EXHIBIT 4.4
PREFERRED STOCK EXCHANGE AGREEMENT
This Preferred Stock Exchange Agreement ("Agreement") is made and
entered into effective as of the 20th day of October 2003, by and among Cadiz
Inc., a Delaware corporation ("Cadiz"), OZ Master Fund, Ltd. ("OZ Master Fund")
and OZF Credit Opportunities Master Fund, Ltd. ("OZF") and is made with
reference to the following facts:
RECITALS
A. WHEREAS, OZ Master Fund is the record and beneficial holder of (i)
4,500 shares of the issued and outstanding Series D Preferred Stock of Cadiz,
(ii) 2,500 shares of the issued and outstanding Series X-0 Xxxxxxxxx Xxxxx xx
Xxxxx, (xxx) 2,500 shares of the issued and outstanding Series E-2 Preferred
Stock of Cadiz and (iv) warrants to purchase 340,834 of the authorized but
unissued shares of common stock, par value $.01 per share (the "Common Stock")
of Cadiz, as described on Appendix A hereto (the "OZ Warrants");
B. WHEREAS, OZF is the record and beneficial holder of (i) 500 shares
of the issued and outstanding Series D Preferred Stock of Cadiz, (ii) 1,250
shares of the issued and outstanding Series E-1 Preferred Stock of Cadiz, and
(iii) 1,250 shares of the issued and outstanding Series E-2 Preferred Stock of
Cadiz and (iv) warrants to purchase 74,166 shares of the Common Stock of Cadiz,
as described on Appendix A hereto (the "OZF Warrants");
C. WHEREAS, the parties wish to provide for the exchange of all of the
shares of Series D Preferred Stock currently owned by OZ Master Fund and OZF for
an aggregate of 8,000,000 shares of heretofore authorized but unissued shares of
the Common Stock of Cadiz, all upon the terms and conditions set forth herein;
D. WHEREAS, the parties wish to provide for the exchange of all of the
shares of Series E-1 Preferred Stock and Series E-2 Preferred Stock currently
owned by OZ Master Fund and OZF (collectively, the "Series E Preferred Stock")
for an aggregate of 2,000,000 shares of heretofore authorized but unissued
shares of the Common Stock of Cadiz, all upon the terms and conditions set forth
herein;
AGREEMENT
NOW, THEREFORE, in consideration of the mutual benefits to be derived
herefrom and of the mutual agreements hereinafter set forth, the parties hereto
agree as follows:
ARTICLE I
THE PREFERRED STOCK EXCHANGE
1.1. EXCHANGE OF STOCK. Upon the terms and subject to the
conditions contained herein, each of OZ Master Fund and OZF (individually, a
"Preferred Stockholder" and collectively, the "Preferred Stockholders") will
contribute, convey, transfer, assign and deliver to Cadiz at the Closing (as
defined below), and Cadiz will accept from each Preferred Stockholder all of its
Preferred Stock, and in exchange therefore (the "Exchange"), Cadiz shall issue
and
deliver to the Preferred Stockholders (i) a total of 8,000,000 shares of duly
authorized, validly issued, fully paid and nonassessable shares of Common Stock
in exchange for the Series D Preferred Stock (the "Series D Exchange Shares"),
with such Series D Exchange Shares to be divided between the Preferred
Stockholders on the basis of One Thousand, Six Hundred (1,600) Series D Exchange
Shares for each share of Series D Preferred Stock exchanged (the "Series D
Exchange Ratio"), (ii) a total of 1,000,000 shares of duly authorized, validly
issued, fully paid and nonassessable shares of Common Stock in exchange for the
Series E-1 Preferred Stock (the "Series E-1 Exchange Shares"), with such Series
E-1 Exchange Shares to be divided between the Preferred Stockholders on the
basis of Two Hundred and Sixty Six and two-thirds (266 2/3) Series E-1 Exchange
Shares for each share of Series E-1 Preferred Stock exchanged (the "Series E-1
Exchange Ratio"), and (iii) a total of 1,000,000 shares of duly authorized,
validly issued, fully paid and nonassessable shares of Common Stock in exchange
for the Series E-2 Preferred Stock (the "Series E-2 Exchange Shares"), with such
Series E-2 Exchange Shares to be divided between the Preferred Stockholders on
the basis of Two Hundred and Sixty Six and two-thirds (266 2/3) Series E-2
Exchange Shares for each share of Series E-2 Preferred Stock exchanged (the
"Series E-2 Exchange Ratio"). The Series D Exchange Shares, Series E-1 Exchange
Shares and Series E-2 Exchange Shares shall be referred to collectively herein
as the "Exchange Shares". Upon consummation of the Exchange, the Exchange Shares
shall be deemed to have been issued in full satisfaction of any and all rights
(whether or not accrued) of the Preferred Stockholders pertaining to the
Preferred Stock, including, without limitation, any rights of the Preferred
Stockholders to accrued but unpaid dividends as of the Closing Date.
