1. University of North Carolina Wilmington October 24, 2013 1

2. University of North Carolina Wilmington Purchase of Foundation’s College Road Cinema property by the Endowment Fund 2

3. University of North Carolina Wilmington College Road Cinema Property History Foundation purchased in March 2003 for $1.8M, financed by a bank promissory note UNCW (State of NC) acquired from Foundation in 2004 for $1.8M Subsequent property purchases by the Foundation in 2006, financed by bank promissory notes:  720 St. James Place - $430,000  737 St. James Place - $545,000  84 Lumber; 4702 MacMillan Avenue - $1,500,000 College Road Cinema property appraised in late 2004 for $2.8M Property swap executed in August 2006 between UNCW (State of NC) and the Foundation. UNCW swapped College Road Cinema back to the Foundation for the three properties listed above.  The St. James properties would provide much needed office space for the university. The 84 Lumber site could be used by Facilities.  It was believed at the time that placing College Road Cinema back with the Foundation would enable future development 3

4. University of North Carolina Wilmington Map of Property 4

5. University of North Carolina Wilmington Background: Proposed Purchase At the request of Foundation’s Subcommittee for Cash & Investments, an analysis done for transfer of Foundation’s College Road Cinema property to the BOT of the Endowment Fund of UNCW. Referenced property being held by Foundation for the sole benefit of the University, which utilizes its parking spaces for students. Through a Management Services Agreement (MSA) with the University, UNCW’s Parking operation pays monthly rent to Foundation which covers all costs, including note principal and interest, related to the property. Costs are primarily (2) promissory notes to BB&T which are being amortized through FY 2021 at interest rate of 1 month LIBOR plus 2.05%. 5

6. University of North Carolina Wilmington Benefits of Property Purchase STRATEGY: Endowment to acquire Foundation property at the outstanding note balances to BB&T of approximately $2,027,504, using unrestricted quasi endowment funds. Because Endowment cannot issue or carry debt, Foundation would use cash proceeds to pay off promissory notes. BENEFITS OF IMPLEMENTATION: Interest savings of $185,000 to University Additional savings of $1,480,837 through FY 2021 Guaranteed fixed rate of return to Endowment to support spending Appreciating parcel of real estate, strategically located for future use and development, placed within the Endowment where greatest flexibility can be exercised by management. 6

7. University of North Carolina Wilmington Quasi Endowment Values $ 6,060,170Quasi endowment values prior to property purchase (2,027,504)Purchase of College Road Cinema $4,032,666Quasi endowment values subsequent to purchase 7

8. University of North Carolina Wilmington Action Item Requested Approvals: 1) Use of unrestricted quasi endowment funds in the amount of $2,027,504 to purchase from the Foundation, property known as College Road Cinema. Proceeds from the sale to be used by the Foundation to pay off outstanding debt. 2) Delegation of authority to University management to manage the property and to execute a Management Services Agreement with the UNCW Parking operation. 8

9. University of North Carolina Wilmington Proforma Savings from Purchase of Property 9