EXHIBIT 10.3
FIRST AMENDED AND RESTATED EXTENSION AGREEMENT
THIS FIRST AMENDED AND RESTATED EXTENSION AGREEMENT is made and
entered into as of October 6, 2005, by and among XXXXX SYSTEMS, INC.
("Borrower"), a South Dakota corporation; XXXXX CORPORATION, an Indiana
corporation ("Guarantor"); and SUNTRUST BANK ("Lender"), a Georgia banking
corporation.
RECITALS:
Lender and Borrower entered into a certain Amended and Restated
Credit Agreement dated June 10, 2002 (as at any time amended, the "Credit
Agreement"), pursuant to which Lender made available a revolving credit and
letter of credit facility to Borrower, which revolving credit and letter of
credit facility is secured by security interests in and liens upon all or
substantially all of the assets of Borrower and are guaranteed unconditionally
by Guarantor.
Lender made a term loan (the "Term Loan") to Borrower as evidenced
by a certain Term Loan Promissory Note, dated August 4, 2003 in the original
principal amount of $498,000 (as at any time amended, the "Term Note"), payment
of which is secured by, among other things, a lien upon and security title to
certain real property of Borrower pursuant to the terms of a certain Security
Deed and Agreement made as of March 30, 2001, between Borrower and Lender (as at
any time amended, the "Security Deed"; together with the Term Note and all other
agreements and instruments executed in connection therewith, the "Term Loan
Documents").
Events of Default under (and as defined in) the Credit Agreement
exist and are continuing, in consequence of which Lender is entitled to
terminate further advances to Borrower, to declare the entire balance owing to
it from Borrower to be immediately due and payable, to enforce its liens and
security interests in the collateral securing its claims against Borrower, and
to enforce its claims against Guarantor.
All of the liabilities and obligations under the Credit Agreement
and the Term Note became due and payable on May 31, 2005.
Borrower, Guarantor and Lender entered into an Extension Agreement
dated as of June 24, 2005, and a First Amendment to Extension Agreement dated as
of August 25, 2005 (collectively, and as at any time amended, the "Prior
Agreement"). Borrower and Guarantor desire that Lender accept partial payment of
the obligations owed to Lender in exchange for a partial release of Lender's
security interests and extend the due date for repayment of the remaining
Obligations to the Termination Date (as hereinafter defined). Lender is willing
to extend the due date for repayment of the Obligations under the terms and
conditions of this Agreement.
NOW, THEREFORE, for TEN DOLLARS ($10.00) in hand paid and in
consideration of the premises and the mutual covenants herein contained, the
parties hereto, intending to be legally bound hereby, agree to amend and restate
the Prior Agreement so that as so amended and restated, it shall read as
follows:
1. DEFINITIONS; RULES OF CONSTRUCTION.
(a) Capitalized terms used in this Agreement, unless otherwise
defined, shall have the meaning ascribed to such terms in the Credit Agreement.
In addition, as used herein, the following terms shall have the meanings
ascribed to them:
"ACCEPTABLE COMMITMENT LETTER" shall mean a commitment letter
that is issued by a bank or other financial institution acceptable
to Lender, provides for Take-Out Financing on or before the last day
of the Extension Period and has no due diligence, credit approval or
other conditions precedent to funding other than customary
conditions relating to documentation and closing.
"AGREEMENT" shall mean this First Amended and Restated Extension
Agreement, as at any time amended.
"APPLICABLE LAW" shall mean all laws, rules and regulations
applicable to the Person, conduct, transaction, covenant or Loan
Document in question, including all applicable common law and
equitable principles; all provisions of all applicable state,
federal and foreign constitutions, statutes, rules, regulations and
orders of governmental bodies; and all orders, judgments and decrees
of all courts and arbitrators.
"BB&T" shall mean Branch Banking and Trust Company.
"COLLECTIONS" shall mean all proceeds received from a sale, lease
or other disposition of any of the Collateral, including payments by
Borrower's customers and any proceeds of insurance relating to any
of the Collateral.
