EXHIBIT 10.39
 
$30,000,000
 
AMENDED AND RESTATED
 
CREDIT AGREEMENT
 
among
 
CADIZ INC.
 
and
 
CADIZ REAL ESTATE LLC,
 
as Borrowers,
 
The Several Lenders from Time to Time Parties Hereto,
 
and
 
LC CAPITAL MASTER FUND, LTD.,
 
as Administrative Agent
 

 

 

 
Dated as of March 5, 2013
 

 
 
 

TABLE OF CONTENTS

SECTION 1.
DEFINITIONS 
1

 
 
1.1
Defined Terms 
1

 
 
1.2
Other Definitional Provisions 
10

 
SECTION 2.
AMOUNT AND TERMS OF LOANS 
11

 
 
2.1
Original Loans; Exchange 
11

 
 
2.2
Repayment of Loans 
11

 
 
2.3
Optional Prepayments 
11

 
 
2.4
Interest Rates and Payment Dates 
11

 
 
2.5
Computation of Interest and Fees 
12

 
 
2.6
Mandatory Prepayments 
12

 
SECTION 3.
REPRESENTATIONS AND WARRANTIES 
12

 
 
3.1
No Change 
12

 
 
3.2
Existence; Compliance with Law 
12

 
 
3.3
Power; Authorization; Enforceable Obligations 
12

 
 
3.4
No Legal Bar 
13

 
 
3.5
Litigation 
13

 
 
3.6
No Default 
13

 
 
3.7
Ownership of Property; Liens 
13

 
 
3.8
Intellectual Property 
14

 
 
3.9
Taxes 
14

 
 
3.10
ERISA 
14

 
 
3.11
Investment Company Act; Other Regulations 
15

 
 
3.12
Subsidiaries 
15

 
 
3.13
Not Used 
15

 
 
3.14
Environmental Matters 
15

 
 
3.15
Accuracy of Information, Etc 
16

 
 
3.16
Security Documents 
16

 
 
3.17
Solvency 
17

 
 
3.18
Regulation H 
17

 
 
3.19
Labor Matters 
17

 
SECTION 4.
CONDITIONS 
17

 
 
4.1
Conditions to Restatement Date 
17

 
 
4.2
Conditions Subsequent to the Restatement Date 
18

 
 
4.3
Waiver of Conditions 
19

 
SECTION 5.
AFFIRMATIVE COVENANTS 
19

 
 
5.1
Financial Statements 
19

 
 
5.2
Certificates; Other Information 
20

 
 
5.3
Payment of Obligations 
20

 
 
5.4
Maintenance of Existence; Compliance 
21

 
 
5.5
Maintenance of Property; Insurance 
21

 
 
5.6
Inspection of Property; Books and Records; Discussions 
21

 
 
5.7
Notices 
21

 
 
5.8
Environmental Laws 
22

 
 
5.9
Additional Collateral, Etc 
22

 
SECTION 6.
NEGATIVE COVENANTS 
23

 
 
6.1
Indebtedness 
23

 
 
6.2
Liens 
24

 
 
6.3
Fundamental Changes 
25

 
 
6.4
Disposition of Property 
25

 
 
6.5
Restricted Payments 
25

 
 
6.6
Investments 
25

 
 
6.7
Transactions with Affiliates 
26

 
 
6.8
Sales and Leasebacks 
26

 
 
6.9
Swap Agreements 
26

 
 
6.10
Changes in Fiscal Periods 
26

 
 
6.11
Negative Pledge Clauses 
26

 
 
6.12
Clauses Restricting Subsidiary Distributions 
26

 
 
6.13
Lines of Business 
27

 
 
6.14
Amendments to Organizational Documents 
27

 
 
6.15
Other Senior Indebtedness 
27

 
 
6.16
Convertible Note Payments 
27

 
SECTION 7.
EVENTS OF DEFAULT 
27

 
SECTION 8.
THE AGENT 
30

 
 
8.1
Appointment 
30

 
 
8.2
Delegation of Duties 
30

 
 
8.3
Exculpatory Provisions 
30

 
 
8.4
Reliance By Agent 
30

 
 
8.5
Notice of Default 
31

 
 
8.6
Non-Reliance on Agent and Other Lenders 
31

 
 
8.7
Indemnification 
32

 
 
8.8
Agent In Its Individual Capacity 
32

 
 
8.9
Successor Agent 
32

 
SECTION 9.
MISCELLANEOUS 
32

 
 
9.1
Amendments and Waivers 
32

 
 
9.2
Notices 
33

 
 
9.3
No Waiver; Cumulative Remedies 
34

 
 
9.4
Survival of Representations and Warranties 
35

 
 
9.5
Payment of Expenses and Taxes; Indemnification 
35

 
 
9.6
Successors and Assigns; Assignments and Participations 
36

 
 
9.7
Surety Waivers 
37

 
 
9.8
Counterparts 
37

 
 
9.9
Severability 
37

 
 
9.10
Integration 
38

 
 
9.11
Governing Law 
38

 
 
9.12
Submission To Jurisdiction; Waivers 
38

 
 
9.13
Acknowledgments 
38

 
 
9.14
Confidentiality 
39

 
 
9.15
Waivers of Jury Trial 
39

 

 
 

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SCHEDULES AND EXHIBITS
Schedules:

1.1A                      Lenders and Loan Amounts
1.1B                      Mortgaged Properties
3.16(a)                                UCC Filing Jurisdictions
3.16(b)                                Mortgage Filing Jurisdictions

Exhibits:

A                      Form of Assignment and Assumption
B                      Form of Compliance Certificate
C                      [INTENTIONALLY OMITTED]
D                      Form of Amended and Restated Security Agreement
E                      Form of Mortgage Amendment
F                      Form of Closing Certificate
G                      Form of Operating Agreement Amendment

 
 

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CREDIT AGREEMENT (this “Agreement”), dated as of March 5, 2013, among Cadiz
Inc., a Delaware corporation (“Cadiz”), and Cadiz Real Estate LLC, a Delaware
limited liability company (“CRE”; together with Cadiz, the “Borrower” or
“Borrowers” ), the lenders from time to time party hereto (“Lenders”) and LC
Capital Master Fund, Ltd. (“LC Capital”), as administrative agent (the “Agent”).
 
The parties hereto hereby agree as follows:
 
SECTION 1.     DEFINITIONS
 
1.1 Defined Terms.  As used in this Agreement, the terms listed in this Section
1.1 shall have the respective meanings set forth in this Section 1.1.
 
“Accreted Loan Value”:  as of the date of determination, the outstanding
principal amount of the applicable Loan, plus all accreted interest, if any,
added to such Loan as of the calendar day immediately prior to such date of
determination.
 
“Affiliate”:  as to any Person, any other Person that, directly or indirectly,
is in control of, is controlled by, or is under common control with, such
Person.  For purposes of this definition, “control” of a Person means the power,
directly or indirectly, either to (a) vote 20% or more of the securities having
ordinary voting power for the election of directors (or persons performing
similar functions) of such Person or (b) direct or cause the direction of the
management and policies of such Person, whether by contract or otherwise.
 
“After-Acquired Property”:  any fee interest in any real property or any
leasehold interest in any Material Leased Property acquired after the
Restatement Date by any Loan Party or its Subsidiaries (other than any such fee
interest in real property or leasehold interest in Material Leased Property
subject to a Lien expressly permitted by Section 6.2(f)).
 
“Agent”:  as defined in the preamble hereto.
 
“Agreement”:  as defined in the preamble hereto.
 
“Applicable Prepayment Premium”:  with respect to any prepayment of Secured Term
Loans pursuant to Section 2.3(a) or Section 2.6 or upon any acceleration of the
outstanding Loans, an amount equal to the product of (a) the Accreted Loan Value
of any amount of the Secured Term Loans being prepaid multiplied by (b) the
amount determined in accordance with the following table:
 
Date of Prepayment
 
Applicable Prepayment Premium
 
From the Restatement Date through but excluding the first (1st) anniversary of
the Restatement Date
    105.0 %
From the first (1st) anniversary of the Restatement Date through but excluding
the second (2nd) anniversary of the Restatement Date
    102.5 %
From the second (2nd) anniversary of the Restatement Date through but excluding
the Maturity Date
    100.0 %

 
“Applicable Rate”: eight percent (8.00%).
 
“Asset Sale”:  any Disposition of any Collateral or of any other property of the
Borrowers or any of their Subsidiaries, other than Dispositions described
Sections 6.4(a) and 6.4(b).
 
“Assignee”:  as defined in Section 9.6(a).
 
“Assignment and Assumption”:  an Assignment and Assumption, substantially in the
form of Exhibit A.
 
“Borrower”:  as defined in the preamble hereto.
 
“Business”:  as defined in Section 3.14(b).
 
“Business Day”:  a day other than a Saturday, Sunday or other day on which
commercial banks in New York City and Los Angeles are authorized or required by
law to close.
 
“Capital Lease Obligations”:  as to any Person, the obligations of such Person
to pay rent or other amounts under any lease of (or other arrangement conveying
the right to use) real or personal property, or a combination thereof, which
obligations are required to be classified and accounted for as capital leases on
a balance sheet of such Person under GAAP and, for the purposes of this
Agreement, the amount of such obligations at any time shall be the capitalized
amount thereof at such time determined in accordance with GAAP.
 
“Capital Stock”:  any and all shares, interests, participations or other
equivalents (however designated) of capital stock of a corporation, any and all
equivalent ownership interests in a Person (other than a corporation) and any
and all warrants, rights or options to purchase any of the foregoing.
 
“Cash Equivalents”:  (a) securities issued or directly and fully guaranteed or
insured by the United States or any agency or instrumentality thereof (provided
that the full faith and credit of the United States is pledged in support
thereof) having maturities of not more than twelve (12) months from the date of
acquisition, (b) Dollar-denominated time deposits and certificates of deposit of
(i) any Lender, (ii) any domestic commercial bank of recognized standing having
capital and surplus in excess of $500 million or (iii) any bank whose short-term
commercial paper rating from S&P is at least A-1 or from Moody’s is at least
P-1, in each case with maturities of not more than three hundred sixty-five
(365) days from the date of acquisition, (c) commercial paper issued by any
issuer bearing at least a “2” rating for any short-term rating provided by S&P
and/or Moody’s and maturing within two hundred seventy (270) days of the date of
acquisition, (d) repurchase agreements entered into by the Borrower with a bank
or trust company (including any of the Lenders) or recognized securities dealer
having capital and surplus in excess of $500 million for direct obligations
issued by or fully guaranteed by the United States, or for mortgage collateral,
in which the Borrower shall have a perfected first priority security interest
(subject to no other Liens) and having, on the date of purchase thereof, a fair
market value of at least one hundred percent (100%) of the amount of the
repurchase obligations, (e) variable or fixed rate notes issued by any issuer
rated at least AA by S&P (or the equivalent thereof) or at least Aa2 by Moody’s
(or the equivalent thereof) and maturing within one (1) year of the date of
acquisition and (f) Investments (classified in accordance with GAAP as current
assets) in money market investment programs registered under the Investment
Company Act of 1940, as amended, that are administered by reputable financial
institutions having capital and surplus of at least $500 million and the
portfolios of which are limited to Investments of the character described in the
foregoing subclauses hereof.
 
“Change of Control”:  the occurrence of any of the following: (i) the Loan
Parties shall sell or transfer all or substantially all of their assets to any
Person other than a Loan Party, (ii) any Borrower shall merge or consolidate
with another Person other than a Loan Party in a transaction not permitted by
this Agreement, (iii) any “person” or “group” (as such terms are used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”)), shall become, or obtain rights (whether by means of warrants,
options or otherwise) to become, the “beneficial owner” (as defined in Rules
13(d)-3 and 13(d) 5 under the Exchange Act), directly or indirectly, of more
than fifty percent (50%) of the outstanding Capital Stock of Cadiz or (iv) a
“Change in Control” as defined under the Indenture.
 
“Code”:  the Internal Revenue Code of 1986, as amended from time to time.
 
“Collateral”:  all property of the Borrowers and their Subsidiaries, now owned
or hereafter acquired, upon which a Lien is purported to be created by any
Security Document.
 
“Commonly Controlled Entity”:  an entity, whether or not incorporated, that is
under common control with the Borrower within the meaning of section 4001 of
ERISA or is part of a group that includes the Borrower and that is treated as a
single employer under section 414 of the Code.
 
“Compliance Certificate”:  a certificate duly executed by a Responsible Officer
substantially in the form of Exhibit B.
 
“Contractual Obligation”:  as to any Person, any provision of any security
issued by such Person or of any agreement, instrument or other undertaking to
which such Person is a party or by which it or any of its property is bound.
 
“Convertible Notes”: the 7.00% Convertible Senior Notes of Cadiz due 2018.
 
 “Default”:  any of the events specified in Section 7, whether or not any
requirement for the giving of notice, the lapse of time, or both, has been
satisfied.
 
“Disposition”:  with respect to any property, any sale, lease, sale and
leaseback, assignment, conveyance, transfer or other disposition (including
pursuant to a condemnation) thereof.  The terms “Dispose” and “Disposed of”
shall have correlative meanings.
 
“Dollars” and “$”:  dollars in lawful currency of the United States.
 
“Environmental Laws”:  any and all foreign, Federal, state, local or municipal
laws, rules, orders, regulations, statutes, ordinances, codes, decrees,
requirements of any Governmental Authority or other Requirements of Law
(including common law) regulating, relating to or imposing liability or
standards of conduct concerning protection of human health or the environment,
as now or may at any time hereafter be in effect.
 
“ERISA”:  the Employee Retirement Income Security Act of 1974, as amended from
time to time.
 
“Event of Default”:  any of the events specified in Section 7, provided that any
requirement for the giving of notice, the lapse of time, or both, has been
satisfied.
 
“Exchange”:  as defined in Section 2.1(a).
 
“GAAP”:  generally accepted accounting principles in the United States as in
effect from time to time.  In the event that any “Accounting Change” (as defined
below) shall occur and such change results in a change in the standards or terms
in this Agreement, then the Borrower and the Agent agrees to enter into
negotiations in order to amend such provisions of this Agreement so as to
reflect equitably such Accounting Changes with the desired result that the
criteria for evaluating the Borrower’s financial condition shall be the same
after such Accounting Changes as if such Accounting Changes had not been
made.  Until such time as such an amendment shall have been executed and
delivered by the Borrower and the Agent, all standards and terms in this
Agreement shall continue to be calculated or construed as if such Accounting
Changes had not occurred.  “Accounting Changes” refers to changes in accounting
principles required by the promulgation of any rule, regulation, pronouncement
or opinion by the Financial Accounting Standards Board of the American Institute
of Certified Public Accountants or, if applicable, the SEC.
 
“Governmental Authority”:  any nation or government, any state or other
political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative functions of or
pertaining to government, any securities exchange and any self-regulatory
organization.
 
“Guarantee Obligation”:  as to any Person (the “Guaranteeing Person”), any
obligation, including a reimbursement, counterindemnity or similar obligation,
of the guaranteeing person that guarantees or in effect guarantees, or which is
given to induce the creation of a separate obligation by another Person
(including any bank under any letter of credit) that guarantees or in effect
guarantees, any Indebtedness, leases, dividends or other obligations (the
“Primary Obligations”) of any other third Person (the “Primary Obligor”) in any
manner, whether directly or indirectly, including any obligation of the
guaranteeing person, whether or not contingent, (i) to purchase any such primary
obligation or any property constituting direct or indirect security therefor,
(ii) to advance or supply funds (1) for the purchase or payment of any such
primary obligation or (2) to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (iii) to purchase property, securities or services primarily
for the purpose of assuring the owner of any such primary obligation of the
ability of the primary obligor to make payment of such primary obligation or
(iv) otherwise to assure or hold harmless the owner of any such primary
obligation against loss in respect thereof; provided, however, that the term
Guarantee Obligation shall not include endorsements of instruments for deposit
or collection in the ordinary course of business.  The amount of any Guarantee
Obligation of any guaranteeing person shall be deemed to be the maximum amount
for which such guaranteeing person may be liable pursuant to the terms of the
instrument embodying such Guarantee Obligation, unless such primary obligation
and the maximum amount for which such guaranteeing person may be liable are not
stated or determinable, in which case the amount of such Guarantee Obligation
shall be such guaranteeing person’s maximum reasonably anticipated liability in
respect thereof as determined by the Borrower in good faith.
 
“Indebtedness”:  of any Person at any date, without duplication, (a) all
indebtedness of such Person for borrowed money, (b) all obligations of such
Person for the deferred purchase price of property or services (other than
current trade payables incurred in the ordinary course of such Person’s
business), (c) all obligations of such Person evidenced by notes, bonds,
debentures or other similar instruments (including the Convertible Notes), (d)
all indebtedness created or arising under any conditional sale or other title
retention agreement with respect to property acquired by such Person (even
though the rights and remedies of the seller or lender under such agreement in
the event of default are limited to repossession or sale of such property), (e)
all Capital Lease Obligations of such Person, (f) all obligations of such
Person, contingent or otherwise, as an account party or applicant under or in
respect of acceptances, letters of credit, surety bonds or similar arrangements,
(g) the liquidation value of all redeemable preferred Capital Stock of such
Person, (h) all Guarantee Obligations of such Person in respect of obligations
of the kind referred to in clauses (a) through (g) above, (i) all obligations of
the kind referred to in clauses (a) through (h) above secured by (or for which
the holder of such obligation has an existing right, contingent or otherwise, to
be secured by) any Lien on property (including accounts and contract rights)
owned by such Person, whether or not such Person has assumed or become liable
for the payment of such obligation, and (j) for the purposes of Section 7(e)
only, all obligations of such Person in respect of Swap Agreements.  The
Indebtedness of any Person shall include the Indebtedness of any other entity
(including any partnership in which such Person is a general partner) to the
extent such Person is liable therefor as a result of such Person’s ownership
interest in or other relationship with such entity, except to the extent the
terms of such Indebtedness expressly provide that such Person is not liable
therefor.
 
“Indemnified Liabilities”:  as defined in Section 9.5.
 
“Indemnitee”:  as defined in Section 9.5.
 
“Indenture”: The Indenture dated as of March 5, 2013 between Cadiz and The Bank
of New York Mellon, N.A., as Trustee, with respect to the Convertible Notes, as
amended, extended, renewed, restated, supplemented or otherwise modified from
time to time.
 
“Insolvency”:  with respect to any Multiemployer Plan, the condition that such
Plan is insolvent within the meaning of Section 4245 of ERISA.
 
“Insolvent”:  pertaining to a condition of Insolvency.
 
“Intellectual Property”:  the collective reference to all rights, priorities and
privileges relating to intellectual property, whether arising under United
States, multinational or foreign laws or otherwise, including copyrights,
copyright licenses, patents, patent licenses, trademarks, trademark licenses,
technology, know-how and processes, and all rights to sue at law or in equity
for any infringement or other impairment thereof, including the right to receive
all proceeds and damages therefrom.
 
“Investments”:  as defined in Section 6.6.
 
“LC Capital”:  as defined in the preamble hereto.
 
“Lender”:  as defined in the preamble hereto.
 
“Lien”:  any mortgage, pledge, hypothecation, assignment, deposit arrangement,
encumbrance, lien (statutory or other), charge or other security interest or any
preference, priority or other security agreement or preferential arrangement of
any kind or nature whatsoever (including any conditional sale or other title
retention agreement and any capital lease having substantially the same economic
effect as any of the foregoing).
 
“Loan”:  any Secured Term Loan held by any Lender pursuant to this Agreement.
 
“Loan Documents”:  this Agreement, the Security Documents and any amendment,
waiver, supplement or other modification to any of the foregoing.
 
“Loan Parties”:  the Borrowers and any of their Subsidiaries that is a party to
a Loan Document.
 
“Material Adverse Effect”:  (a) a material adverse effect on the business,
property, operations, condition (financial or other) or prospects of the
Borrower and its Subsidiaries taken as a whole, (b) ten (10) Business Days after
the occurrence of an event, which would not otherwise fall into the purview of
clause (a) above, which results in an adverse effect that has or is reasonably
likely to have a financial consequence of Five Hundred Thousand Dollars
($500,000) or more to the Borrower and its Subsidiaries taken as a whole, or (c)
a material adverse effect on the validity or enforceability of this Agreement or
any of the other Loan Documents or the rights or remedies of the Lenders
hereunder or thereunder.
 
“Material Leased Property”:  any real property located in the United States in
which a Loan Party or any of their Subsidiaries has a leasehold interest
(excluding any such real property that is used primarily for executive and
administrative functions of the Loan Parties).
 
“Materials of Environmental Concern”:  any hazardous or toxic substances,
materials or wastes, defined or regulated as such in or under any Environmental
Law, including asbestos, polychlorinated biphenyls and urea-formaldehyde
insulation.
 
“Maturity Date”: the third (3rd) anniversary of the Restatement Date.
 
“Mortgage”:  each mortgage or deed of trust, including, without limitation, the
Original Mortgages, any amendments thereto made by any Loan Party in favor of,
or for the benefit of, the Agent for the benefit of the Lenders (with such
changes thereto as shall be advisable under the law of the jurisdiction in which
such mortgage or deed of trust is to be recorded).
 
“Mortgage Amendment”:  as defined in Section 4.1(a)(iii).
 
“Mortgaged Properties”:  the real properties listed on Schedule 1.1B, as to
which the Agent for the benefit of the Lenders shall be granted a Lien pursuant
to the Mortgage.
 
“Multiemployer Plan”:  a Plan that is a multiemployer plan as defined in Section
4001(a)(3) of ERISA.
 
“Net Cash Proceeds”:  with respect to any Asset Sale, the cash proceeds
(including cash proceeds subsequently received (as and when received) in respect
of noncash consideration initially received), net of (a) selling expenses
(including broker’s fees or commissions, legal fees, transfer and similar taxes
and the Borrowers’ good faith estimate of income taxes paid or payable in
connection with such sale), (b) amounts provided as a reserve, in accordance
with GAAP (to the extent applicable), against any liabilities under any
indemnification obligations or purchase price adjustment associated with such
Asset Sale (provided  that, to the extent and at the time any such amounts are
released from such reserve, such amounts shall constitute Net Cash Proceeds) and
(c) the principal amount, premium or penalty, if any, interest and other amounts
on any Indebtedness for borrowed money permitted pursuant to Section 6.1 which
is secured by the Collateral or other property sold in such Asset Sale (to the
extent such Lien is permitted pursuant to Section 6.2) and which is required to
be repaid with such proceeds (other than any such Indebtedness assumed by the
purchaser of such asset).
 
“Obligations”:  the unpaid principal of and interest on (including interest
accruing after the maturity of the Loans and interest accruing after the filing
of any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to the Borrower, whether or not a
claim for post-filing or post-petition interest is allowed in such proceeding)
the Loans and all other obligations and liabilities of the Borrower to the Agent
or to any Lender, whether direct or indirect, absolute or contingent, due or to
become due, or now existing or hereafter incurred, which may arise under, out
of, or in connection with, this Agreement, any other Loan Document or any other
document made, delivered or given in connection herewith or therewith, whether
on account of principal, interest, reimbursement obligations, fees, indemnities,
costs, expenses (including all reasonable fees, charges and disbursements of
counsel to the Agent or to any Lender that are required to be paid by the
Borrower pursuant hereto) or otherwise.
 
“Original Credit Agreement”:  the 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, 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,
by and among the Borrowers, the lenders party thereto and LC Capital, as
administrative agent; as further amended pursuant to that certain Amendment No.
4 to Credit Agreement dated as of July 25, 2011, by and among the Borrowers, the
lenders party thereto and LC Capital, as administrative agent; as further
amended pursuant to that certain Amendment No. 5 to Credit Agreement and
Amendment No. 3 to Registration Rights Agreement dated as of August 8, 2012, 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. 6 to Credit Agreement and Amendment No. 4 to Registration Rights Agreement
dated as of October 30, 2012, 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 Restatement Date).
 
“Original Lender”:  as defined in Section 2.1(a).
 
“Original Loans”:  means the loans under the Original Credit Agreement
outstanding immediately prior to the Restatement.
 
“Original Mortgages”:  means (a) the Mortgage initially recorded in the offices
specified on Schedule 3.16(b) on June 29, 2006 and (b) the Mortgage initially
recorded in the offices specified on Schedule 3.16(b) on December 3, 2010, in
each case, as the same have and may be further amended and supplemented from
time to time prior to the Restatement Date.
 
“PBGC”:  the Pension Benefit Guaranty Corporation established pursuant to
Subtitle A of Title IV of ERISA (or any successor).
 
“Person”:  an individual, partnership, corporation, limited liability company,
business trust, joint stock company, trust, unincorporated association, joint
venture, Governmental Authority or other entity of whatever nature.
 
“Plan”:  at a particular time, any employee benefit plan that is covered by
ERISA and in respect of which the Borrower or a Commonly Controlled Entity is
(or, if such plan were terminated at such time, would under Section 4069 of
ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.
 
“Register”:  as defined in Section 9.6(a).
 
“Reorganization”:  with respect to any Multiemployer Plan, the condition that
such plan is in reorganization within the meaning of Section 4241 of ERISA.
 
“Reportable Event”:  any of the events set forth in Section 4043(c) of ERISA,
other than those events as to which the thirty day notice period is waived under
subsections .27, .28, .29, .30, .31, .32, .34 or .35 of PBGC Reg. 4043.
 
“Required Lenders”:  at any time, the holders of more than 50% of the aggregate
unpaid principal amount of the Loans then outstanding.
 
“Requirement of Law”:  as to any Person, the Certificate of Incorporation and
By-Laws or other organizational or governing documents of such Person, and any
law, treaty, rule or regulation or determination of an arbitrator or a court or
other Governmental Authority, in each case applicable to or binding upon such
Person or any of its property or to which such Person or any of its property is
subject.
 
“Responsible Officer”:  the chief executive officer, president or chief
financial officer of the Borrower, but in any event, with respect to financial
matters, the chief financial officer of the Borrower.
 
“Restatement Date”:  the date on which the conditions precedent set forth in
Section 4.1 shall have been satisfied or waived in accordance with the
provisions of Section 4.3.
 
