EXHIBIT 10.2
 
 
 

 
AMENDMENT NO. 5 TO CREDIT AGREEMENT AND AMENDMENT NO. 3 TO REGISTRATION RIGHTS
AGREEMENT

This AMENDMENT NO. 5 TO CREDIT AGREEMENT AND AMENDMENT NO. 3 TO REGISTRATION
RIGHTS AGREEMENT (this “Amendment”) dated as of August 8, 2012 (the “Effective
Date”), by and among CADIZ INC. and CADIZ REAL ESTATE LLC, as borrowers (the
“Borrowers”), the lenders from time to time party hereto (the “Lenders”) and LC
CAPITAL MASTER FUND, LTD., as administrative agent (“LC Capital” or, in such
capacity, the “Agent”).

RECITALS

WHEREAS, the Borrowers entered into that certain Credit Agreement, dated as of
June 26, 2006, by and among the Borrowers, the lenders party thereto and Peloton
Partners LLP, as administrative agent (“Peloton Agent”), as amended pursuant to
that certain Amendment No. 1 to Credit Agreement dated as of September 29, 2006,
by and among the Borrowers, the lenders party thereto and Peloton Agent; as
further amended pursuant to that certain Amendment No. 2 to Credit Agreement and
Amendment No. 1 to Registration Rights Agreement dated as of June 4, 2009 (the
“Second Amendment”), by and among the Borrowers, the lenders party thereto and
LC Capital, as administrative agent; as further amended pursuant to that certain
Amendment No. 3 to Credit Agreement and Amendment No. 2 to Registration Rights
Agreement dated as of October 19, 2010 (the “Third Amendment”), by and among the
Borrowers, the lenders party thereto and LC Capital, as administrative agent;
and as further amended pursuant to that certain Amendment No. 4 to Credit
Agreement dated as of July 25, 2011 (the “Fourth Amendment”), by and among the
Borrowers, the lenders party thereto and LC Capital, as administrative agent
(and as the same may be further amended and supplemented from time to time prior
to the Effective Date, the “Credit Agreement”);

WHEREAS, Cadiz Inc. entered into that certain Registration Rights Agreement
dated as of June 26, 2006, by and among Cadiz Inc. and Peloton Agent on behalf
of each holder of registrable securities (as the same has been amended and
supplemented from time to time prior to the Effective Date, the “Registration
Rights Agreement”);

WHEREAS, the Borrowers desire to obtain the right to extend the Maturity Date
(currently June 29, 2013) until November 1, 2013;

WHEREAS, the Borrowers, the Agent and the Lenders have agreed to amend the
Credit Agreement and the Registration Rights Agreement on the terms and
conditions set forth herein; and

WHEREAS, each of the defined terms used herein shall, if not otherwise defined
in this Amendment, has the same meaning as set forth in the Credit Agreement.

NOW, THEREFORE, in consideration of the foregoing and other good and valuable
consideration, the receipt and adequacy of which are hereby expressly
acknowledged, the parties hereby agree as follows:

ARTICLE I
Amendments to Credit Agreement

1.01           The following definition in Section 1.1 of the Credit Agreement
is hereby amended and restated in its entirety as follows:

““Maturity Date” (a) the seventh anniversary of the Closing Date (which is June
29, 2013) unless the Extension Right is properly exercised by the Borrowers, in
which case November 1, 2013 or (b) the ninth anniversary of the Closing Date if
prior to the applicable date described in clause (a) the Two Year Extension
Period applies pursuant to Section 9.6(a).”

1.02           The following definitions are hereby added to Section 1.1 of the
Credit Agreement in their proper alphabetical order:

““Extension Consideration” the aggregate sum of $500,000, which shall be
allocable to the Lenders in proportion to their respective percentage interests
in the Loans then outstanding, and which shall be payable, at the Borrowers’
option, (a) in cash, (b) in freely-tradable shares of common stock of Cadiz Inc.
at a price per share equal to the volume weighted average price of such common
stock on The Nasdaq for the five (5) days immediately preceding the payment of
$500,000 to the Lenders, and/or (c) in the form (including price) of such other
securities of Cadiz Inc. as the Borrowers, the Agent and the Lenders may agree.”

““Extension Right” the right of the Borrowers to extend the Maturity Date from
June 29, 2013 to November 1, 2013, which right (a) the Borrowers shall be
entitled to exercise at any time after the Fifth Amendment Effective Date and
prior to June 29, 2013 and (b) shall only be deemed exercised upon (i) receipt
by the Lenders and the Agent after the Fifth Amendment Effective Date of a
written notice of exercise from the Borrowers pursuant to Section 9.2 of the
Credit Agreement and (ii) receipt by the Lenders after the Fifth Amendment
Effective Date of payment in full by the Borrowers of the Extension
Consideration; provided that at the time of receipt of such notice and payment
no Default and no Event of Default shall have occurred and be continuing.”

““Fifth Amendment” that certain Amendment No. 5 to Credit Agreement and
Amendment No. 3 to Registration Rights Agreement, by and among the Borrowers,
the Agent and the Lenders, and dated as of Fifth Amendment Effective Date.”

““Fifth Amendment Effective Date” August 8, 2012.”

ARTICLE II
Amendment to Registration Rights Agreement

2.01           The first sentence of the definition of “Registrable Securities”
in Section 1 of the Registration Rights Agreement is hereby amended and restated
to read in its entirety as follows:

““Registrable Securities” means any and all of (i) the shares of Common Stock of
the Company received by Holders upon conversion of the Loans and (ii) the shares
of Common Stock of the Company (including any shares of Common Stock of the
Company underlying any convertible or exchangeable securities) received by
Holders as Extension Consideration upon the exercise by the Borrowers of the
Extension Right, as such terms are defined in the Credit Agreement, as amended,
and (iii) any securities issuable or issued or distributed in respect of any of
the securities identified in clauses (i) and (ii) by way of stock dividend or
stock split or in connection with a combinations of shares, recapitalization,
reorganization, merger, consolidation or otherwise.”

