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EXHIBIT 99.1
AGREEMENT FOR CONTINUED FUNDING
AGREEMENT FOR CONTINUED FUNDING (this "Continued Funding Agreement")
dated March 2, 2000, but effective as of February 14, 2000 (the "Effective
Date"), by and among JDN Realty Corporation (the "Borrower"), JDN Development
Company, Inc. (the "Guarantor"), the Banks parties hereto (the "Banks") and
Wachovia Bank, N.A., as Agent (the "Agent").
WHEREAS, the parties hereto are parties to the Amended and Restated
Credit Agreement dated as of September 2, 1998, as amended by First Amendment to
Credit Agreement dated as of June 11, 1999, by and among the Borrower, the Banks
and the Agent (as so amended, the "Credit Agreement"); and
WHEREAS, on February 14, 2000, the Borrower furnished the Agent a copy
of its press release issued February 14, 2000 concerning the discovery of
certain real estate transactions, which included undisclosed compensation
arrangements, payments of fees and related party transactions, in favor of Xxx
X. Xxxxxx, Senior Vice President, and C. Xxxxxxx Xxxxxxxxxx, XX, Vice President,
of the Guarantor, which transactions are more particularly described in separate
written disclosures to the Agent and the Banks on and before the date hereof
(collectively, the "Undisclosed Transactions"); and
WHEREAS, the Undisclosed Transactions: (i) were not accurately recorded
in the Borrower's accounting records; (ii) were not accurately recorded or
disclosed in the Borrower's audited financial statements for its Fiscal Years
ended December 31, 1994 through 1998; and (iii) give rise to unreported
compensation for its Fiscal Years ended December 31, 1994 through 1998, which
could possibly be required to be expensed for each of such Fiscal Years,
resulting in a restatement of the Borrower's financial statements for such years
and a reduction of Consolidated Net Income and Funds From Operations for those
periods (such matters being, collectively, the "Undisclosed Transactions
Matters", and collectively, with the Undisclosed Transactions, the "Known
Events");
WHEREAS, as a result of the Undisclosed Transactions and the
Undisclosed Transactions Matters, certain Defaults and Events of Default have
occurred under the Credit Agreement, as described below, and the Borrower and
the Guarantor (individually and collectively, as the context shall require, the
"Obligors") have requested that the Agent and the Banks agree not to exercise
their rights, remedies and powers under the Loan Documents and at law or in
equity during the Continued Funding Period, and in order to permit the Borrower
to furnish the Agent and the Banks with the Borrower's and its Subsidiaries'
consolidated annual financial statements for the Fiscal Year ended December 31,
1999 and the separate annual financial statements of the Guarantor for the
Fiscal Year ended December 31, 1999 (collectively, the "1999 Statements") and
for the Agent and the Banks to review and evaluate the 1999 Statements and to
conduct due diligence inquiries into certain matters regarding the Borrower and
its Subsidiaries, including, without limitation, corporate governance,
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accounting policies and procedures, internal reporting practices, shareholder
lawsuits, the effect of the Undisclosed Transactions and Undisclosed
Transactions Matters on customer relations and the Debt Rating (collectively,
the "Due Diligence Inquiries"), and to give the parties an opportunity to
discuss and agree upon appropriate amendments to the Credit Agreement, if any as
a result thereof, and provided that the Obligors comply with the provisions of
this agreement, the Agent and the Banks are willing to agree to the Obligor's
request, subject to the terms and conditions of this Continued Funding
Agreement.
1. DEFINED TERMS. In addition to terms expressly defined herein,
capitalized terms used but not defined herein have the meanings given them in
the Credit Agreement; PROVIDED, HOWEVER, that for purposes of this Continued
Funding Agreement, the term "Event of Default" includes any breach or default by
either of the Obligors under this Continued Funding Agreement and the term "Loan
Documents" includes, without limitation, this Continued Funding Agreement.
2. EXISTING EVENTS OF DEFAULT; CERTAIN ACKNOWLEDGMENTS BY THE OBLIGORS.
(a) Each of the Obligors hereby acknowledges, without admitting or
denying that other Events of Default may exist or arise as a result of
any of the Known Events (any such other Event of Default not arising
out of a Known Event being an "Other Possible Event of Default"), that
Events of Default are in existence under the following Sections of the
Credit Agreement as a result of the Undisclosed Transactions and
Undisclosed Transaction Matters (collectively, the "Existing Events of
Default", which term for purposes of this Continued Funding Agreement
shall not include any Other Possible Event of Default which is
determined to be an Event of Default): (i) the covenant contained in
Section 5.02(i) was breached; and (ii) the covenant contained in
Section 5.07 was breached as to the payment of taxes.
