Document:

exhibit10-1.htm

 

 

EXHIBIT 10-1

CADIZ – WATER ASSET MANAGEMENT LEASE

	
1.  Parties

	
Cadiz Real Estate LLC (“Cadiz”), a wholly-owned subsidiary of Cadiz Inc., is the owner of approximately 45,000 acres of land and the subsurface strata, inclusive of the unsaturated soils and appurtenant water rights located in San Bernardino County, California and more particularly identified on Exhibit “A” attached hereto (the “Cadiz Property”).

 

Water Asset Management, LLC (together with any affiliated entity to whom it assigns its rights in and to the Lease, “WAM”) is a private company that invests in water-related assets as the manager of equity funds focused on water resources investment.

 

	
2.  Leased Property

	
2,100 acres within the Cadiz Property, as more particularly described on Exhibit “B” attached hereto (“Leased Property”) along with all improvements located thereon and corresponding rights and appurtenances, including, but not limited to, the right to use underlying water, as limited by the terms of this Lease, required for farming the Leased Property consistent with existing permits, free and clear of all liens and encumbrances. The Leased Property is located within a portion of the Cadiz Property zoned for agricultural use and containing approximately 9,600 acres as more particularly identified on Exhibit “C” attached hereto (the “Cadiz Farm Property”). The Leased Property includes the non-exclusive easement to access and utilize the Cadiz Property and any rights of way, improvements, and infrastructure located on or appurtenant to the Cadiz Property as reasonably necessary for WAM’s use and enjoyment of the Leased Property.

 

Effective as of the Effective Date, Cadiz hereby assigns to WAM all of its rights and obligations, including providing acreage to farm within the 2,100 acres leased herein by WAM and delivering water as provided in and to that certain lease, dated as of July 1, 2013, as amended and restated as of February 3, 2015 (the “Limoneira Lease”), between Cadiz and Limoneira Company for a portion of the Leased Property, a copy of which is attached hereto as Exhibit “D”, including, without limitation, the right to receive any payments thereunder (including any payments of Base Rent and Net Cash Flow, as such terms are defined in the Limoneira Lease) and the right to enforce the terms of the Limoneira Lease, and Cadiz may not exercise any rights under the Limoneira Lease during the Term.  Cadiz shall continue to be responsible for the Cadiz buy-out right and the Limoneira Tag Right under the Limoneira Lease.  Further, Cadiz will have the right to enforce the Limoneira Lease upon at least ten (10) business days’ advance written notice to WAM if WAM fails to do so.  Cadiz shall notify Limoneira Company of such assignment of rights on the Effective Date.

 

Within thirty (30) days following the Effective Date (as defined below), Cadiz shall provide WAM with an ALTA 2006 Plain Language Title Insurance Commitment with respect to the Leased Property (the “Commitment”) that identifies any and all instruments recorded against the Leased Property (together with legible copies of the recorded instruments), and a customary recognition and non-disturbance agreement (in recordable form and otherwise in form and substance reasonably acceptable to WAM) executed by the holder of any lien recorded against the Leased Property that is senior to this Lease and is not otherwise automatically subordinated according to its terms in a manner sufficient for WAM’s title insurance company to insure the subordinated nature of such lien.

 

Further, as the parties may mutually agree from time to time during the Term, the Cadiz Property may be used for green waste removal or renewable energy uses and housing and other dwelling structures located adjacent to or near the Leased Property may be included within the “Leased Property” for purposes of housing WAM’s employees working on the Leased Property.  Terms associated with such green waste removal or renewable energy uses on the Cadiz Property and such temporary housing facilities will be agreed to in writing by the parties at reasonable market rates (for the avoidance of doubt, any use of the Cadiz Property by WAM that is incidental to WAM’s farming operations on the Leased Property (including storing items on the Cadiz Property for use on the Leased Property) shall be without charge).

 

	
3. Exclusivity

 

	
WAM, on the one hand, and Cadiz and Cadiz Inc. (collectively, the “Company”), on the other hand, have entered into that certain non-binding letter of intent (the “Term Sheet”) regarding, among other things, a certain loan facility (the “WAM Loan Facility”) proposed to be provided by WAM (or an affiliate thereof) in an amount equal to $55,000,000 and the right to convert such loan facility into a 99 year ground lease on the Cadiz Farm Property.  By virtue of execution of this Lease, the parties hereto agree that the Term Sheet is hereby amended to (i) decrease the size of the WAM Loan Facility to $43,000,000, to provide that the WAM Loan Facility, if consummated, shall be funded no later than February 15, 2016 and to provide that the Term Sheet shall terminate on (but not prior to) February 15, 2016 and (ii) provide for the right of WAM to convert the WAM Loan Facility, in whole or in part from time to time, into a 99 year ground lease on the portion of the Cadiz Farm Property not subject to this Lease (or, in the event of a partial conversion of the WAM Loan Facility, a pro rata portion of the Cadiz Farm Property not subject to this Lease that is identified by WAM).  In other words, if the transaction set forth in the Term Sheet is consummated, there will exist (y) a 99 year ground lease on the Leased Property in favor of WAM, and (z) a Loan Facility from WAM (or its affiliate) in the amount of $43,000,000.

 

In order to induce WAM to enter into this Lease, from the date of this Lease through February 15, 2016 (and, in the case of clause (y), such date shall be extended through the 30th day after WAM does not exercise its option to lease additional acreage as set forth in Section 5 below), neither the Company nor any of its  affiliates nor any of its or their respective officers, employees, directors, agents or other representatives (including financial advisors) will (a) solicit, initiate, encourage or accept any other inquiries, proposals or offers from any Person (as defined below) (w) relating to the sale or issuance of any debt securities of the Company or the refinancing of the Company’s senior secured indebtedness, (x) with respect to any recapitalization or reorganization of the Company,  (y) regarding any sale or disposition of, or grant of any lease, license or option with respect to, the Cadiz Farm Property or (z) to enter into any other transaction that would frustrate or impede the consummation of the transaction contemplated by the Term Sheet (any of the transactions described in clauses (w), (x), (y) and (z) being referred to herein as a “Competing Transaction”), or (b) participate in any discussions, conversations, negotiations or other communications with any other Person regarding, or furnish to any other Person any information with respect to, or otherwise cooperate in any way, assist or participate in, facilitate or encourage any effort or attempt by any other Person to seek to do any of the foregoing.  The Company immediately shall cease and cause to be terminated all existing discussions, conversations, negotiations and other communications with any Persons conducted heretofore with respect to any Competing Transaction.  This exclusivity may be terminated sooner as provided in Section 4.

 

Nothing herein shall prevent the Company from issuing equity securities in connection with a working capital raise (provided, that, the proceeds of such working capital raise do not obviate the necessity for the Company to consummate the transaction contemplated by the Term Sheet) or from pursuing any further right to extend its existing loan facility.

 

As used in this Lease, the term “Person” means any individual, partnership, firm, corporation, limited liability company, association, trust, unincorporated organization or other entity, as well as any syndicate or group that would be deemed to be a person under Section 13(d)(3) of the Securities Exchange Act of 1934, as amended.

	
4.  Lease Payment

	
Upon execution of this Lease, WAM shall pay into an escrow account maintained by a nationally recognized title insurance company selected by WAM, as escrow agent, $12 million (the “Lease Payment”) and advise the escrow agent, at the time escrow is opened, that Cadiz and WAM shall jointly notify the escrow agent to release the escrowed funds within one business day following the satisfaction of the Release Conditions (as defined below) (the date of release of the escrowed funds to Cadiz is hereinafter referred to as the “Closing Date”) so long as the Release Conditions are satisfied on or prior to February 15, 2016. Cadiz and WAM shall be obligated to jointly notify the escrow agent to release the escrowed funds within one business day following the satisfaction of the Release Conditions so long as the Release Conditions are satisfied on or prior to February 15, 2016.   Cadiz shall use the Lease Payment to repay at least $9 million of the senior secured indebtedness of Cadiz Inc., plus any additional amounts required to be prepaid by the terms of the senior secured indebtedness of Cadiz Inc., with the balance for costs and expenses associated with this transaction (including escrow fees and attorneys’ fees of the Company and WAM, subject to the cap set forth in Section 19) and working capital.  If, prior to the satisfaction of the Release Conditions, WAM closes on the transaction set forth in the Term Sheet, then the parties will instruct the escrow agent to release the entire amount of the Lease Payment to Cadiz, and Cadiz shall use the Lease Payment, together with the payments made in respect of the WAM Loan Facility, to repay, in full, the senior secured indebtedness of Cadiz Inc.

 

The release of the Lease Payment from escrow to Cadiz on the Closing Date shall be subject to the satisfaction of the following conditions precedent (the “Release Conditions”) on or prior to February 15, 2016 (which conditions precedent may be waived by WAM, in its sole and absolute discretion):  (x) Cadiz Inc. will provide a written officer’s certificate certifying that Cadiz Inc. is in a position to, and upon receipt of the Lease Payment and disbursement of the proceeds thereof as provided herein shall, satisfy all the conditions to the proviso in “Maturity Date” (as defined in the senior secured credit agreement of Cadiz Inc.) to prevent the maturity date from changing from June 30, 2017 to the earlier date of March 5, 2016; (y) receipt by the Company of any requisite consents or releases to the grant of the lease to WAM of the Leased Property and to the assignment of the rights of Cadiz under the Limoneira Lease and to any of the other provisions of this Lease not permitted by the Company’s senior secured credit agreement as in effect on the date hereof, including but not limited to any required consents or releases and waivers from the Company’s senior secured lenders; and (z) receipt by WAM of a customary recognition and non-disturbance agreement (in recordable form) executed by the holder of any lien which is senior to this Lease and is not otherwise automatically subordinated according to its terms in a manner sufficient for WAM’s title insurance company to insure the subordinated nature of such lien, recorded against the Leased Property (including the lien in favor of Wells Fargo Bank, N.A. (“Wells Fargo”), as agent on behalf of the Company’s senior secured lenders) in form and substance reasonably acceptable to WAM. After receipt of the Commitment, WAM will promptly notify Cadiz of any existing lien holder, if any, in addition to Wells Fargo that will be required to sign off on the customary recognition and non-disturbance agreement. If any of the Release Conditions have not been satisfied by February 15, 2016 and WAM has not closed on the transaction set forth in the Term Sheet, then, at WAM’s request, the parties shall deliver a joint request to cause the escrowed funds to be released to WAM and, in such event, this Lease shall terminate and be of no further force and effect and the parties will have no further rights or obligations to each other under this Lease.

 

Each of Cadiz and WAM shall act in good faith and in a manner designed to promptly satisfy the Release Conditions.  As noted above, upon satisfaction of the Release Conditions on or prior to February 15, 2016, the parties will, within one business day thereafter, instruct the escrow agent to distribute the escrowed funds to Cadiz.  If for any reason, customary documents necessary to satisfy all of the Release Conditions are provided to WAM, and Cadiz and WAM are unable to promptly agree within three (3) days following WAM’s receipt thereof that the documents (to the extent executed by the requisite parties other than WAM) satisfy the Release Conditions, then the exclusivity to WAM shall terminate on two (2) days’ written notice from Cadiz to WAM.

 

	
5.  Initial Lease; Option to Lease Additional Acreage

 

	
Cadiz hereby leases to WAM, and WAM hereby leases from Cadiz, the Leased Property.  Additionally, in the event WAM does not close on the transaction set forth in the Term Sheet by the Closing Date, but this lease remains in effect, WAM shall have the option to expand the Leased Property and lease additional tracts within the Cadiz Farm Property as follows:

 

(1) A tract containing approximately 2,093 contiguous acres to be designated by WAM (in its good faith and reasonable discretion and which is adjacent to he Leased Property) by delivering written notice to Cadiz on or before June 1, 2016 and paying Cadiz an amount equal to an additional $12,000,000 by wire transfer of immediately available U.S. funds;

 

(2) An additional tract containing approximately 2,093 contiguous acres to be designated by WAM (in its good faith and reasonable discretion and which is adjacent to the Leased Property, as expanded by the first option parcel described in item (1) above) by delivering written notice to Cadiz on or before September 1, 2016 and paying Cadiz an amount equal to an additional $12,000,000 by wire transfer of immediately available U.S. funds; and

 

(3) An additional tract containing approximately 3,314 contiguous acres to be designated by WAM (in its good faith and reasonable discretion and which is adjacent to the Leased Property, as expanded by the first and second option parcels described in items (1) and (2) above) by delivering written notice to Cadiz on or before December 22, 2016 and paying Cadiz an amount equal to an additional $19,000,000 by wire transfer of immediately available U.S. funds.

 

Any proceeds paid by WAM to Cadiz in connection with the exercise of any expansion option described in this Section 5, net of any fees and transactions costs incurred in connection therewith, shall be used solely to repay the senior secured indebtedness of Cadiz, Inc., with any remaining proceeds to be applied toward mandatory prepayments, if applicable, of the outstanding convertible notes of Cadiz Inc.

 

WAM’s use of the El Paso Pipeline will increase proportionally with the exercise of each expansion option described in this Section 5.  In the event that a payment date was missed, WAM has an additional 30 days to exercise each option set forth above and preserve its exclusivity.  In the event one of the 30 day periods expires without the payment being made, the exclusivity and remaining options will terminate.

 

	
6.  Effective Date; Lease Term

	
This Lease shall be effective as of the Closing Date (the “Effective Date”) (provided that Sections 1, 3, 4, 6 and 15 through 20 shall be effective as of the last date this Lease is executed by the parties hereto), and shall expire ninety-nine (99) years following the Effective Date, or as earlier terminated pursuant to this Lease (the “Term”).

 

	
7.  Use of Leased Property

	
The Leased Property is leased to WAM for the following purposes:

 

§ The planting, growing, and harvesting of agricultural crops and other uses incidental thereto.

 

If WAM desires to use the Leased Property for any other purpose, WAM shall seek the consent of Cadiz, which consent shall not be unreasonably withheld, delayed or conditioned; provided, that, it shall not be unreasonable for Cadiz to withhold its consent if such other desired use of the Leased Property is inconsistent with the then-existing use of the other portions of the Cadiz Property, including implementation of the Cadiz Water Project, and would have a material adverse effect on such other portions of the Cadiz Property.  If Cadiz fails to notify WAM in writing that Cadiz reasonably disapproves WAM’s consent request within ten (10) business days after Cadiz receives such consent request, then WAM shall deliver a second notice to Cadiz, stating in bold type on the first page thereof “URGENT - FINAL NOTICE,” and if Cadiz fails to respond within 5 days thereafter, then Cadiz shall be deemed to have granted its consent to the change of use requested by WAM. WAM need not operate the Leased Property or conduct business of any nature on the Leased Property. WAM may discontinue operation of the Leased Property at any time or from time to time. WAM may vacate the Leased Property.

 

Cadiz hereby represents that a conditional use permit from the County of San Bernardino is not required for agricultural use of the Leased Property.

 

In connection with any farming activities that WAM may conduct on the Leased Property, WAM shall carry on such activities in accordance with commercially reasonable husbandry and farming practices and sound management in accordance with sustainable farming practices and in such a manner that does not degrade the aquifer underlying the Leased Property.  WAM shall not use or permit the use of the Leased Property for any unlawful purpose or in any way that will interfere with Cadiz’s use of the portion of its property not included in the Leased Property.

 

 

 

	
8.  Water Infrastructure and Supply

	
Consistent with the well field design established by Cadiz or any well field design hereafter established by WAM and approved by Cadiz (which approval shall be granted by Cadiz if Cadiz determines in its good faith and reasonable judgment that such well field design is compatible with the exportation of water and consistent with Cadiz’s then current design), WAM has the right to construct any additional infrastructure that may be necessary in order to access water for its irrigation purposes on the Leased Property.  If WAM elects to construct such infrastructure, then WAM shall be responsible for well maintenance and infrastructure constructed by WAM, including mains and laterals (if any).

 

The water supply source for the Leased Property shall be from the Cadiz Property, and shall be made available  by Cadiz to WAM for use on the Leased Property consistent with this Lease.  The maximum water supply to which WAM is entitled shall be the average groundwater available to the Leased Property over the previous 10 years, such amount not to be less than 5 acre-feet per acre (the “Total Water Allowance”).  For illustration purposes only, if WAM leases 2,100 acres, its Total Water Allowance shall be 10,500 acre-feet.  To the extent additional water is available pursuant to the Cadiz groundwater pumping permit on an annual basis and is otherwise not being put to beneficial use, then supplemental supply would be made available to WAM for use on its 2,100 acres.

 

	
9.  Taxes and Assessments

	
WAM shall pay, when due, all real property, personal property and/or any other type of tax or assessment relating exclusively to the Leased Property accruing during the Term (prorated for any partial tax year and further apportioned if the Leased Property is part of a larger tax parcel), including taxes or assessments attributable to any alterations, additions or improvements made to the Leased Property by WAM or attributable to WAM’s personal property or fixtures.

 

	
10.  Maintenance and Repairs; Utilities

	
All farming operations on the Leased Property shall be done at the sole cost and expense of WAM, and WAM agrees to keep the Leased Property free and clear of all liens or claims of any kind for labor or material, and agrees to keep the Leased Property and the crops thereon free of any labor claims of any kind or nature, other than liens or claims being contested in good faith by appropriate proceedings.

 

WAM agrees that it will not commit any material physical waste or suffer any material physical waste to be committed on the Leased Property and that at all times during the Term, it will keep and maintain all improvements now on the Leased Property, or that shall be constructed on the Leased Property during the Term, in as good order, condition and repair as reasonable use and wear thereof will permit, damage by the elements excepted.

 

WAM will observe, comply and conform to all applicable laws of the State of California and all applicable ordinances of the County of San Bernardino, affecting the use or occupation of the Leased Property, including without limitation all laws and ordinances relating to the transportation and use of fertilizer and other chemicals.

 

During the Term, WAM will keep and maintain in good order, condition and repair all subsurface irrigation pipelines, valves and headgates, and other subsurface structures and pipelines on the Leased Property used for the purposes of controlling the flow of water within the Leased Property.

 

Cadiz shall have no obligation to operate, maintain or repair the Leased Property or any improvements constructed thereon by WAM; provided, however, Cadiz shall maintain in good condition and repair all rights of way, improvements and infrastructure located on or appurtenant to the Cadiz Property as reasonably necessary for WAM’s use and enjoyment of the Leased Property.

 

	
11.  Insurance

	
WAM agrees to obtain and keep in force during the Term workers’ compensation, general liability and such other insurance coverages as deemed reasonably necessary by Cadiz to protect against any liability for personal injury or property damage to the public incident to WAM’s use of or resulting from any accident occurring on or about the Leased Property. The commercial liability policy shall insure any contingent liability of Cadiz and shall name Cadiz as an additional insured.  Such policies shall also provide for at least twenty (20) days written notice by the insurer to Cadiz prior to any cancellation thereof.

 

	
12.  Cadiz’s Right of Entry and Inspection

	
Cadiz, its agents or attorneys, shall have the right at all reasonable times to enter upon the Leased Property to inspect, to determine if WAM is complying with the terms of this Lease. In exercising Cadiz’s right of entry, Cadiz shall use all commercially reasonable efforts to minimize any interference with WAM’s use and operation of the Leased Property.

 

	
13.  Cadiz Lease Termination Option

	
For a period of twenty (20) years following the Effective Date of this Lease, Cadiz shall have an option to terminate this Lease (“Cadiz Lease Termination Option”) upon ninety (90) days’ advance written notice to WAM at a price equal to the sum of the following three items (collectively, the “Purchase Price”): 1) the Lease Payment plus a ten percent (10%) compounded annual (365 days) return to WAM through the closing date of the repurchase (“10% Return”); provided however, (y) the amount of such payment shall not be less than $14,400,000; and (z) if the transaction contemplated by the Term Sheet is consummated, the 10% Return shall automatically (and retroactively) increase to a twenty percent (20%) compounded annual return to WAM from the Effective Date through the closing date of such repurchase; and; 2) reimburse WAM for the actual cost of any farming related infrastructure incurred by WAM on the Leased Property and for the actual cost of any water related infrastructure incurred by WAM on the Leased Property plus 8% per annum,, as well as the costs of any water-transfer related investments; and 3) reimburse any development expenses incurred by WAM, working in coordination with Cadiz, for the El Paso Pipeline up to $1,000,000, plus a 3x multiple  return to WAM on the amount of such development expenses (“Development Expense Return”) (for the avoidance of doubt, the maximum Development Expense Return would be $3,000,000).  In addition, if WAM closes on the transaction contemplated by the Term Sheet and exercises any expansion option described in Section 5 above, a similar provision will apply.

 

In the event (x) Cadiz does not exercise the Cadiz Lease Termination Option prior to its expiration, or (y) Cadiz files for bankruptcy protection (or an involuntary bankruptcy petition is filed against Cadiz not discharged within 90 days of filing) during the twenty (20) year Cadiz Lease Termination Option, WAM shall have the right to purchase the Leased Property for $1.00 (“Lease Purchase Option”).  By no later than January 7, 2016, Cadiz and WAM shall agree upon, and on the Closing Date enter into, a definitive option agreement in recordable form (and otherwise in form and substance reasonably acceptable to the parties) documenting the Lease Purchase Option.  Cadiz and WAM shall act in good faith and in a manner designed to promptly agree upon the form of such definitive option agreement.

 

	
14. Pipeline Usage Agreement

	
In the event that WAM notifies Cadiz at any time after 3 years from the Effective Date that WAM has negotiated a binding long term contract (which binding long term contract is reasonably capable of being performed within a reasonable period of time) to export up to 4,364 acre feet of water per year through the El Paso Pipeline (“Pipeline Usage Agreement”), and Cadiz has not exercised the Cadiz Lease Termination Option, Cadiz shall have an additional right to terminate the Lease on 90 days’ advance written notice delivered to WAM with respect to the portion of the Leased Property relating to the amount of water subject to the Pipeline Usage Agreement, calculated as the amount of water utilized per the Pipeline Usage Agreement divided by the Total Water Allowance (“Pro Rata Amount”). In such event, Cadiz shall pay to WAM, simultaneous with Cadiz’s termination notice, the Purchase Price for the Pro Rata Amount (as determined in accordance with Section 13 above, including all amounts set forth in clauses 1), 2) and 3) of Section 13 above as if Cadiz had exercised the Cadiz Lease Termination Option) (“Pro Rata Termination Option”).  In the event that Cadiz does not exercise the Pro Rata Termination Option within 180 days of such notice by WAM, WAM shall have the right to enter into the Pipeline Usage Agreement provided that WAM agrees to pay to Cadiz a fee of 10% of WAM’s net profit from the Pipeline Usage Agreement.

