SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 1)*
ERLY INDUSTRIES INC.
(Name of Issuer)
Common Stock, par value $.01 per share
(Title of Class of Securities)
268839 10 7
(CUSIP Number)
N. Dwight Cary, Esq.
Murphy, Weir & Butler
2049 Century Park East, 21st floor
Los Angeles, CA 90067
310-788-3700
(Name, Address and Telephone Number
of Person Authorized to
Receive Notices and Communications)
July 28, 1995
(Date of Event which Requires Filing
of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ]
Check the following box if a fee is being paid with this statement / / (A fee is
not required only if the reporting person: (1) has a previous statement on file
reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendments subsequent
thereto reporting beneficial ownership of less than five percent of such class.
See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter disclosure
provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
"filed" for the purpose of Section 18 of the Securities Exchange Act of 1934
("Act") or otherwise subject to
<PAGE>
liabilities of that section of the Act but shall be subject to all other
provisions of the Act (however, see the Notes).
SCHEDULE 13D
CUSIP No. 268839 10 7
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Internationale Nederlanden (U.S.) Capital Corporation
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b) / X /
3. SEC USE ONLY
4. SOURCE OF FUNDS*
WC
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) / /
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF 7. SOLE VOTING POWER 483,530
SHARES
BENEFICIALLY 8. SHARED VOTING POWER 0
OWNED BY
EACH 9. SOLE DISPOSITIVE POWER 483,530
REPORTING
PERSON
WITH 10. SHARED DISPOSITIVE POWER 0
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
483,530
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
11.51%
14. TYPE OF REPORTING PERSON*
CO
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 (INCLUDING
EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
Amendment No. 1 to Schedule 13D
This Statement amends the Schedule 13D, dated March 7, 1995 (the "Schedule
13D"), filed by Internationale Nederlanden (U.S.) Capital Corporation with
respect to the Common Stock, $.01 par value (the "Common Stock") of ERLY
Industries Inc., a California corporation ("Issuer"). Capitalized terms used
without definition have the meanings ascribed to them in the Schedule 13D.
I. Item 3 of the Schedule 13D, Source and Amount of Funds or Other
Consideration, is hereby amended by adding the following paragraphs:
"At the request of Issuer, Holder and Issuer entered into (i) Amendment
No. 1 to A Warrant, (ii) Amendment No. 1 to B Warrant, (iii) Amendment No. 1 to
C Warrant, and (iv) Amendment No. 1 to D Warrant, each dated as of July 28, 1995
(the warrant amendments described in (i)-(iv) above, the "Warrant Amendments"),
pursuant to which, among other things, Holder agreed to (a) amend the
antidilution provisions contained in the warrants with respect to certain other
convertible securities of Issuer, (b) reduce the "call price" with respect to
the A Warrant and B Warrant from $8.75 per share to $5.50 per share (subject to
adjustment) , and to extend the period during which the "call" option can be
exercised from April 1, 1996 to September 30, 1996, so long as the obligations
owing to Holder under the ERLY Juice Loan Agreement and certain obligations of
American Rice, Inc., a Texas corporation and a subsidiary of which Issuer owns
81% of the voting power ("ARI"), to Holder (as described in Item 6) were
satisfied in full on or before September 30, 1995, (c) permit partial exercise
by Issuer of its "call" rights under the A Warrant and the B Warrant, and (d)
allow Issuer to assign its "call" rights under the A Warrant and the B Warrant
to affiliates of Issuer. Also at the request of Issuer, Holder and Issuer
entered into an Agreement dated as of July 11, 1995, pursuant to which, among
other things, Holder agreed that certain fees and costs incurred by Holder in
connection with the Warrant Amendments would be borne by Holder if the
obligations owing to Holder under the ERLY Juice Loan Agreement and the
obligations of ARI owing to Holder were satisfied in full on or before September
30, 1995.
Upon the effectiveness of the Warrant Amendments, (i) the A Warrant and B
Warrant each will be exercisable for 241,765 shares of Common Stock, for an
aggregate total of 483,530, (ii) the number of shares of Common Stock for which
the C Warrant will be exercisable after April 1, 1996 is 48,353, representing
1.09% of the number of issued and outstanding shares of Common Stock of issuer
(assuming exercise in full of all rights of Holder to acquire Common Stock), and
(iii) the number of shares of Common Stock for which the D Warrant will be
exercisable after April 1, 1996 is 193,412, representing 4.35% of the number of
issued and outstanding shares of Common Stock of issuer (assuming exercise in
full of all rights of Holder to acquire Common Stock).
One of Issuer's subsidiaries currently is seeking to commence an offering
of debt securities. It is contemplated that $10.5 million of such financing will
be used to provide an intercompany loan by the subsidiary to Issuer. It is
expected that upon the consummation of such financing and intercompany loan,
Issuer may exercise its "call" option with respect to a significant portion of
the Warrants. Issuer also is expected to repay to Holder all of the obligations
owing under the ERLY Juice Loan Agreement in the amount of approximately $9.6
million. It also is expected that upon consummation of such financing, ARI's
obligations owing to Holder in the amount of approximately $23.4 million would
be repaid.
<PAGE>
The descriptions of the Warrant Amendments contained herein are qualified
in their entirety by reference to such Warrant Amendments, copies of which are
attached hereto as Exhibits 1, 2, 3 and 4, respectively."
II. Item 5(a) of the Schedule 13D, "Interest in Securities of the Issuer," is
amended and restated in its entirety by the following:
"Holder may be deemed to own beneficially (as that term is defined in Rule
13d-3 ("Rule 13d-3") under the Act) the shares of Common Stock which it has a
right to acquire pursuant to the Warrants (the "Warrant Shares"). After giving
effect to all adjustments, Holder has a right as of August 1, 1995 to acquire
483,530 shares of Common Stock pursuant to the Warrants. According to the
Issuer's Form 10-K for the fiscal year ended March 31, 1995, there were
3,718,272 shares of Common Stock outstanding as of June 15, 1995. Based on such
number and assuming exercise of the Warrants in full, the Warrant Shares that
Holder may be deemed to own beneficially (as that term is defined in Rule 13d-3)
represent approximately 11.51% of the outstanding Common Stock. Except as
described herein, none of (i) Holder, (ii) U.S. Holdings, (iii) INB, (iv) ING
and, (v) to the best knowledge of Holder, the persons identified in Schedule 1
hereto, presently beneficially own any Common Stock."
Item 7. Material to be Filed as Exhibits.
Exhibit 1 - Amendment No. 1 to A Warrant dated as of July 28, 1995 between
Erly Industries Inc. and Internationale Nederlanden (U.S.) Capital
Corporation, amending warrant dated as of October 22, 1993 and
amended and restated as of February 16, 1995.
Exhibit 2 - Amendment No. 1 to B Warrant dated as of July 28, 1995 between
Erly Industries Inc. and Internationale Nederlanden (U.S.) Capital
Corporation, amending warrant dated as of October 22, 1993,
amended as of November 18, 1994 and amended and restated as of
February 16, 1995.
Exhibit 3 - Amendment No. 1 to C Warrant dated as of July 28,
1995 between Erly Industries Inc. and Internationale
Nederlanden (U.S.) Capital Corporation, amending warrant
dated as of February 16, 1995.
Exhibit 4 - Amendment No. 1 to D Warrant dated as of July 28,
1995 between Erly Industries Inc. and Internationale
Nederlanden (U.S.) Capital Corporation, amending warrant
dated as of February 16, 1995.
Exhibit 5 - Agreement dated July 11, 1995, between Erly Industries Inc. and
Internationale Nederlanden (U.S.) Capital Corporation, relating to
certain matters, including fees and expenses.
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: August 2, 1995
INTERNATIONALE NEDERLANDEN (U.S.)
CAPITAL CORPORATION
By: /s/ Michael W. Adler
Name: Michael W. Adler
Title: Vice President
SCHEDULE 1
Set forth below are the name and position of each of the executive
officers and directors of (i) Holder, (ii) U.S. Holdings, (iii) INB and (iv)
ING.
Except as otherwise indicated, the principal occupation of each person
listed below is as a Senior Officer of Holder, U.S. Holdings, INB and/or ING, as
the case may be. Unless otherwise indicated, each person listed below is a
citizen of The Netherlands.
The business address of each person at Holder and U.S. Holdings is 135
East 57th Street, New York, New York 10022. The business address of each person
at INB is De Amsterdamse Poort, 1102 MG, Amsterdam Zuid - Oost, Postbus 1800,
1000 AV, Amsterdam, The Netherlands. The business address of each person at ING
is Strawinskylaan 2631, Postbus 810, 1000 AV Amsterdam, The Netherlands.
Executive Officers of Holder
Name Position
L.C. Grijns Chairman
H.D. Bartges President
(U.S.)
Directors of Holder
Principal Occupation
Name (if other than as indicated above)
L.C. Grijns
Chairman
H.D. Bartges
(U.S.)
J.C. Gray Treasurer and Senior Managing Director of Holder
(U.S.)
<PAGE>
Executive Officers of U.S. Holdings
Name Position
L.C. Grijns Chairman
H.D. Bartges President
(U.S.)
P. Geraghty Senior Managing Director
(U.S.)
Directors of U.S. Holdings
Principal Occupation
Name (if other than as indicated above)
L.C. Grijns
Chairman
G.J. Tammes Retired
J. Kemp General Manager of INB
J.C. Grey
(U.S.)
H.D. Bartges
(U.S.)
H.H. Idzerda General Manager of INB
C. Maas
J.H.M Lindenbergh
D. Arends
Executive Officers of INB
Name Position
G.J.A. van der Lugt Chairman
J.H.M. Lindenbergh Member
C. Maas Member
M. Minderhoud Member
Directors of INB
Principal Occupation
Name (if other than as indicated above)
J.W. Berghuis Vice Chairman, Executive Board, Koninklijke Pakhoed N.V.
J. Kamminga Chairman of the Board, MKB Nederland; director of
Makelaarskantoor J. Kamminga & Zonen B.V.
