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                                                                 EXHIBIT 10.14.4

                               REDWOOD TRUST, INC.

                              AMENDED AND RESTATED

                    1994 EXECUTIVE AND NON-EMPLOYEE DIRECTOR

                                STOCK OPTION PLAN

                         (LAST AMENDED JANUARY 18, 2001)

SECTION 1. GENERAL PURPOSE OF PLAN; DEFINITIONS.

        The name of this plan is the Redwood Trust, Inc. Amended and Restated
1994 Executive and Non-Employee Director Stock Option Plan (the "Plan"). The
Plan was adopted by the Board on June 23, 1994, subject to the approval of the
Company stockholders, which approval was obtained on June 23, 1994. The Board
approved amendments to the Plan on March 8, 1996 which became effective upon
approval by the Company's stockholders on June 14, 1996. The Board approved
additional non-material amendments on December 13, 1996, June 12, 1997 and June
4, 1998, all of which became effective on such respective dates. The purpose of
the Plan is to enable the Company and its Subsidiaries to obtain and retain
competent personnel who will contribute to the Company's success by their
ability, ingenuity and industry, to give the Company's non-employee directors a
proprietary interest in the Company and to provide incentives to the
participating directors, officers and other key employees, and agents and
consultants that are linked directly to increases in stockholder value and will
therefore inure to the benefit of all stockholders of the Company.

        For purposes of the Plan, the following terms shall be defined as set
forth below:

        (1) "Accrued DERs" means DERs with the accrual rights described in
Section 5(11).

        (2) "Administrator" means the Board, or if the Board does not administer
the Plan, the Committee in accordance with Section 2.

        (3) "Board" means the Board of Directors of the Company.

        (4) "Code" means the Internal Revenue Code of 1986, as amended from time
to time, or any successor thereto.

        (5) "Committee" means the Compensation Committee of the Board, which
shall be composed entirely of individuals who meet the qualifications to be a
"Non-Employee Director" as defined in Rule 16b-3 ("Rule 16b-3) as promulgated by
the Securities and Exchange Commission (the "Commission") under the Securities
Exchange Act of 1934 (the "Act"), and as such Rule may be amended from time to
time, or any successor definition adopted by the Commission, or any other
Committee the Board may subsequently appoint to administer the Plan. If at any
time the Board shall not administer the Plan, then the functions of the Board
specified in the Plan shall be exercised by the Committee.

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        (6) "Company" means Redwood Trust, Inc., a corporation organized under
the laws of the State of Maryland (or any successor corporation).

        (7) "Current-pay DERs" means DERs with the current-pay rights described
in Section 5(11).

        (8) "DERs" shall mean Accrued DERs and Current-pay DERs.

        (9) "Deferred Stock" means an award granted pursuant to Section 7 of the
right to receive Stock at the end of a specified deferral period.

        (10) "Disability" means permanent and total disability as determined
under the Company's disability program or policy.

        (11) "Effective Date" shall mean the date provided pursuant to Section
12.

        (12) "Eligible Employee" means an employee of the Company or any
Subsidiary eligible to participate in the Plan pursuant to Section 4.

        (13) "Eligible Non-Employee Director" means a member of the Board or the
board of directors of any Subsidiary who is not a bona fide employee of the
Company or any Subsidiary and who is eligible to participate in the Plan
pursuant to Section 5A.

        (14) "Fair Market Value" means, as of any given date, with respect to
any awards granted hereunder, at the discretion of the Administrator and subject
to such limitations as the Administrator may impose, (A) the closing sale price
of the Stock on the next preceding business day as reported in the Western
Edition of the Wall Street Journal Composite Tape, or (B) the average of the
closing price of the Stock on each day on which the Stock was traded over a
period of up to twenty trading days immediately prior to such date, or (C) if
the Stock is not publicly traded, the fair market value of the Stock as
otherwise determined by the Administrator in the good faith exercise of its
discretion.

        (15) "Incentive Stock Option" means any Stock Option intended to be
designated as an "incentive stock option" within the meaning of Section 422 of
the Code.

        (16) "Limited Stock Appreciation Right" means a Stock Appreciation Right
that can be exercised only in the event of a "Change of Control" (as defined in
Section 10 below).

        (17) "Non-Employee Director" shall have the meaning set forth in Rule
16b-3.

        (18) "Non-Qualified Stock Option" means any Stock Option that is not an
Incentive Stock Option, including any Stock Option that provides (as of the time
such option is granted) that it will not be treated as an Incentive Stock
Option.

        (19) "Parent Corporation" means any corporation (other than the Company)
in an unbroken chain of corporations ending with the Company, if each of the
corporations in the chain (other than the Company) owns stock possessing 50% or
more of the combined voting power of all classes of stock in one of the other
corporations in the chain.

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        (20) "Participant" means any Eligible Employee or any consultant or
agent of the Company or any Subsidiary selected by the Committee, pursuant to
the Administrator's authority in Section 2, to receive grants of Stock Options,
DERs, Stock Appreciation Rights, Limited Stock Appreciation Rights, Restricted
Stock awards, Deferred Stock awards, Performance Shares or any combination of
the foregoing, or any Eligible Non-Employee Director eligible to receive grants
of Non-Qualified Stock Options and DERs pursuant to Section 5A below.

        (21) "Performance Share" means an award of shares of Stock granted
pursuant to Section 7 that is subject to restrictions based upon the attainment
of specified performance objectives.

        (22) "Restricted Stock" means an award granted pursuant to Section 7 of
shares of Stock subject to restrictions that will lapse with the passage of
time.

        (23) "Stock" means the common stock, $0.01 par value, of the Company.

        (24) "Stock Appreciation Right" means the right pursuant to an award
granted under Section 6 to receive an amount equal to the difference between (A)
the Fair Market Value, as of the date such Stock Appreciation Right or portion
thereof is surrendered, of the shares of Stock covered by such right or such
portion thereof, and (B) the aggregate exercise price of such right or such
portion thereof.

        (25) "Stock Option" means an option to purchase shares of Stock granted
pursuant to Section 5 or Section 5A.

        (26) "Subsidiary" means (A) any corporation (other than the Company) in
an unbroken chain of corporations beginning with the Company, if each of the
corporations (other than the last corporation) in the unbroken chain owns stock
possessing 50% or more of the total combined voting power of all classes of
stock in one of the other corporations in the chain or (B) except for purposes
of determining eligibility for receipt of Incentive Stock Options, any
corporation or other type of entity (a "company") (other than the Company) in an
unbroken chain of companies beginning with the Company, if each of the companies
(other than the last company) in the unbroken chain owns stock or other forms of
equity investment (i) possessing 50% or more of the total combined voting power
of all classes of stock or other forms of equity in one of the other companies
in the chain or (ii) representing 50% or more of the total value of all classes
of stock or other forms of equity in one of the other companies in the chain.

SECTION 2. ADMINISTRATION.

        The Plan shall be administered by the Board or by a Committee appointed
by the Board, which shall serve at the pleasure of the Board; provided, however,
that at all times when the Company is subject to the reporting requirements of
the Securities Exchange Act of 1934, as amended, the Plan shall be administered
by the Committee appointed by the Board.

        The Administrator shall have the power and authority to grant to
Eligible Employees and consultants or agents of the Company or any Subsidiary,
pursuant to the terms of the Plan: (a) Stock Options (with or without DERs), (b)
Stock Appreciation Rights or Limited Stock Appreciation Rights, (c) Restricted
Stock, (d) Deferred Stock, (e) Performance Shares or (f) any combination of the
foregoing.

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        In particular, the Administrator shall have the authority:

        (a) to select those employees of the Company or any Subsidiary who shall
be Eligible Employees;

        (b) to determine whether and to what extent Stock Options (with or
without DERs), Stock Appreciation Rights, Limited Stock Appreciation Rights,
Restricted Stock, Deferred Stock, Performance Shares or a combination of the
foregoing, are to be granted to Eligible Employees or any consultant or agent of
the Company or any Subsidiary hereunder;

        (c) to determine the number of shares to be covered by each such award
granted hereunder;

        (d) to determine the terms and conditions, not inconsistent with the
terms of the Plan, of any award granted hereunder (including, but not limited
to, (x) the restricted period applicable to Restricted or Deferred Stock awards
and the date or dates on which restrictions applicable to such Restricted or
Deferred Stock shall lapse during such period, and (y) the performance goals and
periods applicable to the award of Performance Shares); and

        (e) to determine the terms and conditions, not inconsistent with the
terms of the Plan, which shall govern all written instruments evidencing the
Stock Options, DERs, Stock Appreciation Rights, Limited Stock Appreciation
Rights, Restricted Stock, Deferred Stock, Performance Shares or any combination
of the foregoing.

        The Administrator shall have the authority, in its discretion, to adopt,
alter and repeal such administrative rules, guidelines and practices governing
the Plan as it shall from time to time deem advisable; to interpret the terms
and provisions of the Plan and any award issued under the Plan (and any
agreements relating thereto); and to otherwise supervise the administration of
the Plan.

        All decisions made by the Administrator pursuant to the provisions of
the Plan shall be final and binding on all persons, including the Company, any
Subsidiaries and the Participants.

        Notwithstanding anything to the contrary herein, no award hereunder may
be made to any Participant to the extent that, following such award, the shares
subject or potentially subject to such Participant's control (including, but not
limited to, (i) shares of the Company's equity stock owned by the Participant,
(ii) Stock Options, whether or not then exercisable, held by the Participant to
purchase additional such shares, (iii) Restricted Stock, Deferred Stock and
Performance Share awards to the Participant, whether or not then vested, and
(iv) Accrued DERs credited to the Participant) would constitute more than 9.8%
of the outstanding capital stock of the Company.

SECTION 3. STOCK SUBJECT TO PLAN.

        The total number of shares of Stock reserved and available for issuance
under the Plan shall be 500,000; provided, however, that from and after such
time as the number of outstanding shares of Stock as reflected on the Company's
quarterly or year-end balance sheet exceeds 6,000,000 (including treasury shares
but not including adjustments in the event of changes in the corporate structure
of the Company as provided below in this Section 3), the total number of shares
of Stock reserved and available for issuance under the Plan shall automatically
be increased so as to equal

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fifteen (15) percent of the number of then outstanding shares of Stock, and
provided further, that no more than 500,000 shares of Stock shall be
cumulatively available for Incentive Stock Options. At all times, the number of
shares reserved and available for issuance hereunder as so determined from time
to time shall be decreased by virtue of awards granted and outstanding or
exercised hereunder.