 

During the Term, WAM shall have the right to use the El Paso Pipeline consistent with existing or acquired permits to export up to 21.82% of the available capacity of acre feet of water or import up to 21.82% of the available capacity of acre feet of water.

 

	
15.  Default

	
The failure by WAM to observe any of the material covenants, conditions or provisions of this Lease, other than the payment of money, where such failure shall continue for a period of thirty (30) days after written notice of such failure from Cadiz to WAM, provided, however, that if the nature of WAM’s default is such that more than thirty (30) days are reasonably required for its cure, WAM will have such additional reasonable period to cure the default provided WAM diligently prosecutes such cure to completion (“WAM Default”).

 

The failure by Cadiz to observe any of the material covenants, conditions or provisions of this Lease, where such failure shall continue for a period of thirty (30) days after written notice of such failure from WAM to Cadiz, provided, however, that if the nature of Cadiz’s default is such that more than thirty (30) days are reasonably required for its cure, Cadiz will have such additional reasonable period to cure the default provided Cadiz diligently prosecutes such cure to completion (“Cadiz Default”).

 

	
16.  Termination

	
This Lease shall terminate upon the earliest of the following:

 

§ The expiration of the Term; provided, however, to the extent not prohibited by applicable law, WAM shall have a right to renew the Term for another 99 years (or such maximum term, not to exceed 99 years, that is permitted by applicable law) on terms and conditions reasonably acceptable to Cadiz and WAM;

 

§ At the option of Cadiz by written notice to WAM, upon the occurrence and continuance of a WAM Default;

 

§ At the option of WAM, upon the occurrence of a Cadiz Default but subject to receipt from Cadiz of the amounts due and owing under Section 13 above as if Cadiz had exercised the Cadiz Lease Termination Option;

 

§ Exercise by Cadiz of the Cadiz Lease Termination Option but subject to receipt from Cadiz of the amounts due and owing under Section 13 above; and

 

§ Exercise by WAM of the Lease Purchase Option.

 

Upon termination of this Lease by WAM or Cadiz (other than in respect of WAM’s exercise of the Lease Purchase Option) and receipt by WAM of any amounts due and owing to it by Cadiz as set forth above, WAM shall quit and surrender the Leased Property to Cadiz.  WAM shall promptly execute, acknowledge and deliver to Cadiz such instruments of further assurance as in the reasonable opinion of Cadiz are necessary or desirable to confirm or perfect Cadiz’s rights, title and interest in and to the Leased Property.  The provisions of this paragraph shall survive the expiration or termination of this Lease.  Upon termination, WAM shall have no further right or interest in or to the Leased Property or any part thereof.

 

 

 

	
17.  Indemnification

	
Cadiz shall not be liable in any manner for any loss, damage or injury to any person or the property of WAM or that of its agents or employees, or to any other person(s) or the property of such person(s) invited or permitted by WAM to come upon or about the Leased Property, or to any other person(s) who enters upon or about the Leased Property whether invitees, by trespass or otherwise, by reason of anything done, permitted to be done or suffered or admitted to be done, by WAM or its agents or employees or otherwise unless caused by the gross negligence or willful misconduct of Cadiz or its agents or employees.  WAM agrees to indemnify and save harmless Cadiz, its officers, directors, agents, employees, successors and assigns from any and all such liability, damage, cost and expense, to protect Cadiz against any claim that may be made, or action that may be brought against Cadiz related to WAM’s use and operation of the Leased Property, and pay all reasonable costs and expenses of such protection and defense; provided, however, the foregoing indemnity will not apply to matters arising from the gross negligence or willful misconduct of Cadiz or its agents or employees, or from the existence of pre-existing adverse matters affecting the Leased Property, including, without limitation, the presence of hazardous materials existing on the Leased Property as of the Effective Date.

 

Cadiz agrees to indemnify and save harmless WAM, its officers, directors, agents, employees, successors and assigns from any and all liability, damage, cost and expense suffered by WAM directly resulting from contamination of the Leased Property or the water supplied by Cadiz hereunder, provided that such contamination is caused by an agent, contractor, or employee of Cadiz.  Cadiz further agrees to indemnify and save harmless WAM, its officers, directors, agents, employees, successors and assigns from any and all liability, damage, cost and expense suffered by WAM (including reasonable attorneys’ fees and costs) directly resulting from actions or causes of actions against WAM that seek to prevent, enjoin or otherwise prohibit WAM from its intended use of the Leased Property.

 

	
18.  Attorneys’ Fees

	
If either WAM or Cadiz has to institute legal proceedings of any kind or character to compel performance of any of the covenants or conditions to be paid, kept or performed under this Lease, the party recovering judgment shall have and recover all attorneys’ fees and costs incurred in connection with any such legal proceedings.

 

	
19.  Binding Nature; General Provisions

 

	
The provisions of this Lease shall be binding upon the parties and their successors and permitted assigns.    Cadiz shall not have the right to assign, sublease and otherwise transfer this Lease or any interest therein (in whole or in part) without the express written consent of WAM.  Upon written notice to Cadiz, WAM shall have the right to pledge, mortgage and assign its rights under this Lease without the consent of Cadiz, subject to the permitted use of the Leased Property as provided in Section 7. After WAM assigns this Lease and the assignee assumes it, the assignor shall have no obligation or liability under this Lease.

 

The validity and interpretation of this Lease shall be governed by the laws of the State of California.

 

All individuals executing this Lease on behalf of the respective parties represent and warrant that they have the capacity and have been duly authorized to so execute the same.  Upon distribution of the escrowed funds to Cadiz, the Company shall reimburse WAM for its reasonable out of pocket fees and expenses (including reasonable attorneys’ fees) incurred in connection with the negotiation, preparation and documentation of this Lease, subject to a cap of $50,000.

 

Any and all notices shall be given by a party to the other party in writing by delivery of such notice to such party personally or by certified or registered mail addressed to the party as set forth on the signature page of this Lease or such other address as delivered to the other party pursuant to this paragraph.  In the case of notices by mail, notice shall be deemed to have been received forty-eight (48) hours after the date of deposit in the United States mail.

 

No waiver of any breach of any of the covenants, agreements, restrictions and conditions of this Lease shall be construed to be a waiver of any succeeding breach of the same or other covenants, agreements, restrictions or conditions.

 

No remedy shall be exclusive but shall, wherever possible, be deemed cumulative with all other remedies at law or in equity.

 

Time is of the essence in respect to the terms and provisions of this Lease.

 

Neither party will issue any public statement with respect to the existence of this Lease or its contemplated transactions, nor will either party use the other party’s names or trademarks, without the other party’s prior written consent or pursuant to applicable law.

 

Each party agrees to cooperate in the performance of this Lease and to execute and deliver any and all reasonable documents and perform any and all acts reasonably necessary to carry out its purpose and intent.

 

Nothing contained in this Lease shall create a partnership, joint venture or employment relationship between the Company and WAM.  Neither party shall be liable, except as otherwise expressly provided for in this Lease, for any obligations or liabilities incurred by the other party.

 

So long as this Lease has not been terminated, and no WAM default is continuing beyond the expiration of any applicable grace or notice and cure period, Cadiz covenants that WAM shall and may peaceably and quietly have, hold, and enjoy the Leased Property for the Term, subject to the terms of this Lease, without molestation, hindrance, or disturbance by or from Cadiz or anyone claiming by or through Cadiz or having title to the Leased Property paramount to Cadiz, and free of any encumbrance created or suffered by Cadiz.

 

Upon request by either WAM or Cadiz, the parties shall promptly execute, acknowledge, and deliver duplicate originals of a Memorandum of Lease, which Memorandum of Lease must include WAM’s option to lease additional property pursuant to Section 5 of this Lease. Either party may record such Memorandum of Lease. Any taxes imposed upon such recording shall be paid equally by the parties. If the parties amend this Lease, then the parties shall have the same rights and obligations regarding a memorandum of such amendment as they do for the Memorandum of Lease. WAM may at any time by notice to Cadiz elect to require the Memorandum of Lease to be terminated.

 

	
20.  Leasehold Mortgagee Protections

 

	
Assignment and Mortgages: Upon written notice to Cadiz, WAM may, without Cadiz’s consent, assign this Lease, including any options it contains, subject to the permitted use of the Leased Property as provided in Section 7.  Upon written notice to Cadiz, WAM may also, without Cadiz’s consent, mortgage this Lease (including any options it contains) to any leasehold mortgagee(s) (each, a “Leasehold Mortgagee”), subject to the permitted use of the Leased Property as provided in Section 7.  A Leasehold Mortgagee (and anyone whose title derives directly or indirectly from a Leasehold Mortgagee, including a purchaser at any foreclosure sale held under a Leasehold Mortgage) may, without Cadiz’s consent, hold a foreclosure sale of this Lease, take title to this Lease, and transfer or assign this Lease, either in its own name or through a nominee.

 

Priority of Fee Mortgages: Any mortgage on Cadiz’s fee estate (a “Fee Mortgage”) shall be subject and subordinate to this Lease. Cadiz shall not enter into any Fee Mortgage that violates the previous sentence. WAM shall not subordinate this Lease to any Fee Mortgage without consent by all Leasehold Mortgagees, which consent shall not be unreasonably withheld. Any inconsistency between any Fee Mortgage and this Lease shall be resolved in favor of this Lease.

 

No Merger: If this Lease and the fee estate in the Leased Property are ever commonly held, then they shall remain separate and distinct estates and shall not merge without consent by all Leasehold Mortgagees.

 

Notice and Opportunity to Cure: If WAM defaults on this Lease, then Cadiz shall so notify all Leasehold Mortgagees. Each of WAM and any Leasehold Mortgagees may cure such default. Notwithstanding anything contained in this Lease to the contrary, Cadiz shall not terminate this Lease for WAM’s default unless and until Cadiz has given all Leasehold Mortgagees written notice of such default and thirty (30) days in which to cure it. If such default cannot reasonably be cured within thirty (30) days, then each Leasehold Mortgagee shall have such additional time as it reasonably needs to cure such default, so long as it proceeds with reasonable diligence. For any default that cannot be cured without possession of the Leased Property or at all, Cadiz shall allow such additional time as Leasehold Mortgagees shall reasonably need to prosecute and complete a foreclosure or equivalent proceeding and obtain possession of the Leased Property.  If a Leasehold Mortgagee completes a foreclosure of this Lease, then Cadiz shall waive any noncurable defaults.

 

Copies of Notices: No notice by Cadiz shall be effective against a Leasehold Mortgagee unless Cadiz has given a copy of such notice to such Leasehold Mortgagee.

 

New Lease. If this Lease terminates because of WAM’s default or because WAM rejects this Lease in bankruptcy or similar proceedings, then Cadiz shall upon request made within 30 days of such termination, enter into a new lease with the most senior Leasehold Mortgagee on the same terms and with the same priority as this Lease.

 

Subleases: Upon written notice to Cadiz, WAM may, without Cadiz’s consent, sublease the Leased Property subject to the permitted use of the Leased Property as provided in Section 7. Cadiz shall not disturb the possession, interest, or quiet enjoyment of any subtenant.

 

Condemnation Awards. WAM’s share of any condemnation award shall be no less than the total condemnation award less the value of Cadiz’s remainder interest in the Leased Property, considered as if unimproved and as if this Lease had not terminated. To the extent that WAM is entitled to any condemnation award, it shall be paid to the most senior Leasehold Mortgagee and, if there are no Leasehold Mortgagees, to WAM.

 

Casualty and Partial Condemnation: In the event of a casualty or a partial condemnation, this Lease shall continue. Any insurance proceeds or condemnation award shall be paid to Leasehold Mortgagee (who shall have the right to participate in and approve settlement of any such claim) or a trustee it designates, to be used first to restore the Leased Property. Any remainder shall be disbursed to Leasehold Mortgagee to the extent required by its loan documents, and thereafter to Cadiz and WAM in accordance with the further terms of this Lease.

 

Preservation of Lease. This Lease may not be amended, modified, changed, cancelled, waived, or terminated without the consent of all Leasehold Mortgagees. Cadiz shall not accept a voluntary surrender of the Lease without consent by all Leasehold Mortgagees. Any such amendment, modification, change, cancellation, termination, waiver, or surrender shall not bind any Leasehold Mortgagee or its successors or assigns unless made with such Leasehold Mortgagee’s consent. Any Leasehold Mortgagee may exercise any or all of WAM’s

rights under this Lease.

 

Options: If this Lease contains any renewal, purchase, or extension option and WAM does not timely exercise it, then Cadiz shall promptly notify each Leasehold Mortgagee, who shall then have thirty (30) days to exercise it on WAM’s behalf.

 

No Personal Liability. No Leasehold Mortgagee (or anyone whose title derives from a Leasehold Mortgagee) shall have any personal liability under this Lease unless and until (and then only so long as) such Person succeeds to WAM’s interest under this Lease. Any such personal liability shall be limited to the value of the liable party’s interest in this Lease.

 

Estoppel Certificates. Cadiz and WAM shall,  at any time and from time to time, within 20 business days and following notice by the other party, execute, acknowledge and deliver to the party which gave such notice a statement in writing certifying (a) that this Lease is unmodified and in full force and effect, or if there shall have been any modification(s) that the same is in full force and effect as modified and stating the modification(s), (b) whether or not to the best of knowledge of the signer of such certificate the other party is in default hereunder, and , if so, specifying each such default, (c) with respect to WAM, whether WAM has exercised any option to extend the term of this Lease and, if so, specifying such extension, and (d) certifying any other matter which shall be reasonably requested by Cadiz, WAM or any lender or prospective lender of Cadiz or WAM.

 

Future Amendments: The parties shall from time to time as necessary or desirable, cooperate in good faith to amend this Lease to accommodate any local laws relating to the Leased Property, and any then prevailing customary provisions of this Lease and ground leases in general to the extent reasonably acceptable to Cadiz acting in good faith (as well as any reasonable requests from any Leasehold Mortgagees).

 

No Consequential Damages: Whenever either party may seek or claim damages against the other party (whether by reason of a breach of this Lease by such party, in enforcement of any indemnity obligation, for misrepresentation or breach of warranty, or otherwise), neither Cadiz nor WAM shall seek, nor shall there be awarded or granted by any court, arbitrator, or other adjudicator, any speculative, consequential, collateral, special, punitive, or indirect  damages, whether such breach shall be willful, knowing, intentional, deliberate, or otherwise. The parties intend that any damages awarded to either party shall be limited to actual, direct damages sustained by the aggrieved party. Neither party shall be liable for any loss of profits suffered or claimed to have been suffered by the other.

 

Conflict: If the terms of this Section 20 conflict with any other terms of this Lease, then the provisions of this Section 20 shall govern and control.

Dated: December 23, 2015                                                                CADIZ REAL ESTATE LLC

By: /s/ Timothy J. Shaheen

 

Its: Manager

Address:

550 S. Hope Street, Suite 2850 Los Angeles, CA  90071

Dated:  December 23, 2015                                                               CADIZ INC.

By: /s/ Timothy J. Shaheen

Its: Chief Financial Officer

Address:

550 S. Hope Street, Suite 2850 Los Angeles, CA  90071

Dated: December 23, 2015                                                                WATER ASSET MANAGEMENT, LLC

By:  /s/ Water Asset Management, LLC

Its:  

Address:

c/o Water Asset Management, LLC

509 Madison Avenue Suite 804 New York, NY  10022

 

EXHIBIT A

 

Cadiz Property

 

 

 

 

EXHIBIT B

 

Leased Property*

 

Section 21:

0556-311-49-0000

0556-311-50-0000

0556-311-52-0000

0556-311-53-0000

Section 27:

0556-311-09-0000

Section 28:

Northeast quarter of Section 28 (160 acres) plus the top eighth of the southeast quarter Section 28.  [Subject to verification]

Section 33:

0556-341-01-0000

0556-341-02-0000

0556-341-03-0000

0556-341-04-0000

0556-341-05-0000

0556-341-06-0000

0556-341-07-0000

0556-341-08-0000

0556-351-01-0000

0556-351-02-0000

0556-351-03-0000

0556-351-04-0000

0556-351-05-0000

0556-351-06-0000

0556-351-07-0000

0556-351-08-0000

* To the extent the Assessor’s Parcel Numbers (“APNs”) or above description of the Leased Property conflicts with the below picture, the APNs and above description shall control, unless otherwise agreed by WAM.

The description of the Leased Property is subject to modification based on the official plat/record of survey to be provided during the escrow period.

 

 

 

EXHIBIT "C"

 

Cadiz Farm Property

 

 

 

EXHIBIT "D"

 

Limoneira Lease

 

CADIZ - LIMONEIRA AMENDED AND RESTATED LEASE

 

	
1.  Parties

	
Cadiz Real Estate LLC (“Cadiz”), a wholly-owned subsidiary of Cadiz Inc., is the owner of approximately 45,000 acres of land and the subsurface strata, inclusive of the unsaturated soils and appurtenant water rights (the “Cadiz Property”).

 

Limoneira Company (“Limoneira”) is a publicly traded agribusiness and real estate development company.

 

	
2.  Leased Property

	
A minimum of 320 acres to a maximum of 1,480 acres located within 9,600 zoned agricultural acres within the Cadiz Property, with the exact location(s) to be mutually agreed to by the parties, on terms set forth in this Lease (“Leased Property”).  Within thirty (30) days following the Effective Date, Cadiz will provide Limoneira a title report that identifies any and all liens recorded against the Leased Property, and a non-disturbance letter with regard to the Leased Property.

 

Further, as the parties may mutually agree from time to time during the Term, housing and other dwelling structures located adjacent to or near the Leased Property may be included within the “Leased Property” for purposes of housing Limoneira’s agricultural employees working on the Leased Property.  Terms associated with such temporary housing facilities shall be agreed to in writing by the parties.

 

	
3.  Initial Lease; Option to Lease

Additional Acreage

 

	
Cadiz leases to Limoneira, and Limoneira leases from Cadiz, Three Hundred Twenty (320) acres (the “Initial Acreage”), plus an additional Two Hundred (200) acres (the “Added Acreage”), the location to be mutually agreed to by the parties, and subject to the planting schedule described in Section 5 hereof.  Further, Cadiz hereby grants to Limoneira the right to exercise an option to lease (beyond the Initial Acreage) up to Six Hundred Forty (640) acres (“Option 1”), and up to Three Hundred Twenty (320) acres (“Option 2”) (the two options together are collectively referred to as the “Option”); provided that (a) notice of Limoneira’s exercise of the Option must be in writing and received by Cadiz no later than December 31, 2016 (for Option 1), and December 31, 2018 (for Option 2), and the physical planting of the lemon trees has occurred no later than December 31, 2017 (for Option 1) and December 31, 2019 (for Option 2).

 

Excepting any water or soil contamination that may exist on the Leased Property as of the Effective Date, Limoneira accepts the Leased Property in its “AS-IS” condition as of the Effective Date, and in respect to the acreage leased under the timely exercise of the Option, as of the date of the exercise of the applicable Option.

 

	
4.  Effective Date; Lease Term

	
This Lease shall be effective as of last date this Lease is executed by the parties hereto as set forth on the signature page (the “Effective Date”), and shall expire with respect to actual planted acreage twenty (20) years following the initial planting on such acreage, and no later than December 31, 2039, or as earlier terminated pursuant to this Lease (the “Term”), with no automatic renewals, provided, however, that the parties may mutually agree (to be exercised in each party’s sole discretion) to extend the Term.

 

	
5.  Use of Leased Property

	
The Leased Property is leased to Limoneira for the following purpose and for no other purpose except with the prior written consent of Cadiz, which shall be exercised by Cadiz in its sole and absolute discretion:

 

§ The planting, growing, and harvesting of lemon trees.

 

Cadiz hereby represents that a conditional use permit from the County of San Bernardino is not required for the abovedescribed use of the Leased Property.

 

The parties agree that the intent of the parties is for Limoneira to plant, grow and harvest lemon trees on all of the Leased Property (that is, all 1,480 acres) by 2019.  Although Limoneira is not obligated to exercise all or any part of the Option, Limoneira agrees that the Initial Acreage shall be planted with lemon trees no later than December 31, 2014.

 

Limoneira shall carry on all activities permitted herein in accordance with the best husbandry and best farming practices and sound management in accordance with sustainable farming practices and in such a manner that does not degrade the aquifer underlying the Leased Property.  Limoneira shall not use or permit the use of the Leased Property for any unlawful purpose or in any way that will interere with Cadiz's use of the portion of its property not included in the Leased Property.

 

	
6.  Lease Payment

	
In consideration for the Lease, Limoneira shall pay to Cadiz or its assignee an annual amount equal to the sum of (a) $200 per acre planted, prorated for partial acreages planted during the relevant period (“Base Rent”) and (b) 20% of the “Net Cash Flow” (“Lease Payment”).  The Lease Payment shall be due and payable semi-annually on June 30 and December 31 of each year, and shall not exceed $1,200 per acre per year.  For purposes of this Lease, “Net Cash Flow” shall mean gross revenues from the sale of the harvested lemons less operating expenses (including Base Rent but excluding depreciation or other non-cash expenses).  “Operating expenses” shall include, but not be limited to, expenditures incurred by Limoneira for farming and growing, frost prevention, soil treatments, irrigation, harvesting, packing and freight.  Further, the parties may mutually agree (each exercised in its sole discretion) upon a characterization that extraordinary non-cash expenses be “operating expenses” for purposes of calculating Net Cash Flow.

 

	
7.  Water Infrastructure and

Supply

	
In consultation with Limoneira, Cadiz shall design, develop and construct the necessary infrastructure in order to supply water to Limoneira for its irrigation purposes on the Leased Property.  Cadiz shall be responsible for well maintenance and the delivery of water to the planted acreage through all subsurface infrastructure, including mains and laterals.  Limoneira shall be responsible for any deep ripping to the land prior to any planting, if necessary, and the costs associated with the surface distribution of such water to the trees through selected drip irrigation.