1.2. CLOSING. Subject to acceleration upon transfer of the
Preferred Stock pursuant to Section 4.3 hereof, the closing of the Exchange (the
"Closing") shall take place on the ninetieth (90th) day following the date
hereof. The date on which the Exchange is effected is hereinafter referred to as
the "Closing Date". At the Closing, Cadiz will execute and deliver to each
Preferred Stockholder, or its respective representative, a stock certificate or
certificates dated as of the Closing Date, registered in the name of such
Preferred Stockholder, representing the Exchange Shares being issued to such
Preferred Stockholder pursuant to the Exchange, and (ii) each Preferred
Stockholder shall deliver to Cadiz a stock certificate or certificates
registered in the name of such Preferred Stockholder (or duly endorsed for
transfer to such Preferred Stockholder), representing the Preferred Stock owned
by such Preferred Stockholder (which certificates shall be duly endorsed for
transfer to Cadiz). To the extent that (i) the Series D Exchange Shares, Series
E-1 Exchange Shares and/or Series E-2 Exchange Shares may be issued without
restrictive legend in reliance upon Rule 144(k) promulgated under the Securities
Act of 1933, as amended, and (ii) Cadiz receives from such Preferred Stockholder
(or its assignee) representations as to such Series of Exchange Shares as set
forth in Appendix B hereto, then stock certificate(s) representing the Exchange
Shares being issued to such Preferred Stockholders with respect to such Series
shall be issued without restrictive legend. Otherwise, such stock
certificates(s) shall bear an investment legend as set forth in Section 3.5
below.
1.3. ADJUSTMENT FOR STOCK SPLIT, RECAPITALIZATION, ETC. In the
event that, subsequent to the effective date of this Agreement but prior to the
Closing Date, Cadiz shall (A) pay a dividend or make a distribution on its
shares of Common Stock in shares of Common Stock, (B) subdivide or reclassify
its outstanding Common Stock into a greater number of shares, (C) combine or
reclassify its outstanding Common Stock into a smaller number of shares, or (D)
issue by capital reorganization or reclassification of its shares of Common
Stock or otherwise (other than a subdivision or combination of its shares
provided for above) any shares of capital stock of Cadiz,
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then the total number of Exchange Shares issuable pursuant to this Agreement and
the Series D Exchange Ratio, Series E-1 Exchange Ratio and/or Series E-2
Exchange Ratio, as applicable, in effect immediately prior to such action shall
be adjusted so that each Preferred Stockholder shall be entitled to receive,
upon consummation of the Exchange, the number of shares of capital stock of
Cadiz which such Preferred Stockholder would have received immediately following
such action had the Exchange been consummated immediately prior thereto. An
adjustment made pursuant to this subparagraph shall become effective
retroactively immediately after the record date in the case of a dividend or
distribution and shall become effective immediately after the effective date in
the case of a subdivision, combination or reclassification. If, as a result of
an adjustment made pursuant to this subparagraph, any Preferred Stockholder
shall become entitled to receive shares of two or more classes of capital stock
of Cadiz in the Exchange, the Board of Directors of Cadiz shall determine in
good faith the allocation of the adjusted Series D Exchange Ratio, Series E-1
Exchange Ratio or Series E-2 Exchange Ratio between or among shares of such
classes of capital stock, which allocation must be reasonably acceptable to the
Preferred Stockholder. Such adjustment shall be made successively whenever any
event listed above shall occur.
