$24,385,000 western washington university student recreation … · 2012-04-17 · $24,385,000 ....

OFFICIAL STATEMENT DATED APRIL 10, 2012

NEW ISSUE MOODY’S RATING: A1 BOOK-ENTRY ONLY STANDARD & POOR’S RATING: A+ (See “RATINGS,” herein)

In the opinion of K&L Gates LLP, Bond Counsel, assuming compliance with certain covenants of the University, interest on the Bonds is excludable from gross income for federal income tax purposes under existing law. Interest on the Bonds is not an item of tax preference for purposes of either individual or corporate alternative minimum tax. Interest on the Bonds may be indirectly subject to corporate alternative minimum tax and certain other taxes imposed on certain corporations. See “TAX MATTERS” herein for a discussion of the opinion of Bond Counsel.

$24,385,000 Western Washington University

Student Recreation Fee Revenue and Refunding Bonds, 2012

Dated: As of the Delivery Date Due: May 1, as shown on inside cover

The Western Washington University (the “University”) Student Recreation Fee Revenue and Refunding Bonds, 2012 (the “Bonds”) will be issued as fully registered bonds under a book-entry system and, when issued, will be registered in the name of Cede & Co., as nominee of The Depository Trust Company (“DTC”), in New York, New York. DTC will act as securities depository for the Bonds. Individual purchases of interests in the Bonds will be made in book-entry form only, in the principal amount of $5,000 or any integral multiple thereof within a single maturity. Purchasers of such interests will not receive certificates representing their interests in the Bonds. Principal and interest are payable directly to DTC by the fiscal agency of the state of Washington (currently The Bank of New York Mellon in New York, New York), as registrar and paying agent (the “Registrar”) for the Bonds.

Interest on the Bonds is payable semiannually on each May 1 and November 1, commencing November 1, 2012. Principal of the Bonds is payable on May 1 in each of the years shown on the inside cover. Upon receipt of payments of principal and interest, DTC is obligated to remit such principal and interest to the DTC Participants (as such term is defined herein) for subsequent disbursement to the purchasers of beneficial interests in the Bonds, as described under the caption “THE BONDS” herein.

Proceeds of the Bonds will be used to pay the cost of refunding a portion of the University’s Student Recreation Fee Revenue Bonds, Series 2002 for the purpose of debt service savings, to pay a portion of the cost of design, construction and improvement to facilities of the student recreation center, and to pay costs of issuance of the Bonds.

The Bonds are subject to redemption prior to their stated maturity date as described herein.

The Bonds are special revenue fund obligations of the University, payable solely from the revenues of the Recreation Center and other revenues deposited into the Bond Fund. The University has pledged to deposit Recreation Center Revenues into the Bond Fund at the times and in the amounts sufficient to pay and redeem the Bonds when due. The University has reserved the right to issue bonds in the future having a parity of lien on Recreation Center Revenues. The Bonds are not an obligation, either general or special, of the state of Washington, nor a general obligation of the University. The University has no taxing power.

This cover page contains certain information for quick reference only. A full review should be made of the entire Official Statement. The offering of the Bonds to potential investors is made only by means of the entire Official Statement.

The Bonds are offered when, as and if executed and delivered by the University and accepted by the Underwriter, and are subject to receipt of the legal opinion of K&L Gates LLP, Seattle, Washington, Bond Counsel to the University. It is expected that the Bonds will be available for delivery through the facilities of DTC in New York, New York, or to the Registrar on behalf of DTC by Fast Automated Securities Transfer on or about April 30, 2012 (the “Delivery Date”).



Due May 1

Principal

Interest Rate

Yield

CUSIP Number (1)

2015 $ 700,000 3.00% 1.03% 959878LP2 2016 725,000 3.00 1.33 959878LQ0 2017 750,000 3.00 1.55 959878LR8 2018 770,000 3.00 1.75 959878LS6 2019 795,000 3.00 2.00 959878LT4 2020 815,000 3.50 2.25 959878LU1 2021 845,000 3.50 2.45 959878LV9 2022 870,000 3.50 2.70 959878LW7 2023 905,000 4.00 2.85 (2) 959878LX5 2024 940,000 4.00 3.00 (2) 959878LY3 2025 980,000 4.00 3.18 (2) 959878LZ0 2026 1,020,000 4.00 3.30 (2) 959878MA4 2027 1,060,000 4.00 3.40 (2) 959878MB2 2028 1,100,000 4.00 3.50 (2) 959878MC0 2029 1,145,000 4.00 3.60 (2) 959878MD8 2030 1,195,000 4.00 3.70 (2) 959878ME6 2031 1,240,000 4.00 3.80 (2) 959878MF3 2032 1,285,000 4.00 3.90 (2) 959878MG1 2033 1,340,000 4.00 4.00 959878MH9

$5,905,000 4.00% Term Bonds due May 1, 2037 priced to yield 4.10%; CUSIP No. (1): 959878MM8 (1) CUSIP is a registered trademark of the American Bankers Association. The CUSIP numbers herein are

provided by CUSIP Global Services, which is managed on behalf of the American Bankers Association by Standard & Poor’s. CUSIP numbers are provided herein for the convenience of reference only, and are subject to change. The University takes no responsibility for the accuracy of such CUSIP numbers.

(2) Priced to the first optional call date of May 1, 2022.

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No quotations from or summaries or explanations of the provisions of laws or documents herein purport to be complete, and reference is made to such laws and documents for full and complete statements of their provisions. This Official Statement is not to be construed as a contract or agreement between the University and the purchasers or owners of any of the Bonds. The cover page hereof and appendices attached hereto are part of this Official Statement.

No dealer, broker, sales representative, or other person has been authorized by the University to give any information or to make any representations other than as contained in this Official Statement in connection with the offering made hereby and, if given or made, such information or representations must not be relied upon as having been authorized by the University. The information and expressions of opinions herein are subject to change without notice, and neither the delivery of this Official Statement nor any sale made hereunder will, under any circumstances, create any implication that there has been no change in the information set forth herein since the date hereof. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the Bonds by any person, in any jurisdiction in which it is unlawful for such persons to make such offer, solicitation or sale.

Certain statements contained in this Official Statement reflect not historical facts but forecasts and “forward-looking statements.” The words “estimate,” “project,” “anticipate,” “expect,” “intend,” “believe” and similar expressions are intended to identify forward-looking statements. The achievement of certain results or other expectations contained in forward-looking statements involves known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements described to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Except as described in the continuing disclosure undertaking of the University, the University does not plan to issue any updates or revisions to those forward-looking statements if or when their expectations or events, conditions or circumstances on which such statements are based occur.

THE BONDS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND THE BOND RESOLUTION HAS NOT BEEN QUALIFIED UNDER THE TRUST INDENTURE ACT OF 1939, AS AMENDED, IN RELIANCE UPON EXEMPTIONS CONTAINED IN SUCH ACTS. THE REGISTRATION OR QUALIFICATION OF THE BONDS IN ACCORDANCE WITH APPLICABLE PROVISIONS OF SECURITIES LAWS OF THE STATES IN WHICH THE BONDS HAVE BEEN REGISTERED OR QUALIFIED AND THE EXEMPTION FROM REGISTRATION OR QUALIFICATION IN OTHER STATES CANNOT BE REGARDED AS A RECOMMENDATION THEREOF. NEITHER THESE STATES NOR ANY OF THEIR AGENCIES HAVE PASSED UPON THE MERITS OF THE BONDS OR THE ACCURACY OR COMPLETENESS OF THIS OFFICIAL STATEMENT. ANY REPRESENTATION TO THE CONTRARY MAY BE A CRIMINAL OFFENSE.

The inactive textual reference to the websites identified herein are not hyperlinks and do not incorporate the identified websites by reference. The websites are not a part of this Official Statement, and investors should not rely on information presented in the websites in determining whether to purchase the Bonds.

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Western Washington University Bellingham, Washington 98225–5996

Telephone: (360) 650-3000 www.wwu.edu *

Board of Trustees Dennis Madsen Chair Ralph Munro Vice-Chair Betti Fujikado Secretary Karen Lee Member Philip E. Sharpe, Jr Member Dick Thompson Member Jacob Whitish Student Member Peggy Zoro Member

Administrative Officers Dr. Bruce Shepard President Dr. Catherine Riordan Provost/Vice President for Academic Affairs Stephanie Bowers Vice President for University Advancement/ Executive Director for WWU Foundation Dr. Eileen V. Coughlin Senior Vice President and Vice President for Enrollment and Student Services Steve Swan Vice President for University Relations Richard Van Den Hul Vice President for Business and Financial Affairs

Certain Student Affairs Directors Dr. Kunle Ojikutu Assistant Vice President for Enrollment and Student Services and Special Assistant to the President for Diversity Linda P. Beckman Division Director of Budget and Administration Marie Sather Director of Campus Recreation Services Adam Leonard Associate Director of Campus Recreation Services

Bond Counsel K&L Gates LLP

Seattle, Washington

Financial Advisor SDM Advisors, Inc.

Mount Vernon, Washington

Fiscal Agent and Registrar

The Bank of New York Mellon New York, New York

* None of the websites referenced in this Official Statement, including the University’s, is included as a part of this Official Statement. Investors should not rely on information presented in the websites in determining whether to purchase the Bonds. Any references to the website addresses are not hyperlinks and do not incorporate any of the websites by reference.

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Table of Contents THE BONDS .................................................................................................................................................................. 1

Page

General Description ................................................................................................................................................... 1 Authorization of the Bonds ........................................................................................................................................ 1 Form of Bonds ........................................................................................................................................................... 1 Registrar .................................................................................................................................................................... 1 Procedure in the Event of Termination of Book-Entry Transfer System ................................................................... 2 Redemption Provisions .............................................................................................................................................. 2 Defeasance ................................................................................................................................................................. 2 Purchase ..................................................................................................................................................................... 2

PURPOSE ....................................................................................................................................................................... 3 Sources and Uses of Funds ........................................................................................................................................ 3 Refunding Plan .......................................................................................................................................................... 3

SECURITY FOR THE BONDS ..................................................................................................................................... 3 Pledge of Revenue ..................................................................................................................................................... 3 Funds and Accounts ................................................................................................................................................... 4 Flow of Funds from Revenue Account ...................................................................................................................... 4 Covenants of the University ...................................................................................................................................... 5 Additional Bonds ....................................................................................................................................................... 5

THE RECREATION CENTER ...................................................................................................................................... 6 The SRC Fee .............................................................................................................................................................. 6 Organization and Administration ............................................................................................................................... 6 Historical Operating Results ...................................................................................................................................... 7 Student Recreation Fee Revenue Bond Debt Service ................................................................................................ 8 Schedule of Student Recreation Fee Revenue Bond Debt Service ............................................................................ 8 Debt Payment Record ................................................................................................................................................ 8 Future Financing ........................................................................................................................................................ 8

LEGAL INFORMATION ............................................................................................................................................... 8 Litigation ................................................................................................................................................................... 8 Approval of Counsel .................................................................................................................................................. 9 Limitations on Remedies ........................................................................................................................................... 9

TAX MATTERS ............................................................................................................................................................. 9 INITIATIVE AND REFERENDUM ............................................................................................................................ 10 CONTINUING DISCLOSURE UNDERTAKING ...................................................................................................... 11 OTHER BOND INFORMATION ................................................................................................................................ 12

Ratings ..................................................................................................................................................................... 12 Financial Advisor .................................................................................................................................................... 12 Underwriter .............................................................................................................................................................. 12 Official Statement .................................................................................................................................................... 13

APPENDICES:

THE UNIVERSITY ................................................................................................................................... APPENDIX A THE BOND RESOLUTION (No. 2012-01) .............................................................................................. APPENDIX B AUDITED FINANCIAL STATEMENTS OF THE UNIVERSITY ......................................................... APPENDIX C FORM OF BOND COUNSEL OPINION ................................................................................................. APPENDIX D BOOK-ENTRY TRANSFER SYSTEM............................................................................ ........................ APPENDIX E

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This Official Statement of Western Washington University (the “University”), a regional university of the state of Washington (the “State”), is provided for the purpose of setting forth information in connection with the issuance by the University of its Student Recreation Fee Revenue and Refunding Bonds, 2012 (the “Bonds”).

The Bonds are special revenue fund obligations of the University, payable solely from the Student Recreation Center Fee (the “SRC Fee”) and the gross revenues received from the ownership and operation of the Recreation Center (“Recreation Center Revenue”) and other revenues deposited into the Recreation Center Bond Fund. The SRC Fee is a mandatory services and activities fee charged to students enrolled at the University’s main campus in Bellingham, Washington, as approved by referendum of the students of the University in February 2000, to pay costs of constructing, operating, and maintaining the Recreation Center. See “SECURITY FOR THE BONDS,” and “THE RECREATION CENTER,” herein.

Capitalized terms used in this Official Statement are to have the meanings assigned to them in the Bond Resolution (as defined below), a copy of which is attached as Appendix B. This Official Statement speaks only as of its date and the information contained herein is subject to change. All summaries herein of documents, provisions and agreements are qualified in their entirety by reference to the actual instruments, copies of each of which are available for inspection at the offices of the University.

THE BONDS General Description

The Bonds will be dated as of the Delivery Date, will be issued in denominations of $5,000 or any integral multiple thereof within a single maturity, and will bear interest from their dated date (or the most recent date to which interest has been paid thereon). Interest on the Bonds will be payable semiannually on each May 1 and November 1, commencing November 1, 2012. The Bonds will bear interest at the rates and will mature on the dates and in the amounts set forth on the inside cover of this Official Statement subject to prior redemption as described herein. Interest will be calculated on the basis of a 360-day year consisting of twelve 30-day months.

Authorization of the Bonds

The Bonds are authorized pursuant to Resolution, No. 2012-01, adopted by the Board of Trustees (the “Board”) at a regular meeting on February 10, 2012 (the “Bond Resolution”), in accordance with the authority granted to the University in sections 28B.10.300 through 28B.10.330, inclusive, of the Revised Code of Washington (“RCW”). A copy of the Bond Resolution is attached as Appendix B hereto.

Form of Bonds

The Bonds will be issued in fully registered form and, when issued, will be registered in the name of Cede & Co., as registered owner and nominee of The Depository Trust Company (“DTC”). DTC will act as securities depository for the Bonds. Individual purchases will initially be made in book-entry form only. Purchasers will not receive certificates representing their beneficial ownership interest in the Bonds so purchased. See Appendix E - “Book-Entry Transfer System.”

Registrar

The University has adopted the system of registration for the Bonds approved by the Washington State Finance Committee (the “Committee”). Pursuant to chapter 43.80 RCW, the Committee designates one or more fiscal agencies (“Fiscal Agency”) for bonds issued within the State. The Committee has designated The Bank of New York Mellon, New York, New York as the Fiscal Agency. The Fiscal Agency initially will act as registrar (the “Registrar”) under the terms of the Bond Resolution.

In order to meet payment requirements for interest on and principal of the Bonds as the same becomes due and payable, the University will remit money to the Registrar. The Registrar will remit payment to DTC in accordance with the terms of the DTC procedures as then in effect. Principal of the Bonds will be paid to registered owners upon presentation and surrender of the Bonds at maturity or upon earlier redemption to the office of the Registrar.

Neither the University nor the Registrar will have any responsibility or obligation to DTC participants or the persons for whom they act as nominees with respect to the Bonds for the accuracy of any records maintained by DTC or any DTC participant, the payment by DTC or any DTC participant of any amount in respect of the principal of or interest on the Bonds, any notice that is permitted or required to be given to Registered Owners under the Bond Resolution (except such notices as are required to be given by the University to the Registrar or to DTC), the selection by DTC or any DTC participant of any person to receive payment in the event of a partial redemption of the Bonds, or any consent given or other action taken by DTC as the Registered Owner. For so long as any Bonds are held in fully immobilized form, DTC or its successor depository will be deemed to be the

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Registered Owner for all purposes, and all references to the Registered Owners will mean DTC or its nominee and will not mean the Beneficial Owners.

Procedure in the Event of Termination of Book-Entry Transfer System

If the University is unable to retain a qualified successor to DTC or the University has determined that it is in the best interest of the University not to continue the book-entry system of transfer or that interests of Beneficial Owners of the Bonds might be adversely affected if the book-entry system of transfer is continued, the University shall execute, authenticate and deliver the Bonds in fully registered form, in the denomination of $5,000 or any integral multiple thereof within a maturity. Thereafter, the principal of the Bonds shall be payable upon due presentment and surrender thereof at the principal office of the Registrar. Interest on the Bonds will be payable by check or draft mailed to the persons in whose names such Bonds are registered, at the address appearing upon the registration books on the 15th day of the month preceding an interest payment date; and the Bonds will be transferable as provided in the Bond Resolution.

Redemption Provisions

Optional Redemption for the Bonds. The Bonds maturing on May 1, 2015 through 2022 are not subject to redemption prior to their stated maturity. The Bonds maturing on and after May 1, 2023 are subject to optional redemption, as a whole or in part, on any date on or after May 1, 2022 at a price of par plus accrued interest to the date fixed for redemption.

Mandatory Redemption for the Bonds. The Bonds maturing on May 1, 2037 are term bonds (the “Term Bonds”), subject to mandatory redemption, in part, at par plus accrued interest to the date fixed for redemption.

Term Bonds Maturing in 2037 Year Amount 2034 $1,390,000 2035 1,445,000 2036 1,505,000 2037 (1) 1,565,000

(1) Final maturity

To the extent that the University has optionally redeemed or purchased any Term Bonds prior to the scheduled mandatory redemption of such Term Bonds, the University may reduce the principal amount of the Term Bonds to be redeemed in like aggregate principal amount. Such reduction may be applied in the year specified by the University.

Selection of Bonds to be Redeemed. For so long as the book-entry only system is being used, the particular Bonds or portions thereof to be redeemed within a maturity will be selected by DTC in accordance with DTC’s operational arrangements. If the book-entry system is no longer being used or, if fewer than all of the Bonds of like maturity are called for prior redemption, the particular Bonds or portions of Bonds within a maturity to be redeemed will be selected by lot in the manner determined by the Fiscal Agent.

Notice of Redemption. Unless waived by any Registered Owners of Bonds to be redeemed, official notice of any such redemption (which notice, in the case of an optional redemption, may be conditional and also is to state that redemption is conditioned by the Registrar on the receipt of sufficient funds for redemption) shall be given by the Registrar on behalf of the University by mailing a copy of an official redemption notice by first class mail at least 20 days and not more than 60 days prior to the date fixed for redemption to each Registered Owner of the Bonds to be redeemed at the address shown on the Bond Register or at such other address as is furnished in writing by such Registered Owner to the Registrar. Notwithstanding the foregoing, if the Bonds are held in book-entry only form, notice of redemption will be given only in accordance with the operational arrangement then in effect at DTC but not less than 20 days prior to the date of redemption. Failure to give notice as to redemption of any Bond or any defect in such notice will not invalidate redemption of any other Bond. The University will not provide notice to any Beneficial Owners of Bonds.

Defeasance

If money and/or noncallable Government Obligations, as defined in the Bond Resolution, maturing at such times and bearing interest to be earned thereon in amounts sufficient to retire any or all of the Bonds in accordance with their terms are set aside irrevocably in a special account and pledged to effect such retirement, then no further payments need to be made to pay or secure the payment of such Bonds, and such Bonds thereafter will be deemed not to be outstanding.

Purchase

The University has reserved the right to use at any time any surplus revenue available after all required payments are made to purchase any of the Bonds offered to or solicited by the University.

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PURPOSE Proceeds of the Bonds will be used, together with other funds of the University, to pay the cost of refunding a portion of the Student Recreation Fee Revenue Bonds, Series 2002 (the “2002 Bonds”) for the purpose of debt service savings, to pay approximately $1,090,000 toward costs of design, and construction of improvements to the facilities of the student recreation center, consisting of multi-purpose playfields for recreational use by the students, and to pay costs of issuance of the Bonds. Proceeds of the 2002 Bonds were used to construct a 98,000 square foot recreational facility (the “Recreation Center”). See “THE RECREATION CENTER,” herein. Simultaneous with delivery of the Bonds, the University will provide for payment of the 2002 Bonds scheduled to mature on May 1, 2012.

Sources and Uses of Funds

Sources of Funds Par Amount of the Bonds $24,385,000 Net Reoffering Premium 876,188 Transfer from Prior Debt Service Fund Total Sources of Funds

586,115 $25,847,303

Uses of Funds Deposit to Refunding Escrow $24,181,115 Deposit to Project Fund 1,090,000 Estimated Costs of Issuance (1) Total Uses of Funds

576,188 $25,847,303

(1) Costs of issuance include legal fees, financial advisor’s fees, underwriting fee, rating agency fees and other costs incurred in connection with the issuance of the Bonds.

Refunding Plan

Proceeds of the Bonds will be used, together with funds of the University, to refund on a current basis a portion of the 2002 Bonds, which were originally scheduled to mature May 1, 2013 through 2023, 2027, and 2033 (the “Refunded Bonds”). Funds will be deposited with U.S. Bank National Association, as Escrow Agent, and held in cash, and will be sufficient to redeem the Refunded Bonds on May 1, 2012, at a price equal to 100 percent of the principal amount thereof, plus accrued interest to the date of redemption. Simultaneous with delivery of the Bonds, the University will provide for payment of the 2002 Bonds scheduled to mature on May 1, 2012.

The Refunded Bonds are shown in the table below.

Student Recreation Fee Revenue Bonds, Series 2002

May 1 Amount Interest Rate CUSIP No. Call Date 2013 $ 670,000 4.40% 959878HM4 May 1, 2012 2014 700,000 4.50 959878HN2 May 1, 2012 2015 725,000 5.00 959878HY8 May 1, 2012 2016 765,000 5.00 959878HZ5 May 1, 2012 2017 805,000 5.00 959878JA8 May 1, 2012 2018 845,000 5.00 959878JB6 May 1, 2012 2019 885,000 5.00 959878JC4 May 1, 2012 2020 930,000 5.00 959878JD2 May 1, 2012 2021 975,000 5.00 959878JE0 May 1, 2012 2022 1,020,000 5.00 959878JF7 May 1, 2012 2023 1,075,000 5.00 959878JG5 May 1, 2012

2027 4,870,000 5.00 959878JK6 May 1, 2012

2033 9,330,000 5.00 959878JL4 May 1, 2012

SECURITY FOR THE BONDS Pledge of Revenue

The Bonds are special revenue fund obligations of the University, payable solely from revenue from the SRC Fee, Recreation Center Revenue, and other revenues deposited into the Recreation Center Bond Fund (the “Bond Fund”). The Bonds are equally and ratably secured by liens created under the Bond Resolution against the money and investments in the Student

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Recreation Fee Revenue Account (the “Revenue Account”) and by first liens against and pledge of the money and investments in the Bond Fund. The University has covenanted to deposit into the Revenue Account, upon receipt, revenue from the SRC Fee, all Recreation Center Revenue and the net income earned on investments in the Revenue Account, and has covenanted to use the money and investments in the Revenue Account as set forth under the heading “Flow of Funds from Revenue Account,” below.

The Bonds do not constitute a general or special obligation of the State or a general obligation of the University. The Registered Owners of the Bonds have no right to require the State, nor has the State any obligation or legal authorization, to levy any taxes or appropriate or expend any of its funds for the payment of the principal of or interest on the Bonds. The University has no taxing power.

SRC Fee. The University charges students enrolled at the main campus in Bellingham, Washington, a mandatory services and activities fee voted by referendum of the students of the University in February 2000, to pay costs of constructing, operating and maintaining the Recreation Center. All students taking six or more credits and enrolled at the Bellingham campus are subject to the SRC Fee, which is a mandatory fee in the amount of $95 per quarter, including summer quarter. Students enrolled in less than six credit hours may choose to pay $95 per quarter for access to the facility, or may pay a daily access fee for use. The SRC Fee may be increased or decreased, so long as the Bond covenants are met. The Bonds are secured by a lien on the gross amount of the SRC Fee collected by the University, after deduction of a 3.5 percent transfer to the University’s financial aid fund as required by State law. See “THE RECREATION CENTER – The SRC Fee,” and “– Historical Operating Results,” herein.

Recreation Center Revenue. The University collects certain revenues from ownership and operation of the Recreation Center, including revenue from membership fees from faculty, staff or alumni. See “THE RECREATION CENTER – Historical Operating Results,” herein.

Funds and Accounts

Revenue Account. The University has established the Revenue Account, which is maintained separate and apart from all other funds and accounts of the University. The University has covenanted to deposit into the Revenue Account, upon receipt, revenue from the SRC Fee, all Recreation Center Revenue and the net income earned on investments in the Revenue Account. The University has established an operating reserve account within the Revenue Account, which operating reserve account had a balance of $1,602,663 as of January 31, 2012. The University intends to use $250,000 of this balance toward costs of the improvements.

Bond Fund. The University has established a Bond Fund to be held separate and apart from all other funds and accounts of the University for the sole purpose of paying and securing the payment of the Bond and Additional Bonds. The University has covenanted to deposit into the Bond Fund from the Revenue Account, amounts which, together with money on hand in the Bond Fund, are necessary to pay the principal of and interest on the Bonds when due. The amounts pledged to be paid into the Bond Fund are a prior lien and charge upon the Recreation Center Revenue, the SRC Fee and/or monies in the Revenue Account, superior to all other charges of any kind or nature whatsoever.

Renewal and Replacement Reserve Account. The University has established a special trust fund designated as the Renewal and Replacement Reserve Account, which fund is kept separate and apart from all other accounts and moneys held by the University. Pursuant to the Bond Resolution, the University has agreed to prepare a Capital Renewal Management Plan (the “Plan”), to be updated at least every five years, which Plan is to identify future capital expenditure requirements for the Recreation Center and recommend the Renewal and Replacement Reserve Requirement for the following five years. As of June 30, 2008, the University reviewed its Plan, and established an annual deposit requirement of $250,000 each fiscal year, from 2009 through 2013. Prior to June 30, 2013 the University is to update the Plan, to identify future capital expenditure requirements for the Recreation Center and recommend the Renewal and Replacement Reserve Requirement for the following five years. The moneys deposited in the Renewal and Replacement Reserve Account may be disbursed to pay expenses under the Plan, non-routine maintenance and upgrade expenses of the Recreation Center and/or for unanticipated capital needs for the Recreation Center. The balance in the Renewal and Replacement Reserve Account as of January 31, 2012 is $1,719,714.

No Debt Service Reserve Fund. The University has not established a debt service reserve fund as additional security for the Bonds and Bond owners have no claim on any reserve fund that may be established as security for Additional Bonds, if any, issued in the future.

Flow of Funds from Revenue Account

The University has covenanted to use the money and investments in the Revenue Account, and has pledged such money and investments, solely for the following purposes (in order of priority):

(i) For transfers to the Bond Fund to pay the principal of, interest on or premium, if any, on the Bonds;

(ii) To pay costs of operation and maintenance of the Recreation Center and the related student recreation programs;

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(iii) To make all payments required to be made into the Common Reserve Fund to maintain the Common Reserve Requirement if there are Outstanding Covered Bonds, and into any other reserve fund or account established for Parity Bonds that are Uncovered Bonds or to meet a reimbursement obligation with respect to any Qualified Insurance or Qualified Letter of Credit or other credit enhancement device, if so required by Resolution of the Board.

(iv) For transfers to the Renewal and Replacement Reserve Account necessary to meet and maintain the Renewal and Replacement Reserve Requirement;

(v) For transfers to any special funds established for the payment of principal of and interest on any revenue bonds or other revenue obligations having a lien upon the money and investments in the Revenue Account junior and subordinate to the lien of the Bonds;

(vi) For establishment of reasonable operating reserves; or

(vii) For the purchase of any Outstanding Bonds and/or Parity Bonds at any price deemed reasonable to the Authorized Representative of the University or the defeasance of Outstanding Bonds and/or Parity Bonds.

Covenants of the University

The University has made the following covenants in the Bond Resolution.

(i) Coverage Covenant. The University is to set rates and charges for the use of the Recreation Center and/or is to maintain or increase the SRC Fee to provide amounts sufficient to pay operating, maintenance and program expenses of the Recreation Center, to provide for repair and replacement of components thereof, to pay insurance premiums with respect thereto, and to pay other costs properly allowable to the Recreation Center and to recover amounts sufficient to pay debt service (taking into account anticipated receipts of the SRC Fee as well as other receipts and allocations made available by the University) with respect to all Outstanding Parity Bonds. The SRC Fee may be decreased as long as the coverage covenant is met.

(ii) Payment of Debt Service. The University is to pay the principal of and the interest on all Outstanding Bonds on the dates, at the places, from the sources of funds and in the manner, all as provided in the Bond Resolution.

(iii) Maintenance of the Recreation Center. The University is to maintain the Recreation Center in good repair, working order and condition, and is to at all times operate the same and the business in connection therewith in an efficient manner and at reasonable cost and maintain the Renewal and Replacement Reserve Requirement.

(iv) Maintenance of Records. The University is to keep accurate financial records and proper books relating to the receipt and expenditure of Recreation Center Revenue and, within 180 days following the end of each Fiscal Year, furnish, upon request, copies of financial reports reflecting in reasonable detail the receipt and use of Recreation Center Revenue and the University’s compliance with the material provisions of the Bond Resolution.

(v) Insurance. The University is to procure and maintain such public liability insurance as is prudent and as is customarily carried by similar institutions engaged in activities of comparable size. The University is to additionally procure and maintain such property and business interruption insurance coverages as are prudent and customarily carried by similar institutions engaged in activities of comparable size.

Additional Bonds

The University has reserved the right to issue one or more series of Additional Bonds to finance the repair, renovation, alteration or betterment of the Recreation Center or related or additional recreational facilities, or to refund or advance refund any Parity Bonds, so long as:

(i) The University is not in default of any of its covenants and undertakings in connection with all Outstanding Bonds; and

(ii) The University has received a certificate of the Treasurer of the University, approved by the Board, based upon the appropriate audited annual financial reports of the University, to the effect that Recreation Center Revenues (taking into account any Board approved increases in the SRC Fee and/or known increases in student enrollment), plus the average dollar amount of the SRC Fee collected during the two most recent Fiscal Years for which audited financial reports are available, immediately preceding the date of issuance of such Additional Bonds, will be at least equal to (i) the Annual Debt Service with respect to all Parity Bonds to be outstanding following the date of issuance of such Additional Bonds, plus (ii) costs of maintenance, operation and programs of the Recreation Center, including insurance premiums, costs of repair and replacement and other costs properly allocable to the Recreation Center.

Nothing in the Bond Resolution prevents the University from granting a lien or liens which are junior and subordinate to the lien of any Outstanding Bonds against the Recreation Center Revenue or the SRC Fee and the money and investments in the Revenue Account.

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THE RECREATION CENTER

The Recreation Center was constructed in 2003 with proceeds of the 2002 Bonds and features 98,000 square feet of recreational space including 10,000 square feet of weight and cardio equipment, three-court gymnasium, two multipurpose rooms, elevated jogging track, men’s and women’s locker rooms, administration and meeting areas, retail food and lounge area, satellite wellness program, a six-lane 25 yard lap pool, and a 32-person spa. The Recreation Center serves approximately 392 elective members consisting of faculty, staff, alumni, spouses, and partners, in addition to fee-paying students. The University estimates the facility is utilized by over 90 percent of the student population and averages over 2,200 patrons a day during the academic year. A portion of Bond proceeds will be used to pay $1,090,000 of the costs of design and construction of improvements to the Recreation Center, consisting of multi-purpose playfields for recreational use by the students.

The SRC Fee

Services and Activities (“S&A”) fees mean fees, other than tuition fees, charged to all students enrolled at the University and are used for the express purpose of funding student activities and programs or for facilities for student use. The Board establishes S&A fees to be charged annually in accordance with the guidelines established by the Board. The Board may increase the existing S&A fee annually, consistent with the budgeting procedures set forth in statute. The percentage increase may not be greater than the annual percentage increase in student tuition fees for resident undergraduate students. The percentage increase limit does not apply to the portion of the S&A fee previously committed to the repayment of bonded debt, such as the SRC Fee. Pursuant to State law, 3.5 percent is deducted from S&A fee revenues for deposit into an institutional financial aid fund that is used to provide student loans and grants.

The University established the SRC Fee as an S&A fee for collection beginning fall quarter 2003, after recommendation from the students of the University on the basis of a referendum in February 2000. The SRC Fee, to be used exclusively to pay costs of constructing and operating the Recreation Center and recreation programs, is currently $95 per quarter and is charged to all students taking six or more credits and enrolled at the Bellingham campus. Other students, faculty, staff and alumni may pay a membership fee on a voluntary basis to gain access to the Recreation Center. The Bonds are secured by revenue from the SRC Fee and Recreation Center Revenue.

Organization and Administration

The Recreation Center is managed by a Director, who is assisted by an Associate Director and reports to the Office of the Vice President for Enrollment and Student Services. The Vice President for Enrollment and Student Services is responsible for strategic long-range planning, and the Division Director of Budget and Administration of Enrollment and Student Services provides fiscal oversight and analysis and serves as a liaison to the University’s Business and Financial Affairs division. The Director of Campus Recreation Services reports to the Assistant Vice President for Enrollment and Student Services, who reports directly to the Vice President for Enrollment and Student Services. The following individuals are responsible for the ongoing operation, management and maintenance of the Recreation Center.

Kunle Ojikutu, Ph.D., Assistant Vice President for Enrollment and Student Services/Special Assistant to the President for Diversity. Dr. Ojikutu has served the University in this capacity since 1996. Dr. Ojikutu assists the Vice President for Enrollment and Student Services with division management and is responsible for Campus Recreation Services, as well as the Student Health Center, Counseling Center, and Prevention and Wellness Services. He provides leadership and overall supervision including fiscal and budgetary oversight, short- and long-range planning, and personnel management for Campus Recreation Services. Dr. Ojikutu received his M.P.A. from the University of New Mexico-Albuquerque and his doctorate from the University of Nebraska-Lincoln with an emphasis in Educational Leadership in Higher Education.

Linda P. Beckman, M.B.A., Division Director of Budget and Administration for Enrollment and Student Services. Ms. Beckman assists the Vice President for Enrollment and Student Services with long-term strategic resource planning and oversees fiscal operations for the division. She has served in this capacity since 1994. Previously, she served as Director of Financial Services (1991-94), Director of Operations (1989-91) and Assistant to the Director of Corporate and Major Giving for the Western Foundation (subsequently renamed the Western Washington University Foundation), the University’s fundraising arm (1986-89). Ms. Beckman received her M.B.A. from the University.

Marie Sather, M.Ed., Director of Campus Recreation Services. Ms. Sather has held this position since 1992. Previously, she served as the Intramural Coordinator/Sport Club Advisor at the University (1984-92). Ms. Sather was a member of the U.S.A. Olympic Field Hockey Team (1976-79) and received her M.Ed. from the University.

Adam Leonard, M.P.E., Associate Director of Campus Recreation Services. Mr. Leonard has held this position since 2007. Before arriving at the University, Mr. Leonard served as the Assistant Director of Campus Recreational Services at the University of Nevada, Las Vegas (2002-2007). During his 15 year professional career, Mr. Leonard has taught at all levels, from elementary education to university curriculum. His teaching experience has been complemented by an extensive coaching career in baseball and basketball. Mr. Leonard is currently working on his Ph.D. in educational leadership.

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Historical Operating Results

The following table depicts historical revenues, expenses and changes in net assets attributable to the Recreation Center for the past five fiscal years.

Western Washington University Recreation Center

Statement of Revenues, Expenses and Changes in Net Assets (1)

2011 2010 2009 2008 2007 Operating Revenues Service and activity fee (2) $ 3,846,718 $ 3,805,911 $ 3,771,537 $ 3,684,400 $ 3,527,755 Staff, faculty and alumni membership fees 226,572 225,263 232,649 199,324 189,062 Instructional course fees 132,442 117,327 110,124 113,434 88,656 Other course fees 6,602 15,264 49,205 2,069 32,656 Rental revenue 48,305 48,606 42,355 49,318 52,294 Other revenues 80,350 87,229 59,261 60,993 Total operating revenues

57,077 $ 4,340,989 $ 4,299,600 $ 4,265,131 $ 4,109,538 $ 3,947,500

Operating Expenses

Salaries and benefits $ 1,296,538 $ 1,234,190 $ 1,159,043 $ 1,017,831 $ 861,774 Depreciation 720,155 712,482 717,839 723,096 721,616 Utilities 277,470 266,709 328,550 309,537 292,281 Repairs and maintenance 280,351 374,974 203,874 283,430 207,700 Equipment and furnishings 100,728 99,349 44,187 137,732 109,398 Supplies and materials 91,294 89,517 70,890 77,298 51,344 Administrative assessment 178,988 138,713 123,791 97,948 34,014 Insurance 27,204 29,953 28,626 21,759 26,287 Other 91,674 87,554 94,541 77,519 Total operating expenses

86,315 $ 3,064,402 $ 3,033,441 $ 2,771,341 $ 2,746,150 $ 2,390,729

Income from operations $ 1,276,587 $ 1,266,159 $ 1,493,790 $ 1,363,388 $ 1,556,771

Non-operating Revenues (Expenses)

Investment income $ 16,537 $ 36,795 $ 87,059 $ 139,479 $ 122,744 Gift income (3) 60 50,050 50,000 50,000 50,050 Interest expense (1,221,531) (1,246,606) (1,269,583) (1,291,517) (1,312,650) Amortization of bond discounts and costs (47,291) (47,755) (48,684) (49,514) (50,316) Parberry Fitness Center support - - (12,792) (25,584) Total non-operating expenses

(25,584) $(1,252,225) $(1,207,516) $(1,194,000) $(1,177,136) $(1,215,756)

Increase in net assets $ 24,362 $ 58,643 $ 299,790 $ 186,252 $ 341,015

Net Assets, Beginning of Year $ 1,987,880 $ 1,929,237 $ 1,629,447 $ 1,443,195 $ 1,102,180 Net Assets, End of Year $ 2,012,242 $ 1,987,880 $ 1,929,237 $ 1,629,447 $ 1,443,195 (1) Information is based on audited financial statements of the Recreation Center. (2) Net of mandatory transfer of an amount equal to 3.5 percent for student financial aid fund. (3) A local donor committed to providing $50,000 each year as support to the Recreation Center, which commitment ended after 2010.

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Student Recreation Fee Revenue Bond Debt Service

Upon the issuance of the Bonds and refunding of the Refunded Bonds, the University will have no outstanding Parity Bonds other than the Bonds. The following schedule shows debt service requirement for the Bonds.

Schedule of Student Recreation Fee Revenue Bond Debt Service

(Fiscal Years Ending June 30)

The Bonds Total Fiscal Year Principal Interest Debt Service

2013 $ - $ 927,920 $ 927,920 2014 - 925,350 925,350 2015 700,000 925,350 1,625,350 2016 725,000 904,350 1,629,350 2017 750,000 882,600 1,632,600 2018 770,000 860,100 1,630,100 2019 795,000 837,000 1,632,000 2020 815,000 813,150 1,628,150 2021 845,000 784,625 1,629,625 2022 870,000 755,050 1,625,050 2023 905,000 724,600 1,629,600 2024 940,000 688,400 1,628,400 2025 980,000 650,800 1,630,800 2026 1,020,000 611,600 1,631,600 2027 1,060,000 570,800 1,630,800 2028 1,100,000 528,400 1,628,400 2029 1,145,000 484,400 1,629,400 2030 1,195,000 438,600 1,633,600 2031 1,240,000 390,800 1,630,800 2032 1,285,000 341,200 1,626,200 2033 1,340,000 289,800 1,629,800 2034 1,390,000 236,200 1,626,200 2035 1,445,000 180,600 1,625,600 2036 1,505,000 122,800 1,627,800 2037 1,565,000 62,600 Total

1,627,600 $24,385,000 $14,937,095 $39,322,095

Debt Payment Record

The University has always promptly met principal and interest payments on outstanding bonds when due. No refunding bonds have been issued for the purpose of preventing an impending default.

Future Financing

The University does not anticipate the issuance of additional bonds for the Recreation Center in the next two years. The University routinely monitors its outstanding obligations for refunding opportunities, and may issue refunding debt when deemed beneficial.

LEGAL INFORMATION

Litigation

At the time of delivery of and payment for the Bonds, the University will deliver a certificate stating that there is no litigation then pending or threatened to restrain or enjoin the issuance, sale, execution or delivery of the Bonds, application of the proceeds of the Bonds as contemplated by the Bond Resolution, in any way contesting or affecting the validity of the Bonds, any proceedings of the University taken with respect to the issuance or sale thereof, the pledge or application of any money or security provided for the payment of the University, the existence or powers of the University or the title of any officers of the University to their respective positions.

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The University periodically reports litigation of a general nature and, after consideration and investigation, has concluded that the University has meritorious defenses or such litigation is immaterial and/or will have no impact on timely repayment of the Bonds.

Approval of Counsel

Legal matters incident to the authorization, execution and delivery of the Bonds are subject to the unqualified approving legal opinion of K&L Gates LLP, Seattle, Washington, Bond Counsel. Bond Counsel has reviewed this document only to confirm that the portions of it describing the Bonds and the authority to issue them conform to the Bonds and the applicable laws under which they are issued. The form of the opinion relating to the Bonds is included in Appendix D of this Official Statement.

Limitations on Remedies

Any remedies available to the owners of the Bonds upon the occurrence of an event of default under the Bond Resolution are in many respects dependent upon judicial actions which are in turn often subject to discretion and delay and could be both expensive and time-consuming to obtain. If the University fails to pay principal of or interest on the Bonds, there can be no assurance that available remedies will be adequate to fully protect the interest of the Registered Owners of the Bonds.

In addition to the limitations on remedies contained in the Resolution, the rights and obligations under the Bonds and the Resolution may be limited by and are subject to bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium and other laws relating to or affecting creditors’ rights, to the application of equitable principles, and to the exercise of judicial discretion in appropriate cases. The opinion to be delivered by K&L Gates LLP, as Bond Counsel, concurrently with the issuance of the Bonds, will be subject to limitations regarding bankruptcy, insolvency and other laws relating to or affecting creditors’ rights. A complete copy of the proposed form of opinion of Bond Counsel is set forth in Appendix D.

TAX MATTERS

In the opinion of Bond Counsel, interest on the Bonds is excludable from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; however, interest on the Bonds is taken into account in determining adjusted current earnings for the purpose of the federal alternative minimum tax imposed on certain corporations.

Federal income tax law contains a number of requirements that apply to the Bonds, including investment restrictions, periodic payments of arbitrage profits to the United States, requirements regarding the use of proceeds of the Bonds and the facilities financed or refinanced with proceeds of the Bonds and certain other matters. The University has covenanted to comply with all applicable requirements.

Bond Counsel’s opinion is subject to the condition that the University comply with the above-referenced covenants and, in addition, will rely on representations by the University and its advisors with respect to matters solely within the knowledge of the University and its advisors, respectively, which Bond Counsel has not independently verified. If the University fails to comply with such covenants or if the foregoing representations are determined to be inaccurate or incomplete, interest on the Bonds could be included in gross income for federal income tax purposes retroactively to the date of issuance of the Bonds, regardless of the date on which the event causing taxability occurs.

Except as expressly stated above, Bond Counsel expresses no opinion regarding any other federal or state income tax consequences of acquiring, carrying, owning or disposing of the Bonds. Owners of the Bonds should consult their tax advisors regarding the applicability of any collateral tax consequences of owning the Bonds, which may include original issue discount, original issue premium, purchase at a market discount or at a premium, taxation upon sale, redemption or other disposition, the extent to which interest on the Bonds is included in adjusted current earnings for the purposes of computing the federal alternative minimum tax imposed on certain corporations and various withholding requirements.

Prospective purchasers of the Bonds should be aware that ownership of the Bonds may result in collateral federal income tax consequences to certain taxpayers, including, without limitation, financial institutions, property and casualty insurance companies, individual recipients of Social Security or Railroad Retirement benefits, certain S corporations with “excess net passive income,” foreign corporations subject to the branch profits tax, life insurance companies and taxpayers who may be deemed to have incurred or continued indebtedness to purchase or carry or have paid or incurred certain expenses allocable to the Bonds. Bond Counsel expresses no opinion regarding any collateral tax consequences. Prospective purchasers of the Bonds should consult their tax advisors regarding collateral federal income tax consequences.

Payments of interest on tax-exempt obligations such as the Bonds, are in many cases required to be reported to the Internal Revenue Service (the “IRS”). Additionally, backup withholding may apply to any such payments made to any owner who is not an “exempt recipient” and who fails to provide certain identifying information. Individuals generally are not exempt recipients, whereas corporations and certain other entities generally are exempt recipients.

Bond Counsel gives no assurance that any future legislation or clarifications of amendments to the Internal Revenue Code of 1986, as amended (the “Code”), if enacted into law, will not cause the interest on the Bonds to be subject, directly or indirectly,

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to federal income taxation, or otherwise prevent owners of the Bonds from realizing the full current benefit of the tax status of the interest on the Bonds. Prospective purchasers of the Bonds should consult their own tax advisors regarding any pending or proposed federal legislation, as to which Bond Counsel expresses no view.

Bond Counsel’s opinion is not a guarantee of result and is not binding on the IRS; rather, the opinion represents Bond Counsel’s legal judgment based on its review of existing law and in reliance on the representations made to Bond Counsel and the University’s compliance with its covenants. The IRS has established an ongoing program to audit tax-exempt obligations to determine whether interest on such obligations is includable in gross income for federal income tax purposes. Bond Counsel cannot predict whether the IRS will commence an audit of the Bonds. Owners of the Bonds are advised that, if the IRS does audit the Bonds, under current IRS procedures, at least during the early stages of an audit, the IRS will treat the University as the taxpayer, and the owners of the Bonds may have limited rights to participate in the audit. The commencement of an audit could adversely affect the market value and liquidity of the Bonds until the audit is concluded, regardless of the ultimate outcome.

Not Qualified Tax-Exempt Obligations. The Bonds are not “qualified tax-exempt obligations” within the meaning of Section 265(b)(3)(B) of the Code.

Original Issue Premium. An amount equal to the excess of the purchase price of a Bond over its stated redemption price at maturity constitutes premium on that Bond. A purchaser of a Bond must amortize any premium over that Bond’s term using constant yield principles, based on the Bond’s yield to maturity. As premium is amortized, the purchaser’s basis in the Bond and the amount of tax-exempt interest received will be reduced by the amount of amortizable premium properly allocable to the purchaser. This will result in an increase in the gain (or decrease in the loss) to be recognized for federal income tax purposes on sale or disposition of the Bond prior to its maturity. Even though the purchaser’s basis is reduced, no federal income tax deduction is allowed. Purchasers of Bonds at a premium, whether at the time of initial issuance or subsequent thereto, should consult their tax advisors with respect to the determination and treatment of premium for federal income tax purposes and the state and local tax consequences of owning such Bonds.

Original Issue Discount. The initial public offering price of certain Bonds (the “Original Issue Discount Bonds”) is less than the stated redemption price at maturity. In such case, the difference between (i) the stated amount payable at the maturity of an Original Issue Discount Bond and (ii) the initial public offering price of that Original Issue Discount Bond constitutes original issue discount with respect to that Original Issue Discount Bond in the hands of the owner who purchased that Original Issue Discount Bond at the initial public offering price in the initial public offering of the Bonds. The initial owner is entitled to exclude from gross income (as defined in Section 61 of the Code) an amount of income with respect to an Original Issue Discount Bond equal to that portion of the amount of the original issue discount allocable to the period that such Original Issue Discount Bond continues to be owned by the initial owner.

In the event of the redemption, sale or other taxable disposition of an Original Issue Discount Bond prior to its stated maturity, however, the amount realized by the initial owner in excess of the basis of the Original Issue Discount Bond in the hands of its initial owner (adjusted upward by the portion of the original issue discount allocable to the period for which such Bond was held by the initial owner) is includable in gross income. Purchasers of Original Issue Discount Bonds should consult their tax advisors regarding the determination and treatment of original issue discount for federal income tax purposes and the state and local tax consequences of owning Original Issue Discount Bonds.

INITIATIVE AND REFERENDUM

Under the State Constitution, the voters of the State have the ability to initiate legislation through the power of initiative and referendum. Initiatives and referenda are submitted to the voters upon receipt of petitions signed by at least eight percent (initiatives) and four percent (referenda) of the number of voters registered and voting for the office of Governor at the preceding regular gubernatorial election. Qualifying initiatives to the voters are submitted at the next state general election and must be approved by a majority of voters to be enacted into law. Initiatives to the Legislature are submitted to the Legislature at its regular session each January. Once submitted, the Legislature must either adopt the initiative as proposed, reject the proposed initiative (in which case the initiative must be placed on the ballot at the next state general election) or approve an amended version of the proposed initiative (in which case both the amended version and the original proposal must be placed on the next state general election ballot). Any initiative approved by a majority of voters may not be amended or repealed by the Legislature within a period of two years following enactment, except by a vote of two–thirds of all the members elected to each house of the Legislature; after two years, the law is subject to amendment or repeal by the Legislature in the same manner as other laws.

In recent years there have been a number of initiatives filed in the State, including initiatives targeting fees and taxes imposed by local jurisdictions or subjecting local jurisdictions to additional requirements. The University cannot predict whether this trend will continue, whether any filed initiatives will receive the requisite signatures to be certified to the ballot, whether such initiatives will be approved by the voters, whether, if challenged, such initiatives will be upheld by the courts, and whether any future initiative could have a material adverse impact on the University.

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CONTINUING DISCLOSURE UNDERTAKING

In accordance with Section (b)(5) of Securities and Exchange Commission Rule 15c2-12 under the Securities Exchange Act of 1934, as the same may be amended from time to time (the “Rule”), the University will agree to provide or cause to be provided to the Municipal Securities Rulemaking Board (“MSRB”), the following annual financial information and operating data for the prior fiscal year (commencing in 2013 for the Fiscal Year ended June 30, 2012).

Annual financial statements, which statements may or may not be audited, showing ending fund balances for the University prepared in accordance with generally accepted accounting principles (“GAAP”) and follow the guidance given by the GASB and generally of the type included in this Official Statement in the table “Western Washington University Recreation Center Statement of Revenues, Expenses and Changes in Net Assets;” and in Appendix C, “Audited Financial Statements of the University.” Additionally, the University will provide operating data generally of the type included in this Official Statement in the table “Schedule of Student Recreation Fee Revenue Bond Debt Service,” and in Appendix A, under the following headings:

1) the Table entitled “Average Annual Enrollment;” 2) the Table entitled “Enrollment Statistics – Fall Quarter;” 3) the Table entitled “Academic Year Tuition and Fees;” 4) the Table entitled “Western Washington University Statement of Revenues, Expenses, and Changes in Net Assets;” 5) the Table entitled “University Operating Budget;” 6) the Table entitled “Investments at Fair Market Value;” 7) the contribution and covered payroll for the WWURP under “Pension Plans;” and 8) the contribution rates table and total employer contributions for PERS, TRS and LEOFF, under “Pension Plans;”

Each of the above items shall be required only to the extent that such information is not included in the annual financial statements of the University. However, the University reserves the right to change the format of such annual information to reflect any changes in reporting formats or accounting policies which may be required due to changes in GAAP.

Such annual information and operating data described above will be so provided on or before the end of nine months after the end of the University’s fiscal year. The University may adjust such date if the University changes its fiscal year by providing written notice of the change of fiscal year to the MSRB. The University’s current Fiscal Year ends on June 30. In lieu of providing such annual financial information and operating data, the University may cross-reference to other documents available to the public on the MSRB’s internet website or filed with the Securities and Exchange Commission.

If not provided as part of the annual financial information discussed above, the University will provide its audited annual financial statements prepared in accordance with GAAP when and if available to the MSRB.

Material Events. The University agrees to provide or cause to be provided, in a timely manner, to the MSRB notice of the occurrence of any of the following events with respect to the Bonds, not in excess of ten business days after the occurrence of the event:

(1) Principal and interest payment delinquencies; (2) Non-payment related defaults, if material; (3) Unscheduled draws on debt service reserves reflecting financial difficulties; (4) Unscheduled draws on credit enhancements reflecting financial difficulties; (5) Substitution of credit or liquidity providers, or their failure to perform; (6) Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of

taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax status of the security, or other material or events affecting the tax status of the Bonds;

(7) Modifications to the rights of Bondholders, if material; (8) Optional, contingent or unscheduled Bond calls, if material, and tender offers; (9) Defeasances; (10) Release, substitution or sale of property, securing the repayment of the Bonds, if material; (11) Rating changes; (12) Bankruptcy, insolvency, receivership or similar event of the University; (13) The consummation of a merger, consolidation, or acquisition of the University or the sale of all or

substantially all of the assets of the University, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement to undertake such an action, other than pursuant to its terms, if material; and

(14) Appointment of a successor or additional trustee or the change of name of the trustee, if material.

Solely for purposes of information, but without intending to modify its undertaking, with respect to the notice regarding property securing the repayment of the Bonds, the University advises that no credit enhancement, property or reserve secures repayment of the Bonds. The University shall promptly determine whether the events described above are material.

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Notification Upon Failure to Provide Financial Data. The University will agree to provide or cause to be provided, in a timely manner, to the MSRB notice of its failure to provide the annual financial information described above in this section on or prior to the date set forth above.

EMMA; Format for Filings with the MSRB. Until otherwise designated by the MSRB or the Securities and Exchange Commission, any information or notices submitted to the MSRB in compliance with the Rule are to be submitted through the MSRB’s Electronic Municipal Market Access system (“EMMA”), currently located at www.emma.msrb.org (which is not incorporated into this Official Statement by reference). All notices, financial information and operating data required by this undertaking to be provided to the MSRB must be in an electronic format as prescribed by the MSRB. All documents provided to the MSRB pursuant to this undertaking must be accompanied by identifying information as prescribed by the MSRB.

Termination/Modification. The University’s obligations to provide notices of material events shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Bonds. Any provision of this section shall be null and void if the University (1) obtains an opinion of nationally recognized bond counsel to the effect that the portions of the Rule that requires this section or any such provision are invalid, have been repealed retroactively or otherwise not apply to the Bonds, and (2) notifies the MSRB of such opinion and the cancellation of this section. The University may amend its undertaking with an approving opinion of nationally recognized bond counsel in accordance with the Rule.

In the event of any amendment of or waiver of a provision of the University’s undertaking, the University will describe such amendment in the next annual report, and will include, as applicable, a narrative explanation of the reason for the amendment or waiver and its impact on the type (or in the case of a change of accounting principles, on the presentation) of financial information or operating data being presented by the University. In addition, if the amendment relates to the accounting principles to be followed in preparing financial statements, (a) notice of such change will be given in the same manner as for a material event, and (b) the annual report for the year in which the change is made will present a comparison (in narrative form and also, if feasible, in quantitative form) between the financial statements as prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles.

Bondowner’s Remedies Related to Continuing Disclosure Undertaking. A Bondowner’s or a Beneficial Owner’s right to enforce the provisions of the University’s undertaking described in this section will be limited to a right to obtain specific enforcement of the University’s obligations, and any failure by the University to comply with the provisions of this undertaking will not be an event of default with respect to the Bonds under the Resolution. For purposes of this section, “Beneficial Owner” means any person who has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bonds, including persons holding Bonds through nominees or depositories.

Continuing Disclosure Undertakings of the University. The University has entered into prior undertakings under the Rule with respect to its obligations and is in compliance with its obligations thereunder.

OTHER BOND INFORMATION

Ratings

Ratings of A1 and A+ have been assigned to the Bonds by Moody’s Investors Service (“Moody’s) and Standard & Poor’s Ratings Services (“S&P”), respectively. Such ratings reflect only the views of the rating organizations and an explanation of the significance of the ratings may be obtained from the rating agencies Moody’s Investors Service and Standard & Poor’s Ratings Services. There is no assurance that the ratings will continue for any given period of time or that they will not be revised downward or withdrawn entirely by the rating agencies if, in the judgment of the agencies, circumstances so warrant. An explanation of the significance of the rating may be obtained from Moody’s, 7 World Trade Center, 250 Greenwich Street, New York, NY 10007, (212) 553-0300, and from S&P, Public Finance Department, 55 Water Street, New York, New York, 10041, (212) 438-7280. Any such downward revision or withdrawal of any of the ratings may have an adverse effect on the market price of the Bonds.

Financial Advisor

SDM Advisors, Inc. has served as Financial Advisor to the University relative to the preparation of the Bonds for sale, timing of the sale and other factors relating to the Bonds. The Financial Advisor has not audited, authenticated or otherwise verified the information set forth in this Official Statement or other information provided relative to the Bonds. SDM Advisors, Inc. makes no guaranty, warranty or other representation on any matter related to the information contained in the Official Statement. The Financial Advisor is an independent financial advisory firm and is not engaged in the business of underwriting, marketing, trading or distributing municipal securities. A portion of the Financial Advisor’s compensation is contingent upon the sale of the Bonds and delivery thereof to the Underwriter.

Underwriter

The Bonds are being purchased by Citigroup Global Markets Inc., (the “Underwriter”) at a price of $24,811,061.41. The Bonds will be re-offered at a price of $25,243,527.80. The Underwriter may offer and sell the Bonds to certain dealers (including dealers depositing Bonds into investment trusts) and others at prices lower than the initial offering prices set forth on

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cover hereof, and such initial offering prices may be changed from time to time by the Underwriter. After the initial public offering, the public offering prices may be varied from time to time.

Official Statement

Statements in this Official Statement, including matters of opinion, whether or not expressly so stated, are intended as such and not as representations of fact. This Official Statement is not to be construed as a contract or agreement between the University or the Underwriters and the Owners of the Bonds.

At the time of the delivery of the Bonds, one or more officials of the University will furnish a certificate stating that to the best of his knowledge and belief at the time of the sale or delivery of the Bonds, this Official Statement and information furnished by the University supplemental hereto did not and do not contain any untrue statements of material fact or omit to state a material fact necessary in order to the statements made, in light of the circumstances under which they were made, not misleading in any material respect.

The preparation and distribution of this Official Statement has been authorized by the University.

A-1

APPENDIX A Western Washington University

THE UNIVERSITY

The University is one of six public, four-year institutions of higher education in the state of Washington (the “State”). In 1893 Governor John H. McGraw signed legislation creating New Whatcom Normal School, which later became Western Washington College of Education in 1937, Western Washington State College in 1961, and achieved university status in 1977. Since the first class of 88 students entered in 1899, the school has grown into a comprehensive university of over 14,800 full and part-time students, making it the third largest institution of higher education in the State.

The University is located in Bellingham, a city of 81,070 that overlooks Bellingham Bay and many of Puget Sound’s 172 San Juan Islands. The University is located 90 miles north of Seattle, 55 miles south of Vancouver, British Columbia, and within a one hour drive from the recreational ski area on 10,778-foot Mount Baker. The University is the second largest employer in Whatcom County.

