TEACHER INSURANCE AND ANNUITY ASSOCIATION
730 Third Avenue
New York, New York 10017-3206
(212) 490-9000
June 9, 1995
Institutional Property Consultants, Inc.
4330 La Jolla Village Drive, Suite 310
San Diego, California 92122
RE: Teachers Insurance and Annuity
Association of America
Real Estate Separate Account;
ERISA Independent Fiduciary
------------------------------
Dear Sirs:
This letter sets forth the terms and conditions under which Teachers
Insurance and Annuity Association of America (the "Company") offers to appoint
Institutional Property Consultants, Inc. ("IPC") to serve as the Independent
Fiduciary, as defined below, under the Employee Retirement Income Security Act
of 1974, as amended ("ERISA") for a new real estate pooled separate account (the
"Account") designed primarily for investment by participants in defined
contribution plans qualified under (Section) 401(a) and (Section) 403(a) of the
Internal Revenue Code of 1986, as amended, ("Code"), Code (Section) 403(b)
plans, and certain individual retirement annuities under (Section) 408 of the
Code.
1. Background
----------
On December 22, 1994 the Company filed an application (the
"Application") with the Department of Labor ("DOL") for exemption from
certain potential prohibited transactions under (Section) 406 of ERISA
and (Section) 4975 of the Code with respect to certain transactions or
classes of transactions involving the establishment and subsequent
administration by the Company of the Account. Among other features, the
Account offers a stand-by liquidity mechanism under which units of
interest in the Account ("Units") may be purchased or sold by the
Company. The Application contemplates that various
Institutional Property Consultants, Inc. Page 2
June 9, 1995
aspects of the Account's operation will be subject to the oversight of
an independent fiduciary ("Independent Fiduciary") which will be a
business organization with substantial real estate investment
experience and which will be familiar with the responsibilities of a
fiduciary with respect to benefit plans under ERISA. The Independent
Fiduciary will act for the exclusive benefit of the plan participants
who elect to participate in the Account.
As of this date, the Application has yet to be approved by the
DOL, although on the basis of discussions to date with the
representatives of the DOL, the Company has no reason to believe that
an exemption with respect to the Account will not be issued in due
course. However, prior to the final disposition of the Application by
the DOL, the Company intends to appoint an Independent Fiduciary who
will undertake responsibility for such activities and such classes of
transactions as are described in the Application, pages 16-33, and for
such other matters as the Company may from time to time request.
Included in the Application are descriptions of the responsibilities of
the Independent Fiduciary. The proposed valuation procedures and rules
for the Account are described in the Application and in Exhibit A to
this Agreement.
2. Compensation
------------
Compensation for services rendered by IPC pursuant to this
Agreement shall be paid from the Account in the amounts and in
accordance with the terms and conditions set forth in Schedule 1
attached hereto.
3. Duties and Responsibilities of the Company
------------------------------------------
The Company is an investment manager, as defined in Section
3(38) of ERISA, with respect to the Account, and shall be primarily
responsible, as a fiduciary under ERISA, for all aspects of the
establishment and administration of the Account. The Company alone
shall be responsible for making determinations with respect to the
acquisition and disposition of properties by the Account and for all
other aspects of the investment of Account assets, subject to the
duties and responsibilities of IPC specifically set forth in the
Application and paragraph 4 hereof.
Institutional Property Consultants, Inc. Page 3
June 9, 1995
4. Duties and Responsibilities of IPC
----------------------------------
A. IPC's duties and responsibilities under this Agreement shall be
those set forth in the Application and as described below:
(1) IPC will review and approve the valuation of the Account
and of the properties held in the Account as outlined on
pages 24-27 of the Application and as more specifically
described in Valuation Procedures and Rules which shall be
adopted for the Account by the Company and which shall be
subject to the approval of IPC. (A copy of the current
draft of the valuation procedures and rules for the
Account is attached as Exhibit A.)
