INITIATIVE AND REFERENDUM Under the State Constitution, the voters of the State have the ability to initiate legislation and to require the State Legislature to refer legislation to the voters through the powers of initiative and referendum, respectively. 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 Any initiative approved by a majority of voters may not be amended or repealed by the State Legislature within a period of two years following enactment, except by a vote of two–thirds of all the members elected to each house of the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 State and local jurisdictions or subjecting State or 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. CONTINUING DISCLOSURE UNDERTAKING Basic Undertaking to Provide Annual Financial Information and Notice of Listed Events . To meet the requirements of paragraph (b)(5) United States Securities and Exchange Commission (the “SEC”) Rule 15c2-12 (“Rule 15c2-12”), as applicable to a participating underwriter for the Series 2018 Bonds, the University will undertake (the “Undertaking”) for the benefit of holders of the Series 2018 Bonds to provide or cause to be provided, either directly or through a designated agent, to the MSRB, in an electronic format as prescribed by the MSRB accompanied by identifying information as prescribed by the MSRB: (i) Annual financial information and operating data of the type included in this Official Statement as generally described below (“annual financial information”); (ii) Timely notice (not in excess of ten business days after the occurrence of the event) of the occurrence of any of the following events with respect to the Series 2018 Bonds: (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 IRS of proposed final determinations of taxability, Notice of Proposed Issue (IRS Form 5701 – TEB) or the material notices or determinations with respect to the tax status of the Series 2018 Bonds, or other material events affecting the tax status of the Series 2018 Bonds; (7) modifications to rights of holders of the Series 2018 Bonds, if material; (8) bond calls (other than scheduled mandatory redemptions of Term Bonds), if material, and tender offers; (9) defeasances; (10) release, substitution, or sale of property securing repayment of the Series 2018 Bonds, if material; (11) rating changes; (12) bankruptcy, insolvency, receivership or similar event of the University, as such “Bankruptcy Events” are defined in Rule 15c2-12; (13) the consummation of a merger, consolidation, or acquisition involving 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 relating to any such actions, other than pursuant to its terms, if material; and (14) appointment of a successor or additional trustee or the change of name of a trustee, if material; and (iii) Timely notice of a failure by the University to provide the required annual financial information described below on or before the date specified below.
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