UCF ITN #1714JP Addendum Questions

  1. Could more details be provided on the pledges such as the timing and collection of the pledges. Also what form are these pledges coming in as, written or verbal pledges?

Response: See attached Downtown Public Donor Pledge Schedule.

  1. For the funding of the building, it’s listed that $20MM will be from the UCF “Capital Fund” can you please clarify what fund this is referring to?

UCF has set aside $20MM of its internal funds aside for the construction of this project.

  1. Can additional details be provided regarding the project? Such as number of classroom and offices?

Response: Here is a link sharing information on our project:

  1. The RFP stated a joint agreement between the City of Orlando, UCF and Valencia. Please expand on the scope of the joint agreement.

Response: UCF and Valencia College share a long history of partnering together to advance educational opportunities and access across Central Florida through programs like DirectConnect to UCF. The institutions will share academic space on the new campus and would partner together on academic program offerings and student support services. UCF and Valencia also will work with Orange County Public Schools on a new K–8 school in Parramore and other community initiatives.

  1. Pledge’s depository account. The ITN does not address where the collected donations will be held. Will the Foundation consider depositing collected donations in a deposit account held with the Lender?

Response: The donations will be made to the Foundation. Upon receipt the donations will transferred to the university during the construction period less any payment that may be required by the LOC. After the construction period, the payments will be transferred via the Corporation to the bank to pay down the note associated with the LOC.

  1. In September 2017, UCF Finance Corporation issued a Series 2017 term loan of $63,359,000. Can you provide us with the terms of that financing (i.e. note term, variable or fixed rate, and if variable, the pricing mechanism).

Response: The UCF Financing Corp is a special purpose DSO the University uses to finance specify projects. UCF issued the Series 2017 Note was to refinance the UCF Health Facilities Authority Capital Improvement Revenue Bonds, Series 2007 whose proceeds were used to build the Burnett Bio Medical Research Facility at the UCF’s Medical College at Lake Nona. The Series 2017 Notes are secured by Contract and Grant Revenues. The revenues for the Series 2017 Note are not pledged to the proposed Downtown Campus Line.The financing is a 20 year fixed rate bank loan at 2.4% with a 15 year put.

  1. Do any of the pledges over $1MM have any contingencies, are pledge agreements available for review, or are there any reasons the pledges could be terminated?

Response: One pledge over $1MM had a contingency that the project had to break ground. That contingency has been satisfied.

  1. As the Creative Village is part of a P3 project with many different components, would delays in the other components impact the completion and opening of the Downtown Campus for UCF/Valencia for the Fall 2019 term?

Response: Delays in other parts of the Creative Village project will not delay the opening of the Downtown Campus. The campus is on schedule to open in Fall 2019.

  1. The newspaper articles emphasize this is Phase 1 with total investment of $485MM – what are the other phases and what is the timing?

Response: Future phases includes the construction of additional academic facilities. The timing will depend upon the growth and demand from the Phase 1 along with the ability to obtain future funding. There are no proposed dates for the future phases as of yet.

  1. Did the public school linked to the downtown campus project open yet? If not, when is it anticipated to be completed?

Response: The public school is open.

  1. Is the $4.5 million received to date available to cover interest payments on line of credit draws?

Response: It will be used for construction and can be used to cover interest payments.

  1. Does the $50,000 drawdown under the tax-exempt loan at closing meet the tax requirements for drawdown facilities? Or are those tax requirements not applicable to this facility?

Response: Yes, the $50,000 drawdown meets the tax requirements.

  1. The drawdown schedule provided does not reflect the outstanding cash balance on hand coming from the approximately $40 million combined state appropriations and the UCF “Capital Fund”. Have these proceeds been fully received?

Response: The $40M has been received.

  1. With respect to the drawdown schedule and LOC Plan provided, please provide the underlying assumptions governing the receipt of $4.5 million in proceeds from donors in December 2018, and from August 2019 annually thereafter. Specifically, please provide the breakdown (by donor) of those amounts and timing for full collection of each pledge by donor. Is the borrower open to establishing an account to deposit pledged funds at the lending institution?

Response: As stated in Question 5 above the Foundation has received to date approximately $4.5M in cash to be used towards the project less any accrued interest on the Line. Upon completion of the Project all donations will be transferred directly to the Bank via the Corporation. (see Downtown Pledge Donor for Payment Schedule).

  1. Is it correct to assume that the pledge loan repayment timeline/schedule provided may be shorter given the faster collection of donor pledges than originally forecasted?

Response: Yes.

  1. Please provide a copy of the operating agreement (or other such similar agreement) governing the Foundation and the Finance Corporation with respect to this project.

Response: There will be no operating agreement for this financing. Draws on the line will simply transferred to the University to build the building. There will be an assignment Agreement between the Finance Corporation assigning the Foundation’s interest in the pledge payments to the Finance Corporation.

