| A.   | Cadiz,      ERA and Liggett entered into a Reorganization Plan and Agreement for      Purchase and Sale of Assets dated as of February 18, 1998, pursuant to      which Cadiz purchased the assets of ERA.  Such Reorganization      Plan and Agreement for Purchase and Sale of Assets, as amended, shall be      referred to in this Agreement as the "Reorganization      Plan and Agreement".  ERA subsequently liquidated, with      Liggett, as the sole shareholder of ERA, becoming the successor in      interest to ERA.  In March 2000, subsequent to such liquidation,      Cadiz and Liggett entered into an Amendment to the Reorganization Plan and      Agreement for Purchase and Sale of Assets (“Amendment      No. 1”). |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| B.   | By      entering into this Agreement, it is the intention of the Parties to fully      and finally settle, terminate and resolve any and all disputes, claims,      demands and causes of action, whether known or unknown, contingent or      certain, past, present or future, which they may have had in any way      related to the Reorganization Plan and  Agreement. |
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| C.   | Prior      to the execution of the Reorganization Plan and Agreement, Cadiz and      Liggett were parties to certain agreements (the "Royalty      Agreements") pursuant to which, among other things, Cadiz granted      to Liggett participation rights and fee rights (collectively, the "Royalty      Rights") relating to the acquisition and/or disposition by Cadiz of      certain property rights (including water rights).  Prior to the      execution of the Reorganization Plan and Agreement, all of the rights of      Liggett under such Royalty Agreements were assigned by Liggett to ERA and,      as assets of ERA, were assigned and transferred to Cadiz pursuant to the      Reorganization Plan and Agreement. |
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| D.   | The      Reorganization Plan and Agreement provides for the contingent issuance to      Liggett of up to 600,000 shares of the common stock of Cadiz (before      giving effect to the 1 for 25 reverse split of Cadiz' common stock in      2003) (the “Contingent      Shares”), of which 100,000 shares were issued to Liggett in 2000      pursuant to Amendment No. 1. |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| E.   | The      conditions provided in the Reorganization Plan and Agreement for the      issuance of the Contingent Shares to Liggett were designed in large part      to replace the Royalty Rights previously held by Liggett and/or ERA, and      were crafted with a view to the reasonable expectations of the Parties      concerning the process and timing by which Cadiz would be developing its      land and water resources, including the Cadiz Groundwater Storage and      Dry-Year Supply Program in the Cadiz and Fenner Valleys (the “Cadiz      Project”). |
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| F.   | Due      to, among other things, certain actions taken by the Metropolitan Water      District of Southern California (the “MWD”)      in 2002, Cadiz was not able to proceed with the Cadiz Project and its      other land and water resource development programs as originally      anticipated by the parties to the Reorganization Plan and Agreement and,      as a consequence, the benchmarks provided in the Reorganization Plan and      Agreement for the issuance of Contingent Shares to Liggett became no      longer meaningful or practical as a means for measuring Liggett's      entitlement to the consideration originally intended by the parties to the      Reorganization Plan and Agreement to be associated with the sale to Cadiz      of the assets of ERA. |
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| G.   | Cadiz      believes that the assertion by Liggett, following the actions of the MWD      in 2002, of any claims against Cadiz or any third party that he has been      unduly deprived of the economic benefits of the Reorganization Plan and      Agreement would not then have been, nor would it presently be, in the best      interests of Cadiz, the Cadiz Project, or development of other Cadiz      properties subject to the Reorganization Plan and    Agreement. |
|----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| H.   | Liggett      believes that the Reorganization Plan and Agreement included an implied      provision that the number of Contingent Shares be proportionately adjusted      for the number of outstanding shares of Cadiz Common Stock changed by a      stock dividend, recapitalization, stock split, reverse stock split,      subdivision, combination, reclassification or similar change in the      capital structure of Cadiz. |
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| I.   | Liggett      has not, to date, exercised any legal right he may have to formally assert      such claims. |
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| J.   | Cadiz      desires to derive the full benefit of the assets acquired by      Cadiz. |
|----------------|-------------------------------------------------------------------------------------|

| K.   | In      order to avoid litigation, attorneys' fees and aggravation, and in order      to avoid any controversy which may adversely affect the Cadiz Project and      Cadiz' other land and water resource development programs, it is in the      best interests of the Parties that the Reorganization Plan and Agreement      be further amended so as to enable Liggett to receive substantially the      same economic benefit intended by the parties to the Reorganization Plan      and Agreement. |
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| 10. | No      Assignment, Liens or SubrogationClaims |
|-----|------------------------------------------------|

| 11. | Additional      Documents — Duty toCooperate |
|-----|----------------------------------------------------|

| 12. | Binding      Effect |
|-----|---------------------|

| 13. | Governing      Law |
|-----|--------------------|

| 14. | Enforceability      — Severable Provisions |
|-----|--------------------------------------------------|

| 15. | No      Violation of Law |
|-----|--------------------------|

| 16. | Integration |
|-----|-------------|

| 17. | Fees      and Costs |
|-----|---------------------|

| 18. | Waiver,      Modification and Amendments |
|-----|------------------------------------------|

| 19. | Neutral      Interpretation — Ambiguities or  Uncertainties |
|-----|-------------------------------------------------------------------|

| 20. | Counterparts |
|-----|--------------|

| 21. | Survival      of the Executory Provisions |
|-----|-------------------------------------------|

| 22. | Captions |
|-----|----------|

|   | ____________________________________ |
|--------|--------------------------------------|

|   | Mark      A. Liggett |
|--------|----------------------|

|   | CADIZ,      INC. |
|--------|------------------|

|   |   |                                                                  |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | By:    | Keith      Brackpool                                                                                                                                                                                                                                                                                                                                                                             |
|   | Its:   | Chairman      and Chief Executive Officer                                                                                                                                                                                                                                                                                                                                                        |