Document:

cdiiex10-4.htm

     

    
      

      

    

    

      CHINA
DIRECT, INC.

      Lock-Up
Agreement

      

      January
23, 2009

      China
Direct, Inc.

      431
Fairway Drive, Suite 200

      Deerfield
Beach, FL 33441

      

      

      Re:  Marc Siegel/China Direct, Inc.
– Lock-Up
Agreement

      

      Dear
Sirs:

      

      This
Lock-Up Agreement (“Lock-Up Agreement”) is dated as of January 23, 2009 by and
among China Direct, Inc. (the “Company”) and Marc Siegel (“Siegel”) with respect
to the sale of the Company’s common stock, $.0001 par value per share (the
“Common Stock”) owned by Siegel.

      

      In
connection with the January 23, 2009 Separation and Severance Agreement entered
into by and between the Company and Siegel (the “Separation Agreement”), Siegel
agrees that, commencing on the date hereof and ending when Siegel no longer owns
any shares of the Company’s Common Stock (the “Lock-Up Period”), except for
Excepted Sales, as defined herein, Siegel will not sell, offer to sell, make any
short sale or otherwise dispose of any shares of the Common Stock owned by
Siegel (including Common Stock held indirectly or as a custodian by
Siegel).

      

      The term
“Excepted Sales” for purposes of this Lock-Up Agreement shall mean the
following:

      

      (i)  For
a period commencing on the date hereof and concluding on the 90 day anniversary
of this Lock-Up Agreement (the “Private Transaction Lock-Up Period”), Siegel may
offer and sell up to a maximum of 700,000 shares of Common Stock plus the
Severance Shares as that term is defined in the Separation Agreement (the
“Private Transaction Shares”) in one or more private
transactions.  Siegel agrees not to remove the restrictive legend on
the Private Transaction Shares pursuant to Rule 144 under the Securities Act of
1933 or any other applicable rule or regulation until a definitive and binding
agreement to sell those shares in a private transaction has been entered into
between Siegel and the buyer of such shares; and

      

      (ii)  A
number of shares of the Common Stock owned by Siegel in amounts that do not
exceed 10% of the daily trading volume of the Company’s Common Stock at the
Volume-Weighted Average Price (VWAP) of the Common Stock.

      

      Siegel agrees that any breach of this
Lock-Up agreement will entitle the Company to terminate the January 23, 2009
Consulting Agreement entered into by and among the Company and
Siegel.  In addition, in the event Siegel breaches any of the terms of
this Lock-Up Agreement, and if requested by the Company, Siegel shall pay to the
Company an amount equal to 50% of the proceeds from such sales in violation of
this Lock-Up Agreement as liquidated damages.  If legal and collection
actions are required to enforce the terms of this Lock-Up Agreement, Siegel
shall be liable for legal fees and collections fees incurred by the Company in
connection with such action.  In no event shall the Company exercising
its rights under this section be precluded by the exercise of such rights from
pursuing, subject to the terms of this Agreement and applicable law, any cause
of action or other claim it may then or at any time thereafter have against
Siegel in respect of any breach or default by Siegel hereunder.

      
        
           

        

        
           

          
            

          

        

        
           

          
            

            China
Direct, Inc.

            January
23, 2009

            Page
2

            

            

          

        

      

      Notwithstanding
the foregoing, Siegel may transfer the Common Stock he owns (i) as a bona fide gift or gifts,
provided that the donee or donees thereof agree to be bound in writing by the
restrictions set forth herein or (ii) to any trust for the direct or indirect
benefit of Siegel or the immediate family of Siegel, provided that the trustee
of the trust agrees to be bound in writing by the restrictions set forth herein,
and provided further that any such transfer shall not involve a disposition for
value.  For purposes of this Lock-Up Agreement, “immediate family”
shall mean any relationship by blood, marriage or adoption, not more remote than
first cousin.  Siegel now has, and, except as contemplated by clauses
(i) and (ii) above, for the duration of this Lock-Up Agreement will have, good
and marketable title to the Common Stock, free and clear of all liens,
encumbrances, and claims whatsoever.  Siegel also agrees and consents
to the entry of stop transfer instructions with the Company’s transfer agent and
registrar against the transfer of Common Stock owned by Siegel except in
compliance with the foregoing restrictions.  In addition, Siegel may
sell such additional shares of the Common Stock he owns as may be approved in
writing by the Company from time to time in the Company’s absolute
discretion.