The main campus of the University, including Sehome Arboretum (38 acres), measures 212 acres. Off-campus sites include the Shannon Point Marine Center in Anacortes (87 acres), Lakewood Recreational Center on Lake Whatcom (15 acres), Whatcom County property utilized for environmental/aquatic analysis (25 acres), administrative offices owned near the Sehome Village Shopping Center, and various other smaller parcels of land.

The University’s facilities include 55 academic and support buildings, eight auxiliary buildings, and 35 residential housing/food service facilities. Academic facilities, both on and off the main campus, total roughly 2.2 million square feet of gross enclosed area, and the academic/service support functions and residential/food facilities add approximately 1.2 million additional square feet of enclosed area. The University offers extended education which provides students the opportunity to complete their degree through evening or distance education options; the University collaborates with colleges, departments and the community to provide the same high standards of quality for which the University is known. The University offers evening degree programs at five sites in western Washington: Bellingham, Bremerton, Everett, Port Angeles and Seattle.

The University was ranked third for public universities in the 14-state western region, according to the 2011 and 2012 U.S. News & World Report college rankings, and as the highest ranking public master’s granting university in the Pacific Northwest, according to the 2011 U.S. News & World Report college rankings. The Carnegie Foundation for the Advancement of Teaching has granted the University its Community Engagement classification, for its efforts to operate community outreach programs, deepen students’ civic and academic learning and enhance overall community well being.

Academic Programs

The University is a liberal arts institution. The University offers over 160 academic programs in its eight colleges, which include the College of Humanities and Social Sciences, College of Sciences and Technology, College of Business and Economics, Fairhaven College of Interdisciplinary Studies, College of Fine and Performing Arts, Huxley College of the Environment, Woodring College of Education, and the Graduate School. The University offers seven masters programs, including masters in teaching, arts, business administration, education, music, professional accounting and science.

Accreditation

The University is accredited by (i) the Northwest Association of Schools and Colleges, (ii) the National Association of Schools of Music, (iii) the National Recreation and Parks Association, (iv) the American Speech and Hearing Association, (v) the National Council for Accreditation of Teacher Education, (vi) the Computing Sciences Accreditation Board, (vii) the Technology Accreditation Commission of the Accreditation Board for Engineering and Technology, (viii) the American Assembly of Collegiate Schools of Business, (ix) the Council for Accreditation of Counseling and Related Education Programs, (x) National Association of Schools of Arts and Design, and (xi) the American Chemical Society.

Governance

The University is governed by an eight-member Board of Trustees (the “Board”), which has broad responsibilities to supervise, coordinate, manage and regulate the University, as provided by State law. Trustees are appointed by the Governor for a term of six years, except a student Trustee, who is appointed to a one-year term. In addition to other powers and duties, the Board employs the President; has full control of the University and its property of various kinds except as otherwise provided by law; with the assistance of the faculty, prescribes the course of study in the various schools and departments thereof, and publish such catalogues thereof as the Board deems necessary; establishes divisions, schools, or departments necessary to carry out the purposes of the University and not otherwise proscribed by law; may acquire real and other property; may purchase supplies and purchase or lease equipment and other personal property needed for the operation or maintenance of the University; and may promulgate such rules and regulations, and perform all other acts not forbidden by law, as the Board deems necessary or appropriate to the administration of the University.

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Current members of the Board are shown in the following table.

Members of the Board of Trustees

Individual

Professional Affiliation

Year of Initial Appointment

Expiration of Term

Dennis Madsen, Chair CEO, Recreational Equipment, Inc. - retired 2004 9/30/2013 Ralph Munro, Vice-Chair Secretary of State – retired 2009 9/30/2015 Betti Fujikado, Secretary Co-Founder, Copacino + Fujikado, LLC 2009 9/30/2012 Karen Lee CEO Pioneer Human Services 2010 9/30/2016 Philip E. Sharpe, Jr. Attorney & Partner of Adelstein, Sharpe, Serka 2002 9/30/2012 Dick Thompson University of Washington - retired 2002 9/30/2015 Jacob Whitish Student Trustee 2011 6/31/2012 Peggy Zoro Sr. VP & Regional Manager, Wells Fargo Bank 2003 9/30/2014

Officers of the Board of Trustees

Dennis Madsen, Chair, was first appointed to the Board in 2004 and reappointed, with a current term ending in 2013. Mr. Madsen is a former president and chief executive officer of Recreational Equipment, Inc. (REI), a national retail cooperative of outdoor gear and clothing. During his 38-year career with REI, he held several leadership positions including executive vice president and chief operating officer. Mr. Madsen earned his bachelor’s degree in mechanical engineering from Seattle Pacific University and pursued MBA studies at Pacific Lutheran University.

Ralph Munro, Vice Chair, was appointed to the Board in 2009 with a current term ending in 2015. Mr. Munro was elected as Secretary of State in 1980, and served the State in that position until retirement in 2001. Prior to that time he worked for the State House of Representatives, the State’s Governor and the Federal government, in Washington D.C. Mr. Munro earned his bachelor’s degree from the University.

Betti Fujikado, Secretary, was appointed to the Board in 2009 with a current term ending in 2012. Ms. Fujikado is the co-founder of Copacino+Fujikado, an advertising agency. She previously held executive positions from CFO, COO to CEO at a number of companies, after starting her career as an accountant. Ms. Fujikado earned her bachelor’s degree in business administration from the University of Washington with an emphasis in accounting.

University Administration

The University is administered by a President, who is appointed by the Board to act as the chief executive officer of the University. The President leads the University in development and fulfillment of institution-wide goals and its long-term strategic plan. The President has appointed a team to assist in management of the University.

The University’s administrative officers are listed below.

Administrative Officers of the University

Individual

Office

Year Hired by the University

Year of Current Appointment

Dr. Bruce Shepard President 2008 2008 Stephanie Bowers Vice President for University Advancement/

Executive Director for WWU Foundation 2001 2002

Dr. Eileen V. Coughlin Senior Vice President and Vice President for Enrollment and Student Services

1994 1994 (1)

Dr. Catherine Riordan Provost/Vice President for Academic Affairs 2009 2009 Steve Swan Vice President for University Relations 2009 2009 Richard Van Den Hul Vice President for Business and Financial Affairs 2010 2010

(1) Dr. Coughlin has served as Vice President for Enrollment and Student Services since 1994, and in 2011 her title changed to reflect additional appointment as Senior Vice President.

Brief resumes for the President and Provost follow.

Dr. Bruce Shepard, President. Dr. Shepard was appointed as the University’s thirteenth president in 2008. Prior to his appointment, Dr. Shepard served as chancellor of the University of Wisconsin-Green Bay from 2001 through 2008. From 1995-2001, Dr. Shepard served as provost at Eastern Oregon University, where he was also a professor of political science. Prior to joining Eastern Oregon University, Dr. Shepard spent 23 years at Oregon State University, earning tenure as a faculty member in the Department of Political Science before moving into university administration. His administrative positions at Oregon State included state government liaison specialist, special assistant to the provost, assistant vice

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president for undergraduate studies and director of undergraduate academic programs. Dr. Shepard earned bachelor’s, master’s and doctoral degrees in Political Science from the University of California, Riverside.

Dr. Catherine Riordan, Provost/Vice President for Academic Affairs. Dr. Riordan was appointed as the University’s Provost and Vice President for Academic Affairs in August 2009. Prior to her appointment, Dr. Riordan served as the Vice Provost for Academic Affairs at Central Michigan University from 2001 to 2009 and Director of Management Systems at the University of Missouri-Rolla from 1991-2000. Dr. Riordan earned a B.S. in Social Welfare from Eastern Michigan University and a Ph.D. in Social Psychology from the State University of New York at Albany.

State Oversight of Higher Education

The State has had a single state postsecondary education planning agency since 1975, as required to qualify for Federal planning and other funds (though the State has had various councils or boards to assist in providing oversight of higher education since 1969). The purpose of the agency is to provide planning, coordination, monitoring, and policy analysis for higher education in the State in cooperation and consultation with the State’s higher education institutions, their governing boards and other segments of postsecondary education.

From 1985 to present, that agency has been the Higher Education Coordinating Board (the “HECB”). In addition to the duties described, the HECB also administered student financial assistance programs and various federal programs. In 2012, the State Legislature adopted legislation (E2SHB 2483), signed by the Governor on March 30, 2012, which amends statutes enacted in 2011 that eliminate the HECB as of July 1, 2012 and divide the HECB’s duties among: (1) a newly created Office of Student Financial Assistance (the “SFA”) to administer all state and federal financial aid and the State’s advanced college tuition payment program; and (2) a newly created Student Achievement Council (the “Council”) with duties similar to the HECB, including proposing statewide goals and priorities for higher education, tracking progress, conducting research and analysis, identifying transition issues and solutions, protecting higher education consumers, directing the SFA, and advocating for higher education. Until July 1, 2012, the HECB is to continue to prioritize capital projects for the higher education system, after which date the legislation transfers this function to the State’s Office of Financial Management. Excepting the student financial aid and capital projects functions discussed above, the HECB powers, duties, resources, staff, and records will be transferred to the new Council.

Faculty, Employees and Labor Relations

As of November 15, 2011, the University has 1,419 full-time equivalent (“FTE”) employees and 2,500 part-time/temporary employees, including 1,828 student employees.

The following shows the number of full and part-time instructional faculty, percentage tenured, and degree status.

Instructional Faculty, Tenure and Degrees

Instructional Faculty

Fall 2011

Fall 2010

Fall 2009

Fall 2008

Fall 2007

Full-time Instructional Faculty 501 504 513 522 505 Part-time Instructional Faculty 286 302 295 286 Total Instructional Faculty

232 787 806 808 808 737

Percent of full-time faculty tenured 67.7% 67.5% 65.3% 64.0% 66.5% Percent of full-time faculty with PhD or Terminal Degree 82.4% 83.6% 81.8% 83.6% 89.9% Percent of total faculty with PhD or Terminal Degree 69.4% 67.0% 65.1% 67.2% 70.1%

The University’s classified employees are represented by two unions, the Washington Federation of State Employees (the “WFSE”), representing 456 employees, and the Public School Employees union (the “PSE”), representing 314 employees. In accordance with the State’s Personnel System Reform Act and RCW 41.80, the University negotiates two-year contracts with the unions, which require ratification of the union membership, and submission to the State Legislature for funding. The University was initially unable to reach an agreement for the 2011-2013 biennium, so the terms and conditions from the 2009-2011 biennial contract continued until agreement was reached for the 2012-2013 fiscal year. Negotiations will begin in spring 2012 for the 2013-2015 contracts which must be submitted to Office of Financial Management for review of financial feasibility by October 1, 2012.

The University’s faculty is represented by the United Faculty of Western Washington (the “UFWW”). In June 2008 the University and the UFWW completed negotiations of their first contract, which extended through July 1, 2011, and was subsequently continued through the end of 2011. Negotiations for a successor agreement began in January 2012, and are currently underway.

University management considers relations with all categories of its employees to be good.

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Student Enrollment

Approximately 92 percent of the University’s students are State residents. Approximately 31 percent of students are from King County, followed by Snohomish, Whatcom and Pierce counties, which together make up 64 percent of students. Additionally, the student body includes residents from 48 other states and the District of Columbia, led by California, Oregon, Colorado and Alaska. International students come from 39 other nations, led in number by Japan, Canada and Vietnam.

Historically, the highest share of the University’s students enters directly from high school and, therefore, the campus is characterized by a young student body with an average age of 21 for undergraduates. Most students enrolled at the University are full-time students. For Fall 2011, the average grade point average (“GPA”) for entering freshmen was 3.5 and the average GPA for transfer students was 3.2. The following shows average annual enrollment, by FTE and headcount, for the current and five prior academic years.

Average Annual Enrollment (1)

Year FTE

Enrollment Headcount

Enrollment 2011-12 (2) 13,383 14,297 2010-11 13,314 14,367 2009-10 13,038 14,079 2008-09 13,010 14,045 2007-08 12,782 13,836 2006-07 12,645 13,676

(1) Includes students enrolled in distance and evening degree programs. (2) Average annual enrollment for 2011-12 is estimated, based on Fall and Winter quarter actual.

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The following table shows graduate and undergraduate headcount enrollment, and freshman and transfer applications and acceptances, based on fall quarter enrollment for each of the past five years.

Enrollment Statistics – Fall Quarter

Fall 2011 Fall 2010 Fall 2009 Fall 2008 Fall 2007 Fall Quarter Enrollment (Headcount) Undergraduates

Seniors 4,270 4,021 3,871 3,997 3,774 Juniors 3,607 3,717 3,418 3,354 3,601 Sophomores 2,569 2,687 2,673 2,550 2,397 Freshmen 3,239 3,228 3,287 3,335

Total Undergraduates 3,195

13,685 13,653 13,249 13,236 12,967 Graduates and Post-Baccalaureates

Graduates 721 757 786 804 780 Post-Baccalaureates 338 413 393 410

Total Graduates and Post-Baccalaureates 397

1,059 1,170 1,179 1,214 1,177 Non-Matriculated 98 156 147 170

Total Headcount Enrollment

132

14,842 14,979 14,575 14,620 14,276

Fall Quarter Enrollment (FTE) 13,910 13,851 13,555 13,527 13,180 Freshmen Applications and Enrollment

Applications 9,083 9,336 9,621 9,520 8,850 Offered 7,118 6,896 6,990 6,752 6,447 Percent of Applications Offered 78 % 74% 73% 71% 73% Enrolled 2,695 2,748 2,689 2,697 2,586 Enrolled Percent of Admissions 38% 40% 38% 40% 40%

Transfer Students Applications and Enrollment

Applications 2,648 2,459 2,419 2,140 2,142 Offered 1,555 1,424 1,415 1,488 1,506 Percent Applicants Offered 59% 58% 58% 70% 70% Enrolled 949 924 892 972 1,003 Enrolled as a Percent of Admissions 61% 65% 63% 65% 67%

Tuition and Fees

The State Legislature authorizes the public institutions of higher education to set tuition rates. For the 2011-13 biennium, the State Legislature granted flexibility to public universities to set tuition levels for resident undergraduates, without limitation, while creating new requirements that increase the amount of financial aid to be funded from revenues from the operating portion of tuition fees from 3.5 percent to 4.0 percent. Prior to the 2011-2013 biennium, the State Legislature prescribed a maximum allowable rate of tuition increase for various public institutions. The State Legislature also granted flexibility to public universities to set tuition levels for graduate and non-resident undergraduate students. The University prepares tuition rate proposals for the upcoming fiscal year, for consideration and approval by the Board. There are two components of fees: tuition (consisting of building fees and operating fees) plus service and activities (“S&A”) fees, some of which are State-mandated, and some of which are approved based on recommendations from students, through a formal process. The University increased tuition by 16 percent for fiscal years 2012 and 2013. S&A and other mandatory fees were unchanged or were increased by various, lower, percentages.

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Resident and non-resident tuition and fees for the current academic year, and the four prior academic years are shown below. This information includes the building fee and operating fee components of tuition and State-mandated S&A fees, which excludes the SRC Fee.

Academic Year Tuition and Fees

Undergraduate Students Graduate Students Academic Year Resident Non-Resident Resident Non Resident

2011-12 $6,973 $17,320 $7,445 $17,125 2010-11 6,081 16,428 6,567 16,242 2009-10 5,397 16,428 6,567 16,242 2008-09 4,788 16,419 6,558 16,233 2007-08 4,568 15,642 6,252 16,216

Comparative Tuition and Fees for Academic Year 2011-12 Washington State Public Universities/Colleges

Resident Undergraduate

Resident Graduate

University of Washington $10,100 $12,424 Washington State University 9,886 10,188 Central Washington University 7,050 8,112 Western Washington University 6,973 7,445 The Evergreen State College 6,909 7,568 Eastern Washington University 6,689 8,931

Source: Higher Education Coordinating Board, 2011-12 Tuition and Fee Rates

Student Financial Aid and Scholarships

A total of 9,459 financial aid recipients received $120.8 million in financial aid during 2010-2011. In addition to the disbursements outlined below, 1,981 students earned an estimated $7.9 million in wages in the Bellingham community, through part-time employment obtained through the University Federal Job Location and Development Program.

Summary of Financial Aid

2010-2011 Percent of Totals 2009-2010 Percent of Totals Funding Source Federal $ 83,837,377 69.4% $ 77,089,247 68.8% State 11,010,335 9.1 11,811,589 10.6 Institutional 19,917,442 16.5 17,673,572 15.8 Private Donor/Other 6,036,905 5.0 5,420,648

Total 4.8

$120,802,059 100.0% $111,995,056 100.0%

Programs Grants $ 31,512,261 26.1% $ 28,233,682 25.2% Scholarships 9,890,186 8.2 8,496,998 7.6 Employment 8,428,926 7.0 9,053,390 8.1 Loans 70,970,686 58.7 66,210,986

Total 59.1

$120,802,059 100.0% $111,995,056 100.0%

Beginning in fiscal year 2012, the University is required by the State Legislature to reserve at least 4 percent of tuition operating fees for college-based student scholarships and assistance (up from 3.5 percent previously). Although State allocation for the State Need Grant and State Work-study funding has diminished over the past several years, the programs continue to provide critical support to certain students.

The majority of the University’s students have repaid their federal student loans in a timely manner, as evidenced by the University’s low default rates for the last several fiscal years. The University’s official cohort default rate for the William D. Ford Federal Direct Loan Program was 1.2 percent for fiscal year 2009 (the most recent year for which data is available) and 1.4 percent for fiscal year 2008, substantially below the 25 percent rate which would endanger the ability of an institution to participate in federal student loan programs. The University’s Financial Aid department is a long-standing participant in the

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Federal Quality Assurance Program, to assure that the delivery of student aid funds is conducted accurately, expediently, and with integrity.

FINANCIAL OPERATIONS Basis of Accounting

The financial statements of the University are presented in accordance with generally accepted accounting principles (“GAAP”) following guidance given by the Governmental Accounting Standards Board (“GASB”). For financial reporting purposes, the University is considered a special-purpose government engaged only in business-type activities. As defined by GAAP, the financial reporting entity consists of the University, as well as its component unit, the Western Washington University Foundation, described below. The Statement of Revenues, Expenses and Changes in Net Assets from the audited financial statements for the five most recent fiscal years is shown below.

Western Washington University Statement of Revenues, Expenses, and Changes in Net Assets (1)

For Fiscal Years Ended June 30

2011 2010 2009 2008 2007 Operating Revenues Student tuition and fees (2) $106,569,013 $ 94,533,107 $ 86,555,613 $ 81,217,433 $ 76,176,650 less tuition discounts (18,363,862) (14,833,867) (12,982,879) (12,215,513) (10,687,587) Federal grants and contracts 8,268,690 6,639,781 8,338,523 11,272,466 17,033,926 State and local grants and contracts 13,319,279 13,953,989 13,257,130 12,595,085 12,303,871 Nongovernmental grants and contracts 2,357,881 1,969,470 1,752,564 1,264,074 1,387,721 Sales and services of educational activities and other 4,956,121 4,922,961 2,229,928 4,836,640 3,240,086 Interest earned on loans to students 140,522 144,792 136,800 136,871 144,086 Auxiliary enterprises (2) 55,375,031 52,947,114 53,481,768 50,334,001 47,663,899 less auxiliary discounts (4,718,356) (4,115,218) (3,856,618) (3,452,539) Total operating revenue

(2,973,160) $167,904,319 $156,162,129 $148,912,829 $145,988,518 $144,289,492

Operating Expenditures Salaries and wages $117,885,280 $118,163,753 $119,402,233 $114,509,642 $105,961,453 Benefits 36,692,598 34,181,520 31,713,625 33,268,166 30,468,850 Scholarships and fellowships 17,805,709 17,634,179 14,675,348 14,527,102 14,002,459 Utilities 5,638,304 5,515,941 6,126,735 6,340,414 6,548,415 Supplies and materials 43,890,835 41,794,644 41,053,047 38,674,456 39,537,729 Purchased and personal services 4,246,383 4,362,892 5,008,483 5,505,286 5,261,560 Depreciation 18,070,849 16,336,531 14,581,784 13,639,067 Total operating expenses

13,388,100 $244,229,958 $237,989,460 $232,561,255 $226,464,133 $215,168,566

Operating income (loss) $(76,325,639) $(81,827,331) $(83,648,426) $(80,475,615) $ (70,879,074) Non-operating Revenues(Expenses) State appropriations $ 63,760,769 $ 64,621,417 $ 78,535,426 $ 75,417,882 $ 64,481,771 Federal Pell Grant Revenue 13,887,899 11,458,908 7,658,503 6,868,173 - Investment income 775,087 1,188,261 4,706,526 5,892,772 6,095,800 Interest on indebtedness (4,061,271) (4,156,297) (3,491,660) (3,607,772) (3,677,177) Gains (Loss) on endowments 1,684,904 516,960 (978,004) (668,488) 826,223 Non-operating rental property income 7,118 15,490 201,443 26,143 Net Non-operating revenues (expenses)

9,778 $ 76,054,506 $ 73,644,739 $ 86,632,234 $ 83,928,710 $ 67,736,395

Income or (loss) before other revenues, expenses, gains, or losses $ (271,133) $ (8,182,592) $ 2,983,808 $ 3,453,095 $ (3,142,679) Capital appropriations 24,166,239 27,609,379 14,839,312 44,268,118 16,526,811 Other capital revenue 3,229,426 4,014,907 2,562,413 - - Gifts to permanent endowments - 50,000 550,000 10,000 Total other revenues

100,000 $ 27,395,665 $ 31,674,286 $ 17,951,725 $ 44,278,118 $ 16,626,811

Increase (Decrease) in net assets $ 27,124,532 $ 23,491,694 $ 20,935,533 $ 47,731,213 $ 13,484,132 Net assets, beginning of year $409,788,893 $386,297,199 $365,361,665 $317,630,452 $304,146,320 Net assets, end of year $436,913,425 $409,788,893 $386,297,198 $365,361,665 $317,630,452 (1) Information is based on audited financial statements of the University. (2) Beginning in 2008 (and restated for 2007) a component of tuition is recorded as auxiliary enterprise revenue. In prior years, all tuition

was recorded as student tuition and fees, despite a component being used for auxiliary purposes.

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Auditing

The University’s Financial Statements and selected auxiliary units are audited annually by the State Auditor’s Office, which provides an opinion on the financial statements. The auditor’s opinion on the University and auxiliary financial statements is unqualified for the period ending June 30, 2011.

The State Auditor’s Office also performs accountability audits to provide reasonable assurance of the University’s compliance with legal requirements and to determine if adequate internal controls are in place. Prior to fiscal year 2011, the State Auditor’s Office conducted compliance and accountability audits on an annual basis. Beginning with fiscal year 2011 the State Auditor’s Office is conducting compliance and accountability audits for individual universities less frequently and changing to compliance and accountability reviews of consistent areas across the public institutions of higher education. In recent years, the University has had no audit findings.

In addition, the State Auditor’s Office performs an annual audit of federal grant expenditures for the State as required by the Single Audit Act. This audit is performed on a statewide basis and includes major federal programs at the University if selected for audit.

State Funding for the University

The University is one of six public universities in the State, and has traditionally received significant State funding for operations and capital projects. Due to economic and financial stress over recent years, the State’s level of funding has declined over the past three biennia. The Board has responsibility under State law for submitting a biennial budget plan for operations, as well as a list of prioritized capital project needs for which it is seeking funding, to the Governor for submission to the State Legislature.

State Funding for Operations. The State Legislature determines a budgeted level of operating support each year based on student FTE enrollment for each institution of higher education in the State. An institution may exceed the budgeted enrollment level but will not receive additional State funding for additional enrollment, in which case any additional cost must be borne by the institution. The State considers one FTE student to be an undergraduate carrying 15 credits or a graduate student with 10 credits. The level of funding for budgeted enrollment is determined by the State Legislature each year, and has declined in recent years. Historically, the State has provided operating support for academic buildings, based on a formula relating to estimated square footage of academic facilities, although the amount funded under the formula has declined in recent years.

Historically, enrollment demand at the University has exceeded State-budgeted enrollment level. The following table shows budgeted and actual enrollment for the University, for the current year and the prior five years.

State Funded Budgeted Versus Actual Enrollment Annual Average FTE

Fiscal Year Budgeted Actual Difference 2012 (1) 11,762 12,647 885 2011 11,762 12,647 885 2010 11,373 12,475 1,102 2009 12,175 12,408 233 2008 12,022 12,141 119 2007 11,729 11,784 55

(1) Actual annual average FTE enrollment for 2012, and resulting difference, is estimated only.

State budget adjustments may be made during subsequent legislative sessions, which modify the level of State funding support for the University’s operating budget. During the past three biennia, the State has made reductions to operating appropriations during the biennium, which required the University to make mid-year budget adjustments. While the State Legislature decreased funding for the University in recent biennia, it also provided the University with greater authority to increase tuition. In addition to increasing student tuition in recent years, the University has reduced the number of employees, eliminated programs, merged and consolidated units, and taken other actions to reduce operating expenditures.

The following table shows the history of operating budget appropriations to the University for the five most recent biennia, which information reflects any subsequent State budget reductions.

Historical State Appropriations for University Operating Budget

2011-13 Biennium

2009-11 Biennium

2007-09 Biennium

2005-07 Biennium

2003-05 Biennium

State Operating Appropriations $84,377,000 $117,121,000 $146,683,527 $127,691,000 $112,586,000

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State Funding for Capital Projects. The State has historically funded capital projects for construction or renovation of academic buildings and minor capital improvements for the University in its capital budget. The University has historically funded capital projects for auxiliaries or student facilities with auxiliary revenues or special revenue bonds, which do not require State funding or approval. Prior to each biennium, the University provides a prioritized list of capital projects for which it is seeking State funding to the State’s Office of Financial Management, which is scored relative to capital project lists provided by other public higher education institutions. A ranked list of capital priorities for the public higher education institutions is presented to the Governor and the State Legislature. Major capital projects are generally reviewed by the State Legislature over a cycle of three biennia, with funding of the costs of pre-design, design and construction appropriated in sequential biennia. The following table shows the history of new capital budget appropriations to the University for the five most recent biennia.

Historical State Appropriations for University Capital Budget

2011-13 Biennium

2009-11 Biennium

2007-09 Biennium

2005-07 Biennium

2003-05 Biennium

State Capital Appropriations $28,291,000 $74,599,002 $47,610,002 $73,452,002 $32,464,330

University Operating Budget

The information below shows the University budget plan provided to the State for the 2009-11 and 2011-13 biennia, which reflect adjustments made during the biennial period. The biennial budget plans do not include auxiliary operations, which are separately budgeted.

University Operating Budget

Fund 2011-13 Biennium (1) 2009-11 Biennium (2) State General Fund $ 67,497,000 $ 89,505,000 Education Legacy Trust 13,266,000 12,917,000 Capital Projects Account 3,614,000 5,814,000 Federal Stimulus - Total State Appropriations

8,885,000 $ 84,377,000 $117,121,000

WWU Operating Fees Account 164,932,136 126,834,806 Local Fund 59,200,000 53,400,000 Grants and Contracts 80,000,000 Total Operating Funds

77,243,218 $388,509,136 $374,599,024

(1) Based on State General Funds currently appropriated by the State Legislature, and subject to change. (2) Based on actual State appropriations, after reductions during the biennium.

The following provides discussion for the University’s major budget sources, as shown in the table above.

State Appropriations. The State appropriated $84,377,000 and $117,121,000 of operating funds for the 2011-13 biennium and the 2009-2011 biennium, respectively. The State Legislature built the 2011-13 State appropriation budget based on an assumed 16 percent tuition increase for in-state undergraduate students in each of fiscal year 2012 and 2013, although the University has discretion to determine the actual level of increase in tuition. The State’s initial 2009-11 biennial budget provided funding of $121,428,000 for the University, which was subsequently decreased to $117,121,000. If the State continues to face budget challenges in the future, the State Legislature could reduce appropriations to the University for the current and future biennia.

WWU Operating Fees Account. Tuition Operating Fees represent the operating portion of the tuition charged to students attending the University, and investment income on the operating fees. Other than a set percentage of the operating fee that is mandated to be used for student financial aid (currently four percent), operating fees are budgeted and used for operation of the University, at the discretion of the Board, after appropriation by the State Legislature.

Local Fund. The Local Fund is used by the University to account for dedicated revenue sources, such as indirect cost reimbursement on sponsored research projects, institutional administrative fees, miscellaneous student fees and interest earnings, and self-sustaining program revenues, distance education, conferences, non-credit outreach courses, summer session tuition, and other sales of materials and services to university units or non-university customers.

Grants and Contracts. Federal and state grant programs provide the largest source of funding in this category of activity, including student work study programs. Revenue in this category, other than financial aid, scholarships and students loans, includes approximately $10 million in Federal research grants and other grants.

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Western Washington University Foundation and University Endowments

The University is supported by a private not-for-profit corporation, the Western Washington University Foundation (the “Foundation”). The Foundation is legally separate from the University, and acts as the University’s primary fundraising organization to supplement State and other funding. In addition to funds raised directly by the Foundation, all unrestricted gifts to the University, with the exception of those involving a State match of funds, are forwarded to the Foundation. Since July 2011, University endowment funds are held, invested and managed by the Foundation, together with the Foundation endowments, in accordance with the Foundation’s investment policies under direction of the Foundation’s Finance and Audit Committee. Total Foundation investments as of June 30, 2011 are $59,648,658, which includes $5,608,043 in donor restricted and unrestricted funds and $4,248,581 in quasi-endowments invested by the Foundation on behalf of the University.

The Foundation’s Finance and Audit Committee is comprised of ten members: two members are faculty and/or staff of the University, two or more are Foundation directors appointed by the President of the Foundation board, and the Treasurer of the Foundation board, who serves as the Chair of the committee. The Executive Director and Finance Officer of the Foundation serve as ex-officio members and do not have voting rights. Members of the committee work in professions ranging from banking to investment management to business development.

The Foundation has investment and spending policies relating to endowments and investments. The target asset allocation for endowment investments is 70 percent equity and 30 percent fixed income investments. The Foundation seeks investments within these broad categories that provide diversification and enhance fund returns. It is the policy of the Foundation to spending formula is weighted with a base of 4.5 percent and a three year rolling market value average.

During fiscal year 2011, the Foundation raised $4.7 million from 9,320 donors and earned approximately $7.6 million in investment gains. As of June 30, 2011, total net assets of the Foundation were $51.2 million, of which $22.2 million were permanently restricted and $16.8 million were temporarily restricted. Funds are used primarily for direct academic support and scholarships

Under GASB 39 criteria, the Foundation is an affiliated organization that meets the criteria for discrete presentation. The Foundation maintains separately audited financial statements, and the financial condition and activities are presented as a discretely reported component unit in the University’s financial statements.

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Investments

The University manages cash and investments centrally, and pools University operating funds for investment purposes. Funds such as bond and reserve funds, unexpended bond proceeds, and renewal and replacement funds for certain auxiliary enterprises are separately invested. The University’s investment policy is structured to limit exposure to fair value losses by limiting the duration of the portfolio. Prior to July 2011, the University managed investment of its endowment funds, pursuant to a separate investment policy, with the primary objective of achieving long term growth.

Investments at Fair Market Value

As of January 31, 2012 (1)

As of June 30, 2011

As of June 30, 2010

University Investment Pool Cash and cash equivalents $ 54,989,833 $35,101,160 $51,085,200 Certificates of deposit 6,007,900 6,000,000 18,650,063 U.S. Treasuries -0- 5,000,000 -0- U.S. Agencies 35,000,000 30,000,000 -0- University Endowment Funds Cash and cash equivalents 51,522 100,050 1,011,589 Fixed Income 1,729,447 1,887,625 2,331,691 Equity securities 5,637,612 6,332,456 4,657,981 Real estate 558,300 515,882 -0- Alternative investments 1,475,670 1,020,611 -0-

Other University Funds (2) Certificates of Deposit 1,493,498 2,977,258 2,812,169 State Treasurer’s LGIP 1,758,413 2,055,907 6,044,593 U.S. Agencies 1,525,000 -0- -0- Miscellaneous 1,010 1,010

Total

1,010

$110,228,205 $90,991,959 $86,594,296 (1) Information is unaudited. (2) Includes bond funds and reserves and unexpended bond proceeds.

State Normal School Permanent Fund

The University is a beneficiary of the State’s Normal School Permanent Fund (the “Permanent Fund”), established under RCW 43.79.160 as a permanent endowment fund, the earnings from which are invested and used for the benefit of the State’s four regional universities, including Central and Eastern Washington Universities, The Evergreen State College, and the University. The primary source of new principal for the Permanent Fund are revenues, primarily timber sales, from certain State lands granted to the State by the Federal government for state normal schools, and which are managed by the State’s Department of Natural Resources. The principal and revenue of the Permanent Fund are invested by the State Treasurer’s Office. For the year ending June 30, 2011, the University received $3,229,426 in earnings and distributions from the Permanent Fund, which is used for capital purposes of the University, after appropriation by the State Legislature.

Risk Management

The University participates in a State risk management self-insurance program. Premiums paid by the University to the State are based on actuarially determined projections and include allowances for payments of both outstanding and current liabilities. The University self-insures unemployment compensation for all employees. In addition, commercial insurance coverage for property casualty loss on the residence halls and the Wade King Student Recreation Center is maintained in accordance with the related bond resolutions.

Pension Plans

The University offers four contributory pension plans that cover eligible employees: (i) the Public Employees’ Retirement System (“PERS”), (ii) the Washington State Teachers’ Retirement System (“TRS”), (iii) the Law Enforcement Officers’ and Firefighters’ Retirement System (“LEOFF”) and (iv) the Western Washington University Retirement Plan (“WWURP”). Under these plans, the employee and employer contribute a percentage of the employee’s compensation. PERS, TRS and LEOFF are cost sharing, multiple-employer defined benefit public retirement plans administered by the State. An actuarial valuation of these plans for University employees is not available on a stand-alone basis. See Appendix C, Note 19, for additional discussion of the University’s pension plans.

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WWURP. The WWURP is a defined contribution pension plan with a supplemental payment, when required. The WWURP plan covers faculty, professional staff, and certain other employees and is administered by the University. The University’s Board is authorized to establish and amend benefit provisions. Contributions to the plan are invested in annuity contracts or mutual fund accounts offered by one or more fund sponsors. Benefits from fund sponsors are available upon separation or retirement at the employee’s option. Employees have at all times a 100 percent vested interest in their accumulations Employee contribution rates to WWURP are based on age, and range from 5 percent to 10 percent of salary. The University matches employee contributions to this plan, and all required contributions have been made.

The WWURP contributions for the year ending June 30, 2011, were $5,624,889 for employees and $5,612,217 for the University.

PERS, TRS and LEOFF. PERS I provides retirement and disability benefits, and minimum benefit increases beginning at age 66 to eligible non-academic plan members hired prior to October 1, 1977. PERS II and III provide retirement and disability benefits, and a cost-of-living allowance, to eligible non-academic plan members hired on or after October 1, 1977. In addition, PERS III has a defined contribution component, which is fully funded by employee contributions. PERS defined benefit plan benefits are vested after an employee completes five years of eligible service.

TRS I provides retirement and disability benefits, a lump sum death benefit, and minimum benefits increases beginning at age 65 to certain eligible faculty hired prior to October 1, 1977. TRS II and III provide retirement benefits, and cost-of-living allowance to certain eligible faculty hired on or after October 1, 1977.

In addition TRS III has a defined contribution component which is fully funded by employee contributions. Defined benefit plan benefits are vested after an employee completes five years of eligible service.

LEOFF II provides retirement benefits and a cost of living allowance for eligible law enforcement officers. LEOFF System benefits are vested after an employee completes five years of eligible service.

The Washington State Legislature establishes or amends benefit provisions for PERS, TRS, and LEOFF. Additional information concerning plan descriptions and benefit provisions is included in a Comprehensive Annual Financial Report publicly available from the Washington System Department of Retirement System, P.O. Box 48380, Olympia, WA, 98504.

The required contribution rates expressed as a percentage of covered payroll at June 30, 2011, were as follows:

Employee University PERS Plan I 6.00% 5.31% Plan II 3.90 5.31 Plan III 5% to 15% 5.31 TRS Plan I 6.00% 6.14% Plan II 3.36 6.14 Plan III 5% to 15% 6.14 LEOFF Plan II 8.46% 5.24%

The required contributions for the year ending June 30, 2011, were as follows:

Employee University PERS $1,466,592 $1,738,991 TRS 28,122 26,711 LEOFF 65,066 66,202

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Contributions rates for the University were updated effective July 1, 2011, and again, effective September 1, 2011. The current contribution rates, effective September 1, 2011, are shown in the table below.

Employee University PERS Plan I 6.00% 7.25% Plan II 4.64 7.25 Plan III 5% to 15% 7.25 TRS Plan I 6.00% 8.04% Plan II 3.37 8.04 Plan III 5% to 15% 8.04 LEOFF Plan II 8.46% 8.62%

Unfunded Pension Liabilities

The University makes direct supplemental payments to qualifying retirees when the retirement benefit provided by the plan sponsor does not meet the benefit goal set forth in the plan, based on a one-time calculation at each employee's retirement date. While the University will continue making supplemental payments required for qualifying retirees, this feature of the WWURP no longer applies for new employees hired after June 30, 2011. The University received an actuarial evaluation of the supplemental component of the WWURP during fiscal 2011, which determined the Unfunded Actuarial Accrued Liability as of June 30, 2011 was $10,035,000, which is amortized over a 13 year period. The evaluation established an Annual Required Contribution of $1,400,000. The actuarial assumptions included an investment rate of return of 6 percent to 8 percent and projected salary increases ranging from 2 percent to 4 percent. Approximately $72,672,927 of the University’s payroll was covered under this plan during fiscal year 2011.

Other Post Employment Benefits

Health care and life insurance programs for employees of the State are administered by the Washington State Health Care Authority (the “HCA”). The HCA calculates the premium amounts each year that are sufficient to fund the State-wide health and life insurance programs on a pay-as-you-go basis. These costs are passed through to individual state agencies based upon active employee headcount; the agencies pay the premiums for active employees to the HCA. The agencies may also charge employees for certain higher cost options elected by the employees.

The State retirees may elect coverage through state health and life insurance plans, for which they pay less than the full cost of the benefits, based on their age and other demographic factors.

The health care premiums for active employees, which are paid by the agency during employees’ working careers, subsidize the “underpayments” of the retirees. An additional factor in the Other Post Employment Benefits (“OPEB”) obligation is a payment that is required by the State Legislature to reduce the premiums for retirees covered by Medicare (an “explicit subsidy”). For fiscal 2011, this amount was $183 per retiree eligible for parts A and B of Medicare, per month. This is also passed through to State agencies via active employees rates charged to the agency.

There is no formal State or University plan that underlies the subsidy of retiree health and life insurance. An actuarial study performed by the State Office of the State Actuary calculated the total OPEB obligation of the State at July 1, 2011.

The actuary calculated the OPEB obligation based on individual state employee data, including age, retirement eligibility, and length of service. The probability of an employee of a given age and length of service retiring and receiving OPEB benefits is based on statewide historical data. Since sufficient specific employee data and other actuarial data are not available at levels below the statewide level, such amounts have not been determined nor recorded in the University’s financial statements. The State’s combined annual financial report can be obtained at: http://www.ofm.wa.gov/cafr/.

The University was billed and paid approximately $18.7 million for active and retiree health care expenses during fiscal year 2011 and $16.6 million in fiscal year 2010.

Funding Status of State Retirement Systems

While the University’s contributions in fiscal year 2011 represented its full current liability under PERS, TRS and LEOFF, any unfunded pension benefit obligations within the systems could be reflected in future years as higher contribution rates. The website of the Office of the State Actuary includes information regarding the values and funding levels of these retirement plans.

According to the 2010 Actuarial Valuation Report (the “Report”) prepared by the Office of the State Actuary, as of June 30, 2010, PERS Plans 2 and 3 and LEOFF Plan 2 had no unfunded actuarial accrued liability. According to the Report, the total

A-14

unfunded actuarial accrued liability of PERS Plan 1 is $3.238 billion and of TRS Plan 1 is $1.439 billion, each as of June 30, 2010. The assumptions used by the State Actuary in calculating unfunded liability are an 8 percent annual rate of investment return, 4 percent general salary increases and 3.5 percent inflation. Liabilities were valued using the “Projected Unit Credit” cost method and assets valued using the actuarial value of assets, which defers a portion of the annual investment gains or losses over a period of up to eight years.

Assets for one plan may not be used to fund benefits for another plan; however, all employers in PERS and all employers in TRS are required to make contributions at rates (percentage of payroll) determined by the Office of the State Actuary every two years for the purpose of amortizing within a rolling 10-year period the unfunded actuarial accrued liability in PERS Plan 1 and TRS Plan 1, respectively. The State Legislature in 2009 established certain maximum contribution rates that began in 2009 and continue until 2015 and certain minimum contribution rates that are to become effective in 2015 and remain in effect until the actuarial value of assets in PERS Plan 1 and in TRS Plan 1 equal 100 percent of their respective actuarial accrued liability. These rates are subject to change by future legislation enacted by the State Legislature to address future changes in actuarial and economic assumptions and investment performance.

In 2011, the State Legislature ended the future automatic annual increase, which is a fixed dollar amount multiplied by the member’s total years of service, for most retirees in PERS Plan 1 and TRS Plan 1. This action is expected to reduce the unfunded accrued actuarial liability in PERS Plan 1 and TRS Plan 1, although litigation challenging this legislation has been filed.

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pro

vide

not

mor

e th

an $

2,50

0,00

0 of

net

Bon

d pr

ocee

ds (n

et

-2

-

of c

osts

of

issu

ance

) (th

e “I

mpr

ovem

ent

Bon

ds”)

in

orde

r to

obt

ain

long

ter

m f

inan

cing

for

addi

tions

, ren

ovat

ion

and

impr

ovem

ents

to re

crea

tiona

l fac

ilitie

s of t

he U

nive

rsity

; and

WH

EREA

S, th

e U

nive

rsity

has

out

stan

ding

its

Stud

ent R

ecre

atio

n Fe

e R

even

ue B

onds

,

Serie

s 20

02, i

ssue

d un

der

date

of

Febr

uary

1, 2

002,

pur

suan

t to

Res

olut

ion

No.

200

2-01

(th

e

“200

2 B

ond

Res

olut

ion”

), m

atur

ing

in p

rinci

pal a

mou

nts a

nd b

earin

g in

tere

st a

s fol

low

s:

Mat

urity

Yea

rs

(May

1)

Prin

cipa

l A

mou

nts

Inte

rest

R

ates

2012

$

640

,000

4.

30%

20

13

670,

000

4.40

20

14

700,

000

4.50

20

15

725,

000

5.00

20

16

765,

000

5.00

20

17

805,

000

5.00

20

18

845,

000

5.00

20

19

885,

000

5.00

20

20

930,

000

5.00

20

21

975,

000

5.00

20

22

1,02

0,00

0 5.

00

2023

1,

075,

000

5.00

20

27

4,87

0,00

0 5.

00

2033

9,

330,

000

5.00

(the

“200

2 B

onds

”); a

nd

W

HER

EAS,

the

200

2 B

onds

mat

urin

g on

and

afte

r M

ay 1

, 20

13 (

the

“Ref

unde

d

Bon

ds”)

, are

sub

ject

to o

ptio

nal r

edem

ptio

n at

the

optio

n of

the

Uni

vers

ity in

who

le o

r in

part

on

any

date

on

or a

fter M

ay 1

, 201

2 at

par

; and

WH

EREA

S, th

e U

nive

rsity

has

bee

n ad

vise

d th

at s

ubst

antia

l deb

t ser

vice

savi

ngs m

ay b

e

obta

ined

by

refu

ndin

g th

e R

efun

ded

Bon

ds th

roug

h th

e is

suan

ce o

f bon

ds h

erei

n au

thor

ized

to b

e

issu

ed (t

he “

Ref

undi

ng B

onds

”); a

nd

WH

EREA

S, i

t ap

pear

s to

the

Boa

rd o

f Tr

uste

es t

hat

it is

in

the

best

int

eres

t of

the

Uni

vers

ity t

hat

the

Impr

ovem

ent

Bon

ds a

nd t

he R

efun

ding

Bon

ds b

e co

mbi

ned

into

a s

ingl

e

B-2

-3

-

issu

e of

Rev

enue

and

Ref

undi

ng B

onds

in

the

aggr

egat

e pr

inci

pal

amou

nt o

f no

t to

exc

eed

$27,

000,

000

(the

“Bon

ds”)

; and

WH

EREA

S, u

nder

the

term

s of t

he 2

002

Bon

d R

esol

utio

n, th

e U

nive

rsity

is a

utho

rized

to

issu

e ad

ditio

nal

bond

s ha

ving

a p

arity

of

lien

on R

ecre

atio

n C

ente

r R

even

ues

(as

here

inaf

ter

defin

ed) w

ith th

e 20

02 B

onds

; and

W

HER

EAS,

the

Boa

rd h

as d

eter

min

ed to

del

egat

e to

the

Pres

iden

t and

Tre

asur

er c

erta

in

mat

ters

rela

ting

to th

e m

anne

r and

tim

ing

of sa

le o

f the

Bon

ds;

N

OW

, TH

EREF

OR

E, B

E IT

RES

OLV

ED B

Y T

HE

BO

AR

D O

F TR

UST

EES

OF

WES

TER

N W

ASH

ING

TON

UN

IVER

SITY

, as f

ollo

ws:

Se

ctio

n 1 .

D

efin

ition

s. T

he te

rms

defin

ed in

this

Sec

tion

1 sh

all,

for a

ll pu

rpos

es o

f

this

Res

olut

ion

(incl

udin

g th

e re

cita

ls)

and

of a

ny R

esol

utio

n su

pple

men

tal

here

to,

have

the

follo

win

g m

eani

ngs:

Acq

uire

d O

blig

atio

ns m

eans

the

Gov

ernm

ent

Obl

igat

ions

acq

uire

d by

the

Uni

vers

ity

unde

r th

e te

rms

of t

his

Res

olut

ion

and

the

Escr

ow A

gree

men

t to

eff

ect

the

defe

asan

ce a

nd

refu

ndin

g of

the

Ref

unde

d B

onds

.

Add

ition

al B

onds

mea

ns o

ne o

r m

ore

serie

s of

add

ition

al o

blig

atio

ns o

f th

e U

nive

rsity

issu

ed o

n a

parit

y of

lien

with

the

Bon

ds in

acc

orda

nce

with

Sec

tion

11 o

f thi

s Res

olut

ion.

Agg

rega

te A

nnua

l Deb

t Ser

vice

mea

ns A

nnua

l Deb

t Ser

vice

for

all

Out

stan

ding

Par

ity

Bon

ds a

nd a

ll Pa

rity

Bon

ds a

utho

rized

but

uni

ssue

d un

less

suc

h Pa

rity

Bon

ds a

re a

utho

rized

to

prov

ide

perm

anen

t fin

anci

ng in

con

nect

ion

with

the

issu

ance

of s

hort

term

obl

igat

ions

.

A

nnua

l D

ebt

Serv

ice

mea

ns,

for

any

spec

ified

Fis

cal

Yea

r, th

e su

m o

f th

e am

ount

s

requ

ired

to b

e pa

id in

to th

e B

ond

Fund

, in

such

Fis

cal Y

ear,

to p

ay (a

) th

e in

tere

st d

ue in

suc

h

Fisc

al Y

ear

on a

ll ou

tsta

ndin

g Pa

rity

Bon

ds, e

xclu

ding

inte

rest

to b

e pa

id f

rom

the

proc

eeds

of

-4

-

the

sale

of

Parit

y B

onds

, (b)

the

prin

cipa

l of

all

outs

tand

ing

Seria

l B

onds

due

in

such

Fis

cal

Yea

r, an

d (c

) th

e si

nkin

g fu

nd r

equi

rem

ent,

if an

y, f

or s

uch

Fisc

al Y

ear.

For

pur

pose

s of

the

Add

ition

al B

onds

tes

t in

Sec

tion

11,

with

res

pect

to

Parit

y B

onds

bea

ring

varia

ble

rate

s of

inte

rest

, Deb

t Ser

vice

sha

ll in

clud

e an

am

ount

for a

ny p

erio

d eq

ual t

o th

e am

ount

whi

ch w

ould

have

bee

n pa

yabl

e fo

r prin

cipa

l and

inte

rest

on

such

Par

ity B

onds

dur

ing

such

per

iod

com

pute

d

on th

e as

sum

ptio

n th

at th

e am

ount

of

varia

ble

rate

Par

ity B

onds

Out

stan

ding

as

of th

e da

te o

f

such

com

puta

tion

wou

ld b

e am

ortiz

ed (

i) in

acc

orda

nce

with

the

man

dato

ry r

edem

ptio

n

prov

isio

ns, i

f any

, set

forth

in th

e R

esol

utio

n au

thor

izin

g th

e is

suan

ce o

f suc

h Pa

rity

Bon

ds, o

r if

man

dato

ry r

edem

ptio

n pr

ovis

ions

are

not

pro

vide

d, d

urin

g a

perio

d co

mm

enci

ng o

n th

e da

te o

f

com

puta

tion

and

endi

ng o

n th

e da

te th

irty

(30)

yea

rs a

fter t

he d

ate

of is

suan

ce; (

ii) a

t an

inte

rest

rate

equ

al to

the

rate

pub

lishe

d as

the

Bon

d B

uyer

Rev

enue

Bon

d In

dex

for

mun

icip

al r

even

ue

bond

s w

ithin

the

thirt

y (3

0) d

ay p

erio

d pr

ior t

o th

e da

te o

f cal

cula

tion

(if s

uch

inde

x is

no

long

er

publ

ishe

d, a

noth

er n

atio

nally

reco

gniz

ed in

dex

for m

unic

ipal

reve

nue

bond

s m

atur

ing

in tw

enty

(20)

to th

irty

(30)

yea

rs);

(iii)

to p

rovi

de fo

r ess

entia

lly le

vel a

nnua

l deb

t ser

vice

of p

rinci

pal a

nd

inte

rest

ove

r suc

h pe

riod.

A

ppro

ved

Bid

mea

ns th

e w

inni

ng b

id s

ubm

itted

for a

ser

ies

of th

e B

onds

if s

uch

serie

s is

sold

by

Com

petit

ive

Sale

.

A

utho

rize

d R

epre

sent

ativ

e of

the

Uni

vers

ity m

eans

the

Pres

iden

t of t

he U

nive

rsity

.

A

vaila

ble

Fun

ds m

eans

mon

ey re

ceiv

ed fr

om c

olle

ctio

n of

the

SRC

Fee

, plu

s R

ecre

atio

n

Cen

ter R

even

ue.

A

vera

ge A

nnua

l D

ebt

Serv

ice

mea

ns,

for

each

ser

ies

of P

arity

Bon

ds,

the

aggr

egat

e

Ann

ual D

ebt S

ervi

ce in

all

year

s bet

wee

n th

e da

te o

f cal

cula

tion

and

the

final

sche

dule

d m

atur

ity

ther

eof,

divi

ded

by th

e nu

mbe

r of y

ears

bet

wee

n su

ch d

ates

.

B-3

-5

-

B

enef

icia

l O

wne

r m

eans

the

per

son

nam

ed o

n th

e B

ond

Reg

iste

r as

hav

ing

the

right

,

with

out a

phy

sica

l cer

tific

ate

evid

enci

ng s

uch

right

, to

trans

fer,

to h

ypot

heca

te a

nd to

rece

ive

the

paym

ent o

f the

prin

cipa

l of a

nd th

e in

tere

st o

n ea

ch B

ond,

whe

n du

e.

B

oard

mea

ns t

he B

oard

of

Trus

tees

of

the

Uni

vers

ity,

whi

ch e

xist

s an

d fu

nctio

ns

purs

uant

to c

hapt

er 2

8B.3

5 R

CW

, as h

eret

ofor

e an

d he

reaf

ter a

men

ded.

B

ond

Act

mea

ns R

CW

28B

.10.

300

thro

ugh

RC

W 2

8B.1

0.33

0, in

clus

ive,

as

here

tofo

re o

r

here

afte

r am

ende

d.

B

ond

Cou

nsel

mea

ns a

n at

torn

ey o

r fir

m o

f at

torn

eys

who

se o

pini

on is

acc

epte

d in

the

natio

nal t

ax-e

xem

pt c

apita

l mar

kets

as

to th

e is

suan

ce a

nd v

alid

ity o

f mun

icip

al se

curit

ies

and

as

to th

e in

tere

st p

aid

ther

eon

bein

g ex

empt

fro

m f

eder

al in

com

e ta

xatio

n, w

hich

atto

rney

or

firm

has b

een

appr

oved

by,

sele

cted

by

or re

tain

ed b

y th

e U

nive

rsity

from

tim

e to

tim

e.

B

ond

Fun

d m

eans

the

Rec

reat

ion

Cen

ter

Bon

d Fu

nd m

aint

aine

d pu

rsua

nt to

Sec

tion

8

here

of.

B

ond

Insu

ranc

e Po

licy

mea

ns t

he i

nsur

ance

pol

icy,

if

any,

iss

ued

by t

he I

nsur

er

guar

ante

eing

the

sch

edul

ed p

aym

ent

of p

rinci

pal

of a

nd i

nter

est

on t

he B

onds

whe

n du

e as

prov

ided

ther

ein.

B

ond

Purc

hase

Con

trac

t m

eans

, if

the

Bon

ds s

hall

be s

old

by N

egot

iate

d Sa

le,

the

purc

hase

con

tract

rela

ting

to th

e B

onds

bet

wee

n th

e U

nive

rsity

and

the

Und

erw

riter

.

B

ond

Reg

iste

r mea

ns th

e re

gist

ratio

n re

cord

s for

the

Bon

ds m

aint

aine

d by

the

Reg

istra

r.

B

onds

mea

ns th

e W

este

rn W

ashi

ngto

n U

nive

rsity

Stu

dent

Rec

reat

ion

Fee

Rev

enue

and

Ref

undi

ng B

onds

, 201

2, a

utho

rized

to b

e is

sued

by

this

Res

olut

ion.

B

ond

Year

mea

ns e

ach

one-

year

per

iod

that

end

s on

the

date

sel

ecte

d by

the

Uni

vers

ity.

The

first

and

las

t B

ond

Yea

rs m

ay b

e sh

ort

perio

ds.

If n

o da

y is

sel

ecte

d by

the

Uni

vers

ity

-6

-

befo

re th

e ea

rlier

of

the

final

mat

urity

dat

e of

the

Bon

ds o

r th

e da

te th

at is

fiv

e ye

ars

afte

r th

e

date

of

issu

ance

of

the

Bon

ds, B

ond

Yea

rs e

nd o

n ea

ch a

nniv

ersa

ry o

f the

dat

e of

issu

e an

d on

the

final

mat

urity

dat

e of

the

Bon

ds.

B

usin

ess

Day

mea

ns a

day

whi

ch i

s no

t a

Satu

rday

, Su

nday

or

othe

r da

y on

whi

ch

com

mer

cial

ban

ks in

the

citie

s of

Sea

ttle,

Was

hing

ton

and

New

Yor

k, N

ew Y

ork,

are

aut

horiz

ed

or re

quire

d by

law

to c

lose

.

Cal

l Dat

e m

eans

the

date

on

whi

ch b

onds

will

be

prep

aid,

as

sele

cted

by

the

Uni

vers

ity,

whi

ch d

ate

will

be

no e

arlie

r tha

n M

ay 1

, 201

2.

C

losi

ng D

ate

mea

ns t

he d

ate

and

time

whe

n th

e B

onds

are

del

iver

ed to

the

suc

cess

ful

bidd

er fo

r the

Bon

ds in

exc

hang

e fo

r pay

men

t in

full

ther

efor

.

C

ode

mea

ns t

he I

nter

nal

Rev

enue

Cod

e of

198

6, a

s he

reto

fore

or

here

afte

r am

ende

d,

toge

ther

with

all

corre

spon

ding

and

app

licab

le f

inal

, te

mpo

rary

or

prop

osed

reg

ulat

ions

and

reve

nue

rulin

gs a

s is

sued

or

amen

ded

with

res

pect

the

reto

by

the

Uni

ted

Stat

es T

reas

ury

Dep

artm

ent o

r the

Inte

rnal

Rev

enue

Ser

vice

to th

e ex

tent

app

licab

le to

the

Bon

ds.

Com

mon

Res

erve

Fun

d m

eans

the

“C

omm

on R

eser

ve F

und”

est

ablis

hed

purs

uant

to

Sect

ion

8 of

this

Res

olut

ion.

Com

mon

Res

erve

Req

uire

men

t m

eans

the

low

est

of (

i) m

axim

um A

ggre

gate

Ann

ual

Deb

t Se

rvic

e w

ith r

espe

ct t

o O

utst

andi

ng C

over

ed B

onds

; (ii

) 12

5 pe

rcen

t of

ave

rage

Ann

ual

Deb

t Se

rvic

e w

ith r

espe

ct t

o O

utst

andi

ng C

over

ed B

onds

; an

d (ii

i) 10

per

cent

of

the

initi

al

prin

cipa

l am

ount

of

each

ser

ies

then

Out

stan

ding

of

Cov

ered

Bon

ds.

The

Com

mon

Res

erve

Req

uire

men

t sh

all

be d

eter

min

ed a

nd c

alcu

late

d as

of

the

date

of

issu

ance

of

each

ser

ies

of

Cov

ered

Bon

ds (a

nd re

calc

ulat

ed u

pon

the

issu

ance

of a

subs

eque

nt se

ries o

f Cov

ered

Bon

ds a

nd

also

, at t

he U

nive

rsity

’s o

ptio

n, u

pon

the

paym

ent o

f prin

cipa

l of C

over

ed B

onds

) and

pro

vide

d

B-4

-7

-

that

if,

as a

res

ult

of t

he i

ssua

nce

of A

dditi

onal

Bon

ds, t

he i

ncre

ase

in t

he C

omm

on R

eser

ve

Req

uire

men

t of A

dditi

onal

Bon

ds w

ould

requ

ire th

at a

n am

ount

be

cont

ribut

ed to

the

Com

mon

Res

erve

Fun

d th

at is

mor

e th

an th

e Ta

x M

axim

um, t

he C

omm

on R

eser

ve R

equi

rem

ent s

hall

be

adju

sted

to re

quire

a c

ontri

butio

n eq

ual t

o th

e Ta

x M

axim

um.

C

ompe

titiv

e Sa

le m

eans

the

proc

ess

by w

hich

the

Bon

ds (o

r a

porti

on o

f the

m) a

re s

old

thro

ugh

the

publ

ic so

licita

tion

of b

ids f

rom

und

erw

ritin

g fir

ms.