        To the extent that (i) a Stock Option or DER expires or is otherwise
terminated without being exercised, or (ii) any shares of Stock subject to any
Restricted Stock, Deferred Stock or Performance Share award granted hereunder
are forfeited, such shares shall again be available for issuance in connection
with future awards under the Plan. If any shares of Stock have been pledged as
collateral for indebtedness incurred by a Participant in connection with the
exercise of a Stock Option and such shares are returned to the Company in
satisfaction of such indebtedness, such shares shall again be available for
issuance in connection with future awards under the Plan.

        In the event of any merger, reorganization, consolidation,
recapitalization, Stock dividend, or other change in corporate structure
affecting the Stock, a substitution or adjustment may be made in (i) the
aggregate number of shares reserved for issuance under the Plan, and (ii) the
kind, number and option price of shares subject to outstanding Stock Options and
DERs granted under the Plan as may be determined by the Administrator, in its
sole discretion, provided that the number of shares subject to any award shall
always be a whole number. Such other substitutions or adjustments shall be made
as may be determined by the Administrator, in its sole discretion; provided,
however, that with respect to Incentive Stock Options, such adjustment shall be
made in accordance with Section 424 of the Code. An adjusted option price shall
also be used to determine the amount payable by the Company upon the exercise of
any Stock Appreciation Right or Limited Stock Appreciation Right associated with
any Stock Option.

        The aggregate number of shares of Stock for which Stock Options or Stock
Appreciation Rights may be granted to any individual during any calendar year
may not, subject to adjustment as provided in this Section 3, exceed 75% of the
shares of Stock reserved for the purposes of the Plan in accordance with the
provisions of this Section 3.

SECTION 4. ELIGIBILITY.

        Officers and other key employees of the Company or Subsidiaries who are
responsible for or contribute to the management, growth and/or profitability of
the business of the Company or its Subsidiaries and consultants and agents of
the Company or its Subsidiaries, shall be eligible to be granted Stock Options,
DERs, Stock Appreciation Rights, Limited Stock Appreciation Rights, Restricted
Stock awards, Deferred Stock awards or Performance Shares hereunder. The
Participants under the Plan shall be selected from time to time by the
Administrator, in its sole discretion, from among the Eligible Employees and
consultants and agents recommended by the senior management of the Company, and
the Administrator shall determine, in its sole discretion, the number of shares
covered by each award; provided, however, that Eligible Non-Employee Directors
shall only be eligible to receive Stock Options as provided in Section 5A.

SECTION 5. STOCK OPTIONS.

        Stock Options may be granted alone or in addition to other awards
granted under the Plan, including DERs as described in Section 5(11). Any Stock
Option granted under the Plan shall be in

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such form as the Administrator may from time to time approve, and the provisions
of Stock Option awards need not be the same with respect to each optionee.
Recipients of Stock Options shall enter into a stock option agreement with the
Company, in such form as the Administrator shall determine, which agreement
shall set forth, among other things, the exercise price of the option, the term
of the option and provisions regarding exercisability of the option granted
thereunder.

        The Stock Options granted under the Plan may be of two types: (i)
Incentive Stock Options and (ii) Non-Qualified Stock Options.

        The Administrator shall have the authority under this Section 5 to grant
any optionee (except Eligible Non-Employee Directors) Incentive Stock Options,
Non-Qualified Stock Options, or both types of Stock Options (in each case with
or without DERs, Stock Appreciation Rights or Limited Stock Appreciation
Rights), provided, however, that Incentive Stock Options may not be granted to
any individual who is not an employee of the Company or its Subsidiaries. To the
extent that any Stock Option does not qualify as an Incentive Stock Option, it
shall constitute a separate Non-Qualified Stock Option. More than one option may
be granted to the same optionee and be outstanding concurrently hereunder.

        Stock Options granted under the Plan shall be subject to the following
terms and conditions and shall contain such additional terms and conditions, not
inconsistent with the terms of the Plan, as the Administrator shall deem
desirable:

        (1) Option Price. The option price per share of Stock purchasable under
a Stock Option shall be determined by the Administrator in its sole discretion
at the time of grant but shall not, in the case of Incentive Stock Options, be
less than 100% of the Fair Market Value of the Stock on such date, and shall
not, in any event, be less than the par value of the Stock. The option price per
share of Stock purchasable under a Non-Qualified Stock Option may be less than
100% of such Fair Market Value. If an employee owns or is deemed to own (by
reason of the attribution rules applicable under Section 425(d) of the Code)
more than 10% of the combined voting power of all classes of stock of the
Company or any Parent Corporation or Subsidiary and an Incentive Stock Option is
granted to such employee, the option price of such Incentive Stock Option (to
the extent required by the Code at the time of grant) shall be no less than 110%
of the Fair Market Value of the Stock on the date such Incentive Stock Option is
granted.

        (2) Option Term. The term of each Stock Option shall be fixed by the
Administrator, but no Stock Option shall be exercisable more than ten years
after the date such Stock Option is granted; provided, however, that if an
employee owns or is deemed to own (by reason of the attribution rules of Section
425(d) of the Code) more than 10% of the combined voting power of all classes of
stock of the Company or any Parent Corporation or Subsidiary and an Incentive
Stock Option is granted to such employee, the term of such Incentive Stock
Option (to the extent required by the Code at the time of grant) shall be no
more than five years from the date of grant.

        (3) Exercisability. Stock Options shall be exercisable at such time or
times and subject to such terms and conditions as shall be determined by the
Administrator at or after grant; provided, however, that, except as provided
herein or unless otherwise determined by the Administrator at or after grant,
Stock Options shall become exercisable as to 25% of the shares subject to such
Stock Option on the first anniversary of the date of grant of the Stock Option,
and as to an additional 25%

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on each of the next three anniversaries of the date of grant. To the extent not
exercised, installments shall accumulate and be exercisable in whole or in part
at any time after becoming exercisable but not later than the date the Stock
Option expires. The Administrator may provide, in its discretion, that any Stock
Option shall be exercisable only in installments, and the Administrator may
waive such installment exercise provisions at any time in whole or in part based
on such factors as the Administrator may determine, in its sole discretion.

        (4) Method of Exercise. Subject to Section 5(3), Stock Options may be
exercised in whole or in part at any time during the option period, by giving
written notice of exercise to the Company specifying the number of shares to be
purchased, accompanied by payment in full of the purchase price in cash or its
equivalent as determined by the Administrator. As determined by the
Administrator, in its sole discretion, payment in whole or in part may also be
made in the form of unrestricted Stock already owned by the optionee, or, in the
case of the exercise of a Non-Qualified Stock Option, Restricted Stock or
Performance Shares subject to an award hereunder (based, in each case, on the
Fair Market Value of the Stock on the date the option is exercised); provided,
however, that in the case of an Incentive Stock Option, the right to make
payment in the form of already owned shares may be authorized only at the time
of grant. Any payment in the form of stock already owned by the optionee may be
effected by use of an attestation form approved by the Administrator. If payment
of the option exercise price of a Non-Qualified Stock Option is made in whole or
in part in the form of Restricted Stock or Performance Shares, the shares
received upon the exercise of such Stock Option (to the extent of the number of
shares of Restricted Stock or Performance Shares surrendered upon exercise of
such Stock Option) shall be restricted in accordance with the original terms of
the Restricted Stock or Performance Share award in question, except that the
Administrator may direct that such restrictions shall apply only to that number
of shares equal to the number of shares surrendered upon the exercise of such
option. An optionee shall generally have the rights to dividends and other
rights of a stockholder with respect to shares subject to the option only after
the optionee has given written notice of exercise, has paid in full for such
shares, and, if requested, has given the representation described in paragraph
(1) of Section 11.

        The Administrator may require the voluntary surrender of all or a
portion of any Stock Option granted under the Plan as a condition precedent to a
grant of a new Stock Option. Subject to the provisions of the Plan, such new
Stock Option shall be exercisable at the price, during such period and on such
other terms and conditions as are specified by the Administrator at the time the
new Stock Option is granted; provided, however, that should the Administrator so
require, the number of shares subject to such new Stock Option shall not be
greater than the number of shares subject to the surrendered Stock Option. Upon
their surrender, Stock Options shall be canceled and the shares previously
subject to such canceled Stock Options shall again be available for grants of
Stock Options and other awards hereunder.

        (5) Loans. The Company may make loans available to Stock Option holders
in connection with the exercise of outstanding options granted under the Plan,
as the Administrator, in its discretion, may determine. Such loans shall (i) be
evidenced by promissory notes entered into by the Stock Option holders in favor
of the Company, (ii) be subject to the terms and conditions set forth in this
Section 5(5) and such other terms and conditions, not inconsistent with the
Plan, as the Administrator shall determine, and (iii) bear interest, if any, at
such rate as the Administrator shall determine. In no event may the principal
amount of any such loan exceed the sum of (x) the exercise price less the par
value of the shares of Stock covered by the option, or portion thereof,

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exercised by the holder, and (y) any federal, state, and local income tax
attributable to such exercise. The initial term of the loan, the schedule of
payments of principal and interest under the loan, the extent to which the loan
is to be with or without recourse against the holder with respect to principal
or interest and the conditions upon which the loan will become payable in the
event of the holder's termination of employment shall be determined by the
Administrator; provided, however, that the term of the loan, including
extensions, shall not exceed seven years. Unless the Administrator determines
otherwise, when a loan is made, shares of Stock having a Fair Market Value at
least equal to the principal amount of the loan shall be pledged by the holder
to the Company as security for payment of the unpaid balance of the loan, and
such pledge shall be evidenced by a pledge agreement, the terms of which shall
be determined by the Administrator, in its discretion; provided, however, that
each loan shall comply with all applicable laws, regulations and rules of the
Board of Governors of the Federal Reserve System and any other governmental
agency having jurisdiction.

        (6) Limits on Transferability of Options.

                (a) Subject to Section 5(6)(b), no Stock Option shall be
transferable by the optionee otherwise than by will or by the laws of descent
and distribution or pursuant to a "qualified domestic relations order," as such
term is defined in the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), and all Stock Options shall be exercisable, during the
optionee's lifetime, only by the optionee or in accordance with the terms of a
qualified domestic relations order.