“Restricted Payments”:  as defined in Section 6.5.
 
“SEC”:  the Securities and Exchange Commission, any successor thereto and any
analogous Governmental Authority.
 
“SEC Reports”:  as defined in Section 4.1(c).
 
“Secured Term Loan”:  a Loan designated as a “Secured Term Loan” in Schedule
1.1A.
 
“Security Agreement”:  the Amended and Restated Security Agreement to be
executed and delivered by the Loan Parties and the Agent, substantially in the
form of Exhibit D.
 
“Security Documents”:  the collective reference to the Security Agreement, the
Mortgage and all other security documents hereafter delivered to the Agent
granting a Lien on any property of any Person to secure the obligations and
liabilities of any Borrower under any Loan Document.
 
“Single Employer Plan”:  any Plan that is covered by Title IV of ERISA, but that
is not a Multiemployer Plan.
 
“Solvent”:  when used with respect to any Person, means that, as of any date of
determination, (a) the amount of the “present fair saleable value” of the assets
of such Person will, as of such date, exceed the amount of all “liabilities of
such Person, contingent or otherwise”, as of such date, as such quoted terms are
determined in accordance with applicable federal and state laws governing
determinations of the insolvency of debtors, (b) the present fair saleable value
of the assets of such Person will, as of such date, be greater than the amount
that will be required to pay the liability of such Person on its debts as such
debts become absolute and matured, (c) such Person will not have, as of such
date, an unreasonably small amount of capital with which to conduct its
business, and (d) such Person will be able to pay its debts as they mature.  For
purposes of this definition, (i) “debt” means liability on a “claim”, and (ii)
“claim” means any (x) right to payment, whether or not such a right is reduced
to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured,
disputed, undisputed, legal, equitable, secured or unsecured or (y) right to an
equitable remedy for breach of performance if such breach gives rise to a right
to payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured or unmatured, disputed, undisputed, secured
or unsecured.
 
“Subsidiary”:  as to any Person, a corporation, partnership, limited liability
company or other entity of which shares of stock or other ownership interests
having ordinary voting power (other than stock or such other ownership interests
having such power only by reason of the happening of a contingency) to elect a
majority of the board of directors or other managers of such corporation,
partnership or other entity are at the time owned, or the management of which is
otherwise controlled, directly or indirectly through one or more intermediaries,
or both, by such Person.  Unless otherwise qualified, all references to a
“Subsidiary” or to “Subsidiaries” in this Agreement shall refer to a Subsidiary
or Subsidiaries of the Borrower.
 
“Title Company”:  as defined in Section 4.1(a)(iii).
 
“United States”:  the United States of America.
 
1.2 Other Definitional Provisions.  Unless otherwise specified therein, all
terms defined in this Agreement shall have the defined meanings when used in the
other Loan Documents or any certificate or other document made or delivered
pursuant hereto or thereto.
 
(a) As used herein and in the other Loan Documents, and any certificate or other
document made or delivered pursuant hereto or thereto, (i) accounting terms
relating to any Loan Party not defined in Section 1.1 and accounting terms
partly defined in Section 1.1, to the extent not defined, shall have the
respective meanings given to them under GAAP, (ii) the words “include”,
“includes” and “including” shall be deemed to be followed by the phrase “without
limitation”, (iii) the word “incur” shall be construed to mean incur, create,
issue, assume, become liable in respect of or suffer to exist (and the words
“incurred” and “incurrence” shall have correlative meanings), (iv) the words
“asset” and “property” shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, Capital Stock, securities, revenues, accounts, leasehold
interests and contract rights, and (v) references to agreements or other
Contractual Obligations shall, unless otherwise specified, be deemed to refer to
such agreements or Contractual Obligations as amended, supplemented, restated or
otherwise modified from time to time.
 
(b) The words “hereof”, “herein” and “hereunder” and words of similar import,
when used in this Agreement, shall refer to this Agreement as a whole and not to
any particular provision of this Agreement, and Section, Schedule and Exhibit
references are to this Agreement unless otherwise specified.
 
(c) The meanings given to terms defined herein shall be equally applicable to
both the singular and plural forms of such terms.
 
SECTION 2.      AMOUNT AND TERMS OF LOANS
 
2.1 Original Loans; Exchange.
 
(a) On the Restatement Date, each lender under the Original Credit Agreement
(each an “Original Lender”) having Original Loans outstanding immediately prior
to the Restatement Date will exchange such Original Loans (i) in part for
Secured Term Loans and (ii) in part for Convertible Notes pursuant to the terms
of the Exchange Agreement dated March 4, 2013 among the Lenders and Cadiz (the
“Exchange”).
 
(b) Immediately after giving effect to the Exchange, (i) the aggregate amount of
Secured Term Loans outstanding will be Thirty Million Dollars ($30,000,000),
(ii) each Lender will hold the principal amount of Secured Term Loans and
Convertible Notes set forth opposite such Lender’s name as is set forth in
Schedule 1.1A and (iii) the Original Loans so exchanged shall be deemed to have
been fully repaid on the Restatement Date.
 
(c) The Borrowers shall not have any right to reborrow any portion of any
Secured Term Loan that may be repaid or prepaid from time to time.
 
2.2 Repayment of Loans.  The Accreted Loan Value of the Secured Term Loan shall
be due and payable on the Maturity Date to the Agent for the account of each
Lender as set forth in the Register referenced in Section 9.6(a).
 
2.3 Optional Prepayments.
 
(a) At any time and from time to time, the Borrowers may prepay the Secured Term
Loans, in whole or in part (in increments of not less than $100,000), for an
amount equal to the Accreted Loan Value of the amount being prepaid through the
day prior to the date of such prepayment plus the Applicable Prepayment Premium,
upon at least thirty (30) Business Days’ notice to the Agent, which notice shall
specify the principal amount of the Secured Term Loans to be prepaid and the
date on which such prepayment will be delivered to the Agent.  It shall not be a
condition to the delivery by the Borrowers of such prepayment notice that the
Borrowers have sufficient available funds to make such prepayment.  The Agent
shall deliver any prepayment notice it receives from the Borrower under this
Section 2.3(a) to the Lenders within three (3) Business Days of receipt of such
notice.
 
(b) The Borrowers shall not have any right to prepay the Loans other than as set
forth in this Section 2.3.
 
2.4 Interest Rates and Payment Dates.  Interest on the Loans shall accrete to
the outstanding principal amount of the Loans (including any additional
principal amount added pursuant to this Agreement) at the at a rate per annum
equal to the Applicable Rate (compounded quarterly on each March 5, June 5,
September 5 and December 5 after the Restatement Date) from and including the
Restatement Date through but excluding the date of payment or prepayment.  If
all or a portion of the principal amount of any Loan shall not be paid when due
(whether at the stated maturity, by acceleration or otherwise), all outstanding
Loans (whether or not overdue) shall bear interest at a rate per annum equal to
the Applicable Rate plus two percent (2.0%).
 
2.5 Computation of Interest and Fees.  Interest and fees payable pursuant hereto
shall be calculated on the basis of a 360-day year for the actual days elapsed.
 
2.6 Mandatory Prepayments.  In the event of any Asset Sale, the Borrowers shall,
within five (5) Business Days after the receipt of Net Cash Proceeds of such
Asset Sale, apply the Net Cash Proceeds of such Asset Sale first to prepay all
amounts due under the Secured Term Loans and the Applicable Prepayment Premium
thereon.  The Agent shall deliver any notice of deposit it receives from the
Borrower under this Section 2.6 to the Lenders within three (3) Business Days.
 
SECTION 3.     REPRESENTATIONS AND WARRANTIES
 
To induce the Agent and the Lenders to enter into this Agreement and to make the
Loans, the Borrowers hereby jointly and severally represent and warrant to the
Agent and each Lender that:
 
3.1 No Change.  Since the last day of the fiscal year with respect to which
Cadiz has filed with the SEC an Annual Report on Form 10-K, there has been no
development or event that has had or could reasonably be expected to have a
Material Adverse Effect.
 
3.2 Existence; Compliance with Law.  Each Loan Party (a) is duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization, (b) has the power and authority, and the legal right, to own and
operate its property, to lease the property it operates as lessee and to conduct
the business in which it is currently engaged, (c) is duly qualified as a
foreign corporation or other organization and in good standing under the laws of
each jurisdiction where its ownership, lease or operation of property or the
conduct of its business requires such qualification and (d) is in compliance
with all Requirements of Law except to the extent that the failure to comply
therewith could not, in the aggregate, reasonably be expected to have a Material
Adverse Effect.
 
3.3 Power; Authorization; Enforceable Obligations.  Each Loan Party has the
power and authority, and the legal right, to make, deliver and perform the Loan
Documents to which it is a party and , in the case of the Borrower, to obtain
extensions of credit hereunder.  Each Loan Party has taken all necessary
organizational action to authorize the execution, delivery and performance of
the Loan Documents to which it is a party and, in the case of the Borrower, to
authorize the extensions of credit on the terms and conditions of this
Agreement.  No consent or authorization of, filing with, notice to or other act
by or in respect of, any Governmental Authority or any other Person is required
in connection with the extensions of credit hereunder or with the execution,
delivery, performance, validity or enforceability of this Agreement or any of
the Loan Documents, except the filings referred to in Section 3.16.  Each Loan
Document has been duly executed and delivered on behalf of each Loan Party
thereto.  This Agreement constitutes, and each other Loan Document upon
execution will constitute, a legal, valid and binding obligation of each Loan
Party thereto, enforceable against each such Loan Party in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors’ rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
 
3.4 No Legal Bar.  The execution, delivery and performance of this Agreement and
the other Loan Documents, the borrowings hereunder and the use of the proceeds
thereof will not violate any Requirement of Law or any Contractual Obligation of
any Loan Party and will not result in, or require, the creation or imposition of
any Lien on any of their respective properties or revenues pursuant to any
Requirement of Law or any such Contractual Obligation (other than the Liens
created by the Security Documents).  No Requirement of Law or Contractual
Obligation applicable to the Borrower or any of its Subsidiaries could
reasonably be expected to have a Material Adverse Effect.
 
3.5 Litigation.  No litigation, investigation or proceeding of or before any
arbitrator or Governmental Authority is pending or, to the knowledge of the
Borrowers, threatened by or against any Loan Party or against any of their
respective properties or revenues (a) with respect to any of the Loan Documents
or any of the transactions contemplated hereby or thereby, or (b) that could
reasonably be expected to have a Material Adverse Effect.
 
3.6 No Default.  No Loan Party is in default under or with respect to any of its
Contractual Obligations in any respect that could reasonably be expected to have
a Material Adverse Effect.
 
3.7 Ownership of Property; Liens.  Each Loan Party has title in fee simple to,
or a valid leasehold interest in, all its real property (including without
limitation the right to extract by any means and use, for domestic and
agricultural purposes, for sale to third parties, and for any other purpose,
water therefrom) other than the property currently owned by Harweal Investments
Limited, the name of which has subsequently been changed to EVCO Limited, as
nominee for Cadiz Land Company, Inc., which property is subject to no Liens
other than Liens in favor of a Loan Party.  Each Loan Party has good title to,
or a valid leasehold interest in, all its other property.  Each Loan Party
represents that Octagon Partners, LLC, a California limited liability company
and an Affiliate of each of the Borrowers, has title in fee simple to all its
real property (including without limitation the right to extract by any means
and use, for domestic and agricultural purposes, for sale to third parties, and
for any other purpose water therefrom).  None of such property referenced in
this Section 3.7 is subject to any Lien except as permitted by Section 6.2 or
such other minor defects in title that do not interfere with such Loan Party’s
ability to conduct its business as currently conducted or to utilize such
properties for their intended purposes.  The property subject to the Mortgage
comprises all of the real property owned by the Loan Parties and any of their
Subsidiaries or Affiliates and all of the Material Leased Properties.
 
3.8 Intellectual Property.  Each Loan Party owns, or is licensed to use, all
Intellectual Property necessary for the conduct of its business as currently
conducted.  No material claim has been asserted and is pending by any Person
challenging or questioning the use of any Intellectual Property or the validity
or effectiveness of any Intellectual Property, nor does any Loan Party know of
any valid basis for any such claim.  The use of Intellectual Property by each
Loan Party does not infringe on the rights of any Person in any material
respect.
 
3.9 Taxes.  Each Loan Party has filed or caused to be filed all Federal, state
and other material tax returns that are required to be filed and has paid all
taxes shown to be due and payable on said returns or on any assessments made
against it or any of its property and all other taxes, fees or other charges
imposed on it or any of its property by any Governmental Authority (other than
(i) any the amount or validity of which are currently being contested in good
faith by appropriate proceedings and with respect to which reserves in
conformity with GAAP have been provided on the books of the relevant Loan Party
or (ii) to the extent the failure of which could not reasonably be expected to
result in a Material Adverse Effect).  No tax Lien has been filed, and, to the
knowledge of the Borrower, no claim is being asserted, with respect to any such
tax, fee or other charge.
 
3.10 ERISA.  No Reportable Event has occurred during the five-year period prior
to the date on which this representation is made or deemed made with respect to
any Plan, each Plan has satisfied the applicable “minimum funding standard” and
has had no “waived funding deficiency” (as such terms are defined in section 412
of the Code and section 302 of ERISA) during the five-year period prior to the
date on which this representation is made or deemed made, and each Plan has
complied in all material respects with the applicable provisions of ERISA and
the Code.  No “prohibited transaction” (and the transactions contemplated by
this Agreement, will not constitute, or indirectly result in, a “prohibited
transaction” within the meaning of section 4975 of the Code or section 406 of
ERISA) has occurred, or is expected to occur, which has subjected, or could
subject, the Mortgaged Properties, Borrower, or any officer, director or
employee of the Borrower, or Trustee of any Single Employer Plan, administrator
or other fiduciary to any tax or penalty on prohibited transactions imposed by
either section 502 of ERISA or section 4975 of the Code or any other liability
with respect thereto.  No termination of a Single Employer Plan has occurred,
and no Lien in favor of the PBGC or a Plan has arisen, during such five-year
period.  The present value of all accrued benefits under each Single Employer
Plan (based on those assumptions used to fund such Plans) did not, as of the
last annual valuation date prior to the date on which this representation is
made or deemed made, exceed the value of the assets of such Plan allocable to
such accrued benefits by a material amount.  Neither the Borrower nor any
Commonly Controlled Entity has had a complete or partial withdrawal from any
Multiemployer Plan that has resulted or could reasonably be expected to result
in a material liability under ERISA, and neither the Borrower nor any Commonly
Controlled Entity would become subject to any material liability under ERISA if
the Borrower or any such Commonly Controlled Entity were to withdraw partially
or completely from any or all Multiemployer Plans as of the valuation date most
closely preceding the date on which this representation is made or deemed
made.  No such Multiemployer Plan is in Reorganization or Insolvent.
 
3.11 Investment Company Act; Other Regulations.  No Loan Party is an “investment
company”, or a company “controlled” by an “investment company”, within the
meaning of the Investment Company Act of 1940, as amended.  No Loan Party is
subject to regulation under any Requirement of Law (other than Regulation X of
the Board of Governors of the Federal Reserve System of the United States or any
successor thereto) that limits its ability to incur Indebtedness.
 
3.12 Subsidiaries.  Except as disclosed to the Agent by the Borrower in writing
from time to time after the Restatement Date, (a) Schedule 3.12 sets forth the
name and jurisdiction of formation of each Subsidiary and, as to each such
Subsidiary, the percentage of each class of Capital Stock owned by any Loan
Party and (b) except as disclosed in public filings to the SEC, there are no
outstanding subscriptions, options, warrants, calls, rights or other agreements
or commitments (other than stock options granted to employees or directors and
directors’ qualifying shares) of any nature relating to any Capital Stock of the
Borrower or any Subsidiary, except as created by the Loan Documents.
 
3.13 Not Used.
 
3.14 Environmental Matters.  Except as, in the aggregate, could not reasonably
be expected to result in a Material Adverse Effect:
 
(a) the Mortgaged Properties do not contain, and have not previously contained,
any Materials of Environmental Concern in amounts or concentrations or under
circumstances that constitute or constituted a violation of, or could give rise
to liability under, any Environmental Law;
 
(b) no Loan Party has received or is aware of any notice of violation, alleged
violation, non-compliance, liability or potential liability regarding
environmental matters or compliance with Environmental Laws with regard to any
of the Mortgaged Properties or the business operated by any Loan Party (the
“Business”), nor does the Borrower have knowledge or reason to believe that any
such notice will be received or is being threatened;
 
(c) Materials of Environmental Concern have not been transported or disposed of
from the Mortgaged Properties in violation of, or in a manner or to a location
that could give rise to liability under, any Environmental Law, nor have any
Materials of Environmental Concern been generated, treated, stored or disposed
of at, on or under any of the Mortgaged Properties in violation of, or in a
manner that could give rise to liability under, any applicable Environmental
Law;
 
(d) no judicial proceeding or governmental or administrative action is pending
or, to the knowledge of the Borrower, threatened, under any Environmental Law to
which any Loan Party is or will be named as a party with respect to the
Mortgaged Properties or the Business, nor are there any consent decrees or other
decrees, consent orders, administrative orders or other orders, or other
administrative or judicial requirements outstanding under any Environmental Law
with respect to the Mortgaged Properties or the Business;
 
(e) there has been no release or threat of release of Materials of Environmental
Concern at or from the Mortgaged Properties, or arising from or related to the
operations of any Loan Party in connection with the Mortgaged Properties or
otherwise in connection with the Business, in violation of or in amounts or in a
manner that could give rise to liability under Environmental Laws;
 
(f) the Mortgaged Properties and all operations at the Mortgaged Properties are
in compliance, and have in the last five years been in compliance, with all
applicable Environmental Laws, and there is no contamination at, under or about
the Mortgaged Properties or violation of any Environmental Law with respect to
the Mortgaged Properties or the Business; and
 
(g) no Loan Party has assumed any liability of any other Person under
Environmental Laws.
 
3.15 Accuracy of Information, Etc.  No statement or information contained in
this Agreement, any other Loan Document, any SEC Report or any other document,
certificate or statement furnished by or on behalf of any Loan Party to the
Agent or the Lenders or filed with the SEC, or any of them, for use in
connection with the transactions contemplated by this Agreement or the other
Loan Documents, contained as of the date such statement, information, document
or certificate was so furnished, any untrue statement of a material fact or
omitted to state a material fact necessary to make the statements contained
herein or therein not misleading.  There is no fact known to any Loan Party that
could reasonably be expected to have a Material Adverse Effect that has not been
expressly disclosed herein, in the other Loan Documents, any SEC Report or in
any other documents, certificates and statements furnished to the Agent or the
Lenders or filed with the SEC for use in connection with the transactions
contemplated hereby and by the other Loan Documents.
 
3.16 Security Documents.
 
(a) The Security Agreement is effective to create in favor of the Agent, for the
benefit of the Lenders holding Secured Term Loans, a legal, valid and
enforceable security interest in the Collateral described therein and proceeds
thereof.  In the case of the other Collateral described in the Security
Agreement, when financing statements and other filings specified on Schedule
3.16(a) in appropriate form are filed in the offices specified on Schedule
3.16(a), the Security Agreement shall constitute a fully perfected Lien on, and
security interest in, all right, title and interest of the Loan Parties in such
Collateral and the proceeds thereof, as security for the Obligations (as defined
in the Security Agreement) under the Secured Term Loans, in each case prior and
superior in right to any other Person (except, in the case of Collateral, Liens
permitted by Section 6.2).
 
(b) The Mortgage is effective to create in favor of the Agent for the benefit of
the Lenders holding Secured Term Loans, a legal, valid and enforceable Lien on
the Mortgaged Properties described therein and proceeds thereof, and when the
Mortgage is filed in the offices specified on Schedule 3.16(b), each such
Mortgage shall constitute a fully perfected Lien on, and security interest in,
all right, title and interest of the Loan Parties in the Mortgaged Properties
and the proceeds thereof, as security for the Obligations (as defined in the
relevant Mortgage) under the Secured Term Loans, in each case prior and superior
in right to any other Person (except exceptions permitted by the Agent in the
relevant title policies).  Schedule 1.1B lists, as of the Restatement Date, each
parcel of real property owned in fee by the Loan Parties and any of their
Subsidiaries and each leasehold interest in Material Leased Properties.  All of
the properties listed on Schedule 1.1B shall be subject to the Mortgage.
 
3.17 Solvency.  Each Loan Party is, and after giving effect to the incurrence of
all Indebtedness and obligations being incurred in connection herewith, will be
and will continue to be, Solvent.
 
3.18 Regulation H.  No Mortgage encumbers improved real property that is located
in an area that has been identified by the Secretary of Housing and Urban
Development as an area having special flood hazards and in which flood insurance
has been made available under the National Flood Insurance Act of 1968.
 
3.19 Labor Matters.  Except as, in the aggregate, could not reasonably be
expected to have a Material Adverse Effect:  (a) there are no strikes or other
labor disputes against any Loan Party pending or, to the knowledge of the
Borrower, threatened; (b) hours worked by and payment made to employees of each
Loan Party have not been in violation of the Fair Labor Standards Act or any
other applicable Requirement of Law dealing with such matters; and (c) all
payments due from any Loan Party on account of employee health and welfare
insurance have been paid or accrued as a liability on the books of the relevant
Loan Party.
 
SECTION 4.     CONDITIONS
 
4.1 Conditions to Restatement Date.  The occurrence of the Restatement Date and
the obligations of each Lender to otherwise complete the transactions
contemplated by this Agreement are, in each case, subject to the satisfaction of
each of the following conditions precedent:
 
(a) Credit Agreement; Mortgage Amendments; Security Agreement.  The Agent shall
have received (i) this Agreement, executed and delivered by the Borrowers, the
Agent and each of the Lenders; (ii) Amendments to the Mortgages, in the form
attached hereto as Exhibit E, and in scope and substance satisfactory to the
Agent (the “Mortgage Amendments”), executed and delivered by the Agent, the
Borrowers and Chicago Title (the “Title Company”), as trustee; and (iii) the
Security Agreement, executed and delivered by each Loan Party party thereto and,
as applicable, the Agent.
 
(b) [Intentionally Omitted].
 
(c) SEC Filings.  The Borrower shall have filed with the SEC all annual reports
on Form 10-K, all quarterly reports on Form 10-Q, all periodic reports on Form
8-K and each preliminary and definitive proxy statement on Schedule 14A required
to be filed as of the Restatement Date (collectively, the “SEC Reports”).  There
shall have not have been any restatement of the financial statements of the
Borrower contained in the SEC Reports that has not been included in an SEC
Report filed prior to the Restatement Date.
 
(d) Approvals and Filings.  All governmental and third party approvals and
filings (including landlords’ consents and the SEC Reports) necessary in
connection with the continuing operations of the Loan Parties and the
transactions contemplated hereby shall have been obtained and/or filed and be in
full force and effect, and all applicable waiting periods shall have expired
without any action being taken or threatened by any competent authority that
would restrain, prevent or otherwise impose adverse conditions on the financing
contemplated hereby.
 
(e) Expenses.  The Lenders and the Agent shall have received payment of all
expenses (including the reasonable fees and expenses of legal counsel) for which
invoices have been presented prior to the Restatement Date.
 
(f) Bring Down.  The representations and warranties contained in the Loan
Documents shall be true and correct as if made on and as of the Restatement 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) and no default or event of default under the
Original Credit Agreement or Default or Event of Default shall have occurred
and, as of the Restatement Date, be continuing.
 
(g) CRE Amendment.  CRE shall have amended its Limited Liability Company
Agreement, dated as of December 11, 2003 (as amended), substantially in the form
attached hereto as Exhibit G.
 
(h) Closing Certificate; Good Standing Certificates.  The Agent shall have
received (i) a certificate of each Loan Party, dated the Restatement Date,
substantially in the form of Exhibit F, with appropriate insertions and
attachments and (ii) a good standing certificate from each Borrower from its
jurisdiction of incorporation and the State of California dated not earlier than
thirty (30) days prior to the Restatement Date.
 
(i) Legal Opinion. The Agent shall have received the legal opinions of Theodora
Oringher P.C. and Cadwalader, Wickersham & Taft LLP, each counsel to the Loan
Parties, in form and substance satisfactory to the Agent.
 
4.2 Conditions Subsequent to the Restatement Date.  No later than the
Restatement Date (a) the Mortgage Amendments shall have been duly recorded in
the offices specified on Schedule 3.16(b), (b) the Agent shall have received
evidence, in form, scope and substance satisfactory to the Agent of such
recordation and (c) the Agent shall have received the irrevocable and
unconditional commitment of the Title Company to issue to the Agent, on behalf
of the Lenders, in form, scope and substance satisfactory to the Agent,
effective as of the date and time the Mortgage Amendments are recorded,
endorsements to each Lender’s Policy which shall (i) redate each policy and all
endorsements to the date of recording of the Mortgage Amendments, (ii) reduce
the aggregate amount of the policies to Thirty Million Dollars ($30,000,000),
plus accreted interest (to be allocated among the policies in such manner as
deemed appropriate by Agent), (iii) reflect continued priority of the Mortgages,
(iv) contain any endorsements as to other matters as the Agent reasonably deems
necessary or advisable, which endorsements shall each be in form, scope and
substance satisfactory to the Agent, (v) be subject to no monetary liens (other
than non-delinquent real property taxes) and only such non-monetary title
exceptions as reasonably approved by the Agent.  Notwithstanding the foregoing,
Agent shall approve of any title exception (x) that was set forth in the
Lender’s Policies previously approved by the Agent in respect of the Original
Credit Agreement or (y) that Agent in its reasonable discretion determines would
not have a Material Adverse Effect on the value of the Collateral, either now or
in the future.  In conjunction with the foregoing conditions, as soon as
reasonably possible after the Effective Date, Borrowers shall cause the Title
Company to provide to the Agent a supplemental title report reflecting any new
exceptions to title not appearing in the existing Lender’s Policy relating to
each Mortgage.  Any premiums, expenses or fees charged by the Title Company in
connection with issuing the foregoing policies and/or endorsements shall be the
responsibility of the Borrowers.
 
