LEGAL INFORMATION
Litigation At the time of delivery of and payment for the Series 2018 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 Series 2018 Bonds or the application of the proceeds of the Series 2018 Bonds as contemplated by the Bond Resolution or in any way contesting or affecting the validity of the Series 2018 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. The University reports litigation of a general nature, but after consideration and investigation has concluded that it has meritorious defenses, or such litigation is immaterial and/or will have no impact on timely repayment of the Series 2018 Bonds. Approval of Counsel Legal matters incident to the authorization, issuance, and sale of the Series 2018 Bonds by the University are subject to the approving legal opinion of Foster Pepper PLLC, Seattle, Washington, Bond Counsel. The form of the opinion of Bond Counsel with respect to the Series 2018 Bonds is attached as APPENDIX C. The opinion of Bond Counsel is given based on factual representations made to Bond Counsel, and under existing law, as of the date of initial delivery of the Series 2018 Bonds, and Bond Counsel assumes no obligation to revise or supplement its opinion to reflect any facts or circumstances that may thereafter come to its attention, or any changes in law that may thereafter occur. The opinion of Bond Counsel is an expression of its professional judgment on the matters expressly addressed in its opinion and does not constitute a guarantee of result. Bond Counsel will be compensated only upon the issuance and sale of the Series 2018 Bonds. Limitations on Remedies Any remedies available to the owners of the Series 2018 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 Series 2018 Bonds, there can be no assurance that available remedies will be adequate to fully protect the interest of the Registered Owners of the Series 2018 Bonds. In addition to the limitations on remedies contained in the Bond Resolution, the rights and obligations under the Series 2018 Bonds and the Bond 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 Foster Pepper PLLC, as Bond Counsel, concurrently with the issuance of the Series 2018 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 C. TAX MATTERS Exclusion From Gross Income. In the opinion of Bond Counsel, under existing federal law and assuming compliance with applicable requirements of the Internal Revenue Code of 1986, as amended (the “Code”), that must be satisfied subsequent to the issue date of the Series 2018 Bonds, interest on the Series 2018 Bonds is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of the alternative minimum tax applicable to individuals. Continuing Requirements. The University is required to comply with certain requirements of the Code after the date of issuance of the Series 2018 Bonds in order to maintain the exclusion of the interest on the Series 2018 Bonds from gross income for federal income tax purposes, including, without limitation, requirements concerning the qualified use of Series 2018 Bond proceeds and the facilities financed or refinanced with Series 2018 Bond proceeds, limitations on investing gross proceeds of the Series 2018 Bonds in higher yielding investments in certain circumstances, and the requirement to comply with the arbitrage rebate requirement to the extent applicable to the Series 2018 Bonds. The University has covenanted in the Series Resolution to comply with those requirements, but if the University fails to comply with those requirements, interest on the Series 2018 Bonds could become taxable retroactive to the date of issuance of the Series 2018 Bonds. Bond Counsel has not undertaken and does not undertake to monitor the University’s compliance with such requirements.
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