Exhibit
10.1


 





EXECUTION VERSION




 


AMENDED
AND RESTATED PAYOFF AGREEMENT AND STIPULATION


 


This
Amended and Restated Payoff Agreement and Stipulation (this “Agreement”) is entered into as of May 24, 2017,
by Cadiz Inc., a Delaware corporation (“Cadiz Inc.”), Cadiz Real Estate LLC, a Delaware limited liability company
(collectively with Cadiz Inc., “Cadiz”), MSD Credit Opportunity Master Fund, L.P. (“MSD”),
Milfam II L.P. (“Milfam”), WPI-Cadiz Farm CA, LLC (“WPI”; collectively with Milfam and MSD,
the “Lenders”) and Wells Fargo Bank, National Association, as administrative agent (the “Agent”).
Cadiz, the Lenders, and the Agent may be referred to herein as the Parties, or individually, as a Party.


 


RECITALS


 


		A.	Cadiz,
                                         as borrowers, the Lenders and the Agent are party to that certain Amended and Restated
                                         Credit Agreement, dated as of October 30, 2013 (the “Credit Agreement”;
                                         capitalized terms used but not defined herein having the meanings set forth therein),
                                         as amended by the First Amendment dated as of November 23, 2015, the Second Amendment
                                         dated as of February 8, 2016, the Third Amendment dated as of March 4, 2016, the Fourth
                                         Amendment dated as of April 28, 2016, and the Fifth Amendment (the “Fifth Amendment”)
                                         dated as of November 29, 2016 (the “Fifth Amendment Effective Date”).
	 	 	 
		B.	It
                                         was a condition precedent to the effectiveness of the Fifth Amendment that Cadiz Inc.
                                         issue to each Lender a Warrant to Purchase Common Stock of Cadiz Inc. (collectively,
                                         the “Warrants”). Cadiz Inc. issued such Warrants on the Fifth Amendment
                                         Effective Date. Each Warrant provides that Cadiz Inc. will be required to issue Warrant
                                         Stock (as defined in each Warrant) to the applicable Lender holder beginning on the “Initial
                                         Exercise Date” of such Warrant, which Initial Exercise Date would occur, in each
                                         case, if any principal or interest amounts are outstanding under the Credit Agreement
                                         on the date that is the one hundred and eightieth (180th) day following the Fifth Amendment
                                         Effective Date. The parties hereto stipulate that the one hundred and eightieth (180th)
                                         day following the Fifth Amendment Effective Date is May 28, 2017.
	 	 	 
		C.	Section
                                         2.3 of the Credit Agreement is entitled “Optional Prepayments.” Section 2.3(a)
                                         states “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, the total prepayment amount 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.” Section 2.3(c) states that “the
                                         Borrowers shall not have any right to prepay the Loans other than as set forth in this
                                         Section 2.3 and as required by Section 2.6 (Mandatory Prepayments).”



 






     

     


    

 


		D.	All
                                         Parties agree that Cadiz Inc. delivered written notice of prepayment; however, there
                                         is a disagreement as to the date of that notice. Cadiz Inc. asserts that it delivered
                                         proper notice in March 2017 and again on May 1, 2017 (the “May Notice”)
                                         and that notice was sufficient to comply with Credit Agreement Section 2.3(a) and allow
                                         prepayment within 180 days of the Fifth Amendment Effective Date. Lenders assert that
                                         notice of prepayment was not provided until the May Notice was delivered to the Agent
                                         and that any notice of prepayment must be delivered 30 Business Days prior to the scheduled
                                         prepayment date (the “30 Business Day Notice Period”). All parties
                                         agree that the May Notice specified June 15, 2017 as the date of prepayment (the “Scheduled
                                         Discharge Date”).