                (b) The Administrator may, in its discretion, authorize all or a
portion of the options to be granted to an optionee to be on terms which permit
transfer by such optionee to (i) the spouse, qualified domestic partner,
children or grandchildren of the optionee and any other persons related to the
optionee as may be approved by the Administrator ("Immediate Family Members"),
(ii) a trust or trusts for the exclusive benefit of such Immediate Family
Members, (iii) a partnership or partnerships in which such Immediate Family
Members are the only partners, or (iv) any other persons or entities as may be
approved by the Administrator, provided that (x) there may be no consideration
for any transfer unless approved by the Administrator, (y) the stock option
agreement pursuant to which such options are granted must be approved by the
Administrator, and must expressly provide for transferability in a manner
consistent with this Section 5(6)(b), and (z) subsequent transfers of
transferred options shall be prohibited except those in accordance with Section
5(6)(a) or expressly approved by the Administrator. Following transfer, any such
options shall continue to be subject to the same terms and conditions as were
applicable immediately prior to transfer, provided that, except for purposes of
Sections 5(7), (8), (9), (10) and 11(3) hereof, the terms "optionee," "Stock
Option holder" and "Participant" shall be deemed to refer to the transferee. The
events of termination of employment under Sections 5(7), (8) and (9) hereof
shall continue to be applied with respect to the original optionee, following
which the options shall be exercisable by the transferee only to the extent, and
for the periods specified under such sections unless the option agreement
governing such options otherwise provides. Notwithstanding the transfer, the
original optionee will continue to be subject to the provisions of Section 11(3)
regarding payment of taxes, including the provisions entitling the Company to
deduct such taxes from amounts otherwise due to such optionee. Any transfer of a
Stock Option that was originally granted with DERs related thereto shall
automatically include the transfer of such DERs, any attempt to transfer such
Stock Option separately from such DERs shall be void, and such DERs shall
continue in effect according

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to their terms. "Qualified domestic partner" for the purpose of this Section
5(6)(b) shall mean a domestic partner living in the same household as the
optionee and registered with, certified by or otherwise acknowledged by the
county or other applicable governmental body as a domestic partner or otherwise
establishing such status in any manner satisfactory to the Administrator. Stock
options granted prior to December 1, 1996 may be amended to provide for their
transferability, subject to the foregoing conditions.

        (7) Termination by Death. If an optionee's employment with the Company
or any Subsidiary terminates by reason of death, the Stock Option may thereafter
be immediately exercised, to the extent then exercisable (or on such accelerated
basis as the Administrator shall determine at or after grant), by the legal
representative of the estate or by the legatee of the optionee under the will of
the optionee, for a period of twelve months (or such shorter period as the
Administrator shall specify at grant) from the date of such death or until the
expiration of the stated term of such Stock Option, whichever period is shorter.

        (8) Termination by Reason of Disability. If an optionee's employment
with the Company or any Subsidiary terminates by reason of Disability, any Stock
Option held by such optionee may thereafter be exercised, to the extent it was
exercisable at the time of such termination (or on such accelerated basis as the
Administrator shall determine at the time of grant), for a period of twelve
months (or such shorter period as the Administrator shall specify at grant) from
the date of such termination of employment or until the expiration of the stated
term of such Stock Option, whichever period is shorter; provided, however, that,
if the optionee dies within such twelve-month period (or such shorter period as
the Administrator shall specify at grant) and prior to the expiration of the
stated term of such Stock Option, any unexercised Stock Option held by such
optionee shall thereafter be exercisable to the extent to which it was
exercisable at the time of termination for a period of twelve months (or such
shorter period as the Administrator shall specify at grant) from the time of
death or until the expiration of the stated term of such Stock Option, whichever
period is shorter. In the event of a termination of employment by reason of
Disability, if an Incentive Stock Option is exercised after the expiration of
the applicable exercise periods under Section 422 of the Code, such Stock Option
shall thereafter be treated as a Non-Qualified Stock Option.

        (9) Other Termination. Except as otherwise determined by the
Administrator, if an optionee's employment with the Company or any Subsidiary
terminates for any reason other than death or Disability, the Stock Option may
be exercised for a period of three months from the date of such termination, or
until the expiration of the stated term of such Stock Option, whichever period
is shorter.

        (10) Annual Limit on Incentive Stock Options. To the extent that the
aggregate Fair Market Value (determined as of the date the Incentive Stock
Option is granted) of shares of Stock with respect to which Incentive Stock
Options granted to an Optionee under this Plan and all other option plans of the
Company, its Parent Corporation or any Subsidiary become exercisable for the
first time by the Optionee during any calendar year exceeds $100,000, such Stock
Options shall be treated as Non-Qualified Stock Options.

        (11) DERs. The Administrator shall have the discretion to grant DERs in
conjunction with grants of Stock Options pursuant to this Section 5. DERs may be
granted in either of two forms, "Current-pay DERs" and "Accrued DERs" and the
Administrator may condition the

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payment or accrual of amounts in respect thereof subject to satisfaction of such
performance objectives as the Administrator may specify at the time of grant.
Assuming satisfaction of any applicable conditions, Current-pay DERs shall be
paid concurrently with any dividends or distributions paid on the Stock during
the time the related Stock Options are outstanding in an amount equal to the
cash dividend (or Stock or other property hereby distributed) per share being
paid on the Stock times the number of shares subject to the related Stock
Options. Current-pay DERs are payable in cash, Stock or such other property as
may be distributed to stockholders. Accrued DERs may be accrued in respect of
cash dividends only or cash dividends and the value of any Stock or other
property distributed to stockholders, as the Administrator shall determine at
the time of grant. Assuming satisfaction of any applicable conditions, Accrued
DERs shall be accrued with respect to the related Stock Options outstanding as
of the date dividends are declared on the Company's Stock in accordance with the
following formula:

                                   (A x B) / C

under which "A" equals the number of shares subject to such Stock Options, "B"
equals the cash dividend per share or the value per share of the Stock or other
property being distributed, as the case may be, and "C" equals the Fair Market
Value per share of Stock on the dividend payment date. The Accrued DERs shall
represent shares of Stock which shall be issuable to the holder of the related
Stock Option proportionately as the holder exercises the Stock Option to which
the Accrued DERs relate, rounded down to the nearest whole number of shares.
DERs shall expire upon the expiration of the Stock Options to which they relate.
The Administrator shall specify at the time of grant whether dividends shall be
payable or credited on Accrued DERs. Notwithstanding anything to the contrary
herein, Accrued DERs granted with respect to Stock Options shall be accrued only
to the extent of the number of shares of stock then reserved and available for
issuance under the Plan in excess of the number of shares subject to issuance
pursuant to outstanding Stock Option, Accrued DER, Stock Appreciation Right,
Limited Stock Appreciation Right, Deferred Stock or Performance Share awards.

SECTION 5A. STOCK OPTIONS FOR ELIGIBLE NON-EMPLOYEE DIRECTORS.

        This Section 5A shall apply only to automatic grants of Stock Options to
Eligible Non-Employee Directors.

        (1) Each Eligible Non-Employee Director shall automatically be granted,
upon first becoming a director of the Company or any Subsidiary, a Non-Qualified
Stock Option to purchase 5,000 shares of Stock, provided that no Eligible
Non-Employee Director may receive more than one such grant for serving as a
director of the Company and one or more Subsidiaries. In addition, on the day
after the annual meeting of stockholders of the Company to be held in the
calendar year 1998, and on the day after each annual stockholders' meeting of
the Company thereafter during the term of the Plan, each Eligible Non-Employee
Director of the Company shall be granted a Non-Qualified Stock Option to
purchase such number of shares of Stock that the aggregate of the option prices
thereof equals $20,000.00, rounded up to the nearest 100 shares. The option
price per share of Stock purchasable under such Stock Option shall be 100% of
the Fair Market Value on the date of grant. Such Stock Option shall become
exercisable as to 25% of the shares subject to such Stock Option on the first
anniversary of the date of grant of the Stock Option or

                                       10
<PAGE>   11

such other date as the Board may approve, and as to an additional 25% of the
shares subject to such Stock Option on each of the next three anniversaries of
the first vesting date. To the extent not exercised, installments shall
accumulate and be exercisable in whole or in part at any time after becoming
exercisable but not later than the date the Stock Option expires. Exercise shall
be by payment in full of the purchase price in cash and no stock option shall be
exercisable more than ten years after the date of grant. The aggregate number of
shares of Stock that may be granted to Eligible Non-Employee Directors pursuant
to the Plan may not exceed 180,000 shares.

        (2) Eligible Non-Employee Directors who receive grants of Stock Options
shall enter into a stock option agreement with the Company, which agreement
shall set forth, among other things, the exercise price of the option, the term
of the option and provisions regarding exercisability of the option granted
thereunder. The Stock Options granted under this section shall be Non-Qualified
Stock Options.

        (3) Non-Qualified Stock Options granted to Eligible Non-Employee
Directors hereunder shall be transferable only to the extent provided in
Sections 5(6)(a) and (b).

        (4) The Board may not amend, alter or discontinue the provisions of this
Section 5A more than once every six months other than to comport with changes in
the Code, ERISA or the rules thereunder.

SECTION 6. STOCK APPRECIATION RIGHTS AND LIMITED STOCK APPRECIATION RIGHTS.

        (1) Grant and Exercise. Stock Appreciation Rights and Limited Stock
Appreciation Rights may be granted either alone ("Free Standing Rights") or in
conjunction with all or part of any Stock Option granted under the Plan
("Related Rights"). In the case of a Non-Qualified Stock Option, Related Rights
may be granted either at or after the time of the grant of such Stock Option. In
the case of an Incentive Stock Option, Related Rights may be granted only at the
time of the grant of the Incentive Stock Option.

        A Related Right or applicable portion thereof granted in conjunction
with a given Stock Option shall terminate and no longer be exercisable upon the
termination or exercise of the related Stock Option, except that, unless
otherwise provided by the Administrator at the time of grant, a Related Right
granted with respect to less than the full number of shares covered by a related
Stock Option shall only be reduced if and to the extent that the number of
shares covered by the exercise or termination of the related Stock Option
exceeds the number of shares not covered by the Stock Appreciation Right.

        A Related Right may be exercised by an optionee, in accordance with
paragraph (2) of this Section 6, by surrendering the applicable portion of the
related Stock Option. Upon such exercise and surrender, the optionee shall be
entitled to receive an amount determined in the manner prescribed in paragraph
(2) of this Section 6. Stock Options which have been so surrendered, in whole or
in part, shall no longer be exercisable to the extent the Related Rights have
been so exercised.

                                       11
<PAGE>   12

        (2) Terms and Conditions. Stock Appreciation Rights shall be subject to
such terms and conditions, not inconsistent with the provisions of the Plan, as
shall be determined from time to time by the Administrator, including the
following:

                (a) Stock Appreciation Rights that are Related Rights ("Related
Stock Appreciation Rights") shall be exercisable only at such time or times and
to the extent that the Stock Options to which they relate shall be exercisable
in accordance with the provisions of Section 5 and this Section 6; provided,
however, that no Related Stock Appreciation Right shall be exercisable during
the first six months of its term, except that this additional limitation shall
not apply in the event of death or Disability of the optionee prior to the
expiration of such six-month period.