(2) IPC will approve the appointment of all independent
appraisers retained by the Company to perform periodic
valuations of Account properties. For this purpose, the
Company will forward to IPC information provided to the
Company with respect to the background, education and
experience of each such independent appraiser.
(3) IPC may require an appraisal in addition to those
conducted by an independent appraiser appointed as
provided in clause (2) above, when it believes that the
characteristics of a particular property have changed
materially or with respect to any property where it deems
an additional appraisal to be necessary or appropriate in
order to assure a correct Account valuation. IPC will
perform such reviews of Account properties as it may
determine to be necessary or desirable in establishing the
necessity of such additional appraisals. IPC shall have
the authority to designate independent appraisers to be
hired by the Company to perform any such additional
appraisals, but the Company hereby reserves the right to
disapprove any such selection. Accordingly, IPC shall
notify the Company at least fourteen (14) days prior to
the anticipated hiring of any appraiser not previously
approved by the Company. Any such appraiser will be deemed
approved by the Company if the Company fails to object
within fourteen (14) days of receipt of the aforesaid
notice and the Company will, thereupon, hire such
appraiser. The Company may in its sole discretion withdraw
its approval
Institutional Property Consultants, Inc. Page 4
June 9, 1995
of an appraiser at any time prior to hiring such appraiser
for future appraisals by giving a notice of withdrawal of
its approval.
(4) IPC shall review purchases and sales of Units by Account
participants and the Company to assure that correct
Account values are applied. IPC shall also review the
fixed repayment schedule applicable to the redemption of
Seed Money Units during the Start Up Period, as defined in
the Application, as approved by the New York Insurance
Department. With respect to the foregoing, IPC may rely
upon the truth, completeness and correctness of
information provided to it by the Company or by the
independent auditor designated by the Company with respect
to the Account.
(5) After (and, if necessary, during) the Start Up Period, as
defined in the Application, IPC will determine with the
Company the appropriate "trigger" guidelines relating to
the level of the Company's ongoing ownership of Liquidity
Units in the Account, as defined in the Application, and
the manner in which any reduction of the Company's
participation in excess of such guidelines is to be
effected as contemplated under the Application. If IPC and
the Company agree that asset sales may be required in
order to reduce the Company's ownership of Units in the
Account, IPC will participate in the planning of any such
program of sales, including the selection of the
properties to be sold and the guidelines to be followed in
making such sales.
(6) In the event of the termination of the Account as
described on pages 27-29 of the Application, IPC will
approve the sale of Account properties and supervise
Account operation during the Wind Down Period (as defined
in the Application). Such period will commence with the
Company's notice to Account participants of its
termination of the Account and will end on the date that
no Units are held by any Participant (and, if applicable,
Participating Plans), as defined in the Application.
(7) IPC will review and approve the investment
Institutional Property Consultants, Inc. Page 5
June 9, 1995
guidelines established by the Company for the Account and
will monitor the conformity of all property acquisitions
and sales with the requirements of such guidelines.
(8) With respect to any other transaction or matter involving
the Account that is submitted to IPC by the Company, IPC
will review said transaction or matter in order to
determine whether it is fair to the Account and in the
Account's best interests.
B. In the event that the Company or the DOL or any other
governmental agency requires or requests IPC to perform
additional functions reasonably related to the type of review
described herein, or to undertake duties with respect to the
Account beyond those specifically enumerated herein, these
additional duties and functions shall be deemed to be included
among the duties of IPC under this Agreement, provided that:
(1) The Company requests IPC to perform such activity in
writing; and
(2) IPC and the Company determine the nature and amount of any
additional compensation that may be appropriate with
respect to such additional duties. If IPC and the Company
are not able to agree upon the nature and amount of any
additional compensation, IPC and the Company hereby agree
to submit any disputed issues to arbitration and to be
bound by the results thereof; provided, however, that IPC
shall nevertheless perform the additional duties described
above during the time required for a final determination
to be made with respect to the nature and/or amount of any
additional compensation that it may receive.