1.4 TERMINATION OF EXCHANGE. Notwithstanding anything in this
Agreement to the contrary, the Exchange may be terminated, and the transactions
contemplated thereby may be abandoned at any time prior to 5:00 P.M. Pacific
Standard Time on the fourth business day following the effective date of this
Agreement (the "OZ Optional Termination Date") by the Preferred Stockholders in
their sole discretion upon written notification. If the Exchange is so
terminated by the Preferred Stockholders, the Exchange will forthwith become
null and void and there will be no liability or obligation on the part of the
Preferred Stockholders (or any of their respective representatives or
affiliates) with respect to such Exchange.
1.5 TEMPORARY WAIVER OF EXERCISABILITY OF WARRANTS. In order that
Cadiz shall have sufficient authorized but unissued shares of Common Stock
available to issue all of the Exchange Shares pursuant to the Exchange, each of
OZ Master Fund and OZF hereby waives, for a period commencing as of the date of
this Agreement and ending 91 days from the date of this Agreement, any
affirmative obligation of Cadiz to reserve for issuance a sufficient quantity of
Common Stock as may be required for issuance and delivery upon any exercise by
OZ Master Fund or OZF of the OZ Warrants or the OZF Warrants.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF CADIZ
Cadiz represents and warrants to each Preferred Stockholder that as of
the date hereof and again as of the Closing Date:
2.1. ORGANIZATION, GOOD STANDING. Cadiz is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware, and is duly qualified and authorized to do business and in good
standing in each other jurisdiction in which it is required to be qualified or
where it owns any material property or conducts any material operations. Cadiz
has all requisite corporate power and authority to own, lease, and operate its
assets and to carry on its business as now being conducted.
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2.2 AUTHORIZATION. Cadiz has the corporate power and authority to
enter into this Agreement and to consummate the transactions contemplated
hereby. All actions on the part of Cadiz necessary for the authorization,
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated hereby have been or will be taken prior to the
Closing Date, and this Agreement constitutes the legal, valid and binding
obligation of Cadiz, enforceable against it in accordance with its terms, except
as enforceability may be restricted, limited or delayed by applicable
bankruptcy, insolvency, fraudulent conveyance, or other laws affecting
creditor's rights generally, and except as enforceability is subject to general
principles of equity.
2.3 NO VIOLATION OF OTHER AGREEMENTS; NO CONFLICTS.
(a) Neither this Agreement nor any of the transactions
contemplated hereunder violates, conflicts with or results in a breach of, or
shall violate, conflict with or result in a breach of any lease, contract,
document or agreement to which Cadiz is a party or by which it may be bound.
(b) Neither the execution and delivery of this Agreement
nor the consummation or performance of the transactions contemplated herein,
will, directly or indirectly (with or without the giving of notice, or lapse of
time, or both):
(i) contravene, conflict with, or result in a
violation of any provision of the organizational documents of Cadiz;
(ii) contravene, conflict with, or result in a
violation of any order, judgment or decree to which Cadiz may be subject; or
(iii) contravene, conflict with or result in a
violation of any of the terms or requirements, or give any governmental body the
right to revoke, withdraw, suspend, cancel, terminate or modify, any
governmental authorization that is held by Cadiz.
2.4 CADIZ CAPITAL STRUCTURE. The authorized capital stock of Cadiz
consists of 70,000,000 shares of common stock, $.01 par value per share, of
which 57,316,939 shares are issued and outstanding as of the date hereof, and
100,000 shares of preferred stock, $.01 par value per share. Of the 100,000
authorized shares of preferred stock, 5,000 have been designated as Series D
Preferred Stock, 3,750 have been designated as Series E-1 Preferred Stock, and
3,750 have been designated as Series E-1 Preferred Stock. As of the date hereof,
5,000 shares of Series D Preferred Stock, 3,750 shares of Series E-1 Preferred
Stock, and 3,750 shares of Series E-1 Preferred Stock have been issued and are
outstanding. Pursuant to a Stockholders Rights Plan adopted by the Company on
May 10, 1999 (the "Plan"), each holder of Common Stock also holds one preferred
share purchase right, as defined in the Plan. Upon issuance and delivery in the
manner herein described, the Exchange Shares will be duly authorized and validly
issued, fully paid and nonassessable and free of preemptive rights.
