-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, Ih6XQvi6TVxmgQL7GBcztvtkZKbXm38rz4W9FHcsZ1m/S891LsVcp/zYfQkRycwc zJ+RTnEiDCCGrAdI0dzEnw== 0000950146-95-000449.txt : 19950803 0000950146-95-000449.hdr.sgml : 19950803 ACCESSION NUMBER: 0000950146-95-000449 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 6 FILED AS OF DATE: 19950802 SROS: NASD SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: ERLY INDUSTRIES INC CENTRAL INDEX KEY: 0000030966 STANDARD INDUSTRIAL CLASSIFICATION: GRAIN MILL PRODUCTS [2040] IRS NUMBER: 952312900 STATE OF INCORPORATION: CA FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-03507 FILM NUMBER: 95558452 BUSINESS ADDRESS: STREET 1: 10990 WILSHIRE BLVD STREET 2: STE 1800 CITY: LOS ANGELES STATE: CA ZIP: 90024 BUSINESS PHONE: 2138791480 MAIL ADDRESS: STREET 1: 10990 WILSHIRE BOULEVARD STREET 2: SUITE 1800 CITY: LOS ANGELES STATE: CA ZIP: 90024 FORMER COMPANY: FORMER CONFORMED NAME: EARLY CALIFORNIA INDUSTRIES INC DATE OF NAME CHANGE: 19851202 FORMER COMPANY: FORMER CONFORMED NAME: EARLY CALIFORNIA FOODS INC DATE OF NAME CHANGE: 19700114 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: INTERNATIONALE NEDERLANDEN CAPITAL CORP CENTRAL INDEX KEY: 0000939812 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 135 EAST 57TH STREET CITY: NEW YORK STATE: NY ZIP: 10022 BUSINESS PHONE: 212-446-1500 MAIL ADDRESS: STREET 1: MURPHY WEIR & BUTLER STREET 2: 101 CALIFORNIA STREET CITY: SAN FRANCISCO STATE: CA ZIP: 94111 SC 13D 1 CAPITAL FORM SCHEDULE 13D 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 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! 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. 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. 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.) 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 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. 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. EX-99.1 2 AMENDMENT NO. 1 TO A WARRANT 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 (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 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 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 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 (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 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 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 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 (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 EX-99.1 3 AMENDMENT NO. 1 TO B WARRANT 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 (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 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 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 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 (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 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 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 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 (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 EX-99.1 4 AMENDMENT NO. 1 TO C WARRANT 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 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 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 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 (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 EX-99.1 5 AMENDMENT NO. 1 TO D WARRANT 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 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 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 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 (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 EX-99.2 6 AGREEMENT 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 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 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 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 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 (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 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 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 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 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 -----END PRIVACY-ENHANCED MESSAGE-----