C. IPC will meet with the Company on a quarterly basis to review
the activities of the Account and the actions that IPC has
taken under this Agreement. IPC will submit to the Company a
summary report from time to time as it may deem necessary or
appropriate, but no less frequently than annually. Such report
shall be a written report that summarizes and explains all
actions and activities that IPC has undertaken since the
submission of the last such report or the commencement of its
terms, except those actions and activities that IPC in its
judgment deems to be not material. All or
Institutional Property Consultants, Inc. Page 6
June 9, 1995
any part of any such report may, after consultation with IPC,
be provided by the Company to any Account participant or to the
DOL or any other governmental agency. IPC shall maintain
appropriate records of its actions and activities under this
Agreement and will allow the Company to review such records
during normal business hours upon reasonable prior request by
the Company, and the Company, after consultation with IPC, may
provide the results of any such review to the DOL or to any
other governmental agency.
D. IPC may make all reasonable inquiries, consult with whomever it
reasonably deems necessary, do all acts that are reasonably
necessary to the performance of its duties, and review such
Company documents as are reasonably appropriate for carrying
out its responsibilities under this Agreement. All work to be
performed pursuant to this paragraph 5, may be performed during
normal business hours at the Company's Home Office, 730 Third
Avenue, New York, New York 10017 or such other place as may be
reasonably designated by IPC, including IPC's offices.
5. Representations
---------------
IPC represents and agrees that:
A. IPC has at least five years of experience with respect to
commercial real estate investments.
B. The gross income which is received by IPC (or any partnership
or corporation of which IPC is a 10 percent or more partner or
shareholder) from the Company and its affiliates (as defined in
any proposed exemption issued with respect to the Account) for
any fiscal year ending during the term of this Agreement shall
not exceed 5 percent of its annual gross income from all
sources for the preceding fiscal year. Such income limitation
will include services rendered to the Account as the
Independent Fiduciary under any prohibited transaction
exemption granted by the DOL. IPC will provide, on an annual
basis, a report to the Company of the gross income it receives
from the Company as a percentage of the gross income received
during the preceding fiscal year.
C. IPC shall not (i) acquire any property from, sell any
Institutional Property Consultants, Inc. Page 7
June 9, 1995
property to or borrow any funds from, the Company or any of its
affiliates during the period for which it serves as an
Independent Fiduciary under this Agreement and for a period of
six months thereafter, or (ii) negotiate any such transaction
described in (i) during the period that IPC serves as the
Independent Fiduciary.
D. In the event that the DOL requires additional representations
by IPC, it is agreed that IPC will make any such reasonably
required representations that are true in fact.
6. Independent Status
------------------
As the Independent Fiduciary, IPC shall not be an agent of the
Company. In keeping with this status, IPC shall be free to control its
method of fulfilling its responsibilities within the framework of its
obligations to the Participants and their beneficiaries (and, if
applicable, Participating Plans), as defined in the Application, and to
the Company.
7. Fiduciary Standards/Confidentiality
-----------------------------------
Notwithstanding any other provision of this Agreement, it is
understood that IPC will act as a fiduciary, as defined in ERISA, with
respect to the Participants and their beneficiaries (and, if
applicable, Participating Plans) that invest in the Account, and that
IPC will perform its duties under this Agreement for the exclusive
benefit of such Participants, their beneficiaries and Participating
Plans and in conformity with the legal requirements imposed upon it by
ERISA.
It is understood that IPC will not unnecessarily engage in any
activity in connection with this appointment that is adverse to the
interest of the Company. IPC may provide similar independent fiduciary
services with respect to other benefit plans subject to ERISA; provided
that IPC does not use or disclose in such relationships confidential
information obtained by it in the course of providing services under
this Agreement.
Upon termination of this Agreement, IPC will disclose to the
Company all material in its possession that has been
Institutional Property Consultants, Inc. Page 8
June 9, 1995
released to it by the Company or produced pursuant to this Agreement.