"EXPENSE REIMBURSEMENT" shall mean $2,305, to be paid by Borrower
to Lender by wire transfer, which shall be used by Lender to
reimburse it for legal fees and expenses incurred by Lender in
August, September, and October (through the date of this Agreement)
of 2005. The amount of the Expense Reimbursement as provided herein
is only an estimate, and Lender reserves the right to recover from
Obligors and the Collateral all costs, fees and expenses for which
Borrower has agreed to indemnify Lender pursuant to the Loan
Documents.
"EXTENSION CONDITIONS" shall mean the conditions to Lender's
extension of the due date of the Obligations set forth in Section 4
of this Agreement.
"EXTENSION PERIOD" shall mean the period commencing on the date
of this Agreement and ending at 5:00 o'clock p.m. on the close of
business on December 31, 2005.
"INSOLVENCY PROCEEDING" shall mean any action, case or proceeding
commenced by or against a Person, or any agreement of such Person,
for (a) the entry of an order for relief under any chapter of the
Bankruptcy Code or other insolvency or debt adjustment law (whether
state, federal or foreign); (b) the appointment of a receiver,
trustee, liquidator or other custodial for such Person or any part
of its property; (c) an assignment or trust mortgage for the benefit
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of creditors of such Person; or (d) the liquidation, dissolution or
winding up of the affairs of such Person.
"LOAN DOCUMENTS" shall mean the Credit Documents and the Term
Loan Documents.
"NEW LC" shall mean an original executed Irrevocable Letter of
Credit, together with a form of Sight Draft, issued by BB&T for the
benefit of Lender, in the form of or under the terms provided in the
document attached hereto as EXHIBIT A.
"OBLIGATIONS" shall mean all liabilities, indebtedness and
obligations at any time owing by Borrower to Lender, whether direct
or indirect, absolute or contingent, due or to become due, secured
or unsecured or liquidated or unliquidated, including all of the
Revolver Obligations and all of the Term Loan Obligations.
"OBLIGORS" shall mean Borrower and Guarantor.
"PAID IN FULL" shall mean, with reference to the Obligations, the
full, final and indefeasible payment in full of all of such
Obligations, the termination of all commitments and any other
obligations that Lender may have under any of the Credit Documents
to extend or renew credit, and the depositing with Lender by
Borrower of cash in an amount equal to 102% of the aggregate undrawn
amount of all Letters of Credit outstanding and all other contingent
obligations at the time due and owing Lender.
"PARTIAL PAYMENT" shall mean a payment by wire transfer from BB&T
to Lender, for the benefit of (and as an advance to) Borrower, in an
amount not less than $760,752.17.
"PARTIAL RELEASE" shall mean a UCC-3 Amendment in the form
attached hereto as EXHIBIT B.
"REVOLVER OBLIGATIONS" shall mean all of the "Obligations" under
(and as defined in) the Credit Agreement.
"STIPULATED DEFAULTS" shall mean the Events of Default referenced
in Section 2(c) of this Agreement.
"TAKE-OUT FINANCING" shall mean financing procured by Borrower
from a third-party financing source in an amount sufficient to cause
all of the Obligations to be Paid in Full at or before the end of
the Extension Period.
"TERMINATION DATE" shall mean the sooner to occur of (a) 5:01
o'clock p.m. on the last day of the Extension Period or (b) the date
on which the Extension Period terminates as provided in Section 5 of
this Agreement.
"TERM LOAN OBLIGATIONS" shall mean all indebtedness, liabilities
and obligations at any time owed by Borrower to Lender under any of
the Term Loan Documents.
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(b) The terms "herein," "hereof" and "hereunder" and other words
of similar import refer to this Agreement as a whole and not to any particular
section, paragraph or subdivision. Any pronoun used shall be deemed to cover all
genders. All references to statutes and related regulations shall include any
amendments of same and any successor statutes and regulations; to any of the
Loan Documents shall include any and all modifications thereto and any and all
restatements, extensions or renewals thereof; to any Person shall mean and
include the successors and permitted assigns of such Person; to "including" and
"include" shall be understood to mean "including, without limitation" (and, for
purposes of this Agreement and each other Loan Document, the parties agree that
the rule of EJUSDEM GENERIS shall not be applicable to limit a general
statement, which is followed by or referable to an enumeration of specific
matters to matters similar to the matters specifically mentioned); or to the
time of day shall mean the time of day on the day in question in Atlanta,
Georgia, unless otherwise expressly provided in this Agreement.
