Document:

FIRST
        AMENDMENT TO EMPLOYMENT AGREEMENT

       

      Kody
        Newland

       

       

      This
        First Amendment to Employment Agreement (the “Amendment”)
        by and
        between NutraCea, a California corporation (the “NutraCea”)
        and
        Kody Newland (the “Employee’),
        entered into February 27, 2006 (the “Agreement”),
        is
        made and effective as of the 8th day of January 2008. Capitalized terms not
        specifically defined hereunder shall have the meanings assigned to them under
        the Agreement. 

       

      1.  Term.
        Section
        3.1 of the Agreement is hereby amended to provide an extended term of two
        years,
        beginning February 28, 2008, and ending February 27, 2010. Section 3.1 of
        the
        Agreement is replaced, amended and restated to read in its entirety as
        follows:

       

      “3.1 Term
        and Termination. Unless
        earlier terminated for Cause (as defined below), Nutracea employs the Employee
        under the terms of this Agreement for a term continuing from the date of
        this
        Amendment through the end of business on February 27, 2010. The term may
        be
        further extended by mutual agreement of the parties on a month to month basis.”

       

      2.  Automobile
        Expense.
        Section
        4.5 of the Agreement is hereby amended to increase the automobile allowance
        provided to Employee to $850 per month. Section 4.5 of the Agreement is
        replaced, amended, and restated to read in its entirety as follows:

       

      “4.5 Car
        Allowance. Employer
        shall provide Employee with an automobile allowance in the amount of $850
        per
        month. Notwithstanding the foregoing, Employer shallnot be obligated to make
        any
        down payments for the purchase of any automobile by or on behalf of
        Employee.”

       

      All
        other
        terms and conditions of the Agreement remain unchanged, except as specifically
        amended by this Amendment, and shall continue in full force and effect, except
        as may be required to effect the forgoing Amendment.

    

     

    
      
        	EMPLOYER:	 	 	EMPLOYEE:
	 	 	 	 
	 	 	 	 
	 	 	 	 
	
                
Nutracea,
                by __________	 	 	
                
Kody
                Newland
	Its
                __________	 	 	 

      

       

      
        
           

        

          1EMPLOYMENT
      AGREEMENT

    

    This
      Employment Agreement (“Agreement”) is entered into by and between NutraCea, a
      California corporation with with
      principal offices at 5090 40th
      North
      Street, Suite 400, Phoenix, Arizona 85018 (“NutraCea”) and Leo Gingras, an
      individual residing at _________________ (“Employee”)
      effective as of January 8, 2008 (“Effective Date”), as follows:

    

    RECITALS

    

    A. NutraCea
      previously employed Employee pursuant to the terms of an employment letter
      dated
      February 7, 2007 and executed by Employee February 8, 2007 (“Letter Agreement”).
      Employee commenced employment with NutraCea March 15, 2007.

    

    B.
       The
      parties desire to set forth more fully the terms and conditions of Employee’s
      employment. The terms of this Agreement supersede and replace in its entirety
      the terms of the Letter Agreement.

    

    AGREEMENT

    

    1. Employment.
      NutraCea wishes to employ Employee and Employee agrees to provide services
      for
      NutraCea on the terms and conditions set forth below.

    

    2. Employment;
      Scope of Employment.
      Employee shall act as the Chief Operating Officer of NutraCea. NutraCea reserves
      the exclusive right to modify and designate Employee’s specific duties from time
      to time in any manner consistent with Employee’s status as Chief Operating
      Officer. No modification or change of Employee’s responsibilities and/or duties
      shall modify, change or revoke any provision of this Agreement.

    

    2.1 Best
      Efforts; Full Working Time. Employee
      agrees to devote his best efforts, attention, skill and experience to the
      performance of Employee’s duties all in accordance with the provisions of this
      Agreement. Employee shall apply his entire full working time to performing
      these
      services. 

    

    2.2 Supervision
      and Direction of Services.
      All of Employee’s services shall be under the supervision and direction of the
      Chief Executive Officer of NutraCea and the Board of Directors of NutraCea.
      