                (b) Upon the exercise of a Related Stock Appreciation Right, an
optionee shall be entitled to receive up to, but not more than, an amount in
cash or that number of shares of Stock (or in some combination of cash and
shares of Stock) equal in value to the excess of the Fair Market Value of one
share of Stock as of the date of exercise over the option price per share
specified in the related Stock Option multiplied by the number of shares of
Stock in respect of which the Related Stock Appreciation Right is being
exercised, with the Administrator having the right to determine the form of
payment.

                (c) Related Stock Appreciation Rights shall be transferable or
exercisable only when and to the extent that the underlying Stock Option would
be transferable or exercisable under paragraph (6) of Section 5.

                (d) Upon the exercise of a Related Stock Appreciation Right, the
Stock Option or part thereof to which such Related Stock Appreciation Right is
related shall be deemed to have been exercised for the purpose of the limitation
set forth in Section 3 on the number of shares of Stock to be issued under the
Plan.

                (e) A Related Stock Appreciation Right granted in connection
with an Incentive Stock Option may be exercised only if and when the Fair Market
Value of the Stock subject to the Incentive Stock Option exceeds the exercise
price of such Stock Option.

                (f) Stock Appreciation Rights that are Free Standing Rights
("Free Standing Stock Appreciation Rights") shall be exercisable at such time or
times and subject to such terms and conditions as shall be determined by the
Administrator at or after grant; provided, however, that no Free Standing Stock
Appreciation Right shall be exercisable during the first six months of its term,
except that this limitation shall not apply in the event of death or Disability
of the recipient of the Free Standing Stock Appreciation Right prior to the
expiration of such six-month period.

                (g) The term of each Free Standing Stock Appreciation Right
shall be fixed by the Administrator, but no Free Standing Stock Appreciation
Right shall be exercisable more than ten years after the date such right is
granted.

                (h) Upon the exercise of a Free Standing Stock Appreciation
Right, a recipient shall be entitled to receive up to, but not more than, an
amount in cash or that number of shares of Stock (or any combination of cash or
shares of Stock) equal in value to the excess of the Fair Market Value of one
share of Stock as of the date of exercise over the price per share specified in
the Free Standing Stock Appreciation Right (which price shall be no less than
100% of the Fair

                                       12
<PAGE>   13
Market Value of the Stock on the date of grant) multiplied by the number of
shares of Stock with respect to which the right is being exercised, with the
Administrator having the right to determine the form of payment.

                (i) Free Standing Stock Appreciation Rights shall be
transferable or exercisable subject to the provisions governing the
transferability and exercisability of Stock Options set forth in paragraphs (3)
and (6) of Section 5.

                (j) In the event of the termination of an employee who has been
granted one or more Free Standing Stock Appreciation Rights, such rights shall
be exercisable to the same extent that a Stock Option would have been
exercisable in the event of the termination of the optionee.

                (k) Limited Stock Appreciation Rights may only be exercised
within the 30-day period following a "Change of Control" (as defined in Section
10 below), and, with respect to Limited Stock Appreciation Rights that are
Related Rights ("Related Limited Stock Appreciation Rights"), only to the extent
that the Stock Options to which they relate shall be exercisable in accordance
with the provisions of Section 5 and this Section 6; provided, however, that no
Related Limited Stock Appreciation Right shall be exercisable during the first
six months of its term, except that this additional limitation shall not apply
in the event of death or Disability of the optionee prior to the expiration of
such six-month period.

                (l) Upon the exercise of a Limited Stock Appreciation Right, the
recipient shall be entitled to receive an amount in cash equal in value to the
excess of the "Change of Control Price" (as defined in Section 10) of one share
of Stock as of the date of exercise over (A) the option price per share
specified in the related Stock Option, or (B) in the case of a Limited Stock
Appreciation Right which is a Free Standing Stock Appreciation Right, the price
per share specified in the Free Standing Stock Appreciation Right, such excess
to be multiplied by the number of shares in respect of which the Limited Stock
Appreciation Right shall have been exercised.

                (m) For the purpose of the limitation set forth in Section 3 on
the number of shares to be issued under the Plan, the grant or exercise of Free
Standing Stock Appreciation Rights shall be deemed to constitute the grant or
exercise, respectively, of Stock Options with respect to the number of shares of
Stock with respect to which such Free Standing Stock Appreciation Rights were so
granted or exercised.

SECTION 7. RESTRICTED STOCK, DEFERRED STOCK AND PERFORMANCE SHARES.

        (1) General. Restricted Stock, Deferred Stock or Performance Share
awards may be issued either alone or in addition to other awards granted under
the Plan. The Administrator shall determine the Eligible Employees to whom, and
the time or times at which, grants of Restricted Stock, Deferred Stock or
Performance Share awards shall be made; the number of shares to be awarded; the
price, if any, to be paid by the recipient of Restricted Stock, Deferred Stock
or Performance Share awards; the Restricted Period (as defined in Section 7(3))
applicable to Restricted Stock or Deferred Stock awards; the performance
objectives applicable to Performance Share or Deferred Stock awards; the date or
dates on which restrictions applicable to such Restricted Stock or Deferred
Stock awards shall lapse during such Restricted Period; and all other conditions
of the Restricted Stock, Deferred Stock and Performance Share awards. The
Administrator may also

                                       13
<PAGE>   14

condition the grant of Restricted Stock, Deferred Stock awards or Performance
Shares upon the exercise of Stock Options, or upon such other criteria as the
Administrator may determine, in its sole discretion. The provisions of
Restricted Stock, Deferred Stock or Performance Share awards need not be the
same with respect to each recipient.

        (2) Awards and Certificates. The prospective recipient of a Restricted
Stock, Deferred Stock or Performance Share award shall not have any rights with
respect to such award, unless and until such recipient has executed an agreement
evidencing the award (a "Restricted Stock Award Agreement," "Deferred Stock
Award Agreement," or "Performance Share Award Agreement," as appropriate) and
delivered a fully executed copy thereof to the Company, within a period of sixty
days (or such other period as the Administrator may specify) after the award
date. Except as otherwise provided below in this Section 7(2), (i) each
Participant who is awarded Restricted Stock or Performance Shares shall be
issued a stock certificate in respect of such shares of Restricted Stock or
Performance Shares; and (ii) such certificate shall be registered in the name of
the Participant, and shall bear an appropriate legend referring to the terms,
conditions, and restrictions applicable to such award, substantially in the
following form:

                "The transferability of this certificate and the shares of stock
        represented hereby are subject to the terms and conditions (including
        forfeiture) of the Redwood Trust, Inc. Amended and Restated 1994
        Executive and Non-Employee Director Stock Option Plan and a Restricted
        Stock Award Agreement or Performance Share Award Agreement entered into
        between the registered owner and Redwood Trust, Inc. Copies of such Plan
        and Agreement are on file in the offices of Redwood Trust, Inc."

        The Company shall require that the stock certificates evidencing such
shares be held in the custody of the Company until the restrictions thereon
shall have lapsed, and that, as a condition of any Restricted Stock award or
Performance Share award, the Participant shall have delivered a stock power,
endorsed in blank, relating to the Stock covered by such award.

        (3) Restrictions and Conditions. The Restricted Stock, Deferred Stock
and Performance Share awards granted pursuant to this Section 7 shall be subject
to the following restrictions and conditions:

                (a) Subject to the provisions of the Plan and the Restricted
Stock, Deferred Stock or Performance Share award agreement, during such period
as may be set by the Administrator commencing on the grant date (the "Restricted
Period"), the Participant shall not be permitted to sell, transfer, pledge or
assign shares of Restricted Stock, Performance Shares or Deferred Stock awarded
under the Plan; provided, however, that the Administrator may, in its sole
discretion, provide for the lapse of such restrictions in installments and may
accelerate or waive such restrictions in whole or in part based on such factors
and such circumstances as the Administrator may determine, in its sole
discretion, including, but not limited to, the attainment of certain performance
related goals, the Participant's termination, death or Disability or the
occurrence of a "Change of Control" as defined in Section 10.

                (b) Except as provided in paragraph (3)(a) of this Section 7,
the Participant shall have, with respect to the shares of Restricted Stock or
Performance Shares, all of the rights of a

                                       14
<PAGE>   15

stockholder of the Company, including the right to vote the shares, and the
right to receive any dividends thereon during the Restricted Period. With
respect to Deferred Stock awards, the Participant shall generally not have the
rights of a stockholder of the Company, including the right to vote the shares
during the Restricted Period; provided, however, that dividends declared during
the Restricted Period with respect to the number of shares covered by a Deferred
Stock award shall be paid to the Participant. Certificates for shares of
unrestricted Stock shall be delivered to the Participant promptly after, and
only after, the Restricted Period shall expire without forfeiture in respect of
such shares covered by the award of Restricted Stock, Performance Shares or
Deferred Stock, except as the Administrator, in its sole discretion, shall
otherwise determine.

                (c) Subject to the provisions of the Restricted Stock, Deferred
Stock or Performance Share award agreement and this Section 7, upon termination
of employment for any reason during the Restricted Period, all shares subject to
any restriction as of the date of such termination shall be forfeited by the
Participant, and the Participant shall only receive the amount, if any, paid by
the Participant for such Restricted Stock or Performance Shares, plus simple
interest on such amount at the rate of 8% per year.

SECTION 8. AMENDMENT AND TERMINATION.

        Subject to the provisions of Section 5A(5), the Board may amend, alter
or discontinue the Plan, but no amendment, alteration, or discontinuation shall
be made that would impair the rights of a Participant under any award
theretofore granted without such Participant's consent, or that without the
approval of the stockholders (as described below) would:

        (1) except as provided in Section 3, increase the total number of shares
of Stock reserved for the purpose of the Plan;

        (2) change the employees or class of employees eligible to participate
in the Plan; or

        (3) extend the maximum option period under paragraph (2) of Section 5 of
the Plan.

        Notwithstanding the foregoing, stockholder approval under this Section 8
shall only be required at such time and under such circumstances as stockholder
approval would be required under Rule 16b-3 of the Act with respect to any
material amendment to any employee benefit plan of the Company.

        The Administrator may amend the terms of any award theretofore granted,
prospectively or retroactively, but, subject to Section 3, no such amendment
shall impair the rights of any holder without his or her consent.

SECTION 9. UNFUNDED STATUS OF PLAN.

        The Plan is intended to constitute an "unfunded" plan for incentive
compensation. With respect to any payments not yet made to a Participant or
optionee by the Company, nothing contained herein shall give any such
Participant or optionee any rights that are greater than those of a general
creditor of the Company.

                                       15
<PAGE>   16

SECTION 10. CHANGE OF CONTROL.