Such material may be retained by IPC if it deems such retention to be
necessary to protect its interests or the interests of the Participants
and their beneficiaries (and, if applicable, Participating Plans) that
have invested in the Account. If IPC retains any such material, it
shall promptly notify the Company in writing of such action. The
aforesaid notice shall include an itemized list of all retained
documents and other materials. Upon receipt of the aforesaid notice, or
at any time thereafter, the Company may at its option, require that IPC
deliver all such retained material to the person who succeeds to its
position as Independent Fiduciary. However, IPC may retain any
materials that it deems necessary to protect its interests, provided
that copies of said materials are furnished to either the Company or
IPC's successor as Independent Fiduciary, upon request. IPC will not at
any time during the term of this Agreement or thereafter disclose any
of the Company's trade secrets, confidential business methods, or any
other confidential information which it may have acquired during its
service as Independent fiduciary under this Agreement.
8. Personnel
---------
IPC agrees that, without limiting its responsibilities under
this Agreement or under ERISA, primary responsibility for the
performance of the services contemplated under this Agreement shall be
assigned to Barbara R. Cambon and that it will use its best efforts to
assure that Barbara R. Cambon continues to act in such capacity during
the term of this Agreement. In the event that Barbara R. Cambon does
not, for any reason, continue to serve in such capacity, IPC agrees
that it will assign primary responsibility for the duties contemplated
under this Agreement to a senior employee of similar experience and
ability.
9. Effective Date/Termination/Notice
---------------------------------
A. This Agreement shall become effective on the date of receipt by
the Company of a copy of this Agreement that has been executed
by IPC and by an authorized officer of the Company.
B. IPC's appointment shall commence on the date this Agreement
becomes effective for a five year term, and
Institutional Property Consultants, Inc. Page 9
June 9, 1995
shall be renewable by the Company, from time to time and
without limitation on the number of renewals, for additional
three (3) year terms. Upon expiration of IPC's appointment
without renewal this Agreement shall terminate. IPC may
terminate this Agreement at any time but must give at least 180
days prior written notice to the Company. The Company may
terminate this Agreement and IPC's appointment prior to the
expiration of the term of its appointment if: (1) a special
subcommittee of the Company's Mortgage Committee, after an
annual revue, decides to terminate the Agreement upon 180 days
prior written notice; or (2) if the Company determines that IPC
has breached any representation set forth in paragraph 5 or
that IPC has failed to carry out its responsibilities under
this Agreement in an effective manner, or is unable to do so.
The Company may terminate this agreement if it determines that
a merger or restructuring of IPC with or into another entity
may cause a conflict of interest that shall impair IPC's
ability to carry out its responsibilities under this Agreement
in an effective manner. The Company may terminate this
Agreement at any time prior to the date on which Units are
acquired by a Participant (or, if applicable, Participating
Plan). In the event that IPC's term shall terminate as
described in this paragraph 9B, IPC shall be compensated only
for services performed by it prior to the date of such
termination.
C. Unless otherwise expressly provided herein, any notice, demand
or request under this Agreement shall be deemed to have been
properly given and served by depositing the same in the United
States mail, addressed as provided herein, postpaid and
registered or certified with return receipt requested. Any such
notice, demand or request shall be effective upon being
deposited in the United States mail. However, the time period
in which a response or action to any such notice, demand or
request must be given or taken shall commence to run from the
date of receipt on the return receipt of the notice, demand or
request by the addressee thereof. Rejection or other refusal to
accept or the inability to deliver because of changed address
of which no notice was given shall be deemed to be receipt of
the notice, demand or request. Notice to the Company shall be
addressed to Joan H. Fallon, Director, Teachers Insurance and
Annuity Association of America, 730 Third Avenue, New York, New
York, 10017-3206, with a copy to
Institutional Property Consultants, Inc. Page 10
June 9, 1995
Jeanne Cullinan Ray, Vice President and Chief Counsel,
Teachers Insurance and Annuity Association of America, 730
Third Avenue, New York, New York, 10017-3206, (or such other
person or persons as the Company may designate). Notice to IPC
shall be addressed to Barbara R. Cambon, Institutional
Property Consultants, Inc., 4330 La Jolla Village Drive, Suite
310, San Diego, California 92122.
