EXHIBIT 10-1

CADIZ – WATER ASSET MANAGEMENT LEASE

1.  Parties
Cadiz Real Estate LLC (“Cadiz”), a wholly-owned subsidiary of Cadiz Inc., is the
owner of approximately 45,000 acres of land and the subsurface strata, inclusive
of the unsaturated soils and appurtenant water rights located in San Bernardino
County, California and more particularly identified on Exhibit “A” attached
hereto (the “Cadiz Property”).
 
Water Asset Management, LLC (together with any affiliated entity to whom it
assigns its rights in and to the Lease, “WAM”) is a private company that invests
in water-related assets as the manager of equity funds focused on water
resources investment.
 
2.  Leased Property
2,100 acres within the Cadiz Property, as more particularly described on Exhibit
“B” attached hereto (“Leased Property”) along with all improvements located
thereon and corresponding rights and appurtenances, including, but not limited
to, the right to use underlying water, as limited by the terms of this Lease,
required for farming the Leased Property consistent with existing permits, free
and clear of all liens and encumbrances. The Leased Property is located within a
portion of the Cadiz Property zoned for agricultural use and containing
approximately 9,600 acres as more particularly identified on Exhibit “C”
attached hereto (the “Cadiz Farm Property”). The Leased Property includes the
non-exclusive easement to access and utilize the Cadiz Property and any rights
of way, improvements, and infrastructure located on or appurtenant to the Cadiz
Property as reasonably necessary for WAM’s use and enjoyment of the Leased
Property.
 
Effective as of the Effective Date, Cadiz hereby assigns to WAM all of its
rights and obligations, including providing acreage to farm within the 2,100
acres leased herein by WAM and delivering water as provided in and to that
certain lease, dated as of July 1, 2013, as amended and restated as of February
3, 2015 (the “Limoneira Lease”), between Cadiz and Limoneira Company for a
portion of the Leased Property, a copy of which is attached hereto as Exhibit
“D”, including, without limitation, the right to receive any payments thereunder
(including any payments of Base Rent and Net Cash Flow, as such terms are
defined in the Limoneira Lease) and the right to enforce the terms of the
Limoneira Lease, and Cadiz may not exercise any rights under the Limoneira Lease
during the Term.  Cadiz shall continue to be responsible for the Cadiz buy-out
right and the Limoneira Tag Right under the Limoneira Lease.  Further, Cadiz
will have the right to enforce the Limoneira Lease upon at least ten (10)
business days’ advance written notice to WAM if WAM fails to do so.  Cadiz shall
notify Limoneira Company of such assignment of rights on the Effective Date.
 
Within thirty (30) days following the Effective Date (as defined below), Cadiz
shall provide WAM with an ALTA 2006 Plain Language Title Insurance Commitment
with respect to the Leased Property (the “Commitment”) that identifies any and
all instruments recorded against the Leased Property (together with legible
copies of the recorded instruments), and a customary recognition and
non-disturbance agreement (in recordable form and otherwise in form and
substance reasonably acceptable to WAM) executed by the holder of any lien
recorded against the Leased Property that is senior to this Lease and is not
otherwise automatically subordinated according to its terms in a manner
sufficient for WAM’s title insurance company to insure the subordinated nature
of such lien.
 
Further, as the parties may mutually agree from time to time during the Term,
the Cadiz Property may be used for green waste removal or renewable energy uses
and housing and other dwelling structures located adjacent to or near the Leased
Property may be included within the “Leased Property” for purposes of housing
WAM’s employees working on the Leased Property.  Terms associated with such
green waste removal or renewable energy uses on the Cadiz Property and such
temporary housing facilities will be agreed to in writing by the parties at
reasonable market rates (for the avoidance of doubt, any use of the Cadiz
Property by WAM that is incidental to WAM’s farming operations on the Leased
Property (including storing items on the Cadiz Property for use on the Leased
Property) shall be without charge).
 
3. Exclusivity
 
WAM, on the one hand, and Cadiz and Cadiz Inc. (collectively, the “Company”), on
the other hand, have entered into that certain non-binding letter of intent (the
“Term Sheet”) regarding, among other things, a certain loan facility (the “WAM
Loan Facility”) proposed to be provided by WAM (or an affiliate thereof) in an
amount equal to $55,000,000 and the right to convert such loan facility into a
99 year ground lease on the Cadiz Farm Property.  By virtue of execution of this
Lease, the parties hereto agree that the Term Sheet is hereby amended to (i)
decrease the size of the WAM Loan Facility to $43,000,000, to provide that the
WAM Loan Facility, if consummated, shall be funded no later than February 15,
2016 and to provide that the Term Sheet shall terminate on (but not prior to)
February 15, 2016 and (ii) provide for the right of WAM to convert the WAM Loan
Facility, in whole or in part from time to time, into a 99 year ground lease on
the portion of the Cadiz Farm Property not subject to this Lease (or, in the
event of a partial conversion of the WAM Loan Facility, a pro rata portion of
the Cadiz Farm Property not subject to this Lease that is identified by
WAM).  In other words, if the transaction set forth in the Term Sheet is
consummated, there will exist (y) a 99 year ground lease on the Leased Property
in favor of WAM, and (z) a Loan Facility from WAM (or its affiliate) in the
amount of $43,000,000.
 
In order to induce WAM to enter into this Lease, from the date of this Lease
through February 15, 2016 (and, in the case of clause (y), such date shall be
extended through the 30th day after WAM does not exercise its option to lease
additional acreage as set forth in Section 5 below), neither the Company nor any
of its  affiliates nor any of its or their respective officers, employees,
directors, agents or other representatives (including financial advisors) will
(a) solicit, initiate, encourage or accept any other inquiries, proposals or
offers from any Person (as defined below) (w) relating to the sale or issuance
of any debt securities of the Company or the refinancing of the Company’s senior
secured indebtedness, (x) with respect to any recapitalization or reorganization
of the Company,  (y) regarding any sale or disposition of, or grant of any
lease, license or option with respect to, the Cadiz Farm Property or (z) to
enter into any other transaction that would frustrate or impede the consummation
of the transaction contemplated by the Term Sheet (any of the transactions
described in clauses (w), (x), (y) and (z) being referred to herein as a
“Competing Transaction”), or (b) participate in any discussions, conversations,
negotiations or other communications with any other Person regarding, or furnish
to any other Person any information with respect to, or otherwise cooperate in
any way, assist or participate in, facilitate or encourage any effort or attempt
by any other Person to seek to do any of the foregoing.  The Company immediately
shall cease and cause to be terminated all existing discussions, conversations,
negotiations and other communications with any Persons conducted heretofore with
respect to any Competing Transaction.  This exclusivity may be terminated sooner
as provided in Section 4.
 
Nothing herein shall prevent the Company from issuing equity securities in
connection with a working capital raise (provided, that, the proceeds of such
working capital raise do not obviate the necessity for the Company to consummate
the transaction contemplated by the Term Sheet) or from pursuing any further
right to extend its existing loan facility.
 