C

over

ed B

onds

mea

ns a

ny P

arity

Bon

ds, d

esig

nate

d as

Cov

ered

Bon

ds s

ecur

ed b

y th

e

Com

mon

Res

erve

Fun

d.

A C

redi

t Eve

nt o

ccur

s w

hen

(a) a

Qua

lifie

d Le

tter o

f Cre

dit t

erm

inat

es, (

b) th

e is

suer

of

Qua

lifie

d In

sura

nce

or a

Qua

lifie

d Le

tter

of C

redi

t sh

all

beco

me

inso

lven

t or

no

long

er b

e in

exis

tenc

e, o

r (c

) a

Qua

lifie

d Le

tter

of C

redi

t or

Qua

lifie

d In

sura

nce

no l

onge

r m

eets

the

requ

irem

ents

est

ablis

hed

ther

efor

in th

e de

finiti

on th

ereo

f.

Cre

dit

Fac

ility

mea

ns a

pol

icy

of m

unic

ipal

bon

d in

sura

nce,

a l

ette

r of

cre

dit,

sure

ty

bond

, lin

e of

cre

dit,

guar

ante

e, s

tand

by p

urch

ase

agre

emen

t or o

ther

fina

ncia

l ins

trum

ent i

ssue

d

by a

third

par

ty w

hose

deb

t obl

igat

ions

are

rate

d at

the

time

of is

suan

ce o

f suc

h C

redi

t Fac

ility

by

at le

ast t

wo

Rat

ing

Age

ncie

s at

ratin

g(s)

not

low

er th

an th

e th

en c

urre

nt lo

ng te

rm ra

ting

on th

e

Parit

y B

onds

whi

ch C

redi

t Fac

ility

obl

igat

es a

third

par

ty to

mak

e pa

ymen

t or p

rovi

de fu

nds

for

the

paym

ent o

f fin

anci

al o

blig

atio

ns o

f th

e U

nive

rsity

, inc

ludi

ng b

ut n

ot li

mite

d to

pay

men

t of

the

prin

cipa

l of,

inte

rest

on

or p

urch

ase

pric

e of

Par

ity B

onds

or

mee

ting

rese

rve

requ

irem

ents

ther

efor

. F

or p

urpo

ses

of t

his

Res

olut

ion,

a C

redi

t Fa

cilit

y in

clud

es a

ny Q

ualif

ied

Insu

ranc

e

and/

or Q

ualif

ied

Lette

r of C

redi

t.

Cre

dit F

acili

ty Is

suer

mea

ns th

e is

suer

of a

ny C

redi

t Fac

ility

.

-8

-

D

TC m

eans

The

Dep

osito

ry T

rust

Com

pany

of N

ew Y

ork,

as

depo

sito

ry fo

r the

Bon

ds,

or a

ny su

cces

sor o

r sub

stitu

te d

epos

itory

for t

he B

onds

.

Esc

row

Age

nt m

eans

the

escr

ow a

gent

, if a

ny, s

elec

ted

by th

e A

utho

rized

Rep

rese

ntat

ive

of th

e U

nive

rsity

in a

ccor

danc

e w

ith S

ectio

n 9

of th

is R

esol

utio

n.

Esc

row

Agr

eem

ent m

eans

the

Escr

ow D

epos

it A

gree

men

t, if

any,

to b

e da

ted

as o

f th

e

date

of t

he C

losi

ng D

ate

of th

e B

onds

subs

tant

ially

in th

e fo

rm a

ttach

ed h

eret

o as

Exh

ibit

A.

F

isca

l Yea

r mea

ns th

e U

nive

rsity

’s d

uly

adop

ted

fisca

l yea

r.

F

und

mea

ns a

ny s

peci

al fu

nd c

reat

ed b

y th

is R

esol

utio

n an

d pl

edge

d as

sec

urity

for

the

Parit

y B

onds

pur

suan

t to

this

Res

olut

ion.

G

over

nmen

t Obl

igat

ions

has

the

mea

ning

giv

en to

suc

h te

rm in

RC

W C

hapt

er 3

9.53

, as

the

sam

e m

ay b

e am

ende

d fr

om ti

me

to ti

me,

pro

vide

d th

at s

uch

oblig

atio

ns a

re n

onca

llabl

e an

d

are

oblig

atio

ns is

sued

or u

ncon

ditio

nally

gua

rant

eed

by th

e U

nite

d St

ates

of A

mer

ica.

Impr

ovem

ent B

onds

mea

ns th

at p

ortio

n of

the

Bon

ds a

utho

rized

to b

e is

sued

her

ein,

in a

prin

cipa

l am

ount

to

prov

ide

not

mor

e th

an $

2,50

0,00

0 of

net

Bon

d pr

ocee

ds (

net

of c

osts

of

issu

ance

), fo

r th

e pu

rpos

e of

fin

anci

ng t

he c

ost

of t

he i

mpr

ovem

ents

to

recr

eatio

nal

faci

litie

s

appr

oved

by

the

Boa

rd.

In

sure

r m

eans

suc

h bo

nd i

nsur

ance

com

pany

, if

any,

fro

m w

hich

a B

ond

Insu

ranc

e

Polic

y, if

any

, may

be

acqu

ired

for t

he B

onds

, in

acco

rdan

ce w

ith th

is R

esol

utio

n.

Le

gisl

atur

e m

eans

the

Legi

slat

ure

of th

e St

ate.

Le

tter

of R

epre

sent

atio

ns m

eans

the

Bla

nket

Iss

uer

Lette

r of

Rep

rese

ntat

ions

fro

m th

e

Uni

vers

ity to

DTC

.

B-5

-9

-

Liqu

idity

Fac

ility

mea

ns a

line

of

cred

it, s

tand

by p

urch

ase

agre

emen

t or

othe

r fin

anci

al

inst

rum

ent o

r any

com

bina

tion

of th

e fo

rego

ing,

whi

ch o

blig

ates

a th

ird p

arty

to m

ake

paym

ent

or to

pro

vide

fund

s for

the

paym

ent o

f the

pur

chas

e pr

ice

of P

arity

Bon

ds.

Liqu

idity

Fac

ility

Issu

er m

eans

the

issu

er o

f any

Liq

uidi

ty F

acili

ty.

M

oody

’s m

eans

Moo

dy’s

Inv

esto

rs S

ervi

ce,

Inc.

, a

corp

orat

ion

duly

org

aniz

ed a

nd

exis

ting

unde

r and

by

virtu

e of

the

law

s of

the

Stat

e of

Del

awar

e, a

nd it

s su

cces

sors

and

ass

igns

,

exce

pt th

at if

suc

h co

rpor

atio

n sh

all b

e di

ssol

ved

or l

iqui

date

d or

sha

ll no

lon

ger

perfo

rm th

e

func

tions

of

a se

curit

ies

ratin

g ag

ency

, the

n th

e te

rm M

oody

’s s

hall

be d

eem

ed to

ref

er to

any

othe

r nat

iona

lly re

cogn

ized

sec

uriti

es ra

ting

agen

cy (o

ther

than

S&

P) s

elec

ted

by th

e A

utho

rized

Rep

rese

ntat

ive

of th

e U

nive

rsity

.

MSR

B m

eans

the

Mun

icip

al S

ecur

ities

Rul

emak

ing

Boa

rd o

r an

y su

cces

sor

to i

ts

func

tions

.

Unt

il ot

herw

ise

desi

gnat

ed

by

the

MSR

B

or

the

Secu

ritie

s an

d Ex

chan

ge

Com

mis

sion

, any

info

rmat

ion,

repo

rts o

r not

ices

sub

mitt

ed to

the

MSR

B in

com

plia

nce

with

the

Rul

e ar

e to

be

subm

itted

thr

ough

the

MSR

B’s

Ele

ctro

nic

Mun

icip

al M

arke

t A

cces

s sy

stem

(“EM

MA

”), c

urre

ntly

loca

ted

at w

ww

.em

ma.

msr

b.or

g.

N

egot

iate

d Sa

le m

eans

the

proc

ess b

y w

hich

the

Bon

ds (o

r a p

ortio

n of

them

) are

sold

by

nego

tiatio

n to

one

or m

ore

unde

rwrit

ing

firm

s se

lect

ed b

y th

e A

utho

rized

Rep

rese

ntat

ive

of th

e

Uni

vers

ity.

N

et P

roce

eds,

whe

n us

ed w

ith r

efer

ence

to B

onds

, mea

ns th

e pr

inci

pal a

mou

nt o

f su

ch

Bon

ds, p

lus

accr

ued

inte

rest

and

orig

inal

issu

e pr

emiu

m, i

f any

, and

less

orig

inal

issu

e di

scou

nt,

if an

y, a

nd p

roce

eds,

if an

y, d

epos

ited

in th

e C

omm

on R

eser

ve F

und.

O

ffic

ial N

otic

e of

Sal

e m

eans

, if t

he B

onds

sha

ll be

sol

d by

Com

petit

ive

Sale

, the

not

ice

of B

ond

sale

aut

horiz

ed to

be

give

n in

Sec

tion

16 o

f thi

s Res

olut

ion.

-1

0-

O

ffic

ial S

tate

men

t mea

ns th

e O

ffic

ial S

tate

men

t of

the

Uni

vers

ity p

erta

inin

g to

the

sale

of th

e B

onds

, in

eith

er p

relim

inar

y or

fina

l for

m.

O

pini

on o

f Bon

d C

ouns

el m

eans

an

opin

ion

in w

ritin

g of

Bon

d C

ouns

el.

O

pini

on o

f Cou

nsel

mea

ns a

n op

inio

n in

writ

ing

of a

law

yer a

dmitt

ed to

pra

ctic

e in

the

Stat

e.

O

utst

andi

ng, w

hen

used

as

of a

par

ticul

ar ti

me

with

refe

renc

e to

Par

ity B

onds

, mea

ns a

ll

Parit

y B

onds

del

iver

ed h

ereu

nder

exc

ept:

(a

) Pa

rity

Bon

ds c

ance

led

by t

he R

egis

trar

or s

urre

nder

ed t

o th

e R

egis

trar

for

canc

ella

tion;

(b

) Pa

rity

Bon

ds p

aid

or d

eem

ed t

o ha

ve b

een

paid

with

in t

he m

eani

ng o

f th

is

reso

lutio

n; a

nd

(c

) Pa

rity

Bon

ds in

lieu

of o

r in

subs

titut

ion

for w

hich

repl

acem

ent P

arity

Bon

ds sh

all

have

bee

n ex

ecut

ed b

y th

e U

nive

rsity

and

del

iver

ed b

y th

e R

egis

trar h

ereu

nder

.

Pa

rity

Bon

ds m

eans

the

Bon

ds a

nd a

ny A

dditi

onal

Bon

ds.

Pe

rson

mea

ns a

ny n

atur

al p

erso

n, f

irm, j

oint

ven

ture

, ass

ocia

tion,

par

tner

ship

, bus

ines

s

trust

, cor

pora

tion,

pub

lic b

ody,

age

ncy

or p

oliti

cal s

ubdi

visi

on th

ereo

f or a

ny o

ther

sim

ilar e

ntity

.

Pr

ivat

e Pe

rson

mea

ns a

ny n

atur

al p

erso

n en

gage

d in

a t

rade

or

busi

ness

or

any

trust

,

esta

te, p

artn

ersh

ip, a

ssoc

iatio

n, c

ompa

ny o

r cor

pora

tion.

Pr

ivat

e Pe

rson

Use

mea

ns th

e us

e of

pro

perty

in a

trad

e or

bus

ines

s by

a P

rivat

e Pe

rson

if su

ch u

se i

s ot

her

than

as

a m

embe

r of

the

gen

eral

pub

lic.

Priv

ate

Pers

on U

se i

nclu

des

owne

rshi

p of

the

prop

erty

by

the

Priv

ate

Pers

on a

s wel

l as o

ther

arr

ange

men

ts th

at tr

ansf

er to

the

Priv

ate

Pers

on t

he a

ctua

l or

ben

efic

ial

use

of t

he p

rope

rty (

such

as

a le

ase,

man

agem

ent

or

ince

ntiv

e pa

ymen

t con

tract

or

othe

r sp

ecia

l arr

ange

men

t) in

suc

h a

man

ner a

s to

set

the

Priv

ate

B-6

-1

1-

Pers

on a

part

from

the

gene

ral p

ublic

. U

se o

f pro

perty

as a

mem

ber o

f the

gen

eral

pub

lic in

clud

es

atte

ndan

ce b

y th

e Pr

ivat

e Pe

rson

at

mun

icip

al m

eetin

gs o

r bu

sine

ss r

enta

l of

pro

perty

to

the

Priv

ate

Pers

on o

n a

day-

to-d

ay b

asis

if th

e re

ntal

pai

d by

suc

h Pr

ivat

e Pe

rson

is th

e sa

me

as th

e

rent

al p

aid

by a

ny P

rivat

e Pe

rson

who

des

ires

to re

nt th

e pr

oper

ty.

Use

of p

rope

rty b

y no

npro

fit

com

mun

ity g

roup

s or

com

mun

ity re

crea

tiona

l gro

ups

is n

ot tr

eate

d as

Priv

ate

Pers

on U

se if

suc

h

use

is in

cide

ntal

to th

e go

vern

men

tal u

ses

of p

rope

rty, t

he p

rope

rty is

mad

e av

aila

ble

for

such

use

by a

ll su

ch c

omm

unity

gro

ups

on a

n eq

ual b

asis

, and

suc

h co

mm

unity

gro

ups

are

char

ged

only

a d

e m

inim

is fe

e to

cov

er c

usto

dial

or s

ecur

ity e

xpen

ses.

Proj

ect m

eans

impr

ovem

ents

to th

e re

crea

tiona

l fac

ilitie

s of

the

Uni

vers

ity a

s ap

prov

ed

by th

e B

oard

.

Proj

ect F

und

mea

ns th

e fu

nd d

esig

nate

d as

the

“Rec

reat

ion

Cen

ter

Con

stru

ctio

n Fu

nd”

mai

ntai

ned

purs

uant

to S

ectio

n 9

of th

is R

esol

utio

n.

Qua

lifie

d In

sura

nce

mea

ns a

ny n

on-c

ance

labl

e m

unic

ipal

bon

d in

sura

nce

polic

y or

Sure

ty B

ond

issu

ed b

y an

y in

sura

nce

com

pany

lice

nsed

to c

ondu

ct a

n in

sura

nce

busi

ness

in a

ny

stat

e of

the

Uni

ted

Stat

es (

or b

y a

serv

ice

corp

orat

ion

actin

g on

beh

alf

of o

ne o

r m

ore

such

insu

ranc

e co

mpa

nies

) (i)

whi

ch i

nsur

ance

com

pany

or

com

pani

es a

re r

ated

, at

the

tim

e of

issu

ance

of

the

polic

y or

Sur

ety

Bon

d, a

s th

e ca

se m

ay b

e, i

n on

e of

the

tw

o hi

ghes

t R

atin

g

Cat

egor

ies

by o

ne o

r mor

e of

the

Rat

ing

Age

ncie

s fo

r uns

ecur

ed d

ebt o

r ins

uran

ce u

nder

writ

ing

or c

laim

s pa

ying

abi

lity

or (i

i) if

as a

resu

lt of

the

issu

ance

of i

ts p

olic

ies,

the

oblig

atio

ns in

sure

d

ther

eby

to b

e ra

ted

in o

ne o

f th

e tw

o hi

ghes

t Rat

ing

Cat

egor

ies

at th

e tim

e of

issu

ance

of

the

polic

y or

sure

ty b

ond

by o

ne o

r mor

e of

the

Rat

ing

Age

ncie

s.

Qua

lifie

d Le

tter

of C

redi

t m

eans

any

irr

evoc

able

let

ter

of c

redi

t is

sued

by

a fin

anci

al

inst

itutio

n, w

hich

inst

itutio

n m

aint

ains

an

offic

e, a

genc

y or

bra

nch

in th

e U

nite

d St

ates

and

is

-1

2-

rate

d, a

t the

tim

e of

issu

ance

of

the

lette

r of

cre

dit,

in o

ne o

f th

e tw

o hi

ghes

t lon

g te

rm R

atin

g

Cat

egor

ies b

y on

e or

mor

e of

the

Rat

ing

Age

ncie

s.

R

atin

g A

genc

y m

eans

Moo

dy’s

or S

&P.

Rat

ing

Cat

egor

y m

eans

the

gene

ric ra

ting

cate

gorie

s of

a R

atin

g A

genc

y, w

ithou

t reg

ard

to a

ny re

finem

ent o

r gra

datio

n of

such

ratin

g ca

tego

ry b

y a

num

eric

al m

odifi

er o

r oth

erw

ise.

R

CW

mea

ns th

e R

evis

ed C

ode

of W

ashi

ngto

n, a

s now

in e

xist

ence

or h

erea

fter a

men

ded,

or a

ny su

cces

sor c

odifi

catio

n of

the

law

s of t

he S

tate

of W

ashi

ngto

n.

R

ecor

d D

ate

mea

ns t

he 1

5th d

ay o

f th

e ca

lend

ar m

onth

im

med

iate

ly p

rece

ding

eac

h

inte

rest

pay

men

t dat

e or

, as

to a

ny d

ate

upon

whi

ch d

efau

lted

inte

rest

on

the

Bon

ds is

to b

e pa

id,

the

date

est

ablis

hed

by th

e R

egis

trar a

s th

e sp

ecia

l rec

ord

date

for t

he p

aym

ent o

f suc

h de

faul

ted

inte

rest

.

R

ecre

atio

n C

ente

r m

eans

the

com

preh

ensi

ve r

ecre

atio

nal f

acili

ties

and

amen

ities

vot

ed

by re

fere

ndum

of t

he st

uden

ts o

f the

Uni

vers

ity o

n Fe

brua

ry 2

3 an

d 24

, 200

0.

R

ecre

atio

n C

ente

r R

even

ues

mea

ns th

e gr

oss

reve

nues

rece

ived

from

the

owne

rshi

p an

d

oper

atio

n of

the

Rec

reat

ion

Cen

ter.

Oth

er S

ervi

ce a

nd A

ctiv

ity F

ees,

spor

t cl

ub d

ues,

and

inte

rmur

al te

am fe

es a

re n

ot a

par

t of t

he R

ecre

atio

n C

ente

r Rev

enue

s.

R

edem

ptio

n D

ate

mea

ns th

e da

te u

pon

whi

ch a

ny B

onds

are

to b

e re

deem

ed, d

eter

min

ed

as p

rovi

ded

in S

ectio

n 3

here

of.

Ref

unde

d B

onds

mea

ns th

e 20

02 B

onds

mat

urin

g on

and

afte

r May

1, 2

013.

Ref

undi

ng B

onds

mea

ns t

he n

et p

ortio

n of

the

Bon

ds i

ssue

d he

rein

, no

t to

exc

eed

$24,

500,

000,

to b

e us

ed fo

r the

pur

pose

of r

efun

ding

the

Ref

unde

d B

onds

.

R

egis

tere

d O

wne

r of a

ny B

ond

mea

ns th

e pe

rson

nam

ed a

s the

Reg

iste

red

Ow

ner o

f suc

h

Bon

d on

the

Bon

d R

egis

ter.

B-7

-1

3-

R

egis

trar

mea

ns t

he f

isca

l ag

ency

of

the

Stat

e of

Was

hing

ton,

who

se d

utie

s in

clud

e

regi

ster

ing

and

auth

entic

atin

g th

e B

onds

, mai

ntai

ning

the

Bon

d R

egis

ter,

trans

ferr

ing

owne

rshi

p

of th

e B

onds

, and

pay

ing

the

prin

cipa

l of a

nd in

tere

st o

n th

e B

onds

.

R

enew

al a

nd R

epla

cem

ent

Res

erve

Acc

ount

mea

ns t

he R

enew

al a

nd R

epla

cem

ent

Res

erve

Acc

ount

so

desi

gnat

ed a

nd e

stab

lishe

d by

Sec

tion

7 he

reof

and

mai

ntai

ned

purs

uant

to

Sect

ion

7 he

reof

.

R

enew

al a

nd R

epla

cem

ent R

eser

ve R

equi

rem

ent m

eans

$25

0,00

0; p

rovi

ded,

how

ever

,

that

the

Ren

ewal

and

Rep

lace

men

t R

eser

ve R

equi

rem

ent

shal

l be

sub

ject

to

adju

stm

ent

as

prov

ided

in S

ectio

n 7

of th

is R

esol

utio

n.

R

even

ue A

ccou

nt m

eans

the

Stud

ent R

ecre

atio

n R

even

ue A

ccou

nt e

stab

lishe

d pu

rsua

nt

to S

ectio

n 7(

a) h

ereo

f.

R

ule

mea

ns R

ule

15c2

-12(

b)(5

) ado

pted

by

the

SEC

und

er th

e Se

curit

ies

Exch

ange

Act

of 1

934,

as t

he sa

me

may

be

amen

ded

from

tim

e to

tim

e.

Savi

ngs

Targ

et m

eans

a n

et p

rese

nt v

alue

dol

lar

amou

nt a

t le

ast

equa

l to

fiv

e pe

rcen

t

(5.0

%) o

f the

prin

cipa

l am

ount

of t

he R

efun

ded

Bon

ds.

SE

C m

eans

the

Secu

ritie

s and

Exc

hang

e C

omm

issi

on.

S&

P m

eans

Sta

ndar

d &

Poo

r’s

Rat

ings

Ser

vice

s, a

Div

isio

n of

The

McG

raw

-Hill

Com

pani

es, I

nc.,

and

its s

ucce

ssor

s an

d as

sign

s, ex

cept

that

if s

uch

corp

orat

ion

or d

ivis

ion

shal

l

be d

isso

lved

or l

iqui

date

d or

sha

ll no

long

er p

erfo

rm th

e fu

nctio

ns o

f a s

ecur

ities

ratin

g ag

ency

,

then

the

term

S&

P sh

all b

e de

emed

to r

efer

to a

ny o

ther

nat

iona

lly re

cogn

ized

sec

uriti

es ra

ting

agen

cy (o

ther

than

Moo

dy’s

) sel

ecte

d by

the

Aut

horiz

ed R

epre

sent

ativ

e of

the

Uni

vers

ity.

-1

4-

Se

rial

Bon

ds m

eans

the

porti

on o

f the

Bon

ds, i

f any

, des

igna

ted

as “

Seria

l Bon

ds”

in th

e

Bon

d Pu

rcha

se C

ontra

ct o

r A

ppro

ved

Bid

for

suc

h B

onds

and

any

Par

ity B

onds

her

eafte

r

prov

ided

for i

n th

e R

esol

utio

n au

thor

izin

g th

eir i

ssua

nce.

SRC

Fee

mea

ns th

e se

rvic

es a

nd a

ctiv

ities

fee

(in

itial

ly a

ppro

ved

by r

efer

endu

m o

f th

e

stud

ents

of t

he U

nive

rsity

on

Febr

uary

23

and

24, 2

000)

to p

ay c

osts

of c

onst

ruct

ing,

ope

ratin

g

and

mai

ntai

ning

the

Rec

reat

ion

Cen

ter.

The

SR

C F

ee w

as s

et in

itial

ly in

the

dolla

r am

ount

of

$80

per q

uarte

r for

eac

h st

uden

t enr

olle

d fo

r six

or m

ore

cred

its a

nd is

cur

rent

ly s

et in

the

dolla

r

amou

nt o

f $9

5 pe

r qu

arte

r. T

he S

RC

Fee

may

be

decr

ease

d fr

om t

he d

olla

r am

ount

ini

tially

appr

oved

as l

ong

as th

e co

vera

ge c

oven

ant i

n Se

ctio

n 12

is m

et.

St

ate

mea

ns th

e St

ate

of W

ashi

ngto

n.

Tax

Max

imum

mea

ns th

e m

axim

um d

olla

r am

ount

per

mitt

ed b

y th

e C

ode

to b

e al

loca

ted

to a

Bon

d re

serv

e ac

coun

t fro

m B

ond

proc

eeds

with

out r

equi

ring

a ba

lanc

e to

be

inve

sted

at a

rest

ricte

d yi

eld.

Te

rm B

onds

mea

ns th

e po

rtion

of t

he B

onds

, if a

ny, d

esig

nate

d as

“Te

rm B

onds

” in

the

Bon

d Pu

rcha

se C

ontra

ct o

r A

ppro

ved

Bid

for

suc

h B

onds

and

any

Par

ity B

onds

her

eafte

r

prov

ided

for i

n th

e R

esol

utio

n au

thor

izin

g th

eir i

ssua

nce.

Tr

easu

rer

mea

ns th

e V

ice

Pres

iden

t for

Bus

ines

s an

d Fi

nanc

ial A

ffai

rs o

f the

Uni

vers

ity

or a

ny s

ucce

ssor

to

the

func

tions

of

such

off

ice,

and

als

o sh

all

incl

ude

any

desi

gnee

of

the

Trea

sure

r for

the

perfo

rman

ce o

f spe

cific

func

tions

und

er th

is R

esol

utio

n.

20

02 B

ond

Res

olut

ion

mea

ns R

esol

utio

n N

o. 2

002-

01 a

dopt

ed o

n Fe

brua

ry 8

, 20

02

auth

oriz

ing

the

2002

Bon

ds.

B-8

-1

5-

20

02 B

onds

mea

ns t

he S

tude

nt R

ecre

atio

n Fe

e R

even

ue B

onds

, Se

ries

2002

of

the

Uni

vers

ity is

sued

pur

suan

t to

the

2002

Bon

d R

esol

utio

n, is

sued

und

er d

ate

of F

ebru

ary

1, 2

002,

and

pres

ently

out

stan

ding

in th

e ag

greg

ate

prin

cipa

l am

ount

of $

24,2

35,0

00.

U

ncov

ered

Bon

ds m

eans

Par

ity B

onds

that

will

not

be

secu

red

by th

e C

omm

on R

eser

ve

Fund

.

Und

erw

rite

r m

eans

, the

und

erw

riter

(s) o

f the

Bon

ds if

the

Bon

ds a

re s

old

by N

egot

iate

d

Sale

or t

he s

ucce

ssfu

l bid

der s

ubm

ittin

g th

e A

ppro

ved

Bid

if th

e B

onds

are

sol

d by

Com

petit

ive

Sale

.

U

nive

rsity

mea

ns W

este

rn W

ashi

ngto

n U

nive

rsity

, a h

ighe

r edu

catio

nal i

nstit

utio

n of

the

Stat

e of

Was

hing

ton,

the

mai

n ca

mpu

s of w

hich

is lo

cate

d at

Bel

lingh

am, W

ashi

ngto

n.

R

ules

of I

nter

pret

atio

n. I

n th

is R

esol

utio

n, u

nles

s the

con

text

oth

erw

ise

requ

ires:

(a

) Th

e te

rms

“her

eby,

” “h

ereo

f,” “

here

to,”

“he

rein

,” “

here

unde

r” a

nd a

ny s

imila

r

term

s, as

use

d in

this

Res

olut

ion,

ref

er to

this

Res

olut

ion

as a

who

le a

nd n

ot to

any

par

ticul

ar

artic

le, s

ectio

n, s

ubdi

visi

on o

r cl

ause

her

eof,

and

the

term

‘he

reaf

ter’

sha

ll m

ean

afte

r, an

d th

e

term

‘her

etof

ore’

shal

l mea

n be

fore

, the

dat

e of

this

Res

olut

ion;

(b

) W

ords

of

the

mas

culin

e ge

nder

sha

ll m

ean

and

incl

ude

corr

elat

ive

wor

ds o

f th

e

fem

inin

e an

d ne

uter

gen

ders

and

wor

ds im

porti

ng th

e si

ngul

ar n

umbe

r sh

all m

ean

and

incl

ude

the

plur

al n

umbe

r and

vic

e ve

rsa;

(c

) W

ords

impo

rting

per

sons

shal

l inc

lude

firm

s, as

soci

atio

ns, p

artn

ersh

ips (

incl

udin

g

limite

d pa

rtner

ship

s), t

rust

s, co

rpor

atio

ns a

nd o

ther

lega

l ent

ities

, inc

ludi

ng p

ublic

bod

ies,

as w

ell

as n

atur

al p

erso

ns;

(d

) A

ny h

eadi

ngs

prec

edin

g th

e te

xt o

f th

e se

vera

l ar

ticle

s an

d se

ctio

ns o

f th

is

Res

olut

ion,

and

any

tab

le o

f co

nten

ts o

r m

argi

nal

note

s ap

pend

ed t

o co

pies

her

eof,

shal

l be

-1

6-

sole

ly f

or c

onve

nien

ce o

f re

fere

nce

and

shal

l not

con

stitu

te a

par

t of

this

Res

olut

ion,

nor

sha

ll

they

aff

ect i

ts m

eani

ng, c

onst

ruct

ion

or e

ffec

t;

(e

) A

ll re

fere

nces

her

ein

to “

artic

les,”

“se

ctio

ns”

and

othe

r sub

divi

sion

s or c

laus

es a

re

to th

e co

rres

pond

ing

artic

les,

sect

ions

, sub

divi

sion

s or c

laus

es h

ereo

f; an

d

(f

) W

hene

ver a

ny c

onse

nt o

r dire

ctio

n is

requ

ired

to b

e gi

ven

by th

e U

nive

rsity

, suc

h

cons

ent o

r dire

ctio

n sh

all b

e de

emed

giv

en w

hen

give

n by

the

Aut

horiz

ed R

epre

sent

ativ

e of

the

Uni

vers

ity o

r hi

s or

her

des

igne

e, r

espe

ctiv

ely,

and

all

refe

renc

es h

erei

n to

the

Aut

horiz

ed

Rep

rese

ntat

ive

of th

e U

nive

rsity

sha

ll be

dee

med

to in

clud

e re

fere

nces

to h

is o

r her

des

igne

e, a

s

the

case

may

be.

Sect

ion

2 .

Aut

horiz

atio

n an

d Pu

rpos

e of

Bon

ds; B

ond

Det

ails

.

(a)

Aut

hori

zati

on a

nd P

urpo

se o

f B

onds

. T

he B

oard

her

eby

auth

oriz

es th

e sa

le a

nd

issu

ance

of

Rev

enue

and

Ref

undi

ng B

onds

in th

e ag

greg

ate

prin

cipa

l am

ount

of

not t

o ex

ceed

$27,

000,

000

to m

ake

impr

ovem

ents

to re

crea

tiona

l fac

ilitie

s of t

he U

nive

rsity

as a

ppro

ved

by th

e

Boa

rd, r

efun

d th

e R

efun

ded

Bon

ds a

nd to

fina

nce

all o

r a p

art o

f the

cos

ts o

f iss

uanc

e.

(b)

Bon

d D

etai

ls.

The

Bon

ds s

hall

be is

sued

in o

ne o

r mor

e se

ries,

to b

e de

sign

ated

as “

Wes

tern

Was

hing

ton

Uni

vers

ity S

tude

nt R

ecre

atio

n Fe

e R

even

ue a

nd R

efun

ding

Bon

ds,

Serie

s 20

12”,

with

suc

h ad

ditio

nal d

esig

natio

ns a

s sh

all b

e de

emed

nec

essa

ry o

r app

ropr

iate

for

purp

oses

of i

dent

ifica

tion,

shal

l be

date

d as

of t

he d

ate

of in

itial

del

iver

y, sh

all b

e fu

lly re

gist

ered

as to

bot

h pr

inci

pal a

nd i

nter

est,

shal

l be

in th

e de

nom

inat

ion

of $

5,00

0 ea

ch, o

r an

y in

tegr

al

mul

tiple

the

reof

, pr

ovid

ed t

hat

no B

ond

shal

l re

pres

ent

mor

e th

an o

ne m

atur

ity,

shal

l be

num

bere

d se

para

tely

in s

uch

man

ner a

nd w

ith a

ny a

dditi

onal

des

igna

tion

as th

e R

egis

trar d

eem

s

nece

ssar

y fo

r pur

pose

s of i

dent

ifica

tion,

bea

r int

eres

t at t

he p

er a

nnum

rate

s, pa

yabl

e on

the

date

s

and

mat

urin

g in

prin

cipa

l am

ount

s se

t fo

rth i

n th

e A

ppro

ved

Bid

or

Bon

d Pu

rcha

se C

ontra

ct,

B-9

-1

7-

purs

uant

to S

ectio

n 16

. Th

e B

onds

sha

ll be

obl

igat

ions

onl

y of

the

Bon

d Fu

nd a

nd th

e C

omm

on

Res

erve

Fun

d if

the

Bon

ds a

re d

esig

nate

d as

Cov

ered

Bon

ds, a

nd sh

all b

e pa

yabl

e an

d se

cure

d as

prov

ided

her

ein.

The

Bon

ds a

re n

ot g

ener

al o

blig

atio

ns o

f the

Uni

vers

ity.

The

Bon

ds s

hall

not

cons

titut

e an

inde

bted

ness

of t

he U

nive

rsity

with

in th

e m

eani

ng o

f the

con

stitu

tiona

l pro

visi

ons

and

limita

tions

of t

he S

tate

of W

ashi

ngto

n.

Sect

ion

3 .

Rig

ht o

f Prio

r Red

empt

ion

and

Purc

hase

.

(a

) O

ptio

nal

Red

empt

ion.

The

Bon

ds s

hall

be s

ubje

ct to

opt

iona

l red

empt

ion

on th

e

date

s, at

the

pric

es a

nd u

nder

the

term

s se

t for

th in

the

Bon

d Pu

rcha

se C

ontra

ct o

r App

rove

d B

id

appr

oved

by

the

Aut

horiz

ed R

epre

sent

ativ

e of

the

Uni

vers

ity p

ursu

ant t

o Se

ctio

n 16

.

(b

) M

anda

tory

Red

empt

ion.

The

Bon

ds s

hall

be s

ubje

ct to

man

dato

ry re

dem

ptio

n to

the

exte

nt, i

f any

, set

forth

in th

e B

ond

Purc

hase

Con

tract

or A

ppro

ved

Bid

and

as

appr

oved

by

the

Aut

horiz

ed R

epre

sent

ativ

e of

the

Uni

vers

ity p

ursu

ant t

o Se

ctio

n 16

.

(c

) E

xtra

ordi

nary

Opt

iona

l R

edem

ptio

n.

The

Bon

ds a

re s

ubje

ct t

o ex

traor

dina

ry

optio

nal

rede

mpt

ion

prio

r to

mat

urity

by

the

Reg

istra

r, up

on t

he r

eque

st o

f th

e U

nive

rsity

, in

who

le o

r in

part

on a

ny d

ate

at a

rede

mpt

ion

pric

e eq

ual t

o 10

0 pe

rcen

t of t

he p

rinci

pal a

mou

nt

ther

eof,

plus

acc

rued

inte

rest

to th

e re

dem

ptio

n da

te, i

n an

agg

rega

te a

mou

nt n

ot to

exc

eed

any

avai

labl

e pr

ocee

ds o

f ca

sual

ty i

nsur

ance

whi

ch t

he U

nive

rsity

rec

eive

s as

a r

esul

t of

maj

or

dam

age

to o

r des

truct

ion

of a

ny p

ortio

n of

the

Rec

reat

ion

Cen

ter.

(d

) P

urch

ase

of B

onds

. Th

e B

onds

may

be

purc

hase

d at

any

tim

e, to

the

exte

nt th

at

such

Bon

ds a

re o

ffer

ed to

the

Uni

vers

ity a

t any

pric

e de

emed

rea

sona

ble

by th

e Tr

easu

rer

but

only

to

the

exte

nt o

f G

ross

Rev

enue

ava

ilabl

e af

ter

prov

idin

g fo

r th

e pa

ymen

ts r

equi

red

by

para

grap

hs (b

)(1)

thro

ugh

(6) o

f Sec

tion

7 of

this

Res

olut

ion.

-1

8-

(e

) E

ffec

t of

Opt

iona

l R

edem

ptio

n/P

urch

ase.

To

the

exte

nt th

at th

e U

nive

rsity

sha

ll

have

opt

iona

lly r

edee

med

or

purc

hase

d an

y Te

rm B

onds

sin

ce t

he l

ast

sche

dule

d m

anda

tory

rede

mpt

ion

of s

uch

Term

Bon

ds, t

he U

nive

rsity

may

red

uce

the

prin

cipa

l am

ount

of

the

Term

Bon

ds o

f the

sam

e m

atur

ity to

be

rede

emed

in li

ke a

ggre

gate

prin

cipa

l am

ount

. Su

ch re

duct

ion

may

be

appl

ied

in th

e ye

ar sp

ecifi

ed b

y th

e A

utho

rized

Rep

rese

ntat

ive

of th

e U

nive

rsity

.

(f

) Se

lect

ion

of B

onds

for

Red

empt

ion.

As

long

as

the

Bon

ds a

re h

eld

in b

ook-

entry

only

form

, the

mat

uriti

es to

be

rede

emed

sha

ll be

sel

ecte

d by

the

Uni

vers

ity a

nd, w

ithin

a s

erie

s

and

mat

urity

, the

sel

ectio

n of

Bon

ds o

f suc

h se

ries

to b

e re

deem

ed s

hall

be m

ade

in a

ccor

danc

e

with

the

ope

ratio

nal

arra

ngem

ents

in

effe

ct a

t D

TC.

If

the

Bon

ds a

re n

o lo

nger

hel

d in

unce

rtific

ated

form

, the

sele

ctio

n of

such

Bon

ds to

be

rede

emed

shal

l be

mad

e as

pro

vide

d in

this

subs

ectio

n (f

). If

the

Uni

vers

ity re

deem

s at

any

one

tim

e fe

wer

than

all

of th

e B

onds

hav

ing

the

sam

e se

ries

and

mat

urity

dat

e, t

he p

artic

ular

Bon

ds o

r po

rtion

s of

Bon

ds o

f su

ch s

erie

s an

d

mat

urity

to

be r

edee

med

sha

ll be

sel

ecte

d by

lot

(or

in

such

oth

er m

anne

r de

term

ined

by

the

Reg

istra

r) in

incr

emen

ts o

f $5,

000.

In

the

case

of a

Bon

d of

a d

enom

inat

ion

grea

ter t

han

$5,0

00,

the

Uni

vers

ity a

nd R

egis

trar

shal

l tre

at e

ach

Bon

d as

rep

rese

ntin

g su

ch n

umbe

r of

sep

arat

e

Bon

ds e

ach

of th

e de

nom

inat

ion

of $

5,00

0 as

is o

btai

ned

by d

ivid

ing

the

actu

al p

rinci

pal a

mou

nt

of s

uch

Bon

d by

$5,

000.

In

the

eve

nt t

hat

only

a p

ortio

n of

the

prin

cipa

l su

m o

f a

Bon

d is

rede

emed

, upo

n su

rren

der o

f the

suc

h B

ond

at th

e pr

inci

pal o

ffic

e of

the

Reg

istra

r the

re s

hall

be

issu

ed to

the

Reg

iste

red

Ow

ner,

with

out c

harg

e th

eref

or, f

or th

e th

en u

nred

eem

ed b

alan

ce o

f the

prin

cipa

l sum

the

reof

, at t

he o

ptio

n of

the

Reg

iste

red

Ow

ner,

a B

ond

or B

onds

of

like

serie

s,

mat

urity

and

inte

rest

rate

in a

ny o

f the

den

omin

atio

ns h

erei

n au

thor

ized

.

B-10

-1

9-

(g

) N

otic

e of

Red

empt

ion.

(1)

Off

icia

l Not

ice .

U

nles

s w

aive

d by

any

ow

ner

of B

onds

to b

e re

deem

ed,

offic

ial

notic

e of

any

suc

h re

dem

ptio

n (w

hich

not

ice,

in

the

case

of

a co

nditi

onal

red

empt

ion,

shal

l sta

te th

at re

dem

ptio

n is

con

ditio

ned

by th

e R

egis

trar

on th

e re

ceip

t of

suff

icie

nt f

unds

for

rede

mpt

ion)

sha

ll be

giv

en b

y th

e R

egis

trar o

n be

half

of th

e U

nive

rsity

by

mai

ling

a co

py o

f an

offic

ial r

edem

ptio

n no

tice

by f

irst c

lass

mai

l at l

east

twen

ty (

20)

days

and

not

mor

e th

an s

ixty

(60)

day

s prio

r to

the

date

fixe

d fo

r red

empt

ion

to th

e R

egis

tere

d O

wne

r of t

he B

ond

or B

onds

to

be r

edee

med

at t

he a

ddre

ss s

how

n on

the

Reg

iste

r or

at

such

oth

er a

ddre

ss a

s is

fur

nish

ed i

n

writ

ing

by su

ch R

egis

tere

d O

wne

r to

the

Reg

istra

r.

A

ll of

ficia

l not

ices

of r

edem

ptio

n sh

all b

e da

ted

and

shal

l sta

te:

(A

) th

e re

dem

ptio

n da

te,

(B

) th

e re

dem

ptio

n pr

ice,

(C

) if

few

er t

han

all

Out

stan

ding

Bon

ds a

re t

o be

red

eem

ed,

the

iden

tific

atio

n by

ser

ies

and

mat

urity

(an

d, i

n th

e ca

se o

f pa

rtial

red

empt

ion,

the

res

pect

ive

prin

cipa

l am

ount

s) o

f the

Bon

ds to

be

rede

emed

,

(D

) th

at o

n th

e re

dem

ptio

n da

te, p

rovi

ded

that

in th

e ca

se o

f op

tiona

l

rede

mpt

ion

the

full

amou

nt o

f the

rede

mpt

ion

pric

e is

on

depo

sit t

here

for,

the

rede

mpt

ion

pric

e

will

bec

ome

due

and

paya

ble

upon

eac

h su

ch B

ond

or p

ortio

n th

ereo

f cal

led

for r

edem

ptio

n, a

nd

that

inte

rest

ther

eon

shal

l cea

se to

acc

rue

from

and

afte

r sai

d da

te,

(E

) th

e pl

ace

whe

re s

uch

Bon

ds a

re to

be

surr

ende

red

for

paym

ent o

f

the

rede

mpt

ion

pric

e, w

hich

pla

ce o

f pay

men

t sha

ll be

the

prin

cipa

l off

ice

of th

e R

egis

trar,

and

-2

0-

(F

) th

at th

e no

tice

of re

dem

ptio

n m

ay b

e w

ithdr

awn

and

the

prop

osed

rede

mpt

ion

of B

onds

can

celle

d if

for a

ny re

ason

fund

s w

ill n

ot b

e av

aila

ble

on th

e da

te fi

xed

for

rede

mpt

ion.

U

nles

s th

e U

nive

rsity

has

rev

oked

the

not

ice

of r

edem

ptio

n, o

n or

prio

r to

any

rede

mpt

ion

date

, the

Tre

asur

er s

hall

depo

sit w

ith th

e R

egis

trar a

n am

ount

of m

oney

suf

ficie

nt to

pay

the

rede

mpt

ion

pric

e of

all

the

Bon

ds o

r por

tions

of B

onds

whi

ch a

re to

be

rede

emed

on

that

date

.

Fa

ilure

to g

ive

notic

e as

to re

dem

ptio

n of

any

Bon

d or

any

def

ect i

n su

ch n

otic

e sh

all n

ot

inva

lidat

e re

dem

ptio

n of

any

oth

er B

ond.

N

otw

ithst

andi

ng th

e fo

rego

ing,

if th

e B

onds

are

then

hel

d in

boo

k-en

try o

nly

form

, not

ice

of r

edem

ptio

n to

any

Reg

iste

red

Ow

ner

or b

enef

icia

l ow

ner

of B

onds

, sha

ll be

giv

en o

nly

in

acco

rdan

ce w

ith t

he o

pera

tiona

l arr

ange

men

ts th

en e

ffec

t at

DTC

but

not

less

than

thi

rty (

30)

days

prio

r to

the

date

of r

edem

ptio

n.

(2)

Effe

ct o

f N

otic

e; B

onds

Due

. O

ffic

ial n

otic

e of

red

empt

ion

havi

ng b

een

give

n as

afo

resa

id, t

he B

onds

or

porti

ons

of B

onds

so

to b

e re

deem

ed s

hall,

on

the

rede

mpt

ion

date

(unl

ess

in th

e ca

se o

f con

ditio

nal r

edem

ptio

n th

e co

nditi

ons

have

not

bee

n fu

lfille

d an

d th

e

notic

e or

red

empt

ion

ther

efor

e w

ithdr

awn)

, be

com

e du

e an

d pa

yabl

e at

the

red

empt

ion

pric

e

ther

ein

spec

ified

, and

fro

m a

nd a

fter

such

dat

e su

ch B

onds

or

porti

ons

of B

onds

sha

ll ce

ase

to

bear

inte

rest

. U

pon

surr

ende

r of s

uch

Bon

ds fo

r red

empt

ion

in a

ccor

danc

e w

ith sa

id n

otic

e, su

ch

Bon

ds s

hall

be p

aid

by th

e R

egis

trar a

t the

rede

mpt

ion

pric

e. I

nsta

llmen

ts o

f int

eres

t due

on

or

prio

r to

a m

anda

tory

rede

mpt

ion

date

shal

l be

paya

ble

as h

erei

n pr

ovid

ed fo

r pay

men

t of i

nter

est.

Upo

n su

rrend

er f

or a

ny p

artia

l re

dem

ptio

n of

any

Bon

d, t

here

sha

ll be

pre

pare

d fo

r th

e

Reg

iste

red

Ow

ner a

new

Bon

d or

Bon

ds o

f the

sam

e se

ries a

nd m

atur

ity in

the

aggr

egat

e am

ount

B-11

-2

1-

of th

e un

paid

prin

cipa

l. A

ll B

onds

whi

ch h

ave

been

rede

emed

sha

ll be

can

cele

d an

d de

stro

yed

by th

e R

egis

trar a

nd sh

all n

ot b

e re

issu

ed.

(3)

Add

ition

al N

otic

e . I

n ad

ditio

n to

the

fore

goin

g no

tice,

furth

er n

otic

e m

ay

be g

iven

by

the

Uni

vers

ity a

s set

out

bel

ow, b

ut n

o de

fect

in sa

id fu

rther

not

ice

nor a

ny fa

ilure

to

give

all

or a

ny p

ortio

n of

such

furth

er n

otic

e sh

all i

n an

y m

anne

r def

eat t

he e

ffec

tiven

ess o

f a c

all

for r

edem

ptio

n if

notic

e th

ereo

f is

give

n as

abo

ve p

resc

ribed

. Ea

ch fu

rther

not

ice

of re

dem

ptio

n

give

n he

reun

der s

hall

cont

ain

the

info

rmat

ion

requ

ired

abov

e fo

r an

offic

ial n

otic

e of

rede

mpt

ion

plus

(A) t

he C

USI

P nu

mbe

rs o

f all

Bon

ds b

eing

rede

emed

; (B

) the

dat

e of

issu

e of

the

Bon

ds a

s

orig

inal

ly is

sued

; (C

) th

e ra

te o

f int

eres

t bor

ne b

y ea

ch B

ond

bein

g re

deem

ed; (

D)

the

mat

urity

date

of e

ach

Bon

d be

ing

rede

emed

; and

(E) a

ny o

ther

des

crip

tive

info

rmat

ion

need

ed to

iden

tify

accu

rate

ly th

e B

onds

bei

ng r

edee

med

. Ea

ch f

urth

er n

otic

e of

red

empt

ion

may

be

sent

at l

east

twen

ty (2

0) d

ays

befo

re th

e re

dem

ptio

n da

te to

eac

h pa

rty e

ntitl

ed to

rece

ive

notic

e pu

rsua

nt to

Sect

ion

19 o

f th

is R

esol

utio

n, a

nd t

o th

e or

igin

al p

urch

aser

of

the

Bon

ds o

r to

its

bus

ines

s

succ

esso

rs, i

f any

, and

to s

uch

pers

ons

(incl

udin

g se

curit

ies

repo

sito

ries

who

cus

tom

arily

at t

he

time

rece

ive

notic

es o

f re

dem

ptio

n in

acc

orda

nce

with

rul

es p

rom

ulga

ted

by th

e Se

curit

ies

and

Exch

ange

Com

mis

sion

) and

with

suc

h ad

ditio

nal i

nfor

mat

ion

as th

e R

egis

trar d

eem

app

ropr

iate

,

but s

uch

mai

lings

shal

l not

be

a co

nditi

on p

rece

dent

to th

e re

dem

ptio

n of

such

Bon

ds.

(4)

Use

of

CU

SIP

Num

bers

. U

pon

the

paym

ent

of t

he r

edem

ptio

n pr

ice

of

Bon

ds b

eing

rede

emed

, eac

h ch

eck

or o

ther

tran

sfer

of f

unds

issu

ed fo

r suc

h pu

rpos

e sh

all b

ear

the

CU

SIP

num

ber i

dent

ifyin

g, b

y m

atur

ity, t

he B

onds

bei

ng re

deem

ed w

ith th

e pr

ocee

ds o

f suc

h

chec

k or

oth

er tr

ansf

er.

(5)

Am

endm

ent o

f Not

ice

Prov

isio

ns.

The

fore

goin

g no

tice

prov

isio

ns o

f thi

s

Sect

ion

3, in

clud

ing

but n

ot li

mite

d to

the

info

rmat

ion

to b

e in

clud

ed in

rede

mpt

ion

notic

es a

nd

-2

2-

the

pers

ons

desi

gnat

ed to

rece

ive

notic

es, m

ay b

e am

ende

d by

add

ition

s, de

letio

ns a

nd c

hang

es

in o

rder

to

mai

ntai

n co

mpl

ianc

e w

ith d

uly

prom

ulga

ted

regu

latio

ns a

nd r

ecom

men

datio

ns

rega

rdin

g no

tices

of r

edem

ptio

n of

mun

icip

al se

curit

ies.

Se

ctio

n 4 .

Pl

ace

and

Med

ium

of

Paym

ent.

The

prin

cipa

l of

, pre

miu

m, i

f an

y, a

nd

inte

rest

on

the

Bon

ds s

hall

be p

ayab

le in

law

ful m

oney

of t

he U

nite

d St

ates

of A

mer

ica.

Int

eres

t

on th

e B

onds

sha

ll be

cal

cula

ted

on th

e ba

sis

of a

thre

e hu

ndre

d si

xty

(360

) day

yea

r con

sist

ing

of tw

elve

, thi

rty (3

0) d

ay m

onth

s. F

or s

o lo

ng a

s al

l Bon

ds a

re in

fully

imm

obili

zed

form

, suc

h

paym

ents

of

prin

cipa

l an

d in

tere

st t

here

on s

hall

be m

ade

as p

rovi

ded

in t

he o

pera

tiona

l

arra

ngem

ents

of D

TC a

s ref

erre

d to

in th

e Le

tter o

f Rep

rese

ntat

ions

.

In

the

even

t tha

t the

Bon

ds a

re n

o lo

nger

in fu

lly im

mob

ilize

d fo

rm, i

nter

est o

n th

e B

onds

shal

l be

paid

by

chec

k or

dra

ft m

aile

d (o

r by

wire

tran

sfer

to a

Reg

iste

red

Ow

ner o

f suc

h B

onds

in a

ggre

gate

prin

cipa

l am

ount

of $

1,00

0,00

0 or

mor

e w

ho s

o re

ques

ts) t

o th

e R

egis

tere

d O

wne

rs

of th

e B

onds

at t

he a

ddre

sses

for s

uch

Reg

iste

red

Ow

ners

app

earin

g on

the

Bon

d R

egis

ter o

n th

e

15th

day

of t

he m

onth

pre

cedi

ng th

e in

tere

st p

aym

ent d

ate.

Prin

cipa

l and

pre

miu

m, i

f any

, of t

he

Bon

ds sh

all b

e pa

yabl

e up

on p

rese

ntat

ion

and

surre

nder

of s

uch

Bon

ds b

y th

e R

egis

tere

d O

wne

rs

at th

e pr

inci

pal o

ffic

e of

the

Reg

istra

r.

Se

ctio

n 5 .

R

egis

tratio

n.

(a

) R

egis

trar

/Bon

d R

egis

ter.

The

Uni

vers

ity h

ereb

y sp

ecifi

es a

nd a

dopt

s th

e sy

stem

of r

egis

tratio

n fo

r th

e B

onds

as

appr

oved

by

the

Stat

e Fi

nanc

e C

omm

ittee

of

the

Stat

e of

Was

hing

ton

from

tim

e to

tim

e. T

he U

nive

rsity

sha

ll ca

use

a bo

nd re

gist

er to

be

mai

ntai

ned

by

the

Reg

istra

r. S

o lo

ng a

s an

y B

onds

rem

ain

Out

stan

ding

, the

Reg

istra

r sha

ll m

ake

all n

eces

sary

prov

isio

ns to

per

mit

the

exch

ange

and

regi

stra

tion

of tr

ansf

er o

f Bon

ds a

t its

prin

cipa

l cor

pora

te

trust

off

ice.

The

Reg

istra

r may

be

rem

oved

at a

ny ti

me

at th

e op

tion

of th

e Tr

easu

rer u

pon

prio

r

B-12

-2

3-

notic

e to

the

Reg

istra

r, th

e In

sure

r, an

d a

succ

esso

r R

egis

trar

appo

inte

d by

the

Trea

sure

r. N

o

resi

gnat

ion

or r

emov

al o

f th

e R

egis

trar

shal

l be

eff

ectiv

e un

til a

suc

cess

or s

hall

have

bee

n

appo

inte

d an

d un

til t

he s

ucce

ssor

Reg

istra

r sh

all

have

acc

epte

d th

e du

ties

of t

he R

egis

trar

here

unde

r. T

he R

egis

trar

is a

utho

rized

, on

beha

lf of

the

Uni

vers

ity, t

o au

then

ticat

e an

d de

liver

Bon

ds t

rans

ferr

ed o

r ex

chan

ged

in a

ccor

danc

e w

ith t

he p

rovi

sion

s of

suc

h B

onds

and

thi

s

reso

lutio

n an

d to

car

ry o

ut a

ll of

the

Reg

istra

r’s

pow

ers

and

dutie

s un

der

this

Res

olut

ion.

Th

e

Reg

istra

r sh

all

be

resp

onsi

ble

for

its

repr

esen

tatio

ns

cont

aine

d in

th

e C

ertif

icat

e of

Aut

hent

icat

ion

on th

e B

onds

.

(b

) R

egis

tere

d O

wne

rshi

p.

The

Uni

vers

ity a

nd th

e R

egis

trar,

each

in it

s di

scre

tion,

may

dee

m a

nd tr

eat t

he R

egis

tere

d O

wne

r of

eac

h B

ond

as th

e ab

solu

te o

wne

r th

ereo

f fo

r al

l

purp

oses

and

nei

ther

the

Uni

vers

ity n

or t

he R

egis

trar

shal

l be

aff

ecte

d by

any

not

ice

to t

he

cont

rary

. Pa

ymen

t of

any

such

Bon

d sh

all b

e m

ade

only

as

desc

ribed

in S

ectio

n 4

here

of, b

ut

such

Bon

d m

ay b

e tra

nsfe

rred

as h

erei

n pr

ovid

ed.

All

such

pay

men

ts m

ade

as d

escr

ibed

in

Sect

ion

5 sh

all b

e va

lid a

nd s

hall

satis

fy a

nd d

isch

arge

the

liabi

lity

of th

e U

nive

rsity

upo

n su

ch

Bon

d to

the

exte

nt o

f the

am

ount

or a

mou

nts s

o pa

id.

(c

) D

TC

Acc

epta

nce/

Let

ter

of R

epre

sent

atio

ns.

To in

duce

DTC

to a

ccep

t the

Bon

ds

as e

ligib

le f

or d

epos

it at

DTC

, th

e U

nive

rsity

has

exe

cute

d an

d de

liver

ed a

Let

ter

of

Rep

rese

ntat

ions

to D

TC.

N

eith

er th

e U

nive

rsity

nor

the

Reg

istra

r will

hav

e an

y re

spon

sibi

lity

or o

blig

atio

n to

DTC

parti

cipa

nts

or t

he p

erso

ns f

or w

hom

the

y ac

t as

nom

inee

s (o

r an

y su

cces

sor

depo

sito

ry)

with

resp

ect

to t

he B

onds

in

resp

ect

of t

he a

ccur

acy

of a

ny r

ecor

ds m

aint

aine

d by

DTC

(or

any

succ

esso

r de

posi

tory

) or

any

DTC

par

ticip

ant,

the

paym

ent

by D

TC (

or a

ny s

ucce

ssor

depo

sito

ry)

or a

ny D

TC p

artic

ipan

t of

any

amou

nt in

res

pect

of

the

prin

cipa

l of

or in

tere

st o

n

-2

4-

Bon

ds, a

ny n

otic

e w

hich

is p

erm

itted

or

requ

ired

to b

e gi

ven

to R

egis

tere

d O

wne

rs u

nder

this

Res

olut

ion

(exc

ept s

uch

notic

es a

s sha

ll be

requ

ired

to b

e gi

ven

by th

e U

nive

rsity

to th

e R

egis

trar

or to

DTC

(or a

ny su

cces

sor d

epos

itory

)), o

r any

con

sent

giv

en o

r oth

er a

ctio

n ta

ken

by D

TC (o

r

any

succ

esso

r dep

osito

ry) a

s th

e R

egis

tere

d O

wne

r. F

or s

o lo

ng a

s an

y B

onds

are

hel

d in

fully

imm

obili

zed

form

her

eund

er,

DTC

or

its s

ucce

ssor

dep

osito

ry s

hall

be d

eem

ed t

o be

the

Reg

iste

red

Ow

ner

for

all

purp

oses

her

eund

er (

exce

pt a

s pr

ovid

ed i

n Se

ctio

n 19

of

this

reso

lutio

n),

and

all

refe

renc

es h

erei

n to

the

Reg

iste

red

Ow

ners

sha

ll m

ean

DTC

(or

any

succ

esso

r dep

osito

ry) o

r its

nom

inee

and

sha

ll no

t mea

n th

e ow

ners

of a

ny b

enef

icia

l int

eres

t in

such

Bon

ds.

If

any

Bon

d sh

all b

e du

ly p

rese

nted

for p

aym

ent a

nd fu

nds

have

not

bee

n du

ly p

rovi

ded

by th

e U

nive

rsity

on

such

app

licab

le d

ate,

then

inte

rest

sha

ll co

ntin

ue to

acc

rue

ther

eafte

r on

the

unpa

id p

rinci

pal t

here

of a

t the

rate

stat

ed o

n su

ch B

ond

until

such

Bon

d is

pai

d.

(d

) U

se o

f Dep

osit

ory.

(1)

The

Bon

ds s

hall

be re

gist

ered

initi

ally

in th

e na

me

of “

CED

E &

CO

.”, a

s

nom

inee

of

DTC

, w

ith o

ne B

ond

mat

urin

g on

eac

h of

the

mat

urity

dat

es f

or t

he B

onds

in

a

deno

min

atio

n co

rres

pond

ing

to t

he t

otal

prin

cipa

l th

erei

n de

sign

ated

to

mat

ure

on s

uch

date

.

