Fred Hutchinson Cancer Research Center)

This Preliminary Official Statement and the information contained herein are subject to change, completion or amendment without notice. These securities may not be sold nor may an offer to buy be accepted prior to the time the Official Statement is delivered in final form. Under no circumstances shall this Preliminary Official Statement constitute an offer to sell or the solicitation of any offer to buy nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction. BOOK-ENTRY ONLY * Preliminary, subjecttochange. Dated: February __,2017. Dated: DateofIssue NEW ISSUE be deliveredtotheBondTrusteeonbehalf ofDTConoraboutMarch30,2017,byFastAutomatedSecuritiesTransfer. for theAuthoritybyitsspecialcounsel,Hillis ClarkMartin&PetersonP.S.;andfortheUnderwriterbyitscounsel,Orrick, Herrington &SutcliffeLLP.TheBondsareexpectedto and to approval of theirlegalityby Hillis Clark Martin & Peterson P.S., Bond Counsel. Certain legal matters will bepassedupon for Fred Hutchby its counsel, Foster Pepper PLLC; including theinsidecoverpageandAppendices attachedhereto(the“OfficialStatement”),toobtaininformationessential makinganinformedinvestmentdecision. INTEREST ONTHEBONDS. TO LEVY ANY TAXES OR APPROPRIATE OR EXPEND ANY OF THEIR RESPECTIVE FUNDS FOR THE PAYMENT OF THE PRINCIPAL OR TENDER PRICE OF OR PREMIUM OR TO REQUIRETHESTATEOFWASHINGTONORAUTHORITY,NORHAS OFWASHINGTONORTHEAUTHORITYANYOBLIGATIONLEGALAUTHORIZATION, OF THESTATEWASHINGTON,ORAGENERALOBLIGATIONAUTHORITY. THEOWNERS(INCLUDINGBENEFICIALOWNERS)OFBONDSHAVENORIGHT pledge ofCollateral.TheBeneficialOwnersarealsodeemedtohaveacknowledged andconsentedtotheterminationofcertainSecurityDocumentsnolongerineffect. and terminationtooccurupontheMasterTrustee’sreceiptofconsent theownersofeachthen-OutstandingMasterNoteexpressedtohavebenefit deemed tohaveconsentedthefullreconveyanceofDeedTrust,and the terminationofrelatedHazardousSubstancesAgreement,withsuchreconveyance the amendments of the CurrentDeed of Trust contained in the Second Amended Deed of Trust. Further, by purchase of theBonds,BeneficialOwners of theBondsare “Deed ofTrust”),whichisexpectedtobecomeeffectiveontheDateIssue.BypurchaseBonds,BeneficialOwnersBondsaredeemed haveconsentedto and restatedbyaSecondAmendedRestatedDeedofTrust,SecurityAgreement andFinancingStatementtobedatedtheDateofIssue(the“SecondAmendedDeedTrust”or and RestatedDeedofTrust,SecurityAgreementFinancingStatement,madebyFred HutchforthebenefitofMasterTrustee(the“CurrentDeedTrust”),whichistobeamended the ObligatedGroupwithrespecttoMasterNotesoutstandingunderIndenture, includingtheSeries2017VariableRateMasterNotes,arecurrentlysecuredbyanAmended Mellon TrustCompany,N.A.,assuccessorMasterTrustee(assupplemented,the“Master Indenture”).FredHutchiscurrentlytheonlyMemberofObligatedGroup.Theobligations such SupplementalIndenturesupplementsthatcertainAmendedandRestatedMaster TrustIndenture,datedNovember 24, 2009,byandbetweenFredHutchTheBankofNewYork Supplemental IndentureNo.29(“Supplemental29”andtogetherwith IndentureNo.28,the“SupplementalIndentures”),eachdatedDateofIssue.Each andtheSeries2017CMasterNotewillbedeliveredpursuantto (“SupplementalIndentureNo. 28”) 2017B MasterNotewillbedeliveredpursuanttoSupplementalIndentureNo. 28 Cancer ResearchCenterObligatedGroup)(the“Series2017CMasterNote,”andtogether withtheSeries2017BMasterNote,“Series2017VariableRateNotes”).The related totheSeries2017CBondswillbesecuredbyjointandseveralobligationsofMembersObligatedGrouppursuantMasterNote–(Fred Hutchinson to MasterNote–Series2017B(FredHutchinsonCancerResearchCenterObligatedGroup)(the“SeriesNote”)andpaymentsbemadeundertheLoan Agreement Payments tobemadeundertheLoanAgreementrelatedSeries2017BBondswillsecuredbyjointandseveralobligationsofMembersObligatedGroup pursuant Indenture. TheLoanAgreementsprovidethatFredHutch’spaymentobligationsthereunder,includingwithoutlimitation,Paymentobligations,shallbeabsoluteand unconditional. Members oftheObligatedGroup(asdefinedherein)underrelatedSeries2017VariableRateMasterNoteherein),andfromcertainotherfundsheld the relatedBond Indenture. EachBondFundis,totheextentandasprovidedinrelatedIndenture,befundedfrompaymentsmadebyFredHutchunderLoanAgreement, bythe descriptions ofthetermsapplicabletosuchBondsinInterestRatePeriodwhicharebeingconverted. Rate Period(includingasubsequentIndexFloatingPeriod),potentialpurchasersofsuchBondswillbeprovidedwithseparateofferingmaterials containing Period. TherearesignificantdifferencesinthetermsofBondsotherInterestRatePeriods.IneventaconversionSeriestoanother Interest at theoptionofFredHutch.ThisOfficialStatementdescribestermsandprovisionsapplicabletoeachSeriesBondsonlywhileitisinitsinitialIndexFloatingRate including theMandatoryPurchaseDate,asdescribedherein.TheBondsarenotsubjecttooptionaltenderforpurchasebyOwners. optional redemption,andtoacceleration,allasdescribedherein.Inaddition,eachSeriesoftheBondsissubjectmandatorytenderforpurchaseonorafteritsapplicable ParCallDate, Date oranyotherpurchasedate. under therelatedLoanAgreement.ThereisnoLiquidityFacilityinplacetoprovidefundsforpurchaseofBondsaSeriesonapplicableMandatoryPurchase Price ofBondsaSeriestenderedordeemedforpurchaseonMandatoryPurchaseDateisanEventDefaultundertherelatedBondIndentureandLoan DefaultEvent Purchase Date”).FredHutchisobligatedtopaytheTenderPriceoftenderedandunremarketedBondsaSeriesonrelatedMandatoryDate.Thefailure theTender the insidecoverhereof). Floating RatePercentage(identifiedontheinsidecoverhereof)andapplicableInde COUNSEL’S APPROVINGOPINIONS.” the federalalternativeminimumtaximposedoncertaincorporations.See“TAXMATTERS–FederalIncomeTaxation”hereinandAPPENDIXE“FORMSOFBOND corporations. However,underexistingfederallaw,interestontheBondsistakenintoaccountindeterminingadjustedcurrentearningsforpurposeofcomputing income forfederaltaxpurposesandisnotanitemofpreferencedeterminingthealternativeminimumimposedonindividuals Internal RevenueCodeof1986,asamended,thatmustbemetsubsequenttotheDateIssue,underexistingfederallaw,interestonBondsisexcludablefromgross The Bondsareofferedwhen,asandifissued bytheAuthorityandreceivedUnderwriter,subjecttopriorsale,withdrawal ormodificationoftheofferwithoutnotice This coverpagecontainscertaininformation foreaseofreferenceonly.Itisnotasummarythisissue.Potentialinvestors areadvisedtoreadtheentireOfficialStatement, THE BONDSDONOTCONSTITUTEOBLIGATIONS,EITHERGENERAL,SPECIALOR MORAL,OFTHESTATEWASHINGTON,ORAPLEDGEFAITHANDCREDIT The BondsofaSeriesarespecialfundrevenueobligationstheAuthority,payablesolelyfrommoneyandinvestmentsinBondFundestablishedunderrelated Bond Each SeriesoftheBondsmaybeconvertedtobearinterestinanotherInterestRatePeriod(includingasubsequentIndexFloatingPeriod)onorafterrelatedParCall Date Each Series of the Bonds is subject to optional redemption on or after the applicable Par Call Date (identified on the inside cover hereof), mandatory sinking fund and extraordinary Each SeriesoftheBondswillbesubjecttomandatorytenderforpurchaseondayfollowinglastinitialIndexFloatingRatePeriodsuch(the“Mandatory Each SeriesoftheBondswillinitiallybearinterestatanIndexFloatingRateasdescribedhereinforPeriodsuchcommencing onthe Each SeriesoftheBondswillbeissuedinfullyregisteredform,andwhennameCede&Co.,asnomineeforTheDepositoryTrustCompany The proceedsofeachSeriesthe Bonds willbelentbytheAuthoritytoFredHutchinsonCancerResearchCenter(“FredHutch”)pursuantaseparate Loan andSecurity The WashingtonHealthCareFacilitiesAuthority(the“Authority”)isissuing$92,350,000*inprincipalamountofitsVariableRateRevenueBonds,Series2017B(FredHutchinson In the opinion ofBondCounsel,astheDateIssue,assuming compliance bytheAuthority,FredHutchand Bond Trusteewithapplicable requirements ofthe

VARIABLE RATEREVENUEBONDS,SERIES2017BAND 2017C WASHINGTON HEALTH CARE FACILITIES AUTHORITY PRELIMINARY OFFICIAL STATEMENT DATED FEBRUARY 27, 2017 (Fred HutchinsonCancerResearchCenter) (Bearing InterestatanIndexFloatingRate) $178,195,000* J.P. Morgan Price: 100%

Maturity Date:asshownoninsidefrontcover RATINGS: Moody’s:A3 (See “RATINGS”) S&P: A

$92,350,000* WASHINGTON HEALTH CARE FACILITIES AUTHORITY VARIABLE RATE REVENUE BONDS, SERIES 2017B (Fred Hutchinson Cancer Research Center)

Index Floating Rate Index Floating Par Call Initial Index Floating Mandatory CUSIP † Index Percentage Rate Spread Date Rate Period Ends Purchase Date Maturity Date Number One- __.__% January 1, 20__ Month LIBOR*

$85,845,000* WASHINGTON HEALTH CARE FACILITIES AUTHORITY VARIABLE RATE REVENUE BONDS, SERIES 2017C (Fred Hutchinson Cancer Research Center)

Index Floating Rate Index Floating Par Call Initial Index Floating Mandatory CUSIP † Index Percentage Rate Spread Date Rate Period Ends Purchase Date Maturity Date Number SIFMA* 100.0% January 1, 20__

* Preliminary; subject to change. † CUSIP is a registered trademark of the American Bankers Association. CUSIP Global Services (CGS) is managed on behalf of the American Bankers Association by S&P Capital IQ. Copyright© 2017 CUSIP Global Services. All rights reserved. CUSIP® data herein is provided by CUSIP Global Services. This data is not intended to create a database and does not serve in any way as a substitute for the CGS database. The CUSIP numbers listed above are being provided solely for the convenience of the bondholders, and none of Fred Hutch, the Authority or the Underwriter makes any representation with respect to such numbers or undertake any responsibility for their accuracy. The CUSIP numbers for one or more of the Bonds are subject to change after the issuance of the Bonds as a result of various subsequent actions including, but not limited to, a refunding in part of the Bonds.

ABOUT THIS OFFICIAL STATEMENT

Each party listed below has provided the information under the caption or captions following its name. Each party is responsible only for the information provided under the captions following its name, unless otherwise stated.

Authority: “THE AUTHORITY” and “ABSENCE OF MATERIAL LITIGATION – The Authority”

DTC: APPENDIX F – “DTC BOOK-ENTRY ONLY SYSTEM”

Bond Trustee “THE BOND TRUSTEE”

Master Trustee: “THE MASTER TRUSTEE”

Financial Advisors: “FINANCIAL ADVISORS”

Underwriter: “UNDERWRITING” and the sentence on this page specifically described as provided by the Underwriter

All other information has been provided by Fred Hutch or another identified source.

You should rely only on the information contained in this Official Statement. No one has been authorized to provide you with information different from that contained in this Official Statement. The information in this Official Statement is accurate only as of the date of this Official Statement, regardless of the time of delivery of this Official Statement or of any sale of the Bonds.

Caution Regarding Forward-looking Statements: This Official Statement contains forward-looking statements that involve risks and uncertainties. In some cases you can identify forward-looking statements by terms such as “plan,” “expect,” “estimate,” “budget,” or similar expressions intended to identify forward-looking statements. Such forward- looking statements include but are not limited to certain statements contained in the information under the caption “BONDOWNERS’ RISKS” in the forepart of this Official Statement and the statements contained in APPENDIX A – “INFORMATION CONCERNING FRED HUTCHINSON CANCER RESEARCH CENTER.” These statements reflect the current views of Fred Hutch with respect to future events and are based on assumptions and subject to risks and uncertainties. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. You should not place undue reliance on forward-looking statements. Each forward-looking statement speaks only as of the date of the particular statement. The Authority and Fred Hutch undertake no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or other information. In light of these risks, results could differ materially from those stated, implied or inferred from the forward-looking statements contained in this Official Statement.

No dealer, broker, salesperson, or any other person has been authorized by the Authority, Fred Hutch or the Underwriter to give any information or to make any representation other than those contained herein in connection with the offering of the Bonds and, if given or made, such information or representation must not be relied upon as having been authorized by any of the foregoing or any other person. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy the Bonds, nor shall there be any offer, solicitation or sale of the Bonds, by any person in any state or jurisdiction in which such offer, solicitation or sale is not authorized or in which the person making such offer, solicitation or sale is not qualified to do so or to any person to whom it is unlawful to make such offer, solicitation or sale in such state or jurisdiction. The information set forth herein has been obtained from sources which are believed to be reliable, but is not guaranteed as to accuracy or completeness, and it is not to be construed as a representation by, the Authority or the Underwriter.

The Underwriter has provided the following sentence for inclusion in this Official Statement: The Underwriter has reviewed the information in this Official Statement in accordance with, and as part of, its responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriter does not guarantee the accuracy or completeness of such information.

IN CONNECTION WITH THE OFFERING OF THE BONDS, THE UNDERWRITER MAY OVERALLOT OR EFFECT TRANSACTIONS THAT STABILIZE OR MAINTAIN THE MARKET PRICE OF THE BONDS OFFERED HEREBY AT LEVELS ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

THE BONDS AND THE SERIES 2017 VARIABLE RATE MASTER NOTES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND NEITHER THE BOND INDENTURES NOR THE MASTER INDENTURE HAVE 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 LAWS OF THE STATES IN WHICH 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.

THIS OFFICIAL STATEMENT IS BEING PROVIDED TO PROSPECTIVE PURCHASERS EITHER IN BOUND PRINTED FORM (“ORIGINAL BOUND FORMAT”) OR IN ELECTRONIC FORMAT ON THE WEBSITE www.MuniOS.com. THIS OFFICIAL STATEMENT MAY BE RELIED UPON ONLY IF IT IS IN ITS ORIGINAL BOUND FORMAT OR IF IT IS PRINTED IN FULL DIRECTLY FROM SUCH WEBSITE. TABLE OF CONTENTS Page

INTRODUCTION ...... 1 General ...... 1 Maturity, Interest, Tender and Redemption of the Bonds ...... 2 Source of Payment for the Bonds ...... 2 Security for the Bonds ...... 3 Fred Hutch and the Obligated Group ...... 4 The Authority ...... 5 Limited Obligations ...... 5 Bondowners’ Risks ...... 5 Plan of Finance ...... 5 THE BONDS ...... 6 General ...... 6 Interest Rate ...... 7 Determination of Index Floating Rate ...... 8 Payment of the Bonds ...... 8 Redemption ...... 10 Conversion to other Interest Rate Periods ...... 13 Tender and Purchase of Bonds ...... 14 Bond Registration and Transfer ...... 16 Events of Default ...... 16 Acceleration of the Bonds ...... 17 BOOK-ENTRY ONLY SYSTEM ...... 17 SECURITY AND SOURCES OF PAYMENT FOR THE BONDS ...... 17 Limitation of State and Authority Liability ...... 17 Sources of Payment and Security for the Bonds ...... 18 Assignment of Rights under the Loan Agreements and Series 2017 Variable Rate Master Notes ...... 19 Security Interest in Bond Funds and Project Funds ...... 19 The Master Indenture and Series 2017 Variable Rate Master Notes ...... 19 Potential Future Members of the Obligated Group ...... 22 Amendments to Bond Indentures, Loan Agreements and Master Indenture ...... 22 PLAN OF FINANCE ...... 23 General ...... 23

i TABLE OF CONTENTS Page

The Project ...... 23 Refunded Bonds ...... 23 ESTIMATED SOURCES AND USES OF FUNDS ...... 24 ESTIMATED FISCAL YEAR DEBT SERVICE REQUIREMENTS ...... 25 THE AUTHORITY ...... 26 THE BOND TRUSTEE ...... 27 THE MASTER TRUSTEE ...... 27 BONDOWNERS’ RISKS ...... 28 General ...... 28 Federal Policy and Other Matters Related to Funding of Research Facilities ...... 28 Increased Enforcement Affecting Clinical Research ...... 30 False Claims Act ...... 31 Anti-Kickback Statute ...... 32 Federal, State and Local Legislation and Regulations ...... 32 Tax-Exempt Status and Other Tax Matters ...... 33 Employment and Labor Issues ...... 36 Privacy Laws ...... 37 Other Risk Factors Generally Affecting Research Facilities ...... 40 Other Risk Factors Affecting the Bonds ...... 40 Risks Related to Outstanding Variable Rate Master Notes ...... 41 Risks Related to Investments ...... 41 Swap Agreement Interest Rate Risk ...... 42 Nature of Fred Hutch’s Facilities ...... 42 Bankruptcy of Obligated Group Member ...... 43 ENFORCEABILITY OF REMEDIES ...... 44 Possible Federal Interest in Mortgaged Property ...... 44 Enforcement of Remedies ...... 44 Risks Related to Obligated Group Financings ...... 45 ABSENCE OF MATERIAL LITIGATION ...... 46 Fred Hutch ...... 46 The Authority ...... 47 TAX MATTERS ...... 47 Federal Income Taxation ...... 47

ii TABLE OF CONTENTS Page

Original Issue Discount and Bond Premium ...... 47 Continuing Requirements ...... 48 Other Federal Tax Matters ...... 48 APPROVAL OF VALIDITY ...... 49 CONTINUING DISCLOSURE ...... 49 FINANCIAL ADVISORS ...... 49 RATINGS ...... 50 UNDERWRITING ...... 50 INDEPENDENT AUDITORS...... 51 OTHER MATTERS...... 51 EXECUTION ...... 52

APPENDIX A INFORMATION CONCERNING FRED HUTCHINSON CANCER RESEARCH CENTER ...... A-1 APPENDIX B AUDITED FINANCIAL STATEMENTS OF FRED HUTCH ...... B-1 APPENDIX C SUMMARY OF CERTAIN PROVISIONS OF THE BOND INDENTURE AND LOAN AGREEMENT ...... C-1 APPENDIX D SUMMARY OF CERTAIN PROVISIONS OF THE MASTER INDENTURE AND DEED OF TRUST ...... D-1 APPENDIX E FORMS OF BOND COUNSEL’S APPROVING OPINIONS ...... E-1 APPENDIX F DTC BOOK-ENTRY ONLY SYSTEM ...... F-1 APPENDIX G FORM OF CONTINUING DISCLOSURE UNDERTAKING ...... G-1

iii [THIS PAGE INTENTIONALLY LEFT BLANK]

OFFICIAL STATEMENT

$178,195,000* WASHINGTON HEALTH CARE FACILITIES AUTHORITY VARIABLE RATE REVENUE BONDS, SERIES 2017B AND SERIES 2017C (Fred Hutchinson Cancer Research Center)

This Official Statement (including the cover page and Appendices attached hereto, the “Official Statement”) is provided to furnish information with respect to the issuance, sale and delivery by the Washington Health Care Facilities Authority (the “Authority”) of $92,350,000* in principal amount of its Variable Rate Revenue Bonds, Series 2017B (Fred Hutchinson Cancer Research Center) (the “Series 2017B Bonds”) and $85,845,000* in principal amount of its Variable Rate Revenue Bonds, Series 2017C (Fred Hutchinson Cancer Research Center) (the “Series 2017C Bonds” and together with the Series 2017B Bonds, the “Bonds”), pursuant to a separate Bond Trust Indenture for each series of the Bonds (each, a “Bond Indenture” and together, the “Bond Indentures”), each dated the date of original issuance of the Bonds (the “Date of Issue”), and each by and between the Authority and U.S. Bank National Association, as bond trustee (the “Bond Trustee”). The Series 2017B Bonds and the Series 2017C Bonds are each referred to herein at times as a “Series” of Bonds.

Unless otherwise defined herein, capitalized terms used in this Official Statement have the meanings assigned to such terms by the Bond Indentures or the Amended and Restated Master Trust Indenture (as supplemented and amended from time to time, the “Master Indenture”), dated November 24, 2009, by and between Fred Hutchinson Cancer Research Center (“Fred Hutch”), which currently is the sole member of the obligated group (the “Obligated Group”) established thereunder, and The Bank of New York Mellon Trust Company, N.A., as successor master trustee (the “Master Trustee”), as applicable. See APPENDIX C – “SUMMARY OF CERTAIN PROVISIONS OF THE BOND INDENTURES AND LOAN AGREEMENTS – DEFINITIONS,” and APPENDIX D – “SUMMARY OF CERTAIN PROVISIONS OF THE MASTER INDENTURE AND DEED OF TRUST – DEFINITIONS.”

INTRODUCTION

The following introductory statement is subject in all respects to the more complete information set forth in this Official Statement. The descriptions and summaries of various documents hereinafter set forth do not purport to be comprehensive or definitive and are qualified in their entirety by reference to each such document for the complete details of all terms and provisions thereof.

General

The Authority is issuing the Bonds in the aggregate principal amount of $178,195,000* pursuant to chapter 70.37 Revised Code of Washington, as amended (the “Act”) and the Bond Indentures. The proceeds of each Series of the Bonds will be lent by the Authority to Fred Hutch pursuant to a separate Loan and Security Agreement for each Series of the Bonds (each, a “Loan Agreement” and together, the “Loan Agreements”), each dated the Date of Issue, and each by and between the Authority and Fred Hutch, to fund all or a portion of: (i) costs of the Project (as defined herein), (ii) costs of refunding the Refunded Bonds (as defined herein), and (iii) costs of issuing the Bonds and other incidental costs. See “PLAN OF FINANCE” and “ESTIMATED SOURCES AND USES OF FUNDS” herein.

* Preliminary; subject to change.

Maturity, Interest, Tender and Redemption of the Bonds

The Series 2017B Bonds will mature on January 1, 20__. The Series 2017C Bonds will mature on January 1, 20__. Each Series of the Bonds will initially bear interest from and including the Date of Issue at an Index Floating Rate during the initial Index Floating Rate Period for such Series as described herein. Interest on each Bond of a Series is payable on the first Business Day (as defined herein) of each month, commencing May 1, 2017, and the day succeeding the last day of the applicable Index Floating Rate Period. During the initial Index Floating Rate Period for each Series of the Bonds, such Bonds will bear interest at a per annum interest rate (not to exceed 12 percent), determined weekly, equal to the sum of (i) the product of the applicable Index Floating Rate Percentage (identified on the inside cover hereof) and the applicable Index (identified on the inside cover hereof), plus (ii) the applicable Index Floating Rate Spread (identified on the inside cover hereof). See “THE BONDS” herein.

Each Series of the Bonds will be subject to mandatory tender for purchase on the day following the last day of the initial Index Floating Rate Period for such Bonds (the “Mandatory Purchase Date”). Fred Hutch is obligated to pay the Tender Price of tendered and unremarketed Bonds of a Series on the related Mandatory Purchase Date. “Tender Price” is an amount equal to 100% of the principal amount tendered for purchase, plus accrued interest, if any, from the immediately preceding Interest Accrual Date to the Tender Date. The failure to pay the Tender Price of Bonds of a Series tendered or deemed tendered for purchase on a Mandatory Purchase Date is an Event of Default under the related Bond Indenture and a Loan Default Event under the related Loan Agreement. There is no Liquidity Facility in place to provide funds for the purchase of Bonds of a Series on the applicable Mandatory Purchase Date or any other purchase date.

Each Series of the Bonds is subject to optional redemption on or after the applicable Par Call Date, mandatory sinking fund and extraordinary optional redemption, and to acceleration, all as described herein. In addition, each Series of the Bonds is subject to mandatory tender for purchase on or after its applicable Par Call Date, including the Mandatory Purchase Date, as described herein. The Bonds are not subject to optional tender for purchase by the Owners.

Each Series of the Bonds may be converted to bear interest in another Interest Rate Period (including a subsequent Index Floating Rate Period) on or after the related Par Call Date at the option of Fred Hutch. This Official Statement describes terms and provisions applicable to each Series of the Bonds only while it is in its initial Index Floating Rate Period. There are significant differences in the terms of the Bonds in other Interest Rate Periods. In the event of a conversion of a Series of Bonds to another Interest Rate Period (including a subsequent Index Floating Rate Period), potential purchasers of such Bonds will be provided with separate offering materials containing descriptions of the terms applicable to such Bonds in the Interest Rate Period to which such Bonds are being converted.

Source of Payment for the Bonds

The Bonds of a Series are special fund revenue obligations of the Authority, payable solely from money and investments in the Bond Fund established under the related Bond Indenture. Pursuant to the Act, the Bonds of a Series constitute a prior charge over all other charges or claims against the related Bond Fund. Each Bond Fund will be funded primarily from principal and interest payments made by Fred Hutch under the related Loan Agreement and payments made by the Members of the Obligated Group in respect of such principal and interest payments under the related Series 2017 Variable Rate Master Note (as defined herein).

Under the Loan Agreements, Fred Hutch is obligated to make payments in the amounts, and at the times required, to pay the principal of and interest on the Series 2017B Bonds or Series 2017C Bonds, as applicable, when regularly scheduled to be due and as due as the result of acceleration prior to maturity, as well as payments required to pay the redemption price (including premium, if any) of and accrued interest on Bonds which are redeemed. Fred Hutch is also obligated to pay the Tender Price of all Bonds tendered or deemed tendered when due and payable, as described in this Official Statement. The Loan Agreements provide that Fred Hutch’s payment obligations thereunder, including without limitation, Loan Payment obligations, shall be absolute and unconditional. The obligations of Fred Hutch under the Loan Agreement related to the Series 2017B Bonds will be secured by a separate master note obligation (the “Series 2017B Master Note”) issued by Fred Hutch, for itself and as representative of the Obligated Group (the “Obligated Group Representative”) and the obligations of Fred Hutch under the Loan Agreement for the Series 2017C Bonds will be secured by a separate master note obligation (the “Series 2017C Master Note” and together with the Series 2017B Master Note, the “Series 2017 Variable Rate Master Notes”), issued by Fred Hutch, for itself and as Obligated Group Representative. The obligations of the Obligated Group under the Series 2017 Variable Rate Master Notes will be secured by liens against and security interests in certain real and personal property of Fred Hutch, subject to Permitted Encumbrances, and release and reconveyance as further described herein. As of the Date of Issue, Fred Hutch will be the only Member of the Obligated Group.

Security for the Bonds

Each Series of the Bonds is secured by a security interest in and a statutory lien, claim and charge against the money and investments in the related Bond Fund, including the Principal and Interest Account established therein. The Series 2017B Bonds will be further secured by a security interest, lien and claim against the money and investments in the Project Fund established under the related Bond Indenture (until such money and investments are applied or transferred in accordance with such Bond Indenture), and by an assignment by the Authority to the Bond Trustee, in trust and without recourse, of all of the Authority’s rights, title and interests in and under the Loan Agreement related to the Series 2017B Bonds (subject to certain reservations and exceptions noted therein) and the Series 2017B Master Note. The Series 2017C Bonds will be further secured by a security interest, lien and claim against the money and investments in the Project Fund established under the related Bond Indenture (until such money and investments are applied or transferred in accordance with such Bond Indenture), and by an assignment by the Authority to the Bond Trustee, in trust and without recourse, of all of the Authority’s rights, title and interests in and under the Loan Agreement related to the Series 2017C Bonds (subject to certain reservations and exceptions noted therein) and the Series 2017C Master Note. See “SECURITY AND SOURCES OF PAYMENT FOR THE BONDS” herein and APPENDIX C – “SUMMARY OF CERTAIN PROVISIONS OF THE BOND INDENTURES AND LOAN AGREEMENTS.”

The Series 2017 Variable Rate Master Notes are being issued by Fred Hutch, for itself and as Obligated Group Representative, pursuant to the Master Indenture, as previously supplemented and as supplemented by Supplemental Indenture No. 28 thereto (“Supplemental Indenture No. 28”) and by Supplemental Indenture No. 29 thereto (“Supplemental Indenture No. 29” and together with Supplemental Indenture No. 28, the “Supplemental Indentures”), each dated the Date of Issue, and each by and between Fred Hutch and the Master Trustee. Pursuant to the Master Indenture, Fred Hutch and any future Members of the Obligated Group agree to make payments on each of the Series 2017 Variable Rate Master Notes in amounts sufficient to pay, when due, the principal of and premium, if any, and interest on the related Series of Bonds. Each Member of the Obligated Group is jointly and severally obligated to make payments on all Master Notes issued under the Master Indenture, including the Series 2017 Variable Rate Master Notes. The Series 2017 Variable Rate Master Notes, together with all other Master Notes outstanding under the Master Indenture from time to time, will initially be secured by liens against and security interests in certain real and personal property of Fred Hutch, subject to Permitted

Encumbrances, and to release and reconveyance all as further described herein. See “SECURITY AND SOURCES OF PAYMENT FOR THE BONDS – The Master Indenture and Series 2017 Variable Rate Master Notes” herein and APPENDIX D – “SUMMARY OF CERTAIN PROVISIONS OF THE MASTER INDENTURE AND DEED OF TRUST.”

The obligations of the Obligated Group with respect to the Master Notes outstanding under the Master Indenture, including the Series 2017 Variable Rate Master Notes, are currently secured by an Amended and Restated Deed of Trust, Security Agreement and Financing Statement, made by Fred Hutch for the benefit of the Master Trustee (the “Current Deed of Trust”), which is to be amended and restated by a Second Amended and Restated Deed of Trust, Security Agreement and Financing Statement to be dated the Date of Issue (the “Second Amended Deed of Trust” or “Deed of Trust”), to become effective upon receipt of the consent of the majority of the aggregate principal amount of the Master Notes expressed to have the benefit of the pledge of Collateral then Outstanding and entitled to vote, which is expected to occur on the Date of Issue.

By purchase of the Bonds, the Beneficial Owners of the Bonds are deemed to have consented to the amendments of the Current Deed of Trust contained in the Second Amended Deed of Trust. See APPENDIX D – “SUMMARY OF CERTAIN PROVISIONS OF THE MASTER INDENTURE AND DEED OF TRUST – DEED OF TRUST – Amendments Included in the Second Amended Deed of Trust” for a summary of certain amendments to the Current Deed of Trust included in the Second Amended Deed of Trust.

Further, by purchase of the Bonds, Beneficial Owners of the Bonds are deemed to have (1) consented to the full reconveyance of the Deed of Trust, and the termination of the related Hazardous Substances Agreement, with such reconveyance and termination to occur upon the Master Trustee’s receipt of the consent of the owners of each then-Outstanding Master Note expressed to have the benefit of the pledge of Collateral, and (2) acknowledged and consented to the termination of certain Security Documents no longer in effect. Upon the reconveyance of the Deed of Trust, the obligations of the Obligated Group under the Master Indenture, including the obligations to make payments required by the Series 2017 Variable Rate Master Notes, will no longer be secured by a security interest in real property. See APPENDIX D – “SUMMARY OF CERTAIN PROVISIONS OF THE MASTER INDENTURE AND DEED OF TRUST – SUPPLEMENTAL INDENTURES NOS. 28 AND 29 – Deed of Trust, Security Documents and Security Related Documents.”

Fred Hutch has previously authorized the issuance of Master Notes, which are currently outstanding under the Master Indenture and which will remain outstanding upon issuance of the Bonds. See “SECURITY AND SOURCES OF PAYMENT FOR THE BONDS – The Master Indenture and Series 2017 Variable Rate Master Notes – Indebtedness” herein. In addition, Fred Hutch anticipates issuing an additional Master Note in connection with the Series 2017A Bonds (as defined herein). See “INTRODUCTION – Plan of Finance” herein.

Fred Hutch and the Obligated Group

Fred Hutch is a Washington nonprofit corporation and a 501(c)(3) Organization located in Seattle, Washington. The Fred Hutchinson Cancer Research Center/University of Washington Consortium, of which Fred Hutch is a part, has been designated by the National Cancer Institute of the National Institutes of Health as one of 40 comprehensive cancer centers in the United States. As such, Fred Hutch is part of a national network of institutions specializing in research into the causes, cures, prevention, diagnosis and treatment of cancer. See APPENDIX A – “INFORMATION CONCERNING

FRED HUTCHINSON CANCER RESEARCH CENTER” and APPENDIX B – “AUDITED FINANCIAL STATEMENTS OF FRED HUTCH” for more information about Fred Hutch.

The Master Indenture establishes the Obligated Group and contains provisions for adding Members to the Obligated Group and for the withdrawal of Members from the Obligated Group from time to time under certain circumstances. Each Member of the Obligated Group is jointly and severally obligated to pay when due the principal of and premium, if any, and interest on each Master Note issued under the Master Indenture, including the Series 2017 Variable Rate Master Notes and the Series 2017A Master Note (as defined herein). As of the Date of Issue, Fred Hutch will be the only Member of the Obligated Group. Fred Hutch will covenant in each of the Supplemental Indentures that it will not withdraw from the Obligated Group so long as the Series 2017 Variable Rate Master Note authorized thereby is outstanding under the Master Indenture, absent consent of not less than a majority in aggregate principal amount of the Owners of the applicable Series of the Bonds then Outstanding. For more information, see APPENDIX D – “SUMMARY OF CERTAIN PROVISIONS OF THE MASTER INDENTURE AND DEED OF TRUST.”

The Authority

The Authority was created in 1974 by the Legislature of the state of Washington (the “State”) pursuant to the Act. The Authority is empowered to issue special fund revenue bonds and to make the proceeds thereof available to private, nonprofit corporations and municipal corporations authorized to operate health care facilities for the purpose of minimizing the costs of providing such facilities. See “THE AUTHORITY” herein.

Limited Obligations

The Bonds of a Series are special fund revenue obligations of the Authority, payable solely from money and investments in the Bond Fund established under the related Bond Indenture and held by the Bond Trustee under such Bond Indenture. The Bonds do not constitute obligations, either general, special or moral, of the State, or a pledge of the faith and credit of the State, or a general obligation of the Authority. The Owners (including the Beneficial Owners) of the Bonds have no right to require the State or the Authority, nor has the State or the Authority any obligation or legal authorization, to levy any taxes or appropriate or expend any of their respective funds for the payment of the principal or Tender Price of, or the interest or any premium on, the Bonds. For more information about the security for the Bonds, see “SECURITY AND SOURCES OF PAYMENT FOR THE BONDS” herein.

Bondowners’ Risks

Each Bond Fund will be funded primarily from principal and interest payments made by Fred Hutch under the related Loan Agreement and payments made by the Members of the Obligated Group in respect of such principal and interest payments under the related Series 2017 Variable Rate Master Note. No assurance can be given that revenue of Fred Hutch and any future Members of the Obligated Group will be sufficient to make such payments, when due. Such payments are expected to be made from revenues derived from the operations of Fred Hutch and the Obligated Group, respectively. See “BONDOWNERS’ RISKS” herein for a discussion of this and other risks related to Fred Hutch and payment of the Bonds. Plan of Finance

Fred Hutch has requested that the Authority issue the Bonds to fund all or a portion of: (i) costs of the Project, (ii) costs of refunding the Refunded Bonds, and (iii) costs of issuing the Bonds and other

incidental costs. See “PLAN OF FINANCE” and “ESTIMATED SOURCES AND USES OF FUNDS” herein.

Fred Hutch has also requested that the Authority issue, contemporaneously with the Bonds, a series of tax-exempt, fixed rate obligations (the “Series 2017A Bonds,” and together with the Bonds, the “Series 2017 Bonds”). Proceeds of the Series 2017A Bonds are expected to finance a portion of the Project and a portion of the proceeds of the Series 2017A Bonds may be used to refund on a current basis, pay and redeem the Refunded Bonds.

The Authority has authorized the issuance of the Series 2017 Bonds in an aggregate principal amount of not to exceed $228,889,000 to accomplish such purposes.

Issuance of the Bonds is not contingent upon the issuance of the Series 2017A Bonds.

See “PLAN OF FINANCE” and “ESTIMATED SOURCES AND USES OF FUNDS” herein.

If the Series 2017A Bonds are issued, sold and delivered: the obligation of Fred Hutch with respect to the loan of the proceeds of the Series 2017A Bonds will be evidenced by a master note obligation (the “Series 2017A Master Note”). The Series 2017A Master Note will be issued by Fred Hutch, for itself and as Obligated Group Representative, pursuant to the Master Indenture, and, together with the 2017 Variable Rate Master Notes, are collectively referred to in this Official Statement as the “Series 2017 Master Notes.” The Series 2017 Master Notes will rank on a parity with all Master Notes issued under the Master Indenture except to the extent specifically provided otherwise in the Master Indenture. See “SECURITY AND SOURCES OF PAYMENT FOR THE BONDS – The Master Indenture and Series 2017 Variable Rate Master Notes – Indebtedness” herein.

THE BONDS

The forepart of this Official Statement describes certain terms of the Bonds only while the Bonds are held in book-entry form. Reference should be made to APPENDIX C – “SUMMARY OF CERTAIN PROVISIONS OF THE BOND INDENTURES AND LOAN AGREEMENTS” for a summary of certain terms applicable after the Book-Entry Termination Date, if any, and to the Bond Indentures for a complete statement of all terms thereof. The discussion herein is qualified by such reference.

General

Each Series of the Bonds may bear interest in an Index Floating Rate Period, a Long-Term Interest Rate Period, a Daily Interest Rate Period, a Weekly Interest Rate Period, a Short-Term Interest Rate Period or a Windows Interest Rate Period (each an “Interest Rate Period”). All the Bonds of a Series must bear interest in the same Interest Rate Period. Each Series of Bonds will initially bear interest in an Index Floating Rate Period. The Index for the Series 2017B Bonds and the Series 2017C Bonds during the related initial Index Floating Rate Period for such series will be One Month LIBOR* and the SIFMA Index*, respectively. See APPENDIX C – “SUMMARY OF CERTAIN PROVISIONS OF THE BOND INDENTURES AND LOAN AGREEMENTS – DEFINITIONS – One Month LIBOR” and “–SIFMA Index.”

This Official Statement describes terms and provisions applicable to each Series of the Bonds only while it is in its initial Index Floating Rate Period. There are significant differences in

* Preliminary, subject to change.

the terms of the Bonds in other Interest Rate Periods. This Official Statement is not intended to provide information with respect to a Series of the Bonds in any Interest Rate Period other than the initial Index Floating Rate Period for such Bonds.

The Series 2017B Bonds will be issued in the principal amount of $92,350,000* and mature on January 1, 20__. The Series 2017C Bonds will be issued in the principal amount of $85,845,000* and mature on January 1, 20__. Each Series of the Bonds will be dated the Date of Issue and delivered in fully registered form and when issued will be registered in the name of Cede & Co., as nominee for The Depository Trust Company (“DTC”), New York, New York, as initial securities depository for the Bonds (the “Securities Depository”). So long as DTC is acting as the Securities Depository for a Series of the Bonds, purchases of beneficial ownership interests in such Series of Bonds may be made in book-entry only form in denominations of $100,000 or any integral multiple of $5,000 in excess of $100,000, as further described herein under the caption “BOOK-ENTRY ONLY SYSTEM.” Each Series of the Bonds will be subject to redemption, tender for purchase and acceleration as described herein. Each Series of Bonds will be transferable and exchangeable as set forth in the related Bond Indenture. See APPENDIX C – “SUMMARY OF CERTAIN PROVISIONS OF THE BOND INDENTURES AND LOAN AGREEMENTS.” So long as Cede & Co. is the registered owner of the Bonds of a Series, principal and Tender Price of and premium, if any, and interest on such Bonds will be paid by the Bond Trustee, to DTC, which, in turn, will remit such principal and Tender Price, premium, if any, and interest to its participants for subsequent disbursement to the Beneficial Owners of such Bonds, as described herein under the caption “BOOK-ENTRY ONLY SYSTEM.” In addition, so long as Cede & Co. is the registered owner of the Bonds of a Series, tenders of such Bonds will be based only upon and subject to the procedures and limitation of the book-entry only system described herein under the caption “BOOK- ENTRY ONLY SYSTEM.”

The initial Index Floating Rate Period for each Series of Bonds shall be for a period commencing on the Date of Issue and ending on, with respect to the Series 2017B Bonds, ______, 20__, and with respect to the Series 2017C Bonds, ______, 20__. The Series 2017B Bonds and the Series 2017C Bonds are subject to mandatory tender for purchase on ______, 20__ and ______, 20__, respectively, which, in each case, is the day following the last day of the initial Index Floating Rate Period for such Bonds (the “Mandatory Purchase Date”). Each Series of the Bonds cannot be optionally redeemed, purchased or converted prior to the applicable Par Call Date. The Par Call Date for the Series 2017B Bonds is ______, 20__ and the Par Call Date for the Series 2017C Bonds is ______, 20__.

Fred Hutch is required to purchase a Series of the Bonds on the applicable Mandatory Purchase Date from any available funds unless they are purchased with remarketing proceeds. The failure to pay the Tender Price of Bonds of a Series tendered or deemed tendered for purchase on a Mandatory Purchase Date is an Event of Default under the related Bond Indenture and a Loan Default Event under the related Loan Agreement and such Series of Bonds will be subject to acceleration.

Interest Rate

Interest on each Bond shall be paid on each Interest Payment Date, Redemption Date, Special Bond Payment Date and Bond Principal Payment Date therefor. The Index Floating Rates shall be determined as set forth below under “THE BONDS – Determination of Index Floating Rate.” The first Interest Payment Date for each Series of the Bonds will be May 1, 2017, and thereafter the Interest Payment Dates for each Series of the Bonds will be the first Business Day of each month and the day succeeding the last day of the applicable Index Floating Rate Period. The interest rate on the Bonds may

* Preliminary, subject to change.

not exceed a Maximum Bond Interest Rate equal to the lesser of 12% per annum and the maximum rate of interest permitted by applicable law. Except during an Index Floating Rate Period during which the Index is One Month LIBOR, interest shall accrue on the basis of the actual number of days elapsed and a year of 365 days (366 days in a leap year). Interest on the Bonds bearing interest at an Index Floating Rate during which the Index is One Month LIBOR shall accrue on the basis of the actual number of days elapsed and a year of 360 days.

Interest on the Bonds shall be payable for the period commencing on the Date of Issue and ending on April 30, 2017, the day immediately preceding the initial Interest Payment Date, and thereafter, commencing on the first calendar day of each month, as applicable, and ending on the last day of such month.

Determination of Index Floating Rate

During each Index Floating Rate Period for the Bonds of a Series, such Bonds will bear interest at the Index Floating Rate. The initial Index Floating Rate for each Series of the Bonds shall be determined by the Underwriter on or prior to the Date of Issue. Thereafter, on each Reset Date, the Index Floating Rate shall be determined by the Calculation Agent. The determination of the Index Floating Rate for a Series of the Bonds in an Index Floating Rate Period by the Calculation Agent shall be conclusive and binding upon Fred Hutch, the Authority, the Bond Trustee, the Remarketing Agent, if any, and the Owners.

The first Index Floating Rate for each Index Floating Rate Period shall apply to the period commencing on the Date of Issue and extending through and including the first Reset Date thereafter (______, 2017), and thereafter each Index Floating Rate shall apply for the period commencing on the day immediately following a Reset Date and extending through and including the following Reset Date. “Reset Date” means every Wednesday or if any Wednesday is not a U.S. Government Securities Business Day or a LIBOR Business Day, the next succeeding U.S. Government Securities Business Day or LIBOR Business Day. “U.S. Government Securities Business Day” means any day except for a Saturday, Sunday or a day on which the Securities Industry and Financial Markets Association recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in United States government securities. “LIBOR Business Day” means any day except for a Saturday, Sunday, or other day on which banks are authorized or required to be closed in London, England.

The Index Floating Rate for each Series of the Bonds shall be the sum of (i) the product of the Index multiplied by the Index Floating Rate Percentage, plus (ii) the initial Index Floating Rate Spread for the Index Floating Rate Period. The Index, Index Floating Rate Percentage and Index Floating Rate Spread in effect for the Bonds of each Series during the initial Index Floating Rate Period for such Bonds are set forth on the inside cover page of this Official Statement. Such Index, Index Floating Rate Percentage and Index Floating Rate Spread shall be in effect through the last day of such initial Index Floating Rate Period, and shall be applied by the Calculation Agent in determining the Index Floating Rate on each Reset Date during the initial Index Floating Rate Period.

Payment of the Bonds

The Bonds of a Series are special fund revenue obligations of the Authority, payable solely from money and investments in the Bond Fund established under the related Bond Indenture. Pursuant to the Act, the Bonds of a Series constitute a prior charge over all other charges or claims against the related Bond Fund. Each Bond Fund will be funded primarily from principal and interest payments made by Fred Hutch under the related Loan Agreement and payments made by the Members of the Obligated Group in respect of such principal and interest payments under the related Series 2017 Variable Rate

Master Note. The Members of the Obligated Group receive a credit on payments due on a Series 2017 Variable Rate Master Note to the extent of payments made by Fred Hutch under the related Loan Agreement. Fred Hutch receives credit on payments due under a Loan Agreement to the extent of payment made by the Members of the Obligated Group under the related Series 2017 Variable Rate Master Note.

Under the Loan Agreements, Fred Hutch is obligated to make payments in the amounts, and at the times required, to pay the principal of and interest on the Series 2017B Bonds or Series 2017C Bonds, as applicable, when regularly scheduled to be due and as due as the result of acceleration prior to maturity, as well as payments required to pay the redemption price (including premium, if any) of and accrued interest on Bonds which are redeemed. Fred Hutch is also obligated to pay the Tender Price of all Bonds tendered or deemed tendered when due and payable, as described in this Official Statement. The Loan Agreements provide that Fred Hutch’s payment obligations thereunder, including without limitation, Loan Payment obligations, shall be absolute and unconditional. The obligations of Fred Hutch under the Loan Agreement related to the Series 2017B Bonds will be secured by the Series 2017B Master Note and the obligations of Fred Hutch under the Loan Agreement for the Series 2017C Bonds will be secured by the Series 2017C Master Note. The obligations of the Obligated Group under the Series 2017 Variable Rate Master Notes will be secured by liens against and security interests in certain real and personal property of Fred Hutch, subject to Permitted Encumbrances, and release and reconveyance as further described herein. As of the Date of Issue, Fred Hutch will be the only Member of the Obligated Group.

So long as DTC is the Securities Depository, the principal and Tender Price of and premium, if any, and interest on the Bonds will be paid by the Bond Trustee to the nominee of the Securities Depository, in accordance with the Letter of Representations. On each Interest Payment Date and on any applicable Redemption Date or Special Bond Payment Date, interest on the Bonds to which such Interest Payment Date, Redemption Date or Special Bond Payment Date relates shall be paid by the Bond Trustee to the nominee of the Securities Depository as the Owner thereof, for the benefit of the Beneficial Owners thereof, in accordance with the procedures set forth in the Letter of Representations. For more information as to payment of the principal of and interest on the Bonds to the Beneficial Owners so long as DTC is the Securities Depository, see “BOOK-ENTRY ONLY SYSTEM” herein and APPENDIX F – “DTC BOOK-ENTRY ONLY SYSTEM.” If the date for making any payment or the last date for the performance of any act or the exercise of any right, as provided in the related Bond Indenture shall be a day which is not a Business Day, such payment may be made or act performed or right exercised on the next succeeding Business Day with the same force and effect as if done on the nominal date provided in such Bond Indenture.

Redemption

The Bonds are subject to optional, mandatory sinking fund and extraordinary optional redemption as described below.

Optional Redemption. While Bonds of a Series bear interest at an Index Floating Rate, such Bonds shall not be subject to redemption prior to the applicable Par Call Date. On or after the applicable Par Call Date, such Bonds shall be subject to optional redemption at the written direction of Fred Hutch, in whole or in part at any time, on any Business Day, at a redemption price equal to 100% of the principal amount thereof, plus accrued interest, if any, to, but not including, the Redemption Date.

Mandatory Sinking Fund Redemption. The Series 2017B Bonds shall be subject to mandatory sinking fund redemption prior to maturity, in part, on January 1 in the years 20__ through 20__ inclusive, in the mandatory sinking fund redemption amounts set forth below (subject to reductions arising from the acquisition and surrender or the optional or extraordinary optional redemption of such Series 2017B Bonds, as described below), at a redemption price equal to 100% of the principal amount thereof, plus accrued interest, if any, to, but not including, the Redemption Date:

Mandatory Sinking Fund Redemption Dates Mandatory Sinking (January 1) Fund Redemption Amounts $

† ______† Maturity

The Series 2017C Bonds shall be subject to mandatory sinking fund redemption prior to maturity, in part, on January 1 in the years 20__ through 20__, inclusive, in the mandatory sinking fund redemption amounts set forth below (subject to reductions arising from the acquisition and surrender or the optional or extraordinary optional redemption of such Series 2017C Bonds, as described below), at a redemption price equal to 100% of the principal amount thereof, plus accrued interest, if any, to, but not including, the Redemption Date:

Mandatory Sinking Fund Redemption Dates Mandatory Sinking (January 1) Fund Redemption Amounts $

† ______† Maturity

The Bond Trustee shall apply the principal amount of any Bonds of a Series which have been optionally or extraordinarily optionally redeemed or acquired by Fred Hutch and surrendered to the Bond Trustee for cancellation, as a credit, to the extent such amounts have not previously been so credited, against the mandatory sinking fund redemption amount scheduled for such Bonds as described above for the sinking fund Redemption Date which is the last day of the Maturity Year designated in the written directions of Fred Hutch delivered to the Bond Trustee pursuant to the provisions of the Loan Agreement. See APPENDIX C – “SUMMARY OF CERTAIN PROVISIONS OF THE BOND INDENTURES AND LOAN AGREEMENTS – THE LOAN AGREEMENTS – Credits Against Loan Payments.”

Extraordinary Optional Redemption. Each Series of the Bonds is subject to extraordinary optional redemption prior to maturity, at the request of Fred Hutch, in whole or in part on any date as soon as practicable following receipt by the Bond Trustee of any proceeds from the redemption of the related Series 2017 Variable Rate Master Note derived from insurance or other proceeds resulting from any damage, destruction, loss or condemnation of the collateral therefor, in such order of scheduled mandatory sinking fund redemption amounts as shall be designated by Fred Hutch (or if not so designated, in inverse order of the scheduled mandatory sinking fund amounts), at a redemption price equal to 100 percent of the principal amount of such Bonds to be redeemed, plus accrued interest to the Redemption Date, in an aggregate amount not to exceed any such redemption proceeds received by the Bond Trustee. See also APPENDIX D – “SUMMARY OF CERTAIN PROVISIONS OF THE MASTER INDENTURE AND DEED OF TRUST.”

Each Series of the Bonds is also subject to extraordinary optional redemption prior to maturity, at the request of Fred Hutch, in whole or in part on any date, in such order of scheduled mandatory sinking fund amounts as shall be designated by Fred Hutch (or if not so designated, in inverse order of scheduled mandatory sinking fund amounts) at a redemption price equal to 100 percent of the principal amount of such Bonds to be redeemed plus accrued interest to the Redemption Date, if each of the following conditions is met:

(1) A Certificate of the Authorized Representative of Fred Hutch is filed with the Authority and the Bond Trustee to the effect that the Governing Body of Fred Hutch has determined in good faith that continued operation of the Project Facilities (or a portion thereof) is not financially feasible or is otherwise disadvantageous to Fred Hutch, and that, as a result thereof, Fred Hutch has decided to change the use of the Project Facilities from the use on the Date of Issue, or has decided to sell, lease or otherwise dispose of such Project Facilities to, or permit a use of the Project Facilities by, a person or entity unrelated to Fred Hutch; and

(2) A written statement of Bond Counsel is filed with the Authority and the Bond Trustee to the effect that, unless such Bonds are redeemed or retired in the amount specified therein either prior to or concurrently with such change in use or such sale, lease or other disposition, or on a subsequent date prior to the first date on which such Bonds are subject to redemption, without premium, at the option of the Authority at the request of Fred Hutch, such Bond Counsel will be unable to render an unqualified opinion that such change in use or such sale, lease or other disposition of such Project Facilities will not adversely affect the validity of any such Bonds or any exemption from federal income taxation to which the interest on such Bonds would otherwise be entitled.

Bond Trustee to Undertake Redemptions; Determination of Redemption Dates. All redemptions of Bonds of a Series are to be undertaken by the Bond Trustee for and on behalf of the Authority. The Bond Trustee shall undertake the mandatory sinking fund redemptions of Bonds of a Series as described in “Redemption – Mandatory Sinking Fund Redemption” above, without further request from the Authority or Fred Hutch. The Bond Trustee will undertake any optional redemptions and extraordinary optional redemptions of Bonds of a Series only upon the written request of Fred Hutch.

The Redemption Dates for any such optional redemption or any extraordinary optional redemption of Bonds of a Series shall be set by the Bond Trustee at the written direction of Fred Hutch, subject to the requirements of the Bond Indentures with respect to the timing of delivery of such notice to the Securities Depository as described in “Notice of Redemption; Cancellation” below.

Notice of Redemption; Cancellation. The Bond Trustee shall give notice of redemption, and the related Redemption Date, to the nominee of the Securities Depository as the Owner of such Bond, for the benefit of the Beneficial Owners thereof, in accordance with the Letter of Representations.

With respect to optional and extraordinary optional redemptions only, Fred Hutch may cancel any request for redemption made by it by delivering to the Bond Trustee, no later than the third Business Day prior to the applicable Redemption Date set for any Bonds, written notice of its decision to cancel its prior request for redemption, and upon delivery of such notice, the purported optional or extraordinary optional redemption shall be cancelled and any prior notice thereof shall be void. Immediately upon receipt of the cancellation notice from Fred Hutch with respect to any Bonds, the Bond Trustee shall give or cause to be given written notice of such cancellation to the nominee of the Securities Depository, as Owner of the Bonds which were to be redeemed, for the benefit of the Beneficial Owners thereof, in accordance with the Letter of Representations. Such notice is required to be given in any manner which the Bond Trustee reasonably believes will result in delivery of such notice to the Securities Depository prior to the Redemption Date; provided, however, that such notice of cancellation shall be effective to cancel such redemption, whether or not it is received by the Securities Depository and such occurrence shall not constitute a default or an Event of Default under the related Bond Indenture, or a Loan Agreement Default.

In addition, with respect to optional and extraordinary optional redemptions only, if the Bond Trustee shall not have funds in its possession on the Redemption Date sufficient to pay the redemption price (including premium, if any, and interest accrued to the Redemption Date) of all of the Bonds to be optionally or extraordinarily optionally redeemed for any reason (including, but not limited to, failure to issue any refunding obligations intended for such purpose on or prior to the Redemption Date), then the purported optional or extraordinary optional redemption and such notice of redemption shall be void, and such occurrence shall not constitute a default or an Event of Default under the related Bond Indenture or a Loan Agreement Default.

Partial Redemption of Bonds. Whenever provision is made in the Bond Indentures for the redemption of fewer than all of the Bonds of the related Series, the Bond Trustee shall select or cause the selection of such Bonds to be redeemed in such manner as directed by Fred Hutch, subject to the provisions of the Letter of Representations, or if not otherwise directed by Fred Hutch, at random in any manner that the Bond Trustee, in its sole discretion, shall deem appropriate and fair. The Bond Trustee shall call for redemption as many Bonds or portions thereof as will, as nearly as practicable, exhaust the money available therefor. Particular Bonds or portions thereof shall be redeemed only in Authorized Denominations.

Effects of Redemption of Bonds. On the Redemption Date, provided that the Bond Trustee is then holding funds sufficient to pay the redemption price (including interest accrued to the Redemption Date and premium, if any) of the Bonds of a Series to be redeemed on such date, interest on such Bonds (or portions thereof) duly called for redemption will cease to accrue, such Bonds (or portions thereof) will cease to be entitled to any benefit or security under the related Bond Indenture, and the Owners of such Bonds will have no rights in respect thereof except to receive payment of such redemption price and interest accrued to the Redemption Date.

Optional Purchase in Lieu of Redemption. Each Owner and Beneficial Owner, by purchase and acceptance of any Bond, irrevocably grants to Fred Hutch the option to purchase such Bond at any time such Bond is subject to optional redemption pursuant to the related Bond Indenture as described above under “Optional Redemption”, such Bond to be purchased at a purchase price equal to the then applicable redemption price of such Bond; provided that such purchase may not occur on the Mandatory Purchase Date. Fred Hutch may only exercise such option if it has delivered a Favorable Opinion of Bond Counsel (which may be based upon, and subject to the same exceptions and qualifications as, the Approving Opinion of Bond Counsel delivered in connection with the original issuance of a Series of the Bonds), addressed to the Authority and the Bond Trustee, to the effect that the action proposed to be taken is authorized or permitted by the related Bond Indenture and will not, in and of itself, result in the inclusion of the interest on such Bonds in gross income for federal income tax purposes, and shall direct the Bond Trustee to provide notice of purchase, such notice to be provided, as and to the extent applicable, in accordance with the provisions of the related Bond Indenture relating to notice of redemption (described above). Bonds to be so purchased shall be selected by the Bond Trustee in the same manner as Bonds called for redemption. On the date fixed for purchase of any Bond in lieu of redemption, Fred Hutch shall pay the purchase price of such Bond to the Bond Trustee in immediately available funds, and the Bond Trustee shall pay the same to the Owners of the Bonds being purchased against delivery thereof. No purchase of any Bond in lieu of redemption as described in this paragraph shall operate to extinguish such Bond or the indebtedness of the Authority evidenced by such Bond. No Owner or Beneficial Owner may elect to retain a Bond subject to purchase in lieu of redemption.

If the Bond Trustee shall not have funds in its possession on the date fixed for optional purchase sufficient to pay the purchase price (including premium, if any, and interest accrued to such purchase date) of all of the Bonds of a Series to be optionally purchased for any reason (including, but not limited to, failure to issue any refunding obligations intended for such purpose on or prior to such purchase date), then the purported optional purchase in lieu of redemption shall be void and the notice thereof shall be void and deemed rescinded, and such failure to have the funds to purchase shall not constitute a default or an Event of Default under the related Bond Indenture or a Loan Agreement Default.

If Fred Hutch shall have delivered to the Bond Trustee, no later than the third Business Day prior to the date fixed for such optional purchase of any Bonds in lieu of redemption, written notice of its decision to cancel its prior request for purchase in lieu of redemption, then the purported optional purchase in lieu of redemption shall be canceled and any prior notice thereof shall be void. Immediately upon receipt of Fred Hutch’s cancellation notice, the Bond Trustee shall give or cause to be given written notice of such cancellation to the nominee of the Securities Depository, as the Owner thereof, for the benefit of the Beneficial Owners thereof, in accordance with the Letter of Representations; provided, however, that such notice of cancellation shall be effective to cancel such purchase whether or not it is received by the Securities Depository, and such occurrence shall not constitute a default or an Event of Default under the related Bond Indenture or a Loan Agreement Default.

Conversion to Other Interest Rate Periods

At the direction of Fred Hutch on behalf of the Authority, a Series of the Bonds may be converted, in whole, from one Interest Rate Period to another Interest Rate Period as provided in the related Bond Indenture upon satisfaction of certain conditions. While any Index Floating Rate is in effect with respect to a Series of the Bonds, such Bonds may be converted to any other Interest Rate Period (including an Index Floating Rate Period with a different Index) at the option of Fred Hutch on any Business Day on or after the related Par Call Date, upon mandatory tender and payment of the Tender Price equal to 100% of the principal amount tendered for purchase, plus accrued interest, if any, from the immediately preceding Interest Accrual Date to the Tender Date. The Bond Indentures provide that the

Bond Trustee will give notice to the Owners of Bonds not less than 10 days prior to the proposed effective date of such conversion.

No conversion of a Series of the Bonds from one Interest Rate Period to another shall take effect under the related Bond Indenture unless each of the following conditions, shall have been satisfied. The Bond Trustee shall have received a Favorable Opinion of Bond Counsel with respect to such conversion dated the effective date of such conversion. The remarketing proceeds available on the Conversion Date shall not be less than the amount required to purchase all of the Bonds at the Tender Price (not including any premium). In the case of any conversion of a Series of the Bonds to a Long-Term Interest Rate Period effective to the Maturity Date thereof, if such Bonds are remarketed at a discount, on or before the Conversion Date, Fred Hutch shall have paid the amount of such discount to the Bond Trustee in immediately available funds for deposit in the related Fred Hutch Purchase Account.

In the event that any condition to the conversion of a Series of the Bonds shall not have been satisfied as provided in the related Bond Indenture, then such Bonds shall continue to bear interest at the Index Floating Rate as in effect immediately prior to such proposed conversion and such Bonds shall not be subject to mandatory tender for purchase on the date which would have been the effective date of the conversion; provided, however, such Bonds will continue to be subject to mandatory tender for purchase if the proposed Conversion Date is the related Mandatory Purchase Date. The failure to pay the Tender Price of Bonds of a Series tendered or deemed tendered for purchase on a Mandatory Purchase Date is an Event of Default under the related Bond Indenture and a Loan Default Event under the related Loan Agreement. There is no Liquidity Facility in place to provide funds for the purchase of Bonds of a Series on the applicable Mandatory Purchase Date or any other purchase date.

Fred Hutch may rescind its election to convert a Series of the Bonds from an Index Floating Rate Period to another Interest Rate Period by delivering a rescission notice to the Authority, the Bond Trustee and the Remarketing Agent (if any), on or prior to 10:00 a.m. on the Business Day preceding the effective date of any such conversion. If sufficient remarketing proceeds are not available for the purchase of all of such Bonds on the date which would have been the effective date of the conversion, then Fred Hutch shall be deemed to have rescinded its election to make such conversion. If Fred Hutch rescinds or is deemed to rescind its election to make such conversion, then such Bonds shall continue to bear interest at the Index Floating Rate in effect immediately prior to such proposed conversion and such Bonds shall not be subject to mandatory tender for purchase on the date which would have been the effective date of the conversion; provided, however, such Bonds will continue to be subject to mandatory tender for purchase if the proposed Conversion Date is the related Mandatory Purchase Date. The failure to pay the Tender Price of Bonds of a Series tendered or deemed tendered for purchase on a Mandatory Purchase Date is an Event of Default under the related Bond Indenture and a Loan Default Event under the related Loan Agreement. There is no Liquidity Facility in place to provide funds for the purchase of Bonds of a Series on the applicable Mandatory Purchase Date or any other purchase date. The Bond Trustee shall give notice of the rescission or deemed rescission by Electronic Means as soon as practicable and in any event not later than the next succeeding Business Day to the Owners of the applicable Series of the Bonds.

Tender and Purchase of Bonds

No Optional Tender for Purchase. The Bonds are not subject to optional tender for purchase by the Owners.

Mandatory Tender for Purchase on the Mandatory Purchase Date. Each Series of the Bonds will be subject to mandatory tender for purchase on the applicable Mandatory Purchase Date set forth on the inside cover of this Official Statement, at the applicable Tender Price. Owners of Bonds of a Series

may not elect to retain their Bonds on the related Mandatory Purchase Date. The Tender Price for tendered or deemed tendered Bonds of a Series will be payable from and to the extent of proceeds of remarketing of such Series of the Bonds or, to the extent that such proceeds are insufficient, funds provided by Fred Hutch. Fred Hutch is obligated to purchase Bonds of a Series not remarketed on the applicable Mandatory Purchase Date. Any failure of Fred Hutch to pay the Tender Price of Bonds of a Series tendered or deemed tendered for purchase on a Mandatory Purchase Date and not remarketed would be an Event of Default under the related Bond Indenture and a Loan Default Event under the related Loan Agreement. There is no Liquidity Facility in place to provide funds to pay the Tender Price of Bonds of a Series not remarketed on the applicable Mandatory Purchase Date.

Mandatory Tender for Purchase on First Day of Each Interest Rate Period on or after the Mandatory Purchase Date. Each Series of the Bonds will be subject to mandatory tender for purchase on the first day of each Interest Rate Period for such Series of the Bonds (which may be a Mandatory Purchase Date), or on the day which would have been the first day of an Interest Rate Period if Fred Hutch had not rescinded its election to convert such Series of the Bonds to a new Interest Rate Period or any condition to such conversion not been satisfied, which resulted in the interest rate on such Bonds not being converted, at the applicable Tender Price, payable in immediately available funds.

Mandatory Tender for Purchase Upon Delivery of Liquidity Facility, Credit Facility or Self- Liquidity Arrangement. Fred Hutch may elect to cause the delivery of a Liquidity Facility, Credit Facility or Self-Liquidity Arrangement with respect to a Series of the Bonds on or after the related Par Call Date. On the effective date of such Liquidity Facility, Credit Facility or Self-Liquidity Arrangement, the Bonds of the applicable Series will be subject to mandatory tender for purchase at the Tender Price, payable in immediately available funds.

Mandatory Tender for Purchase at the Direction of Fred Hutch on or after a Par Call Date. Each Series of the Bonds will be subject to mandatory tender for purchase on any Business Day designated by Fred Hutch on or after the related Par Call Date, with the consent of the Remarketing Agent, if any, at the Tender Price, payable in immediately available funds. If sufficient remarketing proceeds are not available for the purchase of all Bonds of a Series being purchased on such mandatory Tender Date, then Fred Hutch’s designation of such Tender Date for such Bonds shall be deemed to be rescinded, such Bonds shall not be tendered or deemed tendered or required to be purchased on such date, and no Event of Default shall occur under the related Bond Indenture and no Loan Default Event shall occur under the related Loan Agreement; unless such date is also a Mandatory Purchase Date, in which case the failure to purchase such Bonds would be an Event of Default under the related Bond Indenture and a Loan Default Event under the related Loan Agreement. The Bond Trustee shall give notice of such rescission by Electronic Means to the Owners, with a copy to the Authority, Fred Hutch, the Bond Trustee, the Remarketing Agent, if any, as soon as practicable and in any event not later than the next succeeding Business Day.

Notice of Mandatory Tender for Purchase. In connection with any mandatory tender for purchase of the Bonds of a Series, the Bond Trustee shall give notice of a mandatory tender for purchase by first-class mail to the Owners, with a copy to the Remarketing Agent, if any, not less than 10 days prior to the Tender Date.

Payment of Tender Price by Fred Hutch. If all or a portion of a Bond of a Series tendered for purchase cannot be remarketed and such tender has not been rescinded as described above, Fred Hutch shall pay to the Bond Trustee as soon as practicable on such Tender Date immediately available funds (together with any remarketing proceeds) sufficient to pay the Tender Price on such Bonds tendered for purchase.

Purchase of Bonds; Sources and Deposits of Tender Price. Bonds of a Series required to be purchased in accordance with the provisions of the related Bond Indenture described above under the headings that begin “Mandatory Tender for Purchase” shall be purchased from the Owners thereof, on the Tender Date and at the Tender Price. Funds for the payment of the Tender Price shall be received by the Bond Trustee from the following sources and used in the order of priority indicated:

(1) Proceeds of the sale of such Bonds remarketed pursuant to the related Bond Indenture and the Remarketing Agreement and furnished to the Bond Trustee by the Remarketing Agent for deposit into the Remarketing Proceeds Account of the Purchase Fund; and

(2) Money, if any, furnished by Fred Hutch to the Bond Trustee for deposit into the Fred Hutch Purchase Account of the Purchase Fund for the purchase of Bonds by Fred Hutch.

Undelivered Bonds; Tender Price. If any Owner of a Bond of a Series subject to mandatory tender for purchase pursuant to the related Bond Indenture shall fail to deliver such Bond to the Bond Trustee at the place and on the Tender Date and at the time specified, or shall fail to deliver such Bond properly endorsed, such Bond shall constitute an Undelivered Bond. If funds in the amount of the Tender Price of the Undelivered Bond are available for payment to the Owner thereof on the Tender Date and at the time specified, then from and after the Tender Date and time of that required delivery (1) the Undelivered Bond shall be deemed to be purchased and shall no longer be deemed to be Outstanding under the related Bond Indenture; (2) interest shall no longer accrue on the Undelivered Bond; and (3) funds in the amount of the Tender Price of the Undelivered Bond shall be held uninvested by the Bond Trustee for the benefit of the Owner thereof (and the Owner shall have no right to any investment proceeds derived from such funds), to be paid on delivery (and proper endorsement) of the Undelivered Bond to the Bond Trustee at its Principal Office for delivery of such Bonds. Any money which the Bond Trustee segregates and holds in trust for the payment of the Tender Price of a Bond which remains unclaimed for three years after the date of purchase shall be paid to Fred Hutch.

Remarketing Agent. The Authority has covenanted in each Bond Indenture to appoint a Remarketing Agent, at the written request of Fred Hutch, on or before the related Mandatory Purchase Date pursuant to the terms of the related Bond Indenture. The Remarketing Agent shall use its best efforts to remarket the applicable Series of the Bonds that have been tendered for purchase.

Bond Registration and Transfer

The Bond Trustee shall act as the Authority’s paying agent, registrar, authenticating trustee and transfer agent for the Bonds. As such, the Bond Trustee shall keep at all times complete and accurate records showing the name and address of each Owner of the Bonds and the principal amount, maturity date and CUSIP number of each Bond owned by such Owner.

The ownership of the Bonds is transferable; the beneficial ownership of Bonds may only be transferred on the records established and maintained by the Securities Depository.

Events of Default

The following events each constitute an “Event of Default” under each Bond Indenture: (a) nonpayment of the interest on any related Bonds, when due, and/or nonpayment of the principal of any related Bonds, when due at maturity or upon mandatory sinking fund redemption; (b) failure to pay the Tender Price of a Bond when due and payable; (c) failure to purchase, redeem or retire all of the related Bonds on any Mandatory Purchase Date; (d) any Loan Agreement Default (See APPENDIX C – “SUMMARY OF CERTAIN PROVISIONS OF THE BOND INDENTURES AND LOAN

AGREEMENTS – THE LOAN AGREEMENTS – Loan Agreement Defaults”); and (e) default by the Authority in the due and punctual performance of any of the covenants, conditions, agreements and provisions contained in the related Bonds or such Bond Indenture (other than the defaults described in clause (a) of this paragraph) on the part of the Authority to be performed, if such default continues for a period of 60 days after written notice shall have been given by the Bond Trustee to the Authority and to Fred Hutch specifying such default and requiring the same to be remedied and giving Fred Hutch the privilege of curing such default in the name of the Authority, if permitted by law; provided that the Bond Trustee shall not be required to take notice or be deemed to have notice of any such default unless the Bond Trustee has actual notice thereof. See also APPENDIX C – “SUMMARY OF CERTAIN PROVISIONS OF THE BOND INDENTURES AND LOAN AGREEMENTS – THE BOND INDENTURES – Events of Default.”

Acceleration of the Bonds

The principal of all Outstanding Bonds and the interest thereon are subject to acceleration as described more fully in APPENDIX C – “SUMMARY OF CERTAIN PROVISIONS OF THE BOND INDENTURES AND LOAN AGREEMENTS – THE BOND INDENTURES – Acceleration of Maturity.”

BOOK-ENTRY ONLY SYSTEM

Prior to the Book-Entry Termination Date, each Series of the Bonds will be issued in the form of a single certificate bearing a CUSIP number, and will be registered in the name of the Securities Depository or its nominee. So long as DTC is the Securities Depository, DTC or its nominee shall hold each such Bond certificate in fully immobilized form for the benefit of the Beneficial Owners pursuant to the Letter of Representations.

For so long as Bonds of a Series are registered in the name of DTC or its nominee, Cede & Co., the Authority and the Bond Trustee will recognize only DTC or its nominee, Cede & Co., as the registered owner of such Bonds for all purposes, including payments, notices and voting.

Payments made by the Bond Trustee to DTC or its nominee will satisfy the Authority’s obligations under the applicable Bond Indenture and Fred Hutch’s obligations under the applicable Loan Agreement, to the extent of the payments so made.

None of the Authority, Fred Hutch, or the Bond Trustee will have any responsibility or liability to any Beneficial Owner of Bonds or to any other person with respect to any error, omission, action or failure to act on the part of the Securities Depository or its Participants with respect to payments to the Beneficial Owners of the principal of, premium, if any, and interest on the Bonds, proper recording of beneficial ownership of Bonds, proper transfers of such beneficial ownership, or any notices to Beneficial Owners or any other matter of similar or different kind pertaining to the Bonds. See APPENDIX F – “DTC BOOK-ENTRY ONLY SYSTEM.”

SECURITY AND SOURCES OF PAYMENT FOR THE BONDS

Limitation of State and Authority Liability

THE BONDS DO NOT CONSTITUTE OBLIGATIONS, EITHER GENERAL, SPECIAL OR MORAL, OF THE STATE, OR A PLEDGE OF THE FAITH AND CREDIT OF THE STATE, OR A GENERAL OBLIGATION OF THE AUTHORITY. THE OWNERS OF THE BONDS (INCLUDING BENEFICIAL OWNERS) HAVE NO RIGHT TO REQUIRE THE STATE OR

THE AUTHORITY, NOR HAS THE STATE OR THE AUTHORITY ANY OBLIGATION OR LEGAL AUTHORIZATION, TO LEVY ANY TAXES OR APPROPRIATE OR EXPEND ANY OF THEIR RESPECTIVE FUNDS FOR THE PAYMENT OF THE PRINCIPAL OR TENDER PRICE OF OR PREMIUM OR INTEREST ON THE BONDS.

Sources of Payment and Security for the Bonds

Each Series of Bonds Payable Solely From Related Bond Fund. The Bonds of a Series are special fund revenue obligations of the Authority payable solely from money and investments in the related Bond Fund, including the Principal and Interest Account therein, established under and held by the Bond Trustee pursuant to the related Bond Indenture. Pursuant to the Act, the Bonds of a Series constitute a prior charge over all other charges or claims against the related Bond Fund.

The Loan Agreements. Fred Hutch will be required by each Loan Agreement to make Loan Payments to the Bond Trustee in amounts sufficient to pay in full and when due interest on the related Series of Bonds and principal of such Bonds coming due by reason of maturity and mandatory sinking fund redemption. Fred Hutch will further be required to pay when due all amounts required to pay the redemption price (including premium, if any) of and interest accrued to such Redemption Date on all Bonds of a Series to be redeemed; provided that the failure of Fred Hutch to pay amounts required to pay the redemption price of any such Bonds to be optionally or extraordinarily optionally redeemed, for any reason, shall not be deemed to be a Loan Agreement Default or an Event of Default under the related Bond Indenture. Fred Hutch is required by each Loan Agreement to pay the Tender Price of all Bonds tendered or deemed tendered when due and payable, as described in this Official Statement. Finally, Fred Hutch will be required to pay or cause to be paid to the Bond Trustee, an amount sufficient to pay the principal of and interest on all Bonds of a Series coming due by reason of a Declaration of Acceleration. The Loan Agreements provide that Fred Hutch’s payment obligations thereunder, including without limitation, Loan Payment obligations, shall be absolute and unconditional. Each Bond Indenture requires the Bond Trustee to deposit all related Loan Payments made by Fred Hutch into the Principal and Interest Account of the related Bond Fund. Fred Hutch receives credit on payments due under a Loan Agreement to the extent of payments made by the Members of the Obligated Group under the related Series 2017 Variable Rate Master Note. See APPENDIX C – “SUMMARY OF CERTAIN PROVISIONS OF THE BOND INDENTURE AND LOAN AGREEMENT – THE LOAN AGREEMENTS –Credits Against Loan Payments.”

Series 2017 Variable Rate Master Notes. To secure Fred Hutch’s obligations under a Loan Agreement, Fred Hutch, for itself and as Obligated Group Representative, concurrently with the issuance of the related Bonds, will issue and deliver to the Bond Trustee, as assignee of the Authority, a Series 2017 Variable Rate Master Note. Such Series 2017 Variable Rate Master Note evidences and secures the obligation of the Members of the Obligated Group (currently only Fred Hutch) to make payments to the Bond Trustee equal to the Loan Payments and other payment obligations of Fred Hutch under the related Loan Agreement (including pursuant to a Declaration of Acceleration and payment of the Tender Price on the related Mandatory Purchase Date), when and as the same become due and payable. Accordingly, payments on each Series 2017 Variable Rate Master Note are required to be made in amounts sufficient to pay, when due, the principal of, premium, if any, and interest on the related Bonds and payment of the Tender Price on the related Mandatory Purchase Date. The Members of the Obligated Group receive a credit on payments due under a Series 2017 Variable Rate Master Note to the extent of payments made by Fred Hutch under the related Loan Agreement.

See “ENFORCEABILITY OF REMEDIES” herein for a discussion of some of the possible limitations on enforceability of the joint and several obligations of the Members of the Obligated Group

under the Master Indenture and the Series 2017 Variable Rate Master Notes and of Fred Hutch under the Loan Agreements.

Assignment of Rights under the Loan Agreements and Series 2017 Variable Rate Master Notes

Pursuant to each Bond Indenture, the Authority will assign to the Bond Trustee as security for the payment of the related Series of Bonds all of its rights, title and interests in and under the related Loan Agreement (with certain exceptions and reservations noted therein) and under the related Series 2017 Variable Rate Master Note, in trust and without recourse.

Security Interest in Bond Funds and Project Funds

Bonds of a Series are secured by a security interest in and a statutory lien, claim and charge against the money and investments in the related Bond Fund and are further secured by a security interest, lien and claim against the money and investments in the related Project Fund (until such money and investments are applied or transferred in accordance with the related Bond Indenture).

The Master Indenture and Series 2017 Variable Rate Master Notes

Under the Master Indenture, the Members of the Obligated Group, upon satisfaction of the conditions therein provided, may issue Master Notes to evidence or secure Indebtedness. The Series 2017 Variable Rate Master Notes are being issued by Fred Hutch, on behalf of itself and as Obligated Group Representative, pursuant to the Supplemental Indentures, to secure the payment obligations of Fred Hutch under the Loan Agreements. Payments on the Series 2017 Variable Rate Master Notes are required to be made in amounts sufficient to pay, when due, the principal of, premium, if any, and interest on the Bonds. All Master Notes outstanding under the Master Indenture from time to time, including the Series 2017 Variable Rate Master Notes and the other Series 2017 Master Note, will be secured by liens against and security interests in certain real and personal property of Fred Hutch, subject to Permitted Encumbrances, and to reconveyance of the Deed of Trust, all as further described under “Accounts Security Agreement” and “The Deed of Trust” below.

Fred Hutch and the Master Trustee have entered into the Master Indenture. Under certain conditions described in APPENDIX D – “SUMMARY OF CERTAIN PROVISIONS OF THE MASTER INDENTURE AND DEED OF TRUST – THE MASTER INDENTURE – Admission to and Withdrawal from the Obligated Group,” additional Members may be added to the Obligated Group from time to time after the issuance of the Bonds and made jointly and severally liable with respect to the Series 2017 Variable Rate Master Notes and all other Master Notes outstanding under the Master Indenture. Additionally, as described under APPENDIX D – “SUMMARY OF CERTAIN PROVISIONS OF THE MASTER INDENTURE AND DEED OF TRUST – THE MASTER INDENTURE – Admission to and Withdrawal from the Obligated Group,” Members may withdraw from the Obligated Group from time to time and be released from all liability with respect to the Master Notes. The Master Indenture also contains additional covenants of the Members of the Obligated Group as well as provisions for amendment under certain circumstances. Fred Hutch is currently the only Member of the Obligated Group and Fred Hutch will covenant in each of the Supplemental Indentures that it will not withdraw from the Obligated Group so long as a Series 2017 Variable Rate Master Note is outstanding under the Master Indenture, absent consent of not less than a majority in aggregate principal amount of the Owners of Bonds then Outstanding. See APPENDIX D – “SUMMARY OF CERTAIN PROVISIONS OF THE MASTER INDENTURE AND DEED OF TRUST” for a summary of certain of these provisions.

Indebtedness. The Members of the Obligated Group are jointly and severally liable on all Indebtedness heretofore or hereafter issued pursuant to the Master Indenture, including the Series 2017

Variable Rate Master Notes and the other Series 2017 Master Note. Indebtedness, including Indebtedness evidenced by Master Notes and secured on a parity with the Series 2017 Variable Rate Master Notes and the other Series 2017 Master Note, may be incurred by Fred Hutch and other Members of the Obligated Group, if any, within the limitations set forth in the Master Indenture. See APPENDIX D – “SUMMARY OF CERTAIN PROVISIONS OF THE MASTER INDENTURE AND DEED OF TRUST – Permitted Additional Indebtedness.” As of February 24, 2017, the aggregate principal amount of Indebtedness evidenced by Master Notes was $323,767,000. After the issuance of the Series 2017 Bonds and the concurrent application of proceeds thereof to refund all or a portion of the Refunded Bonds, the aggregate principal amount of Indebtedness evidenced by Master Notes is anticipated to be approximately $______. See “PLAN OF FINANCE” and “ESTIMATED FISCAL YEAR DEBT SERVICE REQUIREMENTS” herein. In addition, certain “Swap Obligations,” which are not included in “Indebtedness” for purposes of the Master Indenture, are also secured by Master Notes issued thereunder.

See “ENFORCEABILITY OF REMEDIES” herein for a discussion of some of the possible limitations on enforceability of the joint and several obligations of the Members of the Obligated Group under the Master Indenture and the Series 2017 Variable Rate Master Notes.

All Master Notes issued and outstanding under the Master Indenture are equally and ratably secured by the Master Indenture except to the extent specifically provided otherwise in the Master Indenture.

Covenant Not to Create Additional Liens. Fred Hutch, as the only Member of the Obligated Group, has agreed in the Master Indenture to keep its Property free and clear of any Lien of any kind except Permitted Encumbrances. The Obligated Group is permitted under the Master Indenture to create additional Liens on its Property (including all or any of the Collateral) within limitations as provided in the Master Indenture. See APPENDIX D – “SUMMARY OF CERTAIN PROVISIONS OF THE MASTER INDENTURE AND DEED OF TRUST – Liens on Property.”

Accounts Security Agreement. Pursuant to an Accounts Security Agreement made as of January 31, 1991 (the “Accounts Security Agreement”), by Fred Hutch for the benefit of the Master Trustee, Fred Hutch has granted to the Master Trustee a security interest in all of Fred Hutch’s right, title and interest, then owned or thereafter acquired, in and to the following property: all accounts, chattel paper, instruments and general intangibles (all as defined in chapter 62A.9 RCW, which has since been recodified at chapter 62A.9A RCW) and the proceeds thereof; excluding, however, all receivables representing gifts, grants, bequests, donations, legacies, pledges and contributions theretofore or thereafter acquired by Fred Hutch which have been specifically restricted to a particular purpose inconsistent with the payment of operating or nonparity expenses or debt service on any indebtedness of Fred Hutch. Such accounts, chattel paper, instruments and general intangibles referred to in the foregoing sentence (but not including the receivables expressly excluded thereby) are collectively referred to as the “Accounts.” The security interest in the Accounts secures the full and prompt payment and performance when due of all obligations and liabilities now or hereafter owning by Fred Hutch or any other Member of the Obligated Group evidenced by the Master Notes, or any of them. Such security interests will be perfected only to the extent that such security interests can be perfected, by filing by the Master Trustee of financing statements which fully comply with the Uniform Commercial Code.

Other Master Indenture Covenants. In addition to the security and other provisions described above, the Master Indenture contains provisions, covenants and restrictions related to debt coverage, rates and charges, mergers and other corporate combinations and divestitures, sales, leases or other dispositions of assets and other matters. See APPENDIX D – “SUMMARY OF CERTAIN PROVISIONS OF THE MASTER INDENTURE AND DEED OF TRUST.”

The Deed of Trust. By purchase of the Bonds, Beneficial Owners of the Bonds are deemed to have consented to the full reconveyance of the Deed of Trust, and the termination of the related Hazardous Substances Agreement, with such reconveyance and termination to occur upon the Master Trustee’s receipt of the consent of the owners of each then-Outstanding Master Note expressed to have the benefit of the pledge of Collateral. Upon the reconveyance of the Deed of Trust, the obligations of the Obligated Group under the Master Indenture, including the obligations to make payments required by the Series 2017 Variable Rate Master Notes, will no longer be secured by a security interest in real property. See APPENDIX D – “SUMMARY OF CERTAIN PROVISIONS OF THE MASTER INDENTURE AND DEED OF TRUST – SUPPLEMENTAL INDENTURES NOS. 28 AND 29 – Deed of Trust, Security Documents and Security Related Documents.”

Notwithstanding such consent by the Beneficial Owners of the Bonds, the Master Notes outstanding under the Master Indenture, including the Series 2017 Variable Rate Master Notes and the other Series 2017 Master Note, are currently secured by an Amended and Restated Deed of Trust, Security Agreement and Financing Statement, dated as of July 16, 1996, and as further amended by an Amendment to Deed of Trust dated as of November 30, 2000, an Amendment to Deed of Trust dated November 15, 2001, an Amendment to Deed of Trust dated November 1, 2002 and an Amendment to Amended and Restated Deed of Trust, Security Agreement and Financing Statement dated November 24, 2009 (as supplemented and amended, the “Current Deed of Trust”).

The Current Deed of Trust is being amended and restated by a Second Amended and Restated Deed of Trust, Security Agreement and Financing Statement to be dated the Date of Issue (the “Second Amended Deed of Trust” or “Deed of Trust”), to become effective upon receipt of the consent of the majority of the aggregate principal amount of the Master Notes expressed to have the benefit of the pledge of Collateral then Outstanding and entitled to vote, which is expected to occur on the Date of Issue.

The Deed of Trust creates a lien subject to Permitted Encumbrances against the real property, buildings, structures, improvements and equipment constituting the Mortgaged Property and will continue to secure all Master Notes outstanding under the Master Indenture, including the Series 2017 Variable Rate Master Notes, until the Deed of Trust is reconveyed upon receipt by the Master Trustee of the consent of the owners of each then-Outstanding Master Note expressed to have the benefit of the pledge of Collateral. For more information about the real property constituting a part of the Mortgaged Property, see APPENDIX A – “INFORMATION CONCERNING FRED HUTCHINSON CANCER RESEARCH CENTER – OTHER INFORMATION – Mortgaged Property – Identification of Mortgaged Property.” The Mortgaged Property and the lien of the Deed of Trust are subject to Permitted Encumbrances, including certain interests of the federal government. See “ENFORCEABILITY OF REMEDIES – Possible Federal Interest in Mortgaged Property” herein and APPENDIX A – “INFORMATION CONCERNING FRED HUTCHINSON CANCER RESEARCH CENTER – OTHER INFORMATION – Mortgaged Property – Use and Transfer Restrictions” for more information about how the federal government’s interest may affect the lien of the Deed of Trust.

The Master Indenture permits the Mortgaged Property to be withdrawn from the lien of the Deed of Trust if certain conditions set forth in the Master Indenture precedent to such withdrawal and/or substitution are met. Under the circumstances described in the Master Indenture, Members of the Obligated Group are permitted or required to add to the Mortgaged Property other unencumbered (except for Permitted Encumbrances) Property owned by the Obligated Group. In addition, the Master Indenture provides that the lien of the Deed of Trust may be subordinated in certain circumstances. See APPENDIX D – “SUMMARY OF CERTAIN PROVISIONS OF THE MASTER INDENTURE AND DEED OF TRUST.”

No appraisal has been made of the Mortgaged Property. At any time, the value of the Mortgaged Property could be substantially less than the principal amount of all Master Notes outstanding under the Master Indenture.

By purchase of the Bonds, Beneficial Owners of the Bonds are deemed to have (1) consented to the amendments of the Current Deed of Trust contained in the Second Amended Deed of Trust, to become effective upon receipt of the consent of the majority of the aggregate principal amount of the Master Notes expressed to have the benefit of the pledge of Collateral then outstanding and entitled to vote, expected to occur on the Date of Issue, (2) consented to the full reconveyance of the Deed of Trust, and the termination of the related Hazardous Substances Agreement, with such reconveyance and termination to occur upon the Master Trustee’s receipt of the consent of the owners of each then-Outstanding Master Note expressed to have the benefit of the pledge of Collateral, and (3) acknowledged and consented to the termination of certain Security Documents no longer in effect. See APPENDIX D – “SUMMARY OF CERTAIN PROVISIONS OF THE MASTER INDENTURE AND DEED OF TRUST – SUPPLEMENTAL INDENTURES NOS. 28 AND 29 – Deed of Trust, Security Documents and Security Related Documents” and “DEED OF TRUST – Amendments Included in the Second Amended Deed of Trust.”

Potential Future Members of the Obligated Group

Any Person may become a Member of the Obligated Group in accordance with the provisions of the Master Indenture (see the information in APPENDIX D – “SUMMARY OF CERTAIN PROVISIONS OF THE MASTER INDENTURE AND DEED OF TRUST – Admission to and Withdrawal from the Obligated Group”) resulting in an Obligated Group which is financially and operationally different from the existing Obligated Group.

Amendments to Bond Indentures, Loan Agreements and Master Indenture

Certain amendments may be made to a Bond Indenture and a Loan Agreement without obtaining the consent of any Owner of the related Outstanding Bonds and certain other amendments to a Bond Indenture and a Loan Agreement require, subject to the nature of the amendment(s), the consent of the Owners of not less than a majority in aggregate principal amount of the related Bonds then Outstanding or the consent of all Owners of the related Bonds. Such amendments that are subject to consent of Owners may adversely affect the security for the related Bonds. See APPENDIX C – “SUMMARY OF CERTAIN PROVISIONS OF THE BOND INDENTURES AND LOAN AGREEMENTS – THE BOND INDENTURES.”