10. Indemnification and Insurance
-----------------------------
A. Subject to the limitations in clause C of this paragraph 10,
IPC shall be indemnified and saved harmless by the Account from
and against any and all claims of liability arising in
connection with the exercise of its duties and responsibilities
to the Account by reason of any act or omission, including all
expenses reasonably incurred in the defense of such act or
omission, unless (1) it shall be established by final judgement
of a court of competent jurisdiction that such act or omission
involved a violation of the duties imposed by Part 4 of Title I
of ERISA on the part of IPC or (2) in the event of a settlement
or other disposition of such claim involving the Account, it is
determined by written opinion of independent counsel acceptable
to both parties that such act or omission involved a violation
of the duties imposed by Part 4 of Title I of ERISA on the part
of IPC.
B. Subject to the limitation in clause C of this paragraph 10, the
Account shall pay expenses (including reasonable attorneys'
fees and disbursements), judgments, fines and amounts paid in
settlement incurred by IPC in connection with any of the
proceedings described above, in advance of the final
disposition of such proceedings, provided that (1) IPC shall
repay such advances to the Account, plus reasonable interest,
if it is established by a final judgment of a court of
competent jurisdiction, or by written opinion of independent
counsel under the circumstances described in section A above,
that IPC violated its duties under Part 4 of Title I of ERISA,
and (2) IPC shall, in the discretion and upon the request of
the Company, provide a bond or make other appropriate
arrangements for repayment of advances. Notwithstanding the
foregoing, no such advances shall be made in connection with
any claim against IPC that
Institutional Property Consultants, Inc. Page 11
June 9, 1995
is made by the Account or the Company, provided that upon the
final disposition of such claim, the expenses (including
reasonable attorneys' fees and disbursements), judgments, fines
and amounts paid in settlement incurred by IPC shall be
reimbursed by the Account to the extent provided above.
C. The indemnification provided under clauses A and B of this
paragraph 10 shall apply only to claims and expenses not
actually covered by insurance. IPC agrees to maintain
professional liability coverage that includes coverage for its
responsibilities under this Agreement, with limits of at least
$1 million, throughout the term of this Agreement.
11. Entire Agreement
----------------
This letter contains the entire agreement between the parties.
However, where the text of this Agreement contains express reference to
the Application, or specific paragraphs of the Application, it is the
intention of the parties that the Application be incorporated in this
Agreement for the purpose of construing the meaning of such express
references. This Agreement may not be changed orally or by conduct but
only by agreement in writing signed by both parties.
12. No Waiver
---------
Failure to insist upon strict compliance with any of the terms,
covenants, or conditions of this Agreement shall not be deemed a waiver
of such term, covenant, or condition, nor shall any waiver or
relinquishment of any right or power hereunder at any one or more times
be deemed a waiver or relinquishment of such right or power at any
other time or times.
13. Severability
------------
The invalidity or unenforceability of any provision of this
Agreement shall in no way affect the validity or enforceability of any
other provision.
Institutional Property Consultants, Inc. Page 12
June 9, 1995
14. Choice of Law
-------------
This Agreement and performance hereunder is subject to ERISA.
However, to the extent that this Agreement and performance hereunder is
not governed by ERISA or other applicable federal law, the laws of the
State of New York shall apply. The choice of law embodied in this
paragraph 15 shall be effective irrespective of the jurisdiction in
which any suit, action or proceeding may be instituted.
Please signify your acceptance by signing below and returning a copy of
this letter to the Company.
Sincerely,
TEACHERS INSURANCE AND ANNUITY
ASSOCIATION OF AMERICA
By /s/ Joan H. Fallon
------------------
Joan H. Fallon
Accepted:
Institutional Property Consultants, Inc.