        The following acceleration and valuation provisions shall apply in the
event of a "Change of Control" as defined in paragraph (2) of this Section 10:

        (1) In the event of a "Change of Control," unless otherwise determined
by the Administrator or the Board in writing at or after grant (including under
any individual agreement), but prior to the occurrence of such Change of
Control:

                (a) any Stock Appreciation Rights outstanding for at least six
months and any Stock Options, including Stock Options granted under Section 5A,
awarded under the Plan not previously exercisable and vested shall become fully
exercisable and vested;

                (b) the restrictions applicable to any Restricted Stock,
Deferred Stock or Performance Share awards under the Plan shall lapse, and such
shares and awards shall be deemed fully vested;

                (c) any indebtedness incurred pursuant to Section 5(5) shall be
forgiven and the collateral pledged in connection with any such loan shall be
released; and

                (d) the value of all outstanding Stock Options (except Stock
Options granted under Section 5A), DERs (except DERs granted in conjunction with
Stock Options granted under Section 5A), Stock Appreciation Rights, Limited
Stock Appreciation Rights, and Restricted Stock, Deferred Stock and Performance
Share awards shall, to the extent determined by the Administrator at or after
grant, be cashed out by a payment in cash or other property, as the
Administrator may determine, on the basis of the "Change of Control Price" (as
defined in paragraph (3) of this Section 10) as of the date the Change of
Control occurs or such other date as the Administrator may determine prior to
the Change of Control.

        (2) For purposes of paragraph (1) of this Section 10, a "Change of
Control" shall be deemed to have occurred if:

                (a) any "person," as such term is used in Sections 13(d) and
14(d) of the Act (other than the Company; any trustee or other fiduciary holding
securities under an employee benefit plan of the Company; or any company owned,
directly or indirectly, by the stockholders of the Company in substantially the
same proportions as their ownership of Stock of the Company) is or becomes after
the Effective Date the "beneficial owner" (as defined in Rule 13d-3 under the
Act), directly or indirectly, of securities of the Company (not including in the
securities beneficially owned by such person any securities acquired directly
from the Company or its affiliates) representing 25% or more of the combined
voting power of the Company's then outstanding securities; or

                (b) during any period of two consecutive years (not including
any period prior to the Effective Date), individuals who at the beginning of
such period constitute the Board, and any new director (other than a director
designated by a person who has entered into an agreement with the Company to
effect a transaction described in clause (a), (c) or (d) of this Section 10(2))
whose election by the Board or nomination for election by the Company's
stockholders was approved by a vote of at least two-thirds (2/3) of the
directors then still in office who either were

                                       16
<PAGE>   17

directors at the beginning of the period or whose election or nomination for
election was previously so approved, cease for any reason to constitute at least
a majority thereof; or

                (c) the stockholders of the Company approve a merger or
consolidation of the Company with any other corporation, other than (A) a merger
or consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity), in combination with the ownership of any trustee or other
fiduciary holding securities under an employee benefit plan of the Company, at
least 75% of the combined voting power of the voting securities of the Company
or such surviving entity outstanding immediately after such merger or
consolidation or (B) a merger or consolidation effected to implement a
recapitalization of the Company (or similar transaction) in which no person
acquires more than 50% of the combined voting power of the Company's then
outstanding securities; or

                (d) the stockholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by the
Company of all or substantially all of the Company's assets.

        (3) For purposes of this Section 10, "Change of Control Price" means the
higher of (i) the highest price per share paid or offered in any transaction
related to a Change of Control of the Company or (ii) the highest price per
share paid in any transaction reported on the exchange or national market system
on which the Stock is listed, at any time during the preceding sixty day period
as determined by the Administrator, except that, in the case of Incentive Stock
Options and Stock Appreciation Rights or Limited Stock Appreciation Rights
relating to Incentive Stock Options, such price shall be based only on
transactions reported for the date on which the Administrator decides to cash
out such options.

SECTION 11. GENERAL PROVISIONS.

        (1) The Administrator may require each person purchasing shares pursuant
to a Stock Option to represent to and agree with the Company in writing that
such person is acquiring the shares without a view to distribution thereof. The
certificates for such shares may include any legend which the Administrator
deems appropriate to reflect any restrictions on transfer.

        All certificates for shares of Stock delivered under the Plan shall be
subject to such stock-transfer orders and other restrictions as the
Administrator may deem advisable under the rules, regulations, and other
requirements of the Commission, any stock exchange upon which the Stock is then
listed, and any applicable federal or state securities law, and the
Administrator may cause a legend or legends to be placed on any such
certificates to make appropriate reference to such restrictions.

        (2) Nothing contained in the Plan shall prevent the Board from adopting
other or additional compensation arrangements, subject to stockholder approval
if such approval is required; and such arrangements may be either generally
applicable or applicable only in specific cases. The adoption of the Plan shall
not confer upon any employee of the Company or any Subsidiary any right to
continued employment with the Company or a Subsidiary, as the case may be, nor
shall it

                                       17
<PAGE>   18

interfere in any way with the right of the Company or a Subsidiary to terminate
the employment of any of its employees at any time.

        (3) Each Participant shall, no later than the date as of which the value
of an award first becomes includable in the gross income of the Participant for
federal income tax purposes, pay to the Company, or make arrangements
satisfactory to the Administrator regarding payment of, any federal, state, or
local taxes of any kind required by law to be withheld with respect to the
award. The obligations of the Company under the Plan shall be conditional on the
making of such payments or arrangements, and the Company (and, where applicable,
its Subsidiaries) shall, to the extent permitted by law, have the right to
deduct any such taxes from any payment of any kind otherwise due to the
Participant.

        (4) No member of the Board or the Administrator, nor any officer or
employee of the Company acting on behalf of the Board or the Administrator,
shall be personally liable for any action, determination, or interpretation
taken or made in good faith with respect to the Plan, and all members of the
Board or the Administrator and each and any officer or employee of the Company
acting on their behalf shall, to the extent permitted by law, be fully
indemnified and protected by the Company in respect of any such action,
determination or interpretation.

SECTION 12. EFFECTIVE DATE OF PLAN.

        The Plan became effective (the "Effective Date") on June 23, 1994, the
date the Company's stockholders formally approved the Plan.

SECTION 13. TERM OF PLAN.

        No Stock Option, Stock Appreciation Right, Limited Stock Appreciation
Right, Restricted Stock, Deferred Stock or Performance Share award shall be
granted pursuant to the Plan on or after the tenth anniversary of the Effective
Date, but awards theretofore granted may extend beyond that date.

                                       18<PAGE>   1

                                                                     EXHIBIT 4.6
                                 (FACE OF NOTE)

                                AMB PROPERTY L.P.
                                MEDIUM-TERM NOTE
REGISTERED                        (FIXED RATE)                        REGISTERED

UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE OPERATING
PARTNERSHIP (AS DEFINED BELOW) OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO. OR IN SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC
(AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

<TABLE>
<S>                                           <C>                                       <C>
NOTE NO:  FXR -1                              CUSIP NO.:  00163X AA8                    PRINCIPAL AMOUNT:  $30,000,000
          ------------------------------                -----------------------------                    ---------------------

ORIGINAL ISSUE DATE:  8/18/2000               REGISTERED HOLDER:  CEDE & CO.            SPECIFIED CURRENCY:  U.S. DOLLARS
                    --------------------                        ---------------------                      -------------------

MATURITY DATE:  8/20/2007                     FORM:     [X] Book-Entry                  PRINCIPAL FINANCIAL CENTER:
              --------------------------                                                                           -----------
                                                        [ ] Certificated                (if the Specified Currency is other than
                                                                                        U.S. dollars or Euro)

TRADE DATE:  8/15/2000
           -----------------------------

EXCHANGE RATE AGENT:                          AGENT'S DISCOUNT OR COMMISSION: 0.600 %   AUTHORIZED DENOMINATION:
                    --------------------                                     --------                           --------------
(if other than State Street Bank and                                                    (if other than $1,000 or integral multiples
Trust Company of California, N.A.)                                                      thereof)

                                              NET PROCEEDS TO ISSUER: $29,820,000
                                                                     ----------------

                                              INTEREST RATE:  7.925       % per annum   INTEREST PAYMENT DATES:  2/20 & 8/20
                                                            --------------                                     ---------------

                                                                                        REGULAR RECORD DATES:  2/5 & 8/5
                                                                                                             -----------------
</TABLE>

<TABLE>
<CAPTION>
REDEMPTION:                                   REPAYMENT:                               DISCOUNT NOTES:      [ ] Yes    [X] No
<S>                                           <C>                                      <C>
[X]  The Note cannot be redeemed prior        [X]  The Note cannot be repaid             Issue Price:____________________________
       to maturity                                  prior to maturity                    Total Amount of OID:____________________
[ ]  The Note may be redeemed at the          [ ]  The Note may be repaid prior          Yield to Maturity:______________________
      option of the Operating Partnership            to maturity at the option of        Initial Accrual Period:_________________
      prior to maturity                              the Holder of the Note
     Redemption Commencement Date:________         Optional Repayment Date(s):_____
     Initial Redemption Percentage:______%         Repayment Price:_______________%
     Annual Redemption Percentage
      Reduction:_____%

ADDENDUM  ATTACHED:   [ ] Yes    [X] No       OTHER/ADDITIONAL PROVISIONS:  The
                                               Notes will initially be limited
                                               to $30,000,000 in aggregate
                                               principal amount.  We may
                                               create and issue additional
                                               Notes with the same terms as
                                               this Note so that the
                                               additional Notes will be combined
                                               with this initial issuance of
                                               Notes.

</TABLE>

<PAGE>   2

       AMB PROPERTY, L.P., a Delaware limited partnership (hereinafter called
the "Operating Partnership", which term includes any successor under the
Indenture referred to below), for value received, hereby promises to pay to the
Registered Holder specified on the face hereof, or registered assigns
("Holder"), upon presentation and surrender of this Note, on the Maturity Date
specified on the face hereof (except to the extent repaid or redeemed prior to
the Maturity Date) the Principal Amount specified on the face hereof in the
Specified Currency specified on the face hereof, and to pay interest thereon at
the Interest Rate per annum specified on the face hereof, until the principal
hereof is paid or duly made available for payment.

       The Operating Partnership will pay interest (other than defaulted
interest) on each Interest Payment Date (as defined below), commencing with the
first Interest Payment Date next succeeding the Original Issue Date specified on
the face hereof, to the person who is the Holder of this Note on the applicable
Regular Record Date (as defined below); provided that if the Original Issue Date
occurs between a Regular Record Date and an Interest Payment Date, the Operating
Partnership will make the first payment of interest on the Interest Payment Date
following the next Regular Record Date to the registered owner on that Regular
Record Date.