O.H.A. van Royen Retired
G. Verhagen Retired
J.J.A. Vollebergh Retired
<PAGE>
Executive Officers of ING
Name Position
A.G. Jacobs Chairman
G.J.A. van der Lugt Vice Chairman
J.H. Holsboer Member
H. Huizinga Member
E. Kist Member
J.H.M. Lindenbergh Member
C. Maas Member
M. Minderhoud Member
Directors of ING
Principal Occupation
Name (if other than as indicated above)
J.H. Choufoer, Retired
Chairman
T.C. Braakman, Retired
Vice Chairman
P.A.J.M. Steenkamp, Retired
Vice Chairman
L.A.A. van den Berghe Professor at Erasmus University of Rotterdam,
(Belgium) The Netherlands (Economics and management of
insurance companies)
J.W. Berghuis Vice Chairman, Executive Board, Koninklijke Pakhoed N.V.
J.P. Erbe Retired
V. Halberstadt Professor at Leyden University, The Netherlands
(Faculty of Law, Public Finance)
J. Kamminga Chairman of the Board, MKB Nederland; director
of Makelaarskantoor J. Kamminga & Zonen B.V.
O.H.A. van Royen Retired
J.J. van Rijn Retired
G. Verhagen Retired
M. Ververs Chairman of Executive Board, Wolters Kluwer N.V.
J.J.A. Vollebergh Retired
EXHIBIT INDEX
Exhibit 1 -- Amendment No. 1 to "A" Warrant Agreement dated as of July 28, 1995
between Erly Industries Inc. and Internationale Nederlanden (U.S.)
Capital Corporation, amending warrant dated as of October 22, 1993
and amended and restated as of February 16, 1995.
Exhibit 2 -- Amendment No. 1 to "B" Warrant Agreement dated as of July 28, 1995
between Erly Industries Inc. and Internationale Nederlanden (U.S.)
Capital Corporation, amending warrant dated as of October 22, 1993,
amended as of November 18, 1994 and amended and restated as of
February 16, 1995.
<PAGE>
Exhibit 3 -- Amendment No. 1 to "C" Warrant Agreement dated as of July 28, 1995
between Erly Industries Inc. and Internationale Nederlanden (U.S.)
Capital Corporation, amending warrant dated as of February 16,
1995.
Exhibit 4 -- Amendment No. 1 to "D" Warrant Agreement dated as of July 28, 1995
between Erly Industries Inc. and Internationale Nederlanden (U.S.)
Capital Corporation, amending warrant dated as of February 16,
1995.
Exhibit 5 -- Agreement dated July 11, 1995, between Erly Industries Inc. and
Internationale Nederlanden (U.S.) Capital Corporation.
EXECUTION COPY
AMENDMENT NO. 1 TO A WARRANT
THIS AMENDMENT NO. 1 TO A WARRANT (this "First A Warrant
Amendment"), dated as of July 28, 1995, is made by ERLY Industries Inc., a
California corporation (the "Issuer") in favor of INTERNATIONALE NEDERLANDEN
(U.S.) CAPITAL CORPORATION, a Delaware corporation ("INCC").
RECITALS
A. Issuer has issued in favor of INCC that certain Amended and Restated
Warrant to Purchase Common Stock of ERLY Industries Inc., denominated the "A
Warrant," dated as of February 16, 1995 (the "A Warrant"). INCC is the sole
"Holder" (as defined in the A Warrant) of the A Warrant.
B. Concurrently herewith, Issuer and INCC are entering into that certain
Agreement (the "Agreement"), pursuant to which, among other things, INCC has
agreed to amend the A Warrant as provided for herein.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, it is agreed as follows:
1. Amendments to A Warrant.
a. Amendment of Section 1 (Definitions). Section 1 of the
Warrant is amended as follows:
(i) ARI. Add a new definition as follows:
"ARI" means American Rice, Inc., a Subsidiary of Issuer.
(ii) Callable Warrant Stock. Add a new defined term as
follows:
"Callable Warrant Stock" means, as of any time of
determination, (i) all Warrant Stock that is purchasable
pursuant to a Warrant held by any Holder and (ii) all
Issued Warrant Stock held by any Holder.
EXECUTION COPY
4658\A014LD.JBL Amendment 1 to A Warrant
<PAGE>
(iii) Call Closing Date. The term "Call Closing Date" shall
be, with respect to any exercise of the Call Option, as defined in Section 26.B
of the Warrant as such Section is amended hereby.
(iv) Call Cutoff Date. Delete the definition of "Call Cutoff
Date" and replace it with the following:
"Call Cutoff Date" means the earlier to occur of (i)
Maturity and (ii) (A) if the Call Share Price Reduction
Conditions shall have been satisfied on or before
September 30, 1995, September 30, 1996, and (B) if the
Call Share Price Reduction Conditions shall not have
been satisfied on or before September 30, 1995, April 1,
1996.
(v) Call Period. Delete the definition of "Call Period" and
replace it with the following:
"Call Period" mean the period, if any, that commences on
the Termination Date and ends on the Call Cutoff Date
(it being understood that the Call Cutoff Date could
occur prior to the Termination Date, in which case there
shall be no Call Period).
(vi) Call Price. The term "Call Price" shall be, with respect
to any exercise of the Call Option, as defined in
Section 26.D of the Warrant as such Section is amended
hereby.
(vii) Call Price Credit. Delete the definition of "Call Price
Credit."
(viii)Call Share Price. Delete the definition of "Call Share
Price" and replace it with the following:
"Call Share Price" means, as of February 16, 1995, and
subject to the last sentence of this definition, $8.75.
If, at any time after February 16, 1995, any of the
adjustments provided for in Section 4.A(2) or 4.A(3)
hereof are made, the Call Share Price shall be adjusted
to the amount obtained by multiplying the Call Share
Price in effect immediately prior to such adjustment by
a fraction, the numerator of which shall be the number
of shares of Common Stock constituting a Stock Unit
immediately prior to the relevant adjustment provided
for
EXECUTION COPY
4658\A014LD.JBL Amendment 1 to A Warrant
2
<PAGE>
in Section 4.A(2) or 4.A(3) hereof, as the case may
be, and the denominator of which shall be the number of
shares of Common Stock constituting a Stock Unit
immediately thereafter. Notwithstanding the first
sentence of this definition, if the Call Share Price
Reduction Conditions shall have been satisfied on or
before September 30, 1995, the Call Share Price shall be
adjusted, as of the time that such conditions have been
satisfied, to be equal to the Reduced Call Share Price
as of such time (provided that the provisions of the
second sentence of this definition shall continue to
apply to the Call Share Price after such adjustment has
been made).
(ix) Call Share Price Reduction Conditions. Add a new
definition as follows:
"Call Share Price Reduction Conditions" means (i) the
commencement of the Call Period and (ii) the full and
complete satisfaction of all monetary obligations of ARI
to INCC.
(x) ING Securities Fees. Delete the definition of "ING
Securities Fees."
(xi) Issued Warrant Stock. Add a new definition as follows:
"Issued Warrant Stock" means any Warrant Stock that has
been issued pursuant to the Warrants.
(xii) Reduced Call Share Price. Add a new definition as
follows:
"Reduced Call Share Price" means, as of any time of
determination, an amount obtained by multiplying the
Call Share Price in effect as of such time by the
following fraction:
5.50
8.75
provided, however, that in no event shall the Reduced
Call Share Price be less than zero.
EXECUTION COPY
4658\A014LD.JBL Amendment 1 to A Warrant
3
<PAGE>
b. Amendment of Section 4.C (Issuance of Additional Shares of
Common Stock or Convertible Securities). Delete Section 4.C of the Warrant and
replace it with the following:
C. Issuance of Additional Shares of Common Stock or
Convertible Securities. If at any time or from time to time
the Issuer shall (except as provided below) issue, whether in
connection with the merger of a corporation into the Issuer or
otherwise, any Additional Shares of Common Stock or
Convertible Securities, then the number of shares of Common
Stock comprising a Stock Unit from such time shall be adjusted
to be that number determined by multiplying the number of
shares of Common Stock comprising a Stock Unit immediately
prior to such adjustment by a fraction (x) the numerator of
which shall be (A) the number of shares of Fully Diluted
Outstanding Common Stock (other than shares for which this
Warrant is exercisable) immediately prior to such adjustment
plus (B) the number of such Additional Shares of Common Stock
so issued (or the number of shares of Common Stock into which
such Convertible Securities are convertible or exchangeable,
as the case may be), and (y) the denominator of which shall be
the number of shares of Fully Diluted Outstanding Common Stock
(other than shares for which this Warrant is exercisable)
immediately prior to such adjustment.
Upon any subsequent adjustment in the number of shares
of Common Stock into which any Convertible Securities are
convertible or exchangeable (including any reductions in such
number), the number of shares of Common Stock comprising a
Stock Unit shall be recalculated in accordance with the
preceding sentence; provided, however, that if such subsequent
adjustment is a reduction in the number of shares of Common
Stock into which any Convertible Securities are convertible or
exchangeable, the numerator to be used in such recalculation
shall be, in lieu of the numerator described in (x) in the
preceding sentence, (A) the number of shares of Fully Diluted
Outstanding Common Stock (other than shares for which this
Warrant is exercisable) immediately prior to such adjustment
minus (B) a number equal to any reduction in the number of
shares of Common Stock into which such Convertible Securities
are convertible or exchangeable, as the case may be.
No further adjustments of the number of shares of Common
Stock comprising a Stock Unit shall be made upon the
EXECUTION COPY
4658\A014LD.JBL Amendment 1 to A Warrant
4
<PAGE>
actual issuance of Common Stock upon the conversion or
exchange of any Convertible Securities.
The foregoing provisions of this Subsection C shall not
apply to any issuance of Additional Shares of Common Stock for
which an adjustment is provided under Subsection A or B of
this Section 4.
c. Amendment of Section 4.D(2) (When Adjustments to Be Made).
Delete Section 4.D(2) of the Warrant and replace it with the following:
2. When Adjustments to Be Made. The adjustments required
by the preceding Subsections of this Section 4 shall be made
whenever and as often as any specified event requiring an
adjustment shall occur (including upon any adjustment in the
number of shares of Common Stock into which any Convertible
Securities are convertible or exchangeable). For the purpose
of any adjustment, any specified event shall be deemed to have
occurred at the close of business on the date of its
occurrence.
d. Amendment of Section 26 (Call Option). Delete Section 26 of
the Warrant and replace it with the following:
26. Call Option.
A. Option to Repurchase Callable Warrant Stock. From
time to time during the Call Period, the Issuer shall have the
right, subject to the terms and conditions of this Section 26,
to repurchase from Holders all or part of the Callable Warrant
Stock held by all Holders as of the relevant Call Closing Date
(such right shall be referred to as the "Call Option").
