AMENDMENT NO. 2 TO THE AMENDED AND RESTATED CREDIT AGREEMENT
Exhibit 10.5
AMENDMENT
NO. 2 TO THE
AMENDED AND RESTATED CREDIT AGREEMENT
AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of March 12,
2010
AMENDMENT NO. 2 TO THE AMENDED AND
RESTATED CREDIT AGREEMENT among XXXXXXX XXXXX & XXXXXX, INC.
(formerly known as The Xxxxxxx Works), a Connecticut corporation (the “Borrower”), the
Lenders executing this Amendment on the signature pages hereto and Citibank,
N.A., as agent (the “Agent”) for the
Lenders.
PRELIMINARY STATEMENTS:
(1) The
Borrower, the banks, financial institutions and other institutional lenders
parties to the Credit Agreement referred to below (collectively, the “Lenders”) and the
Agent have entered into an Amended and Restated Credit Agreement dated as of
February 27, 2008, and Amendment No. 1 thereto dated as of February 17, 2009
(such Credit Agreement, as so amended, the “Credit
Agreement”). Capitalized terms not otherwise defined in this
Amendment have the same meanings as specified in the Credit
Agreement.
(2) The
Borrower and the Required Lenders have agreed to further amend the Credit
Agreement as hereinafter set forth.
SECTION 1. Amendments to Credit
Agreement. The Credit Agreement is, effective as of the date
hereof and subject to the satisfaction of the conditions precedent set forth in
Section 2, hereby amended as follows:
(a) The
definitions of “Applicable Facility Fee
Rate”, “Base
Rate”, “EBITDA”, “Interest Coverage
Ratio” and “Interest Expense” in
Section 1.01 are amended in full to read as follows:
“Applicable Facility Fee
Rate” means, on any date, a rate per annum equal to (i) 0.150% if on such
date the Company’s outstanding Long-Term Indebtedness is rated A+ or higher by
Standard & Poor’s, A1 or higher by Xxxxx’x, or A+ or higher by Fitch, (ii)
0.200% if on such date clause (i) is inapplicable and the Company’s outstanding
Long-Term Indebtedness is rated A or higher by Standard & Poor’s, A2 or
higher by Xxxxx’x, or A or higher by Fitch, (iii) 0.250% if on such date clauses
(i) and (ii) are inapplicable and the Company’s outstanding Long-Term
Indebtedness is rated A- or higher by Standard & Poor’s, A3 or higher by
Xxxxx’x, or A- or higher by Fitch, (iv) 0.300% if on such date clauses (i), (ii)
and (iii) are inapplicable and the Company’s outstanding Long-Term Indebtedness
is rated BBB+ or higher by Standard & Poor’s, Baa1 or higher by Xxxxx’x, or
BBB+ or higher by Fitch, and (v) 0.375% if on such date clauses (i), (ii), (iii)
and (iv) are inapplicable (including if such Long-Term Indebtedness is no longer
rated by any agency); provided that if the respective
levels of the Company’s outstanding Long-Term Indebtedness credit ratings
differ, the “Applicable Facility Fee Rate” will be determined based on, (a) if
two of the ratings are at the same level and the other rating is higher or lower
than those same ratings, the level corresponding to the two same ratings shall
apply and (b) if each of the three ratings falls within different levels, then
the level corresponding to the rating that is in between the highest and the
lowest ratings shall apply.
“Base Rate” means a
fluctuating interest rate per annum as shall be in effect from time to time,
which rate per annum shall at all times be equal to the highest of:
(a) the rate of interest
announced publicly by the Reference Bank in New York, New York, from time to
time, as its base rate;
(b) 1/2 of one percent per
annum above the Federal Funds Rate; and
(c) the rate equal to the
Eurocurrency Rate for a Dollar denominated Advance having an Interest Period of
one month determined for each day that a Base Rate Loan is outstanding (and in
respect of any day that is not a Banking Day, such rate as in effect on the
immediately preceding Banking Day) plus 1.00% per
annum.