(b) Each of the Obligors acknowledges and agrees that: (i) the
Existing Events of Default constitute continuing Events of Default
under the Credit Agreement and the Obligors hereby are and will be
deemed to have received adequate and sufficient notice thereof; (ii)
such Existing Events of Default and any other Default or Event of
Default, whether known or unknown (including, without limitation, any
Other Possible Events of Default which are determined to be an Event of
Default), have not been, are not hereby and shall not be deemed, waived
by the Agent or the Banks, expressly or impliedly, by this Continued
Funding Agreement, through course of conduct or otherwise; (iii) as a
result of the Existing Events of Default, the Agent and the Banks (x)
have no obligation to make any advances, Loans (including Refunding
Loans) or other financial accommodations to the Borrower under any of
the Loan Documents, (y) have no obligation to forebear against pursuing
any rights or remedies under the Loan Documents, and (z) have the right
to pursue their rights, powers and remedies under the Loan Documents,
including, without limitation, the right to terminate the Commitments
and to accelerate the obligations of the Borrower under the Credit
Agreement and the Notes (the "Obligations") and exercise other rights
and remedies, all pursuant and subject to the terms, requirements and
limitations of the Credit Agreement, the Guaranty, the other Loan
Documents and applicable law; and (iv) as a result of the Existing
Events of Default, pursuant to Section 2.02(e) of the Credit Agreement,
no Euro-Dollar Borrowing may be made, and all Syndicated Loans
(including Refunding Loans) shall be made as Base Rate Loans.
Notwithstanding the Existing Events of Default, each of the Obligors
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hereby represents and warrants to, and assures, the Agent and the Banks
that no further Event of Default (other than the Existing Events of
Default) is reasonably anticipated by such Obligor, and each of the
Obligors hereby acknowledges that the Agent and the Banks are relying
upon such representation, warranty and assurance.
3. CONTINUED FUNDING DURING THE CONTINUED FUNDING PERIOD.
Notwithstanding the acknowledgments contained in Section 2 hereof, or any
provision of the Loan Documents to the contrary, so long as no New Event of
Default occurs under the Credit Agreement, and subject to the terms and
conditions hereof, the Agent and the Banks have determined not to exercise any
rights, powers or remedies under the Loan Documents and to make Loans (including
Refunding Loans) from time to time during the period (the "Continued Funding
Period") from February 14, 2000 (the "Effective Date") until whichever is the
earlier of (x) April 14, 2000 and (y) the occurrence of a New Event of Default;
PROVIDED, HOWEVER that the aggregate principal amount of the Loans outstanding
at any time during the Continued Funding Period shall not exceed the lesser of
the Borrowing Base and $153,000,000 (such amount having been determined on the
basis of the report of the Borrower attached hereto as Exhibit A and by
reference made a part hereof entitled Estimated Cash Needs and covering the
period set forth therein, starting March 2, 2000). Such agreement not to
exercise rights, powers or remedies and to make loans is made without waiving
any Existing Event of Default and without prejudice to any right, power or
remedy which the Agent and the Banks have or may have under the Loan Documents
or at law or in equity, as a result of such Existing Events of Default, except
during the Continued Funding Period, and all such rights, powers or remedies
hereby are reserved and retained in full, including, without limitation, to
terminate the Commitments and to accelerate the Obligations, notwithstanding any
forbearance by the Agent and the Banks with respect thereto pursuant to this
Continued Funding Agreement, except during the Continued Funding Period.
For purposes hereof, the term "New Event of Default" means:
(i) the occurrence of any breach or default by either of the
Obligors hereunder or any representation or warranty of either of the
Obligors contained or incorporated herein proves to be incorrect or
misleading in a material respect; the occurrence of any Event of
Default, other than the Existing Events of Default or those based on
any of the Known Events; and
(ii) the occurrence of any event, act, occurrence, or condition
which the Required Banks determine either does or has a reasonable
probability of causing a Material Adverse Effect (whether or not
arising as a result of any of the Known Events).
4. CERTAIN COVENANTS OF THE BORROWER.
(a) The Borrower hereby agrees that, simultaneously with the
delivery of any report to or by the Borrower's special committee of the
board of directors, or to shareholders, holders of the Borrower's
senior debt securities issued pursuant to the Indenture dated as of
July 15, 1997, as amended or supplemented to date, with First Union
National Bank, as Trustee, or to the Securities and Exchange
Commission, regarding the Undisclosed Transactions, the Undisclosed
Transaction Matters or any related matter, or with the issue of any
press release pertaining to any of the foregoing, the Borrower shall
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furnish to the Agent and the Banks a copy thereof; PROVIDED, HOWEVER,
as to any such reports to or by the Borrower's special committee of the
board of directors, if the Borrower reasonably believes, based on
advice of counsel, that the delivery of such report in unredacted form
would constitute a waiver of any attorney-client or other privilege
which otherwise would be available to it, it may instead furnish a
redacted report, or a summary of such report, which is limited to the
relevant facts.