B. Notice and Exercise of Call Option. In order to
exercise (whether in whole or in part) the Call Option, the
Issuer must give written notice to all Holders during the Call
Period, which notice must
(i) specify the date of the repurchase of the
Callable Warrant Stock to be repurchased pursuant to
such exercise of the Call Option (such date shall be,
with respect to such repurchase, the "Call Closing
Date"), which date shall be no less than three (3) and
no more than ten (10) Business Days after the date such
notice is given,
EXECUTION COPY
4658\A014LD.JBL Amendment 1 to A Warrant
5
<PAGE>
(ii) specify the number of shares of Callable
Warrant Stock to be repurchased pursuant to such
exercise of the Call Option,
(iii) state the Call Share Price applicable as of
such Call Closing Date,
(iv) state the Call Price applicable as of such
Call Closing Date without regard to the amount specified
in clause (ii) of the definition of Call Price (which
amount shall be specified by INCC in a written notice to
Issuer no later than one Business Day prior to the
relevant Call Closing Date), and
(v) indicate the methods by which the Call Share
Price and the Call Price (without regard to the amount
specified in clause (ii) of the definition of Call
Price) were calculated.
If, upon any partial exercise of the Call Option, (x) more
than one Holder holds Warrants and/or (y) any of the Callable
Warrant Stock is Issued Warrant Stock, INCC shall determine,
in its sole and absolute discretion, which Callable Warrant
Stock (and related Warrants) shall be subject to such Call
Option, and shall so notify the Issuer and any other Holders
no less than one Business Day prior to the Call Closing Date.
C. Transactions on Call Closing Date. On the Call
Closing Date with respect to any exercise of the Call Option,
at the offices of INCC or such other location as is designated
by INCC, (A) each Holder shall surrender to the Issuer any
Warrants held by it which are being repurchased pursuant to
the exercise of the relevant Call Option (as determined, in
the case of a partial exercise of the Call Option, pursuant to
the last sentence of Section 26.B hereof), without being
required to make any representation or warranty, and (B) each
Holder shall deliver to the Issuer any certificates
representing Issued Warrant Stock held by it, to the extent
that such Issued Warrant Stock is subject to the exercise of
the relevant Call Option (as determined, in the case of a
partial exercise of the Call Option, pursuant to the last
sentence of Section 26.B hereof), duly endorsed for transfer
to the Issuer, without being required to make any
representation or warranty, all against payment of the Call
Price applicable to such exercise of the Call
EXECUTION COPY
4658\A014LD.JBL Amendment 1 to A Warrant
6
<PAGE>
Option by wire transfer of immediately available funds to an
account designated by each such Holder for such purpose. Upon
the delivery of any such Warrants and/or Issued Warrant Stock
to the Issuer pursuant to this Section 26.C, the Issuer shall
immediately cancel such Warrants and any such Warrant Stock
being repurchased. If less than all of any Warrant is being
repurchased pursuant to such exercise of the Call Option, the
Issuer shall deliver to the relevant Holder a Warrant
exercisable for the number of Stock Units available under such
Warrant that are not being repurchased pursuant to such Call
Option.
D. Call Price. The purchase price payable for the
repurchase of the Callable Warrant Stock pursuant to an
exercise of the Call Option (such price, with respect to any
such exercise of the Call Option, the "Call Price"), is, as of
the relevant Call Closing Date, (i) an amount equal to the
then applicable Call Share Price multiplied by the number of
shares of Callable Warrant Stock being repurchased upon such
exercise of the Call Option plus (ii) if any of the Callable
Warrant Stock being repurchased is Issued Warrant Stock, the
aggregate Exercise Price that was paid by Holders to the
Issuer for such Issued Warrant Stock pursuant to the Warrant.
E. No Restriction on Holder's Right to Exercise Warrant;
Certain Restrictions on Transferability. Nothing in this
Section 26 restricts or otherwise limits Holder's right to
exercise the Warrant in whole or in part at any time prior to
the commencement of or during the Call Period; provided,
however, that Holder hereby agrees that (i) it shall not sell
or otherwise transfer the Warrant, other than to an Affiliate
of Holder which agrees to be bound by the terms hereof, prior
to the Call Cutoff Date, and (ii) if it does exercise or
partially exercise the Warrant prior to the Call Cutoff Date,
it shall not sell or otherwise transfer any issued Warrant
Stock obtained upon such exercise, other than to an Affiliate
of Holder which agrees to be bound by the terms hereof, prior
to the Call Cutoff Date.
F. Assignment of Call Option to Affiliates of Issuer.
The Issuer may, upon written notice to all Holders, assign its
right to exercise the Call Option to any of its Affiliates,
provided that (i) no such Affiliate may assign such rights to
any Person other than Issuer, (ii) in connection with any such
assignment, the assignee must agree in a writing delivered to
all Holders to be
EXECUTION COPY
4658\A014LD.JBL Amendment 1 to A Warrant
7
<PAGE>
bound by the terms and conditions of the Warrant as they relate
to the Call Option, and (iii) notwithstanding any such
assignment, the provisions of Section 26.C, and the rights and
obligations of Issuer and Holders pursuant to such Section
26.C, shall remain unaffected.
2. Representations and Warranties. Issuer hereby represents and
warrants as follows:
a. Organization, etc. Issuer is a corporation duly organized,
validly existing and in good standing under the laws of the state of California,
is duly qualified to do business and is in good standing as a foreign
corporation in each jurisdiction where the nature of its business makes such
qualification necessary, has full power and authority to own, and hold under
lease, its property and to conduct its business as presently conducted by it and
as proposed to be conducted, and has full power and authority to enter into and
perform its obligations under this First A Warrant Amendment.
b. Power; Authorization. The execution, delivery and performance by
Issuer of this First A Warrant Amendment: (a) are within Issuer's powers; (b)
have been duly authorized by all necessary or proper corporate or stockholder
action; (c) are not in contravention of any provision of Issuer's articles of
incorporation or bylaws, (d) will not violate any law or regulation, or any
order or decree of any court or governmental authority; (e) will not conflict
with or result in the breach or termination of, constitute a default under, or
accelerate any performance required by, any indenture, mortgage, deed of trust,
lease, agreement or other instrument to which Issuer is a party or by which
Issuer or any of its property is bound; (f) will not result in the creation or
imposition of any lien upon any of the property of Issuer; and (g) do not
require the consent or approval of any governmental authority or any other
Person.
c. Validity, etc. This First A Warrant Amendment constitutes the
legal, valid, and binding obligation of Issuer enforceable in accordance with
its terms, subject, as to enforcement, only to bankruptcy, insolvency,
reorganization, moratorium, or similar laws at the time in effect affecting the
enforceability of the rights of creditors generally.
3. Miscellaneous.
a. Complete Agreement. This First A Warrant Amendment and the A
Warrant as amended hereby constitute the complete agreement between Issuer and
INCC with respect to the subject matter hereof and thereof, and supersede any
prior written or oral agreements, writings, communications or understandings of
the parties with respect to the subject matter hereof and
EXECUTION COPY
4658\A014LD.JBL Amendment 1 to A Warrant
8
<PAGE>
thereof, including, without limitation, that certain letter agreement from INCC
to Issuer dated as of June 9, 1995.
b. Headings. The various headings of this First A Warrant
Amendment are inserted for convenience only and shall not affect the meaning or
interpretation of this First A Warrant Amendment.
c. Governing Law. This First A Warrant Amendment shall be governed
by, and construed and enforced in accordance with, the laws of the State of
California applicable to contracts made and performed in such state, without
regard to the principles thereof regarding conflict of laws.
d. Effect of This First A Warrant Amendment. Issuer hereby
acknowledges and agrees to the following:
(i) Except to the extent specifically amended by the terms of
this First A Warrant Amendment, all of the provisions of the A Warrant shall
remain in full force and effect to the extent in effect on the date hereof.
EXECUTION COPY
4658\A014LD.JBL Amendment 1 to A Warrant
9
<PAGE>
(ii) In the event of any inconsistency between the provisions
of this First A Warrant Amendment and any other provision of the A Warrant, the
terms and provisions of this First A Warrant Amendment shall govern and control.
e. Effective Date of This First A Warrant Amendment. This First A
Warrant Amendment shall be effective as of February 16, 1995.
IN WITNESS WHEREOF, Issuer has caused this First A Warrant Amendment
to be signed in its name by its President or Vice President and attested by its
Secretary or an Assistant Secretary as of the day and year first above written.
ERLY INDUSTRIES INC., a California
corporation
By: /S/ Kurt Grey
--------------
Name: Kurt Grey
Title: Vice President
ATTEST:
By: /S/ Thomas A. Whitlock
-----------------------
Name: Thomas A. Whitlock
Title: Vice President;
Controller
THE UNDERSIGNED, AS SOLE HOLDER OF
THE A WARRANT, CONSENTS TO THE FOREGOING
AMENDMENT OF THE A WARRANT
INTERNATIONALE NEDERLANDEN (U.S.)
CAPITAL CORPORATION, a Delaware
corporation
By: /S/ Michael W. Adler
-----------------------
Name: Michael W. Adler
Title: Vice President
EXECUTION COPY
4658\A014LD.JBL Amendment 1 to A Warrant
10
EXECUTION COPY
AMENDMENT NO. 1 TO B WARRANT
THIS AMENDMENT NO. 1 TO B WARRANT (this "First B Warrant
Amendment"), dated as of July 28, 1995, is made by ERLY Industries Inc., a
California corporation (the "Issuer") in favor of INTERNATIONALE NEDERLANDEN
(U.S.) CAPITAL CORPORATION, a Delaware corporation ("INCC").
RECITALS
A. Issuer has issued in favor of INCC that certain Amended and Restated
Warrant to Purchase Common Stock of ERLY Industries Inc., denominated the "B
Warrant," dated as of February 16, 1995 (the "B Warrant"). INCC is the sole
"Holder" (as defined in the B Warrant) of the B Warrant.
B. Concurrently herewith, Issuer and INCC are entering into that certain
Agreement (the "Agreement"), pursuant to which, among other things, INCC has
agreed to amend the B Warrant as provided for herein.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, it is agreed as follows:
1. Amendments to B Warrant.
a. Amendment of Section 1 (Definitions). Section 1 of the
Warrant is amended as follows:
(i) ARI. Add a new definition as follows:
"ARI" means American Rice, Inc., a Subsidiary of Issuer.