      

      Siegel
understands and agrees that this Lock-Up Agreement is irrevocable and shall be
binding upon Siegel’s heirs, legal representatives, successors, and
assigns.

      

      This
Lock-Up Agreement may be executed in two counterparts, each of which shall be
deemed an original but both of which shall be considered one and the same
instrument.

      

      This
Lock-Up Agreement will be governed by and construed in accordance with the laws
of the State of Florida, without giving effect to any choice of law or
conflicting provision or rule that would cause the laws of any jurisdiction
other than the State of Florida to be applied.  In furtherance of the
foregoing, the internal laws of the State of Florida will control the
interpretation and construction of this Lock-Up Agreement, even if under such
jurisdiction's choice of law or conflict of law analysis, the substantive law of
some other jurisdiction would ordinarily apply.

       

      
        
          	 	 	 	
                   Very
      truly yours,

                   

                	 
	
                   

                	 	 	
                  /s/
      Marc Siegel

                	 
	
                   

                	 	 	
                  Marc
      Siegel

                	 
	
                   

                	 	 	
                   

                	 

        

      

       

      Agreed to
and Acknowledged:

       

      

        
          
            
              	
                      China
      Direct, Inc.

                    	 
      	 
      	
                       

                    	 
      
	
                      By:
      /s/James Wang

                    	 
      	 
      	
                       

                    	 
      
	
                      Name:
      Yuejian (James) Wang

                    	 
      	 
      	
                       

                    	 
      
	
                      Title:  Chief
      Executive Officer, Chairman of the Board of Directorsexh4-11.htm

    SUBSCRIPTION
AGREEMENT

     

    
      	
              CADIZ
      INC.

              550
      South Hope Street, Suite 2850

              Los
      Angeles, CA  90071

            	
              PERSONAL
      AND CONFIDENTIAL

            

    

    

    Ladies
and Gentlemen:

     

    Cadiz
Inc. (the “Company”) is offering
(the “Offering”) up to
165,000 units (the “Units”) at a price of
$31.50 per Unit (the “Purchase Price”),
each Unit consisting of three (3) shares of the Company's Common Stock, par
value $0.01 per share (the “Common Stock”) and
two (2) Common Stock purchase warrants in the form of Exhibit "B" hereto (the
“Warrant/s”).

     

    One
Warrant will entitle the holder to purchase, commencing 90 days from the date of
issuance, one (1) share of Common Stock at an exercise price of $12.50 per
share.  This Warrant will have a term of one (1) year, but will be
callable by the Company commencing six months following completion of this
Offering if the closing market price of the Company's Common Stock exceeds
$18.75 for 10 consecutive trading days.

     

    The
second Warrant will entitle the holder to purchase, commencing 90 days from the
date of issuance, one (1) share of Common Stock at an exercise price of $12.50
per share.  This Warrant will have a term of three (3) years and is
not callable by the Company.

     

    The
undersigned hereby agrees to purchase, at the Purchase Price and on the terms
and subject to the conditions set forth herein, that number of Units which is
set forth on the signature page of this Subscription Agreement.

     

    The
proceeds of the Offering will be applied by the Company for general corporate
purposes.

     

    The
undersigned understands it is contemplated that the Units will not be registered
under the Securities Act of 1933, as amended (the “Act”), or the state
blue sky laws.  The undersigned also understands that in order to
assure that the Offering will be exempt from registration under the Act and
various state securities laws, each prospective offeree must have such knowledge
and experience in financial and business matters in order that the undersigned
is able to evaluate the risks and merits of an investment in the
Units.