    

    2.3 Rules. Employee
      shall be bound by all the policies, rules and regulations of NutraCea now in
      force and by all such other policies, rules and regulations as may be hereafter
      implemented and shall faithfully observe and abide by the same. No such policy,
      rule or regulation shall alter, modify or revoke Employee’s status as an at-will
      employee or any other provision of this Agreement. 

    

    
      
         

      

      
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    2.4 Exclusive
      Services.
      During the term of this Agreement and any extension of this Agreement, Employee
      shall not, directly or indirectly, whether as a partner, employee, creditor,
      shareholder, independent contractor or otherwise, promote, participate or engage
      in any activity or other business which NutraCea deems in its sole discretion
      to
      be competitive in any way with NutraCea’s current or future business operations.
      Employee agrees that Employee shall not enter into an agreement to establish,
      form, contract with or become employed by a competing business of NutraCea
      while
      Employee is employed by NutraCea. 

    

    2.5 Non-Solicitation.
      To the fullest extent permissible under applicable law, Employee agrees that
      both during the term of this Agreement and for a period of two (2) year
      following termination of this Agreement, Employee shall not take any action
      to
      induce employees or independent contractors of NutraCea to sever their
      relationship with NutraCea and accept an employment or an independent contractor
      relationship with any other business.

    

    2.6 Office
      Location.
      Employee shall primarily perform his duties under this Agreement at NutraCea’s
      offices, and at such other locations as the Chief Executive Officer may
      designate from time-to-time.

    

    3. Term
      and Termination; Payments upon Termination.
      

    

    3.1 Term
      and Termination.
      Unless earlier terminated for Cause (as defined below), Nutracea hereby
      employees the Employee for a period commencing upon the Effective Date and
      ending on ________, 2010 (the “Term”). The Term may be extended by mutual
      agreement of the parties on a month to month basis.

    

    3.1.1 Termination
      for Cause.
      “Cause” for termination of Employee’s employment shall mean the occurrence of
      any of the following: 

    

    (a) Employee
      has materially breached the terms hereof;

    

    (b) Employee,
      in the reasonable determination of the Board of Directors of NutraCea has been
      grossly negligent or engaged in material willful or gross misconduct in the
      performance of his duties;

    

    (c) has
      failed to meet written standards established by NutraCea for the performance
      of
      duties hereunder;

    

    
      
         

      

      
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    (d) Employee
      has committed, as determined by the Board of Directors of NutraCea, or has
      been
      convicted of fraud, moral turpitude, embezzlement, theft, or dishonesty or
      other
      criminal conduct;

    

    (e) Employee
      has taken other actions or omitted to take any actions such that such action
      or
      omissions constitute legal cause for termination under California law, as then
      in effect; or

    

    (f) Habitual
      misuse of alcohol or any non prescribed drug.

    

    3.2 Payments
      Upon Termination.
      

     

    3.2.1For
      Cause.
      Following any termination by the Company for Cause, Employee shall be entitled
      to receive in cash payment an amount equal to all previously accrued but unpaid
      or unused compensation, including but not limited to, salary, vacation pay
      and
      Employee may retain the vested portion of any stock and stock options properly
      and duly granted to Employee as of such date, subject and pursuant to the terms
      of the stock option agreements or stock purchase agreements entered into between
      NutraCea and Employee, which grant NutraCea certain repurchase
      rights.

    

    3.2.2 Without
      Cause.
      Following any termination by the Company without Cause, Employee (or Employee’s
      estate) shall be entitled to receive in cash payment an amount equal to all
      previously accrued but unpaid or unused compensation, including but not limited
      to, salary, vacation pay and Employee may retain the vested portion of any
      stock
      and stock options properly and duly granted to Employee as of such date, subject
      and pursuant to the terms of the stock option agreements or stock purchase
      agreements entered into between NutraCea and Employee, which grant NutraCea
      certain repurchase rights. In addition, Employee shall be entitled to receive
      severance payments equal in the aggregate to twelve (12) months of Employee’s
      salary, reduced only by disability payments received by Employee from long
      term
      disability insurance maintained by the Company, which payments shall be made
      at
      regular payroll intervals. 