(ii) Callable Warrant Stock. Add a new defined term as
follows:
"Callable Warrant Stock" means, as of any time of
determination, (i) all Warrant Stock that is purchasable
pursuant to a Warrant held by any Holder and (ii) all
Issued Warrant Stock held by any Holder.
EXECUTION COPY
4658\A018LA.JBL Amendment 1 to B Warrant
<PAGE>
(iii) Call Closing Date. The term "Call Closing Date" shall
be, with respect to any exercise of the Call Option, as defined in Section 26.B
of the Warrant as such Section is amended hereby.
(iv) Call Cutoff Date. Delete the definition of "Call Cutoff
Date" and replace it with the following:
"Call Cutoff Date" means the earlier to occur of (i)
Maturity and (ii) (A) if the Call Share Price Reduction
Conditions shall have been satisfied on or before
September 30, 1995, September 30, 1996, and (B) if the
Call Share Price Reduction Conditions shall not have
been satisfied on or before September 30, 1995, April 1,
1996.
(v) Call Period. Delete the definition of "Call Period" and
replace it with the following:
"Call Period" mean the period, if any, that commences on
the Termination Date and ends on the Call Cutoff Date
(it being understood that the Call Cutoff Date could
occur prior to the Termination Date, in which case there
shall be no Call Period).
(vi) Call Price. The term "Call Price" shall be, with respect
to any exercise of the Call Option, as defined in Section 26.D of the Warrant as
such Section is amended hereby.
(vii) Call Price Credit. Delete the definition of "Call Price
Credit."
(viii)Call Share Price. Delete the definition of "Call Share
Price" and replace it with the following:
"Call Share Price" means, as of February 16, 1995, and
subject to the last sentence of this definition, $8.75.
If, at any time after February 16, 1995, any of the
adjustments provided for in Section 4.A(2) or 4.A(3)
hereof are made, the Call Share Price shall be adjusted
to the amount obtained by multiplying the Call Share
Price in effect immediately prior to such adjustment by
a fraction, the numerator of which shall be the number
of shares of Common Stock constituting a Stock Unit
immediately prior to the relevant adjustment provided
for
EXECUTION COPY
4658\A018LA.JBL Amendment 1 to B Warrant
2
<PAGE>
in Section 4.A(2) or 4.A(3) hereof, as the case may be,
and the denominator of which shall be the number of
shares of Common Stock constituting a Stock Unit
immediately thereafter. Notwithstanding the first
sentence of this definition, if the Call Share Price
Reduction Conditions shall have been satisfied on or
before September 30, 1995, the Call Share Price shall be
adjusted, as of the time that such conditions have been
satisfied, to be equal to the Reduced Call Share Price
as of such time (provided that the provisions of the
second sentence of this definition shall continue to
apply to the Call Share Price after such adjustment has
been made).
(ix) Call Share Price Reduction Conditions. Add a new
definition as follows:
"Call Share Price Reduction Conditions" means (i) the
commencement of the Call Period and (ii) the full and
complete satisfaction of all monetary obligations of ARI
to INCC.
(x) ING Securities Fees. Delete the definition of "ING
Securities Fees."
(xi) Issued Warrant Stock. Add a new definition as follows:
"Issued Warrant Stock" means any Warrant Stock that has
been issued pursuant to the Warrants.
(xii) Reduced Call Share Price. Add a new definition as
follows:
"Reduced Call Share Price" means, as of any time of
determination, an amount obtained by multiplying the
Call Share Price in effect as of such time by the
following fraction:
5.50
8.75
provided, however, that in no event shall the Reduced
Call Share Price be less than zero.
EXECUTION COPY
4658\A018LA.JBL Amendment 1 to B Warrant
3
<PAGE>
b. Amendment of Section 4.C (Issuance of Additional Shares of
Common Stock or Convertible Securities). Delete Section 4.C of the Warrant and
replace it with the following:
C. Issuance of Additional Shares of Common Stock or
Convertible Securities. If at any time or from time to time
the Issuer shall (except as provided below) issue, whether in
connection with the merger of a corporation into the Issuer or
otherwise, any Additional Shares of Common Stock or
Convertible Securities, then the number of shares of Common
Stock comprising a Stock Unit from such time shall be adjusted
to be that number determined by multiplying the number of
shares of Common Stock comprising a Stock Unit immediately
prior to such adjustment by a fraction (x) the numerator of
which shall be (A) the number of shares of Fully Diluted
Outstanding Common Stock (other than shares for which this
Warrant is exercisable) immediately prior to such adjustment
plus (B) the number of such Additional Shares of Common Stock
so issued (or the number of shares of Common Stock into which
such Convertible Securities are convertible or exchangeable,
as the case may be), and (y) the denominator of which shall be
the number of shares of Fully Diluted Outstanding Common Stock
(other than shares for which this Warrant is exercisable)
immediately prior to such adjustment.
Upon any subsequent adjustment in the number of shares
of Common Stock into which any Convertible Securities are
convertible or exchangeable (including any reductions in such
number), the number of shares of Common Stock comprising a
Stock Unit shall be recalculated in accordance with the
preceding sentence; provided, however, that if such subsequent
adjustment is a reduction in the number of shares of Common
Stock into which any Convertible Securities are convertible or
exchangeable, the numerator to be used in such recalculation
shall be, in lieu of the numerator described in (x) in the
preceding sentence, (A) the number of shares of Fully Diluted
Outstanding Common Stock (other than shares for which this
Warrant is exercisable) immediately prior to such adjustment
minus (B) a number equal to any reduction in the number of
shares of Common Stock into which such Convertible Securities
are convertible or exchangeable, as the case may be.
No further adjustments of the number of shares of Common
Stock comprising a Stock Unit shall be made upon the
EXECUTION COPY
4658\A018LA.JBL Amendment 1 to B Warrant
4
<PAGE>
actual issuance of Common Stock upon the conversion or
exchange of any Convertible Securities.
The foregoing provisions of this Subsection C shall not
apply to any issuance of Additional Shares of Common Stock for
which an adjustment is provided under Subsection A or B of
this Section 4.
c. Amendment of Section 4.D(2) (When Adjustments to Be Made).
Delete Section 4.D(2) of the Warrant and replace it with the following:
2. When Adjustments to Be Made. The adjustments required
by the preceding Subsections of this Section 4 shall be made
whenever and as often as any specified event requiring an
adjustment shall occur (including upon any adjustment in the
number of shares of Common Stock into which any Convertible
Securities are convertible or exchangeable). For the purpose
of any adjustment, any specified event shall be deemed to have
occurred at the close of business on the date of its
occurrence.
d. Amendment of Section 26 (Call Option). Delete Section 26 of
the Warrant and replace it with the following:
26. Call Option.
A. Option to Repurchase Callable Warrant Stock. From
time to time during the Call Period, the Issuer shall have the
right, subject to the terms and conditions of this Section 26,
to repurchase from Holders all or part of the Callable Warrant
Stock held by all Holders as of the relevant Call Closing Date
(such right shall be referred to as the "Call Option").
B. Notice and Exercise of Call Option. In order to
exercise (whether in whole or in part) the Call Option, the
Issuer must give written notice to all Holders during the
Call Period, which notice must
(i) specify the date of the repurchase of the
Callable Warrant Stock to be repurchased pursuant to
such exercise of the Call Option (such date shall be,
with respect to such repurchase, the "Call Closing
Date"), which date shall be no less than three (3) and
no more than ten (10) Business Days after the date such
notice is given,
EXECUTION COPY
4658\A018LA.JBL Amendment 1 to B Warrant
5
<PAGE>
(ii) specify the number of shares of Callable
Warrant Stock to be repurchased pursuant to such
exercise of the Call Option,
(iii) state the Call Share Price applicable as of
such Call Closing Date,
(iv) state the Call Price applicable as of such
Call Closing Date without regard to the amount specified
in clause (ii) of the definition of Call Price (which
amount shall be specified by INCC in a written notice to
Issuer no later than one Business Day prior to the
relevant Call Closing Date), and
(v) indicate the methods by which the Call Share
Price and the Call Price (without regard to the amount
specified in clause (ii) of the definition of Call
Price) were calculated.
If, upon any partial exercise of the Call Option, (x) more
than one Holder holds Warrants and/or (y) any of the Callable
Warrant Stock is Issued Warrant Stock, INCC shall determine,
in its sole and absolute discretion, which Callable Warrant
Stock (and related Warrants) shall be subject to such Call
Option, and shall so notify the Issuer and any other Holders
no less than one Business Day prior to the Call Closing Date.
C. Transactions on Call Closing Date. On the Call
Closing Date with respect to any exercise of the Call Option,
at the offices of INCC or such other location as is designated
by INCC, (A) each Holder shall surrender to the Issuer any
Warrants held by it which are being repurchased pursuant to
the exercise of the relevant Call Option (as determined, in
the case of a partial exercise of the Call Option, pursuant to
the last sentence of Section 26.B hereof), without being
required to make any representation or warranty, and (B) each
Holder shall deliver to the Issuer any certificates
representing Issued Warrant Stock held by it, to the extent
that such Issued Warrant Stock is subject to the exercise of
the relevant Call Option (as determined, in the case of a
partial exercise of the Call Option, pursuant to the last
sentence of Section 26.B hereof), duly endorsed for transfer
to the Issuer, without being required to make any
representation or warranty, all against payment of the Call
Price applicable to such exercise of the Call
EXECUTION COPY
4658\A018LA.JBL Amendment 1 to B Warrant
6
<PAGE>
Option by wire transfer of immediately available funds to an
account designated by each such Holder for such purpose. Upon
the delivery of any such Warrants and/or Issued Warrant Stock
to the Issuer pursuant to this Section 26.C, the Issuer shall
immediately cancel such Warrants and any such Warrant Stock
being repurchased. If less than all of any Warrant is being
repurchased pursuant to such exercise of the Call Option, the
Issuer shall deliver to the relevant Holder a Warrant
exercisable for the number of Stock Units available under such
Warrant that are not being repurchased pursuant to such Call
Option.
D. Call Price. The purchase price payable for the
repurchase of the Callable Warrant Stock pursuant to an
exercise of the Call Option (such price, with respect to any
such exercise of the Call Option, the "Call Price"), is, as of
the relevant Call Closing Date, (i) an amount equal to the
then applicable Call Share Price multiplied by the number of
shares of Callable Warrant Stock being repurchased upon such
exercise of the Call Option plus (ii) if any of the Callable
Warrant Stock being repurchased is Issued Warrant Stock, the
aggregate Exercise Price that was paid by Holders to the
Issuer for such Issued Warrant Stock pursuant to the Warrant.