 

The water supply source for the Leased Property shall be from the Cadiz Property, and shall be provided by Cadiz to Limoneira for use on the Leased Property consistent with this Lease at a cost equal to $50 (in July 2013 dollars) per acre-foot as increased (but not decreased) by an escalation equal to the percentage change (year over year) of the Consumer Price Index for All Urban Consumers, Los Angeles-Riverside-Orange County, CA, All Items, not seasonally adjusted (1982-1984=100) (“CPI”) (“Water Cost”), which shall be invoiced by Cadiz and paid by Limoneira to Cadiz on a quarterly basis.  The maximum water supply to which Limoneira is entitled shall be 5 acre-feet per acre of the Leased Property (the “Total Water Allowance,” with actual entitlement based on the number of acres actually planted being “Planted Water Allowance”).  For illustration purposes only, if Limoneira has 1,280 acres planted, its Planted Water Allowance shall be 6,400 acre-feet, at a total cost of $320,000 + CPI.

 

Any and all water rights initiated or preserved as a result of Limoneira’s use of water on the Leased Property shall accrue to the benefit of Cadiz.  Cadiz will be responsible to provide water in quantity and suitability for the purposes set forth in this Lease.

 

	
8.  Taxes and Assessments

	
Cadiz shall pay, when due, all real property, personal property and/or any other type of tax or assessment relating to the Leased Property, except that Limoneira shall pay any taxes or assessments attributable to any alterations, additions or improvements made to the Leased Property by Limoneira or attributable to Limoneira’s personal property or fixtures.

 

	
9.  Maintenance and Repairs;

Utilities

	
All farming operations on the Leased Property shall be done at the sole cost and expense of Limoneira, and Limoneira agrees to keep the Leased Property free and clear of all liens or claims of any kind for labor or material, and agrees to keep the Leased Property and the crops thereon free of any labor claims of any kind or nature.

 

Limoneira agrees that it will not commit any waste or suffer any waste to be committed on the Leased Property and that at all times during the Term, it will keep and maintain all improvements now on the Leased Property, or that shall be constructed on the Leased Property during the Term with the approval of Cadiz, in as good order, condition and repair as reasonable use and wear thereof will permit, damage by the elements not traceable to the negligence of Limoneira or its agents or employees excepted.

 

Limoneira will observe, comply and conform to all laws of the State of California and all ordinance of the County of San Bernardino, affecting the use or occupation of the Leased Property, including without limitation all laws and ordinances relating to the transportation and use of fertilizer and other chemicals.  Limoneira agrees not to apply pesticides, herbicides, insecticides, fungicides or other chemical treatments on the Leased Property that may have

a residual effect beyond the Term of the Lease.

 

During the Term, Limoneira will keep and maintain in good order, condition and repair all subsurface irrigation pipelines, valves and headgates, and other subsurface structures and pipelines on the Leased Property used for the purposes of controlling the flow of water within the Leased Property.

 

	
10.  Insurance

	
Limoneira agrees to obtain and keep in force during the Term workers’ compensation, general liability and such other insurance coverages as deemed reasonably necessary by Cadiz to protect against any liability for personal injury or property damage to the public incident to Limoneira’s use of or resulting from any accident occurring on or about the Leased Property. Such policies shall insure any contingent liability of Cadiz and shall name Cadiz as an additional insured.  Such policies shall also provide for at least twenty (20) days written notice by the insurer to Cadiz prior to any cancellation or modification thereof.

 

	
11.  Cadiz’s Right of Entry and Inspection

 

	
Cadiz, its agents or attorneys, shall have the right at all times to enter upon the Leased Property to inspect, to determine if Limoneira is complying with the terms of this Lease, and for any other purpose.

 

	
12.  Cadiz Buy-Out Right

	
At any time during the Term, Cadiz shall have the right, exercised at any time and in its sole and absolute discretion, to divert the Total Water Allowance (or any portion thereof) by paying to Limoneira an amount equal to the sum of (a) all unamortized capital costs incurred by Limoneira pursuant to its permitted use of the Leased Property (based on a 20- year amortization schedule) and (b) 30% of such unamortized capital costs (“Cadiz BuyOut Right”).  In the event Cadiz exercises the Cadiz BuyOut Right, Cadiz agrees that it shall not, directly or allow any third party to, harvest the then-planted lemon trees for profit on such portion of the Leased Property associated with the Total Water Allowance (or portion thereof) diverted.

 

	
13.  Limoneira Tag Right

	
During the Term, Limoneira shall have the right to convert up to 578 acre-feet of the Total Water Allowance (proportionately reduced if the Planted Water Allowance is less than the Total Water Allowance) (the “Tag Right”) to obtain rights within the permitted 50,000 acre feet of that certain Cadiz Valley Water Conservation, Recovery, and Storage Project located on the Cadiz Property overlying the Fenner Valley Aquifer System (the “Project”).

 

Cadiz shall provide Limoneira written notice of any “firm contract” (that is, a non-contingent contract to sell Project water) within seven (7) days of the execution of the firm contract.  Limoneira shall have sixty (60) days to exercise its Tag Right by providing written notice to Cadiz.  See Exhibit A attached hereto and incorporated herein for an illustration of the Tag Right.

 

Limoneira agrees that if it exercises its Tag Right pursuant to this Section 13, it shall curtail use of any of the Total Water Allowance on one-fourth (1/4th) of the acres planted.  For illustration purposes, if 320 acres are planted, Limoneira’s Tag Right is 125 acre-feet, and if exercised, it is precluded from using any of the Total Water Allowance on 80 acres, unless other water is deemed available by Cadiz through the implementation of its Project and an agreement is reached between Cadiz and Limoneira as to the source and cost of such new water supply.

 

	
14.  Default

	
The occurrence of any one or more of the following events shall constitute a material default and breach of this Lease by Limoneira (each, a “Limoneira Default”):

 

§ The failure by Limoneira to make any Lease Payment or any other payment, including the Water Cost, required to be made by Limoneira under this Lease as and when due, where such failure shall continue for a period of ten (10) days after written notice of such failure from Cadiz to Limoneira;

 

§ The failure by Limoneira to observe any of the material covenants, conditions or provisions of this Lease, other than the payment of money, where such failure shall continue for a period of twenty (20) days after written notice of such failure from Cadiz to Limoneira, provided, however, that if the nature of Limoneira’s default is such that more than twenty (20) days are reasonably required for its cure, Limoneira continually and diligently prosecutes such cure to completion.

 

The failure by Cadiz to observe any of the material covenants, conditions or provisions of this Lease, where such failure shall continue for a period of twenty (20) days after written notice of such failure from Limoneira to Cadiz, provided, however, that if the nature of Cadiz’s default is such that more than twenty (20) days are reasonably required for its cure, Cadiz continually and diligently prosecutes such cure to completion (“Cadiz Default”).

 

	
15.  Termination

	
This Lease shall terminate upon the earliest of the following:

 

§ The expiration of the Term (as to the particular acreage then expiring);

 

§ Upon mutual agreement of the parties for any reason, including, but not limited to, a determination that the intended use of the Leased Property (that is, to plant, grow and harvest lemon trees for profit) is or becomes “economically unviable,” which shall include, without limitation, market or weather conditions that render the lemon operation unprofitable, the existence or occurrence of water or soil contamination or pollution, pest infestation, litigation and injunctions prohibiting or precluding the intended use of the Leased Property.

 

§ At the option of Cadiz, the occurrence of a Limoneira Default;

 

§ At the option of Limoneira, the occurrence of a Cadiz Default;

 

§ At the option of either party, the occurrence of a “Force Majeure” event, which for purposes of this Lease shall be defined as the failure of a party to perform its obligations hereunder by reason of any fire, earthquake, flood, epidemic, explosion, riot, civil disturbance, act of public enemy or terrorism, war, act of God or similar event beyond such party’s control, and specifically with respect to Cadiz’s supply of water pursuant to the terms of this Lease, any governmental or judicial order to reduce the water volume or flow rate to the Leased Property;

 

§ Exercise by Cadiz of the Cadiz Buy-Out Right.

 

Upon termination of this Lease, Limoneira shall quit and surrender the Leased Property to Cadiz in at least as good order, condition and repair as when received, reasonable use, damage by act of God or by natural causes excepted, remove all of Limoneira’s personal property and fixtures from the Leased Property (excepting planted lemon trees), and repair any damage caused by such removal.  Limoneira shall promptly execute, acknowledge and deliver to Cadiz such instruments of further assurance as in the reasonable opinion of Cadiz are necessary or desirable to confirm or perfect Cadiz’s rights, title and interest in and to the Leased Property.  The provisions of this paragraph shall survive the expiration or termination of this Lease.  Upon termination, Limoneira shall have no further right or interest in or to the Leased Property or any part thereof.

 

In the event the Lease is terminated due to Cadiz’s exercise of the Cadiz Buy-Out Right or the occurrence of a Cadiz Default, Cadiz hereby agrees that it shall not, directly or allow any third party to, harvest the then-planted lemon trees for profit.

 

	
16.  Indemnification

	
Cadiz shall not be liable in any manner for any loss, damage or injury to any person or the property of Limoneira or that of its agents or employees, or to any other person(s) or the property of such person(s) invited or permitted by Limoneira to come upon or about the Leased Property, or to any other person(s) who enters upon or about the Leased Property whether invitees, by trespass or otherwise, by reason of anything done, permitted to be done or suffered or admitted to be done, by Limoneira or its agents or employees or otherwise.  Limoneira agrees to indemnify and save harmless Cadiz, its officers, directors, agents, employees, successors and assigns from any and all such liability, damage, cost and expense, to protect Cadiz against any claim that may be made, or action that may be brought against Cadiz, and pay all reasonable costs and expenses of such protection and defense.

 

Cadiz agrees to indemnify and save harmless Limoneira, its officers, directors, agents, employees, successors and assigns from any and all liability, damage, cost and expense suffered by Limoneira directly resulting from contamination of the Leased Property or the water supplied by Cadiz hereunder, provided that such contamination is caused by an agent or employee of Cadiz.  Cadiz further agrees to indemnify and save harmless Limoneira, its officers, directors, agents, employees, successors and assigns from any and all liability, damage, cost and expense suffered by Limoneira (including reasonable attorneys’ fees and costs) directly resulting from actions or causes of actions against Cadiz and Limoneira that seek to prevent, enjoin or otherwise prohibit Limoneira from its intended use of the Leased Property.

 

	
17.  Attorneys’ Fees

	
If either Limoneira or Cadiz has to institute legal proceedings of any kind or character to compel performance of any of the covenants or conditions to be paid, kept or performed under this Lease, the party recovering judgment shall have and recover all attorneys’ fees and costs incurred in connection with any such legal proceedings.

 

	
18.  Binding Nature; General

Provisions

 

	
Upon execution of this Lease, the parties modify, amend and restate that certain Cadiz-Limoneira Lease dated July 1, 2013.

 

The provisions of this Lease shall be binding upon the parties and their successors and permitted assigns commencing on the date last set forth the parties’ signatures.  Limoneira shall not assign this Lease or sublet the Leased Property without the prior written consent of Cadiz which shall be exercised in Cadiz’s sole and absolute discretion.

 

The validity and interpretation of this Lease shall be governed by the laws of the State of California.

 

All individuals executing this Lease on behalf of the respective parties represent and warrant that they have the capacity and have been duly authorized to so execute the same.  Each signatory shall indemnify each other party, and hold them harmless, from all damages, costs, attorneys’ fees and other expenses if not so authorized.

 

Any and all notices shall be given by a party to the other party in writing by delivery of such notice to such party personally or by certified or registered mail addressed to the party as set forth on the signature page of this Lease or such other address as delivered to the other party pursuant to this paragraph.  In the case of notices by mail, notice shall be deemed to have been received forty-eight (48) hours after the date of deposit in the United States mail.

 

No waiver of any breach of any of the covenants, agreements, restrictions and conditions of this Lease shall be construed to be a waiver of any succeeding breach of the same or other covenants, agreements, restrictions or conditions.

 

No remedy shall be exclusive but shall, wherever possible, be deemed cumulative with all other remedies at law or in equity.

 

Time is of the essence in respect to the terms and provisions of this Lease.

 

Neither party will issue any public statement with respect to the existence of this Lease or its contemplated transactions, nor will either party use the other party’s names or trademarks, without the other party’s prior written consent.

 

Each party agrees to cooperate in the performance of this Lease and to execute and deliver any and all documents and perform any and all acts necessary to carry out its purpose and intent.

 

Nothing contained in this Lease shall create a partnership, joint venture or employment relationship between Cadiz and Limoneira.  Neither party shall be liable, except as otherwise expressly provided for in this Lease, for any obligations or liabilities incurred by the other party.

 

[signatures contained on next page]  

 

IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the date set forth below.

 

 

	
Dated: 

	
February 3, 2015 

	
CADIZ REAL ESTATE LLC

	  	  	  
	  	
By: 

	
/s/ Timothy J. Shaheen

	  	  	  
	  	  	
Its: 

	
Manager

	  	  	  	  
	  	  	
Address: 

	  	  	
550 S. Hope Street, Suite 2850 

	  	  	
Los Angeles, CA  90071 

 

 

 

	
Dated: 

	
February 3, 2015 

	
LIMONEIRA COMPANY

	  	  	  
	  	
By: 

	
/s/ Joseph Rumley

	  	  	  
	  	  	
Its: 

	
CFO

	  	  	  	  
	  	  	
Address: 

	  	  	
1141 Cummings Road

	  	  	
Santa Paula, CA  93060EX-10.1

 Exhibit 10.1 

LOAN AND SECURITY AGREEMENT 

THIS LOAN AND SECURITY AGREEMENT (this “Agreement”) dated as of December 29, 2015 (the “Effective
Date”) between SILICON VALLEY BANK, a California corporation (“Bank”), and ARCADIA BIOSCIENCES, INC., a Delaware corporation (“Borrower”), provides the terms on which Bank shall lend to
Borrower and Borrower shall repay Bank. The parties agree as follows: 
  

	 	1	ACCOUNTING AND OTHER TERMS 

 Accounting terms not defined in this Agreement shall
be construed following GAAP. Calculations and determinations must be made following GAAP. Capitalized terms not otherwise defined in this Agreement shall have the meanings set forth in Section 13. All other terms contained in this Agreement,
unless otherwise indicated, shall have the meaning provided by the Code to the extent such terms are defined therein. 
  

	 	2	LOAN AND TERMS OF PAYMENT 

 2.1 Promise to Pay. Borrower hereby
unconditionally promises to pay Bank the outstanding principal amount of all Credit Extensions and accrued and unpaid interest thereon as and when due in accordance with this Agreement. 

2.1.1 Term Loan. 

(a) Availability. Bank shall make one (1) term loan available to Borrower in an amount up Term Loan Amount on or after thirty
(30) days from the Effective Date, subject to the satisfaction of the terms and conditions of this Agreement. 
 (b)
Repayment. Borrower shall make “interest only” payments with respect to the Term Loan during the Interest Only Period. Thereafter, the Term Loan shall be payable in (i) thirty six (36) equal monthly installments of
principal, plus (ii) monthly payments of accrued interest (each, a “Term Loan Payment”). Each Term Loan Payment shall be payable on the first day of each month, beginning on January 1, 2018. Borrower’s final Term Loan
Payment, due on the Term Loan Maturity Date, shall include all outstanding principal and accrued and unpaid interest under the Term Loan and the Final Payment. Once repaid, the Term Loan may not be reborrowed. 

(c) Prepayment. 
 (i)
Voluntary. Borrower shall have the option to prepay all or any portion of the Term Loan, provided Borrower (a) delivers written notice to Bank of its election to prepay the Term Loan at least five (5) days prior to such prepayment,
and (b) pays, on the date of such prepayment (i) all outstanding principal with respect to the Term Loan, plus accrued and unpaid interest thereon, (ii) the Term Loan Prepayment Fee, (iii) the Final Payment and (iv) all
other sums, including Bank Expenses, if any, that shall have become due and payable hereunder in connection with the Term Loan. 
 (ii)
Involuntary. If the Term Loan has become due and payable according to the terms hereof because of the occurrence and continuance of an Event of Default, Borrower shall pay to Bank on the date that the Term Loan has become due and payable
according to the terms hereof, in addition to any other sums owing, (i) all outstanding principal with respect to the Term Loan, plus accrued and unpaid interest thereon, (ii) the Term Loan Prepayment Fee, (iii) the Final Payment and
(iv) all other sums, including Bank Expenses, if any, that shall have become due and payable hereunder in connection with the Term Loan. 

2.2 Intentionally Omitted. 

 2.3 Payment of Interest on the Credit Extensions. 

(a) Interest Rate. Subject to Section 2.3(b), the principal amount outstanding under the Term Loan shall accrue interest at a
floating per annum rate equal to nine tenths of one percentage point (0.90%) above the Prime Rate, which interest shall be payable monthly. 

(b) Default Rate. (i) Immediately upon the occurrence and during the continuance of an Event of Default described in
Section 8.5 and (ii) upon written notice from Bank that Bank is electing to charge interest at the Default Rate as a result of the occurrence and during the continuance of any other Event of Default, the Obligations shall bear interest at
a rate per annum which is five percentage points (5.0%) above the rate that is otherwise applicable thereto (the “Default Rate”). Fees and expenses which are required to be paid by Borrower pursuant to the Loan Documents
(including, without limitation, Bank Expenses) but are not paid when due shall bear interest until paid at a rate equal to the highest rate applicable to the Obligations. Payment or acceptance of the increased interest rate provided in this
Section 2.3(b) is not a permitted alternative to timely payment and shall not constitute a waiver of any Event of Default or otherwise prejudice or limit any rights or remedies of Bank. 

(c) Adjustment to Interest Rate. Changes to the interest rate of any Credit Extension based on changes to the Prime Rate shall be
effective on the effective date of any change to the Prime Rate and to the extent of any such change. 
 (d) Payment; Interest
Computation. Interest is payable monthly on the first calendar day of each month and shall be computed on the basis of a 360-day year for the actual number of days elapsed. In computing interest, (i) all payments received after 12:00 p.m.
Pacific time on any day shall be deemed received at the opening of business on the next Business Day, and (ii) the date of the making of any Credit Extension shall be included and the date of payment shall be excluded; provided, however, that
if any Credit Extension is repaid on the same day on which it is made, such day shall be included in computing interest on such Credit Extension. 

2.4 Fees. Borrower shall pay to Bank: 

(a) Final Payment. The Final Payment, when due hereunder; 

(b) Term Loan Prepayment Fee. The Term Loan Prepayment Fee when due pursuant to the terms of Section 2.1.1(c); and 

(c) Bank Expenses. All Bank Expenses (including reasonable attorneys’ fees and expenses for documentation and negotiation of this
Agreement) incurred through and after the Effective Date, when due (or, if no stated due date, upon demand by Bank). 
 (d) Fees Fully
Earned. Unless otherwise provided in this Agreement or in a separate writing by Bank, Borrower shall not be entitled to any credit, rebate, or repayment of any fees earned by Bank pursuant to this Agreement notwithstanding any termination of
this Agreement or the suspension or termination of Bank’s obligation to make loans and advances hereunder. Bank may deduct amounts owing by Borrower under the clauses of this Section 2.4 pursuant to the terms of Section 2.5(c). Bank
shall provide Borrower prior written notice of deductions to be made from the Designated Deposit Account pursuant to the terms of the clauses of this Section 2.4. 

2.5 Payments; Application of Payments; Debit of Accounts. 

(a) All payments to be made by Borrower under any Loan Document shall be made in immediately available funds in Dollars, without setoff or
counterclaim, before 12:00 p.m. Pacific time on the date when due. Payments of principal and/or interest received after 12:00 p.m. Pacific time are considered received at the opening of business on the next Business Day. When a payment is due on a
day that is not a Business Day, the payment shall be due the next Business Day, and additional fees or interest, as applicable, shall continue to accrue until paid. 

  
 -2- 

 (b) Bank has the exclusive right to determine the order and manner in which all payments with
respect to the Obligations may be applied. Borrower shall have no right to specify the order or the accounts to which Bank shall allocate or apply any payments required to be made by Borrower to Bank or otherwise received by Bank under this
Agreement when any such allocation or application is not specified elsewhere in this Agreement. 
 (c) Bank may debit any of Borrower’s
deposit accounts, including the Designated Deposit Account, for principal and interest payments or any other amounts Borrower owes Bank when due. These debits shall not constitute a set-off. 

2.6 Withholding. 

(a) Payments received by Bank from Borrower under this Agreement will be made free and clear of and without deduction for any and all present
or future taxes, levies, imposts, duties, deductions, withholdings, assessments, fees or other charges imposed by any Governmental Authority (including any interest, additions to tax or penalties applicable thereto). Specifically, however, if at any
time any Governmental Authority, applicable law, regulation or international agreement requires Borrower to make any withholding or deduction from any such payment or other sum payable hereunder to Bank, Borrower hereby covenants and agrees that the
amount due from Borrower with respect to such payment or other sum payable hereunder will be increased to the extent necessary to ensure that, after the making of such required withholding or deduction, Bank receives a net sum equal to the sum which
it would have received had no withholding or deduction been required, and Borrower shall pay the full amount withheld or deducted to the relevant Governmental Authority. Borrower will, upon request, furnish Bank with proof reasonably satisfactory to
Bank indicating that Borrower has made such withholding payment; provided, however, that Borrower need not make any withholding payment if the amount or validity of such withholding payment is contested in good faith by appropriate and timely
proceedings and as to which payment in full is bonded or reserved against by Borrower. The agreements and obligations of Borrower contained in this Section 2.6 shall survive the termination of this Agreement. 

(b) If any assignee of Bank’s rights under Section 12.2 of this Agreement is not a “United States Person” as
defined in Section 7701(a)(30) of the Internal Revenue Code of 1986, as amended from time to time (such assignee, a “Non-U.S. Lender”), such Non-U.S. Lender shall, upon becoming party to this Agreement, to the extent that such
Non-U.S. Lender is entitled to an exemption from U.S. withholding tax on interest, deliver to Borrower a complete and properly executed IRS Form W-8BEN, W-8ECI or W-8IMY, as appropriate, or any successor form prescribed by the IRS, certifying that
such Non-U.S. Lender is entitled to such exemption from U.S. withholding tax on interest. Notwithstanding Section 2.6(a) above, Borrower shall not be required to pay any additional amount to any Non-U.S. Lender under Section 2.6(a) if such
Non-U.S. Lender fails or is unable to deliver the forms, certificates or other evidence described in the preceding sentence, unless such non-U.S. Lender’s failure or inability to deliver such forms is the result of any change in any applicable
law, treaty or governmental rule, or any change in the interpretation thereof after such Non-U.S. Lender became a party to this Agreement. 
  