4.3 Waiver of Conditions.  Each of the conditions precedent set forth in Section
4.1 may be waived with the consent of each of the Lenders.
 
SECTION 5.     AFFIRMATIVE COVENANTS
 
The Borrowers hereby jointly and severally agree that, so long as any Loan is
owing to any Lender hereunder, each of the Borrowers shall and shall cause each
of its Subsidiaries to:
 
5.1 Financial Statements.  Furnish to the Agent (for distribution to each Lender
within three (3) Business Days after receipt thereof):
 
(a) within 90 days after the end of each fiscal year of the Borrower, a copy of
the audited consolidated balance sheet of the Borrower and its consolidated
Subsidiaries as at the end of such year and the related audited consolidated
statements of income and of cash flows for such year, setting forth in each case
in comparative form the figures for the previous year, reported on without a
“going concern” or like qualification or exception, or qualification arising out
of the scope of the audit, by PriceWaterhouseCoopers LLP or other independent
certified public accountants of nationally recognized standing;
 
(b) within 45 days after the end of each of the first three quarterly periods of
each fiscal year of the Borrower, the unaudited consolidated balance sheet of
the Borrower and its consolidated Subsidiaries as at the end of such quarter and
the related unaudited consolidated statements of income and of cash flows for
such quarter and the portion of the fiscal year through the end of such quarter,
setting forth in each case in comparative form the figures for the previous
year, certified by a Responsible Officer as being fairly stated in all material
respects (subject to normal year-end audit adjustments); and (c) at the request
of the Agent and to the extent prepared for, and concurrently with the delivery
to, Cadiz’s management or Board of Directors, after the end of each month
occurring during each fiscal year of the Borrower, the unaudited consolidated
balance sheets of the Borrower and its Subsidiaries as at the end of such month
and the related unaudited consolidated statements of income and of cash flows
for such month and the portion of the fiscal year through the end of such month,
setting forth in each case in comparative form the figures for the previous
year, certified by a Responsible Officer as being fairly stated in all material
respects (subject to normal year-end audit adjustments). All such financial
statements shall be complete and correct in all material respects and shall be
prepared in reasonable detail and in accordance with GAAP applied (except as
approved by such accountants or officer, as the case may be, and disclosed in
reasonable detail therein) consistently throughout the periods reflected therein
and with prior periods.
 
5.2 Certificates; Other Information.  Furnish to the Agent (for distribution to
each Lender within three (3) Business Days after receipt thereof):
 
(a) upon Agent’s request at a cost to the Borrowers not to exceed Ten Thousand
Dollars ($10,000), a certificate of the independent certified public accountants
reporting on such financial statements stating that in making the examination
necessary therefor no knowledge was obtained of any Default or Event of Default,
except as specified in such certificate;
 
(b) concurrently with the delivery of any financial statements pursuant to
Section 5.1, (i) a certificate of a Responsible Officer stating that, to the
best of such Responsible Officer’s knowledge, each Loan Party during such period
has observed or performed all of its covenants and other agreements, and
satisfied every condition contained in this Agreement and the other Loan
Documents to which it is a party to be observed, performed or satisfied by it,
and that such Responsible Officer has obtained no knowledge of any Default or
Event of Default except as specified in such certificate and (ii) in the case of
quarterly or annual financial statements, (x) a Compliance Certificate
containing all information necessary for determining compliance by each Loan
Party with the provisions of this Agreement referred to therein as of the last
day of the fiscal quarter or fiscal year of the Borrower, as the case may be,
and (y) to the extent not previously disclosed to the Agent, a description of
any change in the jurisdiction of organization of any Loan Party and a list of
any Intellectual Property acquired by any Loan Party since the date of the most
recent report delivered pursuant to this clause (y);
 
(c) within five days after the same are sent, copies of all financial statements
and reports that the Borrower sends to the holders of any class of its debt
securities or public equity securities and, within five days after the same are
filed, copies of all financial statements and reports that the Borrower may make
to, or file with, the SEC; and
 
(d) promptly, such additional financial and other information as the Agent may
from time to time reasonably request.
 
5.3 Payment of Obligations.  Pay, discharge or otherwise satisfy at or before
maturity or before they become delinquent, as the case may be, all its material
obligations of whatever nature, except where the amount or validity thereof is
currently being contested in good faith by appropriate proceedings and reserves
in conformity with GAAP with respect thereto have been provided on the books of
the relevant Borrower.
 
5.4 Maintenance of Existence; Compliance.
 
(a) (i) Preserve, renew and keep in full force and effect its organizational
existence and (ii) take all reasonable action to maintain all rights, privileges
and franchises necessary or desirable in the normal conduct of its business,
except, in each case, as otherwise permitted by Section 6.4 and except, in the
case of clause (ii) above, to the extent that failure to do so could not
reasonably be expected to have a Material Adverse Effect; and
 
(b) Comply with all Contractual Obligations and Requirements of Law except to
the extent that failure to comply therewith could not, in the aggregate,
reasonably be expected to have a Material Adverse Effect.
 
5.5 Maintenance of Property; Insurance.
 
(a) Keep all property useful and necessary in its business in good working order
and condition, ordinary wear and tear excepted.
 
(b) Maintain with financially sound and reputable insurance companies insurance
on all its property in at least such amounts and against at least such risks
(but including in any event public liability, product liability and business
interruption) as are usually insured against in the same general area by
companies engaged in the same or a similar business.
 
5.6 Inspection of Property; Books and Records; Discussions.
 
(a) Keep proper books of records and account in which full, true and correct
entries in conformity with GAAP and all Requirements of Law shall be made of all
dealings and transactions in relation to its business and activities; and
 
(b) permit representatives of the Agent and each Lender to concurrently visit
and inspect any of its properties and examine and make abstracts from any of its
books and records at any reasonable time and as often as may reasonably be
desired and to discuss the business, operations, properties and financial and
other condition of the Loan Parties with officers and employees of the Loan
Parties and with their independent certified public accountants.
 
5.7 Notices.  Promptly give notice to the Agent (for distribution to each Lender
within three (3) Business Days after receipt thereof):
 
(a) the occurrence of any Default or Event of Default;
 
(b) any (i) default or event of default under any Contractual Obligation of any
Loan Party or (ii) litigation, investigation or proceeding that may exist at any
time between any Loan Party and any Governmental Authority, that in either case,
if not cured or if adversely determined, as the case may be, could reasonably be
expected to have a Material Adverse Effect;
 
(c) any litigation or proceeding affecting any Loan Party (i) in which the
amount involved is $500,000 or more and not covered by insurance, (ii) in which
injunctive or similar relief is sought or (iii) which relates to any Loan
Document;
 
(d) the following events, as soon as possible and in any event within 30 days
after the Borrower knows or has reason to know thereof:  (i) the occurrence of
any Reportable Event with respect to any Plan, a failure to make any required
contribution to a Plan, the creation of any Lien in favor of the PBGC or a Plan
or any withdrawal from, or the termination, Reorganization or Insolvency of, any
Multiemployer Plan or (ii) the institution of proceedings or the taking of any
other action by the PBGC or the Borrower or any Commonly Controlled Entity or
any Multiemployer Plan with respect to the withdrawal from, or the termination,
Reorganization or Insolvency of, any Plan; and
 
(e) any development or event that has had or could reasonably be expected to
have a Material Adverse Effect.
 
Each notice pursuant to this Section 5.7 shall be accompanied by a statement of
a Responsible Officer setting forth details of the occurrence referred to
therein and stating what action the relevant Loan Party proposes to take with
respect thereto.
 
5.8 Environmental Laws.
 
(a) Comply in all material respects with, and ensure compliance in all material
respects by all tenants and subtenants, if any, with, all applicable
Environmental Laws, and obtain and comply in all material respects with and
maintain, and ensure that all tenants and subtenants obtain and comply in all
material respects with and maintain, any and all licenses, approvals,
notifications, registrations or permits required by applicable Environmental
Laws, and
 
(b) Conduct and complete all investigations, studies, sampling and testing, and
all remedial, removal and other actions required under Environmental Laws and
promptly comply in all material respects with all lawful orders and directives
of all Governmental Authorities regarding Environmental Laws.
 
5.9 Additional Collateral, Etc.
 
(a) With respect to any property acquired after the Restatement Date by any Loan
Party (other than (x) any property described in paragraph (b) below or (y) any
property subject to a Lien expressly permitted by Section 6.2(f)) as to which
the Agent, for the benefit of the Lenders does not have a perfected Lien,
promptly (i) execute and deliver to the Agent such amendments to the Security
Agreement or Mortgages and such other documents as the Agent deems necessary or
advisable to grant to the Agent, for the benefit of the Lenders, a security
interest in such property and (ii) take all actions necessary or advisable to
grant to the Agent, for the benefit of the Lenders, a perfected first priority
security interest in such property, including the filing of Uniform Commercial
Code financing statements in such jurisdictions as may be required by the
Security Agreement or by law or as may be requested by the Agent.
 
(b) With respect to any After-Acquired Property, promptly (i) deliver an amended
and restated version of Schedule 1.1B which shall include a legal description of
such After-Acquired Property, (ii) unless directed otherwise by the Agent,
deliver a Phase I environmental assessment with respect to such After-Acquired
Property, (iii) execute and deliver a first priority Mortgage, in favor of the
Agent, for the benefit of the Lenders, covering such After-Acquired Property,
(iv) provide the Agent with (x) title and extended coverage insurance covering
such After-Acquired Property in an amount at least equal to the purchase price
of such real property (or such other amount as shall be reasonably specified by
the Agent) and (y) any consents and estoppels reasonably deemed necessary or
advisable by the Agent in connection with such Mortgage, each of the foregoing
in form, scope and substance reasonably satisfactory to the Agent and (v) if
requested by the Agent, deliver to the Agent legal opinions relating to matters
described above, which opinions shall be in form, scope and substance, and from
counsel, reasonably satisfactory to the Agent.
 
SECTION 6.     NEGATIVE COVENANTS
 
The Borrowers hereby jointly and severally agree that, so long as any Loan or
other amount is owing to any Lender hereunder, each of the Borrowers shall not,
and shall not permit any of its Subsidiaries to, directly or indirectly:
 
6.1 Indebtedness.  Create, issue, incur, assume, become liable in respect of or
suffer to exist any Indebtedness, except:
 
(a) Indebtedness of any Loan Party pursuant to any Loan Document;
 
(b) Indebtedness (including, without limitation, Capital Lease Obligations)
incurred to finance the acquisition, construction or improvement of any assets,
and Indebtedness assumed in connection with the acquisition of any such assets
or secured by a Lien on any such assets prior to the acquisition thereof, and
extensions, renewals and replacements of any such Indebtedness that do not
increase the outstanding principal amount thereof; provided that (i) such
Indebtedness is incurred prior to 90 days after such acquisition or the
completion of such construction or improvement and (ii) the aggregate principal
amount of such Indebtedness shall not exceed $500,000 at any one time
outstanding;
 
(c) Indebtedness of any Loan Party to any other Loan Party, provided that any
such intercompany loan is evidenced by a note that is pledged to the Agent for
the benefit of the Lenders;
 
(d) Indebtedness constituting unsecured debt in an aggregate principal amount
not to exceed $250,000 at any one time outstanding; and
 
(e) Indebtedness constituting Convertible Notes in an aggregate original
principal amount not to exceed $53,458,000 at any one time outstanding plus any
accretion to such principal amount pursuant to the terms of the Indenture and
the Convertible Notes.
 
6.2 Liens.  Create, incur, assume or suffer to exist any Lien upon any of its
property, whether now owned or hereafter acquired, except:
 
(a) Liens for taxes not yet due or that are being contested in good faith by
appropriate proceedings, provided that adequate reserves with respect thereto
are maintained on the books of the Borrower or its Subsidiaries, as the case may
be, in conformity with GAAP;
 
(b) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other
like Liens arising in the ordinary course of business that are not overdue for a
period of more than 30 days or that are being contested in good faith by
appropriate proceedings;
 
(c) pledges or deposits in connection with workers’ compensation, unemployment
insurance and other social security legislation;
 
(d) deposits to secure the performance of bids, trade contracts (other than for
borrowed money), leases, statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature incurred in the
ordinary course of business;
 
(e) easements, rights-of-way, restrictions and other similar encumbrances
incurred in the ordinary course of business that, in the aggregate, are not
substantial in amount and that do not in any case materially detract from the
value of the property subject thereto or materially interfere with the ordinary
conduct of the business of the Borrower or any of its Subsidiaries;
 
(f) Liens securing Indebtedness of the Borrower or any other Subsidiary incurred
pursuant to Section 6.1(b), provided that (i) such Liens are incurred prior to
90 days after such acquisition or the completion of such construction or
improvement, (ii) such Liens do not at any time encumber any property other than
the property financed by such Indebtedness and (iii) the amount of Indebtedness
secured thereby is not increased;
 
(g) Liens created pursuant to the Security Documents;
 
(h) any interest or title of a lessor under any lease entered into by the
Borrower or any other Subsidiary in the ordinary course of its business and
covering only the assets so leased;
 
(i) Liens arising out of any judgment awarded against the Borrower which have
been discharged, vacated, reversed or execution thereof stayed pending appeal;
 
(j) Liens with respect to which the Borrower or related lessee shall have
provided a bond or other security in an amount and under terms reasonably
satisfactory to the Agent and which does not involve any material risk of the
sale, forfeiture or loss of any interest in Borrower’s real or personal
property;
 
(k) Liens described in the Lender’s Policy issued by the Title Company, insuring
priority in the Mortgage, and permitted by the Agent as of the Restatement Date;
and
 
(l) Liens not otherwise permitted by this Section so long as the aggregate
outstanding principal amount of the obligations secured thereby does not exceed
(as to the Loan Parties) $200,000 at any one time outstanding.
 
6.3 Fundamental Changes.  Enter into any merger, consolidation or amalgamation,
or liquidate, wind up or dissolve itself (or suffer any liquidation or
dissolution), or Dispose of all or substantially all of its property or
business, except that any Investment expressly permitted by Section 6.6 may be
structured as a merger, consolidation or amalgamation.
 
6.4 Disposition of Property.  Dispose of any of its property, whether now owned
or hereafter acquired, or, in the case of any Subsidiary, issue or sell any
shares of such Subsidiary’s Capital Stock to any Person, except:
 
(a) the Disposition of obsolete or worn out property in the ordinary course of
business;
 
(b) the Disposition of other property having a fair market value not to exceed
$200,000 in the aggregate for any fiscal year of the Borrower.
 
6.5 Restricted Payments.  Declare or pay any dividend (other than dividends
payable solely in common stock of the Person making such dividend) on, or make
any payment on account of, or set apart assets for a sinking or other analogous
fund for, the purchase, redemption, defeasance, retirement or other acquisition
of, any Capital Stock of any Loan Party, whether now or hereafter outstanding,
or make any other distribution in respect thereof, either directly or
indirectly, whether in cash or property or in obligations of any Borrower
(collectively, “Restricted Payments”), except that any Subsidiary may make
Restricted Payments to the Borrowers.  Notwithstanding the foregoing, this
Section 6.5 shall not prohibit (a) Cadiz from converting all or any portion of
the Convertible Notes into Capital Stock of the Company pursuant to the terms of
the Indenture or (b) the Borrowers from making the following payments, (i) the
Accreted Principal Amount on the Maturity Date (as defined in the Indenture) or
any Default Interest, (ii) the Fundamental Change Repurchase Price on the
Fundamental Change Repurchase Date, (iii) and cash in lieu of fractional shares
of Common Stock upon conversion of the Convertible Notes pursuant to the
Indenture and (iv) cash payable in respect of shares of Common Stock that cannot
be issued pursuant to Section 10.24 of the Indenture.  Capitalized terms used in
the preceding sentence of this Section 6.5 without definition shall have the
meanings ascribed to such terms in the Indenture.
 
6.6 Investments.  Make any advance, loan, extension of credit (by way of
guaranty or otherwise) or capital contribution to, or purchase any Capital
Stock, bonds, notes, debentures or other debt securities of, or any assets
constituting a business unit of, or make any other investment in, any Person
(all of the foregoing, “Investments”), except:
 
(a) extensions of trade credit in the ordinary course of business;
 
(b) investments in Cash Equivalents;
 
(c) intercompany Investments by any Loan Party in another Loan Party;
 
(d) acquisitions (by merger, purchase of securities or purchase of assets) where
100% of the purchase price is paid in the Capital Stock of Cadiz, provided that
(i) any such acquisition must be reasonably acceptable to the Agent and the
Required Lenders and (ii) any equity interests so acquired must be pledged to
the Agent, for the benefit of the Lenders, as provided in Section 5.9(a).
 
6.7 Transactions with Affiliates.  Enter into any transaction, including any
purchase, sale, lease or exchange of property, the rendering of any service or
the payment of any management, advisory or similar fees, with any Affiliate
(other than among the Loan Parties) unless such transaction is (a) otherwise
permitted under this Agreement, (b) in the ordinary course of business of the
relevant Loan Party, and (c) upon fair and reasonable terms no less favorable to
the relevant Loan Party than it would obtain in a comparable arm’s length
transaction with a Person that is not an Affiliate.
 
6.8 Sales and Leasebacks.  Enter into any arrangement with any Person providing
for the leasing by any Borrower of real or personal property that has been or is
to be sold or transferred by such Borrower to such Person or to any other Person
to whom funds have been or are to be advanced by such Person on the security of
such property or rental obligations of such Borrower.
 
6.9 Swap Agreements.  Enter into any Swap Agreement, except (a) Swap Agreements
entered into to hedge or mitigate risks to which the Borrower or any Subsidiary
has actual exposure and (b) Swap Agreements entered into in order to effectively
cap, collar or exchange interest rates (from fixed to floating rates, from one
floating rate to another floating rate or otherwise) with respect to any
interest-bearing liability or investment of the Borrower or any Subsidiary.
 
6.10 Changes in Fiscal Periods.  Permit the fiscal year of the Borrower to end
on a day other than December 31 or change the Borrower’s method of determining
fiscal quarters.
 
6.11 Negative Pledge Clauses.  Enter into or suffer to exist or become effective
any agreement that prohibits or limits the ability of any Loan Parties to
create, incur, assume or suffer to exist any Lien upon any of its property or
revenues, whether now owned or hereafter acquired, other than (a) this Agreement
and the other Loan Documents and (b) any agreements governing any purchase money
Liens or Capital Lease Obligations otherwise permitted hereby (in which case,
any prohibition or limitation shall only be effective against the assets
financed thereby).
 
6.12 Clauses Restricting Subsidiary Distributions.  Enter into or suffer to
exist or become effective any consensual encumbrance or restriction on the
ability of any Subsidiary of any Borrower to (a) make Restricted Payments in
respect of any Capital Stock of such Subsidiary held by, or pay any Indebtedness
owed to, the Borrower or any other Subsidiary of the Borrower, (b) make loans or
advances to, or other Investments in, the Borrower or any other Subsidiary of
the Borrower or (c) transfer any of its assets to the Borrower or any other
Subsidiary of the Borrower, except for such encumbrances or restrictions
existing under or by reason of (i) any restrictions existing under the Loan
Documents or the limited liability company agreement of CRE, (ii) imposed by
law, or (iii) any restrictions with respect to a Subsidiary imposed pursuant to
an agreement that has been entered into in connection with the Disposition of
all or substantially all of the Capital Stock or assets of such Subsidiary.
 
6.13 Lines of Business.
 
(a) With respect to any Loan Party, enter into any business, either directly or
through any Subsidiary, except for those businesses in which the Borrower and
its Subsidiaries are engaged on the date of this Agreement or that are
reasonably related thereto.
 
(b) With respect to any Subsidiary that is not a Loan Party, engage in any
business activity, incur any liabilities or own any assets, other than those
activities relating to the maintenance of its legal existence as an inactive
Subsidiary.
 
6.14 Amendments to Organizational Documents.  Amend, supplement or otherwise
modify (pursuant to a waiver or otherwise) the terms and conditions of the
organizational documents of any Borrower or any Subsidiary.
 
6.15 Other Senior Indebtedness.  Incur any Indebtedness senior to or pari passu
with the Secured Term Loans or secured by the Collateral without the consent of
all of the holders of the Secured Term Loans.
 
6.16 Convertible Note Payments.  Make any cash payment with respect to
Convertible Notes, other than (i) the Accreted Principal Amount on the Maturity
Date (as defined in the Indenture) or any Default Interest, (ii) the Fundamental
Change Repurchase Price on the Fundamental Change Repurchase Date, (iii) and
cash in lieu of fractional shares of Common Stock upon conversion of the
Convertible Notes pursuant to the Indenture and (iv) cash payable in respect of
shares of Common Stock that cannot be issued pursuant to Section 10.24 of the
Indenture.  Capitalized terms used in this Section 6.16 without definition shall
have the meanings ascribed to such terms in the Indenture.
 
SECTION 7.     EVENTS OF DEFAULT
 
If any of the following events shall occur and be continuing:
 
(a) the Borrower shall fail to pay any principal of any Loan when due in
accordance with the terms hereof; or the Borrower shall fail to pay any interest
on any Loan, or any other amount payable hereunder or under any other Loan
Document, within five (5) days after any such interest or other amount becomes
due in accordance with the terms hereof; or
 
(b) any representation or warranty made or deemed made by any Loan Party herein
or in any other Loan Document or that is contained in any certificate, document
or financial or other statement furnished by it at any time under or in
connection with this Agreement or any such other Loan Document shall prove to
have been inaccurate in any material respect on or as of the date made or deemed
made; or
 
(c) (i) any Loan Party shall default in the observance or performance of any
agreement contained in Section 5.4(a), Section 5.7, or Section 6 of this
Agreement or Sections 4.5 of the Security Agreement, (ii) the conditions
subsequent set forth in Section 4.2 shall not have been satisfied, (iii) an
“Event of Default” under the Indenture shall have occurred and be continuing, or
(iv) an “Event of Default” under and as defined in any Mortgage shall have
occurred and be continuing; or
 
(d) any Loan Party shall default in the observance or performance of any other
agreement contained in this Agreement or any other Loan Document (other than as
provided in paragraphs (a) through (c) of this Section), and such default shall
continue unremedied for a period of 30 days after notice to the Borrower from
the Agent; or
 
(e) any Loan Party shall (i) default in making any payment of any principal of
any Indebtedness (including any Guarantee Obligation, but excluding the Loans)
on the scheduled or original due date with respect thereto beyond the period of
grace, if any; or (ii) default in making any payment of any interest on any such
Indebtedness beyond the period of grace, if any, provided in the instrument or
agreement under which such Indebtedness was created; or (iii) default in the
observance or performance of any other agreement or condition relating to any
such Indebtedness or contained in any instrument or agreement evidencing,
securing or relating thereto, or any other event shall occur or condition exist,
the effect of which default or other event or condition is to cause, or to
permit the holder or beneficiary of such Indebtedness (or a trustee or agent on
behalf of such holder or beneficiary) to cause, with the giving of notice if
required, such Indebtedness to become due prior to its stated maturity or (in
the case of any such Indebtedness constituting a Guarantee Obligation) to become
payable; Provided, that a default, event or condition described in clause (i),
(ii) or (iii) of this paragraph (e) shall not at any time constitute an Event of
Default unless, at such time, one or more defaults, events or conditions of the
type described in clauses (i), (ii) and (iii) of this paragraph (e) shall have
occurred and be continuing with respect to Indebtedness the outstanding
principal amount of which exceeds in the aggregate $500,000; or
 
(f) (i) any Loan Party shall commence any case, proceeding or other action (A)
under any existing or future law of any jurisdiction, domestic or foreign,
relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking
to have an order for relief entered with respect to it, or seeking to adjudicate
it a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment,
winding-up, liquidation, dissolution, composition or other relief with respect
to it or its debts, or (B) seeking appointment of a receiver, trustee,
custodian, conservator or other similar official for it or for all or any
substantial part of its assets, or any Loan Party shall make a general
assignment for the benefit of its creditors; or (ii) there shall be commenced
against any Loan Party any case, proceeding or other action of a nature referred
to in clause (i) above that (A) results in the entry of an order for relief or
any such adjudication or appointment or (B) remains undismissed, undischarged or
unbonded for a period of 60 days; or (iii) there shall be commenced against any
Borrower any case, proceeding or other action seeking issuance of a warrant of
attachment, execution, distraint or similar process against all or any
substantial part of its assets that results in the entry of an order for any
such relief that shall not have been vacated, discharged, or stayed or bonded
pending appeal within 60 days from the entry thereof; or (iv) any Loan Party
shall take any action in furtherance of, or indicating its consent to, approval
of, or acquiescence in, any of the acts set forth in clause (i), (ii), or (iii)
above; or (v) any Loan Party shall generally not, or shall be unable to, or
shall admit in writing its inability to, pay its debts as they become due; or
 
(g)  (i) any Person shall engage in any “prohibited transaction” (as defined in
section 406 of ERISA or section 4975 of the Code) involving any Plan, (ii) any
“unpaid minimum required contribution” (as defined in Section 302 of ERISA),
whether or not waived, shall exist with respect to any Plan or any Lien in favor
of the PBGC or a Plan shall arise on the assets of any Loan Party or any
Commonly Controlled Entity, (iii) a Reportable Event shall occur with respect
to, or proceedings shall commence to have a trustee appointed, or a trustee
shall be appointed, to administer or to terminate, any Single Employer Plan,
which Reportable Event or commencement of proceedings or appointment of a
trustee is, in the reasonable opinion of the Required Lenders, likely to result
in the termination of such Plan for purposes of Title IV of ERISA, (iv) any
Single Employer Plan shall terminate for purposes of Title IV of ERISA, (v) any
Loan Party or any Commonly Controlled Entity shall, or in the reasonable opinion
of the Required Lenders is likely to, incur any liability in connection with a
withdrawal from, or the Insolvency or Reorganization of, a Multiemployer Plan or
(vi) any other event or condition shall occur or exist with respect to a Plan;
and in each case in clauses (i) through (vi) above, such event or condition,
together with all other such events or conditions, if any, could, in the sole
judgment of the Required Lenders, reasonably be expected to have a Material
Adverse Effect; or
 
(h) one or more judgments or decrees shall be entered against any Loan Party
involving in the aggregate a liability (not paid or fully covered by insurance
as to which the relevant insurance company has acknowledged coverage) of
$500,000 or more, and all such judgments or decrees shall not have been paid,
satisfied, vacated, discharged, stayed or bonded pending appeal within 30 days
from the entry thereof; or
 
(i) any of the Security Documents shall cease, for any reason, to be in full
force and effect, or any Loan Party or any Affiliate of any Loan Party shall so
assert, or any Lien created by any of the Security Documents shall cease to be
enforceable and of the same effect and priority purported to be created thereby;
or
 
(j) a Change of Control;
 
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above with respect to the Borrower,
automatically the Loans (with accrued interest thereon) and all other amounts
owing under this Agreement and the other Loan Documents shall immediately become
due and payable, and (B) if such event is any other Event of Default, the Agent
may, or upon the request of the Required Lenders (or any Lender with respect to
an Event of Default specified in paragraph (j) above (solely with respect to
such Lender’s Loans)), by notice to the Borrower, declare the Loans (with
accrued interest thereon) and all other amounts owing under this Agreement and
the other Loan Documents to be due and payable forthwith, whereupon the same
shall immediately become due and payable.  Except as expressly provided above in
this Section, presentment, demand, protest and all other notices of any kind are
hereby expressly waived by the Borrower.  Nothing in this Agreement or any of
the Loan Documents shall impair any Lender’s right to enforce its claims for
amounts owed to such Lender hereunder and under the Loan Documents following the
Maturity Date until payment in full of the Obligations and, subject to the
provisions of this Section 7 and Section 9.1, to pursue any enforcement action
or remedies at law or equity with respect to amounts owed to any Lender as such
Lender shall determine in its sole discretion.
 