(b) Each of the Obligors hereby agrees that from and after the
Effective Date, it shall not, and shall not permit any Subsidiary to,
enter into or become a party to any contractual restriction on the
ability of either of the Obligors or any such Subsidiary to xxxxx x
Xxxx to secure the Obligations on any asset now owned or hereafter
acquired by it (any such restriction being a "Negative Pledge Clause");
PROVIDED, HOWEVER, that if either of the Obligors or any Subsidiary
obtains any purchase money financing for the acquisition and/or
construction of a project (without creating a New Event of Default
under the Credit Agreement), nothing in the foregoing shall restrict
its right to include, as part of such purchase money financing, a
Negative Pledge Clause as to the project being financed (but not as to
any other assets).
(c) Each of the Obligors hereby agrees that from and after the
Effective Date, it shall not, and shall not permit any Subsidiary to,
remove from the Borrowing Base any Eligible Property which is in the
Borrowing Base on the Effective Date (collectively, the "Existing
Borrowing Base Properties") or convey, assign or otherwise transfer, or
create, assume or (except for any servitude or easement which is not a
Mortgage and which was in existence on the Effective Date) suffer to
exist any Lien on, any of the Existing Borrowing Base Properties (other
than Liens incidental to the conduct of its business or the ownership
of its assets which (i) do not secure Debt and (ii) do not in the
aggregate materially detract from the value of any of the Existing
Borrowing Base Properties or materially impair the use thereof in the
operation of its business), without the consent of the Agent, acting at
the direction of the Required Banks.
5. TERMINATION OF CONTINUED FUNDING PERIOD; RESERVATION OF RIGHTS. The
Agent and the Banks shall have no obligation to refrain from exercising or
enforcing any of their rights or remedies after the termination of the Continued
Funding Period. Immediately upon the occurrence of any New Event of Default, the
agreements of the Agent and the Banks set forth in this Continued Funding
Agreement shall immediately and automatically terminate and be of no further
force or effect without further notice to or consent of either of the Obligors,
and the Agent and the Banks shall have the right to exercise and enforce any and
all rights, powers and remedies available to them under any and all Loan
Documents and under applicable laws to the same extent as though this Continued
Funding Agreement had never been executed, without regard to any notice or cure
period contained in any of the Loan Documents or (to the fullest extent
permitted by law) otherwise available under applicable laws. In the event of a
New Event of Default, the Banks reserve the right at any time for the Required
Banks to direct the Agent to terminate the Commitments and/or declare the Notes
and all other amounts payable under the Credit Agreement and the other Loan
Documents to be immediately due and payable pursuant to Section 6.01 of the
Credit Agreement as a result of such New Event of Default. From and after the
termination of the Continued Funding Period, all rights, powers and remedies
available to the Agent and the Banks under any and all of the Loan Documents,
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and under applicable laws, may be asserted, enforced and exercised concurrently,
cumulatively or successively from time to time and at any time until such time
as all of the Obligations have been indefeasibly paid in full.
6. REPRESENTATIONS AND WARRANTIES. By entering into this Continued
Funding Agreement and upon each request for a Syndicated Loan or Money Market
Loan, the Borrower shall be deemed to have made all representations and
warranties as set forth in the Credit Agreement (except with respect to matters
pertaining to the Existing Events of Default).
7. AMOUNTS OUTSTANDING. As of the close of business on February 29,
2000, the outstanding principal balance of (x) the Syndicated Loans was an
aggregate of $100,000,000; and (y) Money Market Loans was an aggregate of
$13,000,000. The outstanding principal balance of each of the foregoing Loans is
due and owing, without defense, counterclaim, recoupment or offset. To the
extent that such defense, counterclaim, recoupment or right of offset exists,
the same are hereby waived and forever released.