“EBITDA” means, for
any period, the sum (without duplication) for the Company and its Consolidated
Subsidiaries on a consolidated basis of the following: (a) net income for such
period plus (b) to the
extent deducted in determining net income for such period, the sum of (i)
depreciation and amortization for such period, (ii) Interest Expense for such
period and (iii) taxes for such period. Notwithstanding the
foregoing, (1) in calculating EBITDA for any period that includes one or more
Restructuring Periods, EBITDA shall be increased by an amount equal to the
Applicable Restructuring Charges for any such Restructuring Periods, (2) in
calculating EBITDA for any period, any impairment charges or asset write-offs,
in each case pursuant to Financial Accounting Standards Board’s Staff Position
Accounting Principles Board Opinion No. 144 (“Accounting for the Impairment or
Disposal of Long-Lived Assets (Issued 8/01)”), shall be excluded, (3) in
calculating EBITDA for any period, non-cash charges arising from purchase
accounting adjustments (including the effects of such adjustments pushed down to
such Person and its Subsidiaries) in component amounts required or permitted by
GAAP, resulting from the write-up of assets or application of purchase
accounting in relation to any consummated acquisition or the amortization,
depreciation, or write-off of any amounts thereof, net of taxes, shall be
excluded, and (4) in calculating EBITDA for any period, charges associated with
stock-based compensation shall be excluded. For the purpose of
calculating EBITDA for any period following the acquisition of The Black &
Xxxxxx Corporation, EBITDA for such period shall be calculated after giving pro
forma effect to such acquisition as if such acquisition occurred on the first
day of such period.
“Interest Coverage
Ratio” means, for any period of four consecutive fiscal quarters, the
ratio of (a) EBITDA for such period to (b) Interest Expense for
such period.
“Interest Expense”
means, for any period, the sum (determined without duplication) of the aggregate
amount of interest reported in respect of such period on the Indebtedness of the
Company and its Consolidated Subsidiaries on a consolidated basis, including,
without limitation, the interest portion of payments under Capital Lease
obligations and any capitalized interest but excluding imputed (non-cash)
interest expense in respect of convertible bonds issued by the Company or any of
its Consolidated Subsidiaries as calculated in accordance with the Financial
Accounting Standards Board’s Staff Position Accounting Principles Board Opinion
No. 14-1 (“Accounting for Convertible Debt Instruments That May be Settled in
Cash upon Conversion (Including Partial Cash Settlement)”), minus (i) interest
income of the Company and its Consolidated Subsidiaries on a consolidated basis
reported in respect of such period, (ii) interest on deferred compensation
reported in respect of such period, and (iii) any income/expense in respect of
such period associated with spot-to-forward differences or points on foreign
currency trades that are included in interest income/expense as a result of
Statement of Financial Accounting Standards No. 133, as amended and
interpreted. For the purpose of calculating Interest Expense for any
period following the acquisition of The Black & Xxxxxx Corporation, Interest
Expense for such period shall be calculated after giving pro forma effect to
such acquisition as if such acquisition occurred on the first day of such
period.
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(b) The
definition of “Applicable Eurocurrency Margin” in Section 1.01 is amended
by (i) deleting the figure “0.75%” and replacing it with “the Floor” in both
places such figure appears and (i) deleting the figure “2.50%” and replacing it
with “the Cap” in the three places such figure appears.
(c) Section 1.01
is further amended by adding the following definitions in the appropriate
alphabetical order:
“Applicable Base Rate
Margin” means, on any day, a rate per annum equal to the higher of (a)
the Applicable Eurocurrency Margin for such day minus 1.00% and (b)
0.00%.
“Applicable Restructuring
Charge” means
(a) for
any Restructuring Period falling in the Company’s fiscal year 2009, the
restructuring charges reported in the Company’s SEC Filings for such fiscal
quarter; provided that the sum of the Applicable Restructuring Charges for all
of the Restructuring Periods in the Company’s fiscal year 2009 will not exceed
$50,000,000 in the aggregate; and
(b) for
any Restructuring Period falling in the Company’s fiscal year 2010, 2011, 2012,
or 2013, amounts relating to one or more of the following: (i) restructuring
charges, including, without limitation, the effect of reconstruction,
recommissioning or reconfiguration of fixed assets for alternative uses, store
closure, office closure, plant closure, facility consolidations, downsizing,
shutdown costs (including future lease commitments and contract termination
costs with respect thereto), curtailments or modifications to pension and
post-retirement employee benefit plans, retention, severance, system
establishment costs, and acquisition integration costs; (ii) change of control
payments and transaction fees; (iii) performance-based bonus payments to Xxxxx
Xxxxxxxxx; (iv) all expenses and charges related to any stock based
compensation; (v) non-cash inventory step-up charges; and (vi) liabilities under
Section 280G of the Internal Revenue Code and gross-ups related thereto;
provided that the sum of the Applicable Restructuring Charges for all of the
Restructuring Periods in the Company’s fiscal years 2010, 2011, 2012, and 2013
will not exceed $1,200,000,000 in the aggregate, of which not more than
$900,000,000 is cash.