2. ACKNOWLEDGMENTS AND STIPULATIONS BY OBLIGORS. Each Obligor
acknowledges, stipulates and agrees that (a) as of the opening of business on
October 3, 2005, the aggregate principal balance of Loans outstanding totaled
$756,096.50, the aggregate undrawn amount of Letters of Credit outstanding
totaled $281,690, and the unpaid principal balance of the Term Loan Obligations
totaled $389,405.53, in each case exclusive of interest, fees, other charges and
attorneys' fees at any time payable by Borrower under any of the Loan Documents;
(b) all of the Obligations (other than contingent obligations with respect to
the undrawn amount of Letters of Credit) are absolutely due and payable by
Obligors to Lender without any defense, deduction, offset or counterclaim (and,
to the extent Obligors had any defense, deduction, offset or counterclaim on the
date hereof, the same is hereby waived); (c) Events of Default have occurred and
now exist under the Credit Documents and are continuing by reason of Borrower's
failure to cause the Obligations to be Paid in Full on May 31, 2005, and
Borrower's breach of its obligations under Section 8.07 of the Credit Agreement
(and, such Event of Default under the Credit Agreement is also a default under
the Term Note); (d) the Loan Documents executed by Borrower are legal, valid and
binding obligations of Borrower and are enforceable against Borrower in
accordance with their terms; (e) the security interests and other liens granted
by Borrower to Lender in the Collateral are duly perfected, first priority
security interests and liens; (f) the Guaranty is a legal, valid and binding
obligation of the Guarantor and is enforceable against Guarantor in accordance
with its terms; (g) each of the recitals contained at the beginning of this
Agreement are true and correct; and (h) prior to executing this Agreement, each
Obligor consulted with and had the benefit of advice of legal counsel of its own
selection and each has relied upon the advice of such counsel, and in no part
upon any representation of Lender concerning the legal effects of this Agreement
or any provision hereof.
3. AGREEMENT TO EXTEND. If and for so long as each of the Extension
Conditions is satisfied, Lender agrees that during the Extension Period it will
not, solely by reason of the existence on this date of the Stipulated Defaults,
(i) exercise any default remedy available to Lender under any of the other Loan
Documents or Applicable Law to enforce collection from Obligors of any of the
Obligations or to foreclose its liens upon or security interests in any of the
Collateral during the Extension Period; or (ii) enforce Section 10.14 of the
Credit Agreement, which requires the deposit to the Cash Collateral Account of
monies equal to 102% of the undrawn amount of outstanding Letters of Credit, but
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the foregoing shall not in any event be deemed to constitute a waiver of any
Lender's right to require the deposit of such monies to the Cash Collateral
Account on or after the Termination Date. Nothing in this Agreement shall be
construed to alter the demand nature of that portion of the Obligations payable
on demand under the terms of any of the Loan Documents. Notwithstanding the
foregoing and anything to the contrary in this Agreement, Lender shall be
permitted to draw on the New LC at any time in accordance with its terms.
