation,” and together with the Operating
Partnership, the “Companies”), and State Street Bank and Trust Company of
California, as trustee thereunder (the “Predecessor Trustee”), as supplemented
by: (a) the First Supplemental Indenture dated as of June 30, 1998, by and among
the Operating Partnership, the Parent Corporation and the Predecessor Trustee;
(b) the Second Supplemental Indenture dated as of June 30, 1998, by and among
the Operating Partnership, the Parent Corporation and the Predecessor Trustee;
(c) the Third Supplemental Indenture dated as of June 30, 1998, by and among the
Operating Partnership, the Parent Corporation and the Predecessor Trustee;
(d) the Fourth Supplemental Indenture dated as of August 15, 2000, by and among
the Operating Partnership, the Parent Corporation and the Predecessor Trustee;
and (e) the Fifth Supplemental Indenture dated as of May 7, 2002, by and among
the Operating Partnership, the Parent Corporation and the Predecessor Trustee
(as so supplemented, and as to be supplemented by the Sixth Supplemental
Indenture (as defined below), together, the “Indenture”).

     WHEREAS, pursuant to and in accordance with the terms of the Indenture,
Morgan Stanley & Co. International Limited (the “Callholder”) exercised its
right to call the Notes and accordingly on June 30, 2005 (the “Coupon Reset
Date”) purchased the aggregate principal amount of the Notes issued and
outstanding at a price equal to 100% of the aggregate principal amount thereof.

     WHEREAS, pursuant to and in accordance with the terms of the Indenture,
Morgan Stanley & Co. Incorporated (the “Seller”) obtained bids for the purchase
of the Notes, matched the bid with the lowest Yield to Maturity (as defined in
the Indenture) and accordingly, on the Coupon Reset Date, purchased the Notes
from the Callholder.

     WHEREAS, on the Coupon Reset Date, pursuant to and in accordance with the
terms of the Purchase Agreement dated as of June 14, 2005, by and among the
Operating Partnership, the Seller, the Callholder and the Holder (the “Purchase
Agreement”), the Seller sold the Notes to the Holder pursuant to the exemptions
from the registration requirements of the Securities Act of 1933, as amended
(the “Securities Act”), including but not limited to the exemption provided by
Rule 144A promulgated under the Securities Act.

     WHEREAS, the Holder and the Operating Partnership desire to cause an
exchange of the Notes in a private placement exempt from the registration
requirements of the Securities Act (the “Exchange”), whereby the Holder shall
exchange all Notes held by the Holder for $112,491,000

 

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in aggregate principal amount of 5.094% Notes Due 2015, which shall constitute a
new series of Securities (as defined in the Indenture) of the Operating
Partnership (the “Exchange Notes”), which are to be issued under the Sixth
Supplemental Indenture to be dated as of the Closing Date, by and among the
Operating Partnership, the Parent Corporation and U.S. Bank National
Association, a national banking association organized and existing under the
laws of the United States of America, as successor-in-interest to the
Predecessor Trustee (together with the Predecessor Trustee, as applicable, the
“Trustee”), substantially in the form attached hereto as EXHIBIT A (the “Sixth
Supplemental Indenture”).

     WHEREAS, the Operating Partnership and the Holder have executed a Loan
Application and Commitment Agreement, dated July 8, 2005 (as may be amended from
time to time after the date hereof, the “Loan Commitment Agreement”), pursuant
to which, subject to the terms thereof, the Holder has agreed to make one or
more first mortgage loans to the Operating Partnership or one or more of its
subsidiaries or affiliated entities (the “Borrower”), in accordance with the
terms of the Loan Commitment Agreement (the “Mortgage Loans”), in exchange for
cancellation of an equal principal amount of Exchange Notes, to be secured by
certain real property identified by the Operating Partnership and approved by
the Holder in accordance with the terms of the Loan Commitment Agreement.

     WHEREAS, the Operating Partnership and the Holder desire to provide that
the Operating Partnership, on the terms and subject to the conditions set forth
herein and in the Loan Commitment Agreement, shall have the right to cancel all
or any portion of the aggregate principal amount of the Exchange Notes for an
obligation of equal dollar amount under the Mortgage Loan.