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“Cap” means, on any
date, a rate per annum equal to (i) 2.500% if on such date the Company’s
outstanding Long-Term Indebtedness is rated BBB+ or higher by Standard &
Poor’s, Baa1 or higher by Xxxxx’x, or BBB+ or higher by Fitch, and (ii) 3.000%
if on such date clause (i) is inapplicable (including if such Long-Term
Indebtedness is no longer rated by any agency); provided that if the respective
levels of the Company’s outstanding Long-Term Indebtedness credit ratings
differ, the “Cap” will be determined based on, (a) if two of the ratings are at
the same level and the other rating is higher or lower than those same ratings,
the level corresponding to the two same ratings shall apply and (b) if each of
the three ratings falls within different levels, then the level corresponding to
the rating that is in between the highest and the lowest ratings shall
apply.
“Floor” means, on any
date, a rate per annum equal to (i) 0.750% if on such date the Company’s
outstanding Long-Term Indebtedness is rated A- or higher by Standard &
Poor’s, A3 or higher by Xxxxx’x, or A- or higher by Fitch, (ii) 1.000% if on
such date clause (i) is inapplicable and the Company’s outstanding Long-Term
Indebtedness is rated BBB+ or higher by Standard & Poor’s, Baa1 or higher by
Xxxxx’x, or BBB+ or higher by Fitch, and (iii) 1.500% if on such date clauses
(i) and (ii) are inapplicable (including if such Long-Term Indebtedness is no
longer rated by any agency); provided that if the respective
levels of the Company’s outstanding Long-Term Indebtedness credit ratings
differ, the “Floor” will be determined based on, (a) if two of the ratings are
at the same level and the other rating is higher or lower than those same
ratings, the level corresponding to the two same ratings shall apply and (b) if
each of the three ratings falls within different levels, then the level
corresponding to the rating that is in between the highest and the lowest
ratings shall apply.
“Loan Parties” means,
collectively, the Borrowers and the Subsidiary Guarantor.
“Restructuring Period”
means (a) if the Company reports taking any restructuring charges during any
quarter of its fiscal year 2009 in the Company’s Exchange Act disclosure
documents filed with the Securities and Exchange Commission on Forms 8K, 10K or
10Q (or their equivalents) (the Company’s “SEC Filings”), each
such fiscal quarter of the Company during its fiscal year 2009, and (b) each
fiscal quarter of the Company during fiscal years 2010, 2011, 2012, and
2013.
“SEC Filings” has the
meaning provided in the definition of “Restructuring
Period”.
“Subsidiary Guarantor”
means The Black & Xxxxxx Corporation, a Maryland corporation.
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“Subsidiary Guaranty”
means the guaranty of the Subsidiary Guarantor, in form and substance reasonably
satisfactory to the Administrative Agent, delivered to the Administrative Agent
on or about the date that the Company acquires the Subsidiary
Guarantor.
(d) Section
2.05(a) is amended by inserting immediately after the phrase “Base Rate in
effect from time to time” the phrase “plus the Applicable Base Rate
Margin”.
(e) Section
3.02(i)(x) is amended by inserting immediately after the parenthetical phrase
“(other than the Excluded Representation”) the phrase “and in Section 7 of the
Subsidiary Guaranty”.
(f) Section
5.02(a)(ix) is amended in full to read as follows:
(ix) Liens on (A) any
property existing at the time of acquisition but only if the amount of
outstanding Indebtedness secured thereby does not exceed the lesser of the fair
market value or the purchase price of the property so purchased and (B) any
property of The Black & Xxxxxx Corporation existing at the time of
acquisition;
(g) Section
6.01(b) is amended by deleting the word “Borrower” and replacing it with “Loan
Party” in both places such word appears.
(h) Section
6.01(g) is amended by deleting the figure “$25,000,000” and replacing it with
“$75,000,000” in both places such figure appears.
(i) Section
6.01(h) is amended by restating clause (B) thereof in full to read as
follows:
(B) any Plan shall have an unfunded
liability, which means the excess, if any, of a Plan’s benefit
liabilities under Section 4001(a)(16) of ERISA, over the current value of that
Plan’s assets, determined in accordance with the assumptions used for funding
that Plan pursuant to Section 412 of the Internal Revenue Code for the
applicable plan year
(j) Section
6.01(i) is amended by deleting the figure “$25,000,000” and replacing it with
“$75,000,000”.
(k) Section
8.02(a) is amended by deleting the word “Borrower” and replacing it with “Loan Party”.
(l) Section
8.07(b) is amended by deleting the word “Borrower” and replacing it with “Loan Party” in both places such word appears.
(m) Section
8.08(a) is amended by deleting the word “Borrower” and replacing it with “Loan Party” in each place such word appears.