Certain amendments may be made to the Master Indenture without obtaining consent of any Holders of Master Notes and certain other amendments to the Master Indenture require, subject to the nature of the amendment(s), the consent of the Holders of not less than a majority in aggregate principal amount of the Master Notes outstanding under the Master Indenture entitled to vote, the consent of the Holder of the Master Note affected by such amendment(s) or the consent of all Holders of Master Notes

entitled to vote. See APPENDIX D – “SUMMARY OF CERTAIN PROVISIONS OF THE MASTER INDENTURE AND DEED OF TRUST.” With respect to amendments to the Master Indenture, the Holders of the requisite percentage of Master Notes outstanding under the Master Indenture may be composed wholly or partially of the Holders of Master Notes other than the Series 2017 Variable Rate Master Notes. Such amendments that are subject to consent of Holders of Master Notes may adversely affect the security for the Series 2017 Variable Rate Master Notes.

PLAN OF FINANCE General

Fred Hutch has requested that the Authority issue the Bonds to fund all or a portion of (i) costs of the Project, (ii) costs of refunding the Refunded Bonds, and (iii) costs of issuing the Bonds and other incidental costs.

Fred Hutch has also requested that the Authority issue, contemporaneously with the Bonds, the Series 2017A Bonds on a fixed rate basis. Proceeds of the Series 2017A Bonds are expected to finance a portion of the Project and a portion of the proceeds of the Series 2017A Bonds may be used to refund on a current basis, pay and redeem the Refunded Bonds.

The Authority has authorized the issuance of the Series 2017 Bonds in an aggregate principal amount of not to exceed $228,889,000 to accomplish these purposes.

Issuance of the Bonds is not contingent upon the issuance of the Series 2017A Bonds. See “ESTIMATED SOURCES AND USES OF FUNDS” herein.

The Project

The Project consists of acquiring, constructing, remodeling, renovating, equipping and improving health care facilities consisting of real property (including land, research and administrative buildings and other structures) and personal property (including software systems, equipment and fixtures) constituting research and support facilities of Fred Hutch’s comprehensive cancer center.

Refunded Bonds

The proceeds of the Series 2017 Bonds, together with other available money, will be used to refund on a current basis, pay and redeem the Washington Health Care Facilities Authority Revenue Bond, Series 2010 (Fred Hutchinson Cancer Research Center) (the “Series 2010 Bond”), the Washington Health Care Facilities Authority Refunding Revenue Bonds, Series 2012A (Fred Hutchinson Cancer Research Center) (the “Series 2012A Bonds”), the Washington Health Care Facilities Authority Refunding Revenue Bond, Series 2012B (Fred Hutchinson Cancer Research Center) (the “Series 2012B Bond”), the Washington Health Care Facilities Authority Revenue Bond, Series 2014 (Fred Hutchinson Cancer Research Center) (the “Series 2014 Bond”), and the Washington Health Care Facilities Authority Revenue Bond, Series 2015B (Fred Hutchinson Cancer Research Center) (the “Series 2015B Bond”) (the “Refunding Plan”). The portion of the Series 2017 Bonds allocable to the Refunding Plan are referred to herein collectively as the “Refunding Bonds.” The Series 2010 Bond, the Series 2012A Bonds, the Series 2012B Bond, the Series 2014 Bond and the Series 2015B Bond to be refunded by the Refunding Bonds are referred to herein collectively as the “Refunded Bonds.” As of February 1, 2017, the Series 2010 Bond, the Series 2012A Bonds, the Series 2012B Bond, the Series 2014 Bond and the Series 2015B Bond were outstanding in the aggregate principal amount of $176,001,340.

ESTIMATED SOURCES AND USES OF FUNDS

Set forth below are the estimated sources and uses of the proceeds of the Series 2017 Bonds.

Sources of Funds Series 2017B Series 2017C Series 2017A Bonds Bonds Bonds Principal Amount $ $ $ Net Original Issue Premium/Discount Release from Refunded Bonds Debt Service Accounts Total Sources of Funds $ $ $

Uses of Funds

Deposit to Project Funds $ $ $ Refunding of Refunded Bonds Issuance Costs(1) Total Uses of Funds $ $ $

______(1) Includes Underwriter’s discount, rating agency fees, financial advisor and legal fees, contingency and other costs connected with the issuance of the applicable Series 2017 Bonds.

ESTIMATED FISCAL YEAR DEBT SERVICE REQUIREMENTS

The following table sets forth, for each fiscal year of Fred Hutch ending June 30, the amounts expected to be required to be made available for the payment of total debt service on the Series 2017 Bonds, together with existing long-term indebtedness of Fred Hutch that will remain outstanding upon the issuance of the Series 2017 Bonds and the concurrent application of proceeds thereof to currently refund the Refunded Bonds. See APPENDIX A – “INFORMATION CONCERNING FRED HUTCHINSON CANCER RESEARCH CENTER” and APPENDIX B – “AUDITED FINANCIAL STATEMENTS OF FRED HUTCH” for more information regarding Fred Hutch’s outstanding indebtedness and debt service coverage ratios.

The Bonds Year Total Debt Total Other Ending Total Debt Service - Series Debt Service Total June 30 Principal Interest Service 2017A Bonds Outstanding(1) Debt Service 2017(2) $ $ $ $ $ 2,954,978 $ 2018 18,532,584 2019 17,141,301 2020 17,182,823 2021 22,318,525 2022 22,170,537 2023 21,975,160 2024 23,744,112 2025 23,298,565 2026 23,124,492 2027 21,738,244 2028 21,479,557 2029 21,261,841 2030 21,189,894 2031 21,052,746 2032 20,904,778 2033 21,222,835 2034 22,146,885 2035 22,236,063 2036 22,404,011 2037 22,587,326 2038 22,766,802 2039 22,957,237 2040 23,016,373 2041 23,073,028 2042 -- Total(3) $ $ $ $ $522,480,699 $ ______(1) Includes debt service on the Refunded Bonds and assumes the variable rate Series 2010 Bond, Series 2012A Bonds, Series 2012B Bond, Series 2014 Bond and Series 2015B Bond will bear interest at 1.70%, 1.61%, 1.72%, 1.08% and 1.02%, respectively, in each case calculated in accordance with the Master Indenture. Debt service as calculated under the Master Indenture includes any payments under interest rate swap agreements. See APPENDIX A – “INFORMATION CONCERNING FRED HUTCHINSON CANCER RESEARCH CENTER – FINANCIAL INFORMATION – Debt Service Coverage” and “– Interest Rate Swap Agreements” and APPENDIX D – “SUMMARY OF CERTAIN PROVISIONS OF THE MASTER INDENTURE AND DEED OF TRUST.” (2) Only includes debt service from the date hereof (February 27, 2017) through fiscal year-end (June 30, 2017). (3) Total may not add due to rounding.

THE AUTHORITY

The Authority was created in 1974 by the Legislature of the State pursuant to the Act and is empowered to issue special fund revenue bonds and to make the proceeds thereof available to private, nonprofit corporations and municipal corporations authorized to operate health care facilities (“Participants”) for the purpose of minimizing the costs of providing such facilities. The Authority has the statutory power to make loans of such proceeds to Participants for such purpose, to accept security for the repayment thereof, to refund its outstanding bonds and existing obligations of participating health care institutions for completed projects, to create special funds for the payment of its bonds, and other powers related thereto.

The Act requires the Authority, upon request of an applicant for bond financing, to investigate and determine the need and feasibility of providing such bonds. In making such investigation, the Authority necessarily relies upon certain information provided by the applicant and others including, but not limited to, the applicant’s accountants and the certificate of need division of the State’s Department of Health; and the Authority does not undertake to verify independently such information. SUCH INVESTIGATION AND DETERMINATION ARE MADE FOR THE LIMITED PURPOSE OF SATISFYING THE AUTHORITY’S STATUTORY OBLIGATION TO FIND THAT PROVIDING SUCH FINANCING IS NECESSARY OR ADVISABLE FOR THE BENEFIT OF THE PUBLIC HEALTH AND SHOULD NOT BE REGARDED AS THE AUTHORITY’S RECOMMENDATION OF THE BONDS TO, OR OTHERWISE BE RELIED UPON BY, THE OFFEREES OR PURCHASERS OF THE BONDS.

The Authority is composed of the persons holding the offices of Governor, Lieutenant Governor, Insurance Commissioner and Secretary of the Department of Health of the State. The fifth member is appointed by the Governor of the State and serves for a term of four years. Pursuant to the Act, the Governor has designated David Schumacher, an employee of the Governor’s office, to attend and vote at meetings on behalf of the Governor and the Insurance Commissioner has designated AnnaLisa Gellermann, an employee of the Insurance Commissioner’s office, to attend and vote at meetings on behalf of the Insurance Commissioner.

The members of the Authority are presently:

Member Office or Affiliation Jay Inslee, Chair Governor, State of Washington Cyrus Habib Lieutenant Governor, State of Washington Mike Kreidler Insurance Commissioner, State of Washington John Wiesman, Secretary Secretary of the Department of Health, State of Washington

Steven R. Jacobs Public Member

The administration and overall operation of the Authority is the responsibility of its Executive Director, who is appointed by and serves at the discretion of the members of the Authority. Ms. Donna A. Murr was appointed the Executive Director, effective January 11, 2007. She had served as an Assistant Executive Director of the Authority since 1999.

Unless specifically provided otherwise, each series of bonds or other obligations of the Authority is secured by a separate trust indenture; consequently, each issue of bonds (with the exception of additional parity bonds with respect to that series) is separate and distinct as to security and source of

payment; and the owners of such other obligations shall have no claim on the security for the Bonds, and the Owners of the Bonds shall have no claims on the security for such other obligations. All of such obligations are special fund revenue obligations of the Authority payable solely from funds pledged to their payment and are not general obligations of the Authority. The Authority may authorize other series of bonds or obligations for the financing of projects of other public or private nonprofit health care facilities in the State. The Authority has issued, prior to February 15, 2017, obligations aggregating over $16.15 billion in original principal amount in 451 series.

Melio & Company, LLC, Northfield, Illinois, serves as financial advisor to the Authority with respect to the Bonds. Hillis Clark Martin & Peterson P.S., Seattle, Washington, serves as bond counsel and special counsel to the Authority in connection with the issuance of the Bonds.

THE BOND TRUSTEE

The Authority has appointed U.S. Bank National Association as the Bond Trustee for the Bonds. The Bond Trustee is the corporate trust subsidiary of U.S. Bancorp and is headquartered in Seattle, Washington, at 1420 Fifth Avenue, 7th Floor. U.S. Bancorp is a multi-state bank holding company with headquarters in Minneapolis, Minnesota. As of September 30, 2016, the total assets of U.S. Bank National Association were in excess of $448 billion. Additional information about the Bond Trustee may be found at its website at http://www.usbank.com/corporatetrust. Neither the information on such website, nor any links to other websites residing on such website, is part of this Official Statement, nor should any such information be relied upon to make investment decisions regarding the Bonds.

The obligations of the Bond Trustee with respect to each Series of the Bonds are described in the related Bond Indenture. The Bond Trustee has undertaken only those duties and obligations with respect to a Series of the Bonds that are expressly set forth in the related Bond Indenture. The Bond Trustee has not independently passed upon the validity of the Bonds, the security of the payment therefor, the value or condition of any assets pledged to the payment thereof, the adequacy of the provisions for such payment, the status for federal or state income tax purposes of the interest on the Bonds, or any other matter with respect to the issuance of the Bonds. Except for the contents of this section, the Bond Trustee has not reviewed or participated in the preparation of this Official Statement and has assumed no responsibility for the nature, content, accuracy or completeness of the information included in this Official Statement.

THE MASTER TRUSTEE

The Master Trustee, The Bank of New York Mellon Trust Company, N.A., is a national banking association duly organized and existing under the laws of the United States of America.

The Master Trustee has undertaken only those duties and obligations that are expressly set out in the Master Indenture. The Master Trustee has not independently passed upon the validity, sufficiency or correctness of any information contained in the Master Indenture or the Series 2017 Variable Rate Master Notes, other than its authentication of the Series 2017 Variable Rate Master Notes. The Master Trustee is not responsible for and makes no representations as to the validity, sufficiency or maintenance or any security afforded by the Master Indenture or the Series 2017 Variable Rate Master Notes. The Master Trustee further makes no representation as to the status for federal or state income tax purposes of any Master Notes or the Bonds.

Except for the information under this caption, the Master Trustee has not reviewed or participated in the preparation of this Official Statement and has assumed no responsibility for the nature, content, accuracy or completeness of the information included in this Official Statement.

BONDOWNERS’ RISKS

The purchase and ownership of the Bonds involves a number of risks that are discussed throughout this Official Statement. Accordingly, each prospective purchaser of the Bonds should make an independent evaluation of all of the information presented in this Official Statement to make an informed investment decision. Investors should recognize that the discussion in Bondowners’ Risks does not cover all such risks, that payment provisions and regulations and restrictions change frequently and that additional material payment limitations and regulations and restrictions may be created, implemented or expanded while the Bonds are outstanding. This section on Bondowners’ Risks focuses primarily on the general risks associated with research facilities such as Fred Hutch; whereas APPENDIX A describes Fred Hutch specifically. These should be read together. The following is a summary, which does not purport to be comprehensive or definitive, of some of such risk factors and does not necessarily reflect the relative importance of the various risks. The operations and financial condition of Fred Hutch may be affected by factors and risks other than those described in this section on Bondowners’ Risks and elsewhere in this Official Statement. No assurance can be given as to the nature of such factors or the potential effects thereof on Fred Hutch.

General

The Bonds of a Series are special fund revenue obligations of the Authority, payable solely from money and investments in the Bond Fund established under the related Bond Indenture and held by the Bond Trustee under such Bond Indenture. Each Bond Fund will be funded primarily from principal and interest payments made by Fred Hutch under the related Loan Agreement and payments made by the Members of the Obligated Group (currently, only Fred Hutch) in respect of such principal and interest payments under the related Series 2017 Variable Rate Master Note. No representation or assurance can be made that revenues will be realized by Fred Hutch in amounts sufficient to make payments required by the Loan Agreements, or by Members of the Obligated Group in amounts sufficient to make payments required by the Series 2017 Variable Rate Master Notes and thus to pay the principal of and interest on the Bonds.

Future economic and other conditions, including the availability of federal and other funding for medical and scientific research, economic trends and events, technological and scientific developments and demographic changes, the confidence of physicians and the public in Fred Hutch, litigation, competition, changes in the methods and rates of grants and payments, as well as increased costs and changes in government regulations, including Internal Revenue Service policy regarding tax exemption, may have a material adverse impact on the future financial condition of Fred Hutch and the Obligated Group and, consequently, their ability to make payments of the principal of and interest on the Bonds. No assurance can be given that the financial condition of Fred Hutch and the Obligated Group will not be adversely affected by these and other factors.

For information concerning the financial condition of Fred Hutch as the only current Member of the Obligated Group for previous fiscal years, see APPENDIX A – “INFORMATION CONCERNING FRED HUTCHINSON CANCER RESEARCH CENTER” and APPENDIX B – “AUDITED FINANCIAL STATEMENTS OF FRED HUTCH.”

Federal Policy and Other Matters Related to Funding of Research Facilities

Fred Hutch relies extensively upon federal support of its research programs. This federal support is subject to federal budget priorities and the annual appropriation process of Congress. In addition, Fred Hutch’s federally sponsored research is subject to the payment rules and regulations of the Office of Management and Budget. The effect of changes in the availability and amount of federal funding or of

changes in existing regulations which provide for federal payment is not determinable. Such changes could have a material and adverse impact on Fred Hutch’s future operations and financial condition.

In the fiscal years ended in 2015 and 2016, approximately 66 percent and 56 percent, respectively, of Fred Hutch’s revenues come from grants and contracts for research activities. Approximately 86 percent of the amount of revenue attributable to grants and contracts for research activities is from federal sources (constituting approximately 57 percent and 48 percent of Fred Hutch’s total revenues in the fiscal years ended in 2015 and 2016, respectively) with the remaining 14 percent being awarded by the State and by private organizations. See APPENDIX A – “INFORMATION CONCERNING FRED HUTCHINSON CANCER RESEARCH CENTER – FINANCIAL INFORMATION – Research and Discretionary Funding.”

While federal funding of grants and research activities have generally declined or been more restricted in recent years, the 21st Century Cures Act (the “Cures Act”), signed by President Obama on December 13, 2016, provides over $4.8 billion over the next ten years to the National Institutes of Health (“NIH”) for a combination of cancer research, the Precision Medicine Initiative (research into genetic, lifestyle and environmental variations of disease), and the Brain Initiative (research to improve understanding of diseases such as Alzheimer’s). Specifically to support cancer research, the Cures Act authorizes over $1.8 billion in funding for research such as the development of cancer vaccines and more sensitive diagnostic tests for cancer, immunotherapy and the development of combination therapies. Funding for cancer research projects under the Cures Act will begin in 2017. While the Cures Act will make additional federal funding available for cancer research, it is unclear whether and how the Cures Act will impact NIH’s funding policies described below and Fred Hutch’s ability to secure additional federal grants.

Because the length of the average federal grant steadily increased during the 1980s, research projects approved in previous years are using up an increasing amount of the available grant money, leaving less for new federal grants. Currently, only those federal grants that fall in the top 10 percent to 20 percent of the ratings by the study sections are likely to be funded. The National Cancer Act of 1971 created the National Cancer Institute as a division of the NIH, and at that time was funding approximately 45 percent to 50 percent of approved grants.

The National Institute of Health, Lung and Blood has published policies which limit escalations on competing renewal awards to no more than 10 percent over the previously committed level of support. Noncompeting years of NIH awards normally include an inflationary factor of 3 percent over the prior year’s award. In addition, a cap is imposed on the salary rate payable out of grant funds. This cap is indexed to the federal pay grade “Executive Level II” ($185,100 effective January 10, 2016). It is possible that in the future this cap could hamper Fred Hutch’s ability to attract and keep senior researchers if general salary levels exceed the cap.

Also, currently, a substantial portion of Fred Hutch’s federal grant funding (approximately one- third of total grant funding) is attributable to indirect cost reimbursement. Consequently, the level of indirect costs reimbursed by the various granting agencies is a major factor affecting such funding. NIH now requires grant applicants to report their indirect cost rates, and proposals concerning a cap on indirect cost reimbursements have been discussed.

Effective October 1, 1995, NIH implemented a new policy under which indirect costs are awarded for all years of an approved project period (four to five years) at the rate in effect at the time of the renewal. An appeal process is available for nonprofit institutions which experience an indirect cost rate increase of more than three percentage points. This policy, however, has the potential to cap the amount of indirect costs awarded to Fred Hutch. There is no guarantee that Fred Hutch will be able to

continue to negotiate indirect cost rates adequate to fund a significant portion of the expenses of Fred Hutch that are not covered by direct grant awards and from other sources.

Funding for grants and contracts related to research are dependent on investigators employed by Fred Hutch who compete for such funding. The overall trend in research budgets of federal and state agencies and federal and state funding of research grants has in recent years seen a flattening of the rate of increase in such funding in comparison to prior years. Such funding may increase at lower rates, remain at current levels or decrease in future years. To the extent that overall funding of grants and contracts for research of the type conducted at Fred Hutch remains flat or decreases, the competition for such funds may increase. In such circumstances, or for any other reason, should the success of Fred Hutch’s investigators in being awarded research grants and contracts fall short of the expectations of the management of Fred Hutch, the ability of Fred Hutch to generate sufficient revenues to pay the costs of operating its facilities and to pay the principal of and interest on the Bonds could be adversely affected. See APPENDIX A – “INFORMATION CONCERNING FRED HUTCHINSON CANCER RESEARCH CENTER – PROGRAMS” and “– FINANCIAL INFORMATION – Research and Discretionary Funding.”

Future actions by the federal government affecting funding of basic research grant programs could lower the amount of reimbursement available to Fred Hutch. Federal deficit reduction requirements or other budgetary considerations may press Congress to make further reductions in federal funding of basic research. In addition, changes in research funding at Fred Hutch could occur if more promising research is being conducted at other research centers, or if Fred Hutch should lose key investigators, or if research to which Fred Hutch has devoted significant resources is disproved. Such changes could have a material and adverse impact on Fred Hutch’s future operations and financial condition.

Increased Enforcement Affecting Clinical Research

In addition to increasing enforcement of laws governing payment and reimbursement, the federal government has also stepped up enforcement of laws and regulations governing the conduct of clinical trials at hospitals. U.S. Department of Health and Human Services (“DHHS”) elevated and strengthened its Office of Human Research Protection, one of the agencies responsible for monitoring federally funded research. In addition, the NIH significantly increased the number of facility inspections that these agencies perform. The Food and Drug Administration (“FDA”) also has authority over the conduct of clinical trials performed in hospitals when these trials are conducted on behalf of sponsors seeking FDA approval to market the drug or device that is the subject of the research. Moreover, the Office of Inspector General of DHHS, in its “Work Plans,” has included several enforcement initiatives related to reimbursement for experimental drugs and devices (including kickback concerns) and has issued compliance program guidance directed at recipients of extramural research awards from the National Institutes of Health and other agencies of the U.S. Public Health Service. The United States Department of Justice (the “DOJ”) may also become involved in enforcement actions relating to the use of federal funds or submission of information to federal agencies. There have been a number of recent government investigations and settlements involving hospital use of federal grant funding in connection with clinical trials and also a settlement involving the submission of claims to Medicare for services provided in a clinical trial. These agencies’ enforcement powers range from substantial fines and penalties to exclusion of researchers and suspension or termination of entire research programs, and errors in billing of the Medicare or Medicaid programs for care provided to patients enrolled in clinical trials that is not eligible for Medicare reimbursement can subject Fred Hutch to sanctions as well as repayment obligations. In addition, the relationships between the sponsors of research and physicians or hospitals may also implicate the Federal Anti-Kickback Statute or the Federal False Claims Act. In the event of any findings of improper conduct, it is possible that the government could suspend research operations at Fred Hutch, or terminate such member’s ability to participate in government-sponsored programs.

False Claims Act

The federal False Claims Act (“FCA”) makes it illegal to knowingly submit or present a false, fictitious or fraudulent claim for payment or approval for payment for which the federal government provides, or reimburses, at least some portion of the requested money or property. Because the term “knowingly” is defined broadly under the law to include not only actual knowledge but also deliberate ignorance or reckless disregard of the facts, the FCA can be used to punish a wide range of conduct. The Patient Protection and Affordable Care Act (the “ACA”) amended the FCA by expanding the activities that are subject to civil monetary penalties to include, among other things, failure to report and return known overpayments within statutory limits. FCA investigations and cases have become common in the health care field and include clinical research activities and may cover a range of activity from submission of intentionally inflated billings, to highly technical billing infractions, to errors or omissions in grant applications. Penalties under the FCA are severe and may include damages equal to three times the amount of the alleged false claims, as well as substantial civil monetary penalties. As a result, violation or alleged violation of the FCA frequently results in settlements that require multi-million dollar payments and costly corporate integrity agreements. The FCA also permits individuals to initiate civil actions on behalf of the government in lawsuits called “qui tam” actions. Qui tam plaintiffs, or “whistleblowers,” file cases under seal, and the federal government is given the option to pursue the lawsuit. If the federal government declines, then the qui tam plaintiff may proceed with the lawsuit. In each case the qui tam plaintiff may be entitled to a share of any amounts recovered by or on behalf of the federal government. The FCA has become one of the government’s primary weapons against health care fraud or suspected health care fraud. FCA violations or alleged violations could lead to settlements, fines, exclusion or reputation damage that could have a material adverse impact on Fred Hutch. Management of Fred Hutch is not aware of any FCA actions that have been filed against Fred Hutch. However, because such lawsuits are filed under seal, there can be no assurance that one or more lawsuits have not been filed or will not be filed in the future without the knowledge of Fred Hutch’s management.

Under the ACA, the FCA has been expanded to include overpayments that are discovered by a healthcare provider and are not promptly refunded to the applicable federal healthcare program, even if the claims relating to the overpayment were initially submitted without any knowledge that they were false. The final rule which took effect on March 14, 2016 requires that providers report and return identified overpayments by the later of 60 days after identification, or the date the corresponding cost report is due, if applicable. If the overpayment is not so reported and returned, it becomes an “obligation” under the FCA. This expansion of the FCA exposes hospitals and other health care providers to liability under the FCA for a considerably broader range of claims than in the past. There was initially great uncertainty in the industry as to when an overpayment is technically “identified” and the ability of a provider to determine the total amount of an overpayment and satisfy its repayment obligation within the required time period. The March 14, 2016 final rule clarified that an overpayment is considered to have been identified when the person has or should have, through the exercise of reasonable diligence, determined that the person has received an overpayment and quantified the amount of the overpayment. That final rule also established a six year lookback period, meaning overpayments must be reported and returned only if a person identifies the overpayment within six years of the date the overpayment was received.

In June 2016, the DOJ issued a rule that more than doubles civil monetary penalties under the FCA. These increases took effect on August 1, 2016 and apply to FCA violations after November 2, 2015.

In June 2016, the United States Supreme Court announced its decision in Universal Health Services, Inc. v. United States ex rel. Escobar, No. 15-7 (U.S. June 16, 2016). Prior to Escobar, lower courts had split on the issue of whether the FCA extended to so-called “implied certification” of

compliance with laws, and whether such compliance was limited to express conditions of payment or extended to conditions of participation. The United States Supreme Court affirmed the theory of “implied certification” and rejected the distinction between conditions of payment and conditions of participation for these purposes, ruling that the relevant inquiry is whether the alleged noncompliance, if known to the government, would have in fact been material to the government’s determination as to whether to pay the claim. There is considerable uncertainty as to the application of the Escobar holding, but depending on how it is interpreted by the lower courts, it could result in an expanded scope of potential FCA liability for noncompliance with applicable laws, regulations and subregulatory guidance.

Anti-Kickback Statute

The federal “Anti-Kickback Statute” is a criminal statute that prohibits anyone from soliciting, receiving, offering or paying any remuneration, directly or indirectly, overtly or covertly, in cash or in kind, in return for a referral of a patient (or to induce a referral) or the ordering or recommending of the purchase of any item or service that is paid by any federal or state health care program. While there are no reported cases involving Anti-Kickback Statute claims against a research organization such as Fred Hutch, which is not a direct provider of services that are billed to Medicare or Medicaid, a regulator could broadly interpret the statute to include federally funded grants as within the scope of a federal health care program. The ACA amended the Anti-Kickback Statute to expressly provide that a claim resulting from a violation of the Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the FCA. Another amendment provides that an Anti-Kickback Statute violation may be established without proving that the defendant acted with specific intent to violate the Anti-Kickback Statute. The new standards could expand criminal and civil fraud exposure under the Anti-Kickback Statute.

Violations or alleged violations of the Anti-Kickback Statute can result in settlements that require multi-million dollar payments and costly corporate integrity agreements. The Anti-Kickback Statute can be prosecuted either criminally or civilly. Violation is a felony, subject to potentially substantial fines and imprisonment, either of which would have a significant detrimental effect on the financial stability of most hospitals. In addition, significant civil monetary penalties may be imposed. Increasingly, the federal government and qui tam relators are pursuing violations of the Anti-Kickback Statute under the FCA, based on the argument that claims resulting from an illegal kickback arrangement are also false claims for FCA purposes. See the discussion under the subheading “False Claims Act” above.

Federal, State and Local Legislation and Regulations

General. Fred Hutch is subject to a wide variety of federal, state and local regulatory actions and legislative and policy changes that could have a significant impact on Fred Hutch. Federal and state legislative bodies have broad discretion in altering or eliminating programs that contribute significantly to the revenues of Fred Hutch. In addition, such entities may enact legislation that imposes significant new burdens on the operations of Fred Hutch. There can be no assurance that such legislative bodies will not make legislative policy changes (or direct governmental agencies to promulgate regulatory changes) that have adverse effects upon the ability of Fred Hutch to generate revenues or upon the favorable utilization of its facilities.

The Health Insurance Portability Act and Accountability Act of 1996. The Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) established criminal sanctions for health care fraud and applies to all health care benefit programs, whether public or private. HIPAA also provides for punishment of a health care provider for knowingly and willfully embezzling, stealing, converting or intentionally misapplying any money, funds, securities, premiums, credits, property, or other assets of a health care benefit program. A health care provider convicted of health care fraud is subject to exclusion from the Medicare program.

Environmental Laws Affecting Research Facilities. Fred Hutch is subject to a wide variety of federal, state and local environmental and occupational health and safety laws and regulations that address, among other things, its operations and its facilities and properties. Among the types of regulatory requirements are: air and water quality control requirements; waste management requirements; specific regulatory requirements applicable to asbestos, medical and infectious wastes, polychlorinated biphenyls, and radioactive substances; requirements for providing notice to employees and members of the public about hazardous materials handled by or located at Fred Hutch’s facilities; requirements for training employees in the proper handling and management of hazardous materials and waste; and other requirements. In its role as owner and operator of properties and facilities, Fred Hutch may be subject to liability for investigation and remedying any hazardous substances that have come to be located on the property, including any such substances that may have migrated off the property. Typical operations at Fred Hutch include, in various combinations, the handling, use, storage, transportation, disposal and discharge of infectious, toxic, radioactive, flammable and other hazardous materials, wastes, pollutants or contaminants. For this reason, such operations are particularly susceptible to the practical financial and legal risks associated with compliance with such laws and regulations. Such risks may result in damage to individuals, property or the environment; may interrupt operations or increase their costs or both; may result in legal liability, damages, injunctions or fines, or may trigger investigations, administrative proceedings, penalties or other government agency actions. There can be no assurance that Fred Hutch will not encounter such risks in the future, and such risks could have a material adverse effect on Fred Hutch’s financial condition.

Tax-Exempt Status and Other Tax Matters

Maintenance of the Tax-Exempt Status of Fred Hutch and Any Future Member of the Obligated Group. The tax-exempt status of the Bonds depends upon Fred Hutch and any future Member of the Obligated Group that receives or benefits from the use of proceeds of the Bonds and the Series 2017A Bonds (the “Benefiting Members”) and other users of Series 2017 Bond financed property maintaining their status as an organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the “Code”) or as a disregarded entity for federal law purposes whose sole member is such an organization. The maintenance of such status is contingent on compliance with general rules promulgated in the Code and related regulations regarding the organization and operation of tax-exempt entities including their operation for charitable and other permissible purposes and their avoidance of transactions that may cause their assets to inure to the benefit of private individuals. As these general principles were developed primarily for public charities that do not conduct large-scale technical operations and business activities, they often do not directly address many of the operations and transactions entered into by a modern medical research organization. Although specific activities of health care organizations, such as medical office building leases, have been the subject of interpretations by the Internal Revenue Service (the “IRS”) in the form of private letter rulings, many activities or categories of activities have not been addressed in any official opinion, interpretation or policy of the IRS. The IRS has announced that it intends to closely scrutinize transactions between nonprofit corporations and for-profit entities, and in particular has issued audit guidelines for tax-exempt hospitals. Because Fred Hutch conducts or may conduct a wide range of transactions involving private parties, no assurance can be given that certain of those transactions would not be challenged by the IRS. Management of Fred Hutch believes that the private party transactions to which it is a party are consistent with the requirements of the Code as to tax-exempt status, but, as noted in this section, there is uncertainty as to the state of the law.

In recent years, the IRS has issued a number of formal and informal statements or interpretations which have increased uncertainty of the IRS’s position on a wide variety of activities commonly undertaken by tax-exempt health care organizations. As a result, tax-exempt organizations and other

providers are currently subject to an increased degree of scrutiny and possibly enforcement by the IRS with respect to such activities.

The IRS has periodically conducted audit and other enforcement activity regarding tax-exempt health care organizations. These audits examine a wide range of possible issues, including tax-exempt bond financing of partnerships and joint ventures, retirement plans and employee benefits, employment taxes, political contributions and other matters. Fred Hutch has not received notice from the IRS that it was selected for such an audit.

If the IRS were to find that any Benefiting Member or other user of property financed with the proceeds of the Series 2017 Bonds has participated in activities in violation of certain regulations or rulings, the tax-exempt status of such entity could be jeopardized. Although the IRS has not frequently revoked the 501(c)(3) tax-exempt status of nonprofit health care corporations, it could do so in the future. Loss of tax-exempt status by even one Benefiting Member or other user of Series 2017 Bond financed property potentially could result in loss of tax exemption of the Bonds and of other tax-exempt debt of Fred Hutch and defaults in covenants regarding the Bonds and other related tax-exempt debt and obligations likely would be triggered. Loss of tax-exempt status also could result in substantial tax liabilities on income of the affected Benefiting Member. For these reasons, loss of tax-exempt status of any Benefiting Member or other user of Series 2017 Bond financed property could have a material adverse effect on the financial condition of Fred Hutch.

In some cases, the IRS has imposed substantial monetary penalties on tax-exempt organizations in lieu of revoking their tax-exempt status. In those cases, the IRS and tax exempt organizations entered into settlement agreements requiring the organization to make substantial payments to the IRS. Given the size of Fred Hutch, the wide range of complex transactions entered into by Fred Hutch, and potential exemption risks, Fred Hutch could be at risk for incurring monetary and other liabilities imposed by the IRS.

In lieu of revocation of exempt status, the IRS may impose penalty excise taxes on certain “excess benefit transactions” involving 501(c)(3) organizations and “disqualified persons.” An excess benefit transaction is one in which a disqualified person or entity receives more than fair market value from the exempt organization or pays the exempt organization less than fair market value for property or services, or shares the net revenues of the tax-exempt entity. A disqualified person is a person (or an entity) who is in a position to exercise substantial influence over the affairs of the exempt organization during the five years preceding an excess benefit transaction. The statute imposes excise taxes on the disqualified person and any “organization manager” who knowingly participates in an excess benefit transaction. These rules do not penalize the exempt organization itself, so there would be no direct impact on Fred Hutch or the tax status of the Bonds if an excess benefit transaction were subject to IRS enforcement, pursuant to these “intermediate sanctions” rules.

State and Local Tax Exemption. State, county and local taxing authorities undertake audits and reviews of the operations of tax-exempt organizations with respect to their real property tax exemptions. The majority of the real property of Fred Hutch is currently treated as exempt from real property taxation. Although the real property tax exemption of Fred Hutch with respect to its core facilities has not, to the knowledge of management, been under challenge or investigation, an audit could lead to a challenge that could adversely affect the real property tax exemptions of Fred Hutch.

It is not possible to predict the scope or effect of future legislative or regulatory actions with respect to taxation of nonprofit corporations. There can be no assurance that future changes in the laws and regulations of state or local governments will not materially adversely affect the financial condition of Fred Hutch by requiring payment of income, local property or other taxes.

Unrelated Business Income. In recent years, the IRS and state, county and local tax authorities have audited the operations of certain nonprofit entities with respect to their exempt activities and the generation of unrelated business taxable income, or UBTI. Most research institutions such as Fred Hutch participate in activities that may generate UBTI. An investigation or audit could result in assessment of taxes, interest and penalties with respect to unreported UBTI and in some cases ultimately could affect the tax-exempt status of such entity, as well as the exclusion from gross income for federal income tax purposes of the interest payable on the Bonds and other tax-exempt debt of Fred Hutch.

Maintenance of Tax-Exempt Status of Interest on the Bonds. The Code imposes a number of requirements that must be satisfied for interest (including properly allocable original issue discount) on state and local obligations, such as the Bonds, to be excludable from gross income for federal income tax purposes. These requirements include limitations on the use of proceeds of the Bonds, limitations on the investment earnings of proceeds of the Bonds prior to expenditure, a requirement that certain investment earnings on proceeds of the Bonds be paid periodically to the United States, and a requirement that the Authority file an information report with the IRS. Fred Hutch and, to the extent so required, the Authority and the Bond Trustee have covenanted in the Tax Agreement and Nonarbitrage Certificate relating to the Series 2017 Bonds, dated the Date of Issue, to comply with such requirements. Future failure by Fred Hutch, the Authority or the Bond Trustee to comply with the requirements stated in the Code and related regulations, rulings and policies may cause interest (including properly allocable original issue discount) on the Bonds to be included in gross income, retroactively to the Date of Issue. In such event, the Bond Indenture does not contain any specific provision for mandatory redemption or acceleration of the Bonds nor does it provide that any additional interest will be paid to the Owners of the Bonds.

Future legislation, if enacted into law, or clarification of the Code may cause interest (including properly allocable original issue discount) on the Bonds to be subject, directly or indirectly, in whole or in part, to federal income taxation, or otherwise prevent Beneficial Owners from realizing the full current benefit of the expected tax-exempt status of such interest. For example, presidential budget proposals in previous years have proposed legislation that would limit the exclusion from gross income of interest on the Bonds to some extent for high-income individuals. The introduction or enactment of any such future legislation or clarification of the Code may also affect the market price for, or marketability of, the Bonds. Prospective purchasers of the Bonds should consult their own tax advisers regarding any pending or proposed federal tax legislation.

IRS officials have indicated that more resources will be invested in audits of tax-exempt bonds, including the use of bond proceeds, in the charitable organization sector, with specific reviews of private use. The Bonds could be audited by the IRS. Under current procedures, parties other than the Authority, Fred Hutch and their appointed counsel, including the Beneficial Owners, would have little, if any, right to participate in the audit examination process. Moreover, because achieving judicial review in connection with an audit examination of tax-exempt bonds is difficult, obtaining an independent review of IRS positions with which the Authority or Fred Hutch legitimately disagrees, may not be practicable. Any action of the IRS, including but not limited to selection of the Bonds for audit, or the course or result of such audit, or an audit of bonds presenting similar tax issues may affect the market price for, or the marketability of, the Bonds, and may cause Fred Hutch or the Beneficial Owners to incur significant expense.

In addition, under its compliance check program, the IRS sent post-issuance compliance questionnaires to several hundred nonprofit corporations that have borrowed on a tax-exempt basis regarding their post-issuance compliance with various requirements for maintaining the federal tax exemption of interest on their bonds. After analyzing responses, IRS representatives indicated that it had commenced a number of examinations of hospital tax-exempt bond issuances with wide-ranging areas of

inquiry. In the final report, issued July 1, 2011, summarizing the findings and conclusions of the questionnaires, the IRS stressed the importance of formal post-issuance compliance and record-keeping procedures which, once implemented, the borrower should continuously review. The IRS suggested that it may issue future questionnaires as part of its goal to promote post-issuance compliance.

Tax-exempt organizations must also complete new schedules to IRS Form 990-Return of Organizations Exempt From Income Tax, which create additional reporting responsibilities. Schedule K requires detailed information related to all outstanding bond issues of tax-exempt borrowers, including information regarding operating, management and research contracts as well as private use compliance. Tax-exempt organizations must also complete Schedule J, which requires reporting of compensation information for the organizations’ officers, directors, trustees, key employees, and other highly compensated employees.

There can be no assurance that responses by Fred Hutch to a questionnaire or Form 990 will not lead to an IRS review that could adversely affect the market value of the Bonds or of other outstanding tax-exempt indebtedness of Fred Hutch. Additionally, the Bonds or other tax-exempt obligations issued for the benefit of Fred Hutch may be, from time to time, subject to examinations or audits by the IRS.

The opinions of Bond Counsel with respect to each Series of the Bonds are based on legal authority on the Date of Issue, cover certain matters not directly addressed by such authorities, and represent Bond Counsel’s judgment as to the proper treatment of interest on the Bonds for federal income tax purposes. The expected forms of the opinions, to be dated the Date of Issue, are attached hereto as APPENDIX E. Fred Hutch has not sought to obtain a private letter ruling from the IRS with respect to the Bonds and the opinions are not binding on the IRS or the courts. Furthermore, Bond Counsel cannot give and has not given any opinion or assurance about the future activities of Fred Hutch, future Members of the Obligated Group, if any, the Authority and the Bond Trustee, or about the effect of future changes in the Code, the applicable regulations, the interpretation thereof or the enforcement thereof by the IRS.

Bond Counsel’s engagement with the Authority in connection with the Bonds ends on the Date of Issue, and, unless separately engaged, Bond Counsel is not obligated to defend the Authority, Fred Hutch or the Beneficial Owners regarding the tax-exempt status of the Bonds in the event of an audit examination by the IRS.

Limitations on Contractual and Other Arrangements Imposed by the Internal Revenue Code. As a tax-exempt organization, Fred Hutch is limited with respect to use of practice income guarantees, reduced rent on medical office space, low interest loans, joint venture programs and other means of recruiting and retaining staff. Any suspension, limitation, or revocation of one or more Benefiting Member’s (or other user of Series 2017 Bond financed property) tax-exempt status or assessment of significant tax liability would have a materially adverse effect on Fred Hutch and might lead to loss of tax exemption of interest on the Bonds.

Cost of Capital. From time to time, Congress has considered and is considering revisions to the Code that may prevent or limit access to the tax-exempt debt market to borrowers or issuers such as Fred Hutch. Such legislation, if enacted into law, may have the effect of increasing the capital costs of Fred Hutch.

Employment and Labor Issues

General. Fred Hutch is a major employer, its work force combining a complex mix of professional, quasi-professional, technical, clerical, housekeeping, maintenance and other types of workers in a single operation. As with all large employers, Fred Hutch bears a wide variety of risks in

connection with its employees. These risks include strikes and other related work actions, contract disputes, difficulties in recruitment, discrimination claims, personal tort actions, work-related injuries, exposure to hazardous materials, interpersonal torts, risks related to its benefit plans, and other risks that may flow from the relationships between employer and employee. Many of these risks are not covered by insurance, and certain of them cannot be anticipated or prevented in advance. Fred Hutch is subject to all of the risks listed above, and such risks, alone or in combination, could have material adverse consequences to the financial condition or operations of Fred Hutch. See APPENDIX A – “INFORMATION CONCERNING FRED HUTCHINSON CANCER RESEARCH CENTER – OTHER INFORMATION.”

Class Actions. In recent years, class action litigation has emerged as a potentially significant source of litigation liability for nonprofit health care organizations. Since the subject matter of class action suits may involve uninsured risks, and since such actions often involve alleged large classes of plaintiffs, they may have material adverse consequences on nonprofit healthcare organizations in the future.

Wage and Hour Class Actions and Litigation. Federal law and many states impose standards related to worker classification, eligibility and payment for overtime, liability for providing rest periods and similar requirements. Large employers with complex workforces, such as Fred Hutch, are susceptible to actual and alleged violations of these standards. In recent years there has been a proliferation of lawsuits over these “wage and hour” issues, often in the form of large class actions. For large employers such as Fred Hutch, such class actions can involve multi-million dollar claims, judgments and/or settlements. A major class action decided or settled adversely to Fred Hutch could have a material adverse impact on its financial condition and results of operations.

Privacy Laws

State and federal laws protecting the privacy of patients and human research subjects also impact how Fred Hutch may use personal and financial information of participants in its research studies. In addition to provisions governing the portability of health insurance and health care fraud, HIPAA includes administrative simplification provisions (“AS Provisions”) intended to reduce costs and administrative burdens in the health care industry by standardizing the electronic transmission of many administrative and financial transactions that currently are carried out manually on paper or in many different electronic formats. The AS Provisions also impose privacy and security requirements on entities covered by HIPAA (“Covered Entities”) as well as mandate other standards such as national identifiers. Covered Entities must also enter into contracts with their business associates with whom they share protected health information to assure that such information is appropriately safeguarded and that other HIPAA requirements are met.

The final HIPAA privacy regulations impose requirements on the use and disclosure of protected health information, create individual rights, and mandate certain administrative requirements for Covered Entities. Additionally, final HIPAA security regulations require Covered Entities to assess risks and develop and implement appropriate security measures to protect individually identifiable health information, with particular focus on administrative procedures, physical safeguards, technical security services, and technical security mechanisms. Penalties for noncompliance with the AS Provisions include civil monetary penalties which were revised under the Health Information Technology for Economic and Clinical Health Act (the “HITECH Act”) as described in the following subsection. Criminal penalties include up to $50,000 in fines and/or one year imprisonment for wrongful disclosure of individually identifiable health information; $100,000 and/or imprisonment of not more than five years for wrongful disclosure under false pretenses; and up to $250,000 and/or 10 years imprisonment for wrongful

disclosure with the intent to sell, transfer, or use individually identifiable health information for commercial advantage, personal gain, or malicious harm.

In February 2009, the American Recovery and Reinvestment Act of 2009 (the “Recovery Act”) was enacted. The Recovery Act includes broad, sweeping changes to the HIPAA provisions regarding confidentiality of medical records. In general, the Recovery Act increases penalties for violations of medical record confidentiality and strengthens enforcement and oversight.

Fred Hutch has made a concerted effort to comply with applicable AS Provisions and other applicable privacy laws. Management cannot predict if additional regulations, amendments or interpretations might increase Fred Hutch’s costs or impair timely collections from Covered Entities.

The HITECH Act. Provisions in the HITECH Act, enacted as part of the Recovery Act, increase the maximum civil monetary penalties for violations of HIPAA and grant enforcement authority of HIPAA to state attorneys general. The HITECH Act also (i) extended the reach of HIPAA beyond “covered entities,” (ii) imposed a breach notification requirement on HIPAA covered entities, (iii) further limited certain uses and disclosures of individually identifiable health information, and (iv) restricted covered entities’ marketing communications. Management of Fred Hutch does not anticipate that compliance with the HITECH Act will have a material adverse effect on the operations or financial condition of Fred Hutch.

The breach notification obligation, in particular, may expose covered entities such as hospitals to heightened liability. Under HITECH, in the event of a data privacy breach, covered entities are required to notify affected individuals and the federal government. If more than 500 individuals are affected by the breach (1) the covered entity must also notify the media and (2) the federal government posts a description of the breach on its website. Although HIPAA does not provide for a private right of action, these reporting obligations increase the risk of government enforcement as well as class action lawsuits filed under state privacy or consumer protection laws, especially if large numbers of individuals are affected by a breach.

The HITECH Act revises the civil monetary penalties associated with violations of HIPAA as well as provides state attorneys general with authority to enforce the HIPAA privacy and security regulations in some cases through a damages assessment of $100 per violation or an injunction against the violator. The revised civil monetary penalty provisions establish a tiered system, ranging from a minimum of $100 per violation for an unknowing violation to $1,000 per violation for a violation due to reasonable cause, but not willful neglect. For a violation due to willful neglect, the penalty is a minimum of $10,000 or $50,000 per violation, depending on whether the violation was corrected within 30 days of the date the violator knew or should have known of the violation. Maximum penalties may reach $1,500,000 per calendar year for violations of identical provisions. Penalties can significantly exceed $1,500,000 where there are violations of multiple provisions occurring over multiple years. The new levels of civil monetary penalties apply immediately for unknowing violations or violations due to reasonable cause.

DHHS increased the above civil monetary penalty amounts for inflation, effective September 6, 2016, to: a minimum of $110 and maximum of $55,010 per violation for an unknowing violation; a minimum of $1,100 per violation and maximum of $55,010 per violation for a violation due to reasonable cause but not willful neglect; a minimum of $11,002 and maximum of $55,010 per violation for a violation due to willful neglect that is corrected within 30 days; and a minimum of $55,010 per violation and a maximum of $1,650,300 per violation for a violation due to willful neglect that is not corrected within 30 days. Maximum penalties may now reach $1,650,300 per calendar year for multiple violations

of an identical provision (with total penalties potentially exceeding this amount where there are violations of multiple provisions occurring over multiple years).

Criminal penalties will be enforced against persons who obtain or disclose personal health information without authorization, even if not a covered entity or business associate. DHHS is also beginning to perform periodic audits of health care providers, group health plans and business associates to ensure that required policies under HIPAA and the HITECH Act are in place.

Finally, the HITECH Act provides that individuals harmed by violations will be able to recover a percentage of monetary penalties or a monetary settlement based upon methods to be established by DHHS for this private recovery, although DHHS has not yet issued rulemaking to effectuate this statutory provision.

On January 25, 2013, DHHS issued comprehensive modifications to the existing HIPAA regulations to implement the requirements of the HITECH Act, commonly known as the “HIPAA Omnibus Rule.” The HIPAA Omnibus Rule became effective on March 26, 2013, and covered entities were required to be in compliance by September 23, 2013 (though certain requirements have a longer timeframe). Key aspects of the HIPAA Omnibus Rule include, but are not limited to: (i) a new standard for what constitutes a breach of private health information, (ii) establishing four levels of culpability with respect to civil monetary penalties assessed for HIPAA violations, (iii) direct liability of business associates for certain violations of HIPAA, (iv) modifications to the rules governing research, (v) stricter requirements regarding non-exempt marketing practices, (vi) modification and re-distribution of notices of privacy practices, and (vii) stricter requirements regarding the protection of genetic information. The obligations imposed under the HIPAA Omnibus Rule could have a material adverse effect on the financial condition of health care organizations.

The Office for Civil Rights (“OCR”) is the administrative office that is tasked with enforcing HIPAA. OCR has stated that it has now moved from education to enforcement in its implementation of the law. Recent settlements of HIPAA violations for breaches involving lost data and have reached the millions of dollars. Any breach of HIPAA, regardless of intent or scope, may result in penalties or settlement amounts that are material to a covered health care provider.

Security Breaches and Unauthorized Releases of Personal Information. Federal, state and local authorities are increasingly focused on the importance of protecting the confidentiality of individuals’ personal information, including patient health information. Many states have enacted laws requiring businesses to notify individuals of security breaches that result in the unauthorized release of personal information. In some states, notification requirements may be triggered even where information has not been used or disclosed, but rather has been inappropriately accessed. State consumer protection laws may also provide the basis for legal action for privacy and security breaches and frequently, unlike HIPAA, authorize a private right of action. In particular, the public nature of security breaches exposes health organizations to increased risk of individual or class action lawsuits from patients or other affected persons, in addition to government enforcement. Failure to comply with restrictions on patient privacy or to maintain robust information security safeguards, including taking steps to ensure that contractors who have access to sensitive patient information maintain the confidentiality of such information, could consequently damage an entity’s reputation and materially adversely affect operations.

Fred Hutch and health care providers generally are dependent upon integrated electronic medical record and other information technology systems. These systems necessarily hold large quantities of highly sensitive protected health information. As a result, the electronic systems and networks of health care providers are considered likely targets for cyberattacks and other potential breaches of their systems. In addition to regulatory fines and penalties, the research and health care entities subject to the breaches

may be liable for the costs of remediating the breaches, damages to individuals (or classes) whose information has been breached and damage to the information technology infrastructure. Fred Hutch has taken, and continues to take, measures to protect its information technology systems, however, despite the implementation of network security measures by Fred Hutch, its information technology systems may be vulnerable to breaches, hacker attacks, computer viruses, physical or electronic break-ins and other similar events or issues. Such events or issues could lead to the inadvertent disclosure of protected health information or other confidential information or could have an adverse effect on the ability of Fred Hutch to operate its business.

Other Risk Factors Generally Affecting Research Facilities

In the future, the following factors, among others, may adversely affect the operation of research facilities, including those of Fred Hutch, to an extent that cannot be determined at this time:

(1) Future scientific advances, e.g. cures for the types of cancer treated or a reduction in the incidence of the types of cancer treated by Fred Hutch, which could reduce the need for research of the kind carried out by Fred Hutch, changes in demographics or a decline in general economic conditions;

(2) Increased competition in the future from other research facilities, including, but not limited to, competition for limited federal funds for sponsoring research of the kind carried out by Fred Hutch and for researchers likely to be awarded grants of such funds;

(3) Cost and availability of any insurance, such as professional liability, fire and general comprehensive liability, that facilities of a similar size and type generally carry; and

(4) Cost increases without corresponding increases in revenue could result from, among other factors, increases in the salaries, wages and fringe benefits of employees; and increases in costs associated with advances in medical technology or with inflation and future legislation which would prevent or limit the ability of Fred Hutch to increase revenues.

Other Risk Factors Affecting the Bonds

In the future, the following factors, among others, may adversely affect the Owners of the Bonds to an extent that cannot be determined at this time:

(1) In the event that the Authority, Fred Hutch or the Bond Trustee fail to comply with the requirements of the Code, interest on the Bonds may become subject to federal income taxation retroactive to the Date of Issue of the Bonds. In such event, the Bond Indenture does not contain any specific provision for mandatory acceleration of the Bonds nor does it provide that any additional interest will be paid to the Owners of the Bonds. See “BONDOWNERS’ RISKS – Tax-Exempt Status and Other Tax Matters” herein and APPENDIX C – “SUMMARY OF CERTAIN PROVISIONS OF THE BOND INDENTURES AND LOAN AGREEMENTS – THE BOND INDENTURES – Events of Default;”

(2) Certain amendments may be made to the Bond Indentures and the Loan Agreements without obtaining the consent of any Owner of the Outstanding Bonds and certain other amendments to the Bond Indentures and the Loan Agreements require, subject to the nature of the amendment(s), the consent of the Owners of not less than a majority in aggregate principal amount of the related Series of Bonds then Outstanding or the consent of all Owners of such Bonds. See APPENDIX C – “SUMMARY OF CERTAIN PROVISIONS OF THE BOND INDENTURES AND LOAN AGREEMENTS.” Certain amendments may be made to the Master Indenture without obtaining consent of any Holders of Master Notes and certain other amendments to the Master Indenture require, subject to the nature of the

amendment(s), the consent of the Holders of not less than a majority in aggregate principal amount of the Master Notes outstanding under the Master Indenture, the consent of the Holder of the Master Note affected by such amendment(s) or the consent of all Holders of Master Notes. With respect to amendments to the Master Indenture, the Holders of the requisite percentage of Master Notes outstanding under the Master Indenture may be composed wholly or partially of the Holders of Master Notes other than the Series 2017 Variable Rate Master Notes. Amendments to the Bond Indentures, the Loan Agreements and the Master Indenture requiring consent could adversely affect the security of the Owners of the affected Bonds. See APPENDIX D – “SUMMARY OF CERTAIN PROVISIONS OF THE MASTER INDENTURE AND DEED OF TRUST;”

(3) The enforceability of the Master Indenture, the Series 2017 Variable Rate Master Notes, the Deed of Trust, the Accounts Security Agreement and other documents relating to the Collateral, the Loan Agreements and the Bond Indentures may be limited by bankruptcy, reorganization, insolvency, moratorium or other similar laws affecting creditors’ rights; and by applicable principles of equity if equitable remedies are sought; and by public policy. See “ENFORCEABILITY OF REMEDIES” herein; and

(4) No assurance can be given that a secondary market for the Bonds will be available and no assurance can be given that the initial offering prices for the Bonds will continue for any period of time.

Risks Related to Outstanding Variable Rate Master Notes

Certain outstanding securities secured by Master Notes issued under the Master Indenture are variable rate obligations, the interest rates on which could rise. The effect on Fred Hutch of any such increase in interest rates could be material. In addition, certain series of these securities were privately placed pursuant to an agreement with the related lender, see APPENDIX A – “INFORMATION CONCERNING FRED HUTCHINSON CANCER RESEARCH CENTER – FINANCIAL INFORMATION – Growth of Balance Sheet Metrics – Overview of Existing Debt and Historical Capitalization.” The agreements with such lenders may include representations and covenants of Fred Hutch in addition to those included in the Master Indenture. The breach of a provision of any such agreement could result in the declaration of an event of default under such agreement and, under certain circumstances, could result in the declaration by the Master Trustee of an event of default under the Master Indenture. The additional covenants in these agreements may be waived or amended by the applicable party or parties without the consent of, or any notice to, the Master Trustee, the Bond Trustee or the holders of any of the Bonds. Upon the occurrence of an event of default under any of these agreements, the outstanding amount due under any such agreement could be declared immediately due and payable. The acceleration of amounts due under any of these agreements could have a material adverse effect on the cash position and financial condition of the Obligated Group.

Economic conditions affecting the credit markets resulted in a number of financial institutions restricting lending, including the extension of liquidity and credit facilities. This also resulted in the unwillingness of financial institutions to extend the term of existing liquidity facilities. No assurance can be given that Fred Hutch’s existing lenders will renew existing agreements or that Fred Hutch will be able to obtain replacement agreements. See APPENDIX A – “INFORMATION CONCERNING FRED HUTCHINSON CANCER RESEARCH CENTER – FINANCIAL INFORMATION – Growth of Balance Sheet Metrics – Overview of Existing Debt and Historical Capitalization.”

Risks Related to Investments

Fred Hutch has significant holdings in a broad range of investments. Market fluctuations may affect the value of those investments and those fluctuations may have a material effect on Fred Hutch. A

concentration of a significant portion of total investments in a particular investment could exacerbate the impact on Fred Hutch of any fluctuation in value related to such investment. See APPENDIX A – “INFORMATION CONCERNING FRED HUTCHINSON CANCER RESEARCH CENTER – FINANCIAL INFORMATION – Summary Balance Sheets” and “– INVESTMENT PERFORMANCE AND POLICY.”

Swap Agreement Interest Rate Risk

Fred Hutch has previously entered into certain interest rate swap agreements (the “Swaps”). See APPENDIX A – INFORMATION CONCERNING FRED HUTCHINSON CANCER RESEARCH CENTER – FINANCIAL INFORMATION – Interest Rate Swap Agreements.” The Swaps are and will be subject to periodic “mark-to-market” valuations and at any time may have a negative value to Fred Hutch. A counterparty to a Swap may terminate such Swap upon the occurrence of certain “termination event” or “events of default.” Fred Hutch may terminate the Swaps at any time. If either the counterparty to a particular Swap or Fred Hutch terminates any of the Swaps during a negative value situation, Fred Hutch may be required to make a termination payment to such Swap’s counterparty, and such payment could be material.

Pursuant to the Swaps, the applicable counterparty will be obligated to make payments to Fred Hutch based on a floating rate index and the applicable notional amount, which payments may be more or less than the variable rates Fred Hutch is required to pay with respect to a comparable principal amount of the variable rate bonds hedged by the Swaps. No determination can be made at this time as to the potential exposure to Fred Hutch relating to the difference in variable rate payments.

Nature of Fred Hutch’s Facilities

Fred Hutch’s facilities subject to the Deed of Trust are not generally suitable for alternative uses without substantial and expensive modification. As a result, in the event of a default by Fred Hutch, the Bond Trustee’s and the Master Trustee’s remedies and the number of entities that could operate such facilities may be limited; and the revenues therefrom might thus be adversely affected. In addition, in the event of foreclosure against the Mortgaged Property, the proceeds of a sale of some or all of such facilities under such circumstances may be less than that obtainable if the sale were not forced. See “ENFORCEABILITY OF REMEDIES – Possible Federal Interest in Mortgaged Property” herein and APPENDIX A – “INFORMATION CONCERNING FRED HUTCHINSON CANCER RESEARCH CENTER – OTHER INFORMATION – Mortgaged Property – Use and Transfer Restrictions.” The proceeds of any such sale would be shared ratably among all Master Notes then outstanding and expressed to have the benefit of the Collateral; and in any event, may not be sufficient to pay the Bonds in full. In such event, the Authority shall not have any obligation to pay any deficiency.

29 – Deed of Trust, Security Documents and Security Related Documents” and “DEED OF TRUST – Amendments Included in the Second Amended Deed of Trust.”

Bankruptcy of Obligated Group Member

In the event that Fred Hutch or any future Obligated Group Member filed for protection from creditors under the United States Bankruptcy Code, the rights and remedies of the Owners of the Bonds would be subject to various provisions of the United States Bankruptcy Code. If Fred Hutch or any future Obligated Group Member were to commence a proceeding in bankruptcy, payments made by such Obligated Group Member during the 90-day period immediately preceding such commencement (or, under certain circumstances, during the preceding one-year period) may be voided as preferential transfers to the extent such payments allow the recipients thereof to receive more than they would have received in the event of the liquidation of such Obligated Group Member. Security interests and other liens granted by Fred Hutch and any such future Obligated Group Member to the Bond Trustee or the Master Trustee and perfected during such preference period may also be voided as preferential transfers to the extent such security interest or other lien secures obligations that arose prior to the date of such grant or perfection.

A bankruptcy filing would operate as an automatic stay of the commencement or continuation of any judicial or other proceeding against such Obligated Group Member and their respective property and as an automatic stay of any act or proceeding to enforce a lien upon or to otherwise exercise control over its property as well as various other actions to enforce, maintain or enhance the rights of the Bond Trustee and the Master Trustee. If the bankruptcy court so ordered, the property of such Obligated Group Member could be used for the financial rehabilitation of such Obligated Group Member despite any security interest of the Bond Trustee therein. The rights of the Bond Trustee and the Master Trustee to enforce their respective interests and other liens could be delayed during the pendency of the rehabilitation proceeding.

Such Obligated Group Member could also file a plan for the adjustment of its debts in any such proceeding which could include provisions modifying or altering the rights of creditors generally, or any class of them, secured or unsecured. The plan, when confirmed by a court, binds all creditors who had notice or knowledge of the plan and, with certain exceptions, discharges all claims against the debtor to the extent provided for in the plan. No plan may be confirmed unless certain conditions are met, among which are conditions that the plan be feasible and that it shall have been accepted by each class of claims impaired thereunder. Each class of claims has accepted the plan if at least two-thirds in dollar amount and more than one-half in number of the class cast votes in its favor. Even if the plan is not so accepted, it may be confirmed if the court finds that the plan is fair and equitable with respect to each class of non- accepting creditors impaired thereunder and does not discriminate unfairly. Any such plan could adversely affect the Owners and Beneficial Owners of the Bonds. In addition, a Bankruptcy Court may, under certain conditions, avoid or strip the liens off of certain of the Obligated Group’s assets, which could include security interests granted to the Master Trustee for the benefit of Holders of Master Notes, including the Series 2017 Variable Rate Master Notes.

In the event of bankruptcy or insolvency of Fred Hutch or any future Obligated Group Members, there is no assurance that certain covenants, including tax covenants, contained in the Bond Indenture, the Loan Agreement or the Master Indenture and certain other documents would survive. Accordingly, such Obligated Group Members, as debtors in possession, or a bankruptcy trustee could take action which might adversely affect the exclusion of interest on the Bonds from gross income for federal income tax purposes.

ENFORCEABILITY OF REMEDIES

Possible Federal Interest in Mortgaged Property The obligations of Fred Hutch, as the only Member of the Obligated Group, under the Series 2017 Variable Rate Master Notes and other Master Notes outstanding under the Master Indenture will initially be secured under the Deed of Trust by a lien against the Mortgaged Property, subject to Permitted Encumbrances and reconveyance of the Deed of Trust. For a description of the Mortgaged Property, see APPENDIX A – “INFORMATION CONCERNING FRED HUTCHINSON CANCER RESEARCH CENTER – OTHER INFORMATION – Mortgaged Property.” By purchase of the Bonds, Beneficial Owners of the Bonds are deemed to have consented to the full reconveyance of the Deed of Trust with such reconveyance and termination to occur upon the Master Trustee’s receipt of the consent of the owners of each then-Outstanding Master Note expressed to have the benefit of the pledge of Collateral. If an Event of Default were to occur under the Master Indenture prior to the effective date of the reconveyance of the Deed of Trust, one of the remedies available to the Master Trustee would be foreclosure on the Mortgaged Property. The federal government may have a prior claim against the Mortgaged Property or there may be a restriction on the use of such property to the extent it is constituted of assets purchased or constructed with grant funds from the federal government, including but not limited to construction grants, or otherwise encumbered by federal interests transferred from other property constructed and acquired with federal direct grant funding. The federal government has executed a subordination agreement with respect to certain of such federal claims as use restrictions. For more information, see APPENDIX A – “INFORMATION CONCERNING FRED HUTCHINSON CANCER RESEARCH CENTER – OTHER INFORMATION – Mortgaged Property – Use and Transfer Restrictions.” In addition, enforceability of the Deed of Trust and the lien against the Mortgaged Property may be limited by the laws of bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditor’s rights; the exercise of judicial discretion in accordance with the laws of equity; and by applicable securities laws.

Enforcement of Remedies

Enforcement of the remedies mentioned in APPENDIX C – “SUMMARY OF CERTAIN PROVISIONS OF THE BOND INDENTURES AND LOAN AGREEMENTS – THE BOND INDENTURES – Acceleration of Maturity” and “ – Other Remedies; Enforcement of Covenants and Conditions” and in APPENDIX D – “SUMMARY OF CERTAIN PROVISIONS OF THE MASTER INDENTURE AND DEED OF TRUST – Remedies Upon the Event of Default; Acceleration,” “ – Application of Moneys Upon Event of Default,” and “ – Remedies” may be limited or delayed in the event of application of federal bankruptcy laws or other laws affecting creditors’ rights and may be substantially delayed and subject to judicial discretion in the event of litigation or the required use of statutory remedial procedures. The various legal opinions to be delivered concurrently with the issuance of the Bonds will be qualified as to the enforceability of the various legal instruments by limitations imposed by state and federal laws, rulings, policy and decisions affecting available remedies, and by bankruptcy, reorganization or other laws of general application affecting the enforcement of creditors’ rights, including fraudulent conveyance considerations, or the enforceability of certain remedies or document provisions.

If a Member of the Obligated Group were to file a petition for relief under Title 11 of the United States Code (the “Bankruptcy Code”), the filing would operate as an automatic stay of the commencement or continuation of any judicial or other proceeding against such Obligated Group Member and any interest it has in property. If a bankruptcy court so ordered, such Obligated Group Member’s property, including its accounts receivable and proceeds thereof, could be used, at least

temporarily, for the benefit of such Obligated Group Member’s bankruptcy estate despite the claims of its creditors. See “BONDOWNERS’ RISKS – Bankruptcy of Obligated Group Member” herein.

The practical realization of any rights upon any default will depend upon the exercise of various remedies specified in the Master Indenture, the Loan Agreements, the Accounts Security Agreement, including without limitation, the Deed of Trust and the Bond Indentures. These remedies, in certain respects, may require judicial action which is often subject to discretion and delay. Under existing law, certain of the remedies specified in the Master Indenture, the Loan Agreements, the Accounts Security Agreement and the Bond Indentures may not be readily available or may be limited. A court may decide not to order the specific performance of these covenants.

Risks Related to Obligated Group Financings

The obligations of Fred Hutch and any future Members of the Obligated Group under the Series 2017 Variable Rate Master Notes will be limited to the same extent as the obligations of debtors typically are affected by bankruptcy, insolvency, avoidance of fraudulent transfers and the application of general principles of creditors’ rights; and as additionally described below. Although upon the issuance of the Bonds, Fred Hutch will be the only Obligated Group Member, the Master Indenture permits the addition of other Obligated Group members if certain conditions are met. See APPENDIX D – “SUMMARY OF CERTAIN PROVISIONS OF THE MASTER INDENTURE AND DEED OF TRUST – Admission to and Withdrawal from the Obligated Group.”

The joint and several obligations described herein of Members of the Obligated Group to make payment of debt service on the Master Notes issued pursuant to and under the Master Indenture may not be enforceable to the extent: (1) enforceability may be limited by applicable bankruptcy, moratorium, reorganization, fraudulent conveyance or similar laws affecting the enforcement of creditors’ rights and by general equitable principles; or (2) such payments (a) are requested to be made with respect to payments on any Master Note that is issued for a purpose that is not consistent with the charitable purpose of the Members of the Obligated Group from which such payment is requested or that is issued for the benefit of any entity other than a tax-exempt organization; (b) are requested to be made from any money or assets that are donor restricted or that are subject to a direct or express trust that does not permit the use of such money or assets for such payment; (c) would result in the cessation or discontinuation of any material portion of the health care or related services provided by the Member of the Obligated Group from which such payment is requested; or (d) are requested to be made pursuant to any loan violating any applicable usury laws. The extent to which the money or assets of any present of future Member of the Obligated Group falls within the categories referred to above cannot be determined and could be substantial. The foregoing notwithstanding, the accounts of the Obligated Group Members will be combined for financial reporting purposes and will be used in determining whether various covenants and tests contained in the Master Indenture (including tests relating to the issuance of Additional Indebtedness) are satisfied.

A Member may not be required to make any payment, loan or other transfer of money or assets to provide for the payment of any Master Note, or portion thereof, the proceeds of which were not loaned or otherwise disbursed to such Member to the extent that such transfer would render the Member insolvent or which would conflict with, not be permitted by or which is subject to recovery for the benefit of other creditors of such Member under applicable laws. There is no clear precedent in the law as to whether such transfers from a Member in order to pay debt service on the Master Notes may be voided by a trustee in bankruptcy in the event of bankruptcy of the Member or by third party creditors in an action brought pursuant to Washington fraudulent conveyance statutes. Under the United States Bankruptcy Code, a trustee in bankruptcy and, under Washington fraudulent conveyance statutes and common law, a creditor of a related guarantor may avoid any obligation incurred by such related guarantor if, among other bases

therefor: (1) the guarantor has not received fair consideration or reasonably equivalent value in exchange for the guaranty; and (2) the guaranty renders the guarantor insolvent, as defined in the United States Bankruptcy Code or Washington fraudulent conveyance statutes, or the guarantor is undercapitalized.

Application by courts of the tests of “insolvency,” “reasonably equivalent value” and “fair consideration” has resulted in a conflicting body of case law. It is possible that, in an action to force a Member of the Obligated Group, to transfer money or assets to pay debt service on a Master Note for which it was not the direct beneficiary, a court might not enforce such a transfer in the event it is determined that the Member is analogous to a guarantor of the debt of the Member who directly benefited from the borrowing and that sufficient consideration for the Member’s guaranty was not received or that the incurrence of such obligation has rendered or will render the Member insolvent.

If the obligation of a particular Obligated Group Member to make payment on the Series 2017 Variable Rate Master Notes or any other Master Note is not enforceable and payment is not made on such Master Note when due in full, then Events of Default will arise under the Master Indenture.

The security interests granted by Fred Hutch (other than real property subject to the lien of the Deed of Trust and certain funds held by the Master Trustee) are perfected only to the extent such perfection can be effected by filing of UCC-1 financing statements. Such perfection may be adversely affected by failure to timely file appropriate continuation statements in the future. In addition, the effectiveness of the security interests in the Pledged Accounts granted in the Accounts Security Agreement may be limited by a number of factors, including: (1) present or future prohibitions against assignment contained in any federal statutes or regulations; (2) certain judicial decisions which cast doubt upon the right of creditors, in the event of a debtor’s bankruptcy, to collect and retain accounts receivable from governmental programs on the ground that a bankruptcy trustee may succeed to the right of the governmental program’s sponsor to avoid the assignment of such receivables; (3) commingling of Pledged Accounts with other money of the Obligated Group not so pledged; (4) statutory liens; (5) rights arising in favor of the United States of America or any agency thereof; (6) constructive trusts, equitable or other rights impressed or conferred by a federal or State court in the exercise of its equitable jurisdiction; (7) federal bankruptcy laws that may affect the enforceability of the security interest in the Pledged Accounts earned within 90 days preceding and after any effectual institution of bankruptcy proceedings by or against a Member of the Obligated Group; and (8) rights of third parties in Pledged Accounts converted to cash and not in the possession of the Master Trustee.

ABSENCE OF MATERIAL LITIGATION Fred Hutch

There is no litigation or proceeding of any nature now pending against Fred Hutch or, to the knowledge of its management, threatened, except: (1) litigation in which the probable recoveries will be entirely within Fred Hutch’s applicable insurance policy limits (subject to applicable deductibles) or are not in excess of the total reserves held under its applicable self-insurance programs, if any; and (2) litigation in which the probable recoveries would not have a materially adverse effect on the operation or condition, financial or otherwise, of Fred Hutch. There is no litigation or proceeding of any nature now pending or, to the knowledge of management of Fred Hutch threatened, which in any manner questions the right of Fred Hutch to use the proceeds of the Bonds as described herein or to enter into the Loan Agreements, the Tax Agreement, the Master Indenture, the Series 2017 Variable Rate Master Notes or the Supplemental Indentures, or which in any manner questions the validity or enforceability of such documents.

The Authority

There is no litigation or proceeding of any nature now pending against the Authority or, to the knowledge of its officers, threatened, which seeks to restrain or enjoin the issuance, sale, execution or delivery of the Bonds or which in any way contests or affects the validity of the Bonds or any proceedings of the Authority taken with respect to the issuance or sale thereof, or the pledge or application of any money or security provided for the payment of the Bonds, or the use of the Bond proceeds.

TAX MATTERS

Federal Income Taxation

In the opinions (the “Approving Opinions”) of Hillis Clark Martin & Peterson P.S., Bond Counsel, as of the Date of Issue, assuming compliance by the Authority, Fred Hutch, and the Bond Trustee with applicable requirements of the Code that must be met subsequent to the Date of Issue, under existing federal law, 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 determining the federal alternative minimum tax imposed on individuals and corporations. However, under existing federal law, interest on the Bonds is taken into account in determining adjusted current earnings for the purpose of computing the federal alternative minimum tax imposed on certain corporations. Bond counsel expresses no opinion regarding any other federal tax consequences of receipt of interest on the Bonds.

Original Issue Discount and Bond Premium

To the extent that the issue price of any Bonds is less than the amount to be paid at maturity of such Bonds (excluding amounts stated to be interest and payable at least annually over the term of such Bonds), the difference constitutes “original issue discount,” the accrual of which, to the extent properly allocable to the Owner thereof, is treated as interest on the Bonds. For this purpose, the issue price of a particular maturity of the Bonds is the first price at which a substantial amount of such maturity of the Bonds is sold to the public (excluding bond houses, brokers, or similar persons or organizations acting in the capacity of underwriters, placement agents or wholesalers). The original issue discount with respect to any maturity of the Bonds will accrue daily over the term to maturity of such Bonds on the basis of a constant interest rate compounded semiannually (with straight-line interpolations between compounding dates). The accruing original issue discount is added to the adjusted basis of such Bonds to determine taxable gain or loss upon disposition (including sale, redemption, or payment on maturity) of such Bonds. Owners of the Bonds should consult their own tax advisors with respect to the tax consequences of ownership of Bonds with original issue discount, including the treatment of owners who do not purchase such Bonds in the original offering to the public at the first price at which a substantial amount of such Bonds is sold to the public.

Bonds purchased, whether at original issuance or otherwise, for an amount higher than the principal amount thereof payable at maturity (or, in some cases, at an earlier call date) (“Premium Bonds”) will be treated as having amortizable bond premium. No deduction is allowable for the amortizable bond premium in the case of Premium Bonds, the interest on which is excluded from gross income for federal income tax purposes. However, the amount of tax-exempt interest received, and an owner’s basis in a Premium Bond, will be reduced by the amount of amortizable bond premium properly allocable to such owner. Owners of Premium Bonds should consult their own tax advisors with respect to the proper treatment of amortizable bond premium in their particular circumstances.

Continuing Requirements

The Code contains certain requirements that must be satisfied subsequent to the Date of Issue in order to maintain the federal tax treatment described above under the caption “Federal Income Taxation,” including requirements relating to the application of the proceeds of the Series 2017 Bonds, use of the Project Facilities financed or refinanced with proceeds of the Series 2017 Bonds, limitations on income derived from the investment of gross proceeds (as defined in Section 148 of the Code) of the Series 2017 Bonds, and rebate to the United States Treasury of certain investment earnings on such gross proceeds. The Authority, Fred Hutch and the Bond Trustee have each covenanted to comply with these requirements to the extent applicable, and the Approving Opinions assume such compliance. However, Bond Counsel has not undertaken and does not undertake to monitor compliance by the Authority, Fred Hutch and/or the Bond Trustee with such requirements; and should the Authority, Fred Hutch or the Bond Trustee fail to comply with such requirements, interest on the Bonds could become includable in gross income for federal income tax purposes and could be treated as an item of tax preference for purposes of determining the federal alternative minimum tax imposed on individuals and corporations, in each case, retroactively to the Date of Issue.

Other Federal Tax Matters

Ownership of the Bonds may result in other federal tax consequences to certain taxpayers including, without limitation, certain corporations subject to the alternative minimum tax, certain S corporations, foreign corporations with branches in the United States, property and casualty insurance companies, individual recipients of Social Security or Railroad Retirement benefits, and taxpayers, including banks, thrift institutions and other financial institutions subject to Section 265 of the Code, who may be deemed to have incurred or continued indebtedness to purchase or carry the Bonds. Bond Counsel is not rendering any opinion as to any federal tax matters other than the Approving Opinions as described above under the caption “Federal Income Taxation.” Prospective purchasers of the Bonds should consult their independent tax advisors.

No assurance can be given that future legislation or clarifications or amendments to the Code will not cause the interest on the Bonds (including any original issue discount properly allocable to an Owner thereof) to be subject, directly or indirectly, to federal or state income taxation, or otherwise prevent the owners from realizing the full current benefit of the tax status of the interest on the Bonds. Prospective purchasers of the Bonds are encouraged to consult their own tax advisors regarding any pending federal or state legislation, as to which Bond Counsel expresses no view.

The Approving Opinions rely on factual representations made by the Authority, Fred Hutch and other persons, including but not limited to the Underwriter on the Date of Issue, and upon the legal opinion of counsel to Fred Hutch concerning the status of Fred Hutch as a 501(c)(3) Organization. Bond Counsel has not verified these representations by independent investigation. Failure of any of these factual representations, or upon the opinion of counsel to Fred Hutch concerning its status as a 501(c)(3) Organization to be correct may result in interest on the Bonds (including any original issue discount properly allocable to an Owner thereof) being included in gross income for federal income tax purposes, possibly from the original Date of Issue.

The Approving Opinions are based on current legal authorities and cover certain matters not directly addressed by such authorities, and represent Bond Counsel’s judgment regarding the proper treatment of the Bonds for federal income tax purposes. The Approving Opinions are not binding on the IRS, state taxing authorities, or the courts, and neither are such opinions a guarantee of results. Furthermore, Bond Counsel cannot give and has not given any opinion or assurance about the future activities of Fred Hutch and the Authority, or about the effect of changes to the Code, applicable state

law, the applicable regulations, the interpretation thereof or the enforcement thereof by the Internal Revenue Service or state taxing authorities.

APPROVAL OF VALIDITY

Legal matters incident to the issuance of the Bonds are subject to the approving opinions of Hillis Clark Martin & Peterson P.S., Bond Counsel. Certain legal matters will be passed upon for Fred Hutch by its special counsel, Foster Pepper PLLC, for the Authority by its Special Counsel, Hillis Clark Martin & Peterson P.S., and for the Underwriter by its counsel, Orrick Herrington & Sutcliffe LLP.

CONTINUING DISCLOSURE

Because the Bonds are special fund revenue obligations of the Authority, payable solely from money and investments in the Bond Funds held by the Bond Trustee under the Bond Indentures as described in this Official Statement, financial or operating data concerning the Authority is not material to an evaluation of the offering of the Bonds or to any decision to purchase, hold or sell the Bonds. Accordingly, the Authority is not providing any such information. Fred Hutch has undertaken all responsibilities for any continuing disclosure to Owners and Beneficial Owners of the Bonds, as described in the following paragraph, and the Authority shall have no liability to such owners of the Bonds with respect to Rule 15c2-12, promulgated under the Securities Exchange Act of 1934, as amended, by the Securities and Exchange Commission (“Rule 15c2-12”).

Pursuant to Rule 15c2-12, Fred Hutch has undertaken for the benefit of Owners and Beneficial Owners of the Bonds to provide certain information quarterly and annually and to provide notices of the occurrence of certain events to the Municipal Securities Rulemaking Board (the “MSRB”) through its Electronic Municipal Market Access System (“EMMA”) (currently accessible at www.emma.msrb.org). Fred Hutch’s undertaking to provide ongoing disclosure in accordance with Rule 15c2-12 will be substantially in the form set forth in APPENDIX G hereto entitled “FORM OF CONTINUING DISCLOSURE UNDERTAKING.” Fred Hutch has identified for the prior five years the following failures to comply with its continuing disclosure undertakings entered into in connection with Rule 15c2-12, the quarterly report for the fiscal quarter ended June 30, 2015, was not timely filed on the CUSIPS for the Authority’s Revenue Bonds, Series 2015 (Fred Hutchinson Cancer Research Center) and the quarterly report for the fiscal quarter ended September 30, 2015, was filed four days late with respect to the Authority’s Revenue Bonds, Series 2009A and Series 2011A (Fred Hutchinson Cancer Research Center) and nine days late with respect to the Authority’s Revenue Bonds, Series 2015 (Fred Hutchinson Cancer Research Center). Notices of failure to file quarterly reports by the date and in the manner required by previous undertakings as described above were not initially provided but have now been filed with the MSRB. In addition, Fred Hutch provided notice of two rating changes to the dissemination agent on a timely basis in connection with the down-rating of two letter of credit banks, however, material event notices were not filed with the MSRB by the dissemination agent.

FINANCIAL ADVISORS

Melio & Company, Northfield, Illinois, serves as financial advisor to the Authority in connection with the issuance of the Bonds.

Fred Hutch has retained Kaufman, Hall & Associates, LLC, Skokie, Illinois, as financial advisor in connection with the issuance of the Bonds. Although Kaufman, Hall & Associates, LLC has assisted in the preparation of this Official Statement, Kaufman, Hall & Associates, LLC was not and is not

obligated to undertake, and has not undertaken to make, an independent verification and assumes no responsibility for the accuracy, completeness or fairness of the information contained in this Official Statement. RATINGS

Moody’s Investors Service, New York, New York (“Moody’s”), and S&P Global Ratings (“S&P”), have assigned ratings of “A3” and “A,” respectively, to the Bonds. No application was made to any other rating agency for the purpose of obtaining an additional rating on the Bonds. Each rating reflects only the view of the applicable rating organization and an interpretation of such rating may be obtained only from the rating agency furnishing the same, at the following addresses: Moody’s Investors Service, 7 World Trade Center at 250 Greenwich Street, New York, New York 10007; and S&P Global Ratings, 55 Water Street, New York, New York 10041. Fred Hutch has furnished, or caused to be furnished, to Moody’s and S&P certain information and materials concerning the Bonds and itself. Generally, a rating agency bases its rating on such information and materials furnished to it and on investigations, studies and assumptions of its own. There is no assurance that such ratings will continue for any given period of time or that they will not be suspended, revised downward or withdrawn entirely by the rating agencies, if, in the judgment of such agencies, circumstances so warrant. Neither the Authority nor the Underwriter has undertaken any responsibility either to bring to the attention of the Owners or Beneficial Owners of the Bonds any proposed revision, suspension or withdrawal of any rating on the Bonds or to oppose any such proposed revision, suspension or withdrawal. Any such suspension, revision or withdrawal of either such rating may have an adverse effect on the market price of the Bonds.

UNDERWRITING

The Bonds are being purchased by the Underwriter at an aggregate purchase price of $______(which represents the principal amount of the Bonds less an Underwriter’s discount of $______) pursuant to the terms of the Bond Purchase Contract pertaining to the Bonds, by and between J.P. Morgan Securities LLC (the “Underwriter”) and the Authority and approved by Fred Hutch, dated March __, 2017 (the “Purchase Contract”). The obligation of the Underwriter to accept delivery of the Bonds is subject to various conditions contained in the Purchase Contract.

The Underwriter, has entered into negotiated dealer agreements (each, a “Dealer Agreement”) with each of Charles Schwab & Co., Inc. (“CS&Co.”) and LPL Financial LLC (“LPL”) for the retail distribution of certain securities offerings at the original issue prices. Pursuant to each Dealer Agreement, each of CS&Co. and LPL may purchase Bonds from the Underwriter at the original issue price less a negotiated portion of the selling concession applicable to any Bonds that such firm sells.

The Purchase Contract provides that the Underwriter will purchase all of the Bonds if any are purchased; and that Fred Hutch will indemnify the Underwriter and the Authority against losses, claims and liabilities arising out of any untrue statement of a material fact contained in this Official Statement or the omission herefrom of any material fact in connection with the transactions contemplated by this Official Statement, except to the extent limited by the provisions of the Purchase Contract.

The Underwriter and its affiliates together comprise a full service financial institution engaged in various activities, which may include securities trading, commercial and investment banking, financial advisory, investment management, principal investment, hedging, financing and brokerage activities. The Underwriter and its affiliates may have, from time to time, engaged, and may in the future engage, in a variety of these services to Fred Hutch or the other Members of the Obligated Group and to persons and entities with relationships with Fred Hutch or other Members of the Obligated Group, for which they received or will receive customary fees and expenses. In the ordinary course of their various business activities, the Underwriter and its affiliates, officers, directors and employees may purchase, sell or hold a

broad array of investments and actively traded securities, derivatives, loans, commodities, currencies, credit default swaps and other financial instruments for their own account and for the accounts of their customers, and such investment and trading activities may involve or relate to assets, securities and/or instruments of the issuer (directly, as collateral securing other obligations or otherwise) and/or persons and entities with relationships with Fred Hutch or the other Members of the Obligated Group. The Underwriter and its affiliates may also communicate independent investment recommendations, market color or trading ideas and/or publish or express independent research views in respect of such assets, securities or instruments and at any time may hold, or recommend to clients that they should acquire, long and/or short positions in such assets, securities and instruments.

At the time of their respective issue, the Series 2010 Bond and the Series 2012A Bonds were purchased by J.P. Morgan Chase Bank, National Association, an affiliate of the Underwriter, pursuant to private placements. All or a portion of such Refunded Bonds are expected to be refunded using proceeds of the Bonds. See “PLAN OF FINANCE” and “ESTIMATED SOURCES AND USES OF FUNDS” herein.

INDEPENDENT AUDITORS

The financial statements of Fred Hutch as of June 30, 2016 and 2015, and for the years then ended, included as APPENDIX B hereto, have been audited by KPMG LLP, independent auditors, as stated in their report appearing therein.

OTHER MATTERS

All quotations from, and summaries and explanations of, the Act, the Master Indenture, the Supplemental Indentures, the Series 2017 Master Notes, the Bond Indentures, the Loan Agreements, the Purchase Contract and other documents referred to herein do not purport to be complete and reference is made to the Act and such documents for full and complete statements of their provisions. Copies of such documents may be obtained during the offering period upon request directed to the Underwriter and thereafter, upon request directed to the offices of the Bond Trustee and Fred Hutch. The Appendices attached hereto are a part of this Official Statement. All statements in this Official Statement involving matters of opinion, estimates or projections whether or not expressly so stated, are intended as such and not as representations of fact.

EXECUTION

This Official Statement has been issued by the Authority and Fred Hutch. This Official Statement is not to be construed as a contract or agreement between the Authority and Fred Hutch, and the purchasers or Owners of any of the Bonds.

WASHINGTON HEALTH CARE FACILITIES AUTHORITY

By: Shannon D. Govia Assistant Executive Director

FRED HUTCHINSON CANCER RESEARCH CENTER

By: Randall C. Main Vice President and Chief Financial Officer

APPENDIX A

INFORMATION CONCERNING FRED HUTCHINSON CANCER RESEARCH CENTER

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APPENDIX A

Information Concerning Fred Hutchinson Cancer Research Center

The information contained herein has been prepared by Fred Hutchinson Cancer Research Center

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TABLE OF CONTENTS Page

INTRODUCTION ...... A-1 MISSION AND STRATEGY ...... A-1 Origins ...... A-1 Strategic Vision of Growth ...... A-1 Integrated Research Centers ...... A-2 Immunotherapy Integrated Research Center ...... A-2 Immunotherapy ...... A-2 Infectious Diseases/Global Oncology ...... A-3 HIV Vaccine Research ...... A-3 Hutch Data Commonwealth ...... A-3 Translational Medicine/Seattle Translational Tumor Research ...... A-4 Precision Medicine/Big Data ...... A-4 Hutchinson Institute for Cancer Outcomes Research/Cancer Care Economics ...... A-4 Diversify Funding Sources ...... A-5 PROGRAMS AND DIVISIONS ...... A-5 Overview ...... A-5 Research Divisions ...... A-5 Other Programs ...... A-8 SCIENTIFIC AND MEDICAL STAFF ...... A-9 Divisional Leaders ...... A-9 SIGNIFICANT SCIENTIFIC ADVANCEMENTS AND AWARDS ...... A-11 Reputation in the Scientific Community ...... A-11 Grants and Contracts ...... A-12 Publications ...... A-13 Treatment Experience and Outcomes ...... A-13 Scientific Advancements ...... A-14 Awards and Honors ...... A-15 SEATTLE CANCER CARE ALLIANCE ...... A-17 JUNO THERAPEUTICS ...... A-18 ORGANIZATIONAL STRUCTURE ...... A-18 The Obligated Group ...... A-18 Controlled Affiliates of Fred Hutch ...... A-18 Corporate Governance and Management ...... A-19 FINANCIAL INFORMATION ...... A-23 Consolidated Statements vs. Obligated Group ...... A-23 Summary Financial Statements ...... A-23

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TABLE OF CONTENTS Page

Summary Balance Sheets ...... A-24 Research and Discretionary Funding ...... A-25 Grants and Contracts ...... A-26 Funding from the NIH ...... A-28 Indirect Cost Reimbursement ...... A-29 Other Research Grants and Contracts ...... A-29 Philanthropic Contributions ...... A-29 Intellectual Property Commercialization Income ...... A-29 Inpatient Service Fees ...... A-30 SCCA Joint Venture Income ...... A-30 Investment Income ...... A-30 Other Income ...... A-30 Management’s Discussion of Operations and Financial Performance ...... A-30 Debt Service Coverage ...... A-31 Growth of Balance Sheet Metrics ...... A-33 Overview of Existing Debt and Historical Capitalization ...... A-34 Expenses ...... A-35 Interest Rate Swap Agreements ...... A-35 INVESTMENT PERFORMANCE AND POLICY ...... A-35 OTHER INFORMATION ...... A-36 Employees ...... A-36 Insurance ...... A-36 Memberships ...... A-37 Facilities ...... A-37 Mortgaged Property ...... A-38

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INTRODUCTION

Fred Hutchinson Cancer Research Center (“Fred Hutch”) is a Washington not for profit corporation, which is exempt from federal income taxation as an organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the “Code”). Fred Hutch was founded in 1971 by Seattle surgeon Dr. William B. Hutchinson in memory of his brother, Fred, a Major League Baseball player and manager who began his baseball career with the Seattle Rainiers and died of cancer at the age of 45. Today, Fred Hutch is a multidisciplinary research institution of international standing, committed to research relating to the prevention and treatment of cancer and related diseases.

The goal of establishing Fred Hutch as a major research center in the Pacific Northwest became a reality with passage of the National Cancer Act of 1971 (the “National Cancer Act”). The National Cancer Act created the National Cancer Institute (“NCI”) as a division of the National Institutes of Health (“NIH”) and the federal agency responsible for overseeing and funding cancer research. NCI made one of its first awards to Fred Hutch in 1971, and named Fred Hutch as one of the country’s seven original comprehensive cancer centers in 1973. In 1998, Fred Hutch, the University of Washington (“UW”) and Seattle Children’s Healthcare System (“Seattle Children’s”) formed Seattle Cancer Care Alliance (“SCCA”), a nonprofit corporation and an organization described in Section 501(c)(3) of the Code, to promote, enhance and integrate their respective cancer research, teaching and clinical programs, with the goal of establishing one of the finest clinical cancer programs in the world.