       The Operating Partnership will pay interest due on the Maturity Date,
Redemption Date (as defined on the reverse hereof) or Repayment Date (as defined
on the reverse hereof), as applicable, to the same person to whom it is paying
the principal amount; provided that if the Operating Partnership would have made
a regular interest payment on the Maturity Date, Redemption Date or Repayment
Date, as the case may be, it will make that regular interest payment to the
Holder as of the applicable Regular Record Date, even if it is not the same
person to whom it is paying the principal amount.

       Any such interest not so punctually paid or duly provided for ("Defaulted
Interest") will forthwith cease to be payable to the Holder on any Regular
Record Date, and shall be paid, at the election of the Operating Partnership, to
either (i) to the Holder at the close of business on a special record date (the
"Special Record Date") for the payment of such Defaulted Interest to be fixed by
the Trustee (as defined on the reverse hereof), notice whereof shall be given to
the Holder of this Note by the Trustee not less than 10 calendar days prior to
such Special Record Date or (ii) at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which this Note
may be listed, and upon such notice as may be required by such exchange, all as
more fully provided for in the Indenture.

       Unless specified on the face hereof, payments of interest on this Note
with respect to any Interest Payment Date, Maturity Date, Redemption Date or
Repayment Date, as applicable, will include interest accrued from and including
each immediately preceding Interest Payment Date (or from and including the
Original Date of Issue if no interest has been paid or duly provided for), to,
but excluding, the Interest Payment Date, Maturity Date, Redemption Date or
Repayment Date, as the case may be.

       If an Interest Payment Date, Maturity Date, Redemption Date or Repayment
Date, as applicable, falls on a day that is not a Business Day (as defined
below), interest (or interest and principal) will be paid on the next Business
Day; provided that interest on the payment will not accrue for the period from
the original Interest Payment Date, Maturity Date, Redemption Date or Repayment
Date, as the case may be, to the date of such payment on the next Business Day.

       Unless otherwise specified on the face hereof, the "Interest Payment
Dates" shall be June 30 and December 30 of each year. The "Regular Record Dates"
shall be June 15 for a June 30 interest payment date, December 15 for a December
30 interest payment date and the date that is 15 calendar days before any other
interest payment date, whether or not those dates are Business Days.

       "Business Day" as used herein means any day, other than a Saturday or
Sunday, (a) that is neither a legal holiday nor a day on which banking
institutions are authorized or required by law or regulation to close (x) in The
City of New York or (y) for notes denominated in a specified currency other than
U.S. dollars, Australian dollars or euro, in the principal financial center of
the country of the specified currency or (z) for notes denominated in Australian
dollars, in Sydney, and (b) for notes denominated in euro, that is also a day on
which the Trans-European

                                       1
<PAGE>   3

Automated Real-time Gross Settlement Express Transfer System, which is commonly
referred to as "TARGET," is operating.

       Payment of principal (and premium, if any) and interest on, this Note on
any day, if the Holder of this Note is DTC (or its nominee or other depository,
a "Depository"), will be made in accordance with any applicable provisions of
such written agreement between the Operating Partnership, the Trustee and the
Depository (or its nominee) as may be in effect from time to time. Otherwise
payment of principal (and premium, if any) and interest on, this Note on any day
shall be payable and this Note may be surrendered for the registration of
transfer or exchange at the Office of the Trustee's affiliate, State Street Bank
and Trust Company, at 61 Broadway, 15th Floor, New York, New York 10006;
provided, however, that at the option of the Operating Partnership, interest may
be paid by check mailed to the address of the Person entitled thereto as such
address shall appear in the Operating Partnership's Security Register or by wire
transfer, if proper wire instructions are on file with the Trustee or are
received at presentment, to an account maintained by the payee located in the
United States. The place where notices or demands to or upon the Operating
Partnership in respect of this Note and the Indenture may be served shall be the
Corporate Trust Office of the Trustee at 633 West Fifth Street, 12th Floor, Los
Angeles, California 90071.

       To receive payment of a U.S. dollar denominated Note upon redemption (if
applicable) or at maturity, a Holder must make presentation and surrender of
such Note on or before the Redemption Date or Maturity Date, as applicable. To
receive payment of a Note denominated in a Foreign Currency (as defined on the
reverse hereof) upon redemption or at maturity, a Holder must make presentation
and surrender of such Note not less than two Business Days prior to the
Redemption Date or Maturity Date, as applicable. Upon presentation and surrender
of a Note denominated in a Foreign Currency at any time after the date two
Business Days prior to the Redemption Date or Maturity Date, as applicable, the
Operating Partnership will pay the principal amount (and premium, if any) of
such Note, and any interest due upon redemption or at maturity (unless the
Redemption Date or Maturity Date is an Interest Payment Date), two Business Days
after such presentation and surrender.

       For procedures relating to the receipt of payment upon repayment, if
applicable, see the reverse hereof.

       The Operating Partnership will pay any administrative costs imposed by
banks in connection with sending payments by wire transfer, but any tax,
assessment or governmental charge imposed upon payments will be borne by the
Holders of the Notes in respect of which payments are made.

       Reference is hereby made to the further provisions of this Note set forth
on the reverse hereof and, if so specified on the face hereof, in the Addendum
hereto, which further provisions shall for all purposes have the same force and
effect as though fully set forth on the face hereof.

       This Note shall not be entitled to any benefit under the Indenture
referred to on the reverse hereof, or become valid or obligatory for any
purpose, until the certificate of authentication hereon shall have been signed
by or on behalf of the Trustee under such Indenture.

       Notwithstanding the foregoing, if an Addendum is attached hereto or
"Other/Additional Provisions" apply to this Note as specified on the face
hereof, this Note shall be subject to the terms set forth in such Addendum or
such "Other/Additional Provisions."

                                       2
<PAGE>   4

       IN WITNESS WHEREOF, the Operating Partnership has caused this Instrument
to be duly executed under.

Dated:  August 18, 2000                 AMB PROPERTY L.P.

                                        By: AMB PROPERTY CORPORATION,
                                        as General Partner

                                        By: /s/ W. Blake Baird
                                            ------------------------------------
                                            President

TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the
series designated and referred to in the
within-mentioned Indenture.

STATE STREET BANK AND TRUST
COMPANY OF CALIFORNIA, N.A., as Trustee

By: /s/ Steve Rivero
    -----------------------------------
    Authorized Signatory

<PAGE>   5

                                (REVERSE OF NOTE)

                                AMB PROPERTY L.P.
                                MEDIUM-TERM NOTE
                                  (FIXED RATE)

       This Note is one of a duly authorized issue of debt securities of the
Operating Partnership (hereinafter called the "Securities") of the series
hereinafter specified, unlimited in aggregate principal amount, all issued or to
be issued under or pursuant to an Indenture dated as of June 30, 1998, among the
Operating Partnership, AMB Property Corporation, a Maryland corporation and
general partner of the Operating Partnership (the "Guarantor"), and State Street
Bank and Trust Company of California, N.A., as Trustee; to which Indenture and
all indentures supplemental thereto (herein collectively called the "Indenture")
reference is hereby made for a specification of the rights and limitation of
rights thereunder of the Holders of the Securities, the rights and obligations
thereunder of the Operating Partnership and the rights, duties and immunities
thereunder of the Trustee. The Securities may be issued in one or more series,
which different series may be issued in various aggregate principal amounts, may
mature at different times, may bear interest (if any) at different rates, may be
subject to different redemption or repayment provisions (if any), may be subject
to different covenants and defaults and may otherwise vary as provided in the
Indenture. This Note is one of a series designated as "Medium-Term Notes"
(hereinafter referred to as the "Notes") of the Operating Partnership, of up to
$400,000,000 in aggregate principal amount. All terms used in this Note which
are defined in the Indenture and which are not otherwise defined in this Note
shall have the meanings assigned to them in the Indenture. The terms of the
Notes include those stated in the Indenture and those made a part of the
Indenture by reference to the Trust Indenture Act of 1939, as amended. The Notes
are subject to all such terms, and the Holders are referred to the Indenture and
such Act for a statement of such terms. To the extent any provision of this Note
conflicts with the provisions of the Indenture, the provisions of the Indenture
shall govern and be controlling.

       Unless stated to the contrary on the face hereof, this Note is issuable
only in registered form without coupons in Book-Entry form represented by one or
more global notes (each a "Global Note") recorded in the book-entry system
maintained by the Depository. If specified on the face hereof, this Note is
issuable in certificated form issued to, and registered in the name of, the
beneficial owner or its nominee (a "Certificated Note").

       Unless a different minimum Authorized Denomination is set forth on the
face hereof, this Note is issuable in minimum denominations of (i) if the
Specified Currency of this Note is US dollars, U.S. $1,000 and in any larger
amount in integral multiples of $1,000 and (ii) if the Specified Currency of
this Note is a currency other than US dollars (a "Foreign Currency"), the
equivalent in such Foreign Currency determined in accordance with the Market
Exchange Rate (as defined below) for such Foreign Currency on the Business Day
immediately preceding the date on which the Operating Partnership accepts an
offer to purchase a Note, of U.S. $1,000 (rounded to an integral multiple of
1,000 units of the Foreign Currency), and in any larger amount in integral
multiples of 1,000 units.

       If this is a Global Note representing Book-Entry Notes, this Note may be
transferred or exchanged only through DTC. In the manner and subject to the
limitations provided in the Indenture, if this is a Certificated Note, it may be
transferred or exchanged, without charge except for any tax or other
governmental charge imposed in relation thereto, for other Notes of authorized
denominations for a like aggregate principal amount, at the office or agency of
the Operating Partnership in the Borough of Manhattan of The City of New York,
or, at the option of the Holder, such office or agency, if any, maintained by
the Operating Partnership in the city in which the principal executive offices
of the Operating Partnership are located or the city in which the principal
corporate trust office of the Trustee is located.

       The principal (and premium, if any) and interest on, this Note is payable
by the Operating Partnership in the Specified Currency.

       If this Note is denominated in a Foreign Currency, in the event that the
Foreign Currency is not available for payment at a time at which any payment is
required hereunder due to the imposition of exchange controls or other
circumstances beyond the control of the Operating Partnership or is no longer
used by the government of the

                                       2
<PAGE>   6

country issuing such currency or for the settlement of transactions by public
institutions within the international banking community, the Operating
Partnership may, in full satisfaction of its obligation to make such payment,
make instead a payment in an equivalent amount of US dollars, determined by the
Exchange Rate Agent, as specified on the face hereof, on the basis of the Market
Exchange Rate for such Foreign Currency on the second Business Day prior to such
payment date or, if such Market Exchange Rate is not then available, on the
basis of the most recently available Market Exchange Rate; provided, however,
that if such Specified Currency is replaced by a single European currency, the
payment of principal of (and premium, if any) or interest, if any, on this Note
denominated in such currency shall be effected in the new single European
currency in conformity with legally applicable measures taken pursuant to, or by
virtue of, the treaty establishing the European Community, as amended by the
treaty on European Unity. The "Market Exchange Rate" for the Specified Currency
means the noon dollar buying rate in The City of New York for cable transfers
for the Specified Currency as certified for customs purposes by (or if not so
certified, as otherwise determined by) the Federal Reserve Bank of New York. Any
payment made under such circumstances in U.S. dollars or a new single European
currency where the required payment is in a Specified Currency other than U.S.
dollars or such single European currency, respectively, will not constitute an
Event of Default (as defined in the Indenture).