2.5 LEGAL PROCEEDINGS. There is no pending legal or administrative
proceeding ("Proceeding"), and, to the knowledge of Cadiz, no person has
threatened to commence any
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Proceeding, that challenges, or that may have the effect of preventing,
delaying, making illegal, or otherwise interfering with, any of the transactions
contemplated hereby.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PREFERRED STOCKHOLDERS
Each Preferred Stockholder represents and warrants severally, and not
jointly, to Cadiz that as of the date hereof and again as of the Closing Date:
3.1 AUTHORIZATION. The Preferred Stockholder has the corporate
power and authority to enter into this Agreement and to consummate the
transactions contemplated hereby. All actions on the part of the Preferred
Stockholder necessary for the authorization, execution, delivery and performance
of this Agreement and the consummation of the transactions contemplated hereby
have been or will be taken prior to the Closing Date, and this Agreement
constitutes the legal, valid and binding obligation of the Preferred
Stockholder, enforceable against it in accordance with its terms, except as
enforceability may be restricted, limited or delayed by applicable bankruptcy,
insolvency, fraudulent conveyance, or other laws affecting creditor's rights
generally, and except as enforceability is subject to general principles of
equity.
3.2 NO VIOLATION OF OTHER AGREEMENTS; NO CONFLICTS.
(a) Neither this Agreement nor any of the transactions
contemplated hereunder violates, conflicts with or results in a breach of, or
shall violate, conflict with or result in a breach of any lease, contract,
document or agreement to which the Preferred Stockholder is a party or by which
it may be bound.
(b) Neither the execution and delivery of this Agreement
nor the consummation or performance of the transactions contemplated herein,
will, directly or indirectly (with or without the giving of notice, or lapse of
time, or both):
(i) contravene, conflict with, or result in a
violation of any provision of the organizational documents of the Preferred
Stockholder;
(ii) contravene, conflict with, or result in a
violation of any order, judgment or decree to which the Preferred Stockholder
may be subject; or
(iii) contravene, conflict with or result in a
violation of any of the terms or requirements, or give any governmental body the
right to revoke, withdraw, suspend, cancel, terminate or modify, any
governmental authorization that is held by the Preferred Stockholder.
3.3 LEGAL PROCEEDINGS. There is no pending legal or administrative
proceeding ("Proceeding"), and, to the knowledge of such Preferred Stockholder,
no person has threatened to commence any Proceeding, that challenges, or that
may have the effect of preventing, delaying, making illegal, or otherwise
interfering with, any of the transactions contemplated hereby.
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3.4 TITLE TO PREFERRED STOCK AND WARRANTS. Such Preferred
Stockholder is the record and beneficial holder of all the Preferred Stock which
is subject to the Exchange and all of the Warrants which are subject to the
temporary waiver set forth in Section 1.5, in each case free and clear of all
pledges, security interests, liens, charges, encumbrances, equities, claims and
options of whatever nature. No Preferred Stockholder nor any individual,
corporation, entity or person having or claiming any interest in, or with
respect to, any of the Preferred Stock owned by such Preferred Stockholder will,
at or after the Closing Date, have any such claim or interest, or have any right
to claim or receive any other payment or consideration with respect to such
Preferred Stock against or from Cadiz at or after the Closing Date.
3.5 RESTRICTIONS ON TRANSFER. Each Preferred Stockholder has been
advised that:
(a) the offer and sale of the Exchange Shares to such
Preferred Stockholder has not been, and will not be, registered under the
Securities Act of 1933, as amended, and the rules and regulations thereunder
(the "Act"), and such Preferred Stockholder may not sell or otherwise transfer
the Exchange Shares unless the transfer is registered under the Act and under
applicable state laws or an exemption from such registration, such as Rule
144(k), is available;
(b) the Exchange Shares that such Preferred Stockholder
is acquiring are "restricted securities," as that term is defined in Rule 144
promulgated under the Act, unless and until the requirements of Rule 144 have
been met with respect to such shares; and
(c) any and all certificates representing Exchange Shares
shall bear an investment legend restricting the transfer of such Exchange Shares
unless or until the requirements of Rule 144 have been met as to such shares to
the reasonable satisfaction of Cadiz and its counsel.