Today, Fred Hutch, UW, Seattle Children’s and SCCA comprise the Fred Hutchinson/University of Washington Cancer Consortium, which is one of 47 comprehensive cancer centers designated by the NCI and the only such center located in the Pacific Northwest. Fred Hutch continues to receive major funding from the NIH. This funding supports the majority of Fred Hutch’s capital and operating requirements, and, together with private contract and grant funding and philanthropic support, enables Fred Hutch to carry out its mission in accordance with the National Cancer Act: To eliminate cancer and related diseases as causes of human suffering and death and to conduct research of the highest standards to improve the prevention and treatment of cancer and related diseases.

Fred Hutch is the sole member of the Obligated Group and is the sole borrower under the loan agreements. Fred Hutch has subsidiary corporations that it controls and conducts business with affiliated organizations that are under no obligation to make any payments with respect to the Series 2017 Bonds. See “SEATTLE CANCER CARE ALLIANCE” and “ORGANIZATIONAL STRUCTURE – Controlled Affiliates of Fred Hutch.”

MISSION AND STRATEGY

Origins

Fred Hutch originally was located on First Hill in Seattle across from Swedish Hospital and Medical Center and, as a biomedical research organization, focused on basic science and clinical research, including care for patients qualified for its research protocols. Initial pioneering work in bone marrow transplantation (“BMT”) to treat leukemia and other blood cancers was performed in the Fred Hutch patient care facility. In 1983, Fred Hutch formed its Public Health Sciences Division coincident with the creation of the Cancer Prevention Research Program, the first NCI- funded cancer prevention research unit in the United States. By 1987, Fred Hutch had expanded to occupy nine leased and owned locations spread out over a two-mile area. In 1991, Fred Hutch assembled its current 15-acre campus, known as the Robert W. Day Campus (the “Day Campus”), in the South Lake Union neighborhood of Seattle and began construction of its first South Lake Union research facility, which housed its Basic Sciences Division and the predecessor of its Human Biology Division.

Strategic Vision of Growth

Today, all five of the Fred Hutch’s research divisions (see “PROGRAMS AND DIVISIONS”) are located on the Day Campus, which allows Fred Hutch’s researchers to interact in a single campus setting. Fred Hutch has established collaborations with UW, Seattle Children’s and SCCA, as well as with industry and other not-for-profit organizations. Fred Hutch has expanded globally by establishing (i) a research lab and clinic in Kampala, Uganda to understand how infectious diseases lead to cancer; (ii) a processing lab in Cape Town, South Africa designed to focus

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on developing a vaccine to prevent human immunodeficiency virus (“HIV”) infections worldwide; and (iii) joint research and training projects in China focused on prevention, early detection, diagnosis and treatment of cancer and infectious diseases, including tuberculosis and hepatitis.

Fred Hutch recently updated its long term strategic plan (the “Strategic Plan”) based on an assessment of the latest dynamics in scientific research to establish key goals and strategies for the next five years. The Fred Hutch Board of Trustees approved this plan in 2016. Since adoption of the Strategic Plan, actions have been taken to accelerate the scientific priorities identified in the plan including increasing the number of faculty members employed by Fred Hutch. The Strategic Plan prioritizes Integrated Research Centers, Immunotherapy (including the establishment of the Immunotherapy Integrated Research Center, Infectious Diseases/Global Oncology, HIV Vaccine Research, Hutch Data Commonwealth, Translational Medicine/Seattle Translational Tumor Research, Precision Medicine/Big Data and Hutchinson Institute for Cancer Outcomes Research/Cancer Care Economics, which are described in more detail below, as areas for investment and growth.

It is currently anticipated by Fred Hutch that the new faculty members employed as a result of the Strategic Plan will be housed in existing space on Fred Hutch’s campus and that no additional buildings will be required. Fred Hutch expects that the Strategic Plan may have an initial adverse impact on Fred Hutch’s changes in net assets from operations and liquidity for a number of fiscal years, as Fred Hutch’s expenses may exceed revenues as the new faculty develop funding sources for their research. Fred Hutch intends to fund any such shortfalls with cash derived from the sale of Juno Therapeutics, Inc. stock in 2016. See “JUNO THERAPEUTICS” and “FINANCIAL INFORMATION – Management’s Discussion of Operations and Financial Performance.” Fred Hutch is also evaluating a comprehensive fundraising campaign as a funding source. Fred Hutch intends to monitor financial results and may adjust the scope of the Strategic Plan from time to time.

Integrated Research Centers

Scientific research has become increasingly complex and multi-disciplinary. Promising breakthroughs often cut across traditional disciplines. To catalyze high impact and innovative research through cross-divisional collaboration, Fred Hutch intends to create a number of Integrated Research Centers that are complementary to the existing research division structure. See “PROGRAMS AND DIVISIONS.” These are intended to serve as an administrative overlay that facilitates collaboration through funding, information sharing, prioritized recruiting, and enhancing support function capabilities. The Integrated Research Centers are expected to increase cohesion across Fred Hutch and focus on essential disciplines to reduce possible fragmentation and critical gaps, to leverage unique Hutch resource and expertise and to accelerate highly competitive areas in which Fred Hutch ha existing strengths.

Immunotherapy Integrated Research Center

The Immunotherapy Integrated Research Center (“IIRC”) is the first of the several planned Integrated Research Centers and was launched in 2016. The IIRC is expected to build on strengths in basic immunology and transplant: with the goal of creating an internationally prominent immunotherapy program (see discussion in next section). The IIRC is expected to support the development of novel effective therapies for patients and provide scientific opportunity to advance interdivisional and interdisciplinary research.

The IIRC will build on existing translational research and clinical programs and is designed to enable Fred Hutch to increase research in basic immune mechanisms with translational endpoints, develop new immunotherapies and accelerate innovation through interdisciplinary, inter-divisional science.

Areas of research conducted by IIRC faculty include cell therapy, transplant immunology, tumor microenvironment, immune checkpoint and regulation, immunogenomics, and therapeutic vaccines.

Immunotherapy

Fred Hutch’s Nobel prize-winning work on BMT provided the first example of the power of the human immune system to cure leukemias and other blood cancers. In 2008, Fred Hutch researchers demonstrated that they could use a patient’s own infection-fighting T-cells to put advanced melanoma into long-term remission. Because

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immunotherapies harness the patient’s own immune system, they are potentially less likely to produce the painful side effects common to traditional cancer treatments. This treatment method has allowed Fred Hutch clinicians to use immunotherapy to increase survival rates for patients with leukemia and other blood cancers. Additionally, immunotherapy shows promise for treating many solid tumors, including those of the lung, colon, breast, pancreas and ovary.

Infectious Diseases/Global Oncology

As Fred Hutch researchers pioneered the technique of BMT to treat cancer, they also developed ways to control infections in immune-compromised transplant patients to increase their chances of long-term survival. These advances in infection control have opened new avenues of research into preventing and treating an array of infection- related cancers and other diseases.

As part of its mission, Fred Hutch is working to reduce the burden of cancers around the world through improved diagnosis, better prevention strategies, and optimized treatment plans. Nearly a quarter of the world’s cancers are caused by infectious diseases that are preventable or treatable, which include lymphoma from Epstein-Barr virus, sarcomas associated with HIV, cervical cancer from human papillomavirus and liver cancer from hepatitis B and C. To help address these cancers Fred Hutch has supported research, clinical care and training of cancer specialists, scientists and support staff in Uganda and other countries.

A cornerstone of Fred Hutch’s research and clinical work in global oncology is its decade-long collaboration with the Uganda Cancer Institute (the “UCI”) in Kampala, Uganda. The UCI is the only comprehensive cancer facility in a country of more than 37 million people, and serves a five-country region with a total population of more than 100 million. With financial support from the United States Agency for International Development, Fred Hutch constructed a 25,000 square-foot research, training and clinical care facility in Kampala, which will help ensure improved cancer treatment for up to 20,000 patients a year and provide a resource to train additional oncologists in Uganda. The facility, which opened in May of 2015, is owned by Hutchinson Centre Research Institute in Uganda Limited and located on land leased from the Uganda government. The facility is operated in collaboration with the UCI. See “ORGANIZATIONAL STRUCTURE – Controlled Affiliates of Fred Hutch.”

HIV Vaccine Research

In 1988, investigators from Fred Hutch’s Basic Sciences Division began researching human immunodeficiency virus (“HIV”). This laid the groundwork for national HIV vaccine trials, which Fred Hutch began conducting in collaboration with UW researchers in 1994. Today, Fred Hutch’s Vaccine and Infectious Disease Division is home to one of the world’s largest HIV research units and is the hub of the HIV Vaccine Trials Network (the “HVTN”), a global effort to develop and test a successful HIV vaccine. The HVTN is the world’s largest publicly funded multi-disciplinary international collaboration facilitating the development of vaccines to prevent HIV and acquired immune deficiency syndrome (“AIDS”). The HVTN conducts all phases of clinical trials, from evaluating experimental vaccines for safety and immunogenicity to testing vaccine efficacy. To better support this research, Fred Hutch, through a South African nonprofit company controlled by Fred Hutch (see “ORGANIZATIONAL STRUCTURE – Controlled Affiliates of Fred Hutch”), leased space in Cape Town and built a 10,000-square foot immunology laboratory that opened in 2014. The laboratory will serve as a base for upcoming HIV vaccine trials in South Africa and throughout the region.

In February 2015, the HVTN launched a clinical safety trial in South Africa to test a modified version of the so-called Thai vaccine, the only experimental vaccine regimen so far to show modest protection against HIV/AIDS. It is expected that the next phase will be a larger efficacy trial to test whether the vaccine protects those who receive it from being infected with HIV.

Hutch Data Commonwealth

Data science presents enormous potential in the fight against cancer and related diseases by unlocking the power embedded in “big data”. In 2016, Fred Hutch created the Hutch Data Commonwealth (“HDC”) in order to make innovative big data capabilities more widely available to all Hutch investigators. HDC is designed to serve as

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a hub for investigators seeking to conduct data-driven projects and to work collaboratively with Fred Hutch scientists to identify and source appropriate datasets, develop tools for accessing and visualizing data, and implement analytic approaches that are reproducible and responsive to scientific objectives. The HDC data analytics platform is designed to be applicable across the entire spectrum of data relevant to Fred Hutch scientific investigations from the molecular level to the population level.

HDC will also serve as a resource for clinical research informatics at Fred Hutch, expanding and refining efforts to build a clinical research data repository initiated under the Hutch Integrated Data Repository and Archive (“HIDRA”) program, and providing engineering and analytics expertise to support additional informatics capabilities.

Translational Medicine/Seattle Translational Tumor Research

Moving science out of the lab and into the clinic, where it will be made available to cancer patients enrolled in clinical studies, is a process known as translational research. The Seattle Translational Tumor Research (the “STTR”) program is a multidisciplinary and multi-organizational effort of physicians and scientists from Fred Hutch, UW and SCCA, with a primary goal of translating laboratory findings into treatment options for patients with solid tumor cancers.

Starting with brain tumors, Fred Hutch researchers are building a database based on thousands of tumor samples from patients. The database will contain genetic profiles for each tumor, plus information on how each patient was treated and responded to treatment. Fred Hutch expects to expand the database to include breast, colon, head and neck, lung, ovarian, pancreas and prostate tumors. The goal is to profile tumors for every patient, which then can be compared to profiles in the database and inform decision-making regarding the most effective therapy. This methodology is helping Fred Hutch researchers implement personalized medicine (see the next section) or the tailoring of specialized and individualized treatment to the specific characteristics of the disease. In practice this means using molecular profiles of tissue or blood samples to accurately predict a person's susceptibility of developing disease, the presence of disease, disease prognosis and its response to different treatments.

Precision Medicine/Big Data

Fundamentally, precision medicine involves testing an individual tumor to identify genetic mutations, then seeing whether drugs that target that particular mutation are either approved or in clinical trials. Precision medicine may also involve identifying mutations in the tumors of patients who respond unusually well to certain drugs in order to find other patients with the same mutation who might also benefit.

The HDC has developed HIDRA in conjunction with the University of Washington as a clinical research data warehouse designed to integrate information from cancer care databases across the Fred Hutch/UW Cancer Consortium. HIDRA serves as a foundational component of the HDC “big data” infrastructure, and is supporting the development of several disease-specific data resources. The STTR program database described above represents another HDC product utilizing data from HIDRA.

Hutchinson Institute for Cancer Outcomes Research/Cancer Care Economics

The Hutchinson Institute for Cancer Outcomes Research (“HICOR”), established in 2012, is a research institute based in the Public Health Sciences Division, dedicated to reducing the human and economic burden of cancer for patients, families and society. HICOR researchers develop and apply scientific methods in health economics, clinical and public health research, and data science to enhance cancer care and improve outcomes for patients. HICOR researchers form a multidisciplinary team that engages partners, such as patient organizations, oncologists, cancer care delivery systems, industry leaders, public and private insurers and policymakers, to ensure that its results are relevant, timely and actionable.

Research being conducted by HICOR faculty and collaborators includes:

• A study of cancer diagnosis as a risk factor for personal bankruptcy;

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• A study of cost-effectiveness analysis alongside clinical trials to compare patient outcomes to determine which transplantation source improves quality-adjusted survival and whether the more effective transplant type also provides a cost savings to the health care payer;

• A study conducted in collaboration with GE Healthcare and Arizona State University to use a systems-based, stakeholder-guided approach to develop cost-effective, evidence-based diagnostics;

• The Advancing Innovative Comparative Effectiveness research-cancer diagnostics (ADVICE) project, conducted in collaboration with Group Health Research, the University of Washington and the Veterans Administration of Puget Sound to perform with active involvement of local stakeholders and develop a data infrastructure for comparative effectiveness research studies that linked private and public insurance claims data with the SEER Cancer Registry;

• A research initiative conducted in collaboration with Genentech Inc. to understand the impact of bevacizumab use in overall survival for patients diagnosed with metastatic colorectal cancer treated in the community; and

• A pilot study to evaluate outcomes and costs of low-dose CT scanning for early detection of lung cancer.

Diversify Funding Sources

Fred Hutch’s strategic plan emphasizes diversification of funding sources as a means of enhancing its financial strength and ability to fund strategic priorities. The strategic plan emphasizes increasing the impact of commercialization of intellectual property by increasing the speed and scale of the transfer of Fred Hutch’s specialized knowledge and technology to commercial markets. This is accomplished through the Business Development and Industry Relations department. See “PROGRAMS AND DIVISIONS – Other Programs – Business Development and Industry Relations.” Philanthropy programs will be expanded and diversified to align major fundraising initiatives around the strategic priorities mentioned above, annual fundraising programs will be expanded and a comprehensive campaign will be planned and implemented.

PROGRAMS AND DIVISIONS Overview

To carry out its mission, Fred Hutch performs fundamental research in clinical, basic and population science disciplines; serves as a focal point for testing and evaluating outputs of research and development efforts; and couples the outputs of cancer research efforts with medical practice. Fred Hutch performs these functions through its five scientific research divisions: the Vaccine and Infectious Disease Division, the Clinical Research Division, the Human Biology Division, the Public Health Sciences Division, and the Basic Sciences Division. Although each division has its own focus, collaboration across divisions is encouraged and there are many interdisciplinary projects that involve investigators from more than one division.

Research Divisions

Vaccine and Infectious Disease Division

The mission of the Vaccine and Infectious Disease Division (“VIDD”) is to eliminate or reduce the mortality and morbidity of infectious diseases. VIDD was established as a division in 2010 to facilitate and enhance Fred Hutch’s efforts in infectious disease prevention and vaccine development. VIDD faculty members lead the HIV Vaccine Trials Network. See “MISSION AND STRATEGY – HIV Vaccine Research”. VIDD faculty members are also studying cancer-associated infections such as herpesvirus-8, as well as common pathogens including herpes simplex viruses, cytomegalovirus and infectious fungi. VIDD scientists fall into four broad research disciplines:

• Biostatistics, Bioinformatics & Epidemiology includes a program called Statistical Center for HIV and AIDS Research and Prevention (“SCHARP”). In conjunction with researchers at UW,

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SCHARP provides statistical collaboration and data management services to multiple international research consortia conducting discovery and translational research on HIV vaccines and clinical trials evaluating candidate HIV vaccines and other HIV prevention strategies.

• Infectious Disease Sciences (“IDS”) is comprised of faculty holding joint appointments at UW and Fred Hutch. IDS’s scientific focus is to effectively detect, prevent and treat the infectious disease complications of the immune-compromised host. IDS scientific teams conduct a wide variety of clinical research projects, including studies of herpes simplex virus, cytomegalovirus, respiratory syncytial virus and other respiratory viruses, human herpes viruses, fungal infections and molecular microbiology. IDS also includes international programs in the HVTN, and studies of infection- associated cancers in Uganda conducted in conjunction with Fred Hutch’s Uganda Program on Cancer and Infectious Diseases. See “MISSION AND STRATEGY – Infectious Diseases/Global Oncology.” The IDS program is closely affiliated with the Division of Virology at UW and is jointly administered by the IDS and Virology Division administrative staff.

• Immunology and Vaccine Development contains the HVTN Laboratory Program, the Seattle HIV Vaccine Trials Unit (“HVTU”) of HVTN, and research laboratories focused on immunopathogenesis, host genetics, vaccine immune monitoring and HIV vaccine and adjuvant design. This program also studies immune correlates of infections, innate immunity, immunology of the mucosa, as well as exposed HIV seronegative and long-term, non-progressor populations. The program oversees programmatic and quality assurance/control for the HVTN Laboratory Program and all HVTN site-affiliated laboratories. In addition, this group provides immunology assay support for the HVTN, the Seattle HVTU and the Primary Infection Program and Microbicide Trials Network.

• Global Oncology Program is comprised of VIDD researchers who partner with scientists at laboratory, clinical and field sites in Africa, Asia and Europe. VIDD has specific initiatives in Uganda, China and the Republic of South Africa to advance the understanding of infection-related cancers and infectious diseases that affect high-risk populations in these regions.

Clinical Research Division

Researchers in Fred Hutch’s Clinical Research Division seek new or improved ways to prevent, treat and cure cancer and related diseases. Foremost among the contributions these researchers have made has been the development of BMT, a technique that is now used to help save thousands of lives worldwide. In 1990, Dr. E. Donnall Thomas, director emeritus of the Clinical Research Division, received the Nobel Prize in physiology or medicine for his pioneering work in developing this technique.

Through clinical research, Fred Hutch’s scientists continue to refine the techniques of BMT and extend its use. Once exclusively used for treatment of leukemia, lymphomas and similar diseases, BMT is now being successfully applied to a number of diseases, including breast, ovarian and kidney cancer, sickle cell disease and autoimmune disorders such as multiple sclerosis and scleroderma.

Research in the Clinical Research Division has expanded to encompass several diverse areas including:

• Hematopoietic Cell Transplantation: Clinical Research Division researchers continue to eliminate major barriers to successful transplants and improve survival for adults and children with malignant and nonmalignant hematological diseases. Dr. Rainer Storb leads research to understand graft- versus-tumor effects, graft failure and other transplant-related toxicities.

• Cord Blood Transplants: Laboratory and clinical research components of the Cord Blood Program, led by Dr. Colleen Delaney, are focused on the development of revolutionary techniques for improving outcomes after cord blood transplantation and changing the standards of care to help prevent infection and speed recovery after transplant or chemotherapy. The Clinical Research Division’s immunotherapy researchers, including Drs. Phil Greenberg, Stanley Riddell, and Oliver

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Press, are spearheading new ways to manipulate T-cell immunity for the treatment of human diseases, and were among the first to develop radio immunotherapies that could improve outcomes for patients with non-Hodgkin’s lymphoma.

• Gene therapy: Dr. Hans Peter Kiem leads efforts to develop novel stem cell-based treatment strategies for a variety of diseases including glioblastoma and HIV.

• Solid tumor biology: Clinical Research Division researchers including Drs. Bruce Clurman, Elahe Mostaghel, Peter Nelson, McGarry Houghton and Edus Warren, are studying how tumors form and progress – and how the immune systems responds to them – with the goal of developing new cancer treatment strategies.

• Genetics: Drs. Daniel Geraghty, John Hansen and Effie Petersdorf are studying the relationship between genes and cancer. Their work includes studies to understand the genetics of the immune response to cancer, investigate how gene expression correlates with graft-versus-host-disease development and outcomes, and understand major histocompatibility (MHC) complex gene function using hematopoietic cell transplantation from unrelated donors as a model system.

• Clinical Biostatistics: Led by Dr. Ted Gooley, the faculty and staff in the Clinical Biostatistics group perform methodological and collaborative biostatistical research. The collaborative work takes place with investigators within the Clinical Research Division at Fred Hutch as well as with other investigators within the Fred Hutch/ UW Cancer Consortium.

Human Biology Division

The goal of the Human Biology Division is to conduct interdisciplinary research focused on human biology and to increase the ongoing research on solid tumor cancer and other complex human diseases. The program is structured to foster and support ongoing laboratory-based and computational research at the interface of basic, clinical, and population sciences. The Human Biology Division blends fundamental, applied, and translational research. While research in the division is grounded in basic research into molecular mechanisms, which is often performed in model organisms and in-vitro systems, Human Biology Division faculty members derive insights from clinical and population observations.

The association of Fred Hutch, UW and SCCA has expanded the care of patients with solid tumors. See “SEATTLE CANCER CARE ALLIANCE.” Fred Hutch has committed to increasing the ongoing research on solid tumor cancer biology that is being done in the Human Biology and Clinical Research divisions, as well as the population-based research on solid tumors done in the Public Health Sciences Division.

Human Biology Division researchers specializing in solid tumors are part of the STTR group, described under “MISSION AND STRATEGY – Translational Medicine/Solid Tumor Translational Research.”

Public Health Sciences Division

The Public Health Sciences Division’s mission is to identify strategies that will ultimately reduce the incidence of and mortality from cancer and other diseases. Public Health Sciences Division researcher efforts focus on determining the causes of cancer, identifying and assessing effective screening and treatment methods, developing prevention strategies that reduce the risk of cancer, and developing research strategies to help people adopt behaviors that promote healthier lifestyles. This prevention-oriented research also extends to diseases other than cancer, including HIV/AIDS, cardiovascular disease, diabetes and fractures.

The Public Health Sciences Division conducts statistical, epidemiological and prevention projects around the world. Public Health Sciences Division scientists have expertise in coordinating national trials for cancer and HIV/AIDS treatment and prevention, including serving as a clinical coordinating center and administering multiple sites for one of the nation’s largest public health research programs, the Women’s Health Initiative (“WHI”). More

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recently, the Public Health Sciences Division has gained national stature in genetic epidemiology and in the development of novel methods for the early detection of cancer, including the use of plasma proteomic biomarkers.

The Public Health Sciences Division is organized into five administrative programs. Each of these programs has a faculty with a wide range of interests and an interactive and interdisciplinary research orientation. These programs are: Biostatistics and Biomathematics, Cancer Prevention, Computational Biology, Epidemiology and Translational Research. Public Health Sciences Division faculty members also actively participate in several of Fred Hutch’s interdisciplinary scientific programs, including leadership of Fred Hutch’s gastroenterology, prostate, breast cancer initiatives.

Basic Sciences Division

The goal of the Basic Sciences Division is to provide a unique and exciting environment to foster creative and groundbreaking research. Basic Sciences Division researchers work in diverse areas related to all aspects of biology and their work is classified into five groups: Cell division, chromosome biology and gene expression; development, aging and metabolism; evolution and viruses; neurobiology and signaling; and protein structure, design and synthetic biology. The labs employ structural, genetic, molecular, cellular, developmental, and evolutionary biology methods to address unresolved questions in biology using a wide range of model systems. These include: viruses, bacteria, yeast, nematode worms, fruit flies, zebrafish, mice and humans. This wide spectrum of models enables a thorough analysis of the internal workings of cells as well as studies of the complex interactions between cells and organisms.

Basic Sciences Division researchers have made major contributions to the scientific community’s awareness that genes within cells “express” themselves in specific ways that determine cellular behavior, including the uncontrolled growth of cancer cells. They have learned to read the coding of genes and are discovering ways to regulate cell activity by turning genes “off” and “on.”

Other Programs

Business Development and Industry Relations

Technology development is an important by-product of Fred Hutch’s focus on research. Business Development and Industry Relations (“BDIR”) is responsible for managing and commercializing the intellectual property assets of Fred Hutch. BDIR works closely with Fred Hutch’s faculty and research staff to patent their discoveries, facilitate scientific collaboration and material sharing, and license intellectual property to existing businesses or newly created startup companies. Fred Hutch has a docket of approximately 476 patent applications in process and approximately 206 issued patents. Fred Hutch has approximately 247 license agreements in place with companies for commercial development of products based on Fred Hutch technologies. As part of the strategic plan, additional investment has been made to increase the capacity of the BDIR and expand outreach to the faculty. The following graph shows the number of disclosures related to Fred Hutch research:

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Fred Hutch has helped make the Seattle area a major biotechnology hub in the U.S. Many biotechnology firms, including Rosetta Inpharmatics LLC, Immunex Corporation, ICOS Corporation, Targeted Genetics Corporation, Argus Genetics LLC, Epimmune Inc., Ikaria Holdings Inc., Presage Biosciences, Adaptive Biotechnologies Corporation, ZetaRx, Inc., Blaze Bioscience, Inc., Juno Therapeutics, Inc., Faraday Pharmaceuticals, Inc. and Nohla Therapeutics, Inc. were founded by current or former Fred Hutch faculty using discoveries developed in part at Fred Hutch. See “JUNO THERAPEUTICS.”

Training and Professional Programs

Fred Hutch’s scientific divisions are engaged in ongoing training programs and the Clinical Research and Public Health Sciences divisions are also actively involved in community outreach. For example, the Clinical Research Division offers training for physicians, nurses, nutritionists, social workers and other health care professionals with an interest in BMT and other related Fred Hutch research.

Fred Hutch, in association with the UW, offers a joint doctoral degree in molecular and cellular biology. Because most Basic Sciences and Human Biology division faculty have affiliate appointments in life science departments at the UW, numerous departmental doctoral students also pursue their thesis research in Fred Hutch laboratories. Collaboration with the UW School of Medicine and Seattle Children’s provides clinical training for fellows in medical and pediatric oncology. Within the Public Health Sciences Division, doctoral and master degree candidates pursue degrees from the UW in biostatistics, cancer prevention and epidemiology, and work with community hospitals in the Puget Sound region on screening and prevention studies.

SCIENTIFIC AND MEDICAL STAFF

Divisional Leaders

All of Fred Hutch’s scientific staff members are qualified researchers and postdoctoral and clinical fellows that hold medical and/or doctoral degrees. Many have been honored by the national and international scientific communities for their achievements. These qualifications and achievements are exemplified by the Directors of Fred Hutch’s five research divisions:

M. Juliana McElrath, M.D., Ph.D. (age 65) became Co-Director of Fred Hutch’s Vaccine and Infectious Disease Division and a Senior Vice President at Fred Hutch in 2010. Dr. McElrath was named Director of VIDD in 2012. She has been a faculty member of Fred Hutch since 1997. Dr. McElrath is principal investigator of the HIV Vaccine Trials Network Laboratory Center and the Seattle/Lausanne Clinical Trial Unit, both within the VIDD. See “MISSION AND STRATEGY – HIV Vaccine Research.” Her work centers on developing an HIV vaccine and investigates the complex relationships between HIV, the immune system, therapies, and vaccines. Dr. McElrath’s research has identified some of HIV’s key mechanisms, and she has led and contributed to a number of national and international HIV prevention efforts. In addition to her joint faculty roles in both VIDD and Fred Hutch’s Clinical Research Division, she is a Professor of Medicine in the departments of Medicine, and adjunct professor in Lab Medicine and Global Health at the UW where she joined in 1990. She received her bachelor’s degree from Furman University, Greenville, SC; her Ph.D. and M.D. degrees from the Medical University of South Carolina, Charleston; her clinical training in infectious diseases at Columbia Presbyterian Medical Center, New York; and her post-doctoral training in molecular immunology at the Rockefeller University in New York.

Nancy E. Davidson, M.D. (age 63) became the director of Fred Hutch’s Clinical Research Division and a Senior Vice President in 2016, arriving from the University of Pittsburgh where she was a distinguished Professor of Medicine and associate vice chancellor for cancer research. She is a world-renowned breast cancer researcher who served as Hillman Professor of Medicine at the University of Pittsburgh, director of the University of Pittsburgh Cancer Institute and held secondary appointments as professor of pharmacology and chemical biology and professor in the Clinical and Translational Science Institute. Dr. Davidson has published key findings on the role of hormones, particularly estrogen, on gene expression and cell growth in breast cancer and has guided several important national clinical trials of potential new therapies, including chemoendocrine therapy for premenopausal breast cancer and coauthored over 300 articles in the top journals of her field, including the New England Journal of Medicine, Journal of the National Cancer Institute, and the Journal of Clinical Oncology. She has won several awards, including being

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elected to membership in the Association of American Physicians and the National Academy of Medicine and received the honor of being named a Thomson Reuters Highly Cited Researcher in 2014 and 2015. Dr. Davidson has served as an elected member of the boards of directors of the American Association of Cancer Research and the American Society of Clinical Oncology, the two largest organizations for cancer researchers and oncology professionals in the world. She was president of the American Society of Clinical Oncology from 2007-2008. She is the current President of the American Association of Cancer Research. She earned her MD degree from Harvard Medical School and completed her internal medicine internship at the Hospital of the University of Pennsylvania and internal medicine residency at Johns Hopkins Hospital. Subsequently, Dr. Davidson completed a medical oncology fellowship at the NIH’s National Cancer Institute. Prior to joining Pitt, she served as director of the Breast Cancer Program and as the breast cancer research chair of oncology in Johns Hopkins University School of Medicine.

Eric Holland, M.D, Ph.D. (age 57) became the Director of Fred Hutch’s Human Biology Division and Senior Vice President in 2013, arriving from Memorial Sloan Kettering Cancer Center where he was the Vice Chairman for Translational Research and an Attending Surgeon in the Department of Neurosurgery. Dr. Holland received his doctoral degree from University of Chicago in 1985 and his medical degree from Stanford University in 1990. He is also a professor of neurological surgery at the UW, where, as the Chap and Eve Alvord and Elias Alvord Chair in Neuro-oncology, he directs the Nancy and Buster Alvord Brain Tumor Center. As Director of the STTR program, Dr. Holland is advancing an inter-institutional program with UW and SCCA to expand Fred Hutch’s commitment to solid tumor research. See “MISSION AND STRATEGY – Translational Medicine/Solid Tumor Translational Research.” Dr. Holland is an internationally-renowned neurosurgeon and brain cancer researcher. He has spent his career working across disciplines to address the molecular basis of brain tumors and develop new treatment approaches. His research focuses on developing mouse models of brain cancer that mimic how the disease behaves in human patients. During his research career, Dr. Holland was named as a Howard Hughes Medical Institute Post-Doctoral Fellow.

Garnet Anderson, Ph.D. (age 57) has been Director of Fred Hutch’s Public Health Sciences Division and Senior Vice President since 2013. Dr. Anderson joined the faculty at Fred Hutch in 1989 after receiving her doctoral degree from UW. She is a member of the Cancer Prevention and Biostatistics and Biomathematics Programs, as well as serving as the principal investigator for the Women’s Health Initiative (WHI) Clinical Coordinating Center. Since the launch of the WHI study in 1993, Dr. Anderson has been a central figure in the WHI Clinical Coordinating Center. She has played a major role in clinical trial design, implementation, monitoring and reporting activities. She serves on the national WHI Steering Committee, having served two terms as chair. She also leads a newer effort to examine cancer survivorship among the 25,000 WHI participants who have been diagnosed with cancer. Dr. Anderson is also the Associate Director for the Southwest Oncology Group Statistical Center for Cancer Control and was recently awarded a Fred Hutch 40th Anniversary Endowed Chair. She serves as a board member for the Marsha Rivkin Center for Ovarian Cancer Research and she is an Affiliate Professor in the UW Department of Biostatistics.

Jonathan Cooper, Ph.D. (age 64) became the Director of Fred Hutch’s Basic Sciences Division and a Senior Vice President in 2010. He has been a faculty member in the Basic Sciences Division since 1985 and is an Affiliate Professor of Biochemistry at the UW. Dr. Cooper received his doctoral degree in biological sciences from the University of Warwick in England in 1976. Dr. Cooper is an expert in the signaling pathways that allow cells to communicate with each other and affect the behavior of normal and cancer cells. In addition to his laboratory research, Dr. Cooper served as co-director of Graduate Program in Molecular and Cellular Biology, which is jointly offered by Fred Hutch and UW, from 1995 to 2000. He has received a NCI MERIT award and has been appointed to several NIH and American Cancer Society grant review committees.

Medical Staff

Researchers in Fred Hutch’s Clinical Research Division responsible for the provision of patient care services are all physicians with medical degrees, and are board qualified or certified in their respective specialties. They are members of the practice plan administered by The Association of University Physicians d/b/a University of Washington Physicians (“UWP”). UWP is a Washington not for profit corporation and an organization described in Section 501(c)(3) of the Code. It is a supporting organization of the UW School of Medicine. Facility-related patient care activities are conducted through SCCA, University of Washington Medicine (“UWM”) and Seattle Children’s. See “SEATTLE CANCER CARE ALLIANCE.”

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Academic Appointments: Affiliation with University of Washington

Fred Hutch’s faculty is composed of Assistant Members (the equivalent of assistant professorships at comparable institutions), Associate Members (the equivalent of associate professorships at comparable institutions), and Members (the equivalent of full professorships at comparable institutions). Fred Hutch faculty members vote in their respective faculty divisions, and serve on various administrative committees. In 1994, Fred Hutch amended its formal affiliation arrangements with the UW and entered into a new Affiliation Agreement with the UW. Most Fred Hutch faculty in the Public Health Sciences Division and the Clinical Research Division also hold regular faculty appointments at the UW, and most Fred Hutch faculty in the Basic Sciences Division and the Human Biology Division hold either regular or affiliate faculty appointments at the UW. The majority of grants and contracts supporting Fred Hutch’s research programs are awarded directly to Fred Hutch. Fred Hutch does not receive funding for its research programs from the UW other than occasional subcontracts relating to specific research projects. The average Fred Hutch faculty headcount and grant and contract revenue generated per Fred Hutch faculty member is shown in the following graph:

$1,350,000 245

$1,300,000 210

$1,250,000 175

$1,200,000 140

$1,150,000 105

$1,100,000 70 Average Faculty Headcount Average Faculty

Grant and Contract Revenue per Faculty $1,050,000 35 Grant & Contract Revenue per Faculty in $ in Faculty per Revenue Contract & Grant Faculty Headcount $1,000,000 0 FY 2009FY 2010FY 2011FY 2012FY 2013FY 2014FY 2015FY 2016

SIGNIFICANT SCIENTIFIC ADVANCEMENTS AND AWARDS

Reputation in the Scientific Community

Currently Fred Hutch enjoys a rare distinction - listing three Presidential Early Career Awards for Scientists and Engineers recipients among its faculty. The Early Career Award is “the highest honor bestowed by the United States government on young professionals in the early stages of their independent research careers.” In 2009, Drs. Ulrike Peters and Harmit S. Malik were named to this elite list, and in 2010, Dr. Muneesh Tewari joined them.

Nine members of Fred Hutch’s faculty have been elected as members of the National Academy of Sciences (two deceased), considered one of the highest honors that can be accorded a scientist, and nine members of Fred Hutch’s faculty are members of the Institute of Medicine (as of July 1, 2015, the National Academy of Medicine), which is the health arm of the National Academy of Sciences.

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Grants and Contracts

One of the most significant indicators of the scientific merit of Fred Hutch’s research is the success of its investigators in winning federal award dollars compared to investigators at other NCI-designated cancer centers and independent research institutes.

Total # of Total NIH/FDA/CDC NIH/FDA/CDC Funded Projects Institution Name Funding FY2016 FY2016 FRED HUTCHINSON CANCER RESEARCH CENTER $278,242,531 346 MEMORIAL SLOAN-KETTERING CANCER CENTER $166,444,523 373 DANA-FARBER CANCER INSTITUTE $162,525,775 352 UNIVERSITY OF TEXAS MD ANDERSON CAN CTR $147,586,540 353 ST. JUDE CHILDREN'S RESEARCH HOSPITAL $82,178,940 131 BURNHAM INSTITUTE FOR MEDICAL RESEARCH $62,437,267 137 WISTAR INSTITUTE $46,672,313 100 CITY OF HOPE/BECKMAN RESEARCH INSTITUTE $46,337,534 119 SALK INSTITUTE FOR BIOLOGICAL STUDIES $35,687,253 84 ROSWELL PARK CANCER INSTITUTE $34,199,673 117 FOX CHASE CANCER CENTER $27,811,097 94 Report updated December 19, 2016 by Ann Data Source:

Marie Clark, Arnold Library, Fred http://projectreporter.nih.gov/reporter.cfm Hutchinson Cancer Research Center

The majority of Fred Hutch’s federal grants utilize the federal government’s Payment Management System (“PMS”) allowing Fred Hutch to draw on its PMS federal account for each award as expenditures are incurred. Fred Hutch’s NIH funding is well distributed among its scientists, with the majority of Fred Hutch’s leading scientists receiving funding equal to 2% or less of Fred Hutch’s total NIH grant and contract revenues. Only two Fred Hutch scientists have received funding in excess of 5% of Fred Hutch’s total NIH grant and contract revenues. Nonetheless, many of Fred Hutch’s researchers are renowned for designing and implementing large and longitudinal scientific projects. Fred Hutch has more than fifty-five active NIH awards that are greater than $1 million.

Some examples of recent or ongoing major awards and projects include:

• MIDAS

Dr. M. Elizabeth (Betz) Halloran received a five-year, $12.5 million award from the National Institute of General Medical Sciences that designates Fred Hutch’s campus as a MIDAS Center of Excellence. Models of Infectious Disease Agency Study (MIDAS) centers are designated to play a role in planning for national emergencies such as a pandemic or an act of bioterrorism.

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• HVTN

HVTN is the world’s largest publicly funded multi-disciplinary international collaboration facilitating the development of vaccines to prevent HIV and AIDS. HVTN is directed and funded by the National Institute of Allergy and Infectious Diseases.

• WHI

Fred Hutch’s Public Health Sciences Division houses the Clinical Coordinating Center for the WHI, one of the largest NIH-funded studies ever conducted on women. The initial 15-year study, established in 1992, involved more than 160,000 women nationwide, including some 3,500 in Washington State. With an award of $55.4 million to Fred Hutch in 2011 from the National Heart, Lung and Blood Institute for continued coordination of the study through 2015, the project is in its next phase, extending and refining the main clinical trial findings, identifying factors associated with healthy aging and searching for more ways to improve women’s health.

• Colorectal Cancer Genetics

Uncovering colon cancer’s genetic roots is the focus of a $13 million, four-year, NCI-funded project. Dr. Ulrike (Riki) Peters, Ph.D., M.P.H., an associate member in the Public Health Sciences Division, will lead the effort. She and her colleagues will use next-generation sequencing, a technique that captures entire genome sequences, to identify genetic links to colorectal cancer.

• Cancer Immunotherapy Trials Network

There is enormous potential to improve cancer therapy through the use of agents that boost patients’ immune systems to fight their own disease. Few of these agents are being adequately tested in patients. The Cancer Immunotherapy Trials Network (“CITN”) employs the collective expertise of top immunologists to design and conduct cancer therapy trials with the most promising of these agents. Total funding since 2010 for the CITN has exceeded $14,700,000.

Publications

Another significant indicator of the scientific merit of Fred Hutch’s research is number of citations the work of its researchers receives in scientific publications authored by their peers. Between 2006 and 2016, Fred Hutch researchers publishing in clinical medicine received an average of 34.31 citations per paper (the field average was 12.56), while papers published by Fred Hutch researchers in the molecular biology and genetics area were cited 52.3 times per paper (field average was 24.51). Source: Essential Science Indicators and InCites databases from Clarivate Analytics (formerly the IP&S business of Thomson Reuters).

Nearly 20% of papers authored by Fred Hutch researchers between 2012 and 2016 were among the top 10% most cited across all works indexed by Web of Science. Thomson Reuters has stated that, “Citation is a direct measure of influence on the literature of a subject, and it is also a strong indicator of scientific contribution, since it is derived from a pattern of interaction among millions of published articles.”

Treatment Experience and Outcomes

Another key measure of the value and success of Fred Hutch’s research programs is reflected in the experience and results achieved by Fred Hutch’s transplant program.

The National Marrow Donor Program’s January 2016 Report, “Transplants by Disease Category at Each U.S. Transplant Center – Leukemia and Lymphoma,” shows that Fred Hutch physicians are nationwide leaders having provided 3,592 donor transplants to leukemia and lymphoma patients since 1989, as compared to the MD Anderson Cancer Center, the second most active provider on the list, which has transplanted 3,195 patients since 1990.

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The Fred Hutch Bone Marrow Transplant Program at Seattle Cancer Care Alliance recently earned recognition by the Center for International Blood and Marrow Transplant Research for outperforming its expected one-year survival rates for allogeneic transplant patients —those who receive donated adult blood-forming stem cells. The Fred Hutch-SCCA BMT program was among the top 9 percent of stem cell transplant programs nationwide — 17 of 179 — according to CIBMTR’s 2016 Transplant Center-Specific Survival Report. This annual report is based on survival outcomes gathered over a three-year period from the National Marrow Donor Program registry.

Scientific Advancements

Fred Hutch scientists study the disease process from every angle – from the most basic, molecular and cellular level to a broad, population-based approach – to uncover the factors that influence a person’s likelihood of getting cancer, and use this knowledge to reduce risk and save lives. Their efforts involve more than 300 labs and projects ranging from answering the fundamental biological questions of life processes and disease development, to finding ways to prevent cancer and other disease development, early detection of disease, developing new treatments and advancing survivorship. Some examples of scientific advancements include:

• Showing that patients with acute leukemia who have failed chemotherapy can be cured with BMT.

• Showing that BMT is one of the best forms of initial therapy for patients with Acute Myelogenous Leukemia, a disease that affects approximately 15,000 Americans each year.

• Showing that BMT can cure Chronic Myelogenous Leukemia, a disease that is otherwise incurable and affects approximately 3,000 Americans each year.

• Developing the first FDA-approved antibody-targeted chemotherapy, making chemotherapy less toxic and more effective.

• Pioneering the first antibody-targeted therapy against a marker specific to non-Hodgkin’s lymphoma, an approach now used to treat thousands of people each year.

• Developing a “tumor paint” that helps surgeons see more precisely where a tumor begins and ends by illuminating the cancerous cells. The tumor paint, derived from scorpion venom, was developed in collaboration with researchers at Seattle Children’s Research Institute.

• Discovering the pathways by which cells decide to divide or stop dividing, identifying the isolated proteins that are involved in these decisions, and establishing that these proteins are also important markers for determining the prognosis of a subset of patients with breast cancer.

• Identifying and cloning genes that encode critical proteins regulating cell division. These proteins regulate the expression of many cellular genes by altering how these genes are packaged with proteins in the nucleus. Improper regulation of expression of these proteins is involved in a variety of human cancers.

• Discovering the mechanisms that affect how large numbers of genes are turned “off” and “on” through the modification of proteins that associate with DNA.

• Discovering genes that determine cell type and are capable of switching some cell types into others.

• Finding that it is possible to administer minute amounts of hydrogen sulfide to reversibly reduce the core temperature of mice to 10 degrees Celsius without loss of life or neurological problems, a discovery that could lead to major breakthroughs in the treatment of trauma and cancer.

• Identifying the genetic underpinnings of a common form of muscular dystrophy, facio- scapulohumeral dystrophy, showed that the disease is caused by two genetic alterations that lead to the inefficient suppression of a gene that is normally expressed only in early development. This work

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is expected to lead to new approaches for muscular dystrophy therapy and broader insights into human diseases which may be affected by similar genetic changes.

• Finding that the helical shape of the bacterium Helicobacter pylori, which causes many ulcers and gastric cancer, is critical in its ability to colonize in the stomach.

• Discovering stable, circulating microRNAs that may be useful as biomarkers of cancer. This holds promise for the early detection of a variety of cancers, including prostate, breast, lung and ovarian cancers.

• Developing abiraterone, a new drug for the treatment of castration-resistant prostate cancer.

• Discovering that a protein called hepsin is a key driver behind the progression of prostate cancer, a finding that the researchers believe could spawn new treatments to prevent the cancer’s spread and extend survival.

• Discovering a new mechanism that explains why some recurrent ovarian tumors become resistant to treatment with commonly-used, platinum-based chemotherapy drugs such as cisplatin and carboplatin.

• Discovering that human resistance to a retrovirus that infected chimpanzees and other nonhuman primates 4 million years ago may be at least partially responsible for the susceptibility of humans to HIV infection today.

• Development of mathematical models to predict course of infectious diseases and inform public health decisions about vaccine development and action to take during epidemics.

• Tracking evolution of disease-causing viruses and other agents using DNA sequencing and computational methodology to model disease dynamics.

• Initiatives in Uganda, China and Republic of South Africa to advance understanding of infection- related cancers and infectious diseases in those countries.

• Identifying genetic variants that affect the development and outcome of graft-versus-host disease in BMT patients

• Understanding the correlation between human papillomavirus (HPV) and cervical cancer that led to development of a vaccine that prevents HPV and averts tens of thousands of cervical cancer cases each year.

Awards and Honors

The Nobel Prize – Many of Fred Hutch’s scientists have been honored for their achievements. Most notably, the late Dr. E. Donnall Thomas, Director Emeritus of the Clinical Research Division; Dr. Lee Hartwell, former President and Director of Fred Hutch; and Dr. Linda Buck, a member of the Basic Sciences Division, have been awarded the Nobel Prize in physiology or medicine. Dr. Thomas received the Nobel in 1990 for his pioneering work in bone marrow transplantations. Dr. Hartwell received the Nobel in 2001 for his pioneering work in yeast genetics, and Dr. Buck received the Nobel in 2004 for her groundbreaking work on odorant receptors and the organization of the olfactory system, the network responsible for our sense of smell.

National Academy of Sciences – Election to the National Academy of Sciences, the nation’s most prestigious scientific organization, is one of the highest honors researchers can receive. Eight Fred Hutch scientists have been so honored: Drs. Lee Hartwell, Linda Buck, Robert Eisenman, Mark Groudine, Steve Henikoff, Daniel Gottschling, Sue Biggins, the late Harold Weintraub and the late E. Donnall Thomas.

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John D. and Catherine T. MacArthur Foundation Fellowship - In 2007 Dr. Mark Roth, a cell biologist in Fred Hutch’s Basic Sciences Division, received the prestigious genius award, which is given annually by the John D. and Catherine T. MacArthur Foundation. Dr. Roth received $500,000 over five years of unrestricted support. Dr. Roth’s work focuses on reversible metabolic hibernation, a technique that in the future may be used to help buy time for patients on organ-transplant lists and in operating rooms, emergency rooms and battlefields.

American Academy of Arts & Sciences - Eight Fred Hutch scientists have been elected to membership in one of the nation’s oldest and most prestigious honorary societies and independent-policy research centers. They are Drs. Gary Gilliland, Linda Buck, Lee Hartwell, Mark Groudine, Robert Eisenman, Daniel Gottschling, Lawrence Corey and the late Harold Weintraub.

National Academy of Medicine (formerly known as the Institute of Medicine of the National Academies). Since 1974, nine Fred Hutch faculty members have been honored with membership in the Institute of Medicine of the National Academies (the “IOM”), Drs. Maureen Henderson, Ross Prentice, Mark Groudine, Linda Buck, Lawrence Corey, Eric Holland, Thomas Fleming, Frederick Appelbaum and Gary Gilliland. The IOM is an independent, nonprofit organization that works outside of government to provide unbiased and authoritative advice to decision makers and the public.

American Association for the Advancement of Science – Thirteen Fred Hutch investigators have been inducted into the American Association for the Advancement of Science, an international non-profit organization dedicated to advancing science around the world. Fred Hutch is and has been represented in the AAAS by Drs. Paul Neiman, John Potter, Mark Groudine, Linda Buck, Meng-Chao Yao, Maxine Linial, Denise Galloway, Gerald Smith, M. Elizabeth Halloran, Roger Brent, Robert Eisenman, Steven Henikoff and Rainer Storb.

Howard Hughes Medical Institute Investigators –Three Fred Hutch faculty members are among the current Howard Hughes Medical Institute (“HHMI”) Investigators. They are Steven Henikoff, Sue Biggins (this appointment ends at the end of February 2017) and Harmit Malik. Eight other past and present Fred Hutch faculty are HHMI alumni: Drs. Steven Hahn, Leonid Kruglyak, James Roberts, Adrian Ferré-D'Amaré, Cecilia Moens, James Priess, Eric Holland and the late Harold Weintraub. HHMI selects an elite few among US researchers, with the aim of identifying those who have the potential to make significant contributions to science. Each investigator receives his or her full salary, benefits, and a research budget from HHMI. Appointment is for a five-year term, which may be renewed. Additionally, Dr. Toshiyasu Taniguchi is a recipient of the Howard Hughes Medical Institute Early Career Scientists Award.

Presidential Early Career Awards for Scientists and Engineers – The Presidential Early Career Award for Scientists and Engineers (PECASE), conferred annually at the White House, is the highest honor bestowed by the U.S. government on outstanding scientists and engineers beginning their independent careers. The award embodies the high priority placed by the government on maintaining the leadership position of the United States in science by producing outstanding scientists and engineers and nurturing their continued development. To date, six Fred Hutch scientists have been honored with the PECASE including, Drs. Ulrike Peters, Harmit Malik, Muneesh Tewari, Cecilia Moens, Bill Grady and Effie Wang Petersdorf.

Damon Runyon Cancer Research Foundation Awards – Damon Runyon fellowships and clinical investigator awards are given annually to advance projects that “have the potential to have a major impact on the prevention, diagnosis and treatment of cancer.” Thirteen clinical researchers at Fred Hutch have been recipients of various Damon Runyon awards, including Drs. Edus Houston Warren, Cassian Yee, Bill Grady, John Pagel, Colleen Delaney, Muneesh Tewari, Robert Bradley, Brian Till, Peter J. Skene, Marie Bleakley, Cameron Turtle, Tera C. Levin, and Alistair B. Russell.

Numerous Other Honors – Fred Hutch’s scientists hold many special awards from the NIH, including NIH Merit Awards, Outstanding Investigator Awards and FIRST (First Independent Research Support and Transition) awards. Other awards Fred Hutch’s faculty have received include the following: The Lucille P. Markey Scholar Award; the Terry Fox Award; McDonnell Foundation fellowships; American Cancer Society Junior Faculty Awards; the American Cancer Society Career Development Award; the Poncin Scholarship Award for Advanced Medical Research; the Leukemia Society of America Stohlman Memorial Award; the National Cancer Institute National Research Service Award; the Gustav Carus Prize and Honorary Membership in the Swiss Society of Hematology; the

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Karl Landsteiner Memorial Award; the Mortimer Spiegelman Awards; the Purdue Frederic Award; the COPSS President’s Award; the NIH Preventive Oncology Academic Award; the Alexander Von Humboldt Foundation Senior United States Scientist Award; the 1990 Founders Award by the Chemical Industry Institute of Toxicology; the Lester R. Ford Award of the Mathematical Society of America; the American Cancer Society Medal of Honor; the Elizabeth Glaser Pediatric AIDS Foundation Award; the Keck Distinguished Young Scholars in Medical Research Program award; the R&D 100 Award; the Herbert J. Block Memorial Lectureship Award for Distinguished Achievement in Cancer; the John Simon Guggenheim Memorial Foundation Fellowship Award; a Novel Targets Grant from the American Foundation for AIDS Research; the Murray Thelin Researcher of the Year Award from the National Hemophilia Foundation; the Pew Scholarship Program; the Searle Scholar Award, the Gairdner Foundation International Award, the Albert Lasker Medical Research Award and the American Association for Cancer Research Dewitt S. Goodman Lectureship.

SEATTLE CANCER CARE ALLIANCE

In June 1998, Fred Hutch, UW and Seattle Children’s organized the Seattle Cancer Care Alliance, a Washington nonprofit corporation, for the purpose of developing and offering a comprehensive program of integrated cancer care services. SCCA is organized as a nonprofit membership corporation. Each of Fred Hutch, UW and Seattle Children’s contributed one-third of SCCA’s initial capital and retains a one-third ownership and voting interest in SCCA. The goal of the three parties and SCCA is to develop a world-class cancer research center that advances knowledge and provides treatment within the context of integrated inpatient and outpatient care, research, teaching and multi-institutional data sources.

SCCA maintains and operates ambulatory cancer care facilities (the “SCCA Clinic”) on Fred Hutch’s main campus. In addition, SCCA owns and operates 20 beds located at UW Medical Center (“UWMC”) as a cancer hospital within a hospital and which is exempt from Medicare’s prospective payment system (the “SCCA Hospital”). Since the formation of SCCA, Fred Hutch uses Seattle Children’s as its principal site of practice for pediatric inpatients and the UWMC and the SCCA Hospital as its principal sites of practice for adult inpatients. Both Fred Hutch and UW Medicine use the SCCA Clinic for certain outpatient oncology services. In addition, Seattle Children’s coordinates with SCCA to provide comprehensive pediatric outpatient cancer care services.

Fred Hutch is the sole Member of the Obligated Group and the sole borrower under the Loan Agreement. None of SCCA, UW or Seattle Children’s are Members of the Obligated Group or are obligated to make any payments under the Master Indenture or the Loan Agreement or otherwise with respect to the Series 2017 Bonds.

Fred Hutch is a party to two separate inpatient services agreements (each an “ISA”): a pediatric ISA among Fred Hutch, SCCA and Seattle Children’s for pediatric patient care, and an adult ISA among Fred Hutch, SCCA and UWMC for adult patient care. The pediatric ISA governs the inpatient hematology/oncology services at Seattle Children’s and the former inpatient pediatric BMT program conducted by Fred Hutch prior to the formation of SCCA. The adult ISA governs the existing adult medical oncology services of UWMC and the former adult inpatient programs conducted by Fred Hutch prior to formation of SCCA. Fred Hutch receives ongoing payments from UWMC, SCCA and Seattle Children’s for (1) research and development services, (2) license fees for use of its name and marks and (3) data collection and analysis.

Select key benefits of SCCA to Fred Hutch are:

• Significant expansion of research protocols and access to research participants;

• Protection from the financial risk of direct patient care;

• Administrative economies of scale; and

• Research and development, licensing and data collection fees, which are a key and reliable source of discretionary funds for Fred Hutch. See “FINANCIAL INFORMATION – Research and Discretionary Funding.”

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JUNO THERAPEUTICS

In the fall of 2013, Juno Therapeutics, Inc. (f/k/a FC Therapeutics, Inc.) (“Juno”) was incorporated and began operations based on collaborations with and technologies licensed from Fred Hutch, Seattle Children’s, Memorial Sloan Kettering Cancer Center and St. Jude Children’s Research Hospital. Juno’s focus is on the development of novel cellular immunotherapies based on two distinct and complementary platforms – Chimeric Antigen Receptors (CARs) and T Cell Receptors (TCRs) technologies - with the goal of revolutionizing medicine by re-engaging the body’s immune system to treat cancer. In addition to licenses of certain Fred Hutch technologies to Juno, including two Fred Hutch licenses originally entered into with ZetaRx, Inc. (another company based on Fred Hutch technology that was acquired by Juno), Fred Hutch entered into a collaboration agreement with Juno focused on research and development of cancer immunotherapy products. The collaboration agreement has a six year term and can be extended upon mutual agreement. Juno committed to aggregate research funding of $8.0 million over a period of six years relating to the research and development of cellular immunology products.

As part of its collaboration with Juno, Fred Hutch received a grant of common stock, as well as rights to certain share-based success payments. Under the terms of this arrangement, Juno may be required to make success payments to Fred Hutch based on increases in the estimated fair value of Juno’s stock, payable in cash or publicly- traded equity at Juno’s discretion. The aggregate success payments to Fred Hutch begin at $10 million for a share price of $20.00 (based on an initial Series A Preferred Stock price of $1.00) and up to $375 million if the share price is $160.00 or more. The initial success payment date occurred on December 19, 2015 and Fred Hutch received 1,601,085 shares as payment for Juno’s share price exceeding $40.00. Subsequent success payment dates are to occur in December 2018, December 2020 and December 2022 or in the event of certain extraordinary transactions such as a merger, consolidation or transfer of substantially all of Juno’s assets.

Juno common stock represent a material portion of Fred Hutch’s assets. Juno common stock owned by Fred Hutch had a fair market value of $139,774,000 as of June 30, 2016, and $68,542,000 as of December 31, 2016. See ‘FINANCIAL INFORMATION – Management’s Discussion of Operations and Financial Performance.”

Pursuant to the licensing agreements mentioned above, Juno is required to pay Fred Hutch royalties based on annual net sales of licensed products by Juno and by its affiliates and sub licensees. In addition Juno is required to pay to Fred Hutch minimum annual royalties and milestone payments upon Juno’s achievement of certain clinical and regulatory milestones relating to the licensed products. Unless earlier terminated, each of these license agreements will expire upon the expiration of the last to expire of the patent rights licensed to Juno under the respective agreements.

Juno stock is publically traded on the NASDAQ exchange.

ORGANIZATIONAL STRUCTURE

The Obligated Group

Fred Hutch is currently the sole member of the Obligated Group. See “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2017 BONDS” in the front portion of this Official Statement. The Fred Hutchinson Cancer Research Center Foundation (“Foundation”), formerly a member of the Obligated Group, was merged with and into Fred Hutch in 2008 and Fred Hutch succeeded to all of the Foundation’s assets and liabilities.

Controlled Affiliates of Fred Hutch

Hutchinson Centre Research Institute in Uganda Limited (“HCRIU”), formerly known as UPCID Limited, is a Uganda not-for-profit corporation. HCRIU is organized and operated for the purpose of researching, detecting, treating and preventing infection-related cancers in Uganda and throughout the world. Fred Hutch and an employee of Fred Hutch are the sole members of HCRIU. Fred Hutch has the right to appoint all the members of its Board of Directors. The income and property of HCRIU is restricted to use in meeting its organizational objectives. The net assets of HCRIU were $(3,542,000) and $(2,201,000) as of June 30, 2016 and 2015, respectively. During fiscal years

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2015 and 2016, Fred Hutch provided financial support to HCRIU in the amount of $1,862,000 and $2,282,000, respectively.

Hutchinson Centre Research Institute of South Africa (“HCRISA”) is a South Africa not-for-profit corporation. HCRISA is organized and operated for the purpose of promoting and conducting clinical, laboratory and other research aimed at the prevention, early detection, diagnosis, and treatment of HIV/AIDS, tuberculosis other infectious diseases and cancer in South Africa and throughout the world. HCRISA has no members. Fred Hutch has the right to appoint and remove all members of its Board of Directors and to approve significant corporate transactions, such as dissolution, sale of all its assets, or amendment of its articles of incorporation. The income and property of HCRISA is restricted to use in meeting its organizational objectives. The net assets of HCRISA were $1,023,000 and $943,000 as of June 30, 2016 and 2015, respectively. During fiscal years 2015 and 2016, Fred Hutch provided financial support to HCRISA in the amount of $283,000 and $94,000, respectively.

Seattle Vaccine Research Fund (“SVRF”) is a Washington not for profit corporation that is exempt from federal taxes under Section 501(c)(3) of the Code. It is operated for the purpose of providing anti retrovirals to eligible participants of the HVTN. See “MISSION AND STRATEGY – HIV Vaccine Research.” Fred Hutch is the sole member of SVRF and appoints all members of its Board of Directors. The net assets of SVRF were $444,000 and $443,000 as of June 30, 2016 and 2015, respectively. During fiscal years 2015 and 2016, Fred Hutch did not provide any financial support to SVRF.

Fred Hutchinson International, LLC (“FHI”), a Washington limited liability company, was formed for the purpose of engaging in business to promote and conduct research aimed at the prevention, early detection, diagnosis and treatment of cancer, infectious disease and related international health concerns. FHI also intends to investigate innovative new concepts and approaches to prevention and treatment of cancer, infectious disease and the fostering and promotion of international partnerships and collaborations. During fiscal years 2015 and 2016, Fred Hutch did not provide any financial support to FHI.

Fred Hutch is the sole Member of the Obligated Group and the sole borrower under the Loan Agreement. None of the controlled affiliates are Members of the Obligated Group or are obligated to make any payments under the Master Indenture or the Loan Agreement or otherwise with respect to the Series 2017 Bonds.

Corporate Governance and Management

Fred Hutch Board of Trustees

Fred Hutch is governed by its Board of Trustees (the “Board”). The Bylaws of Fred Hutch provide that the Board is to consist of no less than 12, and no more than 24 members, who are to serve staggered terms of three years. Currently the Board has 20 members divided into three classes. Board members are not compensated, but may be reimbursed for reasonable expenses incurred in connection with their duties as trustees.

The Board has the following standing committees: (1) Audit Committee, (2) Executive Committee, (3) Finance Committee, (4) Investment Committee, (5) Board Governance Committee, (6) Compensation Committee, (7) Research Ethics Committee, and (8) Development Committee. The Executive Committee acts as a liaison between the Board and the President to ensure that Board policies are carried out. It exercises the full power of the Board between Board meetings, except to the extent limited by statute and the Bylaws. The Executive Committee consists of the Board officers, the immediate past Chair (for one year), and such other at-large members as may be appointed and ratified annually. The Executive Committee currently has seven members.

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BOARD OF TRUSTEES

Years of Name Occupation Service

The Honorable Chris Gregoire Former Washington State Governor 4 Chair

Mr. Matthew McIlwain Managing Director, Madrona Venture Group 4 Vice Chair Mr. Norman Metcalfe, Director, the Ryland Group 4 Treasurer Mr. Richard W. Anderson, EVP, & COO, Washington Real Estate Holdings 7 Secretary

Ms. Paula R. Reynolds, President & CEO, PreferWest LLC 6 Former Chair

Mr. Carl Behnke President, REB Enterprises 11

Mr. Mike Clayville V.P. Worldwide Commercial Sales, Amazon 1

Ms. Hollis S. Dillon Co-founder, HeidiSays.com 7

Mr. Mark Fleishchauer JH Kelly Holdings, LLC 1

Ms. Teresa Gillespie Managing Director, Trilogy Partnership 4

Mr. Stephen M. Graham Partner, Fenwick & West LLP 10.5

Mr. Ron Howell CEO, WRF Capital 5

Mr. Henry James Principal, Convergent Investors 17

Mr. Satya Nadella CEO, Microsoft 1

Mr. Peter Neupert Operating Partner, Health Evolution Partners 8

Mr. Paul Reed Retired 2

Mr. James D. Sinegal, Co-Founder & Director, Costco Wholesale 8 Emeritus Ms. Kathy Surace-Smith Vice President, General Counsel & Corporate 3 Secretary, NanoString Technologies, Inc.

Mr. Bryan White President, Sahsen Ventures, LLC 1

Mr. Stephen Zaruby Formerly the President and Chief Executive Officer, 2 Aurinia Pharmaceuticals, Inc.

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Relationship of Certain Trustees to Fred Hutch

Satya Nadella is CEO of Microsoft which is one of Fred Hutch’s vendors and has provided some research funding to Fred Hutch. Kathy Surace-Smith is vice-president, general counsel and corporate secretary of NanoString Technologies, Inc., a publicly held provider of life science tools for translational research and molecular diagnostics, which recently sold an nCounter System to Fred Hutch. Mr. Mike Clayville is V.P. Worldwide Commercial Sales at Amazon, which is one of Fred Hutch’s vendors.

Management of Fred Hutch believes that all relationships and transactions involving these persons and their related entities have been conducted at arm’s length upon reasonable business terms and that none of these board members have voted on or otherwise participated in any decisions on behalf of Fred Hutch that directly involve the entities with which they have a relationship.

The Board of Ambassadors

The Board of Ambassadors (“BOA”) is an appointed group of volunteers whose purpose is to support Fred Hutch and its mission of eliminating cancer and other diseases as a cause of human suffering and death by serving as ambassadors for Fred Hutch in the community. The BOA is not a governance board and is not responsible for managing the affairs of Fred Hutch. Its members do not have the powers or duties of trustees or directors of Fred Hutch by virtue of their serving on the BOA. The specific responsibilities of the BOA are: (a) to serve as ambassadors of Fred Hutch in the community and to advocate for Fred Hutch when called upon by Fred Hutch leadership; (b) to serve as a liaison between Fred Hutch and the community at large, both locally and nationally; (c) to assist Fred Hutch leadership in developing and strengthening relationships with key Fred Hutch constituencies locally and nationally, including government, academia, biotechnology, healthcare and underserved communities; (d) to provide input and feedback on issues of interest and concern to Fred Hutch when requested by Fred Hutch leadership; (e) to serve on Fred Hutch councils as community representatives when called upon by Fred Hutch leadership; (f) to be knowledgeable about Fred Hutch, its mission and current scientific activities; (g) to attend meetings of the Board and other briefings from Fred Hutch leadership; and (h) to respect the confidentiality of Fred Hutch confidential information when asked to do so by Fred Hutch leadership. The BOA currently has 24 members.

Management

Management of the daily activities of Fred Hutch, together with the implementation of the policies and resolutions of Fred Hutch’s Board is vested in Fred Hutch’s President and Director and senior management. Summary biographical information concerning key members of management is provided below. For summary biographical information concerning the Directors for the Clinical Research Division, the Public Health Sciences Division, the Basic Sciences Division, the Human Biology Division and the Vaccine and Infectious Disease Division, see “SCIENTIFIC AND MEDICAL STAFF – Divisional Leaders.” Fred Hutch is currently engaged in nationwide searches to fill the positions of Vice President, Development, and has recently filled the position of Vice President, Business Development and Vice President, Information Technology and Chief Information Officer.

Gary Gilliland, M.D., Ph.D. (age 62) became President and Director of Fred Hutch effective January 2, 2015 after arriving from the Perelman School of Medicine at the University of Pennsylvania where he was Vice Dean and Vice President of Precision Medicine. At the University of Pennsylvania he worked to bring together research and clinical care initiatives across disciplines to create a model for delivering personalized medicine to patients with a range of diseases. Dr. Gilliland received his doctoral degree from the University of California, Los Angeles in 1980 and his M.D. degree from the University of California, San Francisco in 1984. Dr. Gilliland spent 20 years on the faculty at Harvard where he was Professor of Medicine at Harvard Medical School and Professor of Stem Cell and Regenerative Biology at Harvard University. He was also an investigator at the Howard Hughes Medical Institute and the Director of the leukemia program at the Dana-Farber/Harvard Cancer Center and has earned numerous honors for his work. The bulk of his initial work at Harvard focused on the genetic basis of blood cancers.

In 2009, Dr. Gilliland left Harvard to go to Merck Research Laboratories as the Senior Vice President and Global Oncology Franchise Head. In this role, he oversaw preclinical and clinical oncology development, as well as clinical oncology licensing. During his four years there, he and the Merck team were able to bring an immunotherapy

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cancer drug called lambrolizumab (Keytruda) to market in record time, from first human trials in 2011 to approval in 2014 by the Food and Drug Administration.

Dr. Gilliland has received many honors and awards for his academic research, including the William Dameshek Prize from the American Society of Hematology, the Emil J. Freireich Award from the MD Anderson Cancer Center and the Stanley J. Korsmeyer Award from the American Society for Clinical Investigation, of which he is an elected member. He is also an elected member of the American Association of Physicians and National Academy of Medicine.

Bruce E. Clurman, M.D., Ph.D. (age 57) is Executive Vice President and Deputy Director of Fred Hutch; Member of the Clinical Research and Human Biology Divisions; and Jose Carreras/E. Donnall Thomas Endowed Chair for Cancer Research. He received his undergraduate degree in Philosophy and Biochemistry from the University of Virginia, his M.D. from Cornell University Medical College and his Ph.D. in Viral Oncology from Cornell University Graduate School of Medical Sciences and the Sloan-Kettering Institute. After his residency in Internal Medicine at Brigham and Women’s Hospital and his post-doctoral and clinical fellowship training in Molecular Medicine and Medical Oncology at Fred Hutch and UW, he joined the faculty of Fred Hutch in 1994. Dr. Clurman is also a Professor of Medicine and an Adjunct Professor of Pathology at the University of Washington School of Medicine. Dr. Clurman is widely known for his research into cellular regulation by the ubiquitin-proteasome system and the molecular control of cell division. His laboratory has been continuously funded by NIH and his work has been recognized with numerous awards, including a W.M. Keck Distinguished Young Scholarship, a Burroughs Welcome Award in Translational Medicine, and membership in the American Society of Clinical Investigation. Dr. Clurman is also an attending physician at the Seattle Cancer Care Alliance and the University of Washington who specializes in hematopoietic stem cell transplantation, and serves on the board of trustees SCCA as a member appointed by Fred Hutch.

Fred Appelbaum, M.D. (age 70) is Executive Vice President and Deputy Director, Fred Hutch. He is a diplomat on the American Boards of Internal Medicine and Medical Oncology, is past chair of the Board of Scientific Advisors of the National Cancer Institute, and is a member of the National Academy of Medicine. Additionally, he has been a board member of a number of scientific societies, including the American Society of Hematology, American Society of Clinical Oncology, American Association for Cancer Research, and the American Society for Blood and Marrow Transplantation. Dr. Appelbaum is Head of the Hematologic Malignancies Program in the Fred Hutch/University of Washington Cancer Consortium and Principal Investigator on several NIH grants. He is the author of over 900 scientific articles and was the lead author on the first paper to describe the successful use of autologous marrow transplantation. Dr. Appelbaum’s current areas of research interests center on the biology and treatment of hematologic malignancies.

Steve Stadum (age 61) became Executive Vice President and Chief Operating Officer effective July 5, 2016. He previously was at Oregon Health & Science University (OHSU), where he was Chief Operating Officer of OHSU’s Knight Cancer Institute and played a central role in securing a $1 billion in philanthropic support and State funding to launch a vast expansion of the Knight Cancer Institute. He began working for OHSU in 1999, first as General Counsel and then as Executive Vice President and Chief Administrative Officer before being appointed COO of the Knight Cancer Institute in 2010. As EVP and CAO at OHSU, Mr. Stadum led the establishment of a new campus in Portland’s South Waterfront neighborhood, connecting to the main campus via an aerial tram, He helped lead efforts to secure $200 million in tobacco settlement funding for expansion of OHSU’s research programs, and led resolution of a tort liability crisis for OHSU and other public bodies. He attended Stanford University and Lewis and Clark College and received his JD from Lewis & Clark Law School. He has served on the Portland State University Foundation Board of Directors and the Portland Business Alliance Board of Directors, as well as the Oregon State Legislature Joint Interim Oregon Tort Claims Act Task Force. In his current role Mr. Stadum oversees all of the administrative and financial functions of Fred Hutch and serves on the Board of Directors of Seattle Cancer Care Alliance.

Randall C. Main, CPA (age 67) has been the Vice President and Chief Financial Officer at the Fred Hutch since 1984 and has broad responsibility for all financial operations, capital structure, and expense management at Fred Hutch. Mr. Main is a CPA and received his M.B.A. from the University of Puget Sound and his B.A. in accounting from Western Washington University. He is a board member and treasurer of the Seattle Institute for Biomedical and Clinical Research, is a board member of the National Comprehensive Cancer Network, and of Labkey Software Inc.

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He is a past president of the Association of Independent Research Institutes, having also previously served as treasurer, is a past board member and treasurer of the Association of American Cancer Institutes, and is a past board member of the Washington State Tobacco Settlement Authority, which is authorized by the state legislature to securitize future revenues from the settlement agreement with the tobacco industry.

FINANCIAL INFORMATION

Consolidated Statements vs. Obligated Group

The following financial information represents the consolidated financial activity of Fred Hutch, including controlled affiliates that are not Members of the Obligated Group. See “ORGANIZATIONAL STRUCTURE” for a description of the Obligated Group and the controlled affiliates of Fred Hutch that are included in the consolidated financial statements but are not Members of the Obligated Group. Fred Hutch comprises over 99% of the research grant and contract revenue and over 99% of the total assets in the consolidated financial statements.

Summary Financial Statements

Summary Statement of Activities

The following Summary Statement of Activities for Fred Hutch for the two fiscal years ended June 30, 2015, and 2016 has been derived from the audited consolidated financial statements of Fred Hutch, which are included in their entirety in the Official Statement as APPENDIX B. The Summary Statement of Activity for the six months ended December 31, 2015 and 2016 is derived from unaudited consolidated financial statements of Fred Hutch that, in the opinion of the management of Fred Hutch, reflect all material adjustments necessary to summarize the results of such periods fairly and in accordance with GAAP. The results for the six-month period ended December 31, 2016 should not be considered as indicative of the results for the full year ending June 30, 2017.

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Summary Statement of Activities (in thousands)

(Unaudited) Fiscal Years Six Months Ended June 30 Ended December 31 2015 2016 2015 2016 REVENUES AND OTHER SUPPORT: Research grants and contracts $321,476 $346,036 $169,566 $183,634 Contributions 50,998 47,353 30,871 26,842 Investment income and realized gains and losses 54,731 86,555 81,542 12,379 Intellectual property commercialization income 6,887 72,786 72,400 1,535 Clinical licensing fee revenue 16,265 19,404 9,871 11,285 Other income 38,150 43,338 20,806 23,638 Total revenues $488,507 $615,472 $385,056 $259,313 EXPENSES: Salaries and wages $193,636 $212,401 $101,930 $111,688 Employee benefits 47,902 53,370 25,554 27,501 Subawards 61,698 67,707 31,788 34,277 Purchased services 26,445 37,862 15,204 17,457 Supplies 26,049 29,548 13,576 14,493 Other 25,705 28,431 12,976 14,458 Rent, utilities and maintenance 13,111 14,048 6,533 6,329 Interest and amortization 18,170 16,357 8,218 7,991 Depreciation 23,745 24,862 12,180 12,613 Total expenses $436,461 $484,586 $227,959 $246,787 Change in net assets from operations $ 52,046 $130,886 $157,097 $ 12,526

Other changes in net assets from financing activities: Change in net unrealized gains and losses in fair value of investments $156,868 $(119,000) $(105,086) $ (68,652) Change in value of split interest agreements (1,086) (870) (538) (80) Change in net foreign currency translation 276 (497) (503) 273 Loss on defeasance of debt 0 (14,651) Change in net unrealized fair value of swap Instruments 102 (4,874) (573) 8,930 Total changes in net assets from financing activities 156,160 (139,892) (106,700) (59,529) TOTAL INCREASE IN NET ASSETS 208,206 (9,006) 50,397 (47,003) NET ASSETS BALANCE AT PERIOD START 281,758 489,964 489,964 480,958 NET ASSETS BALANCE, PERIOD END $489,964 $480,958 $540,361 $433,955

Summary Balance Sheets

The following Summary Balance Sheets for Fred Hutch as of June 30, 2015, and 2016 have been derived from the audited consolidated financial statements of Fred Hutch, which are included in their entirety in the Official Statement as APPENDIX B. The Summary Balance Sheet as of December 31, 2016 is derived from unaudited consolidated financial statements of Fred Hutch that, in the opinion of the management of Fred Hutch, reflect all material adjustments necessary to summarize the results of such periods fairly and in accordance with GAAP.

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Summary Balance Sheets (in thousands)

As of As of June 30 Dec 31 Assets 2015 2016 2016 Cash and cash equivalents $ 43,159 $ 14,281 $ 45,052 Restricted cash 19,340 16,420 6,726 Receivables 37,197 42,807 40,719 Investments 340,427 350,831 270,060

Other assets 1,806 1,886 1,785 Property, net 379,129 378,094 376,409 Beneficial interest in perpetual trusts 27,677 27,228 27,501 Beneficial interest in assets of SCCA 102,497 121,753 127,189 Total Assets $951,232 $953,300 $895,441 Liabilities and Net Assets Liabilities: Accrued payable and payroll $ 29,340 $ 37,516 $ 31,183 Deferred revenue 51,949 44,722 55,610 Long-term debt 351,295 356,546 350,118 Deferred credit on cash flow hedges 28,684 33,558 24,629 Total liabilities $461,268 $472,342 $461,540 Net Assets: Unrestricted $364,402 $344,335 $285,269 Temporarily restricted 65,683 62,979 73,688 Permanently restricted 59,879 73,644 74,944 Total net assets $489,964 $480,958 $433,901 Total Liabilities and Net Assets $951,232 $953,300 $895,441

Research and Discretionary Funding

Overview Historically, the majority of Fred Hutch’s revenues have been derived from grants and contracts for research activities, as shown below. Discretionary funding resulting from unrestricted contributions, intellectual property commercialization income, inpatient services fees and investment income can be used to support research activities or other activities such as fundraising or administrative expenses.

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Revenue Breakdown by Component

Fiscal Years Ended June 30, 6 Month Period Ended December 31, 2015 2016 2015 2016 Source ($ in 000s) % ($ in 000s) % ($ in 000s) % ($ in 000s) % Grants and Contracts $321,476 66% $346,036 56% $169,566 44% $183,634 71% Contributions 50,998 10% 47,353 8% 30,871 8% 26,842 10% IP Commercialization Income 6,887 1% 72,786 12% 72,400 19% 1,535 1%

Inpatient Service Fees 16,265 3% 19,404 3% 9,871 3% 11,285 4%

SCCA Joint Venture 13,530 3% 19,256 3% 8,606 2% 5,435 2%

Investment Income 41,201 9% 67,299 11% 72,936 19% 6,944 3%

Other Income 38,150 8% 43,338 7% 20,806 5% 23,938 9% Total Revenue $488,507 100% $615,472 100% $385,056 100% $259,313 100%

Fred Hutch Revenues by Component $700,000 Other Income

$600,000 IP $500,000 Commercialization Income $400,000 Inpatient Service $300,000 Agreement Fees

$ in Thousands in $ $200,000 SCCA Joint Venture Income $100,000 Investment $- Income/(Loss) FY FY FY FY FY FY FY FY 2009 2010 2011 2012 2013 2014 2015 2016

Grants and Contracts

Grants and contracts include all funds received from outside granting entities and foundations used by Fred Hutch for research studies, including reimbursement for direct expenses and facilities and administrative costs. Through NIH, the federal government has been the principal source of such revenues. The majority of grants made by the NIH are three to five years in duration. Most grants are received over a four-year award period. In 2009, the federal government passed the American Recovery and Reinvestment Act (“ARRA”) providing additional temporary funding for grants and contracts. Fred Hutch received over $65 million of ARRA funding, including a $9.6 million construction grant. ARRA funding for Fred Hutch ended in fiscal year 2014. The primary source of grants and contracts revenue is the NIH as shown by the following table:

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Total Research Grant Revenues (in thousands)

$400,000 $350,000 $300,000 $250,000 $200,000 $150,000 $100,000 $50,000 $- FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 NIH ARRA Stimulus Funding Other Federal Agencies Commercial Research Agreements Non-Federal Agencies

Source: Fred Hutch financial statements, NIH Fred Hutch’s revenue from the NIH is not limited to support from the National Cancer Institute, but represents a diversified array of awards from many different institutes within NIH. Despite the diversification of research awards from various institutes, Fred Hutch was impacted by the sequestration in grant funding due to the Budget Control Act of 2011. The result was a reduction in NIH grant and contract revenues in fiscal years 2013 and 2014. The following chart shows the primary institutes within NIH that Fred Hutch receives grant and contract support. Diversification of NIH Grant Revenues (in thousands)

300,000

250,000

200,000

150,000

100,000

50,000

0 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016

National Cancer Institute Allergy and Infectious Dis (NIAID) Diabetes, Digestive, Kidney (NIDDK) General Medical Sciences (NIGMS) Heart, Lung and Blood (NHLBI) Other NIH

Source: Fred Hutch financial statements, NIH

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To compete for the limited number of award dollars available from research programs funded by NIH, Fred Hutch investigators are reviewed and evaluated by other members of the scientific community through a rigorous peer review process. Federal budget constraints in recent years have resulted in funding for only the most highly rated applications. In this intensely competitive environment, Fred Hutch’s funding rate for research grant applications to the NIH has consistently exceeded the national average, as shown by the following table:

National Institutes of Health Fred Hutch

Federal Applications Applications Applications Applications Fiscal Year Aw arded Review ed Success % Aw arded Review ed Success % 2010 9,455 45,983 20.56% 76 236 32.20% 2011 8,765 49,592 17.67% 61 247 24.70% 2012 9,032 51,313 17.60% 55 220 25.00% 2013 8,310 49,581 16.76% 59 240 24.58% 2014 9,241 51,073 18.09% 61 237 25.74% 2015 9,540 52,190 18.28% 65 226 28.76%

54,343 299,732 18.13% 377 1,406 26.81%

Source: Information Services Branch, Division of Research Grants, NIH; based on numbers of applications submitted.

Funding from the NIH

Once NIH grants are awarded, NIH funding is the most stable and reliable source of funding for Fred Hutch’s research activities. Grants from NIH typically are made for three to five year periods and cover the total cost of research, direct costs and indirect costs.

While there has been some periodic variability in the amount the NIH has available to award, most years the annual budget has increased showing the long-term commitment the federal government has to medical research funding. There can be no guarantees that the federal government will maintain this commitment in the future. Fred Hutch has been able to grow NIH funding over the past 15 years as shown in the following table:

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Indirect Cost Reimbursement

Most grant awards include not only funding of direct expenses for the research project but also funding for overhead and other indirect costs. For federal grants Fred Hutch’s indirect cost recovery rate is approximately 75%, meaning that for every dollar of direct research funding Fred Hutch is awarded an additional 75 cents to reimburse its overhead and similar support costs. Unlike federal grant awards, awards from private foundations often pay very little for indirect costs, often 30% or less. Thus, Fred Hutch and its’ researchers value and focus on securing federal grants to maximize overall grant revenue. Because federal funds cannot be used to make up the difference between the indirect costs paid by a private foundation and Fred Hutch’s federal indirect cost recovery rate, Fred Hutch must make up this recovery shortfall from donations, investment income, royalty income, or other Fred Hutch discretionary funds. See “FINANCIAL INFORMATION - Research and Discretionary Funding - Philanthropic Contributions”, “FINANCIAL INFORMATION – Research and Discretionary Funding - Investment Income” and “FINANCIAL INFORMATION - Research and Discretionary Funding - Royalty Income.”

Other Research Grants and Contracts

In addition to federal funding for research activities, Fred Hutch receives funding through research grants and contracts awarded by commercial entities, the state of Washington and private organizations and foundations, including, the American Cancer Society, the Leukemia Society of America and the Bill and Melinda Gates Foundation. The annual revenues derived by Fred Hutch from such non-federal grants and contracts constituted about 14% and 15% in fiscal years 2015 and 2016, respectively, of Fred Hutch’s total research grant and contract revenue.

Philanthropic Contributions

From its inception, Fred Hutch has benefited from strong philanthropic support. Each year, funding from individual and institutional donors helps Fred Hutch recruit highly talented scientists, provide world-class laboratory space, equipment and support staff, pursue cutting-edge, early stage research projects. In addition, donations allow Fred Hutch to leverage significant additional investment from private foundation grants. A sustained decline in contributions could negatively impact Fred Hutch’s ability to fund these important functions which require Fred Hutch discretionary funds.

Fred Hutch’s philanthropic efforts are carried out through its Development Office, which currently includes a full-time professional staff of 67. Private contributions constituted 10% and 8% of Fred Hutch’s total revenues, in fiscal years 2015 and 2016, respectively. Fundraising costs have represented 18% and 23% of revenues generated from fundraising activities (including certain revenues from private foundations which are reported as research grant and contract revenues) during fiscal years 2015 and 2016, respectively. Fred Hutch is registered in Washington to solicit donations under the Washington Charitable Funds Solicitation Act and in all other states where it conducts fundraising activities that require similar registrations.

Intellectual Property Commercialization Income

Fred Hutch generates intellectual property commercialization income from licensing agreements with companies using Fred Hutch technologies for the commercial development of products. Fred Hutch royalty income constituted about 1% and 12% of its total revenues in fiscal years 2015 and 2016, respectively. The majority of this revenue came from a licensing contract with Juno. See “JUNO THERAPEUTICS”.

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Inpatient Service Fees

When SCCA was formed, Fred Hutch entered into agreements with UW and Seattle Children’s to provide certain inpatient services for adult patients to UWMC and SCCA and for pediatric patients to Seattle Children’s. These services relate to research and development support, data collection and analysis and license rights to use Fred Hutch’s name in connection with the inpatient cancer service programs. The table below shows the inpatient service fees received by Fred Hutch from each entity (in thousands):

Fiscal Year Ended Fiscal Year Ended Six Months Ended June 30, 2015 June 30, 2016 December 31, 2016 ($ in 000’s) ($ in 000’s) ($ in 000’s) UW Medicine $10,415 $12,351 $ 7,187 SCCA 5,208 6,659 3,613 Seattle Children’s 642 484 485 Total $16,265 $19,404 $11,285 % of Total Revenue 4% 3% 4%

SCCA Joint Venture Income

The SCCA is a not for profit corporation jointly owned and operated by UW/UW Medicine, Seattle Children’s and Fred Hutch and members share equally in capital contributions and in the results of operations. The SCCA income is reflected in the investment income and realized gains and losses on the Summary Statements of Activities above and represents Fred Hutch’s one-third share of the SCCA’s increase in net assets.

Investment Income

Fred Hutch’s investment income comes from dividends on equity securities, interest income on fixed income securities, realized gains and losses on investments and the recording of the one-third share of SCCA net income or loss under the equity accounting method. During fiscal years 2015 and 2016, Fred Hutch generated realized gains from sales of shares of Juno stock after the end of the lock-up period.

Other Income

Fred Hutch’s income from non-research sources such as sales of services to SCCA, sales of shared resources to external organizations and other incidental services and activities (e.g., program income on grants and contracts, parking revenue, and rental income) constituted about 8% and 7% of Fred Hutch’s total revenues in fiscal years 2015 and 2016, respectively.

Management’s Discussion of Operations and Financial Performance

General. Since opening its doors in 1975, Fred Hutch has earned a reputation for high quality scientific research patient care programs and facilities. Since 1990, Fred Hutch successfully implemented six construction projects by acquiring the land for the Day Campus and constructing, equipping and placing in service four state-of- the-art laboratory research facilities, two office buildings and, in conjunction with SCCA, an ambulatory care facility. See “OTHER INFORMATION – Facilities.”

Overall, cost-containment efforts, improved contribution revenue, improved investment returns and continued success despite challenges in grant funding, have all helped to strengthen Fred Hutch’s financial and cash flow positions.

Juno common stock represents a material portion of Fred Hutch’s assets. See “JUNO THERAPEUTICS.” Juno common stock owned by Fred Hutch had a fair market value of $139,774,000 as of June 30, 2016, and $68,542,000 as of December 31, 2016, representing 14.7% and 7.7%, respectively, of Fred Hutch’s total assets at

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those dates. In December 2014, Juno completed its initial public offering and Fred Hutch’s equity position in this company had an openly quoted market price to measure for fair value. Juno has been a volatile stock, and fluctuations in the market value of Juno stock can have a significant effect on Fred Hutch’s financial results. Realized gains and losses from the sale of Juno stock are recorded as revenue in the period the stock is sold and affect the change in net assets from operations. Unrealized gains and losses relating to fluctuations in the market price of Juno stock are recorded as a change in net assets.

Comparison of Fiscal Year 2016 to Fiscal Year 2015. In fiscal year 2016, Fred Hutch generated a $130.9 million increase in net assets from operations compared to a $52.0 million increase in fiscal year 2015. This increase was primarily attributable to intellectual property commercialization income generated in fiscal year 2016 whereby Fred Hutch participated in the increase in stock price of Juno. Realized gains on sales of Juno stock were higher in fiscal year 2016 compared to fiscal year 2015. The operating margin percentage in fiscal year 2016 was 21.3% compared to an operating margin percentage of 10.7% in fiscal year 2015.

Revenue from research grants and contracts increased 7.6% in fiscal year 2016 ($346.0 million) compared to fiscal year 2015 ($321.5 million) primarily due to the effects of sequestration from the Budget Control Act of 2011. Revenue from federal grants and contracts increased from $276.6 million in fiscal year 2015 to $294.1 million in fiscal year 2016, while revenue from other research grants and contracts increased from at $44.9 million in fiscal year 2015 to $51.5 million in fiscal year 2016.

Fred Hutch recorded an increase in net assets from financing activities in fiscal year 2015 of $208.2 million while recording a decrease of $139.9 million in fiscal year 2014. Fred Hutch recorded an increase in change in net unrealized fair value of investments of $156.9 million in fiscal year 2015 primarily due to Juno Therapeutics initial public offering and a rise in the stock price. In fiscal year 2016, Fred Hutch recorded a decrease in change in net unrealized fair value of investments of $119.0 million as Juno shares that were sold generated realized gains and a decline in the stock price of Juno between fiscal years. GAAP requires that Fred Hutch record the current fair value of its investments in swap instruments. Decreasing interest rates during 2016 resulted in Fred Hutch recording decreases in its net assets related to the change in fair value of swap instruments of $4.9 million.

Overall, total net assets increased in fiscal year 2015 while decreasing in fiscal year 2016. In fiscal year 2015, total net assets increased by $208.2 million or 42.6% of total revenues and other support while in fiscal year 2016, total net assets decreased by $9.0 million or 1.5% of total revenues and other support.

Six Months Ended December 2015 to Six Months Ended December 2016. Research grants and contracts increased by 8.3% due primarily to increases in the success rate for grant awards, increases in the number of faculty generating revenue and increases in non-Federal contract activity. Charitable contributions decreased by 13.1% due to a $10 million contribution to support Fred Hutch’s immunotherapy program received in 2015. Investment income and realized gains and losses decreased by 84.8% because Fred Hutch recognized gains as it sold Juno stock in the six months ended December 2015. Intellectual property commercialization income decreased by 97.9% due to revenue recognized from a success payment on Juno stock in the six months ended December 2015 not recurring in the six months ended December 2016. Total expenses increased by 8.3% consistent with the increase in research grant and contract revenues as almost all functional expenses increased except rent, utilities and maintenance, and interest and amortization.

