EXHIBIT 10.40

 
WAIVER AGREEMENT UNDER AMENDED AND RESTATED CREDIT AGREEMENT
 
THIS WAIVER AGREEMENT UNDER AMENDED AND RESTATED CREDIT AGREEMENT, dated as of
March 9, 2016 (this “Waiver”), is entered into by and among Cadiz Inc., a
Delaware corporation (the “Company”), Cadiz Real Estate LLC, a Delaware limited
liability company (“CRE” and collectively with the Company, the “Borrowers”) and
the Required Lenders.  Capitalized terms used but not defined herein shall have
the meanings provided in the Credit Agreement (as defined below), as applicable.
 
RECITALS:
 
WHEREAS, the Borrowers, the Lenders party thereto and LC Capital Master Fund,
Ltd., as agent (“LC Capital”), entered into an Amended and Restated Credit
Agreement (the “March 2013 Credit Agreement”), dated as of March 5, 2013 (as
amended through the date hereof, the “Credit Agreement”);
 
WHEREAS, Section 5.1(a) of the Credit Agreement requires the Borrowers to
deliver audited financial statements of the Borrowers and their consolidated
Subsidiaries reported on without a “going concern” or like qualification or
exception, or qualification arising out of the scope of the audit;
 
WHEREAS, it is anticipated that the report of PricewaterhouseCoopers LLP with
respect to the audited consolidated financial statements for the year ended
December 31, 2015 (the “2015 Audit”) may contain a “going concern” or like
qualification or exception or qualification arising out of the scope of the
audit (the “Designated Default”); and
 
WHEREAS, pursuant to Section 9.1 of the Credit Agreement, the Required Lenders
and each Loan Party may, from time to time, waive any of the requirements of the
Credit Agreement and the Borrowers have requested that the Required Lenders
prospectively waive the Designated Default under Section 5.1(a) of the Credit
Agreement solely with respect to the 2015 Audit.
 
Accordingly, in consideration of the mutual agreements contained herein and
other good and valuable consideration, the sufficiency and receipt of which are
hereby acknowledged, the parties hereto agree as follows:
 
 
ARTICLE I
 
WAIVER
 
In reliance upon the representations, warranties and covenants of the Borrowers
contained in Article II of this Waiver, and subject only to (i) the execution of
this Waiver by the Required Lenders and the Borrowers, (ii) no breach or
inaccuracy of any representation or warranty contained in Article II hereof and
(iii) no development or event having occurred that has had or could reasonably
be expected to have a Material Adverse Effect, the Required Lenders hereby
prospectively waive the Designated Default under Section 5.1(a) of the Credit
Agreement solely with respect to the 2015 Audit. Other than with respect to the
express and specific waiver of the Designated Default set forth above, the
foregoing shall not (a) be deemed a waiver of any other Default that may now
exist or may occur after the date hereof, (b) establish a custom or course of
dealing among the Lenders and the Borrowers, (c) operate as a waiver of any
other right, power, or remedy of the Lenders under the Credit Agreement, (d) be
construed as an agreement or understanding by the Lenders to grant any other
waiver or other accommodation in the future with respect to any provision of the
Credit Agreement or any of the other Loan Documents, or (e) modify any of the
Borrowers’ obligations to comply with the covenants set forth in the Credit
Agreement, including, without limitation, Section 5.1(a) thereof.
 
 
ARTICLE II
 
REPRESENTATIONS AND WARRANTIES AND COVENANTS
 
In order to induce the Required Lenders to enter into this Waiver, each Borrower
hereby represents and warrants that, as of the date hereof, the following
statements are true and correct:
 
(a) all representations and warranties contained herein and in the Credit
Agreement and the other Loan Documents are true and correct in all material
respects (or, in the case of any such representation or warranty already
qualified as to materiality, in all respects) as of the date hereof as though
made on and as of such date, except to the extent that such representations and
warranties expressly relate solely to an earlier date (in which case such
representations and warranties shall have been true and correct on and as of
such earlier date);
 
(b) the execution and delivery of this Waiver by each Borrower (i) have been
duly authorized by all requisite action, corporate or otherwise, of each
Borrower and (ii) will not conflict with or result in a breach of, or constitute
a default (or might, upon the passage of time or the giving of notice or both,
constitute a default) under, any of the terms, conditions or provisions of any
applicable statute, law, rule, regulation or ordinance or any Borrowers’
organizational documents or the Indenture or any judgment or order of any court
or governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, and (iii) will not result in the creation
or imposition of any lien, charge or encumbrance of any nature whatsoever upon
any of the property or assets of any Borrower under the terms or provisions of
any such agreement or instrument;
 
(c) this Waiver has been duly executed by each Borrower and this Waiver and the
Credit Agreement constitute the legal, valid and binding obligations of each
Borrower, enforceable in accordance with their terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other laws affecting
creditors’ rights generally and subject to general principles of equity,
regardless of whether considered in a proceeding in equity or at law;
 
(d) no consent, approval or authorization of or designation, declaration or
filing with any Governmental Authority or any other Person on the part of any
Borrower is required in connection with the execution and delivery of this
Waiver or performance by such Borrower under the Credit Agreement;
 
(e) other than the Designated Default, no Event of Default and no event which,
after notice or lapse of time or both, would become an Event of Default, has
occurred and is continuing under the Credit Agreement; and
 
 
ARTICLE III
 
MISCELLANEOUS
 
(a) Governing Law.  THIS WAIVER AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
UNDER THIS WAIVER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
 
(b) Successor and Assigns.  This Waiver shall inure to the benefit of, and be
binding upon, the parties hereto and their respective successors and assigns.
 