As used in this Lease, the term “Person” means any individual, partnership,
firm, corporation, limited liability company, association, trust, unincorporated
organization or other entity, as well as any syndicate or group that would be
deemed to be a person under Section 13(d)(3) of the Securities Exchange Act of
1934, as amended.
4.  Lease Payment
Upon execution of this Lease, WAM shall pay into an escrow account maintained by
a nationally recognized title insurance company selected by WAM, as escrow
agent, $12 million (the “Lease Payment”) and advise the escrow agent, at the
time escrow is opened, that Cadiz and WAM shall jointly notify the escrow agent
to release the escrowed funds within one business day following the satisfaction
of the Release Conditions (as defined below) (the date of release of the
escrowed funds to Cadiz is hereinafter referred to as the “Closing Date”) so
long as the Release Conditions are satisfied on or prior to February 15, 2016.
Cadiz and WAM shall be obligated to jointly notify the escrow agent to release
the escrowed funds within one business day following the satisfaction of the
Release Conditions so long as the Release Conditions are satisfied on or prior
to February 15, 2016.   Cadiz shall use the Lease Payment to repay at least $9
million of the senior secured indebtedness of Cadiz Inc., plus any additional
amounts required to be prepaid by the terms of the senior secured indebtedness
of Cadiz Inc., with the balance for costs and expenses associated with this
transaction (including escrow fees and attorneys’ fees of the Company and WAM,
subject to the cap set forth in Section 19) and working capital.  If, prior to
the satisfaction of the Release Conditions, WAM closes on the transaction set
forth in the Term Sheet, then the parties will instruct the escrow agent to
release the entire amount of the Lease Payment to Cadiz, and Cadiz shall use the
Lease Payment, together with the payments made in respect of the WAM Loan
Facility, to repay, in full, the senior secured indebtedness of Cadiz Inc.
 
The release of the Lease Payment from escrow to Cadiz on the Closing Date shall
be subject to the satisfaction of the following conditions precedent (the
“Release Conditions”) on or prior to February 15, 2016 (which conditions
precedent may be waived by WAM, in its sole and absolute discretion):  (x) Cadiz
Inc. will provide a written officer’s certificate certifying that Cadiz Inc. is
in a position to, and upon receipt of the Lease Payment and disbursement of the
proceeds thereof as provided herein shall, satisfy all the conditions to the
proviso in “Maturity Date” (as defined in the senior secured credit agreement of
Cadiz Inc.) to prevent the maturity date from changing from June 30, 2017 to the
earlier date of March 5, 2016; (y) receipt by the Company of any requisite
consents or releases to the grant of the lease to WAM of the Leased Property and
to the assignment of the rights of Cadiz under the Limoneira Lease and to any of
the other provisions of this Lease not permitted by the Company’s senior secured
credit agreement as in effect on the date hereof, including but not limited to
any required consents or releases and waivers from the Company’s senior secured
lenders; and (z) receipt by WAM of a customary recognition and non-disturbance
agreement (in recordable form) executed by the holder of any lien which is
senior to this Lease and is not otherwise automatically subordinated according
to its terms in a manner sufficient for WAM’s title insurance company to insure
the subordinated nature of such lien, recorded against the Leased Property
(including the lien in favor of Wells Fargo Bank, N.A. (“Wells Fargo”), as agent
on behalf of the Company’s senior secured lenders) in form and substance
reasonably acceptable to WAM. After receipt of the Commitment, WAM will promptly
notify Cadiz of any existing lien holder, if any, in addition to Wells Fargo
that will be required to sign off on the customary recognition and
non-disturbance agreement. If any of the Release Conditions have not been
satisfied by February 15, 2016 and WAM has not closed on the transaction set
forth in the Term Sheet, then, at WAM’s request, the parties shall deliver a
joint request to cause the escrowed funds to be released to WAM and, in such
event, this Lease shall terminate and be of no further force and effect and the
parties will have no further rights or obligations to each other under this
Lease.
 
Each of Cadiz and WAM shall act in good faith and in a manner designed to
promptly satisfy the Release Conditions.  As noted above, upon satisfaction of
the Release Conditions on or prior to February 15, 2016, the parties will,
within one business day thereafter, instruct the escrow agent to distribute the
escrowed funds to Cadiz.  If for any reason, customary documents necessary to
satisfy all of the Release Conditions are provided to WAM, and Cadiz and WAM are
unable to promptly agree within three (3) days following WAM’s receipt thereof
that the documents (to the extent executed by the requisite parties other than
WAM) satisfy the Release Conditions, then the exclusivity to WAM shall terminate
on two (2) days’ written notice from Cadiz to WAM.
 
5.  Initial Lease; Option to Lease Additional Acreage
 
Cadiz hereby leases to WAM, and WAM hereby leases from Cadiz, the Leased
Property.  Additionally, in the event WAM does not close on the transaction set
forth in the Term Sheet by the Closing Date, but this lease remains in effect,
WAM shall have the option to expand the Leased Property and lease additional
tracts within the Cadiz Farm Property as follows:
 
(1) A tract containing approximately 2,093 contiguous acres to be designated by
WAM (in its good faith and reasonable discretion and which is adjacent to he
Leased Property) by delivering written notice to Cadiz on or before June 1, 2016
and paying Cadiz an amount equal to an additional $12,000,000 by wire transfer
of immediately available U.S. funds;
 
(2) An additional tract containing approximately 2,093 contiguous acres to be
designated by WAM (in its good faith and reasonable discretion and which is
adjacent to the Leased Property, as expanded by the first option parcel
described in item (1) above) by delivering written notice to Cadiz on or before
September 1, 2016 and paying Cadiz an amount equal to an additional $12,000,000
by wire transfer of immediately available U.S. funds; and
 
(3) An additional tract containing approximately 3,314 contiguous acres to be
designated by WAM (in its good faith and reasonable discretion and which is
adjacent to the Leased Property, as expanded by the first and second option
parcels described in items (1) and (2) above) by delivering written notice to
Cadiz on or before December 22, 2016 and paying Cadiz an amount equal to an
additional $19,000,000 by wire transfer of immediately available U.S. funds.
 
Any proceeds paid by WAM to Cadiz in connection with the exercise of any
expansion option described in this Section 5, net of any fees and transactions
costs incurred in connection therewith, shall be used solely to repay the senior
secured indebtedness of Cadiz, Inc., with any remaining proceeds to be applied
toward mandatory prepayments, if applicable, of the outstanding convertible
notes of Cadiz Inc.
 
WAM’s use of the El Paso Pipeline will increase proportionally with the exercise
of each expansion option described in this Section 5.  In the event that a
payment date was missed, WAM has an additional 30 days to exercise each option
set forth above and preserve its exclusivity.  In the event one of the 30 day
periods expires without the payment being made, the exclusivity and remaining
options will terminate.
 
6.  Effective Date; Lease Term
This Lease shall be effective as of the Closing Date (the “Effective Date”)
(provided that Sections 1, 3, 4, 6 and 15 through 20 shall be effective as of
the last date this Lease is executed by the parties hereto), and shall expire
ninety-nine (99) years following the Effective Date, or as earlier terminated
pursuant to this Lease (the “Term”).
 
7.  Use of Leased Property
The Leased Property is leased to WAM for the following purposes:
 
§ The planting, growing, and harvesting of agricultural crops and other uses
incidental thereto.
 
If WAM desires to use the Leased Property for any other purpose, WAM shall seek
the consent of Cadiz, which consent shall not be unreasonably withheld, delayed
or conditioned; provided, that, it shall not be unreasonable for Cadiz to
withhold its consent if such other desired use of the Leased Property is
inconsistent with the then-existing use of the other portions of the Cadiz
Property, including implementation of the Cadiz Water Project, and would have a
material adverse effect on such other portions of the Cadiz Property.  If Cadiz
fails to notify WAM in writing that Cadiz reasonably disapproves WAM’s consent
request within ten (10) business days after Cadiz receives such consent request,
then WAM shall deliver a second notice to Cadiz, stating in bold type on the
first page thereof “URGENT - FINAL NOTICE,” and if Cadiz fails to respond within
5 days thereafter, then Cadiz shall be deemed to have granted its consent to the
change of use requested by WAM. WAM need not operate the Leased Property or
conduct business of any nature on the Leased Property. WAM may discontinue
operation of the Leased Property at any time or from time to time. WAM may
vacate the Leased Property.
 