As a result of a decline in the market value of Juno stock and sales of Juno stock that generated realized gains, Fred Hutch recorded a change in net unrealized gains and losses in fair value of investments of $(105.1) million for the six months ending December 2015 compared with $(68.7) million for the six months ending December 2016. The fair value of Fred Hutch’s investment in swap instruments decreased by $0.6 million for the six month period ending December 2015 compared to an increase of $8.9 million for the six month period ending December 2016 as interest rates have increased.

Debt Service Coverage

The following table presents certain information relating to Fred Hutch’s actual debt service coverage for fiscal years 2015 and 2016, and pro forma maximum annual debt service coverage upon the issuance of the Series 2017 Bonds and the application of the proceeds thereof in accordance with the plan of finance described in the Official

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Statement under the heading “PLAN OF FINANCE.” The debt service coverage ratios for fiscal years 2015 and 2016 were calculated in accordance with requirements of the Master Indenture. The calculation of the pro forma maximum annual debt service requirement amount performed in connection with the pro forma maximum annual debt service coverage ratio calculation was calculated in accordance with the Master Indenture.

Fiscal Years Ended June 30, (In Thousands) 2015 2016 Net Income Available for Debt Service: Adjusted Gross Revenues: Research grants and contracts $320,398 $345,134 Plus: Other operating revenues 114,639 221,940 Plus: Non-operating revenues 0 0 Plus: Adjusted contributions 30,865 34,435 Less: Operating and non-operating expenses (432,402) (482,149) Total Adjusted Gross Revenues $ 33,500 $119,360 Plus: Interest expense 17,937 16,771 Plus: Amortization of expenses 233 (414) Plus: Depreciation expense 23,295 23,940 Total Net Income Available for Debt Service (A) $ 74,965 $159,657 Debt Service: Principal Payments $ 5,100 $ 5,635 Interest 17,937 16,771 Total Debt Service (B) $ 23,037 $ 22,406 Debt Service Coverage (A)/(B) 3.25 7.13 Pro Forma Maximum Annual Debt Service Requirement (C) $24,063* Pro Forma Maximum Annual Debt Service Coverage Ratio (A)/(C) 6.63*

* Preliminary subject to change. Debt service as calculated under the Master Indenture includes any payments under interest rate swap agreements. See “– Interest Rate Swap Agreements” below and APPENDIX D – “SUMMARY OF CERTAIN PROVISION OF THE MASTER INDENTURE AND DEED OF TRUST.”

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Growth of Balance Sheet Metrics

Historical and Pro Forma Liquidity Schedule - Days Cash on Hand

Fred Hutch’s liquidity as shown by the days cash on hand decreased from fiscal year 2015 to 2016 as the market value of unrestricted cash and investments declined due to stock price decreases in Juno, which is partially offset by positive operating performance.

As of As of As of June 30, 2015 June 30, 2016 December 31, 2016

Unrestricted Cash $ 43,159 $ 14,281 $ 45,052 Unrestricted Investments 255,481 251,733 219,526 Total Unrestricted Cash and Investments $298,640 $266,014 $264,578

Total Operating Expenses 436,461 484,586 493,574 Less: Depreciation and Amortization (23,977) (24,367) (24,672) Adjusted Total Operating Expenses 412,484 460,219 468,902

Average Daily Adjusted Total Operating 1,130 1,261 1,285 Expenses

Days Cash on Hand 264 211 206

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Overview of Existing Debt and Historical Capitalization

The following table summarizes the characteristics of Fred Hutch’s existing debt outstanding as of December 31, 2016.

Principal

Outstanding as of Letter of Credit Original Final Bank Term December 31, Provider / Principal Maturity Rate Mode Expiration 2016 Lender Fixed Rates Series $114,920,000 $ 13,305,000 2020 Ranging Between N/A N/A 2009A(1) 4.75% - 5.00% JP Morgan November Series $ 30,000,000 $ 24,287,000 2032 1.16% + (74% * 1 2010(2) Mo LIBOR) Chase 2018 Fixed Rates Series $ 84,150,000 $ 78,555,000 2035 Ranging Between N/A N/A 2011A 3.00% - 6.00% JP Morgan Series $ 57,685,000 $ 57,685,000 2041 1.21% + (74% * 1 August 2017 2012A(2) Mo LIBOR) Chase September Series $ 84,800,000 $ 84,800,000 2041 1.18% + (100% * Bank of America 2012B(2) 1 Mo LIBOR) 2021 Series $ 4,435,000 $ 4,022,000 2039 0.70% + (71% * 1 U.S. Bank July 2021 2014(2) Mo LIBOR) Fixed Rates Series $ 78,510,000 $ 78,440,000 2033 Ranging Between N/A N/A 2015 3.00% - 5.00% December Series $ 5,475,000 $ 5,273,480 2040 0.65% + (69% * 1 U.S. Bank 2015B(2) Mo LIBOR) 2022

Total $459,975,000 $346,367,480 ______(1) The Series 2009A Bonds were defeased by Fred Hutch on February 23, 2017, with a combination of Fred Hutch cash and existing Series 2009 bond proceeds. (2) Expected to be refunded with proceeds of the Series 2017 Bonds. See “PLAN OF FINANCE” in forepart of the Official Statement.

The Series 2012B Bonds are subject to mandatory tender on September 1, 2021 and every five years thereafter. Fred Hutch may request in writing at least one year in advance of the call date that the bondholder waive the mandatory tender right for the upcoming mandatory tender date. The holder has agreed to use its best efforts to respond to the waiver request within three months of receipt of such request. If the holder fails to grant the waiver request, then the lender shall be deemed to have exercised its right to require purchase of the Series 2012 Bonds by Fred Hutch on the mandatory tender date.

The Series 2014 Note is subject to mandatory prepayment on July 1, 2021, unless the Lender waives prepayment and the parties satisfy the other conditions set forth in the documents relating to the Series 2014 Note.

The Series 2015B Note is subject to mandatory prepayment on December 1, 2022, unless the Lender waives prepayment and the parties satisfy the other conditions set forth in the documents relating to the Series 2015B Note.

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The following calculation of Fred Hutch’s capitalization shows the changes in the long-term debt to capitalization ratio resulting from operating performance in fiscal years 2015 and 2016 and the impact of the fair value of Fred Hutch’s investment in Juno. Total indebtedness includes unamortized bond discount.

As of As of As of June 30, 2015 June 30, 2016 December 31, 2016

Total Indebtedness $351,295 $356,546 $350,118 Unrestricted Net Assets 364,402 344,335 285,269 Total Capitalization 715,697 700,881 635,387

Long-Term Debt to Capitalization Ratio 49.1% 50.9% 55.1%

Expenses

The operating expenses of Fred Hutch result from two key areas: the research divisions and the administrative functions. Fred Hutch’s grant accounting system monitors research expenses closely to ensure that expenditures will not exceed the amount of grant awards received. Excluding fixed facilities expenses for depreciation, interest and amortization, and rent, utilities and maintenance, approximately 89% of Fred Hutch’s expenses are variable. While continuously working to control its overall cost base, Fred Hutch focuses primarily on Fred Hutch funded research support and administrative expenses as a method of enhancing profitability and improving cash flow. Fred Hutch has targeted staffing efficiencies, improved information technology and reduced-cost purchased services in its cost containment efforts.

Interest Rate Swap Agreements

Fred Hutch has entered into two hedging transactions for the purpose of fixing the interest rate to take advantage of the favorable long-term interest rates that were available when the hedging transactions were entered into. These hedging transactions were entered into between Fred Hutch and Barclays Bank PLC. The notional amount, timing of principal payments and timing of interest payments for each of the swaps are similar to the terms of the bonds with which they were originally issued, specifically the Series 2001A Bonds and the Series 2009B Bonds, which have since been refunded. In exchange for paying Barclays Bank PLC a fixed rate of interest of 5.19%, Fred Hutch receives a variable rate payment based on the Securities Industry and Financial Markets Association rate plus 0.20% on the interest rate swap associated originally with the Series 2009B Bonds. For the interest rate swap associated with the Series 2001A Bonds, Barclays Bank PLC pays a variable rate payment based upon the three-month London Interbank Offer Rate (“LIBOR”). The variable rate paid is the three-month LIBOR rate times 67% plus 0.64% in exchange for Fred Hutch paying a fixed rate of interest of 4.97%. (See footnote disclosure for interest rate swap agreements contained in APPENDIX B – AUDITED FINANCIAL STATEMENTS OF FRED HUTCH.)

INVESTMENT PERFORMANCE AND POLICY

The fair value of Fred Hutch’s board-designated investments was $151 million and $197 million as of June 30, 2015 and June 30, 2016, respectively. Board-designated investments do not include Fred Hutch’s equity investment in Juno. See “JUNO THERAPEUTICS.” Fred Hutch utilizes both professional fund managers and mutual fund investments. Investment decisions are guided by a formal, written investment policy (see below). Fred Hutch’s investment income (excluding the change in net unrealized gains and losses in fair value of investments) from its Board-designated investments, together with Trustee-held funds and current investments (including working capital cash and short-term investments), constituted 3% and 7% of Fred Hutch’s total revenues in fiscal years 2013 and 2014, respectively. Fred Hutch’s share of SCCA income or loss is accounted for under the equity method and is included in investment income.

The primary objective of Fred Hutch’s investment policy is to provide a rate of total return, including all gains and losses, realized and unrealized, which exceeds the rate of inflation (as represented by the Consumer Price Index-All Urban consumers) plus 5% over the long term. The latter period is defined as five years and more.

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Consistent returns are emphasized over spectacular (and often erratic) individual year results, although the possibility of losses in a given year cannot be ignored, given that equity investments make up a substantial part of this portfolio.

The long-term asset allocation targets for the investments are developed by the Finance Committee and approved by the Executive Committee to facilitate the achievement of the long-term investment objective within acceptable risk parameters measured on a prospective basis. Since the allocation of investments between asset classes may be the single most important determinant of the investment performance, asset allocation targets are reviewed at least annually by the Finance Committee and more frequently if necessary.

The asset allocation target is 28% for domestic equities, 19% for developed international equities and 6% for emerging market equities for a total of 53% to marketable equity securities. Additional targets are 15% in fixed income and cash, 20% in marketable alternative investments, 2% in private equity/venture capital and 10% in real assets. The actual amount of fund managed investments and actual allocations by asset class are shown below: Long-Term Investment Allocation (in thousands) As of As of As of June 30, 2015 June 30, 2016 December 31, 2016

U.S. Equities $ 30,210 $ 48,227 $ 46,231 U.S. Equities (as a percentage) 20.0% 24.5% 24.3% Global Ex. U.S. Equity $ 23,655 $ 32,681 $ 34,064 Global Ex. U.S. Equity (as a percentage) 15.6% 16.6% 17.9% Emerging Markets $ 9,246 $ 10,820 $ 7,831 Emerging Markets (as a percentage) 6.1% 5.5% 4.1% Global Equity $ 9,412 $ 17,387 $ 18,026 Global Equity (as a percentage) 6.2% 8.8% 9.5% Fixed Income & Cash $ 25,930 $ 21,509 $ 20,814 Fixed Income & Cash (as a percentage) 17.1% 10.9% 11.0% Marketable Alternatives $ 34,365 $ 47,083 $ 43,135 Marketable Alternatives (as a percentage) 22.7% 23.9% 22.7% Private Equity/Venture Capital $ 3,361 $ 1,348 $ 1,107 Private Equity/Venture Capital (as a percentage) 2.2% 0.7% 0.6% Real Assets $ 15,025 $ 18,123 $ 18,760 Real Assets (as a percentage) 9.9% 9.2% 9.9%

Total Long-Term Investments $151,204 $197,178 $189,968 100.0% 100.0% 100.0%

OTHER INFORMATION

Employees

As of December 31, 2016, Fred Hutch had 2,745 employees. Of this number 40 technician employees are covered by a collective bargaining agreement with the International Union of Operating Engineers expiring June 30, 2019. Fred Hutch has a defined contribution retirement plan for its employees, and employees are generally eligible after one year of service.

Insurance

Fred Hutch carries policies covering property damage and loss, general and professional liability, directors’ and officers’ liability and other insurance of a type, and in amounts, which Fred Hutch believes to be commercially

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reasonable and consistent with the types and amounts of insurance carried by other institutions of similar size that are engaged in similar activities.

Memberships

Fred Hutch is a member of the Association of American Cancer Institutes, the Association of Independent Research Institutes, the Association of Washington Business, the Biotechnology Industry Organization, the International Union Against Cancer, the Washington Association of Biomedical Research, the Washington State Biotechnology and Biomedical Association, the Washington State Medical Society, and the Washington State Hospital Association, as well as other research, scientific and community-based organizations. Several of Fred Hutch’s faculty members are elected members of the National Academy of Sciences.

Facilities

Fred Hutch’s operations are currently conducted in owned and leased space. The Robert W. Day Campus, which is owned by Fred Hutch, is a 15-acre campus located on the southeast corner of Lake Union in Seattle, Washington. Fred Hutch’s leased space is located in the 1616 Eastlake Building (the “1616 Eastlake Campus”), a laboratory and office building located approximately six blocks north of the Day Campus. In December 2010, Fred Hutch purchased a new building located at 1100 Eastlake Ave. E. adjacent to the Day Campus. The 177,000 gross square-foot building provides research and infrastructure support and allows for the expansion of solid tumor, immunotherapy and infectious disease research. In September 2012, the research and support activities of the VIDD relocated from the 1616 Eastlake Campus to the Day Campus enabling all of Fred Hutch’s research divisions to be located on the Day Campus.

The map below identifies all facilities owned or leased by Fred Hutch on the Day Campus, including the Mortgaged Property:

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Mortgaged Property

By purchase of the Series 2017 Bonds, the Beneficial Owners of the Series 2017 Bonds are deemed to have consented to the amendments of the Current Deed of Trust contained in the Second Amended Deed of Trust. Further, by purchase of the Series 2017 Bonds, Beneficial Owners of the Series 2017 Bonds are deemed to have consented to the full reconveyance of the Deed of Trust, and the termination of the related Hazardous Substances Agreement, with such reconveyance and termination to occur upon the Master Trustee’s receipt of the consent of the owners of each then-Outstanding Master Note expressed to have the benefit of the pledge of Collateral. The Beneficial Owners are also deemed to have acknowledged and consented to the termination of certain Security Documents no longer in effect. See “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2017 BONDS - The Master Indenture and Series 2017 Master Note.”

Identification of Mortgaged Property

The Mortgaged Property subject to the lien of the Deed of Trust includes the Weintraub, Hutchinson, Thomas, Fairview and Arnold buildings. See also, discussion of the terms of the Deed of Trust set forth in APPENDIX D to the Official Statement.

Use and Transfer Restrictions

Certain real and personal property acquired by Fred Hutch through direct cost grant support provided by the federal government, including portions of the Weintraub, Hutchinson, Thomas and Arnold buildings, may be subject to federal use and transfer restrictions imposed by conditions of such grants and/or by applicable law. For example, current regulations applicable to direct cost grants from agencies of the U.S. Department of Health and Human Services, including NIH, (which have been, and are currently, the principal source of grant support for Fred Hutch) require that equipment and other personal property acquired with direct grant support be used for the originally- authorized purpose, for so long as needed for that purpose. When no longer so needed, the grant recipient may request approval of the granting agency to use the property for projects supported by other federal grants or activities that have purposes consistent with those under which the original grant was made. Otherwise, disposition instructions of the granting agency are required to be followed. These instructions provide that the grant recipient must do one of the following: (1) sell the property and pay the federal government a share of the sale proceeds proportionate to the amount of direct cost grant funds used to acquire the property (the “Federal Share”); (2) retain the property and pay to the granting agency the Federal Share, based on the fair market value of the property; or (3) transfer the property either to the federal government or another eligible user, in which case the grant recipient will be paid an amount equal to the value of the property, less the Federal Share. The Weintraub, Hutchinson and Thomas buildings are also subject to significant federal use restrictions and interests as a result of direct grants received by Fred Hutch for construction of facilities formerly owned by Fred Hutch which have been transferred to such property. These federal use restrictions and interests could adversely affect Fred Hutch’s ability to grant a lien against the Mortgaged Property, or the ability of the Master Trustee to realize upon the lien of the Deed of Trust.

Under a Consent, Release and Subordination Agreement (“Subordination Agreement”), the federal government, acting through NCI, has agreed (1) to subordinate certain federal interests in the Mortgaged Property to the lien of the Deed of Trust, (2) to release certain claims that may otherwise arise by law against a transferee of the Mortgaged Property in the case of a foreclosure, and (3) to subordinate certain federal claims against Fred Hutch to certain Master Trust Indebtedness of Fred Hutch including without limitation, the Series 2017 Master Note, which in turn secures the Series 2017 Bonds. However, notwithstanding the terms of the Subordination Agreement, Fred Hutch is and will remain subject to federal use restrictions, interests and claims relating to equipment and personal property acquired with federal support.

A-38

APPENDIX B

AUDITED FINANCIAL STATEMENTS OF FRED HUTCH

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[THIS PAGE INTENTIONALLY LEFT BLANK] FRED HUTCHINSON CANCER RESEARCH CENTER Consolidated Financial Statements June 30, 2016 and 2015 (With Independent Auditors’ Report Thereon)

FRED HUTCHINSON CANCER RESEARCH CENTER

Table of Contents

Page(s)

Independent Auditors’ Report 1–2

Consolidated Financial Statements:

Statements of Financial Position 3

Statements of Activities 4–5

Statements of Cash Flows 6

Statements of Functional Expenses 7

Notes to Consolidated Financial Statements 8–31

KPMG LLP Suite 2900 1918 Eighth Avenue Seattle, WA 98101

Independent Auditors’ Report

The Board of Trustees Fred Hutchinson Cancer Research Center:

Report on the Financial Statements We have audited the accompanying consolidated financial statements of Fred Hutchinson Research Cancer Research Center (the Center), which comprise the consolidated statement of financial position as of June 30, 2016 and 2015, and the related consolidated statements of activities and cash flows for the year then ended, and the related notes to the consolidated financial statements.

Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with U.S. generally accepted accounting principles; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

KPMG LLP is a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. Opinion In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Fred Hutchinson Research Cancer Research Center as of June 30, 2016 and 2015, and the changes in its net assets and its cash flows for the year then ended in accordance with U.S. generally accepted accounting principles.

October 28, 2016

2 FRED HUTCHINSON CANCER RESEARCH CENTER Consolidated Statements of Financial Position June 30, 2016 and 2015 (In thousands)

Assets 2016 2015 Assets: Cash and cash equivalents $ 14,281 43,159 Restricted cash 16,420 19,340 Grants and contracts receivable, net 25,470 18,905 Notes and pledges receivable, net 8,752 4,393 Other receivables, net 8,585 13,899 Investments 350,831 340,427 Land, buildings, and equipment, net of accumulated depreciation of $348,165 and $326,983, respectively 378,094 379,129 Beneficial interest in perpetual trusts 27,228 27,677 Beneficial interest in assets of SCCA 121,753 102,497 Other assets 1,886 1,806 Total assets $ 953,300 951,232

Liabilities and Net Assets Liabilities: Accounts payable and accrued liabilities $ 16,645 11,644 Accrued payroll and related costs 20,871 17,696 Deferred revenue 44,722 51,949 Long-term debt 356,546 351,295 Deferred credit on cash flow hedges 33,558 28,684 Total liabilities 472,342 461,268 Net assets: Unrestricted 344,335 364,402 Temporarily restricted 62,979 65,683 Permanently restricted 73,644 59,879 Total net assets 480,958 489,964 Total liabilities and net assets $ 953,300 951,232

See accompanying notes to consolidated financial statements.

3 FRED HUTCHINSON CANCER RESEARCH CENTER Consolidated Statement of Activities Year ended June 30, 2016 (In thousands)

2016 Temporarily Permanently Unrestricted restricted restricted Total Revenues and other support: Research grants and contracts $ 346,036 — — 346,036 Contributions 20,700 13,136 13,517 47,353 Investment income and realized gains and losses 87,299 (1,481) 737 86,555 IP commercialization income 72,786 — — 72,786 Clinical service fee revenue 19,404 — — 19,404 Other income 43,338 — — 43,338 Net assets released from restrictions 13,882 (13,882) — — Total revenues 603,445 (2,227) 14,254 615,472 Expenses: Program services research 367,389 — — 367,389 Management and general 105,818 — — 105,818 Fundraising 11,379 — — 11,379 Total expenses 484,586 — — 484,586 Change in net assets from operations 118,859 (2,227) 14,254 130,886 Other changes in net assets: Change in net unrealized fair value of investments (118,484) (477) (39) (119,000) Change in net foreign currency translation (497) — — (497) Loss on defeasance of debt (14,651) — — (14,651) Change in value of split-interest agreements (420) — (450) (870) Change in net unrealized fair value of swap instruments (4,874) — — (4,874) Total other changes in net assets (138,926) (477) (489) (139,892) Total increase/(decrease) in net assets (20,067) (2,704) 13,765 (9,006) Net assets balance at beginning of year 364,402 65,683 59,879 489,964 Net assets balance at end of year $ 344,335 62,979 73,644 480,958

See accompanying notes to consolidated financial statements.

4 FRED HUTCHINSON CANCER RESEARCH CENTER Consolidated Statement of Activities Year ended June 30, 2015 (In thousands)

2015 Temporarily Permanently Unrestricted restricted restricted Total Revenues and other support: Research grants and contracts $ 321,476 — — 321,476 Contributions 21,836 26,500 2,662 50,998 Investment income and realized gains and losses 53,692 1,006 33 54,731 IP commercialization income 6,887 — — 6,887 Clinical service fee revenue 16,265 — — 16,265 Other income 38,150 — — 38,150 Net assets released from restrictions 10,655 (10,655) — — Total revenues 468,961 16,851 2,695 488,507 Expenses: Program services research 337,789 — — 337,789 Management and general 88,372 — — 88,372 Fundraising 10,300 — — 10,300 Total expenses 436,461 — — 436,461 Change in net assets from operations 32,500 16,851 2,695 52,046 Other changes in net assets: Change in net unrealized fair value of investments 158,629 (1,775) 14 156,868 Change in net foreign currency translation 276 — — 276 Change in value of split-interest agreements (120) — (966) (1,086) Change in net unrealized fair value of swap instruments 102 — — 102 Total other changes in net assets 158,887 (1,775) (952) 156,160 Total increase in net assets 191,387 15,076 1,743 208,206 Net assets balance at beginning of year 173,015 50,607 58,136 281,758 Net assets balance at end of year $ 364,402 65,683 59,879 489,964

See accompanying notes to consolidated financial statements.

5 FRED HUTCHINSON CANCER RESEARCH CENTER Consolidated Statements of Cash Flows Years ended June 30, 2016 and 2015 (In thousands)

2016 2015 Cash flows from operating activities: Change in net assets $ (9,006) 208,206 Adjustments to reconcile change in net assets to net cash provided by (used in) operating activities: Depreciation and amortization 24,367 23,977 Noncash deferred revenue (1,106) (815) Equity in earnings of SCCA (19,256) (13,530) Change in net unrealized losses (gains) in fair value of investments 46,336 (156,868) Change in value of split-interest agreements 870 1,086 Change in fair value of swap instruments 4,874 (102) Net realized gains on investments (62,354) (39,075) Noncash contributions (3,243) (12,935) Noncash IP commercialization income (71,742) — Loss on defeasance of debt 14,651 — Permanently restricted contributions (13,517) (2,662) Changes in assets and liabilities: Grants and contracts receivable (6,565) 2,689 Notes and pledges receivable (4,359) 401 Other receivables 5,387 (1,629) Prepaid expenses and deposits (61) (771) Accounts payable and accrued liabilities 4,826 (746) Accrued payroll and related costs 3,175 1,344 Deferred grant and contract revenue (6,766) 11,395 Net cash (used in) provided by operating activities (93,489) 19,965 Cash flows from investing activities: Additions to land, buildings, equipment, and rental property (23,686) (30,532) Purchase of investments (211,581) (85,549) Sale of investments 288,516 113,540 Change in restricted cash 2,920 (9,793) Net cash provided by (used in) investing activities 56,169 (12,334) Cash flows from financing activities: Proceeds from new debt 92,160 4,435 Additions to deferred financing costs (1,016) (349) Repayment of debt (100,049) (9,609) Contributions restricted for long-term investment 16,760 15,597 Net cash provided by financing activities 7,855 10,074 Change in foreign currency translation 587 531 Net (decrease) increase in cash and cash equivalents (28,878) 18,236 Cash and cash equivalents at beginning of year 43,159 24,923 Cash and cash equivalents at end of year $ 14,281 43,159

Supplemental disclosure of cash flow information: Interest paid $ 17,364 17,962 Capital expenditures in accounts payable 654 513

See accompanying notes to consolidated financial statements.

6 FRED HUTCHINSON CANCER RESEARCH CENTER Consolidated Statements of Functional Expenses Years ended June 30, 2016 and 2015 (In thousands)

Program services Management research and general Fundraising Total 2016: Salaries and wages $ 162,811 44,466 5,124 212,401 Employee benefits 41,247 10,844 1,279 53,370 Subawards 67,626 81 — 67,707 Purchased services 15,855 21,111 896 37,862 Supplies 25,691 3,729 128 29,548 Other 16,261 8,450 3,720 28,431 Rent, utilities, and maintenance 3,568 10,254 226 14,048 Interest and amortization 14,732 1,625 — 16,357 Depreciation 19,598 5,258 6 24,862 Total June 30, $ 2016 367,389 105,818 11,379 484,586

2015: Salaries and wages $ 150,479 38,887 4,270 193,636 Employee benefits 37,614 9,247 1,041 47,902 Subawards 61,645 53 — 61,698 Purchased services 10,791 14,882 772 26,445 Supplies 23,259 2,724 66 26,049 Other 14,836 6,989 3,880 25,705 Rent, utilities, and maintenance 3,794 9,046 271 13,111 Interest and amortization 16,353 1,817 — 18,170 Depreciation 19,018 4,727 — 23,745 Total June 30, $ 2015 337,789 88,372 10,300 436,461

See accompanying notes to consolidated financial statements.

7 FRED HUTCHINSON CANCER RESEARCH CENTER Notes to Consolidated Financial Statements June 30, 2016 and 2015 (In thousands)

(1) Organization Fred Hutchinson Cancer Research Center (the Center), a Washington not-for-profit corporation, is organized and operated exclusively for charitable, scientific, and educational purposes, within the meaning of Section 501(c)(3) of the Internal Revenue Code of 1986, as amended, including without limitation (i) eliminating cancer as a cause of human suffering and death; (ii) conducting investigations into the nature and causes of cancer and related medical and public health problems; (iii) investigating methods of prevention and treatment of cancer and related diseases; (iv) conducting education in all phases of cancer research; (v) performing research in all aspects of biomedical science that have a relationship to cancer; (vi) disseminating knowledge acquired pursuant to the foregoing activities; and (vii) maintaining facilities for cancer and related biomedical research. The Center is designated by the National Cancer Institute as a comprehensive cancer research center.

Controlled Affiliates of the Center Hutchinson Centre Research Institute in Uganda Limited (HCRIU), is a Uganda not-for-profit corporation. It is organized and operated for the purpose of researching, detecting, treating and preventing infection-related cancers in Uganda and throughout the world. The Center is the sole member of HCRIU. The income and property of HCRIU is restricted to be used in meeting its organizational objectives. The net assets of HCRIU of $(3,542) and $(2,201) as of June 30, 2016 and 2015, respectively, are not considered pledged assets under debt covenants.

Hutchinson Centre Research Institute of South Africa (HCRISA) is a South Africa not-for-profit corporation. It is organized and operated for the purpose of promoting and conducting clinical, laboratory and other research aimed at the prevention, early detection, diagnosis, and treatment of HIV/AIDS, Tuberculosis and other infectious diseases and cancer in South Africa and throughout the world. The Center is the sole member of HCRISA. The income and property of HCRISA is restricted to be used in meeting its organizational objectives. The net assets of HCRISA of $1,023 and $943 as of June 30, 2016 and 2015, respectively, are not considered pledged assets under debt covenants.

Seattle Vaccine Research Fund (SVRF), a Washington State not-for-profit corporation, is exempt from federal taxes under Section 501(c)(3). It is operated for the purpose of providing anti retrovirals to eligible participants of HIV Trials Network. The net assets of SVRF of $444 and $443 as of June 30, 2016 and 2015, respectively, are not considered pledged assets under debt covenants.

(2) Summary of Significant Accounting Policies (a) Basis of Presentation The consolidated financial statements include the accounts of the Center and its controlled affiliates, collectively referred to as the Center. All significant intercompany balances and transactions between the Center and its controlled affiliates have been eliminated in consolidation.

8 (Continued) FRED HUTCHINSON CANCER RESEARCH CENTER Notes to Consolidated Financial Statements June 30, 2016 and 2015 (In thousands)

(b) Use of Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

(c) Cash and Cash Equivalents Included in cash and cash equivalents are cash equivalents of approximately $11,982 and $11,436 as of June 30, 2016 and 2015, respectively, which are invested in money market funds and highly liquid debt instruments with original maturities of three months or less.

The Center maintains cash and cash equivalents on deposit at financial institutions, which at times exceed the limits insured by the Federal Deposit Insurance Corporation. This exposes the Center to potential risk of loss in the event that the financial institution becomes insolvent.

(d) Restricted Cash Restricted cash includes trustee held funds and posted collateral funds. Trustee held funds are in U.S. government and agency obligations held for the purpose of debt service. Posted collateral funds are held to comply with the terms of swap agreements as further discussed in note 16.

(e) Investments Investments, including board-designated investments and other restricted investments, carried at fair value include cash and cash equivalents, equity securities, debt securities, and alternative investments.

(f) Land, Buildings, and Equipment Land, buildings, and equipment acquisitions are recorded at cost. Depreciation is provided over the estimated useful life of each class of depreciable asset and is computed using the straight-line method. Interest costs incurred on borrowed funds during the period of construction of capital assets are capitalized as a component of the cost of acquiring those assets. Improvements and replacements of land, buildings, and equipment are capitalized; maintenance and repairs costs are expensed. In accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 360, Property, Plant, and Equipment, long-lived assets, such as property, plant, and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the long-lived asset may not be recoverable. The Center receives reimbursement for a portion of its property, plant, and equipment through direct and indirect cost reimbursement primarily from the federal government in connection with federal grants.

9 (Continued) FRED HUTCHINSON CANCER RESEARCH CENTER Notes to Consolidated Financial Statements June 30, 2016 and 2015 (In thousands)

(g) Beneficial Interest in Assets of SCCA The Center accounts for its 33% ownership interest in Seattle Cancer Care Alliance (SCCA) using the equity method of accounting, as further discussed in note 13. (h) Research Grants and Contracts Revenue The Center receives grant and contract funds for services it performs. The sources of these funds are both federal and non-federal agencies. Approximately 85% of the Center's revenue is funded by the Federal Government. The Center expends these funds consistent with the terms of the grants and contracts agreements. Total grants and contracts revenue is $346,036 and $321,476 for the years ended June 30, 2016 and 2015, respectively. (i) Deferred Revenue and Grants and Contracts Receivable, net Deferred revenue represents grant and contract funds received for services to be performed by the Center, which have not yet been expended under terms of the grant and contract agreements and which do not meet the criteria for reporting as contributions. The Center recognizes these amounts as revenue as such funds are expended. The Center also includes certain construction grants from the federal government as deferred revenue, which are recognized as revenue at the same rate as depreciation expense. The balance in grants and contracts receivable, net, as reflected on the accompanying statement of financial position, represents expenditures made in accordance with the terms of provisions of the grants and contracts not yet reimbursed by cash. (j) Donor-Restricted Gifts Unconditional promises to give cash and other assets to the Center are reported at fair value at the date the promise is received. Conditional promises to give and intentions to give are reported at fair value at the date the gift is received or when the conditions are met. The gifts are reported as either temporarily or permanently restricted support if they are received with donor stipulations that limit the use of the donated assets or contain a time restriction. When a donor restriction expires, that is, when a stipulated time restriction ends or purpose restriction is accomplished, temporarily restricted net assets are reclassified as unrestricted net assets and reported in the statements of activity as net assets released from restrictions. Donor-restricted contributions whose restrictions are met within the same year as received are reported as unrestricted contributions in the accompanying financial statements. (k) Perpetual Trusts and Charitable Remainder Trusts The Center is the beneficiary of irrevocable perpetual trusts and charitable remainder trusts for which the Center is not the trustee. These funds held in trust by others represent resources neither in the possession nor under the control of the Center and are administered by third party trustees. When the Center is notified of the existence of an irrevocable perpetual trust and can reasonably value its interest, the Center recognizes its beneficial interest in the outside trust at fair value as a contribution. The contribution is classified as an increase in permanently restricted net assets based on restrictions placed by the donor. The changes in the fair value of the irrevocable perpetual trusts are reflected as investment changes restricted by donors, in permanently restricted net assets on the statements of activity.

10 (Continued) FRED HUTCHINSON CANCER RESEARCH CENTER Notes to Consolidated Financial Statements June 30, 2016 and 2015 (In thousands)

When the Center is notified of an irrevocable charitable remainder trust for which it is not the trustee, the Center recognizes its beneficial interest in the outside trust as a contribution at fair value, which is measured as the present value of the estimated expected future benefits to be received. The contribution is classified as an increase in temporarily restricted net assets based on restriction placed by the donor upon the Center’s beneficial interest in the assets. Periodic adjustments recorded to the beneficial interest to reflect changes in the fair value, life expectancy, and discount rate are recognized based on information from outside trustees. Any charitable remainder trusts for which the Center is not the trustee are reflected as a receivable from trusts and are included in other receivables in the accompanying consolidated statements of financial position. These amounts as of June 30, 2016 and 2015 were $1,018 and $1,406, respectively.

(l) Foreign Currency Translation and Transaction Gains and Losses The consolidated financial statements include foreign currency amounts attributable to foreign operations. The foreign currency amounts have been translated into U.S. dollars using year-end exchange rates for certain assets and liabilities, historical rates for net assets and average monthly rates for revenues and expenditures.

HCRISA’s general ledger is maintained in South Africa rand, and their financial statements are measured using the currency of the primary economic environment in which the entity operates. Unrealized gains or losses arising from fluctuations in the year-end exchange rates are recorded as net asset adjustments from foreign currency translation, and gains or losses resulting from actual foreign exchange transactions are recorded in revenues and expenses in the consolidated statements of activities. The foreign currency translation amounts to losses of $434 at June 30, 2016 and gains of $354 at June 30, 2015.

In accordance with the ASC Topic 230, Statement of Cash Flows, cash flows from HCRISA’s operations are calculated based on its local reporting currency and translated to U.S. dollars.

HCRIU’s general ledger is maintained in U.S. dollars, and its financial statements are measured using the currency of the primary economic environment in which the entity operates, which is U.S. dollars. Unrealized gains or losses arising from fluctuations in the year-end exchange rates, and gains or losses resulting from actual foreign exchange transactions are recorded in revenues and expense. The foreign currency translation losses amount to $63 and $78 at June 30, 2016 and 2015, respectively.

(m) Temporarily and Permanently Restricted Net Assets Temporarily restricted net assets are those that have uses that have been limited by donors to a specific time period or purpose. The Center’s temporarily restricted net assets are restricted to scientific research expenses and other program related expenses.

Permanently restricted net assets have been restricted by donors to be maintained by the Center in perpetuity. The Center’s permanently restricted net assets consist of various endowment funds and the Center’s interest in perpetual trusts. Income earned on permanently restricted funds is used for operations in accordance with the terms of each endowment fund and the Uniform Prudent Management of Institutional Funds Act (UPMIFA).

11 (Continued) FRED HUTCHINSON CANCER RESEARCH CENTER Notes to Consolidated Financial Statements June 30, 2016 and 2015 (In thousands)

(n) Statements of Activities The statements of activities describe the results of various financial events that are included in presenting the change in the Center’s net assets. Contributions received by the Center may be either unrestricted, temporarily restricted, or permanently restricted. Investment income and realized gains and losses may be restricted based on donor intent or unrestricted. Research grant and contract revenue generated by the Center and related expenses incurred are unrestricted. Changes in asset values resulting from “mark-to-market” adjustments to record unrealized gains and losses are shown as Other Changes in Net Assets. A total increase or decrease in net assets for each net asset grouping is shown to roll forward the beginning of the year balance to the end of the year balance.

(o) IP Commercialization Income The Center actively develops intellectual property (IP) to pursue a strategy of translating research discoveries into new products and services that generate revenue in the form of licensing agreements, partnerships, royalty streams and new businesses.

(p) Federal Income Taxes The Center has obtained a determination letter from the Internal Revenue Service that it is exempt from federal income taxes under Section 501(c)(3), except for unrelated business income.

(q) Recent Accounting Pronouncements In April 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2015-03, Simplifying the Presentation of Debt Issuance Costs. The guidance requires that debt issuance costs related to a recognized debt liability be reported on the balance sheet as a direct deduction from the carrying amount of that debt liability. The guidance is effective for fiscal years beginning after December 15, 2015, and is required to be applied retrospectively. Early adoption is permitted. We have adopted ASU 2015-03 and have reclassified $2,065 and $2,076 as of June 30, 2016 and 2015, respectively, of our debt issuance costs related to existing debt liabilities from assets to liabilities on the balance sheet.

In May 2015, the FASB issued ASU 2015-07, Disclosures for Investments in Certain Entities that Calculate Net Asset Value per Share (or Its Equivalent). ASU 2015-07 removes the requirements from U.S. GAAP to categorize within the fair value hierarchy all investments for which fair value is measured using the net asset value per share practical expedient. ASU 2015-07 is effective for the Center for annual periods in fiscal years beginning after December 15, 2016, and requires retrospective adoption. The Center will implement the provisions of ASU 2015-07 as of July 1, 2017, and does not expect it to have a material impact on its consolidated financial statements.

12 (Continued) FRED HUTCHINSON CANCER RESEARCH CENTER Notes to Consolidated Financial Statements June 30, 2016 and 2015 (In thousands)

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, which requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. An entity also should disclose sufficient quantitative and qualitative information to enable users of financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. ASU 2014-09 is effective for the Center for annual periods in fiscal years beginning after December 15, 2018 (as amended in August 2015 by ASU 2015-14, Deferral of the Effective Date). The Center will implement the provisions of ASU 2014-09 as of July 1, 2019, and has not yet determined the effect of the new standard on its current policies for revenue recognition.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which supersedes FASB ASC Topic 84, Leases, and makes other conforming amendments to US. GAAP. ASU 2016-02 requires, among other changes to the lease accounting guidance, lessees to recognize most leases on-balance sheet via a right of use asset and lease liability, and additional qualitative and quantitative disclosures. ASU 2016-02 is effective for the Center for annual periods in fiscal years beginning after December 15, 2019, and mandates a modified retrospective transition method. The Center will implement the provisions of ASU 2016-02 as of July 1, 2020, and does not expect it to have a material impact on its consolidated financial statements.

In August 2016, the FASB issued ASU 2016-14, Not-for-Profit Entities (Topic 958) Presentation of Financial Statements for Not-for-Profit Entities. ASU 2016-04 replaces the current presentation of three classes of net assets with two classes of net assets – net assets with donor restricted and net assets without donor restriction, along with additional qualitative and quantitative disclosures regarding liquidity, and additional reporting and disclosure changes. ASU 2016-14 is effective for the Center for annual periods in fiscal years beginning after December 15, 2017, and requires retrospective application. The Center will implement the provisions of ASU 2016-04 as of July 1, 2018, and has not yet determined the effect of the new standard on its consolidated financial statements.

(r) Reclassifications Certain reclassifications have been made to the prior year amounts in order to conform to the current year presentation.

(3) Due from Government Agencies The Center incurs facilities and administrative (F&A) costs to support its research activities. Research programs are charged for these costs through an F&A cost rate, which is applied to modified total direct research costs. Both direct and F&A costs are recovered by the Center from research programs supported by federal and other grant revenue.

The fixed federal F&A rate for grant and contract supported programs is determined by prospective negotiation with the Department of Health and Human Services (DHHS) based on an estimate of the costs that will be incurred during the period to which the rate applies. Any difference between the costs recovered through the fixed F&A cost rate and actual F&A costs incurred represents an estimated F&A settlement with the federal government, which will be included in future rates. No estimated settlement was recorded as of June 30, 2016 or 2015.

13 (Continued) FRED HUTCHINSON CANCER RESEARCH CENTER Notes to Consolidated Financial Statements June 30, 2016 and 2015 (In thousands)

(4) Investments Investments are carried at fair value and include cash and cash equivalents, equity securities, debt securities and alternative investments. Fair value is defined as the price that the Center would receive upon selling an asset in an orderly transaction to an independent buyer in the principal or most advantageous market of the investment. FASB ASC 820-10-50, Fair Value Measurement, established a three-tier hierarchy to maximize the use of observable market data and minimize the use of unobservable inputs, and to establish classification of fair value measurements for disclosure purposes. Inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk. Inputs may be observable or unobservable. Observable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability based upon market data obtained from sources independent of the reporting entity. Unobservable inputs are inputs that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available. The three-tier hierarchy is summarized below:

Level 1 – Valuation inputs are quoted prices in active markets for identical investments. At June 30, 2016 and 2015, Level 1 measurements include primarily cash and cash equivalents, domestic and global equities, equity funds, and bond funds. Level 2 – Valuation inputs are quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market. At June 30, 2016 and 2015, Level 2 measurements included fixed income and debt securities, such as U.S. government obligations, mortgage-backed securities, corporate bonds, municipal obligations, interest rate swaps, and certain hedged equity and real asset funds. Level 3 – Valuation inputs are derived from model-based techniques that use significant assumptions not observable in the market. These unobservable assumptions reflect the Center’s estimates of assumptions that market participants would use in pricing the asset or liability. Valuation techniques include use of discounted cash flow models and similar techniques. At June 30, 2016 and 2015, Level 3 securities included hedged equity funds, private equity and venture capital funds, privately held equities, beneficial interests in charitable trusts, and beneficial interests in perpetual trusts.

The level in the fair value hierarchy within which a fair value measurement in its entirety falls is based on the lowest level input that is significant to the fair value measurement in its entirety.

14 (Continued) FRED HUTCHINSON CANCER RESEARCH CENTER Notes to Consolidated Financial Statements June 30, 2016 and 2015 (In thousands)

The fair value of alternative investments is reported based on information provided by the respective alternative investment funds’ managers. The alternative investments classified in Levels 2 and 3 consist of shares or units in investment funds as opposed to direct interests in the fund’s underlying holdings, which may be marketable. Because the net asset value reported by each fund is used as a practical expedient to estimate the fair value of the Center’s interest therein, its classification in Level 2 or 3 is based on the Center’s ability to redeem its interest at or near the statement of financial position date. If the interest can be redeemed in the near term, the investment is classified as Level 2. The classification in the fair value hierarchy is not necessarily an indication of the risks, liquidity, or degree of difficulty in estimating the fair value of each investment’s underlying assets and liabilities.

(a) Fair Value Calculation Methodology The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate that value:

Cash and Cash Equivalents – The carrying amount (cost) approximates fair value because of the short maturity of those instruments.

Investments and Trusts – Investments in equity and debt securities, beneficial interest in charitable remainder trusts and perpetual trusts are measured at fair value based on quoted market prices, if available, or estimated using quoted market prices for similar securities. Alternative investments are measured at fair value based on each fund’s net asset value as a practical expedient. Other equity securities, which are shares held in a nonpublic entity, are measured at fair value based on management’s valuation model. Management’s model utilizes data and assumptions that are not observable to market participants.

Long-Term Debt – The carrying amount of long-term debt with variable interest rates approximates fair value because interest rates are adjusted either daily or weekly for the variable rate demand bonds. The carrying amount of the fixed rate debt is calculated based upon the net present value of the future cash outflows of the associated fixed rate debt discounted at the interest rates in effect as of June 30, 2016.

Cash Flow Hedges – The carrying amounts of the interest rate swaps are at estimated fair values based on the net present value of the associated variable cash flows, adjusted for the Center’s and the respective counterparty’s nonperformance risk.

15 (Continued) FRED HUTCHINSON CANCER RESEARCH CENTER Notes to Consolidated Financial Statements June 30, 2016 and 2015 (In thousands)

(b) Fair Value Hierarchy The following tables present assets and liabilities that are measured at fair value on a recurring basis at June 30, 2016 and 2015:

2016 June 30, 2016 Level 1 Level 2 Level 3

Investments: Cash and cash equivalents $ 20,438 20,438 —— Global equity securities and mutual funds 248,130 209,483 18,670 19,977 Governments, mortgage and corporate debt funds 12,938 448 12,361 129 Real estate funds 5,304 ——5,304 Directional hedge funds 48,882 — 11,320 37,562 Private equity and venture capital funds 1,690 53 — 1,637 Commodity investments and funds 12,632 2,491 10,141 — Other equity securities 817 424 — 393 Total investments $ 350,831 233,337 52,492 65,002

2016 June 30, 2016 Level 1 Level 2 Level 3 Other receivables: Beneficial interest in charitable remainder trusts $ 1,016 ——1,016 Beneficial interest in perpetual trusts 27,228 ——27,228 Trustee-held funds 2,020 149 1,871 — Liabilities: Deferred credit on cash flow hedges $ (33,558) — (33,558) —

16 (Continued) FRED HUTCHINSON CANCER RESEARCH CENTER Notes to Consolidated Financial Statements June 30, 2016 and 2015 (In thousands)

2015 June 30, 2015 Level 1 Level 2 Level 3

Investments: Cash and cash equivalents $ 12,018 12,018 —— Global equity securities and mutual funds 248,064 231,912 12,269 3,883 Governments, mortgage and corporate debt funds 26,654 10,931 15,583 140 Real estate funds 6,221 ——6,221 Directional hedge funds 34,389 — 9,245 25,144 Private equity and venture capital funds 3,673 ——3,673 Commodity investments and funds 8,169 2,550 5,619 — Other equity securities 1,228 1,085 — 143 Total investments $ 340,416 258,496 42,716 39,204

2015 June 30, 2015 Level 1 Level 2 Level 3 Other receivables: Beneficial interest in charitable remainder trusts $ 1,404 ——1,404 Beneficial interest in perpetual trusts 27,677 ——27,677 Trustee-held funds 10,940 9,083 1,857 — Liabilities: Deferred credit on cash flow hedges $ (28,684) — (28,684) —

17 (Continued) FRED HUTCHINSON CANCER RESEARCH CENTER Notes to Consolidated Financial Statements June 30, 2016 and 2015 (In thousands)

The following tables presents the Center’s activities for assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the years ended June 30, 2016 and 2015:

2016 2015

Beginning balance, July 1 $ 68,285 87,146 Transfers out of Level 3 (53) (16,732) Net realized and unrealized gains (6,899) 3,916 Purchases 35,741 8,041 Sales (2,101) (7,735) Return of capital distribution (1,727) (6,351) Ending balance, June 30 $ 93,246 68,285

The following table summarizes the Center’s Level 3 investments by major category, as well as related strategy, liquidity, and funding commitment as of June 30:

June 30, June 30, Redemption Days Unfunded 2016 2015 or liquidation notice commitment

Directional hedge funds $ 37,562 25,144 Qtrly – Every 2 yrs 30–184 N/A Limited partnerships: Venture capital funds 491 592 N/A (1) N/A N/A Global equity securities 19,977 3,883 Monthly 30 N/A Private equity funds 1,146 3,081 N/A (1) N/A (2) Real estate funds 708 1,974 N/A (1) N/A (3) Real estate funds 4,596 4,247 Quarterly 90 N/A Corporate debt funds 129 140 Daily One N/A Other equity securities 393 143 N/A (1) N/A N/A Other real and personal property ——N/A (1) N/A N/A

Total investments $ 65,002 39,204

(1) Not eligible for redemption

(2) Unfunded Commitment of $405 as of June 30, 2016 and 2015

(3) Unfunded Commitment of $523 as of June 30, 2016 and 2015

At June 30, 2016 and 2015, the Center had $2,793 and $5,790, respectively, in investments that are not readily marketable. These are investments for which liquidation is at the discretion of the fund manager. These investments represent 1% and 2% of total investments and 1% of net assets at June 30, 2016 and 2015. These investment instruments may contain elements of both credit and market risk. Such risks include, but are not limited to, limited liquidity, absence of regulatory oversight, dependence upon key individuals, emphasis on speculative investments (both derivatives and nonmarketable investments), and nondisclosure of portfolio composition. Because of these risks, the recorded value for these investments may differ from the value that would have been used had a ready market for such investments existed. Such differences could be material.

18 (Continued) FRED HUTCHINSON CANCER RESEARCH CENTER Notes to Consolidated Financial Statements June 30, 2016 and 2015 (In thousands)

The Center has funds invested in 32 limited partnerships and companies with ownership interests ranging from 0.32% to 4.18% at June 30, 2016 and 2015. In 2016, three of these partnerships were venture capital funds, four are private equity, 20 are hedge funds, three are debt funds, and two are real estate funds.

The Center’s restricted investments contain endowment funds with donor restrictions for a variety of purposes. The Center’s board-designated investments include funds designated by the board of trustees to function as endowments. The board of trustees may also periodically remove designations on funds previously designated. As required by GAAP, net assets associated with endowment funds, including funds designated by the board of trustees to function as endowments, are classified and reported based on the existence or absence of donor-imposed restrictions.

Interest $ 1,845 1,762 Dividends 2,583 1,193 Net realized gains 63,855 39,075 Equity in earnings of SCCA investment 19,256 13,530

87,539 55,560 Less investment management fees (984) (829) $ 86,555 54,731

(5) Endowments (a) Return Objectives and Risk Parameters The Center has adopted investment and spending policies for its endowment that will provide resources to programs supported by the endowment. The endowment includes donor-restricted funds as well as board-designated investments. Under this policy, as approved by the Center’s board of trustees, the primary objective of the investment of the endowment is to provide a rate of total return, including all gains and losses, realized and unrealized, which exceeds the rate of inflation (as represented by the Consumer Price Index-All Urban Consumers) plus 5% over the long term. The Center defines the long term as five years and more. Consistent returns are to be emphasized over individual year results, although the possibility of loss in a given year cannot be ignored. The endowment should experience risk (volatility and variability of return) no greater than that of the market. The Center defines the market as the portfolio’s asset allocation policy applied to the Russell 3000 Index, the Morgan Stanley Capital Europe, Australia, Far East (EAFE) Index or its equivalent, and the iShares Barclays Aggregate Bond Index.

19 (Continued) FRED HUTCHINSON CANCER RESEARCH CENTER Notes to Consolidated Financial Statements June 30, 2016 and 2015 (In thousands)

(b) Strategies Employed for Achieving Objectives The Center relies on a total return strategy in which investment returns are achieved through both capital appreciation (realized and unrealized) and current yield (interest and dividends) to achieve its long-term rate of return objectives. The Center utilizes an efficient frontier approach to establish the appropriate asset allocation balancing long-term return objectives within prudent risk constraints. The Investment Committee of the Center’s board of trustees reviews the Center’s asset allocation at least once a year.

(c) Spending Policies and How the Investment Objectives Relate to Spending Policies The Center’s spending policy for endowment funds is to appropriate for distribution each year 5% of the endowment fund’s average fair value over the prior three years, provided that the fair value of the endowment fund exceeds the corpus. For a portion of the Center’s board-designated investments, the Center does not appropriate for distribution any amount of investment return as all of the return earned is held to grow the fund for future obligations and repayment of long-term debt. For the remaining board-designated investments, the Center makes all investment return available for expenditure to support research. In establishing these policies, the Center considered the long-term expected returns on its endowment and board-designated investments.

(d) Funds with Deficiencies Unless otherwise agreed with the donor, the Center’s policy has been to maintain the value of the original corpus of each individual donor-restricted endowment fund. From time to time, the fair value of assets in such endowment funds may fall below this level or such other level as may have been agreed to by the donor or required by law. Losses on the investments of a donor-restricted endowment fund reduce temporarily restricted net assets to the extent that donor-imposed restrictions on net appreciation of the fund have not been met before a loss occurs and any remaining loss reduces unrestricted net assets. As of June 30, 2016 and 2015, the aggregate reduction from unrestricted net assets totaled $569 and $3, respectively.

The following tables show the net asset composition of the Center’s endowment funds by type of fund as of June 30, 2016 and 2015:

2016 Temporarily Permanently Unrestricted restricted restricted Total

Donor-restricted endowment funds $ (569) 8,657 40,944 49,032 Board-designated endowment funds 148,140 ——148,140 Total $ 147,571 8,657 40,944 197,172

20 (Continued) FRED HUTCHINSON CANCER RESEARCH CENTER Notes to Consolidated Financial Statements June 30, 2016 and 2015 (In thousands)

2015 Temporarily Permanently Unrestricted restricted restricted Total

Donor-restricted endowment funds $ (3) 13,253 31,549 44,799 Board-designated endowment funds 97,275 ——97,275 Total $ 97,272 13,253 31,549 142,074

The following tables show the activity that has occurred within the endowment net asset accounts for the years ended June 30, 2016 and 2015:

2016 Temporarily Permanently Unrestricted restricted restricted Total Endowment net assets, beginning of year $ 97,272 13,253 31,549 142,074 Investment return: Investment income 1,781 437 — 2,218 Net realized gain (8,082) (2,067) — (10,149) Net unrealized loss (3,907) (490) — (4,397) Total investment return (10,208) (2,120) — (12,328) Contributions — 686 9,395 10,081 Distributions ———— Board transfers in 65,507 ——65,507 Board transfers out (5,000) ——(5,000) Appropriation of — endowment assets for expenditure — (3,162) — (3,162) Endowment net assets, end of year $ 147,571 8,657 40,944 197,172

21 (Continued) FRED HUTCHINSON CANCER RESEARCH CENTER Notes to Consolidated Financial Statements June 30, 2016 and 2015 (In thousands)

2015 Temporarily Permanently Unrestricted restricted restricted Total Endowment net assets, beginning of year $ 99,553 16,053 28,607 144,213 Investment return: Investment income 603 269 — 872 Net realized gain 769 784 — 1,553 Net unrealized loss (2,246) (1,418) — (3,664) Total investment return (874) (365) — (1,239) Contributions — 20 2,942 2,962 Distributions ———— Board transfers in ———— Board transfers out (1,407) ——(1,407) Appropriation of — endowment assets for expenditure — (2,455) — (2,455) Endowment net assets, end of year $ 97,272 13,253 31,549 142,074

Contributions to the endowment are only recognized when cash is received; pledges are recorded outside of the endowment until collected.

(6) Land, Buildings, and Equipment Summaries of land, buildings and equipment at cost as of June 30 are as follows:

2016 2015

Land $ 66,091 66,091 Buildings and improvements 496,340 488,121 Equipment 157,874 146,021 Construction in progress 5,954 5,879

726,259 706,112

Less accumulated depreciation (348,165) (326,983) $ 378,094 379,129

22 (Continued) FRED HUTCHINSON CANCER RESEARCH CENTER Notes to Consolidated Financial Statements June 30, 2016 and 2015 (In thousands)

Buildings are depreciated on a straight-line basis over 45 years, while improvements and equipment are depreciated over 3 to 30 years, depending on the nature of the asset. Interest expense on borrowed funds during construction is a component of the cost of assets. The amount capitalized represents interest on funds expended for construction. Capitalization of interest ceases when the asset is placed in service. The Center had no capitalized interest in 2016 and 2015.

(7) Notes and Pledges Receivable Components of notes and pledges receivable as of June 30 are as follows:

2016 2015

Amounts due in: Less than one year $ 5,190 2,137 One to five years 3,650 4,575 Less: Unamortized discount (82) (13) Allowance for uncollectible pledges (6) (2,306) Notes and pledges receivable, net $ 8,752 4,393

As of June 30, 2016 and 2015, the gross notes and pledges receivable balances include pledges with a donor-restricted purpose of $8,140 and $3,806, respectively. The discounts on pledges are computed at the rate commensurate with the risks applicable to the year in which the promise is received. Notes and pledges have been discounted using a rate ranging from 2.5% to 5.0%.

23 (Continued) FRED HUTCHINSON CANCER RESEARCH CENTER Notes to Consolidated Financial Statements June 30, 2016 and 2015 (In thousands)

(8) Long-Term Debt Summaries of long-term debt as of June 30 are as follows:

2016 2015 Series 2009A Revenue Bonds secured by a deed of trust due in 2020 (partially defeased in 2015) $ 16,700 100,785 Series 2010 Revenue Bonds secured by a deed of trust due in varying amounts through 2020 plus interest at fixed rates 25,359 26,380 Series 2011A Revenue Bonds secured by a deed of trust due in varying amounts through 2035 plus interest at varying rates 79,865 80,990 Series 2012A Revenue Bonds secured by a deed of trust due in varying amounts through 2041 plus interest at varying rates 57,685 57,685 Series 2012B Revenue Bonds secured by a deed of trust due in varying amounts through 2041 plus interest at varying rates 84,800 84,800 Series 2014 Revenue Bonds secured by a deed of trust due in payments of $177 through 2039 and a final payment of $40 in 2040 plus interest at varying rates 4,111 4,288 Series 2015 Revenue Bonds secured by a deed of trust due in varying amounts through 2033 plus interest at varying rates 78,510 — Series 2015B Revenue Bonds secured by a deed of trust due in payments of $220 through 2040 and a final payment of $90 in 2041 plus interest at varying rates 5,383 — 352,413 354,928 Deferred financing costs (2,065) (2,076) Unamortized premium/(discount) 6,198 (1,557) $ 356,546 351,295

Fair value disclosure (note 4) $ 384,304 380,289

On December 18, 2015, the Center issued through the Washington Health Care Facilities Authority (the Authority) $5,475 of tax-exempt revenue bonds Series 2015B (2015B Bond). The 2015B Bond is a variable rate bond, with interest ranging from 0.82% to 0.97% for the year ended June 30, 2016, used to reimburse the Center for the purchase of property on the Center’s campus. The 2015B Bonds were issued under a private placement with U.S. Bancorp and all interest and principal payments are made directly to the bank. The deed of trust only secures the specific property on the Center’s campus.

24 (Continued) FRED HUTCHINSON CANCER RESEARCH CENTER Notes to Consolidated Financial Statements June 30, 2016 and 2015 (In thousands)

On July 8, 2015, the Center issued through the Authority $78,510 of tax-exempt revenue bonds Series 2015 (2015 Bonds). The 2015 Bonds are fixed rate bonds, with interest ranging from 3.00% to 6.00%, used to advance refund and defease a portion of the 2009A Bonds. The portion of the 2009A bonds that were defeased by the 2015 Bonds totaled $80,865 and represented the term bonds maturing on January 1, 2024 and January 1, 2033. These bonds were placed into escrow along with the proceeds of the 2015 bonds and principal and interest payments will be made to bondholders through the call date, July 1, 2019. The remaining 2009A serial bonds maturing through January 1, 2020, totaling $19,920, are still outstanding as a liability for the Center.

On July 24, 2014, the Center issued through the Authority $4,435 of tax-exempt revenue bonds Series 2014 (2014 Bond). The 2014 Bond is a variable rate bond, with interest ranging from 0.81% to 1.22% for the years ended June 30, 2016 and 2015, used to refund the 2007 Bond, which was used to reimburse the Center for the purchase of property on the Center’s campus. The 2014 Bonds were issued under a private placement with U.S. Bancorp and all interest and principal payments are made directly to the bank. The deed of trust only secures the specific property on the Center’s campus.

On August 30, 2012, the Center issued through the Authority $57,685 of tax-exempt revenue bonds Series 2012A (2012A Bonds) and an $84,800 tax-exempt revenue bond Series 2012B (2012B Bond). The 2012A Bonds are variable rate bonds, with interest ranging from 1.02% to 1.55% for the years ended June 30, 2016 and 2015, used to refund the 2011B bonds. The 2012A Bonds were issued under a private placement with JP Morgan Chase Bank, N.A. The 2012B Bond is a variable rate bond, with interest ranging from 1.30% to 1.65% for the years ended June 30, 2016 and 2015, used to refund the 2011C Bonds. The 2012B Bond was issued under a private placement with Bank of America, N.A. and all interest and principal payments are made directly to the bank.

On June 30, 2011, the Center issued through the Authority $84,150 of tax-exempt revenue bonds Series 2011A (2011A Bonds).The 2011A Bonds are fixed rate bonds issued under the Center’s credit rating with interest rates ranging from 0.50% to 6.00% used to refund a portion of the 2001A Bonds and the 2009B Bonds.

On November 4, 2010, the Center issued through the Authority a $30,000 tax-exempt revenue bond Series 2010 (2010 Bond). The 2010 Bond is a variable rate bond, with interest ranging from 1.29% to 1.48% for the years ended June 30, 2016 and 2015 used to purchase the Yale Building from National Healthcare Research and Education Finance Corporation (NHREFCO) (note 11). The 2010 Bond was issued under a private placement with JP Morgan Chase Bank, N.A. and all interest and principal payments are made directly to the bank.

On November 24, 2009, the Center issued through the Authority $114,920 of tax-exempt revenue bonds Series 2009A (2009A Bonds). The 2009A Bonds are fixed rate bonds issued under the Center’s credit rating with interest rates ranging from 3.50% to 6.00% and were used to refund the 2001B Bonds and 2002 Bonds. A portion of the 2009A Bonds were defeased by the 2015 Bonds.

25 (Continued) FRED HUTCHINSON CANCER RESEARCH CENTER Notes to Consolidated Financial Statements June 30, 2016 and 2015 (In thousands)

The bond documents for the 2009A Bonds, 2010 Bonds, 2011A Bonds, 2012A Bonds, 2012B Bonds and the 2015 Bonds have covenants that require the Center to provide to the Authority, pursuant to a deed of trust, a mortgage and security interest in substantially all of the real estate and improvements owned by the Center, a security interest in the funds held by the trustees, and in the gross receivables and equipment owned by the Center. The bond documents for the 2012A Bonds and 2012B Bond require the Center to maintain unrestricted and unencumbered cash, cash equivalents, and marketable debt and equity securities of at least 80 days of cash operating expenses less subaward expenses and net income available for debt service must exceed 150% of the debt service in the same year. The bond documents for the 2009A Bonds require the establishment and maintenance of a debt service reserve fund. Additional covenants include a restriction on the creation of additional liens on the Center’s property, a restriction on the issuance of additional debt, and a requirement that net income available for debt service must exceed 125% of the debt service in the same year.

The following schedule shows future long-term maturities by year:

2017 $ 6,262 2018 6,622 2019 7,059 2020 7,483 2021 7,945 Thereafter 317,042 $ 352,413

(9) Retirement Plan The Center has a 403(b) defined-contribution plan for its salaried employees. Employees are generally eligible after one year of service. The Center contributes 7% of each employee’s compensation up to the Social Security wage base limit and 12% on compensation above that limit. For certain management employees, the Center contributes 10% of compensation up to the Social Security wage base limit and 15% above the limit.

Retirement plan contributions for the years ended June 30, 2016 and 2015 was $14,379 and $13,677, respectively.

(10) Annuities The Center administers, through a third party, gift annuities for which it is obligated to make periodic distributions to designated beneficiaries. When contributed assets are initially received, the assets are recorded at fair value within the investments balance, and contribution revenue is recorded equal to the value of the contributed assets received less the annuity liability. The present value of the payments due to the beneficiaries totaled $3,388 and $3,500 at June 30, 2016 and 2015, respectively. The annuity liability is revalued annually based upon actuarially computed present values. Present values are based on life expectancy and discount rates range between 4% and 10%. The Center maintains segregated

26 (Continued) FRED HUTCHINSON CANCER RESEARCH CENTER Notes to Consolidated Financial Statements June 30, 2016 and 2015 (In thousands)

funds that exceed the actuarial value of the annuity liability as required by state law. The gift annuity payable is recorded in accrued liabilities.

(11) Commitments and Contingencies (a) Operating Leases Certain equipment and facilities utilized by the Center in its operations are leased. The related future minimum rental payments for these operating leases with noncancelable terms in excess of one year as of June 30, 2016 are as follows:

2017 $ 2,317 2018 1,643 2019 1,449 2020 1,486 2021 1,533 Thereafter 3,710 $ 12,138

Rental expense for all operating leases for the years ended June 30, 2016 and 2015 was $3,906 and $4,138, respectively.

In conjunction with purchase and renovation of office and lab space in the 1100 Eastlake Building, the Center gave notice on March 31, 2011 of its intent to terminate its lease obligation for the 1616 Eastlake Building. Under the terms of the operating lease, beginning on October 1, 2012, the Center reduced the amount of space leased from approximately 106,000 net rentable square feet to approximately 40,000 net rentable square feet. The lease term for most of the 40,000 net rentable square feet extends through September 30, 2017. On May 11, 2012, the Center entered into a lease amendment to reduce the amount of space leased by approximately 13,000 net rentable square feet to approximately 27,000 net rentable square feet. The Center expects to continue to utilize the office portion of this space and has subleased the lab portion of this space as of June 30, 2016.

(b) Litigation and Compliance with Laws and Regulations The Center is involved in litigation and regulatory investigations arising in the normal course of its business. After consultation with legal counsel, management estimates that these matters will be resolved without material adverse effect on the Center’s future financial position or results from operations.

The research industry is subject to numerous federal, state, and local laws and regulations. Some of these laws govern licensure, accreditation, and government program participation requirements. Government agencies are actively conducting investigations concerning possible violations of these statutes and regulations by research facilities. Violations of these laws and regulations could result in expulsion from government programs, together with the imposition of significant fines and penalties. Management believes that the Center is in material compliance with all applicable laws and

27 (Continued) FRED HUTCHINSON CANCER RESEARCH CENTER Notes to Consolidated Financial Statements June 30, 2016 and 2015 (In thousands)

regulations. Compliance with laws and regulations is subject to future government review and interpretation of such laws and regulations as well as regulatory actions unknown or unasserted at this time.

(c) Contingent Liability The Center received federal grant funding for a portion of the construction of its South Lake Union Campus. Because the Center received federal grant funding for a portion of this facility, the government retains an interest in the net proceeds received if the facility is sold. The Center has not recorded any liability related to this interest as it is contingent upon the sale of the facility, and management has determined the probability of this transaction occurring to be remote.

(12) Professional Liability Insurance The Center has claims-made professional and general liability insurance for 2016 and 2015. The Center has accrued an actuarial estimate of unreported instances and claims as of June 30, 2016, which is included in accounts payable.

(13) Related-Party Transactions In June 1998, the SCCA was formed. The SCCA is a joint venture between the University of Washington Academic Medical Center (UWMC), Children’s Hospital and Regional Medical Center (now Seattle Children’s Hospital (Seattle Children’s)), and the Center. As a separately incorporated nonprofit corporation, the SCCA is organized for the purpose of developing and offering a comprehensive program of integrated cancer care services in the Northwest that will enhance the cancer research, teaching, and clinical programs of the Center, UWMC, and Seattle Children’s. The SCCA is one of several Medicare-designated cancer hospitals in the United States. Members of the SCCA share equally in capital contributions and in the results of operations. The SCCA began operations in January 2001. The SCCA coordinates adult inpatient services with the UWMC and pediatric inpatient services with Seattle Children’s, while operating its own ambulatory cancer care service facility. The Center is accounting for its interest in the SCCA under the equity method.

Under the terms of the Members’ Agreement, the Center has certain financial obligations to the SCCA, including funding its share of capital contributions. From 1998 through 2001, the Center contributed a total of $13,562 in cash capital contributions, which have been recorded as beneficial interest in assets of SCCA on the consolidated statements of financial position. The Center’s obligations to the SCCA were fully paid as of June 30, 2001. In addition, in 2001 the Center contributed its existing outpatient cancer care program valued at $12,124, equipment, supplies, and other assets valued at $1,800, and a ground lease valued at $3,600 to the SCCA. The Center records the amortization of these contributed assets in investment income.

28 (Continued) FRED HUTCHINSON CANCER RESEARCH CENTER Notes to Consolidated Financial Statements June 30, 2016 and 2015 (In thousands)

The following is a summary of the SCCA’s financial position and results as of and for the years ended June 30, 2016 and 2015:

2016 2015

Assets $ 556,565 523,791

Liabilities $ 163,085 187,969 Net assets 393,480 335,822 Total liabilities and net assets $ 556,565 523,791

2016 2015 Revenues $ 525,214 475,921 Less expenses (473,690) (441,517) Plus nonoperating income/(loss) 3,497 (17,185) Excess of revenues over expenses 55,021 17,219 Grant contributions restricted for capital acquisition — 21 Net change in unrealized gains/(losses) on investments — (32) Increase in unrestricted net assets $ 55,021 17,208

The Center has entered into service agreements to provide support services to the SCCA. The service agreements are for administrative services, facilities usage, and patient care housing. The Center recognized $20,224 and $16,956 of other income for the years ended June 30, 2016 and 2015, respectively, as a result of these agreements.

The Center recognized other income (see below) for the years ended June 30, 2016 and 2015, respectively, for fees associated with licenses, data collection, and research and development services provided by the Center to the SCCA.

(14) Other Income Other income includes income from noncore sources including service agreements, related party transactions (see note 13), professional services, core resources, rent, parking and similar activities. The Center had $43,338 and $38,150 of Other Income for the years ended June 30, 2016 and 2015, respectively.

29 (Continued) FRED HUTCHINSON CANCER RESEARCH CENTER Notes to Consolidated Financial Statements June 30, 2016 and 2015 (In thousands)

(15) Clinical Service Fee Revenue The Center has entered into inpatient service agreements with UWMC, Seattle Children’s, and the SCCA for which the Center receives various payments related to research and development support, data collection and analysis, physician assistant services, consulting services, and license rights to use the Center’s name in connection with the inpatient cancer services program. Fees for services during the years ended June 30, 2016 and 2015 from UWMC total $12,351 and $10,415, respectively, from Seattle Children’s total $484 and $642 respectively, and from the SCCA total $6,569 and $5,208, respectively. Of these amounts, $4,014 and $5,713 are included in other receivables as of June 30, 2016 and 2015, respectively.

(16) Accounting for Derivative Instruments and Hedging Activities Accounting principles require that every derivative instrument (including certain derivative instruments embedded in other contracts) be recorded on the statement of financial position as either an asset or liability measured at its fair value. These principles require that changes in the derivative instrument’s fair value be recognized currently.

(a) Interest Rate Swaps In October 2008, the Center entered into two interest rate swaps to replace the swaps that were terminated. One of the swaps was associated with the Series 2000 Bonds (Series 2000 Replacement Swap) and one is associated with the Series 2001A Bonds (Series 2001A Replacement Swap). The notional amount, timing of principal payments, and timing of interest payments for each of the Replacement Swaps are similar to the terms of the bonds with which they are associated. In the case of the Series 2000 Replacement Swap, the interest rate paid by the Center was fixed at 5.19% while the counterparty pays the Center an indexed rate plus 0.20%. In the case of the Series 2001A Replacement Swap, the interest rate paid by the Center was fixed at 4.97% while the counterparty pays the Center an indexed rate plus 0.20%. Upon entering into the Replacement Swaps, the Center received a payment of $7,150 for the Series 2000 Replacement Swap and $7,690 for the Series 2001A Replacement Swap from the counterparty. These payments were recorded as deferred credits on cash flow hedges on the statement of financial position. The fair value is the estimated amount the bank would receive or pay to terminate the swap agreement at the reporting date, taking into account current interest rates and the current creditworthiness of the swap counterparties. The fair value of the Series 2000 Replacement Swap included in liabilities was $12,644 at June 30, 2016 and $11,756 at June 30, 2015. The fair value of the Series 2001A Replacement Swap included in liabilities was $20,914 at June 30, 2016 and $16,928 at June 30, 2015. The fair value of the swap instruments will change in future time periods as interest rates change and as the time period remaining for the hedged transaction shortens. Provided that the Center holds the swaps to maturity, the value of the derivative will be zero.

(b) Amendment to Series 2001A Replacement Swap In May 2011, the Center amended the Series 2001A Replacement Swap to change the rate paid by the counterparty from a tax-exempt indexed rate plus 0.20% to 67% of three month LIBOR plus 0.64%. All other terms of the Series 2011A Replacement Swap, including notional amount, timing, and amount of principal payments remain unchanged.

30 (Continued) FRED HUTCHINSON CANCER RESEARCH CENTER Notes to Consolidated Financial Statements June 30, 2016 and 2015 (In thousands)

(c) Collateral Posted with Swap Counterparty The replacement swap agreements contain terms that require the Center to post collateral with the counterparty if certain conditions are met, including the mark-to-market amount to terminate the Series 2000 Replacement Swap and the Series 2001A Replacement swap exceeds $20,000. Collateral of $14,400 and $8,400 was posted as of June 30, 2016 and 2015, respectively.

(d) Juno covered call options On June 6, 2016, the Center sold 1,330 contracts for options for Juno stock for $2,000. The options have strike dates from August 2016 to January 2017 with strike prices ranging from $50 to $60.

(17) Subsequent Events The Center evaluated subsequent events from June 30, 2016 to October 28, 2016 the date on which these financial statements were issued.

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APPENDIX C

SUMMARY OF CERTAIN PROVISIONS OF THE BOND INDENTURES AND LOAN AGREEMENTS

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APPENDIX C

SUMMARY OF CERTAIN PROVISIONS OF THE BOND INDENTURES AND LOAN AGREEMENTS

TABLE OF CONTENTS Page INTRODUCTION ...... C-1 DEFINITIONS ...... C-1 THE BOND INDENTURES ...... C-22 Introduction ...... C-22 Termination of Book Entry System ...... C-22 Payment of the Bonds After the Book-Entry Termination Date ...... C-23 Transfer and Exchange of Bonds After the Book-Entry Termination Date ...... C-23 Mutilated, Lost, Stolen or Destroyed Bonds ...... C-24 Notice of Redemption After the Book-Entry Termination Date ...... C-24 Purchase Fund ...... C-24 Project Fund: General ...... C-25 Project Fund: Issuance Costs Account ...... C-25 Project Fund: Project Account ...... C-25 Bond Fund: General ...... C-26 Bond Fund: Principal and Interest Account ...... C-26 Bond Fund: Credit Facility Proceeds Account ...... C-27 Bond Fund: Bank Bond Account ...... C-27 Reimbursement Fund: General ...... C-27 Reimbursement Fund: Credit Reimbursement Account ...... C-28 Reimbursement Fund: Liquidity Reimbursement Account ...... C-28 Investment of Funds ...... C-28 Liquidity Facility; Credit Facility; Alternate Liquidity Facility; Alternate Credit Facility; Self-Liquidity Arrangement ...... C-29 Remarketing Agent; Calculation Agent ...... C-29 Events of Default ...... C-29 Notice of Default, Cure or Waiver ...... C-30 Acceleration of Maturity ...... C-30 Other Remedies; Enforcement of Covenants and Conditions ...... C-32 Application of Money Held in Funds upon Event of Default ...... C-33 Right of Bond Trustee to Act Without Possession of Bonds ...... C-33 Limitation on Suits by Owners ...... C-34 Waiver by Owners ...... C-34 Remedies Cumulative, Restoration Rights ...... C-34 Concerning the Bond Trustee ...... C-35 Qualifications of Bond Trustee ...... C-36 Resignation or Removal of Bond Trustee ...... C-36 Appointment of Successor Bond Trustee; Merger of Bond Trustee...... C-37 Determination of Owners’ Concurrence...... C-37 Discharge of Lien of Bond Indenture by Payment of Bonds ...... C-38 Discharge of Lien of Bond Indenture by Defeasance ...... C-38 Effect of Discharge of Lien of Bond Indenture ...... C-39 Unclaimed Money ...... C-40 Modification of Bond Indenture Without Consent of Owners ...... C-40 Modification of Bond Indenture with Consent of Owners ...... C-40 Modification of Loan Agreement Without Consent of Owners ...... C-41 Modification of Loan Agreement With Consent of Owners ...... C-41

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THE LOAN AGREEMENTS ...... C-42 The Loan; Covenant to Repay ...... C-42 Credits Against Loan Payments ...... C-43 Payments Required for Redemption, Acceleration and/or Purchase of Bonds ...... C-43 Reimbursements to Credit and Liquidity Providers ...... C-43 Obligations of Fred Hutch Unconditional ...... C-44 Fred Hutch’s Purchase of Bonds in Open Market ...... C-44 Security Under the Loan Agreement ...... C-44 Recording, Filing, Maintenance and Termination of Security Interests ...... C-44 Covenant to Maintain Corporate Existence of Fred Hutch...... C-44 Excess Margin Covenant ...... C-45 General Covenants ...... C-45 Use of Facilities and Project Facilities ...... C-45 Permitted Leases and Operating Contracts ...... C-46 Limitation on Encumbrances ...... C-46 Covenant to Pay Project Costs and Issuance Costs ...... C-46 Notice of Insolvency or Event of Bankruptcy ...... C-46 Public Benefit ...... C-47 Tax Covenants ...... C-47 Compliance with Environmental Laws ...... C-47 Indemnification ...... C-47 Loan Agreement Defaults ...... C-47 Remedies on Default ...... C-48 Credit Provider Rights Upon Loan Agreement Default ...... C-50 No Remedy Exclusive ...... C-50 Fees and Expenses ...... C-50

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INTRODUCTION

The following is a summary of certain provisions of the Bond Indenture pertaining to the Series 2017B Bonds (the “Series 2017B Bond Indenture”) and the Bond Indenture pertaining to the Series 2017C Bonds (the “Series 2017C Bond Indenture” and, together with the Series 2017B Bond Indenture, the “Bond Indentures”), the Loan Agreement pertaining to the Series 2017B Bonds (the “Series 2017B Loan Agreement”) and the Loan Agreement pertaining to the Series 2017C Bonds (the “Series 2017C Loan Agreement” and, together with the Series 2017B Loan Agreement, the “Loan Agreements”), which are not described elsewhere in this Official Statement. The summaries provided herein refer to both Bond Indentures and Loan Agreements, except where specifically noted. It is important to keep in mind that this summary does not purport to be and is not comprehensive or definitive. In particular, because the Official Statement is intended to describe provisions of the Bonds only so long as they are in the initial Index Floating Rate Period, provisions of the Bond Indentures and Loan Agreements that would be applicable to the Bonds after Conversion to any other Interest Rate Period (including a subsequent Index Floating Rate Period), or the occurrence of a Book-Entry Termination Date are excluded. Reference should also be made to each Bond Indenture and each Loan Agreement for a complete statement of the terms of such agreements.

A description of the provisions of the Tax Agreement (which contains certifications, warranties and covenants necessary to establish the eligibility of the interest on the Bonds for exclusions from gross income for purposes of the regular federal income tax under current federal law) is beyond the scope of this Summary of Certain Provisions of the Bond Indentures and Loan Agreements. Reference should be made to such agreement for a full statement of its provisions.

DEFINITIONS

Unless the context otherwise requires, capitalized terms used in this Summary of Certain Provisions of the Bond Indentures and Loan Agreements and elsewhere in this Official Statement have the meanings set forth below, such definitions to be equally applicable to both the singular and plural forms of any of the terms defined.

“Acceleration Date” means the date upon which the applicable Bond Trustee gives a Declaration of Acceleration pursuant to the related Bond Indenture. See “THE BOND INDENTURES—Acceleration of Maturity” below.

“Accountant” means “Accountant,” as defined in the Master Indenture. See “APPENDIX D—Summary of Certain Provisions of the Master Indenture and Deed of Trust.”

“Accounts” means the accounts created in any Fund as permitted or required by the applicable Bond Indenture.

“Act” means chapter 70.37 RCW, as now in existence or as hereafter amended.

“Adjusted Gross Revenues” means “Adjusted Gross Revenues,” as defined in the Master Indenture. See “APPENDIX D—Summary of Certain Provisions of the Master Indenture and Deed of Trust.”

“Affiliate” means “Affiliate,” as defined in the Master Indenture. See “APPENDIX D—Summary of Certain Provisions of the Master Indenture and Deed of Trust.”

“Alternate Credit Facility” means a replacement irrevocable direct-pay letter of credit containing administrative provisions reasonably satisfactory to the applicable Bond Trustee, issued and delivered to, and accepted by, such Bond Trustee in accordance with the related Bond Indenture; provided, however, that any amendment, extension or renewal of a Credit Facility then in effect for the sole purpose of extending the Expiration Date of such Credit Facility or modifying such Credit Facility pursuant to its terms shall not be deemed to be an Alternate Credit Facility for purposes of such Bond Indenture so long as the material terms as they relate to the suspension or termination thereof are not changed.

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“Alternate Liquidity Facility” means a replacement Liquidity Facility delivered to, and accepted by, the applicable Bond Trustee in accordance with the related Bond Indenture; provided, however, that any amendment, extension or renewal of a Liquidity Facility then in effect for the sole purpose of extending the Expiration Date of such Liquidity Facility shall not be deemed to be an Alternate Liquidity Facility for purposes of such Bond Indenture so long as the material terms as they relate to the suspension or termination thereof are not changed.

“Audited Financial Statements” means, for any Fiscal Year, the audited combined, combining or consolidated financial report for such Fiscal Year examined and reported on by an Accountant covering the operations of Fred Hutch for such Fiscal Year and containing an audited combined balance sheet as of the end of such Fiscal Year and audited combined statements of operations, changes in net assets and cash flows of Fred Hutch (or the substantially equivalent financial statements as updated from time to time by the Financial Accounting Standards Board), showing in each case in comparative form the consolidated financial figures for the preceding Fiscal Year.

“Authority” means the Washington Health Care Facilities Authority, a public body corporate and politic and an agency of the State which was created by the Act, or any board, body, commission, department or officer succeeding to the principal functions thereof or to whom the powers conferred upon the Authority shall be given by law.

“Authorized Denomination” means $100,000 or any integral multiple of $5,000 in excess of $100,000.

“Authorized Investments” means any of the following:

(a) Government Obligations;

(b) Obligations issued or guaranteed by the following instrumentalities or agencies of the United States of America as noted below:

(1) U.S. Export-Import Bank,

(2) Farm Credit System Financial Assistance Corporation,

(3) Rural Economic Community Development Administration (formerly Farmers Home Administration),

(4) General Services Administration,

(5) U.S. Maritime Administration,

(6) Small Business Administration,

(7) Government National Mortgage Association (“GNMA”),

(8) U.S. Department of Housing and Urban Development (“PHAs”), or

(9) Federal Housing Administration.

(c) Senior debt obligations rated, on the date of purchase of any such investment, “AAA” by S&P and “Aaa” by Moody’s, issued by the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation with remaining maturities not exceeding three years and any other senior debt obligations of government-sponsored agencies.

(d) United States dollar denominated deposit accounts, federal funds or banker’s acceptances with any domestic commercial bank (including the applicable Bond Trustee or its affiliates, if otherwise eligible), the short-term certificates of deposit of which are rated, on the date of purchase of any such investment, “A-1” or “A-1+” by S&P and “P-1” by Moody’s, maturing no more than 360 days after the date of purchase thereof, and which deposit accounts or time deposits are fully and continuously insured by the Federal Deposit Insurance Corporation (or its successor in interest) (“FDIC”) or are fully secured, to the extent they are not insured by the FDIC, by Government Obligations; provided, that

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for purposes of this clause (d), the ratings of any bank holding company shall not be considered as the rating of any such domestic commercial bank; and provided further, that if such deposit accounts or time deposits are so secured (1) such Bond Trustee shall have a perfected first security interest in the Government Obligations securing such deposit accounts or time deposits; (2) such Bond Trustee shall hold or shall have the option of appointing another bank, trust company or savings and loan association as its agent to hold the Government Obligations securing such certificates of deposit or time deposits free and clear of the claims of third parties; and (3) such Government Obligations must be valued daily and have a market value at all times at least equal to the principal amount of the deposits.

(e) The following obligations (“Municipal Obligations”):

(1) Direct general obligations of any state of the United States of America or any subdivision or agency thereof to which is pledged the full faith and credit of a state the unsecured general obligation debt of which is rated “A3” by Moody’s and “A” by S&P, or better, or any obligation fully and unconditionally guaranteed by any state, subdivision or agency whose unsecured general obligation debt is so rated;

(2) Direct general short-term obligations of any state agency or subdivision or agency thereof described in clause (1) above and rated “A-1+” by S&P and “MIG 1” by Moody’s; and

(3) “Special revenue bonds” (as defined in the Federal Bankruptcy Code) of any state, state agency or subdivision described in clause (1) above and rated “AA” or better by S&P and “Aa” or better by Moody’s.

(f) Pre-refunded Municipal Obligations rated “AAA” by S&P and “Aaa” by Moody’s meeting the following requirements:

(1) The Municipal Obligations are (A) not subject to redemption prior to maturity or (B) the trustee for the Municipal Obligations has been given irrevocable instructions concerning their call and redemption and the issuer of the Municipal Obligations has covenanted not to redeem such Municipal Obligations other than as set forth in such instructions;

(2) The Municipal Obligations are secured by cash or Government Obligations which may be applied only to payment of the principal of, interest and premium on such Municipal Obligations;

(3) The principal of and interest on the Government Obligations (plus any cash in the escrow) has been verified by the report of independent certified public accountants to be sufficient to pay in full all principal of, interest and premium, if any, due and to become due on the Municipal Obligations (a “Verification”);

(4) The cash or Government Obligations serving as security for the Municipal Obligations are held by an escrow agent or trustee in trust for owners of the Municipal Obligations;

(5) No substitution of a Government Obligation shall be permitted except with another Government Obligation and upon delivery of a new Verification; and

(6) The cash or Government Obligations are not available to satisfy any other claims, including those by or against the related trustee or escrow agent.

(g) Repurchase agreements with (i) any domestic bank, or domestic branch of a foreign bank, the long-term debt of which is rated at least “A” by S&P and Moody’s; (ii) any broker-dealer with “retail customers” or a related affiliate thereof which broker-dealer has, or the parent company (which guarantees the provider) of which has, long-term debt rated at least “A” by S&P and Moody’s, which broker-dealer falls under the jurisdiction of the Securities Investors Protection Corporation; or (iii) any other entity rated “A” or better by S&P and Moody’s, provided that:

(1) The market value of the collateral is maintained at levels and upon such conditions as would be acceptable to S&P and Moody’s to maintain an “A” rating in an “A” rated structured financing (with a market value approach);

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(2) The applicable Bond Trustee or a third party acting solely as agent thereof or for the issuer (the “Holder of the Collateral”) has possession of the collateral or the collateral has been transferred to the Holder of the Collateral in accordance with applicable state and federal laws (other than by means of entries on the transferor’s books);

(3) The repurchase agreement shall state and an opinion of counsel shall be rendered at the time such collateral is delivered to the effect that the Holder of the Collateral has a perfected first priority security interest in the collateral, any substituted collateral and all proceeds thereof (in the case of bearer securities, this means the Holder of the Collateral is in possession);

(4) All other requirements of S&P in respect of repurchase agreements shall be met; and

(5) The repurchase agreement shall provide that if during its term the provider’s rating by either Moody’s or S&P is withdrawn or suspended or falls below “A-” by S&P or “A3” by Moody’s, as appropriate, the provider must, at the direction of Fred Hutch or the applicable Bond Trustee (acting at the written direction of Fred Hutch), within 10 days of receipt of such direction, repurchase all collateral and terminate the agreement, with no penalty or premium to the Authority, Fred Hutch or such Bond Trustee.

Notwithstanding the foregoing, if a repurchase agreement has a term of 270 days or less (with no evergreen provision), collateral levels need not be as specified in (1) above, so long as such collateral levels are 103% or better and the provider is rated at least “A” by S&P and Moody’s.

(h) Investment agreements with a domestic or foreign bank or corporation (other than a life or property casualty insurance company) the long-term debt of which, or, in the case of a guaranteed corporation the long-term debt, or, in the case of a monoline financial guaranty insurance company, claims paying ability, of the guarantor is rated at least “AA” by S&P and “Aa” by Moody’s; provided that, by the terms of the investment agreement:

(1) Interest payments are to be made to the applicable Bond Trustee at times and in amounts as necessary to pay debt service on the Bonds of a series;

(2) The invested funds are available for withdrawal without penalty or premium, at any time upon not more than seven days’ prior notice; the applicable Bond Trustee agrees in the related Bond Indenture to give or cause to be given notice in accordance with the terms of the investment agreement so as to receive funds thereunder with no penalty or premium paid;

(3) The investment agreement shall state that it is the unconditional and general obligation of, and is not subordinated to any other obligation of, the provider thereof or, if the provider is a bank, the investment agreement or opinion of counsel shall state that the obligation of the provider to make payments thereunder ranks pari passu with the obligations of the provider to other depositors and its other unsecured and unsubordinated creditors;

(4) The Authority, Fred Hutch and the applicable Bond Trustee shall receive an Opinion of Counsel (and an opinion from foreign counsel, if applicable), which opinion shall be addressed to the Authority, Fred Hutch and such Bond Trustee, that such investment agreement is legal, valid, binding and enforceable upon the provider in accordance with its terms and of foreign counsel (if applicable);

(5) The investment agreement shall provide that if during its term:

(A) The provider’s rating by either S&P or Moody’s falls below “AA-” or “Aa3”, respectively, the provider shall, at its option, within 10 days of receipt of publication of such downgrade, either (i) collateralize the investment agreement by delivering or transferring in accordance with applicable state and federal laws (other than by means of entries on the provider’s books) to the Holder of the Collateral free and clear of any third-party liens or claims the market value of which collateral is maintained at levels and upon such conditions as would be acceptable to S&P and Moody’s to maintain an “A” rating in an “A” rated structured financing (with a market value approach); or (ii) repay the principal of and accrued but unpaid interest on the investment;

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(B) The provider’s rating by either S&P or Moody’s is withdrawn or suspended or falls below “A-” or “A3,” respectively, the provider must, at the direction of Fred Hutch or the applicable Bond Trustee, within 10 days of receipt of such direction, repay the principal of and accrued but unpaid interest on the investment, in either case with no penalty or premium to the Authority, Fred Hutch or such Bond Trustee;

(C) The provider shall default in its payment obligations, the provider’s obligations under the investment agreement shall, at the direction of Fred Hutch or the applicable Bond Trustee (acting at the written direction of Fred Hutch), be accelerated and amounts invested and accrued but unpaid interest thereon shall be repaid to such Bond Trustee; and

(D) The provider shall become insolvent, not pay its debts as they become due, be declared or petition to be declared bankrupt, the provider’s obligations shall automatically be accelerated and amounts invested and accrued but unpaid interest thereon shall be repaid to the applicable Bond Trustee.