A G R E E M E N T

     NOW, THEREFORE, in consideration of the premises and of the mutual
representations, warranties, covenants and undertakings contained herein, and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Holder and the Operating Partnership now hereby
agree as follows:

     1. Exchange. Subject to the terms and conditions set forth below, on the
Closing Date (as defined below) the Holder shall assign and transfer to the
Operating Partnership all the Notes held by the Holder and the Operating
Partnership shall issue and deliver to the Holder $112,491,000 in aggregate
principal amount of Exchange Notes.

     2. Delivery of Exchange Notes. Delivery of the Exchange Notes pursuant to
Section 1 of this Agreement shall occur at 10:00 a.m., New York City time, on
July 11, 2005, or such other time or date as shall be designated in writing by
each of the Operating Partnership and the Holder (as applicable, the “Closing
Date”), and shall be delivered by “book-entry” with, and credited to the
securities account specified by the Holder at, the Depository Trust Company
(“DTC”).

     3. Operating Partnership Condition to Closing. The obligations of the
Operating Partnership to deliver the Exchange Notes to the Holder on the Closing
Date are subject to the following conditions; provided, however, that the
Operating Partnership may waive such condition in the sole and absolute
discretion of the Operating Partnership.

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          (a) The Holder has assigned and transferred to the Operating
Partnership all Notes held by the Holder; and

          (b) The representations, warranties and covenants of the Holder in
Section 5 of this Agreement shall be true and correct as of the Closing Date as
set out in a certificate dated the Closing Date executed by any managing
director of the Holder.

     4. Holder Conditions to Closing. The obligations of the Holder to exchange
the Exchange Notes for the Notes on the Closing Date are subject to the
following conditions; provided, however, that the Holder may waive such
conditions in the sole and absolute discretion of the Holder:

          (a) The representations, warranties and covenants of the Operating
Partnership in Section 5A of this Agreement shall be true and correct as of the
Closing Date as set out in a certificate dated the Closing Date executed by any
executive officer of the Parent Corporation in the Parent Corporation’s capacity
as general partner of the Operating Partnership; and

          (b) The Operating Partnership shall have executed the Sixth
Supplemental Indenture and the Registration Rights Agreement substantially in
the form attached hereto as EXHIBIT B (the “Registration Rights Agreement”).

          (c) The Holder shall have received opinions of counsel from Ballard
Spahr Andrews & Ingersoll LLP and Tamra D. Browne, General Counsel of the Parent
Corporation, substantially in the forms attached hereto as EXHIBIT C and EXHIBIT
D, respectively.

     5. Representations, Warranties and Covenants of the Holder. The Holder
represents, warrants and covenants, as of the date hereof, as of the Closing
Date, and as of any Mortgage Loan Closing Date, as applicable, as follows:

          (a) The Holder is (i) a “qualified institutional buyer” within the
meaning of Rule 144A under the Securities Act (a “QIB”) and is an institutional
“accredited investor” within the meaning of Rule 501(a)(1), (2), (3) or (7) of
Regulation D promulgated under the Securities Act, (ii) aware that the Exchange
is a private placement exempt from the registration requirements of the
Securities Act and (iii) acquiring the Exchange Notes for its own account, for
investment only and not with a view toward their distribution in violation of
federal or state securities laws.

          (b) The Holder understands and agrees that the Exchange is not a
transaction involving any public offering within the meaning of the Securities
Act and that the Exchange Notes have not been registered under the Securities
Act, and that if prior to the expiration of the applicable holding period
specified in Rule 144(k) of the Securities Act the Holder decides to offer,
resell, pledge or otherwise transfer any of the Exchange Notes, such Exchange
Notes may be offered, resold, pledged or otherwise transferred only pursuant to
and in accordance with the restrictions set forth in Section 5(c) of this
Agreement and the Sixth Supplemental Indenture; and (ii) no representation is
made as to the availability of any exemption under the Securities Act or any
state securities laws for the resale of the Exchange Notes.

