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First Substitute S.J.R. 11
Senator L. Alma Mansell proposes to substitute the following bill:
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RESOLUTION ADDRESSING OLYMPIC FINANCING
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2000 GENERAL SESSION
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STATE OF UTAH
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Sponsor: L. Alma Mansell
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A JOINT RESOLUTION OF THE LEGISLATURE AUTHORIZING TIME LIMITED
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DEFERRAL OF $58,000,000 OWED TO THE STATE BY THE SALT LAKE OLYMPIC
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ORGANIZING COMMITTEE FOR THE PURCHASE AND SALE OF THE UTAH WINTER
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SPORTS PARK; AND AUTHORIZING THE GOVERNOR TO DEFER, UNDER CERTAIN
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CIRCUMSTANCES, UP TO $20,000,000 OWED BY THE SALT LAKE OLYMPIC
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ORGANIZING COMMITTEE TO THE UTAH ATHLETIC FOUNDATION.
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Be it resolved by the Legislature of the state of Utah:
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WHEREAS, as used in this resolution:
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(1) "credit agreement" means the credit agreement between the organizing committee and
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the lending institution, as defined in S.J.R. 14 (1998 General Session);
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(2) "eurodollar rate" means:
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(a) with regard to deferral of the organizing committee's payment of $58,000,000 to the
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state, the eurodollar rate published in the Wall Street Journal on January 10, 2002; and
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(b) with regard to potential deferral of up to $20,000,000 of the organizing committee's
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payment to the Utah Athletic Foundation, the eurodollar rate published in the Wall Street Journal
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on March 7, 2002;
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(3) "lending institution" means the institution or institutions that have provided and that
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provide or will provide the organizing committee with one or more revolving or other lines of
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credit;
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(4) "LLC" means "SLOC, LLC", a Delaware limited liability company, formed by the
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organizing committee on December 19, 1997 in accordance with requirements of the lending
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institution;
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(5) "NBC television revenue" means NBC television royalties that have been irrevocably
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assigned by the organizing committee to the LLC in the approximate amount of $228,900,000, to
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be paid to the LLC on February 24, 2002, and March 6, 2002;
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(6) "Olympics" means the Olympic Winter Games of 2002;
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(7) "Olympic special revenue fund" means the fund established pursuant to Subsection
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59-12-103
(4);
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(8) "organizing committee" means the Salt Lake Olympic Organizing Committee for the
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Olympic Winter Games of 2002;
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(9) "organizing committee revenues" means all revenues that have been or may be received
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by the organizing committee or any of its wholly owned subsidiaries, including revenues received
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from any contract into which the committee has entered or may enter, and proceeds payable under
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insurance contracts;
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(10) "State Olympic Officer" means the individual appointed pursuant to Section
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63A-10-103
;
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(11) "Utah Athletic Foundation" means the private nonprofit entity created in accordance
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with S.J.R. 17 (1994 General Session); and
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(12) "Utah Sports Authority" means the agency created pursuant to Title 63A, Chapter 7;
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WHEREAS, on August 1, 1994 the Utah Sports Authority entered into an agreement with
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the organizing committee regarding the purchase and sale of the Utah Winter Sports Park and
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providing for certain contractual obligations relating to the Oquirrh Park speed skating oval, in
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which the organizing committee agreed to pay up to $99,000,000, in accordance with the terms and
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requirements of that agreement;
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WHEREAS, the organizing committee obtained a revolving line of credit from the lending
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institution;
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WHEREAS, S.J.R. 17 (1994 General Session) governs the sale of the Utah Winter Sports
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Park and payment of the purchase price of up to $99,000,000, depending on the actual total funds
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expended or incurred by the Utah Sports Authority, through the closing date referred to in the
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purchase agreement and thereafter extended by the parties to July 14, 1999, except to the extent
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that a specific requirement of S.J.R. 17 is expressly superseded by a subsequent joint resolution
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of the Legislature;
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WHEREAS, on July 14, 1999 the Utah Winter Sports Park purchase agreement closing
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documents were executed, and title to the Utah Winter Sports Park was transferred from the Utah
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Sports Authority to the organizing committee subject to certain restrictive covenants and