	 	3	CONDITIONS OF LOANS 

 3.1 Conditions Precedent to Initial Credit Extension.
Bank’s obligation to make the initial Credit Extension is subject to the condition precedent that Bank shall have received, in form and substance satisfactory to Bank, such documents, and completion of such other matters, as Bank may reasonably
deem necessary or appropriate, including, without limitation: 
 (a) duly executed original signatures to the Loan Documents; 

(b) the Operating Documents and long-form good standing certificates of Borrower certified by the Secretary of State (or equivalent agency) of
Borrower’s jurisdiction of organization or formation and each jurisdiction in which Borrower is qualified to conduct business, each as of a date no earlier than thirty (30) days prior to the Effective Date; 

(c) duly executed original signatures to the completed Borrowing Resolutions for Borrower; 

  
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 (d) evidence that the Loan Agreement dated as of April 28, 2015, as amended by that certain
First Amendment to Loan and Security Agreement dated as of July 24, 2015, between Borrower and Special Value Continuation Partners, LP and TCPC SBIC, LP, together with all documents and agreements executed in connection therewith, shall have
been, or concurrently with the initial Credit Extension will be, terminated (other than inchoate indemnity obligations which expressly survive termination) and all amounts thereunder shall have been, or concurrently with the initial Credit Extension
will be, paid in full (other than inchoate indemnity obligations which expressly survive termination); 
 (e) a payoff letter providing that
(i) the Liens, if any, securing Indebtedness owed by Borrower to Special Value Continuation Partners, LP and TCPC SBIC, LP will be terminated and (ii) the documents and/or filings evidencing the perfection of such Liens, including without
limitation any financing statements and/or control agreements, shall have been, or concurrently with the initial Credit Extension will be, terminated; 

(f) a payoff letter providing that the Convertible Promissory Note dated as of September 30, 2013, between Borrower and Mahyco
International Pte Ltd., a company formed under the laws of Singapore, in the original principal amount of Two Hundred Fifty Thousand Dollars ($250,000), together with all documents and agreements executed in connection therewith (other than any
warrants issued by Borrower in connection therewith and any provisions in such documents and agreements to the extent relating to such warrants and the shares of Borrower for which such warrants are exercisable), shall have been, or concurrently
with the initial Credit Extension will be, terminated and all amounts thereunder shall have been, or concurrently with the initial Credit Extension will be, paid in full; 

(g) a payoff letter providing that the Convertible Promissory Note dated as of December 11, 2013, between Borrower and Mahyco
International Pte Ltd., a company formed under the laws of Singapore, in the original principal amount of Four Million Five Hundred Thousand Dollars ($4,500,000), together with all documents and agreements executed in connection therewith (other
than any warrants issued by Borrower in connection therewith and any provisions in such documents and agreements to the extent relating to such warrants and the shares of Borrower for which such warrants are exercisable), shall have been or
concurrently with the initial Credit Extension will be, terminated and all amounts thereunder shall have been, or concurrently with the initial Credit Extension will be, paid in full; 

(h) a payoff letter providing that (i) the Liens securing Indebtedness owed by Borrower to Mahyco International Pte Ltd., a company
formed under the laws of Singapore, will be terminated and (ii) the documents and/or filings evidencing the perfection of such Liens, including without limitation any financing statements and/or control agreements, shall have been, or
concurrently with the initial Credit Extension will be, terminated; 
 (i) certified copies, dated as of a recent date, of financing
statement searches, as Bank may request, accompanied by written evidence (including any UCC termination statements) that the Liens indicated in any such financing statements either constitute Permitted Liens or have been or, concurrently with the
initial Credit Extension, will be, terminated or released; 
 (j) the Perfection Certificate of Borrower, together with the duly executed
original signatures thereto; 
 (k) evidence satisfactory to Bank that the insurance policies and endorsements required by Section 6.5
hereof are in full force and effect, together with appropriate evidence showing lender loss payable and/or additional insured clauses or endorsements in favor of Bank; and 

(l) payment of the fees and Bank Expenses then due as specified in Section 2.5 hereof. 

3.2 Conditions Precedent to all Credit Extensions. Bank’s obligations to make each Credit Extension, including the initial Credit
Extension, is subject to the following conditions precedent: 
 (a) timely receipt of an executed Payment/Advance Form; 

  
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 (b) the representations and warranties in this Agreement shall be true, accurate, and complete in
all material respects on the date of the Payment/Advance Form and on the Funding Date of each Credit Extension; provided, however, that such materiality qualifier shall not be applicable to any representations and warranties that already are
qualified or modified by materiality in the text thereof; and provided, further that those representations and warranties expressly referring to a specific date shall be true, accurate and complete in all material respects as of such date, and no
Event of Default shall have occurred and be continuing or result from the Credit Extension. Each Credit Extension is Borrower’s representation and warranty on that date that the representations and warranties in this Agreement remain true,
accurate, and complete in all material respects; provided, however, that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof; and
provided, further that those representations and warranties expressly referring to a specific date shall be true, accurate and complete in all material respects as of such date; and 

(c) Bank determines to its satisfaction that there has not been a Material Adverse Change. 

3.3 Post-Closing Conditions. 

(a) As soon as possible but no later than ninety (90) days after the Effective Date, Borrower shall deliver to Bank, a landlord’s
consent in favor of Bank for 202 Cousteau Place, Suites 105 and 200, Davis, CA 95618, in form and substance satisfactory to Bank, signed by the landlord thereof, together with the duly executed original signatures thereto. 

3.4 Covenant to Deliver. Borrower agrees to deliver to Bank each item required to be delivered to Bank under this Agreement as a
condition precedent to any Credit Extension. Borrower expressly agrees that a Credit Extension made prior to the receipt by Bank of any such item shall not constitute a waiver by Bank of Borrower’s obligation to deliver such item, and the
making of any Credit Extension in the absence of a required item shall be in Bank’s sole discretion. 
  

	 	4	CREATION OF SECURITY INTEREST 

 4.1 Grant of Security Interest. Borrower
hereby grants Bank, to secure the payment and performance in full of all of the Obligations, a continuing security interest in, and pledges to Bank, the Collateral, wherever located, whether now owned or hereafter acquired or arising, and all
proceeds and products thereof. 
 Borrower acknowledges that it previously has entered, and/or may in the future enter, into Bank Services
Agreements with Bank. Regardless of the terms of any Bank Services Agreement, Borrower agrees that any amounts Borrower owes Bank thereunder shall be deemed to be Obligations hereunder and that it is the intent of Borrower and Bank to have all such
Obligations secured by the first priority perfected security interest in the Collateral granted herein (subject only to Permitted Liens and statutory liens that are permitted pursuant to the terms of this Agreement to have superior priority to
Bank’s Lien in this Agreement). 
 If this Agreement is terminated, Bank’s Lien in the Collateral shall continue until the
Obligations (other than cash secured Bank Services and inchoate indemnity obligations) are repaid in full in cash. Upon payment in full in cash of the Obligations (other than cash secured Bank Services and inchoate indemnity obligations) and at such
time as Bank’s obligation to make Credit Extensions has terminated, Bank shall, at the sole cost and expense of Borrower, release its Liens in the Collateral and all rights therein shall revert to Borrower. In the event (x) all Obligations
(other than inchoate indemnity obligations), except for Bank Services, are satisfied in full, and (y) this Agreement is terminated, Bank shall terminate the security interest granted herein upon Borrower providing cash collateral acceptable to
Bank in its good faith business judgment for Bank Services, if any. In the event such Bank Services consist of outstanding Letters of Credit, Borrower shall provide to Bank cash collateral in an amount equal to (x) if such Letters of Credit are
denominated in Dollars, then at least one hundred five percent (105.0%); and (y) if such Letters of Credit are denominated in a Foreign Currency, then at least one hundred ten percent (110.0%), of the Dollar Equivalent of the face amount of all
such Letters of Credit plus all interest, fees, and costs due or to become due in connection therewith (as estimated by Bank in its business judgment), to secure all of the Obligations relating to such Letters of Credit. 

  
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 4.2 Priority of Security Interest. Borrower represents, warrants, and covenants that the
security interest granted herein is and shall at all times continue to be a first priority perfected security interest in the Collateral (subject only to Permitted Liens that are permitted pursuant to the terms of this Agreement to have superior
priority to Bank’s Lien under this Agreement). Bank agrees that statutory liens which as a matter of law are superior to Bank’s Lien are permitted to be superior to Bank’s Lien under this Agreement. If Borrower shall acquire a
commercial tort claim in an amount greater than Fifty Thousand Dollars ($50,000), Borrower shall promptly notify Bank in a writing signed by Borrower of the general details thereof and grant to Bank in such writing a security interest therein and in
the proceeds thereof, all upon the terms of this Agreement, with such writing to be in form and substance reasonably satisfactory to Bank. 

4.3 Authorization to File Financing Statements. Borrower hereby authorizes Bank to file financing statements, without notice to
Borrower, with all appropriate jurisdictions to perfect or protect Bank’s interest or rights hereunder, including a notice that any disposition of the Collateral, by either Borrower or any other Person, shall be deemed to violate the rights of
Bank under the Code. 
 4.4 Pledge of Accounts. Borrower hereby assigns, pledges, delivers, and transfers to Bank, and hereby grants
to Bank, a continuing first priority security interest in and against all right, title and interest of the following, whether now or hereafter existing or acquired by Borrower: 

(a) the Pledged Account and general intangibles arising therefrom or relating thereto; and all documents, instruments and agreements
evidencing the same; and all extensions, renewals, modifications and replacements of the foregoing; and any interest or other amounts payable in connection therewith; 

(b) all proceeds of the foregoing (including whatever is receivable or received when the Pledged Account or proceeds is invested, sold,
collected, exchanged, returned, substituted or otherwise disposed of, whether such disposition is voluntary or involuntary, including rights to payment and return premiums and insurance proceeds under insurance with respect to the Pledged Account,
and all rights to payment with respect to any cause of action affecting or relating to the Pledged Account); and 
 (c) all renewals,
replacements and substitutions of items of the Pledged Accounts. 
 If, at any time, Borrower’s Liquidity Ratio is greater than or
equal to 1.40 to 1.00, and so long as no Default or Event of Default has occurred and is continuing, Bank shall, at the written request of Borrower and subject to the requirements of Section 6.6, transfer any available funds in the Pledged
Account to another Collateral Account. In addition, if, at any time, Borrower’s Liquidity Ratio is less than 1.40 to 1.00 but the amount of available funds in the Pledged Account exceeds the Minimum Collateral Value, and so long as no Default
or Event of Default has occurred and is continuing, Bank shall, at the written request of Borrower and subject to the requirements of Section 6.6, transfer any such excess, within five (5) Business Days of such request, to another
Collateral Account identified by Borrower in such written request. The parties to this Agreement do not intend that Borrower’s delivery of the Pledged Account to Bank as herein provided will constitute an advance payment of any Obligations or
liquidated damages, nor do the parties intend that the Pledged Account increase the dollar amount of the Obligations. Bank shall have sole control over the Pledged Account. 
  

	 	5	REPRESENTATIONS AND WARRANTIES 

 Borrower represents and warrants as follows: 

5.1 Due Organization, Authorization; Power and Authority. Borrower is duly existing and in good standing as a Registered Organization
in its jurisdiction of formation and is qualified and licensed to do business and is in good standing in any jurisdiction in which the conduct of its business or its ownership of property requires that it be qualified except where the failure to do
so could not reasonably be expected to have a material adverse effect on Borrower’s business. In connection with this Agreement, Borrower has delivered to Bank a completed certificate signed by Borrower, entitled “Perfection
Certificate”. Borrower represents and warrants to Bank that (a) Borrower’s exact legal name is that indicated on the Perfection Certificate and on the signature page hereof; (b) Borrower is an organization of the type and is
organized in the jurisdiction set forth in the Perfection 

  
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Certificate; (c) the Perfection Certificate accurately sets forth Borrower’s organizational identification number or accurately states that Borrower has none; (d) the Perfection
Certificate accurately sets forth Borrower’s place of business, or, if more than one, its chief executive office as well as Borrower’s mailing address (if different than its chief executive office); (e) Borrower (and each of its
predecessors) has not, in the past five (5) years, changed its jurisdiction of formation, organizational structure or type, or any organizational number assigned by its jurisdiction; and (f) all other information set forth on the
Perfection Certificate pertaining to Borrower and each of its Subsidiaries is accurate and complete (it being understood and agreed that Borrower may from time to time update certain information in the Perfection Certificate after the Effective Date
to the extent permitted by one or more specific provisions in this Agreement). If Borrower is not now a Registered Organization but later becomes one, Borrower shall promptly notify Bank of such occurrence and provide Bank with Borrower’s
organizational identification number. 
 The execution, delivery and performance by Borrower of the Loan Documents to which it is a party
have been duly authorized, and do not (i) conflict with any of Borrower’s Operating Documents, (ii) contravene, conflict with, constitute a default under or violate any material Requirement of Law, (iii) contravene, conflict or
violate any applicable order, writ, judgment, injunction, decree, determination or award of any Governmental Authority by which Borrower or any of its Subsidiaries or any of their property or assets may be bound or affected, (iv) require any
action by, filing, registration, or qualification with, or Governmental Approval from, any Governmental Authority (except such Governmental Approvals which have already been obtained and are in full force and effect or (v) conflict with,
contravene, constitute a default or breach under, or result in or permit the termination or acceleration of, any material agreement by which Borrower is bound. Borrower is not in default under any agreement to which it is a party or by which it is
bound in which the default could reasonably be expected to have a material adverse effect on Borrower’s business. 
 5.2 Collateral;
Intellectual Property. (a) Borrower has good title to, rights in, and the power to transfer each item of the Collateral upon which it purports to grant a Lien hereunder, free and clear of any and all Liens except Permitted Liens. Borrower
has no Collateral Accounts at or with any bank or financial institution other than Bank or Bank’s Affiliates except for (i) the Collateral Accounts described in the Perfection Certificate delivered to Bank in connection herewith and
(ii) other Collateral Accounts for which Borrower is in compliance with Section 6.6. 
 (b) No Collateral with a value in excess
of Five Hundred Thousand Dollars ($500,000) is in the possession of any third party bailee (such as a warehouse) except as otherwise provided in the Perfection Certificate or as disclosed in writing to Bank pursuant to Section 7.2. 

(c) Borrower is the sole owner of the Intellectual Property which it owns or purports to own that is material to its business except for
(i) Intellectual Property subject to Permitted Licenses, (ii) over-the-counter software and other non-customized mass-market licenses that are commercially available to the public, and (iii) Intellectual Property licensed to Borrower
or its Subsidiaries and noted on the Perfection Certificate or as otherwise disclosed to Bank in writing pursuant to Section 6.8. Except as noted on the Perfection Certificate, to the best of Borrower’s knowledge, each Patent which it owns
or purports to own and which is material to Borrower’s business is valid and enforceable, and no part of the Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s business has been judged invalid
or unenforceable, in whole or in part. To the best of Borrower’s knowledge, no claim has been made that any part of the Intellectual Property violates the rights of any third party except to the extent such claim would not reasonably be
expected to have a material adverse effect on Borrower’s business. 
 5.3 Intentionally Omitted. 

5.4 Litigation. There are no actions or proceedings pending or, to the knowledge of any Responsible Officer, threatened in writing by
or against Borrower or any of its Subsidiaries that could reasonably be expected to result in Borrower or any of its Subsidiaries being liable for damages that, individually or in the aggregate exceed, Two Hundred Fifty Thousand Dollars ($250,000).

 5.5 Financial Statements; Financial Condition. All consolidated financial statements for Borrower and any of its Subsidiaries
delivered to Bank fairly present in all material respects Borrower’s consolidated financial 

  
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condition as of the date of such financial statements and Borrower’s consolidated results of operations for the periods covered by such financial statements (other than, in the case of
unaudited financial statements, the absence of footnotes and normal year-end adjustments). There has not been any material deterioration in Borrower’s consolidated financial condition since the date of the most recent financial statements
submitted to Bank. 
 5.6 Solvency. The fair salable value of Borrower’s consolidated assets (including goodwill minus
disposition costs) exceeds the fair value of Borrower’s liabilities; Borrower is not left with unreasonably small capital after the transactions in this Agreement; and Borrower is able to pay its debts (including trade debts) as they mature.

 5.7 Regulatory Compliance. Borrower is not an “investment company” or a company “controlled” by an
“investment company” under the Investment Company Act of 1940, as amended. Borrower is not engaged as one of its important activities in extending credit for margin stock (under Regulations X, T and U of the Federal Reserve Board of
Governors). Borrower has not violated any Requirements of Law the violation of which could reasonably be expected to have a material adverse effect on its business. None of Borrower’s or any of its Subsidiaries’ properties or assets has
been used by Borrower or any Subsidiary or, to the best of Borrower’s knowledge, by previous Persons, in disposing, producing, storing, treating, or transporting any hazardous substance other than in material compliance with Requirements of
Law. Borrower and each of its Subsidiaries have obtained all consents, approvals and authorizations of, made all declarations or filings with, and given all notices to, all Government Authorities that are necessary to continue their respective
businesses as currently conducted. 
 5.8 Subsidiaries; Investments. Borrower does not own any stock, partnership, or other ownership
interest or other equity securities except for Permitted Investments. 
 5.9 Tax Returns and Payments; Pension Contributions.
Borrower has timely filed all required tax returns and reports, and Borrower has timely paid all foreign, federal, state and local taxes, assessments, deposits and contributions owed by Borrower except (a) to the extent such taxes are being
contested in good faith by appropriate proceedings promptly instituted and diligently conducted, so long as such reserve or other appropriate provision, if any, as shall be required in conformity with GAAP shall have been made therefor, or
(b) if such taxes, assessments, deposits and contributions do not, individually or in the aggregate, exceed Twenty Five Thousand Dollars ($25,000). 

To the extent Borrower defers payment of any contested taxes, that, individually or in the aggregate, exceed Twenty Five Thousand Dollars
($25,000) Borrower shall (i) notify Bank in writing of the commencement of, and any material development in, the proceedings, and (ii) post bonds or take any other steps required to prevent the governmental authority levying such contested
taxes from obtaining a Lien upon any of the Collateral that is other than a “Permitted Lien.” Borrower is unaware of any claims or adjustments proposed for any of Borrower’s prior tax years which could result in additional taxes
becoming due and payable by Borrower in excess of Twenty Five Thousand Dollars ($25,000). Borrower has paid all amounts necessary to fund all present pension, profit sharing and deferred compensation plans in accordance with their terms, and
Borrower has not withdrawn from participation in, and has not permitted partial or complete termination of, or permitted the occurrence of any other event with respect to, any such plan which could reasonably be expected to result in any liability
of Borrower, including any liability to the Pension Benefit Guaranty Corporation or its successors or any other governmental agency. 

5.10 Use of Proceeds. Borrower shall use the proceeds of the Credit Extensions solely to refinance existing Indebtedness, as working
capital and to fund its general business requirements and not for personal, family, household or agricultural purposes. 
 5.11 Full
Disclosure. No written representation, warranty or other statement of Borrower in any certificate or written statement given to Bank, as of the date such representation, warranty, or other statement was made, taken together with all such written
certificates and written statements given to Bank, contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements contained in the certificates or statements not materially misleading (it being
recognized by Bank that the projections and forecasts provided by Borrower in good faith and based upon reasonable assumptions are not viewed as facts and that actual results during the period or periods covered by such projections and forecasts may
differ from the projected or forecasted results). 

  
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 5.12 Anawah. The fair market value of Anawah’s assets is less than Fifty Thousand
Dollars ($50,000) and Anawah does not engage in any business activities. 
 5.13 Definition of “Knowledge.” For purposes of
the Loan Documents, whenever a representation or warranty is made to Borrower’s knowledge or awareness, to the “best of” Borrower’s knowledge, or with a similar qualification, knowledge or awareness means the actual knowledge,
after reasonable investigation, of any Responsible Officer. 
  

	 	6	AFFIRMATIVE COVENANTS 

 Borrower shall do all of the following: 

6.1 Government Compliance. 

(a) Maintain its and, except for mergers and consolidations of Subsidiaries permitted by Section 7.3 and dissolutions of Subsidiaries
whose assets are Transferred in accordance with Section 7.1, all its Subsidiaries’ legal existence and good standing in their respective jurisdictions of formation and maintain qualification in each jurisdiction in which the failure to so
qualify could reasonably be expected to have a material adverse effect on Borrower’s business or operations. Borrower shall comply, and have each Subsidiary comply with all laws, ordinances and regulations to which it is subject, the
non-compliance with which could reasonably be expected to have a material adverse effect on Borrower’s or such Subsidiary’s business or operations. 

(b) Obtain all of the Governmental Approvals necessary for the performance by Borrower of its obligations under the Loan Documents to which it
is a party and the grant of a security interest to Bank in all of its property. Borrower shall promptly provide copies of any such obtained Governmental Approvals to Bank. 