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          (c) The Holder understands that the Exchange Notes will, until the
earlier of the expiration of the applicable holding period set forth in Rule
144(k) of the Securities Act, unless sold pursuant to a registration statement
that has been declared effective under the Securities Act or in compliance with
Rule 144, bear a legend substantially to the following effect:

     THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD,
PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE
ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH IN THE FOLLOWING
SENTENCE. BY ITS ACQUISITION HEREOF (OR OF A BENEFICIAL INTEREST HEREIN) THE
HOLDER: (1) REPRESENTS THAT (A) IT IS A “QUALIFIED INSTITUTIONAL BUYER” (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (A “QIB”), (B) IT IS NOT A U.S.
PERSON, IS NOT ACQUIRING THIS SECURITY FOR THE ACCOUNT OR BENEFIT OF A U.S.
PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN COMPLIANCE
WITH REGULATION S UNDER THE SECURITIES ACT OR (C) IT IS AN INSTITUTIONAL
“ACCREDITED INVESTOR” (AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) OF
REGULATION D UNDER THE SECURITIES ACT) (AN “IAI”); (2) AGREES THAT IT WILL NOT,
WITHIN THE TIME PERIOD REFERRED TO UNDER RULE 144(k) (TAKING INTO ACCOUNT THE
PROVISIONS OF RULE 144(d) UNDER THE SECURITIES ACT, IF APPLICABLE) UNDER THE
SECURITIES ACT AS IN EFFECT ON THE DATE OF THE TRANSFER OF THIS SECURITY, RESELL
OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY
THEREOF, (B) TO A PERSON WHOM THE HOLDER REASONABLY BELIEVES IS A QIB PURCHASING
FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB IN COMPLIANCE WITH RULE 144A
UNDER THE SECURITIES ACT, (C) OUTSIDE THE UNITED STATES IN AN OFFSHORE
TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT, (D) PURSUANT
TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT
(IF AVAILABLE), (E) TO AN IAI THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE
TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
RELATING TO THE REGISTRATION OF TRANSFER OF THIS SECURITY, THE FORM OF WHICH
LETTER CAN BE OBTAINED FROM THE TRUSTEE, AND AN OPINION OF COUNSEL ACCEPTABLE TO
THE COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT OR
(F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT,
AND, IN EACH CASE, IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS; AND
(3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS SECURITY OR AN
INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS
LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS SECURITY OR ANY INTEREST HEREIN
WITHIN THE TIME PERIOD REFERRED TO ABOVE,

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THE HOLDER MUST CHECK THE APPROPRIATE BOX CONTAINED IN A CERTIFICATE OF TRANSFER
AVAILABLE FROM THE TRUSTEE RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT
THIS CERTIFICATE TO THE TRUSTEE. AS USED HEREIN, THE TERMS “OFFSHORE
TRANSACTION,” “UNITED STATES” AND “U.S. PERSON” HAVE THE MEANINGS GIVEN TO THEM
BY RULE 902 OF REGULATION S UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS A
PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS
SECURITY IN VIOLATION OF THE FOREGOING RESTRICTIONS.

          (d) The Holder (i) is able to fend for itself in the transactions
contemplated by this Agreement, (ii) has such knowledge and experience in
financial and business matters as to be capable of evaluating the merits and
risks of its prospective investment in the Exchange Notes and (iii) has the
ability to bear the economic risks of its prospective investment and can afford
the complete loss of such investment.

          (e) The Holder acknowledges that (i) it has conducted its own
investigation of the Companies and the terms of the Exchange Notes and (ii) it
has had access to the public filings of the Companies with the Securities and
Exchange Commission (the “Commission”) and to such financial and other
information as it deems necessary to make its decision to acquire the Exchange
Notes.

          (f) The Holder understands that the Companies will rely upon the truth
and accuracy of the foregoing representations, acknowledgements and agreements
and agrees that if any of the representations or acknowledgements deemed to have
been made by it in connection with the Exchange is no longer accurate, the
Holder shall promptly notify the Companies. If the Holder is acquiring the
Exchange Notes as a fiduciary or agent for one or more investor accounts, it
represents that is has sole investment discretion with respect to each such
account and it has full power to make the foregoing representations,
acknowledgements and agreements on behalf of such account.

          (g) The Holder has full right, power, authority and capacity to enter
into this Agreement and to consummate the transactions contemplated hereby and
has taken all necessary action to authorize the execution, delivery and
performance of this Agreement and the Exchange.