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reversionary interests cited in the purchase agreement, closing documents, and joint resolutions
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of the Legislature;
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WHEREAS, according to joint resolutions of the Legislature, the Utah Winter Sports Park
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purchase agreement, and subsequent final sales agreements:
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(1) $1,000,000 was paid, a portion of which was value in kind, to the Utah Sports
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Authority at the July 14, 1999 closing date;
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(2) $58,000,000 of the purchase price is to be paid by the organizing committee into the
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Olympic Special Revenue Fund on January 10, 2002 for repayment to state and local governments
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as provided in the purchase agreement, joint resolutions of the Legislature, and in statute; and
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(3) $40,000,000 is to be paid by the organizing committee to the Utah Athletic Foundation
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on or before March 7, 2002;
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WHEREAS, the state has a security interest in all organizing committee revenues and
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assets;
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WHEREAS, the security interest held by the state in organizing committee revenues and
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assets:
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(1) secures:
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(a) the unpaid purchase price of the Utah Winter Sports Park;
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(b) an amount equal to the bond obligations owed with respect to the State Building
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Ownership Authority bond, in accordance with its terms and as described in S.J.R. 14 (1998
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General Session); and
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(c) the amount owed by the organizing committee to the University of Utah for use of the
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Rice-Eccles Stadium;
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(2) is first in priority with respect to the Utah Winter Sports Park, and with respect to
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$42,000,000 of organizing committee revenues relating to housing at the University of Utah and
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use of the Rice-Eccles Stadium; and
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(3) is second in priority only to the lending institution with respect to all other organizing
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committee revenues and assets, and immediately becomes a first priority security interest in all
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organizing committee revenue upon satisfaction of the terms and conditions of the credit
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agreement, and release by the lending institution in accordance with the terms of that agreement;
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WHEREAS, the Utah Sports Authority is an agency of the state and therefore, as
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previously established by joint resolutions of the Legislature, any security interest or right to
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payment from the organizing committee held by the Utah Sports Authority is held by the state in
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organizing committee revenues;
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WHEREAS, S.J.R. 11 (1997 General Session) required the Utah Sports Authority to
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execute agreements and take actions, consistent with S.J.R. 11 (1997 General Session), as was
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required by the lending institution, in order to evidence subordination and subrogation of the state's
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security interest to the security interest of the lending institution;
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WHEREAS, the line of credit extended by the lending institution to the organizing
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committee expires on June 30, 2000, unless it is renewed;
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WHEREAS, the lending institution has placed restrictions on the line of credit extended
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to the organizing committee including a requirement that, in order to renew its line of credit, the
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organizing committee obtain legislative approval to defer payment of $58,000,000 owed to state
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and local governments, from January 10, 2002 to March 7, 2002;
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WHEREAS, the lending institution has also conditioned renewal of the organizing
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committee's line of credit upon agreement of the International Olympic Committee and the United
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States Olympic Committee to grant certain concessions and defer certain payments owed to them
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by the organizing committee;
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WHEREAS, the International Olympic Committee and the United States Olympic
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Committee have granted the required concessions and agreed to the required deferrals, conditioned
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upon the state's agreement to defer the $58,000,000 payment;
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WHEREAS, the organizing committee is requesting the state to defer $58,000,000 of the
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$99,000,000 purchase price of the Utah Winter Sports Park from January 10, 2002 to no later than
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March 7, 2002 in order to address the requirements of the lending institution;
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WHEREAS, the organizing committee proposes that if needs regarding the timing of
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post-Olympic cash flow are projected and documented in accordance with the specific
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requirements of this resolution, up to $20,000,000 of the $40,000,000 owed by the organizing