     

    Employee’s
      Initials ___________

    

    4. Compensation;
      Benefits.
      

    

    4.1 Salary.
      Employee shall be paid at a rate, which if annualized, equals two hundred twenty
      thousand dollars ($220,000) per year subject to normal payroll withholdings
      and
      NutraCea’s standard payroll practices. Commencing on the second anniversary of
      the Effective Date of this Agreement, Employee’s salary shall be increased
      annually by a cost of living factor equal to the percentage of such salary
      that
      is equal to the percentage increase in the published Consumer Price Index
      selected by NutraCea (“CPI”) for such year over the same CPI for the previous
      year of the term. 

     

    4.2 Bonus.
      Employee shall be eligible to participate in any NutraCea bonus program that
      is
      applicable to officers of NutraCea as may be
      adopted
      and in effect from time to time (subject to the terms and conditions of any
      such
      program). In addition, Employee shall be eligible for an annual discretionary
      bonus as approved by the Chief Executive Officer of NutraCea after review and
      approval by the NutraCea compensation committee and/or its Board of
      Directors. 

    

    4.3 Stock
      Options.
      NutraCea previously granted to Employee, as of Employee’s February 8, 2007
      initial employment date, a nonqualified stock option to purchase 250,000 shares
      of NutraCea’s common stock pursuant to the terms and conditions of the NutraCea
      Equity Incentive Plan and an associated Nonqualified Stock Option Agreement.
      Such option is subject to the vesting schedule set forth therein. Employee
      may,
      from time to time and at NutraCea’s sole discretion, be granted additional stock
      options. All option grants shall be subject to Board of Directors (and/or its
      compensation committee) approval and to the terms and conditions of the
      corresponding Option Agreements. 

    

    
      
         

      

      
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    4.4 Car
      Allowance.
      Employer will provide Employee with an automobile allowance in the amount of
      $850 per month. Notwithstanding the foregoing, Employer shall not be obligated
      to make any down payments for the purchase of any automobile by or on behalf
      of
      Employee.

    

    4.5. Vacation
      and other Standard Benefits.
      Employee shall be entitled to four (4) weeks of paid vacation time per year
      of
      Employee’s employment. Employee may not accrue vacation time in excess of such
      four (4) week maximum. Accrual of vacation time shall be subject to the terms
      and conditions of NutraCea’s vacation policy. Employee shall be entitled to
      health benefits in accordance with NutraCea’s standard policies. In addition,
      Employee is entitled to paid holidays, sick leave and other benefits in
      accordance with NutraCea’s standard policies. Employee shall be reimbursed for
      reasonable business expenses, subject to prior approval by NutraCea in
      accordance with NutraCea’s standard policies for employees and conditioned upon
      Employee’s prior presentation to NutraCea’s accounting department of appropriate
      receipts or such other verification of expenses as NutraCea may require from
      time to time.

    

    5. Employment
      Information.
      Employee represents and warrants to NutraCea that information provided by
      Employee in connection with Employee’s employment and any supplemental
      information provided to NutraCea is complete, true and materially correct in
      all
      respects. Employee has not omitted any information that is or may reasonably
      be
      considered necessary or useful to evaluate the information provided by Employee
      to NutraCea. Employee shall immediately notify NutraCea in writing of any change
      in the accuracy or completeness of all such information.

     

    6. Trade
      Secrets.
      Employee acknowledges that NutraCea has gone to great time and expense to
      develop customers and to develop procedures and processes for development of
      products and services and the sales of products and services. Such procedures
      and processes in addition to various other types of proprietary information
      are
      included as part of the “confidential information” described in the “Proprietary
      Information Agreement” attached hereto as Exhibit B. Employee has previously
      executed the Proprietary Information Agreement or agrees to execute NutraCea’s
      Proprietary Information Agreement contemporaneously with the execution of this
      Agreement and employment. 