          (h) The Holder understands that nothing in this Agreement, the public
filings of the Companies with the Commission or any other materials presented to
the Holder in connection with the Exchange constitutes legal, tax or investment
advice. The Holder has consulted such legal, tax and investment advisors as it,
in its sole discretion, has deemed necessary or appropriate in connection with
the Exchange and its investment in the Exchange Notes and has made its own
assessment and has satisfied itself concerning the relevant tax and other
economic considerations relevant to the Exchange and its investment in the
Exchange Notes.

          (i) The Holder represents and warrants that, to the knowledge of the
Holder, no direct or indirect payment of commission or remuneration has been
paid to any third party in connection with the Exchange and the issuance of the
Exchange Notes.

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          (j) The Holder has valid title to the Notes, free and clear of all
security interests, claims, liens, equities or other encumbrances created or
authorized by it; and the delivery of the Notes by the Holder pursuant to this
Agreement will pass valid title thereto to the Operating Partnership, free and
clear of any “adverse claim” created or authorized by it (as defined in
Section 8-102 of the Uniform Commercial Code of the State of New York as in
effect on the date hereof and on the Closing Date).

     5A. Representations, Warranties and Covenants of the Operating Partnership.
The Operating Partnership represents, warrants and covenants, as of the date
hereof, as of the Closing Date, and as of any Mortgage Loan Closing Date, as
applicable, as follows:

          (a) The Operating Partnership is a limited partnership duly organized,
validly existing and in good standing under the laws of the state of Delaware.
The Operating Partnership has full right, power, authority and capacity to enter
into this Agreement, the Sixth Supplemental Indenture, the Registration Rights
Agreement, the Exchange Notes and to consummate the transactions contemplated
hereby and thereby and has taken all necessary action to authorize the
execution, delivery and performance of this Agreement, the Indenture, the Sixth
Supplemental Indenture, the Registration Rights Agreement, the Exchange Notes
and the Exchange.

          (b) The Parent Corporation is a corporation duly organized, validly
existing and in good standing under the laws of the state of Maryland. The
Parent Corporation has full right, power, authority and capacity to enter into
the Indenture and the Sixth Supplemental Indenture and to consummate the
transactions contemplated hereby and thereby and has taken all necessary action
to authorize the execution, delivery and performance of the Indenture and the
Sixth Supplemental Indenture.

          (c) This Agreement and the Indenture constitute, and upon execution
and delivery thereof, each of the Sixth Supplemental Indenture, the Registration
Rights Agreement and the Exchange Note will constitute, a legal, valid and
binding obligation of the Operating Partnership, enforceable against the
Operating Partnership in accordance with its terms, except as such
enforceability may be limited by (i) applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors’ rights generally and (ii) general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).

          (d) The Indenture constitutes, and upon execution and delivery
thereof, the Sixth Supplemental Indenture will constitute, a legal, valid and
binding obligation of the Parent Corporation, enforceable against the Parent
Corporation in accordance with its terms, except as such enforceability may be
limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting the enforcement of creditors’ rights generally and
(ii) general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).

          (e) The execution, delivery and performance by the Operating
Partnership of its obligations under this Agreement, the Indenture, as it
pertains to the transactions referenced herein, the Sixth Supplemental
Indenture, the Registration Rights Agreement and the Exchange Notes will not (i)
contravene, result in any breach of, or constitute a default under, or result in
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creation of any material mortgage, lien, pledge, charge, security interest or
other material encumbrance in respect of any property of the Operating
Partnership or any subsidiary of the Operating Partnership under, any material
indenture, mortgage, deed of trust, loan, purchase or credit agreement, lease,
corporate charter or by-laws, or any other material agreement or instrument to
which the Operating Partnership or any subsidiary is bound or by which the
Operating Partnership or any subsidiary or any of their respective properties
may be bound or affected, except for any cancellation pursuant to Section 7
hereof, (ii) conflict with or result in a breach of any of the terms, conditions
or provisions of any order, judgment, decree, or ruling of any federal, state,
local and other governmental authority, governmental or regulatory agency or
body, court, arbitrator or self-regulatory organization applicable to the
Operating Partnership or any subsidiary (each a “Governmental Authority”) or
(iii) violate any provision of any statute or other rule or regulation of any
Governmental Authority applicable to the Operating Partnership or any
subsidiary.