E. No Restriction on Holder's Right to Exercise Warrant;
Certain Restrictions on Transferability. Nothing in this
Section 26 restricts or otherwise limits Holder's right to
exercise the Warrant in whole or in part at any time prior to
the commencement of or during the Call Period; provided,
however, that Holder hereby agrees that (i) it shall not sell
or otherwise transfer the Warrant, other than to an Affiliate
of Holder which agrees to be bound by the terms hereof, prior
to the Call Cutoff Date, and (ii) if it does exercise or
partially exercise the Warrant prior to the Call Cutoff Date,
it shall not sell or otherwise transfer any issued Warrant
Stock obtained upon such exercise, other than to an Affiliate
of Holder which agrees to be bound by the terms hereof, prior
to the Call Cutoff Date.
F. Assignment of Call Option to Affiliates of Issuer.
The Issuer may, upon written notice to all Holders, assign its
right to exercise the Call Option to any of its Affiliates,
provided that (i) no such Affiliate may assign such rights to
any Person other than Issuer, (ii) in connection with any such
assignment, the assignee must agree in a writing delivered to
all Holders to be
EXECUTION COPY
4658\A018LA.JBL Amendment 1 to B Warrant
7
<PAGE>
bound by the terms and conditions of the Warrant as they
relate to the Call Option, and (iii) notwithstanding any such
assignment, the provisions of Section 26.C, and the rights and
obligations of Issuer and Holders pursuant to such Section
26.C, shall remain unaffected.
2. Representations and Warranties. Issuer hereby represents and
warrants as follows:
a. Organization, etc. Issuer is a corporation duly organized,
validly existing and in good standing under the laws of the state of California,
is duly qualified to do business and is in good standing as a foreign
corporation in each jurisdiction where the nature of its business makes such
qualification necessary, has full power and authority to own, and hold under
lease, its property and to conduct its business as presently conducted by it and
as proposed to be conducted, and has full power and authority to enter into and
perform its obligations under this First B Warrant Amendment.
b. Power; Authorization. The execution, delivery and performance by
Issuer of this First B Warrant Amendment: (a) are within Issuer's powers; (b)
have been duly authorized by all necessary or proper corporate or stockholder
action; (c) are not in contravention of any provision of Issuer's articles of
incorporation or bylaws, (d) will not violate any law or regulation, or any
order or decree of any court or governmental authority; (e) will not conflict
with or result in the breach or termination of, constitute a default under, or
accelerate any performance required by, any indenture, mortgage, deed of trust,
lease, agreement or other instrument to which Issuer is a party or by which
Issuer or any of its property is bound; (f) will not result in the creation or
imposition of any lien upon any of the property of Issuer; and (g) do not
require the consent or approval of any governmental authority or any other
Person.
c. Validity, etc. This First B Warrant Amendment constitutes the
legal, valid, and binding obligation of Issuer enforceable in accordance with
its terms, subject, as to enforcement, only to bankruptcy, insolvency,
reorganization, moratorium, or similar laws at the time in effect affecting the
enforceability of the rights of creditors generally.
3. Miscellaneous.
a. Complete Agreement. This First B Warrant Amendment and the B
Warrant as amended hereby constitute the complete agreement between Issuer and
INCC with respect to the subject matter hereof and thereof, and supersede any
prior written or oral agreements, writings, communications or understandings of
the parties with respect to the subject matter hereof and thereof, including,
EXECUTION COPY
4658\A018LA.JBL Amendment 1 to B Warrant
8
<PAGE>
without limitation, that certain letter agreement from INCC to Issuer dated as
of June 9, 1995.
b. Headings. The various headings of this First B Warrant
Amendment are inserted for convenience only and shall not affect the meaning or
interpretation of this First B Warrant Amendment.
c. Governing Law. This First B Warrant Amendment shall be governed
by, and construed and enforced in accordance with, the laws of the State of
California applicable to contracts made and performed in such state, without
regard to the principles thereof regarding conflict of laws.
d. Effect of This First B Warrant Amendment. Issuer hereby
acknowledges and agrees to the following:
(i) Except to the extent specifically amended by the terms of
this First B Warrant Amendment, all of the provisions of the B Warrant shall
remain in full force and effect to the extent in effect on the date hereof.
EXECUTION COPY
4658\A018LA.JBL Amendment 1 to B Warrant
9
<PAGE>
(ii) In the event of any inconsistency between the provisions
of this First B Warrant Amendment and any other provision of the B Warrant, the
terms and provisions of this First B Warrant Amendment shall govern and control.
e. Effective Date of This First B Warrant Amendment. This First
B Warrant Amendment shall be effective as of February 16, 1995.
IN WITNESS WHEREOF, Issuer has caused this First B Warrant Amendment
to be signed in its name by its President or Vice President and attested by its
Secretary or an Assistant Secretary as of the day and year first above written.
ERLY INDUSTRIES INC., a California
corporation
By: /S/ Kurt Grey
---------------
Name: Kurt Grey
Title: Vice President
ATTEST:
By: /S/ Thomas A. Whitlock
-----------------------
Name: Thomas A. Whitlock
Title: Vice President;
Controller
THE UNDERSIGNED, AS SOLE HOLDER OF
THE B WARRANT, CONSENTS TO THE FOREGOING
AMENDMENT OF THE B WARRANT
INTERNATIONALE NEDERLANDEN (U.S.)
CAPITAL CORPORATION, a Delaware
corporation
By: /S/ Michael W. Adler
---------------------
Name: Michael W. Adler
Title: Vice President
EXECUTION COPY
4658\A018LA.JBL Amendment 1 to B Warrant
10
EXECUTION COPY
AMENDMENT NO. 1 TO C WARRANT
THIS AMENDMENT NO. 1 TO C WARRANT (this "First C Warrant
Amendment"), dated as of July 28, 1995, is made by ERLY Industries Inc., a
California corporation (the "Issuer") in favor of INTERNATIONALE NEDERLANDEN
(U.S.) CAPITAL CORPORATION, a Delaware corporation ("INCC").
RECITALS
A. Issuer has issued in favor of INCC that certain Warrant to Purchase
Common Stock of ERLY Industries Inc., denominated the "C Warrant," dated as of
February 16, 1995 (the "C Warrant"). INCC is the sole "Holder" (as defined in
the C Warrant) of the C Warrant.
B. Concurrently herewith, Issuer and INCC are entering into that certain
Agreement (the "Agreement"), pursuant to which, among other things, INCC has
agreed to amend the C Warrant as provided for herein.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, it is agreed as follows:
1. Amendments to C Warrant.
a. Amendment of Section 4.C (Issuance of Additional Shares of
Common Stock or Convertible Securities). Delete Section 4.C of the Warrant and
replace it with the following:
C. Issuance of Additional Shares of Common Stock or
Convertible Securities. If at any time or from time to time
the Issuer shall (except as provided below) issue, whether in
connection with the merger of a corporation into the Issuer or
otherwise, any Additional Shares of Common Stock or
Convertible Securities, then the number of shares of Common
Stock comprising a Stock Unit from such time shall be adjusted
to be that number determined by multiplying the number of
shares of Common Stock comprising a Stock Unit immediately
prior to such adjustment by a fraction (x) the numerator of
which shall be (A) the number of shares of Fully Diluted
Outstanding Common Stock (other than shares for which this
EXECUTION COPY
4658\A017LB.JBL Amendment 1 to C Warrant
<PAGE>
Warrant is exercisable) immediately prior to such adjustment
plus (B) the number of such Additional Shares of Common Stock
so issued (or the number of shares of Common Stock into which
such Convertible Securities are convertible or exchangeable,
as the case may be), and (y) the denominator of which shall be
the number of shares of Fully Diluted Outstanding Common Stock
(other than shares for which this Warrant is exercisable)
immediately prior to such adjustment.
Upon any subsequent adjustment in the number of shares
of Common Stock into which any Convertible Securities are
convertible or exchangeable (including any reductions in such
number), the number of shares of Common Stock comprising a
Stock Unit shall be recalculated in accordance with the
preceding sentence; provided, however, that if such subsequent
adjustment is a reduction in the number of shares of Common
Stock into which any Convertible Securities are convertible or
exchangeable, the numerator to be used in such recalculation
shall be, in lieu of the numerator described in (x) in the
preceding sentence, (A) the number of shares of Fully Diluted
Outstanding Common Stock (other than shares for which this
Warrant is exercisable) immediately prior to such adjustment
minus (B) a number equal to any reduction in the number of
shares of Common Stock into which such Convertible Securities
are convertible or exchangeable, as the case may be.
No further adjustments of the number of shares of Common
Stock comprising a Stock Unit shall be made upon the actual
issuance of Common Stock upon the conversion or exchange of
any Convertible Securities.
The foregoing provisions of this Subsection C shall not
apply to any issuance of Additional Shares of Common Stock for
which an adjustment is provided under Subsection A or B of
this Section 4.
b. Amendment of Section 4.D(2) (When Adjustments to Be Made).
Delete Section 4.D(2) of the Warrant and replace it with the following:
2. When Adjustments to Be Made. The adjustments
required by the preceding Subsections of this Section 4 shall
be made whenever and as often as any specified event requiring
an adjustment shall occur (including upon any adjustment in
the number of shares of Common Stock into which any
Convertible
EXECUTION COPY
4658\A017LB.JBL Amendment 1 to C Warrant
2
<PAGE>
Securities are convertible or exchangeable). For the purpose
of any adjustment, any specified event shall be deemed to have
occurred at the close of business on the date of its
occurrence.
2. Representations and Warranties. Issuer hereby represents and
warrants as follows:
a. Organization, etc. Issuer is a corporation duly organized,
validly existing and in good standing under the laws of the state of California,
is duly qualified to do business and is in good standing as a foreign
corporation in each jurisdiction where the nature of its business makes such
qualification necessary, has full power and authority to own, and hold under
lease, its property and to conduct its business as presently conducted by it and
as proposed to be conducted, and has full power and authority to enter into and
perform its obligations under this First C Warrant Amendment.
b. Power; Authorization. The execution, delivery and performance by
Issuer of this First C Warrant Amendment: (a) are within Issuer's powers; (b)
have been duly authorized by all necessary or proper corporate or stockholder
action; (c) are not in contravention of any provision of Issuer's articles of
incorporation or bylaws, (d) will not violate any law or regulation, or any
order or decree of any court or governmental authority; (e) will not conflict
with or result in the breach or termination of, constitute a default under, or
accelerate any performance required by, any indenture, mortgage, deed of trust,
lease, agreement or other instrument to which Issuer is a party or by which
Issuer or any of its property is bound; (f) will not result in the creation or
imposition of any lien upon any of the property of Issuer; and (g) do not
require the consent or approval of any governmental authority or any other
Person.
c. Validity, etc. This First C Warrant Amendment constitutes the
legal, valid, and binding obligation of Issuer enforceable in accordance with
its terms, subject, as to enforcement, only to bankruptcy, insolvency,
reorganization, moratorium, or similar laws at the time in effect affecting the
enforceability of the rights of creditors generally.