SECTION
2. Conditions of
Effectiveness. This Amendment shall become effective as of the
time of the delivery of all evidence referenced in clause (f) below on the date
(the “Amendment
Effective Date”), which shall be on or before June 30, 2010, as of which
the Administrative Agent shall confirm to the Company that it has received the
following, each dated such day, in form and substance satisfactory to the
Administrative Agent:
(a) Executed
Counterparts. Counterparts of this Amendment executed by the
Company and the Lenders party to the Credit Agreement constituting the Required
Lenders;
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(b) Subsidiary
Guaranty. The Subsidiary Guaranty, in substantially the form
of Exhibit A to this Amendment, duly executed and delivered by the Subsidiary
Guarantor;
(c) Authority and
Approvals. Certified copies of the resolutions of the Board of
Directors of the Subsidiary Guarantor (or equivalent documents) authorizing and
approving the Subsidiary Guaranty and the transactions contemplated thereby and
certified copies of all documents evidencing all necessary corporate action and
all other necessary action (corporate, partnership or otherwise) and
governmental approvals, if any, with respect to the Subsidiary
Guaranty;
(d) Secretary’s or Assistant
Secretary’s Certificate. A certificate of the Secretary or an
Assistant Secretary of the Subsidiary Guarantor, dated the Amendment Effective
Date, certifying the names and true signatures of the officers of the Subsidiary
Guarantor authorized to execute and deliver the Subsidiary
Guaranty;
(e) Legal
Opinions. An opinion of counsel to the Subsidiary Guarantor,
dated the Amendment Effective Date;
(f) Acquisition of The Black
& Xxxxxx Corporation. Evidence satisfactory to the
Administrative Agent that Blue Xxx Acquisition Corp. shall have consummated the
merger with The Black & Xxxxxx Corporation that is contemplated by that
certain Agreement and Plan of Merger dated as of November 2, 2009 by and among
the Company, Blue Xxx Acquisition Corp., and The Black & Xxxxxx Corporation
, together with evidence that the commitments under the Five-Year Credit
Agreement dated as of December 7, 2007 among The Black & Xxxxxx Corporation,
Black & Xxxxxx Luxembourg Finance S.C.A. and Black & Xxxxxx Luxembourg
S.aR.L., as borrowers, certain lenders parties thereto and Citibank, N.A., as
administrative agent for said lenders (the “B&D Facility”) have been or
concurrently with the Effective Date are being terminated and all amounts
payable under the B&D Facility have been paid; and
(g) Fees and
Expenses. Payment by the Company in full of the costs,
expenses and fees as set forth in Section 8.04(a) of the Credit
Agreement.
SECTION
3. Representations and
Warranties. The Company represents and warrants to the Lenders
and the Administrative Agent, as to itself and each of its Subsidiaries, that
(a) the representations and warranties set forth in Article IV of the Credit
Agreement and in each of the other Loan Documents that have been entered into by
the Company or any of the Designated Borrowers are true and correct in all
material respects on the date hereof as if made on and as of the date hereof
(or, if any such representation or warranty is expressly stated to have been
made as of a specific date, such representation and warranty shall be true and
correct in all material respects as of such specific date) and as if each
reference in said Article IV to “this Agreement” included reference to this
Amendment; provided that (x) in
Sections 4.01(f) and 4.01(h) of the Credit Agreement, the reference to the
Company’s Annual Report on Form 10-K for the year ended December 29, 2007 shall
be deemed to be a reference to the Company’s Annual Report on Form 10-K for the
fiscal year ended January 2, 2010, each of the Company’s reports on Form 8-K and
10-Q during the period from January 2, 2010 through and including the date of
this Amendment and the Subsidiary Guarantor’s Annual Report on
Form 10-K for the year ended December 31, 2009 and (y) in Section 4.01(g) of the
Credit Agreement, the reference to December 29, 2007 shall be deemed to be a
reference to January 2, 2010 and (b) no Default or Event of Default has occurred
and is continuing.
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SECTION
4. Reference to and Effect on the Loan
Documents. (a) On and after the effectiveness of
this Amendment, each reference in the Credit Agreement to “this Agreement”,
“hereunder”, “hereof” or words of like import referring to the Credit Agreement,
and each reference in the Notes and each of the other Loan Documents to “the
Credit Agreement”, “thereunder”, “thereof” or words of like import referring to
the Credit Agreement, shall mean and be a reference to the Credit Agreement, as
amended by this Amendment.
(b) The
Credit Agreement, the Notes and each of the other Loan Documents, as
specifically amended by this Amendment, are and shall continue to be in full
force and effect and are hereby in all respects ratified and
confirmed.