       If the Specified Currency is a composite currency and if such composite
currency is unavailable due to the imposition of exchange controls or other
circumstances beyond the control of the Operating Partnership, then the
Operating Partnership will be entitled to satisfy its obligations to the Holder
of this Note by making such payment in U.S. dollars. The amount of each payment
in U.S. dollars shall be computed by the Exchange Rate Agent on the basis of the
equivalent of the composite currency in U.S. dollars. The component currencies
of the composite currency for this purpose (collectively, the "Component
Currencies" and each, a "Component Currency") shall be the currency amounts that
were components of the composite currency as of the last day on which the
composite currency was used. The equivalent of the composite currency in U.S.
dollars shall be calculated by aggregating the U.S. dollar equivalents of the
Component Currencies. The U.S. dollar equivalent of each of the Component
Currencies shall be determined by the Exchange Rate Agent on the basis of the
most recently available Market Exchange Rate for each such Component Currency,
or as otherwise specified on the face hereof.

       If the official unit of any Component Currency is altered by way of
combination or subdivision, the number of units of the currency as a Component
Currency shall be divided or multiplied in the same proportion. If two or more
Component Currencies are consolidated into a single currency, the amounts of
those currencies as Component Currencies shall be replaced by an amount in such
single currency equal to the sum of the amounts of the consolidated Component
Currencies expressed in such single currency. If any Component Currency is
divided into two or more currencies, the amount of the original Component
Currency shall be replaced by the amounts of such two or more currencies, the
sum of which shall be equal to the amount of the original Component Currency.

       All determinations referred to above made by the Exchange Rate Agent
shall be at its sole discretion and shall, in the absence of manifest error, be
conclusive for all purposes and binding on the Holder of this Note.

       If a Redemption Commencement Date is specified on the face hereof, this
Note may be redeemed, whether or not any other Note is concurrently redeemed, at
the option of the Operating Partnership, in whole, or from time to time in part,
on any Business Day on or after such Redemption Commencement Date and prior to
the Maturity Date, upon mailing by first-class mail, postage prepaid, a notice
of such redemption not less than 30 nor more than 60 days prior to the actual
date of redemption ("Redemption Date"), to the Holder of this Note at such
Holder's address appearing in the Security Register, as provided in the
Indenture (provided that, if the Holder of this Note is a Depository or a
nominee of a Depository, notice of such redemption shall be given in accordance
with any applicable provisions of such written agreement between the Operating
Partnership, the Trustee and such Depository (or its nominee) as may be in
effect from time to time), at the Redemption Price (as defined below), together
in each case with interest accrued to the Redemption Date (subject to the right
of the Holder of record on a Regular Record Date to receive interest due on an
Interest Payment Date). The "Redemption Price" shall be equal to (i) the Initial
Redemption Percentage specified on the face of this Note, as adjusted downward
on each anniversary of the Redemption Commencement Date by the Annual Redemption
Price Reduction, if any, specified on the face hereof, multiplied by (ii) the
unpaid Principal Amount of this Note to be redeemed. In the event of

                                       3
<PAGE>   7

redemption of this Note in part only, a new Note or Notes of this series, and of
like tenor, for the unredeemed portion hereof will be issued in the name of the
Holder hereof upon the cancellation hereof.

       If an Optional Repayment Date(s) is specified on the face hereof, this
Note will be subject to repayment by the Operating Partnership at the option of
the Holder hereof on such Optional Repayment Date(s), in whole or in part in
increments of U.S. $1,000, at the Repayment Price specified on the face hereof,
together with unpaid interest accrued hereon to the date of repayment
("Repayment Date"). For this Note to be repaid, this Note must be received,
together with the form hereon entitled "Option to Elect Repayment" duly
completed, by the Trustee at the corporate trust office of the Trustee's
Affiliate, State Street Bank and Trust Company, at 61 Broadway Street, New York,
New York (or at such other address of which the Operating Partnership shall from
time to time designate and notify Holders of the Notes) at least 30 but not more
than 60 days prior to the Repayment Date. Exercise of such repayment option by
the Holder hereof will be irrevocable. In the event of repayment of this Note in
part only, a new Note of like tenor for the unrepaid portion hereof and
otherwise having the same terms as this Note shall be issued in the name of the
Holder hereof upon the presentation and surrender hereof.

       If this is a Global Note representing Book-Entry Notes, only the
Depository may exercise the repayment option in respect of this Note.
Accordingly, if this is a Global Security representing Book-Entry Notes and the
beneficial owner desires to have all or any portion of the Book-Entry Note
represented by this Global Security repaid, the beneficial owner must instruct
the participant through which he owns his interest to direct the Depository to
exercise the repayment option on his behalf by delivering this Note and duly
completed election form to the Trustee as aforesaid.

       If this Note is an Original Issue Discount Note, as specified on the face
hereof, the amount payable to the Holder of this Note in the event of
redemption, repayment or acceleration of maturity will be equal to the sum of
(i) the Issue Price specified on the face hereof (increased by any accruals of
the Discount, as defined below) multiplied, in the event of any redemption or
repayment of this Note (if applicable), by the Redemption Price or Repayment
Price, as the case may be, and (ii) any unpaid interest on this Note accrued
from the Original Issue Date to the Redemption Date, Repayment Date or date of
acceleration of maturity, as the case may be. The difference between the Issue
Price, as specified on the face hereof, and 100% of the principal amount of this
Note is referred to herein as the "Discount".

       For purposes of determining the amount of Discount that has accrued as of
any Redemption Date, Repayment Date or date of acceleration of maturity of this
Note, such Discount will be accrued so as to cause the yield on the Note to be
constant. The constant yield will be calculated using a 30-day month, 360-day
year convention, a compounding period that, except for the Initial Period (as
defined below), corresponds to the shortest period between Interest Payment
Dates (with ratable accruals within a compounding period) and an assumption that
the maturity of this Note will not be accelerated. If the period from the
Original Issue Date to the initial Interest Payment Date (the "Initial Period")
is shorter than the compounding period for this Note, a proportionate amount of
the yield for an entire compounding period will be accrued. If the Initial
Period is longer than the compounding period, then such period will be divided
into a regular compounding period and a short period, with the short period
being treated as provided in the preceding sentence.

       In case a default, as defined in the Indenture, shall occur and be
continuing with respect to the Notes, the principal amount of all Notes then
outstanding under the Indenture may be declared or may become due and payable
upon the conditions and in the manner and with the effect provided in the
Indenture. The Indenture provides that such declaration may in certain events be
annulled by the Holders of a majority in principal amount of the Notes
outstanding.

       To the extent permitted by, and as provided in, the Indenture, the
Operating Partnership may enter into one or more supplements to the Indenture
for the purpose of modifying or altering the Indenture, without the consent of
any Holders of Notes, for the limited purposes described in the Indenture.

       To the extent permitted by, and as provided in, the Indenture, the
Operating Partnership may enter into one or more supplements to the Indenture
for the purpose of modifying or altering the rights and obligations of the

                                       4
<PAGE>   8

Operating Partnership and the Holders of the Securities (as defined in the
Indenture) with the consent of the Holders of not less than a majority in
principal amount of all Outstanding Securities (as defined in the Indenture) of
any series affected, evidenced as provided in the Indenture.

       The Indenture contains provisions for legal defeasance and covenant
defeasance with respect to the Notes, in each case, upon compliance with certain
conditions set forth therein, which provisions apply to the Notes.

       The Operating Partnership, the Trustee, any Authenticating Agent, any
paying agent and any Security registrar may deem and treat the registered Holder
hereof as the absolute owner hereof (whether or not this Note shall be overdue
and notwithstanding any notice of ownership or other writing hereon by anyone
other than the Operating Partnership or any Security registrar) for the purpose
of receiving payment of or on account of the principal hereof (and premium, if
any), and interest hereon, and for all other purposes, and none of the Operating
Partnership, the Trustee, an Authenticating Agent, a paying agent nor the
Security registrar shall be affected by any notice to the contrary. All such
payments shall be valid and effectual to satisfy and discharge the liability
upon this Note to the extent of the sum or sums so paid.

       No recourse under or upon any obligation, covenant or agreement of the
Indenture or of this Note, or for any claim based thereon or otherwise in
respect thereof, shall be had against any incorporator, partner, stockholder,
officer or director, as such, past, present or future, of the Operating
Partnership or the Guarantor or of any successor entity, either directly or
through the Operating Partnership or the Guarantor, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any assessment or
penalty or otherwise; it being expressly understood that the Indenture and this
Note are solely corporate obligations, and that no such personal liability
whatever shall attach to, or is or shall be incurred by the incorporators,
partners, stockholders, officers or directors, as such, of the Operating
Partnership or the Guarantor or of any successor entity, or any of them, because
of the creation of the indebtedness authorized by the Indenture, or under or by
reason of the obligations, covenants or agreements contained in the Indenture or
this Note or implied therefrom; and that any and all such personal liability,
either at common law or in equity or by constitution or statute, or any and all
such rights and claims against, every such incorporator, partner, stockholder,
officer or director, as such, because of the creation of the indebtedness
authorized by the Indenture, or under or by reason of the obligations, covenants
or agreements contained in the Indenture or this Note or implied therefrom, are,
by acceptance of this Note, hereby expressly waived and released as a condition
of, and as consideration for, the issue of this Note. In the event of any sale
or transfer of its assets and liabilities substantially as an entirety to a
successor entity, the predecessor entity may be dissolved and liquidated as more
fully set forth in the Indenture.

       All U.S. dollar amounts used in or resulting from calculations referred
to in this Note shall be rounded to the nearest cent (with one half cent being
rounded upwards).

       THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF NEW YORK.