     

    7. Remedies
      for Breach of Covenant Regarding Confidentiality.
      The parties agree that the breach by Employee of any covenants contained in
      Sections 2.4, 2.5, 5 and 6 will result in immediate and irreparable injury
      to
      NutraCea. In the event of any breach by Employee of the covenants contained
      in
      Sections 2.4, 2.5, 5 or 6, NutraCea shall be entitled to seek recourse through
      all available legal and equitable remedies necessary or useful to prevent any
      likelihood of immediate or irreparable injury to NutraCea. The parties agree
      that, in the case of such a breach or threat of breach by Employee of any of
      the
      provisions of such Sections, NutraCea may take any appropriate legal action,
      including without limitation action for injunctive relief, consisting of orders
      temporarily restraining and preliminarily and permanently enjoining such actual
      or threatened breach. 

     

    
      
         

      

      
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    8. Miscellaneous.
      

    

    8.1 Choice
      of Law, Jurisdiction, Venue.
      The rights and obligations of the parties and the interpretation and performance
      of this Agreement shall be governed by the laws of California, excluding its
      conflict of laws rules. The exclusive jurisdiction and venue of any legal action
      brought by either party under this Agreement shall be in the County of
      Sacramento, California.

    

    8.2. Entire
      Agreement.
      This Agreement, the Proprietary Information Agreement dated ____________
      described in Section 6 and the Option Agreement referenced in Section 4.2
      contain the entire Agreement among the parties and supersede the Letter
      Agreement and all prior and contemporaneous oral and written agreements,
      understandings and representations among the parties, including without
      limitation any offer letter. There are no representations, agreements,
      arrangements, or understandings, whether oral or written, between or among
      the
      parties relating to the subject matter of this Agreement that are not fully
      expressed herein and therein.

    

    8.3 Notices.
      Any notice under this Agreement shall be in writing, and any written notice
      or
      other document shall be deemed to have been duly given (i) on the date of
      personal service on the parties, (ii) on the third business day after mailing,
      if the document is mailed by registered or certified mail, (iii) one day after
      being sent by professional or overnight courier or messenger service
      guaranteeing one-day delivery, with receipt confirmed by the courier, or (iv)
      on
      the date of transmission if sent by telegram, telex, telecopy or other means
      of
      electronic transmission resulting in written copies, with receipt confirmed.
      Any
      such notice shall be delivered or addressed to the parties at the addresses
      set
      forth above or at the most recent address specified by the addressee through
      written notice under this provision. Failure to conform to the requirement
      that
      mailings be done by registered or certified mail shall not defeat the
      effectiveness of notice actually received by the addressee.

     

    8.4 Severability.
      NutraCea and Employee agree that should any provision of this Agreement be
      declared or be determined by any court of competent jurisdiction to be illegal,
      invalid or unenforceable, the legality, validity and enforceability of the
      remaining parts, terms and provisions shall not be affected thereby, and said
      illegal, unenforceable or invalid part, term or provision shall be deemed not
      to
      be part of this Agreement. 

     

    
      
         

      

      
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    8.5 Attorneys’
      Fees.
      If the services of an attorney are used by any party to secure the performance
      of this Agreement or otherwise upon the breach or default of another party
      to
      this Agreement, or if any judicial remedy or arbitration is sought to enforce
      or
      interpret any provision of this Agreement or the rights and duties of any person
      in relation thereto, the prevailing party shall be entitled to reasonable
      attorneys’ fees, costs and other expenses, in addition to any other relief to
      which such party may be entitled. Any award of damages by any court or
      arbitration as a result of the breach of this Agreement or any of its provisions
      shall include an award of prejudgment interest from the date of the breach
      at
      the maximum amount of interest allowed by law.

    

    8.6 Amendment.
      The provisions of this Agreement may be modified at any time by agreement of
      the
      parties. Any such agreement hereafter made shall be ineffective to modify this
      Agreement in any respect unless in writing and signed by the party against
      whom
      enforcement of the modification or discharge is sought.

     

    8.7 No
      Transfer or Assignment; No Third-Party Beneficiaries.
      The rights of Employee hereunder have been granted by NutraCea with the
      understanding that this Agreement is personal to, and shall be performed by
      Employee individually. This Agreement is not transferable or assignable by
      Employee in any manner. No person or entity other than NutraCea and Employee
      shall have any rights whatsoever under this Agreement. No person or entity
      other
      than NutraCea or Employee shall have any right to enforce any provision of
      this
      Agreement, or to recover damages on account of the breach of this Agreement.
      No
      heir, successor or assign of Employee, whether voluntarily or by operation
      of
      law, shall have or succeed to any rights of NutraCea or Employee
      hereunder.