By: /s/ Barbara R. Cambon Date: June 9, 1995
---------------------- ------------
Barbara R. Cambon
SCHEDULE 1
TEACHERS INSURANCE AND ANNUITY ASSOCIATION OF AMERICA
FIDUCIARY COMPENSATION SCHEDULE
FOR REAL ESTATE SEPARATE ACCOUNT
--------------------------------
The annual fee payable to IPC shall be $100,000 per year plus its
reasonable direct out-of-pocket expenses. The annual fee shall be paid
quarterly, on first business day of each quarter, in advance, with the first
quarterly payment due on July 3, 1995. Direct out-of-pocket expenses shall be
reimbursed as incurred and shall be limited to reasonable travel-related
expenses, including transportation, hotels, and meals incurred in the
performance of IPC's duties. IPC shall, however, bear the cost of all operating
and administrative expenses relating to the performance of its obligations and
duties under this Agreement.
EXHIBIT A
TEACHERS INSURANCE AND ANNUITY ASSOCIATION OF AMERICA
VALUATION PROCEDURES AND RULES
FOR REAL ESTATE ACCOUNT
-----------------------
This outline summarizes the basic elements of the valuation procedures
and rules for the Account.
Basic Principles
- ----------------
1. The valuation of equity real estate holdings is not an exact science;
it requires appraisals which are independent estimates of market
value.
A. Sales are the best measure of the value of equity real estate
holdings, but since they don't occur frequently, appraisals are
generally believed to be the best estimate of value at a given
point in time.
B. Independent appraisals are expensive, and a balance is required
between the accuracy of the estimate of value and the cost to
the Account of additional appraisals.
2. The Account's valuation procedures and rules are under the direct
supervision of an Independent Fiduciary and operate within guidelines
and limits established by the Independent Fiduciary.
Valuation Procedures for the Account
- ------------------------------------
1. Independent Fiduciary. The valuation of Account properties is
conducted under the supervision of the Independent Fiduciary.
A. The valuation procedures and rules will be approved by the
Independent Fiduciary. They cannot be changed without the
consent of the Independent Fiduciary.
B. The rules will limit the extent to which a property's value can
change without the prior approval of the Independent Fiduciary.
C. The Independent Fiduciary may require a new independent
appraisal of any property at any time.
2. Initial Valuation. The initial value of each property will be the
price at which it is acquired (including all expenses relating to
purchase, such as acquisition fees, legal fees and expenses, and other
closing costs).
3. Scheduled Valuations.
---------------------
A. Independent Appraisals. Each property will be valued by an
independent appraiser at least once per year.
(i) The appraisal cycle will be set up so that properties
will be independently appraised in as even a pattern
as practical over the course of a calendar year. This
will be done by assigning to each property, at the
time it is purchased, the month in which its
independent appraisal will occur each year.
(ii) The independent appraisers selected by TIAA must be
approved by the Independent Fiduciary.
(iii) The following would be among the factors generally
considered in the annual appraisal:
- description and condition of the property
- regional and local market conditions
- current and projected occupancy levels
- highest and best use of the property
- cost approach
- sales comparison approach
- income approach including discounted cash flow
analysis
B. Quarterly Updates. TIAA's staff will update the independent
appraisals on a quarterly basis.
(i) Appraisal assumption (e.g. discount rates and rates
of inflation) will be reviewed and revised as
necessary.
(ii) Occupancy levels, cash flow, etc. will be reviewed as
well as regional and local market conditions.
C. Accruals. The Accumulation, Seed and Liquidity Unit Values of
the Account may change by a daily accrual of projected income
and expenses during a given month. The Annuity Unit values of
the Account may change on the last calendar day of each month
by the accrual of projected income and expenses for that month.
4. Special Adjustments. The value of a given property could be adjusted at
any time to reflect any immediate or significant changes in value.
5. Limits and Supervision
A. The Independent Fiduciary receives quarterly valuation reports
from TIAA which, in addition to their involvement, detail
Account activity. The format of these reports will be developed
with the Independent Fiduciary. The Fiduciary will, therefore,
be familiar with Account properties.