SECTION 8.     THE AGENT
 
8.1 Appointment.  Each Lender hereby irrevocably designates and appoints the
Agent as the administrative agent of such Lender under this Agreement and the
other Loan Documents, and each such Lender irrevocably authorizes the Agent, in
such capacity, to take such action on its behalf under the provisions of this
Agreement and the other Loan Documents and to exercise such powers and perform
such duties as are expressly delegated to the Agent by the terms of this
Agreement and the other Loan Documents, together with such other powers as are
reasonably incidental thereto.  Notwithstanding any provision to the contrary
elsewhere in this Agreement, the Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against the Agent.
 
8.2 Delegation of Duties.  The Agent may execute any of its duties under this
Agreement and the other Loan Documents by or through agents or attorneys-in-fact
and shall be entitled to advice of counsel concerning all matters pertaining to
such duties.  The Agent shall not be responsible for the negligence or
misconduct of any agents or attorneys in-fact selected by it with reasonable
care.
 
8.3 Exculpatory Provisions.  Neither the Agent nor any of its officers,
directors, employees, agents, attorneys-in-fact or affiliates shall be (i)
liable for any action lawfully taken or omitted to be taken by it or such Person
under or in connection with this Agreement or any other Loan Document (except to
the extent that any of the foregoing are found by a final and nonappealable
decision of a court of competent jurisdiction to have resulted from its or such
Person’s own gross negligence or willful misconduct) or (ii) responsible in any
manner to any of the Lenders for any recitals, statements, representations or
warranties made by any Loan Party or any officer thereof contained in this
Agreement or any other Loan Document or in any certificate, report, statement or
other document referred to or provided for in, or received by the Agent under or
in connection with, this Agreement or any other Loan Document or for the value,
validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement or any other Loan Document or for any failure of any Loan Party a
party thereto to perform its obligations hereunder or thereunder.  The Agent
shall not be under any obligation to any Lender to ascertain or to inquire as to
the observance or performance of any of the agreements contained in, or
conditions of, this Agreement or any other Loan Document, or to inspect the
properties, books or records of any Loan Party.
 
8.4 Reliance By Agent.  The Agent shall be entitled to rely, and shall be fully
protected in relying, upon any instrument, writing, resolution, notice, consent,
certificate, affidavit, letter, telecopy, telex or teletype message, statement,
order or other document or conversation believed by it to be genuine and correct
and to have been signed, sent or made by the proper Person or Persons and upon
advice and statements of legal counsel (including counsel to the Borrower),
independent accountants and other experts selected by the Agent.  The Agent
shall be fully justified in failing or refusing to take any action under this
Agreement or any other Loan Document unless it shall first receive such advice
or concurrence of the Required Lenders (or, if so specified by this Agreement,
all Lenders) as it deems appropriate or it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense that may
be incurred by it by reason of taking or continuing to take any such
action.  The Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement and the other Loan Documents in
accordance with a request of the Required Lenders (or, if so specified by this
Agreement, all Lenders), and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Lenders and all future holders of
the Loans.
 
8.5 Notice of Default.  The Agent shall not be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default unless the Agent has
received notice from a Lender or the Borrower referring to this Agreement,
describing such Default or Event of Default and stating that such notice is a
“notice of default”.  In the event that the Agent receives such a notice, the
Agent shall give notice thereof to the Lenders.  The Agent shall take such
action with respect to such Default or Event of Default as shall be reasonably
directed by the Required Lenders (or, if so specified by this Agreement, all
Lenders); provided that unless and until the Agent shall have received such
directions, the Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable in the best interests of the Lenders.
 
8.6 Non-Reliance on Agent and Other Lenders.  Each Lender expressly acknowledges
that neither the Agent nor any of its officers, directors, employees, agents,
attorneys-in-fact or affiliates have made any representations or warranties to
it and that no act by the Agent hereafter taken, including any review of the
affairs of a Loan Party or any affiliate of a Loan Party, shall be deemed to
constitute any representation or warranty by the Agent to any Lender.  Each
Lender represents to the Agent that it has, independently and without reliance
upon the Agent or any other Lender, and based on such documents and information
as it has deemed appropriate, made its own appraisal of and investigation into
the business, operations, property, financial and other condition and
creditworthiness of the Loan Parties and their affiliates and made its own
decision to make its Loans hereunder and enter into this Agreement.  Each Lender
also represents that it will, independently and without reliance upon the Agent
or any other Lender, and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement and
the other Loan Documents, and to make such investigation as it deems necessary
to inform itself as to the business, operations, property, financial and other
condition and creditworthiness of the Loan Parties and their affiliates. Except
for notices, reports and other documents expressly required to be furnished to
the Lenders by the Agent hereunder, the Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of any Loan Party or any affiliate of
a Loan Party that may come into the possession of the Agent or any of its
officers, directors, employees, agents, attorneys-in-fact or affiliates.
 
8.7 Indemnification.  The Lenders agree to indemnify each Agent in its capacity
as such (to the extent not reimbursed by the Borrower and without limiting the
obligation of the Borrower to do so), ratably according to their respective
holding of the outstanding Loans in effect on the date on which indemnification
is sought under this Section, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind whatsoever that may at any time (whether
before or after the payment of the Loans) be imposed on, incurred by or asserted
against the Agent in any way relating to or arising out of, this Agreement, any
of the other Loan Documents or any documents contemplated by or referred to
herein or therein or the transactions contemplated hereby or thereby or any
action taken or omitted by the Agent under or in connection with any of the
foregoing; provided that no Lender shall be liable for the payment of any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements that are found by a final and
nonappealable decision of a court of competent jurisdiction to have resulted
from the Agent’s gross negligence or willful misconduct.  The agreements in this
Section shall survive the payment of the Loans and all other amounts payable
hereunder.
 
8.8 Agent In Its Individual Capacity.  The Agent and its affiliates may make
loans to, accept deposits from and generally engage in any kind of business with
any Loan Party as though the Agent were not an Agent.  The terms “Lender” and
“Lenders” shall include each Agent in its individual capacity.
 
8.9 Successor Agent.  The Agent may resign as Agent upon ten (10) days’ notice
to the Lenders and the Borrower.  If the Agent shall resign as Agent under this
Agreement and the other Loan Documents, then the Required Lenders shall appoint
from among the Lenders a successor agent for the Lenders, which successor agent
shall (unless an Event of Default under Section 7(a) or Section 7(f) with
respect to the Borrower shall have occurred and be continuing) be subject to
approval by the Borrower (which approval shall not be unreasonably withheld or
delayed), whereupon such successor agent shall succeed to the rights, powers and
duties of the Agent, and the term “Agent” shall mean such successor agent
effective upon such appointment and approval, and the former Agent’s rights,
powers and duties as Agent shall be terminated, without any other or further act
or deed on the part of such former Agent or any of the parties to this Agreement
or any holders of the Loans.  If no successor agent has accepted appointment as
Agent by the date that is 10 days following a retiring Agent’s notice of
resignation, the retiring Agent’s resignation shall nevertheless thereupon
become effective, and the Lenders shall assume and perform all of the duties of
the Agent hereunder until such time, if any, as the Required Lenders appoint a
successor agent as provided for above. After any retiring Agent’s resignation as
Agent, the provisions of this Section 8 shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Agent under this
Agreement and the other Loan Documents.
 
SECTION 9.     MISCELLANEOUS
 
9.1 Amendments and Waivers.  Neither this Agreement, any other Loan Document,
nor any terms hereof or thereof may be amended, supplemented or modified except
in accordance with the provisions of this Section 9.1.  The Required Lenders and
each Loan Party party to the relevant Loan Document may, or, with the written
consent of the Required Lenders, the Agent and each Loan Party party to the
relevant Loan Document may, from time to time, (a) enter into written
amendments, supplements or modifications hereto and to the other Loan Documents
for the purpose of adding any provisions to this Agreement or the other Loan
Documents or changing in any manner the rights of the Agent, the Lenders or of
the Loan Parties hereunder or thereunder or (b) waive, on such terms and
conditions as the Required Lenders or the Agent, as the case may be, may specify
in such instrument, any of the requirements of this Agreement or the other Loan
Documents or any Default or Event of Default and its consequences; provided,
however, that, in the case of clause (a) and clause (b) hereof, no such waiver
and no such amendment, supplement or modification shall (i) forgive the
principal amount or extend the final scheduled date of maturity of any Loan,
reduce the stated rate of any interest or fee payable hereunder or extend the
scheduled date of any payment thereof, in each case without the written consent
of each Lender directly affected thereby; (ii) eliminate or reduce the voting
rights of any Lender under this Section 9.1 without the written consent of such
Lender; (iii) reduce any percentage specified in the definition of Required
Lenders, or consent to the assignment or transfer by the Borrowers of any of
their rights and obligations under this Agreement and the other Loan Documents,
in each case without the written consent of all Lenders; (iv) release all or
substantially all of the Collateral or amend, modify or waive the last paragraph
of Section 7 or Section 5.5 of the Security Agreement, in each case without the
written consent of all Lenders; (v) amend, modify or waive any of the provisions
of the Security Agreement (other than Section 5.5), or amend, modify or waive
any of the provisions of Section 2.6, Section 3.7,  Section 3.16, Section 3.18,
Section 5.9, Section 6.4, Section 6.8 or Section 6.15 or any of the definitions
relating to any of the foregoing, in each case without the written consent of
the Required Lenders; or (vi) amend, modify or waive any provision of this
Section 9 without the written consent of the Agent.  Any such waiver and any
such amendment, supplement or modification shall apply equally to each of the
Lenders and shall be binding upon the Loan Parties, the Lenders, the Agent and
all future holders of the Loans.  In the case of any waiver, the Loan Parties,
the Lenders and the Agent shall be restored to their former position and rights
hereunder and under the other Loan Documents, and any Default or Event of
Default waived shall be deemed to be cured and not continuing; but no such
waiver shall extend to any subsequent or other Default or Event of Default, or
impair any right consequent thereon.
 
9.2 Notices.  All notices, requests and demands to or upon the respective
parties hereto to be effective shall be in writing (including by telecopy), and,
unless otherwise expressly provided herein, shall be deemed to have been duly
given or made when delivered, or, in the case of telecopy notice, when received,
addressed as follows, or to such other address as may be hereafter notified by
the respective parties hereto:
 
 
Borrowers:

 
          Cadiz Inc.
          550 South Hope Street, Suite 2850
          Los Angeles, CA 90017
          Attention: Chief Financial Officer
          Telecopy: 213-271-1614
          Telephone: 213-271-1600
 
 
with a copy to:

 
          Theodora Oringher P.C.
          10880 Wilshire Boulevard, Suite 1700
          Los Angeles, CA 90024
          Attention: Howard Unterberger
          Telecopy: 310-551-0283
          Telephone: 310-557-2009
 
Agent:
 
          LC Capital Master Fund, Ltd.
          c/o Lampe Conway & Company
          680 Fifth Avenue, Suite 1202
          New York, New York 10019
          Attention: Steven G. Lampe
          Telecopy: 212-581-8999
          Telephone:  212-581-8989
 
with a copy to:
 
          Manatt, Phelps & Phillips, LLP
          7 Times Square
          New York, NY 10036
          Attention:  Neil S. Faden
          Telecopy: 212-790-4545
          Telephone:  212-790-4500
 
provided that any notice, request or demand to or upon the Agent or the Lenders
shall not be effective until received.
 
Notices and other communications to the Lenders hereunder may be delivered or
furnished by electronic communications pursuant to procedures approved by the
Agent.  The Agent or the Borrower may, in its discretion, agree to accept
notices and other communications to it hereunder by electronic communications
pursuant to procedures approved by it;
 
provided that approval of such procedures may be limited to particular notices
or communications.
 
9.3 No Waiver; Cumulative Remedies.  No failure to exercise and no delay in
exercising, on the part of the Agent or any Lender, any right, remedy, power or
privilege hereunder or under the other Loan Documents shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege.  The rights, remedies,
powers and privileges herein provided are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law.
 
9.4 Survival of Representations and Warranties.  All representations and
warranties made hereunder, in the other Loan Documents and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Agreement and the making of the
Loans and other extensions of credit hereunder.
 
9.5 Payment of Expenses and Taxes; Indemnification.  The Borrower agrees (a) to
pay or reimburse the Agent for all its out-of-pocket costs and expenses incurred
in connection with the development, preparation and execution of, and any
amendment, supplement or modification to, this Agreement and the other Loan
Documents and any other documents prepared in connection herewith or therewith,
and the consummation and administration of the transactions contemplated hereby
and thereby, including the reasonable fees and disbursements of counsel to the
Agent and filing and recording fees and expenses, with statements with respect
to the foregoing to be submitted to the Borrower prior to the Restatement Date
(in the case of amounts to be paid on the Restatement Date) and from time to
time thereafter on a quarterly basis or such other periodic basis as the Agent
shall deem appropriate, (b) to pay or reimburse each Lender and the Agent for
all its costs and expenses incurred in connection with the enforcement or
preservation of any rights under this Agreement, the other Loan Documents and
any such other documents, including the fees and disbursements of counsel
(including the allocated fees and expenses of in-house counsel) to each Lender
and of counsel to the Agent, (c) to pay, indemnify, and hold the Agent and the
Lenders harmless from, any and all recording and filing fees and any and all
liabilities with respect to, or resulting from any delay in paying, stamp,
excise and other taxes, if any, that may be payable or determined to be payable
in connection with the execution and delivery of, or consummation or
administration of any of the transactions contemplated by, or any amendment,
supplement or modification of, or any waiver or consent under or in respect of,
this Agreement, the other Loan Documents and any such other documents, and (d)
to pay, indemnify, and hold the each Lender and the Agent and their respective
officers, directors, employees, affiliates, agents and controlling persons
(each, an “Indemnitee”) harmless from and against any and all other liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever with respect to the
execution, delivery, enforcement, performance and administration of this
Agreement, the other Loan Documents and any such other documents, including any
of the foregoing relating to the use of proceeds of the Loans or the violation
of, noncompliance with or liability under, any Environmental Law applicable to
the operations of any Loan Party or any of the Mortgaged Properties and the
reasonable fees and expenses of legal counsel in connection with claims, actions
or proceedings by any Indemnitee against any Loan Party under any Loan Document
(all the foregoing in this clause (d), collectively, the “Indemnified
Liabilities”), provided, that the Borrower shall have no obligation hereunder to
any Indemnitee with respect to Indemnified Liabilities to the extent such
Indemnified Liabilities are found by a final and nonappealable decision of a
court of competent jurisdiction to have resulted from the gross negligence or
willful misconduct of such Indemnitee.  Without limiting the foregoing, and to
the extent permitted by applicable law, the Borrower agrees not to assert and to
cause its Subsidiaries not to assert, and hereby waives and agrees to cause its
Subsidiaries to waive, all rights for contribution or any other rights of
recovery with respect to all claims, demands, penalties, fines, liabilities,
settlements, damages, costs and expenses of whatever kind or nature, under or
related to Environmental Laws, that any of them might have by statute or
otherwise against any Indemnitee.  All amounts due under this Section 9.5 shall
be payable not later than 10 days after written demand therefor.
 
9.6 Successors and Assigns; Assignments and Participations.
 
(a) The provisions of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns
permitted hereby, except that (i) the Borrower may not assign or otherwise
transfer any of its rights or obligations hereunder without the prior written
consent of the Agent (and any attempted assignment or transfer by the Borrower
without such consent shall be null and void) and (ii) the Lenders may not assign
or otherwise transfer its rights or obligations hereunder except to an assignee
(“Assignee”).  Subject to acceptance and recording thereof pursuant to this
Section, from and after the effective date specified in each Assignment and
Assumption the Assignee thereunder shall be a party hereto and, to the extent of
the interest assigned by such Assignment and Assumption, have the rights and
obligations of a Lender under this Agreement, and the assigning Lender
thereunder shall, to the extent of the interest assigned by such Assignment and
Assumption, be released from its obligations under this Agreement (and, in the
case of an Assignment and Assumption covering all of the assigning Lender’s
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto but shall continue to be entitled to the benefits of Section
9.5).  The Agent, acting for this purpose as an agent of the Borrower, shall
maintain at one of its offices a copy of each Assignment and Assumption
delivered to it and a register for the recordation of the names and addresses of
the Lenders, and principal amount of the Loans owing to, each Lender pursuant to
the terms hereof from time to time (the “Register”).  The entries in the
Register shall be conclusive, and the Borrower, the Agent, and the Lenders may
treat each Person whose name is recorded in the Register pursuant to the terms
hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding
notice to the contrary.  Upon its receipt of a duly completed Assignment and
Assumption executed by an assigning Lender and an Assignee, the Assignee’s
completed administrative questionnaire (unless the Assignee shall already be a
Lender hereunder), and any written consent to such assignment required by this
Section, the Agent shall accept such Assignment and Assumption and record the
information contained therein in the Register.  No assignment shall be effective
for purposes of this Agreement unless it has been recorded in the Register as
provided in this paragraph.
 
(b) Any Lender may, without the consent of the Borrower or the Agent, sell
participations to one or more entities in all or a portion of such Lender’s
rights and obligations under this Agreement (including all or a portion of the
Loans owing to it); provided that (i) such Lender’s obligations under this
Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (iii) the Borrower, the Agent and the other Lenders shall continue to deal
solely and directly with such Lender in connection with such Lender’s rights and
obligations under this Agreement.  Any agreement pursuant to which a Lender
sells such a participation shall provide that such Lender shall retain the sole
right to enforce this Agreement and to approve any amendment, modification or
waiver of any provision of this Agreement; provided that such agreement may
provide that such Lender will not, without the consent of the loan participant,
agree to any amendment, modification or waiver that (x) requires the consent of
each Lender directly affected thereby pursuant to Section 9.1 and (y) directly
affects such loan participant.
 
9.7 Surety Waivers.  This paragraph is included solely out of an abundance of
caution, and shall not be construed to mean that any of the above-referenced
provisions of California law are in any way applicable to this Agreement or to
any of the Obligations, or that CRE is a guarantor hereunder.  As used in this
paragraph, any reference to “the principal” includes Cadiz, and any reference to
“the creditor” includes the Agent and the Lenders.  In accordance with Section
2856 of the California Civil Code:  (a) CRE unconditionally and irrevocably
waives any and all rights and defenses available to it by reason of Sections
2787 to 2855, inclusive, 2899 and 3433 of the California Civil Code; and (b) CRE
unconditionally and irrevocably waives any and all rights and defenses available
to it by reason of the Obligation being secured by real property or otherwise,
including without limitation, any rights and defenses based upon Section 580a,
580b, 580d, or 726 of the California Code of Civil Procedure or other law, which
means, among other things, (1) the creditor may collect from CRE without first
foreclosing on any real or personal property collateral pledged by the
principal, (2) if the creditor forecloses on any real property collateral
pledged by the principal, (A) the amount of the Obligations may be reduced only
by the price for which that collateral is sold at the foreclosure sale, even if
the collateral is worth more than the sale price and (B) the creditor may
collect from CRE even if the creditor, by foreclosing on the real property
collateral, has destroyed any right CRE may have to collect from the principal,
and (3) CRE is waiving all rights and defenses arising out of an election of
remedies by the creditor, even though that election of remedies, such as a
nonjudicial foreclosure with respect to security for the Obligations, has
destroyed CRE’s rights of subrogation and reimbursement against the principal by
the operation of Section 580d of the California Code of Civil Procedure or
otherwise, and even though that election of remedies by the creditor, such as
nonjudicial foreclosure with respect to security for an obligation of any other
guarantor of any of the Obligations, has destroyed CRE’s rights of contribution
against any other guarantor.  No other provision of this Agreement shall be
construed as limiting the generality of any of the covenants and waivers set
forth in this paragraph.
 
9.8 Counterparts.  This Agreement may be executed by one or more of the parties
to this Agreement on any number of separate counterparts, and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.  Delivery of an executed signature page of this Agreement by
facsimile transmission shall be effective as delivery of a manually executed
counterpart hereof.  A set of the copies of this Agreement signed by all the
parties shall be lodged with the Borrower and the Agent.
 
9.9 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 hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
 
9.10 Integration.  This Agreement and the other Loan Documents represent the
entire agreement of the parties hereto with respect to the subject matter hereof
and thereof, and there are no promises, undertakings, representations or
warranties by any such party relative to the subject matter hereof not expressly
set forth or referred to herein or in the other Loan Documents.
 
9.11 Governing Law.  THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
 
9.12 Submission To Jurisdiction; Waivers.  Each of the Borrowers hereby
irrevocably and unconditionally:
 
(a) submits for itself and its property in any legal action or proceeding
relating to this Agreement and the other Loan Documents to which it is a party,
or for recognition and enforcement of any judgment in respect thereof, to the
non-exclusive general jurisdiction of the courts of the State of New York, the
courts of the United States for the Southern District of New York, and appellate
courts from any thereof;
 
(b) consents that any such action or proceeding may be brought in such courts
and waives any objection that it may now or hereafter have to the venue of any
such action or proceeding in any such court or that such action or proceeding
was brought in an inconvenient court and agrees not to plead or claim the same;
 
(c) agrees that service of process in any such action or proceeding may be
effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to the Borrowers at its
address set forth in Section 9.2 or at such other address of which the Agent
shall have been notified pursuant thereto;
 
(d) agrees that nothing herein shall affect the right to effect service of
process in any other manner permitted by law or shall limit the right to sue in
any other jurisdiction; and
 
(e) waives, to the maximum extent not prohibited by law, any right it may have
to claim or recover in any legal action or proceeding referred to in this
Section any special, exemplary, punitive or consequential damages.
 
9.13 Acknowledgments.  Each of the Borrowers hereby acknowledges that:
 
(a) it has been advised by counsel in the negotiation, execution and delivery of
this Agreement and the other Loan Documents; and
 
(b) no joint venture is created hereby or by the other Loan Documents or
otherwise exists by virtue of the transactions contemplated hereby among the
Borrowers and the Lender.
 
9.14 Confidentiality.  Each of the Agent and each Lender agrees to keep
confidential all material non-public information provided to it by any Loan
Party pursuant to or in connection with this Agreement that is designated as
confidential; provided that nothing herein shall prevent the Agent or any Lender
from disclosing any such information (a) to the Agent, any other Lender or any
affiliate thereof, (b) subject to an agreement to comply with the provisions of
this Section, to any actual or prospective Assignee, (c) to its employees,
directors, agents, attorneys, accountants and other professional advisors or
those of any of its affiliates, (d) upon the request or demand of any
Governmental Authority, (e) in response to any order of any court or other
Governmental Authority or as may otherwise be required pursuant to any
Requirement of Law, (f) if requested or required to do so in connection with any
litigation or similar proceeding, (g) that has been publicly disclosed, or (h)
in connection with the exercise of any remedy hereunder or under any other Loan
Document.  The Agent and each Lender further agrees that it shall not engage in
any public purchases or sales of any securities of Cadiz for so long as the
Agent or such Lender possesses material non-public information about the
Borrowers.
 
9.15 Waivers of Jury Trial.  EACH OF THE BORROWERS , THE AGENT, AND THE LENDERS
HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION
OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY
COUNTERCLAIM THEREIN.
 

IN WITNESS WHEREOF, the parties hereto have caused this Amended and Restated
Credit Agreement to be duly executed and delivered by their proper and duly
authorized officers as of the day and year first above written.
 
 
CADIZ INC.

 
 
By:/s/ Timothy J. Shaheen

 
Name: Timothy J. Shaheen

 
Title: CFO

 
 
CADIZ REAL ESTATE LLC

 
 
By: /s/ Timothy J. Shaheen

 
Name:Timothy J. Shaheen

 
Title:CEO

(signature page to Amended and Restated Credit Agreement)

 
 

--------------------------------------------------------------------------------

 

 
THE AGENT:

 
LC CAPITAL MASTER FUND, LTD.,

 
as Administrative Agent

 
 
By: /s/ Richard F. Conway

 
Name: Richard F. Conway

 
Title: Director

(signature page to Amended and Restated Credit Agreement)

 
 

--------------------------------------------------------------------------------

 

THE LENDERS:

 
LC CAPITAL MASTER FUND, LTD.,

 
as Lender

 
 
By: /s/ Richard F. Conway

 
Name: Richard F. Conway

 
Title: Director

 
(signature page to Amended and Restated Credit Agreement)

 
 

--------------------------------------------------------------------------------

 

 
MILFAM II L.P.