(6) The investment agreement shall state and an Opinion of Counsel shall be rendered, in the event collateral is required to be pledged by the provider under the terms of the investment agreement, at the time such collateral is delivered, that the Holder of the Collateral has a perfected first priority security interest in the collateral, any substituted collateral and all proceeds thereof (in the case of bearer securities, this means the Holder of the Collateral is in possession).

(i) Shares of a money market fund (including, without limitation, any mutual fund for which the applicable Bond Trustee or an affiliate of such Bond Trustee serves as investment manager, administrator, shareholder servicing agent, and/or custodian or subcustodian, notwithstanding that (1) such Bond Trustee or an affiliate of such Bond Trustee receives fees from such funds for services rendered, (2) such Bond Trustee charges and collects fees for services rendered pursuant to the related Bond Indenture, which fees are separate from the fees received from such funds, and (3) services performed for such funds and pursuant to the related Bond Indenture may at times duplicate those provided to such funds by such Bond Trustee or its affiliates) which is rated “AAAm” or “AAAm-G” or better by S&P.

(j) Commercial paper of a United States corporation, finance company or banking institution maturing not more than 270 days from the date of purchase thereof which is rated, at the time of purchase of any such investment, “A- 1+” by S&P and “P-1” by Moody’s.

Provided, that investments set forth in clauses (a) through (j) of this definition shall constitute “Authorized Investments” only if the following requirements are met, to the extent applicable:

(1) If any of the foregoing investments, during any period of time, constitute:

(A) “certificated securities” or other “instruments” (as defined in the UCC), then during such period of time, such investments shall constitute “Authorized Investments” only if and so long as such investments are in the physical possession of either the applicable Bond Trustee or a third-party that holds such instruments (i) as an agent of such Bond Trustee and in such a manner that no creditor, bankruptcy trustee or other receiver of such third-party shall have any claim to or right to recover from such investments either upon the bankruptcy or other insolvency of such third-party or otherwise, and (ii) as bailee for such Bond Trustee for purposes of perfection by possession of such Bond Trustee’s security interest in such investment; or

(B) “uncertificated securities” (as defined in the UCC), then during such period of time, such investments shall constitute “Authorized Investments” only if and so long as the applicable Bond Trustee is the registered owner of such investment; and

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trustee or other receiver of such Bond Trustee or such third party shall have any claim to or right to recover from such investments either upon the bankruptcy or other insolvency of such Bond Trustee or such third- party or otherwise.

“Authorized Representative” means (a) as to Fred Hutch, its president and director, its executive vice president and chief operating officer, its vice president and chief financial officer or its vice president and general counsel, or any person or persons designated an Authorized Representative or an alternative Authorized Representative of Fred Hutch by a certificate of Fred Hutch signed by its president and director, its executive vice president and chief operating officer, its vice president and chief financial officer or its vice president and general counsel and filed with the applicable Bond Trustee; and (b) as to the Authority, the Chair, Secretary or Executive Director of the Authority or any other person designated by duly adopted motion or resolution of the Authority, a copy of which motion or resolution has been furnished to the applicable Bond Trustee.

“Available Amount” means, as of any time, (a) with respect to any Credit Facility, the maximum amount available to be drawn at such time under such Credit Facility, which shall be an amount at least equal to the then Outstanding principal amount of the applicable series of Bonds, plus the applicable Interest Component thereon at the Maximum Bond Interest Rate; and (b) with respect to any Liquidity Facility, the maximum amount available to be drawn at such time under such Liquidity Facility, which shall be an amount at least equal to the then Outstanding principal amount of the applicable series of Bonds, plus the applicable Interest Component thereon at the Maximum Bond Interest Rate; provided, that such Liquidity Facility shall by its terms either provide for reinstatement of the Available Amount or for an increase in the Available Amount, as the case may be, in an amount equal to the principal amount of and appropriate Interest Component on Bank Bonds not later than upon remarketing thereof and payment of amounts owed to the Liquidity Provider with respect to the amount to be reinstated.

“Bank Bonds” means Bonds of a series purchased by a Liquidity Provider or Credit Provider pursuant to a Liquidity Facility or Credit Facility during the period beginning on the date such Bonds are purchased until the earlier of (a) the date on which such Bonds are remarketed to a purchaser identified by the Remarketing Agent, or (b) the date on which such Liquidity Provider or Credit Provider elects pursuant to the related Bond Indenture not to sell such Bonds to a purchaser identified by the Remarketing Agent.

“Bank Bond Account” means the Account of that name in the applicable Bond Fund, created pursuant to the related Bond Indenture.

“Beneficial Owner” means, with respect to any Bond registered in the name of a Securities Depository or its nominee, the Person named on the records of the Securities Depository or the records of a Participant, as applicable, as having the right, without a physical certificate evidencing such right, to transfer, to hypothecate, and to receive the payment of the purchase price, to the extent due, or the principal of, premium, if any, and interest on such Bond as the same becomes due and payable.

“Board-Designated Assets” means “Board Designated Assets,” as defined in the Master Indenture. See “APPENDIX D—Summary of Certain Provisions of the Master Indenture and Deed of Trust.”

“Bond Counsel” means an attorney or firm of attorneys whose opinion is accepted in the national tax-exempt capital markets as to the issuance and validity of municipal securities and as to the interest paid thereon being excluded from gross income for federal income taxation purposes, which attorney or firm has been approved by, selected by or retained by the Authority from time to time.

“Bond Fund” means the Fund of that name created pursuant to each Bond Indenture, including its Accounts.

“Bond Indenture” means either the Series 2017B Bond Indenture or the Series 2017C Bond Indenture, as the context implies; “Bond Indentures” means, collectively, the Series 2017B Bond Indenture and the Series 2017C Bond Indenture.

“Bond Interest Term” means, with respect to a Bond of a series, each period established in accordance with the related Bond Indenture during which such Bond bears interest at a Bond Interest Term Rate.

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“Bond Interest Term Rate” means, with respect to each Bond of a series in a Bond Interest Term, a non- variable interest rate on such Bond established periodically in accordance with the related Bond Indenture.

“Bond Principal Payment Date” means, with respect to the Bonds of a series, each mandatory sinking fund Redemption Date and Maturity Date.

“Bonds” means, collectively, the Series 2017B Bonds and the Series 2017C Bonds.

“Bond Trustee” means either the Series 2017B Bond Trustee or the Series 2017C Bond Trustee, as the context implies.

“Book-Entry Termination Date” means the fifth Business Day following the date of receipt by the applicable Bond Trustee of the Authority’s request to terminate the book-entry system of registering the beneficial ownership of the applicable series of Bonds.

“Business Day” means any day other than a Saturday, Sunday or other day on which the New York Stock Exchange is closed or on which banks are authorized or required to be closed in any of Seattle, Washington, New York, New York or any other municipalities in which the Principal Offices of the applicable Bond Trustee and the Remarketing Agent and the office of the Liquidity Provider or Credit Provider from which payments pursuant to the respective Liquidity Facility or Credit Facility are to be made are located.

“Calculation Agent” means the applicable Bond Trustee, or such other Calculation Agent as may be selected by Fred Hutch, its successors or assigns; provided, that such Bond Trustee shall not be the Calculation Agent under the related Bond Indenture for any Index Floating Rate Period subsequent to the initial Index Floating Rate Period, unless on or prior to the applicable Index Floating Conversion Date, such Bond Trustee has specifically accepted such position.

“Code” means the Internal Revenue Code of 1986, as now in existence or hereafter amended, together with all applicable regulations heretofore or hereafter promulgated thereunder.

“Continuing Disclosure Agreement” means the Continuing Disclosure Agreement, dated the Date of Issue, between Fred Hutch and U.S. Bank National Association, as Bond Trustee and dissemination agent.

“Conversion” means a conversion of the Bonds of a series from one Interest Rate Period to another Interest Rate Period (including the establishment of a new interest period within the Long-Term Interest Rate Period or the Index Floating Rate Period) as provided in the related Bond Indenture.

“Conversion Date” means, with respect to the Bonds of a series, the Business Day that is the effective date of a Conversion of such Bonds.

“Credit Facility” means an irrevocable, direct-pay letter of credit issued in favor of the applicable Bond Trustee by a Credit Provider and all amendments, extensions, renewals or substitutions thereof pursuant to its terms, and upon the effectiveness of any Alternate Credit Facility, such Alternate Credit Facility.

“Credit Facility Default” means, whenever a Credit Facility is in effect for the Bonds of a series, any failure by the Credit Provider thereof to honor a Draw under its Credit Facility.

“Credit Facility Proceeds Account” means the Account of that name in the applicable Bond Fund, created pursuant to the related Bond Indenture.

“Credit Facility Purchase Account” means the Account of that name in the applicable Purchase Fund, created pursuant to the related Bond Indenture.

“Credit Provider” means the issuer of a Credit Facility and, upon the effectiveness of an Alternate Credit Facility, the issuer of such Alternate Credit Facility.

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“Credit Provider Agreement” means any agreement between Fred Hutch (or any Affiliate of Fred Hutch) and a Credit Provider, pursuant to which a Credit Facility is issued by the Credit Provider, as the same may be amended or supplemented.

“Credit Reimbursement Account” means the Account of that name in the applicable Reimbursement Fund, created pursuant to the related Bond Indenture.

“Cushion Ratio” means, for any Fiscal Year, the ratio consisting of (a) a numerator equal to the amount determined by, dividing (i) the sum of all cash (including cash equivalents determined in accordance with GAAP), investments (valued at market), and Board-Designated Assets of the Obligated Group as reflected on the audited financial statements of the Obligated Group as of the end of the immediately preceding Fiscal Year, by (ii) the Debt Service Requirements for all Funded Indebtedness of the Obligated Group for the current Fiscal Year; and (b) a denominator of one.

“Daily Interest Rate” means, with respect to the Bonds of a series, a variable interest rate for such Bonds established in accordance with the related Bond Indenture.

“Daily Interest Rate Period” means each period during which Daily Interest Rates are in effect for the Bonds of a series, except for Bank Bonds, to and excluding the next Conversion Date to a different Interest Rate Period.

“Date of Issue” means the date on which the Bonds are issued and delivered to the Underwriter in return for payment by the Underwriter of the purchase price therefor.

“Debt Service Requirements” means “Debt Service Requirements,” as defined in the Master Indenture. See “APPENDIX D—Summary of Certain Provisions of the Master Indenture and Deed of Trust.”

“Declaration of Acceleration” means the written notice of the acceleration of the principal of any Outstanding Bonds of a series and the interest accrued thereon, given by the applicable Bond Trustee as provided in the related Bond Indenture. See “THE BOND INDENTURES—Acceleration of Maturity” below.

“Defeasance Deposit” means the irrevocable deposit of Eligible Funds or noncallable Government Obligations that are not subject to redemption prior to maturity in order to provide for the payment of all or a portion of the principal of, premium, if any, and interest on any Bonds of a series in accordance with, and simultaneously meeting all the requirements of, the related Bond Indenture summarized herein under “THE BOND INDENTURES— Discharge of Lien of Bond Indenture by Defeasance.”

“Draw” means, with respect to any Credit Facility or Liquidity Facility, any drawing or other request to advance funds thereunder made by or on behalf of the applicable Bond Trustee in the manner authorized by and in accordance with the terms and conditions of such Credit Facility or Liquidity Facility.

“Electronic Means” means telecopy, facsimile transmission, e-mail transmission or other similar electronic means of communication providing evidence of transmission, including a telephonic communication confirmed by any other method set forth in this definition.

“Eligible Funds” means (a) money derived from the proceeds of the initial sale of the Bonds of a series held by the applicable Bond Trustee in any Fund, Account or Subaccount under the related Bond Indenture; (b) money derived from the remarketing of the Bonds of a series to any Person other than the Authority, Fred Hutch or any other Member of the Obligated Group or any Affiliate; (c) money derived from the proceeds of bonds issued by the Authority for the benefit of Fred Hutch or any other Member of the Obligated Group pursuant to a refunding plan adopted pursuant to the related Bond Indenture; (d) money derived from the proceeds of any Draw; (e) money which has been held by the applicable Bond Trustee in the applicable Bond Fund or any Account or Subaccount therein for a period of at least one year, and not commingled with any money not so held or so held for less than said period, and during which period Fred Hutch, each other Member of the Obligated Group, any Affiliate and the Authority shall not have become Insolvent and no Event of Bankruptcy with respect to Fred Hutch or any other Member of the Obligated Group, or event with respect to the Authority or any Affiliate which would be an Event of Bankruptcy if such event occurred with respect to Fred Hutch or any other Member of the Obligated Group, shall have occurred; (f) other money

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the use of which to make payments with respect to the Bonds of a series will not, according to an Opinion of Bankruptcy Counsel reasonably acceptable to the applicable Bond Trustee and the Rating Agencies then maintaining a rating on such Bonds (but only if such acceptance by a Rating Agency is then required to maintain such Rating Agency’s rating on such Bonds), constitute a transfer avoidable under Section 547(b) of the Federal Bankruptcy Code, subject to recovery under Section 550(a) of the Federal Bankruptcy Code in the event of bankruptcy, insolvency, reorganization, moratorium or similar proceedings with respect to the Authority, Fred Hutch, any other Member of the Obligated Group or any Affiliate, as applicable; and (g) investments purchased with, and the income derived from the investment of, money described in clauses (a), (b), (c), (d), (e) or (f) of this definition.

“Environmental Laws” means all local, state and federal laws, ordinances, regulations and orders relating to (a) environmental protection; (b) the use, storage, generation, production, treatment, emission, discharge, remediation, removal, disposal or transport of any Hazardous Substance; or (c) any other environmental matter.

“Event of Bankruptcy” means any of the following events:

(a) Fred Hutch (or any other Person obligated, as guarantor or otherwise, to make payments on the Bonds of a series or under the related Loan Agreement, the related Series 2017 Variable Rate Master Note, the Master Indenture or a Credit Provider Agreement, or an “affiliate” of Fred Hutch as defined in Federal Bankruptcy Code Section 101(2)) or the Authority shall (1) apply for or consent to the appointment of, or the taking of possession by, a receiver, custodian, trustee, liquidator or the like of Fred Hutch (or such other Person) or the Authority or of all or any substantial part of their respective property, (2) commence a voluntary case under the Federal Bankruptcy Code, or (3) file a petition seeking to take advantage of any other law relating to bankruptcy, insolvency, reorganization, winding-up or composition or adjustment of debts; or

(b) A proceeding or case shall be commenced, without the application or consent of Fred Hutch (or any other Person obligated, as guarantor or otherwise, to make payments on the Bonds of a series or under the related Loan Agreement, the related Series 2017 Variable Rate Master Note, the Master Indenture or a Credit Provider Agreement, or an “affiliate” of Fred Hutch as defined in Federal Bankruptcy Code Section 101(2)) or the Authority in any court of competent jurisdiction, seeking (1) the liquidation, reorganization, dissolution, winding-up, or composition or adjustment of debts, of Fred Hutch (or any such other Person) or the Authority, (2) the appointment of a trustee, receiver, custodian, liquidator or the like of Fred Hutch (or any such other Person) or the Authority or of all or any substantial part of their respective property, or (3) similar relief in respect of Fred Hutch (or any such other Person) or the Authority under any law relating to bankruptcy, insolvency, reorganization, winding-up or composition or adjustment of debts.

“Event of Default” means, with respect to the Bonds of a series, an Event of Default under the related Bond Indenture, summarized herein under the caption “THE BOND INDENTURES—Events of Default.”

“Event of Nonreinstatement” means the receipt by the applicable Bond Trustee of written notice from (a) the Credit Provider that its Credit Facility will not be reinstated following a Draw to pay interest on the Bonds of a series (other than interest on such Bonds no longer Outstanding after such payment of such Draw), or (b) the Liquidity Provider that its Liquidity Facility will not be reinstated following a Draw to pay the interest portion of the purchase price of any such Bonds.

“Excess Margin” means, for any Fiscal Year, the number that is the remainder of all operating and nonoperating revenues of Fred Hutch, less all operating and nonoperating expenses of Fred Hutch.

“Expiration Date” means the termination date of a Liquidity Facility or a Credit Facility then in effect, as extended from time to time.

“Facilities” means “Facilities,” as defined in the Master Indenture. See “APPENDIX D—Summary of Certain Provisions of the Master Indenture and Deed of Trust.”

“Favorable Opinion of Bond Counsel” means an Opinion of Bond Counsel, which, in the discretion of such Bond Counsel, may be based upon, and subject to the same exceptions and qualifications as, the approving Opinion of Bond Counsel delivered in connection with the original issuance of the Bonds of a series, addressed to the Authority

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and the applicable Bond Trustee to the effect that the action proposed to be taken is authorized or permitted by the related Bond Indenture and will not result in the inclusion of interest on such Bonds in gross income for federal income tax purposes.

“Federal Bankruptcy Code” means Title 11 of the United States Code, as now in existence or hereafter amended.

“Fiscal Year” means “Fiscal Year,” as defined in the Master Indenture. See “APPENDIX D—Summary of Certain Provisions of the Master Indenture and Deed of Trust.”

“Fitch” means Fitch Ratings, a corporation organized and existing under the laws of the State of New York, its successors and assigns, and, if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, “Fitch” shall be deemed to refer to any other nationally recognized securities rating agency designated by Fred Hutch by notice to the Authority and the applicable Bond Trustee.

“501(c)(3) Organization” means an organization that is exempt from the regular federal income tax under Section 501(a) of the Code, as an organization described in Section 501(c)(3) of the Code.

“Fred Hutch” means Fred Hutchinson Cancer Research Center, a Washington nonprofit corporation, and any surviving, resulting or successor corporation thereto.

“Fred Hutch Purchase Account” means the Account of that name in the applicable Purchase Fund, created pursuant to the related Bond Indenture.

“Fund” means any special fund created or authorized by the applicable Bond Indenture and pledged as security for the related series of Bonds pursuant to such Bond Indenture.

“Funded Indebtedness” means “Funded Indebtedness,” as defined in the Master Indenture. See “APPENDIX D—Summary of Certain Provisions of the Master Indenture and Deed of Trust.”

“GAAP” means generally accepted accounting principles applicable in the United States of America as from time to time in effect.

“Governing Body” means “Governing Body,” as defined in the Master Indenture. See “APPENDIX D— Summary of Certain Provisions of the Master Indenture and Deed of Trust.”

“Government Obligations,” when used in connection with the requirements of the applicable Bond Indenture, means (a) SLGS; (b) other direct and general obligations of the United States of America, or obligations the full and timely payment of principal of and interest on which are fully and unconditionally guaranteed by the United States of America; provided, that investments in such obligations shall be limited to circumstances where the owner of the investment is the real party in interest and has the right to proceed directly and individually against the United States of America in respect of its obligation or guaranty; and (c) evidences of direct ownership of proportionate interests in future interest or principal payments of direct and general obligations of the United States of America; provided, that investments in such evidences of direct ownership of such proportionate interests must be limited to circumstances wherein (1) a commercial bank or trust company acts as custodian and holds the underlying United States obligations; (2) the owner of the investment is the real party in interest and has the right to proceed directly and individually against the United States of America in respect of such proportionate interests in its obligations; (3) the underlying United States obligations are held in safekeeping in a special account, segregated from the custodian’s general assets, and are not available to satisfy any claim of the custodian, any Person claiming through the custodian, or any Person to whom the custodian may be obligated; and (4) such evidences of direct ownership of such proportionate interests are rated in the highest rating category (without regard to any refinement or gradation of such rating category by a numerical modifier or otherwise) by each Rating Agency.

“Granting Clauses” means the granting clauses identified as such at the beginning of each Bond Indenture, as the same may be supplemented and amended from time to time.

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“Hazardous Substances” means any substance or material defined or designated, as of the Date of Issue, as hazardous or toxic waste, hazardous or toxic material, a hazardous, toxic or radioactive substance, or other similar term, by any Environmental Laws and shall include any such substance or material as may hereafter become defined or designated as hazardous or toxic material by such Environmental Laws.

“Health Care Facility” means “health care facility,” as defined in the Act.

“Indebtedness” means “Indebtedness,” as defined in the Master Indenture. See “APPENDIX D—Summary of Certain Provisions of the Master Indenture and Deed of Trust.”

“Index” means any of (a) One Month LIBOR, (b) Three Month LIBOR, (c) the S&P Municipal Bond 7 Day Index, (d) the SIFMA Index or (e) any other index which is chosen by Fred Hutch, approved by the Authority in consultation with the Remarketing Agent, and procedurally acceptable to the Calculation Agent.

“Index Floating Conversion Date” means, with respect to the Bonds of a series, the date on which such Bonds are converted to bear interest at an Index Floating Rate.

“Index Floating Rate” means, with respect to the Bonds of a series, an interest rate on such Bonds established in accordance with the related Bond Indenture.

“Index Floating Rate Period” means each period during which an Index Floating Rate Spread is in effect for the Bonds of a series, determined in accordance with the related Bond Indenture.

“Index Floating Rate Spread” means (a) as of the Date of Issue, ___% per annum (for the Series 2017B Bonds) and ___% per annum (for the Series 2017C Bonds), or (b) with respect to any Conversion to an Index Floating Rate Period, the spread determined by the Remarketing Agent on or prior to the Conversion Date pursuant to the applicable Bond Indenture, in either case, for the relevant Index Floating Rate Period.

“Insolvent” means “insolvent,” as defined in the Federal Bankruptcy Code.

“Interest Accrual Date” means, with respect to the Bonds of a series, including Bank Bonds, in:

(a) Any Weekly Interest Rate Period, the first day thereof and, thereafter, the first Wednesday of each calendar month during such Weekly Interest Rate Period;

(b) Any Daily Interest Rate Period, the first day thereof and, thereafter, the first day of each calendar month during such Daily Interest Rate Period;

(c) Any Long-Term Interest Rate Period, the first day thereof and, thereafter, each Interest Payment Date during that Long-Term Interest Rate Period, other than the last such Interest Payment Date;

(d) Each Bond Interest Term within a Short-Term Interest Rate Period, the first day thereof;

(e) Any Windows Interest Rate Period, the first day thereof and, thereafter, the first Thursday of each calendar month during such Windows Interest Rate Period; and

(f) Any Index Floating Rate Period, the first day thereof and, thereafter, the first day of each calendar month during such Index Floating Rate Period; provided that for the first Interest Payment Date the Interest Accrual Date shall be the Date of Issue.

“Interest Component” means, as of any date, the maximum amount, determined with reference to the relevant Interest Coverage Period and the Maximum Bond Interest Rate, for each Bond of a series available to be drawn under any Credit Facility or any Liquidity Facility (as reduced and reinstated from time to time in accordance with the terms thereof) to pay accrued interest on any such Bond.

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“Interest Coverage Period” means the number of days specified in computing the Interest Component of the Available Amount under any Liquidity Facility, which shall be not less than the sum of (a) the maximum number of days in a Bond Interest Period, plus (b) the number of days, if any, in the period specified in such Liquidity Facility for the reinstatement of the availability of the Interest Component thereof.

“Interest Payment Date” means, with respect to the Bonds of a series, for interest accrued in:

(a) Any Weekly Interest Rate Period, the first Wednesday of each calendar month, or, if the first Wednesday is not a Business Day, the next succeeding Business Day;

(b) Any Daily Interest Rate Period, the fifth Business Day of the next succeeding calendar month;

(c) Any Long-Term Interest Rate Period, each ______and ______, or if any ______or ______is not a Business Day, the next succeeding Business Day;

(d) Any Bond Interest Term, the day next succeeding the last day of that Bond Interest Term;

(e) Any Interest Rate Period, the first Business Day next succeeding the last day thereof;

(f) Any period on Bank Bonds, the Interest Payment Date for other Bonds of a series (or any other dates specified in the Credit Provider Agreement or any amendment to or replacement thereof approved by the Authority, if the applicable Bond Trustee has received a Favorable Opinion of Bond Counsel);

(g) Any Windows Interest Rate Period, the first Thursday of each calendar month, or if the first Thursday is not a Business Day, the next succeeding Business Day; and

(h) Any Index Floating Rate Period, the first Business Day of each month. commencing ______, 2017.

“Interest Rate Period” means each Daily Interest Rate Period, Weekly Interest Rate Period, Windows Interest Rate Period, Short-Term Interest Rate Period, Index Floating Rate Period or Long-Term Interest Rate Period.

“Issuance Costs” means, with respect to the Bonds of a series, without intending to limit or restrict any proper definition of such costs under any applicable laws and GAAP, the following:

(a) Costs reasonably incurred incident to preparing, offering, selling, issuing and delivering such Bonds, including, without limitation, the fees and expenses of Bond Counsel, special counsel and financial advisor to the Authority, accountants, financial consultants and legal counsel to Fred Hutch and to the Underwriter, the costs of feasibility reports, audits, printing, CUSIP bureau fees, rating agency fees, title insurance premium and recording and filing fees;

(b) The initial annual proprietary charge payable to the Authority with respect to the such Bonds;

(c) The fees, costs and expenses (including reasonable counsel fees and expenses) payable to the applicable Bond Trustee incident to such Bond Trustee’s acceptance of the trust created by related Bond Indenture;

(d) The fees, costs and expenses (including reasonable counsel fees and expenses) payable to the bond trustees and/or depository banks for the Series 2010 Bond, the Series 2012A Bonds, the Series 2012B Bond, the Series 2014 Bond and/or the Series 2015B Bond incident to the refunding thereof; and

(e) The fees, costs and expenses (including reasonable counsel fees and expenses) payable to the Master Trustee incident to the Master Trustee’s acceptance of its duties under Supplemental Indenture No. 28 or Supplemental Indenture No. 29, as applicable.

“Issuance Costs Account” means the Account of that name in the applicable Project Fund, created pursuant to the related Bond Indenture.

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“Letter of Representations” means either the Series 2017B Letter of Representations or the Series 2017C Letter or Representations as the context implies.

“LIBOR Business Day” means any day except for a Saturday, Sunday, or other day on which banks are authorized or required to be closed in London, England.

“Liquidity Facility” means a letter of credit, standby bond purchase agreement, line of credit, loan, guaranty or similar agreement by a Liquidity Provider to provide liquidity support to pay the Tender Price of Bonds of a series tendered for purchase in accordance with the provisions of the related Bond Indenture and any Alternate Liquidity Facility delivered pursuant to, and with terms that are not inconsistent with the terms of, such Bond Indenture.

“Liquidity Facility Default” means any failure by the Liquidity Provider to honor a Draw under its Liquidity Facility.

“Liquidity Facility Purchase Account” means the Account of that name in the applicable Purchase Fund, created pursuant to the related Bond Indenture.

“Liquidity Provider” means the provider of a Liquidity Facility, and its successors and permitted assigns, and, upon the effective date of an Alternate Liquidity Facility, the bank or banks or other financial institution or financial institutions or other Person or Persons issuing such Alternate Liquidity Facility, their successors and assigns. If any Alternate Liquidity Facility is issued by more than one bank, financial institution or other Person, notices required to be given to the Liquidity Provider may be given to the bank, financial institution or other Person under such Alternate Liquidity Facility appointed to act as agent for all such banks, financial institutions or other Persons.

“Liquidity Reimbursement Account” means the Account of that name in the applicable Reimbursement Fund, created pursuant to the related Bond Indenture.

“Loan” means either the Series 2017B Loan or the Series 2017C Loan, as the context implies.

“Loan Agreement” means either the Series 2017B Loan Agreement or the Series 2017C Loan Agreement, as the context implies; “Loan Agreements” means, collectively, the Series 2017B Loan Agreement and the Series 2017C Loan Agreement.

“Loan Agreement Default” means, with respect to the Bonds of a series, any event of default under the related Loan Agreement, summarized herein under “THE LOAN AGREEMENTS—Loan Agreement Defaults.”

“Loan Interest Payment” means a payment of interest on the Series 2017B Loan or the Series 2017C Loan pursuant to the related Loan Agreement and the related Series 2017 Variable Rate Master Note.

“Loan Payments” means, collectively, the Loan Principal Payments and the Loan Interest Payments.

“Loan Principal Payment” means a payment of principal of the Series 2017B Loan or the Series 2017C Loan pursuant to the related Loan Agreement and the related Series 2017 Variable Rate Master Note.

“Loan Principal Payment Date” means, with respect to the Bonds of a series, any date established for the payment of the Loan Principal Payments, as specified in the related Loan Agreement, and summarized herein under subparagraph (2) of “THE LOAN AGREEMENTS—The Loan; Covenant to Repay.”

“Long-Term Interest Rate” means, with respect to the Bonds of a series, a term, non-variable interest rate established in accordance with the applicable Bond Indenture.

“Long-Term Interest Rate Period” means each period during which a Long-Term Interest Rate is in effect, except for Bank Bonds, to and excluding the next Conversion Date to a different Interest Rate Period.

“Management Consultant” means “Management Consultant,” as defined in the Master Indenture. See “APPENDIX D—Summary of Certain Provisions of the Master Indenture and Deed of Trust.”

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“Mandatory Credit/Liquidity Tender” means the mandatory tender of the Bonds of a series pursuant to the related Bond Indenture upon receipt by the applicable Bond Trustee of written notice from the Credit Provider or the Liquidity Provider, as the case may be, that an event has occurred as to which the Credit Provider Agreement, Credit Facility or Liquidity Facility, as applicable, requires or gives the Credit Provider or Liquidity Provider the option to terminate the Credit Facility or Liquidity Facility, and to cause a mandatory tender or acceleration of such Bonds upon the designated notice. Mandatory Credit/Liquidity Tender shall not include circumstances, if any, where the Liquidity Provider may suspend or terminate its obligations to purchase securities without notice, in which case there will be no mandatory tender.

“Mandatory Purchase Date” means (a) for the initial Index Floating Rate Period, ______, 20__ (for the Series 2017B Bonds) and ______, 20__ (for the Series 2017C Bonds); and (b) for any subsequent Index Floating Rate Period, the first day next succeeding such Index Floating Rate Period.

“Master Indenture” means the Amended and Restated Master Trust Indenture, dated November 24, 2009, by and between Fred Hutch and the Master Trustee, as it may from time to time be amended or supplemented in accordance with its terms. See “APPENDIX D—Summary of Certain Provisions of the Master Indenture and Deed of Trust.”

“Master Indenture Default” means any “Event of Default,” as defined in the Master Indenture. See “APPENDIX D—Summary of Certain Provisions of the Master Indenture and Deed of Trust.”

“Master Notes” means “Master Notes,” as defined in the Master Indenture. See “APPENDIX D—Summary of Certain Provisions of the Master Indenture and Deed of Trust.”

“Master Trustee” means The Bank of New York Mellon Trust Company, N.A., or any successor thereto under the Master Indenture.

“Maturity Date” means ______, 20__ (for the Series 2017B Bonds) and ______, 20__ (for the Series 2017C Bonds).

“Maturity Year” means (a) initially, the period commencing on the Date of Issue and ending on the next succeeding Bond Principal Payment Date; and (b) thereafter, the period commencing on the day following the Bond Principal Payment Date in any year and ending on the Bond Principal Payment Date in the immediately succeeding year.

“Maximum Bank Bond Interest Rate” means the lesser of (a) 15% per annum and (b) the Maximum Lawful Rate.

“Maximum Bond Interest Rate” means the lesser of (a) 12% per annum and (b) the Maximum Lawful Rate.

“Maximum Lawful Rate” means the maximum rate of interest on the relevant obligation permitted by applicable law. If the Bonds of a series are in a Windows Interest Rate Period or an Index Floating Rate Period, Fred Hutch shall notify the Windows Calculation Agent when in a Windows Interest Rate Period or the Calculation Agent when in an Index Floating Rate Period if at any time the Maximum Lawful Rate is less than 12% or the Maximum Bank Bond Interest Rate is less than 15%.

“Member” means “Member,” as defined in the Master Indenture. See “APPENDIX D—Summary of Certain Provisions of the Master Indenture and Deed of Trust.”

“Moody’s” means Moody’s Investors Service, Inc., a corporation organized and existing under the laws of the State of Delaware, its successors and assigns, or, if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, “Moody’s” shall be deemed to refer to any other nationally recognized securities rating agency designated by Fred Hutch by notice to the Authority and the applicable Bond Trustee.

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“Obligated Group” means “Obligated Group,” as defined in the Master Indenture. See “APPENDIX D— Summary of Certain Provisions of the Master Indenture and Deed of Trust.”

“Obligated Group Representative” means “Obligated Group Representative,” as defined in the Master Indenture. See “APPENDIX D—Summary of Certain Provisions of the Master Indenture and Deed of Trust.”

“One Month LIBOR” means the rate for deposits in United States dollars with a one-month maturity as reported on the Reuters Screen LIBOR01 Page or the Bloomberg Screen US0001M Index, as selected by the Calculation Agent (or any successor or substitute page of such service or such other page as may replace that page on that service, or such other service as may be nominated by the ICE Benchmark Administration Limited, for the purpose of displaying London interbank offered rates for U.S. dollar deposits), as of 11:00 a.m., London, England time, on the day that is two LIBOR Business Days preceding such Reset Date, except that, if such rate is not available on the day that is two LIBOR Business Days preceding such Reset Date, One Month LIBOR means a rate determined on the basis of the rates at which deposits in United States dollars for a one-month maturity and in a principal amount of at least $1,000,000 United States dollars are offered at approximately 11:00 a.m., London, England time, on the day that is two LIBOR Business Days preceding such Reset Date, to prime banks in the London interbank market by three Reference Banks. The Calculation Agent shall request the London, England office of each of such Reference Banks to provide a quotation of its rate. If at least two such quotations are provided, One Month LIBOR will be the arithmetic mean of such quotations. If fewer than two quotations are provided, One Month LIBOR will be the arithmetic mean of the rates quoted by three (if three quotations are not provided, two or one, as applicable) major banks in New York City, selected by the Calculation Agent at the direction of Fred Hutch, at approximately 11:00 a.m. on the day that is two LIBOR Business Days preceding such Reset Date for loans in United States dollars to leading European banks in a principal amount of at least U.S. $1,000,000 having a one-month maturity. If none of the banks in New York City selected by the Calculation Agent is then quoting rates for such loans, then One Month LIBOR for the ensuing interest period will mean One Month LIBOR then in effect in the immediately preceding Index Floating Rate Accrual Period.

“Opinion of Bankruptcy Counsel” means an opinion in writing of an attorney or firm of attorneys with nationally recognized experience in bankruptcy matters.

“Opinion of Bond Counsel” means an opinion in writing of Bond Counsel.

“Opinion of Counsel” means an opinion in writing of a lawyer admitted to practice in any state of the United States.

“Outstanding” means, as of any particular time, all Bonds of a series that have been duly authenticated under the related Bond Indenture, except:

(a) Bonds of such series theretofore cancelled by the applicable Bond Trustee or delivered to such Bond Trustee for cancellation after purchase in the open market or because of payment at, or redemption prior to, maturity;

(b) Bonds of such series for which a Defeasance Deposit has been made, but only to the extent that the principal of and interest on such Bonds are payable from such Defeasance Deposit; provided, that such Bonds to be paid or redeemed with such Defeasance Deposit shall be deemed to be Outstanding, to the extent applicable, for the purpose of optional and mandatory tenders and purchases (including remarketing, necessary Liquidity Facility Draws and payment of Purchase Price), transfers and exchanges under the related Bond Indenture or for the purpose of replacement of lost, stolen, mutilated or destroyed Bonds under such Bond Indenture;

(c) Temporary, mutilated, lost, stolen or destroyed Bonds of such series for which new Bonds have been authenticated, to the extent applicable, pursuant to the related Bond Indenture; and

(d) Bonds of such series exchanged, to the extent applicable, for new Bonds pursuant to the related Bond Indenture.

“Owner” means, with respect to any Bond, the Person named as the registered owner of such Bond on the registry books of the applicable Bond Trustee.

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“Par Call Date” means (a) for the initial Index Floating Rate Period, ______, 20__ (for the Series 2017B Bonds) and ______, 20__ (for the Series 2017C Bonds); and (b) for any subsequent Index Floating Rate Period that is two years or longer in duration, the date six months prior to the end of such Index Floating Rate Period and, in any other Index Floating Rate Period, means the Mandatory Purchase Date.

“Participant” means any Person who or which is a participant in the Securities Depository’s computerized book-entry system.

“Permitted Encumbrances” means “Permitted Encumbrances,” as defined in the Master Indenture. See “APPENDIX D—Summary of Certain Provisions of the Master Indenture and Deed of Trust.”

“Person” means “Person,” as defined in the Master Indenture. See “APPENDIX D—Summary of Certain Provisions of the Master Indenture and Deed of Trust.”

“Principal and Interest Account” means the Account of that name in the applicable Bond Fund, created pursuant to the related Bond Indenture.

“Principal Office” means for book-entry only Bonds and for any other Bonds while in a Long-Term Interest Rate Period means with respect to the applicable Bond Trustee or the Remarketing Agent, the address of such Person identified as its notice address in the related Bond Indenture or otherwise notified in writing by such Person to the Authority, Fred Hutch, such Bond Trustee, the Credit Provider and the Remarketing Agent; and for Bonds (other than book-entry only Bonds) in a Daily Interest Rate Period, Weekly Interest Rate Period, Short-Term Interest Rate Period, Windows Interest Rate Period or an Index Floating Rate Period means with respect to such Bond Trustee its corporate trust office located in St. Paul, Minnesota.

“Project” means acquiring, constructing, remodeling, renovating, equipping and improving Health Care Facilities consisting of real property (including land, research and administrative buildings and other structures) and personal property (including software systems, equipment and fixtures) constituting research and support facilities of Fred Hutch’s comprehensive cancer center at the following locations:

1100 Eastlake Avenue East, Seattle, Washington 98109 1000 Fairview Avenue North, Seattle, Washington 98109 1100 Fairview Avenue North, Seattle, Washington 98109 1210 Valley Street, Seattle, Washington 98109 1300 Valley Street, Seattle, Washington 98109 820 Minor Avenue North, Seattle, Washington, 98109 820 Yale Avenue North, Seattle, Washington 98109 823 Yale Avenue North, Seattle, Washington 98109.

“Project Account” means the Account of that name in the applicable Project Fund, created pursuant to the related Bond Indenture.

“Project Completion Date” means the date of completion of the payment of all applicable Project Costs to be paid from the related Project Account as evidenced by the certificate of the Authorized Representative of Fred Hutch delivered to the applicable Bond Trustee pursuant to the related Bond Indenture.

“Project Costs” means without intending thereby to limit or restrict any proper definition of such costs under any applicable laws and GAAP, the following:

(a) Obligations incurred for labor (including payroll costs of employees of Fred Hutch according to time spent by such employees on the Project) and to contractors, builders and materialmen in connection with the acquisition, construction and installation of the Project Facilities and demolition of any existing building included in the Facilities or removal of any equipment (net of any salvage), including obligations for machinery, materials and equipment therefor;

(b) Land and interests in land acquired specifically for the Project;

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(c) The cost of any indemnity and surety bonds deemed necessary by Fred Hutch with respect to the Project, taxes and other municipal or governmental charges levied or assessed with respect to the Project or any property acquired therefor, and the premiums for insurance, if any, in connection with the Project;

(d) Costs of acquisition, moving, and installation of equipment incident to accomplishment of the Project;

(e) Fees and expenses of engineers and architects for surveys and estimates and other preliminary investigations, preparation of plans, drawings and specifications, and supervising construction, as well as for the performance of all other duties of engineers and architects in relation to the acquisition and betterment of the Project or the issuance of the Bonds therefor; and

(f) Any other obligation or expense (other than Issuance Costs) heretofore or hereafter incurred by Fred Hutch in direct connection with the accomplishment of the Project, if approved in writing by Fred Hutch.

“Project Facilities” means those certain Health Care Facilities financed or refinanced, in whole or in part, with the proceeds of the Bonds.

“Project Fund” means the Fund of that name created pursuant to each Bond Indenture, including its Accounts.

“Purchase Fund” means the Fund of that name created pursuant to each Bond Indenture, including its Accounts.

“Rating Agency” means, as of any date, each nationally recognized statistical ratings organization that is maintaining a current rating on the Bonds of a series at the request of the Authority or Fred Hutch.

“RCW” means the Revised Code of Washington, as now in existence or hereafter amended.

“Rebate Payments” means “Rebate Payments,” as defined in the Tax Agreement.

“Record Date” means, with respect to the Bonds of a series, (a) with respect to any Interest Payment Date in respect of any Daily Interest Rate Period, the last Business Day of each calendar month and in the case of the last Interest Payment Date in respect of a Daily Interest Rate Period, the Business Day immediately preceding such Interest Payment Date, (b) with respect to any Interest Payment Date in respect of any Weekly Interest Rate Period, any Windows Interest Rate Period, any Index Floating Rate Period or any Short-Term Interest Rate Period, the Business Day immediately preceding such Interest Payment Date, and (c) with respect to any Interest Payment Date in respect of any Long-Term Interest Rate Period, the fifteenth day immediately preceding that Interest Payment Date or, in the event that an Interest Payment Date shall occur less than 15 days after the first day of a Long-Term Interest Rate Period, that first day.

“Redemption Date” means, with respect to the Bonds of a series, the date upon which any Bonds are to be redeemed in accordance with the related Bond Indenture.

“Reference Bank” means, with respect to an Index, any of the four largest United States banks with an office in London, England, based upon consolidated total asset size, as listed by the Federal Reserve in its most current statistical release on its website with respect thereto. Fred Hutch shall select the Reference Banks and notify the Calculation Agent of such selection.

“Refunding Plan” means the refunding, on a current basis, payment and redemption of the Series 2010 Bond, the Series 2012A Bonds, the Series 2012B Bond, the Series 2014 Bond and the Series 2015B Bond.

“Reimbursement Fund” means the Fund of that name created pursuant to each Bond Indenture, including its Accounts.

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“Reimbursement Obligations” means all amounts owing from time to time by Fred Hutch to (a) the Credit Provider pursuant to its Credit Provider Agreement, or (b) the Liquidity Provider pursuant to its Liquidity Facility.

“Remarketing Agent” means each Person qualified to act as Remarketing Agent for the Bonds of a series pursuant to the related Bond Indenture and appointed by the Authority from time to time, subject to the approval of the Credit Provider.

“Remarketing Agreement” means, with respect to the Bonds of a series, the Remarketing Agreement among the Authority, Fred Hutch and the Remarketing Agent whereby the Remarketing Agent undertakes to perform the duties of the Remarketing Agent for such Bonds under the related Bond Indenture, as amended from time to time.

“Remarketing Proceeds Account” means the Account of that name in the applicable Purchase Fund, created pursuant to the related Bond Indenture.

“Reset Date” means, for Bonds of a series in an Index Floating Rate Period, every Wednesday or if any Wednesday is not a U.S. Government Securities Business Day or a LIBOR Business Day, the next succeeding U.S. Government Securities Business Day or LIBOR Business Day; provided, however, the date of Conversion to an Index Floating Rate Period shall not be a Reset Date.

“Responsible Officer” means, with respect to the applicable Bond Trustee, the officer in the corporate trust office of such Bond Trustee (or any comparable business unit) having direct responsibility for the administration of the related Bond Indenture.

“S&P” means S&P Global Ratings, its successors and assigns, or, if such entity shall be dissolved or liquidated or shall no longer perform the functions of a nationally recognized statistical ratings organization designated by Fred Hutch and not objected to by the Authority in writing within ten days after receipt of notice of such designation.

“S&P Municipal Bond 7 Day Index” for any day means the S&P Municipal Bond 7 Day High Grade Rate Index maintained by Standard & Poor’s Securities Evaluations, Inc., which appears on the Bloomberg Screen SPMUV7DO Page (or any successor or substitute page of such service or such other page as may replace that page on that service). If such index is no longer published or otherwise not available, the S&P Municipal Bond 7 Day Index means instead an index that Fred Hutch, after consultation with the Remarketing Agent, determines most closely approximates the S&P Municipal Bond 7 Day Index, and which is procedurally acceptable to the Calculation Agent.

“Securities Act” means the Securities Act of 1933, as amended, and any successor thereto.

“Securities Depository” means (a) The Depository Trust Company, New York, New York, or (b) any successor thereto engaged by the Authority at the request of Fred Hutch to operate a book-entry system for recording, through electronic or manual means, the beneficial ownership of the Bonds, in which system no physical certificates are issued to the Beneficial Owners of the Bonds, but in which a limited number of physical certificates are issued to and registered in the name of the Custodian or its nominee, and delivered to the Custodian; provided, that such book- entry system operated by the Custodian may include the use of subsystems of recording the beneficial ownership of Bonds which are operated by parties other than the Custodian and the use of a nominee for the Custodian; and the term “Custodian,” as used herein, includes any party operating any such subsystem.

“Self-Liquidity Arrangement” means the Bonds of a series that are rated in the highest short term rating category (without giving effect to any gradations within such category) without the support of a Liquidity Facility or a Credit Facility by at least one of Moody’s, S&P or Fitch, and by all of them that will maintain short term ratings of such Bonds, upon the effectiveness of such Self-Liquidity Arrangement.

“Series 2010 Bond” means the WASHINGTON HEALTH CARE FACILITIES AUTHORITY REVENUE BOND, SERIES 2010 (Fred Hutchinson Cancer Research Center), dated November 4, 2010.

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“Series 2012A Bonds” means the WASHINGTON HEALTH CARE FACILITIES AUTHORITY REFUNDING REVENUE BONDS, SERIES 2012A (Fred Hutchinson Cancer Research Center), dated August 30, 2012.

“Series 2012B Bond” means the WASHINGTON HEALTH CARE FACILITIES AUTHORITY REFUNDING REVENUE BOND, SERIES 2012B (Fred Hutchinson Cancer Research Center), dated August 30, 2012.

“Series 2014 Bond” means the WASHINGTON HEALTH CARE FACILITIES AUTHORITY REVENUE BOND, SERIES 2014 (Fred Hutchinson Cancer Research Center), dated July 22, 2014.

“Series 2015B Bond” means the WASHINGTON HEALTH CARE FACILITIES AUTHORITY REVENUE BOND, SERIES 2015B (Fred Hutchinson Cancer Research Center), dated December 18, 2015.

“Series 2017 Bonds” means, collectively, the Series 2017A Bonds, the Series 2017B Bonds and the Series 2017C Bonds.

“Series 2017 Variable Rate Master Note” means either the Series 2017B Master Note or the Series 2017C Master Note, as the context implies; “Series 2017 Variable Rate Master Notes” means, collectively, the Series 2017B Master Note and the Series 2017C Master Note.

“Series 2017A Bonds” means the WASHINGTON HEALTH CARE FACILITIES AUTHORITY FIXED RATE REVENUE BONDS, SERIES 2017A (Fred Hutchinson Cancer Research Center), dated the Date of Issue.

“Series 2017B Bond Indenture” means the Bond Trust Indenture related to the Series 2017B Bonds, dated the Date of Issue, by and between the Authority and the Series 2017B Bond Trustee, including any indentures supplemental or amendatory thereto made in conformity therewith.

“Series 2017B Bonds” means the WASHINGTON HEALTH CARE FACILITIES AUTHORITY VARIABLE RATE REVENUE BONDS, SERIES 2017B (Fred Hutchinson Cancer Research Center), dated the Date of Issue.

“Series 2017B Bond Trustee” means U.S. Bank National Association, as trustee, paying agent, registrar, authenticating trustee and transfer agent, all in accordance with the Series 2017B Bond Indenture, or any successor thereto under such Bond Indenture.

“Series 2017B Letter of Representations” means the issuer letter of representations from the Authority to the Securities Depository in effect from time to time, if any, pertaining to the payment of the Series 2017B Bonds and the “book-entry” system for evidencing the beneficial ownership of the Series 2017B Bonds, and shall include any supplements or amendments thereto.

“Series 2017B Loan” means the loan from the Authority to Fred Hutch made pursuant to the Series 2017B Loan Agreement.

“Series 2017B Loan Agreement” means the Loan and Security Agreement related to the Series 2017B Bonds, dated the Date of Issue, by and between the Authority and Fred Hutch, including any supplements or amendments thereto made in conformity therewith.

“Series 2017B Master Note” means the Master Note – Series 2017B (Fred Hutchinson Cancer Research Center Obligated Group) of Fred Hutch, dated the Date of Issue, delivered to the Bond Trustee, as assignee of the Authority, pursuant to the Master Indenture and Supplemental Indenture No. 28.

“Series 2017C Bond Indenture” means the Bond Trust Indenture related to the Series 2017C Bonds, dated the Date of Issue, by and between the Authority and the Series 2017C Bond Trustee, including any indentures supplemental or amendatory thereto made in conformity therewith.

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“Series 2017C Bonds” means the WASHINGTON HEALTH CARE FACILITIES AUTHORITY VARIABLE RATE REVENUE BONDS, SERIES 2017C (Fred Hutchinson Cancer Research Center), dated the Date of Issue.

“Series 2017C Bond Trustee” means U.S. Bank National Association, as trustee, paying agent, registrar, authenticating trustee and transfer agent, all in accordance with the Series 2017C Bond Indenture, or any successor thereto under such Bond Indenture.

“Series 2017C Letter of Representations” means the issuer letter of representations from the Authority to the Securities Depository in effect from time to time, if any, pertaining to the payment of the Series 2017C Bonds and the “book-entry” system for evidencing the beneficial ownership of the Series 2017C Bonds, and shall include any supplements or amendments thereto.

“Series 2017C Loan” means the loan from the Authority to Fred Hutch made pursuant to the Series 2017C Loan Agreement.

“Series 2017C Loan Agreement” means the Loan and Security Agreement related to the Series 2017C Bonds, dated the Date of Issue, by and between the Authority and Fred Hutch, including any supplements or amendments thereto made in conformity therewith.

“Series 2017C Master Note” means the Master Note – Series 2017C (Fred Hutchinson Cancer Research Center Obligated Group) of Fred Hutch, dated the Date of Issue, delivered to the Bond Trustee, as assignee of the Authority, pursuant to the Master Indenture and Supplemental Indenture No. 29.

“Short-Term Interest Rate Period” means each period, consisting of Bond Interest Terms, during which the Bonds of a series bear interest at one or more Bond Interest Term Rates, except for Bank Bonds.

“SIFMA Index” means, on any date, a rate known as the Securities Industry and Financial Markets Association (“SIFMA”) Municipal Swap Index, which is determined on the basis of the seven-day high grade market index of tax-exempt variable rate demand obligations, as calculated by Bloomberg as the calculation agent for SIFMA and published or made available by SIFMA or any Person acting in cooperation with or under the sponsorship of SIFMA and acceptable to the Bond Trustee and effective from such date. If such index is no longer published or otherwise not available, the SIFMA Index means, on any date, 70% of the One Month LIBOR. If at any time neither such index is available, the SIFMA Index means instead an index that Fred Hutch, after consultation with the Remarketing Agent, determines most closely approximates the SIFMA Index, and which is procedurally acceptable to the Calculation Agent.

“SLGS” means United States Treasury Certificates of Indebtedness, Notes, Bonds and Demand Deposit United States Treasury Certificates of Indebtedness—State and Local Government Series.

“Special Bond Payment Date” means any date established by the Bond Trustee for the payment of defaulted principal or interest on any Bond.

“State” means the State of Washington.

“Supplemental Indenture No. 28” means Supplemental Indenture No. 28, dated the Date of Issue, by and between Fred Hutch and the Master Trustee.

“Supplemental Indenture No. 29” means Supplemental Indenture No. 29, dated the Date of Issue, by and between Fred Hutch and the Master Trustee.

“Tax Agreement” means the Tax Agreement and Nonarbitrage Certificate pertaining to the Series 2017 Bonds, dated the Date of Issue, by and among the Authority, Fred Hutch and the Bond Trustee, including any supplements or amendments thereto made in conformity therewith.

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“Tender Date” means, with respect to the Bonds of a series, the date on which such Bonds are required to be purchased pursuant to the related Bond Indenture.

“Tender Price” means the purchase price to be paid to the Owners of Bonds of a series purchased pursuant to the related Bond Indenture, which shall be equal to the principal amount thereof tendered for purchase, without premium, plus accrued interest from the immediately preceding Interest Accrual Date to the Tender Date (if the Tender Date is not an Interest Accrual Date).

“Three Month LIBOR” means the rate for deposits in United States dollars with a three-month maturity as reported on the Reuters Screen LIBOR01 Page or the Bloomberg Screen US0003M Index, as selected by the Calculation Agent (or any successor or substitute page of such service or such other page as may replace that page on that service, or such other service as may be nominated by the ICE Benchmark Administration Limited, for the purpose of displaying London interbank offered rates for U.S. dollar deposits), as of 11:00 a.m., London, England time, on the day that is two LIBOR Business Days preceding such Reset Date, except that, if such rate is not available on the day that is two LIBOR Business Days preceding such Reset Date, Three Month LIBOR means a rate determined on the basis of the rates at which deposits in United States dollars for a three-month maturity and in a principal amount of at least United States $1,000,000 are offered at approximately 11:00 a.m., London, England time, on the day that is two LIBOR Business Days preceding such Reset Date, to prime banks in the London interbank market by three Reference Banks. The Calculation Agent shall request the London, England office of each of such Reference Banks to provide a quotation of its rate. If at least two such quotations are provided, Three Month LIBOR will be the arithmetic mean of such quotations. If fewer than two quotations are provided, Three Month LIBOR will be the arithmetic mean of the rates quoted by three (if three quotations are not provided, two or one, as applicable) major banks in New York City, selected by the Calculation Agent at the direction of Fred Hutch, at approximately 11:00 a.m., on the day that is two LIBOR Business Days preceding such Reset Date for loans in United States. dollars to leading European banks in a principal amount of at least $1,000,000 United States dollars having a three-month maturity. If none of the banks in New York City selected by the Calculation Agent is then quoting rates for such loans, then Three Month LIBOR for the ensuing interest period will mean Three Month LIBOR then in effect in the immediately preceding Interest Accrual Period.

“Trust Estate” means the interest of the applicable Bond Trustee, created by the related Bond Indenture, in and to the property described in the Granting Clauses therein, and all revenues, money, investments, general intangibles and instruments and the income, interest and proceeds thereof and thereon.

“Trust Indenture Act” means the Trust Indenture Act of 1939, as amended, and any successor thereto.

“UCC” means the Washington Uniform Commercial Code, Title 62A RCW.

“Unclaimed Money” means, with respect to any Bond of a series and as of any time, funds held by the applicable Bond Trustee in the related Bond Fund, which are unclaimed by the Owner thereof but which are sufficient for the payment of (a) the principal of such Bond then due at maturity or upon redemption or acceleration, and/or (b) any valid check or draft for interest on such Bond.

“Undelivered Bond” means any Bond of a series which constitutes an Undelivered Bond under the provisions of the related Bond Indenture.

“U.S. Government Securities Business Day” means any day except for a Saturday, Sunday or a day on which the Securities Industry and Financial Markets Association recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in United States government securities.

“Weekly Interest Rate” means, with respect to the Bonds of a series, a variable interest rate for such Bonds established in accordance with the related Bond Indenture.

“Weekly Interest Rate Period” means each period during which a Weekly Interest Rate is in effect for the Bonds of a series, except for Bank Bonds, to and excluding the next Conversion Date to a different Interest Rate Period.

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“Windows Calculation Agent” means the applicable Bond Trustee or an agent appointed by such Bond Trustee pursuant to the related Bond Indenture to calculate the Windows Interest Rate.

“Windows Interest Rate” means, with respect to the Bonds of a series, a variable interest rate for such Bonds established in accordance with the related Bond Indenture.

“Windows Interest Rate Period” means each period during which a Windows Interest Rate is in effect for the Bonds of a series, except for Bank Bonds, to and excluding the next Conversion Date to a different Interest Rate Period.

THE BOND INDENTURES

Introduction

The Series 2017B Bonds are issued under and secured by the Series 2017B Bond Indenture and the Series 2017C Bonds are issued under and secured by the Series 2017C Bond Indenture. Each Bond Indenture is a contract between the Authority and the applicable Bond Trustee, setting forth the terms upon which the related Bonds are to be issued, paid and secured. Except as to matters that, by their nature, are specific to a particular series (e.g., designation as “2017B” or “2017C,” mandatory redemption schedules, and use of proceeds of each particular series of Bonds, etc.), the provisions of the Series 2017B Bond Indenture and the Series 2017C Bond Indenture are substantially identical. Consequently, unless the context otherwise specifically requires, references in the following summary of the Bond Indentures to the “Bond Indenture” shall mean either the Series 2017B Bond Indenture or the Series 2017C Bond Indenture, as applicable. Similarly, references to the “Bonds,” the “Loan Agreement,” the “Loan” and the like shall mean the Bonds of the series, Series 2017B Loan or Series 2017C Loan, and Series 2017B Loan Agreement or Series 2017C Loan Agreement, or similar term related to the particular Bond Indenture in question. Similarly, references to the “Bond Trustee,” the “Securities Depository” and the like shall mean such entity, acting in such capacity with respect the particular Bonds in question.

In considering matters described in this summary of the Bond Indentures, it is important to keep in mind that the provisions of each Bond Indenture apply solely to the particular series of Bonds issued under and secured by it, and such provisions are to operate independently. For example, an election to terminate the book-entry system for registration of ownership of the Series 2017B Bonds would not operate to terminate the book-entry system for registration of ownership of the Series 2017C Bonds, redemptions of Series 2017B Bonds do not have an effect on the Series 2017C Bonds, etc. The Bond Indentures are not cross-collateralized (except through cross-collateralization of the Series 2017B Master Note and the Series 2017C Master Note under the Master Indenture), and the Bond Indentures do not contain provisions for cross default (again, except through cross default under the Master Indenture). Consequently, the occurrence of an Event of Default under the Bond Indenture related to the Bonds of a series by reason of a failure to make a payment on such Bonds, when due, would not constitute an Event of Default under the Bond Indenture related to the Bonds of the other series; a Declaration of Acceleration of the Bonds of one series would not, in and of itself, operate to accelerate the principal of and interest on the Bonds of the other series; and so on. Amounts deposited in any Funds established under the Bond Indenture related to the Bonds of a series will not be available to pay the Bonds of the other series, upon the occurrence of an Event of Default or otherwise.

It is also important to keep in mind that this summary does not purport to be comprehensive or definitive. In particular, it should be noted that this summary only describes provisions of the Bond Indentures relating to the Bonds while in the initial Index Floating Rate Period. Also, it should be noted that there is no Liquidity Facility in place to provide funds for the purchase of Bonds of a series on the applicable Mandatory Purchase Date or any other purchase date, and there is no Credit Facility in place to secure payment of the Bonds of either series; thus, these summaries do not describe all of the provisions of the Bond Indentures relating to the Bonds while supported by a Liquidity Facility or Credit Facility. Reference is hereby made to the full text of each of the respective Bond Indentures for the complete details thereof.

Termination of Book Entry System

The “book-entry” system of registering ownership of the Bonds may be terminated by the Authority upon written request from Fred Hutch (provided Fred Hutch is not then in default of any payment then due on the Loan)

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and upon written notice of such request to the Credit Provider and the Liquidity Provider. In such event, upon surrender to the Bond Trustee of the immobilized certificates evidencing all of the then Outstanding Bonds, the Bond Trustee shall issue and deliver new certificates to each Beneficial Owner or such Beneficial Owner’s duly authorized agent, naming such Beneficial Owner or such Beneficial Owner’s nominee as the Owner thereof. Such certificates shall be in any Authorized Denomination.

Payment of the Bonds After the Book-Entry Termination Date

From and after the Book-Entry Termination Date, the principal and Tender Price of and premium, if any, on each Bond shall be paid by the Bond Trustee by check or draft payable to the Owner of such Bond. Said check or draft shall be delivered to the Owner or such Owner’s duly authorized agent on or after the Maturity Date of such Bond or, if earlier, any applicable Redemption Date (which has not been voided or cancelled in accordance with the Bond Indenture and provided notice of redemption has been duly given to the Owner of such Bond) or any Acceleration Date, but only upon the presentation for payment and the surrender of such Bond at the designated corporate trust office of the Bond Trustee or at such other location designated in writing by the Bond Trustee, notice of which designation shall be given (at the expense of the Bond Trustee) to each Owner; provided, that any Owner of $1,000,000 or more in aggregate principal amount of Bonds may be paid principal of and premium, if any, by wire transfer to an account in the United States, but only upon the presentation for payment and surrender of such Bonds at the designated corporate trust office of the Bond Trustee, notice of which designation shall be given to each Owner, and only if such Owner makes a written request of the Bond Trustee, received before the close of the Bond Trustee’s business on the Record Date immediately preceding the date scheduled for the payment of such principal and premium, if any, which request shall specify the account number and address, which request may provide that it remain in effect until changed or revoked in writing.

From and after the Book-Entry Termination Date, interest due on each Bond shall be paid by check or draft mailed by the Bond Trustee on each Interest Payment Date, any applicable Redemption Date (which has not been voided or cancelled in accordance with the Bond Indenture and provided notice of redemption has been duly given to the Owner of such Bond) and any Acceleration Date to the Person who is the Owner of such Bond on the Record Date for such Interest Payment Date, any applicable Redemption Date or Special Bond Payment Date at such Owner’s address appearing on the registry books of the Bond Trustee by first-class mail, postage prepaid; provided, that any Owner of $1,000,000 or more in aggregate principal amount of Bonds may be paid interest by wire transfer to an account in the United States, but only if, such Owner makes a written request of the Bond Trustee, received before the close of the Bond Trustee’s business on the Record Date immediately preceding the date scheduled for the payment of such interest, if any, which request shall specify the account number and address, which request may provide that it remain in effect until changed or revoked in writing.

Transfer and Exchange of Bonds After the Book-Entry Termination Date

Unless Bonds are held in book-entry only form, transfer of the registered ownership of any Bond shall be valid only if such Bond is surrendered at the designated corporate trust office of the Bond Trustee, with the assignment form appearing on such Bond duly executed by, or accompanied by a written instrument or instruments of transfer in form satisfactory to the Bond Trustee duly executed by, the Owner or such Owner’s duly authorized agent, in a manner satisfactory to the Bond Trustee. Upon such surrender, the Bond Trustee shall cancel the surrendered Bond certificate and shall authenticate and deliver, in exchange for such surrendered and cancelled Bond certificate and without charge to the Owner therefor (other than any governmental fees or taxes payable on account of such transfer), a new Bond certificate (or Bond certificates, at the option of the new Owner), naming as Owner the Person(s) listed as the assignee(s) on the assignment form appearing on the surrendered Bond, of the same maturity, interest rate, terms and conditions and for the same aggregate principal amount.

Unless Bonds are held in book-entry only form, any Bond may be exchanged at the designated corporate trust office of the Bond Trustee by the Owner thereof or such Owner’s duly authorized agent for new Bond(s) of any Authorized Denomination as specified by the Owner of the exchanged Bond or such Owner’s agent. Any new Bonds delivered pursuant to the Bond Indenture shall have the same aggregate principal amount and terms and conditions, other than denomination, number and, if applicable, the identity of the Owner, as the Bonds being exchanged. Such exchanges shall be made without charge to the Owner therefor (other than any taxes or other governmental charges payable on account of such exchange). The Bond Trustee shall cancel any Bonds exchanged for new Bonds.

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Mutilated, Lost, Stolen or Destroyed Bonds

If any Bond becomes mutilated, lost, stolen or destroyed, the Bond Trustee may authenticate and deliver a new Bond of the same amount, number, interest provisions and Maturity Date and of like tenor and effect in substitution therefor, all in accordance with the provisions of applicable State law. Or, if such mutilated, lost, stolen or destroyed Bond has matured, the Bond Trustee may, at its option, pay the same without the surrender thereof. However, no such substitution or payment shall be made unless the applicant shall furnish (a) evidence satisfactory to the Bond Trustee of the destruction or loss of the original Bond, and of the ownership thereof; (b) the written affidavit required by applicable State law (if any); and (c) such additional security and indemnity as may be required by the Bond Trustee. No substitute Bond shall be furnished unless the applicant shall reimburse the Authority and the Bond Trustee for their expenses in the furnishing thereof. Any such substitute Bond so furnished shall be clearly marked “Duplicate,” shall be recorded on the books of the Bond Trustee as a replacement Bond, and shall be equally and proportionately entitled to the security of the Bond Indenture as all other such Bonds issued thereunder.

Notice of Redemption After the Book-Entry Termination Date

During any period the Bonds are not held in book-entry only form, the Bond Trustee shall notify each Owner of a Bond called for redemption not less than 15 days nor more than 30 days before the Redemption Date with respect to such Bond. Such notice shall be mailed by first-class mail, postage prepaid, to each affected Owner at his address shown on the registry books maintained by the Bond Trustee on the date such notice is mailed. All expenses incurred in giving any notice of call for redemption of Bonds shall be paid by Fred Hutch. No notice of a call for redemption need be given if the Owners of all Bonds then called for redemption waive notice thereof in writing and such waiver is filed with the Bond Trustee.

Each notice of a call for redemption during any period the Bonds are not held in book-entry only form shall state: (1) that it is being given by the Bond Trustee on behalf of the Authority; (2) the date of the notice; (3) the name and address of the Bond Trustee, as paying agent for the Bonds; (4) the Redemption Date; (5) the CUSIP numbers of the Bonds to be redeemed; provided, that such redemption notice may state that the Bond Trustee makes no representation as to the accuracy of CUSIP numbers set forth therein or on the Bonds; (6) the certificate numbers of the Bonds to be redeemed; (7) in the case of Bonds to be redeemed in part only, the respective portions of the principal amount thereof to be so redeemed and that a new Bond shall be issued for any unredeemed portion; (8) the interest rates and Maturity Dates of the Bonds to be redeemed; (9) the Date of Issue; (10) unless the redemption has been cancelled or voided as provided in the Bond Indenture, that from and after such Redemption Date, interest thereon shall cease to accrue; (11) that the Owners of such Bonds shall be required to surrender them to the Bond Trustee, as the paying agent, for redemption; (12) that the Bond Trustee shall only redeem Bonds from funds made available to it by or on behalf of Fred Hutch; and (13) if applicable, a summary of the substance under the caption “THE BONDS— Redemption—Notice of Redemption; Cancellation” in the forepart of this Official Statement.

The Bond Indenture provides that the foregoing notice requirements are deemed satisfied when notice in accordance therewith is given as provided in the Bond Indenture, regardless of whether such notice is actually received by the Owners of any Bonds. Failure to provide notice of any mandatory sinking fund redemption as provided in the Bond Indenture shall not affect the validity of the proceedings for such mandatory sinking fund redemption. However, if notice of any call for optional or extraordinary optional redemption shall not have been given as provided in the Bond Indenture, then the purported optional or extraordinary optional redemption, as appropriate, is void, but only as to those Owners to whom the notice shall not have been given.

Purchase Fund

The Purchase Fund is established under the Bond Indenture, is to be held in trust by the Bond Trustee separate and apart from all other accounts and funds of the Authority, Fred Hutch and the Bond Trustee, and is to be maintained at all times that the Bonds bear interest in any Interest Rate Period. The Purchase Fund initially consists of the “Remarketing Proceeds Account,” the “Liquidity Facility Purchase Account,” the “Credit Facility Purchase Account” and the “Fred Hutch Purchase Account.” The funds in the Purchase Fund shall be held uninvested and shall be applied solely in accordance with the provisions of the Bond Indenture.

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The proceeds of the sale by the Remarketing Agent of Bonds shall be delivered to the Bond Trustee for deposit into the Remarketing Proceeds Account of the Purchase Fund. Upon receipt of the proceeds of a remarketing of the Bonds on a Tender Date, the Bond Trustee shall deposit such proceeds in the Remarketing Proceeds Account for application to the Tender Price of such Bonds in accordance with the Bond Indenture.

Upon receipt from Fred Hutch of any funds for the purchase of tendered Bonds, the Bond Trustee shall deposit such money, if any, in the Fred Hutch Purchase Account for application to the Tender Price of Bonds required to be purchased on a Tender Date in accordance with the Bond Indenture to the extent that the money on deposit in the Remarketing Proceeds Account shall not be sufficient.

Project Fund: General

The Bond Indenture establishes the Project Fund, which initially will consist of the Issuance Costs Account and the Project Account. The Project Fund shall be held by the Bond Trustee, separate and apart from all other funds and accounts of the Authority, Fred Hutch and the Bond Trustee, and shall be maintained until (1) all funds therein are transferred to the Principal and Interest Account upon the occurrence of an Event of Default, or (2) all Issuance Costs and Project Costs have been paid and the balance of funds therein has been transferred to the Principal and Interest Account as provided in the Bond Indenture. The funds in the Project Fund shall be held in trust by the Bond Trustee for the benefit of the Owners, and shall be applied solely in accordance with the provisions of the Bond Indenture.

Project Fund: Issuance Costs Account

Immediately upon receipt thereof, the Bond Trustee shall deposit the amount, derived from the proceeds of the Bonds, required to be deposited into the Issuance Costs Account on the Date of Issue, as described in the forepart of this Official Statement under the heading “ESTIMATED SOURCES AND USES OF FUNDS.” The Authority has no obligation under the Bond Indenture or under the Act to deposit any funds (other than a portion of the proceeds of the Bonds on the Date of Issue in accordance with the Bond Indenture) into the Issuance Costs Account, or to apply any funds to the payment of the Issuance Costs except the funds in the Issuance Costs Account or other funds specifically made available therefor by or on behalf of Fred Hutch.

The Bond Trustee shall pay the Issuance Costs, but only from the funds in the Issuance Costs Account; provided, however, that Fred Hutch may pay or cause to be paid any of such Issuance Costs, in which case the Bond Trustee shall reimburse Fred Hutch from the Issuance Costs Account. All payments made from the Issuance Costs Account pursuant to a written request for payment from the Authorized Representative of Fred Hutch shall be presumed to be made properly and the Bond Trustee shall not be required to examine any statements or billings pertaining to any Issuance Costs, to see to the application of any payments made from the Issuance Costs Account or to inquire into the purposes for which withdrawals are being made from the Issuance Costs Account. The date of completion of the payment of all Issuance Costs shall be the date when the Bond Trustee shall have received a certificate of the Authorized Representative of Fred Hutch to that effect. As soon as practicable following receipt of said certificate by the Bond Trustee, but in no event later than 90 days after the Date of Issue, the Bond Trustee shall transfer any money and investments remaining in the Issuance Costs Account to the Project Account. Following such transfer, the Bond Trustee shall close the Issuance Costs Account.

Project Fund: Project Account

Immediately upon receipt thereof, the Bond Trustee shall make the following deposits into the Project Account:

(a) The amount, derived from proceeds of the Bond, required to be deposited into the Project Account pursuant to the Bond Indenture;

(b) Such amounts as are received by the Bond Trustee from Fred Hutch or from any other source for the purpose of paying Project Costs;

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(d) The amount, if any, required to be transferred to the Project Account from the Issuance Costs Account pursuant to the Bond Indenture.

The Authority has no obligation under the Bond Indenture or under the Act to deposit any funds (other than the proceeds of the Bonds as provided in the Bond Indenture) into the Project Account, or to apply any funds to the payment of the Project Costs except the funds in the Project Account or other funds specifically made available therefor by or on behalf of Fred Hutch.

The Bond Trustee shall pay the Project Costs (or reimburse Fred Hutch for Project Costs previously paid) from the funds in the Project Account. All payments made from the Project Account pursuant to written requests for payment from the Authorized Representative of Fred Hutch shall be presumed to be made properly and the Bond Trustee shall not be required to see to the application of any payments made from the Project Account or to inquire into the purposes for which withdrawals are being made from the Project Account. The Project Completion Date shall be the date when the Bond Trustee shall have received a certificate of the Authorized Representative of Fred Hutch certifying that the payment of all Project Costs is complete. As soon as practicable following receipt of said certificate by the Bond Trustee, the Bond Trustee shall transfer any money and investments remaining in the Project Account to the Principal and Interest Account. Following such transfer, the Bond Trustee shall close the Project Account.

Bond Fund: General

The Bond Indenture establishes the Bond Fund, which initially will consist of the Principal and Interest Account, the Credit Facility Proceeds Account and the Bank Bond Account. The Bond Fund shall be held by the Bond Trustee separate and apart from all other funds and accounts of the Authority, Fred Hutch and the Bond Trustee, and shall be maintained as long as any Bonds remain Outstanding. The money and investments held in the Accounts of the Bond Fund shall be held in trust by the Bond Trustee for the benefit of the Owners and shall be applied solely in accordance with and subject to the provisions of the Bond Indenture.

Bond Fund: Principal and Interest Account

Immediately upon receipt thereof, the Bond Trustee shall deposit the following into the Principal and Interest Account:

(1) All Loan Payments and any payments in respect thereof pursuant to the Series 2017 Variable Rate Master Note;

(2) The net income realized on investments of money in the Principal and Interest Account;

(3) All amounts required to be transferred to the Principal and Interest Account from the Project Fund pursuant to the Bond Indenture. See “THE BOND INDENTURES—Project Fund,” “—Issuance Costs Account” and “—Project Account” above and “—Application of Money Held in Funds upon Event of Default” below;

(4) The proceeds of any Defeasance Deposit for any Bonds, but only to the extent provided in the refunding plan therefor; and

(5) All other amounts required to be transferred to or deposited in the Principal and Interest Account pursuant to any provision of the Bond Indenture or the Loan Agreement; provided, that no deposits shall be made to the Principal and Interest Account while a Credit Facility is in effect and no Credit Facility Default with respect thereto has occurred and is then continuing.

The funds, if any, in the Principal and Interest Account are irrevocably pledged and shall be used by the Bond Trustee, from time to time, to the extent required, in the following order of priority:

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(1) For application as described below under the caption “THE BOND INDENTURES—Application of Money Held in Funds upon Event of Default” upon the occurrence of an Event of Default or a Declaration of Acceleration;

(2) For the payment of (A) the interest on the Outstanding Bonds that are not Bank Bonds coming due on the next Interest Payment Date; provided, that any funds transferred to the Principal and Interest Account from the Project Account shall be applied first to the payment of interest coming due on the Bonds that are not Bank Bonds on the next Interest Payment Date but if such funds exceed the amount necessary for such purpose, then the excess shall be set aside in a separate subaccount in the Principal and Interest Account and applied to succeeding payments of interest on the Bonds that are not Bank Bonds in direct order of their due date until all such funds have been expended on such payments; (B) the principal of the Outstanding Bonds that are not Bank Bonds coming due on the next Bond Principal Payment Date, whether by reason of maturity or mandatory sinking fund redemption prior to maturity; and (C) the redemption price (including accrued interest, if any) of any Outstanding Bonds that are not Bank Bonds duly called for optional, extraordinary optional or extraordinary mandatory redemption on or before the next Bond Principal Payment Date;

(3) For transfer to the Bank Bond Account for the payment of (A) the interest on Bank Bonds coming due on the next Interest Payment Date, (B) the principal of Bank Bonds coming on due the next Bond Principal Payment Date, whether by reason of maturity or mandatory sinking fund redemption, and (C) the redemption price of and accrued interest on Bank Bonds called for optional, extraordinary optional or extraordinary mandatory redemption on or before the next Bond Principal Payment Date;

(4) Upon written request from Fred Hutch, for the payment of the purchase price of and accrued interest on Bonds purchased in the open market for surrender to the Bond Trustee on or before the next Bond Principal Payment Date (with notice to the Bond Trustee) for credit against Loan Principal Payments as provided in the Loan Agreement and described below under the caption “THE LOAN AGREEMENTS—Credits Against Loan Payments;” and

(5) Provided there is no Event of Default which has not been cured or waived in accordance with the Bond Indenture, for return to Fred Hutch (as an overpayment) on the Business Day immediately preceding each Bond Principal Payment Date, of all funds which the Bond Trustee has determined, as of such Business Day, to be in excess of those necessary for the purposes described in clauses (1) through (4) above, inclusive

Bond Fund: Credit Facility Proceeds Account

The Credit Facility Proceeds Account shall be funded only from the proceeds of Draws on any Credit Facility then in effect for the purposes of paying the principal of and interest on Bonds that are not Bank Bonds.

Bond Fund: Bank Bond Account

The Bank Bond Account is established primarily to hold funds required to be deposited therein in order to pay the principal of and interest on Bank Bonds from time to time.

Reimbursement Fund: General

The Bond Indenture establishes the Reimbursement Fund, which shall consist of the Credit Reimbursement Account and the Liquidity Reimbursement Account. The Reimbursement Fund shall be held separate and apart from all other funds and accounts of the Authority, Fred Hutch and the Bond Trustee, and shall be maintained so long as any Bonds remain Outstanding. The funds in the Reimbursement Fund shall be held in trust by the Bond Trustee for the benefit of the Credit Provider, the Liquidity Provider and the Owners of the Bonds. Pending application as set forth in the Bond Indenture, money in the Reimbursement Fund shall be invested and reinvested, to the extent practicable, by the Bond Trustee pursuant to the Bond Indenture, summarized below under the caption “THE BOND INDENTURES—Investment of Funds.”

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Reimbursement Fund: Credit Reimbursement Account

Pursuant to the Bond Indenture, no deposits will be made to the Credit Reimbursement Account unless a Credit Facility is in effect. At all times while the Credit Facility is in effect and so long as no Credit Facility Default has occurred with respect thereto, the Bond Trustee shall deposit into the Credit Reimbursement Account, immediately upon receipt thereof: all Loan Payments and any payments in respect thereof pursuant to the Series 2017 Variable Rate Master Note, and such other amounts as provided in the Bond Indenture. The Bond Trustee shall pay the Reimbursement Obligations, if any, owed to the Credit Provider from the money and investments in the Credit Reimbursement Account in the manner and to the extent provided in the Bond Indenture.

Reimbursement Fund: Liquidity Reimbursement Account

Pursuant to the Bond Indenture, no deposits will be made to the Liquidity Reimbursement Account unless liquidity support for the Outstanding Bonds is provided by a Liquidity Facility and so long as no Liquidity Facility Default has occurred with respect thereto. At all times that liquidity support for the Outstanding Bonds is provided by a Liquidity Facility, the Bond Trustee shall deposit the following into the Liquidity Reimbursement Account, immediately upon receipt thereof: all remarketing proceeds received by the Bond Trustee upon the remarketing of any Bank Bonds, and all other money required to be transferred to or deposited in the Liquidity Reimbursement Account pursuant to any provision of the Bond Indenture or the Loan Agreement. The money and investments in the Liquidity Reimbursement Account are irrevocably pledged and shall be used by the Bond Trustee, from time to time, to the extent required, in the manner and to the extent provided in the Bond Indenture.

Investment of Funds

The Bond Indenture provides that, other than funds in the Purchase Fund, which shall be held uninvested, so long as there is no Event of Default which has not been cured or waived as provided in accordance with the terms of the Bond Indenture, the Bond Trustee shall invest or reinvest money on deposit in the Bond Fund, the Project Fund, the Reimbursement Fund and their respective Accounts, to the extent practicable, in such Authorized Investments as directed by Fred Hutch in writing; but in the event of any such Event of Default, the Bond Trustee shall, to the extent practicable, invest or reinvest money held by the Bond Trustee on deposit in such Funds and Accounts in such Authorized Investments as the Bond Trustee, in its discretion, shall choose. In making any investments under the Bond Indenture, other than as directed in writing by Fred Hutch, in accordance with this paragraph, the Bond Trustee shall be subject to the “prudent person” standard of RCW 11.100.020; provided, that notwithstanding any directions of Fred Hutch or the requirements of RCW 11.100.020, all such Authorized Investments shall mature, or be subject to withdrawal, repurchase or redemption, each without penalty, at the option of the holder on or before the dates on which the invested amounts are reasonably expected to be needed for the purposes of the Bond Indenture; and all proceeds of Draws (other than such proceeds held in the Purchase Fund) shall either be invested in Government Obligations described in clause (a) of the definition thereof maturing not more than one day from the date of investment, or held uninvested by the Bond Trustee pending application as required by the Bond Indenture.

All gain and loss resulting from the sale of any investments in any fund, account or subaccount shall be charged, and the net income received in respect of such investments shall be deposited and credited upon receipt, as follows:

(1) All gain and loss resulting from the sale of any investments in any specified fund, account or subaccount shall be charged when realized to the fund, account or subaccount, respectively, from which such gain or loss arose;

(2) The net income realized on the investment of money in the Issuance Costs Account or the Project Account shall, upon receipt, be deposited in and credited to the Project Account;

(3) The net income realized on the investment of money in the Credit Facility Proceeds Account and the Credit Reimbursement Account shall, upon receipt, be deposited in and credited to the Credit Reimbursement Account;

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(4) The net income realized on investments of money in the Bank Bond Account and the Liquidity Reimbursement Account shall, upon receipt, be deposited in and credited to the Liquidity Reimbursement Account; and

(5) The net income realized on the investment of money in the Principal and Interest Account shall, upon receipt, be deposited in and credited to the Principal and Interest Account.

The Bond Trustee, unless otherwise directed by Fred Hutch, may make any and all investments of funds authorized under the Bond Indenture through its own investment department or that of any affiliate of the Bond Trustee.

Liquidity Facility; Credit Facility; Self-Liquidity Arrangement

The Bond Indenture does not require that there be a Credit Facility, a Liquidity Facility or a Self- Liquidity Arrangement in effect with respect to the Bonds during any Index Floating Rate Period, and Fred Hutch has initially opted that there be no credit support or liquidity support for the Bonds on the Date of Issue.

Remarketing Agent; Calculation Agent

The Authority shall appoint, at the written request of Fred Hutch, a Remarketing Agent for the Bonds prior to the Mandatory Purchase Date. Each Remarketing Agent shall be a member of the Financial Industry Regulatory Authority (“FINRA”), having a combined capital stock, surplus and undivided profits of at least $15,000,000 and authorized by law to perform all the duties imposed upon it by the Bond Indenture and the Remarketing Agreement. The Bond Trustee shall be the initial Calculation Agent.

Events of Default

Any one or more of the following events shall constitute an “Event of Default” under the Bond Indenture:

(1) Nonpayment of the interest on any Bonds, when due, and/or nonpayment of the principal of any Bonds, when due at maturity or upon the mandatory sinking fund redemption thereof (other than the principal of and interest on any Bank Bonds deemed paid as provided in the Bond Indenture);

(2) Failure to pay the Tender Price of a Bond when due and payable; provided, however, that if a Liquidity Facility or Credit Facility is in effect and the Liquidity Provider or Credit Provider defaults in its obligation to provide money to purchase any such tendered Bond, no Event of Default under this clause (2) shall be deemed to have occurred or to exist if the Tender Price of such Bond is paid within 365 days after the Tender Date;

(3) Failure to purchase, redeem or retire all of the Bonds on any Mandatory Purchase Date;

(4) Any Loan Agreement Default;

(5) Receipt by the Bond Trustee of written notice from the Credit Provider that an “Event of Default” has occurred under the Credit Provider Agreement and a written direction from the Credit Provider that the Bonds be accelerated;

(6) Receipt by the Bond Trustee of written notice from the Credit Provider of the occurrence of any Event of Nonreinstatement or an event giving rise to a Mandatory Credit/Liquidity Tender under the Credit Provider Agreement pertaining to its Credit Facility, together with direction from the Credit Provider to accelerate all of the Bonds; or

(7) Default by the Authority in the due and punctual performance of any of the covenants, conditions, agreements and provisions contained in the Bonds or the Bond Indenture (other than the defaults described in clauses (1) through (6) above) on the part of the Authority to be performed, if such default shall have continued for a period of 60 days after written notice shall have been given by the Bond Trustee to the Authority and to Fred Hutch specifying such default and requiring the same to be remedied and giving Fred Hutch the privilege of curing such default in the

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name of the Authority, if permitted by law; provided, that the Bond Trustee shall not be required to take notice or be deemed to have notice of any such default unless the Bond Trustee has actual notice thereof.

Notice of Default, Cure or Waiver

The Bond Trustee shall cause written notice to be given to the Authority, Fred Hutch, the Master Trustee, the Remarketing Agent, the Credit Provider, the Liquidity Provider and the Owners of all Bonds by first-class mail, postage prepaid, within five Business Days of the date upon which the Bond Trustee has received notice from any source, including, without limitation, written notice from the Credit Provider (or is deemed to have notice, pursuant to the Bond Indenture) of the occurrence of any Event of Default. The Bond Trustee shall cause written notice to be given to the Authority, Fred Hutch, the Master Trustee, the Remarketing Agent, the Credit Provider, the Liquidity Provider and the Owners of all Bonds by first-class mail, postage prepaid, within five Business Days of the date upon which the Bond Trustee has received notice from any source, including, without limitation, written notice from the Credit Provider (or is deemed to have notice, pursuant to the Bond Indenture) of any cure or waiver of any Event of Default.

Acceleration of Maturity

(1) Whenever the Bonds are not secured by a Credit Facility, upon the occurrence of any Event of Default described in clauses (1) through (6) of the section above captioned “THE BOND INDENTURES—Events of Default,” the Bond Trustee may, with the consent of the Owners of not less than a majority in aggregate principal amount of the Bonds, or, at the written request of the Owners of not less than majority in aggregate principal amount of Outstanding Bonds, the Bond Trustee shall declare the principal of all Outstanding Bonds and the interest accrued thereon to be due and payable on the Acceleration Date.

(2) Whenever credit support for the Outstanding Bonds is provided by a Credit Facility, the principal of all Outstanding Bonds and the interest accrued thereon are subject to acceleration as follows: (a) so long as no Credit Facility Default has occurred, upon the occurrence of any Event of Default described in clauses (1) through (6) of the section above captioned “THE BOND INDENTURES—Events of Default,” but only upon the written direction of the Credit Provider, the Bond Trustee shall immediately declare the principal of all Outstanding Bonds and the interest accrued thereon to be due and payable on the Acceleration Date; (b) if a Credit Facility Default has occurred, upon the occurrence of any Event of Default described in clauses (1) through (6) of the section above captioned “THE BOND INDENTURES—Events of Default,” the Bond Trustee may, in its sole discretion, or, at the written request of the Owners of not less than a majority in aggregate principal amount of Outstanding Bonds, shall declare the principal of all Outstanding Bonds and the interest accrued thereon to be due and payable on the Acceleration Date; or(c) the Bond Trustee shall declare the principal of all Outstanding Bonds and the interest accrued thereon to be due and payable immediately upon or after receipt of notice of any acceleration of any Master Note by the Master Trustee.

(3) Any acceleration of the Outstanding Bonds and the interest accrued thereon by the Bond Trustee shall be made by immediately giving to the Authority, Fred Hutch, the Master Trustee, the Credit Provider, the Liquidity Provider, the Remarketing Agent and each Rating Agency a Declaration of Acceleration, which Declaration of Acceleration shall state that the principal of all Outstanding Bonds shall become due and payable on the Acceleration Date, together with all interest accrued on such Outstanding Bonds to such Acceleration Date. The Bond Trustee is also required to give written notice of such Declaration of Acceleration and its consequences to the Owners no more than two Business Days after the date upon which the Bond Trustee gives the Declaration of Acceleration, which notice must disclose that interest shall cease to accrue on the Outstanding Bonds from and after the Acceleration Date.

(4) Immediately following any Declaration of Acceleration given while credit support for the Bonds is provided by a Credit Facility, the Bond Trustee shall make a Draw on such Credit Facility in accordance with the Bond Indenture. Upon payment of such Draw, if it is paid in full, the Bond Trustee shall deposit the proceeds of such Draw into the Credit Facility Proceeds Account. Following such deposit, the Bond Trustee shall apply all funds in the Credit Facility Proceeds Account to the payment of the principal of and interest on the Bonds that are not Bank Bonds coming due by reason of such Declaration of Acceleration, without preference or priority of principal over interest or of interest over principal, or of any installment of interest over any other installment of interest, or of any such Bond over any other such Bond, ratably, according to the amounts due respectively for principal and interest, to

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the Persons entitled thereto without any discrimination or privilege; provided, that upon any Declaration of Acceleration and without limiting the obligations of Fred Hutch under the applicable Credit Provider Agreement, all of the principal of and accrued interest on all Bank Bonds shall be paid solely from the money and investments in the Bank Bond Account, if any, and if such money and investments are insufficient to make such payment in full, the remaining principal of and accrued interest on all Bank Bonds shall be deemed to have been paid and retired under the Bond Indenture, whether the other Bonds can be so paid and retired or not, and all of the Authority’s obligations thereunder, and the Bond Trustee’s obligations to the Liquidity Provider with respect thereto, shall be deemed discharged, without any other payment therefor pursuant to these provisions of the Bond Indenture, and thereafter the Liquidity Provider shall only be entitled to look to Fred Hutch for payment of the Reimbursement Obligations incurred under the applicable Credit Provider Agreement with respect to such Bank Bonds. Alternatively, if the Credit Provider fails to pay such Draw in full, resulting in a Credit Facility Default, the Bond Trustee shall proceed as described in the paragraph immediately below.

(5) Immediately following any Declaration of Acceleration (a) given following a Credit Facility Default, (b) given while no Credit Facility is in effect providing credit support for the Bonds, or (c) in the circumstances described in the last sentence of the paragraph immediately above, and in time to make the payments described in the next sentence, the Bond Trustee shall transfer all funds from the Credit Facility Proceeds Account and all remaining funds in the Project Fund and the Reimbursement Fund to the Principal and Interest Account. On the Acceleration Date, the Bond Trustee shall apply funds in the Principal and Interest Account to the payment of principal and interest on the Bonds that are not Bank Bonds coming due by reason of such Declaration of Acceleration, without preference or priority of principal over the interest or interest over principal, or any installment of interest due over any other installment of interest, or any such Bond over any other such Bond, ratably, according to the amounts due respectively for principal and interest, to the persons entitled thereto, without any discrimination or privilege, plus, to the extent permitted by applicable law, interest on overdue installments of interest or principal at the rate borne by each respective Bond; provided, that upon any Declaration of Acceleration and without limiting the obligations of Fred Hutch under the applicable Credit Provider Agreement, all of the principal of and accrued interest on all Bank Bonds shall be paid solely from the money and investments in the Bank Bond Account, if any, and if such money and investments are insufficient to make such payment in full, the remaining principal of and accrued interest on all Bank Bonds shall be deemed to have been paid under the Bond Indenture, whether the other Bonds can be so paid or not, and all of the Authority’s obligations thereunder shall be deemed discharged, without any other payment therefor pursuant to these provisions of the Bond Indenture, and thereafter, the Liquidity Provider shall only be entitled to look to Fred Hutch for payment of the Reimbursement Obligations incurred under the applicable Credit Provider Agreement with respect to such Bank Bonds.