Reg

iste

red

owne

rshi

p of

suc

h im

mob

ilize

d B

onds

, or a

ny p

ortio

ns th

ereo

f, m

ay n

ot th

erea

fter b

e

trans

ferr

ed e

xcep

t (A

) to

any

succ

esso

r of D

TC o

r its

nom

inee

, pro

vide

d th

at a

ny s

uch

succ

esso

r

shal

l be

qual

ified

und

er a

ny a

pplic

able

law

s to

pro

vide

the

serv

ice

prop

osed

to b

e pr

ovid

ed b

y it;

(B) t

o an

y su

bstit

ute

depo

sito

ry a

ppoi

nted

by

the

Trea

sure

r pur

suan

t to

subs

ectio

n (2

) bel

ow o

r

such

subs

titut

e de

posi

tory

’s su

cces

sor;

or (C

) to

any

pers

on a

s pro

vide

d in

subs

ectio

n (4

) bel

ow.

(2)

Upo

n th

e re

sign

atio

n of

DTC

or i

ts s

ucce

ssor

(or a

ny s

ubst

itute

dep

osito

ry

or i

ts s

ucce

ssor

) fr

om i

ts f

unct

ions

as

depo

sito

ry o

r a

dete

rmin

atio

n by

the

Tre

asur

er t

o

B-13

-2

5-

disc

ontin

ue th

e sy

stem

of

book

ent

ry tr

ansf

ers

thro

ugh

DTC

or

its s

ucce

ssor

(or

any

sub

stitu

te

depo

sito

ry o

r its

suc

cess

or),

the

Trea

sure

r m

ay h

erea

fter

appo

int a

sub

stitu

te d

epos

itory

. A

ny

such

sub

stitu

te d

epos

itory

sha

ll be

qua

lifie

d un

der

any

appl

icab

le la

ws

to p

rovi

de th

e se

rvic

es

prop

osed

to b

e pr

ovid

ed b

y it.

(3)

In th

e ca

se o

f any

tran

sfer

pur

suan

t to

clau

se (A

) or (

B) o

f sub

sect

ion

(1)

abov

e, th

e R

egis

trar s

hall,

upo

n re

ceip

t of a

ll ou

tsta

ndin

g B

onds

, tog

ethe

r with

a w

ritte

n re

ques

t

of th

e Tr

easu

rer,

issu

e a

sing

le n

ew B

ond

for

each

mat

urity

then

out

stan

ding

, reg

iste

red

in th

e

nam

e of

suc

h su

cces

sor o

r suc

h su

bstit

ute

depo

sito

ry, o

r the

ir no

min

ees,

as th

e ca

se m

ay b

e, a

ll

as sp

ecifi

ed in

such

writ

ten

requ

est o

f the

Tre

asur

er.

(4)

In th

e ev

ent t

hat (

A)

DTC

or

its s

ucce

ssor

(or

subs

titut

e de

posi

tory

or

its

succ

esso

r) re

sign

s fro

m it

s fu

nctio

ns a

s de

posi

tory

, and

no

subs

titut

e de

posi

tory

can

be

obta

ined

,

or (B

) the

Tre

asur

er d

eter

min

es th

at it

is in

the

best

inte

rest

of t

he b

enef

icia

l ow

ners

of t

he B

onds

that

suc

h ow

ners

be

able

to o

btai

n su

ch b

onds

in th

e fo

rm o

f Bon

d ce

rtific

ates

, the

ow

ners

hip

of

such

Bon

ds m

ay t

hen

be t

rans

ferr

ed t

o an

y pe

rson

or

entit

y as

her

ein

prov

ided

, and

sha

ll no

long

er b

e he

ld in

ful

ly-im

mob

ilize

d fo

rm.

The

Trea

sure

r sh

all d

eliv

er a

writ

ten

requ

est t

o th

e

Reg

istra

r, to

geth

er w

ith a

sup

ply

of d

efin

itive

Bon

ds, t

o is

sue

Bon

ds a

s he

rein

pro

vide

d in

any

auth

oriz

ed d

enom

inat

ion.

Upo

n re

ceip

t by

the

Reg

istra

r of

all

then

out

stan

ding

Bon

ds to

geth

er

with

a w

ritte

n re

ques

t of

the

Tre

asur

er t

o th

e R

egis

trar,

new

Bon

ds s

hall

be i

ssue

d in

the

appr

opria

te d

enom

inat

ions

and

regi

ster

ed in

the

nam

es o

f suc

h pe

rson

s as

are

requ

este

d in

suc

h

writ

ten

requ

est.

(e

) R

egis

trat

ion

of T

rans

fer

of O

wne

rshi

p or

Exc

hang

e; C

hang

e in

Den

omin

atio

ns.

If t

he B

onds

are

no

long

er h

eld

in b

ook-

entry

onl

y fo

rm,

the

trans

fer

of a

ny B

ond

may

be

regi

ster

ed a

nd B

onds

may

be

exch

ange

d, b

ut n

o tra

nsfe

r of a

ny s

uch

Bon

d sh

all b

e va

lid u

nles

s

-2

6-

such

Bon

d is

surr

ende

red

to th

e R

egis

trar w

ith th

e as

sign

men

t for

m a

ppea

ring

on su

ch B

ond

duly

exec

uted

by

the

Reg

iste

red

Ow

ner

or s

uch

Reg

iste

red

Ow

ner’

s du

ly a

utho

rized

age

nt i

n a

man

ner

satis

fact

ory

to t

he R

egis

trar.

Upo

n su

ch s

urre

nder

, th

e R

egis

trar

shal

l ca

ncel

the

surr

ende

red

Bon

d an

d sh

all a

uthe

ntic

ate

and

deliv

er, w

ithou

t cha

rge

to th

e R

egis

tere

d O

wne

r or

trans

fere

e th

eref

or, a

new

Bon

d (o

r B

onds

at t

he o

ptio

n of

the

new

Reg

iste

red

Ow

ner)

of th

e

sam

e se

ries,

date

, mat

urity

and

inte

rest

rate

and

for t

he s

ame

aggr

egat

e pr

inci

pal a

mou

nt in

any

auth

oriz

ed d

enom

inat

ion,

nam

ing

as R

egis

tere

d O

wne

r th

e pe

rson

or

pers

ons

liste

d as

the

assi

gnee

on

the

assi

gnm

ent

form

app

earin

g on

the

sur

rend

ered

Bon

d, i

n ex

chan

ge f

or s

uch

surr

ende

red

and

canc

eled

Bon

d.

If th

e B

onds

are

no

long

er h

eld

in b

ook-

entry

onl

y fo

rm, a

ny

Bon

d m

ay b

e su

rrend

ered

to th

e R

egis

trar a

nd e

xcha

nged

, with

out c

harg

e, fo

r an

equa

l agg

rega

te

prin

cipa

l am

ount

of

Bon

ds o

f th

e sa

me

date

, m

atur

ity a

nd i

nter

est

rate

, in

any

aut

horiz

ed

deno

min

atio

n or

den

omin

atio

ns.

The

Reg

istra

r sha

ll no

t be

oblig

ated

to re

gist

er th

e tra

nsfe

r or t

o

exch

ange

any

Bon

d du

ring

the

fifte

en (

15)

days

pre

cedi

ng t

he d

ate

any

such

Bon

d is

to

be

rede

emed

.

(f

) R

egis

trar

’s O

wne

rshi

p of

Bon

ds.

The

Reg

istra

r m

ay b

ecom

e th

e R

egis

tere

d

Ow

ner

of a

ny B

ond

with

the

sam

e rig

hts

it w

ould

hav

e if

it w

ere

not t

he R

egis

trar,

and

to th

e

exte

nt p

erm

itted

by

law

, may

act

as

depo

sito

ry fo

r an

d pe

rmit

any

of it

s of

ficer

s or

dire

ctor

s to

act a

s m

embe

r of,

or in

any

oth

er c

apac

ity w

ith re

spec

t to,

any

com

mitt

ee fo

rmed

to p

rote

ct th

e

right

of t

he R

egis

tere

d O

wne

rs o

f Bon

ds.

(g

) R

egis

trat

ion

Cov

enan

t. T

he U

nive

rsity

cov

enan

ts th

at, u

ntil

all B

onds

hav

e be

en

surr

ende

red

and

canc

eled

, it w

ill m

aint

ain

a sy

stem

for

rec

ordi

ng th

e ow

ners

hip

of e

ach

Bon

d

that

com

plie

s with

the

prov

isio

ns o

f Sec

tion

149

of th

e C

ode.

B-14

-2

7-

Se

ctio

n 6.

Fo

rm, E

xecu

tion

and

Aut

hent

icat

ion

of B

onds

.

(a)

For

m o

f Bon

ds.

The

Bon

ds sh

all b

e in

subs

tant

ially

the

follo

win

g fo

rm:

UN

ITED

STA

TES

OF

AM

ERIC

A

NO

.

$_

____

__

ST

ATE

OF

WA

SHIN

GTO

N

WES

TER

N W

ASH

ING

TON

UN

IVER

SITY

ST

UD

ENT

REC

REA

TIO

N F

EE R

EVEN

UE

AN

D R

EFU

ND

ING

BO

ND

S, 2

012

IN

TER

EST

RA

TE:

%

M

ATU

RIT

Y D

ATE

: C

USI

P N

O.:

REG

ISTE

RED

OW

NER

:

PRIN

CIP

AL

AM

OU

NT:

Wes

tern

Was

hing

ton

Uni

vers

ity (

the

“Uni

vers

ity”)

, her

eby

ackn

owle

dges

its

elf

to o

we

and

for

valu

e re

ceiv

ed p

rom

ises

to p

ay to

the

Reg

iste

red

Ow

ner

iden

tifie

d ab

ove,

or

regi

ster

ed

assi

gns,

on th

e M

atur

ity D

ate

iden

tifie

d ab

ove,

the

Prin

cipa

l Am

ount

indi

cate

d ab

ove

and

to p

ay

inte

rest

fro

m _

____

____

___,

201

2, o

r th

e m

ost r

ecen

t dat

e to

whi

ch in

tere

st h

as b

een

paid

or

duly

pro

vide

d fo

r, un

til p

aym

ent o

f th

is B

ond

at th

e In

tere

st R

ate

set f

orth

abo

ve, p

ayab

le o

n __

____

___

1, 2

012,

and

sem

iann

ually

ther

eafte

r on

the

first

day

s of

eac

h su

ccee

ding

May

and

N

ovem

ber.

Bot

h pr

inci

pal

of a

nd i

nter

est

on t

his

Bon

d ar

e pa

yabl

e in

law

ful

mon

ey o

f th

e U

nite

d St

ates

of

Am

eric

a.

Inte

rest

sha

ll be

pai

d as

pro

vide

d in

the

Bla

nket

Iss

uer

Lette

r of

R

epre

sent

atio

ns (

the

“Let

ter

of R

epre

sent

atio

ns”)

by

the

Uni

vers

ity t

o Th

e D

epos

itory

Tru

st

Com

pany

(“D

TC”)

. Pr

inci

pal s

hall

be p

aid

as p

rovi

ded

in th

e Le

tter

of R

epre

sent

atio

ns to

the

Reg

iste

red

Ow

ner o

r ass

igns

upo

n pr

esen

tatio

n an

d su

rren

der o

f thi

s B

ond

at th

e pr

inci

pal o

ffic

e of

the

fisca

l age

ncy

of th

e St

ate

of W

ashi

ngto

n (th

e “R

egis

trar”

).

This

Bon

d is

one

of

an a

utho

rized

iss

ue o

f B

onds

of

like

date

and

ten

or, e

xcep

t as

to

num

ber,

amou

nt,

rate

of

inte

rest

and

dat

e of

mat

urity

, in

the

agg

rega

te p

rinci

pal

amou

nt o

f $_

____

_ (th

e “B

onds

”),

and

is i

ssue

d pu

rsua

nt t

o R

esol

utio

n N

o. 2

012-

01 (

the

“Bon

d R

esol

utio

n”) p

asse

d by

the

Boa

rd o

f Tru

stee

s of

the

Uni

vers

ity o

n Fe

brua

ry 1

0, 2

012

[to p

rovi

de

fund

s to

mak

e im

prov

emen

ts t

o re

crea

tiona

l fa

cilit

ies

of t

he U

nive

rsity

,] re

fund

cer

tain

ou

tsta

ndin

g R

even

ue B

onds

of

the

Uni

vers

ity a

nd p

ay c

osts

of

issu

ance

of

the

Bon

ds.

Cap

italiz

ed te

rms

used

in

this

Bon

d an

d no

t ot

herw

ise

defin

ed s

hall

have

the

mea

ning

s gi

ven

them

in th

e B

ond

Res

olut

ion.

The

Uni

vers

ity r

eser

ves

the

right

to

rede

em t

he B

onds

mat

urin

g on

and

afte

r M

ay 1

, __

____

_, in

who

le o

r in

part

on a

ny d

ate

on o

r afte

r May

1, _

____

, at p

ar, p

lus a

ccru

ed in

tere

st to

th

e da

te o

f red

empt

ion.

The

Bon

ds a

re p

ayab

le s

olel

y fr

om t

he s

peci

al f

und

of t

he U

nive

rsity

kno

wn

as t

he

“Rec

reat

ion

Cen

ter

Bon

d Fu

nd,

incl

udin

g al

l ac

coun

ts t

here

in”

(the

“Bon

d Fu

nd”)

[an

d th

e C

omm

on R

eser

ve F

und]

mai

ntai

ned

by th

e B

ond

Res

olut

ion

in th

e of

fice

of th

e Tr

easu

rer o

f the

-2

8-

Uni

vers

ity.

The

Uni

vers

ity h

as ir

revo

cabl

y ob

ligat

ed a

nd b

ound

itse

lf to

pay

into

the

Bon

d Fu

nd

out

of t

he S

RC

Fee

and

Rec

reat

ion

Cen

ter

Rev

enue

s or

fro

m s

uch

othe

r m

oney

as

may

be

prov

ided

for

suc

h pu

rpos

e ce

rtain

am

ount

s ne

cess

ary

to p

ay a

nd s

ecur

e th

e pa

ymen

t of

the

pr

inci

pal a

nd in

tere

st o

n su

ch b

onds

.

The

Uni

vers

ity h

as p

ledg

ed to

set

asi

de fr

om th

e R

even

ue A

ccou

nt o

ut o

f the

Rec

reat

ion

Cen

ter R

even

ues

and

the

SRC

Fee

and

to p

ay in

to th

e B

ond

Fund

the

vario

us a

mou

nts

requ

ired

by th

e B

ond

Res

olut

ion

to b

e pa

id in

to a

nd m

aint

aine

d in

suc

h Fu

nd w

ithin

the

times

pro

vide

d by

the

Bon

d R

esol

utio

n.

To

the

exte

nt m

ore

parti

cula

rly p

rovi

ded

by th

e B

ond

Res

olut

ion,

the

amou

nts s

o pl

edge

d to

be

paid

of A

vaila

ble

Fund

s int

o th

e B

ond

Fund

shal

l be

a lie

n an

d ch

arge

ther

eon

equa

l in

rank

to

the

lie

n an

d ch

arge

upo

n su

ch R

ecre

atio

n C

ente

r R

even

ue a

nd S

RC

Fee

of

the

amou

nts

requ

ired

to p

ay a

nd s

ecur

e an

y R

even

ue B

onds

her

eafte

r iss

ued

on a

par

ity w

ith th

e B

onds

and

su

perio

r to

all o

ther

lien

s and

cha

rges

of a

ny k

ind

or n

atur

e.

Th

e U

nive

rsity

cov

enan

ts th

at it

will

per

form

all

the

cove

nant

s of

this

Bon

d an

d of

the

Bon

d R

esol

utio

n, a

nd re

fere

nce

is h

ereb

y m

ade

to th

e B

ond

Res

olut

ion

for a

com

plet

e st

atem

ent

of su

ch c

oven

ants

.

This

Bon

d is

a s

peci

al li

mite

d ob

ligat

ion

of th

e U

nive

rsity

and

is n

ot a

n ob

ligat

ion

of th

e St

ate

of W

ashi

ngto

n or

any

pol

itica

l sub

divi

sion

ther

eof

othe

r th

an th

e U

nive

rsity

, and

nei

ther

th

e fu

ll fa

ith a

nd c

redi

t no

r th

e ta

xing

pow

er o

f th

e U

nive

rsity

or

the

Stat

e of

Was

hing

ton

is

pled

ged

to th

e pa

ymen

t of t

his B

ond.

This

Bon

d sh

all n

ot b

e va

lid o

r bec

ome

oblig

ator

y fo

r any

pur

pose

or b

e en

title

d to

any

se

curit

y or

ben

efit

unde

r th

e B

ond

Res

olut

ion

until

the

Cer

tific

ate

of A

uthe

ntic

atio

n ha

s be

en

man

ually

sign

ed b

y th

e R

egis

trar.

It

is h

ereb

y ce

rtifie

d th

at a

ll ac

ts, c

ondi

tions

and

thin

gs re

quire

d by

the

Con

stitu

tion

and

stat

utes

of

the

Stat

e of

Was

hing

ton

to e

xist

, to

hav

e ha

ppen

ed,

been

don

e an

d pe

rform

ed

prec

eden

t to

and

in th

e is

suan

ce o

f thi

s B

ond

have

hap

pene

d, b

een

done

and

per

form

ed a

nd th

at

the

issu

ance

of

this

Bon

d an

d th

e bo

nds

of t

his

serie

s do

es n

ot v

iola

te a

ny c

onst

itutio

nal,

stat

utor

y or

oth

er li

mita

tion

upon

the

amou

nt o

f bo

nded

ind

ebte

dnes

s th

at t

he U

nive

rsity

may

in

cur.

B-15

-2

9-

Th

e U

nive

rsity

has

cau

sed

this

Bon

d to

be

exec

uted

by

the

man

ual o

r fac

sim

ile s

igna

ture

of

the

Cha

ir of

the

Boa

rd o

f Tru

stee

s an

d to

be

atte

sted

by

the

man

ual o

r fac

sim

ile s

igna

ture

of

the

Secr

etar

y of

the

Boa

rd o

f Tru

stee

s, an

d ha

s ca

used

the

seal

of t

he U

nive

rsity

to b

e im

pres

sed

or im

prin

ted

on th

is B

ond,

as o

f thi

s ___

_ da

y of

___

____

____

____

201

2.

W

ESTE

RN

WA

SHIN

GTO

N U

NIV

ERSI

TY

By

/s

/

Cha

ir, B

oard

of T

rust

ees

ATT

EST:

/s

/

Secr

etar

y, B

oard

of T

rust

ees

Th

e R

egis

trar’s

Cer

tific

ate

of A

uthe

ntic

atio

n on

the

Bon

ds s

hall

be in

sub

stan

tially

the

follo

win

g fo

rm:

C

ERTI

FIC

ATE

OF

AU

THEN

TIC

ATI

ON

This

is o

ne o

f the

Stu

dent

Rec

reat

ion

Fee

Rev

enue

and

Ref

undi

ng B

onds

, Ser

ies

2012

of

Wes

tern

Was

hing

ton

Uni

vers

ity, d

ated

___

____

____

, 201

2, d

escr

ibed

in th

e B

ond

Res

olut

ion.

WA

SHIN

GTO

N S

TATE

FIS

CA

L A

GEN

CY

, as R

egis

trar

By

A

utho

rized

Sig

nato

ry

(b

) E

xecu

tion

and

Aut

hent

icat

ion

of B

onds

. Th

e B

onds

shal

l be

exec

uted

on

beha

lf of

the

Uni

vers

ity b

y th

e C

hair

of th

e B

oard

and

sha

ll be

atte

sted

by

the

Secr

etar

y of

the

Boa

rd b

y

eith

er m

anua

l or f

acsi

mile

sig

natu

res.

In th

e ev

ent t

hat a

ny o

f the

off

icer

s of

the

Uni

vers

ity w

ho

shal

l hav

e ex

ecut

ed o

r atte

sted

the

Bon

ds s

hall

ceas

e to

be

offic

ers

of th

e U

nive

rsity

bef

ore

the

Bon

ds s

hall

have

bee

n is

sued

and

del

iver

ed b

y th

e U

nive

rsity

, the

Bon

ds n

ever

thel

ess

may

be

deliv

ered

and

issu

ed, a

nd u

pon

such

del

iver

y an

d is

sue,

sha

ll be

bin

ding

upo

n th

e U

nive

rsity

as

thou

gh th

ose

offic

ers

who

sig

ned

the

sam

e ha

d co

ntin

ued

to b

e su

ch o

ffic

ers

of th

e U

nive

rsity

.

-3

0-

Furth

er, t

he B

onds

may

be

sign

ed o

n be

half

of th

e U

nive

rsity

by

such

an

offic

er w

ho, o

n th

e da

te

of e

xecu

tion

of th

e B

onds

, is a

pro

per o

ffic

er o

f the

Uni

vers

ity, a

lthou

gh o

n th

e da

te b

orne

by

the

Bon

ds su

ch o

ffic

er sh

all n

ot h

ave

held

such

off

ice.

Th

e B

onds

sha

ll be

sig

ned

unde

r th

e of

ficia

l sea

l of

the

Uni

vers

ity, a

nd s

aid

seal

, or

a

facs

imile

ther

eof,

shal

l be

impr

esse

d, im

prin

ted

or o

ther

wis

e re

prod

uced

ther

eon.

If a

facs

imile

seal

is

used

, su

ch f

acsi

mile

or

repr

oduc

ed s

eal

is h

ereb

y ad

opte

d as

the

off

icia

l se

al o

f th

e

Uni

vers

ity fo

r suc

h B

onds

.

N

o B

ond

shal

l be

valid

or o

blig

ator

y fo

r any

pur

pose

nor

sha

ll th

e R

egis

tere

d O

wne

r of

such

Bon

d be

ent

itled

to a

ny r

ight

or

bene

fit h

ereu

nder

, unl

ess

the

Reg

istra

r sh

all h

ave

sign

ed

man

ually

on

such

Bon

d a

Cer

tific

ate

of A

uthe

ntic

atio

n ap

pear

ing

on s

uch

Bon

d.

Such

Cer

tific

ate

of A

uthe

ntic

atio

n up

on a

ny B

ond

shal

l be

con

clus

ive

evid

ence

tha

t th

e B

ond

so

auth

entic

ated

has

bee

n du

ly i

ssue

d un

der

this

Res

olut

ion

and

that

the

Reg

iste

red

Ow

ner

is

entit

led

to th

e be

nefit

s of

this

Res

olut

ion.

No

Bon

d sh

all b

e au

then

ticat

ed e

xcep

t in

acco

rdan

ce

with

this

Sec

tion

6.

Se

ctio

n 7 .

R

even

ue A

ccou

nt.

(a)

Rev

enue

Acc

ount

. Th

e U

nive

rsity

has

est

ablis

hed

a sp

ecia

l fun

d to

be

mai

ntai

ned

sepa

rate

and

apa

rt fr

om a

ll ot

her

fund

s an

d ac

coun

ts o

f th

e U

nive

rsity

, an

d kn

own

as t

he

“Stu

dent

Rec

reat

ion

Rev

enue

Acc

ount

” (th

e “R

even

ue A

ccou

nt”)

.

Th

e U

nive

rsity

cov

enan

ts to

dep

osit

or c

ause

to b

e de

posi

ted

into

the

Rev

enue

Acc

ount

,

upon

rec

eipt

, all

Rec

reat

ion

Cen

ter

Rev

enue

and

the

SR

C F

ee a

nd t

he n

et i

ncom

e ea

rned

on

inve

stm

ents

in th

e R

even

ue A

ccou

nt.

B-16

-3

1-

(b

) F

low

of

Fun

ds;

Pri

orit

ies.

Th

e U

nive

rsity

cov

enan

ts t

o us

e th

e m

oney

and

inve

stm

ents

in th

e R

even

ue A

ccou

nt, a

nd p

ledg

es s

uch

mon

ey a

nd in

vest

men

ts, s

olel

y fo

r th

e

follo

win

g pu

rpos

es (i

n or

der o

f prio

rity)

:

(1)

For

trans

fers

to

the

Bon

d Fu

nd t

o pa

y th

e pr

inci

pal

of,

inte

rest

on

or

prem

ium

, if a

ny, o

n th

e B

onds

;

(2)

To p

ay c

osts

of

oper

atio

n an

d m

aint

enan

ce o

f th

e R

ecre

atio

n C

ente

r an

d

the

rela

ted

stud

ent r

ecre

atio

n pr

ogra

ms;

(3)

To m

ake

all

paym

ents

req

uire

d to

be

mad

e in

to t

he C

omm

on R

eser

ve

Fund

to m

aint

ain

the

Com

mon

Res

erve

Req

uire

men

t if

ther

e ar

e O

utst

andi

ng C

over

ed B

onds

,

and

into

any

oth

er r

eser

ve f

und

or a

ccou

nt e

stab

lishe

d fo

r Pa

rity

Bon

ds t

hat

are

Unc

over

ed

Bon

ds o

r to

mee

t a

reim

burs

emen

t ob

ligat

ion

with

res

pect

to

any

Qua

lifie

d In

sura

nce

or

Qua

lifie

d Le

tter o

f Cre

dit o

r oth

er c

redi

t enh

ance

men

t dev

ice,

if so

requ

ired

by R

esol

utio

n of

the

Boa

rd;

(4)

For t

rans

fers

to th

e R

enew

al a

nd R

epla

cem

ent R

eser

ve A

ccou

nt n

eces

sary

to m

eet a

nd m

aint

ain

the

Ren

ewal

and

Rep

lace

men

t Res

erve

Req

uire

men

t;

(5)

For t

rans

fers

to a

ny s

peci

al fu

nds

esta

blis

hed

for t

he p

aym

ent o

f prin

cipa

l

of a

nd in

tere

st o

n an

y R

even

ue B

onds

or o

ther

reve

nue

oblig

atio

ns h

avin

g a

lien

upon

the

mon

ey

and

inve

stm

ents

in th

e R

even

ue A

ccou

nt ju

nior

and

subo

rdin

ate

to th

e lie

n of

the

Bon

ds;

(6

) Fo

r est

ablis

hmen

t of r

easo

nabl

e op

erat

ing

rese

rves

; or

(7

) Fo

r th

e pu

rcha

se o

f an

y O

utst

andi

ng B

onds

and

/or

Parit

y B

onds

at

any

pric

e de

emed

reas

onab

le to

the

Aut

horiz

ed R

epre

sent

ativ

e of

the

Uni

vers

ity o

r the

def

easa

nce

of

Out

stan

ding

Bon

ds a

nd/o

r Par

ity B

onds

.

-3

2-

(c)

Tra

nsfe

rs f

rom

Rev

enue

Acc

ount

to B

ond

Fun

d. O

n or

bef

ore

the

day

prio

r to

the

due

date

ther

eof,

or, w

ith re

spec

t to

any

Bon

ds th

at a

re in

sure

d, th

e fif

th d

ay p

rior t

o th

e du

e da

te

ther

eof,

and

cont

inui

ng f

or s

o lo

ng a

s an

y B

onds

are

Out

stan

ding

, the

Uni

vers

ity c

oven

ants

to

trans

fer

to t

he B

ond

Fund

fro

m t

he R

even

ue A

ccou

nt,

mon

ey a

nd i

nves

tmen

ts e

qual

to

the

inte

rest

or

prin

cipa

l or

pre

miu

m,

if an

y, c

omin

g du

e on

the

Bon

ds o

n su

ch d

ue d

ate.

Th

e

Uni

vers

ity a

lso

may

redu

ce th

e am

ount

of a

ny tr

ansf

er re

quire

d to

be

mad

e to

the

Bon

d Fu

nd o

n

the

day,

or,

with

resp

ect t

o an

y B

onds

that

are

insu

red,

the

fifth

day

, im

med

iate

ly p

rece

ding

eac

h

inte

rest

pay

men

t dat

e by

an

amou

nt e

qual

to a

ll am

ount

s av

aila

ble

to p

ay p

rinci

pal,

inte

rest

or

prem

ium

on

the

Bon

ds o

n de

posi

t th

erei

n an

d to

the

ext

ent

that

suc

h am

ount

s ha

ve n

ot

prev

ious

ly b

een

cred

ited

agai

nst s

uch

paym

ents

.

(d

) R

enew

al a

nd R

epla

cem

ent

Res

erve

Acc

ount

. T

he U

nive

rsity

has

est

ablis

hed

a

spec

ial

trust

fun

d de

sign

ated

as

the

“Ren

ewal

and

Rep

lace

men

t R

eser

ve A

ccou

nt,”

and

sha

ll

keep

such

Ren

ewal

and

Rep

lace

men

t Res

erve

Acc

ount

sepa

rate

and

apa

rt fr

om a

ll ot

her a

ccou

nts

and

mon

eys

held

by

it, a

nd s

hall

adm

inis

ter s

uch

Ren

ewal

and

Rep

lace

men

t Res

erve

Acc

ount

as

prov

ided

in th

is S

ectio

n 7(

d).

(1)

Dep

osits

. A

s of J

une

30, 2

008,

the

Uni

vers

ity u

pdat

ed it

s Cap

ital R

enew

al

Man

agem

ent P

lan,

and

est

ablis

hed

an a

nnua

l dep

osit

requ

irem

ent o

f $2

50,0

00 e

ach

fisca

l yea

r,

from

200

9 th

roug

h 20

14.

Prio

r to

Jun

e 30

, 201

3 an

d ea

ch f

ive

year

s th

erea

fter,

the

Uni

vers

ity

shal

l up

date

the

Cap

ital

Ren

ewal

Man

agem

ent

Plan

, w

hich

pla

n sh

all

iden

tify

futu

re c

apita

l

expe

nditu

re

requ

irem

ents

fo

r th

e R

ecre

atio

n C

ente

r an

d re

com

men

d th

e R

enew

al

and

Rep

lace

men

t Res

erve

Req

uire

men

t for

the

follo

win

g fiv

e ye

ars.

The

Uni

vers

ity w

ill u

se it

s be

st

effo

rts to

fol

low

suc

h pl

an, i

nclu

ding

a m

odifi

catio

n, if

any

, of

the

Ren

ewal

and

Rep

lace

men

t

B-17

-3

3-

Res

erve

Req

uire

men

t an

d sh

all

esta

blis

h pr

ior

to e

ach

such

Jun

e 30

, th

e R

enew

al a

nd

Rep

lace

men

t Res

erve

Req

uire

men

t in

effe

ct fo

r the

nex

t fiv

e ye

ars.

(2)

Dis

burs

emen

ts.

The

mon

eys

depo

site

d in

the

Ren

ewal

and

Rep

lace

men

t

Res

erve

Acc

ount

sha

ll be

dis

burs

ed a

t any

tim

e up

on th

e w

ritte

n re

ques

t of t

he U

nive

rsity

to p

ay

expe

nses

und

er t

he C

apita

l R

enew

al M

anag

emen

t Pl

an, n

on-r

outin

e m

aint

enan

ce a

nd u

pgra

de

expe

nses

of

the

Rec

reat

ion

Cen

ter

and/

or f

or u

nant

icip

ated

cap

ital

need

s fo

r th

e R

ecre

atio

n

Cen

ter.

The

mon

eys

cred

ited

to t

he R

enew

al a

nd R

epla

cem

ent

Res

erve

Acc

ount

sha

ll no

t be

com

min

gled

, exc

ept

for

inve

stm

ent

purp

oses

, with

any

oth

er m

oney

s of

the

Uni

vers

ity.

Any

mon

eys

rem

aini

ng in

the

Ren

ewal

and

Rep

lace

men

t Res

erve

Acc

ount

afte

r all

Parit

y B

onds

are

no lo

nger

Out

stan

ding

may

be

used

for a

ny p

urpo

se o

f the

Uni

vers

ity.

Se

ctio

n 8 .

B

ond

Fund

and

Com

mon

Res

erve

Fun

d.

(a)

Bon

d F

und.

A

spe

cial

fun

d of

the

Uni

vers

ity d

esig

nate

d th

e “R

ecre

atio

n C

ente

r

Bon

d Fu

nd”

(the

“Bon

d Fu

nd”)

is h

ereb

y au

thor

ized

to b

e cr

eate

d in

the

offic

e of

the

Trea

sure

r

for t

he p

urpo

se o

f pay

ing

and

secu

ring

the

paym

ent o

f Par

ity B

onds

, whi

ch F

und

is to

be

draw

n

upon

for

the

sol

e pu

rpos

e of

pay

ing

the

prin

cipa

l of

, pre

miu

m, i

f an

y, a

nd i

nter

est

on P

arity

Bon

ds, a

s the

sam

e sh

all b

ecom

e du

e.

(1

) Th

e U

nive

rsity

her

eby

oblig

ates

and

bin

ds i

tsel

f, an

d th

e Tr

easu

rer

is

here

by a

utho

rized

and

dire

cted

, as s

oon

as th

e B

onds

are

del

iver

ed a

nd p

aid

for,

to se

t asi

de fr

om

the

proc

eeds

of t

he sa

le th

ereo

f and

pay

into

the

Bon

d Fu

nd a

ll ac

crue

d in

tere

st re

ceiv

ed th

ereo

n.

(2

) Th

e U

nive

rsity

her

eby

furth

er o

blig

ates

and

bin

ds it

self,

and

the

Trea

sure

r

is h

ereb

y au

thor

ized

and

dire

cted

, to

set a

side

and

pay

into

the

Bon

d Fu

nd f

rom

the

Rev

enue

Acc

ount

, th

ose

amou

nts

whi

ch,

toge

ther

with

any

mon

ey o

n ha

nd i

n th

e B

ond

Fund

, ar

e

-3

4-

nece

ssar

y to

pay

the

int

eres

t on

the

Bon

ds,

and

to p

ay t

he p

rinci

pal

of t

he B

onds

as

such

prin

cipa

l and

inte

rest

bec

ome

due

and

paya

ble.

(3)

Said

am

ount

s so

ple

dged

in s

ubse

ctio

n (b

) of t

his

sect

ion

to b

e pa

id o

ut o

f

the

Rev

enue

Acc

ount

int

o th

e B

ond

Fund

and

int

o th

e C

omm

on R

eser

ve F

und

as h

erei

nafte

r

prov

ided

, are

her

eby

decl

ared

to b

e a

prio

r lie

n an

d ch

arge

upo

n th

e R

ecre

atio

n C

ente

r Rev

enue

and

the

SRC

Fee

and

/or t

he m

onie

s in

the

Rev

enue

Acc

ount

sup

erio

r to

all o

ther

cha

rges

of a

ny

kind

or

natu

re w

hats

oeve

r ex

cept

that

the

amou

nts

so p

ledg

ed a

re e

qual

in r

ank

to a

ny c

harg

es

upon

suc

h R

ecre

atio

n C

ente

r R

even

ue a

nd t

he S

RC

Fee

and

/or

the

mon

ies

in t

he R

even

ue

Acc

ount

whi

ch m

ay h

erea

fter

be m

ade

to p

ay a

nd s

ecur

e th

e pa

ymen

t of

the

prin

cipa

l of

and

inte

rest

on

any

Add

ition

al B

onds

.

(b

) C

omm

on R

eser

ve F

und.

Th

e Tr

easu

rer

is h

ereb

y au

thor

ized

and

dire

cted

to

esta

blis

h a

Com

mon

Res

erve

Fun

d fo

r th

e pu

rpos

e of

sec

urin

g th

e pa

ymen

t of t

he p

rinci

pal o

f,

prem

ium

, if

any,

and

int

eres

t on

all

Cov

ered

Bon

ds.

The

Aut

horiz

ed R

epre

sent

ativ

e of

the

Uni

vers

ity is

furth

er a

utho

rized

to d

esig

nate

or n

ot to

des

igna

te th

e B

onds

as

Cov

ered

Bon

ds o

r

in th

e al

tern

ativ

e to

est

ablis

h a

sepa

rate

rese

rve

acco

unt w

ithin

the

Bon

d Fu

nd fo

r the

pur

pose

of

secu

ring

the

Bon

ds.

Any

suc

h se

para

te r

eser

ve s

hall

be f

unde

d an

d ad

min

iste

red

as p

rovi

ded

here

in w

ith r

espe

ct to

the

Com

mon

Res

erve

Fun

d, a

lthou

gh th

e se

para

te a

ccou

nt w

ould

sec

ure

only

the

Bon

ds o

f thi

s is

sue,

and

the

dolla

r am

ount

of t

he re

serv

e re

quire

men

t wou

ld b

e se

t for

th

in th

e O

ffic

ial N

otic

e of

Sal

e or

Pur

chas

e C

ontra

ct.

The

Res

olut

ion

auth

oriz

ing

the

issu

ance

of

each

ser

ies

of A

dditi

onal

Bon

ds m

ay p

rovi

de th

at th

e se

ries

of A

dditi

onal

Bon

ds w

ill b

e is

sued

as “

Cov

ered

Bon

ds”

or, i

n th

e al

tern

ativ

e, p

rovi

de w

heth

er a

sep

arat

e re

serv

e se

curin

g on

ly th

at

serie

s of

Add

ition

al B

onds

sho

uld

be e

stab

lishe

d.

The

Com

mon

Res

erve

Fun

d m

ay b

e

esta

blis

hed

as a

sep

arat

e fu

nd o

r mai

ntai

ned

as a

n ac

coun

t or s

ubac

coun

t with

in th

e B

ond

Fund

.

B-18

-3

5-

The

Com

mon

Res

erve

Fun

d sh

all b

e m

aint

aine

d in

an

amou

nt n

ot le

ss th

an th

e C

omm

on R

eser

ve

Req

uire

men

t, su

bjec

t to

per

mitt

ed w

ithdr

awal

s of

am

ount

s in

exc

ess

of t

he C

omm

on R

eser

ve

Req

uire

men

t, of

am

ount

s to

pay

deb

t ser

vice

on

Cov

ered

Bon

ds in

the

even

t of a

def

icie

ncy

in a

Bon

d Fu

nd fo

r Cov

ered

Bon

ds, o

f am

ount

s to

pay

the

prin

cipa

l of,

prem

ium

, if a

ny, a

nd in

tere

st

on a

ll O

utst

andi

ng C

over

ed B

onds

, of

am

ount

s be

ing

repl

aced

by

Qua

lifie

d In

sura

nce

or a

Qua

lifie

d Le

tter

of C

redi

t, an

d of

am

ount

s re

quire

d to

pre

vent

any

Bon

ds f

rom

bec

omin

g

“Arb

itrag

e B

onds

,” in

eac

h ca

se a

s pro

vide

d he

rein

. Th

e C

omm

on R

eser

ve R

equi

rem

ent s

hall

be

mai

ntai

ned

by d

epos

its o

f ca

sh a

nd/o

r qu

alifi

ed i

nves

tmen

ts,

a Q

ualif

ied

Lette

r of

Cre

dit

or

Qua

lifie

d In

sura

nce,

or a

com

bina

tion

of th

e fo

rego

ing.

To

the

exte

nt th

at th

e U

nive

rsity

obt

ains

a Q

ualif

ied

Lette

r of

Cre

dit o

r Q

ualif

ied

Insu

ranc

e in

sub

stitu

tion

for

cash

or

secu

ritie

s in

the

Com

mon

Res

erve

Fun

d, a

ll or

a p

ortio

n of

the

mon

ey o

n ha

nd in

the

Com

mon

Res

erve

Fun

d

shal

l be

tra

nsfe

rred

to

the

fund

or

acco

unt,

spec

ified

by

the

Aut

horiz

ed R

epre

sent

ativ

e of

the

Uni

vers

ity w

ithin

the

limita

tions

per

mitt

ed b

y th

e ta

x co

vena

nts,

if an

y, fo

r the

Cov

ered

Bon

ds.

In c

ompu

ting

the

amou

nt o

n ha

nd in

the

Com

mon

Res

erve

Fun

d, Q

ualif

ied

Insu

ranc

e an

d/or

a

Qua

lifie

d Le

tter o

f Cre

dit s

hall

be v

alue

d at

the

low

er o

f the

face

am

ount

ther

eof a

nd th

e am

ount

avai

labl

e to

be

draw

n th

ereu

nder

, and

all

othe

r obl

igat

ions

pur

chas

ed a

s an

inve

stm

ent o

f mon

eys

ther

ein

shal

l be

mar

ked-

to-m

arke

t, at

leas

t onc

e an

nual

ly a

nd a

t the

tim

e of

any

with

draw

al fr

om

the

Com

mon

Res

erve

Fun

d.

As

used

her

ein,

the

term

“ca

sh”

shal

l inc

lude

U.S

. cur

renc

y, c

ash

equi

vale

nts

and

evid

ence

s th

ereo

f, in

clud

ing

dem

and

depo

sits

and

cer

tifie

d or

cas

hier

’s c

heck

s;

and

the

depo

sit

to t

he C

omm

on R

eser

ve F

und

may

be

satis

fied

by t

he t

rans

fer

of q

ualif

ied

inve

stm

ents

to s

uch

acco

unt.

If a

def

icie

ncy

in th

e C

omm

on R

eser

ve F

und

shal

l exi

st a

s a

resu

lt

of t

he f

oreg

oing

val

uatio

n, s

uch

defic

ienc

y sh

all

be m

ade

up i

n eq

ual

mon

thly

ins

tallm

ents

with

in a

yea

r the

reaf

ter.

-3

6-

If

the

bala

nce

on h

and

in th

e C

omm

on R

eser

ve F

und

is s

uffic

ient

to s

atis

fy th

e C

omm

on

Res

erve

Req

uire

men

t, in

tere

st e

arni

ngs

ther

eon

shal

l be

app

lied

as p

rovi

ded

in t

he f

ollo

win

g

sent

ence

s. W

hene

ver t

here

is a

suf

ficie

nt a

mou

nt in

the

Bon

d Fu

nds

for t

he C

over

ed B

onds

and

the

Com

mon

Res

erve

Fun

d to

pay

the

prin

cipa

l of

, pr

emiu

m,

if an

y, a

nd i

nter

est

on a

ll

Out

stan

ding

Cov

ered

Bon

ds, t

he m

oney

in th

e C

omm

on R

eser

ve F

und

may

be

used

to p

ay s

uch

prin

cipa

l and

inte

rest

. So

long

as

the

mon

ey le

ft re

mai

ning

on

depo

sit i

n th

e C

omm

on R

eser

ve

Fund

is n

ot le

ss th

an th

e C

omm

on R

eser

ve R

equi

rem

ent,

mon

ey in

the

Com

mon

Res

erve

Fun

d

may

be

trans

ferr

ed to

the

fund

or a

ccou

nt s

peci

fied

in w

ritin

g by

the

Aut

horiz

ed R

epre

sent

ativ

e

of th

e U

nive

rsity

with

in th

e lim

itatio

ns p

erm

itted

by

the

tax

cove

nant

s fo

r th

e C

over

ed B

onds

.

The

Uni

vers

ity a

lso

may

tra

nsfe

r ou

t of

the

Com

mon

Res

erve

Fun

d an

y m

oney

req

uire

d to

prev

ent a

ny B

onds

from

bec

omin

g “A

rbitr

age

Bon

ds.”

If

a de

ficie

ncy

in a

ny B

ond

Fund

for a

ser

ies

of C

over

ed B

onds

sha

ll oc

cur i

mm

edia

tely

prio

r to

an in

tere

st p

aym

ent d

ate,

suc

h de

ficie

ncy

shal

l be

mad

e up

from

the

Com

mon

Res

erve

Fund

by

the

with

draw

al o

f cas

h th

eref

rom

for t

hat p

urpo

se (i

nclu

ding

cas

h pr

ovid

ed b

y th

e sa

le

or re

dem

ptio

n of

obl

igat

ions

hel

d in

the

Com

mon

Res

erve

Fun

d, in

such

am

ount

s as w

ill p

rovi

de

cash

in th

e C

omm

on R

eser

ve F

und

suff

icie

nt to

mak

e up

any

suc

h de

ficie

ncy

with

resp

ect t

o th

e

Cov

ered

Bon

ds),

and

if a

defic

ienc

y in

any

Bon

d Fu

nd fo

r a s

erie

s of

Cov

ered

Bon

ds s

till e

xist

s

imm

edia

tely

prio

r to

the

inte

rest

pay

men

t dat

e fo

r su

ch s

erie

s of

Cov

ered

Bon

ds a

nd a

fter

the

trans

fer

of c

ash

from

the

Com

mon

Res

erve

Fun

d to

suc

h B

ond

Fund

, the

Uni

vers

ity s

hall

then

draw

fro

m a

ny Q

ualif

ied

Lette

r of

Cre

dit o

r Q

ualif

ied

Insu

ranc

e th

en c

redi

ted

to th

e C

omm

on

Res

erve

Fun

d in

suf

ficie

nt a

mou

nt to

mak

e up

the

defic

ienc

y.

If t

he a

mou

nt in

the

Com

mon

Res

erve

Fun

d is

ins

uffic

ient

to

mak

e up

all

defic

ienc

ies

in t

he B

ond

Fund

(s)

for

all

Cov

ered

Bon

ds c

omin

g du

e on

a C

over

ed B

ond

paym

ent d

ate,

the

defic

ienc

ies

shal

l be

mad

e up

on

a pr

o

B-19

-3

7-

rata

bas

is b

ased

on

the

prin

cipa

l, if

any,

and

inte

rest

pay

men

ts c

omin

g du

e on

Cov

ered

Bon

ds o

n

such

int

eres

t pa

ymen

t da

te.

Any

dra

w o

n a

Qua

lifie

d Le

tter

of C

redi

t or

Qua

lifie

d In

sura

nce

shal

l be

mad

e at

such

tim

es a

nd u

nder

such

con

ditio

ns a

s the

agr

eem

ent f

or su

ch Q

ualif

ied

Lette

r

of C

redi

t or s

uch

Qua

lifie

d In

sura

nce

shal

l pro

vide

. R

eim

burs

emen

t may

be

mad

e to

the

issu

er

of a

ny Q

ualif

ied

Lette

r of

Cre

dit o

r Q

ualif

ied

Insu

ranc

e in

acc

orda

nce

with

the

reim

burs

emen

t

agre

emen

t rel

ated

ther

eto,

and

afte

r mak

ing

nece

ssar

y pr

ovis

ion

for t

he p

aym

ents

requ

ired

to b

e

mad

e in

par

agra

phs

(b)(

1) a

nd (

2) o

f Se

ctio

n 7

of th

is R

esol

utio

n. I

f th

e U

nive

rsity

sha

ll ha

ve

faile

d to

mak

e an

y pa

ymen

t req

uire

d to

be

mad

e un

der

such

rei

mbu

rsem

ent a

gree

men

t for

the

Cov

ered

Bon

ds, t

he is

suer

sha

ll be

ent

itled

to e

xerc

ise

all r

emed

ies

avai

labl

e at

law

or u

nder

this

Res

olut

ion;

pro

vide

d, h

owev

er,

that

no

acce

lera

tion

of t

he B

onds

sha

ll be

per

mitt

ed,

and

no

rem

edie

s th

at a

dver

sely

affe

ct t

he b

enef

icia

l ow

ners

of

the

Bon

ds s

hall

be p

erm

itted

. A

ny

defic

ienc

y cr

eate

d in

the

Com

mon

Res

erve

Fun

d by

rea

son

of a

ny s

uch

with

draw

al s

hall

be

mad

e up

with

in tw

o ye

ars,

from

Qua

lifie

d In

sura

nce

or a

Qua

lifie

d Le

tter o

f Cre

dit o

r out

of N

et

Rev

enue

s (o

r ou

t of

any

othe

r m

oney

s on

han

d le

gally

ava

ilabl

e fo

r su

ch p

urpo

se),

in tw

enty

-

four

(24

) eq

ual

mon

thly

ins

tallm

ents

, af

ter

first

mak

ing

nece

ssar

y pr

ovis

ion

for

all

paym

ents

requ

ired

to b

e m

ade

into

the

Bon

d Fu

nds f

or C

over

ed B

onds

with

in su

ch y

ear.

In

mak

ing

the

paym

ents

and

cre

dits

to

the

Com

mon

Res

erve

Fun

d re

quire

d by

thi

s

Sect

ion

8, to

the

exte

nt th

at th

e U

nive

rsity

has

obt

aine

d Q

ualif

ied

Insu

ranc

e or

a Q

ualif

ied

Lette

r

of C

redi

t for

spe

cific

am

ount

s re

quire

d pu

rsua

nt to

this

sec

tion

to b

e pa

id o

ut o

f th

e C

omm

on

Res

erve

Fun

d, s

uch

amou

nts

then

ava

ilabl

e to

be

draw

n un

der

such

Qua

lifie

d In

sura

nce

or a

Qua

lifie

d Le

tter o

f Cre

dit s

hall

be c

redi

ted

agai

nst t

he a

mou

nts

requ

ired

to b

e m

aint

aine

d in

the

Com

mon

Res

erve

Fun

d by

this

Sec

tion

8 to

the

exte

nt th

at su

ch p

aym

ents

and

cre

dits

to b

e m

ade

are

to b

e m

ade

or i

nsur

ed b

y th

e is

suer

of

such

Qua

lifie

d In

sura

nce,

or

are

to b

e m

ade

or

-3

8-

guar

ante

ed b

y a

Qua

lifie

d Le

tter

of C

redi

t. I

f a

Cre

dit

Even

t oc

curs

, th

e C

omm

on R

eser

ve

Req

uire

men

t sha

ll be

sat

isfie

d (A

) with

in o

ne (1

) yea

r afte

r the

occ

urre

nce

of s

uch

Cre

dit E

vent

with

oth

er Q

ualif

ied

Insu

ranc

e or

ano

ther

Qua

lifie

d Le

tter o

f Cre

dit,

or (B

) with

in th

ree

(3) y

ears

(in th

ree

equa

l ann

ual i

nsta

llmen

ts) a

fter t

he o

ccur

renc

e of

suc

h C

redi

t Eve

nt, o

ut o

f Rec

reat

ion

Cen

ter

Rev

enue

s (o

r ou

t of

othe

r m

oney

on

hand

and

lega

lly a

vaila

ble

for

such

pur

pose

) af

ter

first

mak

ing

nece

ssar

y pr

ovis

ions

for

all

paym

ents

req

uire

d to

be

mad

e in

to th

e B

ond

Fund

for

Cov

ered

Bon

ds.

(e

) U

se o

f E

xces

s M

oney

. M

oney

in th

e B

ond

Fund

not

nee

ded

to p

ay th

e in

tere

st o

r

prin

cipa

l an

d in

tere

st n

ext

com

ing

due

on a

ny O

utst

andi

ng B

onds

or

to m

aint

ain

requ

ired

rese

rves

ther

efor

may

be

used

to p

urch

ase

or r

edee

m a

nd r

etire

Bon

ds.

Mon

ey in

the

Rev

enue

Fund

, the

Bon

d Fu

nd a

nd th

e C

omm

on R

eser

ve F

und,

if a

ny, m

ay b

e co

mm

ingl

ed fo

r inv

estm

ent

purp

oses

and

may

be

inve

sted

in a

ny in

vest

men

ts le

gal f

or th

e U

nive

rsity

.

Se

ctio

n 9 .

A

pplic

atio

n of

Bon

d Pr

ocee

ds a

nd C

all

for

Red

empt

ion

of R

efun

ded

Bon

ds.

(a)

Impr

ovem

ent

Bon

ds.

The

Trea

sure

r cur

rent

ly m

aint

ains

a fu

nd o

f the

Uni

vers

ity

(the

“Pro

ject

Fun

d”) i

nto

whi

ch th

e pr

ocee

ds o

f the

Impr

ovem

ent B

onds

shal

l be

depo

site

d at

the

time

of c

losi

ng.

Mon

ey o

n ha

nd i

n th

e Pr

ojec

t Fu

nd s

hall

be u

sed

to p

ay t

he c

osts

of

or

reim

burs

e th

e U

nive

rsity

for

the

paym

ent o

f th

e co

sts

of th

e Pr

ojec

t and

the

cost

s of

fun

ding

a

prop

ortio

nate

sha

re o

f co

sts

of is

suan

ce o

f th

e B

onds

. Th

e Tr

easu

rer

or h

is/h

er d

esig

nee

may

inve

st m

oney

in th

e Pr

ojec

t Fun

d in

lega

l inv

estm

ents

for

Uni

vers

ity f

unds

. Ea

rnin

gs o

n su

ch

inve

stm

ents

sha

ll ac

crue

to

the

bene

fit o

f th

e fu

nd e

arni

ng s

uch

inte

rest

. A

ny p

art

of t

he

proc

eeds

of t

he B

onds

rem

aini

ng in

the

Proj

ect F

und

afte

r all

cost

s of

the

Proj

ect h

ave

been

pai

d

B-20

-3

9-

(incl

udin

g co

sts

of is

suan

ce) m

ay b

e us

ed fo

r any

recr

eatio

nal c

apita

l pur

pose

of t

he U

nive

rsity

or m

ay b

e tra

nsfe

rred

to th

e D

ebt S

ervi

ce A

ccou

nt.

(b)

Ref

undi

ng B

onds

. U

nles

s th

e R

efun

ded

Bon

ds w

ill b

e re

deem

ed s

imul

tane

ous

with

del

iver

y of

the

Bon

d pr

ocee

ds, t

he p

roce

eds

of s

ale

of th

e R

efun

ding

Bon

ds in

the

dolla

r

amou

nt c

ertif

ied

by th

e U

nive

rsity

to th

e Es

crow

Age

nt s

hall

be d

eliv

ered

to th

e Es

crow

Age

nt

for t

he p

urpo

se o

f def

easi

ng th

e R

efun

ded

Bon

ds a

nd p

ayin

g re

late

d co

sts o

f iss

uanc

e.

M

oney

rece

ived

by

the

Escr

ow A

gent

from

Bon

d pr

ocee

ds a

nd o

ther

mon

ey p

rovi

ded

by

the

Uni

vers

ity,

shal

l be

use

d im

med

iate

ly b

y th

e Es

crow

Age

nt u

pon

rece

ipt

ther

eof

in

acco

rdan

ce w

ith t

he t

erm

s of

the

Esc

row

Agr

eem

ent

to d

efea

se t

he R

efun

ded

Bon

ds a

s

auth

oriz

ed b

y th

e 20

02 B

ond

Res

olut

ion,

and

to p

ay c

osts

of

issu

ance

of

the

Ref

undi

ng B

onds

.

If th

e R

efun

ded

Bon

ds w

ill n

ot b

e pa

id a

nd re

deem

ed o

n th

e da

te o

f iss

uanc

e of

the

Bon

ds, t

he

Uni

vers

ity sh

all d

efea

se th

e R

efun

ded

Bon

ds a

nd d

isch

arge

such

obl

igat

ions

by

the

use

of m

oney

depo

site

d w

ith th

e Es

crow

Age

nt to

pur

chas

e ce

rtain

Gov

ernm

ent O

blig

atio

ns (w

hich

obl

igat

ions

so p

urch

ased

, are

her

ein

calle

d “A

cqui

red

Obl

igat

ions

”), b

earin

g su

ch in

tere

st a

nd m

atur

ing

as to

prin

cipa

l an

d in

tere

st i

n su

ch a

mou

nts

and

at s

uch

times

whi

ch,

toge

ther

with

any

nec

essa

ry

begi

nnin

g ca

sh b

alan

ce, w

ill p

rovi

de fo

r the

pay

men

t of:

(1)

inte

rest

on

the

Ref

unde

d B

onds

com

ing

due

on th

e C

all D

ate;

and

(2)

the

rede

mpt

ion

pric

e (1

00%

of

the

prin

cipa

l am

ount

ther

eof)

on th

e C

all

Dat

e of

the

Ref

unde

d B

onds

.

Su

ch A

cqui

red

Obl

igat

ions

sha

ll be

pur

chas

ed a

t a

yiel

d no

t gr

eate

r th

an t

he y

ield

perm

itted

by

the

Cod

e an

d re

gula

tions

rel

atin

g to

acq

uire

d ob

ligat

ions

in

conn

ectio

n w

ith

Ref

undi

ng B

ond

issu

es.

-4

0-

(b

) A

ppoi

ntm

ent

of E

scro

w A

gent

. T

he A

utho

rized

Rep

rese

ntat

ive

of th

e U

nive

rsity

is h

ereb

y au

thor

ized

to d

eter

min

e w

heth

er o

r not

an

Escr

ow A

gent

will

be

requ

ired

and,

if s

o, to

appo

int a

qua

lifie

d ba

nkin

g as

soci

atio

n to

act

as

the

escr

ow a

gent

(the

“Es

crow

Age

nt”)

for t

he

Ref

unde

d B

onds

. A

beg

inni

ng c

ash

bala

nce,

if a

ny, a

nd A

cqui

red

Obl

igat

ions

shal

l be

depo

site

d

irrev

ocab

ly w

ith th

e Es

crow

Age

nt in

an

amou

nt s

uffic

ient

to d

efea

se th

e R

efun

ded

Bon

ds.

The

proc

eeds

of

the

Ref

undi

ng B

onds

rem

aini

ng a

fter

acqu

isiti

on o

f th

e A

cqui

red

Obl

igat

ions

and

prov

isio

n fo

r th

e ne

cess

ary

begi

nnin

g ca

sh b

alan

ce s

hall

be u

tiliz

ed t

o pa

y ex

pens

es o

f th

e

acqu

isiti

on a

nd s

afek

eepi

ng o

f th

e A

cqui

red

Obl

igat

ions

and

exp

ense

s of

the

iss

uanc

e of

the

Ref

undi

ng B

onds

and

/or r

etur

ned

to th

e U

nive

rsity

for t

he p

aym

ent o

f suc

h ex

pens

es.

(c)

Cal

l fo

r R

edem

ptio

n of

Ref

unde

d B

onds

. I

f th

e R

efun

ded

Bon

ds w

ill n

ot b

e

rede

emed

on

the

date

of

issu

ance

of

the

Bon

ds,

the

Uni

vers

ity h

ereb

y irr

evoc

ably

set

s as

ide

suff

icie

nt f

unds

out

of

the

purc

hase

of

Acq

uire

d O

blig

atio

ns f

rom

pro

ceed

s of

the

Ref

undi

ng

Bon

ds to

mak

e th

e pa

ymen

ts d

escr

ibed

in S

ectio

n 9(

a) o

f thi

s Res

olut

ion.

Th

e U

nive

rsity

her

eby

irrev

ocab

ly c

alls

the

Ref

unde

d B

onds

for r

edem

ptio

n on

the

Cal

l

Dat

e in

acc

orda

nce

with

ter

ms

of t

he 2

002

Bon

d R

esol

utio

n pu

rsua

nt t

o w

hich

the

Ref

unde

d

Bon

ds w

as i

ssue

d au

thor

izin

g th

e re

dem

ptio

n an

d re

tirem

ent

of t

he R

efun

ded

Bon

ds p

rior

to

thei

r fix

ed m

atur

ities

.