 


		E.	Cadiz
                                         Inc. asserts (i) that it provided proper and timely notice of prepayment more than 30
                                         Business Days in advance of the anticipated prepayment date; (ii) that the Lenders are
                                         not entitled to enforce Section 2.3(a); (iii) that the Lenders have waived the requirements
                                         of Section 2.3(a); and therefore, (iv) Cadiz is entitled to prepay amounts due under
                                         the Credit Agreement without any further turnover of shares or Warrants, or any other
                                         payment or penalty. Cadiz Inc. further asserts that under the circumstances, turnover
                                         of shares or Warrants, and any other payments beyond the prepayment amounts would violate
                                         the Credit Agreement and constitute an unfair and unenforceable windfall and penalty.



 


		F.	The
                                         Lenders assert that they are entitled to the enforcement of Section 2.3(a) and that the
                                         Lenders have not waived any requirement of Section 2.3(a), including but not limited
                                         to the 30 Business Day Notice Period. The Lenders assert that the Lenders have no obligation
                                         to waive any such requirements. The Lenders assert that such a waiver would deprive the
                                         Lenders of the interest of the Secured Term Loans to be paid up to the Scheduled Discharge
                                         Date and, because May 28, 2017 occurs before the Scheduled Discharge Date, the Warrant
                                         Stock that would be available to them under the Warrants.



 


SECTION
I


CONDITIONAL
AGREEMENT OF PREPAYMENT


 


		1.	The
                                         Lenders hereby agree to accept on or before May 26, 2017, prepayment in full of the Secured
                                         Term Loans, by wire transfer of immediately available funds, an amount equal to all Obligations
                                         arising under, out of, or in connection with the Credit Agreement, any other Loan Document
                                         or any other document made, delivered or given in connection therewith, including, without
                                         limitation the Accreted Loan Value of the Secured Term Loans calculated as if such Secured
                                         Term Loans remained outstanding as of the Scheduled Discharge Date along with interest
                                         that would have accrued through the Scheduled Discharge Date and all other reimbursement
                                         obligations, fees, indemnities, costs, expenses (including all reasonable fees, charges
                                         and disbursements of counsel to the Agent, MSD’s reasonable legal fees incurred
                                         in connection with this Agreement, not to exceed $115,000.00, and all legal fees to any
                                         other Lender that are required to be paid by the Borrower pursuant to the Credit Agreement
                                         (all such amounts, the “Payoff Amount”)), provided, however, that
                                         notwithstanding the foregoing, Cadiz’s indemnification and reimbursement obligations,
                                         and other obligations that, by their express terms, survive termination of the Credit
                                         Agreement, in each case shall continue to survive notwithstanding receipt by the Lenders
                                         of the Payoff Amount. Notwithstanding the foregoing, absent agreement by the Parties,
                                         the determination of whether the Warrants may be exercised by the Lenders shall be made
                                         pursuant to the arbitration to be conducted in accordance with Section 2 herein.



 






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SECTION
II


SUBMISSION
TO MEDIATION AND ARBITRATION


 


		2.	The
                                         Lenders’ acceptance of the Payoff Amount is given as an accommodation. Each party
                                         hereto hereby acknowledges and agrees that the parties will submit the following questions
                                         to mediation and, if necessary, binding arbitration:



 


		(a)	Whether
                                         the 30 Business Day Notice Period in Section 2.3 of the Credit Agreement is enforceable
                                         by the Lenders and entitles the Lenders to refuse prepayment prior to the expiration
                                         of such 30 Business Day Notice Period.
	 	 	 
		(b)	Whether
                                         the Lenders may not enforce the 30 Business Day Notice Period due to waiver, estoppel,
                                         laches, implied agreement, or such similar legal basis.
	 	 	 



		3.	The
                                         Parties agree to conduct the mediation within 60 days of the effective date of this agreement.
                                         Notwithstanding the foregoing, either MSD or Cadiz Inc. may terminate the agreement to
                                         mediate or the mediation process upon written notice to the other.