Cadiz hereby represents that a conditional use permit from the County of San
Bernardino is not required for agricultural use of the Leased Property.
 
In connection with any farming activities that WAM may conduct on the Leased
Property, WAM shall carry on such activities in accordance with commercially
reasonable husbandry and farming practices and sound management in accordance
with sustainable farming practices and in such a manner that does not degrade
the aquifer underlying the Leased Property.  WAM shall not use or permit the use
of the Leased Property for any unlawful purpose or in any way that will
interfere with Cadiz’s use of the portion of its property not included in the
Leased Property.
 
 
 
8.  Water Infrastructure and Supply
Consistent with the well field design established by Cadiz or any well field
design hereafter established by WAM and approved by Cadiz (which approval shall
be granted by Cadiz if Cadiz determines in its good faith and reasonable
judgment that such well field design is compatible with the exportation of water
and consistent with Cadiz’s then current design), WAM has the right to construct
any additional infrastructure that may be necessary in order to access water for
its irrigation purposes on the Leased Property.  If WAM elects to construct such
infrastructure, then WAM shall be responsible for well maintenance and
infrastructure constructed by WAM, including mains and laterals (if any).
 
The water supply source for the Leased Property shall be from the Cadiz
Property, and shall be made available  by Cadiz to WAM for use on the Leased
Property consistent with this Lease.  The maximum water supply to which WAM is
entitled shall be the average groundwater available to the Leased Property over
the previous 10 years, such amount not to be less than 5 acre-feet per acre (the
“Total Water Allowance”).  For illustration purposes only, if WAM leases 2,100
acres, its Total Water Allowance shall be 10,500 acre-feet.  To the extent
additional water is available pursuant to the Cadiz groundwater pumping permit
on an annual basis and is otherwise not being put to beneficial use, then
supplemental supply would be made available to WAM for use on its 2,100 acres.
 
9.  Taxes and Assessments
WAM shall pay, when due, all real property, personal property and/or any other
type of tax or assessment relating exclusively to the Leased Property accruing
during the Term (prorated for any partial tax year and further apportioned if
the Leased Property is part of a larger tax parcel), including taxes or
assessments attributable to any alterations, additions or improvements made to
the Leased Property by WAM or attributable to WAM’s personal property or
fixtures.
 
10.  Maintenance and Repairs; Utilities
All farming operations on the Leased Property shall be done at the sole cost and
expense of WAM, and WAM agrees to keep the Leased Property free and clear of all
liens or claims of any kind for labor or material, and agrees to keep the Leased
Property and the crops thereon free of any labor claims of any kind or nature,
other than liens or claims being contested in good faith by appropriate
proceedings.
 
WAM agrees that it will not commit any material physical waste or suffer any
material physical waste to be committed on the Leased Property and that at all
times during the Term, it will keep and maintain all improvements now on the
Leased Property, or that shall be constructed on the Leased Property during the
Term, in as good order, condition and repair as reasonable use and wear thereof
will permit, damage by the elements excepted.
 
WAM will observe, comply and conform to all applicable laws of the State of
California and all applicable ordinances of the County of San Bernardino,
affecting the use or occupation of the Leased Property, including without
limitation all laws and ordinances relating to the transportation and use of
fertilizer and other chemicals.
 
During the Term, WAM will keep and maintain in good order, condition and repair
all subsurface irrigation pipelines, valves and headgates, and other subsurface
structures and pipelines on the Leased Property used for the purposes of
controlling the flow of water within the Leased Property.
 
Cadiz shall have no obligation to operate, maintain or repair the Leased
Property or any improvements constructed thereon by WAM; provided, however,
Cadiz shall maintain in good condition and repair all rights of way,
improvements and infrastructure located on or appurtenant to the Cadiz Property
as reasonably necessary for WAM’s use and enjoyment of the Leased Property.
 
11.  Insurance
WAM agrees to obtain and keep in force during the Term workers’ compensation,
general liability and such other insurance coverages as deemed reasonably
necessary by Cadiz to protect against any liability for personal injury or
property damage to the public incident to WAM’s use of or resulting from any
accident occurring on or about the Leased Property. The commercial liability
policy shall insure any contingent liability of Cadiz and shall name Cadiz as an
additional insured.  Such policies shall also provide for at least twenty (20)
days written notice by the insurer to Cadiz prior to any cancellation thereof.
 
12.  Cadiz’s Right of Entry and Inspection
Cadiz, its agents or attorneys, shall have the right at all reasonable times to
enter upon the Leased Property to inspect, to determine if WAM is complying with
the terms of this Lease. In exercising Cadiz’s right of entry, Cadiz shall use
all commercially reasonable efforts to minimize any interference with WAM’s use
and operation of the Leased Property.
 
13.  Cadiz Lease Termination Option
For a period of twenty (20) years following the Effective Date of this Lease,
Cadiz shall have an option to terminate this Lease (“Cadiz Lease Termination
Option”) upon ninety (90) days’ advance written notice to WAM at a price equal
to the sum of the following three items (collectively, the “Purchase Price”): 1)
the Lease Payment plus a ten percent (10%) compounded annual (365 days) return
to WAM through the closing date of the repurchase (“10% Return”); provided
however, (y) the amount of such payment shall not be less than $14,400,000; and
(z) if the transaction contemplated by the Term Sheet is consummated, the 10%
Return shall automatically (and retroactively) increase to a twenty percent
(20%) compounded annual return to WAM from the Effective Date through the
closing date of such repurchase; and; 2) reimburse WAM for the actual cost of
any farming related infrastructure incurred by WAM on the Leased Property and
for the actual cost of any water related infrastructure incurred by WAM on the
Leased Property plus 8% per annum,, as well as the costs of any water-transfer
related investments; and 3) reimburse any development expenses incurred by WAM,
working in coordination with Cadiz, for the El Paso Pipeline up to $1,000,000,
plus a 3x multiple  return to WAM on the amount of such development expenses
(“Development Expense Return”) (for the avoidance of doubt, the maximum
Development Expense Return would be $3,000,000).  In addition, if WAM closes on
the transaction contemplated by the Term Sheet and exercises any expansion
option described in Section 5 above, a similar provision will apply.
 
In the event (x) Cadiz does not exercise the Cadiz Lease Termination Option
prior to its expiration, or (y) Cadiz files for bankruptcy protection (or an
involuntary bankruptcy petition is filed against Cadiz not discharged within 90
days of filing) during the twenty (20) year Cadiz Lease Termination Option, WAM
shall have the right to purchase the Leased Property for $1.00 (“Lease Purchase
Option”).  By no later than January 7, 2016, Cadiz and WAM shall agree upon, and
on the Closing Date enter into, a definitive option agreement in recordable form
(and otherwise in form and substance reasonably acceptable to the parties)
documenting the Lease Purchase Option.  Cadiz and WAM shall act in good faith
and in a manner designed to promptly agree upon the form of such definitive
option agreement.
 