3.6 DISCLOSURE. Each Preferred Stockholder has heretofore received
and reviewed Cadiz' press releases, public filings with the Securities and
Exchange Commission (the "SEC") through July 22, 2003, and exhibits attached
thereto (the "Disclosure Documents"). In addition to the foregoing, each
Preferred Stockholder has had the opportunity to speak directly with officers of
Cadiz concerning Cadiz' business plan and operations.
3.7 NO WARRANTY. Each Preferred Stockholder represents and
warrants that it never has been represented, guaranteed, or warranted to them by
any officer or director of Cadiz, their agents or employees or any other person
in connection with Cadiz, expressly or by implication, any of the following:
(a) The approximate or exact length of time that the
Preferred Stockholder will be required to remain as the owner of the Exchange
Shares;
(b) The exact amount of profit and/or amount or type of
consideration, profits or losses (including tax benefits) to be realized, if
any, by Cadiz; and
(c) That the past performance or experience of the
officers and directors of Cadiz, or any other person connected with Cadiz can
predict the results of the ownership of the Exchange Shares or the overall
success of Cadiz.
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3.8 SIGNIFICANT RISKS. Each Preferred Stockholder understands the
following:
(a) There are a number of risks relating to an investment
in Cadiz as set forth herein, as further described in the Disclosure Documents
and in the Preferred Stockholder's direct communications with Cadiz.
(b) Each Preferred Stockholder may lose its entire
investment in the Exchange Shares and Cadiz.
(c) No federal or state agency, or any other regulatory
body, has passed upon the Exchange Shares, or an investment therein, or made any
finding or determination as to the fairness of an investment in the Exchange
Shares.
(d) If a bankruptcy petition is filed by or against Cadiz
following the execution of this Agreement but prior to the Closing Date, the
rights of the Preferred Stockholders under this Agreement may be subject to
rejection and/or cancellation in accordance with applicable bankruptcy law.
3.9 RELIANCE. Each Preferred Stockholder has relied solely upon
this Agreement, the Disclosure Documents and independent investigations made by
the Preferred Stockholder or the Preferred Stockholder's representatives with
respect to the Preferred Stockholder's investment in the Exchange Shares, and no
oral or written representations inconsistent with the contents of the Disclosure
Documents have been made to the Preferred Stockholder by Cadiz or any of its
representatives.
3.10 NO REPRESENTATION REGARDING INDIVIDUAL SEC REPORTING
REQUIREMENTS. Cadiz has made no representations to such Preferred Stockholder
regarding its reporting requirements with the SEC related to its ownership in
Cadiz, and such Preferred Stockholder acknowledges and agrees that it is the
Preferred Stockholder's responsibility to ensure that it complies with any
disclosure and reporting requirements of the SEC.
3.11 KNOWLEDGE OF LATE SEC REPORTING. Cadiz has informed such
Preferred Stockholder that (i) Cadiz has not yet filed required periodic reports
with the SEC after March 21, 2003, including its Annual Report on Form 10-K for
the year ended December 31, 2002 and its Quarterly Reports for the quarters
ended March 31, 2003 and June 30, 2003, and therefore the Disclosure Documents
do not provide disclosure regarding developments concerning Cadiz for the
periods that would be covered by those reports or any subsequent period, (ii)
Cadiz is currently in default on its senior secured loan obligations, (iii)
Cadiz is a guarantor of the $115 million 11 1/4% First Mortgage Bonds of its
wholly-owned subsidiary, Sun World International, Inc., which filed a voluntary
petition under Chapter 11 of the Bankruptcy Code on January 30, 2003 and is in
default of its obligations under such bonds, and (iv) such Preferred Stockholder
must rely upon its own independent investigations with respect to such Preferred
Stockholder's investment in the Exchange Shares and on discussions with officers
of Cadiz with respect to any developments subsequent to reports that Cadiz has
filed with the SEC.