3. Miscellaneous.
a. Complete Agreement. This First C Warrant Amendment and the C
Warrant as amended hereby constitute the complete agreement between Issuer and
INCC with respect to the subject matter hereof and thereof, and supersede any
prior written or oral agreements, writings, communications or understandings of
the parties with respect to the subject matter hereof and thereof, including,
without limitation, that certain letter agreement from INCC to Issuer dated as
of June 9, 1995.
EXECUTION COPY
4658\A017LB.JBL Amendment 1 to C Warrant
3
<PAGE>
b. Headings. The various headings of this First C Warrant
Amendment are inserted for convenience only and shall not affect the meaning or
interpretation of this First C Warrant Amendment.
c. Governing Law. This First C Warrant Amendment shall be
governed by, and construed and enforced in accordance with, the laws of the
State of California applicable to contracts made and performed in such state,
without regard to the principles thereof regarding conflict of laws.
d. Effect of This First C Warrant Amendment. Issuer hereby
acknowledges and agrees to the following:
(i) Except to the extent specifically amended by the terms of
this First C Warrant Amendment, all of the provisions of the C Warrant shall
remain in full force and effect to the extent in effect on the date hereof.
EXECUTION COPY
4658\A017LB.JBL Amendment 1 to C Warrant
4
<PAGE>
(ii) In the event of any inconsistency between the provisions
of this First C Warrant Amendment and any other provision of the C Warrant, the
terms and provisions of this First C Warrant Amendment shall govern and control.
e. Effective Date of This First C Warrant Amendment. This First
C Warrant Amendment shall be effective as of February 16, 1995.
IN WITNESS WHEREOF, Issuer has caused this First C Warrant Amendment
to be signed in its name by its President or Vice President and attested by its
Secretary or an Assistant Secretary as of the day and year first above written.
ERLY INDUSTRIES INC., a California
corporation
By: /S/ Kurt Grey
--------------
Name: Kurt Grey
Title: Vice President
ATTEST:
By: /S/ Thomas A. Whitlock
-----------------------
Name: Thomas A. Whitlock
Title: Vice President;
Controller
THE UNDERSIGNED, AS SOLE HOLDER OF
THE C WARRANT, CONSENTS TO THE FOREGOING
AMENDMENT OF THE C WARRANT
INTERNATIONALE NEDERLANDEN (U.S.)
CAPITAL CORPORATION, a Delaware
corporation
By: /S/ Michael W. Adler
---------------------
Name: Michael W. Adler
Title: Vice President
EXECUTION COPY
4658\A017LB.JBL Amendment 1 to C Warrant
5
EXECUTION COPY
AMENDMENT NO. 1 TO D WARRANT
THIS AMENDMENT NO. 1 TO D WARRANT (this "First D Warrant
Amendment"), dated as of July 28, 1995, is made by ERLY Industries Inc., a
California corporation (the "Issuer") in favor of INTERNATIONALE NEDERLANDEN
(U.S.) CAPITAL CORPORATION, a Delaware corporation ("INCC").
RECITALS
A. Issuer has issued in favor of INCC that certain Warrant to Purchase
Common Stock of ERLY Industries Inc., denominated the "D Warrant," dated as of
February 16, 1995 (the "D Warrant"). INCC is the sole "Holder" (as defined in
the D Warrant) of the D Warrant.
B. Concurrently herewith, Issuer and INCC are entering into that certain
Agreement (the "Agreement"), pursuant to which, among other things, INCC has
agreed to amend the D Warrant as provided for herein.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, it is agreed as follows:
1. Amendments to D Warrant.
a. Amendment of Section 4.C (Issuance of Additional Shares of
Common Stock or Convertible Securities). Delete Section 4.C of the Warrant and
replace it with the following:
C. Issuance of Additional Shares of Common Stock or
Convertible Securities. If at any time or from time to
time the Issuer shall (except as provided below) issue,
whether in connection with the merger of a corporation
into the Issuer or otherwise, any Additional Shares of
Common Stock or Convertible Securities, then the number of
shares of Common Stock comprising a Stock Unit from such
time shall be adjusted to be that number determined by
multiplying the number of shares of Common Stock
comprising a Stock Unit immediately prior to such
adjustment by a fraction (x) the numerator of which shall
be (A) the number of shares of Fully Diluted Outstanding
Common Stock (other than shares for which this
EXECUTION COPY
4658\A019LA.JBL Amendment 1 to D Warrant
<PAGE>
Warrant is exercisable) immediately prior to such
adjustment plus (B) the number of such Additional Shares
of Common Stock so issued (or the number of shares of
Common Stock into which such Convertible Securities are
convertible or exchangeable, as the case may be), and (y)
the denominator of which shall be the number of shares of
Fully Diluted Outstanding Common Stock (other than shares
for which this Warrant is exercisable) immediately prior
to such adjustment.
Upon any subsequent adjustment in the number of
shares of Common Stock into which any Convertible
Securities are convertible or exchangeable (including any
reductions in such number), the number of shares of Common
Stock comprising a Stock Unit shall be recalculated in
accordance with the preceding sentence; provided, however,
that if such subsequent adjustment is a reduction in the
number of shares of Common Stock into which any
Convertible Securities are convertible or exchangeable,
the numerator to be used in such recalculation shall be,
in lieu of the numerator described in (x) in the preceding
sentence, (A) the number of shares of Fully Diluted
Outstanding Common Stock (other than shares for which this
Warrant is exercisable) immediately prior to such
adjustment minus (B) a number equal to any reduction in
the number of shares of Common Stock into which such
Convertible Securities are convertible or exchangeable, as
the case may be.
No further adjustments of the number of shares of
Common Stock comprising a Stock Unit shall be made upon
the actual issuance of Common Stock upon the conversion or
exchange of any Convertible Securities.
The foregoing provisions of this Subsection C shall
not apply to any issuance of Additional Shares of Common
Stock for which an adjustment is provided under Subsection
A or B of this Section 4.
b. Amendment of Section 4.D(2) (When Adjustments to Be Made).
Delete Section 4.D(2) of the Warrant and replace it with the following:
2. When Adjustments to Be Made. The adjustments
required by the preceding Subsections of this Section 4
shall be made whenever and as often as any specified event
requiring an adjustment shall occur (including upon any
adjustment in the number of shares of Common Stock into
which any Convertible
EXECUTION COPY
4658\A019LA.JBL Amendment 1 to D Warrant
2
<PAGE>
Securities are convertible or exchangeable). For the
purpose of any adjustment, any specified event shall be
deemed to have occurred at the close of business on the
date of its occurrence.
2. Representations and Warranties. Issuer hereby represents and
warrants as follows:
a. Organization, etc. Issuer is a corporation duly organized,
validly existing and in good standing under the laws of the state of California,
is duly qualified to do business and is in good standing as a foreign
corporation in each jurisdiction where the nature of its business makes such
qualification necessary, has full power and authority to own, and hold under
lease, its property and to conduct its business as presently conducted by it and
as proposed to be conducted, and has full power and authority to enter into and
perform its obligations under this First D Warrant Amendment.
b. Power; Authorization. The execution, delivery and performance
by Issuer of this First D Warrant Amendment: (a) are within Issuer's powers; (b)
have been duly authorized by all necessary or proper corporate or stockholder
action; (c) are not in contravention of any provision of Issuer's articles of
incorporation or bylaws, (d) will not violate any law or regulation, or any
order or decree of any court or governmental authority; (e) will not conflict
with or result in the breach or termination of, constitute a default under, or
accelerate any performance required by, any indenture, mortgage, deed of trust,
lease, agreement or other instrument to which Issuer is a party or by which
Issuer or any of its property is bound; (f) will not result in the creation or
imposition of any lien upon any of the property of Issuer; and (g) do not
require the consent or approval of any governmental authority or any other
Person.
c. Validity, etc. This First D Warrant Amendment constitutes the
legal, valid, and binding obligation of Issuer enforceable in accordance with
its terms, subject, as to enforcement, only to bankruptcy, insolvency,
reorganization, moratorium, or similar laws at the time in effect affecting the
enforceability of the rights of creditors generally.
3. Miscellaneous.
a. Complete Agreement. This First D Warrant Amendment and the D
Warrant as amended hereby constitute the complete agreement between Issuer and
INCC with respect to the subject matter hereof and thereof, and supersede any
prior written or oral agreements, writings, communications or understandings of
the parties with respect to the subject matter hereof and thereof, including,
without limitation, that certain letter agreement from INCC to Issuer dated as
of June 9, 1995.
EXECUTION COPY
4658\A019LA.JBL Amendment 1 to D Warrant
3
<PAGE>
b. Headings. The various headings of this First D Warrant
Amendment are inserted for convenience only and shall not affect the meaning or
interpretation of this First D Warrant Amendment.
c. Governing Law. This First D Warrant Amendment shall be
governed by, and construed and enforced in accordance with, the laws of the
State of California applicable to contracts made and performed in such state,
without regard to the principles thereof regarding conflict of laws.
d. Effect of This First D Warrant Amendment. Issuer hereby
acknowledges and agrees to the following:
(i) Except to the extent specifically amended by the
terms of this First D Warrant Amendment, all of the provisions of the D Warrant
shall remain in full force and effect to the extent in effect on the date
hereof.
EXECUTION COPY
4658\A019LA.JBL Amendment 1 to D Warrant
4
<PAGE>
(ii) In the event of any inconsistency between the provisions
of this First D Warrant Amendment and any other provision of the D Warrant, the
terms and provisions of this First D Warrant Amendment shall govern and control.
e. Effective Date of This First D Warrant Amendment. This
First D Warrant Amendment shall be effective as of February 16, 1995.
IN WITNESS WHEREOF, Issuer has caused this First D Warrant
Amendment to be signed in its name by its President or Vice President and
attested by its Secretary or an Assistant Secretary as of the day and year first
above written.