6.2 Financial Statements, Reports, Certificates. Provide Bank with the following: 

(a) Monthly Financial Statements. As soon as available, but no later than thirty (30) days after the last day of each month, a
company prepared consolidated and consolidating balance sheet and income statement covering Borrower’s and each of its Subsidiary’s operations for such month certified by a Responsible Officer and in a form acceptable to Bank (the
“Monthly Financial Statements”); 
 (b) Monthly Compliance Certificate. Within thirty (30) days after the last
day of each month and together with the Monthly Financial Statements, a duly completed Compliance Certificate signed by a Responsible Officer, certifying that, except as otherwise set forth therein, as of the end of such month, Borrower was in full
compliance with all of the terms and conditions of this Agreement, and setting forth calculations showing compliance with the financial covenants set forth in this Agreement and such other information as Bank may reasonably request; 

(c) Annual Operating Budget and Financial Projections. Within thirty (30) days after the end of each fiscal year of Borrower and
within five (5) Business Days of any updates thereto, annual operating budgets for the upcoming fiscal year approved by Borrower’s board of directors and projected income statements and cash flow statements for each month in such fiscal
year; 
 (d) Annual Audited Financial Statements. As soon as available, but no later than one hundred eighty days (180) after
the last day of Borrower’s fiscal year, audited consolidated financial statements prepared under GAAP, consistently applied, together with an unqualified opinion on the financial statements from an independent certified public accounting firm
reasonably acceptable to Bank; 
 (e) Other Statements. Within five (5) days of delivery, copies of all statements, reports and
notices generally made available to Borrower’s security holders or to any holders of Subordinated Debt; 
 (f) SEC Filings.
Within five (5) days of filing, copies of all periodic and other reports, proxy statements and other materials filed by Borrower with the SEC, any Governmental Authority succeeding to any or 

  
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all of the functions of the SEC or with any national securities exchange, or generally distributed to its shareholders, as the case may be. Documents required to be delivered pursuant to the
terms hereof (to the extent any such documents are included in materials otherwise filed with the SEC) may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date on which Borrower posts such documents, or
provides a link thereto, on Borrower’s website on the Internet at Borrower’s website address; 
 (g) Legal Action Notice. A
prompt report of any legal actions pending or threatened in writing against Borrower or any of its Subsidiaries that could reasonably be expected to result in damages or costs to Borrower or any of its Subsidiaries of, individually or in the
aggregate, Two Hundred Fifty Thousand Dollars ($250,000) or more; and 
 (h) Other Financial Information. Other financial information
reasonably requested by Bank. 
 In no event shall the requirements set forth in this Section 6.2 require Borrower or any of its
Subsidiaries to provide any such information which (i) constitutes non-financial trade secrets or non-financial proprietary information, (ii) in respect of which disclosure Bank (or its representatives or contractors) is prohibited by
applicable Requirements of Law or (iii) is subject to attorney-client or constitutes attorney work-product. 
 6.3 Returns.
Returns and allowances between Borrower and its Account Debtors shall follow Borrower’s customary practices as they exist at the Effective Date. Borrower must promptly notify Bank of all returns, recoveries, disputes and claims that involve
more than Two Hundred Fifty Thousand Dollars ($250,000). 
 6.4 Taxes; Pensions. Timely file, and require each of its Subsidiaries to
timely file, all required tax returns and reports and timely pay, and require each of its Subsidiaries to timely pay, all foreign, federal, state and local taxes, assessments, deposits and contributions owed by Borrower and each of its Subsidiaries,
except for (x) deferred payment of any taxes contested pursuant to the terms of Section 5.9 hereof and (y) taxes that do not, individually or in the aggregate, exceed Twenty-Five Thousand Dollars ($25,000), and shall deliver to Bank,
on demand, appropriate certificates attesting to such payments, and pay all amounts necessary to fund all present pension, profit sharing and deferred compensation plans in accordance with their terms. 

6.5 Insurance. 
 (a) Keep
its business and the Collateral insured for risks and in amounts standard for companies in Borrower’s industry and location and as Bank may reasonably request. Insurance policies shall be in a form, with financially sound and reputable
insurance companies that are not Affiliates of Borrower, and in amounts that are satisfactory to Bank. All property policies shall have a lender’s loss payable endorsement showing Bank as lender loss payee. All liability policies shall show, or
have endorsements showing, Bank as an additional insured. Bank shall be named as lender loss payee and/or additional insured with respect to any such insurance providing coverage in respect of any Collateral. 

(b) Ensure that, proceeds payable under any property policy are payable jointly to Borrower and Bank on account of the Obligations.
Notwithstanding the foregoing, (a) so long as no Event of Default has occurred and is continuing, Borrower shall have the option of applying the proceeds of any casualty policy up to Five Hundred Thousand Dollars ($500,000) in the aggregate for
all losses under all casualty policies in any one year, toward the replacement or repair of destroyed or damaged property; provided that any such replaced or repaired property (i) shall be of equal or like value as the replaced or repaired
Collateral and (ii) shall be deemed Collateral in which Bank has been granted a first priority security interest, and (b) after the occurrence and during the continuance of an Event of Default, all proceeds payable under such casualty
policy shall, at the option of Bank, be payable to Bank on account of the Obligations. 
 (c) At Bank’s request, Borrower shall deliver
certified copies of insurance policies and evidence of all premium payments. Each provider of any such insurance required under this Section 6.5 shall agree, by endorsement upon the policy or policies issued by it or by independent instruments
furnished to Bank, that it will give Bank thirty (30) days prior written notice before any such policy or policies shall be canceled. If Borrower fails to obtain insurance as required under this Section 6.5 or to pay any amount or furnish
any required proof of payment to third persons and Bank, Bank may make all or part of such payment or obtain such insurance policies required in this Section 6.5, and take any action under the policies Bank deems prudent. 

  
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 6.6 Operating Accounts. 

(a) Within forty-five (45) days of the Effective Date and at all times thereafter, Borrower shall maintain its primary and its
Subsidiaries’ primary operating and other deposit accounts and securities accounts with Bank and Bank’s Affiliates, which accounts shall represent at least eighty-five percent (85%) of the dollar value of Borrower’s and such
Subsidiaries accounts at all financial institutions; provided that (i) prior to the Effective Date Borrower shall initiate the transfer of its accounts to Bank and (ii) Borrower shall maintain cash and Cash Equivalents at Bank or at
Bank’s Affiliates subject to a Control Agreement from the date that is two (2) days after the Effective Date through the date that is forty-five (45) days after the Effective Date, in an amount not less than Fifteen Million Dollars
($15,000,000). In addition, Borrower shall, subject to reasonable fee arrangements, use Bank for its letters of credit and foreign exchange needs. 

(b) Provide Bank five (5) days prior written notice before establishing any Collateral Account (other than Collateral Accounts described
in clause (i) or (ii) below) at or with any bank or financial institution other than Bank or Bank’s Affiliates. For each Collateral Account that Borrower at any time maintains, Borrower shall cause the applicable bank or financial
institution (other than Bank) at or with which any Collateral Account is maintained to execute and deliver a Control Agreement or other appropriate instrument with respect to such Collateral Account to perfect Bank’s Lien in such Collateral
Account in accordance with the terms hereunder which Control Agreement may not be terminated without the prior written consent of Bank. The provisions of the previous sentence shall not apply to (i) Collateral Accounts maintained outside of
Bank and Bank’s Affiliates containing cash and Cash Equivalents in an aggregate amount not to exceed Five Hundred Thousand Dollars ($500,000) at any time or (ii) deposit accounts exclusively used for payroll, payroll taxes and other
employee wage and benefit payments to or for the benefit of Borrower’s employees and identified to Bank by Borrower as such. 
 6.7
Financial Covenants. Borrower shall maintain at all times, subject to periodic reporting as of the last day of each month, either (a) a Liquidity Ratio of at least 1.40 to 1.00 or (b) a minimum aggregate balance in the Pledged Account
equal to or greater than the applicable Minimum Collateral Value. 
 6.8 Protection of Intellectual Property Rights; Notice of Changes to
Intellectual Property. 
 (a) (i) Protect, defend and maintain the validity and enforceability of its Intellectual Property that is
material to Borrower’s business; (ii) promptly advise Bank in writing of Borrower becoming aware of material infringements of Borrower’s Intellectual Property that is material to Borrower’s business or any other event that could
reasonably be expected to materially and adversely affect the value of such Intellectual Property; and (iii) not allow any Intellectual Property material to Borrower’s business to be abandoned, forfeited or dedicated to the public without
Bank’s written consent. 
 (b) Provide written notice to Bank within thirty (30) days of the last day of each calendar quarter if
Borrower entered into or became bound by any Restricted License (other than over-the-counter software that is commercially available to the public) during such quarter. 

6.9 Litigation Cooperation. From the date hereof and continuing through the termination of this Agreement, make available to Bank,
without expense to Bank, Borrower and its officers, employees and agents and Borrower’s books and records, to the extent that Bank may deem them reasonably necessary to prosecute or defend any third-party suit or proceeding instituted by or
against Bank with respect to any Collateral or relating to Borrower. 
 6.10 Access to Collateral; Books and Records. Allow Bank or
its agents to inspect the Collateral and audit and copy Borrower’s Books. Such inspections or audits shall be conducted no more often than once every twelve (12) months unless an Event of Default has occurred and is continuing in which
case such inspections and audits shall occur as often as Bank shall determine is necessary. The foregoing inspections and audits shall be at Borrower’s expense, and the charge therefor shall be Eight Hundred Fifty Dollars ($850) per person per
day (or such 

  
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higher amount as shall represent Bank’s then-current standard charge for the same), plus reasonable out-of-pocket expenses. In the event Borrower and Bank schedule an audit more than ten
(10) days in advance, and Borrower cancels or seeks to reschedule the audit with less than ten (10) days written notice to Bank, then (without limiting any of Bank’s rights or remedies), Borrower shall pay Bank a fee of One Thousand
Dollars ($1,000) plus any out-of-pocket expenses incurred by Bank to compensate Bank for the anticipated costs and expenses of the cancellation or rescheduling. 

6.11 Formation or Acquisition of Subsidiaries. Notwithstanding and without limiting the negative covenants contained in Sections 7.3
and 7.7 hereof, at the time that Borrower or any Guarantor forms any direct or indirect Wholly-Owned Domestic Subsidiary or acquires any direct or indirect Wholly-Owned Domestic Subsidiary after the Effective Date, Borrower and such Guarantor shall
(a) cause such new Wholly-Owned Domestic Subsidiary to provide to Bank a joinder to the Loan Agreement to cause such Wholly-Owned Domestic Subsidiary to become a co-borrower or Guarantor hereunder, together with such appropriate financing
statements and/or Control Agreements, all in form and substance satisfactory to Bank (including being sufficient to grant Bank a first priority Lien (subject to Permitted Liens) in and to the assets of such newly formed or acquired Wholly-Owned
Domestic Subsidiary), (b) provide to Bank appropriate certificates and powers and financing statements, pledging all of the direct or beneficial ownership interest in such new Wholly-Owned Domestic Subsidiary, in form and substance satisfactory
to Bank, and (c) provide to Bank all other documentation in form and substance satisfactory to Bank, including one or more opinions of counsel satisfactory to Bank, which in its opinion is appropriate with respect to the execution and delivery
of the applicable documentation referred to above. Any document, agreement, or instrument executed or issued pursuant to this Section 6.11 shall be a Loan Document. 

6.12 Further Assurances. Execute any further instruments and take further action as Bank reasonably requests to perfect or continue
Bank’s Lien in the Collateral or to effect the purposes of this Agreement. 
  

	 	7	NEGATIVE COVENANTS 

 Borrower shall not do any of the following without
Bank’s prior written consent: 
 7.1 Dispositions. Convey, sell, lease, transfer, assign, or otherwise dispose of (collectively,
“Transfer”), or permit any of its Subsidiaries to Transfer, all or any part of its business or property, except for Transfers (a) of Inventory in the ordinary course of business; (b) of
worn-out, surplus or obsolete Equipment that is, in the reasonable judgment of Borrower, no longer economically practicable to maintain or useful in the ordinary course of business of Borrower;
(c) consisting of Permitted Liens, Permitted Investments and dividends, distributions and payments in respect of, and redemptions or repurchases of, capital stock permitted under Section 7.7; (d) consisting of Borrower’s use or
transfer of money or Cash Equivalents in a manner that is not prohibited by the terms of this Agreement or the other Loan Documents; (e) of Permitted Licenses; (f) of property to the extent that (i) such property is exchanged for
credit against the purchase price of similar replacement property or (ii) the proceeds of such disposition are promptly applied to the purchase price of such replacement property; (g) consisting of the lapse or abandonment in the ordinary
course of business of any registrations or applications for registration of any immaterial Intellectual Property; (h) by Subsidiaries to Borrower or to Subsidiaries (if any) that have become co-borrowers or Guarantors in accordance with the
terms of Section 6.11 hereof, (i) among Borrower and Subsidiaries (if any) that have become co-borrowers or Guarantors in accordance with the terms of Section 6.11 hereof; and (j) of other property in an aggregate amount not to
exceed One Hundred Fifty Thousand Dollars ($150,000) in any fiscal year of Borrower. 
 7.2 Changes in Business, Management, Control, or
Business Locations. (a) Engage in or permit any of its Subsidiaries to engage in any business other than the businesses currently engaged in by Borrower and such Subsidiary, as applicable, or reasonably related thereto; (b) liquidate
or dissolve; (c) fail to provide notice to Bank of any Key Person departing from or ceasing to be employed by Borrower within five (5) days after his or her departure from Borrower; or (d) permit or suffer any Change in Control. 

Borrower shall not, without at least ten (10) Business Days prior written notice to Bank: (1) change its jurisdiction of
organization, (2) change its organizational structure or type, (3) change its legal name, (4) change any organizational number (if any) assigned by its jurisdiction of organization or (5) add any new offices or business
locations, including warehouses (other than any new office or business location that contains less than Five Hundred 

  
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Thousand Dollars ($500,000) in Borrower’s assets or property) or deliver any portion of the Collateral valued in excess of Five Hundred Thousand Dollars ($500,000) to a bailee at a location
other than to locations already disclosed on the Perfection Certificate. 
 7.3 Mergers or Acquisitions. Merge or consolidate, or
permit any of its Subsidiaries to merge or consolidate, with any other Person, or acquire, or permit any of its Subsidiaries to acquire, all or substantially all of the capital stock or property of another Person (including, without limitation, by
the formation of any Subsidiary), other than Permitted Investments. A Subsidiary may merge or consolidate into another Subsidiary or into Borrower. 

7.4 Indebtedness. Create, incur, assume, or be liable for any Indebtedness, or permit any Subsidiary to do so, other than Permitted
Indebtedness. 
 7.5 Encumbrance. (a) Create, incur, allow, or suffer any Lien on any of its property, or assign or convey any
right to receive income, including the sale of any Accounts, or permit any of its Subsidiaries to do so, except for Permitted Liens (subject to Permitted Liens that are permitted by this Agreement to be superior to the security interest in favor of
Bank on such Collateral), (b) permit any Collateral not to be subject to the first priority security interest granted herein, or enter into any agreement, document, instrument or other arrangement (except with or in favor of Bank) with any
Person which directly or indirectly prohibits or has the effect of prohibiting Borrower or any Subsidiary from assigning, mortgaging, pledging, granting a security interest in or upon, or encumbering any of Borrower’s or any Subsidiary’s
Intellectual Property, except as is otherwise permitted in Section 7.1 hereof and the definition of “Permitted Liens” herein. 

7.6 Maintenance of Collateral Accounts. Maintain any Collateral Account except pursuant to the terms of Section 6.6 hereof. 

7.7 Distributions; Investments. (a) Pay any dividends or make any distribution or payment on or in respect of, or redeem, retire
or repurchase any shares of, Borrower’s capital stock, provided that (i) Borrower may convert any of its convertible securities into other securities pursuant to the terms of such convertible securities or otherwise in exchange thereof and
may pay cash in lieu of issuing fractional shares in connection with such conversion, (ii) Borrower may pay dividends solely in common stock; (iii) Borrower may issue shares of its capital stock to option holders and warrant holders in
connection with the exercise of options warrants pursuant to the terms thereof and may pay cash in lieu of issuing fractional shares in connection with such exercise, and (iv) Borrower may repurchase the stock of former employees, directors or
consultants pursuant to stock repurchase agreements so long as an Event of Default does not exist at the time of such repurchase and would not exist after giving effect to such repurchase, provided that the aggregate amount of all such repurchases
does not exceed Two Hundred Fifty Thousand Dollars ($250,000) per fiscal year; or (b) directly or indirectly make any Investment (including, without limitation, by the formation of any Subsidiary) other than Permitted Investments, or permit any
of its Subsidiaries to do so. Notwithstanding the foregoing, Borrower shall not allow Anawah to own assets with a fair market value in excess of Fifty Thousand Dollars ($50,000) or conduct any business activities unless and until Anawah becomes a
Guarantor. 
 7.8 Transactions with Affiliates. Directly or indirectly enter into or permit to exist any material transaction with
any Affiliate of Borrower, except for (a) transactions that are in the ordinary course of Borrower’s business, upon fair and reasonable terms that are no less favorable to Borrower than would be obtained in an arm’s length transaction
with a non-affiliated Person, (b) transactions permitted pursuant to the terms of Section 7.3 hereof, (c) transactions among Borrower and any Subsidiary of Borrower that is or becomes a Guarantor or co-borrower hereunder in accordance
with Section 6.11 hereof, (d) transactions with Verdeca LLC pursuant to which Borrower will enter into certain Investments with Verdeca LLC as disclosed to Bank prior to the Effective Date, and (e) other individual transactions that
do not involve amounts in excess of Two Hundred Fifty Thousand Dollars ($250,000) per transaction or series of related transactions; provided that the aggregate amount of all such transactions permitted in accordance with this clause (e) shall
not exceed Five Hundred Thousand Dollars ($500,000) in any fiscal year. 
 7.9 Subordinated Debt. (a) Make or permit any payment
on any Subordinated Debt, except under the terms of the subordination, intercreditor, or other similar agreement to which such Subordinated Debt is subject, or (b) amend any provision in any document relating to the Subordinated Debt which
would increase the amount thereof, provide for earlier or greater principal, interest, or other payments thereon, or adversely affect the subordination thereof to Obligations owed to Bank. 

  
 -13- 

 7.10 Compliance. Become an “investment company” or a company controlled by an
“investment company”, under the Investment Company Act of 1940, as amended, or undertake as one of its important activities extending credit to purchase or carry margin stock (as defined in Regulation U of the Board of Governors of the
Federal Reserve System), or use the proceeds of any Credit Extension for that purpose; fail to (a) meet the minimum funding requirements of ERISA, (b) prevent a Reportable Event or Prohibited Transaction as defined in ERISA, or
(c) comply with the Federal Labor Standards Act, the failure of any of the conditions in clauses (a) through (c) which could reasonably be expected to have a material adverse effect on Borrower’s business, or violate any other
law or regulation, if the violation could reasonably be expected to have a materials adverse effect on Borrower’s business or permit any Subsidiaries to do so; withdraw or permit any Subsidiary to withdraw from participation in, permit partial
or complete termination of, or permit the occurrence of any other event with respect to, any present pension, profit sharing and deferred compensation plan which could reasonably be expected to result in any liability of Borrower, including any
liability to the Pension Benefit Guaranty Corporation or its successors or any other governmental agency. 
  

	 	8	EVENTS OF DEFAULT 

 Any one of the following shall constitute an event of default
(an “Event of Default”) under this Agreement: 
 8.1 Payment Default. Borrower fails to (a) make any payment of
principal or interest on any Credit Extension when due, or (b) pay any other Obligations within three (3) Business Days after such Obligations are due and payable (which three (3) Business Day cure period shall not apply to payments
due on the Term Loan Maturity Date). During the cure period, the failure to make or pay any payment specified under clause (b) hereunder is not an Event of Default (but no Credit Extension will be made during the cure period); 

8.2 Covenant Default. 

(a) Borrower fails or neglects to perform any obligation in Sections 6.2, 6.4, 6.5, 6.6, 6.7, or 6.10 or violates any covenant in
Section 7; or 
 (b) Borrower fails or neglects to perform, keep, or observe any other term, provision, condition, covenant or
agreement contained in this Agreement or any Loan Documents, and as to any default (other than those specified in this Section 8) under such other term, provision, condition, covenant or agreement that can be cured, has failed to cure the
default within ten (10) days after the occurrence thereof; provided, however, that if the default cannot by its nature be cured within the ten (10) day period or cannot after diligent attempts by Borrower be cured within such ten
(10) day period, and such default is likely to be cured within a reasonable time, then Borrower shall have an additional period (which shall not in any case exceed thirty (30) days) to attempt to cure such default, and within such
reasonable time period the failure to cure the default shall not be deemed an Event of Default (but no Credit Extensions shall be made during such cure period). Cure periods provided under this section shall not apply, among other things, to
financial covenants or any other covenants set forth in clause (a) above; 
 8.3 Material Adverse Change. A Material Adverse
Change occurs; 
 8.4 Attachment; Levy; Restraint on Business. 

(a) (i) The service of process seeking to attach, by trustee or similar process, any material funds of Borrower or of any entity under the
control of Borrower (including a Subsidiary), or (ii) a notice of lien or levy is filed against any material portion of Borrower’s assets by any Governmental Authority, and the same under subclauses (i) and (ii) hereof are not,
within ten (10) days after the occurrence thereof, discharged or stayed (whether through the posting of a bond or otherwise); provided, however, no Credit Extensions shall be made during any ten (10) day cure period; or 

(b) (i) any material portion of Borrower’s assets is attached, seized, levied on, or comes into possession of a trustee or receiver, or
(ii) any court order enjoins, restrains, or prevents Borrower from conducting all or any material part of its business; 

  
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 8.5 Insolvency. (a) Borrower or any of its Subsidiaries is unable to pay its debts
(including trade debts) as they become due or otherwise becomes insolvent; (b) Borrower or any of its Subsidiaries begins an Insolvency Proceeding; or (c) an Insolvency Proceeding is begun against Borrower or any of its Subsidiaries and is
not dismissed or stayed within forty-five (45) days (but no Credit Extensions shall be made while any of the conditions described in clause (a) exist and/or until any Insolvency Proceeding is dismissed); 

8.6 Other Agreements. There is, under any agreement to which Borrower or any Guarantor is a party with a third party or parties,
(a) any default resulting in a right by such third party or parties, whether or not exercised, to accelerate the maturity of any Indebtedness in an amount individually or in the aggregate in excess of Five Hundred Thousand Dollars ($500,000);
or (b) any breach or default by Borrower or Guarantor, the result of which could have a material adverse effect on Borrower’s or any Guarantor’s business; 

8.7 Judgments; Penalties. One or more fines, penalties or final judgments, orders or decrees for the payment of money in an amount,
individually or in the aggregate, of more than One Million Dollars ($1,000,000) (not covered by independent third-party insurance as to which liability has not been disputed in writing by such insurance carrier) shall be rendered against Borrower by
any Governmental Authority, and the same are not, within fifteen (15) Business Days after the entry, assessment or issuance thereof, discharged, satisfied, or paid, or after execution thereof, stayed or bonded pending appeal, or such judgments
are not discharged prior to the expiration of any such stay (provided that no Credit Extensions will be made prior to the satisfaction, payment, discharge, stay, or bonding of such fine, penalty, judgment, order or decree); 

8.8 Misrepresentations. Borrower or any Person acting for Borrower makes any representation, warranty, or other statement now or later
in this Agreement, any Loan Document or in any writing delivered to Bank or to induce Bank to enter this Agreement or any Loan Document, and such representation, warranty, or other statement is incorrect in any material respect when made;

 8.9 Subordinated Debt. Any document, instrument, or agreement evidencing any Subordinated Debt shall for any reason be revoked
or invalidated or otherwise cease to be in full force and effect, any Person shall be in breach thereof or contest in any manner the validity or enforceability thereof or deny that it has any further liability or obligation thereunder, or the
Obligations shall for any reason be subordinated or shall not have the priority contemplated by this Agreement; 
 8.10
Guaranty. (a) Any guaranty of any Obligations terminates or ceases for any reason to be in full force and effect; (b) any Guarantor does not perform any obligation or covenant under any guaranty of the Obligations; (c) any
circumstance described in Sections 8.4, 8.5, 8.7, or 8.8 occurs with respect to any Guarantor, or (d) the death, liquidation, winding up, or termination of existence of any Guarantor (except for mergers and consolidations of Subsidiaries
permitted by Section 7.3 and dissolutions of Subsidiaries whose assets are Transferred in accordance with Section 7.1); or (e) a material impairment in the perfection or priority of Bank’s Lien in the collateral provided by
Guarantor or in the value of such collateral; or 
 8.11 Governmental Approvals. Any Governmental Approval shall have been
(a) revoked, rescinded, suspended, modified in an adverse manner or not renewed in the ordinary course for a full term or (b) subject to any decision by a Governmental Authority that designates a hearing with respect to any applications
for renewal of any of such Governmental Approval or that could result in the Governmental Authority taking any of the actions described in clause (a) above, and such decision or such revocation, rescission, suspension, modification or
non-renewal causes, or could reasonably be expected to cause, a Material Adverse Change. 
  