3.12 RELIANCE ON OWN COUNSEL AND ADVISERS. In evaluating the merits
and risks of an investment in the Exchange Shares, such Preferred Stockholder
has not relied upon Cadiz or
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Cadiz' attorneys or advisers for legal or tax advice, and has, if desired, in
all cases sought the advice of the undersigned's own personal legal counsel and
tax advisers.
ARTICLE IV
ASSIGNMENT; THIRD PARTY BENEFICIARIES
4.1. ASSIGNMENT. This Agreement and all of the provisions hereof
shall be binding upon and shall inure to the benefit of the parties and their
respective heirs (as applicable), legal representatives, and permitted
successors and assigns. Without limitation of the foregoing, the parties
expressly agree that this Agreement and the rights, interests and obligations of
the Preferred Stockholders hereunder shall immediately and automatically be
assigned by any Preferred Stockholder to any purchaser or transferee of
Preferred Stock from such Preferred Stockholder with respect to the shares of
Preferred Stock so sold or transferred and such Preferred Stockholder shall have
no further obligations hereunder with respect to such shares of Preferred Stock
so sold or transferred; provided, however, that any such sale or transfer be in
compliance with all applicable state and federal securities laws and/or the
securities laws of any other applicable jurisdiction and provided further that
the transferee explicitly acknowledge and assume the obligations of the
transferor hereunder with respect to the shares of Preferred Stock so sold or
transferred. Any assignment or delegation in contravention of this Section shall
be null and void. Upon any such assignment or transfer, the term "Preferred
Stockholder," as used herein, shall mean, when the context so requires, the
assignee or transferee of such shares of Preferred Stock.
4.2. NOTICE OF TRANSFER. Not later than two (2) business days
following the effectuation of any transfer of Preferred Stock, the transferor
and the transferee of the Preferred Stock shall provide joint written notice to
Cadiz of such transfer substantially in the form of Exhibit A hereto (the
"Transfer Notice"), which notice shall specify (i) the identity of the
transferor, (ii) the identity of the transferee, (iii) the number of shares of
each Series of Preferred Stock transferred, (iv) the effective date of transfer,
(iv) an acknowledgment by the transferee of applicability of this Exchange
Agreement to the shares of Preferred Stock transferred, and (vi) if applicable
as to any Series of Preferred Stock transferred, Rule 144(k) representations in
the form of Exhibit B hereto. Such Transfer Notice shall be accompanied by a
stock certificate or certificates duly endorsed for transfer to the transferee,
representing the Preferred Stock so transferred (which certificates shall be
duly endorsed for transfer to Cadiz), in accordance with the requirements of
Section 1.2 above.
4.3. ACCELERATION OF CLOSING DATE. Upon any transfer or assignment
of Preferred Stock satisfying the requirements of this Article IV, the Closing
Date (with respect to the shares of Preferred Stock so transferred and to those
shares of Preferred Stock only) shall automatically be accelerated to the
effective date of such transfer. Not later than the later to occur of (i) the
effective date of transfer or (ii) the seventh business day following receipt by
Cadiz of the Transfer Notice and share certificates pursuant to Section 4.2
above, Cadiz will execute and deliver to the transferee, or its respective
representative, a stock certificate or certificates, registered in the name of
such transferee, representing the Exchange Shares being issued to such
transferee pursuant to the Exchange.
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4.4. THIRD PARTY BENEFICIARY AGREEMENT. Any person acquiring
Preferred Stock from a Preferred Stockholder in a manner satisfying the
requirements of this Article IV shall be deemed to be a third party beneficiary
for purposes of this Agreement and shall be entitled to assert any right, claim
or remedy provided under this Agreement with respect to the shares of Preferred
Stock so acquired (including, without limitation, the obligation of Cadiz to
issue Exchange Shares in exchange for such shares of Preferred Stock in
accordance with the terms of this Agreement).
