Item 1.01
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Entry into a Material Definitive Agreement.
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As previously reported in a Current Report
on Form 8-K filed with the Securities and Exchange Commission (the “Commission”) on May 2, 2017 (the “Original
Report”), on May 1, 2017, Cadiz Inc. (the “Company”) and Cadiz Real Estate LLC (collectively, the “Borrowers”
or “Cadiz”), entered into a $60,000,000 Credit Agreement (the “Credit Agreement”) with Apollo Special Situations
Fund, L.P. (“Apollo”, and together with the other lenders from time to time party to the Credit Agreement, the “Lenders”)
and Wells Fargo Bank, National Association, as agent for the Lenders, pursuant to which the Lenders agreed to make secured term
loans to the Borrowers (the “Loans”) in an aggregate principal amount of $60,000,000 (the “Apollo Loan Transaction”).
The Apollo Loan Transaction closed on May 25, 2017 (the “Closing Date”). In conjunction with the closing of the Apollo
Loan Transaction, the Company issued to Apollo a warrant to purchase an aggregate 357,500 shares of its common stock, subject to
adjustment (the “Apollo Warrant”) and the Borrowers entered into a Security Agreement (the “Security Agreement”)
and a Deed of Trust, Assignment of Leases and Rents, Security Agreement, Financing Statement and Fixture Filing (“Mortgage”)
whereby the Borrowers granted, for the benefit and security of the Lenders, a security interest in all of the property owned or
at any time acquired by the Borrowers, subject to certain exceptions, as collateral security for the payment and performance when
due (whether at the stated maturity, by acceleration or otherwise) of the Borrower Obligations and each Loan Party’s Obligations,
each as defined in the Security Agreement.
Prior to the Closing Date, on May 24, 2017,
Cadiz entered into an Amended and Restated Payoff Agreement and Stipulation (the “Restated Payoff Agreement”) with
its former lenders, MSD Master Credit Opportunity Fund, L.P. (“MSD”), Milfam II L.P. and WPI-Cadiz Farm CA, LLC (collectively,
the “Former Lenders”) and Wells Fargo Bank, National Association, as administrative agent (the “Agent”),
which Restated Payoff Agreement amended and restated in its entirety a Payoff Agreement and Stipulation entered into on May 23,
2017 among Cadiz, the Former Lenders and the Agent. The Restated Payoff Agreement provides for, among other things, the Former
Lenders’ acceptance of prepayment of certain loans pursuant to the Amended and Restated Credit Agreement, dated as of October
30, 2013, by and among Cadiz, the Former Lenders and the Agent, as it was subsequently amended on November 23, 2015, February 8,
2016, March 4, 2016, April 28, 2016 and November 29, 2016 (the “Prior Credit Agreement”) and the submission to mediation
or, if necessary, binding arbitration, of certain disputed matters concerning the Prior Credit Agreement and the prepayment of
loans thereunder. Pursuant to the Restated Payoff Agreement, if the disputed matters concerning the Prior Credit Agreement are
decided in favor of the Former Lenders, the Company will be required to issue to the Former Lenders registered shares of Common
Stock (as defined in the warrants issued to the Former Lenders), together with any other payment that would be due to each Former
Lender holding a warrant from the Company upon the cashless exercise of the applicable warrant for all Warrant Stock (as defined
the warrants issued to the Former Lenders), as if the Initial Exercise Date and the Exercise Date (each as defined in the warrants
issued to the Former Lenders) were the business day immediately following such arbitration determination. The warrants issued to
the Former Lenders are described in and attached as exhibits to the Company’s Current Report on Form 8-K filed with the Commission
on December 1, 2016.
The discussion above
does not purport to be a complete description of the Apollo Warrant, the Security Agreement, the Mortgage or the Restated Payoff
Agreement, and such discussion is qualified in its entirety by reference to the full text of each such document, each of which
is attached as an exhibit to this Current Report and is incorporated herein by reference.