4. EXTENSION CONDITIONS. The following conditions shall constitute
Extension Conditions, the timely satisfaction of each and every one of which
during the Extension Period shall be a condition to all agreements of Lender
hereunder:
(a) Each Obligor duly and punctually observes, performs and
discharges each and every obligation and covenant on its part to be performed
under this Agreement;
(b) No Event of Default occurs or exists (other than the
Stipulated Defaults that are in existence on the date hereof) and each Obligor
strictly complies with all of the terms, conditions and covenants contained in
each of the Loan Documents that are applicable to such Obligor;
(c) No Insolvency Proceeding is commenced by or against either
Obligor;
(d) No material adverse change occurs in either Obligor's
business, prospects or financial condition after the date hereof;
(e) All of the Obligations are Paid in Full on or before the last
day of the Extension Period;
(f) Guarantor does not attempt to revoke or terminate, or dispute
Guarantor's liability under, Guarantor's Guaranty;
(g) No representation or warranty made by either Obligor in this
Agreement proves to have been false or misleading in any material respect;
(h) Borrower is able to pay and does pay, as the same shall
become due and payable, all debts incurred by Borrower on or after the date
hereof;
(i) No Person to whom Borrower is indebted for money borrowed
accelerates the maturity or demands payment of such indebtedness, in whole or in
part;
(j) On or before the first Business Day after execution of this
Agreement, the Partial Payment, the New LC and the Expense Reimbursement are
delivered to Lender; and
(k) Borrower diligently and in good faith attempts to procure
Take-Out Financing on or before the last day of the Extension Period and
periodically apprises Lender of the status of its attempts to procure such
Take-Out Financing.
5. TERMINATION OF EXTENSION. If any one or more of the Extension
Conditions is not satisfied, then (i) Lender's agreement to extend the maturity
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of the Obligations shall at Lender's election, but without further notice to or
demand upon Obligors, terminate, (ii) all of the Obligations shall be
immediately due and payable without any further notice to or demand upon
Obligors, all of which notice and demand each Obligor hereby waives, and (iii)
Lender shall thereupon have and may exercise from time to time all of the
remedies available to it under the Loan Documents and Applicable Law as a
consequence of an Event of Default. On and after the Termination Date, all of
the Obligations shall be immediately due and payable and Lender shall be
authorized, at any time and without further notice to or demand upon Obligors or
any other Person, to enforce all of its remedies under the Loan Documents and
Applicable Law.
6. NO LOANS OR EXTENSIONS OF CREDIT. Borrower shall not be permitted
to obtain any Loans from Lender pursuant to the Credit Agreement or otherwise,
but Lender shall be entitled, in its sole and absolute discretion, to make one
or more Loans to Borrower to refinance or to reimburse Lender for any Obligation
as provided in the Credit Agreement.
7. PARTIAL PAYMENT AND PARTIAL RELEASE OF SECURITY INTEREST. On or
before the first Business Day after execution of this Agreement, Borrower shall
cause the Partial Payment, the Expense Reimbursement and the New LC to be
delivered to Lender. No later than two (2) Business Days after the date on which
Lender has received the Partial Payment and the Expense Reimbursement (in
immediately available funds) and the New LC, Lender shall cause the Partial
Release to be filed with the Secretary of State of the State of South Dakota.
Neither Lender's acceptance of the Partial Payment nor the filing of the Partial
Release is intended or shall be construed to constitute an accord and
satisfaction, a reinstatement of the maturity of any of the Obligations, a
release of any of the Obligations (other than that portion of the Obligations
that are repaid by the Partial Payment), or a release of any of Lender's liens
upon and security interests in property of Borrower that is not included as
released collateral in the Partial Release.
8. APPLICABLE RATE OF INTEREST.
(a) From and after the date of this Agreement, and except as
otherwise provided in this Section 8, interest shall accrue on the unpaid
principal balance of the Obligations outstanding at the rate of 5-1/2% per
annum, calculated and paid in accordance with the terms of the Term Note.
(b) If by October 30, 2005, Borrower has not delivered to Lender
a term sheet, proposal letter or other writing definitively evidencing the fact
that Borrower is engaged in active discussions with a bank or other financial
institution to provide Take-Out Financing, then the otherwise applicable rate of
interest with respect to the principal balance of the Obligations shall be
increased by 100 basis points, effective November 1, 2005.
(c) If by November 30, 2005, Borrower has not delivered to Lender
an Acceptable Commitment Letter, then the otherwise applicable rate of interest
with respect to the Obligations shall be increased by an additional 100 basis
points (in addition to and after giving effect to any increase provided for in
paragraph (b) of this Section 8), effective December 1, 2005.