     

    The
undersigned understands that the information supplied in this Subscription
Agreement will be disclosed to no one other than the officers and directors and
employees of the Company and/or to counsel, accountants, advisors, or agents for
the Company without the undersigned’s consent, except as necessary for the
Company to use such information to support the exemption from registration under
the Act to
be claimed for this transaction, and except as necessary to be provided to
federal, state and local governmental and other regulatory agencies, including
the Securities and Exchange Commission (the “SEC”) or as otherwise
may be required by law or legal process.

     

    AN
INVESTMENT IN THE UNITS OFFERED HEREBY SHOULD BE CONSIDERED HIGHLY SPECULATIVE,
INVOLVING SUBSTANTIAL RISKS AND SUITABLE ONLY FOR PERSONS OF ADEQUATE FINANCIAL
MEANS WHO HAVE NO NEED FOR LIQUIDITY WITH RESPECT TO THIS INVESTMENT AND WHO CAN
BEAR THE RISKS ASSOCIATED WITH A COMPLETE LOSS OF THEIR
INVESTMENT.

     

    A.    Subscription.  The
Company shall sell to the undersigned, and the undersigned shall purchase, the
Units subscribed for by the undersigned on the signature page hereto (the “Closing”), upon
satisfaction of the following conditions:

     

    1    the
undersigned shall have delivered to the Company this Subscription Agreement
pursuant to the method of notice set forth in Section H hereof on or prior
to 12:00p.m. Eastern Daylight Time, Thursday, November 13, 2008 and
payment for Units purchased pursuant to this Subscription Agreement must be
delivered to the Company pursuant to the wire transfer instructions set forth in
Exhibit A hereto on or prior to Monday, November 15, 2008, unless either of such
deadlines is waived or extended by the Company in its sole discretion;
and

     

    2    this
Subscription Agreement shall have been countersigned by the Company, after
review for compliance with applicable securities laws.

     

    B.    Representations
and Warranties of the Undersigned.  In order to induce the
Company to issue the Units to the undersigned as a prospective offeree of the
Units, the undersigned represents and warrants that:

     

    1    The
undersigned is either experienced in or knowledgeable with regard to the
business of the Company, or is capable, by reason of knowledge and experience in
financial and business matters in general, and investments in particular, of
evaluating the merits and risks of an investment in the Units, and is able to
bear the economic risk of the investment and can otherwise be reasonably assumed
to have the capacity to protect the undersigned’s own interests in connection
with the investment in the Units.

     

    2    The
undersigned is an “accredited investor”,
as that term is defined in Rule 501(a) promulgated under the Act.

     

    3    In
evaluating the merits and risks of an investment in the Units, the undersigned
has not relied upon the Company or the Company’s attorneys or advisers for legal
or tax advice, and has, if desired, in all cases sought the advice of the
undersigned’s own personal legal counsel and tax advisers.

     

    4    The
acquisition of the Units by the undersigned is solely for the undersigned’s own
account, for investment, and not with a view to, or to offer or sell for an
issuer in connection with, the distribution of the Units (or the securities
constituting the Units), or to participate or have a direct or indirect
participation in any such undertaking, or to participate or have a participation
in the direct or indirect underwriting of any such undertaking.  The
undersigned has no contract, arrangement or understanding with the Company or
any other person to participate in the distribution of the Units or underlying
securities.

     

    5    The offer
to sell the Units was directly communicated to the undersigned, and the
undersigned was able to ask questions of and receive answers concerning the
terms of this transaction.  At no time was the undersigned presented
with or solicited by any leaflet, newspaper or magazine article, radio or
television advertisement, or any other form of general advertising or solicited
or invited to attend a promotional meeting otherwise than in connection and
concurrently with such communicated offer.

     

    6    The
undersigned has heretofore received and reviewed the Company’s press releases,
public filings with the SEC, and exhibits attached thereto (the “Disclosure
Documents”).  In addition to the foregoing, the undersigned has
had the opportunity to speak directly with officers of the Company concerning
the Company’s business plan and operations.

     

    7    The
undersigned represents and warrants that it never has been represented,
guaranteed, or warranted to the undersigned by any officer or director of the
Company, their agents or employees or any other person in connection with the
Company, expressly or by implication, any of the following:

     

    (a)    the
approximate or exact length of time that the undersigned will be required to
remain as the owner of the Units or the securities underlying the
Units;

     

    (b)    the exact
amount of profit and/or amount or type of consideration, profits or losses
(including tax benefits) to be realized, if any, by the Company; or

     

    (c)    that the
past performance or experience of the officers and directors of the Company, or
any other person connected with the Company can predict the results of the
ownership of the Units or the overall success of the Company.