	 	9	BANK’S RIGHTS AND REMEDIES 

 9.1 Rights and Remedies. Upon the
occurrence and during the continuance of an Event of Default, Bank may, without notice or demand, do any or all of the following: 

(a) declare all Obligations immediately due and payable (but if an Event of Default described in Section 8.5 occurs all Obligations are
immediately due and payable without any action by Bank); 

  
 -15- 

 (b) stop advancing money or extending credit for Borrower’s benefit under this Agreement or
under any other agreement between Borrower and Bank; 
 (c) terminate any FX Contracts; 

(d) verify the amount of, demand payment of and performance under, and collect any Accounts and General Intangibles, settle or adjust disputes
and claims directly with Account Debtors for amounts on terms and in any order that Bank considers advisable, and notify any Person owing Borrower money of Bank’s security interest in such funds; 

(e) make any payments and do any acts it considers necessary or reasonable to protect the Collateral and/or its security interest in the
Collateral; 
 (f) apply to the Obligations any (i) balances and deposits of Borrower it holds, or (ii) any amount held by Bank
owing to or for the credit or the account of Borrower; 
 (g) ship, reclaim, recover, store, finish, maintain, repair, prepare for sale,
advertise for sale, and sell the Collateral. Bank is hereby granted a non-exclusive, royalty-free license or other right to use, without charge, Borrower’s labels, Patents, Copyrights, mask works, rights of use of any name, trade secrets, trade
names, Trademarks, and advertising matter, or any similar property as it pertains to the Collateral, in completing production of, advertising for sale, and selling any Collateral and, in connection with Bank’s exercise of its rights under this
Section, Borrower’s rights under all licenses and all franchise agreements inure to Bank’s benefit; 
 (h) place a
“hold” on any account maintained with Bank and/or deliver a notice of exclusive control, any entitlement order, or other directions or instructions pursuant to any Control Agreement or similar agreements providing control of any
Collateral; 
 (i) demand and receive possession of Borrower’s Books; and 

(j) exercise all rights and remedies available to Bank under the Loan Documents or at law or equity, including all remedies provided under the
Code (including disposal of the Collateral pursuant to the terms thereof). 
 9.2 Power of Attorney. Borrower hereby irrevocably
appoints Bank as its lawful attorney-in-fact, exercisable upon the occurrence and during the continuance of an Event of Default, to: (a) endorse Borrower’s name on any checks or other forms of payment or security; (b) sign
Borrower’s name on any invoice or bill of lading for any Account or drafts against Account Debtors; (c) settle and adjust disputes and claims about the Accounts directly with Account Debtors, for amounts and on terms Bank determines
reasonable; (d) make, settle, and adjust all claims under Borrower’s insurance policies; (e) pay, contest or settle any Lien, charge, encumbrance, security interest, and adverse claim in or to the Collateral, or any judgment based
thereon, or otherwise take any action to terminate or discharge the same; and (f) transfer the Collateral into the name of Bank or a third party as the Code permits. Borrower hereby appoints Bank as its lawful attorney-in-fact to sign
Borrower’s name on any documents necessary to perfect or continue the perfection of Bank’s security interest in the Collateral regardless of whether an Event of Default has occurred until all Obligations (other than inchoate indemnity
obligations) have been satisfied in full and Bank is under no further obligation to make Credit Extensions hereunder. Bank’s foregoing appointment as Borrower’s attorney in fact, and all of Bank’s rights and powers, coupled with an
interest, are irrevocable until all Obligations (other than inchoate indemnity obligations) have been fully repaid and performed and Bank’s obligation to provide Credit Extensions terminates. 

9.3 Protective Payments. If Borrower fails to obtain the insurance called for by Section 6.5 or fails to pay any premium thereon
or fails to pay any other amount which Borrower is obligated to pay under this Agreement or any other Loan Document or which may be required to preserve the Collateral, Bank may obtain such 

  
 -16- 

 
insurance or make such payment, and all amounts so paid by Bank are Bank Expenses and immediately due and payable, bearing interest at the then highest rate applicable to the Obligations, and
secured by the Collateral. Bank will make reasonable efforts to provide Borrower with notice of Bank obtaining such insurance at the time it is obtained or within a reasonable time thereafter. No payments by Bank are deemed an agreement to make
similar payments in the future or Bank’s waiver of any Event of Default. 
 9.4 Application of Payments and Proceeds Upon
Default. If an Event of Default has occurred and is continuing, Bank shall have the right to apply in any order any funds in its possession, whether from Borrower account balances, payments, proceeds realized as the result of any collection of
Accounts or other disposition of the Collateral, or otherwise, to the Obligations. Bank shall pay any surplus to Borrower by credit to the Designated Deposit Account or to other Persons legally entitled thereto; Borrower shall remain liable to Bank
for any deficiency. If Bank, directly or indirectly, enters into a deferred payment or other credit transaction with any purchaser at any sale of Collateral, Bank shall have the option, exercisable at any time, of either reducing the Obligations by
the principal amount of the purchase price or deferring the reduction of the Obligations until the actual receipt by Bank of cash therefor. 

9.5 Bank’s Liability for Collateral. So long as Bank complies with reasonable banking practices regarding the safekeeping of the
Collateral in the possession or under the control of Bank, Bank shall not be liable or responsible for: (a) the safekeeping of the Collateral; (b) any loss or damage to the Collateral; (c) any diminution in the value of the
Collateral; or (d) any act or default of any carrier, warehouseman, bailee, or other Person. Borrower bears all risk of loss, damage or destruction of the Collateral. 

9.6 No Waiver; Remedies Cumulative. Bank’s failure, at any time or times, to require strict performance by Borrower of any
provision of this Agreement or any other Loan Document shall not waive, affect, or diminish any right of Bank thereafter to demand strict performance and compliance herewith or therewith. No waiver hereunder shall be effective unless signed by the
party granting the waiver and then is only effective for the specific instance and purpose for which it is given. Bank’s rights and remedies under this Agreement and the other Loan Documents are cumulative. Bank has all rights and remedies
provided under the Code, by law, or in equity. Bank’s exercise of one right or remedy is not an election and shall not preclude Bank from exercising any other remedy under this Agreement or other remedy available at law or in equity, and
Bank’s waiver of any Event of Default is not a continuing waiver. Bank’s delay in exercising any remedy is not a waiver, election, or acquiescence. 

9.7 Demand Waiver. Borrower waives demand, notice of default or dishonor, notice of payment and nonpayment, notice of any default,
nonpayment at maturity, release, compromise, settlement, extension, or renewal of accounts, documents, instruments, chattel paper, and guarantees held by Bank on which Borrower is liable. 

 

	 	10	NOTICES 

 All notices, consents, requests, approvals, demands, or other
communication by any party to this Agreement or any other Loan Document must be in writing and shall be deemed to have been validly served, given, or delivered: (a) upon the earlier of actual receipt and three (3) Business Days after
deposit in the U.S. mail, first class, registered or certified mail return receipt requested, with proper postage prepaid; (b) upon transmission, when sent by electronic mail or facsimile transmission; (c) one (1) Business Day after
deposit with a reputable overnight courier with all charges prepaid; or (d) when delivered, if hand-delivered by messenger, all of which shall be addressed to the party to be notified and sent to the address, facsimile number, or email address
indicated below. Bank or Borrower may change its mailing or electronic mail address or facsimile number by giving the other party written notice thereof in accordance with the terms of this Section 10. 

 

			
	If to Borrower:	  	ARCADIA BIOSCIENCES, INC.
		  	202 Cousteau Place, Suite 200
		  	Davis, CA 95618
		  	Attn: Eric Rey, CEO
		  	Fax: (530) 756-7027
		  	Email: eric.rey@arcadiabio.com

  
 -17- 

 
			
	With a copy to:	  	ARCADIA BIOSCIENCES, INC.
		  	4222 E. Thomas Rd., Suite 320
		  	Phoenix, AZ 85018
		  	Attn: Wendy Neal
		  	Fax: (602) 429-0481
		  	Email: wendy.neal@arcadiabio.com
		
	If to Bank:	  	SILICON VALLEY BANK
		  	555 Mission Street, Suite 900
		  	San Francisco, CA 94105
		  	Attn: Jennifer Friel Goldstein, Managing Director, Life Sciences
		  	Fax: (415) 615-0076
		  	Email: jgoldstein@svb.com

  

	 	11	CHOICE OF LAW, VENUE, JURY TRIAL WAIVER, AND JUDICIAL REFERENCE 

 Except as
otherwise expressly provided in any of the Loan Documents, California law governs the Loan Documents without regard to principles of conflicts of law. Borrower and Bank each submit to the exclusive jurisdiction of the State and Federal courts in
Santa Clara County, California; provided, however, that nothing in this Agreement shall be deemed to operate to preclude Bank from bringing suit or taking other legal action in any other jurisdiction to realize on the Collateral or any other
security for the Obligations, or to enforce a judgment or other court order in favor of Bank. Borrower expressly submits and consents in advance to such jurisdiction in any action or suit commenced in any such court, and Borrower hereby waives any
objection that it may have based upon lack of personal jurisdiction, improper venue, or forum non conveniens and hereby consents to the granting of such legal or equitable relief as is deemed appropriate by such court. Borrower hereby waives
personal service of the summons, complaints, and other process issued in such action or suit and agrees that service of such summons, complaints, and other process may be made by registered or certified mail addressed to Borrower at the address set
forth in, or subsequently provided by Borrower in accordance with, Section 10 of this Agreement and that service so made shall be deemed completed upon the earlier to occur of Borrower’s actual receipt thereof or three (3) days after
deposit in the U.S. mails, proper postage prepaid. 
 TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, BORROWER AND BANK EACH WAIVE
THEIR RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION ARISING OUT OF OR BASED UPON THIS AGREEMENT, THE LOAN DOCUMENTS OR ANY CONTEMPLATED TRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER CLAIMS. THIS WAIVER IS A MATERIAL
INDUCEMENT FOR BOTH PARTIES TO ENTER INTO THIS AGREEMENT. EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS COUNSEL. 
 WITHOUT INTENDING IN
ANY WAY TO LIMIT THE PARTIES’ AGREEMENT TO WAIVE THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY, if the above waiver of the right to a trial by jury is not enforceable, the parties hereto agree that any and all disputes or controversies of any
nature between them arising at any time shall be decided by a reference to a private judge, mutually selected by the parties (or, if they cannot agree, by the Presiding Judge of the Santa Clara County, California Superior Court) appointed in
accordance with California Code of Civil Procedure Section 638 (or pursuant to comparable provisions of federal law if the dispute falls within the exclusive jurisdiction of the federal courts), sitting without a jury, in Santa Clara County,
California; and the parties hereby submit to the jurisdiction of such court. The reference proceedings shall be conducted pursuant to and in accordance with the provisions of California Code of Civil Procedure §§ 638 through 645.1,
inclusive. The private judge shall have the power, among others, to grant provisional relief, including without limitation, entering temporary restraining orders, issuing preliminary and permanent injunctions and appointing receivers. All such
proceedings shall be closed to the public and confidential and all records relating thereto shall be permanently sealed. If during the course of any dispute, a party desires to seek provisional relief, but a judge has not been appointed at that
point pursuant to the judicial reference procedures, then such party may apply to the Santa Clara County, California Superior Court for such relief. The proceeding before the private judge shall be conducted in the same manner as it would be before
a court under the rules of evidence applicable to judicial proceedings. The parties shall be entitled to discovery which shall be conducted in the same manner as it would be before a court 

  
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under the rules of discovery applicable to judicial proceedings. The private judge shall oversee discovery and may enforce all discovery rules and orders applicable to judicial proceedings in the
same manner as a trial court judge. The parties agree that the selected or appointed private judge shall have the power to decide all issues in the action or proceeding, whether of fact or of law, and shall report a statement of decision thereon
pursuant to California Code of Civil Procedure § 644(a). Nothing in this paragraph shall limit the right of any party at any time to exercise self-help remedies, foreclose against collateral, or obtain provisional remedies. The private judge
shall also determine all issues relating to the applicability, interpretation, and enforceability of this paragraph. 
 This Section 11
shall survive the termination of this Agreement. 
  

	 	12	GENERAL PROVISIONS 

 12.1 Termination; Survival. All covenants,
representations and warranties made in this Agreement continue in full force until this Agreement has terminated pursuant to its terms and all Obligations (other than inchoate indemnity obligations, any other obligations which, by their terms, are
to survive the termination of this Agreement, and any Obligations under Bank Services Agreements that are cash collateralized in accordance with Section 4.1 of this Agreement) have been satisfied. So long as Borrower has satisfied the
Obligations (other than inchoate indemnity obligations, any other obligations which, by their terms, are to survive the termination of this Agreement, and any Obligations under Bank Services Agreements that are cash collateralized in accordance with
Section 4.1 of this Agreement), this Agreement may be terminated, effective three (3) Business Days after written notice of termination is given to Bank. Those obligations that are expressly specified in this Agreement as surviving this
Agreement’s termination shall continue to survive notwithstanding this Agreement’s termination. 
 12.2 Successors and
Assigns. This Agreement binds and is for the benefit of the successors and permitted assigns of each party. Borrower may not assign this Agreement or any rights or obligations under it without Bank’s prior written consent (which may be
granted or withheld in Bank’s discretion). Bank has the right, without the consent of or notice to Borrower, to sell, transfer, assign, negotiate, or grant participation in all or any part of, or any interest in, Bank’s obligations,
rights, and benefits under this Agreement and the other Loan Documents. 
 12.3 Indemnification. Borrower agrees to indemnify,
defend and hold Bank and its directors, officers, employees, agents, attorneys, or any other Person affiliated with or representing Bank (each, an “Indemnified Person”) harmless against: (i) all obligations, demands, claims,
and liabilities (collectively, “Claims”) claimed or asserted by any other party in connection with the transactions contemplated by the Loan Documents; and (ii) all losses or expenses (including Bank Expenses) in any way
suffered, incurred, or paid by such Indemnified Person as a result of, following from, consequential to, or arising from transactions between Bank and Borrower (including reasonable attorneys’ fees and expenses), except for Claims and/or losses
directly caused by such Indemnified Person’s gross negligence or willful misconduct. 
 This Section 12.3 shall survive
until all statutes of limitation with respect to the Claims, losses, and expenses for which indemnity is given shall have run. 
 12.4
Time of Essence. Time is of the essence for the performance of all Obligations in this Agreement. 
 12.5 Severability of
Provisions. Each provision of this Agreement is severable from every other provision in determining the enforceability of any provision. 

12.6 Correction of Loan Documents. Bank may correct patent errors and fill in any blanks in the Loan Documents consistent with the
agreement of the parties. 
 12.7 Amendments in Writing; Waiver; Integration. No purported amendment or modification of any
Loan Document, or waiver, discharge or termination of any obligation under any Loan Document, shall be enforceable or admissible unless, and only to the extent, expressly set forth in a writing signed by the party against which enforcement or
admission is sought. Without limiting the generality of the foregoing, no oral promise or  

  
 -19- 

 
statement, nor any action, inaction, delay, failure to require performance or course of conduct shall operate as, or evidence, an amendment, supplement or waiver or have any other effect on any
Loan Document. Any waiver granted shall be limited to the specific circumstance expressly described in it, and shall not apply to any subsequent or other circumstance, whether similar or dissimilar, or give rise to, or evidence, any obligation or
commitment to grant any further waiver. The Loan Documents represent the entire agreement about this subject matter and supersede prior negotiations or agreements. All prior agreements, understandings, representations, warranties, and negotiations
between the parties about the subject matter of the Loan Documents merge into the Loan Documents. 
 12.8 Counterparts. This
Agreement may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, is an original, and all taken together, constitute one Agreement. 

12.9 Confidentiality. In handling any confidential information, Bank shall exercise the same degree of care that it exercises for its
own proprietary information, but disclosure of information may be made: (a) to Bank’s Subsidiaries or Affiliates (such Subsidiaries and Affiliates, together with Bank, collectively, “Bank Entities”); (b) to
prospective transferees or purchasers of any interest in the Credit Extensions (provided, however, Bank shall obtain any prospective transferee’s or purchaser’s agreement to the terms of this provision); (c) as required by law,
regulation, subpoena, or other order; (d) to Bank’s regulators or as otherwise required in connection with Bank’s examination or audit; (e) as Bank considers appropriate in exercising remedies under the Loan Documents; and
(f) to third-party service providers of Bank so long as such service providers have executed a confidentiality agreement with Bank with terms no less restrictive than those contained herein. Confidential information does not include information
that is either: (i) in the public domain or in Bank’s possession when disclosed to Bank, or becomes part of the public domain (other than as a result of its disclosure by Bank in violation of this Agreement) after disclosure to Bank; or
(ii) disclosed to Bank by a third party, if Bank does not know that the third party is prohibited from disclosing the information. 

Bank Entities may use anonymous forms of confidential information for aggregate datasets, for analyses or reporting, and for any other uses
not expressly prohibited in writing by Borrower. The provisions of the immediately preceding sentence shall survive termination of this Agreement. 

12.10 Attorneys’ Fees, Costs and Expenses. In any action or proceeding between Borrower and Bank arising out of or relating to the
Loan Documents, the prevailing party shall be entitled to recover its reasonable attorneys’ fees and other costs and expenses incurred, in addition to any other relief to which it may be entitled. 

12.11 Electronic Execution of Documents. The words “execution,” “signed,” “signature” and words of like
import in any Loan Document shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect, validity and enforceability as a manually executed signature or the use of a
paper-based recordkeeping systems, as the case may be, to the extent and as provided for in any applicable law, including, without limitation, any state law based on the Uniform Electronic Transactions Act. 

12.12 Captions. The headings used in this Agreement are for convenience only and shall not affect the interpretation of this
Agreement. 
 12.13 Construction of Agreement. The parties mutually acknowledge that they and their attorneys have
participated in the preparation and negotiation of this Agreement. In cases of uncertainty this Agreement shall be construed without regard to which of the parties caused the uncertainty to exist. 

12.14 Relationship. The relationship of the parties to this Agreement is determined solely by the provisions of this Agreement. The
parties do not intend to create any agency, partnership, joint venture, trust, fiduciary or other relationship with duties or incidents different from those of parties to an arm’s-length contract. 

12.15 Third Parties. Nothing in this Agreement, whether express or implied, is intended to: (a) confer any benefits, rights or
remedies under or by reason of this Agreement on any persons other than the express parties to it and their respective permitted successors and assigns; (b) relieve or discharge the obligation or liability of any person not an express party to
this Agreement; or (c) give any person not an express party to this Agreement any right of subrogation or action against any party to this Agreement. 

  
 -20- 

	 	13	DEFINITIONS 

 13.1 Definitions. As used in the Loan Documents, the word
“shall” is mandatory, the word “may” is permissive, the word “or” is not exclusive, the words “includes” and “including” are not limiting, the singular includes the plural, and numbers denoting
amounts that are set off in brackets are negative. As used in this Agreement, the following capitalized terms have the following meanings: 

“Account” is any “account” as defined in the Code with such additions to such term as may hereafter be made,
and includes, without limitation, all accounts receivable and other sums owing to Borrower. 
 “Account
Debtor” is any “account debtor” as defined in the Code with such additions to such term as may hereafter be made. 

“Affiliate” is, with respect to any Person, each other Person that owns or controls directly or indirectly the Person,
any Person that controls or is controlled by or is under common control with the Person, and each of that Person’s senior executive officers, directors, partners and, for any Person that is a limited liability company, that Person’s
managers and members. 
 “Agreement” is defined in the preamble hereof. 

“Anawah” means Anawah, Inc., a Washington corporation. 

“Authorized Signer” is any individual listed in Borrower’s Borrowing Resolution who is authorized to execute the
Loan Documents, including any Payment/Advance Form, on behalf of Borrower. 
 “Bank” is defined in the
preamble hereof. 
 “Bank Entities” is defined in Section 12.9. 

“Bank Expenses” are all audit fees and expenses, costs, and expenses (including reasonable attorneys’ fees and
expenses) for preparing, amending, negotiating, administering, defending and enforcing the Loan Documents (including, without limitation, those incurred in connection with appeals or Insolvency Proceedings) or otherwise incurred with respect to
Borrower or any Guarantor. 
 “Bank Services” are any products, credit services, and/or financial
accommodations previously, now, or hereafter provided to Borrower or any of its Subsidiaries by Bank or any Bank Affiliate, including, without limitation, any letters of credit, cash management services (including, without limitation, merchant
services, direct deposit of payroll, business credit cards, and check cashing services), interest rate swap arrangements, and foreign exchange services as any such products or services may be identified in Bank’s various agreements related
thereto (each, a “Bank Services Agreement”). 
 “Borrower” is defined in the preamble
hereof. 
 “Borrower’s Books” are all Borrower’s books and records including ledgers, federal and
state tax returns, records regarding Borrower’s assets or liabilities, the Collateral, business operations or financial condition, and all computer programs or storage or any equipment containing such information. 

“Borrowing Resolutions” are, with respect to any Person, those resolutions substantially in the form attached hereto
as Exhibit D. 
 “Business Day” is any day that is not a Saturday, Sunday or a day on which Bank is
closed. 