          (f) The execution, delivery and performance by the Parent Corporation
of its obligations under the Indenture, as it pertains to the transactions
referenced herein, and the Sixth Supplemental Indenture will not (i) contravene,
result in any breach of, or constitute a default under, or result in the
creation of any material mortgage, lien, pledge, charge, security interest or
other material encumbrance in respect of any property of the Parent Corporation
under, any material indenture, mortgage, deed of trust, loan, purchase or credit
agreement, lease, corporate charter or by-laws, or any material other agreement
or instrument to which the Parent Corporation is bound or by which the Parent
Corporation or any of its properties may be bound or affected, except for any
cancellation pursuant to Section 7 hereof, (ii) conflict with or result in a
breach of any of the terms, conditions or provisions of any order, judgment,
decree, or ruling of any Governmental Authority applicable to the Parent
Corporation or (iii) violate any provision of any statute or other rule or
regulation of any Governmental Authority applicable to the Parent Corporation.

          (g) No consent, approval or authorization of, or registration, filing
or declaration with, any Governmental Authority is required in connection with
the execution, delivery or performance by the Operating Partnership or the
Parent Corporation of this Agreement, the Indenture, the Sixth Supplemental
Indenture, the Registration Rights Agreement or the Exchange Notes.

          (h) Neither the Operating Partnership nor anyone acting on its behalf
has offered the Exchange Notes or any similar securities for sale to, or
solicited any offer to buy any of the same from, or otherwise approached or
negotiated in respect thereof with, any person other than the Holder. Neither
the Operating Partnership nor anyone acting on its behalf has taken, or will
take, any action that would subject the issuance or sale of the Exchange Notes
to the registration requirements of Section 5 of the Securities Act.

          (i) On the Closing Date the Operating Partnership agrees to pay the
Holder all accrued and unpaid interest on the Notes up to, but not including,
the Closing Date.

     6. Covenants of the Operating Partnership.

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          (a) Bloomberg. The Operating Partnership shall use its best efforts to
make the Notes available on the online financial service provided by Bloomberg,
L.P. within thirty (30) calendar days of the Exchange.

          (b) Registration Rights. The Operating Partnership and the Holder
shall execute the Registration Rights Agreement substantially in the form
attached hereto as EXHIBIT B.

          (c) Ratings. For so long the Holder shall own any of the Exchange
Notes, the Operating Partnership shall use its commercially reasonable efforts
to cause each of Standard & Poor’s Ratings Services, Moody’s Investors Service,
Inc. and Fitch, Inc. to provide a rating for the Operating Partnership’s senior,
unsecured debt.

     7. Cancellation of Exchange Notes; Mortgage Loans.

          (a) Demand Right. Subject to the terms and conditions set forth in
this Agreement, at any time and from time to time during the Demand Period (as
defined below), the Operating Partnership shall have the right in its sole
discretion to exercise its Demand Right by providing a notice to the Holder
requiring the Holder to deliver for cancellation all or any portion of the
aggregate principal amount of the Exchange Notes (in integral multiples of
$1,000, subject to the next sentence) for an equal dollar amount of Mortgage
Loans (the “Demand Right”). Notwithstanding anything in this Agreement or the
Loan Commitment Agreement to the contrary, the Operating Partnership may not
exercise its Demand Right for (i) less than $20,000,000 aggregate principal
amount of the Exchange Notes at any one time or (ii) more than $52,491,000
aggregate principal amount of the Exchange Notes after January 11, 2007. The
“Demand Period” shall commence on the Closing Date and shall terminate on
July 11, 2008. The Holder shall have the right to extend the Demand Period in
its sole discretion upon notice to the Operating Partnership.

          Notwithstanding the foregoing, the Demand Right and the obligation of
the Holder to make any Mortgage Loans shall immediately terminate and expire in
the event that the Parent Corporation shall consummate any transaction, whether
by means of an exchange offer, liquidation, tender offer, consolidation, merger,
combination, reclassification, recapitalization or otherwise, in connection with
which the Parent Corporation is not the surviving entity, unless the Holder
consents in advance to such transaction in writing, which consent may be
withheld in the Holder’s sole discretion.