 
By:  Milfam LLC, as general partner

 
 
By: /s/ Lloyd Miller, III

 
Name: Lloyd Miller, III

 
Title: Managing Member

(signature page to Amended and Restated Credit Agreement)

 
 

--------------------------------------------------------------------------------

 

 
WATER ASSET MANAGEMENT—MANAGED ACCOUNT #1, L.L.C.,

 
 
By: /s/ Matthew Diserio

 
Name: Matthew Diserio

 
Title: Member

 
 

--------------------------------------------------------------------------------

 
 
Schedule 1.1A

LENDERS AND LOAN AMOUNTS

Lender
Secured Term Loan
Convertible Notes
LC CAPITAL MASTER FUND, LTD.
c/o Lampe, Conway &  Company LLC
680 Fifth Avenue, Suite 1202
New York, NY 10019
Attn:  Steven G. Lampe
Telecopy:  212-581-8999
Telephone:  212-581-8989
with a copy to:
Manatt, Phelps & Phillips, LLP
7 Times Square
New York, NY 10036
Attn:  Neil S. Faden
Telecopy:  212-790-4545
Telephone:  212-790-4500
 
$24,370,000
$29,426,000
MILFAM II L.P.
222 Lakeview Avenue, Suite 160-365
West Palm Beach, FL 33401
Attn:  Eric Fangmann
Telecopy:  619-923-2908
Telephone:  561-287-5399
with a copy to:
O’Melveny & Myers LLP
400 South Hope Street
Los Angeles, CA 90071
Attn:  Steve Warren
Telecopy:  213-430-6407
Telephone:  213-430-7875
 
$4,353,000
$5,256,000
WATER ASSET MANAGEMENT—MANAGED ACCOUNT
c/o Water Asset Management, LLC
509 Madison Avenue, Suite 804
New York, NY 10022
Attn:  Stacy Kincaid
Telecopy: 212-754-5101
Telephone:
 
$1,277,000
$1,276,000
AGGREGATE TERM LOANS/COMMITMENTS
$30,000,000
$35,958,000

 
 

--------------------------------------------------------------------------------

 
Schedule 1.1B

MORTGAGED PROPERTIES
 
SCHEDULE 1.1B:  MORTGAGED PROPERTIES
 
Parcel Number
 
Legal Description
 
Area
 
Owner’s Title Policy
 
Acreage
 
Purchase Date
 
Use
0556-271-06-0000
T5N R13E Sec 1
Cadiz
TICOR no. 901984
673.82
10/14/1988
Undeveloped
0556-271-25-0000
T5N R13E Sec 13
Cadiz
TICOR no. 901984
129.60
10/14/1988
Undeveloped
0556-271-26-0000
T5N R13E Sec 13
Cadiz
TICOR no. 901984
440.80
10/14/1988
Undeveloped
0556-281-02-0000
T5N R14E Sec 5
Cadiz
TICOR no. 901984
682.38
10/14/1988
Undeveloped
0556-281-12-0000
T5N R14E Sec 9
Cadiz
TICOR no. 901984
640.00
10/14/1988
Undeveloped
0556-281-13-0000
T5N R14E Sec 8
Cadiz
TICOR no. 864655
640.00
12/31/1986
Undeveloped
0556-281-17-0000
T5N R14E Sec 18
Cadiz
TICOR no. 864655
624.68
12/31/1986
Undeveloped
0556-281-19-0000
T5N R14E Sec 17
Cadiz
TICOR no. 864655
280.00
12/31/1986
Undeveloped
0556-281-20-0000
T5N R14E Sec 17
Cadiz
TICOR no. 864655
332.00
12/31/1986
Undeveloped
0556-291-10-0000
T5N R14E Sec 16
Cadiz
no owner’s title policy
106.00
11/6/1984
Undeveloped
0556-291-11-0000
T5N R14E Sec 16
Cadiz
no owner’s title policy
500.00
11/6/1984
Undeveloped
0556-301-06-0000
T5N R14E Sec 13
Cadiz
TICOR no. 901984
342.70
10/14/1988
Undeveloped
0556-301-07-0000
T5N R14E Sec 13
Cadiz
TICOR no. 901984
276.22
10/14/1988
Undeveloped
0556-311-01-0000
T5N R14E Sec 19
Cadiz
TICOR no. 864655
646.78
12/31/1986
Undeveloped
0556-311-02-0000
T5N R14E Sec 20
Cadiz
TICOR no. 864655
640.00
12/31/1986
Undeveloped
0556-311-05-0000
T5N R14E Sec 23
Cadiz
TICOR no. 864655
632.71
12/31/1986
Undeveloped
0556-311-06-0000
T5N R14E Sec 24
Cadiz
TICOR no. 864655
640.00
12/31/1986
Undeveloped
0556-311-10-0000
T5N R14E Sec 28
Cadiz
TICOR no. 864655
640.00
12/31/1986
Undeveloped
0556-311-11-0000
T5N R14E Sec 29
Cadiz
TICOR no. 864655
640.00
12/31/1986
Undeveloped
0556-311-14-0000
T5N R14E Sec 32
Cadiz
TICOR no. 864655
640.00
12/31/1986
Undeveloped
0556-311-16-0000
T5N R14E Sec 34
Cadiz
no owner’s title policy
640.00
N/A
Undeveloped
0556-311-17-0000
T5N R14E Sec 35
Cadiz
no owner’s title policy
638.57
N/A
Undeveloped
0556-311-41-0000
T5N R14E Sec 25
Cadiz
TICOR no. 901984
628.50
10/14/1988
Undeveloped
0556-311-47-0000
T5N R14E Sec 26
Cadiz
TICOR no. 864655
536.93
12/31/1986
Undeveloped
0556-311-49-0000
T5N R14E Sec 21
Cadiz
TICOR no. 864655
37.58
12/31/1986
Vineyard-PSWRI
0556-311-52-0000
T5N R14E Sec 21
Cadiz
TICOR no. 864655
484.82
12/31/1986
Undeveloped
0556-311-53-0000
T5N R14E Sec 21
Cadiz
CT no. 8222127
80.00
12/31/1986
Vineyard-SWFG
0556-321-02-0000
T4N R14E Sec 5
Cadiz
CT no. 8222127
640.92
10/14/1988
Undeveloped-SWFG
0556-321-03-0000
T4N R14E Sec 4
Cadiz
TICOR no. 901984
639.60
10/14/1988
Undeveloped
0556-321-04-0000
T4N R14E Sec 3
Cadiz
TICOR no. 864655
640.68
12/31/1986
Undeveloped
0556-321-05-0000
T4N R14E Sec 2
Cadiz
CT no. 8222127
640.22
10/14/1988
Undeveloped-SWFG
0556-321-06-0000
T4N R14E Sec 1
Cadiz
CT no. 8222127
639.42
10/14/1988
Undeveloped-SWFG
0556-321-10-0000
T4N R14E Sec 9
Cadiz
CT no. 8222127
640.00
10/14/1988
Undeveloped-SWFG
0556-321-18-0000
T4N R14E Sec 13
Cadiz
TICOR no. 901984
640.00
10/14/1988
Undeveloped
0556-341-01-0000
T5N R14E Sec 33, Par 1
Cadiz
CT no. 8222127
36.45
12/31/1986
Vineyard-SWFG
0556-341-03-0000
T5N R14E Sec 33, Par 3
Cadiz
CT no. 8222127
38.81
12/31/1986
Vineyard-SWFG
0556-341-04-0000
T5N R14E Sec 33, Par 4
Cadiz
CT no. 8222127
36.45
12/31/1986
Vineyard-Cadiz
0556-341-05-0000
T5N R14E Sec 33, Par 5
Cadiz
CT no. 8222127
36.45
12/31/1986
Vineyard-SWFG
0556-341-06-0000
T5N R14E Sec 33, Par 6
Cadiz
CT no. 8222127
38.81
12/31/1986
Vineyard-SWFG
0556-341-07-0000
T5N R14E Sec 33, Par 7
Cadiz
CT no. 8222127
38.81
12/31/1986
Vineyard-SWFG
0556-341-08-0000
T5N R14E Sec 33, Par 8
Cadiz
CT no. 8222127
36.45
12/31/1986
Vineyard-SWFG
0556-351-01-0000
T5N R14E Sec 33, Par 9
Cadiz
CT no. 8222127
36.89
12/31/1986
Vineyard-SWFG
0556-351-02-0000
T5N R14E Sec 33, Par 10
Cadiz
CT no. 8222127
38.96
12/31/1986
Vineyard-SWFG
0556-351-03-0000
T5N R14E Sec 33, Par 11
Cadiz
CT no. 8222127
39.06
12/31/1986
Vineyard-SWFG
0556-351-04-0000
T5N R14E Sec 33, Par 12
Cadiz
CT no. 8222127
36.78
12/31/1986
Vineyard-SWFG
0556-351-05-0000
T5N R14E Sec 33, Par 13
Cadiz
CT no. 8222127
36.87
12/31/1986
Vineyard-SWFG
0556-351-06-0000
T5N R14E Sec 33, Par 14
Cadiz
CT no. 8222127
39.38
12/31/1986
Vineyard-SWFG
0556-351-07-0000
T5N R14E Sec 33, Par 15
Cadiz
CT no. 8222127
39.48
12/31/1986
Vineyard-SWFG
0556-351-08-0000
T5N R14E Sec 33, Par 16
Cadiz
CT no. 8222127
39.56
12/31/1986
Vineyard-SWFG
0558-181-04-0000
T6N R14E Sec 31
Cadiz
no owner's title policy
30.00
12/26/1985
Undeveloped
0558-201-11-0000
T6N R14E Sec 29
Cadiz_Option
CT no. 6053782
640.00
12/26/1996
Undeveloped
0558-201-13-0000
T6N R14E Sec 33
Cadiz_Option
CT no. 6053782
448.00
12/26/1996
Undeveloped
0558-201-14-0000
T6N R14E Sec 33
Cadiz_Option
CT no. 6053782
165.50
12/26/1996
Undeveloped
0653-021-14-0000
T4N R15E Sec 17
Cadiz
TICOR no. 9101984
640.00
10/14/1988
Undeveloped
0653-041-10-0000
T5N R15E Sec 9
Cadiz
TICOR no. 9101984
440.00
10/14/1988
Undeveloped
0653-041-13-0000
T5N R15E Sec 8
Cadiz
TICOR no. 9101984
560.10
10/14/1988
Undeveloped
0653-041-15-0000
T5N R15E Sec 18
Cadiz
TICOR no. 864655
622.44
12/31/1986
Undeveloped
0653-041-16-0000
T5N R15E Sec 17
Cadiz
TICOR no. 9101984
612.52
10/14/1988
Undeveloped
0653-041-23-0000
T5N R15E Sec 5
Cadiz
TICOR no. 9101984
622.00
10/14/1988
Undeveloped
0653-041-24-0000
T5N R15E Sec 5
Cadiz
TICOR no. 9101984
12.80
10/14/1988
Undeveloped
0654-011 -03-0000
T6N R15E Sec 21
Cadiz
TICOR no. 9101984
640.00
10/14/1988
Undeveloped
0654-011-11-0000
T6N R15E Sec 29
Cadiz
TICOR no. 9101984
640.00
10/14/1988
Undeveloped
0654-011-21-0000
T6N R15E Sec 33
Cadiz
TICOR no. 9101984
640.00
10/14/1988
Undeveloped
0654-011-22-0000
T6N R15E Sec 33
Cadiz
TICOR no. 9101984
0.00
10/14/1988
Undeveloped
0654-021-27-0000
T6N R15E Sec 13
Cadiz
TICOR no. 9101984
297.05
10/14/1988
Undeveloped
0645-071-18-0000
T3N R18E Sec 36
Danby
CT 6053566 k26
640.00
3/21/1995
Undeveloped
0645-091-06-0000
T2N R18E Sec 12
Danby
Commonwlth 94 411050
20.00
10/7/1994
Undeveloped
0645-091-09-0000
T2N R18E Sec 12
Danby
Commonwlth 94 411050
20.00
10/12/1994
Undeveloped
0645-091-10-0000
T2N R18E Sec 12
Danby
Commonwlth 94 411050
20.00
10/7/1994
Undeveloped
0645-101-04-0000
T2N R18E Sec 23
Danby
Commonwlth 94 411050
80.00
10/7/1994
Undeveloped
0645-121-05-0000
T2N R18E Sec 36
Danby
OCT no. 94 409589
20.00
10/6/1994
Undeveloped
0645-121-06-0000
T2N R18E Sec 36
Danby
OCT no. 94 409589
15.59
10/6/1994
Undeveloped
0645-121-09-0000
T2N R18E Sec 36
Danby
OCT no. 94 409589
15.50
10/6/1994
Undeveloped
0645-271-03-0000
T2N R18E Sec 16
Danby
OCT no. 94 409589
20.00
10/6/1994
Undeveloped
0645-271-05-0000
T2N R18E Sec 16
Danby
OCT no. 94 409589
20.00
10/6/1994
Undeveloped
0645-271-06-0000
T2N R18E Sec 16
Danby
OCT no. 94 409590
20.00
10/6/1994
Undeveloped
0645-271-07-0000
T2N R18E Sec 16
Danby
OCT no. 94 409589
20.00
10/6/1994
Undeveloped
0645-271-08-0000
T2N R18E Sec 16
Danby
OCT no. 94 409589
20.00
10/6/1994
Undeveloped
0645-271-10-0000
T2N R18E Sec 16
Danby
OCT no. 94 409590
20.00
10/6/1994
Undeveloped
0645-271-11-0000
T2N R18E Sec 16
Danby
OCT no. 94 409589
17.34
10/6/1994
Undeveloped
0645-271-13-0000
T2N R18E Sec 16
Danby
OCT no. 94 409589
20.00
10/6/1994
Undeveloped
0645-271-15-0000
T2N R18E Sec 16
Danby
OCT no. 94 409589
20.00
10/6/1994
Undeveloped
0645-271-16-0000
T2N R18E Sec 16
Danby
OCT no. 94 29882
20.00
10/6/1994
Undeveloped
0645-271-18-0000
T2N R18E Sec 16
Danby
OCT no. 94 409590
15.45
10/6/1994
Undeveloped
0645-271-23-0000
T2N R18E Sec 16
Danby
OCT no. 94 409589
20.00
10/6/1994
Undeveloped
0568-341-04-0000
T12N R20E Sec 33
Piute
FATCo no. 93-000748
571.41
1/6/1993
Undeveloped
0568-341-07-0000
T12N R20E Sec 29
Piute
FATCo no. 96-197383
463.48
1/6/1993
Undeveloped
0659-171-10-0000
T10N R21E Sec 29
Piute
CT no. 92035296 k27
640.00
6/18/1999
Undeveloped
0659-181-03-0000
T10N R21E Sec 5
Piute
CT no. 92035296 k27
13.64
6/18/1999
Undeveloped
0659-181-06-0000
T10N R21E Sec 9
Piute
CT no. 92035296 k27
641.36
6/18/1999
Undeveloped
0659-241-02-0000
T10N R21E Sec 17
Piute
CT no. 92035296 k27
612.45
6/18/1999
Undeveloped
0659-241-16-0000
T10N R21E Sec 21
Piute
CT no. 92035296 k27
457.19
6/18/1999
Undeveloped
0659-241-17-0000
T10N R21E Sec 21
Piute
CT no. 92035296 k27
91.74
6/18/1999
Undeveloped
0658-131-02-0000
T11N R20E Gov Tract 38
Piute
FATCo no. 93-00748
640.60
1/6/1993
Undeveloped
0658-131-06-0000
T11N R20E Gov Tract 42
Piute
FATCo no. 93-00748
640.00
1/6/1993
Undeveloped
0658-141-04-0000
T11N R20E Gov Tract 39
Piute
FATCo no. 93-00748
640.00
1/6/1993
Undeveloped
0659-051-07-0000
T10N R19E Sec 25
Homer
FATCo no. 93-419956
640.00
9/30/1993
Undeveloped
0659-061-16-0000
T10N R19E Sec 13
Homer
FATCo no. 93-419956
640.00
9/30/1993
Undeveloped
0659-081-03-0000
T10N R20E Sec 21
Homer
FATCo no. 93-419956
640.00
9/30/1993
Undeveloped
0659-081-25-0000
T10N R20E Sec 29
Homer
FATCo no. 93-419956
627.97
9/30/1993
Undeveloped
0659-081-26-0000
T10N R20E Sec 29
Homer
FATCo no. 93-419956
640.00
9/30/93
Undeveloped
0556-251-03-0000
T5N R13E Sec 21
Cadiz_Rail Cycle
CT no. 12035113
640.00
5/9/2001
Undeveloped
0556-251-11-0000
T5N R13E Sec 29
Cadiz_Rail Cycle
CT no. 12035113
640.00
5/9/2001
Undeveloped
0556-251-15-0000
T5N R13E Sec 33
Cadiz_Rail Cycle
CT no. 12035113
640.00
5/9/2001
Undeveloped
0556-271-02-0000
T5N R13E Sec 5
Cadiz_Rail Cycle
CT no. 12035113
682.38
5/9/2001
Undeveloped
0556-271-10-0000
T5N R13E Sec 9
Cadiz_Rail Cycle
CT no. 12035113
557.25
5/9/2001
Undeveloped
0556-271-14-0000
Map 804 36 63 Par 5
Cadiz_Rail Cycle
CT no. 12035113
50.00
5/9/2001
Undeveloped
0556-271-15-0000
Map 804 36 63 Par 6
Cadiz_Rail Cycle
CT no. 12035113
21.00
5/9/2001
Undeveloped
0556-271-16-0000
Map 804 36 63 Par 7
Cadiz_Rail Cycle
CT no. 12035113
21.00
5/9/2001
Undeveloped
0556-271-22-0000
T5N R13E Sec 16
Cadiz_Rail Cycle
CT no. 12035113
625.49
5/9/2001
Undeveloped
0556-271-23-0000
T5N R13E Sec 17
Cadiz_Rail Cycle
CT no. 12035113
640.00
5/9/2001
Undeveloped
0556-311-04-0000
T5N R14E Sec 22
Cadiz
FATCo no. 972090
620.57
12/31/1986
Undeveloped
0556-311-09-0000
T5N R14E Sec 27
Cadiz
FATCo no. 972090
640.00
12/31/1986
Citrus
0556-311-50-0000
T5N R14E Sec 21
Cadiz
FATCo no. 972090
37.58
12/31/1986
Vineyard-Harweal
0556-341-02-0000
T5N R14E Sec 33, Par 2
Cadiz
CT no. 8222127
38.81
12/31/86
Vineyard-SWFG
0558-151-14-0000
T6N R13E Sec 33
Cadiz_Rail Cycle
CT no. 12035113
523.00
5/9/01
Undeveloped
0558-151-15-0000
T6N R13E Sec 33
Cadiz_Rail Cycle
CT no. 12035113
88.40
5/9/2001
Undeveloped
0558-171-16-0000
T6N R13E Sec 36
Cadiz
no owner's title policyi
40.00
6/27/1995
Undeveloped
0558-181-05-0000
T6N R14E Sec 31
Cadiz
no owner's title policyii
10.00
10/31/2007
Undeveloped
0558-181-21-0000
T6N R14E Sec 31
Cadiz
CT no. 8222457
160.00
9/28/1998
Mobile Home Park – Land
0558-181-21-6000
T6N R14E Sec 31
Cadiz
no owner's title policy
N/A
2/7/1999
Mobile Home Park – Facilities
0568-251-10-0000
T13N R19E Sec 29
Cadiz_Rail Cycle
CT no. 12035113
640.00
5/9/2001
Undeveloped
0645-061-15-0000
T3N R18E Sec 16
Danby
CT no. 6053565
640.00
6/4/1996
Undeveloped
0653-011-15-0000
T4N R15E Sec 33
Cadiz_Rail Cycle
CT no. 12035113
640.00
5/9/2001
Undeveloped
0654-031-02-0000
T6N R15E Sec 1
Cadiz
TICOR no. 9101984
477.60
10/14/1988
Undeveloped
0654-031-03-0000
T6N R15E Sec 1
Cadiz
TICOR no. 9101984
149.20
10/14/1988
Undeveloped
0656-111-18-0000
T9N R17E Sec 13
Cadiz_Rail Cycle
CT no. 12035113
640.00
5/9/2001
Undeveloped
0659-241-03-0000
T10N R21E Sec 16
Piute
CT no. 605364 k26
556.32
6/4/96
Undeveloped

 
 

--------------------------------------------------------------------------------

 
Schedule 3.16(a)

UCC FILING JURISDICTIONS

LOAN PARTY
UCC FILING JURISDICTION
 
CADIZ INC.
 
Delaware, California
 
CADIZ REAL ESTATE LLC
 
Delaware, California

 
 

--------------------------------------------------------------------------------

 
Schedule 3.16(b)

MORTGAGE FILING JURISDICTIONS

The Office of the County Recorder for the County of San Bernardino, California
 
 
 
 
Exhibit A

Exhibit A
 

FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT

ASSIGNMENT AND ASSUMPTION AGREEMENT (this “ASSIGNMENT AGREEMENT”) is entered
into as of [DATE] between [NAME OF ASSIGNOR] (the “Assignor”) and [NAME OF
ASSIGNEE] (the “Assignee”).  Reference is made to the credit agreement described
in Annex I hereto (the “Credit Agreement”).   Capitalized terms used herein and
not otherwise defined shall have the meanings ascribed to them in the Credit
Agreement.

1. In accordance with the terms and conditions of section 9.6 of the Credit
Agreement, the Assignor hereby sells and assigns to the Assignee, and the
Assignee hereby purchases and assumes from the Assignor without recourse and
without representation or warranty (except as provided in this Assignment
Agreement), that interest in and to the Assignor's rights and obligations under
the Loan Documents as of the date hereof with respect to the Obligations owing
to the Assignor to the extent specified on Annex I.

2. The Assignor (a) represents and warrants that (i) it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim and (ii) it has full power and
authority, and has taken all action necessary, to execute and deliver this
Assignment Agreement and to consummate the transactions contemplated hereby; (b)
makes no representation or warranty and assumes no responsibility with respect
to (i) any statements, representations or warranties made in or in connection
with the Loan Documents, or (ii) the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Loan Documents or any
other instrument or document furnished pursuant thereto; (c) makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of Borrower or the performance or observance by Borrower of
any of its obligations under the Loan Documents or any other instrument or
document furnished pursuant thereto, and (d) represents and warrants that the
amount set forth as the Purchase Price on Annex I represents the amount owed by
Borrower to Assignor with respect to Assignor's share of the Loans assigned
hereunder, as reflected on the Assignor's books and records.

3. The Assignee represents and warrants that (a) it has full power and
authority, and has taken all action necessary, to execute and deliver this
Assignment Agreement and to consummate the transactions contemplated hereby and
(b) that this Assignment Agreement has been duly authorized, executed and
delivered by the Assignee and that this Assignment Agreement constitutes a
legal, valid and binding obligation of the Assignee, enforceable in accordance
with its terms, except as enforceability may be limited by applicable
bankruptcy, moratorium or other similar laws affecting creditors' rights
generally and by general equitable principles.

4.  The Assignee (a) confirms that it has received copies of the Credit
Agreement and the other Loan Documents, together with copies of the financial
statements referred to therein and such other documents and information as it
has deemed appropriate to make its own credit analysis and decision to enter
into this Assignment Agreement and that it is not relying upon any
representation, warranty or statement (except any such representation, warranty
or statement expressly set forth in this Assignment Agreement); (b) agrees that
it will, independently and without reliance upon Agent, Assignor or any other
Lender based upon such documents and information as it shall deem appropriate at
the time, continue to make its own credit decisions in taking or not taking any
action under the Loan Documents; (c) appoints and authorizes the Agent to take
such action as agent on behalf and to exercise such powers under the Loan
Documents as are delegated to the Agent by the terms thereof, together with such
powers as are reasonably incidental thereto; (d) agrees that it will perform in
accordance with their terms all of the obligations which by the terms of the
Loan Documents are required to be performed by it as a Lender; and (e) and
attaches the forms prescribed by the Internal Revenue Service of the United
States certifying as to the Assignee's status for purposes of determining
exemption from United States withholding taxes with respect to all payments to
be made to the Assignee under the Credit Agreement or such other documents as
are necessary to indicate that all such payments are subject to such rates at a
rate reduced by an applicable tax treaty.   The Assignor shall have no duty or
responsibility either initially or on a continuing basis to make any such
investigation or any such appraisal on behalf of the Assignee or to provide the
Assignee with any credit or other information with respect thereto, whether
coming into its possession before the making of the initial extension of credit
under the Credit Agreement or at any time or times thereafter.

5.  Following the execution of this Assignment Agreement by the Assignor and
Assignee, the Assignor will deliver this Assignment Agreement to the Agent for
recording by the Agent.   The effective date of this Assignment (the “Settlement
Date”) shall be the later to occur of (a) the date of the execution and delivery
hereof by the Assignor and the Assignee, and (b) the date specified in Annex I.

6. As of the Settlement Date (a) the Assignee shall be a party to the Credit
Agreement and, to the extent of the interest assigned pursuant to this
Assignment Agreement, have the rights and obligations of the Lender thereunder
and under the other Loan Documents, and (b) the Assignor shall, to the extent of
the interest assigned pursuant to this Assignment Agreement, relinquish its
rights and be released from its obligations under the Credit Agreement and the
other Loan Documents.

7. Upon the Settlement Date, Assignee shall pay to Assignor the Purchase Price
(as set forth in Annex 1).   From and after the Settlement Date, the Agent shall
make all payments that are due and payable to the holder of the interest
assigned hereunder (including payments of principal, interest, fees and other
amounts) to Assignor for amounts which have accrued up to but excluding the
Settlement Date and to Assignee for amounts which have accrued from and after
the Settlement Date.   On the Settlement Date, Assignor shall pay to Assignee an
amount equal to the portion of any interest, fee, or any other charge that was
paid to Assignor prior to the Settlement Date on account of the interest
assigned hereunder and that are due and payable to Assignee with respect
thereto, to the extent that such interest, fee or other charge relates to the
period of time from and after the Settlement Date.