     

    8    The
undersigned represents and warrants that the undersigned has been advised
that:

     

    (a)    the
issuance of the Units that the undersigned is acquiring has not been registered
under the Act, and the Units and securities underlying the Units must be held
indefinitely unless a transfer of the Units and/or such securities is
subsequently registered under the Act or an exemption from such registration is
available;

     

    (b)    the Units
and securities underlying the Units that the undersigned is acquiring are “restricted
securities” as that term is defined in Rule 144 promulgated under the
Act; and

     

    (c)    any and
all certificates representing the Units and securities underlying the Units
shall bear an investment legend restricting the transfer of such Units and
securities underlying the Units.

     

    9    The
undersigned understands the following:

     

    (a)    there are
a number of risks relating to an investment in the Company as set forth herein,
as further described in the Disclosure Documents and in the undersigned’s direct
communications with the Company;

     

    (b)    the
undersigned may lose the undersigned’s entire investment in the Units and the
Company; and

     

    (c)    no
federal or state agency, or any other regulatory body, has passed upon the
Units, or an investment therein, or made any finding or determination as to the
fairness of the Offering.

     

    10    The
undersigned has relied solely upon this Subscription Agreement, the Disclosure
Documents and independent investigations made by the undersigned or the
undersigned’s representatives with respect to the undersigned’s investment in
the Units, and no oral or written representations inconsistent with the contents
of the Disclosure Documents have been made to the undersigned by the Company or
any of its representatives.

     

    11    The
Company has made no representations to the undersigned regarding the
undersigned’s reporting requirements with the SEC related to the undersigned’s
ownership in the Company, and the undersigned acknowledges and agrees that it is
the responsibility of the undersigned to ensure that it complies with any
disclosure and reporting requirements of the SEC.

     

    12    The
undersigned has been advised that:

     

    (a)    Any U.S.
federal tax advice contained in this Agreement or the Disclosure Documents is
not intended or written to be used, and cannot be used, by any taxpayer for the
purpose of avoiding penalties under the Internal Revenue Code;

     

    (b)    The
advice was written in connection with the promotion or marketing of the
Offering; and

     

    (c)    The
undersigned should seek advice based on the undersigned's particular
circumstances from an independent tax advisor.

     

    13    The
undersigned, if not an individual, is empowered and duly authorized to enter
into this Agreement under any applicable partnership agreement, trust
instrument, pension plan, charter, articles or certificate of incorporation,
bylaws or any other like governing document.  The person signing this
Agreement on behalf of the undersigned is empowered and duly authorized to do so
by the applicable governing document, board of directors or stockholder
resolution, or the like.

     

    C.    Representations,
Warranties and Covenants of the Company.  In order to induce
the undersigned to purchase the Units from the Company, the Company represents
and warrants as follows:

     

    1    The
Company has full corporate power and authority to enter into this Agreement and
to perform its obligations hereunder and to consummate the transactions
contemplated hereby, including, without limitation, the issuance and sale of the
Units to the undersigned.  The execution, delivery and performance of
this Agreement by the Company and the consummation by the Company of the
transactions contemplated hereby have been duly and validly approved by the
Company’s Board of Directors, and no other corporate proceedings on the part of
the Company or its stockholders are necessary to authorize the execution,
delivery and performance of this Agreement by the Company and the consummation
by the Company of the transactions contemplated hereby, including, without
limitation, under the Delaware General Corporation Law, and the Company’s
Certificate of Incorporation and Bylaws, each as revised.  This
Agreement has been duly and validly executed and delivered by the Company and
constitutes a legal, valid and binding obligation of the Company enforceable
against the Company in accordance with its terms, except as enforceability may
be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the enforcement of creditors’ rights generally and by
general equitable principles (regardless of whether such enforceability is
considered in a proceeding in equity or at law).