ERLY INDUSTRIES INC., a California
corporation
By: /S/ Kurt Grey
-----------------
Name: Kurt Grey
Title: Vice President
ATTEST:
By: /S/ Thomas A. Whitlock
-----------------------
Name: Thomas A. Whitlock
Title: Vice President;
Controller
THE UNDERSIGNED, AS SOLE HOLDER OF
THE D WARRANT, CONSENTS TO THE FOREGOING
AMENDMENT OF THE D WARRANT
INTERNATIONALE NEDERLANDEN (U.S.)
CAPITAL CORPORATION, a Delaware
corporation
By: /S/ Michael W. Adler
---------------------
Name: Michael W. Adler
Title: Vice President
EXECUTION COPY
4658\A019LA.JBL Amendment 1 to D Warrant
5
EXECUTION COPY
AGREEMENT
THIS AGREEMENT (this "Agreement"), dated as of July 11, 1995, is
made by ERLY Industries Inc., a California corporation ("Parent") and
Internationale Nederlanden (U.S.) Capital Corporation, a Delaware corporation
("Lender").
RECITALS
A. ERLY Juice Inc., a California corporation and wholly owned subsidiary
of Parent ("ERLY Juice") and Lender are parties to that certain Amended and
Restated Loan Agreement dated as of February 16, 1995 (the "ERLY Juice Loan
Agreement"), which amended and restated that certain Loan Agreement dated as of
September 26, 1988, as such agreement had been amended from time to time (the
"Original ERLY Juice Loan Agreement"). For the purposes hereof, the
"Obligations" (as defined in the ERLY Juice Loan Agreement) shall be referred to
as the "ERLY Juice Obligations."
B. At all relevant times, Parent has guaranteed the obligations of ERLY
Juice to Lender. Such guaranty is evidenced by that certain Amended and Restated
Guaranty and Pledge Agreement dated as of November 18, 1994, as amended by that
certain First Amendment to Amended and Restated Guaranty and Pledge Agreement
dated as of February 16, 1995 (such agreement, as so amended, the "Parent
Guaranty").
C. In connection with the Erly Juice Loan Agreement, Parent issued to
Lender (i) that certain Amended and Restated Warrant to Purchase Common Stock of
ERLY Industries Inc., denominated the "A Warrant" (hereafter referred to as the
"A Warrant"), and (ii) that certain Amended and Restated Warrant to Purchase
Common Stock of ERLY Industries Inc., denominated the "B Warrant" (hereafter
referred to as the "B Warrant"). The A Warrant and B Warrant amended and
restated that certain A Warrant and that certain B Warrant, respectively, that
had been issued to Lender on October 22, 1993 in connection with the Original
ERLY Juice Loan Agreement.
D. Also in connection with the Erly Juice Loan Agreement, Parent issued to
Lender (i) that certain Warrant to Purchase Common Stock of ERLY Industries
Inc., denominated the "C Warrant" (hereafter referred to as the "C Warrant"),
and (ii) that certain Warrant to Purchase Common Stock of ERLY Industries Inc.,
denominated the "D Warrant" (hereafter referred to as the "D Warrant"; the A
Warrant, B Warrant, C Warrant and D Warrant will be referred to collectively
herein as the "Warrants").
EXECUTION COPY
4658\A015LD.JBL AGREEMENT
<PAGE>
E. Pursuant to the A Warrant and the B Warrant, Lender agreed to provide
Parent with an option to repurchase such Warrants and any issued Warrant Stock
(as defined in such Warrants) under certain terms and conditions at an exercise
price of $8.75 per share (subject to adjustments as provided in such Warrants),
provided that Parent could not partially exercise such option but could only do
so with respect to both such Warrants in their entirety. In addition, at the
time that the A Warrant and B Warrant were issued, it was contemplated that
Internationale Nederlanden (U.S.) Securities Corporation ("ING Securities"), an
affiliate of Lender, would participate as an advisor in connection with the
offer and issuance of securities by American Rice, Inc. ("ARI"), a Texas
corporation and a subsidiary of Parent. At the request of Parent, the A Warrant
and B Warrant provided that Parent would receive a credit towards the repurchase
of such Warrants equal to 200% of any net advisory fees actually received by ING
Securities in connection such offer and issuance of securities.
F. ING Securities was never engaged to assist ARI with any proposed offer
and issuance of ARI's securities. However, Parent has informed Lender that ARI
is presently proceeding with an offer of securities, and that certain proceeds
of such offering would be used by Parent to pay some or all of the ERLY Juice
Obligations. In connection therewith, Parent has requested that Lender, among
other things, amend the A Warrant and B Warrant to (i) reduce the price at which
such Warrants and issued Warrant Stock (as defined in the Warrants) may be
repurchased by Parent pursuant to the repurchase option, (ii) extend the period
during which Parent may exercise the repurchase option, (iii) permit partial
repurchases pursuant to the repurchase option, and (iv) permit Parent to assign
the repurchase option to its affiliates. In addition, Parent has also requested
that Lender amend all of the Warrants to provide that, upon the expiration or
termination of any Convertible Securities (as such term is defined in the
Warrants) at any time after the date of issuance of the Warrants, certain
downward adjustments would be made to the number of shares of Parent's common
stock for which such Warrants are exercisable.
G. Lender is willing to consent to the requests described in the
foregoing paragraph, subject to the terms and conditions hereof.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained, the receipt and adequacy of which are hereby
acknowledged, it is agreed as follows:
EXECUTION COPY
4658\A015LD.JBL AGREEMENT
2
<PAGE>
1. DEFINITIONS.
a. Defined Terms. The following terms (whether or not underscored)
when used in this Agreement, including its preamble and recitals, shall, except
where the context otherwise requires, have the following meanings (such meanings
to be equally applicable to the singular and plural forms thereof):
"A Warrant" is defined in the recitals.
"A Warrant Amendment" means Amendment No. 1 to A Warrant, dated
as of July 28, 1995, made by Parent in favor of Lender.
"Agreement" is defined in the preamble.
"ARI" is defined in the recitals.
"B Warrant" is defined in the recitals.
"B Warrant Amendment" means Amendment No. 1 to B Warrant, dated
as of July 28, 1995, made by Parent in favor of Lender.
"C Warrant" is defined in the recitals.
"C Warrant Amendment" means Amendment No. 1 to C Warrant, dated
as of July 28, 1995, made by Parent in favor of Lender.
"D Warrant" is defined in the recitals.
"D Warrant Amendment" means Amendment No. 1 to D Warrant, dated
as of July 28, 1995, made by Parent in favor of Lender.
"ERLY Juice" is defined in the recitals.
"ERLY Juice Loan Agreement" is defined in the recitals.
"ERLY Juice Obligations" is defined in the recitals.
"ING Securities" is defined in the recitals.
"Lender" is defined in the preamble.
"Lender's Transaction Costs" means all out-of-pocket costs and
expenses of Lender incurred in connection with the negotiation, preparation,
EXECUTION COPY
4658\A015LD.JBL AGREEMENT
3
<PAGE>
execution, or delivery of this Agreement, the Warrant Amendments, and any other
documents related hereto, but excluding the Schedule 13D Amendment Costs.
"Original ERLY Juice Loan Agreement" is defined in the recitals.
"Parent" is defined in the preamble.
"Parent Guaranty" is defined in the recitals.
"Schedule 13D" means the Schedule 13D that Lender filed with the
Securities and Exchange Commission in or about March, 1995.
"Schedule 13D Amendment" means an amendment of the Schedule 13D to
reflect, among other things, the transactions contemplated herein and in the
Warrant Amendments.
"Schedule 13D Amendment Costs" means all out-of-pocket costs and
expenses of Lender (including, without limitation, attorneys' fees and costs,
printing costs, and filing fees) incurred in connection with the preparation,
review, and filing of the Schedule 13D Amendment.
"Warrant Amendments" means the A Warrant Amendment, the B Warrant
Amendment, the C Warrant Amendment, and the D Warrant Amendment.
"Warrants" is defined in the recitals.
b. Use of Defined Terms. Unless otherwise defined or the context
otherwise requires, terms for which meanings are provided in this Agreement
shall have such meanings when used in each notice and other communication
delivered from time to time in connection with this Agreement.
c. Cross-References. Unless otherwise specified, references in this
Agreement to any Section are references to such Section of this Agreement, and
unless otherwise specified, references in any Section or definition to any
clause are references to such clause of such Section or definition.
d. Certain Matters of Construction. The recitals shall be construed
as part of this Agreement. For purposes of this Agreement and Warrant
Amendments, the following additional rules of construction shall apply, unless
specifically indicated to the contrary: (i) wherever from the context it appears
appropriate, each term stated in either the singular or plural shall include the
singular and the plural, and pronouns stated in the masculine, feminine or
neuter gender shall include the masculine, the feminine and the neuter; (ii) the
term "or" is not exclusive; (iii) the term "including" (or any form thereof)
shall not be limiting or
EXECUTION COPY
4658\A015LD.JBL AGREEMENT
4
<PAGE>
exclusive; and (iv) all references to any instruments or agreements, including
references to any of the Warrant Amendments, shall include any and all
modifications or amendments thereto and any and all extensions or renewals
thereof.
2. LENDER'S AGREEMENT. Subject to Section 3 below, Lender hereby
agrees as follows:
a. Amendment of Warrants. Lender agrees to amend the Warrants
as provided in the Warrant Amendments.
b. Conditional Forgiveness of Lender's Transaction Costs. If the
ERLY Juice Obligations and all obligations of ARI to Lender are satisfied on or
before September 30, 1995, then Lender shall forgive that portion of the ERLY
Juice Obligations constituting Lender's Transaction Costs, together with any
interest that may have accrued thereon pursuant to the ERLY Juice Loan
Agreement.