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(d) During the Extension Period, and provided that each of the
Extension Conditions is satisfied, Lender shall not be authorized to charge or
collect any default rate of interest that Lender would otherwise be entitled to
charge or collect in the absence of this Agreement, but on and after the
Termination Date Lender may charge and collect such default rate of interest to
the extent authorized by the Loan Documents.
9. ADDITIONAL COVENANTS. During the Extension Period and thereafter
for so long as any of the Obligations is outstanding, Borrower shall not pay any
cash or distribute any other property to or for the benefit of Parent, any
Subsidiary of Borrower or any Affiliate of Borrower, Parent or any Subsidiary,
whether as a dividend or other distribution or as payment of any management,
consulting or other fees at any time incurred by Borrower to or in favor of any
of such Persons.
10. APPLICATION OF PROCEEDS. Each Obligor hereby waives the right,
if any, to direct the manner in which Lender applies any payments, Collections
or other Collateral proceeds to the Obligations and agrees that notwithstanding
anything to the contrary in the Credit Agreement, Lender may apply and reapply
all such payments, Collections or proceeds to the Obligations as Lender in its
sole and absolute discretion elects from time to time.
11. REPRESENTATIONS AND WARRANTIES OF OBLIGORS. Each Obligor
represents and warrants that (a) no Default or Event of Default exists under the
Loan Documents, except for the Stipulated Defaults that are in existence on the
date hereof; (b) subject to the existence of the Stipulated Defaults, the
representations and warranties of Borrower contained in the Loan Documents were
true and correct in all material respects when made and continue to be true and
correct in all material respects on the date hereof; (c) the execution, delivery
and performance by Obligors of this Agreement and the consummation of the
transactions contemplated hereby are within the corporate powers of Obligors and
have been duly authorized by all necessary corporate action on the part of
Obligors, do not require any approval or consent, or filing with, any
governmental agency or authority, do not violate any provisions of any law, rule
or regulation or any provision of any order, writ, judgment, injunction, decree,
determination or award presently in effect in which either Obligor is named or
any provision of the charter documents of either Obligor and do not result in a
breach of or constitute a default under any agreement or instrument to which
either Obligor is a party or by which it or any of its properties are bound; (d)
this Agreement constitutes the legal, valid and binding obligation of each
Obligor, enforceable against such Obligor in accordance with its terms; (e) each
Obligor is entering into this Agreement freely and voluntarily with the advice
of legal counsel of his or its own choosing; and (f) each Obligor has freely and
voluntarily agreed to the releases, waivers and undertakings set forth in this
Agreement.
12. REAFFIRMATION OF OBLIGATIONS. Borrower hereby ratifies and
reaffirms the Loan Documents and all of its obligations and liabilities
thereunder. Guarantor hereby ratifies and reaffirms the validity, legality and
enforceability of the Guaranty and agrees that such Guaranty is and shall remain
in full force and in effect until all the Obligations have been paid in full.
13. SPECIFIC WAIVERS. Each Obligor hereby waives, to the fullest
extent permitted by Applicable Law, (a) any and all rights to receive notice in
connection with the enforcement by Lender of its liens and security interests
with respect to any of the Collateral, including notices under or in connection
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with O.C.G.A. Sections 11-9-610 through 613 and Section 11-9-623, and (b) the
benefit of any statute of limitations that might otherwise bar the recovery of
any of the Obligations from any one or more of them.
14. RELATIONSHIP OF PARTIES; NO THIRD PARTY BENEFICIARIES. Nothing
in this Agreement shall be construed to alter the existing debtor-creditor
relationship between Borrower and Lender, nor is this Agreement intended to
change or affect in any way the relationship between Lender and Guarantor to one
other than a debtor-creditor relationship. This Agreement is not intended, nor
shall it be construed, to create a partnership or joint venture relationship
between or among any of the parties hereto. No Person other than a party hereto
is intended to be a beneficiary hereof and no Person other than a party hereto
shall be authorized to rely upon or enforce the contents of this Agreement.