ARTICLE V
CLOSING CONDITIONS
5.1. CONDITIONS TO THE OBLIGATIONS OF THE PREFERRED STOCKHOLDERS.
The obligations of each Preferred Stockholder to effect the transactions
contemplated hereby shall be subject to the fulfillment at or prior to the
Closing Date of the following conditions, which may be waived only by the
approval of such Preferred Stockholder:
(a) Cadiz shall have performed and complied in all
material respects with the covenants and agreements contained in this Agreement
required to be performed and complied with by it at or prior to the Closing
Date, and the representations and warranties of Cadiz set forth in this
Agreement shall be true and correct in all material respects as of the date of
this Agreement and as of the Closing Date as though made at and as of the
Closing Date.
(b) Since the date of this Agreement, there must not have
been commenced or threatened against Cadiz or the Preferred Stockholder any
proceeding (i) involving any challenge to, or seeking damages or other relief in
connection with, any of the transactions contemplated hereby, or (ii) that may
have the effect of preventing, delaying, making illegal, or otherwise
interfering with any of the transactions contemplated hereby.
5.2. CONDITIONS TO THE OBLIGATIONS OF CADIZ. The obligations of
Cadiz to effect the transactions contemplated hereby, as to any Preferred
Stockholder, shall be subject to the fulfillment at or prior to the Closing Date
of the following conditions, which may be waived only by the approval of Cadiz:
(a) Such Preferred Stockholder shall have performed and
complied in all material respects with the covenants and agreements contained in
this Agreement required to be performed and complied with by it at or prior to
the Closing Date, and the representations and warranties of such Preferred
Stockholder set forth in this Agreement shall be true and correct in all
material respects as of the date of this Agreement and as of the Closing Date as
though made at and as of the Closing Date.
(b) Since the date of this Agreement, there must not have
been commenced or threatened against Cadiz or the Preferred Stockholder any
proceeding (i) involving any challenge to, or seeking damages or other relief in
connection with, any of the transactions contemplated hereby, or (ii) that may
have the effect of preventing, delaying, making illegal, or otherwise
interfering with any of the transactions contemplated hereby.
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ARTICLE VI
INJUNCTIVE RELIEF
6.1 INJUNCTIVE RELIEF. It is understood and agreed that the remedy
at law for the breach of any provision of this Agreement will be inadequate and
that any party hereto shall be entitled to injunctive relief without bond. Such
injunctive relief shall not be exclusive, but shall be in addition to any other
rights or remedies the non-breaching party may have for such breach, and the
non-breaching party shall be entitled to recover all costs and expenses,
including reasonable attorneys' fees incurred by reason of any breach.
ARTICLE VII
MISCELLANEOUS
7.1 ENTIRE AGREEMENT. This Agreement (with Exhibits) constitutes
the entire agreement between the parties with respect to the subject matter
hereof, supersedes all other and prior agreements on the same subject, whether
written or oral, and contains all of the covenants and agreements between the
parties with respect to the subject matter hereof.
7.2 COUNTERPARTS. This Agreement, and any amendments thereto, may
be executed in counterparts, each of which shall constitute an original
document, but which together shall constitute one and the same instrument.
Facsimile signatures of the parties shall be as effective to bind the parties as
original manual signatures.
7.3 HEADINGS. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
7.4 AMENDMENT. This Agreement may be amended at any time by
agreement of the parties, provided that any amendment shall be in writing and
executed by all parties.
7.5 NO WAIVER. No waiver of any term, provision or condition of
this Agreement, whether by conduct or otherwise, in any one or more instances,
shall be deemed to be or be construed as a further or continuing waiver of any
such term, provision or condition or as a waiver of any other term, provision or
condition of this Agreement.
7.6 NOTICES. Any notices required or permitted to be given
hereunder by any party to the other shall be in writing and shall be deemed
delivered upon personal delivery; twenty-four (24) hours following deposit with
a courier for overnight delivery; or five (5) business days hours following
deposit in the U.S. Mail, registered or certified mail, postage prepaid, return-
receipt requested, addressed to the parties at the following addresses or to
such other addresses as the parties may specify in writing:
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If to Cadiz: Cadiz Inc.