          (b) Notice of Exercise of Demand Right. Subject to Section 7(h) below,
if the Operating Partnership chooses to exercise its Demand Right, the Operating
Partnership shall notify the Holder at least ninety (90) calendar days in
advance of each date that the Operating Partnership wishes to cancel Exchange
Notes for an obligation of equal dollar amount under the Mortgage Loan (each
such date on which Exchange Notes shall be cancelled and Loan Documents shall be
executed, a “Mortgage Loan Closing Date”). Such notice (the “Exchange Notice”)
shall be irrevocable by the Operating Partnership once the Holder and the
Operating Partnership have agreed on the value of the properties that will
secure such Mortgage Loan. Notwithstanding the preceding sentence, the Operating
Partnership shall have the right to delay the Mortgage Loan Closing Date for up
to one hundred and twenty (120) calendar days in the event that, subsequent to
the delivery of such notice, (x) the Operating Partnership or the

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Corporation determines in its good faith judgment that the cancellation of any
Exchange Notes or the consummation of a Mortgage Loan Closing with respect to
such notice would require the disclosure of non-public material information that
the Operating Partnership or the Parent Corporation has a bona fide business
purpose for preserving as confidential or the disclosure of which would impede
the Operating Partnership’s or the Parent Corporation’s ability to consummate a
material action, or (y) all reports required to be filed by the Companies
pursuant to the Exchange Act have not been filed by the required date without
regard to any extension, or if the consummation of any business combination by
either of the Companies has occurred or is probable for purposes of Rule 3-05 or
Article 11 of Regulation S-X under the Act.

          (c) Mortgage Loan Closing Representations by the Holder. On each
Mortgage Loan Closing Date, the Holder shall deliver a certificate to the
Operating Partnership executed by any managing director of the Holder and
making, on behalf of the Holder, the representations, warranties and covenants
set forth in EXHIBIT E hereto.

          (d) Conditions to the Holder’s Obligations. The Holder’s obligation to
deliver Exchange Notes for cancellation for an equal dollar amount of Mortgage
Loans at any Mortgage Loan Closing (as defined below) shall be subject to
satisfaction or waiver of all of the conditions to such Mortgage Loan Closing
contained in the Loan Commitment Agreement.

          (e) Procedure for Mortgage Loan Closings. Subject to Section 7(d)
hereof and the Loan Commitment Agreement, on each Mortgage Loan Closing Date,
the Borrower and the Holder shall execute Loan Documents (as defined in the Loan
Commitment Agreement) or execute additional Loan Documents, or otherwise amend
or supplement existing Loan Documents, as appropriate, to evidence a Mortgage
Loan in an amount equal to the aggregate principal amount of the Exchange Notes
to be cancelled (such amount, the “Demand Amount”). In addition, on such
Mortgage Loan Closing Date, the Operating Partnership shall pay to the Holder
(i) any accrued but unpaid interest due on the Exchange Notes to be cancelled
to, but excluding, the Mortgage Loan Closing Date and (ii) a cancellation fee
equal to 0.20% of the Demand Amount. In consideration of the foregoing, on such
Mortgage Loan Closing Date the Holder shall cause to be delivered to the account
of the trustee for the Exchange Notes a book-entry interest in the Exchange
Notes in a principal amount equal to the Demand Amount. Upon receipt of such
book-entry interest and the execution of Loan Documents evidencing the Mortgage
Loan on the Mortgage Loan Closing Date, the Operating Partnership shall cause
the trustee to cancel such book-entry interest and such book-entry interest
shall thereafter be of no further effect. The consummation of the transactions
contemplated by this Section 7(e) on a Mortgage Loan Closing Date shall be
referred to in this Agreement as the “Mortgage Loan Closing” with respect to
such Mortgage Loan Closing Date.

          (f) Limitations on Sale of Exchange Notes.