(c) Severability. Any provision of this Waiver 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.
 
(d) Counterparts.  This Waiver may be executed in one or more counterparts, each
of which counterparts when executed and delivered (including by facsimile or
electronic transmission) shall be deemed to be an original, and all of which
shall constitute one and the same instrument.  Delivery of an executed
counterpart of a signature page to this Waiver by facsimile or other electronic
transmission will be effective as delivery of a manually executed counterpart
thereof.
 
(e) Submission to Jurisdiction.  Each of the parties hereto hereby irrevocably
and unconditionally submits, for itself and its property, to the nonexclusive
jurisdiction of the Supreme Court of the State of New York sitting in New York
County and of the United States District Court of the Southern District of New
York, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to this Waiver, or for recognition or enforcement of
any judgment, and each of the parties hereto hereby irrevocably and
unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court.  Each of the parties hereto agrees that
a final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law.  Nothing in this Waiver shall affect any right that any party
hereto may otherwise have to bring any action or proceeding relating to this
Waiver against any Borrower or its properties in the courts of any jurisdiction.
 
(f) Waiver of Right to Trial by Jury.  EACH OF THE PARTIES HERETO WAIVES ANY
RIGHT TO TRIAL BY JURY ON ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION
(A) ARISING UNDER THIS WAIVER OR (B) IN ANY WAY CONNECTED WITH OR RELATED OR
INCIDENTAL TO THE DEALINGS OF THE BORROWERS OR THE LENDERS WITH RESPECT TO THIS
WAIVER OR THE TRANSACTIONS RELATED HERETO, IN EACH CASE WHETHER SOUNDING IN
CONTRACT OR TORT OR OTHERWISE.  EACH OF THE PARTIES HERETO AGREES AND CONSENTS
THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT
TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS WAIVER MAY FILE AN ORIGINAL
COUNTERPART OR A COPY OF THIS CLAUSE WITH ANY COURT AS WRITTEN EVIDENCE OF THE
CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY
JURY.  EACH PARTY HERETO ACKNOWLEDGES THAT THEY HAVE HAD THE OPPORTUNITY TO
CONSULT WITH COUNSEL REGARDING THIS CLAUSE, THAT THEY FULLY UNDERSTAND ITS
TERMS, CONTENT AND EFFECT, AND THAT THEY VOLUNTARILY AND KNOWINGLY AGREE TO THE
TERMS OF THIS CLAUSE.
 
(g) References.  On and after the date hereof, each reference in the Credit
Agreement to “this Agreement,” “hereunder,” “hereof,” “herein” or words of like
import referring to the Credit Agreement, and each reference in the other Loan
Documents to the “Credit Agreement,” “thereunder,” ‘‘thereof” or words of like
import referring to the Credit Agreement shall mean and be a reference to the
Credit Agreement after giving effect to this Waiver.
 
(h) Release. In consideration of the Required Lenders entering into this Waiver
and for other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, as of the date hereof, each Borrower on behalf of
itself and its affiliates and their respective successors, assigns, and other
legal representatives, hereby absolutely, unconditionally and irrevocably
releases, remises and forever discharges Agent and Lenders, their respective
affiliates and their successors and assigns, and their present and former
shareholders, directors, officers, attorneys, employees, agents and other
representatives (Agent, each Lender and all such other Persons being hereinafter
referred to collectively as the “Releasees” and individually as a “Releasee”),
of and from all demands, actions, causes of action, suits, covenants, contracts,
controversies and any and all other claims, counterclaims, defenses, rights of
set off, demands and liabilities whatsoever of every name and nature, known or
unknown, suspected or unsuspected, both at law and in equity, which any
Borrower, any of their respective affiliates, or any of its or their respective
successors, assigns, or other legal representatives may now or hereafter own,
hold, have or claim to have against the Releasees by reason of any circumstance,
action, cause or thing whatsoever which occurred on or prior to the date hereof
pursuant to or arising out of the Credit Agreement, the Loan Documents or
transactions directly related thereto between any Borrowers, on one hand, and
the Releasees, on the other.
 
(i) Waiver.  No delay or failure on the part of any party hereto in exercising
any right, power or remedy hereunder shall effect or operate as a waiver
thereof, nor shall any single or partial exercise thereof or any abandonment or
discontinuance of steps to enforce such right, power or remedy preclude any
further exercise thereof or of any other right, power or remedy.
 
[Signature Pages Follow]

 
IN WITNESS WHEREOF, each of the undersigned has caused its duly authorized
officer to execute and deliver this Waiver as of the date first above written.
 
 

  MSD CREDIT OPPORTUNITY MASTER FUND, L.P., as a Lender (and Required Lenders) 
      By:  /s/ Marcello Liguori     Name: Marcello Liguori     Title:  Managing
Director

 

 
CADIZ INC., as a Borrower
     
By:
/s/ Timothy J. Shaheen
   
Name: Timothy J. Shaheen
   
Title: Chief Financial Officer

 
 

  CADIZ REAL ESTATE LLC, as a Borrower       By:  /s/ Timothy J. Shaheen    
Name: Timothy J. Shaheen     Title:  Chief Financial Officer