 


		4.	In
                                         the event of a termination of the agreement to mediate or the mediation process, any
                                         remaining disputes shall be resolved exclusively by binding arbitration. This agreement
                                         is entered into pursuant to the Federal Arbitration Act. The arbitration shall be governed
                                         by the law of New York and the applicable rules of the American Arbitration Association
                                         (“AAA”) and shall be conducted before AAA. The exclusive venue for
                                         the arbitration shall be New York, New York. The arbitration shall be heard by a panel
                                         of three (3) arbitrators. All awards must be issued by means of a written, reasoned opinion
                                         and must be by agreement of a majority of the arbitrators. The award shall be final and
                                         binding and may be confirmed by entry of a judgment in a state or federal court in New
                                         York, New York.



 


SECTION
III


AGREEMENT
OF THE PARTIES


 


		5.	Unless
                                         otherwise agreed by the applicable parties, in the event that it is determined in arbitration
                                         that (a) the 30 Business Day Notice Period is enforceable by the Lenders and entitles
                                         the Lenders to refuse prepayment before the expiration of the 30 Business Day Notice
                                         Period, and (b) the Lenders did not waive such 30 Business Day Notice Period prior to
                                         the date hereof, then notwithstanding any provision of any Warrant to the contrary, then
                                         the foregoing arbitration determination shall require Cadiz Inc. to deliver, and Cadiz
                                         Inc. shall deliver, to such Lender holder, on the Business Day immediately following
                                         such arbitration determination, registered shares of Common Stock (as defined in the
                                         Warrants) that would be deliverable by Cadiz Inc., together with any other payment that
                                         would be due to such Lender holder from Cadiz Inc., upon a cashless exercise of the applicable
                                         Warrant pursuant to Section 2.1(c)(ii) thereof for all Warrant Stock (as defined in such
                                         Warrant) as if the Initial Exercise Date and the Exercise Date of such Warrant were the
                                         Business Day immediately following such arbitration determination. Such arbitration determination
                                         shall also require Cadiz Inc. to comply, and Cadiz Inc. shall comply, with all other
                                         provisions of the Warrant, including but not limited to Section 3.6 thereof. Such arbitration
                                         determination shall include components of one of the following, as may be applicable:
                                         1) an increase to the number of registered shares of Common Stock to Lenders (which shall
                                         be issued on the same basis as the Warrant Stock under the Warrant but without an exercise
                                         price) to compensate for losses attributable to the delay in the issuance of such shares,
                                         due to a decrease in the value of the shares through the date of issuance; and 2) credit
                                         or offset to Cadiz’s obligations and the amount of shares Lender would be entitled
                                         to, due to an increase in the value of the shares through the date of issuance. With
                                         respect to the foregoing, the arbitrators will assume that each Lender holder would have
                                         exercised such Lender holder’s Warrant, and sold the shares issued in respect thereof,
                                         in each case on May 30, 2017. For the avoidance of doubt, in the event Cadiz Inc. is
                                         unable to deliver registered shares of Common Stock to satisfy any required issuances
                                         under this Section 5, Cadiz Inc. shall be required to deliver the difference between
                                         the aggregate warrant exercise price ($3,575.00) and the value of shares of Common Stock
                                         to be issued in cash by wire transfer to the account designated by each Lender. In the
                                         event that Cadiz Inc. fails to comply with this paragraph 5, in addition to all remedies,
                                         all protections and rights of each Lender holder shall remain in place as if the Warrants
                                         had become exercisable, and had not been exercised, until such registered shares of Common
                                         Stock are issued, including, for the avoidance of doubt, any increases in the number
                                         of shares of Common Stock issued thereunder due to any anti-dilution protection contained
                                         in Article 4 of each Warrant. This paragraph shall operate to prevent the expiration
                                         or termination of any Warrant in accordance with its terms, including for the avoidance
                                         of doubt, due to there being no principal or interest outstanding on the 180 day following
                                         the Fifth Amendment Effective Date.



 






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		6.	Any
                                         arbitration determination shall include an award of indemnities, costs and expenses payable
                                         pursuant to Section 9.5 of the Credit Agreement and Section 11.3 of each Warrant.