               (i) If at any time the Holder desires to sell all or a portion of
the Exchange Notes, the Holder shall promptly notify the Operating Partnership
(such notice, for purposes of this Section 7(f)(i), the “Sale Notice”). The
Operating Partnership shall have the option, exercisable by delivering a notice
(such notice, for purposes of this Section 7(f)(i), the “Repurchase Notice”) to
the Holder within three (3) business days following receipt of the Sale Notice,
to repurchase from the Holder all or any portion (in integral multiples of
$1,000) of the Exchange Notes subject to the Sale Notice from the Holder at a
repurchase price equal to 100%

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of the aggregate principal amount of such Exchange Notes, plus any accrued but
unpaid interest due on such Exchange Notes to, but excluding, the date of
repurchase. The closing of any such repurchase by the Operating Partnership
shall occur within seven (7) business days following receipt by the Holder of
the Repurchase Notice, unless the parties mutually agree to extend such closing
date and if such closing does not occur within seven (7) business days or such
later period agreed to by the parties, the Holder may sell the Exchange Note in
compliance with Section 5(b) and 5(c) hereof.

               (ii) Subject to the provisions of (f)(i) above, if an Exchange
Notice has become irrevocable by the Operating Partnership pursuant to Section
7(b) of this Agreement, until ninety (90) calendar days from the date such
Exchange Notice became irrevocable (or such later date coinciding with any
delayed Mortgage Closing Date) (such 90-day or later period, the “Lockout
Period”), the Holder shall not sell any Exchange Notes unless after giving
effect to such sale, the Holder would own Exchange Notes having an aggregate
principal amount at least equal to the Demand Amount with respect to such
Exchange Notice (plus any other Exchange Notices previously made and for which
the Lockout Period with respect thereto has not expired, provided that if any
such sale should occur, such sale is in compliance with Section 5(b) and 5(c)
hereof.

          Notwithstanding the preceding paragraph, if a Downgrade Trigger (as
defined below) occurs during the Lockout Period, the Holder shall have the right
to sell immediately all or any portion of the Exchange Notes that are subject to
the restrictions on sale pursuant to the preceding paragraph, provided that any
such sale is in compliance with Section 5(b) and 5(c) hereof. If the Holder
desires to sell all or any portion of the Exchange Notes pursuant to one of the
two preceding sentences, the Holder shall promptly notify the Operating
Partnership (such notice, for purposes of this Section 7(f)(ii), the “Sale
Notice”). The Operating Partnership shall have the option, exercisable by
delivering a notice (such notice, for purposes of this Section 7(f)(ii), the
“Repurchase Notice”) to the Holder within three (3) business days following
receipt of the Sale Notice, to repurchase from the Holder all or any portion (in
integral multiples of $1,000) of the Exchange Notes subject to the Sale Notice
from the Holder at a repurchase price equal to 100% of the aggregate principal
amount of such Exchange Notes, plus any accrued but unpaid interest due on such
Exchange Notes to, but excluding, the date of repurchase. The closing of any
such repurchase by the Operating Partnership shall occur within five
(5) business days following receipt by the Holder of the Repurchase Notice,
unless the parties mutually agree to extend such closing date.

          As used herein, a “Downgrade Trigger” shall be deemed to have occurred
at any time that (i) Standard & Poor’s Ratings Services shall maintain a rating
for the Operating Partnership’s senior, unsecured debt of BBB- with a negative
outlook, or lower, (ii) Moody’s Investors Service, Inc. shall maintain a rating
for the Operating Partnership’s senior, unsecured debt of Baa2 with a negative
outlook, or lower, or (iii) Fitch, Inc. shall maintain a rating for the
Operating Partnership’s senior, unsecured debt of BBB with a negative outlook,
or lower.

          (g) Expiration of the Demand Period. Notwithstanding anything in this
Agreement or the Loan Commitment Agreement to the contrary, the Operating
Partnership may not exercise its Demand Right pursuant to Section 7(a) hereof
subsequent to the expiration of the Demand Period.

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          (h) Mortgage Loan Closings. Mortgage Loan Closings may take place
subsequent to the expiration of the Demand Period provided that the Operating
Partnership made proper exercises of its Demand Right prior to the expiration of
the Demand Period with respect to such Mortgage Loan Closings. In the event that
the Holder approves the properties that will secure such Mortgage Loan and the
parties agree as to the loan amount, the Mortgage Loan Closing with respect
thereto must take place within (but not later than) sixty (60) calendar days
subsequent to such approval (or such longer period as the parties hereto agree).
The parties agree that they will use their commercially reasonable efforts to
cause such Mortgage Loan Closing to occur promptly.