  1. If not addressed by #5 above, please provide a copy of the applicable agreement governing the transfer or assignment of pledge proceeds between the Foundation and the Finance Corporation with respect to this project.

Response: This has not been drafted at this point in time but will be in a form acceptable to the bank.

  1. Once cash from pledges for the project is received by the Foundation, are those funds then classified as Restricted?

Response: Yes.

  1. Please provide a copy/template of the pledge agreement between donors and UCF Foundation being utilized for this project.

Response: See attached Downtown Building Fund DRAFT Donor template.

  1. Are there any specific provisions in the Dr. Phillips pledge agreement that are materially different from the other executed pledge agreements received to date? If so, what are they?

Response: No.

  1. If not addressed by #8 above, are there specific construction achievements or timing hurdles that must be achieved before donors are to release proceeds to the Foundation.

Response: None.

  1. Is there prior history of contributions by Dr. Phillips, Inc. to either UCF Foundation or the University within the past 5-10 years? Is so, please provide such amounts.

Response: Donor information is confidential.

  1. Specifically with respect to the project, who is the general contractor and is the construction contract a fixed price (or guaranteed maximum price) contract?

Response: The project will have a Guaranteed Maximum Price. Here is a link:

  1. The ITN states the University of Central Florida grants a lien on a pledge payment to the Corporation (Borrower) and the Corporation will grant the Lender a lien on the pledge payments. However, the pledges are received by the Foundation, not the Borrower. How will the Lender legally have security to the pledges? What type of agreement will there be between the Foundation and the Corporation that the Lender would be a party to?

Response: The University of Central Florida Foundation, Inc. will grant a lien on pledge payments it receives to the Corporation. The pledge agreements between the Foundation and the donors will not be assigned to the lender.

  1. Can a form of the pledge agreement with the donors be provided? Is the Borrower willing to given an assignment of the pledge agreements to the Lender?

Response: The Foundation will not assign any interest in the pledge agreements with the donors and the lender will have no rights to enforce a pledge agreement with a donor. The Foundation will provide a form of a pledge agreement for this project. In the event a donor defaults the Foundation will endeavor to replace the pledge with a new agreement.

  1. Will the facility be secured by all pledge payments received by the Foundation? Or only those ear-marked / designated for this project?

Response: The security for this loan will only be the pledges for this project. It was a specific capital campaign

  1. The requested facility amount is $13.65MM, and the ITN states the University expects to receive additional pledges and would like the ability to increase the line as additional pledges are received. Can you state a maximum facility amount the Borrower would be interested in subject to adequate pledge receivables outstanding? If additional pledges are received, would the project size grow, or would it reduce the use of funds from the capital account? Or something else?

Response: While the University has received a commitment from Orange County for $3 million timing of the payments have not been finalized and not included in $13.6 million request if prior to closing the University finalizes the County’s payment schedule or receives additionally pledges, subject to the bank’s approve, negotiate an increase Line par amount. A maximum amount cannot be determined at this time.

  1. The total cost of the project is estimated to be $60MM, with $20MM coming from approved State appropriations, $20MM coming from the UCF Capital Fund, and the remaining $20MM coming from donations pledged. How much is currently in the UCF Capital Fund?

Response: The UCF Capital Fund has $20MM.

  1. Is the FYE 06/30/2017 audit available for UCF Finance Corporation?

Response: See attached UCF FinanceCorp FS 6 30 17.

  1. Is the FYE 06/30/2017 audit (or draft) available for the University?

Response: See attached UCF Financial Draft.

  1. Are the programs being housed at the project facility new to the University, or existing programs being relocated from another building?

Response: Existing programs will be relocated from the main campus to the downtown campus.

  1. What would the secondary source of repayment be in the event there is an issue with the pledges? Would the Lender have claim to any other financial wherewithal of the Corporation or the Foundation on an unsecured basis?

Response: There will be no secondary source of repayment, the lender will not claim to any other financial wherewithal of the Corporation or the Foundation on an unsecured basis.

  1. The ITN mentions that the University will cover cost overages, is this part of an official agreement? Will there be any document supporting that?

Response: There is no official agreement. This is the university’s project and it is committed to its success.

  1. Commitment vs Proposal: The ITN discusses a request for a proposal but there is a mention of a commitment. Is the Finance Corporation needing a formal proposal or actual loan commitment on February 13th?

Response: The Corporation is looking for a proposal that explains the commitment the proposer is willing to make.

  1. The ITN mentions the availability of a pledge report/schedule. Is that something that can be provided now as part of our review?

Response: See the current Pledge Schedule attached.

  1. Are the $40,000M in funds from the State and UCF Capital Fund 100% committed and available at the start of construction?

Response: Yes.

  1. Are there signed pledge commits/agreements from the donors that can be provided for review?

Response: Donor information is confidential.