(6) Any acceleration of the Outstanding Bonds and any deemed payment of Bank Bonds by reason of such acceleration in accordance with the foregoing provisions is subject to the condition that if, at any time after such Declaration of Acceleration and before (a) the Bond Trustee has made the Draw on the Credit Facility required pursuant to the Bond Indenture, or (b) the Acceleration Date (in all other cases), the Authority, Fred Hutch or any Member of the Obligated Group shall deposit with the Bond Trustee a sum sufficient to pay all the overdue principal of and interest on such Bonds, with interest on such overdue principal at the rate(s) borne by the respective Bonds, including, without limitation, any past due fees and expenses of the Bond Trustee and the reasonable charges and expenses of the Bond Trustee, and any and all other defaults actually known to a Responsible Officer of the Bond Trustee (other than in the payment of principal of and interest on the Bonds which have become due and payable solely by reason of such Declaration of Acceleration) shall have been made good or cured to the satisfaction of the Bond Trustee or provision deemed by the Bond Trustee to be adequate shall have been made therefor, then and in every such case, upon the written request of (i) the Credit Provider, so long as no Credit Facility Default has occurred, or otherwise (ii) if a Credit Facility Default has occurred or if there is then no Credit Facility in effect providing credit support for the Bonds, the Owners of not less than a majority in aggregate principal amount of all Outstanding Bonds, the Bond Trustee shall rescind and annul such Declaration of Acceleration and its consequences, including without limitation, the acceleration and deemed payment of Bank Bonds, if any, and waive such default on behalf of all the Owners, by written notice to the Authority, Fred Hutch, the Master Trustee, the Credit Provider, any Liquidity Provider, any Remarketing Agent and each Rating Agency; provided, that no such rescission and annulment shall be effective unless and until the Available Amount under any Credit Facility and under any Liquidity Facility have been fully reinstated; provided further, that such right to rescind and annul such Declaration of Acceleration and its consequences shall not extend to the Owners if the Bond Trustee made such Declaration of Acceleration as a result of the acceleration of any Master Note by the Master Trustee and the corresponding acceleration of the Master Notes has

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not been rescinded or annulled in accordance with the Master Indenture; and provided further, that no such rescission and annulment shall extend to or shall affect any subsequent default, or shall impair or exhaust any right or power consequent thereon.

(7) Following the payment (or deemed payment pursuant to paragraph (4) or (5) above, in the case of Bank Bonds) of all amounts due to the Owners of Bonds upon their acceleration, the Bond Trustee shall make the following payments from any money and investments thereafter remaining in the Funds and Accounts held by the Bond Trustee under the Bond Indenture (other than Unclaimed Money), in the following order of priority: (a) any Rebate Payments then due and payable to the United States Treasury; (b) the costs and expenses incurred by the Bond Trustee in the proceedings resulting in the collection of such money and of the fees, expenses, liabilities and advances incurred or made by the Bond Trustee (including reasonable counsel fees and expenses) then due and unpaid shall be paid to the Bond Trustee; (c) any Reimbursement Obligations then due and unpaid (as evidenced by a written statement of the Credit Provider and the Liquidity Provider delivered to Fred Hutch and the Bond Trustee) shall be paid to the Credit Provider and the Liquidity Provider, as the case may be; and (d) any excess shall be remitted to Fred Hutch.

(8) The Bond Trustee shall transfer, assign and convey all of its rights, title and interests in and to the Series 2017 Variable Rate Master Note to any nondefaulting Credit Provider.

Other Remedies; Enforcement of Covenants and Conditions

Subject to the provisions of the Bond Indenture described in the next full paragraph, upon the occurrence of any Event of Default described in clause (7) of the section above captioned “THE BOND INDENTURES—Events of Default,” which has not been waived as permitted in accordance with the Bond Indenture, the Bond Trustee’s sole remedy shall be to take appropriate action, including, but not limited to, the commencement and prosecution of appropriate legal or equitable proceedings, to compel the Authority to perform its obligations. Also subject to the provisions of the Bond Indenture described in the next full paragraph, upon the occurrence of an Event of Default described in clause (1), (2), (3), (4), (5) or (6) of the section above captioned “THE BOND INDENTURES—Events of Default,” which has not been cured or waived as permitted in accordance with the Bond Indenture, the Bond Trustee may proceed to enforce any such appropriate legal or equitable remedy as the Bond Trustee shall deem most effectual to protect and enforce any of its rights or any of the rights of the Owners, including, but not limited to, the following:

(1) Proceeding forthwith by suit(s) at law or in equity or by any other appropriate remedy to enforce (a) payment of the Bonds; (b) the application to such payment of the funds, revenues and income appropriated thereto by the Bond Indenture and by the Bonds; (c) the rights of the Authority assigned to the Bond Trustee under the Loan Agreement and/or the Series 2017 Variable Rate Master Note; and (d) the rights of the Bond Trustee under the Bond Indenture, the Series 2017 Variable Rate Master Note and the Tax Agreement; and

(2) Pursuing all remedies of a secured creditor under the applicable laws of the State.

The Bond Indenture provides that, if the Bond Trustee has been provided with a Credit Facility that is then in effect, so long as no Credit Facility Default has occurred and is continuing, the Credit Provider shall have the right to direct the Bond Trustee by written request, and the Bond Trustee shall proceed as directed in writing by the Credit Provider, to take such actions as permitted in the paragraph immediately above, and/or such actions as are permitted in the Loan Agreement. If the Bond Trustee has not been provided with a Credit Facility that is then in effect or if a Credit Facility Default has occurred and is continuing, the Bond Trustee may proceed to take the action to enforce the remedies in the Bond Indenture and/or the Loan Agreement in its discretion, and shall proceed to take such action upon the written request of the Owners of not less than a majority in aggregate principal amount of the Outstanding Bonds. Notwithstanding the foregoing, but subject to the provisions of the Bond Indenture, the Bond Trustee need not proceed, including upon any such written request of the Owners of the Bonds, or the Credit Provider, as aforesaid, unless the Credit Provider, if any (provided no Credit Facility Default has occurred and is continuing), or the Owners (if a Credit Facility has not been provided or a Credit Facility Default has occurred and is continuing), as applicable, shall have offered to the Bond Trustee security and indemnity satisfactory to it against the fees, costs, expenses and liabilities to be incurred by the Bond Trustee therein or thereby.

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Application of Money Held in Funds upon Event of Default

Upon the occurrence of an Event of Default followed by a Declaration of Acceleration that has not been cured or waived as provided in the Bond Indenture, the Bond Trustee is required to apply the money and investments in the Funds and the Accounts held under the Bond Indenture as provided under the section above captioned “THE BOND INDENTURES—Acceleration of Maturity.”

Upon the occurrence of any other Event of Default, the Bond Trustee shall transfer all funds in the Project Fund to the Principal and Interest Account. All other money received by the Bond Trustee pursuant to any right given, remedy pursued or action taken under these provisions of the Bond Indenture or by virtue of action taken under provisions of the Loan Agreement or the Series 2017 Variable Rate Master Note, after payment of the costs and expenses of the proceedings resulting in the collection of such money and of the fees, expenses, liabilities and advances incurred or made by the Bond Trustee, none of which shall be paid from Draw proceeds, and after provision satisfactory to the Bond Trustee for payment of the fees and expenses to be incurred in the future by the Bond Trustee, shall be deposited and applied as follows:

(1) If the principal of all Outstanding Bonds shall not otherwise have become due and remains unpaid, the Bond Trustee shall apply any such funds available in the Principal and Interest Account, first, to the payment of the interest on the Bonds then due, in the order of the maturity of the installments of such interest, such payments to be made ratably to the Persons entitled thereto, without discrimination or preference, until all interest then due is paid, and the Bond Trustee shall apply any excess remaining thereafter to the payment of the principal on any Bonds then due, such payments to be made ratably to the Persons entitled thereto, without discrimination or preference; and then any excess remaining shall be applied to the payment of Reimbursement Obligations then due and payable related to payments of interest and principal of Bonds pursuant to a Draw on the Credit Facility; or

(2) If the principal of all Outstanding Bonds shall otherwise have become due and payable, on each Special Bond Payment Date, the Bond Trustee shall apply any such funds available in the Principal and Interest Account to the payment of the principal and interest then due and unpaid upon such Bonds, without preference or priority of principal over interest or of interest over principal, or of any installment of interest over any other installment of interest, or of any Bond over any other Bond, ratably, according to the amounts due respectively for principal and interest, to the Persons entitled thereto, without any discrimination or preference; or

(3) After the payments required to be made pursuant to clauses (1) and (2) above, the Bond Trustee shall apply any funds available for the payment of Reimbursement Obligations then due and payable to the Credit Provider; or

(4) Whenever all principal of and interest on all Outstanding Bonds have been paid under the provisions of the Bond Indenture and all fees, expenses and charges of the Bond Trustee and the Authority under the Bond Indenture or pursuant to the Loan Agreement and the Series 2017 Variable Rate Master Note have been paid, and all Rebate Payments due to the United States Treasury have been made, any balance remaining with the Bond Trustee shall be returned to Fred Hutch.

Right of Bond Trustee to Act Without Possession of Bonds

All rights of action (including the right to file proofs of claim under the Bond Indenture, the Loan Agreement, the Series 2017 Variable Rate Master Note or any of the Bonds) may be enforced by the Bond Trustee without the possession of any of the Bonds, or the production thereof in any trial or other proceeding relating thereto, and any such suit or proceeding instituted by the Bond Trustee shall be brought in its name as Bond Trustee, without the necessity of joining as plaintiffs or defendants any Owners of the Bonds, and any recovery of judgment shall be for the benefit of the Owners of all Outstanding Bonds. Nothing in the Bond Indenture shall be deemed to authorize the Bond Trustee to authorize or consent to or accept or adopt on behalf of any Owner of Bonds any plan of reorganization, arrangement, adjustment or composition affecting the Bonds or the rights of any Owner thereof, or to authorize the Bond Trustee to vote in respect of the claim of any Owner in any such proceeding without the approval of the Owners of Bonds so affected.

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Limitation on Suits by Owners

Except as otherwise specifically provided in the Loan Agreement, the Owners of Outstanding Bonds shall have no right to institute any suit, action or proceeding in equity or at law for the enforcement of the Bond Indenture, the Loan Agreement or the Series 2017 Variable Rate Master Note for the execution of any trust of the Bond Indenture or for any other remedy under the Bond Indenture unless: (a) a default has occurred and is continuing of which the Bond Trustee has been given notice in writing or of which it is deemed to have notice in accordance with the Bond Indenture; (b) such default shall have become an Event of Default that has not been rescinded or waived in accordance with the Bond Indenture; (c) if the Bond Trustee has been provided with a Credit Facility that is then in effect, a Credit Facility Default has occurred thereunder; and (d) the Owners of not less than a majority in aggregate principal amount of Outstanding Bonds shall have made written request to the Bond Trustee and shall have offered it reasonable opportunity either to proceed to exercise the powers granted to it under the Bond Indenture or to institute such action, suit or proceeding in its own name; and also shall have offered to the Bond Trustee indemnity and payment of fees and expenses as provided in the Bond Indenture. Such notification, request and offer of indemnity and payment of fees and expenses are at the option of the Bond Trustee to be conditions precedent to the execution of the powers and trusts of the Bond Indenture and to any action or cause of action for enforcement or for any other remedy thereunder, it being understood and intended that the Owners of Outstanding Bonds shall have no right in any manner whatsoever to affect, disturb or prejudice the lien of the Bond Indenture by their action or to enforce any right thereunder except in the manner provided in the Bond Indenture, and that all proceedings at law or in equity shall be instituted, had and maintained in the manner and for the benefit of the Owners of all Outstanding Bonds, all as provided in the Bond Indenture. Nothing in the Bond Indenture contained, however, shall affect or impair the right of any Owner of Bonds, which is absolute and unconditional, to enforce and bring suit for the payment of the principal of and interest on any Bond at and after the maturity thereof or the obligations of the Authority to cause the payment of the principal of and interest on each of the Bonds issued under the Bond Indenture to the respective Owners thereof at the time and place expressed in said Bonds, in accordance with the terms of the Bonds.

Waiver by Owners

Upon the written request of (a) the Credit Provider, if a Credit Facility is then in effect and no Credit Facility Default has occurred thereunder, which written request shall be accompanied, if applicable, by notice of full reinstatement of the Available Amount under any Credit Facility, or otherwise (b) if no Credit Facility is then in effect or if a Credit Facility Default has occurred, the Owners of not less than a majority in aggregate principal amount of all Outstanding Bonds, the Bond Trustee shall waive any Event of Default and its consequences; provided however, that for these purposes, the Credit Provider shall be deemed to be the Owner of all Outstanding Bonds so long as no Credit Facility Default has occurred and is continuing. Notwithstanding the foregoing, an Event of Default in the payment of the principal of the Bonds, when due, whether upon maturity or mandatory sinking fund redemption, or an Event of Default in the payment of interest on the Bonds, or the occurrence and continuance of an Event of Default described in clauses (5) of the section above captioned “THE BOND INDENTURES—Events of Default,” shall not be waived by the Bond Trustee unless, prior to such waiver, all arrears of principal and interest, if any, and all expenses of the Bond Trustee shall have been paid or shall have been provided for by deposit with the Bond Trustee of a sum sufficient to pay the same; and provided further, that (1) the amount available for drawing under the Credit Facility has been reinstated to an amount at least equal to the required Available Amount immediately after such waiver, and (2) the Credit Provider has rescinded or revoked any Event of Nonreinstatement and any notice thereof. In case of any such waiver, the Authority, the Bond Trustee, Fred Hutch, the other Members of the Obligated Group, the Credit Provider and the Owners shall be restored to their former positions and rights under the Bond Indenture respectively. No such waiver shall extend to any subsequent or other default or any Event of Default or impair any right consequent thereon.

Remedies Cumulative, Restoration Rights

No remedy conferred upon or reserved to the Bond Trustee, the Credit Provider or the Owners by the terms of the Bond Indenture, the Loan Agreement or the Series 2017 Variable Rate Master Note is intended to be exclusive of any other remedy, but each and every such remedy shall be cumulative and shall be in addition to any other remedy given under the Bond Indenture or now or hereafter existing at law or in equity or by statute. No delay or omission to exercise any right or power accruing upon any default or Event of Default shall impair any such right or power or shall be construed to be a waiver of any such default or Event of Default or acquiescence therein, and every such right

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and power may be exercised from time to time and as often as may be deemed expedient. No waiver of any default or Event of Default under the Bond Indenture, whether by the Bond Trustee, the Credit Provider or the Owners, shall extend to or shall affect any subsequent default or Event of Default or shall impair any rights or remedies consequent thereon.

In case the Bond Trustee, the Credit Provider or the Owners shall have proceeded to enforce any right under the Bond Indenture and any proceedings shall have been discontinued or abandoned for any reason, or shall have been determined adversely to the Bond Trustee, the Credit Provider or the Owners, then and in every such case the Authority, Fred Hutch, the other Members of the Obligated Group, the Bond Trustee, the Credit Provider and the Owners shall be restored to their former positions and rights under the Bond Indenture with respect to all rights, remedies and powers of the Bond Trustee or the Owners, which shall continue as if no such proceedings had been taken.

Concerning the Bond Trustee

Generally, the Bond Trustee shall not be liable with respect to any action taken or omitted to be taken under the Bond Indenture except for its own negligent action, its own negligent failure to act, or its own willful misconduct; provided, that:

(1) The duties and obligations of the Bond Trustee shall be determined solely by the express provisions of the Bond Indenture; the Bond Trustee shall be obligated to take only such actions as are specifically set forth therein or as are specifically required to be taken by the Bond Trustee when requested from time to time by the Credit Provider or the Owners of the percentage of aggregate principal amount of Outstanding Bonds specified therein with respect to the actions in question in accordance with the express provisions of the Bond Indenture;

(2) In the absence of bad faith on the part of the Bond Trustee, the Bond Trustee may conclusively rely, as to the truth of the statements and to the correctness of the opinions expressed therein, upon any certificate or opinion furnished to the Bond Trustee in accordance with the Bond Indenture and conforming to the applicable procedural requirements of the Bond Indenture and the Loan Agreement; but in the case of any such certificate or opinion which by any provision of the Bond Indenture is specifically required to be furnished to the Bond Trustee, the Bond Trustee shall be under a duty to examine the same to determine whether or not it conforms to the applicable requirements of the Bond Indenture and the Loan Agreement on its face;

(3) The Bond Trustee shall not be liable for any error of judgment made in good faith by the Bond Trustee unless it shall be proved that the Bond Trustee was negligent in ascertaining the pertinent facts;

(4) The Bond Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Credit Provider or the Owners of the percentage of aggregate principal amount of Outstanding Bonds specified in the Bond Indenture with respect to the actions in question or in accordance with the express provisions of the Bond Indenture;

(5) All notices or other instruments required or permitted to be delivered to the Bond Trustee pursuant to the Bond Indenture or the Loan Agreement must be delivered to the Bond Trustee at the address set forth or otherwise designated for notices pursuant to the Bond Indenture in order to be effective; and

(6) The Bond Trustee shall not be required to maintain or review copies of any policies of insurance required pursuant to the Loan Agreement.

The Bond Trustee may execute any of the trusts or powers of, and perform any of its duties under, the Bond Indenture, by or through attorneys, accountants and other experts, agents, servicers, receivers or employees but shall be answerable for the conduct of the same in accordance with the standard of conduct specified in the Bond Indenture.

The permissive right of the Bond Trustee to do things enumerated in the Bond Indenture shall not be construed as a duty of the Bond Trustee, and the Bond Trustee shall be answerable only for its own negligence or willful misconduct. The Bond Trustee shall not be required to give any bond or surety in respect of the execution of the said trusts and powers or otherwise in respect of the premises.

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In case an Event of Default has occurred and is continuing, except in accordance with directions of the Credit Provider or the Owners, the Bond Trustee shall exercise such of the rights and powers vested in it by the Bond Indenture, and use the same degree of care and skill in its exercise, as a prudent person would exercise or use under the circumstances in the conduct of such person’s own affairs. However, other than with respect to its duties to give notice of redemptions and mandatory tenders, to make Draws under any Credit Facility or Liquidity Facility, to make payment on the Bonds when due to the extent of funds available therefor, and to pursue the remedy of acceleration as provided in the Bond Indenture and described under the caption “THE BOND INDENTURES—Acceleration of Maturity,” for each of which no additional security or indemnity may be required, the Bond Trustee shall be under no obligation to institute any suit, to take any proceeding under the Bond Indenture or the Loan Agreement, to enter any appearance or in any way defend in any suit in which it may be defendant, or to take any steps in the execution of the trusts created by, or in the enforcement of any rights and powers under, the Bond Indenture, until it shall have reasonable grounds for believing that prompt repayment of all costs and expenses, outlays and counsel fees and other reasonable disbursements in connection therewith, and satisfactory indemnity against all risk and liability, is reasonably assured to it; provided, that the Bond Trustee shall not be entitled to seek indemnity (1) to make a payment of principal and interest on the Bonds when due in accordance with the Bond Indenture to the extent of funds available therefor, (2) to give a Declaration of Acceleration of the Bonds upon proper direction by the Credit Provider or the Owners, as the case may be, in accordance with the Bond Indenture, or (3) to make a Draw under the Credit Facility or any Liquidity Facility.

Qualifications of Bond Trustee

The Bond Indenture provides that the Bond Trustee shall at all times be an association or a corporation organized and doing business under the laws of the United States or any state thereof; be authorized under such applicable laws to exercise corporate trust powers and authorized under applicable State law to serve as Bond Trustee under the Bond Indenture; have a combined capital and surplus of at least $75,000,000; and be subject to supervision or examination by federal or state authority. If such association or corporation publishes reports of condition at least annually, pursuant to law or to the requirements of any supervising or examining authority above referred to, then the combined capital and surplus of such association or corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. In case at any time the Bond Trustee shall cease to be eligible in accordance with the provisions of the Bond Indenture and another association or corporation is eligible, the Bond Trustee shall resign immediately.

Resignation or Removal of Bond Trustee

The Bond Trustee may resign and be discharged from the trusts created by the Bond Indenture by giving to the Authority, the Credit Provider, the Liquidity Provider and Fred Hutch 60 days’ advance written notice; provided, that the Bond Trustee may resign upon 10 days’ advance written notice to the Authority, the Credit Provider, the Liquidity Provider and Fred Hutch, accompanied by an Opinion of Counsel to the effect that a reasonable argument can be made that the Bond Trustee’s continued service under the Bond Indenture would subject the Bond Trustee to a claim of liability for breach of its duty of undivided loyalty or similar or related duties under the Bond Indenture. Such resignation shall take effect on the day specified in such notice, but the resigning Bond Trustee shall not be discharged from the trusts created by the Bond Indenture until a successor Bond Trustee has been appointed, and accepted such appointment, all conditions precedent to the transfer of any Credit Facility and/or Liquidity Facility then in effect have been satisfied and such Credit Facility and/or Liquidity Facility are in fact transferred to the successor Bond Trustee or a new Credit Facility and/or Liquidity Facility, as applicable, are delivered to the successor Bond Trustee. Subsequent to such date, the resigning Bond Trustee shall have no further duties and obligations under the Bond Indenture or the Loan Agreement.

The Bond Trustee shall be removed at any time, either with or without cause, by the Authority (1) if the Bond Trustee has been provided with a Credit Facility that is then in effect and so long as no Credit Facility Default has occurred and is continuing thereunder, at the written request of the Credit Provider; or (2) if the Bond Trustee has not been provided with a Credit Facility that is then in effect or if a Credit Facility Default has occurred and is continuing, at the written request of the Owners of a majority in aggregate principal amount of Outstanding Bonds; or (3) so long as no Event of Default has occurred and is continuing or any default which with the passage of time or the giving of notice would ripen into an Event of Default, at the written request of Fred Hutch subject to the approval of such

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removal by the Authority and the Credit Provider (so long as no Credit Facility Default has occurred and is continuing). If removal of the Bond Trustee is without cause, the Authority shall give the Bond Trustee 60 days’ prior written notice of such removal. No prior written notice shall be required for a removal of the Bond Trustee if such removal is with cause as provided in the Bond Indenture. The Bond Trustee may also be removed by the Authority at any time for (a) any breach of trust, (b) acting or proceeding in violation of, or failing to act or proceed in accordance with, any provision of the Bond Indenture with respect to the duties and obligations of the Bond Trustee, or (c) an increase in the Bond Trustee’s fees for the administration of the trusts created by the Bond Indenture to a level which materially exceeds the average of the then current fees for comparable services of other corporate fiduciaries authorized under State law to serve as Bond Trustee thereunder. Any removal of the Bond Trustee shall be effected by delivery to the Bond Trustee, the Credit Provider and Fred Hutch of a written instrument signed by the Authorized Representative of the Authority to that effect, which instrument shall also appoint a successor to the Bond Trustee so removed and shall be accompanied by evidence of the successor’s acceptance of the trusts under the Bond Indenture.

Appointment of Successor Bond Trustee; Merger of Bond Trustee

In case at any time the Bond Trustee shall resign, be removed or otherwise become incapable of acting, or shall be adjudged a bankrupt or insolvent, or if a receiver of the Bond Trustee or of its property shall be appointed, or if a public supervisory office shall take charge or control of the Bond Trustee or of its property or affairs, a vacancy shall forthwith and ipso facto be created in the office of the Bond Trustee under the Bond Indenture, and a successor shall be appointed by the Authority, with the prior written consent of the Credit Provider and the Liquidity Provider, if any, so long as no Credit Facility Default or Liquidity Facility Default has occurred and is continuing (which consent shall not be unreasonably withheld or delayed), subject to the requirements of the Bond Indenture and State law, (1) if the Bond Trustee has been provided with a Credit Facility that is then in effect and so long as no Credit Facility Default has occurred and is continuing, at the written request of the Credit Provider, or (2) if the Bond Trustee has not been provided with a Credit Facility that is then in effect or if a Credit Facility Default has occurred and is continuing (A) at the written request of the Owners of a majority in aggregate principal amount of Outstanding Bonds, or (B) if no such request has been made, at the written request of Fred Hutch (so long as there is no Event of Default which remains uncured) or in the Authority’s discretion (if an Event of Default has occurred and remains uncured). Any appointment shall be made by a written instrument delivered to Fred Hutch, the Credit Provider and the Bond Trustee and executed by the Authorized Representative of the Authority and shall be subject to satisfaction of all conditions precedent to the transfer of any Credit Facility and/or Liquidity Facility then in effect and delivery to the successor Bond Trustee of such Credit Facility and/or Liquidity Facility, or delivery of a new Credit Facility and/or Liquidity Facility, as applicable, to the successor Bond Trustee. After any such appointment by the Authority, the Authority shall cause the successor Bond Trustee to mail notice by first-class mail, postage prepaid, at least once, within 30 days of such appointment, to the Owners of the Outstanding Bonds at their addresses on the registry books maintained by the Bond Trustee. If no appointment of a successor Bond Trustee shall be made pursuant to the Bond Indenture within 60 days after the receipt by the Authority and Fred Hutch of the Bond Trustee’s notice of resignation given, or the removal of the Bond Trustee, pursuant thereto, any Owner or the retiring Bond Trustee may apply to any court of competent jurisdiction to appoint a successor Bond Trustee. Said court may thereupon, after such notice, if any, as such court may deem proper and prescribe, appoint a successor Bond Trustee.

Any corporation or association into which the Bond Trustee may be converted or merged, or with which it may be consolidated, or to which it may sell or transfer its corporate trust business and assets as a whole or substantially as a whole, or any corporation or association resulting from any such conversion, sale, merger, consolidation or transfer to which it is a party, ipso facto, shall be and become successor Bond Trustee under the Bond Indenture, without the execution or filing of any instrument or any further act, deed or conveyance, provided the resulting entity is qualified to serve as Bond Trustee in accordance with the Bond Indenture.

Determination of Owners’ Concurrence

In determining whether the Owners of the requisite aggregate principal amount of Outstanding Bonds have concurred in any demand, request, direction, consent or waiver under the Bond Indenture, Bonds which are owned by Fred Hutch, another Member of the Obligated Group or any Affiliate of any Member shall be disregarded and deemed not to be Outstanding for the purpose of any such determination unless all of the Outstanding Bonds are so owned; provided, that for the purpose of determining whether the Bond Trustee shall be protected in relying on any such demand, request, direction, consent or waiver only Bonds which a Responsible Officer of the Bond Trustee knows to

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be so owned shall be disregarded. Bonds so owned which have been pledged in good faith may be regarded as Outstanding if the pledgee shall establish to the satisfaction of the Bond Trustee the pledgee’s right to vote such Bonds and that the pledgee is not Fred Hutch, any other Member of the Obligated Group or an Affiliate of any Member. In case of a dispute as to such right, any decision by the Bond Trustee taken upon the written advice of counsel shall be full protection to the Bond Trustee against any liability therefor.

Discharge of Lien of Bond Indenture by Payment of Bonds

At such time as all of the principal of, premium, if any, and interest on all or any part of the Bonds has been fully paid as and when the same is due and payable, whether by reason of maturity, redemption or acceleration, or if any Bond is acquired by Fred Hutch and is surrendered to the Bond Trustee for cancellation as permitted pursuant to the Bond Indenture, then said Bonds shall cease to be entitled to any lien, benefit or security of the Bond Indenture and the Trust Estate.

Discharge of Lien of Bond Indenture by Defeasance

Any or all Outstanding Bonds, prior to the maturity thereof, shall be deemed to have been paid and not Outstanding under the Bond Indenture and shall cease to be entitled to any lien, benefit or security of the Bond Indenture and of the Trust Estate except the right to receive the money and the proceeds and income of the Government Obligations set aside and pledged to such purposes in accordance with the Bond Indenture and rights in connection with tenders, transfers and exchanges under the Bond Indenture or for the purpose of replacement of lost, stolen, mutilated or destroyed Bonds under the Bond Indenture, if:

(1) In the event that any or all of said Bonds are to be optionally or extraordinarily optionally redeemed prior to maturity pursuant to any optional or extraordinary optional redemption provision relating thereto, Fred Hutch shall have given to the Bond Trustee irrevocable instructions to give such notice of redemption of such Bonds as may be required by the provisions of the Bond Indenture;

(2) There shall have been made a deposit, irrevocably and in trust, with the Bond Trustee or another corporate fiduciary qualified to do business in this State, of either (A) Eligible Funds, or (B) if the Bonds bear interest at a Long-Term Interest Rate to the Maturity Date, Government Obligations the payments on which when due, without reinvestment, together with any Eligible Funds will provide a series of payments which shall be sufficient, together with any money initially deposited, to provide for the payment of all of the principal of, premium, if any, and interest on such Bonds when due in accordance with their terms or in accordance with the schedule of mandatory redemption pertaining thereto, or upon the earlier redemption thereof in accordance with a refunding plan; and such money and the principal of and interest on such obligations are irrevocably set aside and pledged for the purpose of effecting such payment or redemption; provided, that if such Defeasance Deposit is made during any period during which the interest rate on the Bonds may change, such refunding plan (i) shall provide that the Bonds shall be redeemed on the earliest practicable Redemption Date therefor considering the notice requirements of the Bond Indenture, and (ii) shall assume that the Bonds bear interest at the Maximum Bond Interest Rate;

(3) If Government Obligations constitute any part of the deposit described in subparagraph (2) above, there shall have been delivered to the Authority, Fred Hutch and the Bond Trustee a letter addressed to the Authority, Fred Hutch and the Bond Trustee from a nationally recognized firm of independent certified public accountants or other experts experienced in the preparation of similar reports verifying the computations which indicate that such Government Obligations, and/or other money to be irrevocably deposited in trust in connection with the defeasance are sufficient to provide for the payment of all of the principal of, premium, if any, and interest on such Bonds when due in accordance with their terms or in accordance with the schedule of mandatory redemption pertaining thereto, or upon the earlier redemption thereof in accordance with a refunding plan;

(4) There shall have been delivered to the Authority, the Bond Trustee and Fred Hutch an Opinion of Bond Counsel (which, in the discretion of such Bond Counsel, may be based upon, and subject to the same exceptions and qualifications as, the approving Opinion of Bond Counsel delivered in connection with the original issuance of the Bonds), addressed to the Authority, the Bond Trustee and Fred Hutch, to the effect that interest on the Bonds being discharged by such defeasance will not be included in gross income for purposes of federal income taxation by reason of such defeasance;

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(5) If, at any time such Defeasance Deposit is made, credit support for the Bonds is provided by a Credit Facility, there shall have been delivered to the Authority, the Bond Trustee and Fred Hutch an Opinion of Bankruptcy Counsel, addressed to the Authority, the Bond Trustee and Fred Hutch, to the effect that payments of the principal of, premium, if any, and interest on the Bonds from the proceeds of such Defeasance Deposit shall not constitute transfers avoidable under Section 547(b) of the Federal Bankruptcy Code, subject to recovery under Section 550(a) of the Federal Bankruptcy Code in a case commenced thereunder by or against the Authority, Fred Hutch, any other Member of the Obligated Group or any Affiliate.

Notwithstanding any other provision of the Bond Indenture to the contrary, if any Outstanding Bonds have been deemed to be paid because a deposit of Eligible Funds has been made under these provisions, the Interest Rate Period may not thereafter be converted to another Interest Rate Period by Fred Hutch.

The Outstanding Bonds may be defeased in accordance with the foregoing provisions in whole or in part. In the event of partial defeasance, the Bond Indenture shall be discharged only as to the particular Bonds, or portions thereof so defeased, and the Bond Trustee shall return to Fred Hutch only those moneys and investments in excess of the money and investments required by the Bond Indenture to be held by the Bond Trustee for the Bonds for which payment has not been provided. The Bond Trustee shall give or cause to be given to the Credit Provider, each Rating Agency and the Owners of any Bonds which are defeased as provided in the Bond Indenture written notice of such defeasance within 30 days following the effective date of such defeasance which written notice shall contain applicable information described in the Bond Indenture.

Effect of Discharge of Lien of Bond Indenture

Upon payment or defeasance of all the Outstanding Bonds as described in the sections above captioned “THE BOND INDENTURES—Discharge of Lien of Bond Indenture by Payment of Bonds” and “—Discharge of Lien of Bond Indenture by Defeasance,” upon payment (or provision therefor satisfactory to the Bond Trustee) to the United States Treasury of any Rebate Payments, and upon payment of all the fees and expenses of the Bond Trustee and the Authority then required to be paid under the Bond Indenture or pursuant to the Loan Agreement and the Series 2017 Variable Rate Master Note, then:

(a) The right, title and interest of the Bond Trustee in and to the Trust Estate (except any Defeasance Deposit and any amounts being held by the Bond Trustee pending payment to the United States Treasury in respect of any Rebate Payments), and all of the covenants, agreements and other obligations of the Authority to the Owners of said Bonds shall thereupon cease, terminate and be discharged and satisfied; provided, however, that, subject to the provisions of the Bond Indenture, the covenants, agreements and other obligations of the Bond Trustee under the Bond Indenture shall cease, terminate and be discharged and satisfied only upon final payment of all Bonds;

(b) If any amount will remain due and owing to the Authority upon any such payment or defeasance, the Bond Trustee shall assign the Series 2017 Variable Rate Master Note to the Authority, which shall return such Series 2017 Variable Rate Master Note to the Master Trustee for cancellation in exchange for a new Master Note, issued, authenticated and delivered to the Authority in accordance with the Master Indenture, evidencing the obligation of the Obligated Group to pay any concurrent or reserved rights to indemnification expressed to survive repayment, defeasance or discharge of the Loan Agreement or the Bonds, which the Series 2017 Variable Rate Master Note shall become secured under and entitled to the benefits of the Master Indenture to the extent any payment obligation arises at any time thereunder;

(c) If no amounts will remain due and owing to the Authority upon any such payment or defeasance, the Bond Trustee shall assign and transfer all of its rights, title and interests in and to the Series 2017 Variable Rate Master Note and, irrespective of whether any such amounts will remain due and owing to the Authority, shall transfer all funds then held by the Bond Trustee in the Bond Fund, the Project Fund and the Reimbursement Fund, and all other money or property held by the Bond Trustee under the Bond Indenture except any Unclaimed Money, upon such discharge, first, to the extent any Reimbursement Obligations are due and payable from Fred Hutch to the Credit Provider (as evidenced by a written statement from the Credit Provider delivered to Fred Hutch and the Bond Trustee), to the Credit Provider, and the balance, if any, to or upon the direction of Fred Hutch, and upon such assignment and

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transfer, all of the duties and obligations of the Bond Trustee to and for the benefit of the Credit Provider under the Bond Indenture shall thereafter cease, terminate and be discharged and satisfied.

(d) The Bond Trustee shall (1) apply each Defeasance Deposit to the payment or redemption of Bonds, together with interest and premium, if any, thereon, as specified in the applicable refunding plan; (2) pay any funds being held by the Bond Trustee in respect of any Rebate Payments to the United States Treasury; (3) transfer all other funds then held by the Bond Trustee in the Funds and Accounts, and all other money or property held by the Bond Trustee under the Bond Indenture, to Fred Hutch; and (4) release all liens and security interests granted pursuant to the Loan Agreement and the Bond Indenture.

Unclaimed Money

If any Bond shall not be presented for payment, when due at maturity or upon redemption or acceleration prior to maturity, or if any valid check or draft on any Bond shall not be presented for payment, and if funds sufficient for the payment thereof shall have been deposited with the Bond Trustee, all liability of the Authority to the Owners thereof for the payment of such principal and interest shall forthwith cease, determine and be completely discharged, and thereupon it shall be the duty of the Bond Trustee to hold and distribute such Unclaimed Money and the earnings thereon, if any, in accordance with the applicable escheat laws. The Bond Trustee shall hold uninvested (without liability for interest or other compensation) in trust for the benefit of the Owners entitled thereto all Unclaimed Money awaiting payment or distribution to the Owners.

Modification of Bond Indenture Without Consent of Owners

The Bond Indenture provides that, after the Date of Issue and subject to the conditions and restrictions of the Bond Indenture, the Authority and the Bond Trustee may enter into such indentures supplemental thereto, with the written consent of Fred Hutch, but without the consent of the Credit Provider, if any, or the Owners, for any one or more of the following purposes:

(1) To add covenants and agreements to the Bond Indenture for the protection of the Owners of the Bonds;

(2) To make subject to the lien of the Bond Indenture additional revenue, properties or collateral;

(3) To qualify the Bond Indenture under the Trust Indenture Act of 1939, as amended, or the securities laws of any state, if such is necessary in the Opinion of Counsel;

(4) To preserve the exclusion of the interest on the Bonds from gross income for purposes of federal or state income taxation and preserve the right of the Authority to continue to issue bonds, debts or other obligations of any nature the interest on which is likewise excluded from gross income for purposes of federal or state income taxation;

(5) To cure any ambiguity or correct any defect or inconsistent provision in the Bond Indenture;

(6) To reflect any changes in GAAP applicable to Fred Hutch or any other Obligated Group Member;

(7) To make any other change, which change will become effective only after all Owners have had the opportunity to tender their Bonds for purchase after receipt of notice of any such change; and

(8) To make any other change that is not materially adverse to the rights, interests or security of the Bond Trustee or the Owners of the Outstanding Bonds, the Credit Provider or the Liquidity Provider.

Modification of Bond Indenture with Consent of Owners

The Bond Indenture may also be modified or amended from time to time and at any time by a written indenture supplemental thereto, which the Authority and the Bond Trustee may enter into with the written consent of (1) the Credit Provider, if the Bond Trustee has been provided with a Credit Facility that is then in effect or any

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Reimbursement Obligations remain unpaid and so long as no Credit Facility Default shall have occurred and is continuing, or (2) if the Bond Trustee has not been provided with a Credit Facility that is then in effect or if a Credit Facility Default has occurred and is continuing, with the written consent of the Owners of a majority in principal amount of the Bonds then Outstanding; provided, that no such modification or amendment shall (A) extend the fixed maturity of any Bond, or reduce the amount of principal thereof, or extend the time of payment or reduce the amount of Bonds subject to mandatory sinking fund redemption on any Redemption Date, or reduce the rate of interest thereon, or extend the time of payment of interest thereon, or reduce any premium payable upon the redemption thereof, without the consent of the Owner of each Bond so affected, or (B) reduce the aforesaid percentage of Bonds the consent of the Owners of which is required to effect any such modification or amendment, or permit the creation of any lien on any portion of the Trust Estate prior to or on a parity with the lien created by the Bond Indenture, or deprive the Owners of the Bonds of the lien created by the Bond Indenture on the Trust Estate (except as expressly provided in the Bond Indenture), without the consent of any Credit Provider and the Owners of all Bonds then Outstanding. It shall not be necessary for the consent of the Owners to approve the particular form of any supplemental indenture, but it shall be sufficient if such consent shall approve the substance thereof. Promptly after the execution by the Authority and the Bond Trustee of any supplemental indenture pursuant to these provisions of the Bond Indenture, the Bond Trustee shall mail a notice, setting forth in general terms the substance of such supplemental indenture to the Owners at the addresses shown on the registration books maintained by the Bond Trustee. Any failure to give such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such supplemental indenture.

Modification of Loan Agreement Without Consent of Owners

After the Date of Issue, the Loan Agreement may be modified or amended from time to time and at any time by a written supplement or amendment thereto, which the Authority, Fred Hutch and the Bond Trustee may enter into without the consent of the Credit Provider, if any, or the Owners, for any one or more of the following purposes:

(1) To add covenants and agreements to the Loan Agreement for the protection of Owners of the Bonds;

(2) To make subject to the lien of the Bond Indenture additional revenue, properties or collateral;

(3) To preserve the exclusion of the interest on the Bonds from gross income for purposes of federal or state income taxation and preserve the right of the Authority to continue to issue bonds, debts or other obligations of any nature the interest on which is likewise excluded from gross income for purposes of federal or state income taxation;

(4) To cure any ambiguity or correct any defect or inconsistent provision in the Loan Agreement;

(5) To reflect any changes in GAAP applicable to Fred Hutch or any other Obligated Group Member;

(6) To make any other change, which change will become effective only after all Owners have had the opportunity to tender their Bonds for purchase after receipt of notice of any such change; and

(7) To make any other change that is not materially adverse to the rights, interests or security of the Bond Trustee or the Owners of the Outstanding Bonds, the Credit Provider or the Liquidity Provider.

Modification of Loan Agreement With Consent of Owners

The Loan Agreement may also be modified or amended by a written supplement or amendment thereto, which the Authority, Fred Hutch and the Bond Trustee may enter into with the written consent of (1) the Credit Provider if the Bond Trustee has been provided with a Credit Facility that is then in effect and so long as no Credit Facility Default shall have occurred and be continuing, or (2) if the Bond Trustee has not been provided with a Credit Facility that is then in effect or if a Credit Facility Default has occurred and is continuing, with the written consent of the Owners of a majority in principal amount of the Bonds then Outstanding; provided, that no such supplement or amendment to the Loan Agreement shall reduce the amount of Loan Payments to be made pursuant to the Loan Agreement, extend the time for making such Loan Payments or reduce the aforesaid percentage of Bonds the consent of the Owners of which is required to effect any such modification or amendment, without the written consent of any Credit Provider and the Owners of all Bonds then Outstanding. It shall not be necessary for the consent of the Owners

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to approve the particular form of any supplement or amendment to the Loan Agreement, but it shall be sufficient if such consent shall approve the substance thereof. Promptly after the execution by the Authority, Fred Hutch and the Bond Trustee of any supplement or amendment to the Loan Agreement in accordance with these provisions of the Bond Indenture, the Bond Trustee shall mail a notice, setting forth in general terms the substance thereof to the Owners at the addresses shown on the registration books maintained by the Bond Trustee. Any failure to give such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such supplement or amendment to the Loan Agreement. The Bond Trustee may request and rely with full acquittance upon an Opinion of Bond Counsel that any supplement or amendment to the Loan Agreement complies with the provisions of the Bond Indenture.

THE LOAN AGREEMENTS

Under the Series 2017B Loan Agreement, the Authority agrees to issue the Series 2017B Bonds and lend the proceeds thereof to Fred Hutch for the Refunding Plan and the Project, and Fred Hutch agrees to repay the Series 2017B Loan to the Authority in installments sufficient and at the times required to pay the principal of and interest on the Series 2017B Bonds, when due. Under the Series 2017C Loan Agreement, the Authority agrees to issue the Series 2017C Bonds and lend the proceeds thereof to Fred Hutch for the Refunding Plan and the Project, and Fred Hutch agrees to repay the Series 2017C Loan to the Authority in installments sufficient and at the times required to pay the principal of and interest on the Series 2017C Bonds, when due. Except as to matters that, by their nature, are specific to a particular series of the Series 2017 Bonds (e.g., the original principal amount of each Loan), the Loan Agreements are substantively identical. Consequently, unless the context otherwise specifically requires, references in the following summary of the Loan Agreements to the “Loan Agreement” shall mean either the Series 2017B Loan Agreement or the Series 2017C Loan Agreement, as applicable. Similarly, references to the “Series 2017 Bonds” and the “Loan” and the like shall mean the Series 2017B Bonds or the Series 2017C Bonds, as applicable, and the Series 2017B Loan or the Series 2017C Loan, as applicable; and references to terms such as the “Bond Indenture” and the “Series 2017 Variable Rate Master Note” shall mean the Bond Indenture and the Series 2017 Variable Rate Master Note, respectively, which is related to such series of the Series 2017 Bonds.

In considering matters discussed in this summary of the Loan Agreements, it is important to keep in mind that the provisions of each Loan Agreement are to operate independently. For example, Loan Payments made in respect of the Series 2017B Loan Agreement are not permitted to be applied to amounts due under the Series 2017C Loan Agreement; failure to make a Loan Payment in respect of the Series 2017B Bonds giving rise to a Loan Agreement Default under the Series 2017B Loan Agreement, is not a Loan Agreement Default under the Series 2017C Loan Agreement (except through cross default provisions of the Master Indenture); and so on.

It is also important to keep in mind that this summary of the Loan Agreements does not purport to be and is not comprehensive or definitive. Reference should be made to each of the respective Loan Agreements for a complete statement of their terms.

The Loan; Covenant to Repay

Pursuant to the Loan Agreement, the Authority loans to Fred Hutch all of the proceeds of the Bonds, and Fred Hutch agrees to repay the Loan, together with interest thereon, in payments which, in the aggregate, shall be sufficient to pay in full all of the principal of and interest on the Bonds. Such Loan Payments are to be made directly to the Bond Trustee as follows:

(1) Loan Interest Payments shall be payable in installments equal to the interest coming due on the Bonds on the next succeeding Interest Payment Date, which installments shall be due and payable to the Bond Trustee in immediately available funds on the last Business Day immediately prior to each such Interest Payment Date until such time as all principal of and interest on the Bonds are paid in full; and

(2) Loan Principal Payments shall be payable in installments equal to the principal of the Bonds coming due by reason of mandatory sinking fund redemption or maturity on the next succeeding Bond Principal Payment Date, which installments shall be due and payable to the Bond Trustee in immediately available funds on the last Business Day immediately prior to each such Bond Principal Payment Date until such time as the principal of such Bonds is paid in full.

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The obligation of Fred Hutch to make the Loan Payments shall be evidenced and secured by the related Series 2017 Variable Rate Master Note. Fred Hutch covenants that it shall pay or cause to be paid to the Bond Trustee sufficient immediately available funds to assure that no default shall occur at any time in the payment of the principal of or interest on the Bonds.

Credits Against Loan Payments

Fred Hutch will be entitled to certain credits against the Loan Payments for Bonds which have either been acquired by Fred Hutch or the other Members of the Obligated Group and surrendered to the Bond Trustee for cancellation or redeemed pursuant to the provisions for optional or extraordinary optional redemption in the Bond Indenture, as follows:

(1) As to Loan Interest Payments, an amount equal to the amount of interest which would have been due on such redeemed or surrendered Bond(s) on each Bond Interest Payment Date, such amount to be credited on each Loan Interest Payment Date.

(2) As to Loan Principal Payments, an amount equal to the principal face amount of such redeemed or surrendered Bond(s), to be applied on the Loan Principal Payment Date in any Maturity Year (as designated by Fred Hutch in writing) ending on a date upon which such Bond(s) would mature or be subject to mandatory sinking fund redemption.

In addition, on each Loan Payment date, amounts on deposit in the Principal and Interest Account, to the extent that such amounts are available to pay the principal of or interest on the Bonds and to the extent that such amounts have not previously been credited against Loan Payments, shall be credited against the next Loan Payments in the direct order of their due dates.

Payments Required for Redemption, Acceleration and/or Purchase of Bonds

On or prior to any Redemption Date, Fred Hutch is required to pay or cause to be paid to the Bond Trustee an amount sufficient to pay the redemption price (including premium, if any) of and interest accrued to said Redemption Date on all Bonds to be redeemed on said Redemption Date, as well as the proper expenses and charges of the Bond Trustee in connection with such redemption; provided that, with respect to optional and extraordinary optional redemptions only, if Fred Hutch shall fail to pay or cause to be paid to the Bond Trustee, the amounts required to pay the redemption price of any Bonds to be optionally or extraordinarily optionally redeemed, for any reason, such failure shall not be deemed to be a Loan Agreement Default or an Event of Default. See “THE BONDS— Redemption—Notice of Redemption; Cancellation” in the forepart of this Official Statement.

On or prior to the Acceleration Date, Fred Hutch shall pay or cause to be paid to the Bond Trustee an amount sufficient to pay the principal of and interest on all Bonds coming due by reason of the Declaration of Acceleration, as well as the proper expenses (including counsel fees and expenses) and charges of the Bond Trustee in connection with such acceleration.

Fred Hutch shall pay, or cause to be paid to the Bond Trustee, the Tender Price of all Bonds tendered or deemed tendered for purchase when due and payable; provided, that if a Liquidity Facility or Credit Facility is in effect and the Liquidity Provider or Credit Provider defaults in its obligation to provide money to purchase any such tendered Bonds, no default or Loan Agreement Default shall be deemed to have occurred or to exist if the Tender Price of such Bonds is paid within 365 days after the Tender Date.

Reimbursements to Credit and Liquidity Providers

Fred Hutch covenants and agrees to pay or cause to be paid to each Credit Provider and Liquidity Provider, if any, within the periods specified in its respective Reimbursement Agreement, if any, amounts sufficient to satisfy the respective Reimbursement Obligations arising under such Reimbursement Agreement.

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Obligations of Fred Hutch Unconditional

The obligations of Fred Hutch to repay the Loan, to make the Loan Payments and to perform and observe the other agreements on its part contained in the Loan Agreement shall be absolute and unconditional and, except as specifically provided therein, shall not be subject to diminution by setoff, counterclaim, abatement or otherwise until such time as the principal of and interest on the Bonds shall have been fully paid or provision for the payment thereof shall have been made in accordance with the Bond Indenture.

Fred Hutch agrees that it will not suspend or discontinue, or permit the suspension or discontinuance of, any payments provided for in the Loan Agreement; will perform and observe all of its other agreements contained in the Loan Agreement, the Continuing Disclosure Agreement, the Master Indenture, Supplemental Indenture No. 28 or Supplemental Indenture No. 29, the related Series 2017 Variable Rate Master Note and the Tax Agreement, and will not suspend the performance of its obligations thereunder for any cause, including, without limiting the generality of the foregoing, failure to accomplish the Refunding Plan or the Project completely, any acts or circumstances that may constitute failure of consideration, eviction or constructive eviction, commercial frustration of purpose, any change in the tax or other laws or administrative rulings of or administrative actions by the United States of America or the State or any political subdivision of either, or any failure of the Authority to perform and observe any agreement, whether express or implied, or any duty, liability or obligation arising out of or connected with the Loan Agreement, whether express or implied.

Fred Hutch’s Purchase of Bonds in Open Market

Fred Hutch or any other Member of the Obligated Group may acquire Bonds by purchase in the open market or otherwise. Fred Hutch or any other Member of the Obligated Group may, but need not, surrender any Bonds so acquired to the Bond Trustee for cancellation in accordance with the Bond Indenture; provided, that Fred Hutch shall give written notice of any such acquisition to the Bond Trustee if such Bond is not surrendered for cancellation and any such Bond that is not so surrendered shall remain Outstanding for all purposes under the Bond Indenture. Upon any such surrender, Fred Hutch shall receive credits against its Loan Payments as described above under the caption “THE LOAN AGREEMENTS—Credits Against Loan Payments.”

Security Under the Loan Agreement

To secure the obligation to make the Loan Payments and the other obligations, agreements and covenants to be performed and observed under the Loan Agreement, Fred Hutch grants to the Authority security interests in its interests, if any, in the money and investments in the Bond Fund, the Project Fund and the Reimbursement Fund. Said security interests shall attach at the moment of acquisition of any such money and investments belonging to said Funds, and shall be free and clear of all prior liens, encumbrances and defects. To further secure its obligation to make the Loan Payments and its other obligations, agreements and covenants to be performed and observed under the Loan Agreement with respect to the Bonds, Fred Hutch shall issue, execute and cause to be authenticated and delivered to the Bond Trustee, as assignee of the Authority, the Series 2017 Variable Rate Master Note. The Authority shall endorse and assign all of its right, title and interest in the Series 2017 Variable Rate Master Note to the Bond Trustee as part of the security for the Bonds.

Recording, Filing, Maintenance and Termination of Security Interests

The Authority’s security interests in Fred Hutch’s interests, if any, in and to the money and investments in the Bond Fund, the Project Fund and the Reimbursement Fund, to the extent that such security interests may be so perfected, shall be perfected by possession by the Bond Trustee and by the filing of financing statements which fully comply with the UCC.

Covenant to Maintain Corporate Existence of Fred Hutch

Fred Hutch covenants and agrees to maintain its existence as (1) a nonprofit corporation duly qualified to do business in the State; (2) a 501(c)(3) Organization, exempt from federal income taxes under Section 501(a) of the Code (except for unrelated business income subject to taxation under Section 511 of the Code); and (3) an organization which is not a “private foundation” described in Section 509(a) of the Code. None of its net income or profits, whether

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realized or unrealized, will be distributed to any of its members or inure to the benefit of any private person, association or corporation; provided, however, that Fred Hutch may pay to any Person the value of any service performed or product supplied to Fred Hutch by such Person.

Excess Margin Covenant

Immediately upon receipt of the Audited Financial Statements for any Fiscal Year, Fred Hutch is required by the Loan Agreement to compute or cause to be computed (1) its Excess Margin for the Fiscal Year which is the subject of such Audited Financial Statements, and (2) the Cushion Ratio for the then-current Fiscal Year. If such computations disclose that (1) the Excess Margin of Fred Hutch for the previous two Fiscal Years was less than zero by an amount greater than one-sixth of one percent (1/6 of 1%) of Fred Hutch’s Adjusted Gross Revenues for the most recent Fiscal Year, with the Excess Margin for the most recent Fiscal Year being worse than that for the penultimate Fiscal Year, or (2) the Excess Margin of Fred Hutch for three of the past four Fiscal Years was less than zero by an amount greater than one-sixth of one percent (1/6 of 1%) of Fred Hutch’s Adjusted Gross Revenues for the most recent Fiscal Year, then, unless the Cushion Ratio for the current Fiscal Year is greater than 2.25:1, Fred Hutch shall, before the 150th day of the current Fiscal Year, retain, at its expense, a Management Consultant (who, for purposes of this Excess Margin covenant only, may not be Fred Hutch’s regular Accountant) to make recommendations as to the methods of operation of Fred Hutch which will result in a positive Excess Margin in the next following Fiscal Year or sooner. Copies of the Management Consultant’s recommendations shall be filed with the Authority and each Credit Provider, and delivered to any Owner requesting a copy (at such Owner’s expense). If the Cushion Ratio for the current Fiscal Year is greater than 2.25:1, then Fred Hutch shall be excused from retaining a Management Consultant as otherwise required in this provision of the Loan Agreement.

Promptly upon receipt of such recommendation, Fred Hutch shall revise its methods of operations and take such other actions as shall be in conformity with such recommendations to the extent feasible; provided, however, that if (1) Fred Hutch determines in good faith, by resolution passed by at least 2/3 of its full Governing Body, that any such recommendation is impossible or wholly detrimental to the operations or purposes of Fred Hutch and states the reasons for such determination, and (2) Fred Hutch delivers to the Authority certified copies of such resolution, then Fred Hutch shall be excused from compliance with such recommendation of the Management Consultant.

If and so long as Fred Hutch complies in all material respects with the recommendations of the Management Consultant, or has been excused from compliance as provided in the paragraph immediately above, the failure of Fred Hutch to meet the Excess Margin requirements of the Loan Agreement in any subsequent Fiscal Year shall not constitute a default thereunder; provided, however, that the Excess Margin provision of the Loan Agreement shall not be construed as in any way excusing Fred Hutch from taking any action or performing any other duty required thereunder, or be construed as constituting a waiver of any other default thereunder.

General Covenants

Among other things, Fred Hutch covenants to pay certain proprietary charges, fees and costs of the Authority and the Bond Trustee in connection with the Bonds, including without limitation both initial and annual proprietary charges of the Authority and fees and costs of the Bond Trustee incurred to enforce the Bonds, the Bond Indenture, the Loan Agreement, the Series 2017 Variable Rate Master Note and the Master Indenture. Fred Hutch agrees, upon written request, to deliver to the Bond Trustee and the Authority certain financial reports to be provided to the Master Trustee in accordance with the Master Indenture. Fred Hutch further agrees to deliver to the Authority and the Bond Trustee, on an annual basis, certain financial reports and compliance certificates.

Use of Facilities and Project Facilities

The Loan Agreement requires Fred Hutch to use all of the Project Facilities only in furtherance of its lawful corporate purposes and only as a Health Care Facility, and for related purposes. Notwithstanding any provision to the contrary contained in Fred Hutch’s articles of incorporation or its bylaws, Fred Hutch shall admit and treat individuals in the Facilities without regard to race, sex, national origin or religious belief and shall respect, permit and not interfere with the religious beliefs of persons admitted and treated, except as the same may be required for proper medical treatment. Except to the extent permitted by the constitutions, statutes and laws of the United States and of the State, Fred Hutch further agrees that it will not use or permit the use of any of the Facilities primarily as a place of religious

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worship or sectarian instruction, or as a facility used primarily in connection with any part of the program of a school or department of divinity for any religious denomination, or for the primary purpose of training priests, ministers, rabbis or other similar persons in the field of religion.

Permitted Leases and Operating Contracts

Fred Hutch may lease all or any part of the Facilities and the equipment therein, or contract for the performance by others of operations or professional services utilizing the Facilities and the equipment therein, or any part thereof, in accordance with the provisions of the Master Indenture, and provided that:

(1) The provisions of each such lease or contract shall be consistent with the provisions of the Loan Agreement;

(2) Fred Hutch shall remain fully obligated and responsible under the Loan Agreement to the same extent as if such lease or contract had not been executed;

(3) No such lease or contract shall permit the use of any Project Facilities for any “private business use,” within the meaning of Section 141 of the Code except in compliance with the Tax Agreement;

(4) No such lease or contract shall, directly or indirectly, cause the Project Facilities to be or become anything other than a Health Care Facility; and

(5) Prior to leasing all or substantially all of the Facilities, Fred Hutch shall obtain the written approval of the Authority, and the rental payments to be received by Fred Hutch under such lease(s) shall be at least sufficient to pay all of the Loan Payments due or to become due during the term of such lease(s).

Limitation on Encumbrances

Fred Hutch covenants and agrees that it will not create, assume or suffer to exist any mortgage, deed of trust, pledge, security interest, encumbrance, lien or charge of any kind, upon its interests, if any, in the money and investments in the Bond Fund, the Project Fund or the Reimbursement Fund, other than the security interests granted in the Loan Agreements and the lien and charge of the Bonds.

Covenant to Pay Project Costs and Issuance Costs

In the event the proceeds of the Bonds and any investment income therefrom deposited into the Project Fund should not be sufficient to pay the Projects Costs and Issuance Costs in full, Fred Hutch agrees, for the benefit of the Authority and the Owners, to complete the Project and to pay the remaining Projects Costs and Issuance Costs or to cause the remaining Projects Costs and Issuance Costs to be paid. The Authority makes no warranty, either express or implied, that the proceeds of the Bonds and the investment income therefrom deposited into the Project Fund will be sufficient for such purpose. Fred Hutch further agrees that if, after exhaustion of the proceeds of the Bonds in the Project Fund, Fred Hutch should pay any Project Costs or Issuance Costs pursuant to these provisions, it shall not be entitled to any reimbursement therefor from the Authority or the Owners, nor shall it be entitled to any diminution in or postponement of the Loan Payments or its other obligations under the Loan Agreement.

Notice of Insolvency or Event of Bankruptcy

Fred Hutch covenants and agrees in the Loan Agreement to notify the Authority and the Bond Trustee immediately if Fred Hutch or any other Member of the Obligated Group shall have become Insolvent or of the occurrence of any Event of Bankruptcy, which notice shall be communicated by Electronic Means and confirmed in writing to the Authority and the Bond Trustee by first-class mail.

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Public Benefit

Fred Hutch covenants in the Loan Agreement that substantially all of the savings realized by Fred Hutch from the availability of financing through tax-exempt bonds, as contrasted with financing through taxable debt, will be used in a manner that will minimize the capital costs of construction, financing and use of modern, well-equipped and reasonably priced Health Care Facilities and thereby the costs to the public of the use of such Health Care Facilities, and to contribute to improving the quality of health care.

Tax Covenants

In addition to its more specific agreements in the Tax Agreement, Fred Hutch covenants and agrees in the Loan Agreement that it will at all times do and perform all actions and things permitted by law and the Loan Agreement which are necessary for the Bonds to satisfy the requirements of Sections 103 and 141 through 150 of the Code in order to assure that interest on the Bonds will be excluded from gross income for federal income tax purposes and will take no action that would result in failure of the Bonds to satisfy those requirements of the Code. To that end, Fred Hutch further covenants and agrees that it will comply with its covenants in the Tax Agreement.

Compliance with Environmental Laws

Fred Hutch agrees in the Loan Agreement to comply with all Environmental Laws and not to cause or permit any Hazardous Substance to be brought upon, kept, used or generated by Fred Hutch, its agents, employees, contractors or invitees, in the operation of the Facilities, unless the use or generation of the Hazardous Substance is necessary for the prudent operation of the Facilities and no functional and reasonably economic nonhazardous substance or process which does not generate Hazardous Substances can be used in place of the Hazardous Substance or the process which generates Hazardous Substances.

Indemnification

Fred Hutch covenants and agrees under the Loan Agreement, at its expense, to pay, and to indemnify and save the Authority and certain related parties harmless of, from and against, any and all claims, damages, demands, expenses, liabilities and taxes of any character or nature whatsoever including, but not limited to, claims for loss or damage to any property or injury to or death of any person, asserted by or on behalf of any Person arising out of, resulting from, or in any way connected with the Facilities, or the conditions, occupancy, use, possession, conduct or management of, or any work done in or about the Facilities, or from the planning, design, acquisition or construction of the Facilities or any part thereof; or any untrue statement or alleged untrue statement of any material fact or the omission or alleged omission to state a material fact necessary to make the statements made not misleading in any statement, information or material furnished to the Authority, including but not limited to any material included in any securities disclosure document(s) utilized in connection with the offer and sale of the Bonds; or the failure of Fred Hutch to comply with its covenants regarding Environmental Laws and Hazardous Substances; or any examination or audit of the Bonds by the Internal Revenue Service, or any determination by the Internal Revenue Service or a court of competent jurisdiction that the interest on the Bonds is or should be subject to federal income taxation.

Loan Agreement Defaults

Any one or more of the following events shall constitute a “Loan Agreement Default” under the Loan Agreement:

(1) Nonpayment of any Loan Payment when the same shall become due and payable;

(2) Nonpayment of any installment of principal of, premium, if any, or interest on the Series 2017 Variable Rate Master Note when the same shall become due and payable;

(3) Nonpayment of the principal of the Bonds when the same shall become due and payable, whether at maturity, mandatory sinking fund redemption (but not optional or extraordinary optional redemption) or acceleration;

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(4) Nonpayment of the interest on the Bonds when the same shall become due and payable;

(5) Nonpayment of the Tender Price of a Bond when due and payable; provided, however, that if a Liquidity Facility or Credit Facility is in effect and the Liquidity Provider or Credit Provider defaults in its obligation to provide money to purchase any such tendered Bond, no Loan Agreement Default shall be deemed to have occurred or to exist if the Tender Price of such Bond is paid within 365 days after the Tender Date;

(6) Any other failure on the part of Fred Hutch to perform or observe any of the other duties, provisions or obligations required of it pursuant to the Loan Agreement, if such failure shall have continued for a period of 30 days after written notice thereof has been delivered to Fred Hutch by the Bond Trustee, as assignee of the Authority, unless the Bond Trustee has determined that Fred Hutch is then taking steps reasonably calculated to cure such failure; provided, that the Bond Trustee shall not be required to take notice or be deemed to have notice of any such failure unless the Bond Trustee has actual notice thereof or has received written notice from the Authority, Fred Hutch or any other Member of the Obligated Group thereof;

(7) Receipt by the Bond Trustee of written notice from the Authority, Fred Hutch or any other Member of the Obligated Group of the inaccuracy of any representation or warranty made by or on behalf of Fred Hutch in the Loan Agreement or any related instruments or certificates as of the Date of Issue;

(8) A Declaration of Acceleration is made pursuant to the Bond Indenture, summarized above under the section captioned “THE BOND INDENTURES—Acceleration of Maturity;”

(9) Receipt by the Bond Trustee of written notice from the Master Trustee of the acceleration of any Master Note under the Master Indenture;

(10) Receipt by the Bond Trustee of written notice from the Master Trustee of any Master Indenture Default;

(11) Receipt by the Bond Trustee of written notice of the occurrence of any Event of Bankruptcy;

(12) Receipt by the Bond Trustee of written notice from any creditor of Fred Hutch (including, but not limited to, a corporate or other trustee therefor) of the occurrence of any default or other event under any indenture, agreement or other similar instrument under which any evidence of Indebtedness of Fred Hutch may be issued, if the default or other event results in the acceleration of the maturity of any Indebtedness of Fred Hutch Outstanding thereunder; provided, that such default shall not constitute a Loan Agreement Default if within 30 days, or within the time allowed for service of a responsive pleading if any proceeding to enforce payment of the Indebtedness is commenced, if (a) Fred Hutch in good faith commences proceedings to contest the existence or payment of such Indebtedness, and (b) sufficient money is escrowed with a bank or trust company for the payment of such Indebtedness or a letter of credit satisfactory to the Bond Trustee securing payment of any such Indebtedness is obtained by Fred Hutch;

(13) Failure to purchase, redeem or retire all of the Bonds on any Mandatory Purchase Date.

Remedies on Default

(a) Upon the occurrence of a Loan Agreement Default described in clause (9) of the immediately preceding section captioned “THE LOAN AGREEMENTS—Loan Agreement Defaults,” the Bond Trustee, as assignee of the Authority (but not the Authority), shall, by written notice to Fred Hutch and any Credit Provider, declare the principal of the Loan (if not then due and payable) to be due and payable immediately, together with all interest accrued thereon to the date of such acceleration, anything in the Loan Agreement to the contrary notwithstanding.

(b) Upon the occurrence of any other Loan Agreement Default, and subject to the provisions of the Loan Agreement summarized under the section below captioned “THE LOAN AGREEMENTS—Credit Provider Rights Upon Loan Agreement Default,” the Bond Trustee, as assignee of the Authority (but not the Authority), may, with the consent of any Credit Provider, and shall, at the direction of the Credit Provider, if any, by written notice to

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Fred Hutch and the Master Trustee, declare the principal of the Loan (if not then due and payable) to be due and payable immediately, together with all interest accrued thereon to the date of such acceleration, anything in the Loan Agreement to the contrary notwithstanding. However, if at any time after the Loan shall have been so declared immediately due and payable and before any judgment or decree for the payment of the money due shall have been obtained or entered, the Master Trustee shall have notified the Bond Trustee and any Credit Provider that the acceleration of such Master Note as described in said clause (9) has been annulled as permitted pursuant to the Master Indenture, and if all arrears of principal and interest, if any, upon the Loan, and the expenses of the Authority and the fees and expenses of the Bond Trustee shall be paid by or in the name of Fred Hutch, and every other default in the observance or performance of any covenant, condition or agreement contained in the Loan Agreement shall be made good or be secured to the satisfaction of the Bond Trustee and any Credit Provider, or provision shall be made therefor in a manner satisfactory to the Bond Trustee and Credit Provider, if any, then in each such case, the Bond Trustee, by written notice to Fred Hutch, any Credit Provider and the Master Trustee shall waive such Loan Agreement Default and shall rescind and annul such declaration and its consequences, but no such waiver, rescission or annulment shall extend to or affect any subsequent Loan Agreement Default or impair any right incident thereto; provided, however, that it is understood and agreed that a Declaration of Acceleration made pursuant to the Bond Indenture shall constitute an acceleration of the Loan without further action by the Bond Trustee, and that such automatic acceleration of the Loan may only be waived or cured if, in addition to the requirements summarized in this paragraph, the requirements for waiver or cure of the Declaration of Acceleration set forth in the Bond Indenture are satisfied.

(1) The Authority, any Credit Provider and the Bond Trustee, as assignee of the Authority, may have access to and inspect, examine and make copies of the books and records and any and all accounts, data and income tax and other tax returns of Fred Hutch.

(2) Subject to the provisions of the Loan Agreement summarized under the section below captioned “THE LOAN AGREEMENTS—Credit Provider Rights Upon Loan Agreement Default,” the Bond Trustee, as assignee of the Authority (but not the Authority), may, without being required to give any notice except as provided in the Loan Agreement, pursue all remedies of a secured creditor under the applicable laws of the State.

(3) Subject to the provisions of the Loan Agreement summarized under the section below captioned “THE LOAN AGREEMENTS—Credit Provider Rights Upon Loan Agreement Default,” the Bond Trustee, in its own right and as assignee of the Authority (but not the Authority), may proceed to protect and enforce its rights in equity or at law, either in mandamus or for the specific performance of any covenant or agreement contained in the Loan Agreement, or for the enforcement of any other appropriate legal or equitable remedy, as the Bond Trustee, being advised by counsel, may deem most effectual to protect and enforce any of its rights or interests under the Loan Agreement.

(4) Subject to the provisions of the Loan Agreement summarized under the section below captioned “THE LOAN AGREEMENTS—Credit Provider Rights Upon Loan Agreement Default,” the Bond Trustee, as assignee of the Authority (but not the Authority), may proceed to enforce its rights in equity or at law, either in mandamus or for the specific performance, of any covenant or agreement contained in the Series 2017 Variable Rate Master Note other than with respect to Authority Reserved Rights (as defined in the Loan Agreement), including, but not limited to, requesting the Master Trustee to accelerate the Series 2017 Variable Rate Master Note (to the extent of the Bond Trustee’s right to do so), or for the enforcement of any other appropriate legal or equitable remedy as the Bond Trustee, being advised by counsel, may deem most effectual to protect and enforce any of its rights or interests under the Series 2017 Variable Rate Master Note.

(5) Subject to the provisions of the Loan Agreement summarized under the section below captioned “THE LOAN AGREEMENTS—Credit Provider Rights Upon Loan Agreement Default,” the Bond Trustee, in its own right and as assignee of the Authority (but not the Authority), may take whatever action in law or equity which appears necessary or desirable to enforce the security provided by or enforce any provision of the Bond Indenture in accordance with the provisions thereof.

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(6) The Authority may proceed to protect and enforce its rights in equity or at law, either in mandamus or for the specific performance of any covenant or agreement contained in the Loan Agreement, or for the enforcement of any other appropriate legal or equitable remedy, as the Authority, being advised by counsel, may deem most effectual to protect and enforce any of its concurrent or reserved rights or interests under the Loan Agreement and under any Master Note (including, but not limited to, the Series 2017 Variable Rate Master Note).

Credit Provider Rights Upon Loan Agreement Default

If the Bond Trustee has been provided with a Credit Facility that is then in effect, so long as no Credit Facility Default has occurred and is continuing, the Credit Provider shall have the right to direct the Bond Trustee by written request, and the Bond Trustee shall proceed as directed in writing by the Credit Provider, to take such actions as are permitted by clauses (b), (c)(2), (c)(3), (c)(4) and (c)(5) under the section above captioned “THE LOAN AGREEMENTS—Remedies on Default” following the occurrence of any Loan Agreement Default. Notwithstanding the foregoing, the Bond Trustee need not proceed upon any such written request of the Credit Provider, as aforesaid, unless the Credit Provider shall have offered to the Bond Trustee security and indemnity satisfactory to it against the fees, costs, expenses and liabilities to be incurred therein or thereby. If the Bond Trustee has not been provided with a Credit Facility that is then in effect or if a Credit Facility Default has occurred and is continuing, the Bond Trustee may proceed to take any action permitted by clauses (b), (c)(2), (c)(3), (c)(4) and (c)(5) under the section above captioned “THE LOAN AGREEMENTS—Remedies on Default” in its discretion, and must proceed to take such action upon the written request of the Owners of not less than 25% in aggregate principal amount of the Outstanding Bonds, subject to the Bond Trustee’s receipt of security and indemnity satisfactory to it against the fees, costs, expenses and liabilities to be incurred therein or thereby.

No Remedy Exclusive

No remedy conferred upon or reserved to the Authority or the Bond Trustee by the Loan Agreement is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under the Loan Agreement or now or hereafter existing at law or in equity or by statute, and the Authority and the Bond Trustee shall be free to pursue, at the same time, each and every remedy, at law or in equity, which it may have under the Loan Agreement, or otherwise.

Fees and Expenses

If a Loan Agreement Default arises under any of the provisions of the Loan Agreement and the Authority or the Bond Trustee should employ attorneys or agents or incur other expenses for the collection of Loan Payments or other amounts due under the Loan Agreement or the enforcement of performance or observance of any obligation or agreement on the part of Fred Hutch contained in the Loan Agreement, on demand therefor, Fred Hutch shall reimburse the reasonable fees of such attorneys and such other reasonable expenses so incurred.

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APPENDIX D

SUMMARY OF CERTAIN PROVISIONS OF THE MASTER INDENTURE AND DEED OF TRUST

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[THIS PAGE INTENTIONALLY LEFT BLANK] APPENDIX D SUMMARY OF CERTAIN PROVISIONS OF THE MASTER INDENTURE AND DEED OF TRUST

INTRODUCTION

The following is a summary of certain provisions of the Master Indenture, Supplemental Indenture No. 28, Supplemental Indenture No. 29, and the Deed of Trust which are not described elsewhere in this Official Statement. It is important to keep in mind that this summary does not purport to be and is not comprehensive or definitive. Reference should be made to the Master Indenture, Supplemental Indenture No. 28, Supplemental Indenture No. 29, and the Deed of Trust for a complete statement of the terms of such agreements.

DEFINITIONS

Unless the context otherwise requires, capitalized terms used in the following summaries of the principal legal documents and elsewhere in this Official Statement have the meanings set forth below, such definitions to be equally applicable to both the singular and plural forms of any of the terms defined.

“Accountant” means any firm of independent certified public accountants selected by the Obligated Group Representative.

“Accounts Receivable” means a Member’s or the Obligated Group’s accounts, chattel paper, instruments and general intangibles (all as defined in U.C.C., Article 9) as are now in existence or as may hereafter be created or acquired, and the proceeds thereof, and specifically including all receivables representing Contributions.

“Accounts Security Agreement” means the Accounts Security Agreement by the Center dated as of January 31, 1991.

“Act” means Chapter 147, Laws of 1974, 1st ex. sess. of the Legislature of the State of Washington, as amended (Chapter 70.37 RCW), as now in existence or as hereafter amended.

“Additional Indebtedness” means Indebtedness incurred by any Member of the Obligated Group on or subsequent to the date on which it becomes a Member of the Obligated Group.

“Adjusted Contributions” means, for any Fiscal Year of a Person, the Contributions to such Person during such Fiscal Year and during the preceding three Fiscal Years of that Person divided by four.

“Adjusted Gross Revenues” means, for any period of time: (a) in the case of any Person providing research or health care services, the sum of (i) gross research and/or patient service revenues less contractual allowances and provisions for uncollectible accounts, free care, discounted care, and discounted research revenue, plus (ii) other operating revenues, plus (iii) nonoperating revenues including Adjusted Contributions and Grant Capital Additions, plus (iv) proceeds of business interruption insurance, all as determined in accordance with GAAP; and (b) in the case of any other Person, gross revenues including Adjusted Contributions less sale discounts and sale returns and allowances, as determined in accordance with GAAP; and (c) and in all cases excluding (i) any gains or losses on the sale or other disposition of investments or fixed or capital assets not in the ordinary course of business, (ii) unrealized gains or losses on investments, including “other than temporary” declines in Book Value, (iii) gains or losses resulting from changes in valuation of any interest rate exchange agreement, hedge or similar arrangement, including, inter alia, an interest rate swap, asset swap, a constant maturity swap, a forward or futures contract, cap, collar, option, floor, forward or other hedging agreement, arrangement or security, direct funding transaction or other derivative, however denominated and whether entered into on a current or forward basis (collectively, for purposes of this definition, “Financial Products Agreements”), (iv) any termination payments, tax gross-up payments, expenses, default interest, and any other payments or indemnification obligations to be paid by or to a counterparty under any Financial Products Agreements, which payments are not regularly scheduled payments required to be paid by or to a counterparty, (v) earnings resulting from any reappraisal, revaluation or write-up of assets; provided, however, that, if such calculation is being made with respect to the Obligated Group, such calculation shall be made in such a manner so as to exclude any revenues attributable to transactions between any

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Member of the Obligated Group and any other Member of the Obligated Group. See also “SUPPLEMENTAL INDENTURES NOS. 28 AND 29 – Amendments of Master Indenture” for amendments to this defined term incorporated in Supplemental Indenture No. 28 and Supplemental Indenture No. 29.

“Affiliate” means a corporation, partnership, joint venture, association, business trust or similar entity organized under the laws of the United States of America or any state thereof: (a) which controls or which is controlled by, directly or indirectly, a Member of the Obligated Group; or (b) a majority of the members of the Directing Body of which are members of the Directing Body of a Member of the Obligated Group. For the purposes of this definition, control means with respect to: (i) a corporation having stock, the ownership, directly or indirectly, of more than 50% of the securities (as defined in Section 2(1) of the Securities Act of 1933 as amended) of any class or classes, the holders of which are entitled to elect or designate a majority of the Directing Body of the corporation; (ii) a corporation not having stock, having the power to elect or designate, directly or indirectly, a majority of the Directing Body of the corporation; or (iii) any other entity, the power to direct the management of such entity through the ownership of at least a majority of its voting securities or the right to designate or elect at least a majority of the members of its Directing Body, by contract or otherwise. For the purposes of this definition, “Directing Body” means: (A) with respect to a corporation having stock, such corporation’s board of directors and the owners, directly or indirectly, of more than 50% of the securities (as defined in Section 2(1) of the Securities Act of 1933, as amended) of any class or classes, the holders of which are ordinarily, in the absence of contingencies, entitled to elect or designate a majority of the corporation’s directors (each of which groups shall be considered a Directing Body); (B) with respect to a corporation not having stock, such corporation’s members if the members have complete discretion to elect or designate the corporation’s directors, or the corporation’s directors if the corporation’s members do not have such discretion or if the corporation has no members, and (c) with respect to any other entity, its governing board or managing body. For the purposes of this definition, all references to directors and members shall be deemed to include all entities performing the function of directors or members however denominated.

“Amendment Effective Date” means the earlier of (1) the first date none of the Existing Master Notes are Outstanding under the Master Indenture, or (2) the first date that all of the holders of all Existing Master Notes then Outstanding have consented to the amendment of the Master Indenture included in clause (aa) of the definition of “Permitted Encumbrances.”

“Annual Coverage Certificate” means the Officer’s Certificate required by the Master Indenture.

“Annual Debt Service” see “Debt Service Requirement.”

“Authority” means the Washington Health Care Facilities Authority, a public body corporate and politic and an agency of the State of Washington, which was created by the Act or any board, body, commission, department or officer succeeding to the principal functions thereof or to whom the powers conferred upon the Authority shall be given by law.

“Authority Related Bonds” means any Related Bonds issued by the Authority.

“Authorized Investments” means any of the following:

(a) Government Obligations;

(b) Obligations issued or guaranteed by the following instrumentalities or agencies of the United States of America as noted below:

(1) U.S. Export-Import Bank,

(2) Farm Credit System Financial Assistance Corporation,

(3) Rural Economic Community Development Administration (formerly Farmers Home Administration),

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(4) General Services Administration,

(5) U.S. Maritime Administration,

(6) Small Business Administration,

(7) Government National Mortgage Association (“GNMA”),

(8) U.S. Department of Housing and Urban Development (“PHAs”), or

(9) Federal Housing Administration;

(c) Senior debt obligations rated, on the date of purchase of any such investment, “AAA” by Standard & Poor’s Public Finance Ratings, its successors and assigns or, if such corporation shall no longer perform the functions of a securities rating agency, any other nationally recognized statistical ratings organization designated by the Obligated Group Agent (“S&P”) and “Aaa” by Moody’s Investors Service, Inc., its successors and assigns or, if such corporation shall no longer perform the functions of a securities rating agency, any other nationally recognized statistical ratings organization designated by the Obligated Group Agent (“Moody’s), issued by the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation with remaining maturities not exceeding three years;

(d) United States dollar denominated deposit accounts, federal funds or banker’s acceptances with any domestic commercial bank (including the Master Trustee or its affiliates, if otherwise eligible), the short-term certificates of deposit of which are rated, on the date of purchase of any such investment, “A-1” or “A-1+” by S&P and “P-1” by Moody’s, maturing no more than 360 days after the date of purchase thereof, and which deposit accounts or time deposits are fully and continuously insured by the Federal Deposit Insurance Corporation (or its successor in interest) (“FDIC”) or are fully secured, to the extent they are not insured by the FDIC, by Government Obligations; provided, that for purposes of this clause (d), the ratings of any bank holding company shall not be considered as the rating of any such domestic commercial bank; and provided further, that if such deposit accounts or time deposits are so secured (1) the Master Trustee shall have a perfected first security interest in the Government Obligations securing such deposit accounts or time deposits; (2) the Master Trustee shall hold or shall have the option of appointing another bank, trust company or savings and loan association as its agent to hold the Government Obligations securing such certificates of deposit or time deposits free and clear of the claims of third parties; and (3) such Government Obligations must be valued daily and have a market value at all times at least equal to the principal amount of the deposits;

(e) The following obligations (“Municipal Obligations”):

(2) Direct general short-term obligations of any state agency or subdivision or agency thereof described in clause (1) above and rated “A-1+” by S&P and “MIG 1” by Moody’s; and

(f) Pre-refunded Municipal Obligations rated “AAA” by S&P and “Aaa” by Moody’s meeting the following requirements:

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(2) The Municipal Obligations are secured by cash or Government Obligations which may be applied only to payment of the principal of, interest and premium on such Municipal Obligations;

(4) The cash or Government Obligations serving as security for the Municipal Obligations are held by an escrow agent or trustee in trust for owners of the Municipal Obligations;

(5) No substitution of a Government Obligation shall be permitted except with another Government Obligation and upon delivery of a new Verification; and

(6) The cash or Government Obligations are not available to satisfy any other claims, including those by or against the related trustee or escrow agent;

(2) The Master Trustee or a third party acting solely as agent thereof or for the issuer (the “Holder of the Collateral”) has possession of the collateral or the collateral has been transferred to the Holder of the Collateral in accordance with applicable state and federal laws (other than by means of entries on the transferor’s books);

(3) The repurchase agreement shall state and an opinion of counsel shall be rendered at the time such collateral is delivered that the Holder of the Collateral has a perfected first priority security interest in the collateral, any substituted collateral and all proceeds thereof (in the case of bearer securities, this means the Holder of the Collateral is in possession);

(4) All other requirements of S&P in respect of repurchase agreements shall be met; and

(5) The repurchase agreement shall provide that if during its term the provider’s rating by either Moody’s or S&P is withdrawn or suspended or falls below “A-” by S&P or “A3” by Moody’s, as appropriate, the provider must, at the direction of the Obligated Group Agent or the Master Trustee (acting at the written direction of the Obligated Group Agent), within 10 days of receipt of such direction, repurchase all collateral and terminate the agreement, with no penalty or premium to the Obligated Group or the Master Trustee.

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(1) The invested funds are available for withdrawal without penalty or premium, at any time upon not more than seven days’ prior notice; the Master Trustee hereby agrees to give or cause to be given notice in accordance with the terms of the investment agreement so as to receive funds thereunder with no penalty or premium paid;

(2) The investment agreement shall state that it is the unconditional and general obligation of, and is not subordinated to any other obligation of, the provider thereof or, if the provider is a bank, the investment agreement or opinion of counsel shall state that the obligation of the provider to make payments thereunder ranks pari passu with the obligations of the provider to other depositors and its other unsecured and unsubordinated creditors;

(3) The Obligated Group Agent and the Master Trustee shall receive the opinion of domestic counsel (which opinion shall be addressed to the Obligated Group Agent and the Master Trustee) that such investment agreement is legal, valid, binding and enforceable upon the provider in accordance with its terms and of foreign counsel (if applicable);

(4) The investment agreement shall provide that if during its term:

(B) The provider’s rating by either S&P or Moody’s is withdrawn or suspended or falls below “A-” or “A3,” respectively, the provider must, at the direction of the Obligated Group Agent or the Master Trustee, within 10 days of receipt of such direction, repay the principal of and accrued but unpaid interest on the investment, in either case with no penalty or premium to the Obligated Group or Master Trustee;

(C) The provider shall default in its payment obligations, the provider’s obligations under the investment agreement shall, at the direction of the Obligated Group Agent or the Master Trustee (acting at the written direction of the Obligated Group Agent), be accelerated and amounts invested and accrued but unpaid interest thereon shall be repaid to the Master Trustee; and

(D) The provider shall become insolvent, not pay its debts as they become due, be declared or petition to be declared bankruptcy, the provider’s obligations shall automatically be accelerated and amounts invested and accrued but unpaid interest thereon shall be repaid to the Master Trustee.

(5) The investment agreement shall state and an opinion of counsel shall be rendered, in the event collateral is required to be pledged by the provider under the terms of the investment agreement, at the time such collateral is delivered, that the Holder of the Collateral has a perfected first priority security interest in the collateral, any substituted collateral and all proceeds thereof (in the case of bearer securities, this means the Holder of the Collateral is in possession).

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(i) Shares of a money market fund (including, without limitation, any mutual fund for which the Master Trustee or an affiliate of the Master Trustee serves as investment manager, administrator, shareholder servicing agent, and/or custodian or subcustodian, notwithstanding that (1) the Master Trustee or an affiliate of the Master Trustee receives fees from such funds for services rendered, (2) the Master Trustee charges and collects fees for services rendered pursuant to the Indenture, which fees are separate from the fees received from such funds, and (3) services performed for such funds and pursuant to the Master Indenture may at times duplicate those provided to such funds by the Master Trustee or its affiliates) which is rated “AAAm” or “AAAm-G” or better by S&P.

Provided, that investments set forth in clauses (a) through (j) of this definition shall constitute “Authorized Investments” only if the following requirements are met, to the extent applicable:

(1) If any of the foregoing investments, during any period of time, constitute:

(A) “certificated securities” or other “instruments” (as defined in the UCC), then during such period of time, such investments shall constitute “Authorized Investments” only if and so long as such investments are in the physical possession of either the Master Trustee or a third-party that holds such instruments (i) as an agent of the Master Trustee and in such a manner that no creditor, bankruptcy trustee or other receiver of such third-party shall have any claim to or right to recover from such investments either upon the bankruptcy or other insolvency of such third-party or otherwise, and (ii) as bailee for the Master Trustee for purposes of perfection by possession of the Master Trustee’s security interest in such investment; or

(B) “uncertificated securities” (as defined in the UCC), then during such period of time, such investments shall constitute “Authorized Investments” only if and so long as the Master Trustee is the registered owner of such investment; and

(2) In all cases and at all times, such investments shall constitute “Authorized Investments” only if and so long as the foregoing investments are held in such a manner that no creditors of the Master Trustee or any third-party holding such investment as agent for the Master Trustee and no bankruptcy trustee or other receiver of the Master Trustee or such third party shall have any claim to or right to recover from such investments either upon the bankruptcy or other insolvency of the Master Trustee or such third-party or otherwise. “Balloon Indebtedness” means Indebtedness, other than Short-Term Indebtedness, 25% or more of the original principal amount of which matures during any consecutive 12-month period if such maturing principal amount is not required to be amortized by mandatory redemption or prepayment prior to such period.

“Board Designated Assets” means cash, cash equivalent deposits and marketable securities that have been designated by the Governing Body of any Member for specific uses and includes endowment or restricted funds except to the extent the use of such funds is restricted in a way which prevents their application to the payment of Debt Service Requirements.

“Book Value,” when used with respect to Property of any Member, means the value of such Property, net of accumulated depreciation and amortization, as reflected in the most recent financial statements of such entity which have been prepared in accordance with GAAP, and when used with respect to Property of the Obligated Group, means the aggregate of the values of such Property, as reflected in the most recent audited combined financial statements of the Obligated Group prepared in accordance with GAAP; provided that such aggregate shall be calculated in such a manner that no portion of the value of any Property of any Member is included more than once; and further provided, however, that (a) there shall be excluded from the determination of Book Value as of any date the value of any Property disposed of since the date of the most recent audited financial statements of such Member or the Obligated Group, as the case may be, as such value was reflected on such financial statements, and (b) there shall be included in the determination of Book Value as of any date the value of any Property acquired

D-6 since the date of the most recent audited financial statements of such Member or the Obligated Group, as the case may be, as such value is certified by the Obligated Group Representative to be properly reflected in accordance with GAAP on the financial statements of such Member or the Obligated Group, as the case may be, on the date of such determination of Book Value.

“Business Day” means any day which is not a Saturday, Sunday or other day on which commercial banks in (a) the city in which the principal corporate trust office of the Master Trustee is located, (b) Seattle, Washington, or (c) New York, New York, are authorized or required by law to be closed.

“Capitalization Ratio” means with respect to any Person, as of any date, the ratio consisting of (a) a numerator equal to the amount determined by dividing (i) the sum of all Outstanding Funded Indebtedness of such Person plus all Outstanding Short-Term Indebtedness of such Person by (ii) the sum of all Outstanding Funded Indebtedness of such Person plus all Outstanding Short-Term Indebtedness of such Person plus the Unrestricted Fund Balance of that Person for the immediately preceding Fiscal Year, and (b) a denominator of one.

“Capitalized Lease” means any lease of real or personal Property which, in accordance with GAAP, is required to be capitalized on the balance sheet of the lessee.

“Capitalized Rentals” means, as of the date of determination, the amount at which the aggregate Net Rentals due and to become due under a Capitalized Lease would, in accordance with GAAP, be reflected as a liability on a balance sheet of the lessee.

“Center” means Fred Hutchinson Cancer Research Center, a Washington nonprofit corporation, its successors and assigns.

“Code” means the Internal Revenue Code of 1986, as now in existence or hereafter amended, together with all applicable regulations promulgated thereunder.

“Collateral” means, as of any date, all Property in which the Master Trustee, for the benefit of the Owners of the Master Notes, has a Lien on such date and any Property which is designated as Collateral in the Master Indenture and in any Supplemental Indenture.

“Commercial Paper Indebtedness” means Short-Term Indebtedness incurred as part of a financing program which contemplates the refunding or advance refunding from time to time of the principal of maturing Short-Term Indebtedness with the proceeds from the issuance of additional Short-Term Indebtedness.

“Commitment Indebtedness” means the obligation or Guaranty of any Person to pay Debt Service on Indebtedness of any Member or repay amounts disbursed pursuant to a commitment from a financial institution to refinance when due or when required to be purchased or redeemed other Indebtedness of such Person, which other Indebtedness would be classified as Short-Term, Commercial Paper, Balloon or Put Indebtedness and which other Indebtedness was incurred in accordance with the provisions of the Master Indenture, plus any fees payable to such financial institution for such commitment.