  
 -21- 

 “Cash Equivalents” means (a) marketable direct obligations issued or
unconditionally guaranteed by the United States or any agency or any State thereof having maturities of not more than one (1) year from the date of acquisition; (b) commercial paper maturing no more than one (1) year after its
creation and having the highest rating from either Standard & Poor’s Ratings Group or Moody’s Investors Service, Inc.; (c) time deposits with or insured certificates of deposit of Bank or any other commercial bank that
(i) is organized under the Laws of the United States, any state thereof or the District of Columbia or is the principal banking Subsidiary of a bank holding company organized under the laws of the United States, any state thereof, the District
of Columbia and is a member of the Federal Reserve System, and (ii) has combined capital and surplus of at least One Billion Dollars ($1,000,000,000), in each case with maturities not exceeding 24 months from the date of acquisition thereof,
(d) money market funds at least ninety-five percent (95%) of the assets of which constitute Cash Equivalents of the kinds described in clauses (a) through (c) of this definition. and (e) other types of liquid investments
that are made in compliance with Borrower’s investment policy approved by the Board but only to the extent that such investments would not otherwise be prohibited under any provision of this Agreement. 

“Change in Control” means (a) at any time, 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 or 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 thirty five percent (35%) or more of the ordinary voting power for the election of directors of
Borrower (determined on a fully diluted basis) other than by the sale of Borrower’s equity securities in a public offering or to venture capital or private equity investors so long as Borrower identifies to Bank the venture capital or private
equity investors at least seven (7) Business Days prior to the closing of the transaction and provides to Bank a description of the material terms of the transaction; (b) during any period of 12 consecutive months, a majority of the
members of the board of directors of Borrower cease to be composed of individuals (i) who were members of that board on the first day of such period, (ii) whose election or nomination to that board was approved by individuals referred to
in clause (i) above constituting at the time of such election or nomination at least a majority of that board or (iii) whose election or nomination to that board or other equivalent governing body was approved by individuals referred to in
clauses (i) and (ii) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body; or (c) at any time, Borrower shall cease to own and control, of record and
beneficially, directly or indirectly, one hundred percent (100%) of each class of outstanding capital stock of each Subsidiary of Borrower free and clear of all Liens (except Liens created by this Agreement), other than in connection with a
transaction that is otherwise permitted in accordance with the terms of this Agreement. 
 “Claims” is defined in
Section 12.3. 
 “Code” is the Uniform Commercial Code, as the same may, from time to time, be enacted and in
effect in the State of California; provided, that, to the extent that the Code is used to define any term herein or in any Loan Document and such term is defined differently in different Articles or Divisions of the Code, the definition of such term
contained in Article or Division 9 shall govern; provided further, that in the event that, by reason of mandatory provisions of law, any or all of the attachment, perfection, or priority of, or remedies with respect to, Bank’s Lien on any
Collateral is governed by the Uniform Commercial Code in effect in a jurisdiction other than the State of California, the term “Code” shall mean the Uniform Commercial Code as enacted and in effect in such other jurisdiction solely
for purposes of the provisions thereof relating to such attachment, perfection, priority, or remedies and for purposes of definitions relating to such provisions. 

“Collateral” is any and all properties, rights and assets of Borrower described on Exhibit A. 

“Collateral Account” is any Deposit Account, Securities Account, or Commodity Account. 

“Commodity Account” is any “commodity account” as defined in the Code with such additions to such term as may
hereafter be made. 
 “Compliance Certificate” is that certain certificate in the form attached hereto as
Exhibit B. 
 “Contingent Obligation” is, for any Person, any direct or indirect liability,
contingent or not, of that Person for (a) any indebtedness, lease, dividend, letter of credit or other obligation of another such as an obligation,  

  
 -22- 

 
in each case, directly or indirectly guaranteed, endorsed, co-made, discounted or sold with recourse by that Person, or for which that Person is directly
or indirectly liable; (b) any obligations for undrawn letters of credit for the account of that Person; and (c) all obligations from any interest rate, currency or commodity swap agreement, interest rate cap or collar agreement, or other
agreement or arrangement designated to protect a Person against fluctuation in interest rates, currency exchange rates or commodity prices; but “Contingent Obligation” does not include endorsements in the ordinary course of business. The
amount of a Contingent Obligation is the stated or determined amount of the primary obligation for which the Contingent Obligation is made or, if not determinable, the maximum reasonably anticipated liability for it determined by the Person in good
faith; but the amount may not exceed the maximum of the obligations under any guarantee or other support arrangement. 

“Control Agreement” is any control agreement entered into among the depository institution at which Borrower maintains
a Deposit Account or the securities intermediary or commodity intermediary at which Borrower maintains a Securities Account or a Commodity Account, Borrower, and Bank pursuant to which Bank obtains control (within the meaning of the Code) over such
Deposit Account, Securities Account, or Commodity Account. 
 “Copyrights” are any and all copyright rights,
copyright applications, copyright registrations and like protections in each work of authorship and derivative work thereof, whether published or unpublished and whether or not the same also constitutes a trade secret. 

“Credit Extension” is the Term Loan or any other extension of credit by Bank for Borrower’s benefit. 

“Default Rate” is defined in Section 2.3(b). 

“Deposit Account” is any “deposit account” as defined in the Code with such additions to such term as may hereafter
be made. 
 “Designated Deposit Account” is the multicurrency account denominated in Dollars, account number
XXX-XXX-XXXX, maintained by Borrower with Bank. 
 “Dollars,” “dollars” or use
of the sign “$” means only lawful money of the United States and not any other currency, regardless of whether that currency uses the “$” sign to denote its currency or may be readily converted into lawful money of the United
States. 
 “Dollar Equivalent” is, at any time, (a) with respect to any amount denominated in Dollars,
such amount, and (b) with respect to any amount denominated in a Foreign Currency, the equivalent amount therefor in Dollars as determined by Bank at such time on the basis of the then-prevailing rate of exchange in San Francisco, California,
for sales of the Foreign Currency for transfer to the country issuing such Foreign Currency. 
 “Domestic
Subsidiary” means a Subsidiary formed under the laws of the United States, any state thereof or the District of Columbia. 

“Effective Date” is defined in the preamble hereof. 

“Equipment” is all “equipment” as defined in the Code with such additions to such term as may hereafter be made,
and includes without limitation all machinery, fixtures, goods, vehicles (including motor vehicles and trailers), and any interest in any of the foregoing. 

“ERISA” is the Employee Retirement Income Security Act of 1974, and its regulations. 

“Event of Default” is defined in Section 8. 

“Exchange Act” is the Securities Exchange Act of 1934, as amended. 

  
 -23- 

 “Final Payment” is a payment (in addition to and not a substitution for
the regular monthly payments of principal and accrued interest) due upon payment or prepayment of the Term Loan equal to Six Hundred Twenty Five Thousand Dollars ($625,000). 

“Foreign Currency” means lawful money of a country other than the United States. 

“Foreign Subsidiary” means any Subsidiary that is organized under the laws of a jurisdiction other than the United
States, a State thereof or the District of Columbia. 
 “Foreign Subsidiary Holdco” means any Domestic
Subsidiary substantially all of whose assets consist (or any Domestic Subsidiary that is formed for the purpose of holding assets that substantially consist) of equity interests or Indebtedness of (a) one or more Foreign Subsidiaries or
(b) other Foreign Subsidiary Holdcos described in clause (a). 
 “Funding Date” is any date on which a
Credit Extension is made to or for the account of Borrower which shall be a Business Day. 
 “FX Contract” is
any foreign exchange contract by and between Borrower and Bank under which Borrower commits to purchase from or sell to Bank a specific amount of Foreign Currency on a specified date. 

“GAAP” is generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other Person as may be approved by a significant segment of
the accounting profession, which are applicable to the circumstances as of the date of determination. 
 “General
Intangibles” is all “general intangibles” as defined in the Code in effect on the date hereof with such additions to such term as may hereafter be made, and includes without limitation, all Intellectual Property, claims, income
and other tax refunds, security and other deposits, payment intangibles, contract rights, options to purchase or sell real or personal property, rights in all litigation presently or hereafter pending (whether in contract, tort or otherwise),
insurance policies (including without limitation key man, property damage, and business interruption insurance), payments of insurance and rights to payment of any kind. 

“Governmental Approval” is any consent, authorization, approval, order, license, franchise, permit, certificate,
accreditation, registration, filing or notice, of, issued by, from or to, or other act by or in respect of, any Governmental Authority. 

“Governmental Authority” is 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. 
 “Guarantor” is any Person providing a Guaranty in favor of Bank. 

“Guaranty” is any guarantee of all or any part of the Obligations, as the same may from time to time be amended,
restated, modified or otherwise supplemented. 
 “Indebtedness” is (a) indebtedness for borrowed money
or the deferred price of property or services, such as reimbursement and other obligations for surety bonds and letters of credit, (b) obligations evidenced by notes, bonds, debentures or similar instruments, (c) capital lease obligations,
and (d) Contingent Obligations. 
 “Indemnified Person” is defined in Section 12.3. 

  
 -24- 

 “Insolvency Proceeding” is any proceeding by or against any Person under
the United States Bankruptcy Code, or any other bankruptcy or insolvency law, including assignments for the benefit of creditors, compositions, extensions generally with its creditors, or proceedings seeking reorganization, arrangement, or other
relief. 
 “Intellectual Property” means, with respect to any Person, means all of such Person’s right,
title, and interest in and to the following: 
 (a) its Copyrights, Trademarks and Patents; 

(b) any and all trade secrets and trade secret rights, including, without limitation, any rights to unpatented inventions, know-how, operating
manuals; 
 (c) any and all source code; 

(d) any and all design rights which may be available to such Person; 

(e) any and all claims for damages by way of past, present and future infringement of any of the foregoing, with the right, but not the
obligation, to sue for and collect such damages for said use or infringement of the Intellectual Property rights identified above; and 

(f) all amendments, renewals and extensions of any of the Copyrights, Trademarks or Patents. 

“Interest Only Period” means the period of time beginning on the Effective Date and continuing through
December 29, 2017. 
 “Inventory” is all “inventory” as defined in the Code in effect on the date
hereof with such additions to such term as may hereafter be made, and includes without limitation all merchandise, raw materials, parts, supplies, packing and shipping materials, work in process and finished products, including without limitation
such inventory as is temporarily out of Borrower’s custody or possession or in transit and including any returned goods and any documents of title representing any of the above. 

“Investment” is any beneficial ownership interest in any Person (including stock, partnership interest or other
securities), and any loan, advance or capital contribution to any Person. 
 “Key Person” is Borrower’s
Chief Executive Officer, who is Eric Rey as of the Effective Date. 
 “Lien” is a claim, mortgage, deed of
trust, levy, charge, pledge, security interest or other encumbrance of any kind, whether voluntarily incurred or arising by operation of law or otherwise against any property. 

“Liquidity Ratio” means, as of any date of determination, a ratio of (i) unrestricted cash and Cash Equivalents
at Bank or subject to a Control Agreement plus the aggregate balance of the Pledged Account plus net billed accounts receivable as of such date to (ii) the aggregate outstanding amount of the Obligations as of such date. 

“Loan Documents” are, collectively, this Agreement and any schedules, exhibits, certificates, notices, and any other
documents related to this Agreement, any Bank Services Agreement, any subordination agreement, any note, or notes or guaranties executed by Borrower or any Guarantor, and any other present or future agreement by Borrower and/or any Guarantor with or
for the benefit of Bank in connection with this Agreement or Bank Services, all as amended, restated, or otherwise modified. 

“Material Adverse Change” is (a) a material impairment in the perfection or priority of Bank’s Lien in the
Collateral or in the value of such Collateral; (b) a material adverse change in the business, operations, or condition (financial or otherwise) of Borrower or (c) a material impairment of the prospect of repayment of any portion of the
Obligations. 

  
 -25- 

 “Minimum Collateral Value” is, as of any date of determination, an amount
equal to the aggregate outstanding amount of the Obligations as of such date. 
 “Monthly Financial
Statements” is defined in Section 6.2(a). 
 “Obligations” are Borrower’s obligations to pay
when due any debts, principal, interest, fees, Bank Expenses, and other amounts Borrower owes Bank now or later, under this Agreement or any of the other Loan Documents, or otherwise, including, without limitation, all obligations relating to
letters of credit (including reimbursement obligations for drawn and undrawn letters of credit), cash management services, and foreign exchange contracts, if any, and including interest accruing after Insolvency Proceedings begin and debts,
liabilities, or obligations of Borrower assigned to Bank, and to perform Borrower’s duties under the Loan Documents. 

“Operating Documents” are, for any Person, such Person’s formation documents, as certified by the Secretary of
State (or equivalent agency) of such Person’s jurisdiction of organization on a date that is no earlier than thirty (30) days prior to the Effective Date, and, (a) if such Person is a corporation, its bylaws in current form,
(b) if such Person is a limited liability company, its limited liability company agreement (or similar agreement), and (c) if such Person is a partnership, its partnership agreement (or similar agreement), each of the foregoing with all
current amendments or modifications thereto. 
 “Patents” means all patents, patent applications and like
protections including without limitation improvements, divisions, continuations, renewals, reissues, extensions and continuations-in-part of the same. 

“Payment/Advance Form” is that certain form attached hereto as Exhibit C. 

“Perfection Certificate” is defined in Section 5.1. 

“Permitted Indebtedness” is: 

(a) Borrower’s Indebtedness to Bank under this Agreement and the other Loan Documents; 

(b) Indebtedness existing on the Effective Date and shown on the Perfection Certificate; 

(c) Subordinated Debt; 
 (d)
unsecured Indebtedness to trade creditors incurred in the ordinary course of business; 
 (e) unsecured Indebtedness arising under credit
cards issued by financial institutions other than Bank in an amount not to exceed Two Hundred Fifty Thousand Dollars ($250,000) in the aggregate at any time; 

(f) Indebtedness (a) owing from Borrower to any Subsidiary that is a co-borrower or Guarantor hereunder and (b) owing from any
Subsidiary that is a co-borrower or Guarantor hereunder to Borrower or any other Subsidiary that is a co-borrower or Guarantor hereunder; 

(g) Indebtedness incurred as a result of endorsing negotiable instruments received in the ordinary course of business; 

(h) Indebtedness secured by Liens permitted under clauses (a) and (c) of the definition of “Permitted Liens” hereunder;

 (i) Indebtedness that also constitutes a Permitted Investment; 

(j) other unsecured Indebtedness not to exceed Two Hundred Fifty Thousand Dollars ($250,000) in the aggregate; and 

(k) extensions, refinancings, modifications, amendments and restatements of any items of Permitted Indebtedness (a) through
(f) above, provided that the principal amount thereof is not increased (except by an amount equal to any accrued interest, premiums, fees and expenses on the Indebtedness being refinancing plus the reasonable fees and expenses incurred by
Borrower in connection with such refinancing) or the terms thereof are not modified to impose more burdensome terms upon Borrower or its Subsidiary, as the case may be. 

  
 -26- 

 “Permitted Investments” are: 

(a) Investments (including, without limitation, Subsidiaries) existing on the Effective Date and shown on the Perfection Certificate; 

(b) Investments after the Effective Date in any Guarantor; 

(c) Investments consisting of Cash Equivalents; 

(d) Investments consisting of the endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary
course of Borrower; 
 (e) Investments consisting of deposit accounts (provided that Borrower has complied with its obligations under
Section 6.6 with respect to such deposit accounts); 
 (f) Investments accepted in connection with Transfers permitted by
Section 7.1; 
 (g) Investments consisting of the creation of a Subsidiary for the purpose of consummating a merger transaction
permitted by Section 7.3 of this Agreement, which is otherwise a Permitted Investment; 
 (h) Investments consisting of travel advances
and employee relocation loans and other employee loans and advances in the ordinary course of business, not to exceed Two Hundred Fifty Thousand Dollars ($250,000) in the aggregate at any one time outstanding; 

(i) Investments (including debt obligations) received in connection with the bankruptcy or reorganization of customers or suppliers and in
settlement of delinquent obligations of, and other disputes with, customers or suppliers arising in the ordinary course of business; 
 (j)
Investments consisting of notes receivable of, or prepaid royalties and other credit extensions, to customers and suppliers who are not Affiliates, in the ordinary course of business; provided that this paragraph (i) shall not apply to
Investments of Borrower in any Subsidiary; 
 (k) Investments consisting of loans not involving the net transfer on a substantially
contemporaneous basis of cash proceeds to employees, officers or directors relating to the purchase of capital stock of Borrower pursuant to employee stock purchase plans or other similar agreements approved by Borrower’s Board of Directors in
an aggregate amount not to exceed Five Hundred Thousand Dollars ($500,000) in any fiscal year; 
 (l) Investments in Verdeca LLC in an
aggregate amount not to exceed Two Million Dollars ($2,000,000) at any time, net of any payments made to Borrower by Verdeca for services rendered to Verdeca by Borrower (i.e. to the extent Verdeca makes such payments to Borrower it will reduce the
amount of the Investment deemed made in Verdeca under this clause (l) prior to such date and Borrower may make additional investments in Verdeca under this clause (l) up to the Two Million Dollars ($2,000,000) cap); 

(m) other Investments that do not exceed an aggregate of Five Hundred Thousand Dollars ($500,000) at any time outstanding (it being understand
that Investments consisting of loans to, equity investments in or capital contributions to another Person shall no longer be deemed outstanding to the extent the principal amount of such loans are repaid in cash or such Person makes a cash dividend
or distribution on account of such equity investments or capital contributions). 

  
 -27- 

 “Permitted Licenses” are (A) licenses of over-the-counter software
that is commercially available to the public, and (B) non-exclusive and exclusive licenses for the use of the Intellectual Property of Borrower or any of its Subsidiaries entered into in the ordinary
course of business, provided, that, with respect to each such license described in clause (B), (i) no Event of Default has occurred or is continuing at the time of such license; and (ii) all upfront payments, royalties, milestone
payments or other proceeds arising from the licensing agreement that are payable to Borrower or any of its Subsidiaries are paid to a Deposit Account at Bank or that is governed by a Control Agreement. For the avoidance of doubt, so long as any
license granted by Borrower is permitted in accordance with the above, to the extent Borrower has any of the following rights with respect to its Intellectual Property, Borrower may include in any license thereof, a transfer of such rights:
(i) the right to use, copy, edit, format, modify, translate and create derivative works based on Intellectual Property; (ii) the right to reproduce, license, rent, lease or otherwise distribute, and have reproduced, licensed, rented,
leased or otherwise distributed, to and by third parties, Intellectual Property and derivative works thereof; and (iii) the right to grant the rights set forth herein to third parties, including the right of such third parties to license such
rights to further third parties. 
 “Permitted Liens” are: 

(a) Liens existing on the Effective Date and shown on the Perfection Certificate or arising under this Agreement and the other Loan Documents;

 (b) Liens for taxes, fees, assessments or other government charges or levies, either (i) not due and payable or (ii) being
contested in good faith and for which Borrower maintains adequate reserves on its Books, provided that no notice of any such Lien has been filed or recorded under the Internal Revenue Code of 1986, as amended, and the Treasury Regulations
adopted thereunder; 
 (c) purchase money Liens and Liens arising under capital leases (i) on Equipment acquired or held by Borrower
incurred for financing the acquisition, construction or expansion of Equipment and related software securing no more than Five Hundred Thousand Dollars ($500,000) in the aggregate amount outstanding, or (ii) existing on Equipment when acquired,
if the Lien is confined to the property and improvements and related software and the proceeds of the Equipment; 
 (d) Liens of
carriers, warehousemen, suppliers, or other Persons that are possessory in nature arising in the ordinary course of business so long as such Liens attach only to Inventory, securing liabilities in the aggregate amount not to exceed Two Hundred Fifty
Thousand Dollars ($250,000) and which are not delinquent or remain payable without penalty or which are being contested in good faith and by appropriate proceedings which proceedings have the effect of preventing the forfeiture or sale of the
property subject thereto; 
 (e) Liens to secure payment of workers’ compensation, employment insurance, old-age pensions, social
security and other like obligations incurred in the ordinary course of business (other than Liens imposed by ERISA); 
 (f) Liens incurred
in the extension, renewal or refinancing of the indebtedness secured by Liens described in (a) through (c), but any extension, renewal or replacement Lien must be limited to the property encumbered by the existing Lien and the principal
amount of the indebtedness may not increase (except by an amount equal to any accrued interest, premiums, fees and expenses on the Indebtedness being refinancing plus the reasonable fees and expenses incurred by Borrower in connection with such
refinancing); 
 (g) leases or subleases of real property granted in the ordinary course of Borrower’s business (or, if referring to
another Person, in the ordinary course of such Person’s business), and leases, subleases, non-exclusive licenses or sublicenses of personal property (other than Intellectual Property) granted in the ordinary course of Borrower’s business
(or, if referring to another Person, in the ordinary course of such Person’s business), if the leases, subleases, licenses and sublicenses do not prohibit granting Bank a security interest therein; 

(h) Permitted Licenses; 

  
 -28- 

 (i) Liens arising from attachments or judgments, orders, or decrees in circumstances not
constituting an Event of Default under Sections 8.4 and 8.7; 
 (j) Liens in favor of other financial institutions arising in connection
with Borrower’s deposit and/or securities accounts held at such institutions, provided that Borrower has complied with its obligations under Section 6.6 with respect to such deposit and/or securities accounts; 

(k) the following deposits, to the extent made in the ordinary course of business: deposits under worker’s compensation, unemployment
insurance, social security and other similar laws; 
 (l) good faith deposits made in connection with Investments permitted by this
Agreement; and 
 (m) easements, zoning restrictions, rights-of-way and similar encumbrances on real property imposed by law or arising in
the ordinary course of business so long as they do not materially impair the value or marketability of the related property; 
 (n)
statutory Liens securing claims or demands of materialmen, artisans, mechanics, landlords and other like Persons arising in the ordinary course of Borrower’s business; provided, that (i) the payment thereof is not yet required or such
claims or (ii) such claims or demands are being contested in good faith and by appropriate proceedings which proceedings have the effect of preventing the forfeiture or sale of the property subject thereto; and 

(o) other Liens securing obligations in an aggregate amount not exceeding One Hundred Thousand Dollars ($100,000) at any one time outstanding.

 “Person” is any individual, sole proprietorship, partnership, limited liability company, joint venture, company,
trust, unincorporated organization, association, corporation, institution, public benefit corporation, firm, joint stock company, estate, entity or government agency. 

“Pledged Account” means Borrower’s restricted account number XXX-XXX-XXXX held at Bank. 