Sa

id d

efea

sanc

e an

d ca

ll fo

r re

dem

ptio

n of

the

Ref

unde

d B

onds

sha

ll be

irre

voca

ble

on

the

date

of

issu

ance

of

the

Bon

ds if

the

Ref

unde

d B

onds

are

sch

edul

ed f

or r

edem

ptio

n on

that

date

(an

d th

e co

nditi

ons

of r

edem

ptio

n ha

ve b

een

satis

fied)

or,

as a

pplic

able

, af

ter

the

final

esta

blis

hmen

t of

the

esc

row

acc

ount

and

del

iver

y of

the

Bon

d Pr

ocee

ds a

nd/o

r A

cqui

red

Obl

igat

ions

to th

e Es

crow

Age

nt.

B-21

-4

1-

Th

e Es

crow

Age

nt o

r th

e A

utho

rized

Rep

rese

ntat

ive

of th

e U

nive

rsity

as

appl

icab

le, i

s

here

by a

utho

rized

and

dire

cted

to

prov

ide

for

the

givi

ng o

f no

tice

of t

he r

edem

ptio

n of

the

Ref

unde

d B

onds

in

acco

rdan

ce w

ith t

he a

pplic

able

pro

visi

ons

of t

he 2

002

Bon

d R

esol

utio

n

purs

uant

to w

hich

the

Ref

unde

d B

onds

was

issu

ed.

The

Trea

sure

r of t

he U

nive

rsity

is a

utho

rized

and

requ

este

d to

pro

vide

wha

teve

r ass

ista

nce

is n

eces

sary

to a

ccom

plis

h su

ch re

dem

ptio

n an

d th

e

givi

ng o

f not

ice

ther

efor

.

Th

e Es

crow

Age

nt o

r th

e A

utho

rized

Rep

rese

ntat

ive

of th

e U

nive

rsity

, as

appl

icab

le, i

s

here

by a

utho

rized

and

dire

cted

to p

ay to

the

Trea

sure

r of

the

Uni

vers

ity, o

r, at

the

dire

ctio

n of

the

Trea

sure

r of t

he U

nive

rsity

, to

the

fisca

l age

ncy

or a

genc

ies o

f the

Sta

te o

f Was

hing

ton,

sum

s

suff

icie

nt to

pay

, whe

n du

e, th

e pa

ymen

ts s

peci

fied

in o

f Se

ctio

n 9(

a) o

f th

is R

esol

utio

n.

All

such

sum

s sh

all b

e pa

id fr

om th

e m

oney

s an

d A

cqui

red

Obl

igat

ions

dep

osite

d w

ith s

aid

Escr

ow

Age

nt p

ursu

ant

to t

he p

revi

ous

subs

ectio

n of

thi

s R

esol

utio

n, a

nd t

he i

ncom

e th

eref

rom

and

proc

eeds

the

reof

. A

ll m

oney

s an

d A

cqui

red

Obl

igat

ions

dep

osite

d w

ith s

aid

bank

and

any

inco

me

ther

efro

m s

hall

be h

eld,

inve

sted

(but

onl

y at

the

dire

ctio

n of

the

Trea

sure

r) a

nd a

pplie

d

in a

ccor

danc

e w

ith t

he p

rovi

sion

s of

thi

s R

esol

utio

n an

d w

ith t

he l

aws

of t

he S

tate

of

Was

hing

ton

for t

he b

enef

it of

the

Uni

vers

ity a

nd o

wne

rs o

f the

Ref

unde

d B

onds

.

If

the

Ref

undi

ng B

ond

proc

eeds

are

dep

osite

d w

ith a

n Es

crow

Age

nt, t

he U

nive

rsity

will

take

suc

h ac

tions

as

are

foun

d ne

cess

ary

to s

ee th

at a

ll ne

cess

ary

and

prop

er fe

es, c

ompe

nsat

ion

and

expe

nses

of t

he E

scro

w A

gent

for t

he R

efun

ded

Bon

ds sh

all b

e pa

id w

hen

due.

In

ord

er to

car

ry o

ut th

e pu

rpos

es o

f the

pre

cedi

ng s

ubse

ctio

n of

this

Res

olut

ion

and

this

subs

ectio

n, th

e Tr

easu

rer o

f th

e U

nive

rsity

is a

utho

rized

and

dire

cted

to e

xecu

te a

nd d

eliv

er a

n

Escr

ow A

gree

men

t to

the

Esc

row

Age

nt i

f th

e A

utho

rized

Rep

rese

ntat

ive

of t

he U

nive

rsity

dete

rmin

es th

at a

n Es

crow

Age

nt w

ill b

e re

quire

d, w

hen

the

prov

isio

ns th

ereo

f hav

e be

en fi

xed

-4

2-

and

dete

rmin

ed.

A fo

rm o

f suc

h ag

reem

ent i

s at

tach

ed h

eret

o as

“Ex

hibi

t A,”

and

the

final

form

of th

e Es

crow

Agr

eem

ent m

ay b

e m

odifi

ed to

mee

t the

act

ual t

erm

s of t

he R

efun

ding

.

Se

ctio

n 10

. In

vest

men

t of

Fund

s. T

he U

nive

rsity

cov

enan

ts to

dire

ct th

e in

vest

men

t

and

rein

vest

men

t of m

oney

dep

osite

d in

the

Rev

enue

Acc

ount

and

the

Bon

d Fu

nd o

nly

in th

ose

inve

stm

ents

in w

hich

age

ncie

s of t

he S

tate

are

aut

horiz

ed to

inve

st p

ursu

ant t

o St

ate

law

.

Se

ctio

n 11

. A

dditi

onal

Bon

ds.

(a

) Th

e U

nive

rsity

sha

ll ha

ve t

he r

ight

to

issu

e on

e or

mor

e se

ries

of A

dditi

onal

Bon

ds t

o fin

ance

the

rep

air,

reno

vatio

n, a

ltera

tion

or b

ette

rmen

t of

the

Rec

reat

ion

Cen

ter

or

rela

ted

or a

dditi

onal

recr

eatio

nal f

acili

ties,

or to

refu

nd o

r adv

ance

refu

nd a

ny P

arity

Bon

ds, i

f:

(1)

The

Uni

vers

ity is

not

in d

efau

lt of

any

of i

ts c

oven

ants

and

und

erta

king

s in

conn

ectio

n w

ith a

ll O

utst

andi

ng B

onds

; and

(2)

The

Uni

vers

ity

has

rece

ived

a

certi

ficat

e of

th

e Tr

easu

rer

of

the

Uni

vers

ity, a

ppro

ved

by th

e B

oard

, bas

ed u

pon

the

appr

opria

te a

udite

d an

nual

fin

anci

al re

ports

of th

e U

nive

rsity

, to

the

effe

ct th

at a

nnua

l Rec

reat

ion

Cen

ter R

even

ues

(taki

ng in

to a

ccou

nt a

ny

Boa

rd a

ppro

ved

incr

ease

s in

the

SRC

Fee

and

/or k

now

n in

crea

ses i

n st

uden

t enr

ollm

ent)

plus

the

aver

age

dolla

r am

ount

of t

he S

RC

Fee

col

lect

ed d

urin

g th

e av

erag

e of

the

two

mos

t rec

ent F

isca

l

Yea

rs f

or w

hich

aud

ited

finan

cial

sta

tem

ent

are

avai

labl

e im

med

iate

ly p

rece

ding

the

dat

e of

issu

ance

of

such

Add

ition

al B

onds

, will

be

at le

ast e

qual

to (

i) th

e A

nnua

l D

ebt

Serv

ice

with

resp

ect t

o al

l Par

ity B

onds

to b

e O

utst

andi

ng f

ollo

win

g th

e da

te o

f is

suan

ce o

f suc

h A

dditi

onal

Bon

ds, p

lus

(ii) a

nnua

l cos

ts o

f mai

nten

ance

, ope

ratio

n an

d pr

ogra

ms

of th

e R

ecre

atio

n C

ente

r,

incl

udin

g in

sura

nce

prem

ium

s, co

sts

of re

pair

and

repl

acem

ent a

nd o

ther

cos

ts p

rope

rly a

lloca

ble

to th

e R

ecre

atio

n C

ente

r.

B-22

-4

3-

(b

) N

othi

ng h

erei

n sh

all p

reve

nt th

e U

nive

rsity

from

gra

ntin

g a

lien

or li

ens w

hich

are

juni

or a

nd s

ubor

dina

te t

o th

e lie

n of

any

Out

stan

ding

Bon

ds a

gain

st t

he R

ecre

atio

n C

ente

r

Rev

enue

or t

he S

RC

Fee

and

the

mon

ey a

nd in

vest

men

ts in

the

Rev

enue

Acc

ount

.

Se

ctio

n 12

. A

dditi

onal

Cov

enan

ts o

f th

e U

nive

rsity

. So

lon

g as

any

Bon

ds a

re

Out

stan

ding

, the

Uni

vers

ity m

akes

the

follo

win

g co

vena

nts.

(a

) C

over

age

Cov

enan

t. T

he U

nive

rsity

sha

ll se

t rat

es a

nd c

harg

es fo

r the

use

of t

he

Rec

reat

ion

Cen

ter a

nd/o

r sha

ll m

aint

ain

or in

crea

se th

e SR

C F

ee to

pro

vide

am

ount

s suf

ficie

nt to

pay

oper

atin

g, m

aint

enan

ce a

nd p

rogr

am e

xpen

ses o

f the

Rec

reat

ion

Cen

ter,

to p

rovi

de fo

r rep

air

and

repl

acem

ent o

f co

mpo

nent

s th

ereo

f, to

pay

insu

ranc

e pr

emiu

ms

with

resp

ect t

here

to a

nd to

pay

othe

r cos

ts p

rope

rly a

lloca

ble

to th

e R

ecre

atio

n C

ente

r and

to re

cove

r am

ount

s su

ffic

ient

to

pay

debt

serv

ice

(taki

ng in

to a

ccou

nt a

ntic

ipat

ed re

ceip

ts o

f the

SR

C F

ee a

s wel

l as o

ther

rece

ipts

and

allo

catio

ns m

ade

avai

labl

e by

the

Uni

vers

ity) w

ith r

espe

ct to

all

Out

stan

ding

Par

ity B

onds

.

The

SRC

Fee

may

be

decr

ease

d fr

om t

he d

olla

r am

ount

ini

tially

app

rove

d as

lon

g as

the

cove

rage

cov

enan

t in

this

subs

ectio

n is

met

.

(b

) P

aym

ent

of D

ebt

Serv

ice.

Th

e U

nive

rsity

sha

ll pa

y or

cau

se t

o be

pai

d th

e

prin

cipa

l of

and

the

int

eres

t on

all

Out

stan

ding

Bon

ds o

n th

e da

tes,

at t

he p

lace

s, fr

om t

he

sour

ces o

f fun

ds a

nd in

the

man

ner,

all a

s pro

vide

d he

rein

;

(c

) M

aint

enan

ce o

f th

e R

ecre

atio

n C

ente

r. T

he U

nive

rsity

will

at a

ll tim

es k

eep

and

mai

ntai

n or

cau

se t

o be

mai

ntai

ned

the

Rec

reat

ion

Cen

ter

in g

ood

repa

ir, w

orki

ng o

rder

and

cond

ition

, and

will

at a

ll tim

es o

pera

te th

e sa

me

and

the

busi

ness

or

busi

ness

es in

con

nect

ion

ther

ewith

in

an e

ffic

ient

man

ner

and

at a

rea

sona

ble

cost

and

mai

ntai

n th

e R

enew

al a

nd

Rep

lace

men

t Res

erve

Req

uire

men

t.

-4

4-

(d

) M

aint

enan

ce o

f R

ecor

ds.

The

Uni

vers

ity s

hall

keep

acc

urat

e fin

anci

al r

ecor

ds

and

prop

er b

ooks

rel

atin

g to

the

rec

eipt

and

exp

endi

ture

of

Rec

reat

ion

Cen

ter

Rev

enue

and

,

with

in o

ne h

undr

ed e

ight

y (1

80) d

ays

follo

win

g th

e en

d of

eac

h Fi

scal

Yea

r, to

fur

nish

upo

n

requ

est t

o an

y R

egis

tere

d O

wne

r re

ques

ting

in w

ritin

g a

copy

of

the

sam

e, c

opie

s of

fin

anci

al

repo

rts re

flect

ing

in re

ason

able

det

ail t

he re

ceip

t and

use

of R

ecre

atio

n C

ente

r Rev

enue

, and

the

Uni

vers

ity’s

com

plia

nce

with

the

mat

eria

l pro

visi

ons o

f thi

s Res

olut

ion;

(e

) In

sura

nce.

Th

e U

nive

rsity

sha

ll pr

ocur

e an

d m

aint

ain

such

pub

lic l

iabi

lity

insu

ranc

e as

is p

rude

nt a

nd a

s is

cus

tom

arily

car

ried

by s

imila

r ins

titut

ions

eng

aged

in a

ctiv

ities

of c

ompa

rabl

e si

ze.

The

Uni

vers

ity w

ill a

lso

proc

ure

and

mai

ntai

n su

ch p

rope

rty a

nd b

usin

ess

inte

rrup

tion

insu

ranc

e co

vera

ges

as a

re p

rude

nt a

nd c

usto

mar

ily c

arrie

d by

sim

ilar

inst

itutio

ns

enga

ged

in a

ctiv

ities

of c

ompa

rabl

e si

ze.

Se

ctio

n 13

. Ta

x C

oven

ants

.

(a)

Arb

itrag

e C

oven

ant.

W

ithou

t lim

iting

the

gen

eral

ity o

f th

e fo

rego

ing,

the

Uni

vers

ity c

oven

ants

that

it w

ill n

ot ta

ke a

ny a

ctio

n or

fail

to ta

ke a

ny a

ctio

n w

ith re

spec

t to

the

proc

eeds

of s

ale

of th

e B

onds

or a

ny o

ther

fund

s of

the

Uni

vers

ity w

hich

may

be

deem

ed to

be

proc

eeds

of

the

Bon

ds p

ursu

ant

to S

ectio

n 14

8 of

the

Cod

e an

d th

e re

gula

tions

pro

mul

gate

d

ther

eund

er w

hich

, if s

uch

use

had

been

reas

onab

ly e

xpec

ted

on th

e da

te o

f del

iver

y of

the

Bon

ds

to th

e in

itial

pur

chas

ers

ther

eof,

wou

ld h

ave

caus

ed th

e B

onds

as

“Arb

itrag

e B

onds

” w

ithin

the

mea

ning

of s

uch

term

as u

sed

in S

ectio

n 14

8 of

the

Cod

e.

Th

e U

nive

rsity

will

com

ply

with

the

req

uire

men

ts o

f Se

ctio

n 14

8 of

the

Cod

e an

d th

e

appl

icab

le re

gula

tions

ther

eund

er th

roug

hout

the

term

of t

he B

onds

.

(b

) P

riva

te P

erso

n U

se L

imit

atio

n fo

r B

onds

. Th

e U

nive

rsity

cov

enan

ts th

at f

or a

s

long

as t

he B

onds

are

Out

stan

ding

, it w

ill n

ot p

erm

it:

B-23

-4

5-

(1)

Mor

e th

an te

n (1

0) p

erce

nt o

f the

Net

Pro

ceed

s of t

he B

onds

to b

e us

ed fo

r

any

Priv

ate

Pers

on U

se; a

nd

(2)

Mor

e th

an t

en (

10)

perc

ent

of t

he p

rinci

pal

or i

nter

est

paym

ents

on

the

Bon

ds in

a B

ond

Yea

r to

be d

irect

ly o

r ind

irect

ly:

(A) s

ecur

ed b

y an

y in

tere

st in

pro

perty

use

d

or to

be

used

for a

ny P

rivat

e Pe

rson

Use

or s

ecur

ed b

y pa

ymen

ts in

resp

ect o

f pro

perty

use

d or

to

be u

sed

for

any

Priv

ate

Pers

on U

se, o

r (B

) de

rived

from

pay

men

ts (

whe

ther

or n

ot m

ade

to th

e

Uni

vers

ity) i

n re

spec

t of p

rope

rty, o

r bor

row

ed m

oney

, use

d or

to b

e us

ed fo

r any

Priv

ate

Pers

on

Use

.

Th

e U

nive

rsity

furth

er c

oven

ants

that

, if:

(3)

Mor

e th

an fi

ve (5

) per

cent

of t

he N

et P

roce

eds o

f the

Bon

ds a

re to

be

used

for a

ny P

rivat

e Pe

rson

Use

; and

(4)

Mor

e th

an f

ive

(5)

perc

ent

of t

he p

rinci

pal

or i

nter

est

paym

ents

on

the

Bon

ds in

a B

ond

Yea

r ar

e (u

nder

the

term

s of

thi

s re

solu

tion

or a

ny u

nder

lyin

g ar

rang

emen

t)

dire

ctly

or i

ndire

ctly

: (A

) sec

ured

by

any

inte

rest

in p

rope

rty u

sed

or to

be

used

for a

ny P

rivat

e

Pers

on U

se o

r se

cure

d by

pay

men

ts i

n re

spec

t of

prop

erty

use

d or

to

be u

sed

for

any

Priv

ate

Pers

on U

se, o

r (B

) der

ived

from

pay

men

ts (w

heth

er o

r not

mad

e to

the

Uni

vers

ity) i

n re

spec

t of

prop

erty

, or b

orro

wed

mon

ey, u

sed

or to

be

used

for a

ny P

rivat

e Pe

rson

Use

, the

n, (i

) any

Priv

ate

Pers

on U

se o

f the

Rec

reat

ion

Cen

ter o

r Priv

ate

Pers

on U

se p

aym

ents

des

crib

ed in

sub

sect

ion

(4)

here

of th

at is

in e

xces

s of t

he fi

ve p

erce

nt li

mita

tions

des

crib

ed in

such

subs

ectio

ns (3

) or (

4) w

ill

be fo

r a P

rivat

e Pe

rson

Use

that

is re

late

d to

the

stat

e or

loca

l gov

ernm

enta

l use

of t

he R

ecre

atio

n

Cen

ter,

and

(ii) a

ny P

rivat

e Pe

rson

Use

will

not

exc

eed

the

amou

nt o

f Net

Pro

ceed

s of

the

Bon

ds

used

for t

he st

ate

or lo

cal g

over

nmen

tal u

se p

ortio

n of

the

Rec

reat

ion

Cen

ter t

o w

hich

the

Priv

ate

Pers

on U

se o

f su

ch p

ortio

n of

the

Rec

reat

ion

Cen

ter

rela

tes.

The

Uni

vers

ity f

urth

er c

oven

ants

-4

6-

that

it w

ill c

ompl

y w

ith a

ny li

mita

tions

on

the

use

of th

e pr

ojec

ts b

y ot

her

than

sta

te a

nd lo

cal

gove

rnm

enta

l us

ers

that

are

nec

essa

ry, i

n th

e op

inio

n of

its

bon

d co

unse

l, to

pre

serv

e th

e ta

x

exem

ptio

n of

the

int

eres

t on

the

Bon

ds.

The

cove

nant

s of

thi

s se

ctio

n ar

e sp

ecifi

ed s

olel

y to

assu

re th

e co

ntin

ued

exem

ptio

n fro

m re

gula

r inc

ome

taxa

tion

of th

e in

tere

st o

n th

e B

onds

.

(c)

Des

igna

tion

. T

he B

onds

sha

ll no

t be

“qu

alifi

ed t

ax-e

xem

pt o

blig

atio

ns”

for

purc

hase

by

finan

cial

inst

itutio

ns p

ursu

ant t

o Se

ctio

n 26

5(b)

(3) o

f the

Cod

e.

Se

ctio

n 14

. N

o R

ecou

rse

Aga

inst

Ind

ivid

uals

. N

o R

egis

tere

d O

wne

r sh

all h

ave

any

reco

urse

for t

he p

aym

ent o

f any

par

t of t

he p

rinci

pal o

r red

empt

ion

pric

e, if

any

, of o

r int

eres

t on

the

Bon

ds,

or f

or t

he s

atis

fact

ion

of a

ny l

iabi

lity

aris

ing

from

, fo

unde

d up

on,

or e

xist

ing

by

reas

on o

f, th

e is

suan

ce o

r ow

ners

hip

of s

uch

Bon

ds a

gain

st t

he o

ffic

ers

of t

he U

nive

rsity

or

offic

ers o

r mem

bers

of t

he B

oard

in th

eir i

ndiv

idua

l cap

aciti

es.

Se

ctio

n 15

. D

efea

sanc

e.

In t

he e

vent

tha

t m

oney

and

/or

Gov

ernm

ent

Obl

igat

ions

mat

urin

g or

hav

ing

guar

ante

ed re

dem

ptio

n pr

ices

at t

he o

ptio

n of

the

owne

r at s

uch

time

or ti

mes

and

bear

ing

inte

rest

to

be e

arne

d th

ereo

n in

am

ount

s (to

geth

er w

ith s

uch

mon

ey,

if an

y)

suff

icie

nt t

o re

deem

and

ret

ire p

art

or a

ll of

the

Bon

ds i

n ac

cord

ance

with

the

ir te

rms,

are

here

afte

r irr

evoc

ably

set

asi

de in

a s

peci

al a

ccou

nt a

nd p

ledg

ed to

eff

ect s

uch

rede

mpt

ion

and

retir

emen

t, th

en n

o fu

rther

pay

men

ts n

eed

be m

ade

into

the

Bon

d Fu

nd o

r any

acc

ount

ther

ein

for

the

paym

ent o

f the

prin

cipa

l of a

nd in

tere

st o

n th

e ce

rtain

Bon

ds so

pro

vide

d fo

r, an

d su

ch B

onds

shal

l the

n ce

ase

to b

e en

title

d to

any

lien

, ben

efit

or s

ecur

ity o

f thi

s re

solu

tion,

exc

ept t

he ri

ght t

o

rece

ive

the

fund

s so

set

asi

de a

nd p

ledg

ed a

nd n

otic

es o

f ea

rly r

edem

ptio

n, i

f an

y, a

nd s

uch

Bon

ds s

hall

no l

onge

r be

dee

med

to

be O

utst

andi

ng h

ereu

nder

, or

und

er a

ny R

esol

utio

n

auth

oriz

ing

the

issu

ance

of b

onds

or o

ther

inde

bted

ness

of t

he U

nive

rsity

.

B-24

-4

7-

Th

e U

nive

rsity

sha

ll pr

ovid

e no

tice

of d

efea

sanc

e of

Bon

ds t

o R

egis

tere

d O

wne

rs o

f

Bon

ds d

efea

sed

and

to e

ach

party

ent

itled

to

rece

ive

notic

e un

der

agre

emen

ts f

or c

ontin

uing

disc

losu

re.

Se

ctio

n 16

. Sa

le o

f Bon

ds.

The

Boa

rd h

as d

eter

min

ed th

at it

is in

the

best

inte

rest

of

the

Uni

vers

ity t

o de

lega

te t

o th

e A

utho

rized

Rep

rese

ntat

ive

of t

he U

nive

rsity

the

aut

horit

y to

dete

rmin

e w

heth

er th

e Im

prov

emen

t Bon

ds w

ill b

e is

sued

, to

dete

rmin

e w

heth

er th

e B

onds

will

be C

over

ed B

onds

, or w

heth

er th

e B

onds

will

be

issu

ed a

s U

ncov

ered

Bon

ds (i

nclu

ding

whe

ther

Unc

over

ed B

onds

will

be

secu

red

by a

sepa

rate

rese

rve)

and

the

auth

ority

to a

ppro

ve th

e m

anne

r

of s

ale,

the

final

inte

rest

rate

s, m

atur

ity d

ates

, agg

rega

te p

rinci

pal a

mou

nt, p

rinci

pal a

mou

nts

of

each

mat

urity

, red

empt

ion

right

s an

d ot

her t

erm

s an

d co

nditi

ons

of th

e B

onds

. Th

e A

utho

rized

Rep

rese

ntat

ive

of t

he U

nive

rsity

is

here

by a

utho

rized

to

dete

rmin

e w

heth

er t

he I

mpr

ovem

ent

Bon

ds w

ill b

e is

sued

, to

det

erm

ine

whe

ther

the

Bon

ds w

ill b

e is

sued

as

Cov

ered

Bon

ds,

or

whe

ther

the

Bon

ds w

ill b

e is

sued

as U

ncov

ered

Bon

ds (i

nclu

ding

whe

ther

Unc

over

ed B

onds

will

be s

ecur

ed b

y a

sepa

rate

res

erve

) an

d to

app

rove

the

man

ner

of s

ale,

the

fin

al i

nter

est

rate

s,

mat

urity

dat

es, a

ggre

gate

prin

cipa

l am

ount

, prin

cipa

l m

atur

ities

and

red

empt

ion

right

s fo

r th

e

Bon

ds i

n th

e m

anne

r pr

ovid

ed h

erea

fter

so l

ong

as (

i) th

e ag

greg

ate

prin

cipa

l am

ount

of

the

Bon

ds d

oes

not

exce

ed $

27,0

00,0

00,

(ii)

the

max

imum

mat

urity

dat

e of

the

Bon

ds d

oes

not

exte

nd b

eyon

d th

e ye

ar 2

040,

(iii

) th

e tru

e in

tere

st c

ost

for

the

Bon

ds d

oes

not

exce

ed 4

.40

perc

ent;

(iv) w

ith r

espe

ct to

the

Ref

undi

ng B

onds

, the

net

pre

sent

val

ue a

ggre

gate

sav

ings

with

resp

ect t

o al

l Ref

unde

d B

onds

to b

e re

aliz

ed a

s a

resu

lt of

the

refu

ndin

g of

the

Ref

unde

d B

onds

(afte

r pay

men

t of a

ll co

sts o

f iss

uanc

e) is

at l

east

equ

al to

the

Savi

ngs T

arge

t and

(v) w

ith re

spec

t

to th

e Im

prov

emen

t Bon

ds, i

mpr

ovem

ents

are

revi

ewed

and

app

rove

d by

reco

mm

enda

tion

of th

e

Stud

ent R

ecre

atio

n C

ente

r’s S

&A

Fee

Com

mitt

ee.

-4

8-

In

det

erm

inin

g w

heth

er th

e Im

prov

emen

t Bon

ds w

ill b

e is

sued

, and

whe

ther

the

Bon

ds

will

be

issu

ed a

s C

over

ed B

onds

(the

Com

mon

Res

erve

Req

uire

men

t if l

ower

than

the

Com

mon

Res

erve

Req

uire

men

t sp

ecifi

ed i

n th

is R

esol

utio

n),

or w

heth

er t

he B

onds

will

be

issu

ed a

s

Unc

over

ed B

onds

(in

clud

ing

whe

ther

Unc

over

ed B

onds

will

be

secu

red

by a

sep

arat

e re

serv

e),

the

final

int

eres

t ra

tes,

mat

urity

dat

es,

aggr

egat

e pr

inci

pal

amou

nt,

prin

cipa

l m

atur

ities

and

rede

mpt

ion

right

s of

the

Bon

ds, t

he A

utho

rized

Rep

rese

ntat

ive

of th

e U

nive

rsity

, in

cons

ulta

tion

with

Uni

vers

ity s

taff

and

the

Uni

vers

ity’s

fina

ncia

l adv

isor

, sha

ll ta

ke in

to a

ccou

nt th

ose

fact

ors

that

, in

his

or h

er j

udgm

ent,

will

res

ult

in t

he l

owes

t tru

e in

tere

st c

ost

on t

he B

onds

to

thei

r

mat

urity

, inc

ludi

ng, b

ut n

ot l

imite

d to

cur

rent

fin

anci

al m

arke

t co

nditi

ons

and

curre

nt i

nter

est

rate

s for

obl

igat

ions

com

para

ble

in te

nor a

nd q

ualit

y to

the

Bon

ds.

In

itial

ly,

the

Aut

horiz

ed R

epre

sent

ativ

e of

the

Uni

vers

ity i

s he

reby

aut

horiz

ed t

o

dete

rmin

e w

heth

er th

e B

onds

sha

ll be

sol

d by

Neg

otia

ted

Sale

or

by a

Com

petit

ive

Sale

. If

a

serie

s of

the

Bon

ds is

sol

d by

Neg

otia

ted

Sale

, the

Aut

horiz

ed R

epre

sent

ativ

e of

the

Uni

vers

ity

shal

l se

lect

one

or

mor

e un

derw

ritin

g fir

ms

to u

nder

writ

e th

e ap

plic

able

ser

ies

of t

he B

onds

thro

ugh

a pr

oces

s of

sol

iciti

ng p

ropo

sals

for

und

erw

ritin

g.

Upo

n th

e se

lect

ion

of o

ne o

r m

ore

unde

rwrit

ers,

the

Aut

horiz

ed R

epre

sent

ativ

e of

the

Uni

vers

ity s

hall

nego

tiate

the

term

s of

sal

e

for t

he B

onds

, inc

ludi

ng th

e te

rms

desc

ribed

in th

is s

ectio

n, in

a c

ontra

ct o

f sal

e (e

ach,

a “

Bon

d

Purc

hase

Con

tract

”).

If th

e B

onds

are

sol

d by

Com

petit

ive

Sale

, sea

led

bids

will

be

rece

ived

by

the

Aut

horiz

ed R

epre

sent

ativ

e of

the

Uni

vers

ity o

r th

e C

ompe

titiv

e Sa

le w

ill b

e un

derta

ken

by

elec

troni

c m

eans

, in

the

man

ner a

nd o

n su

ch d

ate

and

time

as th

e A

utho

rized

Rep

rese

ntat

ive

of

the

Uni

vers

ity h

erea

fter

shal

l det

erm

ine.

The

Aut

horiz

ed R

epre

sent

ativ

e of

the

Uni

vers

ity w

ill

appr

ove

the

bid

offe

ring

to p

urch

ase

the

Bon

ds a

t the

low

est t

rue

inte

rest

cos

t to

the

Uni

vers

ity a

t

such

pric

e as

sha

ll be

det

erm

ined

at

the

time

of s

ale

by t

he A

utho

rized

Rep

rese

ntat

ive

of t

he

B-25

-4

9-

Uni

vers

ity, p

lus a

ccru

ed in

tere

st to

the

date

of d

eliv

ery,

on

all t

he te

rms

and

cond

ition

s set

out

in

the

appl

icab

le O

ffic

ial N

otic

e of

Sal

e.

A

ll bi

ds s

ubm

itted

for

the

pur

chas

e th

e B

onds

sha

ll be

as

set

forth

in

the

appl

icab

le

Off

icia

l N

otic

e of

Sal

e or

oth

erw

ise

as e

stab

lishe

d by

the

Aut

horiz

ed R

epre

sent

ativ

e of

the

Uni

vers

ity w

hich

will

be

furn

ishe

d up

on r

eque

st m

ade

to th

e A

utho

rized

Rep

rese

ntat

ive

of th

e

Uni

vers

ity.

Su

bjec

t to

the

ter

ms

and

cond

ition

s se

t fo

rth i

n th

is S

ectio

n 16

, th

e A

utho

rized

Rep

rese

ntat

ive

of t

he U

nive

rsity

is

here

by a

utho

rized

to

acce

pt a

n A

ppro

ved

Bid

in

a

Com

petit

ive

Sale

and

/or

exec

ute

the

final

for

m o

f a

Bon

d Pu

rcha

se C

ontra

ct i

n a

Neg

otia

ted

Sale

, up

on h

is o

r he

r ap

prov

al o

f th

e fin

al i

nter

est

rate

s, m

atur

ity d

ates

, ag

greg

ate

prin

cipa

l

amou

nt, p

rinci

pal m

atur

ities

and

red

empt

ion

right

s se

t for

th th

erei

n.

Follo

win

g th

e sa

le o

f th

e

Bon

ds,

the

Aut

horiz

ed R

epre

sent

ativ

e of

the

Uni

vers

ity s

hall

prov

ide

a re

port

to t

he B

oard

,

desc

ribin

g th

e fin

al t

erm

s of

the

Bon

ds a

ppro

ved

purs

uant

to

the

auth

ority

del

egat

ed i

n th

is

sect

ion.

U

pon

the

adop

tion

of th

is R

esol

utio

n, th

e pr

oper

off

icia

ls o

f the

Uni

vers

ity, i

nclu

ding

the

Aut

horiz

ed R

epre

sent

ativ

e of

the

Uni

vers

ity, a

re a

utho

rized

and

dire

cted

to u

nder

take

all

othe

r

actio

ns n

eces

sary

for t

he p

rom

pt s

ale,

exe

cutio

n an

d de

liver

y of

the

Bon

ds a

nd fu

rther

to e

xecu

te

all c

losi

ng c

ertif

icat

es a

nd d

ocum

ents

requ

ired

to e

ffec

t the

clo

sing

and

del

iver

y of

the

Bon

ds in

acco

rdan

ce w

ith th

e te

rms

of th

e O

ffici

al N

otic

e of

Sal

e, A

ppro

ved

Bid

and

/or

Bon

d Pu

rcha

se

Con

tract

.

Th

e A

utho

rized

Rep

rese

ntat

ive

of th

e U

nive

rsity

is a

utho

rized

to ra

tify

and

to a

ppro

ve fo

r

purp

oses

of

the

Rul

e, o

n be

half

of th

e U

nive

rsity

, an

Off

icia

l Sta

tem

ent f

or e

ach

Bon

d Se

ries

(and

any

Pre

limin

ary

Off

icia

l Sta

tem

ent)

and

any

supp

lem

ent t

here

to re

latin

g to

the

issua

nce

and

-5

0-

sale

of

each

ser

ies

of t

he B

onds

and

the

dis

tribu

tion

of t

he B

onds

pur

suan

t th

eret

o w

ith s

uch

chan

ges,

if an

y, a

s may

be

deem

ed b

y hi

m/h

er to

be

appr

opria

te.

Th

e au

thor

ity g

rant

ed b

y th

is se

ctio

n sh

all r

emai

n in

eff

ect u

ntil

Dec

embe

r 31,

201

2.

Sect

ion

17.

Bon

d In

sura

nce.

Th

e pa

ymen

ts o

f th

e pr

inci

pal

of a

nd i

nter

est

on t

he

Bon

ds, o

r pr

inci

pal

mat

uriti

es t

here

of m

ay b

e in

sure

d by

the

iss

uanc

e of

the

Bon

d In

sura

nce

Polic

y. T

he A

utho

rized

Rep

rese

ntat

ive,

with

the

assi

stan

ce o

f the

Uni

vers

ity’s

fina

ncia

l adv

isor

,

is h

ereb

y fu

rther

aut

horiz

ed a

nd d

irect

ed t

o so

licit

prop

osal

s fro

m m

unic

ipal

bon

d in

sura

nce

com

pani

es f

or t

he i

ssua

nce

of a

Bon

d In

sura

nce

Polic

y.

In t

he e

vent

tha

t th

e A

utho

rized

Rep

rese

ntat

ive

of th

e U

nive

rsity

rec

eive

s m

ultip

le p

ropo

sals

, the

Aut

horiz

ed R

epre

sent

ativ

e of

the

Uni

vers

ity m

ay s

elec

t the

pro

posa

l hav

ing

the

low

est c

ost a

nd r

esul

ting

in a

n ov

eral

l low

er

inte

rest

cos

t with

resp

ect t

o th

e ap

plic

able

serie

s of t

he B

onds

. Th

e A

utho

rized

Rep

rese

ntat

ive

of

the

Uni

vers

ity m

ay e

xecu

te a

com

mitm

ent r

ecei

ved

from

eac

h In

sure

r sel

ecte

d by

the

Aut

horiz

ed

Rep

rese

ntat

ive

of th

e U

nive

rsity

. Th

e B

oard

fur

ther

aut

horiz

es a

nd d

irect

s al

l pro

per

offic

ers,

agen

ts, a

ttorn

eys

and

empl

oyee

s of

the

Uni

vers

ity to

coo

pera

te w

ith e

ach

Insu

rer

in p

repa

ring

such

add

ition

al a

gree

men

ts, c

ertif

icat

es, a

nd o

ther

doc

umen

tatio

n on

beh

alf o

f the

Uni

vers

ity a

s

shal

l be

nece

ssar

y or

adv

isab

le in

pro

vidi

ng f

or th

e ap

plic

able

Bon

d In

sura

nce

Polic

y.

To th

e

exte

nt th

at th

e B

onds

are

insu

red

by a

Bon

d In

sura

nce

Polic

y, th

e In

sure

r of e

ach

mat

urity

of t

he

Bon

ds s

o in

sure

d sh

all

be d

eem

ed t

o th

e R

egis

tere

d O

wne

r of

suc

h B

onds

for

all

purp

oses

,

incl

udin

g co

nsen

t, un

der t

his R

esol

utio

n.

Se

ctio

n 18

. D

eter

min

atio

n of

R

egis

tere

d O

wne

rs’

Con

curre

nce.

In

dete

rmin

ing

whe

ther

the

Reg

iste

red

Ow

ners

of

the

requ

isite

agg

rega

te p

rinci

pal

amou

nt o

f O

utst

andi

ng

Bon

ds h

ave

conc

urre

d in

any

dem

and,

req

uest

, di

rect

ion,

con

sent

or

wai

ver

unde

r th

is

Res

olut

ion,

Bon

ds w

hich

are

ow

ned

by o

r hel

d in

the

nam

e of

the

Uni

vers

ity sh

all b

e di

sreg

arde

d

B-26

-5

1-

and

deem

ed n

ot to

be

Out

stan

ding

for t

he p

urpo

se o

f any

suc

h de

term

inat

ion.

Bon

ds s

o ow

ned

whi

ch h

ave

been

ple

dged

in g

ood

faith

may

be

rega

rded

as

Out

stan

ding

for t

he p

urpo

ses

of th

is

Sect

ion

18 if

the

pled

gee

shal

l est

ablis

h to

the

satis

fact

ion

of th

e U

nive

rsity

the

pled

gee’

s rig

ht to

vote

such

Bon

ds a

nd th

at th

e pl

edge

e is

not

the

Uni

vers

ity.

Sect

ion

19.

Und

erta

king

to

Pr

ovid

e O

ngoi

ng

Dis

clos

ure.

The

Aut

horiz

ed

Rep

rese

ntat

ive

of th

e U

nive

rsity

is a

utho

rized

to, i

n hi

s or

her

dis

cret

ion,

exe

cute

and

del

iver

a

certi

ficat

e re

gard

ing

cont

inui

ng d

iscl

osur

e in

ord

er to

ass

ist t

he U

nder

writ

er in

com

plyi

ng w

ith

Sect

ion

(b)(

5) o

f the

Rul

e.

Se

ctio

n 20

. C

ontra

ct-S

avin

gs C

laus

e. T

he c

oven

ants

con

tain

ed in

this

Res

olut

ion,

the

Bon

ds a

nd th

e pr

ovis

ions

of t

he B

ond

Act

sha

ll co

nstit

ute

a co

ntra

ct b

etw

een

the

Uni

vers

ity a

nd

the

Reg

iste

red

Ow

ners

of t

he B

onds

and

sha

ll be

con

stru

ed in

acc

orda

nce

with

and

con

trolle

d by

the

law

s of t

he S

tate

of W

ashi

ngto

n. I

f any

one

or m

ore

of th

e co

vena

nts o

r agr

eem

ents

pro

vide

d

in th

is R

esol

utio

n to

be

perf

orm

ed o

n th

e pa

rt of

the

Uni

vers

ity s

hall

be d

ecla

red

by a

ny c

ourt

of

com

pete

nt ju

risdi

ctio

n an

d fin

al a

ppea

l, if

any

appe

al b

e ta

ken,

to b

e co

ntra

ry to

law

, the

n su

ch

cove

nant

or

cove

nant

s, ag

reem

ent

or a

gree

men

ts s

hall

be n

ull

and

void

and

sha

ll be

dee

med

sepa

rabl

e fr

om th

e re

mai

ning

cov

enan

ts a

nd a

gree

men

ts in

this

res

olut

ion

and

shal

l in

no w

ay

affe

ct th

e va

lidity

of t

he o

ther

pro

visi

ons o

f thi

s Res

olut

ion

or o

f the

Bon

ds.

-5

2-

Se

ctio

n 21

. Im

med

iate

Eff

ect.

Thi

s R

esol

utio

n sh

all t

ake

effe

ct im

med

iate

ly u

pon

its

adop

tion.

A

DO

PTED

AN

D A

PPR

OV

ED b

y th

e B

oard

of

Trus

tees

of

Wes

tern

Was

hing

ton

Uni

vers

ity, a

t a re

gula

r mee

ting

held

this

10th

day

of F

ebru

ary,

201

2.

WES

TER

N W

ASH

ING

TON

UN

IVER

SITY

Cha

ir, B

oard

of T

rust

ees

A

TTES

T:

Secr

etar

y of

the

Boa

rd

B-27

A

-1

EX

HIB

IT A

ES

CR

OW

DE

PO

SIT

AG

RE

EM

EN

T

WES

TER

N W

ASH

ING

TON

UN

IVER

SITY

ST

UD

ENT

REC

REA

TIO

N F

EE R

EVEN

UE

AN

D R

EFU

ND

ING

BO

ND

S, 2

012

THIS

ESC

RO

W A

GR

EEM

ENT,

dat

ed a

s of

___

____

___,

201

2 (h

erei

n, t

oget

her

with

an

y am

endm

ents

or s

uppl

emen

ts h

eret

o, c

alle

d th

e “A

gree

men

t”) i

s en

tere

d in

to b

y an

d be

twee

n W

este

rn

Was

hing

ton

Uni

vers

ity

(her

ein

calle

d th

e “U

nive

rsity

”)

and

____

____

____

____

____

____

____

____

____

__ a

s es

crow

age

nt (

here

in,

toge

ther

with

any

su

cces

sor i

n su

ch c

apac

ity, c

alle

d th

e “E

scro

w A

gent

”).

The

notic

e ad

dres

ses

of th

e U

nive

rsity

an

d th

e Es

crow

Age

nt a

re sh

own

on E

xhib

it A

atta

ched

her

eto

and

mad

e a

part

here

of.

W

ITN

ES

SE

TH

:

WH

EREA

S, th

e U

nive

rsity

her

etof

ore

has

issu

ed a

nd th

ere

pres

ently

rem

ain

outs

tand

ing

the

oblig

atio

ns d

escr

ibed

in E

xhib

it B

atta

ched

her

eto

(the

“Ref

unde

d B

onds

”); a

nd

W

HER

EAS,

pur

suan

t to

Res

olut

ion

No.

201

2-01

ado

pted

on

Febr

uary

10,

201

2 (th

e “B

ond

Res

olut

ion”

), th

e U

nive

rsity

has

det

erm

ined

to is

sue

its S

tude

nt R

ecre

atio

n Fe

e R

even

ue

and

Ref

undi

ng B

onds

, Ser

ies 2

012

(the

“Bon

ds”)

; and

WH

EREA

S, a

por

tion

of t

he p

roce

eds

of t

he B

onds

are

bei

ng u

sed

for

the

purp

ose

of

prov

idin

g fu

nds t

o pa

y th

e co

sts o

f ref

undi

ng th

e R

efun

ded

Bon

ds; a

nd

W

HER

EAS,

pur

suan

t to

the

Bon

d R

esol

utio

n, th

e R

efun

ded

Bon

ds h

ave

been

des

igna

ted

for

rede

mpt

ion

prio

r to

the

ir sc

hedu

led

mat

urity

dat

es a

nd,

afte

r pr

ovis

ion

is m

ade

for

such

re

dem

ptio

n, th

e R

efun

ded

Bon

ds w

ill c

ome

due

in s

uch

year

s, be

ar in

tere

st a

t suc

h ra

tes,

and

be

paya

ble

at su

ch ti

mes

and

in s

uch

amou

nts a

s are

set f

orth

in E

xhib

it C

atta

ched

her

eto

and

mad

e a

part

here

of; a

nd

W

HER

EAS,

whe

n Es

crow

ed S

ecur

ities

hav

e be

en d

epos

ited

with

the

Escr

ow A

gent

for

the

paym

ent o

f al

l prin

cipa

l and

inte

rest

of

the

Ref

unde

d B

onds

whe

n du

e, th

en th

e R

efun

ded

Bon

ds s

hall

no lo

nger

be

rega

rded

as

outs

tand

ing

exce

pt f

or th

e pu

rpos

e of

rec

eivi

ng p

aym

ent

from

the

fund

s pro

vide

d fo

r suc

h pu

rpos

e; a

nd

W

HER

EAS,

the

issu

ance

, sal

e, a

nd d

eliv

ery

of th

e B

onds

hav

e be

en d

uly

auth

oriz

ed to

be

issu

ed, s

old,

and

del

iver

ed fo

r the

pur

pose

of o

btai

ning

the

fund

s re

quire

d to

pro

vide

for t

he

paym

ent o

f the

prin

cipa

l of,

inte

rest

on

and

rede

mpt

ion

prem

ium

(if a

ny) o

n th

e R

efun

ded

Bon

ds

whe

n du

e as

show

n on

Exh

ibit

C a

ttach

ed h

eret

o;

N

OW

, TH

EREF

OR

E, i

n co

nsid

erat

ion

of t

he m

utua

l un

derta

king

s, pr

omis

es a

nd

agre

emen

ts h

erei

n co

ntai

ned,

the

suff

icie

ncy

of w

hich

her

eby

are

ackn

owle

dged

, and

to s

ecur

e th

e fu

ll an

d tim

ely

paym

ent

of p

rinci

pal

of a

nd t

he i

nter

est

on t

he R

efun

ded

Bon

ds,

the

Uni

vers

ity a

nd t

he E

scro

w A

gent

mut

ually

und

erta

ke,

prom

ise

and

agre

e fo

r th

emse

lves

and

th

eir r

espe

ctiv

e re

pres

enta

tives

and

succ

esso

rs, a

s fol

low

s:

A

-2

Art

icle

1. D

efin

ition

s

Sect

ion

1.1.

Def

initi

ons.

U

nles

s th

e co

ntex

t cl

early

ind

icat

es o

ther

wis

e, t

he f

ollo

win

g te

rms

shal

l ha

ve t

he

mea

ning

s ass

igne

d to

them

bel

ow w

hen

they

are

use

d in

this

Agr

eem

ent:

E

scro

w F

und

mea

ns t

he f

und

crea

ted

by t

his

Agr

eem

ent

to b

e es

tabl

ishe

d, h

eld

and

adm

inis

tere

d by

the

Escr

ow A

gent

pur

suan

t to

the

prov

isio

ns o

f thi

s Agr

eem

ent.

E

scro

wed

Se

curi

ties

mea

ns

the

nonc

alla

ble

Gov

ernm

ent

Obl

igat

ions

des

crib

ed i

n Ex

hibi

t D a

ttach

ed t

o th

is A

gree

men

t, or

cas

h or

oth

er n

onca

llabl

e ob

ligat

ions

sub

stitu

ted

ther

efor

pur

suan

t to

Sect

ion

4.2

of th

is A

gree

men

t.

Gov

ernm

ent

Obl

igat

ions

m

eans

di

rect

, no

ncal

labl

e (a

) U

nite

d St

ates

Tr

easu

ry

Obl

igat

ions

, (b)

Uni

ted

Stat

es T

reas

ury

Obl

igat

ions

- S

tate

and

Loc

al G

over

nmen

t Se

ries,

(c)

non-

prep

ayab

le o

blig

atio

ns w

hich

are

unc

ondi

tiona

lly g

uara

ntee

d as

to f

ull a

nd ti

mel

y pa

ymen

t of

prin

cipa

l an

d in

tere

st b

y th

e U

nite

d St

ates

of

Am

eric

a or

(d)

REF

CO

RP

debt

obl

igat

ions

un

cond

ition

ally

gua

rant

eed

by th

e U

nite

d St

ates

.

Payi

ng A

gent

mea

ns th

e fis

cal a

genc

y of

the

Stat

e of

Was

hing

ton,

as t

he p

ayin

g ag

ent f

or

the

Ref

unde

d B

onds

.

Sect

ion

1.2.

Oth

er D

efin

ition

s.

The

term

s “A

gree

men

t,” “

Uni

vers

ity,”

“Es

crow

Age

nt,”

“B

ond

Res

olut

ion,

” “R

efun

ded

Bon

ds,”

and

“B

onds

” w

hen

they

are

use

d in

this

Agr

eem

ent,

shal

l hav

e th

e m

eani

ngs a

ssig

ned

to

them

in th

e pr

eam

ble

to th

is A

gree

men

t.

Sect

ion

1.3.

Int

erpr

etat

ions

.

The

title

s an

d he

adin

gs o

f the

arti

cles

and

sec

tions

of t

his

Agr

eem

ent h

ave

been

inse

rted

for c

onve

nien

ce a

nd re

fere

nce

only

and

are

not

to b

e co

nsid

ered

a p

art h

ereo

f and

shal

l not

in a

ny

way

mod

ify o

r re

stric

t th

e te

rms

here

of.

This

Agr

eem

ent a

nd a

ll of

the

term

s an

d pr

ovis

ions

he

reof

sha

ll be

libe

rally

con

stru

ed to

eff

ectu

ate

the

purp

oses

set

forth

her

ein

and

to a

chie

ve th

e in

tend

ed p

urpo

se o

f pr

ovid

ing

for

the

refu

ndin

g of

the

Ref

unde

d B

onds

in

acco

rdan

ce w

ith

appl

icab

le la

w.

B-28

A

-3

Art

icle

2.

Dep

osit

of F

unds

and

Esc

row

ed S

ecur

ities

Sect

ion

2.1.

Dep

osits

in th

e E

scro

w F

und.

Con

curr

ently

with

the

sal

e an

d de

liver

y of

the

Bon

ds t

he U

nive

rsity

sha

ll de

posi

t, or

ca

use

to b

e de

posi

ted,

with

the

Escr

ow A

gent

, for

dep

osit

in th

e Es

crow

Fun

d, th

e fu

nds

(fro

m

the

proc

eeds

of t

he B

onds

and

a c

ash

cont

ribut

ion

by th

e U

nive

rsity

) su

ffic

ient

to p

urch

ase

the

Escr

owed

Sec

uriti

es a

nd p

ay c

osts

of

issu

ance

des

crib

ed in

Exh

ibit

D a

ttach

ed h

eret

o, a

nd th

e Es

crow

Age

nt s

hall,

upo

n th

e re

ceip

t th

ereo

f, ac

know

ledg

e su

ch r

ecei

pt t

o th

e U

nive

rsity

in

writ

ing.

Art

icle

3.

Cre

atio

n an

d O

pera

tion

of E

scro

w F

und

Se

ctio

n 3.

1. E

scro

w F

und.

The

Escr

ow A

gent

has

cre

ated

on

its b

ooks

a sp

ecia

l tru

st fu

nd a

nd ir

revo

cabl

e es

crow

to

be k

now

n as

the

Ref

undi

ng A

ccou

nt (t

he “

Escr

ow F

und”

). T

he E

scro

w A

gent

her

eby

agre

es th

at

upon

rece

ipt t

here

of it

will

dep

osit

to th

e cr

edit

of th

e Es

crow

Fun

d th

e fu

nds

and

the

Escr

owed

Se

curit

ies

desc

ribed

in

Exhi

bit

D a

ttach

ed h

eret

o an

d pa

y C

osts

of

Issu

ance

as

desc

ribed

in

Exhi

bit

D.

Such

dep

osit,

all

proc

eeds

the

refro

m, a

nd a

ll ca

sh b

alan

ces

from

tim

e to

tim

e on

de

posi

t the

rein

(a)

sha

ll be

the

prop

erty

of

the

Escr

ow F

und,

(b)

sha

ll be

app

lied

only

in s

trict

co

nfor

mity

with

the

ter

ms

and

cond

ition

s of

thi

s A

gree

men

t, an

d (c

) ar

e he

reby

irr

evoc

ably

pl

edge

d to

the

paym

ent o

f the

prin

cipa

l of a

nd in

tere

st o

n th

e R

efun

ded

Bon

ds, w

hich

pay

men

t sh

all b

e m

ade

by ti

mel

y tra

nsfe

rs o

f su

ch a

mou

nts

at s

uch

times

as

are

prov

ided

for

in S

ectio

n 3.

2 he

reof

. W

hen

the

final

tran

sfer

s ha

ve b

een

mad

e fo

r th

e pa

ymen

t of

such

prin

cipa

l of

and

inte

rest

on

the

Ref

unde

d B

onds

, an

y ba

lanc

e th

en r

emai

ning

in

the

Escr

ow F

und

shal

l be

tra

nsfe

rred

to

the

Uni

vers

ity,

and

the

Escr

ow A

gent

sha

ll th

ereu

pon

be d

isch

arge

d fr

om a

ny

furth

er d

utie

s her

eund

er.

Se

ctio

n 3.

2. P

aym

ent o

f Pri

ncip

al a

nd In

tere

st.

Th

e Es

crow

Age

nt is

her

eby

irrev

ocab

ly in

stru

cted

to tr

ansf

er to

the

Payi

ng A

gent

from

th

e ca

sh b

alan

ces

from

tim

e to

tim

e on

dep

osit

in th

e Es

crow

Fun

d, th

e am

ount

s re

quire

d to

pay

th

e pr

inci

pal o

f the

Ref

unde

d B

onds

at t

heir

resp

ectiv

e re

dem

ptio

n da

tes

and

inte

rest

ther

eon

to

such

rede

mpt

ion

date

s in

the

amou

nts a

nd a

t the

tim

es sh

own

in E

xhib

it C

atta

ched

her

eto.

Sect

ion

3.3.

Suf

ficie

ncy

of E

scro

w F

und.

The

Uni

vers

ity re

pres

ents

that

, bas

ed u

pon

the

info

rmat

ion

prov

ided

by

SDM

Adv

isor

s, In

c.,

the

succ

essi

ve r

ecei

pts

of t

he p

rinci

pal

of a

nd i

nter

est

on t

he E

scro

wed

Sec

uriti

es w

ill

assu

re th

at th

e ca

sh b

alan

ce o

n de

posi

t fro

m ti

me

to ti

me

in th

e Es

crow

Fun

d w

ill b

e at

all

times

su

ffic

ient

to p

rovi

de m

oney

s fo

r tra

nsfe

r to

the

Payi

ng A

gent

at t

he ti

mes

and

in th

e am

ount

s re

quire

d to

pay

the

inte

rest

on

the

Ref

unde

d B

onds

as

such

inte

rest

com

es d

ue a

nd th

e pr

inci

pal

of th

e R

efun

ded

Bon

ds a

s th

e R

efun

ded

Bon

ds a

re p

aid

on a

n op

tiona

l red

empt

ion

date

prio

r to

mat

urity

, all

as m

ore

fully

set

forth

in E

xhib

it E

atta

ched

her

eto.

If,

for a

ny re

ason

, at a

ny ti

me,

th

e ca

sh b

alan

ces

on d

epos

it or

sch

edul

ed t

o be

on

depo

sit

in t

he E

scro

w F

und

shal

l be

in

suff

icie

nt to

tran

sfer

the

amou

nts

requ

ired

by th

e Pa

ying

Age

nt to

mak

e th

e pa

ymen

ts s

et fo

rth

A

-4

in S

ectio

n 3.

2. h

ereo

f, th

e U

nive

rsity

sha

ll tim

ely

depo

sit i

n th

e Es

crow

Fun

d, f

rom

any

fun

ds

that

are

law

fully

ava

ilabl

e th

eref

or,

addi

tiona

l fu

nds

in t

he a

mou

nts

requ

ired

to m

ake

such

pa

ymen

ts.

Not

ice

of a

ny s

uch

insu

ffici

ency

sha

ll be

giv

en p

rom

ptly

as

here

inaf

ter p

rovi

ded,

but

th

e Es

crow

Age

nt s

hall

not i

n an

y m

anne

r be

res

pons

ible

for

any

insu

ffici

ency

of

fund

s in

the

Escr

ow F

und

or th

e U

nive

rsity

’s fa

ilure

to m

ake

addi

tiona

l dep

osits

ther

eto.

Sect

ion

3.4.

Tru

st F

und.

The

Escr

ow A

gent

or i

ts a

ffili

ate,

sha

ll ho

ld a

t all

times

the

Escr

ow F

und,

the

Escr

owed

Se

curit

ies

and

all o

ther

ass

ets

of th

e Es

crow

Fun

d, w

holly

seg

rega

ted

from

all

othe

r fu

nds

and

secu

ritie

s on

dep

osit

with

the

Escr

ow A

gent

; it s

hall

neve

r allo

w th

e Es

crow

ed S

ecur

ities

or a

ny

othe

r as

sets

of

the

Escr

ow F

und

to b

e co

mm

ingl

ed w

ith a

ny o

ther

fun

ds o

r se

curit

ies

of t

he

Escr

ow A

gent

; and

it s

hall

hold

and

dis

pose

of

the

asse

ts o

f th

e Es

crow

Fun

d on

ly a

s se

t for

th

here

in.

The

Escr

owed

Sec

uriti

es a

nd o

ther

ass

ets o

f the

Esc

row

Fun

d sh

all a

lway

s be

mai

ntai

ned

by th

e Es

crow

Age

nt a

s tru

st fu

nds

for

the

bene

fit o

f the

ow

ners

of t

he R

efun

ded

Bon

ds; a

nd a

sp

ecia

l acc

ount

ther

eof s

hall

at a

ll tim

es b

e m

aint

aine

d on

the

book

s of

the

Escr

ow A

gent

. Th

e ow

ners

of

the

Ref

unde

d B

onds

sha

ll be

ent

itled

to th

e sa

me

pref

erre

d cl

aim

and

firs

t lie

n up

on

the

Escr

owed

Sec

uriti

es, t

he p

roce

eds

ther

eof,

and

all o

ther

ass

ets

of th

e Es

crow

Fun

d to

whi

ch

they

are

ent

itled

as

owne

rs o

f the

Ref

unde

d B

onds

. Th

e am

ount

s re

ceiv

ed b

y th

e Es

crow

Age

nt

unde

r th

is A

gree

men

t sh

all

not

be c

onsi

dere

d as

a b

anki

ng d

epos

it by

the

Uni

vers

ity, a

nd th

e Es

crow

Age

nt s

hall

have

no

right

to

title

with

res

pect

the

reto

exc

ept a

s a

trust

ee a

nd E

scro

w

Age

nt u

nder

the

term

s of t

his A

gree

men

t. T

he a

mou

nts r

ecei

ved

by th

e Es

crow

Age

nt u

nder

this

A

gree

men

t sha

ll no

t be

subj

ect t

o w

arra

nts,

draf

ts o

r che

cks

draw

n by

the

Uni

vers

ity o

r, ex

cept

to

the

exte

nt e

xpre

ssly

her

ein

prov

ided

, by

the

Payi

ng A

gent

.

Art

icle

4.

Lim

itatio

n on

Inve

stm

ents

Sect

ion

4.1.

Inv

estm

ents

.