“Completion Indebtedness” means any Indebtedness for borrowed money: (a) incurred for the purpose of financing the completion of the acquisition, construction, remodeling, renovation or equipping of Facilities with respect to which Indebtedness for borrowed money has been incurred by any Member in accordance with the provisions hereof, and (b) with a principal amount not in excess of the amount required to provide a completed and equipped facility of substantially the same type and scope contemplated at the time such prior Indebtedness was originally incurred and to provide for any requisite capitalized interest or reserve funds and to pay the cost and expenses of issuing such Completion Indebtedness.

“Construction Index” means the Dodge Construction Index for U.S. and Canadian Cities with reference to the city in which the subject Property is located as most recently published prior to the date in question, or, if such index is no longer published, such other index which is certified to be comparable and appropriate by the Obligated Group Representative in an Officer’s Certificate delivered to the Master Trustee.

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“Consultant” means a professional consulting firm having the skill and experience necessary to render the particular report required and having a recognized reputation for such skill and experience, which firm shall have no interest, direct or indirect, in any Member of the Obligated Group or any Affiliate.

“Contributions” means, for any Fiscal Year of any Member, the aggregate amount of all contributions, charitable grants, gifts, bequests and devises actually received in cash or marketable securities by any Member in the applicable Fiscal Year and any such contributions, charitable grants, gifts, bequests and devises received in a form other than cash or marketable securities by any Member which are converted in the applicable Fiscal Year of such Member to cash or marketable securities and which, in either case, are not restricted in any way which would prevent their application to the payment of debt service on any of such Member’s Indebtedness or to the payment of costs and expenses of operation.

“Core Site Mortgaged Property” means (1) the real property described on Exhibit C attached to the Master Indenture and any other Property subject to the lien of the Deed of Trust; and (2) any Property hereafter subjected to the lien of the Deed of Trust or which otherwise becomes Collateral in accordance with the Master Indenture, which is specifically designated as “Core Site Mortgaged Property” at the time such lien is created.

“Credit Facility” means any letter of credit, line of credit, insurance policy, surety bond or other credit enhancement device obtained by a Member to support the payment of any Master Note or Related Bond, including, but not limited to, the payment of the principal, purchase price thereof, and premium, if any, and interest thereon.

“Cross-over Date,” with respect to Cross-over Refunding Indebtedness, means the date on which the principal portion of the Cross-over Refunded Indebtedness is paid or redeemed from the proceeds of such Cross-over Refunding Indebtedness.

“Cross-over Refunded Indebtedness” means Indebtedness of a Person refunded by Cross-over Refunding Indebtedness.

“Cross-over Refunding Indebtedness” means Indebtedness of a Person issued for the purpose of refunding other Indebtedness of such Person if the proceeds of such Cross-over Refunding Indebtedness are irrevocably deposited in escrow to secure the payment on the applicable Cross-over Date of the Cross-over Refunded Indebtedness, and the earnings on such escrow deposit are required to be applied to pay interest on such Cross-over Refunding Indebtedness until the Cross-over Date.

“Current Assets” and “Current Liabilities” mean such assets and liabilities of the Obligated Group as shall be determined to be current assets or current liabilities, as the case may be, in accordance with GAAP; provided, however, that such current assets shall also include: (a) Board Designated Assets to the extent that such assets would be classified as current assets in accordance with GAAP if they were not so designated; and (b) the amount of moneys held by the Master Trustee or any Related Bond Trustee which are required by the Master Indenture or any Related Bond Indenture, as the case may be, to be applied to pay the portion of interest or principal on any Master Notes or Related Bonds, as the case may be, which interest or principal is classified as a current liability in accordance with GAAP.

“Current Value” means, with respect to any Property, Plant and Equipment: (a) the aggregate fair market value of such Property, Plant and Equipment as reflected in the most recent written report of an appraiser, in the case of real Property, who is a member of MAI, delivered to the Master Trustee (which report shall be dated not more than three years prior to the date as of which Current Value is to be calculated), increased or decreased by a percentage equal to the aggregate percentage increase or decrease in the Construction Index from the date of such report to the date as of which Current Value is to be calculated; plus (b) the Book Value of any such Property, Plant and Equipment acquired since the last such report, increased or decreased by a percentage equal to the aggregate percentage increase or decrease in the Construction Index from the date of such acquisition to the date as of which Current Value is to be calculated; minus (c) the greater of the Book Value or the fair market value (as reflected in such most recent appraiser’s report) of any such Property, Plant and Equipment disposed of since the last such report, increased or decreased by a percentage equal to the aggregate percentage increase or decrease in the Construction Index from the later of (i) the date of such report or (ii) the date of the acquisition of any such Property, Plant and Equipment, to the date as of which Current Value is to be calculated.

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“Cushion Ratio” means, for any Fiscal Year, the ratio consisting of (a) a numerator equal to the amount determined by, dividing (i) the sum of all cash (including cash equivalents determined in accordance with GAAP), investments (valued at market), and Board Designated Assets of the Obligated Group as reflected on the audited financial statements of the Obligated Group as of the end of the immediately preceding Fiscal Year, by (ii) the Debt Service Requirements for all Funded Indebtedness of the Obligated Group for the current Fiscal Year; and (b) a denominator of one.

“Debt Service Requirements” or “Debt Service” means, with respect to the period of time and the Indebtedness for which calculated, the aggregate of the payments required to be made in respect of principal (whether at maturity, as a result of mandatory sinking fund redemption, mandatory prepayment, acceleration or otherwise) and interest payable on such Indebtedness for such period, taking into account any Swap Obligations applicable to such interest; provided that: (a) the amount of such payments for a future period shall be calculated in accordance with the assumptions contained in the Master Indenture and summarized under “THE MASTER INDENTURE – Permitted Additional Indebtedness” and “– Calculation of Debt Service Coverage” below; (b) the amount of such payments with respect to Guaranties for a past period shall be calculated in accordance with the assumptions contained in the Master Indenture and summarized under “THE MASTER INDENTURE – Calculation of Debt Service Coverage” below; (c) interest shall be excluded from the determination of the Debt Service Requirements for any past or future period to the extent that Funded Interest was, with respect to a past period, or is, with respect to a future period, available to pay such interest; (d) principal shall be excluded from the determination of the Debt Service Requirements for any past period to the extent that such principal was refunded with the proceeds of Additional Indebtedness; and (e) principal and interest shall be excluded from the determination of Debt Service Requirements to the extent that amounts are on deposit in an Irrevocable Deposit with respect to such Indebtedness.

“Deed of Trust” means the Deed of Trust, Security Agreement and Financing Statement dated as of January 31, 1991 between the Center, as Grantor, and DWTR&J Corp., as trustee or any successor trustee, for the benefit of Puget Sound National Bank, in its capacity as Master Trustee, as Beneficiary, as amended and supplemented from time to time, as amended by an Amended and Restated Deed of Trust, Security Agreement and Financing Statement as of July 16, 1996, as amended by an Amendment to Deed of Trust dated as of November 30, 2000, an Amendment to Deed of Trust dated as of November 15, 2001, an Amendment to Deed of Trust dated as of November 1, 2002, and an Amendment to Amended and Restated Deed of Trust, Security Agreement and Financing Statement dated November 24, 2009 (as so amended, the “Current Deed of Trust”). The Deed of Trust is expected to be further amended and restated, effective the Date of Issue, by a Second Amended and Restated Deed of Trust, Security Agreement and Financing Statement to be dated the Date of Issue, by the Center, as Grantor, for the benefit of the Master Trustee (the “Second Amended Deed of Trust”).

“Deed of Trust Trustee” means DWTR&J Corp. or any successor trustee, as Trustee under the Deed of Trust, as amended. It is anticipated that First American Title Company will be successor Deed of Trust Trustee under the Second Amended Deed of Trust.

“Encumbered” means, when used with respect to any Property, subject to a Lien or lease other than a Lien or lease described in subparagraphs (b) through (k), (m), (o) through (q), (s) and (t) of the definition of “Permitted Encumbrances.”

“Equipment” means the equipment, as defined in U.C.C. Article 9, now or hereafter located or used on, in connection with or incorporated into, or intended to be used on, in connection with or incorporated into any Facilities or purchased with the proceeds of any Master Notes, any Related Bonds or with any proceeds disbursed from any fund or account established by any Related Bond Indenture and owned or leased (to the extent of the Member’s or the Obligated Group’s interest as lessee) by the Obligated Group or any Member or Members.

“Event of Bankruptcy” means (a) the filing of a petition by the Obligated Group or any Member under the laws of the United States or any state seeking adjudication as an insolvent or a bankrupt, or seeking a reorganization, composition or arrangement with the creditors of the Obligated Group or any Member, (b) the admission by the Obligated Group or any Member in writing of its insolvency or inability to pay its debts as they mature, or the consent of the Obligated Group or any Member to the appointment of a receiver, trustee or debtor in possession for all or a major portion of its Property; or (c) the appointment of a receiver, trustee or debtor in possession for all or a

D-9 major portion of the property of the Obligated Group or a Member or the filing of a petition against the Obligated Group or any Member under the laws of the United States or any state seeking adjudication of the Obligated Group or a Member as an insolvent or a bankrupt or a composition or arrangement with the creditors of the Obligated Group or a Member, and, for a period of 45 days, such action has not been vacated, dismissed or otherwise neutralized and nullified.

“Event of Default” means any event or condition defined as an Event of Default pursuant to the Master Indenture as summarized under “Defaults and Remedies” below.

“Existing Master Notes” means the Master Note – Series 2000 Swap, the Master Note – Series 2001A Swap, the Master Note – Series 2001A Authority, the Master Note – Series 2001A Reimbursement Obligations and the Master Note – Series 2001A Surety.

“Existing Supplemental Indenture No. 1” means Supplemental Indenture No. 1 dated as of January 29, 1991, between the Center and the Master Trustee.

“Existing Supplemental Indenture No. 10” means Supplemental Indenture No. 10 dated as of November 15, 2001, between the Center and the Master Trustee.

“Existing Supplemental Indenture No. 14” means Supplemental Indenture No. 14 dated as of October 21, 2008, between the Center and the Master Trustee.

“Existing Supplemental Indenture No. 15” means Supplemental Indenture No. 15 dated October 21, 2008, between the Center and the Master Trustee.

“Expenses” means, for any period of time, the aggregate of all expenses (including, without limitation, any taxes) incurred during such period by the Person or group of Persons involved, and, if such calculation is being made with respect to the Obligated Group, excluding any such expenses attributable to transactions between any Member and any other Member, in all cases as calculated in accordance with GAAP.

“Exposure on Guaranteed Debt” means, with respect to the period of time for which calculated, an amount equal to 25% of the Debt Service Requirements on all Indebtedness of a Primary Obligor which is the subject of Guaranties made by the Obligated Group; provided, however, that if the Obligated Group has been required, by reason of its Guaranty, to make a payment in respect of the Indebtedness which is so guaranteed within the immediately preceding two full Fiscal Years, Exposure on Guaranteed Debt means an amount equal to 100% of the Debt Service Requirement on the Indebtedness so guaranteed.

“Facilities” means all land, buildings, fixtures and Equipment owned, leased or occupied by any Member.

“FDIC” shall have the meaning ascribed thereto in “Authorized Investments.”

“Federal Bankruptcy Code” means Title 11 of the United States Code, as now in existence or hereafter amended.

“Financial Consultant” means a professional investment banking firm, commercial banking institution or financial advisory firm having the skill and experience necessary to render the particular report required and having a recognized reputation for such skill and experience, which firm shall have no interest, direct or indirect, in any Member or Affiliate.

“Fiscal Year” means any 12-month period beginning on July 1 of any calendar year and ending on June 30 of the following calendar year, or any other 12-month period selected by the Obligated Group as the fiscal year of the Obligated Group, as certified to the Master Trustee by the Obligated Group Representative. Members, upon admission to the Obligated Group, or from time to time, may, if otherwise permitted by law, have a different fiscal year; provided, however, that the financial information for the Fiscal Year of the Obligated Group shall include

D-10 financial information from the most recent fiscal year of each Member ending on a date on or prior to the ending date of the Fiscal Year of the Obligated Group.

“Fixture Filing” means UCC-2 financing statement executed by the Center as debtor relating to the Deed of Trust and filed with the King County Department of Records and Elections in King County, Washington.

“Foundation” means Fred Hutchinson Cancer Research Center Foundation, a Washington nonprofit corporation. The Foundation was formerly a member of the Obligated Group, and on June 30, 2008, was merged with and into the Center.

“Funded Indebtedness” means with respect to any Person (a) all Indebtedness of such Person for borrowed money which Indebtedness is not Short-Term; (b) all Short-Term Indebtedness of such Person incurred pursuant to the provisions of the Master Indenture summarized under paragraph (D) under “THE MASTER INDENTURE – Permitted Additional Indebtedness” below; (c) all Indebtedness which is not Short-Term of such Person incurred or assumed in connection with the acquisition or construction of Property; (d) all Indebtedness which is not Short-Term whether or not incurred or assumed by such Person that is secured by any Lien on Property of such Person; (e) all Guaranties by such Person of Indebtedness of another Person which constitutes Funded Indebtedness of such other Persons under this definition; (f) all Commercial Paper Indebtedness of such Person incurred pursuant to the provisions of the Master Indenture summarized under paragraph (I) under “THE MASTER INDENTURE – Permitted Additional Indebtedness” below; and (g) Capitalized Rentals under Capitalized Leases entered into by such Person; provided, however, that Indebtedness that could be described under more than one of the foregoing categories shall not in any case be considered more than once for the purpose of any calculation made pursuant to the Master Indenture.

“Funded Interest” means amounts deposited in a restricted fund or escrow in connection with the issuance of Indebtedness to pay interest on such Indebtedness during the acquisition, construction, remodeling, renovation, equipping or start-up period of the Facilities to be financed or refinanced with the proceeds of such Indebtedness.

“GAAP” means as of any date, generally accepted accounting principles then in effect; provided, however, that references to GAAP shall be assumed to provide that the financial statements of, and any financial or accounting statistics or other information concerning, any Affiliate of a Member, which Affiliate is not a Member, shall be excluded and ignored even if such financial statements or financial or accounting statistics or other information would ordinarily be included or considered under GAAP.

“Governing Body” means, with respect to the Center, unless otherwise designated by the Board of Trustees of the Center or required by applicable law, the Executive Committee of the Board of Trustees of the Center.

“Government Obligations” means (a) SLGS; (b) other direct and general obligations of, or obligations the full and timely payment of principal of and interest on which are unconditionally guaranteed by, the United States of America; (c) evidences of a direct ownership interest in future principal or interest payments of direct and general obligations of the United States of America; provided that investments in such proportionate interests must be limited to circumstances wherein (1) a commercial bank or trust company acts as custodian and holds the underlying United States obligations; (2) the owner of the investment is the real party in interest and has the right to proceed directly and individually against the obligor of the underlying United States obligations; and (3) the underlying United States obligations are held in safekeeping in a special account, segregated from the custodian’s general assets, and are not available to satisfy any claim of the custodian, any Person claiming through the custodian or any Person to whom the custodian may be obligated; and (d) obligations which are rated in the highest rating category by a Rating Agency and which are not subject to redemption prior to maturity or on another date (except as provided in the security agreement described below) and are issued or incurred by any state, commonwealth or territory of the United States of America or any political subdivision, public instrumentality or public authority of any state, commonwealth or territory of the United States of America, which obligations are fully secured by and payable solely from an escrow fund consisting of obligations described in subsection (b) hereof, which security is held by a corporate fiduciary pursuant to a security agreement (which may not be amended to provide for redemption on a date earlier than that originally contemplated by the parties on the date such security agreement was first executed) and the sufficiency of which for payment of such obligations has been verified by an Accountant.

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“Grant Capital Additions” means, for any fiscal period, the aggregate amount received by the Member during such fiscal period pursuant to Federal grants or Federal contracts the use of which is expressly limited to the purchase by the Member of Equipment by the terms of such grant or contract.

“Guaranteed” means subject to a Guaranty.

“Guaranty” means all obligations of a Person resulting from any guarantee of any Indebtedness of any Primary obligor (including an Affiliate of such Person) in any manner, whether directly or indirectly, including, but not limited to, obligations incurred through an agreement, contingent or otherwise, by such Person (a) to purchase such Indebtedness or any Property constituting security therefor; (b) to advance or supply funds (i) for the purchase or payment of such Indebtedness, (ii) to maintain working capital or any other balance sheet condition, or (iii) to otherwise advance or make available funds for the purchase or payment of such Indebtedness; (c) to purchase securities or other Property or services primarily for the purpose of assuring the owner of such Indebtedness of the ability of the Primary Obligor to make payment of the Indebtedness; or (d) otherwise to assure such owner of the Indebtedness of the Primary Obligor against loss in respect thereof.

“Hazardous Substance Certificate” means the Certificate and Indemnity Regarding Hazardous Substances for Bond Financing dated January 31, 1991 executed by the Center in favor of the Master Trustee, Morgan Guaranty Trust Company of New York, the Authority and Security Pacific Bank Washington, N.A., as such certificate may be amended from time to time.

“Historical Debt Service Coverage Ratio” means, for any period of time, the ratio consisting of (a) a numerator equal to the amount determined by dividing Net Income Available for Debt Service for that period by the Debt Service Requirements for such period, and (b) a denominator of one.

“Historical Pro Forma Debt Service Coverage Ratio” means, for any period of time, the ratio consisting of (a) a numerator equal to the amount determined by dividing Net Income Available for Debt Service for that period by the Maximum Annual Debt Service Requirement for the Funded Indebtedness then Outstanding and the Funded Indebtedness then proposed to be issued, giving effect to the application of the proceeds of such proposed Funded Indebtedness, and (b) a denominator of one.

“Historical/Projected Debt Service Coverage Ratio” means, for any future period of time, the ratio consisting of (a) a numerator equal to the amount determined by dividing (i) the sum of (A) the projected Net Income Available for Debt Service for such Period of the Person then seeking to incur Funded Indebtedness, calculated as if such Person were the only Member, plus (B) the Net Income Available for Debt Service of all other Members for the most recent full Fiscal Year for which financial statements reported upon by Accountants are available, calculated as if such Persons were the only Members, by (ii) the Maximum Annual Debt Service Requirement for all Funded Indebtedness of the Obligated Group then Outstanding and the Funded Indebtedness then proposed to be issued, giving effect to the application of the proceeds of such proposed Funded Indebtedness; and (b) a denominator of one.

“Improvements” means additions to, expansions, improvement, remodeling, equipping or reequipping of the Facilities, whether accomplished before or after the date of the Master Indenture, (i) the costs of which are required to be capitalized under GAAP; (ii) which are deemed by the Obligated Group or a Member to be useful to the total operating unity and efficiency of the Obligated Group or such Member, as the case may be; and (iii) which have been approved, if necessary, by any appropriate governmental regulatory authorities.

“Indebtedness” means, for any Person, (a) all Guaranties by such Person; (b) all liabilities (exclusive of reserves, deferred revenues or other deferred credits) recorded or required to be recorded as liabilities on the financial statements of such Person in accordance with GAAP; and (c) all obligations for the payment of moneys existing, incurred or assumed by such Person (i) due and payable in all events or (ii) if existing, incurred or assumed primarily to assure the repayment of moneys borrowed or credit extended, due and payable upon the occurrence of a condition precedent or upon the performance of work, possession of Property as lessee, rendering of services by others or otherwise; provided, however, that the obligations described in this clause (c) shall not include obligations under leases (including operating leases) not required to be recorded as liabilities on the balance sheet of the lessee under GAAP and shall not include Swap Obligations; and (d) Non-Recourse Indebtedness; provided that

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Indebtedness shall not include Indebtedness of one Member to another Member or any Guaranty by any Member of Indebtedness of any other Member; and provided, further, that Indebtedness that could be described under more than one of the foregoing categories shall not in any case be considered more than once for the purpose of any calculation made pursuant to the Master Indenture.

“Independent Architect” means an architect, engineer or firm of architects or engineers selected by any Member licensed by, or permitted to practice in, the state where the construction involved is located, which architect or engineer or firm of architects or engineers, in the case of an individual, shall not be a partner, member, officer or employee of any Member or Affiliate and, in the case of a firm, shall not have a partner, member, director, officer or employee who is such a partner, member, officer or employee of any Member or Affiliate.

“Independent Counsel” means an attorney or firm of attorneys duly admitted to practice law before the highest court of any state and who, in the case of an individual, shall not be a partner, member, officer or employee of any Member or Affiliate, and which in the case of any firm, shall not have a Partner or employee who is such a partner, member, officer or employee of any Member or Affiliate.

“Independent Insurance Consultant” means a person or firm who, in the case of an individual, is not a partner, member, director, employee or officer of any Member or Affiliate and which, in the case of a firm, shall not have a partner, member, director, officer or employee who is such a partner, member, director, officer or employee, appointed by any Member or Affiliate, qualified to survey risks and to recommend insurance coverage for research or health care facilities and services of the type involved, and having a favorable reputation for skill and experience in such surveys and such recommendations; it being understood that an arm’s-length contract or relationship with any Member or Affiliate for the performance of insurance brokerage services shall not in and of itself be regarded as creating an employee relationship with such entity and that the term Independent Insurance Consultant may include an insurance broker or brokerage firm who or which otherwise meets the requirements of this definition and with whom or with which a Member or Affiliate transacts business.

“Irrevocable Deposit” means with respect to any Indebtedness which would otherwise be considered as Outstanding under or for purposes of the Master Indenture, the irrevocable deposit, in trust with the Master Trustee in the case of Master Notes, a Related Bond Trustee in the case of Related Bonds or another corporate fiduciary qualified to conduct trust business in the state in which such trustee or corporate fiduciary has its Principal Office, of money and/or Authorized Investments which are not subject to redemption at the option of the issuer thereof prior to their stated maturity, in an amount which shall be sufficient, taking into consideration the scheduled payments of principal of and interest on the Authorized Investments initially deposited in trust for such purpose and without considering any reinvestment of the proceeds thereof, to provide for the payment of all or any portion of the principal of and/or interest on and any redemption premium on such Indebtedness in accordance with the scheduled terms of payment of such Indebtedness or upon the earlier redemption or prepayment thereof, all in accordance with a refunding plan duly adopted by the debtor(s) under such Indebtedness at the time of such deposit. Such refunding plan shall require, among other things, (a) if otherwise required, the irrevocable giving of notice by the appropriate party or parties of any early redemption or payment of such Outstanding Indebtedness in accordance with the refunding plan; (b) the irrevocable pledge by the debtor(s) of the money and/or Authorized Investments deposited in trust to effect the refunding plan; (c) unless the Irrevocable Deposit is in the form of cash in an amount sufficient to meet the requirements of the refunding plan without considering the earnings on any investment of such cash, the delivery to the Center, the Obligated Group Representative, each Related Bond Trustee, each Related Issuer, each issuer of a Credit Facility and the Master Trustee of the report of a nationally recognized firm of Accountants addressed to all such persons, verifying the computations which indicate that the money and/or Authorized Investments irrevocably deposited in trust to effect such refunding plan will be sufficient to provide for the payment of such outstanding Indebtedness in accordance with the refunding plan; and (d) if otherwise required or requested by any of those persons designated to receive the report required by subsection (c) immediately above, of an opinion of nationally recognized municipal bond counsel, addressed to all such Persons, to the effect that undertaking and accomplishing the refunding plan will not cause the interest on such Outstanding Indebtedness which was not includable in the gross income of the recipient for purposes of federal income taxation prior to the adoption of the refunding plan to become so includable as a result of the undertaking and accomplishing of such refunding plan.

“Lien” means any mortgage, deed of trust or similar encumbrance or pledge of, security interest in or lien, charge or encumbrance of any kind on any Property of any Member which secures any obligation to any Person

D-13 other than any Member and any Capitalized Lease, conditional sale agreement or other title retention agreement under which any Member is lessee and the lessor is not a Member.

“MAI” means member of the American Institute of Real Estate Appraisers.

“Management Consultant” means a Consultant having a reputation for skill and experience in management of institutions of the general size and nature of the Center.

“Map With Ownership Parcel Numbers” means the map attached to the Master Indenture.

“Master Indenture” means the Amended and Restated Master Trust Indenture dated the Date of Issue between the Center and any other Members of the Obligated Group and the Master Trustee, as it may from time to time be amended or supplemented in accordance with the terms hereof.

“Master Noteowner,” “Owner” or “Owner of the Master Notes” means the registered owner of a Master Note.

“Master Notes” means all Master Notes issued under the Master Indenture, including any Master Notes issued in exchange or substitution for previously issued Master Notes.

“Master Note – Series 2000 Swap” means the “Master Note – Series 2000 Interest Rate Swap Obligations (Fred Hutchinson Cancer Research Center), dated October 21, 2008, issued and delivered pursuant to the Existing Master Indenture and Existing Supplemental Indenture No. 15.

“Master Note – Series 2001A Authority” means the Master Note – Series 2001A Authority (Fred Hutchinson Cancer Research Center Obligated Group), dated November 15, 2001, issued and delivered pursuant to the Existing Master Indenture and Existing Supplemental Indenture No. 10.

“Master Note – Series 2001A Reimbursement Obligations” means Master Note – Series 2001A Reimbursement Obligations (Fred Hutchinson Cancer Research Center Obligated Group), dated October 21, 2008, issued and delivered pursuant to the Existing Master Indenture and Existing Supplemental Indenture No. 14.

“Master Note – Series 2001A Surety” means the Master Note – Series 2001A Surety Bond Guaranty Obligations (Fred Hutchinson Cancer Research Center Obligated Group, dated November 15, 2001, issued and delivered pursuant to the Existing Master Indenture and Existing Supplemental Indenture No. 10.

“Master Note – Series 2001A Swap” means the “Master Note – Series 2001A Interest Rate Swap Obligations (Fred Hutchinson Cancer Research Center), dated October 21, 2008, issued and delivered pursuant to the Existing Master Indenture and Existing Supplemental Indenture No. 15.

“Master Note – Series 2017A” means Master Note – Series 2017A (Fred Hutchinson Cancer Research Center Obligated Group), expected to be issued in connection with the Series 2017A Bonds, if such Series 2017A Bonds are issued and delivered, and to be dated the date of issue of the Series 2017A Bonds and to be issued and delivered pursuant to Supplemental Indenture No. 27.

“Master Note – Series 2017B” means Master Note – Series 2017B (Fred Hutchinson Cancer Research Center Obligated Group) to be dated the Date of Issue and to be issued and delivered pursuant to Supplemental Indenture No. 28. See “SUPPLEMENTAL INDENTURES NOS. 28 AND 29” below.

“Master Note – Series 2017C” means Master Note – Series 2017C (Fred Hutchinson Cancer Research Center Obligated Group) to be dated the Date of Issue and to be issued and delivered pursuant to Supplemental Indenture No. 29. See “SUPPLEMENTAL INDENTURES NOS. 28 AND 29” below.

“Master Trustee” means The Bank of New York Mellon Trust Company, N.A., in its capacity as successor master trustee under the Master Indenture, or any successor trustee under the Master Indenture.

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“Maximum Annual Debt Service Requirement” or “Maximum Annual Debt Service” means the Debt service Requirement for the Fiscal Year in which the computation is made or in any succeeding Fiscal Year, whichever is largest.

“Member” or “Member of the Obligated Group” means, as of any time, the Center and any other Person who is then a member of the Obligated Group pursuant to the terms of the Master Indenture.

“Mortgaged Property” means “Property” as defined in the Deed of Trust.

“Net Income Available for Debt Service” means, for any period of time, the excess of Adjusted Gross Revenues over operating and non-operating Expenses, plus:

(a) Interest expense on all Funded Indebtedness Outstanding during such period, excluding capitalized interest (provided that if interest on any such Funded Indebtedness with respect to which an Irrevocable Deposit has been made was not deducted as an Expense in calculating the excess of revenues over Expenses, such interest expense shall not be added); and

(b) Amortization of expenses (to the extent taken into account in computing the Obligated Group’s operating and non-operating Expenses); and

Such calculations shall exclude:

(i) Income on any Irrevocable Deposit;

(ii) Profits or losses resulting from the early extinguishment of debt; and

(iii) The net proceeds of insurance (other than business interruption insurance).

“Net Proceeds” means, when used with respect to any insurance or condemnation award or sale consummated under threat of condemnation, the gross proceeds from the insurance or condemnation award or sale with respect to which that term is used less all expenses (including attorney’s fees, adjuster’s fees and any expenses of the Master Trustee) incurred in the collection of such gross proceeds.

“Net Rentals” means all fixed rents (including as such all payments which the lessee is obligated to make to the lessor on termination of the lease or surrender of the Property other than upon termination of the lease for a default thereunder) payable under a lease or sublease of real or Personal Property, excluding any amounts required to be paid by the lessee (whether or not designated as rents or additional rents) on account of maintenance, repairs, insurance, taxes and similar charges. Net Rentals for any future period under any so-called “percentage lease” shall be computed on the basis of the amount reasonably estimated to be payable thereunder for such period, but in any event shall not be less than the amount paid or payable thereunder during the immediately preceding period of the same duration as such future period unless the amount in such future period is reduced as a result of a reduction in the applicable percentage under such lease.

“Net Sale Proceeds” shall mean the proceeds of the sale, transfer or other disposition of Collateral after payment of any excise or similar taxes payable in connection with such sale, transfer or other disposition, any reasonable costs of the Center or its affiliates in connection with such sale, transfer or other disposition and any moneys paid by the Center or such affiliates in order to release such Collateral from any Permitted Encumbrances applicable thereto or an amount equal thereto.

“Non Core Site Mortgaged Property” means any real property subject to the lien of the Deed of Trust, or otherwise designated as Collateral, which is not Core Site Mortgaged Property.

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“Non-Recourse Indebtedness” means any Indebtedness secured by a Lien, liability for which is effectively limited to the Property subject to such Lien with no recourse, directly or indirectly, to any other Property of any Member.

“Obligated Group” means, as of any time, the Center, and any other Person designated as a Member pursuant to the provisions of the Master Indenture summarized under “Admission to and Withdrawal from the Obligated Group,” which has not ceased that status pursuant to the Master Indenture provisions summarized under such heading. During any period of time that the Center is the only Member, all references to the Obligated Group and to the Members shall be deemed references to the Center only.

“Obligated Group Representative” means the Center or any other Member designated as the Obligated Group Representative to the Master Trustee by a Written Request signed by the Center.

“Officer’s Certificate” means a certificate signed, in the case of a certificate delivered on behalf of any corporation, by the chief executive officer or chief financial officer of such corporation or any other Person duly authorized by such corporation or, on behalf of any other Person, the chief executive or chief financial officer of such other Person.

“Operating Lease” means the Operating Lease dated as of October 31, 2000, between National Healthcare, Research and Education Financing Corporation, as lessor, and the Center, as lessee.

“Opinion of Counsel” means an opinion in writing of a lawyer admitted to practice in the highest court in any state of the United States.

“Other Tangible Collateral” means the tangible person property referred to in the Deed of Trust that does not constitute Real Property Related Collateral.

“Outstanding” means, as of any particular date:

(a) With respect to Indebtedness of a Person, other than Master Notes, all such Indebtedness of such Person, except:

(i) Any portion thereof cancelled after purchase on the open market or surrendered for cancellation to the trustee for such Indebtedness or because of payment at, or prepayment or redemption prior to, maturity;

(ii) Any such Indebtedness which is no longer deemed outstanding under its terms and with respect to which such Person is no longer liable under the terms of such Indebtedness; and

(iii) Any Indebtedness for which an Irrevocable Deposit has been established, but only to the extent that the principal of, premium, if any, or interest on such Indebtedness is payable from such Irrevocable Deposit.

(b) With respect to Master Notes, all Master Notes which have been duly authenticated and delivered by the Master Trustee under the Master Indenture, except:

(i) Master Notes cancelled by the Master Trustee after purchase in the open market or because of payment at, or prepayment or redemption prior to, maturity;

(ii) Master Notes in lieu of which other Master Notes have been authenticated and delivered under the Master Indenture;

(iii) Any Master Note deemed paid pursuant to the Master Indenture, unless such Master Note is deemed to be Outstanding pursuant to the terms of its Related Supplemental

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Indenture; provided, however, that Master Notes deemed paid pursuant to the Master Indenture or any Supplemental Indenture shall be deemed to be Outstanding Master Notes for the purpose of payment of amounts due and owing thereunder, for the purpose of transfers and exchanges under the Master Indenture and for the purpose of replacement of lost, stolen, mutilated or destroyed Master Notes under the Master Indenture; and

(iv) For the purpose of any waivers, consents, notices or other actions under the Master Indenture or with respect to one or more Master Notes or the Master Indenture, Master Notes held by or on behalf of any Member.

“Paying Agent” means the bank or banks, if any, designated pursuant to the Master Indenture to receive and disburse the principal of and interest on any Master Notes or designated pursuant to a Related Bond Indenture to receive and disburse the principal of and interest on any Related Bonds.

“Permitted Encumbrances” means, as of any particular time, the following Liens against the Property of any Member, whether created before or after the effective date of the Master Indenture (unless otherwise limited):

(a) Any Lien on Property not otherwise included within this definition which is permitted by the Master Indenture as summarized under “THE MASTER INDENTURE – Liens on Property” below;

(b) Any Lien, easement, right-of-way, covenant, condition, restriction, exception, defect in and irregularity of title and encroachment on adjoining real estate with respect to which the parties secured or benefited are all Members;

(c) Leases whereunder any Member is lessor which relate to Property which is of a type that is customarily the subject of such leases, including, without limitation, office space for research personnel, physicians and educational institutions, food service facilities, parking facilities, barber shops, beauty shops, flower shops, gift shops, radiology, pathology or other research or healthcare related specialty services and pharmacy and similar departments; and leases whereunder any Member is lessor entered into in accordance with the disposition of Property provisions of the Master Indenture summarized under “THE MASTER INDENTURE – Sale, Lease or other Disposition of Property” below, including leases of Property of a Member to an Affiliate which is not a Member of the type described in the last paragraph under “THE MASTER INDENTURE – Sale, Lease or other Disposition of Property” below.

(d) Liens arising by reason of good faith deposits with any Member in connection with tenders, leases of real estate, bids or contracts (other than contracts for the payment of money), deposits by any Member to secure public utility or statutory obligations, or to secure, or in lieu of, surety, stay or appeal bonds, and deposits as security for the payment of taxes or assessments or other similar charges; any Lien arising by reason of deposits with, or the giving of any form of security to, any governmental agency or any body created or approved by law or governmental regulation for any purpose at any time as required by law or governmental regulation as a condition to the transaction of any business or the exercise of any privilege or license, or to enable any Member of the Obligated Group to maintain self-insurance or to participate in any funds established to cover any insurance risks or in connection with workmen’s compensation, unemployment insurance, pensions or profit sharing plans or other social security plans or programs, or to share in the privileges or benefits required for corporations participating in such arrangements;

(e) Liens for taxes and special assessments or other governmental fees which are not then delinquent, or if then delinquent are being contested in accordance with the provisions of the Master Indenture summarized under “THE MASTER INDENTURE – Additional Covenants of the Obligated Group” below;

(f) Easements, exceptions or reservations for the purpose of pipelines, telephone lines, power lines and substations, roads, streets, alleys, highways, railroad purposes, drainage and sewerage purposes, dikes, canals, laterals, ditches, the removal of oil, gas, coal or other minerals, and other like purposes, or for the joint or common use of real property, facilities and equipment, which in the aggregate do not, as

D-17 described in an Opinion of Counsel to the Obligated Group or a written opinion of an Independent Architect, materially impair the use of the Property for the purpose for which it was acquired or is being held by its Owner, or if not currently operated, the purpose for which it was designed;

(g) Any mechanic’s, laborer’s, materialman’s, supplier’s or vendor’s lien or other statutory lien arising in the course of any construction project or in the ordinary course of business or right in respect thereof if payment is not yet due under the contract in question or if such Lien is being contested in accordance with the provisions of the Master Indenture summarized under “THE MASTER INDENTURE – Additional Covenants of the Obligated Group” below;

(h) Such minor defects and irregularities of title to the Property as normally exist with respect to similar Property which do not in the aggregate materially adversely affect the value of, or materially impair, the Property affected thereby for the purpose for which it was acquired or is held by the owner thereof or if not currently operated, the purpose for which they were designed;

(i) Present or future valid zoning or land use laws and ordinances, including, but not limited to, laws and ordinances requiring short-plat or subdivision of property upon hypothecation or sale;

(j) Any right of the United States to recover against the owner of Property or any transferee of the Property or any portion thereof, by reason of advances of federal funds made under federal grant statutes including, but not limited to, 42 U.S.C. §285, 285(a), 291 and 299(d), relating to grants, respectively, commonly referred to as “Public Health Service Grants” and “Hill-Burton Grants,” and similar rights arising under other similar federal and/or State statutes;

(k) All right, title and interest of the state where the Property involved is located, municipalities and the public in and to tunnels, bridges and passageways over, under or upon a public way;

(l) Liens on or in Property which is a Contribution to a Member existing at the time of Contribution, provided that (i) such Liens attach solely to the Property which is the subject of such Contribution, and (A) the Indebtedness, if any, secured by such Liens is not assumed by any Member; or (B)(i) the Indebtedness secured by such Lien is Permitted Additional Indebtedness under the provisions of the Master Indenture summarized under “THE MASTER INDENTURE – Permitted Additional Indebtedness” and (ii) the Lien is a Lien permitted under the Master Indenture as summarized under “THE MASTER INDENTURE – Liens on Property” below;

(m) Liens of or resulting from any judgment or award, the time for the appeal or petition for rehearing of which shall not have expired, or in respect of which any Member shall at any time in good faith be prosecuting an appeal or proceeding for a review and in respect of which a stay of execution pending such appeal or proceeding for review shall have been secured;

(n) Any Lien on any Related Bond or any other evidence of Indebtedness of any Member acquired by or on behalf of any Member which secures Commitment Indebtedness and only Commitment Indebtedness;

(o) Liens on moneys deposited by patients or others with any Member as security for or as prepayment for the cost of patient care or research;

(p) Liens on Property received by any Member through gifts, grants or bequests, such Liens being due to restrictions on such gifts, grants or bequests of Property or the income thereon;

(q) Liens on Property due to rights of third-party payors or grant payors for recoupment of excess payments or for recapture on sale to or from any Member;

(r) Liens on Property if such Lien equally and ratably secures all of the Master Notes and only the Master Notes and, at the option of the Obligated Group, any Related Bonds;

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(s) Any security interest in any depreciation reserve, debt service reserve, debt service or similar fund established pursuant to the terms of any Supplemental Indenture or any Related Bond Documents in favor of the Master Trustee, Related Bond Trustee or the holder or owner of the Indebtedness issued pursuant to such Supplemental Indenture or Related Bond Documents or any related commitment Indebtedness;

(t) Liens on Accounts Receivable arising as a result of a sale or pledge of, or grant of a security interest in, such Accounts Receivable with recourse, provided that the principal amount of Indebtedness secured by any such Lien (i) does not exceed the lesser of 10% of Adjusted Gross Revenues or 80% of the outstanding pledgable or assignable Accounts Receivable at the end of the immediately preceding Fiscal Year for which financial statements are available under Master Indenture as summarized under “THE MASTER INDENTURE – Financial Statements; Etc.” below, and (ii) does not exceed the aggregate sale price, including fees, of such Accounts Receivable of the Member selling, pledging or granting a security interest in the same;

(u) Any Liens, encumbrances, security interests and claims securing the Master Notes or Related Bonds;

(v) Liens, encumbrances, security interests and claims which are subordinate to the Liens, encumbrances, security interests and claims securing Master Notes, or Related Bonds;

(w) Purchase money security interests in Equipment and lessors’ interests in Equipment which secure any Additional Indebtedness, purchase money security interests granted by any Member prior to the date hereof, lessors interests in Equipment acquired by any Member under operating leases, and bailors’ interests in Equipment in possession of any Member as a bailee;

(x) Any Lien which secures Non-Recourse Indebtedness and only Non-Recourse Indebtedness;

(y) Any Lien on the Property of a Member at the time it becomes a Member provided that no such encumbrance may by its terms or any modification thereof apply to any Property of any other Member or other Property of such Member, and provided, further, that no Additional Indebtedness may be incurred or assumed which is secured by such encumbrance unless the terms of the Master Indenture summarized under “THE MASTER INDENTURE – Permitted Additional Indebtedness” and “– Liens on Property” and are met as to such Additional Indebtedness and any Lien which secures it;

(z) Such Liens, covenants, conditions and restrictions, if any, as are set forth in the Master Indenture on the date of the execution and delivery of the Master Indenture; and

(aa) Any Lien granted in a royalty stream or interest in payments or portions thereof to be received by a Member or Members of the Obligated Group pursuant to a license agreement in connection with the sale, monetization or assignment of such royalty stream or other interest.

“Person” means an individual, corporation, firm, association, partnership, trust, joint venture, joint stock company, unincorporated organization or other legal entity or group of entities, including a governmental entity or any agency or political subdivision thereof, and shall also include executors, administrators, trustees, receivers or other representatives.

“Pledged Equipment” means Equipment which constitutes Collateral.

“Potential Default” means any event or condition which with the giving of notice, lapse of time or both would become an Event of Default under the Master Indenture.

“Primary Obligor” means the Person who is primarily obligated on an obligation which is guaranteed by another Person.

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“Principal Office” of any Person means the office generally recognized as the main or head office of such Person and, when used with respect to the Master Trustee, means the principal corporate trust office of the Master Trustee, which currently is located at 1101 Pacific Avenue, Third Floor, Tacoma, Washington 98402; and, when used with respect to a Paying Agent, means the office thereof designated in writing to the Master Trustee.

“Projected Debt Service Coverage Ratio” means, for any future period of time, the ratio consisting of (a) a numerator equal to the amount determined by dividing the Projected Net Income Available for Debt Service for that period by the Maximum Annual Debt Service Requirements for the Funded Indebtedness expected to be Outstanding during such period, and (b) a denominator of one.

“Projected Rate” means, for the purpose of estimating the Debt Service Requirements for any particular Indebtedness of the Obligated Group as if such Indebtedness were long-term fixed-rate Indebtedness, the projected yield at par of a hypothetical obligation of the Obligated Group in the same principal amount as the Indebtedness with respect to which debt service is being estimated, the interest on which is excluded from federal income taxation (or, if it is not expected that it will be reasonably possible to issue such tax-exempt obligations to refinance the Indebtedness with respect to which debt service is being estimated, obligations the interest on which is includable in federal income taxation) payable on an approximate level annual debt service basis with a 25-year term as set forth in the report of a Financial Consultant, which report shall state that in determining the Projected Rate such Financial Consultant reviewed (to the extent available) the yield evaluations at par of not less than three obligations selected by it as being reasonable comparators (including without limit as to credit, business, maturity and amortization of principal) in developing such Projected Rate and which obligations were Outstanding at any time during the three-month period preceding the date of calculation.

“Property” means any and all rights, titles and interests in and to any and all property, whether real or personal or mixed, tangible or intangible, and wherever situated.

“Property, Plant and Equipment” means all Property of the Members which is classified as property, plant and equipment under GAAP.

“Put Date” means any date on which Put Indebtedness may become payable or required to be purchased or redeemed, at the option of the holder thereof, prior to its stated maturity date.

“Put Indebtedness” means Indebtedness which is payable, or required to be purchased or redeemed, at the option of the holder thereof prior to its stated maturity date.

“Rating Agency” means each nationally recognized securities rating agency which is maintaining a current rating on Indebtedness of or secured or guaranteed by the Obligated Group at its request.

“Real Property Related Collateral” means the property defined in the Deed of Trust as Property together with that portion of the tangible personal property referred to in the Deed of Trust that is necessary for or otherwise relates to the operation of the Improvements (as defined in the Deed of Trust).

“Registrar” means (a) with respect to Master Notes, the Master Trustee or such other Person as may be appointed in accordance with the Master Indenture to keep the official records of Owners of Master Notes, or (b) with respect to Related Bonds, the Person or Persons keeping the official records of the registered owners of Related Bonds and/or is acting as paying agent in respect thereto as may be provided in any Related Bond Indenture.

“Related Bonds” means bonds, notes or similar obligations issued by or on behalf of any Member, or the Obligated Group, by any state of the United States of America or any municipal corporation or other political subdivision thereof, or any authority, agency or instrumentality of any of the foregoing, the proceeds of which are loaned or otherwise made available to any Member, in consideration, in whole or in part, of the execution, authentication and delivery of a Master Note or Master Notes.

“Related Bond Documents” means, collectively, any Related Bond Indenture, any reimbursement agreement relating to a Credit Facility relating to any series of Related Bonds and any documents entered into in

D-20 connection with any Related Bonds and any other documents designated as Related Bond Documents in a Supplemental Indenture.

“Related Bond Indenture” or “Related Indenture” means any indenture, bond resolution or similar instrument pursuant to which any series of Related Bonds is issued.

“Related Bond Trustee” means the trustee under any Related Bond Indenture and any successor trustee thereunder.

“Related Issuer” means the issuer of any series of Related Bonds.

“Related Master Note” means, with respect to any Related Bonds, a Master Note issued in connection with the issuance of such Related Bonds, including, without limitation, any Master Note issued to an issuer of a Credit Facility with respect to such Related Bonds.

“Related Supplemental Indenture” means, with respect to any Master Note or series of Master Notes, the Supplemental Indenture pursuant to which such Master Note or series of Master Notes were issued.

“Restatement Date” means the Date of Issue, which is the date that the Existing Master Indenture was amended and restated by the Master Indenture.

“Security Agreement” means any instrument or agreement pursuant to which the Master Trustee is granted a Lien on any Property or which is filed or otherwise executed in connection with or in order to perfect such Lien and any other instrument or agreement designated as a Security Agreement in a Supplemental Indenture.

“Security Documents” means the Master Indenture, the documents listed in the Master Indenture, any other agreement or instrument executed and delivered by any Member to the Master Trustee from time to time in order to further secure the obligations of the Obligated Group under the Master Notes or which is expressly stated therein to constitute a “Security Document” for purposes of the Master Indenture.

“Security Related Documents” means the documents listed in the Master Indenture, any other agreement or instrument executed and delivered to the Master Trustee from time to time with respect to Security Documents or other documents in order to further secure the obligations of the Obligated Group under the Master Notes or which is expressly stated therein to constitute a “Security Related Document” for purposes of the Master Indenture.

“Short-Term,” when used in connection with Indebtedness, means having an original stated maturity (without regard to whether such Indebtedness is payable, or required to be purchased or redeemed, at the option of the holder thereof prior to its stated maturity date) less than or equal to one year and not renewable or extendable at the sole option of the debtor for a term greater than one year beyond the date of original issuance.

“SLGS” means U.S. Treasury Certificates, Notes, Bonds and Demand Deposit Certificates – State and Local Government Series.

“State” means the State of Washington.

“Subordinated Indebtedness” shall mean Indebtedness which contains provisions substantially in the form set forth in the Master Indenture.

“Supplemental Indenture” means an indenture entered into pursuant to the Master Indenture.

“Supplemental Indenture No. 27” means Supplemental Indenture No. 27, expected to be entered into in connection with the issuance of the Series 2017A Bonds, if such Series 2017A Bonds are issued and delivered, and to be dated the date of issue of the Series 2017A Bonds, between the Center and the Master Trustee.

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“Supplemental Indenture No. 28” means Supplemental Indenture No. 28, to be entered into in connection with the issuance of the Series 2017B Bonds and to be dated the Date of Issue, between the Center and the Master Trustee. See “SUPPLEMENTAL INDENTURE NOS. 28 AND 29” below.

“Supplemental Indenture No. 29” means Supplemental Indenture No. 29, to be entered into in connection with the issuance of the Series 2017C Bonds and to be dated the Date of Issue, between the Center and the Master Trustee. See “SUPPLEMENTAL INDENTURE NOS. 28 AND 29” below.

“Swap Obligations” means the obligations of any Person in connection with any interest rate swap, cap or other hedge arrangement, incurred in connection with any existing Indebtedness or any permitted Additional Indebtedness.

“UCC” means the Uniform Commercial Code as applicable under Washington choice of law rules.

“Unrestricted Fund Balance” means, for any Person, such Person’s unrestricted fund balance, including endowment funds not restricted by the donor, determined in accordance with GAAP.

“Written Request” means a request in writing signed by the President or a Vice President of any Member, or by any other duly authorized Persons designated by such Member.

THE MASTER INDENTURE

The Master Indenture sets forth, among other things, the terms upon which the Members of the Obligated Group may incur and secure debt, and, in connection with such provisions, imposes restrictions upon the Members of the Obligated Group. The following summarizes certain of such provisions. It is not a comprehensive description of all terms of the Master Indenture, however, and reference should be made to the full text of the Master Indenture (including Supplemental Indenture No. 28 and Supplemental Indenture No. 29), as well as to the Deed of Trust.

As further described herein, provisions of the Master Indenture and Security Documents may be amended or waived in certain instances, solely with the consent of the Owners of a majority in aggregate principal amount of the Master Notes then Outstanding and entitled to vote.

The Master Notes

The Master Indenture generally does not limit the number of series or the aggregate principal amount of Master Notes which may be issued under the Master Indenture, except through restrictions upon the incurrence of Additional Indebtedness. See “THE MASTER INDENTURE - Permitted Additional Indebtedness.” Each Master Note issued by the Obligated Group will constitute the unconditional, irrevocable, joint and several obligation of the Members of the Obligated Group. However, security for each Master Note shall be only as provided in the Related Supplemental Indenture.

Security for the Master Notes

Each of the Master Note – Series 2017B and Master Note – Series 2017C will be designated under the Master Indenture to have the benefit of the pledge of the Collateral. For so long as the Master Note – Series 2017B and/or Master Note – Series 2017C remains outstanding, the Master Trustee is required to hold the Collateral, in trust, for the equal and pro rata benefit and security of the Owners of such Master Note and all other Master Notes issued and Outstanding under the Master Indenture, without preference, priority or distinction as to the participation in the lien, benefit and protection thereof, of one Master Note over or from the others, by reason of priority in the issuance or negotiation or maturity thereof, or for any other reason whatsoever, so that each and all of the Master Notes shall have the same right, lien and privilege under the Master Indenture and shall be equally secured by all Collateral until such Collateral is released and discharged from the lien or security interest in favor of the Master Trustee in accordance with the terms of the Master Indenture and the Related Supplemental Indentures.

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Release of Collateral

The Obligated Group may exercise the following rights at any time and from time to time:

(A) Obtain a release or reconveyance of the Core Site Mortgaged Property from the Lien created pursuant to the Deed of Trust, provided that: (1) there has been delivered to the Master Trustee a certificate of the Obligated Group Representative to the effect that no Event of Default under the Master Indenture, or any “event of default” (however defined) under any reimbursement agreement or other agreement with respect to any Credit Facility existing with respect to any Master Notes expressed to have the benefit Collateral or the Deed of Trust or under any other Security Documents or under any Related Bond document or any event, act or omission which with notice, lapse of time or both shall constitute an “event of default” (however defined) under the Master Indenture, any reimbursement or other such agreement, the Deed of Trust, any other Security Documents or any Related Bond Document shall have occurred and be continuing; and (2) at least one health care facility, as defined in the Act, will remain a part of the Mortgaged Property; and (3) the value of the Mortgaged Property to remain subject to the Lien of the Deed of Trust shall not be less than either (at the election of the Obligated Group Representative): 110% of the aggregate principal amount of (a) all Outstanding Master Notes securing Related Bonds and (b) any other Indebtedness evidenced or secured by Outstanding Master Notes, where the value of such Mortgaged Property is established at its Book Value; or, 150% of the aggregate principal amount of (a) all Outstanding Master Notes securing Related Bonds and (b) any other Indebtedness evidenced or secured by Outstanding Master Notes, where the value of such Mortgaged Property is established at its Current Value; and (4) the Obligated Group Representative shall have furnished a certificate to the Master Trustee that there is satisfactory access to the Mortgaged Property remaining subject to the Lien of the Deed of Trust (the “Remaining Parcel”); and (5) the Obligated Group Representative shall have furnished a certificate to the Master Trustee that it has obtained all governmental approvals which may be required in order that no violation of zoning, environmental, subdivision, use or related laws, ordinances, rules or regulations will result from the release with regard to either the Mortgaged Property to be released (the “Released Parcel”) or the Remaining Parcel; and (6) the Obligated Group Representative shall have furnished a certificate to the Master Trustee that the Remaining Parcel will be adequately serviced by all public utilities deemed necessary by the Master Trustee including, but not limited to, water, electricity and sewers; and (7) the Obligated Group Representative shall have furnished a certificate to the Master Trustee that the Remaining Parcel is a separate subdivision lot and will be treated for property tax purposes as a separate tax parcel; and (8) there is in effect immediately following the addition, substitution and/or withdrawal of any real property, a title insurance policy or policies insuring the first lien of the Deed of Trust, subject only to Permitted Encumbrances, against all real property then included in the Lien of the Deed of Trust, in an amount not less than the aggregate principal amount of (a) all Outstanding Master Notes securing Related Bonds and (b) any other Outstanding Indebtedness evidenced or secured by then Outstanding Master Notes; and (9) so long as any Authority Related Bonds are Outstanding the Master Trustee shall have received a certificate from an independent architect to the effect that the release of the Released Parcel will not impair the operating unity or the character of the Remaining Parcel as a health care facility, as defined in the Act; and (10) the Obligated Group shall have paid all required costs and expenses, including, without limitation, the Deed of Trust trustee’s attorney’s fees and all title, permit, recording and other costs and expenses associated with partial reconveyance.

(B) Obtain a release or reconveyance of Non Core Site Mortgaged Property from the lien created pursuant to the Deed of Trust, provided that: (1) the sale price received from such sale is not less than could have been obtained in an arm’s length transaction; and (2) the requirements described in Subsections (1), (2), and (4) through (10), inclusive, of clause (A) under this definition are met.

(C) Obtain a release or reconveyance of any part of the Core Site Mortgaged Property or the Non Core Site Mortgaged Property from the lien created pursuant to the Deed of Trust, if at the same time the Obligated Group shall substitute therefor other real property, subject only to Permitted Encumbrances, provided that: (1) environmental indemnities satisfactory to the Master Trustee are provided to the Master Trustee; and (2) the Current Value of the real property to be substituted shall be no less than the Current Value of the Mortgaged Property withdrawn; and (3) all procedural steps are taken which are necessary to create a first lien for the benefit of the Owners of Outstanding Master Notes, subject only to Permitted Encumbrances, in any added or substituted real property; and (4) The requirements described in Paragraphs (1), (2) and (4) through (10), inclusive, of Subsection (A) under this definition are met.

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(D) Add to the Mortgaged Property real property, subject only to Permitted Encumbrances, provided that environmental indemnities satisfactory to the Master Trustee are provided to the Master Trustee, and the requirements described in Subsections (A)(1), (A)(8), and (C)(2) under this definition are met.

(E) Obtain a release of any item(s) of Pledged Equipment from the security interest granted pursuant to the Deed of Trust and to dispose of such Pledged Equipment for its fair market value, free of such security interest, or to substitute therefor other Pledged Equipment, subject only to Permitted Encumbrances, provided the Obligated Group Representative shall have delivered to the Master Trustee the certificate described in paragraph C under the caption “THE MASTER INDENTURE - Sale, Lease or other Disposition of Property.”

(F) Obtain a release of pledged Accounts Receivable if the Obligated Group Representative shall have delivered to the Master Trustee a certificate stating that, in the judgment of the signer, such pledged Accounts Receivable have been sold, leased or otherwise disposed of in return for other Property or services of substantially equivalent value.

By purchase of the Bonds, Beneficial Owners of the Bonds are deemed to have (1) consented to the full reconveyance of the Deed of Trust, and the termination of the related Hazardous Substances Certificate, with such reconveyance and termination to occur upon the Master Trustee’s receipt of the consent of the owners of each then-Outstanding Master Note expressed to have the benefit of the pledge of Collateral, and (2) acknowledged and consented to the termination of certain Security Documents no longer in effect. Upon the reconveyance of the Deed of Trust, the obligations of the Obligated Group under the Master Indenture, including the obligations to make payments required by the Master Note – Series 2017B and the Master Note – Series 2017C, will no longer be secured by a security interest in real property. See “SUPPLEMENTAL INDENTURES NOS. 28 AND 29 – Deed of Trust, Security Documents and Security Related Documents” and “DEED OF TRUST.”

Sale, Lease or Other Disposition of Property

The Obligated Group agrees under the Master Indenture, that except to secure permitted Additional Indebtedness, it will not sell, lease or otherwise dispose of its Property, including without limitation, Collateral (whether or not such Property may be released from the liens securing the Master Notes) except for sales, leases or other dispositions: (A) In the ordinary course of business; (B) In return for other Property of equal or greater value; (C) To any Person, if prior to such sale, lease or other disposition there is delivered to the Master Trustee a certificate of the Obligated Group Representative stating that, in the judgment of the signer, such Property has, or within the next succeeding 24 calendar months is reasonably expected to, become inadequate, obsolete, worn out, unsuitable, unprofitable, undesirable or unnecessary and the sale, lease, removal or other disposition thereof will not impair the structural soundness, efficiency or economic value of the remaining Property; (D) To another Member of the Obligated Group (including dividends or Contributions paid to Members of the Obligated Group); (E) To any Person if such transfer (which may include, without limitation, sales of Accounts Receivable pursuant to factoring transactions in the ordinary course of business) is upon fair and reasonable terms no less favorable to the Member transferring the same than would be obtained in a comparable arm’s length transaction, and, if the Property transferred constitutes Property, Plant and Equipment, following such transfer the proceeds received by the Obligated Group are applied to acquire additional Property or are applied to repay the principal of Funded Indebtedness of any Member of the Obligated Group; pending such application such proceeds are required to be invested in Authorized Investments; (F) To a Person which is not a Member of the Obligated Group, if such Person shall become a Member of the Obligated Group pursuant to the provisions of the Master Indenture summarized under the caption “THE MASTER INDENTURE - Admission to and Withdrawal from the Obligated Group” contemporaneously with such transfer; (G) To any Person, if such Property consists solely of assets which are specifically restricted by the donor or grantor to a particular purpose which is inconsistent with their use for payment on the Master Notes or other Indebtedness for borrowed money or for the payment of costs and expenses of operation; (H) In regard to which, prior to the transfer there is delivered to the Master Trustee a certificate of the Obligated Group Representative to the effect that the transfer would not cause the Historical/Projected Debt Service Coverage Ratio for each of the next two succeeding Fiscal Years to be lower than the Historical/Projected Debt Service Coverage Ratio which would obtain in the absence of the transfer; (I) In regard to which, prior to the transfer, there is delivered to the Master Trustee: (1) either a certificate of the Obligated Group Representative to the effect that the Historical Debt Service Coverage Ratio for the most recently ended Fiscal Year, calculated as if the

D-24 sale, lease or other disposition had occurred at the beginning of such Fiscal Year, either: (a) would not be less than 1.75:1; or (b) either (1) would not have been reduced to less than 75% of the actual Historical Debt Service Coverage Ratio for such Fiscal Year and would not have been less than 1.50:1, or (2) would not have been reduced to less than 85% of the actual Historical Debt Service Coverage Ratio for such Fiscal Year and would not have been less than 1.25:1; provided, however, that in the event that a Management Consultant shall deliver a report to the Master Trustee to the effect that applicable laws or regulations have prevented or will prevent, or have substantially contributed or will substantially contribute to preventing, the Obligated Group from generating the amount of Net Income Available for Debt Service required to be generated by this clause (I)(1) as a prerequisite for the sale, lease or other disposition, and such report is accompanied by a concurring Opinion of independent Counsel as to any conclusions of law supporting such report; or (2) a report of a Management Consultant, that immediately after such transaction and after giving effect to such transaction, (a) the Historical/Projected Debt Service Coverage Ratio of the Obligated Group for each of the two Fiscal Years immediately succeeding the proposed date of such transaction is expected to satisfy the conditions described in clause (I)(i) above including, in the case of clause (I)(i)(b), the requirement that the Debt Service Coverage Ratio would not be reduced to less than 75% or 85%, as the case may be, of the Debt Service Coverage Ratio for each such Fiscal Year; and (b) immediately after such transaction, the conditions described in Subsection (A)(i) or (A)(ii) under the caption “THE MASTER INDENTURE - Permitted Additional Indebtedness” would be met for the incurrence of one dollar of Additional Indebtedness after giving effect to the transaction (which shall be deemed to occur at the beginning of the applicable Fiscal Year if the conditions of such Subsection (A)(i) are applied) which conditions are required to be supported by a report of a Management Consultant or an Accountant if required under such clause (A); (J) In the case of cash or cash equivalents, as a loan to any Person provided that (i) such loan has been evidenced in writing, (ii) such loan bears interest at a reasonable interest rate as determined by the Obligated Group Representative, (iii) there is a reasonable expectation that such loan will be repaid in accordance with its terms and (iv) in the case of loans to non-affiliates, the aggregate of such loans Outstanding at any time are not permitted to exceed 10% of Adjusted Gross Revenues of the Obligated Group for the most recent Fiscal Year for which financial statements are available under provisions of the Master Indenture; and/or (K) Which are in addition to sales, leases and other dispositions of Property permitted by clauses (A) through (J) described under this caption and which, when aggregated with all other such additional transfers of Property in the same Fiscal Year, total not more than (i) 5% of the total value of the Obligated Group’s Property or (ii) up to 10% of such total value if the aggregate sales, leases and other dispositions described this clause (K) in the previous three years aggregate less 5% of that total value (calculated on the basis of the Book Value or, at the election of the Obligated Group Representative, the Current Value of the assets shown on the assets side of the balance sheet in the most recent audited financial statements of the Obligated Group).

The foregoing notwithstanding, no Member is permitted to sell, lease, donate or otherwise dispose of or use any Property (a) which if sold, leased, donated or disposed of could reasonably be expected to result in a reduction of the Net Income Available for Debt Service of the Obligated Group such that the Obligated Group may be required to retain a Management Consultant pursuant to the provisions of the Master Indenture summarized under the caption “THE MASTER INDENTURE - Certification of Debt Service Coverage Ratios” unless such Management Consultant can come to the conclusions described in clause (b) of this paragraph, or (b) if a Management Consultant has been retained in the circumstances described under such caption, and such action, in the opinion of such Management Consultant, will not have a material adverse effect on the Net Income Available for Debt Service of the Obligated Group.

The sale of any Property, the rendering of any service, the making of any loan, the extension of any credit or the leasing of any Property by any Member in the ordinary course of such Member’s business with or to any affiliated entity which is not a Member of the Obligated Group on such terms as do not, in the good faith judgment of the Obligated Group Representative, result in an economic loss to such Member (whether or not reelected as a loss on the financial statements of such Member) will not be deemed to give rise to a transfer subject to the requirements described under this caption.

Application of Net Sale Proceeds of Collateral

So long as any Master Note expressed to have the benefit of the pledge of Collateral is Outstanding, the Master Indenture requires proceeds from disposition of Collateral released from the lien of the Deed of Trust, if any, to be applied as follows.

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The Master Trustee is required to use Net Sale Proceeds derived from disposition of Core Site Mortgaged Property, if any, as soon as is possible to prepay Master Notes in the following order: (A) to pay to any Master Noteowner who is a Credit Facility Provider, only so much of the Outstanding principal of its Master Note that represents unreimbursed drawings or other payments under such Credit Facility relating to the payment of the principal of and interest on (but not the purchase price of) any Authority Related Bonds in the order and in the amounts (as approved by the Owners of a majority in aggregate principal amount of Master Notes then Outstanding and entitled to vote) as set forth in a certificate of the Obligated Group Representative delivered to the Master Trustee; and (B) to pay or cause to be paid any principal amounts Outstanding and any accrued interest on Master Notes with respect to any Authority Related Bonds, in the order and in the amounts (as approved by a majority in aggregate principal amount of Master Notes then Outstanding and entitled to vote) as set forth in a certificate of the Obligated Group Representative delivered to the Master Trustee; and (C) to pay the remaining principal amounts Outstanding and any accrued interest on the Master Notes referred to in clause (A) above and any principal amounts Outstanding and any accrued interest on any other Master Notes, in the order and in the amounts (as approved by a majority in aggregate principal amount of Master Notes then Outstanding and entitled to vote) as set forth in a certificate of the Obligated Group Representative delivered to the Master Trustee; provided, however, that if the Net Sale Proceeds resulted from the sale, transfer or other disposition of Collateral that was financed or refinanced directly or indirectly, in whole or in part, from the proceeds of any series of Master Notes, the Master Notes of such series will be redeemed or prepaid prior to any other series of Master Notes but otherwise in accordance with clause (A) through (C) above.

The Master Trustee may apply Net Sales Proceeds from disposition of Non Core Site Mortgaged Property as directed by the Obligated Group Representative, provided the requirements described under the caption “THE MASTER INDENTURE –Release of Collateral” would be met after giving effect to the prepayment of Master Notes. If such requirements cannot be met, the Master Indenture requires such proceeds to be applied as follows: (1) to pay any principal amounts Outstanding and any accrued interest on Master Notes with respect to any Authority Related Bonds, in the order and in the amounts (as approved by the Owners of a majority in aggregate principal amount of Master Notes Outstanding and entitled to vote) as set forth in a certificate of the Obligated Group Representative delivered to the Master Trustee; (2) to pay any principal amounts Outstanding and any accrued interest on any other Master Notes, in the order and in the amounts (as approved by the Owners of a majority in aggregate principal amount of Master Notes Outstanding and entitled to vote) as set forth in a certificate of the Obligated Group Representative delivered to the Master Trustee; provided, however, that if such Net Sale Proceeds result from the sale, transfer or other disposition of Non Core Site Mortgaged Property financed or refinanced directly or indirectly, in whole or in part, from the proceeds of any series of Master Notes, the Master Notes of such series will be redeemed or prepaid prior to any other series of Master Notes.

Insurance

The Master Indenture requires each Member to maintain, or cause to be maintained, at its sole cost and expense, insurance with respect to its Property, the operation thereof and its business. A Member may self-insure, against such casualties, contingencies and risks (including but not limited to public liability, professional liability and employee dishonesty) in such amounts not less than is customary in the case of corporations engaged in the same similar activities and similarly situated and as, in the judgment of the Obligated Group Representative, is adequate to protect such Member’s Property, operations and businesses; provided, however, the Obligated Group may not self insure as to Property, Plant or Equipment damage or casualty, except to the extent of usual and ordinary deductible amounts. The insurance and/or self-insurance required to be maintained is required to be reviewed as to its customariness and adequacy by an Independent Insurance Consultant at least once every two Fiscal Years.

Damage, Destruction or Condemnation

Each Member covenants to maintain its Property in good repair, working order and condition and make all necessary and proper repairs, renewals and replacements thereof as it judges necessary to the conduct of its business. In the event of any damage to or loss or destruction or condemnation of the Facilities or any portion thereof, the Net Proceeds of which are estimated to exceed the greater of (A) $1,000,000 or (B) the sum of $1,000,000 plus an amount equal to $1,000,000 multiplied by a percentage equal to the aggregate percentage increase or decrease in the Construction Index from its level as of January l, 1991, the Member suffering such casualty or loss is required to immediately notify the Master Trustee of such event. Each Member hereby irrevocably assigns to the Master

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Trustee, as its interests may appear, all right, title and interest of such Member in and to any Net Proceeds resulting from any condemnation or taking, or from a sales transaction consummated under threat of condemnation.

Within one year of the date on which the Net Proceeds are finally determined, and subject to the approval of the Master Trustee (which approval shall not be unreasonably withheld), the Member suffering such casualty or loss will be obligated to do the following: (A) replace, repair, reconstruct, restore, or improve, the affected portion of the Facilities; or (B) apply all or a portion of the Net Proceeds to prepayment of the Master Notes; or (C) apply a portion of the Net Proceeds to replace, repair, reconstruct, restore, or improve, the affected portion of the Facilities and apply the remainder of the Net Proceeds to prepayment of the Master Notes. Notwithstanding any condemnation, loss of insured title or damage or destruction of the Facilities, the Obligated Group shall continue to pay and perform with respect to the Master Notes.

Permitted Additional Indebtedness

Under the Master Indenture, each Member agrees that, so long as any Master Notes are Outstanding, it will not incur any Additional Indebtedness other than:

(A) Funded Indebtedness, other than Guaranties, if prior to incurrence thereof, or if such Funded Indebtedness was incurred in accordance with another subsection described under this caption and the Obligated Group wishes to have such Indebtedness classified as having been issued under this clause (A), prior to such classification, there is delivered to the Master Trustee:

i. An Officer’s Certificate of the Obligated Group Representative stating that the Historical Pro Forma Debt Service Coverage Ratio of the Obligated Group for the most recent Fiscal Year preceding the date of delivery of such report for which financial statements reported on by Accountants are available was not less than 1.25:1; or

ii. An Officer’s Certificate of the Obligated Group Representative stating that the Historical Pro Forma Debt Service Coverage Ratio of the Obligated Group for the most recent Fiscal Year preceding the date of delivery of such report for which financial statements reported on by Accountants are available was not less than 1.10:1; and

Either (1) an Officer’s Certificate of the Obligated Group Representative (or, if the Historical Debt Service Coverage Ratio of the Obligated Group certified to in the report of an Accountant then being delivered pursuant to this subsection (ii) is less than 1.50:1, a written Management Consultant’s report) to the effect that the Projected Debt Service Coverage Ratio of the Obligated Group for each of the next two full succeeding Fiscal Years or, if such Indebtedness is being incurred in connection with the financing of Facilities, for the first two full Fiscal Years succeeding the projected completion date of such Facilities, is not less than 1.25:1, which Officer’s Certificate (or Management Consultant’s report, if so required) shall include forecasted balance sheets, statements of revenue and expense and statements of changes in financial position for each of such two Fiscal Years and a statement of the relevant assumptions upon which such forecasted statements are based, which financial statements must indicate that sufficient revenues and cash flow could be generated to meet the operating expenses of the Obligated Group’s proposed and existing Facilities and the debt service requirements of the Obligated Group’s other existing Indebtedness during such two Fiscal Years; or (2) an Officer’s Certificate of the Obligated Group Representative (or, if the Historical Debt Service Coverage Ratio of the Obligated Group certified to in the certificate then being delivered pursuant to this subsection (ii) above is less than 1.50:1, a written Management Consultant’s report (which report may be based, insofar as it relates to historical financial information, upon an Officer’s Certificate of the Obligated Group Representative)) to the effect that the Historical/Projected Debt Service Coverage Ratio of the Obligated Group for each of the next two full succeeding Fiscal Years or, if such Indebtedness is being incurred in connection with the financing of Facilities, the two full Fiscal Years succeeding the projected completion date of such Facilities, is not less than 1.25:1, which Officer’s Certificate (or Management Consultant’s report, if so required) shall include historical and forecasted balance sheets, statements of revenue and expense and statements of changes in financial position for the relevant Fiscal Years and a statement of the relevant assumptions upon which such forecasted financial statements are based, and which forecasted financial statements must indicate that sufficient revenues and cash flow could be generated to pay the operating expenses of the Obligated Group’s

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iii. The requirements of the foregoing subsections (ii)(a) and (b), as the case may be, shall be deemed satisfied if the following conditions are satisfied:

a. The Officer’s Certificate referred to in the foregoing subsection (ii) is accompanied by a written report of a Management Consultant which demonstrates, or which contains an opinion of such Management Consultant, that applicable laws or regulations have prevented, or have substantially contributed to preventing, the Obligated Group from generating Net Income Available for Debt Service required to be generated by such Subsection as a prerequisite to the issuance of Funded Indebtedness, which is accompanied by a concurring opinion of Independent Counsel as to any conclusions of law supporting such report; and

b. the Historical Debt Service Coverage Ratio, the Projected Debt Service Coverage Ratio and the Historical/Projected Debt Service Coverage Ratio, as the case may be, of the Obligated Group referred to in the foregoing subsections (i) and (ii) are at least 1.0:1.0.

(B) Completion Indebtedness, without limit, if there is delivered to the Master Trustee: (i) an Officer’s Certificate of the Obligated Group Representative stating that at the time the original Indebtedness for the Facilities to be completed was issued, the Obligated Group had reason to believe that the proceeds of such Funded Indebtedness together with other moneys then expected to be available would provide sufficient moneys for the completion of such Facilities; and (ii) a statement of an Independent Architect acceptable to the Obligated Group Representative setting forth the amount estimated to be needed to complete the Facilities.

(C) Funded Indebtedness for the purpose of refinancing or refunding (whether in advance or otherwise) any outstanding Funded Indebtedness so as to render it no longer Outstanding if prior to incurrence thereof:

i. either (A) an Officer’s Certificate of the Obligated Group Representative is delivered to the Master Trustee stating that the Maximum Annual Debt Service Requirement of all Funded Indebtedness of the Obligated Group then to be Outstanding, taking the issuance of the proposed Funded Indebtedness and the refunding or refinancing of the existing Funded Indebtedness into account, will not exceed the Maximum Annual Debt Service Requirement of all Funded Indebtedness of the Obligated Group outstanding immediately prior to such issuance and refunding or refinancing by more than 15%, or (B) the conditions described in clause (A) under this caption are met with respect to such proposed Funded Indebtedness, taking into account the refunding or refinancing of the Funded Indebtedness to be refunded or refinanced; and

ii. there is delivered to the Master Trustee an opinion of Independent Counsel stating that upon the incurrence of such proposed Funded Indebtedness and application of the proceeds thereof, the outstanding Funded Indebtedness to be refunded thereby will no longer be Outstanding within the meaning of the Master Indenture.

(D) Short-Term Indebtedness incurred in anticipation of the refunding thereof by Funded Indebtedness if:

i. there is in effect at the time the Short-Term Indebtedness provided for by this clause (D) is incurred a binding commitment by a financial institution, generally regarded as responsible, to provide financing sufficient to pay such Short-Term Indebtedness plus interest at its maturity, and such commitment provides for repayment of principal over a term of at least 12 months commencing with the maturity of such Short-Term Indebtedness; and

ii. the conditions described in clause (A) under this caption above are met with respect to such Short-Term Indebtedness when it is assumed that such Short-Term Indebtedness is Funded Indebtedness which matures over a term of 25 years, from the date of issuance of such Short-Term Indebtedness, bears interest at the Projected Rate and is payable over the assumed term on a level annual debt service basis.

(E) Short-Term Indebtedness, other than Short-Term Indebtedness incurred in accordance with clause (D) under this caption above, and Guaranties of Short-Term Indebtedness, the total principal amount of which (with the

D-28 principal amount of such guaranteed Short-Term Indebtedness which is deemed to be Indebtedness of the guarantor to be calculated in accordance with clause (H) under this caption and summarized under the caption “Calculation of Debt Service Coverage”) does not exceed 15% of the Adjusted Gross Revenues of the Obligated Group for the most recent Fiscal Year reflected in the most recent available audited financial statements of the Obligated Group; provided, however, that for a period of 20 consecutive calendar days in each Fiscal Year the total principal amount of such Short-Term Indebtedness and Guaranties of Short-Term Indebtedness of the Obligated Group shall be not more than 3% of the Adjusted Gross Revenues of the Obligated Group during the preceding Fiscal Year. For the purposes of this clause (E), Short-Term Indebtedness shall be deemed not to include overdrafts to banks to the extent there are immediately available funds of the Obligated Group sufficient to pay such overdrafts and such overdrafts are incurred and corrected in the normal course of business.

(F) Non-Recourse Indebtedness if:

i. such Indebtedness is secured by a Lien on Property and/or Equipment which is part of the Property, Plant and Equipment of the Obligated Group but which is not part of the Collateral or which is Subordinate to the Lien of the Master Trustee except as to Permitted Encumbrances; and

ii. an Officer’s Certificate is delivered to the Master Trustee that the total principal amount of such Non-Recourse Indebtedness Outstanding after the incurrence of such Indebtedness will not exceed either (A) the Book Value of Property, Plant and Equipment of the Obligated Group encumbered by the Non-Recourse Indebtedness as reflected in the latest available financial statements of the Obligated Group reported upon by an Accountant, or (B) at the option of the Obligated Group, the Current Value of such Property, Plant and Equipment.

(G) Balloon Indebtedness and Put Indebtedness if the conditions described in clause (A) under this caption above are met with respect to such Indebtedness when it is assumed that such Indebtedness matures over a 25-year term from its date of incurrence, bears interest at the Projected Rate and is payable on a level annual debt service basis over the assumed term.

(H) Guaranties by a Member of the Indebtedness of a Person not a Member of the Obligated Group of a sum certain if the conditions set forth in clause (A) under this caption above are satisfied when it is assumed that the obligation guaranteed is Funded Indebtedness of the Obligated Group; provided, however, that if the obligation guaranteed is Short-Term Indebtedness of the type specified in clause (D) under this caption, Balloon Indebtedness, Put Indebtedness or Commercial Paper Indebtedness, the assumptions set forth in clauses (D), (G) and (I) under this caption, as the case may be, shall be utilized in making such determination; provided, further, that for the purpose of so determining whether the conditions set forth in the appropriate subsection under this caption are satisfied, and for all other purposes of the Master Indenture, the Maximum Annual Debt Service Requirement on the obligation guaranteed shall be the Exposure on Guaranteed Debt with respect to such obligation; and provided, further, that the Obligated Group’s Net Income Available for Debt Service shall not be deemed to include any Adjusted Gross Revenues of the Primary Obligor.

(I) Commercial Paper Indebtedness if:

i. there is in effect at the time the Commercial Paper Indebtedness provided for by this subsection (I) is incurred a binding commitment by a financial institution, generally regarded as responsible, to provide financing sufficient to pay such Commercial Paper Indebtedness at its maturity, and such commitment provides for repayment of principal over a term of at least 12 months commencing with the maturity of such Commercial Paper Indebtedness; and

ii. either (A) the conditions described in clause (A) under this caption above are met with respect to such Commercial Paper Indebtedness when it is assumed that such Commercial Paper Indebtedness matures over a term of 25 years, from its date of incurrence, bears interest at the Projected Rate and is payable on a level annual debt service basis, or (B) such Commercial Paper Indebtedness is incurred solely to refund or advance refund the principal of Outstanding Commercial Paper Indebtedness.

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(J) Liabilities for contributions to self-insurance programs required by law or permitted to be maintained under the Master Indenture.

(K) Commitment Indebtedness without limit.

(L) Subordinated Indebtedness without limit.

(M) Indebtedness, the principal amount of which does not exceed the lesser of 10% of the Adjusted Gross Revenues or 80% of outstanding pledgable or assignable Accounts Receivable of the Obligated Group for the most recent Fiscal Year for which financial statements are available in accordance with provisions of the Master Indenture, incurred in connection with a sale of Accounts Receivable, or a grant of a security interest in such accounts, with recourse consisting of an obligation to repurchase all or a portion of such Accounts Receivable upon certain conditions, provided that the principal amount of such Indebtedness permitted hereby shall not exceed the aggregate sales price of, or loan secured, by such Accounts Receivable received by the Member of the Obligated Group incurring such Indebtedness.

(N) Cross-over Refunding Indebtedness if prior to the issuance of such Cross-over Refunding Indebtedness either (i) an Officer’s Certificate of the Obligated Group Representative is delivered to the Master Trustee stating that, immediately after the issuance of the proposed Cross-over Refunding Indebtedness, the Maximum Annual Debt Service Requirement of all Funded Indebtedness of the Obligated Group will not be increased by more than 15%, or (ii) the conditions described in clause (A) under this caption hereof are met with respect to such proposed Cross-over Refunding Indebtedness.

(O) Liabilities (other than those of the types described in clauses (A) through (N) under this caption) incurred in the ordinary course of the Obligated Group’s business, including, without limitation, payments for goods and services, operating leases and general and professional liability claims.

(P) Indebtedness, the principal amount of which at the time incurred, together with the aggregate principal amount of all other Indebtedness then Outstanding which was issued on or after the date of the execution and delivery hereof without meeting any of the requirements of (A) through (O) under this caption, inclusive, does not exceed 25% of the Adjusted Gross Revenues of the Obligated Group for the most recent Fiscal Year reflected in the most recent available audited financial statements of the Obligated Group.

(Q) Indebtedness incurred on or prior to June 30, 1991 in an aggregate principal amount, together with the combined original principal amounts of the first eight Master Notes issued under the Master Indenture, without duplication, not in excess of $125,000,000 incurred for the purpose of acquiring certain real property and constructing and equipping two research laboratory buildings thereon; acquiring other real property and the existing facilities thereon for the Center and other nonprofit health care administration, support and parking use; acquiring fee title to real property underlying the Center’s existing research and clinical facility as well as funding certain financing related costs.

(R) Funded Indebtedness if there is delivered to the Master Trustee an Officer’s Certificate of the Obligated Group Representative to the effect that after the incurrence of the proposed Additional Indebtedness, the Capitalization Ratio will be less than 0.667.

The aggregate Indebtedness incurred and Outstanding described by clauses (E), (M) and (P) under this caption above, shall not exceed 30% of the Adjusted Gross Revenues of the Obligated Group for the most recent Fiscal Year for which financial statements are available in accordance with applicable provisions of the Master Indenture.

The Members of the Obligated Group covenant that liabilities of the type permitted to be incurred under clause (O) under this caption above will not be allowed to become overdue for a period in excess of that which is ordinary for similar institutions without being contested in good faith and by appropriate proceedings.

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Subject to the foregoing, except to the extent otherwise provided in a Related Supplemental Indenture, Additional Indebtedness may be issued, and the proceeds thereof may be applied, by the Members of the Obligated Group for any purpose which is lawful and within the corporate purposes of such Member.

Calculation of Debt Service Coverage

Under the Master Indenture, the various calculations of the amount of Indebtedness of various entities, the amortization schedules of such Indebtedness and the debt service payable with respect to such Indebtedness for future periods required under certain provisions of the Master Indenture shall be made in a manner consistent with that described under the caption “Permitted Additional Indebtedness.” In the case of Short Term Indebtedness, Balloon Indebtedness, Put Indebtedness and Commercial Paper Indebtedness, unless such Indebtedness is reclassified as provided for under the Master Indenture, with the further assumption that such Indebtedness is being issued on the date estimated by the Obligated Group Representative as the most likely date of incurrence. In determining the amount of debt service payable on Indebtedness in the course of various calculations required under certain provisions of the Master Indenture, if the terms of the Indebtedness being considered are such that interest thereon for any future period of time is expressed to be calculated at a rate which is not then susceptible of precise determination, then for the purpose of making such determination of debt service, interest on such Indebtedness for such period (the “Determination Period”) shall be computed by assuming that the rate of interest applicable to the Determination Period is equal to the lesser of (A) the average annual rate of interest (calculated in the manner in which the rate of interest for the Determination Period is expressed to be calculated) which would have been in effect for any 12 month period ending not more than 60 days prior to the date on which such calculation is made, provided that if the index or other basis for calculating such interest was not in existence during any portion of any such 12 month period, the rate of interest for such portion of such period shall be deemed to be the rate of interest borne by such Indebtedness when issued, and (B) the average annual rate of interest (calculated as aforesaid) which would have been in effect for the 60 day period immediately preceding the date on which such calculation is made.

Put Indebtedness shall be deemed payable in accordance with its terms if the option of the holder to require that Put Indebtedness be paid, purchased or redeemed prior to its stated maturity date has expired as of the date of calculation.

Guaranties described in clause (P) under the caption “Permitted Additional Indebtedness” shall also be deemed to include Indebtedness equal to 25% of the principal amount guaranteed, unless the Obligated Group has been required, by reason of its Guaranty, to make a payment in respect of the Indebtedness which is so guaranteed within the immediately preceding two full Fiscal Years, in which case such Guaranties shall be deemed to include 100% of the principal amount guaranteed.

No debt service shall be deemed payable with respect to Commitment Indebtedness until such time as funding occurs under the commitment which gave rise to such Commitment Indebtedness. No Additional Indebtedness shall be deemed to arise when any funding occurs under any such commitment or any such commitment is renewed. No Additional Indebtedness shall be deemed to arise when variable rate Indebtedness converts to fixed rate Indebtedness if such conversion is in accordance with the provisions applicable to such variable rate Indebtedness when it was initially incurred. In connection with any determination of or with regard to Debt Service Requirements under the Master Indenture, the Master Trustee may rely on such opinions or reports of Consultants as it deems appropriate.

The Obligated Group may elect to have Indebtedness issued pursuant to one provision described under the caption “THE MASTER INDENTURE – Permitted Additional Indebtedness” classified as having been incurred under another provision described thereunder by demonstrating compliance with such other provision on the assumption that such Indebtedness is being reissued on the date of delivery of the materials required to be delivered under such other provision including the certification of any applicable Projected Rate. From and after such demonstration, such Indebtedness shall be deemed to have been incurred under the provision with respect to which such compliance has been demonstrated until any subsequent reclassification of such Indebtedness.

Master Notes issued to evidence or secure Indebtedness described under the caption “THE MASTER INDENTURE – Permitted Additional Indebtedness” shall not be treated as Additional Indebtedness.

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Certification of Debt Service Coverage Ratios

Under the Master Indenture, the Obligated Group Representative covenants and agrees that each financial report delivered pursuant to certain provisions of the Master Indenture will be accompanied by an Annual Coverage Certificate certifying: (A) whether the Historical Debt Service Coverage Ratio for the Obligated Group for the Fiscal Year covered by such report (“Reported Fiscal Year”) is greater than, equal to or less than 1.25:1, and (B) whether the Cushion Ratio of the Obligated Group for the Reported Fiscal Year is greater than, equal to or less than 1.50:1.

If for any Fiscal Year the applicable financial report and/or the Annual Coverage Certificate discloses: (A) that the Historical Debt Service Coverage Ratio of the Obligated Group for the Reported Fiscal Year is less than 1.25:1, and (B) that the Cushion Ratio of the Obligated Group for the reported Fiscal Year is less than 1.50:1, then the Obligated Group is required to retain, at its expense, a Management Consultant before the 150th day of the current Fiscal Year. The Management Consultant so retained is required to be engaged to make recommendations with respect to the Obligated Group’s methods of operation and other factors affecting its financial condition and operating results, which, if complied with, would enable the Obligated Group to perform in a manner not requiring the retention of a Management Consultant in future Fiscal Years.

A copy of the Management Consultant’s report and recommendations, if any, is required to be filed with the Master Trustee and each Related Bond Trustee. The Obligated Group is required to follow each recommendation of the Consultant to the extent feasible unless: (A) independent counsel delivers a written opinion to the Master Trustee to the effect that there is a substantial likelihood that following such recommendation is unlawful or will jeopardize the not for profit or tax exempt status of any Member or may jeopardize the status of any Member as a recipient or participant in a funding, grant or payment program which is material to its activities as a medical research institution, or (B) the Governing Body of the Obligated Group Representative by good faith resolution at a duly called regular or special meeting determines in accordance with its bylaws that it is more likely than not that following such recommendation would be detrimental to the operation or purposes of the Obligated Group, and such resolution states the reasons for that determination and shall have been delivered to the Master Trustee and each Related Bond Trustee.

Only for the purposes of the Annual Coverage Certificate requirements described under this caption, the Historical Debt Service Coverage Ratio will not be deemed to be less than 1.25:1 if the Historical Debt Service Coverage Ratio is at least 1.0:1, and there is filed with the Master Trustee a written report of a Management Consultant meeting the qualifications described under this caption addressed to the Master Trustee which demonstrates, or which contains an opinion of such Management Consultant, that applicable laws or regulations have prevented, or have substantially contributed to preventing, the Obligated Group from generating Net Income Available for Debt Service in an amount sufficient to yield an Historical Debt Service Coverage Ratio of 1.25:1 and such report is accompanied by a concurring Opinion of independent Counsel as to any conclusions of law supporting such report.

The Obligated Group will not be required to cause the Management Consultant’s report to be prepared more frequently than once every two Fiscal Years if at the end of the first of such two Fiscal Years the Obligated Group provides to the Master Trustee an Opinion of Independent Counsel to the effect that the applicable laws and regulations underlying the Management Consultant’s report delivered in the previous year have not changed in any material way.

The provisions described under this caption are not intended to prohibit the Members from serving indigent patients or from serving any other class or classes of patients without charge or at reduced rates so long as such service does not prevent the Obligated Group from satisfying the other requirements described under this caption.

Liens on Property

Each Member agrees under the Master Indenture to keep its Property free and clear of all Liens, leases, easements, rights-of-way, covenants, conditions, restrictions, exceptions, defects in and irregularities of title and encroachments on adjoining real estate which are not Permitted Encumbrances, unless: (A) such lien is approved, in writing, by the Owner(s) of not less than a majority in aggregate principal amount of Master Notes then Outstanding and entitled to vote, or (B) if such Lien is on Property, the Book Value or, at the option of the Obligated Group, the

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Current Value, of which does not exceed 20% of the value (by the same measure) of the Property Plant and Equipment of the Obligated Group. For the purposes of this paragraph, a Member will be deemed to own any Property subject to a Capitalized Lease under which such Member is lessor or lessee.

Merger, Consolidation, Sale or Conveyance

Under the Master Indenture, each Member agrees not to merge into, or consolidate with, one or more corporations which are not Members, allow one or more of such corporations to merge into such Member or sell, lease or convey all or substantially all its Property to any Person who is not a Member unless: (A) either (1) such Member is the surviving corporation or (2) such successor corporation is a corporation organized and existing under the laws of the United States of America or a state thereof with all necessary licenses to operate the Facilities owned or operated by such Member, if the successor corporation intends to operate the Facilities, and such successor corporation becomes a Member pursuant to the provisions of the Master Indenture summarized under the caption “THE MASTER INDENTURE - Admission to and Withdrawal from the Obligated Group” or such Member satisfies the requirements for and withdraws from the Obligated Group as summarized under the caption “THE MASTER INDENTURE - Admission to and Withdrawal from the Obligated Group;” and (B) the Obligated Group, immediately after such merger, consolidation, sale, lease or conveyance, would not be in default in the performance or observance of any term, covenant, condition or provision of any Related Bond Indenture or the Master Indenture, and the conditions described under the caption “THE MASTER INDENTURE - Liens on Property” would be met for the creation of an additional Lien on Property and the conditions described under the caption “THE MASTER INDENTURE - Permitted Additional Indebtedness” would be met for the incurrence of one dollar of Additional Funded Indebtedness.