     8. Miscellaneous Provisions.

          (a) Each subsequent holder of any Exchange Note by its acceptance
thereof shall be deemed to agree to the provisions set forth in Sections 5(b)
and 5(c) hereof.

          (b) No provision of this Agreement may be amended, waived or modified
other than by a document signed by the Operating Partnership and the Holder.

          (c) This Agreement and all actions arising out of or in connection
with this Agreement shall be governed by and construed in accordance with the
laws of the State of New York, without regard to the conflicts of law provisions
of the State of New York or of any other state.

          (d) This Agreement together with the Sixth Supplemental Indenture
(including the Form of Exchange Note contained therein), the Loan Commitment
Agreement and the Registration Rights Agreement shall constitute the full and
entire understanding and agreement between the parties with regard to the
subject matter hereof.

          (e) All notices and other communications required or permitted
hereunder shall be in writing and shall be sent via facsimile (and deemed
delivered upon facsimile machine confirmation of delivery received), overnight
courier service or mailed by certified or registered mail, postage prepaid,
return receipt requested, addressed or sent as set forth below:

  (i)   if to the Operating Partnership:         AMB Property, L.P.
c/o AMB Property Corporation
Pier One, Bay One
San Francisco, CA 94111
Attn: General Counsel
Facsimile Number: (415) 394-9001     (ii)   with a copy to:         Latham &
Watkins LLP
505 Montgomery Street, Suite 2000
San Francisco, CA 94111

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      Attn: Laura L. Gabriel, Esq.
Facsimile Number: (415) 395-8095     (iii)   if to the Holder, to:

Teachers Insurance and Annuity Association of America
730 Third Avenue
New York, NY 10017
Attn: Joseph Romano, Managing Director
Facsimile Number: (212) 916-6960     (iv)   with a copy to:         Mayer,
Brown, Rowe & Maw LLP
1675 Broadway
New York, NY 10019-5820
Attn: Jin K. Kim
Facsimile Number: (212) 849-5696

          (f) If any provision of this Agreement shall be judicially determined
to be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.

          (g) The Operating Partnership shall bear its own expenses and legal
fees incurred with respect to this Agreement and the transactions contemplated
herein. In addition, the Operating Partnership shall: (i) pay the reasonable
documented fees and disbursements of Mayer, Brown, Rowe & Maw LLP, special
counsel to the Holder, (ii) pay the reasonable documented fees and disbursements
of special counsel to the Holder in connection with any amendment, waiver or
consent with respect to this Agreement or the Exchange Notes or any Cancellation
of any Exchange Notes contemplated by Section 7(a) hereof (including the cost of
issuing and transmitting a book-entry interest in any replacement Exchange
Notes), and all other reasonable expenses in connection therewith, including the
reasonable fees and expenses of enforcing the collection of amounts due on the
Exchange Notes, whether before or after any bankruptcy, reorganization,
dissolution, winding up or liquidation of the Operating Partnership and
(iii) reimburse the Holder for its reasonable documented out-of-pocket expenses
in connection with the transactions contemplated hereby and such amendments,
waivers or consents, and any items of the character referred to in clause
(ii) which shall have been paid by the Holder (except out-of-pocket expenses
occasioned by any sale or transfer of any of the Exchange Notes).

          (h) The headings and subheadings used in this Agreement are used for
convenience only and are not to be considered in construing or interpreting this
Agreement.

          (i) This Agreement may be executed in any number of counterparts, each
of which shall be an original, but all of which together shall be deemed to
constitute one instrument.

          (j) This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns; provided,
however, that no assignment,

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delegation or other transfer shall be made by any party without the prior
written consent of all the other parties hereto.

[Intentionally Left Blank]

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     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.

         
 
      AMB PROPERTY, L.P.
 
       
 
  By:   AMB Property Corporation,
 
                as General Partner
 
       
 
  By:             /s/ Michael A. Coke
 
       
 
      Name: Michael A. Coke
Title: Executive Vice President and
          Chief Financial Officer

 

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      TEACHERS INSURANCE AND
           ANNUITY ASSOCIATION OF AMERICA    
 
           
 
  By:             /s/ Stephen J. Kraljic    
 
           
 
      Name: Stephen J. Kraljic    
 
      Title: Director