Exce

pt f

or th

e in

itial

inve

stm

ent i

n th

e Es

crow

ed S

ecur

ities

, and

exc

ept a

s pr

ovid

ed in

Se

ctio

n 4.

2 he

reof

, the

Esc

row

Age

nt s

hall

not h

ave

any

pow

er o

r dut

y to

inve

st o

r rei

nves

t any

m

oney

hel

d he

reun

der,

or to

mak

e su

bstit

utio

ns o

f the

Esc

row

ed S

ecur

ities

, or t

o se

ll, tr

ansf

er, o

r ot

herw

ise

disp

ose

of th

e Es

crow

ed S

ecur

ities

.

Sect

ion

4.2.

Sub

stitu

tion

of S

ecur

ities

.

At

the

writ

ten

requ

est

of t

he U

nive

rsity

, an

d up

on c

ompl

ianc

e w

ith t

he c

ondi

tions

he

rein

afte

r st

ated

, th

e Es

crow

Age

nt s

hall

utili

ze c

ash

bala

nces

in

the

Escr

ow F

und,

or

sell,

tra

nsfe

r, ot

herw

ise

disp

ose

of o

r req

uest

the

rede

mpt

ion

of th

e Es

crow

ed S

ecur

ities

and

app

ly th

e pr

ocee

ds t

here

from

to

purc

hase

Ref

unde

d B

onds

or

Gov

ernm

ent

Obl

igat

ions

whi

ch d

o no

t pe

rmit

the

rede

mpt

ion

ther

eof a

t the

opt

ion

of th

e ob

ligor

. A

ny su

ch tr

ansa

ctio

n m

ay b

e ef

fect

ed

by th

e Es

crow

Age

nt o

nly

if (a

) the

Esc

row

Age

nt s

hall

have

rece

ived

a w

ritte

n op

inio

n fro

m a

fir

m o

f cer

tifie

d pu

blic

acc

ount

ants

that

such

tran

sact

ion

will

not

cau

se th

e am

ount

of m

oney

and

se

curit

ies

in th

e Es

crow

Fun

d to

be

redu

ced

belo

w a

n am

ount

suf

ficie

nt to

pro

vide

for

the

full

and

timel

y pa

ymen

t of p

rinci

pal o

f and

inte

rest

on

all o

f the

rem

aini

ng R

efun

ded

Bon

ds a

s th

ey

beco

me

due,

taki

ng in

to a

ccou

nt a

ny o

ptio

nal r

edem

ptio

n th

ereo

f exe

rcis

ed b

y th

e U

nive

rsity

in

conn

ectio

n w

ith s

uch

trans

actio

n; a

nd (b

) the

Esc

row

Age

nt s

hall

have

rece

ived

the

unqu

alifi

ed

B-29

A

-5

writ

ten

lega

l opi

nion

of i

ts b

ond

coun

sel o

r tax

cou

nsel

to th

e ef

fect

that

such

tran

sact

ion

will

not

ca

use

any

of th

e B

onds

or

Ref

unde

d B

onds

to b

e an

“A

rbitr

age

Bon

d” w

ithin

the

mea

ning

of

Sect

ion

148

of th

e In

tern

al R

even

ue C

ode

of 1

986,

as a

men

ded.

Art

icle

5.

App

licat

ion

of C

ash

Bal

ance

s

Sect

ion

5.1.

In

Gen

eral

.

Exce

pt a

s pr

ovid

ed i

n Se

ctio

n 2.

1, 3

.2 a

nd 4

.2 h

ereo

f, no

with

draw

als,

trans

fers

or

rein

vest

men

t sha

ll be

mad

e of

cas

h ba

lanc

es in

the

Escr

ow F

und.

Cas

h ba

lanc

es sh

all b

e he

ld b

y th

e Es

crow

Age

nt in

Uni

ted

Stat

es c

urre

ncy

as c

ash

bala

nces

as

show

n on

the

book

s an

d re

cord

s of

the

Esc

row

Age

nt a

nd,

exce

pt a

s pr

ovid

ed h

erei

n, s

hall

not

be r

einv

este

d by

the

Esc

row

A

gent

; pro

vide

d, h

owev

er, a

con

vers

ion

to c

urre

ncy

shal

l not

be

requ

ired

(i) f

or s

o lo

ng a

s th

e Es

crow

Age

nt’s

inte

rnal

rate

of r

etur

n do

es n

ot e

xcee

d tw

enty

(20)

per

cent

, or (

ii) if

the

Escr

ow

Age

nt’s

inte

rnal

rate

of r

etur

n ex

ceed

s tw

enty

(20)

per

cent

, the

Esc

row

Age

nt re

ceiv

es a

lette

r of

inst

ruct

ions

, acc

ompa

nied

by

the

opin

ion

of n

atio

nally

rec

ogni

zed

bond

cou

nsel

, app

rovi

ng th

e as

sum

ed re

inve

stm

ent o

f suc

h pr

ocee

ds a

t suc

h hi

gher

yie

ld.

A

rtic

le 6

. R

edem

ptio

n of

Ref

unde

d B

onds

Sect

ion

6.1.

Cal

l for

Red

empt

ion.

The

Uni

vers

ity h

ereb

y irr

evoc

ably

cal

ls t

he R

efun

ded

Bon

ds f

or r

edem

ptio

n on

the

ir ea

rlies

t red

empt

ion

date

s, as

show

n on

App

endi

x A

atta

ched

her

eto.

Sect

ion

6.2.

Not

ice

of R

edem

ptio

n/N

otic

e of

Def

easa

nce.

The

Escr

ow A

gent

agr

ees t

o gi

ve a

not

ice

of d

efea

sanc

e an

d a

notic

e of

the

rede

mpt

ion

of

the

Ref

unde

d B

onds

pur

suan

t to

the

term

s of

the

Ref

unde

d B

onds

and

in s

ubst

antia

lly th

e fo

rms

atta

ched

her

eto

as A

ppen

dice

s A

and

B a

ttach

ed h

eret

o an

d as

des

crib

ed o

n sa

id A

ppen

dice

s A

an

d B

to th

e Pa

ying

Age

nt fo

r dis

tribu

tion

as d

escr

ibed

ther

ein.

The

Not

ice

of D

efea

sanc

e sh

all

be g

iven

imm

edia

tely

follo

win

g th

e ex

ecut

ion

of th

is A

gree

men

t, an

d th

e N

otic

e of

Red

empt

ion

shal

l be

give

n in

acc

orda

nce

with

the

Res

olut

ion

auth

oriz

ing

the

Ref

unde

d B

onds

. Th

e Es

crow

A

gent

her

eby

certi

fies

that

pro

visi

on s

atis

fact

ory

and

acce

ptab

le to

the

Escr

ow A

gent

has

bee

n m

ade

for t

he g

ivin

g of

Not

ice

of R

edem

ptio

n of

the

Ref

unde

d B

onds

.

Art

icle

7.

Rec

ords

and

Rep

orts

Sect

ion

7.1.

Rec

ords

.

The

Escr

ow A

gent

will

kee

p bo

oks o

f rec

ord

and

acco

unt i

n w

hich

com

plet

e an

d ac

cura

te

entri

es s

hall

be m

ade

of a

ll tra

nsac

tions

rel

atin

g to

the

rece

ipts

, dis

burs

emen

ts, a

lloca

tions

and

ap

plic

atio

n of

the

mon

ey a

nd E

scro

wed

Sec

uriti

es d

epos

ited

to th

e Es

crow

Fun

d an

d al

l pro

ceed

s th

ereo

f, an

d su

ch b

ooks

sha

ll be

ava

ilabl

e fo

r in

spec

tion

durin

g bu

sine

ss h

ours

and

afte

r re

ason

able

not

ice.

A

-6

Se

ctio

n 7.

2. R

epor

ts.

W

hile

thi

s A

gree

men

t re

mai

ns i

n ef

fect

, the

Esc

row

Age

nt q

uarte

rly s

hall

prep

are

and

send

to th

e U

nive

rsity

a w

ritte

n re

port

sum

mar

izin

g al

l tra

nsac

tions

rela

ting

to th

e Es

crow

Fun

d du

ring

the

prec

edin

g fin

anci

al q

uarte

r, in

clud

ing,

with

out l

imita

tion,

cre

dits

to th

e Es

crow

Fun

d as

a re

sult

of in

tere

st p

aym

ents

on

or m

atur

ities

of t

he E

scro

wed

Sec

uriti

es a

nd tr

ansf

ers f

rom

the

Escr

ow F

und

for

paym

ents

on

the

Ref

unde

d B

onds

or

othe

rwis

e, t

oget

her

with

a d

etai

led

stat

emen

t of

all E

scro

wed

Sec

uriti

es a

nd th

e ca

sh b

alan

ce o

n de

posi

t in

the

Escr

ow F

und

as o

f th

e en

d of

such

per

iod.

Art

icle

8.

Con

cern

ing

the

Payi

ng A

gent

and

Esc

row

Age

nt

Se

ctio

n 8.

1. R

epre

sent

atio

ns.

Th

e Es

crow

Age

nt h

ereb

y re

pres

ents

that

it h

as a

ll ne

cess

ary

pow

er a

nd a

utho

rity

to e

nter

in

to th

is A

gree

men

t and

und

erta

ke th

e ob

ligat

ions

and

res

pons

ibili

ties

impo

sed

upon

it h

erei

n,

and

that

it w

ill c

arry

out

all

of it

s obl

igat

ions

her

eund

er.

Se

ctio

n 8.

2. L

imita

tion

on L

iabi

lity.

The

liabi

lity

of th

e Es

crow

Age

nt to

tran

sfer

fund

s for

the

paym

ent o

f the

prin

cipa

l of a

nd

inte

rest

on

the

Ref

unde

d B

onds

sha

ll be

lim

ited

to th

e pr

ocee

ds o

f the

Esc

row

ed S

ecur

ities

and

th

e ca

sh b

alan

ces

from

tim

e to

tim

e on

dep

osit

in t

he E

scro

w F

und.

N

otw

ithst

andi

ng a

ny

prov

isio

n co

ntai

ned

here

in to

the

cont

rary

, the

Esc

row

Age

nt s

hall

have

no

liabi

lity

wha

tsoe

ver

for t

he in

suff

icie

ncy

of fu

nds f

rom

tim

e to

tim

e in

the

Escr

ow F

und

or a

ny fa

ilure

of t

he o

blig

ors

of th

e Es

crow

ed S

ecur

ities

to m

ake

timel

y pa

ymen

t the

reon

, exc

ept f

or th

e ob

ligat

ion

to n

otify

th

e U

nive

rsity

pro

mpt

ly o

f any

such

occ

urre

nce.

The

reci

tals

her

ein

and

in t

he p

roce

edin

gs a

utho

rizin

g th

e B

onds

sha

ll be

tak

en a

s th

e st

atem

ents

of t

he U

nive

rsity

and

sha

ll no

t be

cons

ider

ed a

s m

ade

by, o

r im

posi

ng a

ny o

blig

atio

n or

liab

ility

upo

n, th

e Es

crow

Age

nt.

Th

e Es

crow

Age

nt i

s no

t a

party

to

the

proc

eedi

ngs

auth

oriz

ing

the

Bon

ds o

r th

e R

efun

ded

Bon

ds a

nd is

not

resp

onsi

ble

for n

or b

ound

by

any

of th

e pr

ovis

ions

ther

eof (

exce

pt to

th

e ex

tent

that

the

Escr

ow A

gent

may

be

a pl

ace

of p

aym

ent a

nd p

ayin

g ag

ent a

nd/o

r a p

ayin

g ag

ent/r

egis

trar

ther

efor

). I

n its

cap

acity

as

Escr

ow A

gent

, it

is a

gree

d th

at t

he E

scro

w A

gent

ne

ed lo

ok o

nly

to th

e te

rms a

nd p

rovi

sion

s of t

his A

gree

men

t.

The

Escr

ow A

gent

mak

es n

o re

pres

enta

tions

as

to th

e va

lue,

con

ditio

ns o

r suf

ficie

ncy

of

the

Escr

ow F

und,

or

any

part

ther

eof,

or a

s to

the

titl

e of

the

Uni

vers

ity t

here

to, o

r as

to

the

secu

rity

affo

rded

the

reby

or

here

by,

and

the

Escr

ow A

gent

sha

ll no

t in

cur

any

liabi

lity

or

resp

onsi

bilit

y in

resp

ect t

o an

y of

such

mat

ters

.

It is

the

inte

ntio

n of

the

parti

es h

eret

o th

at th

e Es

crow

Age

nt s

hall

neve

r be

requ

ired

to

use

or a

dvan

ce it

s ow

n fu

nds

or o

ther

wis

e in

cur p

erso

nal f

inan

cial

liab

ility

in th

e pe

rform

ance

of

any

of it

s dut

ies o

r the

exe

rcis

e of

any

of i

ts ri

ghts

and

pow

ers h

ereu

nder

.

B-30

A

-7

Th

e Es

crow

Age

nt sh

all n

ot b

e lia

ble

for a

ny a

ctio

n ta

ken

or n

egle

cted

to b

e ta

ken

by it

in

good

fai

th in

any

exe

rcis

e of

rea

sona

ble

care

and

bel

ieve

d by

it to

be

with

in th

e di

scre

tion

or

pow

er c

onfe

rred

upo

n it

by th

is A

gree

men

t, no

r sh

all t

he E

scro

w A

gent

be

resp

onsi

ble

for

the

cons

eque

nces

of a

ny e

rror

of j

udgm

ent;

and

the

Escr

ow A

gent

shal

l not

be

answ

erab

le e

xcep

t for

its

ow

n ne

glec

t or w

illfu

l mis

cond

uct,

nor f

or a

ny lo

ss u

nles

s th

e sa

me

shal

l hav

e be

en th

roug

h its

neg

ligen

ce o

r bad

faith

.

Unl

ess

it is

spe

cific

ally

oth

erw

ise

prov

ided

her

ein,

the

Esc

row

Age

nt h

as n

o du

ty t

o de

term

ine

or i

nqui

re i

nto

the

happ

enin

g or

occ

urre

nce

of a

ny e

vent

or

cont

inge

ncy

or t

he

perf

orm

ance

or

failu

re o

f pe

rfor

man

ce o

f th

e U

nive

rsity

with

res

pect

to

arra

ngem

ents

or

cont

ract

s w

ith o

ther

s, w

ith t

he E

scro

w A

gent

’s s

ole

duty

her

eund

er b

eing

to

safe

guar

d th

e Es

crow

Fun

d, t

o di

spos

e of

and

del

iver

the

sam

e in

acc

orda

nce

with

thi

s A

gree

men

t. I

f, ho

wev

er,

the

Escr

ow A

gent

is

calle

d up

on b

y th

e te

rms

of t

his

Agr

eem

ent

to d

eter

min

e th

e oc

curr

ence

of

any

even

t or

cont

inge

ncy,

the

Escr

ow A

gent

sha

ll be

obl

igat

ed, i

n m

akin

g su

ch

dete

rmin

atio

n, o

nly

to e

xerc

ise

reas

onab

le c

are

and

dilig

ence

, and

in e

vent

of

erro

r in

mak

ing

such

det

erm

inat

ion

the

Escr

ow A

gent

sha

ll be

liab

le o

nly

for

its o

wn

will

ful m

isco

nduc

t or

its

negl

igen

ce.

In d

eter

min

ing

the

occu

rren

ce o

f any

suc

h ev

ent o

r con

tinge

ncy

the

Escr

ow A

gent

m

ay re

ques

t fro

m th

e U

nive

rsity

or a

ny o

ther

per

son

such

reas

onab

le a

dditi

onal

evi

denc

e as

the

Escr

ow A

gent

in

its d

iscr

etio

n m

ay d

eem

nec

essa

ry t

o de

term

ine

any

fact

rel

atin

g to

the

oc

curr

ence

of

such

eve

nt o

r co

ntin

genc

y, a

nd i

n th

is c

onne

ctio

n m

ay m

ake

inqu

iries

of,

and

cons

ult w

ith, a

mon

g ot

hers

, the

Uni

vers

ity a

t any

tim

e.

Se

ctio

n 8.

3. C

ompe

nsat

ion.

The

Uni

vers

ity s

hall

pay

to th

e Es

crow

Age

nt fe

es fo

r per

form

ing

the

serv

ices

her

eund

er

and

for t

he e

xpen

ses

incu

rred

or t

o be

incu

rred

by th

e Es

crow

Age

nt in

the

adm

inis

tratio

n of

this

A

gree

men

t pu

rsua

nt t

o th

e te

rms

of t

he F

ee S

ched

ule

atta

ched

her

eto

as A

ppen

dix

C.

The

Es

crow

Age

nt h

ereb

y ag

rees

that

in n

o ev

ent s

hall

it ev

er a

sser

t any

cla

im o

r lie

n ag

ains

t the

Es

crow

Fun

d fo

r any

fees

for i

ts s

ervi

ces,

whe

ther

regu

lar o

r ext

raor

dina

ry, a

s Es

crow

Age

nt, o

r in

any

oth

er c

apac

ity, o

r fo

r re

imbu

rsem

ent f

or a

ny o

f its

exp

ense

s as

Esc

row

Age

nt o

r in

any

ot

her c

apac

ity.

Se

ctio

n 8.

4. S

ucce

ssor

Esc

row

Age

nts.

A

ny c

orpo

ratio

n, a

ssoc

iatio

n or

oth

er e

ntity

int

o w

hich

the

Esc

row

Age

nt m

ay b

e co

nver

ted

or m

erge

d, o

r with

whi

ch it

may

be

cons

olid

ated

, or t

o w

hich

it m

ay s

ell o

r oth

erw

ise

trans

fer

all

or s

ubst

antia

lly a

ll of

its

cor

pora

te t

rust

ass

ets

and

busi

ness

or

any

corp

orat

ion,

as

soci

atio

n or

oth

er e

ntity

res

ultin

g fr

om a

ny s

uch

conv

ersi

on, s

ale,

mer

ger,

cons

olid

atio

n or

ot

her

trans

fer

to w

hich

it

is a

par

ty,

ipso

fac

to,

shal

l be

and

bec

ome

succ

esso

r es

crow

age

nt

here

unde

r, ve

sted

with

all

othe

r mat

ters

as

was

its

pred

eces

sor,

with

out t

he e

xecu

tion

or fi

ling

of

any

inst

rum

ent

or a

ny f

urth

er a

ct o

n th

e pa

rt of

the

par

ties

here

to,

notw

ithst

andi

ng a

nyth

ing

here

in to

the

cont

rary

.

If at

any

tim

e th

e Es

crow

Age

nt o

r its

leg

al s

ucce

ssor

or

succ

esso

rs s

houl

d be

com

e un

able

, th

roug

h op

erat

ion

or l

aw o

r ot

herw

ise,

to

act

as E

scro

w A

gent

her

eund

er,

or i

f its

pr

oper

ty a

nd a

ffai

rs s

hall

be t

aken

und

er t

he c

ontro

l of

any

sta

te o

r fe

dera

l co

urt

or

adm

inis

trativ

e bo

dy b

ecau

se o

f ins

olve

ncy

or b

ankr

uptc

y or

for a

ny o

ther

reas

on, a

vac

ancy

shal

l fo

rthw

ith e

xist

in

the

offic

e of

Esc

row

Age

nt h

ereu

nder

. I

n su

ch e

vent

the

Uni

vers

ity,

by

A

-8

appr

opria

te a

ctio

n, p

rom

ptly

shal

l app

oint

an

Escr

ow A

gent

to fi

ll su

ch v

acan

cy.

If no

succ

esso

r Es

crow

Age

nt s

hall

have

bee

n ap

poin

ted

by th

e U

nive

rsity

with

in s

ixty

(60

) da

ys, a

suc

cess

or

may

be

appo

inte

d by

the

owne

rs o

f a m

ajor

ity in

prin

cipa

l am

ount

of t

he R

efun

ded

Bon

ds th

en

outs

tand

ing

by a

n in

stru

men

t or i

nstru

men

ts in

writ

ing

filed

with

the

Uni

vers

ity, s

igne

d by

suc

h ow

ners

or

by th

eir

duly

aut

horiz

ed a

ttorn

eys-

in-f

act.

If,

in a

pro

per

case

, no

appo

intm

ent o

f a

succ

esso

r Esc

row

Age

nt sh

all b

e m

ade

purs

uant

to th

e fo

rego

ing

prov

isio

ns o

f thi

s sec

tion

with

in

thre

e (3

) m

onth

s af

ter

a va

canc

y sh

all

have

occ

urre

d, t

he o

wne

r of

any

Ref

unde

d B

ond

may

ap

ply

to a

ny c

ourt

of c

ompe

tent

juris

dict

ion

to a

ppoi

nt a

suc

cess

or E

scro

w A

gent

. Su

ch c

ourt

may

the

reup

on,

afte

r su

ch n

otic

e, i

f an

y, a

s it

may

dee

m p

rope

r, pr

escr

ibe

and

appo

int

a su

cces

sor E

scro

w A

gent

.

Any

suc

cess

or E

scro

w A

gent

sha

ll be

a c

orpo

ratio

n or

gani

zed

and

doin

g bu

sine

ss u

nder

th

e la

ws

of th

e U

nite

d St

ates

or t

he S

tate

of W

ashi

ngto

n, a

utho

rized

und

er s

uch

law

s to

exe

rcis

e co

rpor

ate

trust

pow

ers,

havi

ng i

ts p

rinci

pal

offic

e an

d pl

ace

of b

usin

ess

in t

he S

tate

of

Was

hing

ton,

hav

ing

a co

mbi

ned

capi

tal a

nd s

urpl

us o

f at

leas

t $10

0,00

0,00

0 an

d su

bjec

t to

the

supe

rvis

ion

or e

xam

inat

ion

by fe

dera

l or s

tate

aut

horit

y.

A

ny s

ucce

ssor

Esc

row

Age

nt s

hall

exec

ute,

ack

now

ledg

e an

d de

liver

to th

e U

nive

rsity

an

d th

e Es

crow

Age

nt a

n in

stru

men

t ac

cept

ing

such

app

oint

men

t he

reun

der,

and

the

Escr

ow

Age

nt s

hall

exec

ute

and

deliv

er a

n in

stru

men

t tra

nsfe

rrin

g to

suc

h su

cces

sor

Escr

ow A

gent

, su

bjec

t to

the

term

s of

thi

s A

gree

men

t, al

l th

e rig

hts,

pow

ers

and

trust

s of

the

Esc

row

Age

nt

here

unde

r. U

pon

the

requ

est o

f any

suc

h su

cces

sor E

scro

w A

gent

, the

Uni

vers

ity s

hall

exec

ute

any

and

all i

nstru

men

ts in

writ

ing

for m

ore

fully

and

cer

tain

ly v

estin

g in

and

con

firm

ing

to s

uch

succ

esso

r Esc

row

Age

nt a

ll su

ch ri

ghts

, pow

ers a

nd d

utie

s.

The

oblig

atio

ns a

ssum

ed b

y th

e Es

crow

Age

nt p

ursu

ant

to t

his

Agr

eem

ent

may

be

trans

ferr

ed b

y th

e Es

crow

Age

nt t

o a

succ

esso

r Es

crow

Age

nt i

f (a

) th

e re

quire

men

ts o

f th

is

Sect

ion

8.4

are

satis

fied;

(b) t

he s

ucce

ssor

Esc

row

Age

nt h

as a

ssum

ed a

ll th

e ob

ligat

ions

of t

he

Escr

ow A

gent

und

er th

is A

gree

men

t; an

d (c

) all

of th

e Es

crow

ed S

ecur

ities

and

mon

ey h

eld

by

the

Escr

ow A

gent

pur

suan

t to

thi

s A

gree

men

t ha

ve b

een

duly

tra

nsfe

rred

to

such

suc

cess

or

Escr

ow A

gent

.

Art

icle

9.

Mis

cella

neou

s

Sect

ion

9.1.

Not

ice.

Any

not

ice,

aut

horiz

atio

n, r

eque

st,

or d

eman

d re

quire

d or

per

mitt

ed t

o be

giv

en

here

unde

r sh

all

be i

n w

ritin

g an

d sh

all

be d

eem

ed t

o ha

ve b

een

duly

giv

en w

hen

mai

led

by

regi

ster

ed o

r cer

tifie

d m

ail,

post

age

prep

aid

addr

esse

d to

the

Uni

vers

ity o

r the

Esc

row

Age

nt a

t th

e ad

dres

s sh

own

on E

xhib

it A

atta

ched

her

eto.

Th

e U

nite

d St

ates

Pos

t O

ffic

e re

gist

ered

or

certi

fied

mai

l rec

eipt

sho

win

g de

liver

y of

the

afor

esai

d sh

all b

e co

nclu

sive

evi

denc

e of

the

date

an

d fa

ct o

f de

liver

y.

Any

par

ty h

eret

o m

ay c

hang

e th

e ad

dres

s to

whi

ch n

otic

es a

re t

o be

de

liver

ed b

y gi

ving

to th

e ot

her p

artie

s not

less

than

ten

(10)

day

s prio

r not

ice

ther

eof.

B-31

A

-9

Se

ctio

n 9.

2. T

erm

inat

ion

of R

espo

nsib

ilitie

s.

Upo

n th

e ta

king

of a

ll th

e ac

tions

as

desc

ribed

her

ein

by th

e Es

crow

Age

nt, t

he E

scro

w

Age

nt s

hall

have

no

furth

er o

blig

atio

ns o

r re

spon

sibi

litie

s he

reun

der

to t

he U

nive

rsity

, th

e ow

ners

of

the

Ref

unde

d B

onds

or

to a

ny o

ther

per

son

or p

erso

ns i

n co

nnec

tion

with

thi

s A

gree

men

t.

Sect

ion

9.3.

Bin

ding

Agr

eem

ent.

Th

is A

gree

men

t sh

all

be b

indi

ng u

pon

the

Uni

vers

ity a

nd t

he E

scro

w A

gent

and

the

ir re

spec

tive

succ

esso

rs a

nd le

gal r

epre

sent

ativ

es, a

nd sh

all i

nure

sole

ly to

the

bene

fit o

f the

ow

ners

of

the

Ref

unde

d B

onds

, the

Uni

vers

ity, t

he E

scro

w A

gent

and

the

ir re

spec

tive

succ

esso

rs a

nd

lega

l rep

rese

ntat

ives

.

Sect

ion

9.4.

Sev

erab

ility

.

In c

ase

any

one

or m

ore

of t

he p

rovi

sion

s co

ntai

ned

in t

his

Agr

eem

ent

shal

l fo

r an

y re

ason

be

held

to b

e in

valid

, ille

gal o

r une

nfor

ceab

le in

any

resp

ect,

such

inva

lidity

, ille

galit

y or

un

enfo

rcea

bilit

y sh

all n

ot a

ffec

t any

oth

er p

rovi

sion

s of t

his A

gree

men

t, bu

t thi

s Agr

eem

ent s

hall

be c

onst

rued

as

if su

ch in

valid

or

illeg

al o

r un

enfo

rcea

ble

prov

isio

n ha

d ne

ver

been

con

tain

ed

here

in.

Se

ctio

n 9.

5. W

ashi

ngto

n L

aw G

over

ns.

Th

is A

gree

men

t sh

all

be g

over

ned

excl

usiv

ely

by t

he p

rovi

sion

s he

reof

and

by

the

appl

icab

le la

ws o

f the

Sta

te o

f Was

hing

ton.

Sect

ion

9.6.

Tim

e of

the

Ess

ence

.

Tim

e sh

all b

e of

the

esse

nce

in th

e pe

rfor

man

ce o

f obl

igat

ions

from

tim

e to

tim

e im

pose

d up

on th

e Es

crow

Age

nt b

y th

is A

gree

men

t.

Sect

ion

9.7.

Not

ice

to M

oody

’s, F

itch

and

Stan

dard

& P

oor’

s.

In

the

even

t tha

t thi

s Agr

eem

ent o

r any

pro

visi

on th

ereo

f is s

ever

ed, a

men

ded

or re

voke

d,

the

Stat

e sh

all p

rovi

de w

ritte

n no

tice

of s

uch

seve

ranc

e, a

men

dmen

t or

revo

catio

n to

Moo

dy’s

In

vest

ors

Serv

ice

at 7

Wor

ld T

rade

Cen

ter

at 2

50 G

reen

wic

h St

reet

, N

ew Y

ork,

New

Yor

k,

1000

7, A

ttent

ion:

Pub

lic F

inan

ce R

atin

g D

esk/

Ref

unde

d B

onds

, Fi

tch

Rat

ings

at

One

Sta

te

Stre

et P

laza

, New

Yor

k, N

ew Y

ork,

100

04, A

ttent

ion:

Pub

lic F

inan

ce R

atin

g D

esk/

Ref

unde

d B

onds

and

to S

tand

ard

& P

oor’

s R

atin

gs G

roup

, 55

Wat

er S

treet

, New

Yor

k, N

ew Y

ork

1004

1,

Atte

ntio

n: M

unic

ipal

Bon

d D

epar

tmen

t.

A

-10

Sect

ion

9.8.

Am

endm

ents

.

This

Agr

eem

ent s

hall

not b

e am

ende

d ex

cept

to c

ure

any

ambi

guity

or

form

al d

efec

t or

omis

sion

in

this

Agr

eem

ent.

No

amen

dmen

t sh

all

be e

ffec

tive

unle

ss t

he s

ame

shal

l be

in

writ

ing

and

sign

ed b

y th

e pa

rties

ther

eto.

No

such

am

endm

ent s

hall

adve

rsel

y af

fect

the

right

s of

the

hold

ers

of th

e R

efun

ded

Bon

ds.

No

such

am

endm

ent s

hall

be m

ade

with

out f

irst r

ecei

ving

w

ritte

n co

nfirm

atio

n fr

om th

e ra

ting

agen

cies

(if a

ny) w

hich

hav

e ra

ted

the

Ref

unde

d B

onds

that

su

ch a

dmin

istra

tive

chan

ges

will

not

res

ult

in a

with

draw

al o

r re

duct

ion

of i

ts r

atin

g th

en

assi

gned

to th

e R

efun

ded

Bon

ds.

If th

is A

gree

men

t is

amen

ded,

prio

r writ

ten

notic

e an

d co

pies

of

the

pro

pose

d ch

ange

s sh

all

be g

iven

to

the

ratin

g ag

enci

es w

hich

hav

e ra

ted

the

Ref

unde

d B

onds

.

EXEC

UTE

D a

s of t

he d

ate

first

writ

ten

abov

e.

W

EST

ER

N W

ASH

ING

TO

N

UN

IVE

RSI

TY

Title

:

[E

SCR

OW

AG

EN

T]

as

Aut

horiz

ed S

igne

r Ex

hibi

t A

—

Add

ress

es o

f the

Uni

vers

ity a

nd th

e Es

crow

Age

nt

Exhi

bit B

—

D

escr

iptio

n of

the

Ref

unde

d B

onds

Ex

hibi

t C

—

Sche

dule

of D

ebt S

ervi

ce o

n R

efun

ded

Bon

ds

Exhi

bit D

—

D

escr

iptio

n of

Beg

inni

ng C

ash

Dep

osit

(if a

ny) a

nd E

scro

wed

Sec

uriti

es

Exhi

bit E

—

Es

crow

Fun

d C

ash

Flow

A

ppen

dix

A

—

Not

ice

of R

edem

ptio

n A

ppen

dix

B

—

Not

ice

of D

efea

sanc

e A

ppen

dix

C

—

Fee

Sche

dule

B-32

A

-A-1

EX

HIB

IT A

A

ddre

sses

of t

he U

nive

rsity

and

Esc

row

Age

nt

Uni

vers

ity:

W

este

rn W

ashi

ngto

n U

nive

rsity

51

6 H

igh

Stre

et, O

ld M

ain

405

Bel

lingh

am, W

ashi

ngto

n 98

225

Atte

ntio

n: V

ice

Pres

iden

t, B

usin

ess a

nd F

inan

cial

Aff

airs

Escr

ow A

gent

: __

____

____

____

____

___

A

ttent

ion:

A

-B-1

EX

HIB

IT B

Des

crip

tion

of th

e R

efun

ded

Bon

ds

W

este

rn W

ashi

ngto

n U

nive

rsity

St

uden

t Rec

reat

ion

Fee

Rev

enue

Bon

ds, S

erie

s 200

2

Mat

urity

Yea

rs

(May

1)

Prin

cipa

l A

mou

nts

Inte

rest

R

ates

2013

$

670

,000

4.

40%

20

14

700,

000

4.50

20

15

725,

000

5.00

20

16

765,

000

5.00

20

17

805,

000

5.00

20

18

845,

000

5.00

20

19

885,

000

5.00

20

20

930,

000

5.00

20

21

975,

000

5.00

20

22

1,02

0,00

0 5.

00

2023

1,

075,

000

5.00

20

27

4,87

0,00

0 5.

00

2033

9,

330,

000

5.00

B-33

A

-C-1

EX

HIB

IT C

Sc

hedu

le o

f Deb

t Ser

vice

on

the

Ref

unde

d B

onds

D

ate

In

tere

st

Prin

cipa

l/ R

edem

ptio

n Pr

ice

To

tal

$

$

$

$

$

$

A

-D-1

EX

HIB

IT D

E

scro

w D

epos

it I.

Cas

h $

____

___

II.

Oth

er O

blig

atio

ns

Des

crip

tion

M

atur

ity D

ate

Prin

cipa

l A

mou

nt

In

tere

st R

ate

To

tal C

ost

$

%

$

$

$

III.

Cos

ts o

f Iss

uanc

e

B-34

A

-E-1

EX

HIB

IT E

E

scro

w F

und

Cas

h Fl

ow

Dat

e Es

crow

Sec

uriti

es

Prin

cipa

l Es

crow

Sec

uriti

es

Inte

rest

C

ash

Rec

eipt

s C

ash

Dis

burs

emen

t Ca

sh

Bala

nce

$

$

$

$

Page

1—

App

endi

x A

APP

EN

DIX

A

NO

TIC

E O

F R

ED

EM

PTIO

N*

W

este

rn W

ashi

ngto

n U

nive

rsity

St

uden

t Rec

reat

ion

Fee

Rev

enue

Bon

ds, S

erie

s 200

2

NO

TIC

E IS

HER

EBY

GIV

EN t

hat

Wes

tern

Was

hing

ton

Uni

vers

ity h

as c

alle

d fo

r re

dem

ptio

n on

May

1, 2

012,

of

its o

utst

andi

ng S

tude

nt R

ecre

atio

n Fe

e R

even

ue B

onds

, Ser

ies

2002

(the

“R

efun

ded

Bon

ds”)

.

The

Ref

unde

d B

onds

will

be

rede

emed

at a

pric

e of

one

hun

dred

per

cent

(100

%) o

f the

ir pr

inci

pal a

mou

nt, p

lus

inte

rest

acc

rued

to M

ay 1

, 201

2. T

he re

dem

ptio

n pr

ice

of th

e R

efun

ded

Bon

ds is

pay

able

on

pres

enta

tion

and

surr

ende

r of t

he R

efun

ded

Bon

ds a

t the

off

ice

of:

Th

e B

ank

of N

ew Y

ork

Mel

lon

Wor

ldw

ide

Secu

ritie

s Pro

cess

ing

20

01 B

ryan

Stre

et, 9

th F

loor

D

alla

s, TX

752

01

-o

r-

Wel

ls F

argo

Ban

k, N

atio

nal A

ssoc

iatio

n C

orpo

rate

Tru

st D

epar

tmen

t 14

th F

loor

99

9 Th

ird A

venu

e Se

attle

, WA

981

04

In

tere

st o

n al

l R

efun

ded

Bon

ds o

r po

rtion

s th

ereo

f w

hich

are

red

eem

ed s

hall

ceas

e to

ac

crue

on

May

1, 2

012.

The

follo

win

g R

efun

ded

Bon

ds a

re b

eing

rede

emed

:

Mat

urity

Yea

rs

(May

1)

Prin

cipa

l A

mou

nts

Inte

rest

R

ates

C

USI

P N

os.

2013

$

670

,000

4.

40%

95

9878

HM

4 20

14

700,

000

4.50

95

9878

HN

2 20

15

725,

000

5.00

95

9878

HY

8 20

16

765,

000

5.00

95

9878

HZ5

20

17

805,

000

5.00

95

9878

JA8

2018

84

5,00

0 5.

00

9598

78JB

6 20

19

885,

000

5.00

95

9878

JC4

2020

93

0,00

0 5.

00

9598

78JD

2 20

21

975,

000

5.00

95

9878

JE0

2022

1,

020,

000

5.00

95

9878

JF7

2023

1,

075,

000

5.00

95

9878

JG5

2027

4,

870,

000

5.00

95

9878

JK6

2033

9,

330,

000

5.00

95

9878

JL4

*

This

not

ice

shal

l be

giv

en n

ot m

ore

than

60

nor

less

than

30

days

prio

r to

May

1, 2

012

by f

irst c

lass

mai

l to

each

re

gist

ered

ow

ner

of t

he R

efun

ded

Bon

ds.

In

addi

tion

notic

e sh

all

be m

aile

d at

lea

st 3

5 da

ys p

rior

to M

ay 1

, 20

12 t

o Th

e D

epos

itory

Tru

st C

ompa

ny, N

ew Y

ork,

New

Yor

k; G

oldm

an S

achs

, New

Yor

k, N

ew Y

ork,

Sie

bert

Bra

nfor

d Sh

ank

& C

o. L

LC,

New

Yor

k, N

ew Y

ork;

UB

S A

G,

New

Yor

k, N

ew Y

ork,

Nat

iona

l Fi

nanc

ial

Gua

rant

y In

sura

nce

Com

pany

(fo

rmer

ly M

BIA

In

sura

nce

Cor

pora

tion)

, New

Yor

k, N

ew Y

ork,

Moo

dy’s

Inve

stor

s Se

rvic

e; F

itch

Inve

stor

Ser

vice

s an

d St

anda

rd &

Poo

r’s;

and

to

the

Mun

icip

al S

ecur

ities

Rul

emak

ing

Boa

rd.

B-35

—

App

endi

x A

By

Ord

er o

f Wes

tern

Was

hing

ton

Uni

vers

ity

The

Ban

k of

New

Yor

k M

ello

n, a

s Pay

ing

Age

nt

Dat

ed:

____

____

____

____

____

____

With

hold

ing

of tw

enty

eig

ht (

28)

perc

ent o

f gr

oss

rede

mpt

ion

proc

eeds

of

any

paym

ent

mad

e w

ithin

th

e U

nite

d St

ates

m

ay

be

requ

ired

by

the

Jobs

an

d G

row

th

Tax

Rel

ief

Rec

onci

liatio

n A

ct o

f 20

03 (

the

“Act

”) u

nles

s th

e Pa

ying

Age

nt h

as t

he c

orre

ct t

axpa

yer

iden

tific

atio

n nu

mbe

r (s

ocia

l se

curit

y or

em

ploy

er

iden

tific

atio

n nu

mbe

r) or

ex

empt

ion

certi

ficat

e of

the

paye

e. P

leas

e fu

rnis

h a

prop

erly

com

plet

ed F

orm

W-9

or e

xem

ptio

n ce

rtific

ate

or e

quiv

alen

t whe

n pr

esen

ting

your

Bon

ds.

App

endi

x B

APP

EN

DIX

B

N

otic

e of

Def

easa

nce*

W

este

rn W

ashi

ngto

n U

nive

rsity

St

uden

t Rec

reat

ion

Fee

Rev

enue

Bon

ds, S

erie

s 200

2

NO

TIC

E IS

HER

EBY

GIV

EN t

o th

e ow

ners

of

that

por

tion

of t

he a

bove

-cap

tione

d B

onds

with

res

pect

to w

hich

, pur

suan

t to

an E

scro

w A

gree

men

t dat

ed _

____

____

____

_, 2

012,

by

an

d be

twee

n W

este

rn

Was

hing

ton

Uni

vers

ity

(the

“Uni

vers

ity”)

an

d __

____

____

____

____

___

(the

“Esc

row

Age

nt”)

, the

Uni

vers

ity h

as d

epos

ited

into

an

escr

ow

acco

unt,

held

by

the

Escr

ow A

gent

, cas

h an

d no

n-ca

llabl

e di

rect

obl

igat

ions

of t

he U

nite

d St

ates

of

Am

eric

a, th

e pr

inci

pal o

f an

d in

tere

st o

n w

hich

, whe

n du

e, w

ill p

rovi

de m

oney

suf

ficie

nt to

pa

y ea

ch y

ear,

to a

nd in

clud

ing

the

resp

ectiv

e m

atur

ity o

r re

dem

ptio

n da

tes

of s

uch

Bon

ds s

o pr

ovid

ed fo

r, th

e pr

inci

pal t

here

of a

nd in

tere

st th

ereo

n (th

e “D

efea

sed

Bon

ds”)

. Su

ch D

efea

sed

Bon

ds a

re th

eref

ore

deem

ed to

be

no lo

nger

out

stan

ding

pur

suan

t to

the

prov

isio

ns o

f Res

olut

ion

No.

200

2-01

of t

he U

nive

rsity

, aut

horiz

ing

the

issu

ance

of t

he D

efea

sed

Bon

ds, b

ut w

ill b

e pa

id

by a

pplic

atio

n of

the

asse

ts o

f suc

h es

crow

acc

ount

.

The

Def

ease

d B

onds

are

des

crib

ed a

s fol

low

s:

Stud

ent R

ecre

atio

n Fe

e R

even

ue B

onds

, Ser

ies 2

002

(Dat

ed:

Febr

uary

1, 2

002)

M

atur

ity Y

ears

(M

ay 1

) D

efea

sed

Am

ount

s In

tere

st

Rat

es

CU

SIP

Nos

. C

all D

ate

(100

%)

2013

$

670

,000

4.

40%

95

9878

HM

4 05

/01/

2012

20

14

700,

000

4.50

95

9878

HN

2 05

/01/

2012

20

15

725,

000

5.00

95

9878

HY

8 05

/01/

2012

20

16

765,

000

5.00

95

9878

HZ5

05

/01/

2012

20

17

805,

000

5.00

95

9878

JA8

05/0

1/20

12

2018

84

5,00

0 5.

00

9598

78JB

6 05

/01/

2012

20

19

885,

000

5.00

95

9878

JC4

05/0

1/20

12

2020

93

0,00

0 5.

00

9598

78JD

2 05

/01/

2012

20

21

975,

000

5.00

95

9878

JE0

05/0

1/20

12

2022

1,

020,

000

5.00

95

9878

JF7

05/0

1/20

12

2023

1,

075,

000

5.00

95

9878

JG5

05/0

1/20

12

2027

4,

870,

000

5.00

95

9878

JK6

05/0

1/20

12

2033

9,

330,

000

5.00

95

9878

JL4

05/0

1/20

12

*

This

not

ice

shal

l be

give

n im

med

iate

ly b

y fir

st c

lass

mai

l to

each

reg

iste

red

owne

r of

the

Def

ease

d B

onds

. In

ad

ditio

n, n

otic

e sh

all b

e m

aile

d to

: The

Dep

osito

ry T

rust

Com

pany

of

New

Yor

k, N

ew Y

ork;

The

Ban

k of

New

Y

ork

Mel

lon,

as

Fisc

al A

gent

; M

oody

’s I

nves

tors

Ser

vice

; St

anda

rd &

Poo

r’s

Rat

ings

Ser

vice

s; F

itch

Ratin

gs;

Mer

rill L

ynch

& C

o., M

BIA

Insu

ranc

e C

orpo

ratio

n an

d to

the

MSR

B.

B-36

App

endi

x B

Info

rmat

ion

for I

ndiv

idua

l Reg

iste

red

Ow

ner

Th

e ad

dres

see

of th

is n

otic

e is

the

regi

ster

ed o

wne

r of B

ond

Cer

tific

ate

No.

___

__ o

f the

D

efea

sed

Bon

ds d

escr

ibed

abo

ve, w

hich

cer

tific

ate

is in

the

prin

cipa

l am

ount

of

$___

____

__.

All

of w

hich

has

bee

n de

feas

ed a

s des

crib

ed a

bove

.

APP

EN

DIX

C

Fee

Sche

dule

Escr

ow A

gent

Fee

: Se

e A

ttach

ed

B-37

FIN

AN

CIA

L S

TA

TE

ME

NT

S

AN

D

R

EQ

UIR

ED

SU

PP

LE

ME

NT

AL

IN

FO

RM

AT

ION

Ta

ble

of C

onte

nts

Pre

sid

ent’

s L

ette

r of

Tra

nsm

itta

l...

....

....

....

....

....

....

....

....

....

....

....

....

....

....

....

....

....

....

....

.3

Boa

rd o

f Tru

stee

s a

nd

Ad

min

istr

ati

ve O

ffic

ers.

....

....

....

....

....

....

....

....

....

....

....

....

....

....

..4

Ma

na

gem

ent’

s D

iscu

ssio

n a

nd

An

aly

sis

....

....

....

....

....

....

....

....

....

....

....

....

....

....

....

....

....

.5

Ind

epen

den

t A

ud

itor

s’R

epo

rt..

....

....

....

....

....

....

....

....

....

....

....

....

....

....

....

....

....

....

....

....

..13

Fin

an

cia

l Sta

tem

ents

:

Sta

tem

ents

of N

et A

sset

s (U

niv

ersi

ty).

....

....

....

....

....

....

....

....

....

....

....

....

....

....

....

....

....

...1

5

Sta

tem

ents

of F

ina

nci

al P

osit

ion

(Fou

nd

ati

on

)..

....

....

....

....

....

....

....

....

....

....

....

....

....

...1

6

Sta

tem

ents

of R

even

ues

, Exp

ense

s a

nd

Ch

an

ges

in N

et A

sset

s(U

niv

ersi

ty).

....

....

....

.17

Sta

tem

ent

of A

ctiv

itie

s a

nd

Ch

an

ges

in N

et A

sset

s 20

11(F

oun

da

tio

n)

....

....

....

....

....

..18

Sta

tem

ent

of A

ctiv

itie

s a

nd

Ch

an

ges

in N

et A

sset

s 20

10 (

Fou

nd

ati

on).

....

....

....

....

....

.19

Sta

tem

ents

of C

ash

Flo

ws

(Un

iver

sity

)...

....

....

....

....

....

....

....

....

....

....

....

....

....

....

....

....

..20

Not

es t

o th

e F

ina

nci

al S

tate

men

ts..

....

....

....

....

....

....

....

....

....

....

....

....

....

....

....

....

....

....

...2

2

This

pag

e in

tent

iona

lly le

ft b

lank

C-1

APPENDIX C Audited Financial Statements of the University (Fiscal Year Ended June 30, 2011)

WE

STE

RN

WA

SHIN

GT

ON

UN

IVE

RSI

TY

PR

ESI

DE

NT

’S L

ET

TE

R O

F T

RA

NSM

ITT

AL

JJu

ne 3

0, 2

011 a

nd 2

010

3

Nov

embe

r 8,

201

1

Den

nis

Mad

sen,

Cha

irB

oard

of T

rust

ees

Wes

tern

Was

hing

ton

Uni

vers

ity

Bel

lingh

am, W

A 9

8225

Dea

r M

r.M

adse

n:

We

are

plea

sed

to s

ubm

it th

e A

nnua

l Fin

anci

al R

epor

t of W

este

rn W

ashi

ngto

n U

nive

rsit

y. T

he a

ccou

nts

of th

e U

nive

rsit

y ar

e m

aint

aine

d in

acc

orda

nce

wit

h po

licie

s an

d re

gula

tion

s es

tabl

ishe

d by

Was

hing

ton

Stat

e an

d it

s O

ffic

e of

Fin

anci

alM

anag

emen

t. T

his

repo

rt h

as b

een

prep

ared

in a

ccor

danc

e w

ith

gene

rally

acc

epte

d ac

coun

ting

pri

ncip

les

and

follo

win

g th

e gu

idan

ce o

f the

Gov

ernm

enta

l Acc

ount

ing

Stan

dard

s B

oard

.

Man

agem

ent a

ssum

es fu

ll re

spon

sibi

lity

for

the

com

plet

enes

s an

d re

liabi

lity

of th

e in

form

atio

n co

ntai

ned

in th

is r

epor

t, ba

sed

upon

a c

ompr

ehen

sive

fram

ewor

k of

inte

rnal

con

trol

that

it h

as e

stab

lishe

d fo

r th

is p

urpo

se.

Bec

ause

the

cost

of

inte

rnal

con

trol

sho

uld

not e

xcee

d an

tici

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than

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at th

e fin

anci

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tate

men

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re fr

ee o

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mat

eria

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stat

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ton

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issu

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qual

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tern

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ton

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vers

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tem

ents

for

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year

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agem

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and

anal

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fina

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l sec

tion

of t

his

repo

rt, p

rovi

des

a na

rrat

ive

intr

oduc

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rvie

w, a

nd a

naly

sis

of th

e ba

sic

finan

cial

sta

tem

ents

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este

rn W

ashi

ngto

n U

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rec

ogni

zed

nati

onw

ide

as a

pre

mie

r pu

blic

com

preh

ensi

ve u

nive

rsit

y. W

este

rn W

ashi

ngto

n U

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the

high

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rank

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publ

ic,

mas

ter’

s-gr

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Paci

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orth

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cord

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201

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adin

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wit

h th

e fin

anci

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tate

men

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ccom

pany

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note

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hich

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low

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ctio

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En

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preh

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vers

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as e

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the

last

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coas

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cou

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s at

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cen

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uni

quel

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ty o

f re

crea

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al,

cult

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ucat

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d ec

onom

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ctiv

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men

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e U

nive

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nanc

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clud

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e St

atem

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et A

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s, t

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men

ts o

f Rev

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xpen

ses

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pr

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n ac

cord

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wit

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over

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ccou

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prin

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est

ablis

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anda

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for

exte

rnal

fina

ncia

l rep

ortin

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r pu

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col

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tem

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finan

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vers

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last

thr

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repo

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sets

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shor

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easu

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and

acc

ount

s re

ceiv

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m s

tude

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Th

e $2

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mill

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(-24

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crea

se i

n to

tal

curr

ent

asse

ts d

urin

g fis

cal 2

011

com

pare

d to

fis

cal 2

010

is p

rim

arily

due

to

a re

duct

ion

in c

ash

and

cash

equ

ival

ents

of

$16.

2 m

illio

n, u

sed

in

fisca

l 201

1 to

pur

chas

e in

vest

men

ts.

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rent

ass

ets

incr

ease

d by

a n

et $

1.4

mill

ion

(1.7

%)

duri

ng fi

scal

201

0 co

mpa

red

to

fisca

l 200

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e to

incr

ease

d ho

ldin

gs o

f cas

h an

d ca

sh e

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alen

ts a

nd a

n in

crea

se in

fund

s he

ld b

y th

e O

ffic

e of

the

Stat

e Tr

easu

rer.

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curr

ent

asse

ts (

excl

udin

g ca

pita

l ass

ets)

incr

ease

d $1

8.3

mill

ion

(52.

9%)

in f

isca

l 201

1 ov

er f

isca

l 201

0 pr

imar

ily d

ue

to t

he in

crea

se in

long

-ter

m r

estr

icte

d an

d un

rest

rict

ed in

vest

men

ts o

ffse

t by

dec

reas

es in

cas

h an

d ca

sh e

quiv

alen

ts a

nd

the

amou

nt d

ue f

rom

Sta

te T

reas

urer

. Th

e in

crea

se i

n lo

ng-t

erm

res

tric

ted

and

unre

stri

cted

inv

estm

ents

was

due

to

purc

hase

s of

U.S

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asur

y an

d A

genc

y Se

curi

ties

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cha

nge

in t

he a

mou

nt d

ue fr

om t

he S

tate

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asur

er is

att

ribu

tabl

e to

an

incr

ease

in c

apit

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xpen

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res

that

occ

urre

d at

the

end

of fi

scal

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0 w

ith

cash

req

uest

ed in

fisc

al 2

011.

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tric

ted

cash

and

cas

h eq

uiva

lent

s de

crea

sed

$3.8

mill

ion

(-54

.6%

)in

fis

cal

2011

pri

mar

ily d

ue t

o sp

endi

ng $

4.0

mill

ion

of t

he

rem

aini

ng a

mou

nt o

f th

e $1

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mill

ion

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ousi

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nd D

inin

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stem

200

9 re

venu

e bo

nd p

roce

eds.

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curr

ent

asse

ts

(exc

ludi

ng c

apit

al a

sset

s) d

ecre

ased

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8 m

illio

n (-

7.5%

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mpa

ring

fis

cal 2

010

to f

isca

l 200

9, p

rim

arily

due

to

spen

ding

$8

.3 m

illio

n of

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$14

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illio

n in

Hou

sing

and

Din

ing

Syst

em r

even

ue b

onds

iss

ued

in 2

009,

off

set

by a

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1 m

illio

n (1

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incr

ease

in th

e am

ount

s du

e fr

om th

e St

ate

Trea

sure

r to

cov

er e

xpen

ditu

res

on th

e M

iller

Hal

l ren

ovat

ion.

Gro

wth

in n

et a

sset

s ov

er t

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st th

ree

fisca

l yea

rs is

due

to th

e co

ntin

uati

on o

f the

Uni

vers

ity’

s ca

pita

l pro

gram

. C

apit

al

asse

ts g

rew

in fi

scal

201

1 by

$22

.4m

illio

n (5

.4%

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d $2

8.9

mill

ion

(7.5

%)

com

pari

ng fi

scal

201

0 to

fisc

al 2

009,

pri

mar

ily

due

to th

e ca

pita

lizat

ion

of w

ork

perf

orm

ed o

n th

eM

iller

Hal

l ren

ovat

ion

and

the

Buc

hana

n To

wer

s re

mod

el.

Lia

bil

itie

sTh

e ex

cess

of c

urre

nt a

sset

s ov

er c

urre

nt li

abili

ties

of

$30.

3 m

illio

n in

fisc

al 2

011

and

$45.

7 m

illio

n in

fisc

al 2

010

refle

cts

the

cont

inui

ng a

bilit

y of

the

Uni

vers

ity

to m

eet

its

shor

t-te

rmob

ligat

ions

wit

h liq

uid

or e

asily

liqu

idat

ed a

sset

s. C

urre

nt

liabi

litie

s de

crea

sed

$4.7

mill

ion

(-13

.1%

) co

mpa

ring

fis

cal 2

011

to f

isca

l 201

0 du

e to

the

pay

men

t of

cap

ital

exp

endi

ture

in

voic

es r

ecor

ded

at f

isca

l 201

0 ye

ar e

nd. T

he c

urre

nt li

abili

ties

incr

ease

of

$6.2

mill

ion

(20.

6%)

whe

n co

mpa

ring

fis

cal

2010

to

fisca

l 20

09 i

s re

late

d to

hig

her

invo

ices

at

year

end

in

cons

truc

tion

pro

ject

act

ivit

y, i

nclu

ding

the

Mill

er H

all

reno

vati

on (

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mill

ion)

and

the

Buc

hana

n To

wer

s re

nova

tion

($1

.8 m

illio

n).

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erre

d re

venu

es i

ncre

ased

$82

6 th

ousa

nd (

15.3

%)

whe

n co

mpa

ring

fis

cal

2011

to

fisc

al 2

010

due

to a

14.0

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crea

se i

nsu

mm

er s

essi

on u

nder

grad

uate

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itio

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d an

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ollm

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ease

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over

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reve

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incr

ease

d $6

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hous

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8 %

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mpa

ring

fis

cal

2010

to

fisca

l 20

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ue t

o an

inc

reas

e of

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0%in

und

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adua

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umm

er t

uiti

on r

ates

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inc

reas

e in

sum

mer

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rollm

ent

of o

ver

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0 st

uden

ts a

nd a

n in

crea

se in

sum

mer

201

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cult

y le

dtr

avel

cou

rses

tha

t ca

rry

high

er f

ees.

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cu

rren

t po

rtio

n of

bon

ds a

nd n

otes

pay

able

inc

reas

ed s

light

ly b

y $1

50 t

hous

and

(4.3

%)

whe

n co

mpa

ring

fis

cal

2011

to

fisca

l 20

10 d

ue t

o th

e ad

diti

on o

f tw

o St

ate

Cer

tific

ates

of

Part

icip

atio

n to

fun

d eq

uipm

ent

purc

hase

s in

Ath

leti

cs.

The

curr

ent

port

ion

of b

onds

and

not

es p

ayab

le i

ncre

ased

$41

1 th

ousa

nd(1

3.4%

)co

mpa

ring

fisc

al 2

010

to f

isca

l 20

09 a

s pr

inci

pal p

aym

ents

bec

ame

due

on th

e 20

09 H

ousi

ng a

nd D

inin

g bo

nd is

sue

duri

ng fi

scal

201

0.

Long

-ter

mlia

bilit

ies

decr

ease

d $1

.8m

illio

n (-

2.1%

) w

hen

com

pari

ng f

isca

l 20

11 t

o fis

cal

2010

due

to

the

reti

rem

ent

of

$3.6

mill

ion

in b

onds

and

not

es p

ayab

le. T

he $

3.6

mill

ion

decr

ease

isof

fset

by

an in

crea

se o

f $1.

3 m

illio

nto

the

unfu

nded

ne

t pe

nsio

n ob

ligat

ion

to c

erta

in s

tate

em

ploy

ees

base

d on

the

est

imat

ed S

tate

Act

uari

al v

alua

tion

of

the

plan

, com

bine

d w

ith

the

addi

tion

of

$450

tho

usan

d in

new

not

espa

yabl

eto

fun

d eq

uipm

ent

in t

he A

thle

tic

Dep

artm

ent.

Long

-ter

mlia

bilit

ies

decr

ease

d by

$2.

2 m

illio

n(-

2.6%

) co

mpa

ring

fisc

al 2

010

to f

isca

l 200

9 du

e to

the

ret

irem

ent

of $

3.2

mill

ion

in

bond

s an

d no

tes

paya

ble,

off

set b

y an

incr

ease

of $

923

thou

sand

to th

e un

fund

ed n

et p

ensi

on o

blig

atio

n.

Net

Ass

ets

The

diff

eren

ce b

etw

een

tota

l ass

ets

and

tota

l lia

bilit

ies

is n

et a

sset

s, o

r eq

uity

. Th

e ch

ange

in n

et a

sset

s m

easu

res

whe

ther

the

over

all

finan

cial

con

diti

on h

as i

mpr

oved

or

dete

rior

ated

dur

i ng

the

year

. N

et a

sset

s ar

e re

port

ed i

n th

e fo

llow

ing

cate

gori

es:

Inve

sted

in

Capi

tal

Ass

ets

(net

of

rela

ted

debt

)–

The

Uni

vers

ity’

s to

tal

inve

stm

ents

in

prop

erty

, pla

nt e

quip

men

t, an

d in

fras

truc

ture

, net

of a

ccum

ulat

ed d

epre

ciat

ion

and

outs

tand

ing

debt

obl

igat

ions

rel

ated

to th

ose

capi

tal a

sset

s.