In case of any such consolidation, merger, sale, lease or conveyance and upon any such assumption by the successor corporation, such successor corporation shall succeed to and be substituted for its predecessor, with the same effect as if it had been named in the Master Indenture as a Member. If all amounts due or to become due on all Related Bonds, the interest on which is excludable from gross income for federal income tax purposes, have not been fully paid to the holders thereof or fully provided for, there shall be delivered to the Master Trustee an opinion of nationally recognized municipal bond counsel, or a private letter ruling or equivalent from the Internal Revenue Service or state taxing authority, as may be relevant, to the effect that under then existing law the consummation of such merger, consolidation, sale, lease or conveyance would not adversely affect the validity of any exclusion otherwise available from federal or state income taxation of interest payable on any such Related Bonds. In case of any such consolidation, merger, sale, lease or conveyance, such conforming changes in phraseology and form (but not in substance) may be made in Outstanding Master Notes or Master Notes thereafter to be issued as may be appropriate.

The provisions described under this caption are not intended to prohibit, in and of themselves, the participation by any Member in joint ventures or the creation by any Member of subsidiaries or affiliated entities, and the transfer or contribution of assets thereto, but any such actions must comply with all applicable provisions of the Master Indenture.

Financial Statements, Etc.

Under the Master Indenture, each Member agrees to file with the Master Trustee within 135 days of the last day of the Fiscal Year of the Obligated Group the following financial information: (A) An audited combined financial report (which is also required to be made available to each Related Bond Trustee, and to any issuer of Related Bonds or any Rating Agency, upon request); and (B) A separate written report of the Accountant preparing such financial report; (C) A certificate of the Obligated Group Representative stating that the Obligated Group has made a review of its activities during the preceding Fiscal Year to determine that it has met all of its obligations under the Master Indenture and the Related Bond Indentures and that the Obligated Group is not in default under any of such Indentures or, as the case may be, specifying any such defaults and the steps being taken, if any, to remedy the same; and such additional information as the Master Trustee (acting at the direction of not less than a majority of the Master Noteholders entitled to vote) may reasonably request in order to determine compliance with the Master Indenture; and (D) such additional information as may be reasonably requested by the Related Bond Trustee to determine compliance with the Related Bond Indentures. See “SUPPLEMENTAL INDENTURES

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NOS. 28 AND 29 – Amendments of Master Indenture” for a description of amendments applicable to the presentation of financial information.

Additional Covenants of the Obligated Group

Under the Master Indenture each Member of the Obligated Group covenants, among other things, to: (A) except as otherwise expressly provided in the Master Indenture (i) preserve its corporate or other separate legal existence, (ii) preserve all its rights and licenses to the extent necessary or desirable in the operation of its business and affairs, and (iii) be qualified to do business and conduct its affairs in each jurisdiction where its ownership of Property or the conduct of its business or affairs requires such qualification; provided, however, no Member will be obligated to retain, preserve or keep in effect any of its rights, licenses or qualifications no longer used or, in the judgment of the Governing Body of such Member, useful in the conduct of its business; and (B) maintain its Property in good repair, working order and condition and make all necessary and proper repairs, renewals and replacements thereof as it judges necessary to the conduct of its business; and (C) pay or cause to be paid (i) all taxes, levies, assessments and charges relating to the use, occupancy, or operation of its Property, all permit and inspection fees and all utility charges assessed or charged against its property or on account of its use or occupancy thereof or the activities conducted thereon or therein; and (ii) all taxes, assessments and impositions upon its Property or its interest in and to its Property, or upon its interest in the Master Indenture or the amounts payable under the Master Indenture or the Master Notes, but may exercise any available options to pay such charges in installments; and (D) at its sole cost and expense, promptly comply with all present and future laws, ordinances, orders, decrees, decisions, rules, regulations and requirements of every duly constituted governmental authority, commission and court and the officers thereof which may be applicable to any of its affairs, business, operations and Property; and (E) promptly pay or otherwise satisfy and discharge all of its obligations and Indebtedness and all demand and claims against it as and when the same become due and payable; and (F) at all time comply with all terms, covenants and provisions of any Liens upon its Property or securing any of its Indebtedness; and (G) procure and maintain all licenses and permits necessary for its operations; and (H) maintain the status of its Facilities (to the extent such Facilities now have or hereafter acquire such status) as provider of health care or research services eligible for participation in those grant or third-party reimbursement programs which its Governing Body determines are appropriate, except to the extent such Governing Body determines in good faith, evidenced by resolution, that maintenance of such status is not in such Member’s best interest and that lack of such status will not materially impair the Obligated Group’s ability to pay its Indebtedness when due; and (I) operate all of its Facilities so as not to discriminate on any legally impermissible basis.

Except as may be limited by any Supplemental Indenture or security agreement, each Member has the right and privilege to contest in good faith, and at its cost and expense and in its own name and behalf, any tax, levy, charge, fee, rate, assessment, imposition, obligation, Indebtedness, demand, claim, Lien, easement, right-of-way, covenant, condition, restriction or encroachment and sale, forfeiture or loss of its Property, as long as such contest will not subject the Master Trustee or any Master Noteowner to the risk of any liability (unless such party or parties are indemnified to their satisfaction). While any such contest is pending, the Obligated Group will not be required to pay or discharge any monetary obligation so contested (other than any Indebtedness evidenced, secured or guaranteed by any Master Note) unless the Obligated Group agrees to settle such contest, but the Obligated Group must have set aside resources with respect to such contest which, in the opinion of the Governing Body of the Obligated Group Representative, are adequate. If the Master Trustee notifies the Obligated Group Representative that, in the Opinion of independent Counsel, nonpayment of any claim will subject any substantial part of the Collateral to imminent loss or forfeiture, the Obligated Group is required to promptly pay, bond or otherwise secure all such unpaid items in a manner which will cause them to be satisfied and discharged or, in the Opinion of such independent Counsel, prevent imminent loss of forfeiture of such Collateral.

Defaults and Remedies

The following events are “Events of Default” under the Master Indenture: (A) The failure of the Obligated Group to make any payment of the principal of, the premium, if any, or interest on, or any other amount payable under, any Master Note when and as the same shall become due and payable, whether at maturity, by acceleration or otherwise, in accordance with the terms thereof and of the Master Indenture including any Related Supplemental Indenture; or (B) Failure of the Obligated Group to perform any other covenant, condition or provision of the Master Indenture for a period of 30 days after written notice thereof from the Master Trustee to each Member unless the

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Master Trustee agrees in writing to an extension of time (which agreement may not be unreasonably withheld) and the Obligated Group institutes corrective action within the period agreed upon and diligently pursues such action until the default is remedied; or (C) If any representation or warranty made by the Obligated Group or any Member in any statement or certificate furnished in connection with the sale of any Related Bonds or furnished by the Obligated Group or any Member pursuant to the Master Indenture proves untrue in any material respect as of the date of the issuance or making thereof and is not made good within 30 days after written notice thereof to each Member by the Master Trustee; or (D) If default shall occur in the payment of the principal of, premium, if any, or interest on any obligation of any Member for borrowed money other than the Master Notes for a period of 30 days after the same shall become due (or, if there are grace periods applicable to such payment, after the expiration of the applicable grace period), the unpaid principal amount of which exceeds an amount equal to 1% of the Adjusted Gross Revenues of the Obligated Group for its most recent Fiscal Year for which audited financial statements are available, or if default shall occur under any mortgage, agreement or other instrument under or pursuant to which such obligation is issued with the result that such obligation becomes due and payable prior to the expressed maturity date thereof and remains unpaid for 30 days after the date fixed for payment by reason of such acceleration, provided, however, that such default will not constitute an Event of Default within the meaning described in this clause (D) if within the applicable 30-day period, (i) one or more Members in good faith commence proceedings to contest the existence or required payment of such obligation, mortgage, agreement or other instrument and (ii) sufficient moneys or a letter of credit in a sufficient amount issued by a commercial bank or trust company rated in one of the three highest categories by a Rating Agency is deposited with the Master Trustee to provide for the payment in full of the amount claimed to be due and owing in respect of such obligation, mortgage, agreement or other instrument; or (E) any judgment, writ or warrant of attachment or any similar process in an amount in excess of 1% of the Adjusted Gross Revenues of the Obligated Group for its most recent Fiscal Year for which audited financial statements are available shall be entered or filed against any Member or against any of its Property and remains unvacated, unpaid, unbonded, uninsured or unstayed for a period of 30 days; provided, however, that no such event will constitute an Event of Default described in this clause (E) if, within such 30-day period, (i) one or more Members in good faith commence proceedings to contest such judgment, writ or warrant of attachment or similar process and (ii) sufficient money or a letter of credit in a sufficient amount issued by a commercial bank or trust company rated in one of the three highest categories by a Rating Agency is deposited with the Master Trustee to provide for the Payment or discharge in full of such judgment, writ or warrant of attachment or similar process; or (F) The occurrence of any Event of Bankruptcy as to any Member which is not dismissed, stayed or otherwise nullified within 60 days after the institution thereof (without regard to any other period allowed for cure in the Master Indenture); or (G) The occurrence of an “Event of Default” as defined in any Related Supplemental Indenture (including without limitation, any of the events described in paragraph (I) below); or (H) Receipt by the Master Trustee of written notice of the occurrence of an “event of default” (however defined) under any Related Bond Indenture or other Related Bond document; or (I) Failure of the Center to purchase the Building (as defined by the Operating Lease) in accordance with the terms thereof upon the occurrence of an event of default thereunder.

Remedies Upon the Event of Default; Acceleration

Upon the occurrence and continuance of any Event of Default, the Master Trustee, if and only if requested or directed by the Owners of not less than a majority in aggregate principal amount of all Master Notes then Outstanding and entitled to vote (A) is required to declare the principal of and accrued interest on all (but not less than all) Master Notes to be due and payable immediately; and (B) shall be entitled to take any other action permitted to be taken by the Master Trustee under the Master Indenture, the Security Documents, and applicable law or otherwise. The principal amount of all Master Notes and the accrued interest thereon will also become immediately due and payable upon any acceleration of the principal and interest payable on any Related Bonds ipso facto and without the necessity of any action by the Master Trustee. If, at any time after the principal of all Master Notes have been so declared due and payable, and before any judgment or decree for the payment of the money due have been obtained or entered as provided in the Master Indenture, the Obligated Group pays or deposits with the Master Trustee a sum sufficient to pay all matured installments of interest upon all such Master Notes and principal and premium, if any, of all such Master Notes that shall have become due otherwise than by acceleration (with interest on overdue installments of interest and on such principal and premium, if any, at the rate borne by such Master Notes to the date of such payment or deposit) and the expenses of the Master Trustee, and any and all Events of Default under the Master Indenture shall have been remedied, then and in every such case the Owners of a majority in aggregate principal amount of all Master Notes then outstanding and entitled to vote, by written notice to each Member and to the Master Trustee, may waive all Events of Default and rescind and annul such declaration

D-35 and its consequences; but no such waiver or rescission and annulment will extend to or affect any subsequent Event or Default, or impair any right consequent thereon.

Application of Moneys Upon Event of Default

The Master Indenture requires any amounts received by the Master Trustee pursuant to, upon the occurrence and during the continuation of, an Event of Default, the realization of its rights and remedies under a Security Agreement or in any Supplemental Indenture to be applied in the order following, at the date or dates fixed by the Master Trustee for the distribution of such moneys, upon presentation of the Master Notes in respect of which payment is being made, and stamping thereon such payment, if only partially paid, and upon surrender thereof if fully paid: (A) to the payment of costs and expenses of collection, and of all amounts due and owing to the Master Trustee; (B) in case one or more installments of interest under one or more of the Master Notes, but no installments of principal under any of the Master Notes, shall have become due and be unpaid, to the payment of interest then due on the Master Notes, with interest upon such overdue installments of interest to the extent permitted by applicable law and provided for in the applicable Master Note (each such overdue installment of interest, together with such permitted interest thereon, if any being referred to as an “Unpaid Interest Installment”), in the order of maturity of the Unpaid Interest Installments; and in case the portion of such money available for application to two or more Unpaid Interest Installments that became due on the same date is insufficient to pay the aggregate amount of such simultaneously due Unpaid Interest Installments, then such portion of such money shall be applied to all such simultaneously due installments pro rata based on the respective amounts of such installments; (C) in case the principal of any Master Notes, or any portion thereof, shall have become due and be unpaid, by declaration of acceleration or otherwise, to the payment of the whole amount then due and unpaid upon such Master Notes for principal and interest (together with interest on the overdue principal and any overdue interest to the extent permitted by applicable law and provided for in the applicable Master Note); and in case such money shall be insufficient to pay in full the whole amount so due and unpaid upon such Master Notes, then to the payment of principal and interest then due and owing with respect to each Master Note, with the money received by the Master Trustee being allocated among the respective Master Notes pro rata based on the amount of principal and interest then due and owing with respect thereto. Each Owner of a Master Note shall be entitled to determine in its sole discretion the manner in which to allocate funds received by it in respect of its Master Note(s) as between principal and interest then due and owing with respect thereto; (D) to the payment of any other amounts due under the Master Indenture or under any Master Notes, pro rata based upon the unpaid principal amount of each such Master Note; (E) to whomsoever may be lawfully entitled to receive the same, or as a court of competent jurisdiction may direct; (F) except as otherwise provided in any Supplemental Indenture, to the payment of the remainder, if any, to the Obligated Group, its successors or assigns or to whomsoever may be lawfully entitled to receive the same, or as a court of competent jurisdiction may direct.

Limitation on Suits by Master Noteowners

Pursuant to the Master Indenture, unless otherwise provided in a Related Supplemental Indenture, no Owner of a Master Note will have any right to institute any suit, action or proceeding in equity or at law upon or under or with respect to the Master Indenture or for the appointment of a receiver or trustee, or any other remedy under the Master Indenture, unless: (A) such Owner previously shall have given to the Master Trustee written notice of the occurrence of an Event of Default and of the continuance thereof; and (B) the Owners of not less than a majority in aggregate principal amount of Master Notes then Outstanding and entitled to vote, shall have made written request upon the Master Trustee to institute such action, suit or proceeding in its own name as Master Trustee and shall have offered to the Master Trustee such reasonable indemnity as it may require against the costs, expenses and liabilities to be incurred therein or thereby; and (C) the Master Trustee, for 30 days after its receipt of such notice, request and offer of indemnity, shall have neglected or refused to institute any such action, suit or proceeding. Each Owner of a Master Note is deemed to have expressly covenanted with every other Owner of a Master Note and the Master Trustee, that no one or more Owners of Master Notes shall have any right in any manner whatever to affect, disturb or prejudice the rights of any other Owner of a Master Note or to obtain or seek to obtain priority or preference to any other such Owner, or to enforce any right under the Master Indenture, except in the manner provided in the Master Indenture and for the equal, ratable and common benefit of all Owners Master Notes.

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Limitations on Liability

Only the Members of the Obligated Group are obligated in any way for payment of the Master Notes or for performance of any of the covenants contained in the Master Indenture. No recourse under or upon any obligation, covenant or agreement of the Master Indenture (including all Related Supplemental Indentures), or on any Master Notes, or for any claim based thereon or otherwise in respect thereof, may be had against any incorporator, officer or member of the Governing Body, past, present or future, of any Member (except any such member which also is a Member of the Obligated Group) or any employee of the Master Trustee. The Master Indenture and any obligations issued under it are solely corporate obligations; and any and all personal liability of every name and nature is expressly waived as a condition of, and consideration for, execution of the Master Indenture (including all Related Supplemental Indentures) and issuance of the Master Notes.

The Master Trustee, prior to the occurrence of an Event of Default and after the curing or waiving of all Events of Default which may have occurred, undertakes to perform such duties and only such duties as are specifically set forth in the Master Indenture.

The Master Trustee will not be deemed to have notice of the occurrence of any Event of Default unless it shall have received written notice from the Obligated Group or any Member thereof, the Obligated Group Representative, an Owner of a Master Note or the issuer of any credit facility or a trustee in bankruptcy, a receiver or court officer specifying such Event of Default and in the absence of such notice so delivered the Master Trustee may conclusively assume that there is no Event of Default; provided that the Master Trustee will be deemed to have notice of the occurrence of any Event of Default if: (A) A payment not made when due is specified in the Master Indenture as an Event of Default and was expressly provided to be made to the Master Trustee for the account of the relevant Owner of a Master Note; or (B) The Obligated Group or any Member fails to comply with any covenant contained in the Master Indenture (including any Related Supplemental Indenture) if compliance therewith is expressly required to be computed, subject to the provisions of the Master Indenture relating to the duties and liabilities of the Master Trustee, by the Master Trustee.

Admission to and Withdrawal from the Obligated Group

Under the Master Indenture, any Person may become a Member of the Obligated Group if: (A) The Obligated Group Representative executes and delivers to the Master Trustee an officer’s certificate consenting to the admission of such Person to the Obligated Group and certifying that such admission has been approved by the affirmative vote of the Governing Body of the Obligated Group Representative; and (B) A supplemental indenture to the Master Indenture is executed by such Person whereby such Person agrees to become a Member of the Obligated Group and to be jointly and severally liable with the other Members of the Obligated Group for the performance of all covenants and agreements, including without limitation payment of the Master Notes, contained in the Master Indenture and in the Master Notes; and (C) The Master Trustee receives an Opinion of Counsel to the effect that nothing in the corporate charter or bylaws of such Person or in any instrument or agreement to which such Person is a party or by which such Person or any of its Property is bound will restrict the ability of such Person to perform its obligations under the Master Indenture or to aid, assist and confer benefits upon the other Members of the Obligated Group or to acquire, own, hold, mortgage and dispose of and invest its funds for the use and benefit of the Obligated Group and in furtherance of the purposes of the Obligated Group; and (D) The Master Trustee receives (i) a certificate of the Obligated Group Representative which demonstrates that, immediately upon such Person becoming a Member, the Obligated Group would not, as a result of such transaction, be in default in the performance or observance of the covenants or conditions to be performed or observed by it under certain provisions of the Master Indenture and the Obligated Group could meet the conditions under the Mater Indenture for the creation of an additional Lien on Property and for the incurrence of one dollar of additional Funded Indebtedness; (ii) an Opinion of Independent Counsel to the effect that the supplemental indenture described in clause (B) above has been duly authorized, executed and delivered and constitutes a legal, valid and binding agreement of such Person, enforceable in accordance with its terms, subject to customary exceptions for laws relating to bankruptcy, insolvency, reorganization or other similar laws affecting the enforcement of creditors’ rights generally and to the availability of equitable remedies; and (iii) with respect to any tax-exempt Related Bonds then outstanding, the opinion or opinions of nationally recognized municipal bond counsel satisfactory to the issuer of such Related Bonds and the Related Bond Trustee to the effect that the consummation of such transaction would not adversely affect the validity of such Related Bonds or, if there are any Related Bonds the interest on which is excluded from

D-37 the gross income of the recipients thereof, would not adversely affect the exclusion of the interest on any such Related Bonds from the gross income of the recipients thereof for the purposes of federal income taxation; and (E) No Event of Default or Potential Default will exist as a result of the admission of such new Member. Upon compliance with the foregoing conditions, such Person will become a Member of the Obligated Group and become jointly and severally liable for the performance of all covenants contained in the Master Indenture and in the Master Notes.

No Member of the Obligated Group may cease being a Member unless: (A) The Master Trustee shall have received a certificate of the Obligated Group Representative consenting to such withdrawal and certifying that such withdrawal has been approved by the affirmative vote of at least 75% of the Members of the Governing Body of the Obligated Group Representative; and (B) The Member proposing to cease such status is not a party to any Related Bond Indenture or other documents with respect to Related Bonds which remain Outstanding; and (C) Prior to the cessation of such status, there is delivered to the Master Trustee an opinion of nationally recognized bond counsel to the effect that the cessation by the Member of its status as a Member will not adversely affect the validity of any Related Bonds of, if there are any Related Bonds the interest on which is excluded from the gross income of the recipients thereof, would not adversely affect the exclusion of the interest on any such Related Bonds from the gross income of the recipients thereof for purposes of federal income taxation; and (D) Prior to the cessation of such status, there is delivered to the Master Trustee a written report by a Consultant stating that immediately after such cessation (i) all conditions under the Master Indenture would be met for the creation of an additional Lien on Property and for the incurrence by the Obligated Group of one dollar of additional Funded Indebtedness; and (E) If it is assumed that such cessation results in a transfer in other than an arm’s length transaction to an unrelated entity of Property owned by the Member proposing to cease such status, the conditions precedent to such a transfer to an entity which is not a Member of the Obligated Group under the Master Indenture have been complied with; and (F) After such cessation no Event of Default or Potential Default exists under the Master Indenture. Upon compliance with the foregoing conditions, the Master Trustee, at the expense of the Obligated Group, is required to deliver to such Member an instrument releasing such Member from the Obligated Group and from the performance of the covenants contained in the Master Indenture and in the Master Notes. Such release will be binding on all holders of the Master Notes and all other Members.

Supplements and Amendments to the Master Indenture

Pursuant to the Master Indenture, except as may be additionally limited by a Related Supplemental Indenture, the Members, when authorized by resolution of their Governing Bodies, and the Master Trustee may, without the consent of the Owners of Master Notes, enter into amendments or supplements to the Master Indenture to: (A) Evidence admission of a Member to or withdrawal of a Member from the Obligated Group; and (B) Evidence the succession of another Person to the covenants, agreements and obligations of a Member under the Master Indenture; and (C) Add additional covenants or Collateral for the protection of the Owners of Master Notes, provided that the grace period allowed for, or limitations on remedies available to the Master Trustee in the case of, defaults under such additional covenants may be different than for other Events of Default; and (D) Cure any ambiguity or defective provision of the Master Indenture or any Related Supplemental Indenture in such manner as is not inconsistent with and does not impair any security of the Master Indenture or adversely affect the interests of Owners of any series of Master Notes; and (E) Qualify the Master Indenture under the Trust Indenture Act of 1939 or under any similar federal or state statute; and (F) amend the Master Indenture in any other respect which, in the judgment of the Master Trustee, is not to the detriment of the Owners of the Master Notes.

The Obligated Group and the Master Trustee may, with the consent of the Owners of not less than a majority in aggregate principal amount of then Outstanding Master Notes entitled to vote, otherwise amend or supplement the Master Indenture for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of the Master Indenture or of any Supplemental Indenture or of modifying in any manner the rights of the Owners of Master Notes, but no such amendment or supplement may: (A) without consent of each owner of an Outstanding Master Note which would be affected by such change or reduction (i) change the times, amounts or currency of payment of interest, principal or any premium on any Master Note or (ii) reduce the principal amount or redemption price of any Master Note or the rate of interest thereon; or (B) without the consent of the Owners of all then Outstanding Master Notes whether or not such Master Note or Master Notes are entitled to vote under the Master Indenture (including the provisions of any Related Supplemental Indenture) (i) reduce the percentage of Master Notes, the Owners of which are required to consent to any such amendment or supplement, or

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(ii) permit the preference or priority of any Master Note over any other Master Note, or (iii) amend the provisions relating to withdrawal of Members of the Obligated Group, or (iv) revise, after the effective date of any Related Supplemental Indenture, the provisions of such Related Supplemental Indenture governing the release of any item of Collateral to the extent it secures the Master Note(s) created by such Related Supplemental Indenture.

Amendment of Security Documents and Security Related Documents

The Master Indenture provides that the Security Documents and Security Related Documents may be amended or waived with the consent of the Owners of a majority of the aggregate principal amount of Master Notes expressed to have the benefit of the pledge of Collateral then Outstanding and entitled to vote, except the following provisions which may not be amended without the consent of the Owners of each Outstanding Master Note expressed to have the benefit of the pledge of Collateral whether or not otherwise entitled to vote: (A) The Master Trustee may not take action which would result in release of Core Site Mortgaged Property, Non Core Site Mortgaged Property, Pledged Equipment and the Pledged Accounts, except as described under the caption “THE MASTER INDENTURE - Release of Collateral;” and (B) The Master Trustee may not waive any Event of Default arising as a result of the creation of any Lien on the Collateral in violation of the provisions of the Master Indenture described in “THE MASTER INDENTURE - Liens on Property;” and (C) No amendment to the definition of Permitted Encumbrances as applied to the Collateral is permitted; and (D) No amendment or waiver of the provisions described under this caption is permitted; and (E) No amendment of the provisions described under the caption “THE MASTER INDENTURE - Application of Net Sale Proceeds of Collateral” is permitted and any waiver will be permitted only with the consent of the Owner of each Master Note Outstanding that would be affected by such waiver.

By purchase of the Bonds, the Beneficial Owners of the Bonds are deemed to have consented to the amendments of the Deed of Trust contained in the Second Amended Deed of Trust. Further, by purchase of the Bonds, Beneficial Owners of the Bonds are deemed to have consented to the full reconveyance of the Deed of Trust, and the termination of the related Hazardous Substances Certificate, with such reconveyance and termination to occur upon the Master Trustee’s receipt of the consent of the owners of each then-Outstanding Master Note expressed to have the benefit of the pledge of Collateral. The Beneficial Owners are also deemed to have acknowledged and consented to the termination of certain Security Documents no longer in effect.

Effective Date of and Consent to Amendments

The Amended and Restated Master Indenture contains certain amendments to the terms of the original Master Indenture. The holders of all Master Notes issued simultaneously with or subsequent to the Restatement Date (including Master Note – Series 2017B and Master Note – Series 2017C), by their acceptance of their respective Master Notes shall be deemed to have consented to all amendments of the Master Trust Indenture included therein. The amendment set forth in clause (aa) of the definition of Permitted Encumbrances; shall not be effective against the holders of the Existing Master Notes until the Amendment Effective Date, which is defined to mean the earlier of (1) the first date none of the Existing Master Notes are Outstanding under the Master Indenture, or (2) the first date that all of the holders of all Existing Master Notes then Outstanding have consented to the amendment of the Master Indenture included in clause (aa) of the definition of “Permitted Encumbrances.” As of the date hereof, the Outstanding Existing Master Notes the holders of which have not yet provided such consent include the Master Note – Series 2000 Swap and the Master Note – Series 2001A Swap. All other amendments included in the Amended and Restated Master Indenture were immediately effective as of the Restatement Date.

SUPPLEMENTAL INDENTURES NOS. 28 AND 29

Creation of Obligations

Supplemental Indenture No. 28 creates a promissory note designated “Master Note – Series 2017B (Fred Hutchinson Cancer Research Center Obligated Group)” (the “Master Note – Series 2017B”) as the joint and several obligation of the Obligated Group. The Master Note – Series 2017B secures the Center’s obligations pursuant to the Related Bond Documents pertaining to the Series 2017B Bonds.

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Supplemental Indenture No. 29 creates a promissory note designated “Master Note – Series 2017C (Fred Hutchinson Cancer Research Center Obligated Group)” (the “Master Note – Series 2017C”) as the joint and several obligation of the Obligated Group. The Master Note – Series 2017C secures the Center’s obligations pursuant to the Related Bond Documents pertaining to the Series 2017C Bonds.

Redemption

Supplemental Indenture No. 28 provides that the Master Note – Series 2017B shall be subject to redemption prior to maturity, in whole at any time, or in part from time to time, on any date on which the Series 2017B Bonds are redeemed under the applicable Bond Indenture. Supplemental Indenture No. 28 provides that the giving of notice of redemption of the Series 2017B Bonds shall, without further notice or action by the Master Trustee or the Center, constitute notice of redemption of the corresponding amounts of principal due on Master Note – Series 2017B, and the same shall, thereby, become due and payable on the date of redemption of the Series 2017B Bonds.

Supplemental Indenture No. 29 provides that the Master Note – Series 2017C shall be subject to redemption prior to maturity, in whole at any time, or in part from time to time, on any date on which the Series 2017C Bonds are redeemed under the applicable Bond Indenture. Supplemental Indenture No. 29 provides that the giving of notice of redemption of the Series 2017C Bonds shall, without further notice or action by the Master Trustee or the Center, constitute notice of redemption of the corresponding amounts of principal due on Master Note – Series 2017C, and the same shall, thereby, become due and payable on the date of redemption of the Series 2017C Bonds.

Master Note – Series 2017B and Master Note – Series 2017C Have Benefit of Collateral

Pursuant to Supplemental Indenture No. 28 and Supplemental Indenture No. 29, respectively, Master Note – Series 2017B and Master Note – Series 2017C are expressed to have the benefit of the pledge of Collateral as contemplated by the Master Indenture.

Special Covenants and Restrictions

Pursuant to Supplemental Indenture No. 28, the Obligated Group covenants and agrees that the Center shall not withdraw from the Obligated Group so long as the Master Note – Series 2017B is Outstanding under the Master Indenture and pursuant to Supplemental Indenture No. 29, the Obligated Group covenants and agrees that the Center shall not withdraw from the Obligated Group so long as Master Note – Series 2017C is Outstanding under the Master Indenture. Each such provision may be waived by the applicable Bond Trustee with the written consent or upon the written direction of the Owners (as defined in the applicable Bond Indenture) of not less than a majority in aggregate principal amount of applicable Series of Bonds then Outstanding under the applicable Bond Indenture.

Amendments of Master Indenture

Supplemental Indenture No. 28 and Supplemental Indenture No. 29 each provide that, with respect to the Master Note – Series 2017B or Supplemental Master Note – Series 2017C, as applicable, and any Master Notes issued thereafter, the definition of “Adjusted Gross Revenues” in the Master Indenture is amended in its entirety to read as follows [new text double underlined]:

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gains or losses on the sale or other disposition of investments or fixed or capital assets not in the ordinary course of business, (ii) unrealized gains or losses on investments, including “other than temporary” declines in Book Value, (iii) gains or losses resulting from changes in valuation of any interest rate exchange agreement, hedge or similar arrangement, including, inter alia, an interest rate swap, asset swap, a constant maturity swap, a forward or futures contract, cap, collar, option, floor, forward or other hedging agreement, arrangement or security, direct funding transaction or other derivative, however denominated and whether entered into on a current or forward basis (collectively, for purposes of this definition, “Financial Products Agreements”), (iv) any termination payments, tax gross-up payments, expenses, default interest, and any other payments or indemnification obligations to be paid by or to a counterparty under any Financial Products Agreements, which payments are not regularly scheduled payments required to be paid by or to a counterparty, (v) earnings resulting from any reappraisal, revaluation or write-up of assets; provided, however, that, if such calculation is being made with respect to the Obligated Group, such calculation shall be made in such a manner so as to exclude any revenues attributable to transactions between any Member of the Obligated Group and any other Member of the Obligated Group, and (vi) all non-operating income and expenses of an entity in which a Member of the Obligated Group has made an investment, if such investment is recorded using the equity method of accounting.

Supplemental Indenture No. 28 and Supplemental Indenture No. 29 further provide that, with respect to the Master Note – Series 2017B or Master Note – Series 2017C, as applicable, and any Master Notes issued thereafter, the revenues, expenses, fund balance and balance sheets of Immaterial Affiliates need not be excluded from financial statements provided pursuant to the Master Indenture, including the provisions of the Master Indenture summarized under “THE MASTER INDENTURE – Financial Statements, Etc.”. Further, such revenues, expenses, fund balances and balance sheets of Immaterial Affiliates may be considered as if they were a portion of the results of operation and financial position of the Members for all purposes of the Master Indenture. For purposes of this provision, “Immaterial Affiliates” means Persons that are not Members of the Obligated Group and whose combined total unrestricted net assets, as shown on their financial statements for their most recently completed fiscal year, aggregated less than 10% of the combined or consolidated unrestricted net assets of the Obligated Group as shown on the financial statements referred to in the provisions summarized under “THE MASTER INDENTURE – Financial Statements, Etc.”, plus the unrestricted net assets of such Persons as if they were Members of the Obligated Group for such period, for the most recently completed Fiscal Year of the Obligated Group.

Deed of Trust, Security Documents and Security Related Documents

Supplemental Indenture No. 28 and Supplemental Indenture No. 29 each provide that the Owner of the Master Note – Series 2017B or Master Note – Series 2017C, as applicable, by acceptance thereof, consents to all amendments of the Deed of Trust contained in the Second Amended Deed of Trust. See “DEED OF TRUST – Amendments Included in the Second Amended Deed of Trust” for a description of certain amendments incorporated in the Second Amended Deed of Trust.

Supplemental Indenture No. 28 and Supplemental Indenture No. 29 further provide that the Owner of the Master Note – Series 2017B or Master Note – Series 2017C, as applicable, by acceptance thereof, consents to the full reconveyance of the Deed of Trust and the termination of the Hazardous Substance Certificate. The Owner of the Master Note – Series 2017B and the Owner of the Master Note – Series 2017C, by acceptance thereof, each directs the Master Trustee to take such action as is necessary to effect such reconveyance of the Deed of Trust and the termination of the Hazardous Substances Certificate, in each case upon receipt of the consent of the owners of each then-Outstanding Master Note expressed to have the benefit of the pledge of Collateral.

The Owner of the Master Note – Series 2017B and the Owner of the Master Note – Series 2017C, by acceptance thereof, each acknowledges and consents to the termination of the following Security Documents:

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(1) General Assignment of Support Contracts dated January 31, 1991, executed by the Center assigning to the Master Trustee, for security purposes, all of the Center’s right, title and interest in, to and under all Support Contracts (defined by the Master Indenture to include an architect’s contract, soils contract, the construction contract and other agreements relating to the construction of the cancer research facility), together with any consents executed by contract obligors thereunder, as such assignment and any such consent may be amended from time to time (the “General Assignment of Support Contracts”);

(2) Assignment of Block 94 Purchase Agreement dated January 31, 1991, executed by the Center assigned to the Master Trustee, for security purposes, the Center’s right, title and interest in, to and under the Block 94 Purchase and Sale Agreement with Repurchase Option dated December 28, 1990, between Swedish Hospital Medical Center and the Center, as such assignment may be amended from time to time (the “Assignment of Block 94 Purchase Agreement”);

(3) Assignment of Architect’s Contract and Plans and Specifications, with Architect’s Consent dated January 31, 1991, executed by the Center assigning to the Master Trustee for security purposes, the Center’s right, title and interest in, to and under the Agreement between Owner and Architect dated as of January 2, 1989, between the Center and Zimmer Gunsul Frasca Partnership (the “Architect”), together with the Consent attached thereto, and executed by the Architect, as such assignment and consent may be amended from time to time (the “Assignment Agreement between Owner and Architect”);

(4) Assignment of Contract’s Agreements, with Contractor’s Consent dated January 31, 1991, executed by the Center assigning to the Master Trustee for security purposes, the Center’s right, title and interest in, to and under the Agreement between Owner and Contractor dated as of January 31, 1991, the Agreement between Owner and Contractor dated as of November 19, 1990, and the Agreement between Owner and Contractor dated July 31, 1990, each between the Center and Baugh/Koll J.V, as general contractor (the “General Contractor”), together with the Consent attached thereto and executed by the General Contractor, as such assignment and consent may be amended from time to time (the “Assignment of Construction Contract”);

(5) Assignment of Parcel No. 14 Acquisition Agreement and Assignment dated January 29, 1991, executed by the Center, assigning to the Master Trustee, for security purposes, the Center’s right, title and interest in, to and under the Parcel No. 14 Purchase Agreement (as defined in the Master Indenture), including the contracts assigned to the Center thereby, together with the consent executed by Koll and Koll Construction to such assignment, as such documents may be amended from time to time (the “Assignment of Parcel No. 14 Purchase Agreement Assignment”);

(6) Assignment of Parcel No. 19 Acquisition Agreement and Assignment dated January 29, 1991, executed by the Center, assigning to the Master Trustee, for security purposes, the Center’s right, title and interest in, to and under the Parcel No. 19 Purchase Agreement Assignment (as defined in the Master Indenture), including the contracts assigned to the Center thereby, together with the consent executed by Koll to such assignment, as such documents may be amended from time to time (the “Assignment of Parcel No. 19 Purchase Agreement Assignment”); and

(7) Assignment of Consultant’s Agreements, with Consultant’s Consent dated January 31, 1991, executed by the Center assigning to the Master Trustee, for security purposes, the Center’s right, title and interest in, to and under the Soils Contracts (as defined in the Master Indenture), together with the consent attached thereto executed by the Soils Contractor, as such assignment and consent may be amended from time to time (the “Assignment of Soils Contract”).

In addition, the Owner of the Master Note – Series 2017B and the Owner of the Master Note – Series 2017C, by acceptance thereof, each acknowledges and consents to the termination of the following Security Related Documents:

(1) Remediation Agreement dated January 31, 1991, as amended by a First Amendment to Remediation Agreement dated July 16, 1996, each executed by the Center in favor of the Master Trustee, as amended from time to time (the “Remediation Agreement”);

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(2) Confirmation Certificates executed by the lessees or sublessees under the leases on Parcel No. 10 and the leases or subleases on Parcel Nos. 14 and 18 with respect to their respective leasehold or subleasehold interests in Parcel Nos. 10, 14 and 18 and such other estoppel certificate and subordination agreements as the lessees or sublessees under any leases or subleases on any other parcels No. 1 through 40 may be a party to, as such certificate may be amended from time to time (the “Lessee Estoppel Certificates”);

(3) Lessor Estoppel Certificates executed by King County, South Lake Union Limited Partnership and Kill with respect to their respective rights as lessors under the lease on Parcel No. 4 and such other lessor estoppel certificates as the lessors under any leases on any other Parcels No. 1 through 40 may be a party to, as such certificates may be amended from time to time; (the “Lessor Estoppel Certificates”);

(4) Written consent pursuant to which Peter Kiewet Sons’ Co. (the “Parcel No. 14 Seller”), among other things, contents to the Parcel No. 14 Purchase Agreement Assignment, as such consent may be amended from time to time (the “Parcel No. 14 Seller Consent”);

(5) Written consent pursuant to which U S West Communications, Inc., a Colorado Corporation, a successor in interest to Pacific Northwest Bell Telephone Company (the Parcel No. 19 Seller”), among other things, consents to the Parcel No. 19 Purchase Agreement Assignment, as such consent may be amended from time to time (the “Parcel No. 19 Seller Consent”);

(6) Consent attached to the Assignment of Parcel No. 14 Purchase Agreement Assignment pursuant to which Koll consents to the transactions contemplated thereby, as such consent may be amended from time to time (the “Parcel No. 14 Koll Consent”);

(7) Consents attached to the Assignment of Parcel No. 14 Purchase Agreement Assignment pursuant to which Koll Construction consents to the transactions contemplated thereby, as such consent may be amended from time to time (the “Parcel No. 14 Koll Construction Consent”);

(8) Consents attached to the Assignment of Parcel No. 19 Purchase Agreement Assignment and the Parcel No. 19 Seller Consent pursuant to which Koll consents to the transactions contemplated by those documents, as such consents may be amended from time to time (the “Parcel No. 19 Koll Consents”);

(9) Agreements signed by the General Contractor, if and to the extent required by any Persons that have furnished goods or services in connection with any excavation, demolition, sewer relocation or other construction or construction-related activities with respect to Parcels No. 1-20 or any portion thereof, subordinating to the Lien of the Deed of Trust any mechanics’ materialmen, engineering or other common law or statutory liens the General Contractor or any such Persons may have obtained as a result of or otherwise relating to the furnishing of such goods and services (the “Contractor Subordination Agreement”);

(10) Subordination Agreement between Security Pacific Bank Washington, N.A. and Seattle- First National Bank dated as of January 31, 1991 (the “Security Pacific Subordination”); and

(11) payment and performance bonds with respect to the project financed with proceeds of the Washington Health Care Facilities Authority Variable Rate Demand Revenue Bonds, Series 1991 (Fred Hutchinson Cancer Research Center, Seattle).

DEED OF TRUST

The Current Deed of Trust is a Deed of Trust, Security Agreement and Financing Statement dated as of January 31, 1991 between the Center, as Grantor, and DWTR&J Corp., as trustee or any successor trustee, for the benefit of the Master Trustee, as Beneficiary, as amended by an Amended and Restated Deed of Trust, Security Agreement and Financing Statement as of July 16, 1996, and as further amended and supplemented from time to

D-43 time. The Deed of Trust secures the Obligated Group’s obligations under the Master Notes. The Deed of Trust is expected to be further amended and restated, effective the Date of Issue, by a Second Amended and Restated Deed of Trust, Security Agreement and Financing Statement to be dated the Date of Issue, by the Center, as Grantor, for the benefit of the Master Trustee (the “Second Amended Deed of Trust”).

By purchase of the Bonds, Beneficial Owners of the Bonds are deemed to have consented to the full reconveyance of the Deed of Trust, and the termination of the related Hazardous Substances Certificate, with such reconveyance and termination to occur upon the Master Trustee’s receipt of the consent of the owners of each then-Outstanding Master Note expressed to have the benefit of the pledge of Collateral. Upon the reconveyance of the Deed of Trust, the obligations of the Obligated Group under the Master Indenture, including the obligations to make payments required by the Master Note – Series 2017B and Master Note – Series 2017C, will no longer be secured by a security interest in real property.

Obligations Secured

The Deed of Trust secures the following obligations and liabilities (collectively, the “Obligations”): full and prompt payment and performance when due of all obligations and liabilities now or hereafter owing by the Center or any other Member of the Obligated Group evidenced by Master Notes from time to time Outstanding under the Master Indenture. The Deed of Trust does not secure any obligations or liabilities arising under the Hazardous Substance Certificate dated as of January 31, 1991, as confirmed, amended and supplemented by the Confirmation dated as of May 31, 1996, and the First Amendment dated as of July 16, 1996, and as further amended and supplemented from time to time, and delivered in connection with the Master Indenture.

Property Granted Pursuant to Deed of Trust

Pursuant to the Deed of Trust, the Center irrevocably grants, bargains, sells and conveys to the Deed of Trust Trustee, in trust, with power of sale and right of entry, all of the Center’s estate, right, title and interest, now owned or hereafter acquired, in and to the following property and rights: (A) Certain real property on its South Lake Union Campus including the real property beneath the Weintraub, Hutchinson, Thomas, Fairview and Arnold buildings and certain rights pertaining to such property, including but not limited to easements, rights of ingress and egress, agreements, tenements, reversions, remainders, licenses, privileges and certain water, oil and other hydrocarbon rights; and (B) All buildings, structures, improvements, equipment, and property now or hereafter built on such real property, including the Weintraub, Hutchinson, Thomas, Fairview and Arnold buildings; and (C) All rents, issues, profits, royalties, avails, income and other benefits derived from such real property, buildings, structures, improvements and equipment.

The Center grants a security interest to the Master Trustee to all such property that is personal property, and also to: (A) All furniture, furnishings, appliances, machinery, equipment, inventory and other property of any kind now or hereafter located on the real property or improvements subject to the Deed of Trust; and (B) All unearned premiums under insurance policies covering such property, all proceeds of the voluntary or involuntary conversion thereof into cash or other liquidated claims, all other insurance or proceeds received pursuant to any sales or rental agreement, and all refunds or rebates of taxes thereon and rights of action in respect thereof; and (C) All plans, specifications, contracts or agreements pertaining to such property; and (D) All commitments or agreements intended by the Obligor thereof to provide the Center with proceeds to satisfy any of the Master Notes or to improve the property subject to the Deed of Trust; (E) All additions, accessions, replacements, substitutions, proceeds and products of the property subject to the Deed of Trust; and (F) All judgments, awards, settlements and compensation for any injury to or decrease in the value of the property subject to the Deed of Trust. The real property, improvements, fixtures, equipment, other property, leases and rents to which the Center grants a security interest to the Master Trustee are collectively referred to as the “Deed of Trust Collateral.” Permitted Encumbrances are excluded from the Deed of Trust Collateral.

Obligations of the Center Regarding Liens and Taxes

Pursuant to the Deed of Trust, the Center shall keep the Deed of Trust Collateral free of all statutory or common law liens except certain taxes and assessments not yet delinquent or other liens expressly allowed, and shall pay all taxes and assessments before delinquency. If the Center fails to pay when due any taxes, assessments,

D-44 ground rents or insurance premiums, then the Master Trustee may require the Center to pay all such taxes, assessments, ground rents or insurance premiums that will become due and payable within 60 days following such request. Such funds will be held without interest in a reserve account.

Covenants Regarding the Deed of Trust Collateral

The Center covenants and agrees as follows under the Deed of Trust: (A) The Center shall not abandon the real property or improvements pledged as collateral, or cease to do business or terminate its business as it relates to the real property or improvements; and (B) Except as expressly permitted by the Deed of Trust or the Master Indenture, the Center shall not allow a sale, mortgage, encumbrance, conveyance, or other transfer of any present or future interest in all or part of the Collateral; and (C) Except as otherwise permitted, the Center shall secure dismissal of any action or proceeding that could result in forfeiture of real property or improvements pledged as Collateral to any governmental authority; and (D) The Center shall obtain all certificates, licenses, authorizations, registrations, permits and/or approvals required for the construction and operation of the Center’s facilities and will comply with all present and future laws, ordinances, rules, regulations and orders of every duly constituted governmental or quasi-governmental authority or agency; and (E) Except as otherwise permitted, the Center shall operate and maintain the real property or improvements pledged as collateral in good order, repair and operating condition; and (F) The Center will at all times keep the real property or improvements pledged as collateral fully equipped and functional as a first-class biomedical research facility; and (G) The Center shall appear in and defend any suit, action or proceeding involving the Collateral, the Center, or its partners that might affect the value of the Deed of Trust or the security provided thereby or the rights and powers of the Master Trustee and/or the Deed of Trust Trustee.

Events of Default

The occurrence or existence of any of the following events or circumstances shall constitute an Event of Default under the Deed of Trust: (A) Except as otherwise expressly permitted, the Center shall fail to make any payment required to be made under the Deed of Trust when due, by acceleration or otherwise, and such failure shall continue after the expiration of any stated cure period; or (B) the Center shall fail to observe or perform any other covenant, condition or agreement contained in the Deed of Trust when such observance or performance is due and such failure shall continue after the expiration of the applicable cure period; or (C) Any representation or warranty made by the Center contained in the Deed of Trust shall be untrue in any material respect on or as of any date when made or deemed made; or (D) Any suit, action or proceeding before any court or governmental authority shall have been commenced to enjoin or otherwise prevent construction of any of the improvements on the Property; or (E) Any event or circumstance that constitutes an “Event of Default” under and as defined in the Master Trust Indenture shall have occurred and be continuing.

Remedies

Pursuant to the Deed of Trust, if an Event of Default has occurred and is continuing, the Master Trustee may, subject to the Master Indenture, but is not required to, in addition to any other rights or remedies available to it: (A) Declare the entire balance of the obligations to be immediately due and payable; or (B) Institute proceedings for complete foreclosure of the Deed of Trust; or (C) Cause any or all of the Collateral to be sold under the power of sale granted by the Deed of Trust, any of the other Loan Documents, or in any manner permitted by applicable law; (D) Institute an action in equity for specific performance of any of the provisions contained in the loan documents or for injunctive relief; or (E) Revoke the Center’s license to collect rents, enter upon the property pledged as Collateral, and exclude the Center and its agents wholly therefrom; or (F) Sue for and recover in its own name all rents and cash collateral derived from the property pledged as Collateral; or (G) Release any portion of the Collateral for such consideration as the Master Trustee may require; or (H) Take all actions permitted under the Uniform Commercial Code; or (I) Take possession of the Research Facilities and perform any and all work and labor necessary to complete construction thereof; or (J) Take any other action or pursue any other right or remedy as the Master Trustee may have under applicable law and the Center does grant said rights and remedies to the Master Trustee.

On the occurrence of an Event of Default, acceleration and written request of the Master Trustee, the Deed of Trust Trustee shall sell the real property, improvements and other Collateral in accordance with applicable law.

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The power of sale conferred by the Deed of Trust and by applicable law is not an exclusive remedy, and when not being exercised the Master Trustee may foreclose the Deed of Trust as a mortgage. All the Master Trustee’s rights and remedies under the Deed of Trust are cumulative and not in substitution for any right or remedy otherwise available.

Amendments Included in the Second Amended Deed of Trust

The following is a summary of certain amendments to the Current Deed of Trust expected to be effected by the Second Amended Deed of Trust. It is important to keep in mind that this summary does not purport to be and is not comprehensive or definitive. Reference should be made to Current Deed of Trust and the form of Second Amended Deed of Trust for a complete statement of the terms of such agreements.

Alternations of the Property/Land – The Second Amended Deed of Trust amends certain provisions of the Current Deed of Trust to permit removal, demolition, material structural alteration of the Property or construction of improvements on the Land if such removal, demolition, alteration or construction does not materially adversely affect the value of the Property or Land affected thereby. If any portion of the Property to be removed, demolished, significantly altered or construction was financed with proceeds of tax-exempt Related Bonds then Outstanding, the Second Amended Deed of Trust requires the Center to provide to the Master Trustee an opinion of bond counsel to the effect that such action would not adversely affect the exclusion of interest on such Related Bonds from the gross income of the recipients thereof for the purposes of federal income taxation.

Removal of Financed Personal Property – The Second Amended Deed of Trust clarifies that limitations on removal of items of tangible personal property financed with proceeds of Related Bonds or Master Notes contained in the Deed of Trust shall apply only if such Related Bonds and/or Master Notes are then-Outstanding. If any portion of the tangible personal property to be removed was financed with proceeds of tax-exempt Related Bonds then Outstanding, the Second Amended Deed of Trust requires the Center to provide to the Master Trustee an opinion of bond counsel to the effect that such removal would not adversely affect the exclusion of interest on such Related Bonds from the gross income of the recipients thereof for the purposes of federal income taxation.

Permitted Encumbrances – The Second Amended Deed of Trust amends the limitation on the ability of the Center to modify, amend or supplement any Exception (as defined therein) without the consent of the Master Trustee, to permit modifications that do not disqualify the Exception for treatment as a Permitted Encumbrance as defined under the Master Indenture. The Second Amended Deed of Trust further revises the limitation on the ability of the Center to impose restrictive covenants or encumbrances on the Property without Master Trustee consent to permit Permitted Encumbrances.

Leases – The Second Amended Deed of Trust eliminates language in the Current Deed of Trust which prohibits the Center from the following, in each case without the consent of the Master Trustee: (A) permitted assignment or subletting of all or any part of the tenants right under a Lease (defined to include leases, agreements, licenses, occupancy agreements, concessions and other arrangements, whether written or oral), (B) modify, amend or in any way alter the terms of the Lease, (C) renew or extend the terms of the Lease unless an option therefor was originally reserved by the tenant, (D) accept surrender of or terminate the Lease, commence any action for dispossession of the tenant, or exercise any right of recapture of the demised premises, except in accordance with the terms of the Lease providing for termination in the event of a default after a bona fide default, (E) receive or collect rents for a period of more than one month in advance of the due date, or (F) set off, compromise or discount any rents or waive, release or discharge the tenant from any obligation, covenant or agreement under a Lease.

The Second Amended Deed of Trust also eliminates a requirement that proceeds or damages resulting from a tenant’s or lessee’s default under a Lease, at the Master Trustee’s option (acting at the direction of Owners of a majority in aggregate principal amount of the Master Notes then Outstanding and entitled to vote), be paid to the Master Trustee and applied against sums owed under the Master Notes. In addition, the Second Amended Deed of Trust expressly permits the Center to enter into Leases with respect to any part of the Property without the prior written consent of the Master Trustee to the extent such Lease constitutes a Permitted Encumbrance or is otherwise permitted by the Master Indenture, eliminates a requirement that Leases be bona fide transactions with parties unrelated and unaffiliated with the Center or any person or entity owning a beneficial interest in the Center, and

D-46 modifies certain provisions of the Current Deed of Trust regarding provision of Leases and other related documentation to the Master Trustee.

Further, the Second Amended Deed of Trust eliminates a provision of the Current Deed of Trust providing that if any Event of Default has occurred and is continuing, if the Center or any other owner of the Collateral occupies the property or any portion thereof, such occupancy will be a tenancy at will, terminable by the Master Trustee (acting at the direction of the Owners of a majority in aggregate principal amount of the Master Notes then Outstanding and entitled to vote under the Master Indenture) and prior to such termination the owner must pay to the Master Trustee a reasonable rental for the occupied space. The net rentals received from the Center after payment of operating costs were to be applied to the Obligations.

Events of Default – The Second Amended Deed of Trust (1) amends the event of default described in clause (B) under the heading “DEED OF TRUST – Events of Default” to provide that, if no specific cure period is provided, such failure to observe or perform the covenant, condition or agreement must continue for a period of 30 days after written notice thereof from the Master Trustee to the Center to constitute an “Event of Default”, and permits the Master Trustee to agree in writing to an extension of time (acting at the direction of the Owners of a majority in aggregate principal amount of the Master Notes then outstanding and entitled to vote under the Master Indenture); (2) amends the event of default described in clause (C) under the heading “DEED OF TRUST – Events of Default” to provide the Center with an opportunity to, within 30 days of written notice thereof, make good any materially untrue representation or warranty; and (3) removes the event of default described in clause (D) under the heading DEED OF TRUST – Events of Default.”

Remedies – The Second Amended Deed of Trust revises or eliminates certain remedy provisions pertaining to the construction of the research facilities, including removal of the remedy described in clause (I) under the heading “DEED OF TRUST – Remedies”.

Construction of Research Facilities – The Second Amended Deed of Trust eliminates certain covenants and other provisions regarding construction of the research facilities in accordance with the therein defined construction schedule.

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APPENDIX E

FORMS OF BOND COUNSEL’S APPROVING OPINIONS

Form of Variable Rate Bond Approving Opinion of Hillis Clark Martin & Peterson P.S., as Bond Counsel Pertaining to the Series 2017B Bonds

______, 2017

Washington Health Care Facilities Authority Olympia, Washington 98504

Members of the Authority:

We have acted as bond counsel to the Washington Health Care Facilities Authority (the “Authority”) in connection with the issuance by the Authority of the following-described bonds (the “Bonds”):

$______WASHINGTON HEALTH CARE FACILITIES AUTHORITY VARIABLE RATE REVENUE BONDS, SERIES 2017B (Fred Hutchinson Cancer Research Center) Dated: ______, 2017 (the “Date of Issue”)

The Bonds are issued pursuant to chapter 70.37 RCW, as amended (the “Act”); Resolution No. 2017-02 of the Authority (the “Resolution”), adopted on February 23, 2017; the Bond Trust Indenture pertaining to the Bonds (the “Bond Indenture”), dated the Date of Issue, by and between the Authority and U.S. Bank National Association, as bond trustee (the “Bond Trustee”); and other proceedings duly had and taken in conformity therewith. Capitalized terms used but not defined herein have the meanings assigned to such terms by the Bond Indenture.

The Authority is lending the proceeds of the Bonds to Fred Hutchinson Cancer Research Center (“Fred Hutch”), a Washington nonprofit corporation authorized to operate nonprofit health care facilities and a “501(c)(3) Organization” (as defined in the Internal Revenue Code of 1986, as amended (the “Code”)), pursuant to the Loan and Security Agreement pertaining to the Bonds (the “Loan Agreement”), dated the Date of Issue, by and between the Authority and Fred Hutch. The Authority is issuing the Bonds for the purpose of providing part of the funds necessary for the Refunding Plan and for the Project and were sold at substantially the same time and pursuant to the same plan of financing as the WASHINGTON HEALTH CARE FACILITIES AUTHORITY FIXED RATE REVENUE BONDS, SERIES 2017A (Fred Hutchinson Cancer Research Center) (the “Series 2017A Bonds”) and the WASHINGTON HEALTH CARE FACILITIES AUTHORITY VARIABLE RATE REVENUE BONDS, SERIES 2017C (Fred Hutchinson Cancer Research Center) (the “Series 2017C Bonds”). The Bonds, the Series 2017A Bonds and the Series 2017C Bonds are collectively referred to herein as the “Series 2017 Bonds”.

The principal of and interest on the Bonds are payable solely from and shall be a valid claim only as against the money and investments in the Bond Fund, a special fund held in trust by the Bond Trustee pursuant to the Bond Indenture. Pursuant to the Act, the Bonds constitute a prior charge over all other charges or claims whatever against the Bond Fund.

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the Authority any obligation or legal authorization, to levy any taxes or appropriate or expend any of their respective funds for the payment of the principal of, premium, if any, or interest on the Bonds.

In rendering this opinion letter, we have examined the following: (i) the Resolution, (ii) the Bond Indenture, (iii) the Loan Agreement, (iv) the Tax Agreement, (v) the Master Indenture, (vi) Supplemental Indenture No. 28, (vii) the Series 2017B Master Note, (viii) the Letter of Representations, (ix) one executed and authenticated Bond (we assume that all other Bonds are in the same form and have been similarly executed and authenticated), and (x) the certified proceedings of the Authority and the other certifications of representatives of the Authority, Fred Hutch and other Persons that have been furnished to us and that comprise the transcript of proceedings pertaining to the issuance of the Series 2017 Bonds (the “Transcript”).

In rendering this opinion letter, we are relying upon the opinion, dated this date, of Foster Pepper PLLC, counsel to Fred Hutch, to the effect that Fred Hutch is a 501(c)(3) Organization. We note that such opinion is subject to a number of qualifications and limitations. Failure of Fred Hutch to be organized and operated in accordance with the Internal Revenue Service’s requirements for the maintenance of its status as a 501(c)(3) Organization could negatively affect several of the opinions and conclusions set forth below.

Various other issues are addressed in (i) the aforementioned opinion of Foster Pepper PLLC, and (ii) the opinion, dated this date, of Orrick, Herrington & Sutcliffe LLP, counsel to the underwriter of the Bonds; and we express no opinions with respect to any of those issues.

As to questions of fact material to the opinions expressed herein, we rely upon the representations of the Authority and Fred Hutch contained in the Loan Agreement and the Tax Agreement, and the certified proceedings of the Authority and the certifications of representatives of the Authority, Fred Hutch and other Persons that have been furnished to us as part of the Transcript, all without undertaking to verify the same by independent investigation.

Based upon the foregoing and our examination of such questions of law as we have deemed necessary or appropriate for the purpose of this opinion letter, and subject to the limitations and qualifications expressed below, we are of the opinion that, as of this date:

1. The Bond Indenture, the Loan Agreement and the Tax Agreement have been duly and lawfully authorized, executed and delivered by the Authority and, assuming due authorization, execution and delivery of said documents by the respective parties thereto other than the Authority, are valid and binding obligations of the Authority, enforceable against the Authority in accordance with their respective terms.

2. The Bonds have been duly authorized, executed, issued and delivered by the Authority and are valid and binding special fund revenue obligations of the Authority, payable solely from the Bond Fund, enforceable in accordance with their terms.

3. Assuming compliance by the Authority, Fred Hutch and the Bond Trustee with applicable requirements of the Code that must be met subsequent to the Date of Issue, under existing federal law, 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 determining the federal alternative minimum tax imposed on individuals and corporations. However, under existing federal law, interest on the Bonds is taken into account in determining adjusted current earnings for the purpose of computing the federal alternative minimum tax imposed on certain corporations.

Except as stated in the preceding paragraph 3, we express no opinion regarding any other federal tax consequences of receipt of interest on the Bonds.

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requirements to the extent applicable, and the opinion expressed in paragraph 3 hereof assumes such compliance. However, we have not undertaken and do not undertake to monitor compliance by the Authority, Fred Hutch or the Bond Trustee with such requirements; and should the Authority, Fred Hutch or the Bond Trustee fail to comply with such requirements, interest on the Bonds could become includable in gross income for federal income tax purposes and could be treated as an item of tax preference for purposes of determining the federal alternative minimum tax imposed on individuals and corporations, in each case, retroactively to the Date of Issue.

The opinions expressed in paragraphs 1 and 2 hereof and certain of the remedies for the enforcement of the Bonds, the Bond Indenture, the Loan Agreement and the Tax Agreement are subject to the qualification that the enforceability thereof may be limited by laws relating to bankruptcy, insolvency, reorganization or moratorium, by other similar laws affecting creditors’ rights, and by the exercise of judicial discretion in accordance with principles of equity.

We bring to your attention the fact that the foregoing opinions are expressions of our professional judgment on the matters expressly addressed and do not constitute guarantees of result.

This opinion is given as of the date hereof and we expressly disclaim any responsibility to advise you of any developments in areas covered by this opinion letter that may hereafter occur.

Respectfully yours,

HILLIS CLARK MARTIN & PETERSON P.S.

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Form of Variable Rate Bond Approving Opinion of Hillis Clark Martin & Peterson P.S., as Bond Counsel Pertaining to the Series 2017C Bonds

______, 2017

Washington Health Care Facilities Authority Olympia, Washington 98504

Members of the Authority:

$______WASHINGTON HEALTH CARE FACILITIES AUTHORITY VARIABLE RATE REVENUE BONDS, SERIES 2017C (Fred Hutchinson Cancer Research Center) Dated: ______, 2017 (the “Date of Issue”)

The Authority is lending the proceeds of the Bonds to Fred Hutchinson Cancer Research Center (“Fred Hutch”), a Washington nonprofit corporation authorized to operate nonprofit health care facilities and a “501(c)(3) Organization” (as defined in the Internal Revenue Code of 1986, as amended (the “Code”)), pursuant to the Loan and Security Agreement pertaining to the Bonds (the “Loan Agreement”), dated the Date of Issue, by and between the Authority and Fred Hutch. The Authority is issuing the Bonds for the purpose of providing part of the funds necessary for the Refunding Plan and for the Project and were sold at substantially the same time and pursuant to the same plan of financing as the WASHINGTON HEALTH CARE FACILITIES AUTHORITY FIXED RATE REVENUE BONDS, SERIES 2017A (Fred Hutchinson Cancer Research Center) (the “Series 2017A Bonds”) and the WASHINGTON HEALTH CARE FACILITIES AUTHORITY VARIABLE RATE REVENUE BONDS, SERIES 2017B (Fred Hutchinson Cancer Research Center) (the “Series 2017B Bonds”). The Bonds, the Series 2017A Bonds and the Series 2017B Bonds are collectively referred to herein as the “Series 2017 Bonds”.

The Bonds do not constitute obligations, either general, special or moral, of the State of Washington (the “State”), or a pledge of the faith and credit of the State, or a general obligation of the Authority. The Owners (including Beneficial Owners) of the Bonds have no right to require the State or the Authority, nor has the State or the Authority any obligation or legal authorization, to levy any taxes or appropriate or expend any of their respective funds for the payment of the principal of, premium, if any, or interest on the Bonds.

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and (x) the certified proceedings of the Authority and the other certifications of representatives of the Authority, Fred Hutch and other Persons that have been furnished to us and that comprise the transcript of proceedings pertaining to the issuance of the Series 2017 Bonds (the “Transcript”).

Except as stated in the preceding paragraph 3, we express no opinion regarding any other federal tax consequences of receipt of interest on the Bonds.

The Code contains certain requirements that must be satisfied subsequent to the Date of Issue in order to maintain the federal tax treatment described in paragraph 3, including requirements relating to application of the proceeds of the Series 2017 Bonds, use of the Project Facilities financed or refinanced with proceeds of the Series 2017 Bonds, limitations on income derived from the investment of gross proceeds (as defined in Section 148 of the Code) of the Series 2017 Bonds, and rebate to the United States Treasury of certain investment earnings on such gross proceeds. The Authority, Fred Hutch and the Bond Trustee have each covenanted to comply with these requirements to the extent applicable, and the opinion expressed in paragraph 3 hereof assumes such compliance. However, we have not undertaken and do not undertake to monitor compliance by the Authority, Fred Hutch or the Bond Trustee with such requirements; and should the Authority, Fred Hutch or the Bond Trustee fail to comply with such requirements, interest on the Bonds could become includable in gross income for federal income tax purposes and could be treated as an item of tax preference for purposes of determining the federal alternative minimum tax imposed on individuals and corporations, in each case, retroactively to the Date of Issue.

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We bring to your attention the fact that the foregoing opinions are expressions of our professional judgment on the matters expressly addressed and do not constitute guarantees of result.

This opinion is given as of the date hereof and we expressly disclaim any responsibility to advise you of any developments in areas covered by this opinion letter that may hereafter occur.

Respectfully yours,

HILLIS CLARK MARTIN & PETERSON P.S.

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APPENDIX F

DTC BOOK-ENTRY ONLY SYSTEM

THE INFORMATION PROVIDED IN THIS APPENDIX F HAS BEEN PROVIDED BY DTC. NO REPRESENTATION IS MADE BY THE AUTHORITY, FRED HUTCH, THE UNDERWRITER OR THE BOND TRUSTEE AS TO THE ACCURACY OR ADEQUACY OF SUCH INFORMATION PROVIDED BY DTC OR AS TO THE ABSENCE OF MATERIAL ADVERSE CHANGES IN SUCH INFORMATION SUBSEQUENT TO THE DATE OF THIS OFFICIAL STATEMENT.

The Depository Trust Company (“DTC”) New York, NY, acts as securities depository for each Series of the Bonds. Each Series of the Bonds will be offered as fully registered securities 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 Series of the Bonds, each in the aggregate principal amount of such Bonds, and deposited with DTC.

DTC, 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, as amended. 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 of DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. 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, 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 a 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.

Purchases of the Bonds of a Series under the DTC system 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 beneficial ownership interests in the Bonds, except in the event that use of the book-entry system for the Bonds is discontinued.

To facilitate subsequent transfers, all Bonds deposited by Direct 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 the Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not affect 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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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. Beneficial Owners of the Bonds may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Bonds, such as redemptions, defaults, and proposed amendments to the bond documents. For example, Beneficial Owners of the Bonds may wish to ascertain that the nominee holding the Bonds for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the Bond Trustee and request that copies of notices be provided directly to them.

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

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 Authority 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 the Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy).

Principal, premium, redemption proceeds and interest payments on the Bonds of a Series 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 Authority or the Bond Trustee, on a payment 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 Participants and not of DTC, its nominee, the Bond Trustee, Fred Hutch or the Authority, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal, premium, redemption proceeds and interest to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Bond Trustee. 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 the Direct and Indirect Participants.

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

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

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APPENDIX G

FORM OF CONTINUING DISCLOSURE UNDERTAKING

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WASHINGTON HEALTH CARE FACILITIES AUTHORITY VARIABLE RATE REVENUE BONDS, SERIES 2017B AND SERIES 2017C (Fred Hutchinson Cancer Research Center)

CONTINUING DISCLOSURE AGREEMENT

This Continuing Disclosure Agreement, made and entered into March __, 2017, is by and between the Fred Hutchinson Cancer Research Center (“Fred Hutch”), a Washington nonprofit corporation exempt from federal income taxation as an organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the “Code”), and U.S. Bank National Association, a national banking association duly organized and existing under the laws of the United States of America and duly authorized and empowered to accept and execute trusts of the character herein set out under and by virtue of the laws of the United States of America, as bond trustee under the Bond Indentures (as defined below) (the “Bond Trustee”) and dissemination agent (the “Dissemination Agent”).

W I T N E S S E T H:

WHEREAS, this Continuing Disclosure Agreement is being executed and delivered in connection with the issuance and delivery by the Washington Health Care Facilities Authority (the “Issuer”) of its $______Variable Rate Revenue Bonds, Series 2017B (Fred Hutchinson Cancer Research Center) (the “Series 2017B Bonds) and its $______Variable Rate Revenue Bonds, Series 2017C (Fred Hutchinson Cancer Research Center) (the “Series 2017C Bonds” and together with the Series 2017B Bonds, the “Bonds”) each such series of Bonds to be issued by the Issuer pursuant to a separate Bond Trust Indenture, each dated March __, 2017 (each, a “Bond Indenture” and collectively, the “Bond Indentures”), and each by and between the Issuer and the Bond Trustee;

WHEREAS, the proceeds of the Series 2017B Bonds are being lent to Fred Hutch by the Issuer pursuant to the Loan Agreements (as defined below) to fund all or a portion of the costs of: (1) the Project (as defined in the Bond Indentures), (2) refunding the Refunded Bonds (as defined in the Bond Indentures) and (3) issuing the Bonds and other incidental costs;

WHEREAS, Rule 15c2-12 (the “Rule”) adopted by the Securities and Exchange Commission imposes certain requirements relating to the continuing disclosure of certain financial information and operating data relating to Fred Hutch; and

WHEREAS, the parties hereto have determined to enter into this Continuing Disclosure Agreement in order to assure that such requirements as applied are fully satisfied on a continuing basis;

NOW, THEREFORE, in consideration of the mutual covenants and undertakings set forth herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Fred Hutch, the Bond Trustee and the Dissemination Agent hereby agree as follows:

Section 1. Definitions. Capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Bond Indentures. In addition to the terms defined in the Bond Indentures or elsewhere in this Continuing Disclosure Agreement, the following terms as used herein shall have the following meanings, unless the context or use indicates another or different meaning or intent, and such definitions shall be equally applicable to both the singular and plural forms of any of the words and terms herein defined:

“Annual Report” means any Annual Report provided by Fred Hutch pursuant to, and as described in, Sections 3 and 4 of this Continuing Disclosure Agreement.

“Beneficial Owner” means any Person which (a) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any of the Bonds, including Persons holding Bonds through nominees, depositories, or other intermediaries, or (b) is treated as the owner of any Bonds for federal income tax purposes (collectively, the “Beneficial Owners”).

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“Bond Trustee” means U.S. Bank National Association, or such other trustee and/or co-trustee as at the time may be serving as such under the Bond Indentures.

“Business Day” means any day that is not a Saturday, Sunday or other day on which commercial banks are authorized or required by law to be closed in (a) Seattle, Washington, (b) New York, New York, and (c) the city (or cities) in which the responsible corporate trust office(s) of the Bond Trustee are located.

“Dissemination Agent” means U.S. Bank National Association, acting in its capacity as Dissemination Agent hereunder, or any successor Dissemination Agent designated in writing by Fred Hutch and which has filed with the Bond Trustee a written acceptance of such designation.

“EMMA” means the Electronic Municipal Market Access system of the MSRB. As of the date of this Continuing Disclosure Agreement, information regarding submissions to the MSRB through EMMA is available at http://emma.msrb.org/submission.

“Fiscal Year” means the twelve month period commencing on the first day of July of a calendar year and ending on the last day of June of the next calendar year, as such may be changed from time to time upon (a) written notice of Fred Hutch to the Bond Trustee and, if the Bond Trustee is not the Dissemination Agent, to the Dissemination Agent and (b) compliance with the provisions of Section 3(a) hereof.

“Fred Hutch” means Fred Hutchinson Cancer Research Center, a Washington nonprofit corporation exempt from federal income taxation as an organization described in Section 501(c)(3) of the Code, and its successors and assigns.

“Issuer” means the Washington Health Care Facilities Authority.

“Listed Event” means any of the events described in Section 5(a) hereof (collectively, the “Listed Events”).

“MSRB” means the Municipal Securities Rulemaking Board established pursuant to Section 15(B)(b)(1) of the Securities Exchange Act of 1934, as amended, and its lawful successors or any other entity designated or authorized by the SEC to receive reports or notices pursuant to the Rule.

“Obligated Person” means any Person who is either generally or through an enterprise, fund, or account of such Person committed by contract or other arrangement to support all or part of the Bonds (other than providers of municipal bond insurance, letters of credit, or other liquidity facilities).

“Owners” means the Persons in whose names any of the Bonds are registered on the books for the registration of the Bonds and for the registration of transfer of the Bonds kept and maintained by the Bond Trustee as bond registrar (each, an “Owner”).

“Participating Underwriter” means the original underwriter of the Bonds required to comply with the Rule in connection with offering of the Bonds.

“Person” means any individual, partnership, corporation, trust, or unincorporated organization, and any government or agency or political subdivision thereof.

“Quarterly Report” means any Quarterly Report provided by Fred Hutch pursuant to, and as described in, Sections 3 and 4 of this Continuing Disclosure Agreement.

“Rule” means Rule 15c2-12 adopted by the SEC under the Securities Exchange Act of 1934, as the same may be amended from time to time.

“SEC” means the United States Securities and Exchange Commission and its lawful successors.

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“Bond Indentures” means, collectively, the Bond Trust Indenture related to the Series 2017B Bonds and the Bond Trust Indenture related to the Series 2017C Bonds, each dated the date hereof, and each by and between the Issuer and the Bond Trustee, as the same may be amended or supplemented from time to time in accordance with the respective provisions thereof.

“Bonds” means, collectively, the Issuer’s $______Variable Rate Revenue Bonds, Series 2017B (Fred Hutchinson Cancer Research Center) and the Issuer’s $______Variable Rate Revenue Bonds, Series 2017C (Fred Hutchinson Cancer Research Center).

“Loan Agreements” means, collectively, the Loan and Security Agreement related to the Series 2017B Bonds and the Loan and Security Agreement related to the Series 2017C Bonds, each dated the date hereof, and each by and between the Issuer and Fred Hutch, as the same may be amended or supplemented from time to time in accordance with the respective provisions thereof and of the related Bond Indenture.

“State” means the state of Washington.

Section 2. Purpose of this Continuing Disclosure Agreement. This Continuing Disclosure Agreement is being executed and delivered by Fred Hutch, the Bond Trustee and the Dissemination Agent for the benefit of the Owners and Beneficial Owners of the Bonds and to assist the Participating Underwriter in complying with the Rule. Fred Hutch, the Bond Trustee and the Dissemination Agent acknowledge that the Issuer has undertaken no responsibility with respect to any reports, notices, or disclosures provided or required under this Continuing Disclosure Agreement, and has no liability to any Person, including any Owner or Beneficial Owner of the Bonds, with respect to the Rule.

Section 3. Provision of Annual Reports and Quarterly Reports.

(a) Not later than one hundred and eighty calendar days after the end of each Fiscal Year, commencing with the report for the Fiscal Year ending June 30, 2017, Fred Hutch (i) shall, or shall cause the Dissemination Agent to, provide an Annual Report which is consistent with the requirements of Section 4 hereof to the MSRB, and (ii) shall notify the Bond Trustee or, if the Bond Trustee is not the Dissemination Agent, cause the Dissemination Agent to notify the Bond Trustee that it has done so. (Currently, filings with the MSRB in accordance with the Rule are required to be filed through EMMA.) In each case, the Annual Report must be submitted in electronic format, and accompanied by such identifying information, as is prescribed by the MSRB, and may cross-reference other information as provided in Section 4 hereof; provided that the audited financial statements of Fred Hutch, if any, may be submitted separately from the balance of the Annual Report and later than the date required above for the filing of the Annual Report if they shall not be available by that date.

If the Fiscal Year shall change, Fred Hutch shall give prompt written notice thereof to the Dissemination Agent and, if the Bond Trustee shall not be the Dissemination Agent, to the Bond Trustee and shall give notice of such change in the same manner as for a Listed Event under Section 5(c) hereof.

(b) Not later than 45 days after the end of each fiscal quarter of the Fiscal Year (except for each fiscal quarter ending a Fiscal Year, for which the report will be due not later than 60 days following the end of that fiscal quarter), commencing with the report for the fiscal quarter ending March 31, 2017, Fred Hutch (i) shall, or shall cause the Dissemination Agent to, provide a Quarterly Report which is consistent with the requirements of Section 4 hereof electronically to the MSRB, in a format prescribed by the MSRB, and (ii) shall notify the Bond Trustee or, if the Bond Trustee is not the Dissemination Agent, cause the Dissemination Agent to notify the Bond Trustee that it has done so. (Currently, filings with the MSRB in accordance with the Rule are required to be filed through EMMA.) In each case, the Quarterly Report must be submitted in electronic format, and accompanied by such identifying information, as is prescribed by the MSRB, and may cross-reference other information as provided in Section 4 hereof.

(c) Not later than 15 Business Days prior to the dates specified in subsection (a) for providing the Annual Report and five Business Days prior to the dates specified in subsection (b) for providing the Quarterly Report to the MSRB, Fred Hutch shall provide the Annual Report and Quarterly Report to the Dissemination Agent

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and, if the Bond Trustee shall not be the Dissemination Agent, the Bond Trustee. If by such dates the Bond Trustee shall not have received a copy of the Annual Report or Quarterly Report, the Bond Trustee shall contact Fred Hutch and the Dissemination Agent to determine if Fred Hutch is in compliance with the first sentence of this subsection (c).

(d) If the Bond Trustee shall be unable to verify that an Annual Report or Quarterly Report shall have been provided electronically to the MSRB, by the date and in the manner required in subsections (a) or (b) of this Section 3, the Bond Trustee shall, in a timely manner, send a notice in substantially the form attached hereto as Exhibit “A” to the MSRB, in a format prescribed by the MSRB.

(e) The Dissemination Agent shall file a report with Fred Hutch, the Issuer and, if the Dissemination Agent shall not be the Bond Trustee, the Bond Trustee certifying that the Annual Report or Quarterly Report has been provided pursuant to this Continuing Disclosure Agreement, stating the date it was provided.

Section 4. Content of Annual Reports and Quarterly Reports.

(a) Fred Hutch’s Annual Report shall contain, or include by reference, Fred Hutch’s comprehensive annual financial report for the prior Fiscal Year, which shall include Fred Hutch’s audited financial statements. If Fred Hutch’s audited financial statements shall not be available by the time the Annual Report is required to be filed pursuant to Section 3(a) hereof, the Annual Report shall contain unaudited financial statements, and the audited financial statements shall be filed in the same manner as the Annual Report when they become available.

(b) Fred Hutch’s Quarterly Report shall contain, or include by reference, quarterly financial reports with respect to Fred Hutch, including unaudited financial statements excluding footnotes.

(c) Any or all of the items listed above may be included by specific reference to other documents, including official statements of debt issues with respect to which Fred Hutch is an Obligated Person, that have been filed with the MSRB. If the document included by reference is a final official statement, it must be available from the MSRB. Fred Hutch shall clearly identify each such other document so included by reference.

(d) Audited and unaudited financial statements included in Fred Hutch’s Annual Reports and/or Quarterly Reports may, at the option of Fred Hutch, contain the financial results of Immaterial Affiliates, as defined in, and to the extent permitted by, Supplemental Indenture No. 28 and Supplemental Indenture No. 29.

Section 5. Reporting of Significant Events.

(a) Pursuant to the provisions of this Section 5, Fred Hutch shall give, or upon delivery of the information to the Dissemination Agent, the Dissemination Agent shall give, notice of the occurrence of any of the following events (each, a “Listed Event”) with respect to the Bonds, in a timely manner not in excess of ten Business Days after the occurrence of the event:

(i) principal and interest payment delinquencies;

(ii) non-payment related defaults, if material;

(iii) unscheduled draws on debt service reserves reflecting financial difficulties;

(iv) unscheduled draws on credit enhancements reflecting financial difficulties;

(v) substitution of credit or liquidity providers, or their failure to perform;

(vi) 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 Bonds, or other material events affecting the tax status of the Bonds;

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(vii) modifications to the rights of holders of the Bonds, if material;

(viii) bond calls, if material, and tender offers;

(ix) defeasances (notice of a legal defeasance should include disclosure that the Bonds have been escrowed to maturity or to a call, as well as disclosure of the timing of the maturity or call);

(x) release, substitution, or sale of property securing repayment of the Bonds, if material;

(xi) rating changes;

(xii) bankruptcy, insolvency, receivership, or similar event of an Obligated Person;

Note: for the purposes of the event identified in subparagraph (xii), the event is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent or similar officer for an obligated person in a proceeding under the U.S. Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the obligated person, or if such jurisdiction has been assumed by leaving the existing governmental body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the obligated person.

(xiii) the consummation of a merger, consolidation or acquisition involving an Obligated Person or the sale of all or substantially all the assets of an Obligated Person, 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

(xiv) the appointment of a successor or additional trustee, or the change in the name of a trustee, if material.

(b) Whenever the Bond Trustee obtains knowledge of the occurrence of a Listed Event, the Bond Trustee shall promptly notify Fred Hutch. Whenever Fred Hutch obtains knowledge of the occurrence of a Listed Event, whether obtained from the Bond Trustee or otherwise, Fred Hutch shall promptly notify the Dissemination Agent in writing. Such notice shall instruct the Dissemination Agent to report the occurrence pursuant to subsection (c) of this Section 5. Reference is hereby made to the Rule for a discussion of when certain events enumerated in this Section 5 are deemed to have “occurred.”

(c) If the Dissemination Agent has been instructed by Fred Hutch to report the occurrence of a Listed Event, the Dissemination Agent shall file a notice of such occurrence employing text authorized for such purpose by Fred Hutch electronically to the MSRB, in an electronic format prescribed by the MSRB in a timely manner, but not in excess of 10 Business Days after the occurrence of a Listed Event, with a copy to Fred Hutch. Until otherwise designated by the MSRB or the SEC, filings with the MSRB are to be made through EMMA.

Section 6. Format for Filings with MSRB. Any report or filing with the MSRB pursuant to this Continuing Disclosure Agreement must be submitted in electronic format, accompanied by such identifying information as is prescribed by the MSRB, in accordance with the Rule.

Section 7. Termination of Reporting Obligation. Fred Hutch’s obligations under this Continuing Disclosure Agreement shall terminate upon the legal defeasance, prior redemption, or payment in full of all of the Bonds. If Fred Hutch’s obligations under the Loan Agreements shall be assumed in full by some other entity, such Person shall be responsible for compliance with this Continuing Disclosure Agreement in the same manner as if it were Fred Hutch and Fred Hutch shall have no further responsibility hereunder. If such termination or substitution

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shall occur prior to the final maturity of the Bonds, Fred Hutch shall give, or cause to be given, notice of such termination or substitution in the same manner as for a Listed Event under Section 5(c) hereof.

Section 8. Dissemination Agent. Fred Hutch or the Bond Trustee may, from time to time, appoint or engage a successor Dissemination Agent to assist Fred Hutch in carrying out its obligations under this Continuing Disclosure Agreement, and may discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent. Any discharge shall be effective only after the Dissemination Agent shall have been paid any fees and expenses owed to it in accordance with the schedule agreed upon by Fred Hutch and the Dissemination Agent in connection with services rendered by it hereunder. The Dissemination Agent (if other than the Bond Trustee or the Bond Trustee in its capacity as Dissemination Agent) shall not be responsible in any manner for the content, sufficiency, or accuracy of any notice or report provided by Fred Hutch pursuant to this Continuing Disclosure Agreement. If at any time there shall not be any other designated Dissemination Agent, the Bond Trustee shall be the Dissemination Agent.

Section 9. Amendment; Waiver. (a) Notwithstanding any other provision of this Continuing Disclosure Agreement, Fred Hutch, the Bond Trustee and the Dissemination Agent may amend this Continuing Disclosure Agreement (and the Bond Trustee and the Dissemination Agent shall agree to any amendment so requested by Fred Hutch) and any provision of this Continuing Disclosure Agreement may be waived, provided the following conditions are satisfied:

(i) If the amendment or waiver shall relate to the provisions of Sections 3(a) or (b), 4, 5(a) or 9 hereof, it may only be made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature, or status of an Obligated Person with respect to the Bonds, or the type of business conducted;

(ii) The Continuing Disclosure Agreement, as amended or taking into account such waiver, would, in the opinion of nationally recognized bond counsel, have complied with the requirements of the Rule at the time of the original issuance of the Bonds, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances;

(iii) The amendment or waiver either (A) is approved by the Owners of the Bonds in the same manner as provided in the Bond Indenture for amendments to the Bond Indenture with the consent of Owners, or (B) does not, in the opinion of the Bond Trustee or nationally recognized bond counsel, materially impair the interests of the Owners or Beneficial Owners of the Bonds; and

(iv) The amendment or waiver shall not impair Fred Hutch’s obligations to pay to the Dissemination Agent its fees and expenses in accordance with the schedule agreed upon by Fred Hutch and the Dissemination Agent in connection with services rendered by it hereunder.

(b) In the event of any amendment or waiver of a provision of this Continuing Disclosure Agreement, Fred Hutch shall describe such amendment in the next Annual Report, and shall 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 Fred Hutch. In addition, if the amendment shall relate to the accounting principles to be followed in preparing financial statements for Fred Hutch, if any, (i) notice of such change shall be given in the same manner as for a Listed Event under Section 5(c) hereof, and (ii) the Annual Report for the year in which the change shall be made should 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.

Section 10. Additional Information. Nothing in this Continuing Disclosure Agreement shall be deemed to prevent Fred Hutch from disseminating any other information, using the means of dissemination set forth in this Continuing Disclosure Agreement or any other means of communication, or including any other information in any Annual Report or Quarterly Report or notice of occurrence of a Listed Event, in addition to that which is required by this Continuing Disclosure Agreement. If Fred Hutch shall choose to include any information in any Annual Report or Quarterly Report or notice of occurrence of a Listed Event, in addition to that which is specifically

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required by this Continuing Disclosure Agreement, Fred Hutch shall have no obligation under this Continuing Disclosure Agreement to update such information or include it in any future Annual Report or Quarterly Report or notice of occurrence of a Listed Event.

Section 11. Default. In the event of a failure of Fred Hutch or the Dissemination Agent to comply with any provision of this Continuing Disclosure Agreement, the Bond Trustee may, and, at the request of any Participating Underwriter or the Owner of any Outstanding Bond, shall, or any Owner or Beneficial Owner of the Bonds may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause Fred Hutch or the Dissemination Agent, as the case may be, to comply with its obligations under this Continuing Disclosure Agreement. A DEFAULT UNDER THIS CONTINUING DISCLOSURE AGREEMENT SHALL NOT BE DEEMED AN EVENT OF DEFAULT UNDER THE BOND INDENTURES OR A LOAN AGREEMENT DEFAULT UNDER THE LOAN AGREEMENTS, AND THE SOLE REMEDY UNDER THIS CONTINUING DISCLOSURE AGREEMENT IN THE EVENT OF ANY FAILURE OF FRED HUTCH OR THE DISSEMINATION AGENT TO COMPLY WITH THIS CONTINUING DISCLOSURE AGREEMENT SHALL BE AN ACTION TO COMPEL PERFORMANCE.

Section 12. Duties, Immunities, and Liabilities of Bond Trustee and Dissemination Agent. Article XII of the Bond Indentures is hereby made applicable to this Continuing Disclosure Agreement as if this Continuing Disclosure Agreement were (solely for this purpose) contained in the Bond Indentures. The Dissemination Agent (if other than the Bond Trustee or the Bond Trustee in its capacity as Dissemination Agent) and the Bond Trustee shall have only such duties as are specifically set forth in this Continuing Disclosure Agreement, and Fred Hutch agrees to indemnify and save the Dissemination Agent, the Bond Trustee, and their officers, directors, employees, and agents, harmless against any loss, expense and liabilities which any of them may incur arising out of or in the exercise or performance of their respective powers and duties hereunder, including the costs and expenses (including attorneys’ fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent’s or the Bond Trustee’s negligence or willful misconduct. The obligations of Fred Hutch under this Section shall survive resignation or removal of the Bond Trustee and/or the Dissemination Agent and payment of the Bonds.

Section 13. Addresses for Notices, etc. Notices or communications to or among any of the parties to this Continuing Disclosure Agreement shall be given as follows:

If to Fred Hutch: Fred Hutchinson Cancer Research Center 1100 Fairview Avenue North Seattle, Washington 98109 Attention: General Counsel Telephone: (206) 667-5000 Facsimile: (206) 667-5092

If to the Bond Trustee U.S. Bank National Association and Dissemination Agent: 1420 Fifth Avenue, 7th Floor PD-WA-T7CT Seattle, Washington, 98101 Attention: Thomas Zrust Telephone: (206) 344-4687 Facsimile: (206) 344-4630

Either party may, by written notice to the other parties listed above, designate a different address or telephone number(s) to which subsequent notices or communications should be sent.

Section 14. Beneficiaries. This Continuing Disclosure Agreement shall inure solely to the benefit of the Issuer, Fred Hutch, the Bond Trustee, the Dissemination Agent, the Participating Underwriter and the Owners and Beneficial Owners from time to time of the Bonds and shall create no rights in any other Person.

Section 15. Counterparts. This Continuing Disclosure Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument.

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Section 16. Payment of Fees and Expenses of the Dissemination Agent. Fred Hutch hereby agrees to compensate the Dissemination Agent for the services provided and the expenses incurred pursuant to this Continuing Disclosure Agreement, in an amount to be agreed upon from time to time hereunder, and to reimburse the Dissemination Agent upon its request for all reasonable expenses, disbursements and advances incurred by the Dissemination Agent hereunder (including any reasonable compensation and expense of counsel) except any such expense, disbursement or advance that may be attributable to its negligence or willful misconduct. The Dissemination Agent shall have no obligation to perform any of its duties hereunder unless and until it shall have been paid all sums owed to it by Fred Hutch in accordance with any agreement relating to the same between Fred Hutch and the Dissemination Agent.

Section 17. Business Days. If the time for performing any act required by this Continuing Disclosure Agreement shall be a day that is not a Business Day, such act may be performed on the next succeeding Business Day with the same force and effect as if done on the nominal date provided in this Continuing Disclosure Agreement.

Section 18. Governing Law. The effect and meanings of this Continuing Disclosure Agreement and the rights of all parties hereunder shall be governed by and construed according to the laws of the State, exclusive of the State’s rules regarding choice of law.

IN WITNESS WHEREOF, the parties hereto have caused this Continuing Disclosure Agreement to be executed in their respective names by their respective duly authorized officers, all as of the day and year first above written.

FRED HUTCHINSON CANCER RESEARCH CENTER

By: ______Name:______Title: ______

U.S. BANK NATIONAL ASSOCIATION, as Bond Trustee and Dissemination Agent

By: ______Name:______Title: ______

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EXHIBIT “A”

FORM OF NOTICE OF FAILURE TO FILE [ANNUAL REPORT/QUARTERLY REPORT]

Name of Issuer: Washington Health Care Facilities Authority

Name of Bond Issue: $______Washington Health Care Facilities Authority Variable Rate Revenue Bonds, Series 2017B and Series 2017C (Fred Hutchinson Cancer Research Center)

Name of Fred Hutch: Fred Hutchinson Cancer Research Center

Date of Issuance: March __, 2017

NOTICE IS HEREBY GIVEN that Fred Hutch has not [provided/caused to be provided] a[n] [Annual Report/Quarterly Report] with respect to the Bonds as required by Section 3 of the Continuing Disclosure Agreement, dated March __, 2017, between Fred Hutch and U.S. Bank National Association, as Bond Trustee and Dissemination Agent. Fred Hutch has advised the undersigned that it anticipates that the [Annual Report/Quarterly Report] will be filed by ______, ___.

Dated: ______, _____.

U.S. BANK NATIONAL ASSOCIATION, as Bond Trustee and Dissemination Agent

By: ______Name:______Title: ______

cc: Fred Hutch

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WASHINGTON HEALTH CARE FACILITIES AUTHORITY • VARIABLE RATE REVENUE BONDS, SERIES 2017B AND SERIES 2017C (Fred Hutchinson Cancer Research Center)