14. Pipeline Usage Agreement
In the event that WAM notifies Cadiz at any time after 3 years from the
Effective Date that WAM has negotiated a binding long term contract (which
binding long term contract is reasonably capable of being performed within a
reasonable period of time) to export up to 4,364 acre feet of water per year
through the El Paso Pipeline (“Pipeline Usage Agreement”), and Cadiz has not
exercised the Cadiz Lease Termination Option, Cadiz shall have an additional
right to terminate the Lease on 90 days’ advance written notice delivered to WAM
with respect to the portion of the Leased Property relating to the amount of
water subject to the Pipeline Usage Agreement, calculated as the amount of water
utilized per the Pipeline Usage Agreement divided by the Total Water Allowance
(“Pro Rata Amount”). In such event, Cadiz shall pay to WAM, simultaneous with
Cadiz’s termination notice, the Purchase Price for the Pro Rata Amount (as
determined in accordance with Section 13 above, including all amounts set forth
in clauses 1), 2) and 3) of Section 13 above as if Cadiz had exercised the Cadiz
Lease Termination Option) (“Pro Rata Termination Option”).  In the event that
Cadiz does not exercise the Pro Rata Termination Option within 180 days of such
notice by WAM, WAM shall have the right to enter into the Pipeline Usage
Agreement provided that WAM agrees to pay to Cadiz a fee of 10% of WAM’s net
profit from the Pipeline Usage Agreement.
 
During the Term, WAM shall have the right to use the El Paso Pipeline consistent
with existing or acquired permits to export up to 21.82% of the available
capacity of acre feet of water or import up to 21.82% of the available capacity
of acre feet of water.
 
15.  Default
The failure by WAM to observe any of the material covenants, conditions or
provisions of this Lease, other than the payment of money, where such failure
shall continue for a period of thirty (30) days after written notice of such
failure from Cadiz to WAM, provided, however, that if the nature of WAM’s
default is such that more than thirty (30) days are reasonably required for its
cure, WAM will have such additional reasonable period to cure the default
provided WAM diligently prosecutes such cure to completion (“WAM Default”).
 
The failure by Cadiz to observe any of the material covenants, conditions or
provisions of this Lease, where such failure shall continue for a period of
thirty (30) days after written notice of such failure from WAM to Cadiz,
provided, however, that if the nature of Cadiz’s default is such that more than
thirty (30) days are reasonably required for its cure, Cadiz will have such
additional reasonable period to cure the default provided Cadiz diligently
prosecutes such cure to completion (“Cadiz Default”).
 
16.  Termination
This Lease shall terminate upon the earliest of the following:
 
§ The expiration of the Term; provided, however, to the extent not prohibited by
applicable law, WAM shall have a right to renew the Term for another 99 years
(or such maximum term, not to exceed 99 years, that is permitted by applicable
law) on terms and conditions reasonably acceptable to Cadiz and WAM;
 
§ At the option of Cadiz by written notice to WAM, upon the occurrence and
continuance of a WAM Default;
 
§ At the option of WAM, upon the occurrence of a Cadiz Default but subject to
receipt from Cadiz of the amounts due and owing under Section 13 above as if
Cadiz had exercised the Cadiz Lease Termination Option;
 
§ Exercise by Cadiz of the Cadiz Lease Termination Option but subject to receipt
from Cadiz of the amounts due and owing under Section 13 above; and
 
§ Exercise by WAM of the Lease Purchase Option.
 
Upon termination of this Lease by WAM or Cadiz (other than in respect of WAM’s
exercise of the Lease Purchase Option) and receipt by WAM of any amounts due and
owing to it by Cadiz as set forth above, WAM shall quit and surrender the Leased
Property to Cadiz.  WAM shall promptly execute, acknowledge and deliver to Cadiz
such instruments of further assurance as in the reasonable opinion of Cadiz are
necessary or desirable to confirm or perfect Cadiz’s rights, title and interest
in and to the Leased Property.  The provisions of this paragraph shall survive
the expiration or termination of this Lease.  Upon termination, WAM shall have
no further right or interest in or to the Leased Property or any part thereof.
 
 
 
17.  Indemnification
Cadiz shall not be liable in any manner for any loss, damage or injury to any
person or the property of WAM or that of its agents or employees, or to any
other person(s) or the property of such person(s) invited or permitted by WAM to
come upon or about the Leased Property, or to any other person(s) who enters
upon or about the Leased Property whether invitees, by trespass or otherwise, by
reason of anything done, permitted to be done or suffered or admitted to be
done, by WAM or its agents or employees or otherwise unless caused by the gross
negligence or willful misconduct of Cadiz or its agents or employees.  WAM
agrees to indemnify and save harmless Cadiz, its officers, directors, agents,
employees, successors and assigns from any and all such liability, damage, cost
and expense, to protect Cadiz against any claim that may be made, or action that
may be brought against Cadiz related to WAM’s use and operation of the Leased
Property, and pay all reasonable costs and expenses of such protection and
defense; provided, however, the foregoing indemnity will not apply to matters
arising from the gross negligence or willful misconduct of Cadiz or its agents
or employees, or from the existence of pre-existing adverse matters affecting
the Leased Property, including, without limitation, the presence of hazardous
materials existing on the Leased Property as of the Effective Date.
 
Cadiz agrees to indemnify and save harmless WAM, its officers, directors,
agents, employees, successors and assigns from any and all liability, damage,
cost and expense suffered by WAM directly resulting from contamination of the
Leased Property or the water supplied by Cadiz hereunder, provided that such
contamination is caused by an agent, contractor, or employee of Cadiz.  Cadiz
further agrees to indemnify and save harmless WAM, its officers, directors,
agents, employees, successors and assigns from any and all liability, damage,
cost and expense suffered by WAM (including reasonable attorneys’ fees and
costs) directly resulting from actions or causes of actions against WAM that
seek to prevent, enjoin or otherwise prohibit WAM from its intended use of the
Leased Property.
 
18.  Attorneys’ Fees
If either WAM or Cadiz has to institute legal proceedings of any kind or
character to compel performance of any of the covenants or conditions to be
paid, kept or performed under this Lease, the party recovering judgment shall
have and recover all attorneys’ fees and costs incurred in connection with any
such legal proceedings.
 
19.  Binding Nature; General Provisions
 
The provisions of this Lease shall be binding upon the parties and their
successors and permitted assigns.    Cadiz shall not have the right to assign,
sublease and otherwise transfer this Lease or any interest therein (in whole or
in part) without the express written consent of WAM.  Upon written notice to
Cadiz, WAM shall have the right to pledge, mortgage and assign its rights under
this Lease without the consent of Cadiz, subject to the permitted use of the
Leased Property as provided in Section 7. After WAM assigns this Lease and the
assignee assumes it, the assignor shall have no obligation or liability under
this Lease.
 
The validity and interpretation of this Lease shall be governed by the laws of
the State of California.
 
All individuals executing this Lease on behalf of the respective parties
represent and warrant that they have the capacity and have been duly authorized
to so execute the same.  Upon distribution of the escrowed funds to Cadiz, the
Company shall reimburse WAM for its reasonable out of pocket fees and expenses
(including reasonable attorneys’ fees) incurred in connection with the
negotiation, preparation and documentation of this Lease, subject to a cap of
$50,000.
 
Any and all notices shall be given by a party to the other party in writing by
delivery of such notice to such party personally or by certified or registered
mail addressed to the party as set forth on the signature page of this Lease or
such other address as delivered to the other party pursuant to this
paragraph.  In the case of notices by mail, notice shall be deemed to have been
received forty-eight (48) hours after the date of deposit in the United States
mail.
 
No waiver of any breach of any of the covenants, agreements, restrictions and
conditions of this Lease shall be construed to be a waiver of any succeeding
breach of the same or other covenants, agreements, restrictions or conditions.
 
No remedy shall be exclusive but shall, wherever possible, be deemed cumulative
with all other remedies at law or in equity.
 