8. CONDUCT OF THE AGENT AND THE BANKS; ABSENCE AND WAIVER OF DEFENSES.
Through the date of execution of this Agreement by the Obligors as set forth
under its signatures below (the "Obligors' Execution Date"), the Agent and each
of the Banks has acted in good faith and has conducted themselves in a
commercially reasonable manner in their relationships with each of the Obligors
in connection with this Continued Funding Agreement and in connection with the
Obligations and the Loan Documents, each of the Obligors hereby waives and
releases any claims to the contrary. To the best of its knowledge, as of the
Obligors' Execution Date, neither of the Obligors has any defenses, affirmative
or otherwise, rights of setoff, rights of recoupment, claims, counterclaims,
actions or causes of action of any kind or nature whatsoever against the Agent
or any of the Banks or any past or present agent, attorney, legal
representative, predecessor in interest, affiliate, successor, assign, employee,
director or officer of the Agent or any of the Banks (collectively, the "Bank
Group"), directly or indirectly, arising out of, based upon, or in any manner
connected with, any transaction, event, circumstance, action, failure to act, or
occurrence of any sort or type, which occurred, existed, was taken or permitted
prior to the execution of this Continued Funding Agreement and occurred,
existed, was taken or permitted in accordance with, pursuant to, or by virtue of
the Obligations or any of the terms or conditions of the Loan Documents, or
which directly or indirectly relate to or arise out of or in any manner are
connected with the Obligations or any of the Loan Documents; to the extent any
such defenses, affirmative or otherwise, rights of setoff, rights of recoupment,
claims, counterclaims, actions or causes of action are claimed to exist or to
have existed, such defenses, rights, claims, counterclaims, actions and causes
of action are hereby forever waived, discharged and released. Each of the
Obligors hereby acknowledges and agrees that the execution of this Continued
Funding Agreement by the Agent and the Banks shall not constitute an
acknowledgment of or admission by the Agent or any Bank or any member of the
Bank Group of the existence of any claims or of liability for any matter or
precedent upon which any claim or liability may be asserted. Each of the
Obligors further acknowledges and agrees that, to the extent any such claims may
presently exist, they are of a speculative nature so as to be incapable of
objective valuation and that, in any event, the value to the Borrower of the
covenants and obligations of the Agent and the Banks contained in this Continued
Funding Agreement and the other documents executed and delivered in connection
with this Continued Funding Agreement substantially and materially exceeds any
and all value of any kind or nature whatsoever of any such claims. Each of the
Obligors further acknowledges and agrees that Agent and the Banks are not in any
way responsible or liable for the previous or current condition or any
deterioration of the business operations and/or financial condition of the
Borrower and that, to the best knowledge of each of the Obligors, neither the
Agent nor any of the Banks has breached any agreement or commitment to loan
money or otherwise make financial accommodations available to the Borrower
through the Obligors' Execution Date or refused to fund any operations of the
Borrower at any time through the Obligors' Execution Date. Each of the Obligors
hereby acknowledges that it has freely and voluntarily entered into this
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Continued Funding Agreement after an adequate opportunity and sufficient period
of time to review, analyze and discuss (i) all terms and conditions of this
Continued Funding Agreement, (ii) any and all other documents executed and
delivered in connection with the transactions contemplated by this Continued
Funding Agreement, and (iii) all factual and legal matters relevant to this
Continued Funding Agreement and/or any and all such other Loan Documents, with
counsel freely and independently selected by the Obligors. Each of the Obligors
further acknowledges and agrees that it has actively and with full understanding
participated in the negotiation of this Continued Funding Agreement and all
other documents executed and delivered in connection with this Continued Funding
Agreement after consultation and review with their counsel, that all of the
terms and conditions of this Continued Funding Agreement and the other documents
executed and delivered in connection with this Continued Funding Agreement have
been negotiated at arm's-length, and that this Continued Funding Agreement and
all such other documents have been negotiated, prepared and executed without
fraud, duress, undue influence, or coercion of any kind or nature whatsoever
having been exerted by or imposed upon any party to this Continued Funding
Agreement upon any other party. No provision of this Continued Funding Agreement
or such other documents shall be construed against or interpreted to the
disadvantage of any party to this Continued Funding Agreement by any court or
other governmental or judicial authority by reason of such party having or being
deemed to have structured, dictated or drafted such provision.
9. NO NOVATION OR AMENDMENT; GOVERNING LAW. Except as expressly
provided herein, this Continued Funding Agreement is not intended to be, nor
shall be deemed or construed to be, a novation, release, modification, amendment
or waiver of the Obligations or any of the Loan Documents, or any other
documents or instruments executed in connection therewith. This Continued
Funding Agreement shall be governed by and construed in accordance with the laws
of the State of Georgia.