C-3

WE

STE

RN

WA

SHIN

GT

ON

UN

IVE

RSI

TY

MA

NA

GE

ME

NT

’S D

ISC

USS

ION

AN

D A

NA

LY

SIS

June

30,

201

1 an

d 20

10

Una

udit

ed–

See

Acc

ompa

nyin

g A

ccou

ntan

t’s R

epor

t7

Res

tric

ted

Net

Ass

ets:

�N

onex

pend

able

net

ass

ets

cons

ists

of f

unds

on

whi

ch th

e do

nor

or o

ther

ext

erna

l par

ty h

as im

pose

d th

e re

stri

ctio

n th

at th

e co

rpus

is n

ot a

vaila

ble

for

expe

ndit

ures

but

for

inve

stm

ent p

urpo

ses

only

.

�E

xpen

dabl

e ne

t as

sets

are

res

ourc

es w

hich

the

Uni

vers

ity

is l

egal

ly o

r co

ntra

ctua

lly o

blig

ated

to

spen

d in

ac

cord

ance

wit

h ti

me

or p

urpo

se r

estr

icti

ons

plac

ed u

pon

them

by

dono

rs o

r ot

her

exte

rnal

par

ties

.

Unr

estr

icte

d N

et A

sset

s–

All

rem

aini

ng f

unds

ava

ilabl

e to

the

inst

itut

ion

for

any

purp

ose,

alt

houg

h th

ese

net

asse

ts a

re

ofte

n in

tern

ally

des

igna

ted

for

spec

ific

purp

oses

.

The

Uni

vers

ity’

s ne

t ass

ets

as o

f Jun

e 30

, 201

1, 2

010

and

2009

are

sum

mar

ized

as

follo

ws:

20

112

010

20

09

Net

Ass

ets

Inve

sted

in c

apit

al a

sset

s, n

et o

f rel

ated

deb

t35

7,8

15$

336,

630

$31

2,26

3$

Res

tric

ted:

Non

expe

ndab

le4,

629

4,62

94,

149

Expe

ndab

le24

,391

26,3

2123

,683

Unr

estr

icte

d50

,07

842

,20

946

,20

2To

tal n

et a

sset

s43

6,91

3$

409,

789

$38

6,29

7$

(Dol

lars

in th

ousa

nds)

Inve

sted

in c

apit

al a

sset

s, n

et o

f rel

ated

deb

t inc

reas

ed $

21.2

mill

ion

(6.3

%) w

hen

com

pari

ng fi

scal

201

1 to

fisc

al 2

010

due

to in

crea

ses

in c

onst

ruct

ion

in p

rogr

ess

for

the

Mill

er H

all a

nd B

ucha

nan

Tow

ers

reno

vati

ons,

alo

ng w

ith

a re

duct

ion

in

long

-ter

m d

ebt

from

pri

ncip

al p

aym

ents

. In

vest

ed i

n ca

pita

l as

sets

, ne

t of

rel

ated

deb

t in

crea

sed

$24.

4 m

illio

n (7

.8%

) co

mpa

ring

fis

cal

2010

to

fisca

l 20

09 p

rim

arily

due

to

the

incr

ease

in

cons

truc

tion

in p

rogr

ess

for

the

Mill

er H

all

and

Buc

hana

n To

wer

s re

nova

tion

s, o

ffse

t by

the

chan

ge in

long

-ter

m d

ebt.

Res

tric

ted

none

xpen

dabl

e ne

t as

sets

incl

ude

dona

tion

s an

d m

atch

ing

Stat

e co

ntri

buti

ons

for

the

purp

ose

of e

stab

lishi

ng

dist

ingu

ishe

d pr

ofes

sors

hips

and

gra

duat

e fe

llow

ship

s. W

hen

com

pari

ng fi

scal

201

1 to

fisc

al 2

010,

ther

e w

as n

o ch

ange

to

rest

rict

ed n

onex

pend

able

net

ass

ets

as n

o ne

w a

ddit

ions

to

endo

wm

ents

wer

e re

ceiv

ed. D

urin

g fis

cal 2

010,

$50

tho

usan

d w

as r

ecei

ved

to e

stab

lish

a ne

w g

radu

ate

fello

wsh

ip c

ompa

red

to t

he r

ecei

pt o

f $5

50 t

hous

and

duri

ng f

isca

l 200

9. W

hen

com

bine

d w

ith

inve

stm

ent g

ains

, the

net

incr

ease

in r

estr

icte

d no

nexp

enda

ble

net a

sset

s w

as $

480

thou

sand

(11.

6%).

Res

tric

ted

expe

ndab

le n

et a

sset

s de

crea

sed

$1.9

mill

ion

(-7.

3%)

whe

n co

mpa

ring

fis

cal

2011

to

fisca

l 20

10 d

ue t

o a

decr

ease

in fu

nds

held

by

the

Stat

e Tr

easu

rer,

off

set b

y in

crea

ses

to s

tude

nt lo

an fu

nds

and

gran

ts.

Res

tric

ted

expe

ndab

le

net a

sset

sin

crea

sed

$2.6

mill

ion

(11.

1 %

) com

pari

ng fi

scal

201

0 to

fisc

al 2

009

due

to a

n in

crea

se in

fund

s he

ld b

y th

e St

ate

Trea

sure

r. T

he S

tate

Per

man

ent

Fund

repr

esen

ts t

he U

nive

rsit

y’s

shar

e of

net

ear

ning

s of

the

Nor

mal

Sch

ool P

erm

anen

t Fu

nd a

nd t

uiti

on d

istr

ibut

ions

, re

duce

d by

exp

endi

ture

s fo

r ca

pita

l pr

ojec

ts.

In a

ddit

ion,

rese

rves

wer

e se

t as

ide

for

rene

wal

s an

d re

plac

emen

ts in

the

Hou

sing

and

Din

ing

Syst

em a

nd t

he W

ade

Kin

g St

uden

t R

ecre

atio

n C

ente

ras

req

uire

d by

bon

d co

vena

nts.

Unr

estr

icte

d ne

t as

sets

inc

reas

ed $

7.9

mill

ion

(18.

6%)

whe

n co

mpa

ring

fis

cal

2011

to

fisca

l 20

10 d

ue t

o in

crea

ses

in

tuit

ion,

H

ousi

ng

and

Din

ning

ca

pita

l pl

an

rese

rves

, in

vest

men

t ga

ins

on

endo

wm

ents

and

othe

r pr

ogra

m

fees

.U

nres

tric

ted

net

asse

tsde

crea

sed

by $

4.0

mill

ion

(-8.

6%)

in f

isca

l 20

10 w

hen

com

pare

d to

fis

cal

2009

, at

trib

utab

le t

o us

ing

unre

stri

cted

res

erve

fund

s to

com

pens

ate

for

redu

ced

stat

e ap

prop

riat

ions

.

WE

STE

RN

WA

SHIN

GT

ON

UN

IVE

RSI

TY

MA

NA

GE

ME

NT

’S D

ISC

USS

ION

AN

D A

NA

LY

SIS

June

30,

201

1 an

d 20

10

Una

udit

ed –

See

Acc

ompa

nyin

g A

ccou

ntan

t’s R

epor

t8C

apit

al I

mp

rove

men

ts a

nd

Rel

ated

Deb

tD

urin

g fis

cals

201

1 an

d 20

10, $

35.8

mill

ion

and

$40.

1 m

illio

n (e

xclu

ding

libr

ary

mat

eria

ls a

nd e

quip

men

t)w

ere

expe

nded

on c

apit

al im

prov

emen

ts, c

ompa

red

to $

21.7

mill

ion

in fi

scal

200

9. O

f the

$35

.8m

illio

n in

cap

ital

impr

ovem

ents

, $20

.3m

illio

n w

as e

xpen

ded

on th

e M

iller

Hal

l bui

ldin

g re

mod

el, $

5.2

mill

ion

on th

e B

ucha

nan

Tow

ers

reno

vati

ons,

$4.

4 m

illio

n on

net

wor

k in

fras

truc

ture

sw

itch

es a

nd $

1.2

mill

ion

on t

he R

idge

way

bet

a re

nova

tion

. In

fis

cal

2010

, $4

0.1

mill

ion

(exc

ludi

ng l

ibra

ry m

ater

ials

and

equ

ipm

ent)

was

exp

ende

d on

cap

ital

im

prov

emen

ts;

$18.

2 m

illio

n on

the

Mill

er h

all

build

ing

rem

odel

, $9

.3 m

illio

n on

th

e B

ucha

nan

Tow

ers

reno

vati

on,

$3.9

mill

ion

on t

he C

hem

istr

y B

uild

ing

addi

tion

, $1

.2 m

illio

n on

the

Fair

have

n Fi

re S

prin

kler

pro

ject

, and

$97

2 th

ousa

nd o

n th

e H

agga

rd H

all/

Wils

on L

ibra

ry r

enov

atio

n.

Spec

ific

proj

ects

com

plet

ed o

r un

derw

ay in

fisc

al 2

011

incl

ude:

Buc

hana

n To

wer

s A

ddit

ion.

A 1

05-b

ed, 3

7,00

0 sq

uare

feet

add

itio

n is

bei

ng c

onst

ruct

ed o

n th

e ea

st s

ide

of th

e B

ucha

nan

Tow

ers

build

ing.

The

pro

ject

is d

esig

ned

wit

h pr

inci

ples

of d

ay li

ghti

ng a

nd n

atur

al v

enti

lati

on to

ach

ieve

a U

SGB

C L

EE

D

Silv

er a

nd p

ossi

bly

Gol

d ra

ting

. The

pr0

ject

is s

ched

uled

to b

e co

mpl

eted

for

Fall

2011

occ

upan

cy.

Mill

er H

all R

enov

atio

n .D

ue t

o th

e hi

stor

ical

sig

nifi

canc

e an

d it

s pr

omin

ent

loca

tion

in t

he h

eart

of c

ampu

s, M

iller

Hal

l w

as s

elec

ted

to u

nder

go a

maj

or r

enov

atio

n be

ginn

ing

in t

he 2

009-

2011

bie

nniu

m.

The

pro

ject

will

pro

vide

gen

eral

U

nive

rsit

y cl

assr

oom

s, c

ompu

ter

labs

, ins

truc

tion

al s

pace

, and

sup

port

fac

iliti

es f

or t

he W

oodr

ing

Col

lege

of

Edu

cati

on

and

the

Dep

artm

ent o

f Mod

ern

and

Cla

ssic

al L

angu

ages

.

Chem

istr

y B

uild

ing

Add

itio

n.Th

e ad

diti

on o

f 4,

300

squa

re f

eet

will

pro

vide

add

itio

nal c

hem

istr

y an

d bi

olog

y re

sear

ch

and

inst

ruct

iona

l sp

ace

reco

gniz

ing

the

colla

bora

tive

nat

ure

of c

hem

istr

y an

d bi

olog

y re

sear

ch.

Con

stru

ctio

n be

gan

in

June

200

9 w

ith

subs

tant

ial c

ompl

etio

n du

ring

fisc

al 2

011.

Sta

tem

ent

of R

even

ues

, Exp

ense

s an

d C

han

ges

in N

et A

sset

sTh

e St

atem

ents

of R

even

ues,

Exp

ense

s an

d C

hang

es i

n N

et A

sset

spr

esen

t th

e U

nive

rsit

y’s

resu

lts

of o

pera

tion

s an

d no

nope

rati

ng it

ems

that

res

ult

in t

he c

hang

es in

net

ass

ets

for

the

year

. In

acc

orda

nce

wit

h G

ASB

rep

orti

ng p

rinc

iple

s,

reve

nues

and

exp

ense

s ar

e cl

assi

fied

as o

pera

ting

or

nono

pera

ting

.

A c

onde

nsed

com

pari

son

of t

he U

nive

rsit

y’s

reve

nues

, exp

ense

s an

d ch

ange

s in

net

ass

ets

for

the

year

s en

ded

June

30,

20

11, 2

010

and

2009

follo

ws:

20

112

010

20

09

Ope

rati

ng r

even

ues

167

,90

4$

156,

162

$14

8,91

3$

Ope

rati

ng e

xpen

ses

244,

230

237

,989

232,

561

Ope

rati

ng lo

ss(7

6,32

6)(8

1,82

7)

(83,

648)

Stat

e ap

prop

riat

ions

rev

enue

63,7

6164

,621

78,

535

Oth

er n

onop

erat

ing

reve

nues

16,3

5513

,180

12,5

66N

onop

erat

ing

expe

nses

(4,0

61)

(4,1

56)

(4,4

70

)(L

oss)

inco

me

bef

ore

othe

r re

venu

es(2

71)

(8,1

82)

2,98

3O

ther

rev

enue

s27

,395

31,6

74

17,9

52In

crea

se in

net

ass

ets

27,1

2423

,492

20,9

35N

et a

sset

s, b

egin

ning

of y

ear

409,

789

386,

297

365,

362

Net

ass

ets,

end

of y

ear

436,

913

$40

9,7

89$

386,

297

$

(Dol

lars

in th

ousa

nds)

Pri

mar

y F

un

din

g S

ou

rces

The

Uni

vers

ity

relie

s pr

imar

ily o

n st

uden

t tu

itio

n an

d fe

es a

nd s

tate

app

ropr

iati

ons

as r

even

ue s

ourc

es t

o su

ppor

t op

erat

ions

. Tu

itio

n re

venu

e, n

et o

f sc

hola

rshi

p al

low

ance

s, h

as c

onti

nued

to

grow

, inc

reas

ing

$8.5

mill

ion

(10.

7%)

and

$6.1

mill

ion

(8.3

%)

in fi

scal

201

1 an

d fis

cal 2

010,

res

pect

ivel

y.

C-4

WE

STE

RN

WA

SHIN

GT

ON

UN

IVE

RSI

TY

MA

NA

GE

ME

NT

’S D

ISC

USS

ION

AN

D A

NA

LY

SIS

June

30,

201

1 an

d 20

10

Una

udit

ed–

See

Acc

ompa

nyin

g A

ccou

ntan

t’s R

epor

t9

The

Was

hing

ton

Stat

e Le

gisl

atur

e pr

ovid

es th

e B

oard

of T

rust

ees

wit

h tu

itio

n se

ttin

g au

thor

ity

for

all s

tude

nt c

ateg

orie

s at

th

e U

nive

rsit

y: r

esid

ent

unde

rgra

duat

e,no

n-re

side

nt u

nder

grad

uate

,res

iden

t gr

adua

te,a

nd n

on-r

esid

ent

grad

uate

. The

U

nive

rsit

y is

fre

e to

set

tui

tion

at

any

leve

l in

the

latt

er t

hree

cat

egor

ies.

Tui

tion

incr

ease

d 14

.0%

dur

ing

fisca

l 201

1 an

d fis

cal

2010

com

pare

d to

an

incr

ease

of

5.0%

dur

ing

fisc

al 2

009,

wit

h en

rollm

ent

incr

easi

ng t

o an

ave

rage

ann

ual

head

coun

t of 1

3,52

1 in

fisc

al 2

011,

com

pare

d t0

13,

300

stud

ents

in fi

scal

201

0 an

d 13

,240

in fi

scal

200

9.

Dur

ing

fisca

l 201

1, s

tate

app

ropr

iati

ons

used

for

oper

atio

ns d

eclin

ed b

y $

861

thou

sand

(-1.

3%

) co

mpa

red

to a

dec

reas

e of

$1

3.9

mill

ion

(-17

.7%

) in

fis

cal

2010

. The

fis

cal

2011

dec

reas

e is

att

ribu

tabl

e to

the

con

tinu

ing

budg

et c

halle

nges

at

the

stat

e le

vel t

hat

resu

lted

in a

red

ucti

on o

f $5

.8 m

illio

n in

sta

te a

ppro

pria

tion

s to

the

Uni

vers

ity,

offs

et b

y $4

.9m

illio

n in

ca

pita

l ap

prop

riat

ion

fund

s th

at a

re u

sed

to s

uppo

rt o

pera

tion

s as

the

se e

xpen

ditu

res

are

belo

w t

he U

nive

rsit

y’s

capi

taliz

atio

n th

resh

old.

The

maj

orit

y of

the

decr

ease

in fi

scal

201

0 st

ate

appr

opri

atio

ns is

als

o du

e to

bud

get c

halle

nges

at

the

stat

e le

vel t

hat r

esul

ted

in a

dec

reas

e in

sta

te fu

ndin

g of

$12

.6 m

illio

n co

mbi

ned

wit

h a

decr

ease

from

the

prio

r ye

ar o

f $1

.3 m

illio

n in

cap

ital

app

ropr

iati

on f

unds

tha

t ar

e us

ed t

o su

ppor

t op

erat

ions

. Th

e U

nive

rsit

y's

stat

e su

ppor

ted

enro

llmen

ts (

FTE

) w

ere

11,7

62 f

orfis

cal

2011

. T

he a

ctua

l av

erag

e FT

E w

as 1

2,64

7 (t

he 8

85 a

ddit

iona

l FT

E a

re n

ot

supp

orte

d by

Sta

te d

olla

rs).

Cap

ital

app

ropr

iati

ons

are

reco

gniz

ed a

s re

venu

e w

hen

expe

ndit

ures

are

incu

rred

on

capi

tal p

roje

cts,

and

the

Uni

vers

ity

is

enti

tled

to

rece

ive

the

cash

. C

apit

al a

ppro

pria

tion

s de

crea

sed

by $

3.4

mill

ion

(-12

.5%

) w

hen

com

pari

ng f

isca

l 20

11 t

o fis

cal

2010

due

to

a re

duct

ion

in c

apit

al f

unds

rec

eive

d as

som

e sm

alle

r ca

pita

l pr

ojec

ts w

ere

com

plet

ed i

n fis

cal

2010

, su

ch a

s im

prov

emen

ts to

Wils

on L

ibra

ry a

nd P

arks

Hal

l. Th

is r

even

ue s

ourc

e in

crea

sed

$12.

8 m

illio

n (8

6.1%

) du

ring

fisc

al

2010

com

pare

d to

fis

cal

2009

pri

mar

ily d

ue t

o fu

nds

rece

ived

to

fund

the

Mill

er H

all

reno

vati

on.

No

sign

ifica

nt n

ew

proj

ects

wer

e st

arte

d du

ring

fisc

al 2

009.

Oth

er c

apit

al r

even

ue is

the

reve

nue

earn

ed fr

om th

e St

ate

of W

ashi

ngto

n N

orm

al S

choo

l Per

man

ent F

und.

The

dec

reas

e of

$78

5 th

ousa

nd (

-19.

6%)

whe

n co

mpa

ring

fisc

al 2

011

to fi

scal

201

0 is

due

to r

educ

ed in

vest

men

t ear

ning

s fr

om th

e St

ate

Trea

sure

r. T

he in

crea

se o

f $1

.5 m

illio

n (5

6.7%

) in

fis

cal 2

010

com

pare

d to

fis

cal 2

009

is d

ue t

o ad

diti

onal

fun

ds h

eld

by

the

Stat

e Tr

easu

rer

in th

e N

orm

al S

choo

l Per

man

ent F

und.

The

follo

win

g gr

aphs

illu

stra

te r

even

ues

by s

ourc

e fo

r th

e ye

ars

ende

d Ju

ne 3

0, 2

011

and

2010

:

WE

STE

RN

WA

SHIN

GT

ON

UN

IVE

RSI

TY

MA

NA

GE

ME

NT

’S D

ISC

USS

ION

AN

D A

NA

LY

SIS

June

30,

201

1 an

d 20

10

Una

udit

ed –

See

Acc

ompa

nyin

g A

ccou

ntan

t’s R

epor

t10Th

e U

nive

rsit

y’s

oper

atin

g ex

pens

es in

crea

sed

by $

6.2

mill

ion

(2.6

%)

whe

n co

mpa

ring

fisc

al 2

011

to fi

scal

201

0 an

d $5

.4m

illio

n (2

.3%

) in

fis

cal

2010

com

pare

d to

fis

cal

200

9. A

sig

nific

ant

port

ion

of t

he f

isca

l 20

11 a

nd f

isca

l 20

10 i

ncre

ases

re

late

tobe

nefit

s ex

pens

e, w

hich

incr

ease

d $2

.5 m

illio

n (7

.3%

) in

fisc

al 2

011

and

$2.5

mill

ion

(7.8

%)

in fi

scal

201

0 du

e to

a

$105

and

$18

4 pe

r m

onth

incr

ease

in th

e em

ploy

er c

ost f

or th

e st

ate

bene

fits

pac

kage

in e

ach

fisca

l yea

r.

Supp

lies

and

purc

hase

d an

d pe

rson

al s

ervi

ces

incr

ease

d $2

.0m

illio

n(4

.3%

) whe

n co

mpa

ring

fisc

al 2

011

to fi

scal

201

0 du

e to

the

pur

chas

ing

of n

on-c

apit

aliz

ed f

urni

shin

gs a

nd e

quip

men

t ne

cess

ary

for

the

Mill

er H

all

and

Buc

hana

n To

wer

s bu

ildin

gs. S

uppl

ies

and

purc

hase

d an

d pe

rson

al s

ervi

ces

incr

ease

d sl

ight

ly b

y $9

6th

ousa

nd (

0.2%

) be

twee

n fis

cal 2

010

and

fisca

l 200

9. D

epre

ciat

ion

expe

nse

incr

ease

d $1

.7 m

illio

n (1

0.6%

) ov

er fi

scal

201

0 an

d $1

.8 m

illio

n (1

2.0%

) ov

er fi

scal

20

09 a

s ad

diti

onal

cap

ital

ass

ets

wer

e co

mpl

eted

and

dep

reci

ated

.

C-5

WE

STE

RN

WA

SHIN

GT

ON

UN

IVE

RSI

TY

MA

NA

GE

ME

NT

’S D

ISC

USS

ION

AN

D A

NA

LY

SIS

June

30,

201

1 an

d 20

10

Una

udit

ed–

See

Acc

ompa

nyin

g A

ccou

ntan

t’s R

epor

t11

The

follo

win

g gr

aphs

illu

stra

te e

xpen

ses

by n

atur

al c

lass

ifica

tion

for

the

year

s en

ded

June

30,

201

1an

d 20

10:

WE

STE

RN

WA

SHIN

GT

ON

UN

IVE

RSI

TY

MA

NA

GE

ME

NT

’S D

ISC

USS

ION

AN

D A

NA

LY

SIS

June

30,

201

1 an

d 20

10

Una

udit

ed –

See

Acc

ompa

nyin

g A

ccou

ntan

t’s R

epor

t12O

per

atin

g L

oss

The

Uni

vers

ity’

s op

erat

ing

loss

es w

ere

$76.

3m

illio

n in

fisc

al 2

011,

a d

ecre

ase

of $

5.5

mill

ion

(-6.

7%)

from

fisc

al 2

010,

and

$8

1.8

mill

ion

in f

isca

l 20

10, a

dec

reas

e of

$1.

8 m

illio

n (-

2.2%

) fr

om f

isca

l 20

09.

O

vera

ll op

erat

ing

reve

nues

inc

reas

ed

$11.

7 m

illio

n (7

.5%

) du

ring

fisc

al 2

011

and

$7.2

mill

ion

(4.9

%)

duri

ng fi

scal

201

0, w

hile

ope

rati

ng e

xpen

ditu

res

incr

ease

d in

fisc

als

2011

and

201

0 by

$6.

2m

illio

n (2

.6%

) and

$5.

4m

illio

n (2

.3%

), r

espe

ctiv

ely.

GA

SB s

tand

ards

req

uire

that

Sta

te a

ppro

pria

tion

s an

d Fe

dera

l Pel

l gra

nts

are

clas

sifie

d as

non

oper

atin

g re

venu

es, t

here

by

crea

ting

the

sig

nific

ant

oper

atin

g lo

ss.

If t

hese

rev

enue

s w

ere

clas

sifie

d as

ope

rati

ng, t

he o

pera

ting

gai

n w

ould

be

$1.3

mill

ion

in fi

scal

201

1 an

d th

e op

erat

ing

loss

wou

ld h

ave

been

$5.

7 m

illio

n in

fisc

al 2

010.

Eco

nom

ic F

acto

rs T

hat

Wil

l Aff

ect

the

Fu

ture

D

urin

g th

e ne

xt b

ienn

ium

, Sta

te s

uppo

rt f

or o

pera

tion

s w

ill a

vera

ge 3

5%of

the

Uni

vers

ity’

s op

erat

ing

budg

et, w

ith

the

bala

nce

of t

he o

pera

tion

al r

equi

rem

ents

rel

ying

on

tuit

ion

incr

ease

s. B

egin

ning

wit

h fis

cal

2012

, th

e le

gisl

atur

e ha

s pr

ovid

ed t

he B

oard

of

Trus

tees

(th

e B

oard

) w

ith

tuit

ion

sett

ing

auth

orit

y fo

r al

l st

uden

t ca

tego

ries

at

the

Uni

vers

ity:

re

side

nt u

nder

grad

uate

, no

n-re

side

nt u

nder

grad

uate

, re

side

nt g

radu

ate,

and

non

-res

iden

t gr

adua

te.

The

legi

slat

ure

defin

es “

tuit

ion”

as

the

tuit

ion

oper

atin

g fe

e an

d th

e ca

pita

l bui

ldin

g fe

e. T

he o

pera

ting

fee

con

trib

utes

to

the

day-

to-d

ay

oper

atio

ns o

f the

uni

vers

ity

and

supp

orts

the

Uni

vers

ity’

s op

erat

ing

budg

et p

lans

.

The

2011

-201

3 op

erat

ing

budg

et i

nclu

des

tuit

ion

incr

ease

s of

16.

0% p

er y

ear

for

the

bien

nium

, an

incr

ease

of

$892

per

ye

ar f

or r

esid

ent

unde

rgra

duat

e st

uden

ts.

The

Uni

vers

ity

will

als

o in

crea

se n

on-r

esid

ent

and

grad

uate

tui

tion

rat

es b

y a

sim

ilar

amou

nt a

s th

e re

side

nt u

nder

grad

uate

. In

crea

ses

in S

tate

and

Fed

eral

fin

anci

al a

id a

nd t

he e

xpan

sion

of F

eder

al

educ

atio

n ta

x cr

edit

s ar

e av

aila

ble

to s

tude

nts

and

can

be u

sed

to o

ffse

t th

e tu

itio

n in

crea

se.

The

Stat

e al

so in

crea

sed

the

Stat

e N

eed

Gra

nt p

rogr

am to

hel

p lo

wer

and

mid

dle

inco

me

fam

ilies

.

App

roxi

mat

ely

81.0

% o

f th

e op

erat

ing

budg

et is

com

mit

ted

to c

ompe

nsat

ion-

rela

ted

expe

ndit

ures

. The

dec

reas

e in

sta

te

supp

ort

has

resu

lted

in

posi

tion

elim

inat

ions

tha

t ar

e pe

ndin

g fo

r fis

cal

2012

, th

e m

ajor

ity

of w

hich

are

fro

m v

acan

t po

siti

ons.

Red

uced

rev

enue

pro

ject

ions

at th

e st

ate

leve

l may

res

ult i

n fu

rthe

r bu

dget

red

ucti

ons

in fi

scal

s 20

12 a

nd 2

013.

C-6

IND

EPE

ND

EN

T A

UD

ITO

R’S

RE

POR

T

In

sura

nce

Bui

ldin

g, P

.O. B

ox 4

0021

� O

lym

pia,

Was

hing

ton

9850

4-00

21 �

(360

) 902

-037

0 �

TD

D R

elay

(800

) 833

-638

8 FA

X (3

60) 7

53-0

646 �

http

://w

ww

.sao

.wa.

gov

Nov

embe

r 8, 2

011

Boar

d of

Tru

stee

s

Wes

tern

Was

hing

ton

Uni

vers

ity

Bellin

gham

, Was

hing

ton

We

have

aud

ited

the

acco

mpa

nyin

g fin

anci

al s

tate

men

ts o

f the

bus

ines

s-ty

pe a

ctiv

ities

and

the

disc

rete

ly p

rese

nted

com

pone

nt u

nit o

f Wes

tern

Was

hing

ton

Uni

vers

ity a

s of

and

for

the

year

ende

d Ju

ne 3

0, 2

011,

whi

ch c

olle

ctiv

ely

com

pris

e th

e U

nive

rsity

’s b

asic

fina

ncia

l sta

tem

ents

as

liste

d in

the

tab

le o

f co

nten

ts.

The

se f

inan

cial

sta

tem

ents

are

the

res

pons

ibilit

y of

the

Uni

vers

ity’s

m

anag

emen

t.

Our

re

spon

sibi

lity

is

to

expr

ess

opin

ions

on

th

ese

finan

cial

stat

emen

ts b

ased

on

our

audi

t. W

e di

d no

t au

dit

the

finan

cial

sta

tem

ents

of

the

Wes

tern

Was

hing

ton

Uni

vers

ity F

ound

atio

n, a

dis

cret

ely

pres

ente

d co

mpo

nent

uni

t. T

hose

fin

anci

al

stat

emen

ts w

ere

audi

ted

by o

ther

aud

itors

who

se re

port

ther

eon

has

been

furn

ishe

d to

us,

and

our

opin

ion,

ins

ofar

as

it re

late

s to

the

am

ount

s in

clud

ed i

n th

e ac

com

pany

ing

finan

cial

stat

emen

ts, i

s ba

sed

on th

e re

port

of th

e ot

her

audi

tors

. Th

e ba

sic

finan

cial

sta

tem

ents

of t

he

Uni

vers

ity a

s of

Jun

e 30

, 201

0, w

ere

audi

ted

by o

ther

aud

itors

who

se r

epor

t dat

ed N

ovem

ber

15, 2

010,

exp

ress

ed u

nqua

lifie

d op

inio

ns o

n th

e U

nive

rsity

’s fi

nanc

ial s

tate

men

ts a

nd d

iscr

etel

y

pres

ente

d co

mpo

nent

uni

t.

We

cond

ucte

d ou

r aud

it in

acc

orda

nce

with

aud

iting

sta

ndar

ds g

ener

ally

acc

epte

d in

the

Uni

ted

Sta

tes

of A

mer

ica.

Th

ose

stan

dard

s re

quire

tha

t w

e pl

an a

nd p

erfo

rm t

he a

udit

to o

btai

n

reas

onab

le a

ssur

ance

abo

ut w

heth

er th

e fin

anci

al s

tate

men

ts a

re fr

ee o

f mat

eria

l mis

stat

emen

t.

An

audi

t inc

lude

s ex

amin

ing,

on

a te

st b

asis

, evi

denc

e su

ppor

ting

the

amou

nts

and

disc

losu

res

in th

e fin

anci

al s

tate

men

ts.

An

audi

t als

o in

clud

es a

sses

sing

the

acco

untin

g pr

inci

ples

use

d an

d

sign

ifica

nt e

stim

ates

mad

e by

man

agem

ent,

as w

ell a

s ev

alua

ting

the

over

all f

inan

cial

sta

tem

ent

pres

enta

tion.

W

e be

lieve

that

our

aud

it an

d th

e re

port

of o

ther

aud

itors

pro

vide

a r

easo

nabl

e

basi

s fo

r our

opi

nion

s.

Was

hing

ton

Stat

e A

udito

r B

rian

Sonn

tag

IND

EPE

ND

EN

T A

UD

ITO

R’S

RE

POR

T

In

sura

nce

Bui

ldin

g, P

.O. B

ox 4

0021

� O

lym

pia,

Was

hing

ton

9850

4-00

21 �

(360

) 902

-037

0 �

TD

D R

elay

(800

) 833

-638

8 FA

X (3

60) 7

53-0

646 �

http

://w

ww

.sao

.wa.

gov

As

disc

usse

d in

Not

e 1,

the

finan

cial

sta

tem

ents

of W

este

rn W

ashi

ngto

n U

nive

rsity

are

inte

nded

to p

rese

nt t

he f

inan

cial

pos

ition

, an

d th

e ch

ange

s in

fin

anci

al p

ositi

on,

and,

whe

re a

pplic

able

,

cash

flow

s of

onl

y th

at p

ortio

n of

the

gove

rnm

enta

l act

iviti

es a

nd b

usin

ess-

type

act

iviti

es o

f the

stat

e of

Was

hing

ton

that

is a

ttrib

utab

le to

the

trans

actio

ns o

f the

Uni

vers

ity.

They

do

not p

urpo

rt

to,

and

do n

ot,

pres

ent

fairl

y th

e fin

anci

al p

ositi

on o

f th

e st

ate

of W

ashi

ngto

n as

of

June

30,

2011

, the

cha

nges

in it

s fin

anci

al p

ositi

on, o

r w

here

app

licab

le, i

ts c

ash

flow

s fo

r th

e ye

ar th

en

ende

d in

con

form

ity w

ith a

ccou

ntin

g pr

inci

ples

gen

eral

ly a

ccep

ted

in t

he U

nite

d S

tate

s of

Am

eric

a.

In o

ur o

pini

on,

base

d on

our

aud

it an

d th

e re

port

of o

ther

aud

itors

, th

e fin

anci

al s

tate

men

ts

refe

rred

to a

bove

pre

sent

fairl

y, in

all

mat

eria

l res

pect

s, th

e re

spec

tive

finan

cial

pos

ition

of t

he

busi

ness

-type

act

iviti

es a

nd t

he d

iscr

etel

y pr

esen

ted

com

pone

nt u

nit

of W

este

rn W

ashi

ngto

n

Uni

vers

ity a

s of

Jun

e 30

, 20

11,

and

the

resp

ectiv

e ch

ange

s in

fin

anci

al p

ositi

on a

nd,

whe

re

appl

icab

le, c

ash

flow

s th

ereo

f for

the

year

then

end

ed in

con

form

ity w

ith a

ccou

ntin

g pr

inci

ples

gene

rally

acc

epte

d in

the

Uni

ted

Sta

tes

of A

mer

ica.

The

man

agem

ent’s

dis

cuss

ion

and

anal

ysis

on

page

s 5

thro

ugh

12, i

s no

t a re

quire

d pa

rt of

the

basi

c fin

anci

al s

tate

men

ts b

ut i

s su

pple

men

tary

inf

orm

atio

n re

quire

d by

the

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ernm

enta

l

Acc

ount

ing

Sta

ndar

ds B

oard

. W

e ha

ve a

pplie

d ce

rtain

lim

ited

proc

edur

es,

whi

ch c

onsi

sted

prin

cipa

lly o

f inq

uirie

s of

man

agem

ent r

egar

ding

the

met

hods

of m

easu

rem

ent a

nd p

rese

ntat

ion

of t

he r

equi

red

supp

lem

enta

ry i

nfor

mat

ion.

H

owev

er,

we

did

not

audi

t th

e in

form

atio

n an

d

expr

ess

no o

pini

on o

n it.

Sin

cere

ly,

BR

IAN

SO

NN

TAG

, CG

FM

STAT

E AU

DIT

OR

Insu

ranc

e B

uild

ing,

P.O

. Box

400

21 �

Oly

mpi

a, W

ashi

ngto

n 98

504-

0021

� (3

60) 9

02-0

370

� T

DD

Rel

ay (8

00) 8

33-6

388

FAX

(360

) 753

-064

6 �

http

://w

ww

.sao

.wa.

gov

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ing

For

finan

cial

rep

ortin

g pu

rpos

es,

the

Uni

vers

ity i

s co

nsid

ered

a

spec

ial-

purp

ose

gove

rnm

ent

enga

ged

only

in

bu

sine

ss-t

ype

acti

vitie

s.

A

ccor

ding

ly,

the

Uni

vers

ity’s

fina

ncia

l sta

tem

ents

hav

e be

en p

rese

nted

us

ing

the

econ

omic

res

ourc

es m

easu

rem

ent f

ocus

and

th

e ac

crua

l ba

sis

of a

ccou

ntin

g.

Und

er t

he a

ccru

al

basi

s,

reve

nues

ar

e re

cogn

ized

w

hen

earn

ed,

and

expe

nses

are

rec

orde

d w

hen

an o

blig

atio

n ha

s be

en

incu

rred

. A

ll in

tra-

agen

cy t

rans

actio

ns h

ave

been

el

imin

ated

. T

he U

nive

rsity

has

ele

cted

not

to

appl

y an

y FA

SB p

rono

unce

men

ts i

ssue

d af

ter

Nov

embe

r 30

, 198

9.

New

Acc

ount

ing

Pron

ounc

emen

tsO

n Ju

ly

1,

2009

, th

e U

nive

rsity

ad

opte

d G

ASB

St

atem

ent

No.

51

, “A

ccou

ntin

g an

d Fi

nanc

ial

Rep

orti

ng

for

Inta

ngib

le

Ass

ets”

. Th

is

pron

ounc

emen

t inc

lude

s pr

ovis

ions

that

all

inta

ngib

le

asse

ts

not

spec

ifica

lly

excl

uded

by

its

sc

ope

be

clas

sifie

d as

cap

ital

asse

ts.

The

Uni

vers

ity h

as n

o ad

ditio

nal

capi

tal

asse

ts

resu

lting

fr

om

this

pr

onou

ncem

ent.

On

July

1,

20

09,

the

Uni

vers

ity

adop

ted

GA

SB

Stat

emen

t N

o.

53,

“Acc

ount

ing

and

Fina

ncia

l R

epor

ting

fo

r D

eriv

ativ

e In

stru

men

ts”.

This

pr

onou

ncem

ent

addr

esse

s th

e re

cogn

ition

, m

easu

rem

ent,

and

disc

losu

re

of

info

rmat

ion

rega

rdin

g de

riva

tive

inst

rum

ents

ent

ered

into

by

stat

e an

d lo

cal g

over

nmen

ts.

The

Uni

vers

ity d

oes

not h

ave

any

deri

vati

ve i

nstr

umen

ts w

ithin

the

sco

pe o

f th

is

stan

dard

.

On

July

1,

20

10,

the

Uni

vers

ity

adop

ted

GA

SB

Stat

emen

t N

o.

54,

“Fun

d B

alan

ce

Rep

ortin

g an

d

C-11

WE

STE

RN

WA

SHIN

GT

ON

UN

IVE

RSI

TY

NO

TE

S T

O T

HE

FIN

AN

CIA

L S

TA

TE

ME

NT

S Ju

ne 3

0, 2

011

and

2010

23

Gov

ernm

enta

l Fu

nd

Type

D

efin

ition

s”.

This

pr

onou

ncem

ent

esta

blis

hes

fund

ba

lanc

e cl

assi

ficat

ions

bas

ed p

rim

arily

on

the

exte

nt t

o w

hich

a

gove

rnm

ent

is

boun

d to

ob

serv

e co

nstr

aint

s im

pose

d up

on t

he u

se o

f the

res

ourc

es r

epor

ted.

The

re

port

ed f

und

bala

nces

of

the

Uni

vers

ity

did

not

chan

ge b

ased

on

this

pro

noun

cem

ent.

On

July

1,

20

10,

the

Uni

vers

ity

adop

ted

GA

SB

Stat

emen

t N

o. 5

9, “

Fina

ncia

l Ins

trum

ents

Om

nibu

s”.

This

pr

onou

ncem

ent

impr

oves

th

e co

nsis

tenc

y of

in

vest

men

t m

easu

rem

ents

th

at

are

repo

rted

by

pe

nsio

n an

d ot

her

post

empl

oym

ent

bene

fit

plan

s.

The

Uni

vers

ity f

inan

cial

sta

tem

ents

did

not

chan

ge

base

d on

this

pro

noun

cem

ent.

Oth

er A

ccou

nti

ng

Pol

icie

s

Cas

h,C

ash

Equ

ival

ents

and

Inv

estm

ents

Cas

h an

d ca

sh e

quiv

alen

ts i

nclu

de c

ash

on h

and,

ba

nk

dem

and

depo

sits

, an

d de

posi

ts

wit

h th

e W

ashi

ngto

n St

ate

Loca

l G

over

nmen

t In

vest

men

t Po

ol (

LGIP

).

Cas

h an

d ca

sh e

quiv

alen

ts t

hat

are

held

wit

h th

e in

tent

to

fund

Uni

vers

ity

oper

atio

ns

are

clas

sifi

ed a

s cu

rren

t as

sets

alo

ng w

ith

oper

atin

g fu

nds

inve

sted

in

the

LGIP

. C

ash,

cas

h eq

uiva

lent

s,

and

inve

stm

ents

th

at

repr

esen

t un

spen

t bo

nd

proc

eeds

or

are

held

wit

h th

e in

tent

to

fund

cap

ital

pr

ojec

ts

are

clas

sifie

d as

no

ncur

rent

as

sets

. E

ndow

men

t in

vest

men

ts

are

also

cl

assi

fied

as

no

ncur

rent

ass

ets.

Th

e U

nive

rsit

y re

cord

s al

l ca

sh,

cash

equ

ival

ent,

and

inve

stm

ents

at

amor

tize

d co

st,

whi

ch a

ppro

xim

ates

fair

val

ue.

The

Uni

vers

ity c

ombi

nes

unre

stri

cted

cas

h op

erat

ing

fund

s fr

om

all

depa

rtm

ents

in

to

an

inte

rnal

in

vest

men

t po

ol, t

he i

ncom

e fr

om w

hich

is

allo

cate

d on

a p

ropo

rtio

nal b

asis

. Th

e in

tern

al in

vest

men

t poo

l is

com

pris

ed o

f ca

sh, c

ash

equi

vale

nts,

cer

tific

ates

of

depo

sit,

U.S

. Tre

asur

ies

and

U.S

. Age

ncy

secu

ritie

s.

Acc

ount

s R

ecei

vabl

eA

ccou

nts

rece

ivab

le c

onsi

sts

of tu

ition

and

fee

char

ges

to s

tude

nts

and

auxi

liary

ent

erpr

ise

serv

ices

pro

vide

d to

st

uden

ts,

facu

lty

and

staf

f.

It

also

in

clud

es

amou

nts

due

from

the

Fede

ral g

over

nmen

t, St

ate

and

loca

l go

vern

men

ts,

or p

riva

te s

ourc

es,

in c

onne

ctio

n w

ith

reim

burs

emen

t of

allo

wab

le e

xpen

ditu

res

mad

e pu

rsua

nt t

o th

e U

nive

rsity

’s g

rant

s an

d co

ntra

cts.

A

ccou

nts

rece

ivab

le

are

show

n ne

t of

es

timat

ed

unco

llect

ible

am

ount

s.

Inve

ntor

ies

Inve

ntor

ies

are

carr

ied

at t

he lo

wer

of

cost

or

mar

ket

valu

e.

Capi

tal A

sset

sLa

nd,

build

ings

and

equ

ipm

ent

are

reco

rded

at

cost

or

, if a

cqui

red

by g

ift, a

t fai

r m

arke

t val

ue o

n th

e da

te

of

the

gift

.

For

equi

pmen

t, th

e U

nive

rsity

’s

capi

taliz

atio

n po

licy

incl

udes

all

item

s w

ith a

uni

t cos

t of

$5,

000

or m

ore

and

an e

stim

ated

use

ful

life

of

grea

ter

than

one

yea

r.

Ren

ovat

ions

to

build

ings

, in

fras

truc

ture

, an

d la

nd

impr

ovem

ents

th

at

sign

ifica

ntly

inc

reas

e th

e va

lue

or e

xten

d th

e us

eful

lif

e of

the

str

uctu

re a

re c

apita

lized

. R

outin

e re

pair

s an

d m

aint

enan

ce a

re c

harg

ed to

ope

rati

ng e

xpen

se in

th

e ye

ar in

whi

ch t

he e

xpen

se w

as in

curr

ed.

Inte

rest

ex

pens

e in

curr

ed

duri

ng

capi

tal

cons

truc

tion

is

ca

pita

lized

as

part

of

the

build

ing

cost

. D

urin

g fis

cal

2011

an

d fis

cal

2010

, $1

42,6

77

and

$176

,208

in

co

nstr

uctio

n re

late

d in

tere

st

was

ca

pita

lized

, re

spec

tivel

y.

Dep

reci

atio

n is

com

pute

d us

ing

the

stra

ight

lin

e m

etho

d ov

er t

he e

stim

ated

use

ful

lives

of

the

ass

ets,

gen

eral

ly 4

0 to

50

year

s fo

r bu

ildin

gs,

20

to

25

year

s fo

r in

fras

truc

ture

an

d la

nd

impr

ovem

ents

, 15

yea

rs f

or l

ibra

ry r

esou

rces

, and

5

to 7

yea

rs fo

r eq

uipm

ent.

Bon

d Pr

emiu

ms/

Dis

coun

ts a

nd Is

suan

ce C

osts

B

ond

prem

ium

s/di

scou

nts

and

issu

ance

cos

ts a

re

defe

rred

and

am

orti

zed

over

the

ter

m o

f th

e bo

nds

usin

g th

e ef

fect

ive

inte

rest

met

hod.

Th

e re

mai

ning

ba

lanc

es o

f bon

d pr

emiu

ms/

disc

ount

s ar

epr

esen

ted

in t

he S

tate

men

ts o

f N

et A

sset

s ne

t of

the

fac

e am

ount

of

bond

s pa

yabl

e.B

ond

issu

ance

cos

ts a

re

show

n as

oth

er a

sset

s on

the

Sta

tem

ents

of

Net

A

sset

s.

Def

erre

d R

even

ues

Def

erre

d re

venu

es o

ccur

whe

n re

venu

es h

ave

been

co

llect

ed in

adv

ance

for

tui

tion

and

fee

s an

d ce

rtai

n au

xilia

ry a

ctiv

itie

s pr

ior

to t

he e

nd o

f th

e fis

cal y

ear,

but

rela

te t

ose

rvic

es t

o be

pro

vide

d in

the

follo

win

g fis

cal y

ear.

Net

Ass

ets

The

Uni

vers

ity’s

net

ass

ets

are

clas

sifie

d as

follo

ws:

Inve

sted

in c

apita

l ass

ets,

net

of r

elat

ed d

ebt

This

rep

rese

nts

the

Uni

vers

ity’s

tot

al i

nves

tmen

t in

ca

pita

l as

sets

, ne

t of

out

stan

ding

deb

t ob

ligat

ions

re

late

d to

thos

e ca

pita

l ass

ets.

To

the

exte

nt d

ebt h

as

been

incu

rred

,but

not

yet

exp

ende

d fo

r ca

pita

l ass

ets,

su

ch a

mou

nts

are

not i

nclu

ded

as a

com

pone

nt o

f

capi

tal

asse

tsbu

t ar

e in

clud

ed a

s a

com

pone

nt o

f re

stri

cted

exp

enda

ble

net a

sset

s de

scri

bed

belo

w.

Res

tric

ted

net a

sset

s,ex

pend

able

Res

tric

ted

expe

ndab

le n

et a

sset

s in

clud

e re

sour

ces

in

whi

ch

the

Uni

vers

ity

is

lega

lly

or

cont

ract

ually

WE

STE

RN

WA

SHIN

GT

ON

UN

IVE

RSI

TY

NO

TE

S T

O T

HE

FIN

AN

CIA

L S

TA

TE

ME

NT

S Ju

ne 3

0, 2

011

and

2010

24

oblig

ated

to

spen

d in

acc

orda

nce

with

res

tric

tions

im

pose

d by

ext

erna

l thi

rd p

artie

s.

Res

tric

ted

net a

sset

s,no

nexp

enda

ble

Non

expe

ndab

le

rest

rict

ed

net

asse

ts

cons

ist

of

endo

wm

ent a

nd s

imila

r ty

pe fu

nds

in w

hich

don

ors

or

othe

r ou

tsid

e so

urce

s ha

ve s

tipul

ated

, as

a co

nditi

on

of t

he g

ift i

nstr

umen

t, th

at t

he p

rinc

ipal

is

to b

e m

aint

aine

d in

viol

ate

and

in p

erpe

tuit

y, a

nd i

nves

ted

for

the

purp

ose

of

prod

ucin

g pr

esen

t an

d fu

ture

in

com

e, w

hich

may

eith

er b

e ex

pend

ed o

r ad

ded

to

prin

cipa

l.U

nres

tric

ted

net a

sset

sU

nres

tric

ted

net

asse

ts r

epre

sent

res

ourc

es d

eriv

ed

from

stu

dent

tui

tion

and

fee

s, S

tate

appr

opri

atio

ns,

and

sale

s an

d se

rvic

es o

f ed

ucat

iona

l de

part

men

ts

and

auxi

liary

ent

erpr

ises

. T

hese

res

ourc

es a

re u

sed

for

tran

sact

ions

re

latin

g to

th

e ed

ucat

iona

l an

d ge

nera

l ope

ratio

ns o

f the

Uni

vers

ity, a

nd m

ay b

e us

ed

at t

he d

iscr

etio

n of

the

gov

erni

ng b

oard

to

mee

t ex

pens

es.

Th

ese

reso

urce

s al

so

incl

ude

auxi

liary

en

terp

rise

s, w

hich

are

sub

stan

tially

sel

f-su

ppor

ting

activ

ities

tha

t pr

ovid

e se

rvic

es f

or s

tude

nts,

fac

ulty

an

d st

aff.

Cla

ssifi

catio

n of

Rev

enue

san

d E

xpen

ses

The

Uni

vers

ity

has

clas

sifie

d its

re

venu

esan

d ex

pens

es

as

eith

er

oper

atin

g or

no

nope

ratin

gac

cord

ing

to th

e fo

llow

ing

crite

ria:

Ope

rati

ng r

even

ues

Ope

ratin

g re

venu

es i

nclu

de a

ctiv

ities

tha

t ha

ve t

he

char

acte

rist

ics

of e

xcha

nge

tran

sact

ions

suc

h as

:(1

) st

uden

t tu

ition

and

fee

s, n

et o

f sc

hola

rshi

p di

scou

nts

and

allo

wan

ces,

(2)

sal

es a

nd s

ervi

ces

of a

uxili

ary

ente

rpri

ses,

(3)

mos

t Fe

dera

l, St

ate

and

loca

l gr

ants

an

d co

ntra

cts,

an

d (4

) in

tere

st

on

inst

ituti

onal

st

uden

t loa

ns.

Ope

ratin

g ex

pens

esO

pera

ting

exp

ense

s ar

e th

ose

cost

s in

curr

ed in

dai

ly

oper

atio

ns,

such

as

sala

ries

and

wag

es,

bene

fits

, sc

hola

rshi

ps a

nd f

ello

wsh

ips

expe

nses

, dep

reci

atio

n,

utili

ties

, and

sup

plie

s.

Non

oper

atin

g re

venu

esN

onop

erat

ing

reve

nues

inc

lude

act

iviti

es t

hat

have

th

e ch

arac

teri

stic

s of

non

-exc

hang

e tr

ansa

ctio

ns, s

uch

as S

tate

appr

opri

atio

ns,

Fede

ral

Pell

gran

t re

venu

ean

d in

vest

men

t inc

ome.

Incl

uded

in fi

scal

201

0 ar

e St

ate

App

ropr

iatio

ns o

ne-t

ime

Fede

ral

Rei

nves

tmen

t an

d R

ecov

ery

Act

stim

ulus

fund

s of

$8.

9 m

illio

n.

Non

oper

atin

g ex

pens

esN

onop

erat

ing

expe

nses

in

clud

e co

sts

rela

ted

to

finan

cing

or

inve

stin

gac

tivi

ties

suc

h as

int

eres

t on

in

debt

edne

ss.

Oth

er R

even

ues

Oth

er

reve

nues

in

clud

e ac

tivi

ties

th

at

have

th

e ch

arac

teri

stic

s of

non

-exc

hang

e tr

ansa

ctio

ns, s

uch

as

stat

e ca

pita

l ap

prop

riat

ions

an

d gi

fts

to

endo

wm

ents

.

Scho

lars

hip

Dis

coun

ts a

nd A

llow

ance

sSt

uden

t tu

itio

n an

d fe

e re

venu

es,

and

cert

ain

othe

rre

venu

es

from

st

uden

ts,

are

repo

rted

ne

t of

sc

hola

rshi

p di

scou

nts

and

allo

wan

ces

in

the

Stat

emen

ts o

f R

even

ues,

Exp

ense

s, a

nd C

hang

es i

n N

et A

sset

s. S

chol

arsh

ip d

isco

unts

and

allo

wan

ces

are

the

diff

eren

ce b

etw

een

the

stat

edch

arge

for

goo

ds

and

serv

ices

pro

vide

d by

the

Uni

vers

ity,

and

the

amou

nt t

hat

is p

aid

by s

tude

nts

and/

or t

hird

par

ties

mak

ing

paym

ents

on

the

stud

ents

’ be

half.

Ce

rtai

n go

vern

men

tal

gran

ts,

such

as

Pell

gran

ts,

and

othe

r Fe

dera

l, St

ate

or

non-

gove

rnm

enta

l pr

ogra

ms

are

reco

rded

as

ei

ther

op

erat

ing

or

nono

pera

ting

reve

nues

in th

e U

nive

rsity

’s fi

nanc

ial S

tate

men

ts.

To t

he e

xten

t th

at r

even

ues

from

suc

h pr

ogra

ms

are

used

to

satis

fy t

uitio

n an

d fe

es a

nd o

ther

stu

dent

ch

arge

s,th

e U

nive

rsity

has

rec

orde

d a

scho

lars

hip

disc

ount

and

allo

wan

ce.

Tax

Exe

mpt

ion

The

Uni

vers

ity

is a

tax-

exem

pt in

stru

men

talit

y of

the

Stat

e of

Was

hing

ton

orga

nize

d un

der

the

prov

isio

ns

of S

ecti

on 1

15(a

) of t

he I

nter

nal R

even

ue C

ode

and

is

exem

pt

from

Fe

dera

l in

com

e ta

xes

on

rela

ted

inco

me.

Rec

lass

ifica

tion

sC

erta

in

acco

unts

in

th

e pr

ior

year

fin

anci

al

stat

emen

ts h

ave

been

rec

lass

ified

for

com

para

tive

pu

rpos

es

to

conf

orm

to

th

e pr

esen

tati

on

in

the

curr

ent y

ear

fina

ncia

l sta

tem

ents

.

2.C

OM

PO

NE

NT

UN

IT

The

Foun

datio

n pr

esen

ts

info

rmat

ion

abou

t its

fin

anci

al p

ositi

on a

nd a

ctiv

ities

acc

ordi

ng to

the

follo

win

g th

ree

clas

ses

of n

et a

sset

s, d

epen

ding

on

the

exis

tenc

e an

d na

ture

of d

onor

res

tric

tion

s:

Unr

estr

icte

d ne

t ass

ets

Supp

ort r

ecei

ved

that

is n

ot s

ubje

ct to

don

or-i

mpo

sed

rest

rict

ions

and

ove

r w

hich

the

Boa

rd o

f Dir

ecto

rs h

as

disc

retio

nary

con

trol

is c

lass

ified

as

unre

stri

cted

.

C-12

WE

STE

RN

WA

SHIN

GT

ON

UN

IVE

RSI

TY

NO

TE

S T

O T

HE

FIN

AN

CIA

L S

TA

TE

ME

NT

S Ju

ne 3

0, 2

011

and

2010

25

Tem

pora

rily

res

tric

ted

net a

sset

sSu

ppor

t re

ceiv

ed

subj

ect

to

dono

r-im

pose

d us

e re

stri

ctio

ns o

r tim

e re

stri

ctio

ns th

at w

ill b

e m

et e

ither

th

roug

h ac

tion

s of

the

Fou

ndat

ion

or b

y th

e pa

ssag

e of

tim

e is

cla

ssifi

ed a

s te

mpo

rari

ly r

estr

icte

d.

In t

he

peri

od

dono

r re

stri

ctio

ns

are

met

, te

mpo

rari

ly

rest

rict

ed n

et a

sset

s ar

e re

clas

sifie

d to

unr

estr

icte

d ne

t as

sets

and

rep

orte

d in

the

sta

tem

ent

of a

ctiv

ities

as

net

ass

ets

rele

ased

from

res

tric

tions

.

Perm

anen

tly r

estr

icte

d ne

t ass

ets

Supp

ort

rece

ived

su

bjec

t to

do

nor-

impo

sed

rest

rict

ions

st

ipul

atin

g th

at

fund

s be

in

vest

ed

in

perp

etui

ty is

cla

ssifi

ed a

s pe

rman

ently

res

tric

ted.

In

ac

cord

ance

wit

h pu

rpos

es s

tipul

ated

by

the

dono

rs,

earn

ings

fro

m s

uch

fund

s m

ay b

e ei

ther

unr

estr

icte

d or

tem

pora

rily

res

tric

ted.

3.C

AS

HA

ND

CA

SH E

QU

IVA

LE

NT

S

The

Uni

vers

ity c

ombi

nes

unre

stri

cted

cas

h op

erat

ing

fund

s fr

om

all

depa

rtm

ents

in

to

an

inte

rnal

in

vest

men

t po

ol, t

he i

ncom

e fr

om w

hich

is

allo

cate

d to

the

dep

artm

ents

on

a pr

opor

tiona

l ba

sis.

Th

e in

tern

al i

nves

tmen

t po

ol i

s co

mpr

ised

of

cash

and

ca

sh e

quiv

alen

ts a

nd in

vest

men

ts.

Cash

and

cas

h eq

uiva

lent

s in

clud

e ca

sh o

n ha

nd, p

etty

ca

sh, c

hang

e fu

nds,

ban

k ba

lanc

es, a

nd fu

nds

held

in

the

Loca

l Gov

ernm

ent I

nves

tmen

t Poo

l (LG

IP).

Ban

k ba

lanc

es a

re i

nsur

ed b

y th

e Fe

dera

l D

epos

it

Insu

ranc

e Co

rpor

atio

n (F

DIC

) or

by

a co

llate

ral p

ool

adm

inis

tere

d by

th

e W

ashi

ngto

n Pu

blic

D

epos

it Pr

otec

tion

Com

mis

sion

(PD

PC).

The

LGIP

is c

ompa

rabl

e to

a R

ule

2a-7

mon

ey m

arke

t fu

nd

reco

gniz

ed

by

the

Secu

ritie

s an

d E

xcha

nge

Com

mis

sion

(17C

FR.2

70.2

a-7)

. R

ule

2a-7

fund

s ar

e lim

ited

to

high

qu

ality

ob

ligat

ions

w

ith

limite

d m

axim

um a

nd a

vera

ge m

atur

itie

s, th

e ef

fect

of w

hich

is

to m

inim

ize

both

mar

ket a

nd c

redi

t ris

k. T

he L

GIP

is

an

unra

ted

inve

stm

ent p

ool.

At

June

30,

201

1 an

d 20

10,

the

carr

ying

am

ount

of

cash

an

d ca

sh

equi

vale

nts

is

$37,

157,

067

and

$57,

129,

793,

res

pect

ivel

y.