B. Daily accruals of income and expenses, as well as incremental
adjustments in property value (from quarterly updates), will be
reported to the Independent Fiduciary as they are included in
the Unit value calculation.
C. Material changes in value (as described in D. below) and all
independent appraisals will be approved by the Fiduciary prior
to inclusion in a Unit Value calculation.
D. TIAA cannot, without the prior approval of the Independent
Fiduciary, change the values of one or more properties if such
changes would exceed the following limits:
(i) The adjustment would result in a 6 percent increase
or decrease in the value of a given property since
the last independent appraisal of that property;
(ii) The adjustments would result in a greater than 2
percent change in the value of the Account since the
prior monthly valuation date; or
(iii) The adjustments would result in a greater than 4
percent change in the value of the Account within any
quarter.
In addition, the Independent Fiduciary will approve any adjustments
made within the first three months after the receipt of the annual appraisal
performed by an independent qualified appraiser.
TEACHER INSURANCE AND ANNUITY ASSOCIATION
730 Third Avenue
New York, New York 10017-3206
(212) 490-9000
October 5, 1995
Institutional Property Consultants, Inc.
4330 La Jolla Village Drive
San Diego, California 92122
Re: Teachers Insurance and Annuity Association
of America Real Estate Separate Account;
ERISA Independent Fiduciary
------------------------------------------
Dear Sirs:
This letter supplements the June 9, 1995 letter setting forth the terms
and conditions under which Teachers Insurance and Annuity Association of America
(the "Company") appointed Institutional Property Consultants, Inc. ("IPC") to
serve as an Independent Fiduciary under the Employee Retirement Income Security
Act of 1974 ("ERISA") for its Real Estate Account ("Account").
Section 4A. of the June 9, 1995 letter setting forth the duties and
responsibilities of IPC is amended by the addition of new subparagraph (9) to
read as follows:
(9) IPC will review and approve in advance any exercise of discretion
by the Company to accelerate the fixed repayment schedule applicable to
the redemption of Seed Money Units and will only give its approval upon
determining that it would be to the benefit of the Account's
participants to do so.
Sincerely,
TEACHERS INSURANCE AND ANNUITY
ASSOCIATION OF AMERICA
By: /s/ Joan H. Fallon
------------------
Joan H. Fallon
Accepted:
INSTITUTIONAL PROPERTY CONSULTANTS, INC.
By: /s/ Barbara R. Cambon Date: October 5, 1995
--------------------- ---------------
Barbara R. Cambon
TEACHER INSURANCE AND ANNUITY ASSOCIATION
730 Third Avenue
New York, New York 10017-3206
(212) 490-9000
June 24, 1996
Institutional Property Consultants, Inc.
4330 La Jolla Village Drive
San Diego, California 92122
Re: Teachers Insurance and Annuity Association
of America Real Estate Separate Account;
ERISA Independent Fiduciary
------------------------------------------
Dear Sir or Madam:
This letter supplements the June 5, 1995 and the October 5, 1995
letters setting forth the terms and conditions under which Teachers Insurance
and Annuity Association of America (the "Company") appointed Institutional
Property Consultants, Inc. ("IPC") to serve as an Independent Fiduciary under
the Employee Retirement Income Security Act of 1974, as amended ("ERISA") for
its Real Estate Account ("Account").