Time is of the essence in respect to the terms and provisions of this Lease.
 
Neither party will issue any public statement with respect to the existence of
this Lease or its contemplated transactions, nor will either party use the other
party’s names or trademarks, without the other party’s prior written consent or
pursuant to applicable law.
 
Each party agrees to cooperate in the performance of this Lease and to execute
and deliver any and all reasonable documents and perform any and all acts
reasonably necessary to carry out its purpose and intent.
 
Nothing contained in this Lease shall create a partnership, joint venture or
employment relationship between the Company and WAM.  Neither party shall be
liable, except as otherwise expressly provided for in this Lease, for any
obligations or liabilities incurred by the other party.
 
So long as this Lease has not been terminated, and no WAM default is continuing
beyond the expiration of any applicable grace or notice and cure period, Cadiz
covenants that WAM shall and may peaceably and quietly have, hold, and enjoy the
Leased Property for the Term, subject to the terms of this Lease, without
molestation, hindrance, or disturbance by or from Cadiz or anyone claiming by or
through Cadiz or having title to the Leased Property paramount to Cadiz, and
free of any encumbrance created or suffered by Cadiz.
 
Upon request by either WAM or Cadiz, the parties shall promptly execute,
acknowledge, and deliver duplicate originals of a Memorandum of Lease, which
Memorandum of Lease must include WAM’s option to lease additional property
pursuant to Section 5 of this Lease. Either party may record such Memorandum of
Lease. Any taxes imposed upon such recording shall be paid equally by the
parties. If the parties amend this Lease, then the parties shall have the same
rights and obligations regarding a memorandum of such amendment as they do for
the Memorandum of Lease. WAM may at any time by notice to Cadiz elect to require
the Memorandum of Lease to be terminated.
 
20.  Leasehold Mortgagee Protections
 
Assignment and Mortgages: Upon written notice to Cadiz, WAM may, without Cadiz’s
consent, assign this Lease, including any options it contains, subject to the
permitted use of the Leased Property as provided in Section 7.  Upon written
notice to Cadiz, WAM may also, without Cadiz’s consent, mortgage this Lease
(including any options it contains) to any leasehold mortgagee(s) (each, a
“Leasehold Mortgagee”), subject to the permitted use of the Leased Property as
provided in Section 7.  A Leasehold Mortgagee (and anyone whose title derives
directly or indirectly from a Leasehold Mortgagee, including a purchaser at any
foreclosure sale held under a Leasehold Mortgage) may, without Cadiz’s consent,
hold a foreclosure sale of this Lease, take title to this Lease, and transfer or
assign this Lease, either in its own name or through a nominee.
 
Priority of Fee Mortgages: Any mortgage on Cadiz’s fee estate (a “Fee Mortgage”)
shall be subject and subordinate to this Lease. Cadiz shall not enter into any
Fee Mortgage that violates the previous sentence. WAM shall not subordinate this
Lease to any Fee Mortgage without consent by all Leasehold Mortgagees, which
consent shall not be unreasonably withheld. Any inconsistency between any Fee
Mortgage and this Lease shall be resolved in favor of this Lease.
 
No Merger: If this Lease and the fee estate in the Leased Property are ever
commonly held, then they shall remain separate and distinct estates and shall
not merge without consent by all Leasehold Mortgagees.
 
Notice and Opportunity to Cure: If WAM defaults on this Lease, then Cadiz shall
so notify all Leasehold Mortgagees. Each of WAM and any Leasehold Mortgagees may
cure such default. Notwithstanding anything contained in this Lease to the
contrary, Cadiz shall not terminate this Lease for WAM’s default unless and
until Cadiz has given all Leasehold Mortgagees written notice of such default
and thirty (30) days in which to cure it. If such default cannot reasonably be
cured within thirty (30) days, then each Leasehold Mortgagee shall have such
additional time as it reasonably needs to cure such default, so long as it
proceeds with reasonable diligence. For any default that cannot be cured without
possession of the Leased Property or at all, Cadiz shall allow such additional
time as Leasehold Mortgagees shall reasonably need to prosecute and complete a
foreclosure or equivalent proceeding and obtain possession of the Leased
Property.  If a Leasehold Mortgagee completes a foreclosure of this Lease, then
Cadiz shall waive any noncurable defaults.
 
Copies of Notices: No notice by Cadiz shall be effective against a Leasehold
Mortgagee unless Cadiz has given a copy of such notice to such Leasehold
Mortgagee.
 
New Lease. If this Lease terminates because of WAM’s default or because WAM
rejects this Lease in bankruptcy or similar proceedings, then Cadiz shall upon
request made within 30 days of such termination, enter into a new lease with the
most senior Leasehold Mortgagee on the same terms and with the same priority as
this Lease.
 
Subleases: Upon written notice to Cadiz, WAM may, without Cadiz’s consent,
sublease the Leased Property subject to the permitted use of the Leased Property
as provided in Section 7. Cadiz shall not disturb the possession, interest, or
quiet enjoyment of any subtenant.
 
Condemnation Awards. WAM’s share of any condemnation award shall be no less than
the total condemnation award less the value of Cadiz’s remainder interest in the
Leased Property, considered as if unimproved and as if this Lease had not
terminated. To the extent that WAM is entitled to any condemnation award, it
shall be paid to the most senior Leasehold Mortgagee and, if there are no
Leasehold Mortgagees, to WAM.
 
Casualty and Partial Condemnation: In the event of a casualty or a partial
condemnation, this Lease shall continue. Any insurance proceeds or condemnation
award shall be paid to Leasehold Mortgagee (who shall have the right to
participate in and approve settlement of any such claim) or a trustee it
designates, to be used first to restore the Leased Property. Any remainder shall
be disbursed to Leasehold Mortgagee to the extent required by its loan
documents, and thereafter to Cadiz and WAM in accordance with the further terms
of this Lease.
 
Preservation of Lease. This Lease may not be amended, modified, changed,
cancelled, waived, or terminated without the consent of all Leasehold
Mortgagees. Cadiz shall not accept a voluntary surrender of the Lease without
consent by all Leasehold Mortgagees. Any such amendment, modification, change,
cancellation, termination, waiver, or surrender shall not bind any Leasehold
Mortgagee or its successors or assigns unless made with such Leasehold
Mortgagee’s consent. Any Leasehold Mortgagee may exercise any or all of WAM’s
rights under this Lease.
 
Options: If this Lease contains any renewal, purchase, or extension option and
WAM does not timely exercise it, then Cadiz shall promptly notify each Leasehold
Mortgagee, who shall then have thirty (30) days to exercise it on WAM’s behalf.
 
No Personal Liability. No Leasehold Mortgagee (or anyone whose title derives
from a Leasehold Mortgagee) shall have any personal liability under this Lease
unless and until (and then only so long as) such Person succeeds to WAM’s
interest under this Lease. Any such personal liability shall be limited to the
value of the liable party’s interest in this Lease.
 
Estoppel Certificates. Cadiz and WAM shall,  at any time and from time to time,
within 20 business days and following notice by the other party, execute,
acknowledge and deliver to the party which gave such notice a statement in
writing certifying (a) that this Lease is unmodified and in full force and
effect, or if there shall have been any modification(s) that the same is in full
force and effect as modified and stating the modification(s), (b) whether or not
to the best of knowledge of the signer of such certificate the other party is in
default hereunder, and , if so, specifying each such default, (c) with respect
to WAM, whether WAM has exercised any option to extend the term of this Lease
and, if so, specifying such extension, and (d) certifying any other matter which
shall be reasonably requested by Cadiz, WAM or any lender or prospective lender
of Cadiz or WAM.
 