2.02           The following definitions are hereby added to Section 1 of the
Registration Rights Agreement in their proper alphabetical order:

““Fifth Amendment” that certain Amendment No. 5 to Credit Agreement and
Amendment No. 3 to Registration Rights Agreement, by and among the Borrowers,
the Agent and the Lenders, and dated as of Fifth Amendment Effective Date.”

““Fifth Amendment Effective Date” August 8, 2012.”

2.03           Section 2(a) of the Registration Rights Agreement is hereby
amended and restated to read in its entirety as follows:
 
 
“(a)           Any Holder may, subject to the terms hereof, request the Company
in writing (each such request, a “Demand”) to effect a registration with the SEC
under and in accordance with the provisions of the Securities Act of all or part
of the Registrable Securities Beneficially Owned by such Holder (a “Demand
Registration”).  The Demand shall specify the aggregate number of shares of
Registrable Securities requested to be so registered on behalf of such
Holder.  For purposes of this Agreement, Holders shall be deemed to have made a
Demand, effective as of the Fifth Amendment Effective Date, with respect to all
of the Registrable Securities (the “Closing Demand”).  Any request received by
the Company from a Holder as provided in this Section 2(a) shall be deemed to be
a “Demand” for purposes of this Agreement, unless the Company, in accordance
with the terms of this Agreement, shall have notified such Holder in writing,
prior to its receipt of such request from such Holder, of its intention to
register securities with the SEC, in which case the request from such Holder
shall be governed by Section 3 hereof, not this Section 2.  All Demands to be
made by a Holder pursuant to this Section 2(a) and any notifications by the
Company pursuant to the preceding sentence must be based upon a good faith
intent of such Holder or the Company, as the case may be, to effect the sale of
securities pursuant to such registrations as promptly as practicable after the
date of the Demand or notification, as the case may be, in accordance with the
terms of this Agreement.”

2.04           Section 2(c)(v) of the Registration Rights Agreement is hereby
amended and restated to read in its entirety as follows:
 
 
“(v)           if the Company shall have, on or after the Fifth Amendment
Effective Date, previously effected four (4) Demand Registrations pursuant to
the terms of this Agreement;”

ARTICLE III
Representations and Warranties

Each of the Borrowers represents and warrants to the Lenders and the Agent that
the representations and warranties set forth in the Credit Agreement and in each
of the other Loan Documents are true and complete on the Effective Date as if
made on and as of the Effective Date (or, if any such representation or warranty
is expressly stated to have been made as of a specific date, such representation
or warranty shall be true and correct as of such specific date).

ARTICLE IV
Conditions Precedent

This Amendment shall become effective as of the Effective Date upon satisfaction
of the following conditions:  (a) the representations and warranties contained
in this Amendment shall be true and correct and no Default or Event of Default
shall have occurred and be continuing; and (b) receipt by the Agent of
(i) counterparts of this Amendment executed by each of the Borrowers and the
Lenders and (i) $100,000 in cash from Borrowers, 86.725% of which (i.e. $86,725)
shall be allocable and paid to LC CAPITAL MASTER FUND, LTD., as a Lender, and
13.275% of which (i.e. $13,275) shall be allocable and paid to MILFAM II L.P.,
as a Lender.

ARTICLE V
Effect of Amendment

Except as expressly amended hereby, the Credit Agreement and the other Loan
Documents shall remain in full force and effect in accordance with their
respective terms. This Amendment is a Loan Document executed pursuant to the
Credit Agreement and shall be construed, administered and applied in accordance
with all of the terms and provisions of the Credit Agreement, as amended hereby.

ARTICLE VI
Counterparts

This Amendment may be executed by one or more of the parties to this Amendment
on any number of separate counterparts, and all of said counterparts take
together shall be deemed to constitute one and the same instrument.  Delivery of
an executed signature page of this Amendment by facsimile transmission shall be
effective as delivery of a manually executed counterpart hereof.  A set of the
copies of this Amendment signed by all of the parties shall be lodged with the
Borrowers and the Agent.

ARTICLE VII
Severability

Any provision of this Amendment 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 hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

ARTICLE VIII
Governing Law

THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS
AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK.

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 5 to
Credit Agreement and Amendment No. 3 to Registration Rights Agreement to be duly
executed by their respective authorized representatives as of the day and year
first above written.

BORROWERS

CADIZ INC., as a Borrower
 

By:  /s/ Keith Brackpool Name:  Keith Brackpool  Title:  Chief Executive
Officer 

 

CADIZ REAL ESTATE LLC, as a Borrower
 

By:  /s/ Timothy J. Shaheen Name:  Timothy J. Shaheen Title:  Chief Executive
Officer 

LENDERS

MILFAM II L.P., as a Lender
 

By: Milfam LLC      By:  /s/ Loyd I. Miller Name:  Lloyd I. Miller Title: 
Managing Member

 
 
LC CAPITAL MASTER FUND, LTD.,
as a Lender
 

By:  /s/ Richard F. Conway Name:  Richard F. Conway Title:  Director 

 

AGENT

LC CAPITAL MASTER FUND, LTD.,
as a Administrative Agent
 

By:  /s/ Richard F. Conway Name:  Richard F. Conway Title:  Director