                                       5
<PAGE>   9

                                PARENT GUARANTEE

       FOR VALUE RECEIVED, the undersigned hereby, jointly and severally with
the Subsidiary Guarantors, if any, unconditionally guarantees to the Holder of
the accompanying Medium Term Note (the "Note") issued by AMB Property, L.P. (the
"Operating Partnership") under an Indenture dated as of June 30, 1998 (together
with the First Supplemental Indenture, the Second Supplemental Indenture and the
Third Supplemental Indenture, each dated as of June 30, 1998 and the Fourth
Supplemental Indenture dated as of August 15, 2000, the "Indenture") among the
Operating Partnership, AMB Property Corporation and State Street Bank and Trust
Company of California, N.A., as trustee (the "Trustee"), (a) the full and prompt
payment of the principal of and premium, if any, on such Note when and as the
same shall become due and payable, whether at the Maturity Date (as defined in
the Note), by acceleration, by redemption, repurchase or otherwise, and (b) the
full and prompt payment of the interest on such Note when and as the same shall
become due and payable, according to the terms of such Note and of the
Indenture. In case of the failure of the Operating Partnership punctually to pay
any such principal, premium or interest, the undersigned hereby agrees to cause
any such payment to be made punctually when and as the same shall become due and
payable, whether at the Maturity Date, upon acceleration, by redemption or
repayment or otherwise, and as if such payment were made by the Operating
Partnership. The undersigned hereby agrees, jointly and severally with the
Subsidiary Guarantors, if any, that its obligations hereunder shall be as
principal and not merely as surety, and shall be absolute and unconditional, and
shall not be affected, modified or impaired by the following: (a) the failure to
give notice to the Guarantors of the occurrence of an Event of Default under the
Indenture; (b) the waiver, surrender, compromise, settlement, release or
termination of the payment, performance or observance by the Operating
Partnership or the Guarantors of any or all of the obligations, covenants or
agreements of either of them contained in the Indenture or any Note; (c) the
acceleration, extension or any other changes in the time for payment of any
principal of or interest or any premium on any Note or for any other payment
under the Indenture or of the time for performance of any other obligations,
covenants or agreements under or arising out of the Indenture or any Note; (d)
the modification or amendment (whether material or otherwise) of any obligation,
covenant or agreement set forth in the Indenture or any Note; (e) the taking or
the omission of any of the actions referred to in the Indenture and in any of
the actions under any Note; (f) any failure, omission, delay or lack on the part
of the Trustee to enforce, assert or exercise any right, power or remedy
conferred on the Trustee in the Indenture, or any other action or acts on the
part of the Trustee or any of the Holders from time to time of any Note; (g) the
voluntary or involuntary liquidation, dissolution, sale or other disposition of
all or substantially all the assets, marshaling of assets and liabilities,
receivership, insolvency, bankruptcy, assignment for the benefit of creditors,
reorganization, arrangement, composition with creditors or readjustment of, or
other similar proceedings affecting the Guarantors or the Operating Partnership
or any of the assets of any of them, or any allegation or contest of the
validity of this Parent Guarantee in any such proceeding; (h) to the extent
permitted by law, the release or discharge by operation of law of the Guarantors
from the performance or observance of any obligation, covenant or agreement
contained in the Indenture; (i) to the extent permitted by law, the release or
discharge by operation of law of the Operating Partnership from the performance
or observance of any obligation, covenant or agreement contained in the
Indenture; (j) the default or failure of the Operating Partnership or the
Trustee fully to perform any of its obligations set forth in the Indenture or
any Note; (k) the invalidity, irregularity or unenforceability of the Indenture
or any Note or any part of any thereof; (l) any judicial or governmental action
affecting the Operating Partnership or any Note or consent or indulgence granted
to the Operating Partnership by the Holders or by the Trustee; or (m) the
recovery of any judgment against the Operating Partnership or any action to
enforce the same or any other circumstance which might constitute a legal or
equitable discharge of a surety or guarantor. The undersigned hereby waives
diligence, presentment, demand of payment, filing of claims with a court in the
event of merger, sale, lease or conveyance of all or substantially all of its
assets, insolvency or bankruptcy of any Guarantor or the Operating Partnership,
any right to require a proceeding first against any other Guarantor or the
Operating Partnership, protest or notice with respect to such Note or the
indebtedness evidenced thereby and all demands whatsoever, and covenants that
this Parent Guarantee will not be discharged except by complete performance of
the obligations contained in such Note and in this Parent Guarantee.

       No reference herein to such Indenture and no provision of this Parent
Guarantee or of such Indenture shall alter or impair the guarantee of the
undersigned, which is absolute and unconditional, of the full and prompt payment
of the principal of and premium, if any, and interest on the Note.

<PAGE>   10

       THIS PARENT GUARANTEE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK.

       This Parent Guarantee shall not be valid or obligatory for any purpose
until the certificate of authentication on the Note shall have been executed by
the Trustee under the Indenture referred to above by the manual signature of one
of its authorized officers. The validity and enforceability of this Parent
Guarantee shall not be affected by the fact that it is not affixed to any
particular Note.

       An Event of Default under the Indenture or any Note shall constitute an
event of default under this Parent Guarantee, and shall entitle the Holder of
the Note to accelerate the obligations of the undersigned hereunder in the same
manner and to the same extent as the obligations of the Operating Partnership.

       Notwithstanding any other provision of this Parent Guarantee to the
contrary, the undersigned hereby waives any claims or other rights which it may
now have or hereafter acquire against any other Guarantor or the Operating
Partnership that arise from the existence or performance of its obligations
under this Parent Guarantee (all such claims and rights are referred to as
"Guarantor's Conditional Rights"), including, without limitation, any right of
subrogation, reimbursement, exoneration, contribution, or indemnification, any
right to participate in any claim or remedy against any Guarantor or the
Operating Partnership, whether or not such claim, remedy or right arises in
equity or under contract, statute or common law, by any payment made hereunder
or otherwise, including without limitation, the right to take or receive from
any Guarantor or the Operating Partnership, directly or indirectly, in cash or
other property or by setoff or in any other manner, payment or security on
account of such claim or other rights. The undersigned hereby agrees not to
exercise any rights which may be acquired by way of contribution under this
Parent Guarantee or any other agreement, by any payment made hereunder or
otherwise, including, without limitation, the right to take or receive from any
other guarantor, directly or indirectly, in cash or other property or by setoff
or in any other manner, payment or security on account of such contribution
rights. If, notwithstanding the foregoing provisions, any amount shall be paid
to the undersigned on account of the Guarantor's Conditional Rights and either
(i) such amount is paid to such undersigned party at any time when the
indebtedness shall not have been paid or performed in full, or (ii) regardless
of when such amount is paid to such undersigned party, any payment made by any
Guarantor or the Operating Partnership to a Holder that is at any time
determined to be a Preferential Payment (as defined below), then such amount
paid to the undersigned shall be held in trust for the benefit of such Holder
and shall forthwith be paid such Holder to be credited and applied upon the
indebtedness, whether matured or unmatured. Any such payment is herein referred
to as a "Preferential Payment" to the extent any Guarantor or the Operating
Partnership makes any payment to such Holder in connection with the Note, and
any or all of such payment is subsequently invalidated, declared to be
fraudulent or preferential, set aside or required to be repaid or paid over to a
trustee, receiver or any other entity, whether under any bankruptcy act or
otherwise.

       To the extent that any of the provisions of the immediately preceding
paragraph shall not be enforceable, the undersigned agrees that until such time
as the indebtedness has been paid and performed in full and the period of time
has expired during which any payment made by any Guarantor, the Operating
Partnership or the undersigned to a Holder may be determined to be a
Preferential Payment, Guarantor's Conditional Rights to the extent not validly
waived shall be subordinate to Holders' right to full payment and performance of
the indebtedness and the undersigned shall not enforce any of Guarantor's
Conditional Rights until such time as the indebtedness has been paid and
performed in full and the period of time has expired during which any payment
made by any Guarantor, the Operating Partnership or the undersigned to Holders
may be determined to be a Preferential Payment.

       The obligations of the undersigned to the Holder of the Note and to the
Trustee pursuant to this Parent Guarantee and the Indenture are expressly set
forth in Article 14 of the Indenture and reference is hereby made to the
Indenture for the precise terms of this Parent Guarantee and all of the other
provisions of the Indenture to which this Parent Guarantee relates.

       Capitalized terms used in this Parent Guarantee which are not defined
herein shall have the meanings assigned to them in the Indenture.

<PAGE>   11

       IN WITNESS WHEREOF, the undersigned has caused this Parent Guarantee to
be duly executed.

            Dated:   August 18, 2000
                     -----------------------

                                             AMB PROPERTY CORPORATION

                                             By: /s/ W. Blake Baird
                                                --------------------------------
                                                Name:  W. Blake Baird
                                                Title:  President

<PAGE>   12

                                   ASSIGNMENT

FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto:

PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE:
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
    (Please print or typewrite name and address of Assignee, including postal
                              zip code of assignee)

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

this Note and all rights thereunder, hereby irrevocably constituting and
appointing:

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

Attorney, to transfer this Note on the books of the Trustee, with full power of
substitution in the premises.

Dated:
      ---------------------          -------------------------------------------
                                     Notice: The signature(s) on this Assignment
                                             must correspond with the name(s) as
                                             written upon the face of this Note
                                             in every particular, without
                                             alteration or enlargement or any
                                             change whatsoever.

<PAGE>   13

                            OPTION TO ELECT REPAYMENT

       The undersigned hereby requests and irrevocably instructs the Operating
Partnership to repay the within Note on the Optional Repayment Date specified on
the face hereof occurring at least 30 but not more than 60 days after the date
of receipt of the within Note by the Trustee at the corporate trust office of
the Trustee's Affiliate, State Street Bank and Trust Company, at 61 Broadway
Street, New York, New York (or at such other addresses of which the Operating
Partnership shall notify the registered holders of the Note of this series).

       (     )   In whole

       (     )   In part equal to $_________________ (must be a whole multiple
                 of $1,000 and the remaining principal amount must be at least
                 $1,000; or if the Note is denominated in a Foreign Currency,
                 rounded integrals of 1,000 units of the Foreign Currency and
                 the remaining principal amount must be at least 1,000 units of
                 the Foreign Currency)

at a price equal to the Repayment Price, determined in accordance with the terms
of the Note.

Signature:                                Please print or type name and address:

-------------------------------------     --------------------------------------
Notice: The signature on this Option
        to Elect Repayment must           --------------------------------------
        correspond with the name as
        written upon the face of the      --------------------------------------
        within instrument in every
        particular without alteration     --------------------------------------
        or enlargement or any change
        whatever.

<PAGE>   14

                                  ABBREVIATIONS

       The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

<TABLE>
<S>                                          <C>
TEN COM--as tenants in common                UNIF GIFT MIN ACT--_____ Custodian_____
                                                               (Cust)         (Minor)
TEN ENT--as tenants by the entireties        Under Uniform Gifts to Minors Act _____
                                                                              (State)
JT TEN--as joint tenants with right of
        survivorship and not as tenants
        in common
</TABLE>

       Additional abbreviations may also be used though not in the above list.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00023-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00023-of-00352.parquet"}]]