Future Amendments: The parties shall from time to time as necessary or
desirable, cooperate in good faith to amend this Lease to accommodate any local
laws relating to the Leased Property, and any then prevailing customary
provisions of this Lease and ground leases in general to the extent reasonably
acceptable to Cadiz acting in good faith (as well as any reasonable requests
from any Leasehold Mortgagees).
 
No Consequential Damages: Whenever either party may seek or claim damages
against the other party (whether by reason of a breach of this Lease by such
party, in enforcement of any indemnity obligation, for misrepresentation or
breach of warranty, or otherwise), neither Cadiz nor WAM shall seek, nor shall
there be awarded or granted by any court, arbitrator, or other adjudicator, any
speculative, consequential, collateral, special, punitive, or indirect  damages,
whether such breach shall be willful, knowing, intentional, deliberate, or
otherwise. The parties intend that any damages awarded to either party shall be
limited to actual, direct damages sustained by the aggrieved party. Neither
party shall be liable for any loss of profits suffered or claimed to have been
suffered by the other.
 
Conflict: If the terms of this Section 20 conflict with any other terms of this
Lease, then the provisions of this Section 20 shall govern and control.

Dated: December 23,
2015                                                                CADIZ REAL
ESTATE LLC

By: /s/ Timothy J. Shaheen
 
Its: Manager

Address:
550 S. Hope Street, Suite 2850 Los Angeles, CA  90071

Dated:  December 23,
2015                                                               CADIZ INC.

By: /s/ Timothy J. Shaheen

Its: Chief Financial Officer

Address:
550 S. Hope Street, Suite 2850 Los Angeles, CA  90071

Dated: December 23,
2015                                                                WATER ASSET
MANAGEMENT, LLC

By:  /s/ Water Asset Management, LLC

Its: 

Address:
c/o Water Asset Management, LLC
509 Madison Avenue Suite 804 New York, NY  10022
 
EXHIBIT A
 
Cadiz Property
 

Exhibit A [exhibita.jpg]
 
 
 
EXHIBIT B
 
Leased Property*
 

Section 21:

0556-311-49-0000
0556-311-50-0000
0556-311-52-0000
0556-311-53-0000

Section 27:

0556-311-09-0000

Section 28:
Northeast quarter of Section 28 (160 acres) plus the top eighth of the southeast
quarter Section 28.  [Subject to verification]

Section 33:

0556-341-01-0000
0556-341-02-0000
0556-341-03-0000
0556-341-04-0000
0556-341-05-0000
0556-341-06-0000
0556-341-07-0000
0556-341-08-0000
0556-351-01-0000
0556-351-02-0000
0556-351-03-0000
0556-351-04-0000
0556-351-05-0000
0556-351-06-0000
0556-351-07-0000
0556-351-08-0000

* To the extent the Assessor’s Parcel Numbers (“APNs”) or above description of
the Leased Property conflicts with the below picture, the APNs and above
description shall control, unless otherwise agreed by WAM.

The description of the Leased Property is subject to modification based on the
official plat/record of survey to be provided during the escrow period.
 
Exhibit B [exhbitb.jpg]
 
 
EXHIBIT "C"
 
Cadiz Farm Property
 
Exhibit C [exhibitc.jpg]
 
 
EXHIBIT "D"
 
Limoneira Lease
 

CADIZ - LIMONEIRA AMENDED AND RESTATED LEASE

 
1.  Parties
Cadiz Real Estate LLC (“Cadiz”), a wholly-owned subsidiary of Cadiz Inc., is the
owner of approximately 45,000 acres of land and the subsurface strata, inclusive
of the unsaturated soils and appurtenant water rights (the “Cadiz Property”).
 
Limoneira Company (“Limoneira”) is a publicly traded agribusiness and real
estate development company.
 
2.  Leased Property
A minimum of 320 acres to a maximum of 1,480 acres located within 9,600 zoned
agricultural acres within the Cadiz Property, with the exact location(s) to be
mutually agreed to by the parties, on terms set forth in this Lease (“Leased
Property”).  Within thirty (30) days following the Effective Date, Cadiz will
provide Limoneira a title report that identifies any and all liens recorded
against the Leased Property, and a non-disturbance letter with regard to the
Leased Property.
 
Further, as the parties may mutually agree from time to time during the Term,
housing and other dwelling structures located adjacent to or near the Leased
Property may be included within the “Leased Property” for purposes of housing
Limoneira’s agricultural employees working on the Leased Property.  Terms
associated with such temporary housing facilities shall be agreed to in writing
by the parties.
 
3.  Initial Lease; Option to Lease
Additional Acreage
 
Cadiz leases to Limoneira, and Limoneira leases from Cadiz, Three Hundred Twenty
(320) acres (the “Initial Acreage”), plus an additional Two Hundred (200) acres
(the “Added Acreage”), the location to be mutually agreed to by the parties, and
subject to the planting schedule described in Section 5 hereof.  Further, Cadiz
hereby grants to Limoneira the right to exercise an option to lease (beyond the
Initial Acreage) up to Six Hundred Forty (640) acres (“Option 1”), and up to
Three Hundred Twenty (320) acres (“Option 2”) (the two options together are
collectively referred to as the “Option”); provided that (a) notice of
Limoneira’s exercise of the Option must be in writing and received by Cadiz no
later than December 31, 2016 (for Option 1), and December 31, 2018 (for Option
2), and the physical planting of the lemon trees has occurred no later than
December 31, 2017 (for Option 1) and December 31, 2019 (for Option 2).
 
Excepting any water or soil contamination that may exist on the Leased Property
as of the Effective Date, Limoneira accepts the Leased Property in its “AS-IS”
condition as of the Effective Date, and in respect to the acreage leased under
the timely exercise of the Option, as of the date of the exercise of the
applicable Option.
 

4.  Effective Date; Lease Term
This Lease shall be effective as of last date this Lease is executed by the
parties hereto as set forth on the signature page (the “Effective Date”), and
shall expire with respect to actual planted acreage twenty (20) years following
the initial planting on such acreage, and no later than December 31, 2039, or as
earlier terminated pursuant to this Lease (the “Term”), with no automatic
renewals, provided, however, that the parties may mutually agree (to be
exercised in each party’s sole discretion) to extend the Term.
 
5.  Use of Leased Property
The Leased Property is leased to Limoneira for the following purpose and for no
other purpose except with the prior written consent of Cadiz, which shall be
exercised by Cadiz in its sole and absolute discretion:
 
§ The planting, growing, and harvesting of lemon trees.
 
Cadiz hereby represents that a conditional use permit from the County of San
Bernardino is not required for the abovedescribed use of the Leased Property.
 
The parties agree that the intent of the parties is for Limoneira to plant, grow
and harvest lemon trees on all of the Leased Property (that is, all 1,480 acres)
by 2019.  Although Limoneira is not obligated to exercise all or any part of the
Option, Limoneira agrees that the Initial Acreage shall be planted with lemon
trees no later than December 31, 2014.
 
Limoneira shall carry on all activities permitted herein in accordance with the
best husbandry and best farming practices and sound management in accordance
with sustainable farming practices and in such a manner that does not degrade
the aquifer underlying the Leased Property.  Limoneira shall not use or permit
the use of the Leased Property for any unlawful purpose or in any way that will
interere with Cadiz's use of the portion of its property not included in the
Leased Property.
 