8. This Assignment Agreement may be executed in counterparts and by the parties
hereto in separate counterparts, each of which when so executed and delivered
shall be an original, but all of which shall together constitute one and the
same instrument.   This Assignment Agreement may be executed and delivered by
telecopier or other facsimile transmission all with the same force and effect as
if the same were a fully executed and delivered original manual counterpart.

9. THIS ASSIGNMENT AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Assumption, including Annex I hereto to be executed by their respective
officers, as of the first date written above.
 

 
[LENDER OR ORIGINAL LENDER],

 
as Assignor

 

  By:    Name:    Title 

 
[LENDER],

 
as Assignee

 

  By:    Name:    Title 

ANNEX FOR ASSIGNMENT AND ASSUMPTION

1.  Borrower: Cadiz Inc.   and Cadiz Real Estate LLC

2.  Name and Date of Credit Agreement:

Amended and Restated Credit Agreement, dated as of March 4, 2013 (as amended,
the “Credit Agreement”), by and among Cadiz Inc.  and Cadiz Real Estate LLC, as
borrowers (the “Borrower”), the lenders party thereto, LC Capital Master Fund,
Ltd., as administrative agent (the “Agent”).

3.  Date of Assignment Agreement:  [DATE]

4.   Amounts:

Designation of Assigned Loan
Amount of Assigned Loan
                   

5.   Settlement Date:  [DATE]

6.   Purchase Price:   [$PRICE]

7.   Notice and Payment Instructions, etc.

Assignor
Assignee
[NAME OF ASSIGNOR]
 
[ADDRESS]
 
[ADDRESS]
 
[ATTENTION]
 
[TELECOPY]
 
[TELEPHONE]
 
[PAYMENT ACCOUNT BANK]
 
[PAYMENT ACCOUNT R/T NUMBER]
 
[PAYMENT ACCOUNT NUMBER]
 
[PAYMENT ACCOUNT REFERENCE]
 

8.   Agreed and Accepted:

 
[NAME OF ASSIGNOR],

 
as Assignor

 

  By:    Name:    Title 

 
[NAME OF ASSIGNEE],

 
as Assignee

 

  By:    Name:    Title 

 
 

--------------------------------------------------------------------------------

 
Exhibit B

FORM OF COMPLIANCE CERTIFICATE

[CADIZ LETTERHEAD]

LC Capital Master Fund, Ltd., as Agent
c/o Lampe Conway & Company
680 Fifth Avenue, Suite 1202
New York, New York 10019
Attention:  Steven G. Lampe

Re:           Compliance Certificate dated _____________________

Ladies and Gentlemen:

Reference is made to that certain Amended and Restated Credit Agreement, dated
as of March 4, 2013 (as amended, the “Credit Agreement”), by and among Cadiz
Inc. (“Cadiz”) and Cadiz Real Estate LLC, as borrowers (together, the
“Borrower”), the lenders party thereto and LC Capital Master Fund, Ltd., as
administrative agent (the “Agent”).  Capitalized terms used in this Compliance
Certificate have the meanings set forth in the Credit Agreement unless
specifically defined herein.

Pursuant to Section 5.2 of the Credit Agreement, the undersigned, being a
Responsible Officer of Cadiz, hereby certifies that:

1.           The financial information of the Borrower furnished in SCHEDULE 1
attached hereto, has been prepared in accordance with GAAP (except for year-end
adjustments and the lack of footnotes), and fairly presents in all material
respects the financial condition of Cadiz and its Subsidiaries.

2.           The undersigned has reviewed the terms of the Credit Agreement and
has made, or caused to be made under his/her supervision, a review in reasonable
detail of the transactions and condition of Cadiz and its Subsidiaries during
the accounting period covered by the financial statements delivered pursuant to
SCHEDULE 5.2 of the Credit Agreement.

3.           Such review has not disclosed the existence on and as of the date
hereof, and the undersigned does not have knowledge of the existence as of the
date hereof, of any event or condition that constitutes a Default or Event of
Default, except for such conditions or events listed on SCHEDULE 2 attached
hereto, specifying the nature and period of existence thereof and what action
Cadiz and its Subsidiaries have taken, are taking or propose to take with
respect thereto.

4.           The representations and warranties of Cadiz and its Subsidiaries
set forth in the Credit Agreement and the other Loan Documents are true and
correct in all material respects on and as of the date hereof (except to the
extent they relate to a specified date), except as set forth on SCHEDULE 3
attached hereto.

IN WITNESS WHEREOF, this Compliance Certificate is executed by the undersigned
this ___ day of ___________________.

CADIZ INC.

By:_________________________
Name:
Title:
 
 

--------------------------------------------------------------------------------

 
 
Exhibit C

INTENTIONALLY OMITTED
 
 

--------------------------------------------------------------------------------

 
Exhibit D

 
SECURITY AGREEMENT
 
made by
 
CADIZ INC.,
 
and
 
CADIZ REAL ESTATE LLC,
 
as Loan Parties
 

 
in favor of
 
LC CAPITAL MASTER FUND, LTD.,
 
as Agent
 

 
Amended and Restated as of March 5, 2013
 

 

 
 
 

TABLE OF CONTENTS

Page
 

SECTION 1.
DEFINED TERMS 
3

 
 
1.1
Definitions 
3

 
 
1.2
Other Definitional Provisions 
6

 
SECTION 2.
GRANT OF SECURITY INTEREST 
6

 
SECTION 3.
REPRESENTATIONS AND WARRANTIES 
7

 
 
3.1
Title; No Other Liens 
7

 
 
3.2
Perfected First Priority Liens 
8

 
 
3.3
Jurisdiction Of Organization; Chief Executive Office 
8

 
 
3.4
Inventory and Equipment 
8

 
 
3.5
Farm Products 
8

 
 
3.6
Investment Property 
8

 
 
3.7
Receivables 
8

 
 
3.8
Intellectual Property 
8

 
SECTION 4.
COVENANTS 
9

 
 
4.1
Delivery of Instruments, Certificated Securities and Chattel Paper 
9

 
 
4.2
Payment of Obligations 
9

 
 
4.3
Maintenance Of Perfected Security Interest; Further Documentation 
10

 
 
4.4
Changes in Locations, Name, Etc 
10

 
 
4.5
Notices 
10

 
 
4.6
Investment Property 
11

 
 
4.7
Receivables 
12

 
SECTION 5.
REMEDIAL PROVISIONS 
12

 
 
5.1
Certain Matters Relating To Receivables 
12

 
 
5.2
Communications With Obligors; Loan Parties Remain Liable 
12

 
 
5.3
Pledged Stock 
13

 
 
5.4
Proceeds to be Turned Over to Agent 
14

 
 
5.5
Application of Proceeds 
14

 
 
5.6
Code and Other Remedies 
14

 
 
5.7
Deficiency 
15

 
SECTION 6.
MISCELLANEOUS 
15

 
 
6.1
Amendments In Writing 
15

 
 
6.2
Notices 
15

 
 
6.3
No Waiver by Course of Conduct; Cumulative Remedies 
16

 
 
6.4
Enforcement Expenses; Indemnification 
16

 
 
6.5
Successors and Assigns 
16

 
 
6.6
Set-Off 
16

 
 
6.7
Counterparts 
17

 
 
6.8
Severability 
17

 
 
6.9
Section Headings 
17

 
 
6.10
Integration 
17

 
 
6.11
GOVERNING LAW 
17

 
 
6.12
Submission to Jurisdiction; Waivers 
17

 
 
6.13
Acknowledgments 
18

 
 
6.14
Releases 
18

 
 
6.15
WAIVER OF JURY TRIAL 
19

 

 

 
 
 

Schedules

Schedule 1                      Notice Addresses
 
Schedule 2                      Investment Property
 
Schedule 3                      Perfection Matters
 
Schedule 4                      Jurisdictions of Organization and Chief
Executive Offices
 
Schedule 5                      Inventory and Equipment Locations
 
Schedule 6                      Intellectual Property
 
SECURITY AGREEMENT
 
SECURITY AGREEMENT, amended and restated as of March 5, 2013, made by each of
the signatories hereto (together with any other entity that may become a party
hereto as provided herein, the “Loan Parties”), in favor of LC Capital Master
Fund, Ltd., as administrative agent (in such capacity, the “Agent”) on behalf of
the Lenders holding Secured Term Loans under the Amended and Restated Credit
Agreement, amended and restated as of March 5, 2013 (as amended, supplemented or
otherwise modified from time to time, the “Credit Agreement”), among Cadiz Inc.,
a Delaware corporation (“Parent”) and Cadiz Real Estate LLC, a Delaware limited
liability company (“CRE”) each as borrowers (together, the “Borrower”), the
lenders party thereto (the “Lenders”) and the Agent.
 
W I T N E S S E T H:
 
WHEREAS, as of the Restatement Date, the Loan Parties and the Lenders have
agreed to enter into the Credit Agreement and to make extensions of credit to
the Borrowers upon the terms and subject to the conditions set forth therein;
 
WHEREAS, it is a condition precedent to the Restatement Date that the Loan
Parties shall have executed and delivered this Agreement to the Agent;
 
NOW, THEREFORE, in consideration of the premises hereunder, and to induce the
Agent and the Lenders to enter into the Credit Agreement and the Lenders to make
the extensions of credit to the Borrowers thereunder, each Loan Party hereby
agrees with the Agent as follows:
 
SECTION 1.     DEFINED TERMS
 
1.1 Definitions.  Unless otherwise defined herein, terms defined in the Credit
Agreement and used herein shall have the meanings given to them in the Credit
Agreement, and the following terms are used herein as defined in the New York
UCC:  Accounts, Certificated Security, Chattel Paper, Commercial Tort Claims,
Contracts, Documents, Equipment, Farm Products, General Intangibles, Goods,
Instruments, Inventory, Letter-of-Credit Rights and Supporting Obligations.  The
following terms shall have the following meanings:
 
(a) “Agreement”:  this Security Agreement, as the same may be amended,
supplemented or otherwise modified from time to time.
 
(b) “Borrower Obligations”:  the collective reference to the Obligations, as
defined in the Credit Agreement, with respect only to the Secured Term Loans
outstanding thereunder and to the Lenders holding Secured Term Loans.
 
(c) “Collateral”:  as defined in Section 2.
 
(d) “Collateral Account”:  any collateral account established by the Agent as
provided in Section 5.1 or 5.4.
 
(e) “Convertible Note Documents”:  means (i) that certain Indenture, dated as of
March 5, 2013, between Parent and The Bank of New York Mellon Trust Company,
N.A., as trustee, (ii) Exchange Agreement, dated as of March 4, 2013, by and
among LC Capital Master Fund, Ltd., Milfam II LP, Water Asset Management Managed
Account #1, L.L.C. and Parent and (iii) that certain Private Placement Purchase
Agreement, dated as of March 4, 2013, by and among Parent, Altima Global Special
Situations Master Fund Ltd, Nokomis Capital Master Fund, LP, Moussescapade,
L.P., Sphinx Trading, LP, Bryant and Carlene Riley JTWROS, B. Riley & Co., LLC
401(k) Profit Sharing Plan, B Riley & Co., LLC, Riley Family Trust DTD 6/20/89,
Modified 01/25/07, and Robert Antin Children Irrevocable Trust DTD 01/01/01.
 
(f) “Copyright Licenses”:  any written agreement naming any Loan Party as
licensor or licensee (including, without limitation, those listed in Schedule
6), granting any right under any Copyright, including, without limitation, the
grant of rights to manufacture, distribute, exploit and sell materials derived
from any Copyright.
 
(g) “Copyrights”:  (i) all copyrights arising under the laws of the United
States, whether registered or unregistered and whether published or unpublished
(including, without limitation, those listed in Schedule 6), all registrations
and recordings thereof, and all applications in connection therewith, including,
without limitation, all registrations, recordings and applications in the United
States Copyright Office, and (ii) the right to obtain all renewals thereof.
 
(h) “Deposit Account”:  as such term is defined in the New York UCC, the deposit
accounts listed on Schedule 2.
 
(i) “Intellectual Property”:  the collective reference to all rights, priorities
and privileges relating to intellectual property arising under United States
laws, including, without limitation, the Copyrights, the Copyright Licenses, the
Patents, the Patent Licenses, the Trademarks and the Trademark Licenses.
 
(j) “Intercompany Note”:  any promissory note evidencing loans made by any Loan
Party to another Loan Party.
 
(k) “Investment Property”:  the collective reference to (i) all “Investment
Property” as such term is defined in Section 9- 102(a)(49) of the New York UCC
and (ii) in any event, all Pledged Notes and all Pledged Stock.
 
(l) “Issuers”:  the collective reference to each issuer of any Investment
Property.
 
(m) “New York UCC”:  the Uniform Commercial Code as from time to time in effect
in the State of New York.
 
(n) “Loan Party Obligations”:  with respect to any Loan Party, all obligations
and liabilities of such Loan Party with respect only to the Secured Term Loans
outstanding thereunder and to the Lenders holding Secured Term Loans which may
arise under or in connection with this Agreement, any other Loan Document to
which such Loan Party is a party, in each case whether on account of guarantee
obligations, reimbursement obligations, fees, indemnities, costs, expenses or
otherwise (including, without limitation, all fees and disbursements of counsel
to the Agent that are required to be paid by such Loan Party pursuant to the
terms of this Agreement, any other Loan Document).
 
(o) “Obligations”:  (i) in the case of the Borrower, the Borrower Obligations,
and (ii) in the case of each other Loan Party, its Loan Party Obligations.
 
(p) “Patent License”:  all agreements, whether written or oral, providing for
the grant by or to any Loan Party of any right to manufacture, use or sell any
invention covered in whole or in part by a Patent, including, without
limitation, any of the foregoing referred to in Schedule 6.
 
(q) “Patents”:  (i) all letters patent of the United States, all reissues and
extensions thereof and all goodwill associated therewith, including, without
limitation, any of the foregoing referred to in Schedule 6, (ii) all
applications for letters patent of the United States, continuations and
continuations-in-part thereof, including, without limitation, any of the
foregoing referred to in Schedule 6, and (iii) all rights to obtain any reissues
or extensions of the foregoing.
 
(r) “Pledged Notes”:  all promissory notes listed on Schedule 2 and all
Intercompany Notes at any time issued to any Loan Party and all other promissory
notes issued to or held by any Loan Party.
 
(s) “Pledged Stock”:  (i) the shares of Capital Stock listed on Schedule 2 and
(ii) any other shares, stock certificates, options, interests or rights of any
nature whatsoever in respect of the Capital Stock of any Person (other than a
Subsidiary that is not a Loan Party) that may be issued or granted to, or held
by, any Loan Party while this Agreement is in effect.
 
(t) “Proceeds”:  all “Proceeds” as such term is defined in Section 9-102(a)(64)
of the New York UCC and, in any event, shall include, without limitation, all
dividends or other income from the Investment Property, collections thereon or
distributions or payments with respect thereto.
 
(u) “Receivable”:  any right to payment for goods sold or leased or for services
rendered, whether or not such right is evidenced by an Instrument or Chattel
Paper and whether or not it has been earned by performance (including, without
limitation, any Account).
 
(v) “Securities Act”:  the Securities Act of 1933, as amended.
 
(w) “Trademark License”:  any agreement, whether written or oral, providing for
the grant by or to any Loan Party of any right to use any Trademark, including,
without limitation, any of the foregoing referred to in Schedule 6.
 
(x) “Trademarks”:  (i) all trademarks, trade names, corporate names, company
names, business names, fictitious business names, trade styles, service marks,
logos and other source or business identifiers, and all goodwill associated
therewith, now existing or hereafter adopted or acquired, all registrations and
recordings thereof, and all applications in connection therewith, whether in the
United States Patent and Trademark Office or in any similar office or agency of
the United States or any State thereof, or otherwise, and all common-law rights
related thereto, including, without limitation, any of the foregoing referred to
in Schedule 5, and (ii) the right to obtain all renewals thereof.
 
1.2 Other Definitional Provisions.
 
(a) The words “hereof,” “herein”, “hereto” and “hereunder” and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and Section and Schedule
references are to this Agreement unless otherwise specified.
 
(b) The meanings given to terms defined herein shall be equally applicable to
both the singular and plural forms of such terms.
 
(c) Where the context requires, terms relating to the Collateral or any part
thereof, when used in relation to a Loan Party, shall refer to such Loan Party’s
Collateral or the relevant part thereof.
 
SECTION 2.     GRANT OF SECURITY INTEREST
 
Each Loan Party hereby grants to the Agent, on behalf of the Lenders holding
Secured Term Loans, a security interest in, all of the following property now
owned or at any time hereafter acquired by such Loan Party or in which such Loan
Party now has or at any time in the future may acquire any right, title or
interest (collectively, the “Collateral”), as collateral security for the prompt
and complete payment and performance when due (whether at the stated maturity,
by acceleration or otherwise) of such Loan Party’s Obligations:
 
(a) all Accounts;
 
(b) all Chattel Paper;
 
(c) all Contracts;
 
(d) the Deposit Accounts;
 
(e) all Documents;
 
(f) all Equipment;
 
(g) all General Intangibles;
 
(h) all Instruments;
 
(i) all Intellectual Property;
 
(j) all Inventory;
 
(k) all Investment Property (other than the capital stock of any Subsidiary that
is not a Loan Party);
 
(l) all Letter-of-Credit Rights;
 
(m) all Goods not otherwise described above;
 
(n) all books and records pertaining to the foregoing; and
 
(o) to the extent not otherwise included, all Proceeds, Supporting Obligations
and products of any and all of the foregoing and all collateral security and
guarantees given by any Person with respect to any of the foregoing;
 
provided, however, that notwithstanding any of the other provisions set forth in
this Section 2, this Agreement shall not constitute a grant of a security
interest in any property to the extent that such grant of a security interest is
prohibited by any Requirements of Law of a Governmental Authority, requires a
consent not obtained of any Governmental Authority pursuant to such Requirement
of Law or is prohibited by, or constitutes a breach or default under or results
in the termination of or requires any consent not obtained under, any contract,
license, agreement, instrument or other document evidencing or giving rise to
such property or, in the case of any Investment Property, Pledged Stock or
Pledged Note, any applicable shareholder or similar agreement, except to the
extent that such Requirement of Law or the term in such contract, license,
agreement, instrument or other document or shareholder or similar agreement
providing for such prohibition, breach, default or termination or requiring such
consent is ineffective under applicable law.
 
SECTION 3.     REPRESENTATIONS AND WARRANTIES
 
To induce the Lenders and the Agent to enter into the Credit Agreement and the
Lenders to make their extensions of credit to the Borrower thereunder, each Loan
Party hereby represents and warrants to the Agent for the benefit of the Lenders
holding Secured Term Loans that:
 
3.1 Title; No Other Liens.  Except for the security interest granted to the
Agent pursuant to this Agreement and the other Liens permitted to exist on the
Collateral by the Credit Agreement, such Loan Party owns each item of the
Collateral free and clear of any and all Liens or claims of others.  No
financing statement or other public notice with respect to all or any part of
the Collateral is on file or of record in any public office, except such as have
been filed in favor of the Agent, for the benefit of the Lenders holding Secured
Term Loans, pursuant to this Agreement or as are permitted by the Credit
Agreement.
 
3.2 Perfected First Priority Liens.  The security interests granted pursuant to
this Agreement (a) upon completion of the filings and other actions specified on
Schedule 3 (which, in the case of all filings and other documents referred to on
said Schedule, have been delivered to the Agent in completed and duly executed
form) will constitute valid perfected security interests in all of the
Collateral in favor of the Agent as collateral security for such Loan Party’s
Obligations, enforceable in accordance with the terms hereof against all
creditors of such Loan Party and any Persons purporting to purchase any
Collateral from such Loan Party and (b) are prior to all other Liens on the
Collateral in existence on the date hereof except, in the case of Collateral
other than Pledged Stock, to the extent permitted by the Credit Agreement.
 
3.3 Jurisdiction Of Organization; Chief Executive Office.  On the date hereof,
such Loan Party’s jurisdiction of organization, identification number from the
jurisdiction of organization (if any) and the location of such Loan Party’s
chief executive office or sole place of business or principal residence, as the
case may be, are specified on Schedule 3.  Such Loan Party has furnished to the
Agent a certified charter, certificate of incorporation or other organization
document and long-form good standing certificate as of a date which is recent to
the date hereof.
 
3.4 Inventory and Equipment.  On the date hereof, a material portion of the
Inventory and the Equipment (other than mobile goods) are kept at the locations
listed on Schedule 5.
 
3.5 Farm Products.  None of the Collateral constitutes, or is the Proceeds of,
Farm Products in any material respect.
 
3.6 Investment Property.  The shares of Pledged Stock pledged by such Loan Party
hereunder constitute all the issued and outstanding shares of all classes of the
Capital Stock of each Issuer owned by such Loan Party.  All the shares of the
Pledged Stock have been duly and validly issued and are fully paid and
nonassessable.  Each of the Pledged Notes constitutes the legal, valid and
binding obligation of the obligor with respect thereto, enforceable in
accordance with its terms, subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors’ rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing.  Such Loan Party is the record
and beneficial owner of, and has good and marketable title to, the Investment
Property pledged by it hereunder, free of any and all Liens or options in favor
of, or claims of, any other Person, except the security interest created by this
Agreement.
 
3.7 Receivables.  No material amount payable to such Loan Party under or in
connection with any Receivable is evidenced by any Instrument or Chattel Paper
which has not been delivered to the Agent.  The amounts represented by such Loan
Party to the Agent from time to time as owing to such Loan Party in respect of
the Receivables will at such times be accurate in all material respects.
 
3.8 Intellectual Property.
 
(a) Schedule 6 lists all registered or applied for Intellectual Property owned
by such Loan Party in its own name on the date hereof which is material to such
Loan Party.
 
(b) On the date hereof, all material Intellectual Property is valid, subsisting,
unexpired and enforceable, has not been abandoned and, to the best knowledge of
such Loan Party, does not infringe the intellectual property rights of any other
Person.
 
(c) Except as set forth in Schedule 6, on the date hereof, no material
Intellectual Property is the subject of any licensing or franchise agreement
pursuant to which such Loan Party is the licensor or franchisor.
 
(d) No holding, decision or judgment has been rendered by any Governmental
Authority which would limit, cancel or question the validity of, or such Loan
Party’s rights in, any Intellectual Property in any respect that could
reasonably be expected to have a Material Adverse Effect.
 
(e) There is no action or proceeding pending, or, to the knowledge of such Loan
Party, threatened, on the date hereof seeking to limit, cancel or question the
validity of any Intellectual Property or such Loan Party’s ownership interest
therein that could reasonably be expected to have a Material Adverse Effect.
 
SECTION 4.     COVENANTS
 
Each Loan Party covenants and agrees with the Agent that, from and after the
date of this Agreement until the Obligations shall have been paid in full:
 
4.1 Delivery of Instruments, Certificated Securities and Chattel Paper.  If any
amount in excess of an aggregate principal amount of $100,000 payable under or
in connection with any of the Collateral shall be or become evidenced by any
Instrument, Certificated Security or Chattel Paper, such Instrument,
Certificated Security or Chattel Paper shall be immediately delivered to the
Agent, duly indorsed in a manner satisfactory to the Agent, to be held as
Collateral pursuant to this Agreement.
 
4.2 Payment of Obligations.  Such Loan Party will pay and discharge or otherwise
satisfy at or before maturity or before they become delinquent, as the case may
be, all taxes, assessments and governmental charges or levies imposed upon the
Collateral or in respect of income or profits therefrom, as well as all claims
of any kind (including, without limitation, claims for labor, materials and
supplies) against or with respect to the Collateral, except that no such tax,
assessment, charge or levy need be paid if the amount or validity thereof is
currently being contested in good faith by appropriate proceedings, reserves in
conformity with GAAP with respect thereto have been provided on the books of
such Loan Party or such failure to pay could not reasonably be expected to
result in the sale, forfeiture or loss of any material portion of the Collateral
or any interest therein.
 
4.3 Maintenance Of Perfected Security Interest; Further Documentation.  Such
Loan Party shall maintain the security interest created by this Agreement as a
perfected security interest having at least the priority described in Section
3.2 and shall defend such security interest against the claims and demands of
all Persons whomsoever, subject to the rights of such Loan Party under the Loan
Documents to dispose of the Collateral.  Such Loan Party will furnish to the
Agent from time to time statements and schedules further identifying and
describing the assets and property of such Loan Party and such other reports in
connection therewith as the Agent may reasonably request, all in reasonable
detail.  At any time and from time to time, upon the written request of the
Agent, and at the sole expense of such Loan Party, such Loan Party will promptly
and duly execute and deliver, and have recorded, such further instruments and
documents and take such further actions as the Agent may reasonably request for
the purpose of obtaining or preserving the full benefits of this Agreement and
of the rights and powers herein granted, including, without limitation, (i)
filing any financing or continuation statements under the Uniform Commercial
Code (or other similar laws) in effect in any jurisdiction with respect to the
security interests created hereby and (ii) to the extent commercially
reasonable, in the case of Investment Property, the Deposit Accounts,
Letter-of-Credit Rights and any other relevant Collateral, taking any actions
necessary to enable the Agent to obtain “control” (within the meaning of the
applicable Uniform Commercial Code) with respect thereto.
 
4.4 Changes in Locations, Name, Etc.  Such Loan Party will not, except upon 10
days’ prior written notice to the Agent and delivery to the Agent of (a) all
additional executed financing statements and other documents reasonably
requested by the Agent to maintain the validity, perfection and priority of the
security interests provided for herein and (b) if applicable, a written
supplement to Schedule 5 showing any additional location at which material
Inventory or Equipment shall be kept:
 
(a) change its jurisdiction of organization or the location of its chief
executive office or sole place of business or principal residence from that
referred to in Section 3.3; or
 
(b) change its name, identity or corporate structure to such an extent that any
financing statement filed by the Agent in connection with this Agreement would
be misleading.
 