     

    2    The Units
(and securities underlying the Units) have been duly authorized by all necessary
corporate action on the part of the Company, and, when issued, shall be validly
issued, fully paid and nonassessable.

     

    3    The net
proceeds to the Company are anticipated to be used by the Company for general
corporate purposes.

     

    4    Neither
the Company, directly or indirectly, nor any agent on its behalf has offered the
Units or any similar securities or has solicited an offer to acquire the Units
or any similar securities from any person so as to require registration of the
issuance and sale of the Units sold to the undersigned under the circumstances
contemplated by this Agreement under the provisions of Section 5 of the
Act.

     

    5    The
Company represents that all documents and information provided to the
undersigned in connection with this Agreement do not include any untrue
statements of material facts, or omit to state any material facts required to
make such documents and statements accurate and not misleading

     

    6    The
Company hereby agrees and covenants as follows:

     

    
      	
              (i)  

            	
              The
      Company shall deliver a stock certificate representing the Common Stock
      underlying the Units and a warrant certificate representing the Warrant to
      the undersigned promptly following the closing of this
      Offering.

            

    

     

    
      	
              (ii)  

            	
              The
      Company shall use its best efforts to file a registration statement which
      shall include the undersigned’s Common Stock underlying the Units
      (including the Common Stock underlying the Warrant) not later than
      December 30, 2008 and to use its reasonable best efforts to cause any
      registration statement so filed by to become effective as soon as
      possible.

            

    

     

    
      	
              (iii)  

            	
              The
      Company shall file as and when applicable, on a timely basis, all reports
      required to be filed by the Company under the Exchange
  Act.

            

    

     

    D.    Survival of
Representations, Warranties, Covenants and Agreements.  The
representations, warranties, covenants and agreements contained in this
Agreement or any other instrument delivered pursuant to this Agreement shall
survive the purchase of the Units.

     

    E.    Binding Effect;
Governing Law; Jurisdiction.  The undersigned
understands that this Subscription Agreement shall be binding upon the
undersigned’s heirs, devisees, legatees, successors-in-interest, estate,
administrators, executors, personal representatives and assigns, and shall be
construed in accordance with the laws of the State of Delaware without
regard to the principles of conflicts of law of such State.  The
Company and the undersigned hereby irrevocably consent to the nonexclusive
jurisdiction of the courts of the State of California and of any federal court
located in such State in connection with any action or proceeding arising out of
or relating to this Agreement.

     

    F.    Additional
Documents.  Each of the
parties hereby agrees to execute such other documents as may be reasonably
necessary to consummate the transaction proposed herein, including, but not
limited to, regulatory filings which may be required to be filed in either of
the parties’ state or country of residence.

     

    G.    Expenses.  Each
party shall pay their own out-of-pocket costs and expenses of counsel incurred
in connection with this Agreement and the transactions contemplated
hereby.  In any action or proceeding brought to enforce any provision
of this Agreement, or where any provision hereof is validly asserted as a
defense, the successful party shall be entitled to recover reasonable attorneys’
fees (including any fees incurred in any appeal) in addition to its costs and
expenses and any other available remedy.

     

    H.    Notices.  All notices,
communications and deliveries to be given or otherwise made to any party to this
Agreement, including delivery of stock certificates, shall be deemed to be
sufficient if contained in a written instrument and deemed received on that day
if delivered in person, received in one day if delivered by facsimile or by
overnight courier, or received in five days if duly sent by first class
registered or certified mail, return receipt requested, postage prepaid,
addressed to such party at the address set forth below or at such other address
as may hereafter be designated in writing by the addressee to the addressor
listing all parties:

     

    if to the
Company, to:

    550 South
Hope Street, Suite 2850

    Los
Angeles, CA  90071

    Attn:
Chief Financial Officer

    Fax:  (213)
271-1614

     

    if to the
undersigned, to the address listed on the signature page hereto.

     

    I.    Severability.  If one or more
provisions of this Agreement are held to be unenforceable under applicable law,
each such provision shall be excluded from this Agreement and the balance of the
Agreement shall be interpreted as if such provision were so excluded and shall
be enforceable in accordance with its terms.