6.  Lease Payment
In consideration for the Lease, Limoneira shall pay to Cadiz or its assignee an
annual amount equal to the sum of (a) $200 per acre planted, prorated for
partial acreages planted during the relevant period (“Base Rent”) and (b) 20% of
the “Net Cash Flow” (“Lease Payment”).  The Lease Payment shall be due and
payable semi-annually on June 30 and December 31 of each year, and shall not
exceed $1,200 per acre per year.  For purposes of this Lease, “Net Cash
Flow” shall mean gross revenues from the sale of the harvested lemons less
operating expenses (including Base Rent but excluding depreciation or other
non-cash expenses).  “Operating expenses” shall include, but not be limited to,
expenditures incurred by Limoneira for farming and growing, frost prevention,
soil treatments, irrigation, harvesting, packing and freight.  Further, the
parties may mutually agree (each exercised in its sole discretion) upon a
characterization that extraordinary non-cash expenses be “operating expenses”
for purposes of calculating Net Cash Flow.
 
7.  Water Infrastructure and
Supply
In consultation with Limoneira, Cadiz shall design, develop and construct the
necessary infrastructure in order to supply water to Limoneira for its
irrigation purposes on the Leased Property.  Cadiz shall be responsible for well
maintenance and the delivery of water to the planted acreage through all
subsurface infrastructure, including mains and laterals.  Limoneira shall be
responsible for any deep ripping to the land prior to any planting, if
necessary, and the costs associated with the surface distribution of such water
to the trees through selected drip irrigation.
 
The water supply source for the Leased Property shall be from the Cadiz
Property, and shall be provided by Cadiz to Limoneira for use on the Leased
Property consistent with this Lease at a cost equal to $50 (in July 2013
dollars) per acre-foot as increased (but not decreased) by an escalation equal
to the percentage change (year over year) of the Consumer Price Index for All
Urban Consumers, Los Angeles-Riverside-Orange County, CA, All Items, not
seasonally adjusted (1982-1984=100) (“CPI”) (“Water Cost”), which shall be
invoiced by Cadiz and paid by Limoneira to Cadiz on a quarterly basis.  The
maximum water supply to which Limoneira is entitled shall be 5 acre-feet per
acre of the Leased Property (the “Total Water Allowance,” with actual
entitlement based on the number of acres actually planted being “Planted
Water Allowance”).  For illustration purposes only, if Limoneira has 1,280 acres
planted, its Planted Water Allowance shall be 6,400 acre-feet, at a total cost
of $320,000 + CPI.
 
Any and all water rights initiated or preserved as a result of Limoneira’s use
of water on the Leased Property shall accrue to the benefit of Cadiz.  Cadiz
will be responsible to provide water in quantity and suitability for the
purposes set forth in this Lease.
 

8.  Taxes and Assessments
Cadiz shall pay, when due, all real property, personal property and/or any other
type of tax or assessment relating to the Leased Property, except that Limoneira
shall pay any taxes or assessments attributable to any alterations, additions or
improvements made to the Leased Property by Limoneira or attributable to
Limoneira’s personal property or fixtures.
 
9.  Maintenance and Repairs;
Utilities
All farming operations on the Leased Property shall be done at the sole cost and
expense of Limoneira, and Limoneira agrees to keep the Leased Property free and
clear of all liens or claims of any kind for labor or material, and agrees to
keep the Leased Property and the crops thereon free of any labor claims of any
kind or nature.
 
Limoneira agrees that it will not commit any waste or suffer any waste to be
committed on the Leased Property and that at all times during the Term, it will
keep and maintain all improvements now on the Leased Property, or that shall be
constructed on the Leased Property during the Term with the approval of Cadiz,
in as good order, condition and repair as reasonable use and wear thereof will
permit, damage by the elements not traceable to the negligence of Limoneira or
its agents or employees excepted.
 
Limoneira will observe, comply and conform to all laws of the State of
California and all ordinance of the County of San Bernardino, affecting the use
or occupation of the Leased Property, including without limitation all laws and
ordinances relating to the transportation and use of fertilizer and other
chemicals.  Limoneira agrees not to apply pesticides, herbicides, insecticides,
fungicides or other chemical treatments on the Leased Property that may have
a residual effect beyond the Term of the Lease.
 
During the Term, Limoneira will keep and maintain in good order, condition and
repair all subsurface irrigation pipelines, valves and headgates, and other
subsurface structures and pipelines on the Leased Property used for the purposes
of controlling the flow of water within the Leased Property.
 

10.  Insurance
Limoneira agrees to obtain and keep in force during the Term workers’
compensation, general liability and such other insurance coverages as deemed
reasonably necessary by Cadiz to protect against any liability for personal
injury or property damage to the public incident to Limoneira’s use of or
resulting from any accident occurring on or about the Leased Property. Such
policies shall insure any contingent liability of Cadiz and shall name Cadiz as
an additional insured.  Such policies shall also provide for at least twenty
(20) days written notice by the insurer to Cadiz prior to any cancellation or
modification thereof.
 
11.  Cadiz’s Right of Entry and Inspection
 
Cadiz, its agents or attorneys, shall have the right at all times to enter upon
the Leased Property to inspect, to determine if Limoneira is complying with the
terms of this Lease, and for any other purpose.
 
12.  Cadiz Buy-Out Right
At any time during the Term, Cadiz shall have the right, exercised at any time
and in its sole and absolute discretion, to divert the Total Water Allowance (or
any portion thereof) by paying to Limoneira an amount equal to the sum of (a)
all unamortized capital costs incurred by Limoneira pursuant to its permitted
use of the Leased Property (based on a 20- year amortization schedule) and (b)
30% of such unamortized capital costs (“Cadiz BuyOut Right”).  In the event
Cadiz exercises the Cadiz BuyOut Right, Cadiz agrees that it shall not, directly
or allow any third party to, harvest the then-planted lemon trees for profit on
such portion of the Leased Property associated with the Total Water Allowance
(or portion thereof) diverted.
 
13.  Limoneira Tag Right
During the Term, Limoneira shall have the right to convert up to 578 acre-feet
of the Total Water Allowance (proportionately reduced if the Planted Water
Allowance is less than the Total Water Allowance) (the “Tag Right”) to obtain
rights within the permitted 50,000 acre feet of that certain Cadiz Valley Water
Conservation, Recovery, and Storage Project located on the Cadiz Property
overlying the Fenner Valley Aquifer System (the “Project”).
 
Cadiz shall provide Limoneira written notice of any “firm contract” (that is, a
non-contingent contract to sell Project water) within seven (7) days of the
execution of the firm contract.  Limoneira shall have sixty (60) days to
exercise its Tag Right by providing written notice to Cadiz.  See Exhibit
A attached hereto and incorporated herein for an illustration of the Tag Right.
 
Limoneira agrees that if it exercises its Tag Right pursuant to this Section 13,
it shall curtail use of any of the Total Water Allowance on one-fourth (1/4th)
of the acres planted.  For illustration purposes, if 320 acres are
planted, Limoneira’s Tag Right is 125 acre-feet, and if exercised, it is
precluded from using any of the Total Water Allowance on 80 acres, unless other
water is deemed available by Cadiz through the implementation of its Project and
an agreement is reached between Cadiz and Limoneira as to the source and cost of
such new water supply.
 

14.  Default
The occurrence of any one or more of the following events shall constitute a
material default and breach of this Lease by Limoneira (each, a “Limoneira
Default”):
 
§ The failure by Limoneira to make any Lease Payment or any other payment,
including the Water Cost, required to be made by Limoneira under this Lease as
and when due, where such failure shall continue for a period of ten (10) days
after written notice of such failure from Cadiz to Limoneira;
 
§ The failure by Limoneira to observe any of the material covenants, conditions
or provisions of this Lease, other than the payment of money, where such failure
shall continue for a period of twenty (20) days after written notice of such
failure from Cadiz to Limoneira, provided, however, that if the nature of
Limoneira’s default is such that more than twenty (20) days are reasonably
required for its cure, Limoneira continually and diligently prosecutes such cure
to completion.
 