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committee to the Utah Athletic Foundation be deferred from March 7, 2002, for a period not to
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exceed one year;
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WHEREAS, NBC is obligated to pay the NBC television revenue to the LLC;
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WHEREAS, the LLC will first use the NBC television revenue to repay the line of credit
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extended to the organizing committee by the lending institution, pursuant to the credit agreement;
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WHEREAS, according to current contractual obligations and estimates, NBC television
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revenue will exceed the amount owed by the organizing committee and the LLC to the lending
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institution, to the extent that all obligations owed to the state relating to the purchase and sale of
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the Winter Sports Park could be paid from the NBC television revenue;
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NOW, THEREFORE, BE IT RESOLVED that, the Legislature authorizes deferral of the
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organizing committee's payment to the state of $58,000,000 from January 10, 2002 to no later than
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March 7, 2002, only if all of the following conditions are met:
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(1) the organizing committee and the LLC execute all agreements and documents
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necessary to:
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(a) obligate the LLC to pay $58,000,000 of NBC television revenue, plus interest as
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described in Subsection (1)(b), directly to the Olympic Special Revenue Fund after the LLC has
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repaid the lending institution in accordance with the credit agreement, but in no case later than
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March 7, 2002;
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(b) obligate the LLC and the organizing committee to pay interest on the $58,000,000 at
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a rate of 7% per annum, or the eurodollar rate plus 1%, whichever is greater, for the period from
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January 10, 2002 to March 7, 2002;
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(c) obligate the LLC to pay $40,000,000 directly to the Utah Athletic Foundation
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immediately after the LLC has paid its $58,000,000 obligation to the state, but in no case may that
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payment be made later than March 7, 2002, unless the specific conditions and exceptions
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subsequently defined in this resolution, relating to potential deferral of up to $20,000,000 of the
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$40,000,000 payment, have been met;
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(d) provide that, other than monies owed to the lending institution pursuant to the credit
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agreement, the LLC cannot disburse or otherwise dispose of, obligate, pledge, or encumber NBC
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television revenue until after the LLC has made the payments to the Olympic Special Revenue
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Fund and the Utah Athletic Foundation, in accordance with the specific provisions of Subsections
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(1)(a), (b), and (c);
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(e) provide that the obligations, provisions, and conditions described and required pursuant
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to Subsections (1)(a), (b), (c), and (d) may not be subsequently altered by the organizing
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committee, the LLC, or the lending institution without the approval of the Legislature through a
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joint resolution of the Legislature;
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(2) the lending institution provides written consent, and takes any other action necessary
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to authorize, permit, or agree to the obligations, provisions, and conditions described in
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Subsections (1)(a), (b), (c), (d), and (e);
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(3) the organizing committee documents that the state's security interest and it's security
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position and priority is in no way affected or altered by any deferrals agreed to or provided for by
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this resolution, and that the organizing committee and the Utah Sports Authority have executed
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or provided for the execution of any and all documentation necessary to maintain the state's
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security interest and its priority position as a secured creditor, as previously described in this
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resolution and in previous joint resolutions of the Legislature;
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(4) by no later than June 15, 2000, the organizing committee provides the State Olympic
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Officer and the attorney general's office with documentation that the organizing committee, the
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lending institution, the LLC, and the Utah Sports Authority have complied with all of the
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requirements and provisions described in Subsections (1), (2), and (3); and
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(5) by no later than June 30, 2000, the State Olympic Officer and the attorney general's
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office notify the President of the Senate and the Speaker of the House that all the requirements and
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provisions described in Subsections (1), (2), (3), and (4) have been complied with, and provide the
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President and the Speaker with any requested documentation.
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BE IT FURTHER RESOLVED that if the foregoing conditions are not met, there is no
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legislative approval for deferral of the $58,000,000 payment for the Utah Winter Sports Park.