4.5 Notices.  Such Loan Party will advise the Agent promptly in reasonable
detail of:
 
(a) any Lien (other than security interests created hereby or Liens permitted
under the Credit Agreement) on any of the Collateral which would materially
adversely affect the ability of the Agent to exercise any of its remedies
hereunder; and
 
(b) of the occurrence of any other event which could reasonably be expected to
have a material adverse effect on the aggregate value of the Collateral or on
the security interests created hereby.
 
4.6 Investment Property.
 
(a) If such Loan Party shall become entitled to receive or shall receive after
the date hereof any certificate (including, without limitation, any certificate
representing a dividend or a distribution in connection with any
reclassification, increase or reduction of capital or any certificate issued in
connection with any reorganization), option or rights in respect of the Capital
Stock of any Issuer, whether in addition to, in substitution of, as a conversion
of, or in exchange for, any shares of the Pledged Stock, or otherwise in respect
thereof, such Loan Party shall accept the same as the agent of the Agent, hold
the same in trust for the Agent and deliver the same forthwith to the Agent in
the exact form received, duly indorsed by such Loan Party to the Agent, if
required, together with an undated stock power covering such certificate duly
executed in blank by such Loan Party and with, if the Agent so requests,
signature guaranteed, to be held by the Agent, subject to the terms hereof, as
additional collateral security for the Obligations.  Any sums paid upon or in
respect of the Investment Property upon the liquidation or dissolution of any
Issuer shall be paid over to the Agent to be held by it hereunder as additional
collateral security for the Obligations, and in case any distribution of capital
shall be made on or in respect of the Investment Property or any property shall
be distributed upon or with respect to the Investment Property pursuant to the
recapitalization or reclassification of the capital of any Issuer or pursuant to
the reorganization thereof, the property so distributed shall, unless otherwise
subject to a perfected security interest in favor of the Agent, be delivered to
the Agent to be held by it hereunder as additional collateral security for the
Obligations.  If any sums of money or property so paid or distributed in respect
of the Investment Property shall be received by such Loan Party, such Loan Party
shall, until such money or property is paid or delivered to the Agent, hold such
money or property in trust for the Agent, segregated from other funds of such
Loan Party, as additional collateral security for the Obligations.
 
(b) Without the prior written consent of the Agent (not to be unreasonably
withheld), such Loan Party will not (i) vote to enable, or take any other action
to permit, any Issuer to issue any Capital Stock of any nature or to issue any
other securities convertible into or granting the right to purchase or exchange
for any Capital Stock of any nature of any Issuer (except pursuant to a
transaction permitted by the Credit Agreement or the Convertible Note
Documents), (ii) sell, assign, transfer, exchange, or otherwise dispose of, or
grant any option with respect to, the Investment Property or Proceeds thereof
(except pursuant to a transaction permitted by the Credit Agreement), (iii)
create, incur or permit to exist any Lien or option in favor of, or any claim of
any Person with respect to, any of the Investment Property or Proceeds thereof,
or any interest therein, except for the security interests created by this
Agreement or permitted by the Credit Agreement or (iv) enter into any agreement
or undertaking restricting the right or ability of such Loan Party or the Agent
to sell, assign or transfer any of the Investment Property or Proceeds thereof
except as permitted by the Credit Agreement.
 
(c) In the case of each Loan Party which is an Issuer, such Issuer agrees that
it will be bound by the terms of this Agreement relating to the Investment
Property issued by it and will comply with such terms insofar as such terms are
applicable to it.
 
(d) In the case of each Loan Party which holds Pledged Notes that have not been
delivered into the possession of the Agent, such Loan Party agrees that it will
not sell, transfer or otherwise dispose of such Pledged Notes to any other party
other than another Loan Party under the Loan Documents, except for any sale,
transfer or disposition in accordance with Section 6.15.
 
4.7 Receivables.  Other than in the ordinary course of business consistent with
its past practice and unless commercially reasonable, such Loan Party will not
(i) (as to any Receivable which is a material amount) grant any extension of the
time of payment of any Receivable, (ii) compromise or settle any Receivable for
less than the full amount thereof, (iii) release, wholly or partially, any
Person liable for the payment of any Receivable, (iv) allow any credit or
discount whatsoever on any Receivable or (v) amend, supplement or modify any
Receivable in any manner that could materially adversely affect the value
thereof.  Such Loan Party will deliver to the Agent a copy of each material
demand, notice or document received by it that questions or calls into doubt the
validity or enforceability of more than 5% of the aggregate amount of the then
outstanding Receivables.
 
SECTION 5.     REMEDIAL PROVISIONS
 
5.1 Certain Matters Relating To Receivables.  If required by the Agent at any
time after the occurrence and during the continuance of an Event of Default, any
payments of Receivables, when collected by any Loan Party, (i) shall be
forthwith (and, in any event, within three Business Days) deposited by such Loan
Party in the exact form received, duly indorsed by such Loan Party to the Agent
if required, in a Collateral Account maintained under the sole dominion and
control of the Agent, subject to withdrawal by the Agent only as provided in
Section 5.5, and (ii) until so turned over, shall be held by such Loan Party in
trust for the Agent, for the benefit of the Lenders holding Secured Term Loans,
segregated from other funds of such Loan Party.  Each such deposit of Proceeds
of Receivables shall be accompanied by a report identifying in reasonable detail
the nature and source of the payments included in the deposit.  Upon the
occurrence and during the continuance of an Event of Default, at the reasonable
request of the Agent, each Loan Party shall deliver to the Agent all original
and other documents evidencing, and relating to, the agreements and transactions
which gave rise to the Receivables, including, without limitation, all original
orders, invoices and shipping receipts.
 
5.2 Communications With Obligors; Loan Parties Remain Liable.  The Agent in its
own name or in the name of others may at any time after the occurrence and
during the continuance of an Event of Default communicate with obligors under
the Receivables to verify with them to the satisfaction of the Agent the
existence, amount and terms of any Receivables.  Upon the request of the Agent
at any time after the occurrence and during the continuance of an Event of
Default, each Loan Party shall notify obligors on the Receivables that the
Receivables have been assigned to the Agent and that payments in respect thereof
shall be made directly to the Agent.  Anything herein to the contrary
notwithstanding, each Loan Party shall remain liable under each of the
Receivables to observe and perform all the conditions and obligations to be
observed and performed by it thereunder, all in accordance with the terms of any
agreement giving rise thereto.  The Agent shall not have any obligation or
liability under any Receivable (or any agreement giving rise thereto) by reason
of or arising out of this Agreement or the receipt by the Agent of any payment
relating thereto, nor shall the Agent be obligated in any manner to perform any
of the obligations of any Loan Party under or pursuant to any Receivable (or any
agreement giving rise thereto), to make any payment, to make any inquiry as to
the nature or the sufficiency of any payment received by it or as to the
sufficiency of any performance by any party thereunder, to present or file any
claim, to take any action to enforce any performance or to collect the payment
of any amounts which may have been assigned to it or to which it may be entitled
at any time or times.
 
5.3 Pledged Stock.  Unless an Event of Default shall have occurred and be
continuing and the Agent shall have given notice to the relevant Loan Party of
the intent of the Agent to exercise its rights pursuant to this Section 5.3 each
Loan Party shall be permitted to receive all cash dividends paid in respect of
the Pledged Stock and all payments made in respect of the Pledged Notes, in each
case paid in the normal course of business of the relevant Issuer and consistent
with past practice, to the extent permitted in the Credit Agreement, and to
exercise all voting and corporate or other organizational rights with respect to
the Investment Property; provided, however, that no vote shall be cast or
corporate or other organizational right exercised or other action taken which,
in the reasonable judgment of the Agent, would materially impair the Collateral
or which would be inconsistent with or result in any violation of any provision
of the Credit Agreement, this Agreement or any other Loan Document.  If an Event
of Default shall occur and be continuing and the Agent shall give notice of its
intent to exercise such rights to the relevant Loan Party or Loan Parties, (i)
the Agent shall have the right to receive any and all cash dividends, payments
or other Proceeds paid in respect of the Investment Property and make
application thereof to the Obligations in accordance with Section 5.5 hereof and
(ii) any or all of the Investment Property shall be registered in the name of
the Agent or its nominee, and the Agent or its nominee may thereafter exercise
(x) all voting, corporate and other rights pertaining to such Investment
Property at any meeting of shareholders of the relevant Issuer or Issuers or
otherwise and (y) any and all rights of conversion, exchange and subscription
and any other rights, privileges or options pertaining to such Investment
Property as if it were the absolute owner thereof (including, without
limitation, the right to exchange at its discretion any and all of the
Investment Property upon the merger, consolidation, reorganization,
recapitalization or other fundamental change in the corporate or other
organizational structure of any Issuer, or upon the exercise by any Loan Party
or the Agent of any right, privilege or option pertaining to such Investment
Property, and in connection therewith, the right to deposit and deliver any and
all of the Investment Property with any committee, depositary, transfer agent,
registrar or other designated agency upon such terms and conditions as the Agent
may determine), all without liability except to account for property actually
received by it, but the Agent shall have no duty to any Loan Party to exercise
any such right, privilege or option and shall not be responsible for any failure
to do so or delay in so doing.  Each Loan Party hereby authorizes and instructs
each Issuer of any Investment Property pledged by such Loan Party hereunder to
(i) comply with any instruction received by it from the Agent in writing that
(x) states that an Event of Default has occurred and is continuing and (y) is
otherwise in accordance with the terms of this Agreement, without any other or
further instructions from such Loan Party, and each Loan Party agrees that each
Issuer shall be fully protected in so complying, and (ii) unless otherwise
expressly permitted hereby, pay any dividends or other payments with respect to
the Investment Property directly to the Agent for application to the Obligations
in accordance with Section 5.5 hereof.
 
5.4 Proceeds to be Turned Over to Agent.  In addition to the rights of the Agent
specified in Section 5.1 with respect to payments of Receivables, if an Event of
Default shall occur and be continuing, all Proceeds received by any Loan Party
consisting of cash, checks and other near-cash items shall be held by such Loan
Party in trust for the Agent, segregated from other funds of such Loan Party,
and shall, forthwith upon receipt by such Loan Party, be turned over to the
Agent in the exact form received by such Loan Party (duly indorsed by such Loan
Party to the Agent, if required).  All Proceeds received by the Agent hereunder
shall be held by the Agent in a Collateral Account maintained under its sole
dominion and control.  All Proceeds while held by the Agent in a Collateral
Account (or by such Loan Party in trust for the Agent) shall continue to be held
as collateral security for all the Obligations and shall not constitute payment
thereof until applied as provided in Section 5.5.
 
5.5 Application of Proceeds.  At such intervals as may be agreed upon by the
Borrower and the Agent or, if an Event of Default shall have occurred and be
continuing, (x) if such event is an Event of Default specified in clause (i) or
(ii) of paragraph (f) of Section 7 of the Credit Agreement with respect to the
Borrower, automatically, (y) if such event is an Event of Default specified in
paragraph (j) of Section 7 of the Credit Agreement, at any time as the Agent may
be so directed by any Lender or (z) if such event is any other Event of Default,
at any time as the Agent may be so directed by Lenders holding a majority in
principal amount of the Secured Term Loans, the Agent may apply all or any part
of Proceeds constituting Collateral, whether or not held in any Collateral
Account, in payment of the Obligations in the following order:  first, to any
costs, fees and expenses incurred by the Agent in connection with this
Agreement, the Credit Agreement, any other Loan Document or any of the
Obligations (including the reasonable costs, fees and expenses of its agents and
legal counsel, and any costs or expenses incurred in connection with the
exercise by the Agent of any right or remedy under this Agreement, the Credit
Agreement or any other Loan Document); second, to the ratable satisfaction of
the Obligations; and third, any balance of remaining Proceeds to the Borrower or
to whomsoever may be lawfully entitled to receive the same.  Any balance of such
Proceeds remaining after the Obligations shall have been paid in full shall be
paid over to the Borrower or to whomsoever may be lawfully entitled to receive
the same.
 
5.6 Code and Other Remedies.  If an Event of Default shall occur and be
continuing, the Agent may exercise, in addition to all other rights and remedies
granted to them in this Agreement and in any other instrument or agreement
securing, evidencing or relating to the Obligations, all rights and remedies of
the Agent under the New York UCC or any other applicable law.  Without limiting
the generality of the foregoing, the Agent, without demand of performance or
other demand, presentment, protest, advertisement or notice of any kind (except
any notice required by law referred to below) to or upon any Loan Party or any
other Person (all and each of which demands, defenses, advertisements and
notices are hereby waived), may in such circumstances forthwith collect,
receive, appropriate and realize upon the Collateral, or any part thereof,
and/or may forthwith sell, lease, assign, give option or options to purchase, or
otherwise dispose of and deliver the Collateral or any part thereof (or contract
to do any of the foregoing), in one or more parcels at public or private sale or
sales, at any exchange, broker’s board or office of the Agent or elsewhere upon
such terms and conditions as it may deem advisable and at such prices as it may
deem best, for cash or on credit or for future delivery without assumption of
any credit risk.  The Agent shall have the right upon any such public sale or
sales, and, to the extent permitted by law, upon any such private sale or sales,
to purchase the whole or any part of the Collateral so sold, free of any right
or equity of redemption in any Loan Party, which right or equity is hereby
waived and released.  Each Loan Party further agrees, at the Agent’s request, to
assemble the Collateral and make it available to the Agent at places which the
Agent shall reasonably select, whether at such Loan Party’s premises or
elsewhere.  The Agent shall apply the net proceeds of any action taken by it
pursuant to this Section 5.6, after deducting all reasonable costs and expenses
of every kind incurred in connection therewith or incidental to the care or
safekeeping of any of the Collateral or in any way relating to the Collateral or
the rights of the Agent hereunder, including, without limitation, reasonable
attorneys’ fees and disbursements, to the payment in whole or in part of the
Obligations, in the order as set forth in Section 5.5, and only after such
application and after the payment by the Agent of any other amount required by
any provision of law, including, without limitation, Section 9-615(a) of the New
York UCC, need the Agent account for the surplus, if any, to any Loan Party.  To
the extent permitted by applicable law, each Loan Party waives all claims,
damages and demands it may acquire against the Agent arising out of the exercise
by them of any rights hereunder.  If any notice of a proposed sale or other
disposition of Collateral shall be required by law, such notice shall be deemed
reasonable and proper if given at least 10 days before such sale or other
disposition.
 
5.7 Deficiency.  Each Loan Party shall remain liable for any deficiency if the
proceeds of any sale or other disposition of the Collateral are insufficient to
pay its Obligations and the fees and disbursements of any attorneys employed by
the Agent to collect such deficiency.
 
SECTION 6.     MISCELLANEOUS
 
6.1 Amendments In Writing.  None of the terms or provisions of this Agreement
may be waived, amended, supplemented or otherwise modified except in accordance
with Section 9.1 of the Credit Agreement.
 
6.2 Notices.  All notices, requests and demands to or upon the Agent or any Loan
Party hereunder shall be effected in the manner provided for in Section 9.2 of
the Credit Agreement.
 
6.3 No Waiver by Course of Conduct; Cumulative Remedies.  The Agent shall not by
any act (except by a written instrument pursuant to Section 6.1), delay,
indulgence, omission or otherwise be deemed to have waived any right or remedy
hereunder or to have acquiesced in any Default or Event of Default.  No failure
to exercise, nor any delay in exercising, on the part of the Agent any right,
power or privilege hereunder shall operate as a waiver thereof.  No single or
partial exercise of any right, power or privilege hereunder shall preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege.  A waiver by the Agent of any right or remedy hereunder on any one
occasion shall not be construed as a bar to any right or remedy which the Agent
would otherwise have on any future occasion.  The rights and remedies herein
provided are cumulative, may be exercised singly or concurrently and are not
exclusive of any other rights or remedies provided by law.
 
6.4 Enforcement Expenses; Indemnification.  Each Loan Party agrees to pay, and
to save the Agent harmless from, any and all liabilities with respect to, or
resulting from any delay in paying, any and all stamp, excise, sales or other
taxes which may be payable or determined to be payable with respect to any of
the Collateral or in connection with any of the transactions contemplated by
this Agreement, except to the extent such liabilities were caused by the gross
negligence or willful misconduct of the Agent, as determined by a final and
nonappealable decision of a court of competent jurisdiction.  Each Loan Party
agrees to pay, and to save the Agent harmless from, any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever with respect to the
execution, delivery, enforcement, performance and administration of this
Agreement to the extent the Borrower would be required to do so pursuant to
Section 9.5 of the Credit Agreement.  The agreements in this Section 6.4 shall
survive repayment of the Obligations and all other amounts payable under the
Credit Agreement and the other Loan Documents.
 
6.5 Successors and Assigns.  This Agreement shall be binding upon the successors
and assigns of each Loan Party and shall inure to the benefit of the Agent and
its successors and assigns; provided that no Loan Party may assign, transfer or
delegate any of its rights or obligations under this Agreement without the prior
written consent of the Agent.
 
6.6 Set-Off.  Each Loan Party hereby irrevocably authorizes the Agent at any
time and from time to time while an Event of Default shall have occurred and be
continuing, without notice to such Loan Party or any other Loan Party, any such
notice being expressly waived by each Loan Party, to set-off and appropriate and
apply any and all deposits (general or special, time or demand, provisional or
final), in any currency, and any other credits, indebtedness or claims, in any
currency, in each case whether direct or indirect, absolute or contingent,
matured or unmatured, at any time held or owing by the Agent to or for the
credit or the account of such Loan Party, or any part thereof in such amounts as
the Agent may elect, against and on account of the obligations and liabilities
of such Loan Party to the Agent hereunder and claims of every nature and
description of the Agent against such Loan Party, in any currency, whether
arising hereunder, under the Credit Agreement or any other Loan Document, as the
Agent may elect, whether or not the Agent has made any demand for payment and
although such obligations, liabilities and claims may be contingent or
unmatured.  The Agent shall notify such Loan Party promptly of any such set-off
and the application made by the Agent of the proceeds thereof, provided that the
failure to give such notice shall not affect the validity of such set-off and
application.  The rights of the Agent under this Section 6.6 are in addition to
other rights and remedies (including, without limitation, other rights of
set-off) which the Agent may have.
 
6.7 Counterparts.  This Agreement may be executed by one or more of the parties
to this Agreement on any number of separate counterparts (including by
telecopy), and all of said counterparts taken together shall be deemed to
constitute one and the same instrument.
 
6.8 Severability.  Any provision of this Agreement which 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.
 
6.9 Section Headings.  The Section headings used in this Agreement are for
convenience of reference only and are not to affect the construction hereof or
be taken into consideration in the interpretation hereof.
 
6.10 Integration.  This Agreement, the other Loan Documents represent the
agreement of the Loan Parties and the Agent with respect to the subject matter
hereof, and there are no promises, undertakings, representations or warranties
by the Agent relative to subject matter hereof not expressly set forth or
referred to herein, in the other Loan Documents.
 
6.11 GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK AND APPLICABLE
FEDERAL LAW.
 
6.12 Submission to Jurisdiction; Waivers.  Each Loan Party hereby irrevocably
and unconditionally:
 
(a) submits for itself and its property in any legal action or proceeding
relating to this Agreement and the other Loan Documents to which it is a party,
or for recognition and enforcement of any judgment in respect thereof, to the
non-exclusive general jurisdiction of the courts of the State and County of New
York, the courts of the United States of America for the Southern District of
New York, and appellate courts from any thereof;
 
(b) consents that any such action or proceeding may be brought in such courts
and waives any objection that it may now or hereafter have to the venue of any
such action or proceeding in any such court or that such action or proceeding
was brought in an inconvenient court and agrees not to plead or claim the same;
 
(c) agrees that service of process in any such action or proceeding may be
effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to such Loan Party at its
address referred to in Section 6.2 or at such other address of which the Agent
shall have been notified pursuant thereto;
 
(d) agrees that nothing herein shall affect the right to effect service of
process in any other manner permitted by law or shall limit the right to sue in
any other jurisdiction; and
 
(e) waives, to the maximum extent not prohibited by law, any right it may have
to claim or recover in any legal action or proceeding referred to in this
Section any special, exemplary, punitive or consequential damages.
 
6.13 Acknowledgments.  Each Loan Party hereby acknowledges that:
 
(a) it has been advised by counsel in the negotiation, execution and delivery of
this Agreement and the other Loan Documents to which it is a party;
 
(b) the Agent has no fiduciary relationship with or duty to any Loan Party
arising out of or in connection with this Agreement or any of the other Loan
Documents, and the relationship between the Loan Parties, on the one hand, and
the Agent, on the other hand, in connection herewith or therewith is solely that
of debtor and creditor; and
 
(c) no joint venture is created hereby or by the other Loan Documents or
otherwise exists by virtue of the transactions contemplated hereby among the
Loan Parties and the Agent or any Lender.
 
6.14 Releases.  At such time as the Loans and the other Obligations shall have
been paid in full, the Collateral shall be released from the Liens created
hereby, and this Agreement and all obligations (other than those expressly
stated to survive such termination) of the Agent and each Loan Party hereunder
(including all guarantee obligations) shall terminate, all without delivery of
any instrument or performance of any act by any party, and all rights to the
Collateral shall revert to the Loan Parties.  At the request and sole expense of
any Loan Party following any such termination, the Agent shall deliver to such
Loan Party any Collateral held by the Agent hereunder, and execute and deliver
to such Loan Party such documents as such Loan Party shall reasonably request to
evidence such termination.  If any of the Collateral shall be sold, transferred
or otherwise disposed of by any Loan Party in a transaction permitted by the
Credit Agreement, then the Agent, at the request and sole expense of such Loan
Party, shall execute and deliver to such Loan Party all releases or other
documents reasonably necessary or desirable for the release of the Liens created
hereby on such Collateral.
 
6.15 WAIVER OF JURY TRIAL.  EACH GRANTOR AND THE AGENT HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
 

 
[Remainder of This Page Left Intentionally Blank]
 

 IN WITNESS WHEREOF, each of the undersigned has caused this Security Agreement
to be duly executed and delivered as of the date first above written.
 
LOAN PARTIES:
 
CADIZ INC.
 

 
By:
 
Name:
 
Title:
 

 
CADIZ REAL ESTATE LLC
 

 
By:
 
Name:
 
Title:
 

 

 
AGENT:
 
LC CAPITAL MASTER FUND, LTD.
 

 
By:
 
Name:
 
Title:
 
 
 
 
 
Schedule 1
 
NOTICE ADDRESSES OF GRANTORS
 
c/o Cadiz Inc.
 
550 South Hope Street, Suite 2850
 
Los Angeles, CA 90071
 
Attention:  Chief Financial Officer
 
Telecopy:  213-271-1614
 
Telephone:  213-271-1600
 
 

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Schedule 2
 
DESCRIPTION OF INVESTMENT PROPERTY
 
Pledged Stock:
 
Issuer
 
Class of Stock
 
No. of Shares
 
Stock Certificate No.
 
Cadiz Real Estate LLC
Membership Interest
100% Interest
N/A

 

 
Pledged Notes:
 

 
Issuer
 
Payee
 
Principal Amount
 
N/A
   

 
 
 

Schedule 3
 
FILINGS AND OTHER ACTIONS REQUIRED
 
TO PERFECT SECURITY INTERESTS
 
Uniform Commercial Code Filings:
 
Loan Party
 
UCC Filing Jurisdictions
 
Cadiz Inc.
Delaware
California
San Bernardino County, California
Cadiz Real Estate LLC
Delaware
California
San Bernardino County, California

 
Patent and Trademark Filings:
 
None
 

 
Actions With Respect to Pledged Stock:
 
N/A
 
 
 
 
 

Schedule 4
 
LOCATION OF JURISDICTION OF ORGANIZATION
 
AND CHIEF EXECUTIVE OFFICE
 
Loan Party
 
Jurisdiction of Organization
 
Location of Chief Executive Office
 
Cadiz Inc.
Delaware
550 South Hope Street
Suite 2850
Los Angeles, CA 90071
Cadiz Real Estate LLC
Delaware
550 South Hope Street
Suite 2850
Los Angeles, CA 90071

 
 
 

Schedule 5
 
LOCATIONS OF INVENTORY AND EQUIPMENT
 
Loan Party
 
Locations
 
Cadiz Inc.
550 South Hope Street, Suite 2850, Los Angeles, CA 90071
Cadiz Real Estate LLC
550 South Hope Street, Suite 2850, Los Angeles, CA 90071
96-726 National Trails Highway, CA 92304

 
 
 
 
Schedule 6
 
INTELLECTUAL PROPERTY
 
Copyrights and Copyright Licenses:
 
None
 

 
Patents and Patent Licenses:
 
None
 

 
Trademarks and Trademark Licenses:
 
None
 
 

--------------------------------------------------------------------------------

 
Exhibit E
[Attached]
 

 

 

 
This Amendment was prepared
 
by and when recorded should
 
be mailed to:
 
Jubin Meraj, Esq.
 
Manatt, Phelps & Phillips, LLP
 
11355 W. Olympic Blvd.
 
Los Angeles, California 90064
 
Space above this line for recorder’s use
 

THIRD AMENDMENT OF DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS,
 
SECURITY AGREEMENT, FINANCING STATEMENT AND FIXTURE FILING
 
KNOW ALL PERSONS BY THESE PRESENTS:
 
THIS THIRD AMENDMENT OF DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS, SECURITY
AGREEMENT, FINANCING STATEMENT AND FIXTURE FILING (this “Amendment”) is made as
of the [__] day of __________, 2013 by and among CADIZ INC., a Delaware
corporation with an address of 550 South Hope Street, Suite 2850, Los Angeles,
California 90071 (“Cadiz”) and CADIZ REAL ESTATE LLC, a Delaware limited
liability company with an address of 550 South Hope Street, Suite 2850, Los
Angeles, California 90071 (“CRE”, together with Cadiz, collectively the
“Trustor”), in favor of Chicago Title Company, having an office at 560 East
Hospitality Lane, San Bernardino, California 92408, as trustee (the “Trustee”)
for the benefit of LC CAPITAL MASTER FUND, LTD., a company organized under the
laws of the Cayman Islands, with an address of c/o Lampe, Conway & Co.  LLC, 680
Fifth Avenue, 12th Floor, New York, New York 10019, as administrative agent for
the benefit of the Lenders (as defined below) (the “Beneficiary”).
 