     

    8.8 Waiver.
      Any of the terms or conditions of this Agreement may be waived at any time
      by
      the party entitled to the benefit thereof, but no such waiver shall affect
      or
      impair the right of the waiving party to require observance, performance or
      satisfaction of that term or condition as it applies on a subsequent occasion
      or
      of any other term or condition.

     

    8.9 Resolution
      of Disputes.

     

    8.9.1 Resolution
      of Disputes.
      NutraCea and Employee agree that any claim or controversy arising out of or
      pertaining to this Agreement or the termination of Employee's employment,
      including but not limited to, claims of wrongful treatment or termination
      allegedly resulting from discrimination, harassment or retaliation on the basis
      of race, sex, age, national origin, ancestry, color, religion, marital status,
      status as a veteran of the Vietnam era, physical or mental disability, medical
      condition, or any other basis prohibited by law ("Dispute") shall be resolved
      by
      binding arbitration as provided in this paragraph. The parties agree that no
      party shall have the right to sue any other party regarding a Dispute except
      as
      provided in this paragraph.

    

    8.9.2   Binding
      Arbitration.
       Any
      Dispute between the parties shall be submitted to, and conclusively determined
      by, binding arbitration in accordance with this paragraph. The provisions of
      this paragraph shall not preclude any party from seeking injunctive or other
      provisional or equitable relief in order to preserve the status quo of the
      parties pending resolution of the Dispute, and the filing of an action seeking
      injunctive or other provisional relief shall not be construed as a waiver of
      that party's arbitration rights. The arbitration of any Dispute between the
      parties to this Agreement shall be governed by the provisions of the California
      Arbitration Act. (California Code of Civil Procedure section 1280, et seq.,
      including the provision of California Code of Civil Procedure section 1283.05.)
      

    

    
      
         

      

      
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    8.9.3 Appointment
      of Arbitrator.
      The arbitrator shall be a neutral arbitrator selected by NutraCea and Employee.
      Within thirty (30) days of service of a demand for arbitration by either party
      to this Agreement, the parties shall endeavor in good faith to select a single
      arbitrator. If they fail to do so within that time period, each party shall
      have
      an additional period of fifteen (15) days in which to appoint an arbitrator
      and
      those arbitrators within fifteen (15) days shall select an additional
      arbitrator. If any party fails to appoint an arbitrator or if the arbitrators
      initially selected by the parties fail to appoint an additional arbitrator
      within the time specified herein, any party may apply to have an arbitrator
      appointed for the party who has failed to appoint, or to have the additional
      arbitrator appointed, by the presiding judge for the Superior Court, Sacramento
      County, California. If the presiding judge, acting in his or her personal
      capacity, is unable or unwilling to appoint the additional arbitrator, that
      arbitrator shall be selected in accordance with California Code of Civil
      Procedure section 1281.6.

    

    8.9.4 Initiation
      of Arbitration.
      In the case of any Dispute between the parties to this Agreement, either party
      shall have the right to initiate the binding arbitration process provided for
      in
      this paragraph by serving upon the other party a demand for arbitration within
      the statutory time period from the date the Dispute first arose. 

     

    8.9.5   Location
      of Arbitration.
      Any arbitration hearing shall be conducted in Sacramento County,
      California.

    

    8.9.6   Applicable
      Law.
      The law applicable to the arbitration of any Dispute shall be the law of the
      State of California, excluding its conflicts of law rules.