3. CONDITIONS PRECEDENT TO LENDER'S OBLIGATIONS.
Notwithstanding any other provision of this Agreement, no party other than
Lender shall have any rights hereunder or under any Warrant Amendment, and
Lender shall have no obligations hereunder or thereunder, and the Warrant
Amendments shall be of no force or effect, until the following conditions have
been satisfied, in Lender's sole discretion, or waived in writing by Lender:
a. Execution and Delivery of This Agreement, the Warrant Amendments,
and Certain Other Documents. This Agreement and the Warrant Amendments shall be
duly executed by, and delivered to, each of the parties hereto, and Lender shall
receive each of the following documents, duly executed, and all such other
documents, instruments and agreements that Lender may reasonably request in
connection with the transactions contemplated by this Agreement:
(i) resolution(s) of the board of directors of Parent
regarding, among other things, (A) the transactions contemplated by this
Agreement and (B) the issuance and reservation of the shares of common stock
issuable upon exercise of the D Warrant;
(ii) secretary's certificate(s) regarding, among other things,
(A) the transactions contemplated by this Agreement and (B) the issuance and
reservation of the shares of common stock issuable upon exercise of the D
Warrant;
EXECUTION COPY
4658\A015LD.JBL AGREEMENT
5
<PAGE>
(iii) opinion of counsel to Parent regarding, among other
things, (A) the transactions contemplated by this Agreement and (B) the issuance
and reservation of the shares of common stock issuable upon exercise of the D
Warrant;
(iv) resolutions of the board of directors of ARI, and related
secretary's certificate, regarding the matters contemplated in the
Acknowledgment of ARI with respect to this Agreement; and
(v) resolutions of the board of directors of ERLY Juice, and
related secretary's certificate, regarding the matters contemplated in the
Acknowledgment of ERLY Juice with respect to this Agreement.
b. Satisfactory Legal Form. All documents executed or submitted
pursuant hereto by or on behalf of Parent or ARI shall be satisfactory in form
and substance to Lender and its counsel; Lender and its counsel shall receive
all information, and such counterpart originals or such certified or other
copies of such materials, as Lender or its counsel may request; and all legal
matters incident to the transactions contemplated by this Agreement shall be
satisfactory to counsel to Lender.
c. Filing of Schedule 13D Amendment. The Schedule 13D
Amendment shall have been filed with the Securities and Exchange Commission.
4. AFFIRMATION OF PARENT GUARANTY. Parent hereby (i) reaffirms the terms
of the Parent Guaranty and (ii) acknowledges that the Secured Obligations, as
defined in the Parent Guaranty, include (a) all obligations of ERLY Juice under
the ERLY Juice Loan Agreement, as the same may be amended, modified, or
supplemented, and (b) all other obligations of Parent under the Parent Guaranty.
5. ACKNOWLEDGEMENT THAT LENDER'S TRANSACTION COSTS AND SCHEDULE 13D
AMENDMENT COSTS CONSTITUTE OBLIGATIONS UNDER THE ERLY JUICE LOAN AGREEMENT.
Parent hereby acknowledges that, pursuant to, among other things, Section 8.3(a)
of the ERLY Juice Loan Agreement, Lender's Transaction Costs and the Schedule
13D Amendment Costs constitute "Obligations" (as such term is defined in the
ERLY Juice Loan Agreement).
6. ACKNOWLEDGEMENT REGARDING FINANCIAL SERVICES. Parent
hereby acknowledges that none of Lender, ING Securities, or their respective
officers, employees and affiliates has ever (i) been retained by Parent or ARI
to provide financial advisory services or any other financial services, or (ii)
provided financial advice, financial advisory services or other services to
Parent or ARI.
EXECUTION COPY
4658\A015LD.JBL AGREEMENT
6
<PAGE>
7. REPRESENTATIONS AND WARRANTIES. Parent hereby represents
and warrants to Lender as follows:
a. Organization, etc. Parent is a corporation duly organized,
validly existing and in good standing under the laws of the State of California,
is duly qualified to do business and is in good standing as a foreign
corporation in each jurisdiction where the nature of its business makes such
qualification necessary, has full power and authority to own, and hold under
lease, its property and to conduct its business as presently conducted by it and
as proposed to be conducted, and has full power and authority to enter into and
perform its obligations under this Agreement and the Warrant Amendments.
b. Power; Authorization. The execution, delivery and performance by
Parent of this Agreement and the Warrant Amendments: (a) are within Parent's
powers; (b) have been duly authorized by all necessary or proper corporate or
stockholder action; (c) are not in contravention of any provision of Parent's
articles of incorporation or bylaws, (d) will not violate any law or regulation,
or any order or decree of any court or governmental authority; (e) will not
conflict with or result in the breach or termination of, constitute a default
under, or accelerate any performance required by, any indenture, mortgage, deed
of trust, lease, agreement or other instrument to which Parent is a party or by
which Parent or any of its property is bound; (f) will not result in the
creation or imposition of any lien upon any of the property of Parent; and (g)
do not require the consent or approval of any governmental authority or any
other person.
c. Validity, etc. This Agreement constitutes, and the Warrant
Amendments, when executed and delivered by Parent, will constitute, the legal,
valid, and binding obligation of Parent enforceable in accordance with their
terms, subject, as to enforcement, only to bankruptcy, insolvency,
reorganization, moratorium, or similar laws at the time in effect affecting the
enforceability of the rights of creditors generally.
8. MISCELLANEOUS.
a. Waivers, Amendments, etc. The provisions of this Agreement may
from time to time be amended, modified, or waived if such amendment,
modification or waiver is in writing and consented to by Lender. No failure or
delay on the part of Lender in exercising any power or right under this
Agreement shall operate as a waiver thereof, nor shall any single or partial
exercise of any such power or right preclude any other or further exercise
thereof or the exercise of any other power or right.
EXECUTION COPY
4658\A015LD.JBL AGREEMENT
7
<PAGE>
b. Costs and Expenses. Parent shall pay all attorneys' fees and
costs in connection with any action taken by Lender to enforce or preserve any
of its rights under this Agreement or the Warrant Amendments.
c. Severability. Any provision of this Agreement that is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions of this Agreement or affecting the
validity or enforceability of such provision in any other jurisdiction.
d. Further Assurances. Parent agrees, upon the written request of
Lender, to execute and deliver to Lender, from time to time, any additional
instruments or documents reasonably considered necessary by Lender to accomplish
the transactions contemplated herein.
e. Headings. The various headings of this Agreement are inserted for
convenience of reference only and shall not affect the meaning or interpretation
of this Agreement or any provisions hereof.
f. Counterparts, Effectiveness, etc. This Agreement may be
executed by the parties hereto in several counterparts, each of which shall be
deemed to be an original and all of which together shall be deemed to be one and
the same instrument.
g. Interpretation. No provision of this Agreement shall be construed
against or interpreted to the disadvantage of any party hereto by any court or
other governmental or judicial authority by reason of such party's having or
being deemed to have structured, drafted or dictated such provision.
h. Complete Agreement. This Agreement constitutes the complete
agreement between the parties, and supersedes any prior written or oral
agreements, writings, communications or understandings of the parties with
respect to the subject matter hereof, including that certain letter agreement
between Lender and Parent dated as of June 9, 1995, as such letter may have been
amended or supplemented from time to time.
i. Time of the Essence. Time is of the essence with respect to
this Agreement and all of the transactions contemplated by this Agreement.
j. Successors and Assigns. This Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and their respective
successors and assigns.
EXECUTION COPY
4658\A015LD.JBL AGREEMENT
8
<PAGE>
k. GOVERNING LAW; CONSENT TO JURISDICTION AND VENUE. IN ALL
RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS
AGREEMENT AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY, AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF CALIFORNIA
APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE, WITHOUT REGARD TO THE
PRINCIPLES THEREOF REGARDING CONFLICT OF LAWS, AND ANY APPLICABLE LAWS OF THE
UNITED STATES OF AMERICA. THE PARTIES CONSENT TO PERSONAL JURISDICTION, WAIVE
ANY OBJECTION AS TO JURISDICTION OR VENUE, AND AGREE NOT TO ASSERT ANY DEFENSE
BASED ON LACK OF JURISDICTION OR VENUE, IN THE COUNTY OF LOS ANGELES, STATE OF
CALIFORNIA.
l. MUTUAL WAIVER OF JURY TRIAL. BECAUSE DISPUTES ARISING IN
CONNECTION WITH COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY
RESOLVED BY AN EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE
STATE AND FEDERAL LAWS TO APPLY, RATHER THAN ARBITRATION RULES, THE PARTIES
DESIRE THAT THEIR DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS.
THEREFORE, TO ACHIEVE THE BEST COMBINATION OF
THE BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION, THE PARTIES HERETO WAIVE
ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION, SUIT OR PROCEEDING BROUGHT TO ENFORCE
OR DEFEND ANY RIGHTS OR REMEDIES UNDER THIS AGREEMENT, WHETHER ARISING IN
CONTRACT, TORT OR OTHERWISE.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the day and year first above written.
ERLY INDUSTRIES INC.
By: /s/ Kurt Grey
Name: Kurt Grey
Its: Vice President
INTERNATIONALE NEDERLANDEN (U.S.)
CAPITAL CORPORATION
By: /s/ Michael W. Adler
--------------------
Name: Michael W. Adler
Its: Vice President
EXECUTION COPY
4658\A015LD.JBL AGREEMENT
9
<PAGE>
ACKNOWLEDGMENT (ARI)
American Rice, Inc. ("ARI") hereby acknowledges (a) that it has
received the foregoing Agreement between ERLY Industries Inc. and Internationale
Nederlanden (U.S.) Capital Corporation ("Lender") and (b) that none of Lender,
Internationale Nederlanden (U.S.) Securities Corporation, or their respective
officers, employees and affiliates has ever (i) been retained by ARI or Parent
to provide financial advisory services or any other financial services, or (ii)
provided financial advice, financial advisory services or other services to ARI
or Parent.
AMERICAN RICE, INC.
By: /s/ C. Bronson Schultz
----------------------
Name: C. Bronson Schultz
Its: Vice President of Finance
and Administration
ACKNOWLEDGMENT (ERLY JUICE)
ERLY Juice Inc. ("ERLY Juice") hereby acknowledges that, pursuant
to, among other things, Section 8.3(a) of that certain Amended and Restated Loan
Agreement (the "ERLY Juice Loan Agreement") between ERLY Juice and
Internationale Nederlanden (U.S.) Capital Corporation ("Lender") dated as of
February 16, 1995, Lender's Transaction Costs and the Schedule 13D Amendment
Costs (as both such terms are defined in the Agreement dated as of July 11, 1995
between ERLY Industries Inc. and Lender to which this Acknowledgment is
attached) constitute "Obligations" (as such term is defined in the ERLY Juice
Loan Agreement).
ERLY JUICE INC.
By: /s/ Kurt Grey
-------------
Name: Kurt Grey
Its: Vice President
EXECUTION COPY
4658\A015LD.JBL AGREEMENT
10