Section 9B. of the June 9, 1995 letter setting forth the
termination provisions is deleted and replaced by a new Section
9B. to read as follows:
IPC's appointment shall commence on the date this Agreement becomes
effective for a five year term, and shall be renewable by the Company,
from time to time, and without limitation on the number of renewals,
for additional three (3) year terms. The Company shall delegate to a
special subcommittee of the Company's Mortgage Committee (the
"Subcommittee") the sole power to renew any such appointment and the
Subcommittee shall not renew the appointment if forty percent (40%) of
the Subcommittee members disapprove
Institutional Property Consultants, Inc. Page 2
June 24, 1996
of such renewal. Upon expiration of IPC's appointment without renewal
this Agreement shall terminate. IPC may terminate this Agreement at any
time but must give at least 180 days prior written notice to the
Company. The Company must terminate this Agreement and IPC's
appointment prior to the expiration of the term of its appointment if a
majority of the Special Subcommittee members determines that: (1) IPC
has breached any representation set forth in paragraph 5; (2) that IPC
has failed to carry out its responsibilities under this Agreement in an
effective manner, or is unable to do so; or (3) that a merger or
restructuring of IPC with or into another entity may cause a conflict
of interest that shall impair IPC's ability to carry out its
responsibilities under this Agreement in an effective manner. In the
event that IPC's term shall terminate as described in this paragraph
9B., IPC shall be compensated only for services performed by it prior
to the date of such termination.
Sincerely,
TEACHERS INSURANCE AND ANNUITY
ASSOCIATION OF AMERICA
By: /s/ Joan H. Fallon
------------------
Joan H. Fallon
Accepted:
INSTITUTIONAL PROPERTY CONSULTANTS, INC.
By: /s/ Barbara R. Cambon Date: June 27, 1996
--------------------- -------------
Barbara R. Cambon
TEACHERS INSURANCE AND ANNUITY ASSOCIATION
730 Third Avenue
New York, New York 10017-3206
(212) 490-9000
February 11, 1997
Institutional Property Consultants, Inc.
4330 La Jolla Village Drive
San Diego, California 92122
Re: Teachers Insurance and Annuity Association
of America Real Estate Separate Account;
ERISA Independent Fiduciary
------------------------------------------
Dear Sir or Madam:
This letter supplements the June 5, 1995, the October 5,
1995, and the June 24, 1996 letters setting forth the terms and
conditions under which Teachers Insurance and Annuity Association
of America (the "Company") appointed Institutional Property
Consultants, Inc. ("IPC") to serve as an Independent Fiduciary
under the Employee Retirement Income Security Act of 1974, as
amended ("ERISA") for its Real Estate Account ("Account").
Section 9B. of the June 9, 1995 letter, as amended by the
June 24, 1996 letter, setting forth the termination provisions is
deleted and replaced by a new Section 9B. to read as follows:
IPC's appointment shall commence on the date this Agreement
becomes effective for a five year term, and shall be
renewable by the Company, from time to time, and without
limitation on the number of renewals, for additional three
(3) year terms. The Company shall delegate to a special
subcommittee of the Company's Investment Committee (the
"Subcommittee") the sole power to renew any such appointment
and the Subcommittee shall not renew the appointment if forty
percent (40%) of the Subcommittee members disapprove of such
renewal. Upon expiration of IPC's appointment without
renewal this Agreement shall terminate. IPC may terminate
this Agreement at any time but must give at least 180 days
prior written notice to the Company. The Company must
terminate this Agreement and IPC's appointment prior to the
expiration of the term of its appointment if a majority of
the Special Subcommittee members determines that: (1) IPC has
breached any representation set forth in paragraph 5; (2)
Institutional Property Consultants, Inc. Page 2
February 11, 1997
that IPC has failed to carry out its responsibilities under
this Agreement in an effective manner, or is unable to do so;
or (3) that a merger or restructuring of IPC with or into
another entity may cause a conflict of interest that shall
impair IPC's ability to carry out its responsibilities under
this Agreement in an effective manner. In the event that
IPC's term shall terminate as described in this paragraph
9B., IPC shall be compensated only for services performed by
it prior to the date of such termination.
Sincerely,
TEACHERS INSURANCE AND ANNUITY
ASSOCIATION OF AMERICA
By: /S/ Joan H. Fallon
-------------------------
Joan H. Fallon
Accepted:
INSTITUTIONAL PROPERTY CONSULTANTS, INC.
By: /s/ Barbara R. Cambon Date: 2/11/97
---------------------
Barbara R. Cambon