The failure by Cadiz to observe any of the material covenants, conditions or
provisions of this Lease, where such failure shall continue for a period of
twenty (20) days after written notice of such failure from Limoneira to Cadiz,
provided, however, that if the nature of Cadiz’s default is such that more than
twenty (20) days are reasonably required for its cure, Cadiz continually and
diligently prosecutes such cure to completion (“Cadiz Default”).
 

15.  Termination
This Lease shall terminate upon the earliest of the following:
 
§ The expiration of the Term (as to the particular acreage then expiring);
 
§ Upon mutual agreement of the parties for any reason, including, but not
limited to, a determination that the intended use of the Leased Property (that
is, to plant, grow and harvest lemon trees for profit) is or becomes
“economically unviable,” which shall include, without limitation, market or
weather conditions that render the lemon operation unprofitable, the existence
or occurrence of water or soil contamination or pollution, pest infestation,
litigation and injunctions prohibiting or precluding the intended use of the
Leased Property.
 
§ At the option of Cadiz, the occurrence of a Limoneira Default;
 
§ At the option of Limoneira, the occurrence of a Cadiz Default;
 
§ At the option of either party, the occurrence of a “Force Majeure” event,
which for purposes of this Lease shall be defined as the failure of a party to
perform its obligations hereunder by reason of any fire, earthquake, flood,
epidemic, explosion, riot, civil disturbance, act of public enemy or terrorism,
war, act of God or similar event beyond such party’s control, and specifically
with respect to Cadiz’s supply of water pursuant to the terms of this Lease, any
governmental or judicial order to reduce the water volume or flow rate to the
Leased Property;
 
§ Exercise by Cadiz of the Cadiz Buy-Out Right.
 
Upon termination of this Lease, Limoneira shall quit and surrender the Leased
Property to Cadiz in at least as good order, condition and repair as when
received, reasonable use, damage by act of God or by natural causes excepted,
remove all of Limoneira’s personal property and fixtures from the Leased
Property (excepting planted lemon trees), and repair any damage caused by such
removal.  Limoneira shall promptly execute, acknowledge and deliver to Cadiz
such instruments of further assurance as in the reasonable opinion of Cadiz are
necessary or desirable to confirm or perfect Cadiz’s rights, title and interest
in and to the Leased Property.  The provisions of this paragraph shall survive
the expiration or termination of this Lease.  Upon termination, Limoneira shall
have no further right or interest in or to the Leased Property or any part
thereof.
 
In the event the Lease is terminated due to Cadiz’s exercise of the Cadiz
Buy-Out Right or the occurrence of a Cadiz Default, Cadiz hereby agrees that it
shall not, directly or allow any third party to, harvest the then-planted lemon
trees for profit.
 

16.  Indemnification
Cadiz shall not be liable in any manner for any loss, damage or injury to any
person or the property of Limoneira or that of its agents or employees, or to
any other person(s) or the property of such person(s) invited or permitted by
Limoneira to come upon or about the Leased Property, or to any other person(s)
who enters upon or about the Leased Property whether invitees, by trespass or
otherwise, by reason of anything done, permitted to be done or suffered or
admitted to be done, by Limoneira or its agents or employees or
otherwise.  Limoneira agrees to indemnify and save harmless Cadiz, its officers,
directors, agents, employees, successors and assigns from any and all such
liability, damage, cost and expense, to protect Cadiz against any claim that may
be made, or action that may be brought against Cadiz, and pay all reasonable
costs and expenses of such protection and defense.
 
Cadiz agrees to indemnify and save harmless Limoneira, its officers, directors,
agents, employees, successors and assigns from any and all liability, damage,
cost and expense suffered by Limoneira directly resulting from contamination of
the Leased Property or the water supplied by Cadiz hereunder, provided that such
contamination is caused by an agent or employee of Cadiz.  Cadiz further agrees
to indemnify and save harmless Limoneira, its officers, directors, agents,
employees, successors and assigns from any and all liability, damage, cost and
expense suffered by Limoneira (including reasonable attorneys’ fees and costs)
directly resulting from actions or causes of actions against Cadiz and Limoneira
that seek to prevent, enjoin or otherwise prohibit Limoneira from its intended
use of the Leased Property.
 

17.  Attorneys’ Fees
If either Limoneira or Cadiz has to institute legal proceedings of any kind or
character to compel performance of any of the covenants or conditions to be
paid, kept or performed under this Lease, the party recovering judgment shall
have and recover all attorneys’ fees and costs incurred in connection with any
such legal proceedings.
 
18.  Binding Nature; General
Provisions
 
Upon execution of this Lease, the parties modify, amend and restate that certain
Cadiz-Limoneira Lease dated July 1, 2013.
 
The provisions of this Lease shall be binding upon the parties and their
successors and permitted assigns commencing on the date last set forth the
parties’ signatures.  Limoneira shall not assign this Lease or sublet the Leased
Property without the prior written consent of Cadiz which shall be exercised in
Cadiz’s sole and absolute discretion.
 
The validity and interpretation of this Lease shall be governed by the laws of
the State of California.
 
All individuals executing this Lease on behalf of the respective parties
represent and warrant that they have the capacity and have been duly authorized
to so execute the same.  Each signatory shall indemnify each other party, and
hold them harmless, from all damages, costs, attorneys’ fees and other expenses
if not so authorized.
 
Any and all notices shall be given by a party to the other party in writing by
delivery of such notice to such party personally or by certified or registered
mail addressed to the party as set forth on the signature page of this Lease or
such other address as delivered to the other party pursuant to this
paragraph.  In the case of notices by mail, notice shall be deemed to have been
received forty-eight (48) hours after the date of deposit in the United States
mail.
 
No waiver of any breach of any of the covenants, agreements, restrictions and
conditions of this Lease shall be construed to be a waiver of any succeeding
breach of the same or other covenants, agreements, restrictions or conditions.
 
No remedy shall be exclusive but shall, wherever possible, be deemed cumulative
with all other remedies at law or in equity.
 
Time is of the essence in respect to the terms and provisions of this Lease.
 
Neither party will issue any public statement with respect to the existence of
this Lease or its contemplated transactions, nor will either party use the other
party’s names or trademarks, without the other party’s prior written consent.
 
Each party agrees to cooperate in the performance of this Lease and to execute
and deliver any and all documents and perform any and all acts necessary to
carry out its purpose and intent.
 
Nothing contained in this Lease shall create a partnership, joint venture or
employment relationship between Cadiz and Limoneira.  Neither party shall be
liable, except as otherwise expressly provided for in this Lease, for any
obligations or liabilities incurred by the other party.
 

[signatures contained on next page]  
 
IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the date
set forth below.
 
 
Dated: 
February 3, 2015 
CADIZ REAL ESTATE LLC
       
By: 
/s/ Timothy J. Shaheen
         
Its: 
Manager
           
Address: 
   
550 S. Hope Street, Suite 2850 
   
Los Angeles, CA  90071 

 
 
 
Dated: 
February 3, 2015 
LIMONEIRA COMPANY
       
By: 
/s/ Joseph Rumley
         
Its: 
CFO
           
Address: 
   
1141 Cummings Road
   
Santa Paula, CA  93060