     

    J.    Counterparts.  This Agreement
may be executed in any number of counterparts, or facsimile counterparts, each
of which shall be deemed an original, and all of which together shall constitute
one and the same instrument.

     

    K.    Arbitration.  Any
controversy or claim arising out of or relating to this Subscription Agreement,
or breach thereof, including without limitation claims against either party, its
affiliates, employees, professionals, officers or directors shall be settled by
binding arbitration in Los Angeles, California, in accordance with the
Commercial Arbitration Rules of the American Arbitration
Association.

     

    L.    Confidentiality.  The
undersigned agrees that it shall not disclose any information that may be
considered material non-public information of the Company, to include
negotiations regarding and execution of this Agreement (“Confidential
Information”), except that the undersigned may disclose Confidential
Information to its directors, officers, employees, representatives, affiliates
(as defined in Rule 405 under the Act) and other advisors and agents
(collectively, the “Agents”) who need to
know such information (it being understood that such Agents shall be informed by
the undersigned of the confidential nature of such information and shall be
directed by the undersigned to treat such information
confidentially).  The foregoing prohibition on disclosure shall not
apply to the extent disclosure of any Confidential Information is required by
any judicial authority or any government or regulatory agency, including the
SEC, or otherwise by applicable law.  The undersigned further agrees
that it shall keep confidential any material non-public information of the
Company received by the undersigned and shall not purchase or sell any shares of
the Company’s Common Stock (other than the purchases contemplated by this
Agreement) for as long as the undersigned possesses material non-public
information about the Company.

     

    M.    Injunctive
Relief.  Each of the
parties hereto acknowledges that in the event of a breach by any of them of any
material provision of this Agreement, the aggrieved party may be without an
adequate remedy at law.  Each of the parties therefore agrees that in
the event of such a breach hereof the aggrieved party may elect to institute and
prosecute proceedings in any court of competent jurisdiction to enforce specific
performance or to enjoin the continuing breach hereof.  By seeking or
obtaining any such relief, the aggrieved party shall not be precluded from
seeking or obtaining any other relief to which that party may be
entitled.

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

     

    SUBSCRIPTION
AGREEMENT SIGNATURE PAGE (PAGE 1 OF 2)

    

    Executed
this ___ day of ______________________, 2008, at _____________, City of
______________, ___________________________ (State or Country).

     

    The
undersigned hereby subscribes for XXXX Units of Cadiz Inc. at $31.50 per Unit
for a total consideration of $XXXX.00.

     

    
      	 
      	
               

              __________________________________

              (Entity
      name)

               

               

              ___________________________________

              (Type
      of entity, i.e., individual Delaware corporation)

               

               

              By:
      ________________________________

              Name:

              Title:

            

    

    

    ACKNOWLEDGED
AND AGREED TO:

    

    CADIZ
INC., a Delaware corporation

     

    
      
        	 By:	                                                           
      	Date: 
      __________________,2008
	 	Keith
      Brackpool	 
	 	Chief Executive
      Officer	 

      

       

      
        
          
          

        

        
          
          

          
          

        

        
          
          

        

      

    

     

    SUBSCRIPTION
AGREEMENT SIGNATURE PAGE (PAGE 2 OF 2)

    

    INSTRUCTIONS
FOR REGISTRATION OF
STOCK:

     

    Name:                      (Please
type or print in block letters):

    

    

    

    

    

    Address:

    

    

    

    

    

    INSTRUCTIONS
FOR PROVISION OF NOTICES
AND DELIVERY OF
STOCK:

    (to a
street address only, not DTC)

     

    Name:                      (Please
type or print in block letters)

    

    

    

    

    

    Address:

    

    

    

    

    

    Telephone
#:

    

    

    

    Fax
#:                      

     

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

     

    EXHIBIT
A - Wire Transfer Instructions

     

    

     

    

     

    Bank
Name:   Mellon First Business Bank

    ABA
Number:  122-038-442

    Account
Name:  Cadiz Inc. Operating Account

    Account
Number:  070600595

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

     

    EXHIBIT
B – Form of Warrant

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