(c) The
execution, delivery and effectiveness of this Amendment shall not, except as
expressly provided herein, operate as a waiver of any right, power or remedy of
any Lender or the Agent under any of the Loan Documents, nor constitute a waiver
of any provision of any of the Loan Documents.
SECTION
5. Costs and Expenses. The
Borrower agrees to pay on demand all costs and expenses of the Agent in
connection with the preparation, execution, delivery, administration,
modification and amendment of this Amendment and the other instruments and
documents to be delivered hereunder (including, without limitation, the
reasonable fees and expenses of counsel for the Agent) in accordance with the
terms of Section 8.04 of the Credit Agreement.
SECTION
6. Execution in
Counterparts. This Amendment may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute but one and the same agreement. Delivery of
an executed counterpart of a signature page to this Amendment by telecopier or
other electronic communication shall be effective as delivery of a manually
executed counterpart of this Amendment.
SECTION
7. Governing Law. This
Amendment shall be governed by, and construed in accordance with, the laws of
the State of New York.
IN WITNESS WHEREOF, the parties hereto
have caused this Amendment to be executed by their respective officers thereunto
duly authorized, as of the date first above written.
XXXXXXX
XXXXX & XXXXXX, INC. (formerly
known as The Xxxxxxx Works) |
|
By
|
/s/ Xxxxx X. Xxxxxxx |
Title:
VP & Treasurer
|
CITIBANK,
N.A.,
as
Agent and as Lender
|
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By
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/s/ Xxxxxxx Xxx |
Name: Xxxxxxx
Xxx
|
|
Title: Vice
President
|
BANK OF AMERICA | ||
By
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/s/ Xxxxxxx X. XxXxxxxxxx | |
Name:
Xxxxxxx X. XxXxxxxxxx
|
||
Title:
SVP
|
CITIBANK,
N.A.,
as
Agent and as Lender
|
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By
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/s/ Xxxxxxx Xxx |
Name: Xxxxxxx
Xxx
|
|
Title: Vice
President
|
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BANK OF AMERICA | ||
By
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/s/ Xxxxxxx X. XxXxxxxxxx | |
Name:
Xxxxxxx X. XxXxxxxxxx
|
||
Title:
SVP
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X.X. XXXXXX XXXXX BANK N.A. | ||
By
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/s/ Xxxxxxx X. Xxxxx | |
Name:
Xxxxxxx X. Xxxxx
|
||
Title:
Vice President
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BARCLAYS BANK PLC | ||
By
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/s/ Xxxxx Xxxxxx | |
Name:
Xxxxx Xxxxxx
|
||
Title:
Director
|
BNP PARIBAS | ||
By
|
/s/ Xxxx Xxxxx | |
Name:
Xxxx Xxxxx
|
||
Title: Managing
Director
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||
By | /s/ Fik Durmus | |
Name: Fik Durmus | ||
Title: Director |
XXXXXXX STREET LLC | ||
By
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/s/ Xxxx Xxxxxx | |
Name:
Xxxx Xxxxxx
|
||
Title:
Authorized Signatory
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UBS LOAN FINANCE LLC | ||
By
|
/s/ Xxxx X. Xxxx | |
Name:
Xxxx X. Xxxx
|
||
Title:
Associate Director
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By | /s/ Xxxx X. Xxxxx | |
Name: Xxxx X. Xxxxx | ||
Title: Associate Director |
XXXXX FARGO BANK, N.A. | ||
By
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/s/ Xxxxxx Xxxxxxxxxx | |
Name:
Xxxxxx Xxxxxxxxxx
|
||
Title:
Director
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THE BANK OF NEW YORK MELLON | ||
By
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/s/ Xxxxxx X. Xxxxxxx, Xx. | |
Name:
Xxxxxx X. Xxxxxxx, Xx.
|
||
Title:
Managing Director
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HSBC BANK USA, NATIONAL ASSOCIATION | ||
By
|
/s/ Xxxxxx Xxxxxxx | |
Name:
Xxxxxx Xxxxxxx
|
||
Title:
Vice President, Relationship
Manager
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XXXXXX XXXXXXX BANK, N.A. | ||
By
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/s/ Xxxxxxx Xxxxx | |
Name:
Xxxxxxx Xxxxx
|
||
Title:
Authorized Signatory
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ROYAL BANK OF CANADA | ||
By
|
/s/ Xxxxxx Xxxxxx | |
Name:
Xxxxxx Xxxxxx
|
||
Title:
Authorized Signatory
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THE NORTHERN TRUST COMPANY | ||
By
|
/s/ Xxxxx Ja. Hallan | |
Name:
Xxxxx X. Xxxxxx
|
||
Title:
Vice President
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