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BE IT FURTHER RESOLVED that, if the organizing committee meets the following
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criteria and provides the described documentation and evidence regarding its revenue projections
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and potential concerns regarding the timing of cash flow, as specified in this resolution, the
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governor may at a future date agree to a deferral of up to $20,000,000 of the $40,000,000 owed
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to the Utah Athletic Foundation for a period not to exceed one year from the agreed date of
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payment, if:
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(1) by no later than December 31, 2001, the organizing committee provides the governor
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and the State Olympic Officer with:
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(a) analysis and supporting documentation evidencing that the organizing committee's
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revenues, revenue projections, expenses, cash flow, and contingency funds demonstrate, to the
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satisfaction of the governor and the State Olympic Officer, that the timing of the organizing
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committee's cash flow will require deferral of some portion of the $40,000,000 owed to the Utah
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Athletic Foundation, which portion may not exceed $20,000,000;
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(b) the specific amount of the requested deferral; and
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(c) the specified dates for the delayed payments in accordance with Subsection (4) and
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with other specific requirements and limitations of this resolution;
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(2) by no later than January 10, 2002, the State Olympic Officer reviews the organizing
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committee's proposal for deferral and provides to the governor his written determination regarding
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whether the specific terms and conditions of this resolution have been complied with, and whether
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the deferral, not to exceed $20,000,000, is in the best interest of the state;
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(3) by no later than January 20, 2002, the governor reviews the information provided to
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him by the State Olympic Officer, pursuant to Subsection (2), and, based on that information and
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any other information that he has requested or that has been provided to him, the governor
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determines, in writing, whether the specific terms and conditions of this resolution have been
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complied with, whether the deferral, not to exceed $20,000,000 is in the best interest of the state,
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and approves that deferral;
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(4) (a) any deferred amount of principal is paid in no more than four equal, quarterly
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payments;
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(b) with regard to any deferred amount of principal, interest is paid to the Utah Athletic
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Foundation monthly, at the rate of no less than 7% per annum, or the eurodollar rate plus 1%,
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whichever is greater; and
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(c) any other consideration agreed to by the organizing committee and the Utah Athletic
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Foundation is paid, so long as the Utah Athletic Foundation remains in a position substantially
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equivalent to its position prior to any deferral of monies owed to the Utah Athletic Foundation;
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(5) the deferral does not affect the state's security interest or security position, or the
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organizing committee's obligations to the state or the Utah Athletic Foundation; and
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(6) any portion not deferred is paid, in accordance with the terms of this resolution, from
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NBC television revenue and any other revenue or asset held by the LLC.
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BE IT FURTHER RESOLVED that, without the specific written approval of the governor,
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in accordance with the terms of this resolution, there shall be no deferral of any portion of the
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$40,000,000 owed by the organizing committee to the Utah Athletic Foundation; and that no other
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person may approve that deferral on behalf of the governor.
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BE IT FURTHER RESOLVED that, nothing in this resolution, or in any agreement or
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document executed pursuant to this resolution, shall be interpreted to affect, modify, or alter the
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organizing committee's debt, and its agreement to fully pay those obligations to the state and to the
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Utah Athletic Foundation from any and all organizing committee revenue, on the dates provided
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by the purchase and sales agreements for the Utah Winter Sports Park, except as expressly
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modified by this resolution, upon compliance with the terms and conditions of deferral described
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in this resolution, or by previous joint resolutions of the Legislature.
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BE IT FURTHER RESOLVED that the Legislature hereby reaffirms S.J.R. 17 (1994
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General Session), S.J.R. 5 (1996 General Session), S.J.R. 11 (1997 General Session), and S.J.R.
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14 (1998 General Session), except as expressly modified by this resolution.
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BE IT FURTHER RESOLVED that nothing in this resolution modifies or affects the state's
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security interest or its security position or priority as a secured creditor with regard to organizing
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committee revenues.
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BE IT FURTHER RESOLVED that if Senate Bill 211, "Olympic Financing Amendments"
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(2000 General Session) does not pass, this Senate Joint Resolution 11 (2000 General Session) does
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not take effect and there is no Legislative approval of any deferral or potential deferral described
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in this resolution.
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