    

    8.9.7   Arbitration
      Procedures.
      Except as otherwise provided in this paragraph, the arbitration shall be
      governed by the California Arbitration Act (Code Civ. Proc., § 1280 et
      seq.). The parties shall be entitled to conduct discovery sufficient to
      adequately arbitrate their claims or defenses, including access to essential
      documents and witnesses, as determined by the arbitrator and subject to limited
      judicial review. In addition, either party may choose, at that party’s
      discretion, to request that the arbitrators resolve any dispositive motions
      prior to the taking of evidence on the merits of the Dispute. By way of example,
      such dispositive motions would include, but not be limited to, those which
      would
      entitle a party to summary judgment or summary adjudication of issues pursuant
      to Code of Civil Procedure section 437c or resolution of a special defense
      as
      provided for at Code of Civil Procedure section 597. In the event a party to
      the
      arbitration requests that the arbitrators resolve a dispositive motion, the
      arbitrators shall receive and consider any written or oral arguments regarding
      the dispositive motion, and shall receive and consider any evidence specifically
      relating thereto, and shall render a decision thereon, before hearing any
      evidence on the merits of the Dispute. 

    

    
      
         

      

      
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    8.9.8   Scope
      of Arbitrators' Award or Decision.
      NutraCea and Employee agree that if the arbitrators find any Disputed claim
      to
      be meritorious, the arbitrators shall have the authority to order all forms
      of
      legal and/or equitable relief that would otherwise be available in court and
      that is appropriate to the claim. Any decision or award by the arbitrators
      shall
      be in writing and shall be specific enough to permit limited judicial review
      if
      necessary. 

    

    8.9.9 Costs
      of Arbitration; Attorneys’ Fees.
      NutraCea shall bear any costs of arbitration that are over and above costs
      that
      would be incurred by Employee had he/she not been required to arbitrate the
      Dispute, but instead had been free to bring the action in court. Each party
      shall bear its own attorneys’ fees. However, NutraCea and Employee agree that
      the arbitrators, in their discretion and consistent with applicable law, may
      award to the prevailing party the costs and attorneys’ fees incurred by that
      party in participating in the arbitration process as long as they do not exceed
      those that would be incurred by Employee in a court action.

    

    8.9.10  Acknowledgment
      of Consent to Arbitration.
      NOTICE:
      BY EXECUTING THIS AGREEMENT EMPLOYEE AGREES TO HAVE ANY DISPUTE ARISING OUT
      OF
      THE MATTERS INCLUDED IN THE "RESOLUTION OF DISPUTES" PROVISION DECIDED BY
      NEUTRAL ARBITRATION AS PROVIDED BY CALIFORNIA LAW AND EMPLOYEE WAIVES ANY RIGHTS
      EMPLOYEE MIGHT POSSESS TO HAVE THE DISPUTE LITIGATED IN A COURT OR JURY TRIAL.
      BY EXECUTING THIS AGREEMENT EMPLOYEE WAIVES EMPLOYEE’S JUDICIAL RIGHTS TO
      APPEAL. IF EMPLOYEE REFUSES TO SUBMIT TO ARBITRATION AFTER AGREEING TO THIS
      PROVISION, EMPLOYEE MAY BE COMPELLED TO ARBITRATE UNDER THE AUTHORITY OF THE
      CALIFORNIA CODE OF CIVIL PROCEDURE. EMPLOYEES AGREEMENT TO THIS ARBITRATION
      PROVISION IS VOLUNTARY. BY EXECUTING THIS AGREEMENT EMPLOYEE IS INDICATING
      THAT
      EMPLOYEE HAS READ AND UNDERSTOOD THE FOREGOING AND AGREES TO SUBMIT DISPUTES
      ARISING OUT OF THE MATTERS INCLUDED IN THIS ARBITRATION OF DISPUTES PROVISION
      TO
      NEUTRAL ARBITRATION.

     

    8.10 Exhibits.
      All exhibits to which reference is made are deemed incorporated in this
      Agreement whether or not actually attached.

     

    
      	 	NutraCea
	 	 
	 	____________________
	 	
              By:
                _________________________

            
	 	Title: ________________________
	 	 
	 	 
	 	Employee: Leo
              Gingras
	 	 
	 	_______________

    

              

    

    

    

    

    [SIGNATURE
      PAGE TO EMPLOYMENT AGREEMENT]

    
      
         

      

      
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    EXHIBIT
      A

    

    OPTION
      AGREEMENT

     

     

    
 

    

    
      
         

      

      
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    EXHIBIT
      B

    

    PROPRIETARY
      RIGHTS AGREEMENT

     

     

     

     

    
      
         

      

      
        10

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