WITNESSETH
 
WHEREAS, reference is made to that certain Credit Agreement dated as of June 26,
2006, among Trustor as borrower, 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 Trustor, the lenders party thereto and Peloton Agent; as further
amended by that certain Amendment No. 2 to Credit Agreement and Amendment No. 1
to Registration Rights Agreement dated as of June 4, 2009 by and among Borrower,
the lenders party thereto and Beneficiary, as administrative agent; as further
amended by that certain Amendment No. 3 to Credit Agreement and Amendment No. 2
to Registration Rights Agreement dated as of October 19, 2010, by and among the
Borrowers, the lenders party thereto and Beneficiary, as administrative agent;
as further amended by that certain Amendment No. 4 to Credit Agreement dated as
of July 25, 2011, by and among the Borrowers, the lenders party thereto and
Beneficiary, as administrative agent; as further amended by that certain
Amendment No. 5 to Credit Agreement and Amendment No. 3 to Registration Rights
Agreement dated as of August 8, 2012, by and among the Borrowers, the lenders
party thereto and Beneficiary, as administrative agent; as further amended by
that certain Amendment No. 6 to Credit Agreement and Amendment No. 4 to
Registration Rights Agreement dated as of October 30, 2012, by and among the
Borrowers, the lenders party thereto and Beneficiary, as administrative agent
(collectively, the “Original Credit Agreement”); and as further amended by that
certain Amended and Restated Credit Agreement dated concurrently herewith (the
“Amended and Restated Credit Agreement”), by and among the Borrowers, the
lenders party thereto and Beneficiary, as administrative agent (as the same may
be further amended and supplemented from time to time, and together with the
Original Credit Agreement, the “Credit Agreement”);
 
WHEREAS, as security for the promises, terms, conditions, agreements and
obligations imposed on the Trustor under the Original Credit Agreement, the
Trustor executed and delivered to the Trustee, for the benefit of Peloton Agent,
that certain Deed of Trust, Assignment of Leases and Rents, Security Agreement,
Financing Statement and Fixture Filing, dated as of June 26, 2006 and recorded
on June 29, 2006 as Document Number 2006-0445332 in the Official Records in the
County of San Bernardino of the State of California (the “Official Records”), as
amended by that certain First Amendment of Deed of Trust, Assignment of Leases
and Rents, Security Agreement, Financing Statement and Fixture Filing dated
October 19, 2010 and recorded on October 20, 2010 as Document Number
2010-0434229 in the Official Records, and as further amended by that certain
Second Amendment of Deed of Trust, Assignment of Leases and Rents, Security
Agreement, Financing Statement and Fixture Filing dated October 30, 2012 and
recorded on November 28, 2012 as Document Number 2012-0506328 in the Official
Records (collectively, the “Existing Deed of Trust”), which covers the real
property more particularly described therein;
 
WHEREAS, the Existing Deed of Trust was assigned from Peleton Agent, as
administrative agent, to Beneficiary, as administrative agent, by that certain
Assignment of Deed of Trust, Assignment of Leases and Rents, Security Agreement,
Financing Statement and Fixture Filing, dated May 22, 2008 and recorded on July
3, 2008 as Document Number 2008-0302078 in the Official Records in the County of
San Bernardino of the State of California (the “Assignment  of Deed of Trust”);
 
WHEREAS, concurrent herewith, the Trustor and Beneficiary are entering into the
Amended and Restated Credit Agreement;
 
WHEREAS, the Trustor and the Beneficiary desire that the Existing Deed of Trust
continue to secure the promises, terms, conditions, agreements and obligations
imposed on the Trustor under the Credit Agreement and the other Loan Documents;
and
 
WHEREAS, the Trustor and the Beneficiary desire to amend, extend and modify the
Existing Deed of Trust, and the liens created thereby, as set forth herein.
 
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties agree that the Existing Deed of
Trust shall be hereby amended and modified as follows:
 
Section 1. Defined Terms.  Each capitalized term used herein and not otherwise
defined herein shall have the meaning assigned thereto in the Existing Deed of
Trust, as amended by this Amendment, or if not defined therein, in the Credit
Agreement.  Each reference in the Existing Deed of Trust to “this Deed of Trust”
shall be deemed to be a reference to the Existing Deed of Trust, as amended by
this Amendment.  The term “Lender” or “Lenders” as used herein shall refer to
the Lenders (as defined in the Credit Agreement) holding Secured Term Loans.
 
Section 2. Modification.  The Existing Deed of Trust is hereby amended as
follows:
 
(a) All references to the “Credit Agreement” shall mean the Amended and Restated
Credit Agreement, as further amended, modified or restated from time to time;
 
(b) The reference in Article I, Section B.1.1(i) thereof to “payment to the
Beneficiary of indebtedness in the total principal amount of up to
$64,597,491.45, with interest accrued or accruing thereon at the rate and in the
manner set forth in the Credit Agreement and any and all modifications,
extensions, renewals and replacements thereof are by this reference hereby made
a part hereof” is hereby deleted and the following is hereby substituted
therefor: “payment to the Beneficiary of indebtedness in connection with the
Secured Term Loans in the total principal amount of up to $30,000,000, with
interest accrued or accruing thereon at the rate and in the manner set forth in
the Credit Agreement and any and all modifications, extensions, renewals and
replacements thereof are by this reference hereby made a part hereof”.
 
Section 3. Confirmation and Restatement.  The Trustor, in order to continue to
secure the payment of the Obligations, hereby confirms and restates (a) the
conveyance pursuant to the Existing Deed of Trust to the Trustee for the benefit
of the Beneficiary of the Trust Estate and (b) the grant pursuant to the
Existing Deed of Trust of a security interest in the Collateral and any other
personal property comprising the Trust Estate.  Nothing contained in this
Amendment shall be construed as (a) a novation of the Obligations or (b) a
release or waiver of all or any portion of the conveyance to the Trustee for the
benefit of the Beneficiary of the Trust Estate or of the grant to the
Beneficiary of a security interest in the Collateral and any other personal
property comprising the Trust Estate pursuant to the Existing Deed of Trust.
 
Section 4. Representations and Warranties.  The Trustor hereby represents and
warrants that the representations and warranties made by it in the Existing Deed
of Trust are true and complete in all material respects on and as of the date
hereof as if made on and as of the date hereof.
 
Section 5. Covenants.  The Trustor hereby covenants and agrees to perform each
and every duty and obligation of the Trustor contained in the Existing Deed of
Trust as amended by this Amendment.
 
Section 6. Effectiveness.  This Amendment shall be effective as of the day and
year first written above upon its execution and delivery by the Trustor.  Except
as herein provided, the Existing Deed of Trust shall remain unchanged and in
full force and effect.
 
Section 7. Counterparts.  This Amendment may be executed in any number of
counterparts, each of which shall be deemed an original and all of which shall
constitute one instrument.
 
[Signature Page Follows]
 
IN WITNESS WHEREOF, this Amendment has been duly executed by the Trustor as of
the day and year first above written.
 
TRUSTOR:
 
CADIZ INC.
 
By:           
 
Name:           Timothy J. Shaheen
 
Title:           CFO
 
CADIZ REAL ESTATE LLC
 
By:           
 
Name:           Timothy J. Shaheen
 
Title:           CEO
 
AGREED TO AND ACCEPTED:
 
LC CAPITAL MASTER FUND, LTD.
 
as the Beneficiary
 
By:             ____________________
 
Name:             ____________________
 
Title:             ____________________
 

Signature Page to Third Amendment to Deed of Trust
 
 

--------------------------------------------------------------------------------

 

[Trustor]
 
State of California  )
                                       )
County of Los Angeles  )
 
On ___________, 2013, before me, _______________________________Notary Public,
personally appeared, Timothy J. Shaheen, who proved to me on the basis of
satisfactory evidence to be the person whose name is subscribed to the within
instrument and acknowledged to me that he executed the same in his authorized
capacity, and that by his signature on the instrument the person, or the entity
upon behalf of which the person acted, executed the instrument.
 
I certify under PENALTY OF PERJURY under the laws of the State of California
that the foregoing paragraph is true and correct.
 
WITNESS my hand and official seal.
 
Signature  (Seal)
 

 
 

--------------------------------------------------------------------------------

 

 
[Beneficiary]
 
State of California  )
                                       )
County of Los Angeles  )
 
On ___________, 2013, before me, _______________________________Notary Public,
personally appeared, _______________________________ who proved to me on the
basis of satisfactory evidence to be the person whose name is subscribed to the
within instrument and acknowledged to me that he executed the same in his
authorized capacity, and that by his signature on the instrument the person, or
the entity upon behalf of which the person acted, executed the instrument.
 
I certify under PENALTY OF PERJURY under the laws of the State of California
that the foregoing paragraph is true and correct.
 
WITNESS my hand and official seal.
 
Signature  (Seal)
 
 

--------------------------------------------------------------------------------

 
 
This Amendment was prepared
 
by and when recorded should
 
be mailed to:
 
Jubin Meraj, Esq.
 
Manatt, Phelps & Phillips, LLP
 
11355 W. Olympic Blvd.
 
Los Angeles, California 90064
 
Space above this line for recorder’s use
 

SECOND AMENDMENT OF DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS,
 
SECURITY AGREEMENT, FINANCING STATEMENT AND FIXTURE FILING
 
KNOW ALL PERSONS BY THESE PRESENTS:
 
THIS SECOND AMENDMENT OF DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS, SECURITY
AGREEMENT, FINANCING STATEMENT AND FIXTURE FILING (this “Amendment”) is made as
of the [__] day of __________, 2013 by and among CADIZ INC., a Delaware
corporation with an address of 550 South Hope Street, Suite 2850, Los Angeles,
California 90071 (“Cadiz”), CADIZ REAL ESTATE LLC, a Delaware limited liability
company with an address of 550 South Hope Street, Suite 2850, Los Angeles,
California 90071 (“CRE”) and Octagon Partners, LLC, a California limited
liability company (“Octagon” and together with Cadiz and CRE, collectively the
“Trustor”), in favor of Chicago Title Company, having an office at 560 East
Hospitality Lane, San Bernardino, California 92408, as trustee (the “Trustee”)
for the benefit of LC CAPITAL MASTER FUND, LTD., a company organized under the
laws of the Cayman Islands, with an address of c/o Lampe, Conway & Co.  LLC, 680
Fifth Avenue, 12th Floor, New York, New York 10019, as administrative agent for
the benefit of the Lenders (as defined below) (the “Beneficiary”).
 
WITNESSETH
 
WHEREAS, reference is made to that certain Credit Agreement dated as of June 26,
2006, among Trustor as borrower, 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 Trustor, the lenders party thereto and Peloton Agent; as further
amended by that certain Amendment No. 2 to Credit Agreement and Amendment No. 1
to Registration Rights Agreement dated as of June 4, 2009 by and among Borrower,
the lenders party thereto and Beneficiary, as administrative agent; as further
amended by that certain Amendment No. 3 to Credit Agreement and Amendment No. 2
to Registration Rights Agreement dated as of October 19, 2010, by and among the
Borrowers, the lenders party thereto and Beneficiary, as administrative agent;
as further amended by that certain Amendment No. 4 to Credit Agreement dated as
of July 25, 2011, by and among the Borrowers, the lenders party thereto and
Beneficiary, as administrative agent; as further amended by that certain
Amendment No. 5 to Credit Agreement and Amendment No. 3 to Registration Rights
Agreement dated as of August 8, 2012, by and among the Borrowers, the lenders
party thereto and Beneficiary, as administrative agent; as further amended by
that certain Amendment No. 6 to Credit Agreement and Amendment No. 4 to
Registration Rights Agreement dated as of October 30, 2012, by and among the
Borrowers, the lenders party thereto and Beneficiary, as administrative agent
(collectively, the “Original Credit Agreement”); and as further amended by that
certain Amended and Restated Credit Agreement dated concurrently herewith (the
“Amended and Restated Credit Agreement”), by and among the Borrowers, the
lenders party thereto and Beneficiary, as administrative agent (as the same may
be further amended and supplemented from time to time, and together with the
Original Credit Agreement, the “Credit Agreement”);
 
WHEREAS, as security for the promises, terms, conditions, agreements and
obligations imposed on the Trustor under the Original Credit Agreement, the
Trustor executed and delivered to the Trustee, for the benefit of Beneficiary as
administrative agent, that certain Deed of Trust, Assignment of Leases and
Rents, Security Agreement, Financing Statement and Fixture Filing, dated as of
December 3, 2010 and recorded on December 3, 2010 as Document Number
2010-0513716 in the Official Records in the County of San Bernardino of the
State of California, as amended by that certain First Amendment of Deed of
Trust, Assignment of Leases and Rents, Security Agreement, Financing Statement
and Fixture Filing dated October 30, 2012 and recorded on November 28, 2012 as
Document Number 2012-0506329 in the Official Records (the “Existing Deed of
Trust”), which covers the real property more particularly described therein;
 
WHEREAS, concurrent herewith, the Trustor and Beneficiary are entering into the
Amended and Restated Credit Agreement;
 
WHEREAS, the Trustor and the Beneficiary desire that the Existing Deed of Trust
continue to secure the promises, terms, conditions, agreements and obligations
imposed on the Trustor under the Credit Agreement, and the other Loan Documents;
and
 
WHEREAS, the Trustor and the Beneficiary desire to amend, extend and modify the
Existing Deed of Trust, and the liens created thereby, as set forth herein.
 
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties agree that the Existing Deed of
Trust shall be hereby amended and modified as follows:
 
Section 1. Defined Terms.  Each capitalized term used herein and not otherwise
defined herein shall have the meaning assigned thereto in the Existing Deed of
Trust, as amended by this Amendment, or if not defined therein, in the Credit
Agreement.  Each reference in the Existing Deed of Trust to “this Deed of Trust”
shall be deemed to be a reference to the Existing Deed of Trust, as amended by
this Amendment.  The term “Lender” or “Lenders” as used herein shall refer to
the Lenders (as defined in the Credit Agreement) holding Secured Term Loans.
 
Section 2. Modification.  The Existing Deed of Trust is hereby amended as
follows:
 
(a) All references to the “Credit Agreement” shall mean the Amended and Restated
Credit Agreement, and as further amended, modified or restated from time to
time;
 
(b) The reference in Article I, Section B.1.1(i) thereof to “payment to the
Beneficiary of indebtedness in the total principal amount of up to
$64,597,491.45, with interest accrued or accruing thereon at the rate and in the
manner set forth in the Credit Agreement and any and all modifications,
extensions, renewals and replacements thereof are by this reference hereby made
a part hereof” is hereby deleted and the following is hereby substituted
therefor:  “payment to the Beneficiary of indebtedness in connection with the
Secured Term Loans in the total principal amount of up to $30,000,000, with
interest accrued or accruing thereon at the rate and in the manner set forth in
the Credit Agreement and any and all modifications, extensions, renewals and
replacements thereof are by this reference hereby made a part hereof”.
 
Section 3. Confirmation and Restatement.  The Trustor, in order to continue to
secure the payment of the Obligations, hereby confirms and restates (a) the
conveyance pursuant to the Existing Deed of Trust to the Trustee for the benefit
of the Beneficiary of the Trust Estate and (b) the grant pursuant to the
Existing Deed of Trust of a security interest in the Collateral and any other
personal property comprising the Trust Estate.  Nothing contained in this
Amendment shall be construed as (a) a novation of the Obligations or (b) a
release or waiver of all or any portion of the conveyance to the Trustee for the
benefit of the Beneficiary of the Trust Estate or of the grant to the
Beneficiary of a security interest in the Collateral and any other personal
property comprising the Trust Estate pursuant to the Existing Deed of Trust.
 
Section 4. Representations and Warranties.  The Trustor hereby represents and
warrants that the representations and warranties made by it in the Existing Deed
of Trust are true and complete in all material respects on and as of the date
hereof as if made on and as of the date hereof.
 
Section 5. Covenants.  The Trustor hereby covenants and agrees to perform each
and every duty and obligation of the Trustor contained in the Existing Deed of
Trust as amended by this Amendment.
 
Section 6. Effectiveness.  This Amendment shall be effective as of the day and
year first written above upon its execution and delivery by the Trustor.  Except
as herein provided, the Existing Deed of Trust shall remain unchanged and in
full force and effect.
 
Section 7. Counterparts.  This Amendment may be executed in any number of
counterparts, each of which shall be deemed an original and all of which shall
constitute one instrument.
 
IN WITNESS WHEREOF, this Amendment has been duly executed by the Trustor as of
the day and year first above written.
 
TRUSTOR:
 
CADIZ INC.
 
By:           
 
Name:           Timothy J. Shaheen
 
Title:           CFO
 
CADIZ REAL ESTATE LLC
 
By:           
 
Name:           Timothy J. Shaheen
 
Title:           CEO
 
AGREED TO AND ACCEPTED:
 
LC CAPITAL MASTER FUND, LTD.
 
as the Beneficiary
 
By:             ____________________
 
Name:             ____________________
 
Title:             ____________________
 

Signature Page to Second Amendment to Deed of Trust
 
 

--------------------------------------------------------------------------------

 

TRUSTOR:
 
OCTAGON PARTNERS, LLC
 
By:           
 
Name:           Timothy J. Shaheen
 
Title:           Manager
 

 

 

Signature Page to Second Amendment to Deed of Trust
 
 

--------------------------------------------------------------------------------

 

[Trustor]
 
State of California  )
                                       )
County of Los Angeles  )
 
On ___________, 2013, before me, _______________________________Notary Public,
personally appeared, Timothy J. Shaheen, who proved to me on the basis of
satisfactory evidence to be the person whose name is subscribed to the within
instrument and acknowledged to me that he executed the same in his authorized
capacity, and that by his signature on the instrument the person, or the entity
upon behalf of which the person acted, executed the instrument.
 
I certify under PENALTY OF PERJURY under the laws of the State of California
that the foregoing paragraph is true and correct.
 
WITNESS my hand and official seal.
 
Signature  (Seal)
 

 
 

--------------------------------------------------------------------------------

 
 
[Beneficiary]
 
State of California  )
                                       )
County of Los Angeles  )
 
On ___________, 2013, before me, _______________________________Notary Public,
personally appeared, _______________________________ who proved to me on the
basis of satisfactory evidence to be the person whose name is subscribed to the
within instrument and acknowledged to me that he executed the same in his
authorized capacity, and that by his signature on the instrument the person, or
the entity upon behalf of which the person acted, executed the instrument.
 
I certify under PENALTY OF PERJURY under the laws of the State of California
that the foregoing paragraph is true and correct.
 
WITNESS my hand and official seal.
 
Signature  (Seal)

 
 

--------------------------------------------------------------------------------

 

Exhibit F
 
[Attached]
 
Form of Closing Certificate
 

 
CADIZ INC.
 
CADIZ REAL ESTATE LLC
 
CLOSING CERTIFICATE
 
March 5, 2013
 
Each of the undersigned, Scott Slater, Chief Executive Officer of Cadiz Inc., a
Delaware corporation (the “Company”), on behalf of and solely in his capacity as
an officer of the Company and Timothy J. Shaheen, Chief Executive Officer of
Cadiz Real Estate LLC, a Delaware limited liability company (the “LLC”), on
behalf of and solely in his capacity as an officer of the LLC, does hereby
certify as of the date hereof as follows:
 
1. This Closing Certificate (this “Certificate”) is being delivered pursuant to
Section 4.1(h) of that certain Amended and Restated Credit Agreement, dated as
of the date hereof (the “Credit Agreement”, capitalized terms used herein
without definition shall have the meanings set forth in the Credit Agreement),
by and among the Company and the LLC, as borrowers, the lenders party thereto
and LC Capital Master Fund, Ltd., as administrative agent.
 
2. Attached hereto as Exhibit 1 is a true, correct and complete copy of the
resolutions of the board of directors of the Company relating to the approval of
the Credit Agreement and the other Loan Documents and any other documents
required thereunder or contemplated thereby that are required to be executed,
delivered and performed by the Company pursuant thereto, which approval is in
full force and effect and has not been altered, amended or rescinded in any way.
 
3. Attached hereto as Exhibit 2 is a true, correct and complete copy of the
resolutions of the board of managers of the LLC relating the approval of the
Credit Agreement and the other Loan Documents and any other documents required
thereunder or contemplated thereby that are required to be executed, delivered
and performed by the LLC pursuant thereto, which approval is in full force and
effect and has not been altered, amended or rescinded in any way.
 
4. The person named below has been duly elected (or appointed) and qualified and
is an acting officer of the Company as of the date hereof, holding the office
set forth opposite his name, and the signature set forth below opposite his name
being the genuine signature of such officer and he is authorized to execute and
deliver this Certificate and all other documents required of the Company in
connection with the execution, delivery and performance of the Credit Agreement
and the other Loan Documents and any other documents required thereunder or
contemplated thereby.
 
Name
Title
Signature
 
Scott Slater
 
Chief Executive Officer
 
Timothy J. Shaheen
Chief Financial Officer
 

 
5. The person named below has been duly elected (or appointed) and qualified and
is an acting officer of the LLC as of the date hereof, holding the office set
forth opposite his name, and the signature set forth below opposite his name
being the genuine signature of such officer and he is authorized to execute and
deliver this Certificate and all other documents required of the LLC in
connection with the execution, delivery and performance of the Credit Agreement
and the other Loan Documents and any other documents required thereunder or
contemplated thereby.
 
Name
 
Title
Signature
Timothy J. Shaheen
Chief Executive Officer
 

6. The person named below has been duly elected (or appointed) and qualified and
is an acting officer of Octagon Partners, LLC (“Octagon”) as of the date hereof,
holding the office set forth opposite his name, and the signature set forth
below opposite his name being the genuine signature of such officer and he is
authorized to execute and deliver this Certificate and all other documents
required of Octagon in connection with the execution, delivery and performance
of the Mortgage Amendments and any other documents required thereunder or
contemplated thereby.
 
Name
 
Title
Signature
Timothy J. Shaheen
Chief Executive Officer
 

 
7. The representations and warranties of the Company and the LLC under the Loan
Documents are true and correct as if made on the date hereof (or, if such
representation or warranty is expressly stated to have been made as of a
specific date, such representation or warranty is true and correct as of such
specific date) and (b) no Default or Event of Default has occurred and is, as of
the date hereof, continuing under the Loan Documents.
 
8. Attached hereto as Exhibit 3 (i) is a true and complete copy of the
Certificate of Incorporation of the Company, as amended, certified by the
Secretary of State of the State of Delaware (the “DSOS”) and (ii) is a true and
complete copy of the Certificate of Formation of the LLC, certified by the DSOS.
 
9. Attached hereto as Exhibit 4 (i) is a true and complete copy of the Bylaws of
the Company, as amended, and such document has not been further amended,
modified, revoked or rescinded and is in full force and effect as of the date
hereof and (ii) is a true and complete copy of the Limited Liability Company
Agreement of the LLC, as amended, and such document has not been further
amended, modified, revoked or rescinded and is in full force and effect as of
the date hereof.
 
10. Attached hereto as Exhibit 5 (i) are true and complete copies of good
standing certificates for the Company and the LLC, certified by the DSOS and
(ii) are true and complete copies of certificates of status for the Company and
the LLC, certified by the Secretary of State of the State of California.
 

[Remainder of page intentionally left blank]

IN WITNESS WHEREOF, the undersigned has executed this Certificate and caused
this Certificate to be delivered as of the 4th day of March, 2013.
 

 
By:  ________________________
 
Name:           Scott Slater
 
Title:           Chief Executive Officer, Cadiz Inc.
 
 
 
By:  ________________________
 
Name:           Timothy J. Shaheen
 
Title:           Chief Financial Officer and Secretary,Cadiz Inc.
 

 
I, Timothy J. Shaheen, the Chief Financial Officer and Secretary of the Company,
do hereby certify on behalf of the Company and solely in my capacities as Chief
Financial Officer and Secretary that Scott Slater is the duly elected, qualified
and acting Chief Executive Officer of the Company, that the signature set forth
above is his genuine signature and that he is authorized to execute and deliver
this Certificate and all other documents required of the Company in connection
with the execution, delivery and performance of the Credit Agreement and the
Loan Documents and any other documents required thereunder or contemplated
thereby.
 
By:  ________________________
 
Name:           Timothy J. Shaheen
 
Title:           Chief Financial Officer and Secretary,Cadiz Inc.
 

 
I, Scott Slater, the Chief Executive Officer of the Company, the holder of all
of the outstanding membership interests of the LLC and of Octagon, do hereby
certify on behalf of the Company, the LLC and Octagon and solely in my capacity
as Chief Executive Officer of the Company that Timothy J. Shaheen is the duly
elected, qualified and acting Chief Financial Officer of the Company, Chief
Executive Officer of the LLC and Manager of Octagon, that the signature set
forth above is his genuine signature and that he is authorized to execute and
deliver this Certificate and all other documents required of the Company, the
LLC and Octagon in connection with the execution, delivery and performance of
the Credit Agreement and the Loan Documents and any other documents required
thereunder or contemplated thereby.
 
By:  ________________________
 
Name:       Scott Slater
 
Title:           Chief Executive Officer, Cadiz Inc.
 
 
 
 
 
EXHIBIT 1
 
Company Resolutions
 

 
 

--------------------------------------------------------------------------------

 

EXHIBIT 2
 

 
LLC Resolutions
 

 
 

--------------------------------------------------------------------------------

 

EXHIBIT 3
 

 
Certificates
 

 
 

--------------------------------------------------------------------------------

 

EXHIBIT 4
 

 
Organizational Documents
 

 
 

--------------------------------------------------------------------------------

 

EXHIBIT 5
 

 
Good Standings
 

 
 

--------------------------------------------------------------------------------

 

Exhibit G
 
Amendment No. 2 to Limited Liability Company Agreement of Cadiz Real Estate LLC