15. ENTIRE AGREEMENT; MODIFICATION OF AGREEMENT. This Agreement, the
Prior Agreement and the other Loan Documents constitute the entire understanding
of the parties with respect to the subject matter hereof and thereof. This
Agreement may not be modified, altered or amended except by agreement in writing
signed by all the parties hereto.
16. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of Georgia.
17. NON-WAIVER OF DEFAULT. Neither this Agreement, nor Lender's
agreements hereunder, nor Lender's acceptance of the Partial Payment and filing
of the Partial Release, shall be deemed a waiver of or consent to the Stipulated
Defaults or any of other Event of Default. Obligors agree that such Events of
Default shall not be deemed to have been waived, released or cured by virtue of
Lender's execution of and performance under this Agreement.
18. NO NOVATION, ETC. This Agreement is not intended to be, nor
shall it be construed to create, a novation or accord and satisfaction and the
Credit Agreement and the other Loan Documents shall remain in full force and
effect. Notwithstanding any prior mutual temporary disregard of any of the terms
of any of the Loan Documents, the parties agree that the terms of each of the
Loan Documents shall be strictly adhered to on and after the date hereof, except
as expressly modified by this Agreement.
19. COUNTERPARTS; FACSIMILE SIGNATURES; WAIVERS OF NOTICE OF
ACCEPTANCE. This Agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed shall constitute an original, but all of which taken together shall be
one and the same instrument. Any signed counterpart of this Agreement that is
transmitted by facsimile transmission shall be deemed to constitute an original
counterpart for all purposes. In proving this Agreement, the Prior Agreement or
any of the other Loan Documents, it shall not be necessary to produce or account
for more than one such counterpart signed by the party against whom enforcement
is sought. Notice of Lender's acceptance hereof is hereby waived.
20. REIMBURSEMENT FOR LEGAL EXPENSES. Borrower agrees to reimburse
Lender for all reasonable costs and expenses, including legal fees, incurred by
Lender in connection with the drafting, negotiation, execution and closing of
this Agreement.
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21. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns.
22. RELEASE OF CLAIMS. TO INDUCE LENDER TO ENTER INTO THIS
AGREEMENT, EACH OBLIGOR HEREBY RELEASES, ACQUITS AND FOREVER DISCHARGES LENDER,
AND LENDER'S OFFICERS, DIRECTORS, AGENTS, EMPLOYEES, SUCCESSORS AND ASSIGNS,
FROM ALL LIABILITIES, CLAIMS, DEMANDS, ACTIONS OR CAUSES OF ACTION OF ANY KIND
(IF ANY THERE BE), WHETHER ABSOLUTE OR CONTINGENT, DUE OR TO BECOME DUE,
DISPUTED OR UNDISPUTED, LIQUIDATED OR UNLIQUIDATED, AT LAW OR IN EQUITY, OR
KNOWN OR UNKNOWN, THAT ANY ONE OR MORE OF THEM NOW HAVE OR EVER HAVE HAD AGAINST
LENDER, WHETHER ARISING UNDER OR IN CONNECTION WITH ANY OF THE LOAN DOCUMENTS OR
OTHERWISE.
23. WAIVER OF JURY TRIAL. TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, THE PARTIES HERETO EACH HEREBY WAIVES THE RIGHT TO TRIAL BY JURY
IN ANY ACTION, SUIT OR PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR
ANY OF THE LOAN DOCUMENTS.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered as of the date first written above.
ATTEST: XXXXX SYSTEMS, INC.
("Borrower")
/s/ Xxxxx Xxxxxxxx By: /s/ Xxxxx Xxxxxxxx
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Secretary Title: President
ATTEST: XXXXX CORPORATION
("Guarantor")
/s/ Xxxxxx Xxxx By: /s/ Xxxx X. Xxxxxxx
-------------------------------- -----------------------------
Secretary Title: President
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Accepted on October 6, 2005.
SUNTRUST BANK
("Lender")
By: /s/ Xxxxxxx X. Xxxxxx
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Title: Senior Vice President
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