 


SECTION
IV


COOPERATION
BY LENDERS


 


		7.	The
                                         Lenders agree, and shall instruct the Agent, to fully cooperate with Cadiz in connection
                                         with the prepayment contemplated under Section I, including but not limited to causing
                                         the May 5, 2017 letter from MSD to the Agent to be rescinded, and to execute such documents
                                         and take other actions as may be necessary to effectuate the intent of this Agreement,
                                         including but not limited the delivery of a deed or deeds of reconveyance.



 


SECTION
V 


GENERAL
PROVISIONS


 


		8.	Nothing
                                         contained herein shall be deemed or construed as a waiver, admission, concession, res
                                         judicata, collateral estoppel, or otherwise relevant in connection with any subsequent
                                         action, cause of action, or proceeding relating to the Credit Agreement or the Warrants
                                         and any respective claims related thereto.



 


		9.	Each
                                         of the parties further agrees to execute documents, instruments, or conveyances of any
                                         kind in mutually agreed (such agreement not to be unreasonably withheld) form and substance
                                         which may be necessary or advisable to carry out any of the transactions contemplated
                                         hereunder and to cooperate with the other party in connection with the foregoing. Each
                                         of the parties agrees that any settlement or any other agreement to be made between Cadiz
                                         and any Lender hereunder or with respect to any Warrant shall not disproportionately
                                         and adversely treat any Warrant of any other Lender (or any rights or remedies of such
                                         Lender hereunder or thereunder) compared to any Warrant (or any such rights and remedies)
                                         of any other Lender provided that any Lender may settle any or all of its claims with
                                         Cadiz so long as such settlement does not prejudice the rights and claims of any other
                                         Lender. For the avoidance of doubt, no Lender is acting as an agent or fiduciary for
                                         any other Lender hereunder.



 






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		10.	This
                                         Agreement may not be modified other than by a signed writing executed by each of the
                                         Parties.



 


		11.	This
                                         Agreement may be signed in counterpart originals as if signed in one original document.



 


		12.	This
                                         Agreement shall be governed by and construed under the laws of the State of New York,
                                         without giving effect to its principles or rules of conflict of laws to the extent such
                                         principles or rules are not mandatorily applicable by statute and would require or permit
                                         the application of the laws of another jurisdiction.



 


		13.	Nothing
                                         in this Agreement shall be construed in favor or to the detriment of any Party in connection
                                         with the mediation or arbitration.



 


		14.	This
                                         Agreement and all rights and obligations hereunder shall automatically terminate if the
                                         Payoff Amount is not received by the Lenders on or before May 26, 2017.



 


		15.	This
                                         Agreement shall amend and restate the Payoff Agreement and Stipulation entered into by
                                         the Parties on May 23, 2017 (the “Existing Agreement”) in its entirety.
                                         The rights and obligations of the Parties under the Existing Agreement shall be subsumed
                                         within, and be governed by, this Agreement.



 


[Signature
pages follow]








 






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IN
WITNESS WHEREOF, the undersigned has set his or her name to this Amended and Restated Payoff Agreement and Stipulation as of the
date set forth above.


  





	 	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










 


[Amended and Restated Payoff Agreement and
Stipulation]











     

     


    

 





	 	MSD
    CREDIT OPPORTUNITY MASTER 

    FUND, L.P., as a Lender
	 	 	 
	 	By:	/s/
    Marcello Liguori
	 	 	Name: Marcello
    Liguori
	 	 	Title:   Managing
    Director


  


[Amended and Restated Payoff Agreement
and Stipulation]






     

     


    

 


	 	MILFAM
                                         II L.P., as
                                         a Lender




	 	 	 
	 	By:	MILFAM LLC
	 	Its:	General Partner


 





	 	By:	/s/
    Lloyd I. Miller III
	 	 	Name: Lloyd
    I. Miller III
	 	 	Title:   Manager


 


 





[Amended and Restated Payoff Agreement
and Stipulation]






     

     


    

 





	 	WPI-CADIZ
                                         FARM CA, LLC,
                                         as a Lender




	 	 	 
	 	By:	/s/ Marc Robert
	 	 	Name: Marc Robert
	 	 	Title:   CDO


 


 





[Amended and Restated Payoff Agreement
and Stipulation]