The

se

bala

nces

inc

lude

re

stri

cted

cas

h an

d ca

sh e

quiv

alen

ts o

f $2

,055

,907

an

d $6

,044

,593

of

un

spen

t H

ousi

ng

and

Din

ing

Syst

em b

ond

proc

eeds

at

June

30,

201

1 an

d 20

10,

resp

ecti

vely

. T

he c

arry

ing

amou

nt o

f ca

sh a

nd c

ash

equi

vale

nts

appr

oxim

ates

the

mar

ket v

alue

.

4.IN

VE

STM

EN

TS

Inve

stm

ents

incl

ude

inte

rnal

ly p

oole

d ca

sh o

pera

ting

fund

s in

vest

ed i

n ce

rtifi

cate

s of

dep

osit

(CD

’s)

and

U.S

. Tr

easu

ry a

nd A

genc

y se

curi

ties,

ren

ewal

and

repl

acem

ent

fund

s,

unsp

ent

bond

pr

ocee

ds,

and

Uni

vers

ity e

ndow

men

t fun

ds.

The

cert

ifica

tes

of

depo

sit

held

in

th

e in

tern

al

inve

stm

ent

pool

are

ins

ured

by

the

(FD

IC)

or b

y a

colla

tera

l po

ol

adm

inis

tere

d by

th

e W

ashi

ngto

n Pu

blic

Dep

osit

Prot

ectio

n C

omm

issi

on (P

DPC

).Th

e U

nive

rsity

he

ld

$6,0

00,0

00

and

$18,

650,

063

of

cert

ifica

tes

of d

epos

its in

poo

led

inve

stm

ents

at

June

30

, 20

11 a

nd20

10,

resp

ectiv

ely.

U.S

. Tr

easu

ry a

nd

Age

ncy

secu

riti

es

are

rate

d A

AA

by

St

anda

rd

&

Poor

’s

and

Fitc

h an

d A

aa

by

Moo

dy’s

In

vest

ors

Serv

ice.

The

Uni

vers

ity h

eld

$35,

000,

000

and

$0of

U

.S. T

reas

ury

and

Age

ncy

secu

ritie

s in

the

inve

stm

ent

pool

at J

une

30, 2

011

and

2010

, res

pect

ivel

y.

The

Uni

vers

ity s

epar

atel

y in

vest

s th

e H

ousi

ng a

nd

Din

ing

Syst

em R

enew

al a

nd R

epla

cem

ent

fund

s.

As

of

June

30

, 20

11

and

2010

, th

e R

enew

al

and

Rep

lace

men

t fu

nds

of

$2,9

77,2

58

and

$2,8

12,1

69

wer

e se

para

tely

inve

sted

in C

D’s

.

Uni

vers

ity e

ndow

men

t fu

nds

are

inve

sted

und

er t

he

dire

ctio

n of

the

End

owm

ent

Inve

stm

ent

Com

mitt

ee.

The

com

mitt

ee

is

resp

onsi

ble

for

revi

ewin

g an

d re

com

men

ding

pol

icy

to d

efin

e in

vest

men

t ob

ject

ives

an

d al

low

able

inv

estm

ents

, m

onito

ring

inv

estm

ent

perf

orm

ance

s an

d so

cial

con

cern

s an

d re

com

men

ding

in

vest

men

ts,

inve

stm

ent

man

ager

s, a

nd/o

r m

utua

l fu

nds.

Eff

ecti

ve J

uly,

201

1 th

e un

iver

sity

end

owm

ent

fund

s ar

e in

vest

ed

in

acco

rdan

ce

with

W

este

rn

Was

hing

ton

Uni

vers

ity F

ound

atio

n po

licy

unde

r th

e di

rect

ion

of th

e Fo

unda

tion

Fin

ance

Com

mitt

ee.

End

owm

ent

fund

s ar

e co

mpr

ised

of

$5,6

08,0

43in

do

nor

rest

rict

ed a

nd u

nres

tric

ted

and

$4,2

48,5

81 in

qu

asi

endo

wm

ents

at

June

30,

201

1 an

d $4

,623

,294

in

don

or r

estr

icte

dan

d un

rest

rict

edan

d $3

,377

,967

in

qua

si e

ndow

men

ts a

t Jun

e 30

, 201

0.

Inte

rest

Rat

e R

isk

The

Uni

vers

ity m

anag

es it

s ex

posu

re to

fair

val

ue

loss

es in

the

inte

rnal

inve

stm

ent

pool

by

limit

ing

the

dura

tion

of it

s po

rtfo

lio t

o a

max

imum

of

1.82

yea

rs,

with

a ta

rget

of 1

.46

year

s.

End

owm

ent

fund

s ar

e in

vest

ed u

nder

End

owm

ent

Inve

stm

ent

Polic

y gu

idel

ines

. Th

ese

guid

elin

es

incl

ude

the

prim

ary

obje

ctiv

e of

ach

ievi

ng lo

ng-t

erm

gr

owth

usi

ng p

rude

nt i

nves

ting

prac

tices

and

do

not

limit

inve

stm

ent m

atur

ities

as

a m

eans

to m

anag

ing

inte

rest

rat

e ex

posu

re.

WE

STE

RN

WA

SHIN

GT

ON

UN

IVE

RSI

TY

NO

TE

S T

O T

HE

FIN

AN

CIA

L S

TA

TE

ME

NT

S Ju

ne 3

0, 2

011

and

2010

26

Con

cent

rati

on o

f Cre

dit R

isk

Con

cent

rati

on o

f cr

edit

ris

k fo

r in

vest

men

ts i

s th

e ri

sk o

f lo

ss a

ttri

buta

ble

to t

he m

agni

tude

of

an

inve

stm

ent

in a

sin

gle

issu

er.

The

Uni

vers

ity

does

no

t ha

ve a

form

al p

olic

y fo

r m

anag

ing

conc

entr

atio

n of

cre

dit

risk

in

the

inte

rnal

inv

estm

ent

pool

. Th

e

End

owm

ent

Inve

stm

ent

Polic

y lim

its

the

endo

wm

ent i

nves

tmen

ts to

no

mor

e th

an 5

.0%

of t

he

port

folio

for

a si

ngle

issu

er.

At J

une

30,2

011,

the

Uni

vers

ity

held

the

follo

win

gin

cas

h, c

ash

equi

vale

nts

and

inve

stm

ents

:

Fair

Wei

ghte

d A

vera

ge

Des

crip

tion

Val

ueM

atur

ity (i

n Y

ears

)

WW

U In

vest

men

t Poo

l:

Cas

h &

Cas

h Eq

uiva

lent

s35

,101

,160

$0.

003

T

ime

Cer

tific

ates

of D

epos

its (C

Ds)

6,00

0,00

00.

046

U

.S. T

reas

urie

s5,

000,

000

0.00

6

U.S

. Age

ncie

s30

,000

,000

0.72

2

WW

U E

ndow

men

t Fun

ds:

Cas

h &

cas

h eq

uiva

lent

s10

0,05

00.

003

Fix

ed in

com

e in

vest

men

ts:

U

.S. T

reas

urie

s27

1,75

95.

500

U

.S. A

genc

ies

279,

228

4.04

0

Oth

er fi

xed

inco

me

1,33

6,63

8n/

a E

quity

inve

stm

ents

6,33

2,45

6n/

a R

eal e

stat

e51

5,88

2n/

a A

ltern

ativ

e in

vest

men

ts1,

020,

611

n/a

Oth

er In

vest

men

ts:

Ren

ewal

and

Rep

lace

men

t Tim

e C

Ds

2,97

7,25

80.

030

Bon

d Pr

ocee

ds In

vest

ed in

LG

IP

2,05

5,90

70.

003

Mis

cella

neou

s1,

010

n/a

TO

TA

L C

ASH

AN

D IN

VES

TM

ENT

S90

,991

,959

$

C-13

WE

STE

RN

WA

SHIN

GT

ON

UN

IVE

RSI

TY

NO

TE

S T

O T

HE

FIN

AN

CIA

L S

TA

TE

ME

NT

S Ju

ne 3

0, 2

011

and

2010

27

At J

une

30, 2

010,

the

Uni

vers

ity

held

the

follo

win

gin

cas

h, c

ash

equi

vale

nts

and

inve

stm

ents

:

5.F

UN

DS

WIT

H S

TA

TE

TR

EA

SU

RE

R

This

acc

ount

repr

esen

tsth

e U

nive

rsity

's sh

are

of n

et

earn

ings

of

the

Stat

e of

Was

hing

ton

Nor

mal

Sch

ool

Perm

anen

t Fun

d an

d tu

ition

dis

trib

utio

ns, r

educ

ed b

y ex

pend

iture

s fo

r ca

pita

l pr

ojec

ts a

nd d

ebt

serv

ice

incu

rred

ov

er

the

year

s.Th

e N

orm

al

Scho

ol

Perm

anen

t Fu

nd, e

stab

lishe

d un

der

RCW

43.

79.1

60,

is a

per

man

ent

endo

wm

ent

fund

.E

arni

ngs

from

the

in

vest

men

t ar

e ei

ther

re

inve

sted

or

us

ed

for

the

bene

fit o

f C

entr

al W

ashi

ngto

n U

nive

rsity

, E

aste

rn

Was

hing

ton

Uni

vers

ity,

Wes

tern

W

ashi

ngto

n U

nive

rsity

, and

The

Eve

rgre

en S

tate

Col

lege

.

The

inve

stin

g ac

tiviti

es a

re t

he r

espo

nsib

ility

of

the

Was

hing

ton

Stat

eTr

easu

rer's

O

ffic

e.Th

e pr

imar

y

sour

ces

of

new

pr

inci

pal

for

the

Nor

mal

Sc

hool

Pe

rman

ent f

und

are

reve

nues

, pri

mar

ily ti

mbe

r sa

les,

fr

om c

erta

in S

tate

lan

ds.

The

Sta

te l

ands

inc

lude

10

0,00

0 ac

res

gran

ted

by

the

Uni

ted

Stat

es

gove

rnm

ent

for

stat

e no

rmal

sc

hool

s an

d ar

e m

anag

ed

by

the

Stat

e D

epar

tmen

t of

N

atur

al

Res

ourc

es.

The

Uni

vers

ity’s

ear

ning

san

d di

stri

butio

nson

the

fu

nd fo

r th

e ye

ars

endi

ngJu

ne 3

0, 2

011

and

2010

are

$3,2

29,4

26 a

nd $

4,01

4,90

7, r

espe

ctiv

ely,

whi

ch a

re

repo

rted

as

othe

r ca

pita

l rev

enue

.

Fair

Wei

ghte

d A

vera

ge

Des

crip

tion

Val

ueM

atur

ity (i

n Y

ears

)

WW

U In

vest

men

t Poo

l:

Cas

h &

Cas

h Eq

uiva

lent

s51

,085

,200

$0.

003

T

ime

Cer

tific

ates

of D

epos

its (C

Ds)

18,6

50,0

630.

145

WW

U E

ndow

men

t Fun

ds:

M

utua

l Fun

ds -

Mon

ey M

arke

t1,

011,

589

1.35

3

U.S

. Tre

asur

ies

1,08

4,63

15.

872

U

.S. A

genc

ies

1,24

7,06

02.

759

Eq

uity

Sec

uriti

es4,

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2010

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are

as

follo

ws:

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112

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$8,

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8.

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S

At J

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ted

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sing

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2011

2010

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374,

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$1,

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l ye

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ende

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land

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cap

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e 30

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15,2

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11

10.A

RT

CO

LL

EC

TIO

NS

The

Uni

vers

ity

has

seve

ral

colle

ctio

ns o

f ar

t th

at i

t do

es

not

capi

taliz

e.

Th

e O

utdo

or

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olle

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n is

a

publ

ic

art

colle

ctio

n di

spla

yed

thro

ugho

ut

the

enti

re

cam

pus.

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e ar

e al

so

colle

ctio

ns

of

19th

and

20th

cent

ury

prin

ts

and

draw

ings

, th

e W

hitt

ingt

on

Col

lect

ion

of

Asi

an

Cer

amic

s, a

nd th

e C

hair

Col

lect

ion.

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se c

olle

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adhe

re t

o th

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nive

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polic

y to

(a)

mai

ntai

n

them

for

pub

lic e

xhib

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duca

tion

, or

res

earc

h;

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prot

ect,

keep

un

encu

mbe

red,

ca

re

for,

an

d pr

eser

ve t

hem

; an

d (c

) re

quir

e pr

ocee

ds f

rom

the

ir

sale

to b

e us

ed to

acq

uire

oth

er c

olle

ctio

n it

ems.

The

U

nive

rsit

y’s

polic

y is

to

pe

rmit

co

llect

ions

m

aint

aine

d in

th

is

man

ner

to

be

char

ged

to

oper

atio

ns

at

the

tim

e of

pu

rcha

se

rath

er

than

ca

pita

lized

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11.

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MP

EN

SAT

ED

AB

SEN

CE

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The

accr

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leav

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lanc

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of

June

30,

201

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d 20

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re$7

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and

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res

pect

ivel

y.Th

is

cons

ists

of

un

used

va

cati

on

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e an

d co

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ory

time

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ed f

or e

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pt p

rofe

ssio

nals

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dcl

assi

fied

staf

f. I

t al

so i

nclu

des

a pe

rcen

tage

of

earn

ed

and

unus

ed

sick

le

ave

for

exem

pt

prof

essi

onal

s an

d cl

assi

fied

staf

f.

For

repo

rtin

g pu

rpos

es,

the

enti

re

bala

nce

of

accr

ued

leav

e is

co

nsid

ered

a c

urre

nt li

abili

ty.

In 2

004,

the

Uni

vers

ity b

egan

par

ticip

atin

g in

the

V

olun

tary

E

mpl

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Ben

efic

iary

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ssoc

iatio

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edic

al E

xpen

se P

lan

(VE

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P).

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pla

n is

a

post

-ret

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ent

med

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ex

pens

e re

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rsem

ent

acco

unt

avai

labl

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pro

fess

iona

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aff

empl

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th

e U

nive

rsity

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eV

EB

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EP

enab

les

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vers

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dep

osit

fund

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uiva

lent

to th

e ca

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of c

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TY

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CIA

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011

and

2010

31

Fund

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posi

ted

into

a V

EB

A-M

EP

acco

unt,

as w

ell a

s th

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rnin

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n th

e ac

coun

ts, a

re n

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ubje

ct to

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urin

g fis

cal

2011

and

fis

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, $34

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and

$77

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, res

pect

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ribu

ted

to V

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A

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the

Uni

vers

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n be

half

of e

mpl

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s.

12.

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TE

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AY

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LE

The

Uni

vers

ity f

inan

ces

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ain

land

and

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ent

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roug

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rtifi

cate

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par

ticip

atio

n is

sued

by

the

Was

hing

ton

Stat

eTr

easu

rer.

The

Uni

vers

ity’s

deb

t ser

vice

req

uire

men

ts fo

r th

ese

agre

emen

ts fo

r th

e ne

xt fi

ve y

ears

and

th

erea

fter

are

as

follo

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ear

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cipa

lIn

tere

st20

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f rev

enue

bon

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sued

by

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vers

ity f

or H

ousi

ng a

nd D

inin

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stem

fac

ilitie

s an

d th

e W

ade

Kin

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Cen

ter.

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tand

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ecifi

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ter

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und

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erat

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expe

nses

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ncip

al a

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tere

st, f

und

debt

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serv

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equi

red

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luti

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lace

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nd

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ret

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the

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ket.

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re

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re p

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ed t

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east

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bt

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tem

has

fund

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and

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ns

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new

al

and

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of

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bond

s.

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sing

and

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ing

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em h

as t

he f

ollo

win

g ou

tsta

ndin

g bo

nd is

sues

:

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es 2

009

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nd B

Rev

enue

Bon

ds w

ith i

nter

est

rate

s ra

ngin

g fr

om 3

.0%

to

7.4%

and

an

aggr

egat

e

face

val

ue o

f $1

4,01

0,00

0 at

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e 30

, 201

1, w

hich

is

repo

rted

net

of t

he o

rigi

nal i

ssue

pre

miu

m o

f $13

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.

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es 2

006

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enue

Bon

ds w

ith

an i

nter

est

rate

of

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nd a

n ag

greg

ate

face

val

ue o

f $7,

905,

000

at J

une

30,

2011

, w

hich

is

repo

rted

net

of

the

orig

inal

issu

epr

emiu

mof

$35

,971

.

Seri

es

2005

R

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ue

and

Ref

undi

ng

Bon

ds

with

in

tere

st r

ates

ran

ging

fro

m 3

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% t

o 4.

50%

and

an

aggr

egat

e fa

ce v

alue

of $

11,4

85,0

00 a

t Ju

ne 3

0, 2

011,

whi

ch i

s re

port

ed n

et o

f th

e un

amor

tized

ori

gina

l di

scou

ntan

dlo

ss o

n de

feas

ance

of $

874,

820.

Seri

es

2003

R

even

ue

and

Ref

undi

ng

Bon

ds

with

in

tere

st r

ates

ran

ging

fro

m 3

.30%

to

4.65

% a

nd a

n ag

greg

ate

face

val

ue o

f $10

,850

,000

at J

une

30, 2

011,

w

hich

is

repo

rted

net

of

the

unam

ortiz

ed o

rigi

nal

issu

e di

scou

ntan

d lo

ss o

n de

feas

ance

of $

126,

716.

Seri

es

1998

Ju

nior

Li

en

Rev

enue

an

d R

efun

ding

B

onds

with

inte

rest

rat

es r

angi

ng f

rom

4.4

% t

o 5.

5%

and

an a

ggre

gate

face

val

ue o

f $11

,605

,000

at J

une

WE

STE

RN

WA

SHIN

GT

ON

UN

IVE

RSI

TY

NO

TE

S T

O T

HE

FIN

AN

CIA

L S

TA

TE

ME

NT

S Ju

ne 3

0, 2

011

and

2010

32

30,

2011

, w

hich

is

repo

rted

net

of

the

unam

ortiz

ed

orig

inal

iss

ue p

rem

ium

and

loss

on

defe

asan

ce o

f $2

81,7

43?

Wad

e K

ing

Stud

ent

Rec

reat

ion

Cen

ter

Rev

enue

and

R

efun

ding

Bon

dsTh

e R

ecre

atio

n C

ente

r is

sued

the

Rev

enue

Bon

ds

Seri

es,

2002

, in

Fe

brua

ry 2

002.

Th

e bo

nds

bear

in

tere

st a

t ra

tes

of 4

% t

o 5%

and

hav

e an

agg

rega

te

face

val

ue o

f $24

,235

,000

at J

une

30, 2

011,

whi

ch is

re

port

ed

net

of

the

unam

ortiz

ed

orig

inal

is

sue

disc

ount

and

loss

on

defe

asan

ce o

f $30

0,39

5.

Adv

ance

Ref

undi

ngTh

e sc

hedu

led

liabi

litie

s as

of J

une

30, 2

011

and

2010

do

not

incl

ude

$11,

165,

000

and

10,7

25,0

00

resp

ectiv

ely,

of H

ousi

ng a

nd D

inin

g Sy

stem

rev

enue

bond

s w

hich

wer

e ad

vanc

ere

fund

ed in

Oct

ober

199

1 an

d M

ay 2

005.

In M

ay 2

004,

the

Wad

e K

ing

Stud

ent

Rec

reat

ion

Cen

ter

defe

ased

$94

5,00

0 of

rev

enue

bon

ds.

The

outs

tand

ing

bala

nces

are

$79

0,00

0an

d $8

10,0

00at

Ju

ne 3

0, 2

011

and

2010

, re

spec

tive

ly.

Gov

ernm

ent

oblig

atio

ns

in

amou

nts,

m

atur

ities

an

d be

arin

g in

tere

st r

ates

suf

ficie

nt t

o fu

nd r

etir

emen

t of

the

se

bond

s ar

e he

ld i

n ir

revo

cabl

e tr

usts

. N

eith

er t

he

asse

ts o

f the

tru

sts,

nor

the

ir o

utst

andi

ng o

blig

atio

ns,

are

incl

uded

in th

e ac

com

pany

ing

bala

nce

shee

ts.

The

debt

ser

vice

req

uire

men

ts fo

r th

e re

venu

e/re

fund

ing

bond

s fo

r th

e ne

xt fi

ve y

ears

and

ther

eaft

er a

re a

s fo

llow

s:

Fisc

al Y

ear

Prin

cipa

lIn

tere

stPr

inci

pal

Inte

rest

2012

2,68

0,00

02,

783,

678

640,

000

1,19

9,75

020

132,

785,

000

2,67

6,71

267

0,00

01,

172,

230

2014

2,89

5,00

02,

563,

847

700,

000

1,14

2,75

020

153,

025,

000

2,44

3,43

272

5,00

01,

111,

250

2016

3,14

5,00

02,

311,

835

765,

000

1,07

5,00

020

17-2

021

18,0

25,0

009,

179,

379

4,44

0,00

04,

761,

000

2022

-20

2615

,705

,000

4,84

8,73

05,

655,

000

3,53

6,25

020

27-2

031

4,40

5,00

02,

158,

550

7,22

5,00

01,

972,

750

2032

-20

343,

190,

000

479,

520

3,41

5,00

025

8,25

0

Tota

l$5

5,85

5,00

0$2

9,44

5,68

324

,235

,000

$16,

229,

230

Una

mor

tize

d pr

emiu

m/(

disc

ount

)(3

3,06

7)(2

49,9

02)

Less

una

mor

tize

d lo

ss

on d

efea

sanc

e1,

266,

542

(50,

493)

Tota

l$5

4,62

1,52

523

,934

,605

Hou

sing

and

Din

ing

Rev

enue

and

R

efun

ding

Bon

dsSt

uden

t Rec

reat

ion

Cent

er R

even

ue

Bond

s

C-16

WE

STE

RN

WA

SHIN

GT

ON

UN

IVE

RSI

TY

NO

TE

S T

O T

HE

FIN

AN

CIA

L S

TA

TE

ME

NT

S Ju

ne 3

0, 2

011

and

2010

33

14.

PL

ED

GE

D R

EV

EN

UE

S

The

Uni

vers

ity

has

pled

ged

cert

ain

reve

nues

, net

of s

peci

fied

oper

atin

g ex

pens

es, t

o re

pay

the

prin

cipa

l and

inte

rest

of

reve

nue

bond

s. T

he fo

llow

ing

is a

sch

edul

e of

the

pled

ged

reve

nues

and

rel

ated

deb

t:

Tota

l Fut

ure

Prop

ortio

n of

Deb

tR

even

ues

Term

of

Serv

ice

to P

ledg

edSo

urce

of R

even

ue P

ledg

edPl

edge

d *

Des

crip

tion

of D

ebt

Purp

ose

of D

ebt

Com

mitm

ent

Rev

enue

s (c

urre

nt y

r)

Hou

sing

and

Din

ing

reve

nues

,$8

5,30

0,68

3H

ousi

ng a

nd D

inin

g C

onst

ruct

ion

and

2034

84.8

%ne

t of o

pera

ting

expe

nses

bond

s is

sued

in 1

998,

re

nova

tion

of s

tude

nt20

03, 2

005,

200

6, 2

009

hous

ing

proj

ects

Stud

ent R

ecre

atio

n C

ente

r gr

oss

$40,

464,

230

Stud

ent R

ecre

atio

n C

ente

rC

onst

ruct

ion

of th

e20

3342

.6%

reve

nues

bond

s is

sued

in 2

002

Stud

ent R

ecre

atio

n C

ente

r*

Tota

l fut

ure

prin

cipa

l and

inte

rest

pay

men

ts o

n de

bt

15.

LO

NG

TE

RM

LIA

BIL

ITIE

S

Follo

win

g ar

e th

e ch

ange

s in

long

term

liab

iliti

esfo

r th

e ye

ars

ende

d Ju

ne 3

0, 2

011

and

2010

:

Add

itio

ns/

6/30

/20

10A

mor

tiza

tion

Ret

irem

ents

6/30

/20

11Cu

rren

t Por

tion

Bond

s an

d no

tes

paya

ble

Rev

enue

and

ref

undi

ng b

onds

$81

,581

,30

7$

169,

823

$3,

195,

00

0$

78,

556,

130

$3,

320

,00

0

Not

es p

ayab

le2,

924,

499

465,

038

286,

908

3,10

2,62

931

0,5

85

Net

pen

sion

obl

igat

ion

2,95

4,86

41,

400

,00

014

9,40

94,

205,

455

214,

00

0

Tota

l lon

g te

rm li

abili

ties

$

87,4

60,6

70

$2,

034

,861

$3,

631,

317

$85

,864

,214

$3,

844,

585

Add

itio

ns/

6/30

/20

09

Am

orti

zati

onR

etir

emen

ts6/

30/2

010

Curr

ent P

orti

on

Bond

s an

d no

tes

paya

ble

Rev

enue

and

ref

undi

ng b

onds

$84

,210

,20

7$

176,

100

$2,

805,

00

0$

81,5

81,3

07

$3,

195,

00

0

Not

es p

ayab

le3,

038

,959

150

,00

026

4,46

02,

924,

499

285,

216

Net

pen

sion

obl

igat

ion

2,0

31,7

381,

053

,00

012

9,87

42,

954,

864

195,

00

0

Tota

l lon

g te

rm li

abili

ties

$89

,280

,90

4$

1,37

9,10

0$

3,19

9,33

4$

87,4

60,6

70

$3,

675,

216

WE

STE

RN

WA

SHIN

GT

ON

UN

IVE

RSI

TY

NO

TE

S T

O T

HE

FIN

AN

CIA

L S

TA

TE

ME

NT

S Ju

ne 3

0, 2

011

and

2010

3416.

LE

ASE

S

The

Uni

vers

ity fi

nanc

es c

erta

in e

quip

men

t thr

ough

non

-can

cela

ble

oper

atin

g le

ases

. A

t Jun

e 30

, 201

1, fu

ture

pay

men

ts

unde

r th

ese

oper

atin

g le

ases

are

as

follo

ws:

17.

DE

FE

RR

ED

CO

MP

EN

SA

TIO

N

The

Uni

vers

ity,

thro

ugh

the

Stat

eof

Was

hing

ton,

of

fers

its

em

ploy

ees

a D

efer

red

Com

pens

atio

n Pl

an

crea

ted

unde

r In

tern

al R

even

ue C

ode

Sect

ion

457.

Th

epl

an,

avai

labl

e to

all

Stat

eem

ploy

ees,

per

mits

in

divi

dual

sto

def

er a

por

tion

of t

heir

sala

ry u

ntil

futu

re y

ears

. Th

e St

ate

of W

ashi

ngto

n ad

min

iste

rs t

he p

lan

on b

ehal

f of

the

Uni

vers

ity's

em

ploy

ees;

the

Uni

vers

ity d

oes

not

have

leg

al a

cces

s to

the

fund

s.

18.O

PE

RA

TIN

G E

XP

EN

SE

S B

YF

UN

CT

ION

AL

CA

TE

GO

RIE

S

In t

he S

tate

men

t of

Rev

enue

s, E

xpen

ses

and

Cha

nges

in

Net

Ass

ets,

ope

ratin

g ex

pens

es a

re d

ispl

ayed

by

natu

ral

clas

sific

atio

ns w

hich

incl

ude

sala

ries

, em

ploy

ee b

enef

its, g

oods

and

ser

vice

s, a

nd o

ther

sim

ilar

cate

gori

es.

Ope

ratin

g ex

pens

es b

y fu

nctio

nal c

lass

ifica

tion

for

the

year

sen

ded

June

30,

201

1an

d 20

10ar

e as

follo

ws:

2011

2010

Op

erat

ing

Ex

pen

ses

Inst

ruct

ion

90,0

67,4

9187

,127

,97

7R

esea

rch

4,86

1,7

335,

066

,585

Aca

dem

ic S

upp

ort

10,9

25,6

4611

,295

,613

Stu

den

t Se

rvic

es16

,166

,086

16,1

62,8

63In

stit

uti

onal

Su

ppor

t17

,585

,199

19,4

15,9

07

Ope

rati

on a

nd

Mai

nte

nan

ce o

f Pla

nt

45,2

99,9

4338

,718

,526

Sch

olar

ship

s an

d ot

her

stu

den

t ai

d17

,80

5,7

09

17,5

44,1

79

Au

xili

ary

en

terp

rise

exp

endi

ture

s41

,518

,151

42,6

57,8

10

T

otal

ope

rati

ng

expe

nse

s 24

4,22

9,95

823

7,9

89,4

60

Fisc

al Y

ear

Leas

e Pa

ymen

t20

1284

5,24

9$

2013

467

,727

2014

362,

538

2015

335,

316

2016

1

36,5

07

20

17-2

027

4

08,

231

Tota

l min

imum

leas

e pa

ymen

ts $

2,

555,

568

C-17

WE

STE

RN

WA

SHIN

GT

ON

UN

IVE

RSI

TY

NO

TE

S T

O T

HE

FIN

AN

CIA

L S

TA

TE

ME

NT

S Ju

ne 3

0, 2

011

and

2010

35

19.

PE

NS

ION

PL

AN

S

The

Uni

vers

ity o

ffer

s fo

ur c

ontr

ibut

ory

pens

ion

plan

s:

the

Was

hing

ton

Stat

ePu

blic

Em

ploy

ees'

Ret

irem

ent

Syst

em (

PER

S) p

lan,

the

Was

hing

ton

Stat

eTe

ache

rs

Ret

irem

ent

Syst

em (

TRS)

, and

the

Law

Enf

orce

men

t O

ffice

rs'

and

Fire

fight

ers'

Ret

irem

ent

Syst

em

(LE

OFF

) an

d th

e W

este

rn W

ashi

ngto

n U

nive

rsity

R

etir

emen

t Pla

n (W

WU

RP)

.

The

payr

oll

for

the

Uni

vers

ity e

mpl

oyee

s co

vere

d by

PE

RS

for

the

year

end

ed J

une

30,

2011

and

2010

is$3

3,25

4,22

0an

d $3

4,38

2,46

0;

the

payr

oll

for

empl

oyee

s co

vere

d by

TR

Sis

$977

,518

and

$1,0

96,6

47;

the

payr

oll

cove

red

by

WW

UR

P is

$7

2,67

2,92

7an

d $7

2,40

2,86

4;th

e pa

yrol

l for

LE

OFF

is

$76

8,01

0an

d $6

54,2

34, r

espe

ctiv

ely.

Wes

tern

W

ashi

ngto

n U

nive

rsity

R

etir

emen

t Pl

an

(WW

UR

P)

Plan

Des

crip

tion

WW

UR

P pl

an c

over

s fa

cult

y, p

rofe

ssio

nal

staf

f, an

d ce

rtai

n ot

her

empl

oyee

s.

It i

s ad

min

iste

red

by t

he

Uni

vers

ity.

The

Uni

vers

ity’

s B

oard

of

Trus

tees

is

auth

oriz

ed to

est

ablis

h an

d am

end

bene

fit p

rovi

sion

s.

Con

trib

utio

ns t

o th

e pl

an a

re i

nves

ted

in a

nnui

ty

cont

ract

s or

mut

ual

fund

acc

ount

s of

fere

d by

one

or

mor

e fu

nd s

pons

ors.

Ben

efits

from

fund

spo

nsor

s ar

e av

aila

ble

upon

se

para

tion

or

retir

emen

t at

th

e m

embe

r’s o

ptio

n.

Em

ploy

ees

have

at

all

times

a

100%

ves

ted

inte

rest

in th

eir

accu

mul

atio

ns.

Fund

ing

Polic

yE

mpl

oyee

con

trib

utio

n ra

tes,

whi

ch a

re b

ased

on

age,

ra

nge

from

5%

to

10%

of

sala

ry.

The

Uni

vers

ity

mat

ches

the

em

ploy

ee c

ontr

ibut

ions

. A

ll re

quir

ed

empl

oyer

an

d em

ploy

ee

cont

ribu

tions

ha

ve

been

m

ade.

The

Wes

tern

Was

hing

ton

Uni

vers

ity R

etir

emen

t Pl

an

(WW

UR

P) i

s a

defin

ed c

ontr

ibut

ion

pens

ion

plan

w

ith a

sup

plem

enta

l pa

ymen

t, w

hen

requ

ired

. Th

e

The

WW

UR

P co

ntri

butio

nsfo

r th

eye

ars

endi

ng J

une

30, 2

011,

and

201

0ar

eas

follo

ws:

20

112

010

Em

plo

yee

$5

,62

4,8

89

$5

,59

8,9

12U

niv

ersi

ty5

,612

,217

5,5

95

,96

3

Supp

lem

enta

l Com

pone

ntTh

e su

pple

men

tal

paym

ent

plan

de

term

ines

a

min

imum

ret

irem

ent

bene

fit g

oal

base

d up

on a

one

-tim

e ca

lcul

atio

n at

eac

h em

ploy

ee's

ret

irem

ent d

ate.

The

Uni

vers

ity m

akes

dir

ect

paym

ents

to

qual

ified

re

tiree

s w

hen

the

retir

emen

t be

nefit

pro

vide

d by

the

fu

nd s

pons

or d

oes

not m

eet t

he b

enef

it g

oal.

The

Uni

vers

ity

rece

ived

an

actu

aria

l ev

alua

tion

of

the

supp

lem

enta

l com

pone

nt o

f the

WW

UR

P du

ring

fis

cal 2

011.

Th

e pr

evio

us e

valu

atio

n w

as p

erfo

rmed

in

200

9.

The

Unf

unde

d A

ctua

rial

Acc

rued

Lia

bilit

y (U

AL)

cal

cula

ted

as o

f Ju

ne 3

0, 2

011

and

2009

was

$10,

035,

000

and

$7,2

87,0

00,

resp

ecti

vely

, an

d is

am

orti

zed

over

a 1

3ye

ar p

erio

d.

The

Ann

ual

Req

uire

d C

ontr

ibut

ion

(AR

C)

of

$1,4

00,0

00co

nsis

ts

of

amor

tiza

tion

of

th

e U

AL

($81

0,00

0),

norm

al

cost

(o

r cu

rren

t co

st)

($56

1,00

0) a

nd i

nter

est.

The

UA

L an

d A

RC

wer

e es

tabl

ishe

d us

ing

the

entr

y ag

e no

rmal

cos

t met

hod.

The

actu

aria

l as

sum

ptio

ns i

nclu

ded

an i

nves

tmen

t ra

te o

f re

turn

of

6% t

o 8%

and

pro

ject

ed s

alar

y in

crea

ses

rang

ing

from

2%

to

4%.

App

roxi

mat

ely

$72,

672,

927

and

$72,

402,

684

of t

he U

nive

rsit

y’s

payr

oll

wer

e co

vere

d un

der

this

pla

n du

ring

fis

cal

2011

an

d fis

cal

2010

, re

spec

tive

ly.

WE

STE

RN

WA

SHIN

GT

ON

UN

IVE

RSI

TY

NO

TE

S T

O T

HE

FIN

AN

CIA

L S

TA

TE

ME

NT

S Ju

ne 3

0, 2

011

and

2010

36

The

follo

win

g ta

ble

refle

cts

the

acti

vity

in th

e N

et P

ensi

on O

blig

atio

n fo

r th

e ye

ar e

nded

Jun

e 30

, 201

1:

PER

S, T

RS

and

LEO

FF

Plan

Des

crip

tion

The

Uni

vers

ity

cont

ribu

tes

to

PER

S,

TRS

and

LEO

FF

cost

sh

arin

g m

ulti

ple-

empl

oyer

de

fine

d be

nefit

pen

sion

pla

ns a

dmin

iste

red

by t

he S

tate

of

Was

hing

ton

Ret

irem

ent S

yste

m.

PER

S I

prov

ides

ret

irem

ent

and

disa

bilit

y be

nefit

s,

and

min

imum

ben

efit

incr

ease

s be

ginn

ing

at a

ge 6

6 to

elig

ible

non

-aca

dem

ic p

lan

mem

bers

hir

ed p

rior

to

O

ctob

er

1,

1977

.

PER

S II

an

d II

I pr

ovid

e re

tire

men

t an

d di

sabi

lity

bene

fits,

and

a c

ost-

of-

livin

g al

low

ance

, to

el

igib

le

non-

acad

emic

pl

an

mem

bers

hir

ed o

n or

aft

er O

ctob

er 1

, 19

77.

In

addi

tion

, PE

RS

III

has

a de

fined

co

ntri

buti

on

com

pone

nt,

whi

ch

is

fully

fu

nded

by

em

ploy

ee

cont

ribu

tion

s.

PER

S de

fined

ben

efit

plan

ben

efit

sar

e ve

sted

aft

er a

n em

ploy

ee c

ompl

etes

fiv

e ye

ars

of

elig

ible

ser

vice

.

TRS

I pr

ovid

es r

etir

emen

t an

d di

sabi

lity

bene

fits

, a

lum

p su

m

deat

h be

nefit

, an

d m

inim

um

bene

fits

incr

ease

s be

ginn

ing

at a

ge 6

5 to

cer

tain

elig

ible

fa

cult

y hi

red

prio

r to

Oct

ober

1, 1

977.

TR

S II

and

III

pr

ovid

e re

tirem

ent

bene

fits,

an

d co

st-o

f-liv

ing

allo

wan

ce t

o ce

rtai

n el

igib

le f

acul

ty h

ired

on

or a

fter

O

ctob

er 1

, 197

7.

In

addi

tion

TRS

III

has

a de

fined

co

ntri

butio

n co

mpo

nent

w

hich

is

fu

lly

fund

ed

by

empl

oyee

co

ntri

butio

ns.

D

efin

ed

bene

fit

plan

be

nefit

s ar

e ve

sted

aft

er a

n em

ploy

ee c

ompl

etes

fiv

e ye

ars

of

elig

ible

ser

vice

.

LEO

FF I

I pr

ovid

es r

etir

emen

t be

nefit

s an

d a

cost

of

livin

g al

low

ance

for

elig

ible

law

enf

orce

men

t of

ficer

s.

LEO

FF S

yste

m b

enef

its a

re v

este

d af

ter

an e

mpl

oyee

co

mpl

etes

five

yea

rs o

f elig

ible

ser

vice

.

The

Was

hing

ton

Stat

e Le

gisl

atur

e es

tabl

ishe

s or

am

ends

be

nefit

pr

ovis

ions

fo

r PE

RS,

TR

S,

and

LEO

FF.

Add

itio

nal

info

rmat

ion

conc

erni

ng p

lan

desc

ript

ions

and

ben

efit

pro

visi

ons

is i

nclu

ded

in a

C

ompr

ehen

sive

A

nnua

l Fi

nanc

ial

Rep

ort

publ

icly

av

aila

ble

from

the

Was

hing

ton

Syst

em D

epar

tmen

t of

Ret

irem

ent

Syst

em,

P.O

. B

ox 4

8380

, O

lym

pia,

W

A, 9

8504

.

Fund

ing

Polic

yE

ach

bien

nium

, the

Off

ice

of t

he S

tate

Act

uary

, usi

ng

fund

ing

met

hods

pre

scri

bed

by s

tatu

te,

dete

rmin

es

actu

aria

lly

requ

ired

em

ploy

ee

and/

or

empl

oyer

co

ntri

butio

n ra

tes

for

PER

S, T

RS,

and

LE

OFF

pla

ns,

exce

pt w

here

em

ploy

ee c

ontr

ibut

ion

rate

s ar

e se

t by

st

atut

e.

All

empl

oyer

s ar

e re

quir

ed t

o co

ntri

bute

at

the

leve

l es

tabl

ishe

d by

St

ate

la

Bala

nce

as o

f Jun

e 30

, 20

09

$2,

031

,738

Ann

ual R

equi

red

Cont

ribu

tion

FY

101,

053

,00

0Pa

ymen

ts to

Ben

efic

iari

es F

Y10

(129

,87

4)Ba

lanc

e as

of J

une

30, 2

010

2,95

4,86

4A

nnua

l Req

uire

d Co

ntri

buti

on F

Y11

1,40

0,0

00

Paym

ents

to B

enef

icia

ries

FY

11(1

49,4

09)

Bala

nce

as o

f Jun

e 30

, 20

11$

4,20

5,45

5

C-18

WE

STE

RN

WA

SHIN

GT

ON

UN

IVE

RSI

TY

NO

TE

S T

O T

HE

FIN

AN

CIA

L S

TA

TE

ME

NT

S Ju

ne 3

0, 2

011

and

2010

37

The

requ

ired

con

trib

utio

n ra

tes

expr

esse

d as

a p

erce

ntag

e of

cur

rent

yea

r co

vere

d pa

yrol

l at J

une

30, 2

011

follo

w:

Empl

oyee

Uni

vers

ity

Plan

I6.

00

%5.

31%

Plan

II

3.90

%5.

31%

Plan

III

5% -

15%

5.31

%TR

S Plan

I6.

00

%6.

14%

Plan

II

3.36

%6.

14%

Plan

III

5% -

15%

6.14

%

Plan

II

8.46

%5.

24%

PER

S

LEO

FF

The

requ

ired

con

trib

utio

ns fo

r th

e ye

ars

endi

ng J

une

30, 2

011

and

2010

are

as fo

llow

s:

2011

2010

Empl

oyee

$1,

466,

592

$1,

518,

542

Uni

vers

ity

1,7

38,9

911,

794

,47

1

Empl

oyee

28,1

2232

,253

Uni

vers

ity

26,7

1132

,890

Empl

oyee

65,0

6655

,337

Uni

vers

ity

66,2

02

56,3

84

PER

S

TRS

LEO

FF

All

requ

ired

em

ploy

er a

nd e

mpl

oyee

con

trib

utio

ns h

ave

been

mad

e.

20.O

TH

ER

P

OST

E

MP

LO

YM

EN

T

BE

NE

FIT

S

(OP

EB

)

Hea

lth

care

an

d lif

e in

sura

nce

prog

ram

s fo

r em

ploy

ees

of

the

Stat

e of

W

ashi

ngto

n ar

e ad

min

iste

red

by t

he W

ashi

ngto

n St

ate

Hea

lth C

are

Aut

hori

ty (

HCA

). T

he H

CA

cal

cula

tes

the

prem

ium

am

ount

s ea

ch y

ear

that

are

suf

ficie

nt t

o fu

nd t

he

Stat

e-w

ide

heal

th a

nd l

ife i

nsur

ance

pro

gram

s on

a

pay-

as-y

ou-g

o ba

sis.

Th

ese

cost

s ar

e pa

ssed

thr

ough

to

in

divi

dual

st

ate

agen

cies

ba

sed

upon

ac

tive

empl

oyee

hea

dcou

nt;

the

agen

cies

pay

the

pre

miu

ms

for

activ

e em

ploy

ees

to t

he H

CA.

The

agen

cies

may

al

so c

harg

e em

ploy

ees

for

cert

ain

high

er c

ost

opti

ons

elec

ted

by th

e em

ploy

ees.

Stat

e of

W

ashi

ngto

n re

tiree

s m

ay

elec

t co

vera

ge

thro

ugh

stat

e he

alth

and

life

ins

uran

ce p

lans

, fo

r

whi

ch t

hey

pay

less

tha

n th

e fu

ll co

st o

f th

e be

nefit

s,

base

d on

thei

r ag

e an

d ot

her

dem

ogra

phic

fact

ors.

The

heal

th

care

pr

emiu

ms

for

activ

e em

ploy

ees,

w

hich

ar

e pa

id

by

the

agen

cy

duri

ng

empl

oyee

s’

wor

king

car

eers

, su

bsid

ize

the

“und

erpa

ymen

ts”

of

the

retir

ees.

A

n ad

ditio

nal

fact

or

in

the

OPE

B

oblig

atio

n is

a p

aym

ent

that

is

requ

ired

by

the

Stat

e Le

gisl

atur

e to

re

duce

th

e pr

emiu

ms

for

retir

ees

cove

red

by M

edic

are

(an

“exp

licit

subs

idy”

). F

or fi

scal

20

11,

this

am

ount

was

$18

3pe

r re

tiree

elig

ible

for

pa

rts

A a

nd B

of

Med

icar

e, p

er m

onth

. Th

is i

s al

sopa

ssed

thro

ugh

to S

tate

age

ncie

s vi

a ac

tive

empl

oyee

s ra

tes

char

ged

to th

e ag

ency

.

Ther

e is

no

form

al S

tate

or

Uni

vers

ity p

lan

that

un

derl

ies

the

subs

idy

of

retir

ee

heal

th

and

life

insu

ranc

e.A

n ac

tuar

ial

stud

y pe

rfor

med

by

th

e

WE

STE

RN

WA

SHIN

GT

ON

UN

IVE

RSI

TY

NO

TE

S T

O T

HE

FIN

AN

CIA

L S

TA

TE

ME

NT

S Ju

ne 3

0, 2

011

and

2010

38

Was

hing

ton

Off

ice

of t

he S

tate

Act

uary

cal

cula

ted

the

tota

l O

PEB

obl

igat

ion

of t

he S

tate

of

Was

hing

ton

at

July

1,2

011.

The

Act

uary

cal

cula

ted

the

OPE

B o

blig

atio

n ba

sed

on

indi

vidu

al

stat

e em

ploy

ee

data

, in

clud

ing

age,

re

tirem

ent

elig

ibili

ty,

and

leng

th o

f se

rvic

e.

The

prob

abili

ty o

f an

empl

oyee

of a

giv

en a

ge a

nd le

ngth

of

serv

ice

retir

ing

and

rece

ivin

g O

PEB

ben

efits

is

base

d on

sta

tew

ide

hist

oric

al d

ata.

Sinc

e su

ffic

ient

spec

ific

em

ploy

ee d

ata

and

othe

r ac

tuar

ial

data

are

no

t ava

ilabl

e at

leve

ls b

elow

the

stat

ewid

e le

vel,

such

am

ount

s ha

ve n

ot b

een

dete

rmin

ed n

or r

ecor

ded

in

the

Uni

vers

ity’

s fin

anci

al s

tate

men

ts.

The

Uni

vers

ity

was

bill

ed a

nd p

aid

appr

oxim

atel

y $1

8.7

mill

ion

for

acti

ve

and

reti

ree

heal

th

care

ex

pens

es d

urin

g fis

cal

2011

and

$16.

6m

illio

n in

fis

cal 2

010.

21.

RIS

K M

AN

AG

EM

EN

T

The

Uni

vers

ity

part

icip

ates

in a

Sta

teof

Was

hing

ton

risk

m

anag

emen

t se

lf-in

sura

nce

prog

ram

. Pr

emiu

ms

to

the

Stat

ear

e ba

sed

on

actu

aria

lly

dete

rmin

ed p

roje

ctio

ns a

nd i

nclu

de a

llow

ance

s fo

r pa

ymen

ts o

f bot

h ou

tsta

ndin

g an

d cu

rren

t lia

bilit

ies.

Th

e U

nive

rsity

se

lf-in

sure

s un

empl

oym

ent

com

pens

atio

n fo

r al

l em

ploy

ees.

In

addi

tion

, su

ffic

ient

in

sura

nce

cove

rage

fo

r pr

oper

ty c

asua

lty

loss

on

the

resi

denc

e ha

llsan

d th

e W

ade

Kin

g St

uden

t R

ecre

atio

n C

ente

ris

mai

ntai

ned

in a

ccor

danc

e w

ith

the

Hou

sing

and

Din

ing

Syst

eman

d W

ade

Kin

g St

uden

t R

ecre

atio

n C

ente

rM

aste

r B

ond

Res

olut

ions

.

The

Uni

vers

ity

has

been

nam

ed i

n se

vera

l la

wsu

its.

W

hile

the

fin

al o

utco

me

of t

he l

awsu

its

cann

ot b

e pr

edic

ted

wit

h ce

rtai

nty,

it

is

th

e U

nive

rsit

y’s

opin

ion

that

the

ult

imat

e lia

bilit

y w

ill n

ot m

ater

ially

af

fect

the

fina

ncia

l sta

tem

ents

.

The

Uni

vers

ity

part

icip

ates

in

the

Stat

e in

sura

nce

prog

ram

and

is

inde

mni

fied

and

will

be

reim

burs

ed

by t

he S

tate

for

any

cla

ims

paid

rel

ated

to

thes

e la

wsu

its.

22.C

OM

MIT

ME

NT

S

Goo

ds a

nd s

ervi

ces

for

oper

atin

g an

d ca

pita

l pro

ject

s,co

ntra

cted

for

but n

ot y

et r

ecei

ved,

are

con

side

red

com

mitm

ents

at

year

end

.Th

e am

ount

of t

hese

com

mit

men

ts a

t Jun

e 30

, 201

1an

d 20

10ar

e:

20

112

010

$4

,58

9,2

01

$4

,59

9,5

05

78

5,1

25

35

9,3

20

14,3

98

,49

93

3,5

77

,52

3

$19

,77

2,8

25

$3

8,5

36

,34

8

Cap

ital

pro

ject

s

To

tal c

om

mit

men

ts

Op

erat

ing

Res

earc

h

23.J

OIN

T V

EN

TU

RE

In f

isca

l 20

10,

the

Uni

vers

ity

part

icip

ated

in

the

form

atio

n of

a

not-

for-

prof

it

corp

orat

ion

titl

ed

Wes

tern

C

ross

ing

Dev

elop

men

t C

orpo

rati

on

(WC

DC

).

W

CD

C

was

fo

rmal

ly

inco

rpor

ated

pu

rsua

nt

to

the

arti

cles

of

in

corp

orat

ion

date

d O

ctob

er 7

, 20

09 a

nd i

s a

501(

c) (

3) c

orpo

rati

on

unde

r th

e In

tern

al R

even

ue c

ode

of 1

986,

am

ende

d.

The

five

mem

ber

Boa

rd

of

Dir

ecto

rs

incl

udes

a

mem

ber

of th

e U

nive

rsit

y B

oard

of T

rust

ees

appo

inte

d by

the

Uni

vers

ity

Boa

rd o

f Tr

uste

es,

the

Pres

iden

t of

th

e U

nive

rsit

y,

a m

embe

r of

th

e C

omm

issi

on o

f th

e Po

rt o

f B

ellin

gham

app

oint

ed b

y th

e C

omm

issi

on o

f th

e Po

rt,

the

Exe

cuti

ve D

irec

tor

of t

he P

ort

of B

ellin

gham

, and

a f

ifth

boar

d m

embe

r w

ho w

asap

poin

ted

by a

maj

orit

y vo

te o

f th

e ot

her

four

boa

rd m

embe

rs w

hoar

e no

t af

filia

ted

wit

h ei

ther

ent

ity.

The

boa

rd o

f di

rect

ors

may

in

the

futu

re a

llow

oth

er W

ashi

ngto

n go

vern

men

ts o

r

C-19

NO

TE

S T

O T

HE

FIN

AN

CIA

L S

TA

TE

ME

NT

SJu

ne

30, 2

011

an

d 2

010

39

educ

atio

nal i

nsti

tuti

ons

to b

ecom

e m

embe

rs u

nder

suc

h te

rms

and

cond

itio

ns a

s th

ey d

eter

min

e. T

he p

urpo

se o

f the

jo

int

vent

ure

is t

o he

lp f

acili

tate

the

tim

ely

deve

lopm

ent

of n

ew f

acili

ties

on

the

Bel

lingh

am w

ater

fron

t. T

his

inve

stm

ent i

s no

t ref

lect

ed o

n th

e U

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APPENDIX D Form of Bond Counsel Opinion

April 30, 2012 Western Washington University Bellingham, Washington Citigroup Global Markets Inc. Los Angeles, California

Re: Western Washington University Student Recreation Fee Revenue and Refunding Bonds, 2012 - $24,385,000 Ladies and Gentlemen: We have acted as bond counsel to Western Washington University (the “University”) and have examined a certified transcript of the proceedings taken in the matter of the issuance by the University of its Student Recreation Fee Revenue and Refunding Bonds, 2012, in the aggregate principal amount of $24,385,000 (the “Bonds”), issued pursuant to Resolution No. 2012-01 of the University, adopted on February 10, 2012 (the “Bond Resolution”) for the purpose of providing funds to refund certain outstanding student recreation fee revenue bonds of the University, make capital improvements to the recreation facilities of the University and to pay issuance costs. Capitalized terms used herein which are not otherwise defined shall have the meanings given such terms in the Bond Resolution. The Bonds are subject to redemption prior to their stated maturities as set forth in the Official Statement dated April 10, 2012. Regarding questions of fact material to our opinion, we have relied on representations of the University in the Bond Resolution and in the certified proceedings and on other certifications of public officials and others furnished to us without undertaking to verify the same by independent investigation. Based on the foregoing, we are of the opinion that, under existing law: 1. The Bonds have been legally issued and constitute valid and binding revenue obligations of the University, both principal thereof and interest thereon being payable solely out of a special fund of the University known as the “Recreation Center Bond Fund” (the “Bond Fund”), except to the extent that the enforcement of the rights and remedies of such owners of the Bonds may be limited by laws relating to bankruptcy, reorganization, insolvency, moratorium or other similar laws of general application affecting the rights of creditors, by the application of equitable principles and the exercise of judicial discretion. 2. The University has irrevocably bound itself to set aside and pay into the Bond Fund and the reserve account therein (the “Common Reserve Fund”) out of the SRC Fee and Recreation Center Revenues or from such other money as may be provided for such purpose amounts necessary to pay the principal of and interest on the Bonds as the same become due. 3. The University has pledged to set aside from the Revenue Account out of the Recreation Center Revenues and the SRC Fee and to pay into the Bond Fund the various amounts required by the Bond Resolution to be paid into and maintained in such Fund within the times provided by the Bond Resolution. To the extent more particularly provided by the Bond Resolution, the amounts so pledged to be paid from Available Funds into the Bond Fund shall be a lien and charge thereon equal in rank to the lien and charge upon such Recreation Center Revenues and the SRC Fee of the amounts required to pay and secure the payment of any revenue bonds hereafter issued on a parity with the Bonds and superior to all other liens and charges of any kind or nature. The University has reserved the right to issue bonds in the future having a parity of lien on Recreation Center Revenues and the SRC Fee on the terms set forth in the Bond Resolution. 4. Interest on the Bonds is excludable from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; however, interest

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on the Bonds is taken into account in determining adjusted current earnings for the purpose of computing the alternative minimum tax imposed on certain corporations. The opinion set forth in the preceding sentence is subject to the condition that the University comply with all requirements of the Internal Revenue Code of 1986, as amended (the “Code”), that must be satisfied subsequent to the issuance of the Bonds in order that the interest thereon be, and continue to be, excludable from gross income for federal income tax purposes. The University has covenanted to comply with all applicable requirements. Failure to comply with certain of such covenants may cause interest on the Bonds to be included in gross income for federal income tax purposes retroactively to the date of issuance of the Bonds. The University has not designated the Bonds as “qualified tax-exempt obligations” under Section 265(b)(3) of the Code.

Except as expressly stated above, we express no opinion regarding any other federal or state income tax consequences of acquiring, carrying, owning or disposing of the Bonds. Owners of the Bonds should consult their tax advisors regarding the applicability of any collateral tax consequences of owning the Bonds, which may include original issue discount, original issue premium, purchase at a market discount or at a premium, taxation upon sale, redemption or other disposition, and various withholding requirements.

We have not been engaged nor have we undertaken to review the accuracy, completeness or sufficiency of the official

statement or other offering material related to the Bonds (except to the extent, if any, stated in the official statement), and we express no opinion relating thereto or relating to the undertaking of the University to provide ongoing disclosure pursuant to Securities and Exchange Commission Rule 15c2-12.

This opinion is given as of the date hereof, and we assume no obligation to update, revise or supplement this opinion to reflect any facts or circumstances that may hereafter come to our attention or any changes in law that may hereafter occur.

Very truly yours, K&L GATES LLP

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APPENDIX E Book-Entry Transfer System

The information in this section concerning the Depository Trust Company, New York, New York (“DTC”) and DTC’s book-entry system has been obtained from sources that the University believes to be reliable, but the University takes no responsibility for the accuracy thereof. Beneficial Owners (as hereinafter defined) should therefore confirm the following with DTC or the Participants (as hereinafter defined). For purposes of this section, references to the Issuer mean the University, and references to Agent mean the Registrar. For the purposes of this Official Statement, the term “Beneficial Owner” includes the person for whom the Participant acquires an interest in the Bonds.

1. DTC will act as securities depository for the Bonds. The Bonds will be issued as fully-registered in the name of Cede & Co. (DTC’s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered Bond certificate will be issued for each maturity of the Bonds in the principal amount of such maturity and will be deposited with DTC.

2. DTC, the world’s largest securities depository, is a limited-purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC’s participants (“Direct Participants”) deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities through electronic computerized book-entry transfers and pledges between Direct Participants’ accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation (“DTCC”). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing services. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, and trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (“Indirect Participants”). DTC has Standard & Poor’s rating of AA+. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com.

3. Purchases of the Bonds under the DTC system, in denominations of $5,000 or any integral multiple thereof, must be made by or through Direct Participants, which will receive a credit for the Bonds on DTC’s records. The ownership interest of each actual purchaser of each Bond (“Beneficial Owner”) is in turn to be recorded on the Direct and Indirect Participants’ records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in the Bonds, except in the event that use of the book-entry system for the Bonds is discontinued.

4. To facilitate subsequent transfers, all Bonds deposited by Participants with DTC are registered in the name of DTC’s partnership nominee, Cede & Co. or such other name as may be requested by an authorized representative of DTC. The deposit of Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Bonds; DTC’s records reflect only the identity of the Direct Participants to whose accounts such Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers.

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5. When notices are given, they will be sent by the Registrar to DTC only. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time.

6. Redemption notices will be sent to DTC. If less than all of the Bonds are being redeemed, DTC’s practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed.

7. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to the Bonds unless authorized by a Direct Participant in accordance with DTC’s MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the University as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.’s consenting or voting rights to those Direct Participants to whose accounts Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy).

8. Redemption proceeds, distributions, and dividend payments on the Bonds will be made to Cede & Co. or such other nominee as may be requested by an authorized representative of DTC. DTC’s practice is to credit Direct Participants’ accounts upon DTC’s receipt of funds and corresponding detail information from the University or the Registrar, on payable date in accordance with their respective holdings shown on DTC’s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in “street name,” and will be the responsibility of such Participant and not of DTC, the Registrar, or the University, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions, and dividend payments to Cede & Co. (or any other nominee as may be requested by an authorized representative of DTC) is the responsibility of the University or the Registrar, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.

9. DTC may discontinue providing its services as securities depository with respect to the Bonds at any time by giving reasonable notice to the University and the Registrar. Under such circumstances, in the event that a successor securities depository is not obtained, Bond certificates are required to be printed and delivered.

10. Issuer may decide to discontinue use of the system of the book-entry transfers through DTC (or a successor securities depository). In that event, Bond certificates will be printed and delivered to DTC.

The information in this section concerning DTC and DTC’s book-entry system has been obtained from sources that Issuer believes to be reliable, but Issuer takes no responsibility for the accuracy thereof.

$24,385,000 western washington university student recreation … · 2012-04-17 · $24,385,000 ....

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