10. ADDITIONAL ACKNOWLEDGMENTS. The parties hereto acknowledge and
agree that (i) neither the Agent and the Banks nor the Obligors have any
obligation whatsoever to agree to any restructuring of the Credit Agreement or
any of the other Obligations, or any modification, amendment, restructuring, or
reinstatement of any of the Obligations or to the exercise of any rights, powers
or remedies under any of the Loan Documents, and (ii) that if there are any
future discussions among the Agent, the Banks and either of the Obligors
concerning such restructuring, then no restructuring or understanding with
respect to any of the Obligations, or any aspect thereof, shall constitute a
legally binding agreement or contract or have any force or effect whatsoever
unless and until reduced to writing and signed by authorized representatives of
the parties hereto and that none of the parties hereto shall assert or claim in
any legal proceedings or otherwise that any such agreement exists except in
accordance with the terms of this Section.
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11. COUNTERPARTS. This Agreement may be signed in any number of
counterparts, each of which may be delivered by facsimile and which (including
counterparts delivered by facsimile) shall be an original, with the same effect
as if the signatures thereto and hereto were upon the same instrument.
12. CONDITIONS PRECEDENT. This Continued Funding Agreement shall be
effective only upon (i) execution and delivery of this Continued Funding
Agreement by each of the Obligors, the Agent and each of the Banks, each such
delivery being made by facsimile of a counterpart signature page hereof to
counsel for the Agent, Xxxxxxxxxxx X. Carson, Jones, Day, Xxxxxx & Xxxxx, at
facsimile no. 000-000-0000 and (ii) payment to the Agent, for the ratable
account of the Banks, of a fee in connection herewith in an aggregate amount
equal to 0.125% of the amount set forth in clause (y) of Section 3 hereof.
13. CREDIT AGREEMENT AMENDMENT. During the Continued Funding Period,
but subject to the completion of and satisfaction with the information obtained
as a result of the Due Diligence Inquiries by the Agent and the Banks, and the
receipt (by such date as will enable the Agent and the Banks to have adequate
time for review and analysis) of the foregoing information and the 1999
Statements in draft form, the parties hereby agree to enter into good faith
negotiations with a view toward executing and delivering an amendment to the
Credit Agreement or other appropriate agreement by March 28, 2000 that, in part,
will confirm that the Credit Agreement continues to be in effect through the
Termination Date, subject to its terms, provisions and conditions as so amended,
including such amendments as the parties shall agree upon.
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IN WITNESS WHEREOF, the parties hereto have caused this Continued
Funding Agreement to be duly executed, under seal, by their respective
authorized officers as of the Effective Date.
JDN REALTY CORPORATION
JDN DEVELOPMENT COMPANY,
as Borrower and Guarantor, respectively
By: /s/ Xxxxxxx X. Xxxxxx ATTEST: /s/ Xxxx X. Xxxxxx, Xx. (SEAL)
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Name: Xxxxxxx X. Xxxxxx Name: Xxxx X. Xxxxxx, Xx.
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Title: Senior Vice President Title: Assistant Secretary
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and Chief Financial
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Officer
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Executed on March 2, 2000, which is the Obligors' Execution Date, but effective
as of the Effective Date.
WACHOVIA BANK, N.A., PNC BANK, NATIONAL ASSOCIATION,
as Agent and as a Bank as a Bank
By: /s/ Xxxxxxxxx X. XxXxxxx (SEAL) By: /s/ Xxxxx Xxxxxxxxx (SEAL)
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Name: Xxxxxxxxx X. XxXxxxx Name: Xxxxx Xxxxxxxxx
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Title: Commercial Officer Title: Vice President
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BANKERS TRUST COMPANY, FIRST TENNESSEE BANK NATIONAL
ASSOCIATION
as a Bank as a Bank
By: /s/ Xxxxxx X. Xxxxxx (SEAL) By: /s/ Xxx Xxxxxxx (SEAL)
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Name: Xxxxxx X. Xxxxxx Name: Xxx Xxxxxxx
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Title: Director Title: Vice President
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FOUR WINDS FUNDING CORPORATION, COMMERZBANK, AG, NEW YORK
as a Bank BRANCH as a Bank
By: (SEAL) By: /s/ E. Xxxxxx Xxxxx (SEAL)
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Name: Name: E. Xxxxxx Xxxxx
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Title: Title: Assistant Vice President
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By: (SEAL) By: /s/ Xxxxx Xxxxxxx (SEAL)
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Name: Name: Xxxxx Xxxxxxx
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Title: Title: Assistant Treasurer
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KEYBANK, N.A. SOUTHTRUST BANK, NATIONAL
as a Bank ASSOCIATION, as a Bank
By:/s/ Xxxxxx X. Xxxxxxx (SEAL) By: /s/ Xxxxxx X. Xxxxx (SEAL)
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Name: Xxxxxx X. Xxxxxxx Name: Xxxxxx X. Xxxxx
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Title: Vice President Title: Senior Vice President
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