“Prime Rate” is the rate of interest per annum from time to time published in the money rates section of The Wall
Street Journal or any successor publication thereto as the “prime rate” then in effect; provided that if such rate of interest, as set forth from time to time in the money rates section of The Wall Street Journal, becomes unavailable for
any reason as determined by Bank, the “Prime Rate” shall mean the rate of interest per annum announced by Bank as its prime rate in effect at its principal office in the State of California (such Bank announced Prime Rate not being
intended to be the lowest rate of interest charged by Bank in connection with extensions of credit to debtors). 

“Registered Organization” is any “registered organization” as defined in the Code with such additions to
such term as may hereafter be made. 
 “Requirement of Law” is as to any Person, the organizational or governing
documents of such Person, and any law (statutory or common), 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” is any of the Chief Executive Officer,
President, Chief Financial Officer and Controller of Borrower. 
 “Restricted License” is any material
license or other agreement with respect to which Borrower is the licensee that is material to Borrower’s business (a) that prohibits or otherwise restricts Borrower from granting a security interest in Borrower’s interest in such
license or agreement or any other property, or (b) for which a default under or termination of could interfere with the Bank’s right to sell any Collateral. 

  
 -29- 

 “SEC” shall mean the Securities and Exchange Commission, any successor
thereto, and any analogous Governmental Authority. 
 “Securities Account” is any “securities account” as
defined in the Code with such additions to such term as may hereafter be made. 
 “Subordinated Debt” is
indebtedness incurred by Borrower subordinated to all of Borrower’s now or hereafter indebtedness to Bank (pursuant to a subordination, intercreditor, or other similar agreement in form and substance satisfactory to Bank entered into between
Bank and the other creditor), on terms acceptable to Bank. 
 “Subsidiary” is, 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 the context otherwise requires, each reference to a Subsidiary herein shall be a reference to a Subsidiary of Borrower or Guarantor. Joint ventures entered into by Borrower with Persons
that are not Affiliates of Borrower (including Verdeca LLC and Limagrain Cereal Seeds LLC) shall not be considered Subsidiaries of Borrower for purposes of this Agreement or any other Loan Document. 

“Term Loan” is a loan made by Bank pursuant to the terms of Section 2.1.1 hereof. 

“Term Loan Amount” is an amount equal to Twenty Five Million Dollars ($25,000,000). 

“Term Loan Maturity Date” is December 1, 2020. 

“Term Loan Prepayment Fee” means a fee due upon prepayment (whether voluntary or otherwise) of the Term Loan equal to
(i) three percent (3.00%) of the outstanding principal balance of the Term Loan if such prepayment occurs on or prior to the first anniversary of the Effective Date, (ii) two percent (2.00%) of the outstanding principal balance
of the Term Loan if such prepayment occurs after the first anniversary of the Effective Date, but on or prior to the second anniversary of the Effective Date or (iii) one percent (1.00%) of the outstanding principal balance of the Term
Loan if such prepayment occurs on or at any time after the second anniversary of the Effective Date. 

“Trademarks” means any trademark and servicemark rights, whether registered or not, applications to register and
registrations of the same and like protections, and the entire goodwill of the business of Borrower connected with and symbolized by such trademarks. 

“Transfer” is defined in Section 7.1. 

“Wholly-Owned Domestic Subsidiary” is a Domestic Subsidiary, all of the equity interests of which are directly or
indirectly owned by Borrower. 
 [Balance of Page Intentionally Left Blank] 

  
 -30- 

 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the
Effective Date. 
  

			
	BORROWER:
	
	ARCADIA BIOSCIENCES, INC.
		
	By	 	 /s/ Eric J. Rey

	Name:	 	 Eric J. Rey

	Title:	 	 President and CEO

	
	BANK:
	
	SILICON VALLEY BANK
		
	By	 	 /s/ Dennis He

	Name:	 	 Dennis He

	Title:	 	 V.P.

 [Signature Page to Loan and Security Agreement] 

 EXHIBIT A 

COLLATERAL DESCRIPTION 

The Collateral consists of all of Borrower’s right, title and interest in and to the following personal property: 

All goods, Accounts (including health-care receivables), Equipment, Inventory, contract rights or rights to payment of money, leases, license
agreements, franchise agreements, General Intangibles (except as provided below), commercial tort claims, documents, instruments (including any promissory notes), chattel paper (whether tangible or electronic), cash, deposit accounts (including but
not limited to the Pledged Account), fixtures, letters of credit rights (whether or not the letter of credit is evidenced by a writing), securities, and all other investment property, supporting obligations, and financial assets, whether now owned
or hereafter acquired, wherever located; and 
 All Borrower’s Books relating to the foregoing, and any and all claims, rights and
interests in any of the above and all substitutions for, additions, attachments, accessories, accessions and improvements to and replacements, products, proceeds and insurance proceeds of any or all of the foregoing. 

Notwithstanding the foregoing, the Collateral does not include (a) any Intellectual Property; provided, however, the Collateral shall
include all Accounts and all proceeds of Intellectual Property. If a judicial authority (including a U.S. Bankruptcy Court) would hold that a security interest in the underlying Intellectual Property is necessary to have a security interest in such
Accounts and such property that are proceeds of Intellectual Property, then the Collateral shall automatically, and effective as of the Effective Date, include the Intellectual Property to the extent necessary to permit perfection of Bank’s
security interest in such Accounts and such other property of Borrower that are proceeds of the Intellectual Property; (b) more than sixty-five percent (65%) of the presently existing and hereafter arising issued and outstanding shares of
capital stock owned by Borrower of any Foreign Subsidiary or Foreign Subsidiary HoldCo which shares entitle the holder thereof to vote for directors or any other matter; (c) any interest of Borrower as a lessee or sublessee under a real
property lease; (d) rights held under a license that are not assignable by their terms without the consent of the counterparty thereto (but only to the extent such restriction on assignment is enforceable under applicable law); (e) any
interest of Borrower as a lessee under an Equipment lease or with respect to Equipment subject to a purchase money security interest if Borrower is prohibited by the terms of such lease or related financing documents from granting a security
interest in such lease or Equipment or under which such an assignment or Lien would cause a default to occur under such lease or financing documents; provided, however, that upon termination of such prohibition, such interest or Equipment shall
immediately become Collateral without any action by Borrower or Bank or (f) equity interests in joint ventures and non-wholly owned Subsidiaries that, if pledged, would breach or require the consent of a third party under the applicable joint
venture or organizational documents. 
 Pursuant to the terms of a certain negative pledge arrangement with Bank, Borrower has agreed not to
encumber any of its Intellectual Property without Bank’s prior written consent. 
 Capitalized terms used and not otherwise defined
herein have the meanings set forth in the Loan and Security Agreement, dated as of December 29, 2015, between Borrower and Bank. 

 EXHIBIT B 

COMPLIANCE CERTIFICATE 
  

					
	TO:	  	SILICON VALLEY BANK	  	Date:                     
	FROM:	  	ARCADIA BIOSCIENCES, INC.	  	

 The undersigned authorized officer of ARCADIA BIOSCIENCES, INC. (“Borrower”) certifies
that under the terms and conditions of the Loan and Security Agreement between Borrower and Bank (the “Agreement”): 

Except as noted below: 
 (1)
Borrower is in complete compliance for the period ending                      with all required covenants; 

(2) there are no Events of Default; 

(3) all representations and warranties in the Agreement are true and correct in all material respects on this date; provided, however, that
such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof; and provided, further that those representations and warranties expressly referring
to a specific date shall be true, accurate and complete in all material respects as of such date; 
 (4) Borrower, and each of its
Subsidiaries, has timely filed all required tax returns and reports, and Borrower has timely paid all foreign, federal, state and local taxes, assessments, deposits and contributions owed by Borrower except (a) to the extent such taxes are
being contested in good faith by appropriate proceedings promptly instituted and diligently conducted, so long as such reserve or other appropriate provision, if any, as shall be required in conformity with GAAP shall have been made therefor, or
(b) if such taxes, assessments, deposits and contributions do not, individually or in the aggregate, exceed Twenty Five Thousand Dollars ($25,000); and 

(5) no Liens have been levied or claims made against Borrower or any of its Subsidiaries relating to unpaid employee payroll or benefits of
which Borrower has not previously provided written notification to Bank. 
 Attached are the required documents supporting the
certification. The undersigned certifies that the financial statements delivered herewith have been prepared in accordance with GAAP consistently applied from one period to the next except as explained in an accompanying letter and, in the case of
unaudited financial statements, the absence of footnotes and normal year-end adjustments. The undersigned acknowledges that no borrowings may be requested at any time or date of determination that Borrower is not in compliance with any of the terms
of the Agreement, and that compliance is determined not just at the date this certificate is delivered. Capitalized terms used but not otherwise defined herein shall have the meanings given them in the Agreement. 

Please indicate compliance status by circling Yes/No under “Complies” column. 

 

					
	 Reporting Covenants
	  	 Required
	  	 Complies

			
	Monthly financial statements with Compliance Certificate	  	Monthly within 30 days	  	Yes No
	Annual financial statement (CPA Audited) + CC	  	FYE within 180 days	  	Yes No
	10-Q, 10-K and 8-K	  	Within 5 days after filing with SEC	  	Yes No
	Annual operating budget (monthly) and financial projections (quarterly) for the upcoming fiscal year	  	FYE within 30 days	  	Yes No

  
 1 

	
	The following Intellectual Property was registered (or a registration application submitted) after the Effective Date (if no registrations, state “None”) (NOTE THE FOREGOING ONLY NEEDS TO BE COMPLETED WITH EACH QUARTER END
COMPLIANCE CERTIFICATE)
	  

	  

  

											
	 Financial Covenants
	  	Required	 	  	Actual	 	  	Complies
				
	 Minimum Liquidity Ratio
	  	 	1.4:1.0	  	  	 	            :1.0	  	  	Yes No
	 OR
	  				  				  	
	 Minimum Collateral Value
	  	$	            	  	  	$	            	  	  	Yes No

 The following financial covenant analysis and information set forth in Schedule 1 attached hereto are true and
accurate as of the date of this Certificate. 
 The following are the exceptions with respect to the certification above: (If no exceptions
exist, state “No exceptions to note.”) 
  
  

 
  
  

							
	ARCADIA BIOSCIENCES, INC.	 		 	BANK USE ONLY
				
		 		 		 	Received by:
                                         
                                     
	By:	 	  
	 		 	AUTHORIZED SIGNER
	Name:	 	  
	 		 	Date:
                                         
                                         
        
	Title:	 	  
	 		 	
		 		 		 	Verified:
                                         
                                         
  
		 		 		 	AUTHORIZED SIGNER
		 		 		 	Date:
                                         
                                         
        
				
		 		 		 	Compliance
Status:                    Yes                    
No

  
 2 

 Schedule 1 to Compliance Certificate 

Financial Covenant of Borrower 

In the event of a conflict between this Schedule and the Loan Agreement, the terms of the Loan Agreement shall govern. 

Dated:                      

Minimum Liquidity Ratio (Section 6.7) 
 Required:
1.40:1.00 
 Actual: 
  

					
	A.	  	Aggregate value of the unrestricted cash and Cash Equivalents of Borrower at Bank or subject to a Control Agreement	  	$            
			
	B.	  	Balance of Pledged Account	  	$            
			
	C.	  	Aggregate value of the net billed accounts receivable of Borrower	  	$            
			
	D.	  	The sum of lines A, B and C	  	$            
			
	E.	  	Aggregate outstanding amount of the Obligations	  	$            
			
	F.	  	Liquidity Ratio (line D divided by line E)	  	$            

 Is line F equal to or greater than 1.40:1:00? 
  

			
	  ̈ No
	  	  ̈ Yes

 If Liquidity Ratio is not equal to or greater than 1.40:1.00, then complete the following: 

Minimum Collateral Value (Section 6.7): 
  

					
	A.	  	Required:	  	$                     (aggregate outstanding amount of the Obligations – Line E above)
			
	B.	  	Actual:	  	$                     (balance of the Pledged Account – Line B above)

 Is line B equal to or greater than line A? 
  

			
	  ̈ No, not in compliance
	  	  ̈ Yes, in compliance

  
 3 

 EXHIBIT C – LOAN PAYMENT/ADVANCE REQUEST FORM 

DEADLINE FOR SAME DAY PROCESSING IS NOON PACIFIC TIME* 
  

			
	Fax To:	  	Date:                     

  

			
	LOAN PAYMENT:
	ARCADIA BIOSCIENCES, INC.
	 	 
	From Account #
                                         
                           	 	To Account #
                                         
                                     
	(Deposit Account #)	 	(Loan Account #)
	Principal $
                                         
                                    	 	and/or Interest $
                                         
                                 
	 	 
	Authorized Signature:
                                         
                  	 	Phone Number:
                                         
                                  
	 Print Name/Title:
                                         
                         
  
	 	 

  

			
	
LOAN ADVANCE:
  

Complete Outgoing Wire Request section below if all or a portion of the funds from this loan advance are for an outgoing wire.

 

	From Account #
                                         
                           	 	To Account #
                                         
                                    
	(Loan Account #)	 	(Deposit Account #)
	 	 
	 Amount of Advance $
                                         
                  
  
	 	 
	  

All Borrower’s representations and warranties in the Loan and Security Agreement are true, correct and complete in all material respects on the date of
the request for an advance; provided, however, that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof; and provided, further that those
representations and warranties expressly referring to a specific date shall be true, accurate and complete in all material respects as of such date:

	 	 
	Authorized Signature:
                                         
                  	 	            Phone Number:
                                         
                     
	 	 
	 Print Name/Title:
                                         
                         
  
	 	 

  

			
	
OUTGOING WIRE REQUEST:
 Complete only if all or a
portion of funds from the loan advance above is to be wired.
 Deadline for same day processing is noon, Pacific Time

 

	Beneficiary Name:
                                         
                       	  	Amount of Wire: $
                                         
                       
	Beneficiary Bank:
                                         
                        	  	Account Number:
                                         
                         
	City and State:
                                         
                             	  	 
	 	 
	Beneficiary Bank Transit (ABA) #:
                                     	  	Beneficiary Bank Code (Swift, Sort, Chip, etc.):                   
	 	  	 (For International Wire Only)

	 	 
	Intermediary Bank:
                                         
                      	  	Transit (ABA) #:
                                         
                          
	 
	For Further Credit to:
                                         
                                         
                                         
                                         
                
	 
	Special Instruction:
                                         
                                         
                                         
                                         
                   
	 
	  

By signing below, I (we) acknowledge and agree that my (our) funds transfer request shall be processed in accordance with and subject to the terms and
conditions set forth in the agreements(s) covering funds transfer service(s), which agreements(s) were previously received and executed by me (us).
  

	Authorized Signature:
                                         
                  	  	2nd Signature (if required):
                                         
          
	 	 
	Print Name/Title:
                                         
                         	  	Print Name/Title:
                                         
                          
	 	 
	 Telephone #:
                                         
                                

 
	  	Telephone #:
                                         
                                 

  

	*	Unless otherwise provided for an Advance bearing interest at LIBOR. 

  
 4 

 EXHIBIT D 

BORROWING RESOLUTIONS 
  

 
 CORPORATE BORROWING CERTIFICATE 

 

									
	BORROWER:	  	ARCADIA BIOSCIENCES, INC.	  		  	DATE:	  	December 29, 2015
	BANK:	  	SILICON VALLEY BANK	  		  		  	

 I hereby certify as follows, as of the date set forth above: 

 

	1.	I am the Secretary, Assistant Secretary or other officer of Borrower. My title is as set forth below. 

  

	2.	Borrower’s exact legal name is set forth above. Borrower is a corporation existing under the laws of the State of Delaware. 

  

	3.	Attached hereto are true, correct and complete copies of Borrower’s Articles/Certificate of Incorporation (including amendments), as filed with the Secretary of State of the state in which Borrower is incorporated
as set forth above. Such Articles/Certificate of Incorporation have not been amended, annulled, rescinded, revoked or supplemented, and remain in full force and effect as of the date hereof. 

 

	4.	The resolutions attached hereto were duly and validly adopted by Borrower’s Board of Directors at a duly held meeting of such directors (or pursuant to a unanimous written consent or other authorized corporate
action). Such resolutions are in full force and effect as of the date hereof and have not been in any way modified, repealed, rescinded, amended or revoked, and Silicon Valley Bank (“Bank”) may rely on them until Bank receives written
notice of revocation from Borrower. 

  

	5.	The persons listed below are Borrower’s officers or employees with their titles and signatures shown next to their names. 

  

													
	Name	 	 	  	Title	 	 	  	Signature	 	 	  	 Authorized to

Add or Remove

Signatories

							
	 Eric Rey
	 		  	 Chief Executive Officer
	 		  	  
	 		  	 ̈
							
	 Steve Brandwein
	 		  	 Chief Financial Officer
	 		  	  
	 		  	 ̈

  

			
	By:	 	  

	Name:	 	Wendy Neal
	Title:	 	Secretary

  
 5 

 Resolutions of the Board passed on October 29, 2015 

Silicon Valley Bank Financing 
 WHEREAS,
the Board has been presented with a proposal for the Company to enter into a secured loan transaction (the “Loan Transaction”) with Silicon Valley Bank (the “Lender”), pursuant to which the Company would
(a) borrow from the Lender up to $25,000,000 in the aggregate pursuant to a term loan facility and use the proceeds thereof to refinance the Company’s existing indebtedness to Tennenbaum Capital and Mahyco International Pte. Ltd., to pay
related prepayment premiums, fees and expenses, and for general corporate purposes and (b) grant to the Lender a security interest in substantially all of the Company’s assets, excluding intellectual property, to secure the Company’s
indebtedness to the Lender. 
 WHEREAS, the Board has determined that it is desirable and in the best interests of the Company and its
stockholders for the Company to enter into the Loan Transaction. 
 NOW, THEREFORE, BE IT RESOLVED, that the Loan Transaction,
substantially in accordance with the terms presented to the Board, together with such changes as the officers of the Company (or any of them), including without limitation the Chief Executive Officer and Chief Financial Officer of the Company (each,
an “Authorized Officer”), may determine to be necessary or desirable, is hereby approved and authorized for all purposes. 

RESOLVED FURTHER, that the Authorized Officers (acting singly or jointly) are hereby authorized and directed to execute and deliver on
behalf of the Company such definitive loan agreements, promissory notes, pledge agreements, security agreements and all other documents necessary to effectuate the Loan Transaction and to grant to the Lender a lien on and security interest in
substantially all of the Company’s assets (excluding intellectual property) (collectively, the “Loan Documents”), together with all amendments or other modifications to any of the foregoing, as the Authorized Officers (or any
of them) may determine to be necessary or desirable, such determination to be conclusively evidenced by the execution and delivery of the Loan Documents. 

RESOLVED FURTHER, that the Authorized Officers (acting singly or jointly) are hereby authorized on behalf of the Company to request
borrowings and other extensions of credit under the Loan Documents, at such times and in such amounts as the Authorized Officers may deem appropriate for the conduct of the Company’s business. 

General Resolutions 
 RESOLVED, that the
Authorized Officers of the Company are hereby authorized and directed, jointly and severally, in the name and on behalf of this Company, to do and perform, or cause to be done or performed, all such acts and things, and to prepare, execute and
deliver, or cause to be prepared, executed and delivered, all such agreements, undertakings, instruments, certificates or other documents they deem necessary or advisable to carry out the purpose and intent of the foregoing resolutions, including
but not limited to obtaining all necessary permits and qualifications under all applicable laws and regulations. 
 RESOLVED FURTHER,
that any and all actions heretofore or hereafter taken by the officers or directors of the Company within the terms of any of the foregoing resolutions are hereby ratified and confirmed in all respects. 

  
 6 

			
	

	 	Marketing Consent Form

  

SVB Financial Group is proud of our business relationships and occasionally like to promote these relationships. We would
like to use your company’s information and logo for promotional and marketing purposes in SVB Financial Group member businesses (collectively “SVB”) materials. While we would appreciate your consent to all of the uses listed below,
please review and select all of the uses that you consent to below. 
  

	 	 ̈	Marketing: You consent to SVB’s use of Company’s name, logo and images provided to us in written and oral presentations, advertising, marketing and PR materials, professional lists, and Web sites.

  

	 	 ̈	Deal Terms: You consent to SVB’s inclusion of the size and type of any loan or credit facility alongside your company’s name in any oral presentations, advertising, marketing and PR materials, customer lists,
and Web sites. 

  

	 	 ̈	Reference: You consent to SVB’s use of Company and representatives’ names as a reference for SVB. 

  

	 	 ̈	Testimonial: You consent to SVB’s use of Company and representatives’ names and quotations in written and oral presentations, marketing and PR materials, and Web sites. Our practice is to send you a draft of
any quotation concerning Company prior to publishing. 

  

	 	 ̈	News release: You consent to SVB’s use of Company’s name, trademarks, service marks, quotations, and images provided to us in the SVB’s news releases concerning Company. Our practice is to send you a
draft of any news release concerning Company prior to publishing. 

 Logos: Please submit your company’s logo in: 

 

	 	•	 	Full color and black and white versions, with or without taglines, and 

  

	 	•	 	At least 300 dpi in EPS, TIF, or JPG formats - please do not send PDF or Web site logos. 

  

			
	Names: Please make sure to print the Company name, and any individual names and titles as you would like them displayed in materials or lists.

			
		 	Company Name

 You grant to SVB a limited license to use the information for the limited purposes above, which you can revoke
upon written notice to SVB. The signer below acknowledges that he or she has authority to bind the Company to this consent. SVB will not be responsible for versions that were printed prior to receiving notice revoking any such consent. Company is
solely responsible for defense and maintenance of its intellectual property. 
 Please return this completed form via email to
logo@svb.com. If you have any questions, contact the SVB Marketing Department at 650.855.3079. 
 ACCEPTED AND
AGREED ON BEHALF OF
                                         
                                    (“COMPANY” OR
“YOU”: 
  
  

					
	Name and Title	 	Signature	 	Date
			
		 		 	
	Address	 	 	 	 
			
		 		 	
	Phone Number	 	Email	 	 
		 		 	

 
  

			
	 Corporate Headquarters

3005 Tasman Drive Santa Clara, California 95054 U.S.A.

Phone 408.654.7400 svb.com
	 	 © SVB Financial Group. All rights reserved. Member Federal Reserve System, SVB,

SVB>Find a way, SVB Financial Group, and Silicon Valley Bank are registered trademarks.

13-12759. Rev. 03-15-13.

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