000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxx Xxxxxxxxx, Chief Executive Officer
With a copy to: Xxxxxx & Xxxxxxx
0000 Xxxxxxx Xxxx Xxxx, Xxxxxxx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxxxxxx, Esq.
If to OZ Master Fund: OZ Master Fund, Ltd.
c/o Och Ziff Capital Management
0 Xxxx 00xx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
With a copy to: Milbank, Tweed, Xxxxxx & XxXxxx LLP
Xxx Xxxxx Xxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxx, Esq.
Facsimile: 000-000-0000
If to OZF: OZF Credit Opportunities Master Fund Ltd.
c/o Och Ziff Capital Management
0 Xxxx 00xx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
With a copy to: Milbank, Tweed, Xxxxxx & XxXxxx LLP
Xxx Xxxxx Xxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxx, Esq.
Facsimile: 000-000-0000
7.7 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of California.
7.8 SEVERABILITY. If any provision of this Agreement is held by a
court of competent jurisdiction to be invalid or unenforceable, the remaining
provisions will nevertheless continue in full force and effect, unless such
invalidity or unenforceability would defeat an essential business purpose of
this Agreement.
7.9 FEES AND EXPENSES. Except as otherwise explicitly set forth
herein, each party shall bear its own expenses including, without limitation,
attorneys' and accountants' fees in connection with the preparation of this
Agreement and the transactions contemplated hereby.
11
7.10 TIME OF ESSENCE. Time is expressly made of the essence of this
Agreement and each and every provision hereof of which time of performance is a
factor.
7.11 ATTORNEYS' FEES. Should any party institute any action or
procedure to enforce this Agreement or any provision hereof, the prevailing
party in any such action or proceeding shall be entitled to receive from the
other party all costs and expenses, including without limitation reasonable
attorneys' fees, incurred by the prevailing party in connection with such action
or proceeding.
7.12 FURTHER ASSURANCES. The parties shall take such actions and
execute and deliver such further documentation as may reasonably be required in
order to give effect to the transaction contemplated by this Agreement and the
intentions of the parties hereto.
7.13 CONSTRUCTION. Whenever in this Agreement the context so
requires, references to the masculine shall be deemed to include the feminine
and the neuter, reference to the neuter shall be deemed to include the masculine
and feminine, references to the plural shall be deemed to include the singular
and the singular to include the plural and references to the words "and" and
"or" shall be deemed to include the inclusive usage "and/or."
[REST OF PAGE INTENTIONALLY BLANK]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
become effective on the day and year first hereinabove written.
CADIZ INC.
By: /s/ Xxxxxxxx Xxxxxx Painter
------------------------------------
Name: Xxxxxxxx Xxxxxx Xxxxxxx
Title: VP, General Counsel
OZ MASTER FUND LTD.
OZ Management, LLC
as investment manager
By: /s/ Xxxxxx X. Och
------------------------------------
Xxxxxx X. Och
Senior Managing Member
OZF CREDIT OPPORTUNITIES MASTER FUND, LTD.
OZ Management, LP as investment manager
OZ Managemer, LLC managing member
By: /s/ Xxxxxx X. Och
------------------------------------
Xxxxxx X. Och
Senior Managing Member
13
EXHIBIT A
NOTICE OF TRANSFER
Cadiz Inc.
000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Chief Executive Officer
Ladies and Gentlemen:
Please be advised that _______________________ ("Transferor") has transferred:
(i) _________ shares of the Series D Preferred Stock of Cadiz Inc.
(the "Company");
(ii) _________ shares of the Series E-1 Preferred Stock of the
Company; and/or
(iii) _________ shares of the Series E-2 Preferred Stock of the
Company;
(collectively, the "Securities") to _________________________________
("Transferee") as of __________________________, 2003 (the "Effective
Date").
In connection with such transfer, we hereby represent, warrant and certify as
follows:
1. The offer of the Securities was made without any general solicitation
or advertising;
2. The Transferee represents and warrants for the benefit of the Company
that (a) the Transferee is an accredited investor and is acquiring the
Securities solely for the Transferee's own account, for investment, and
not with a view to distribution of the Securities, and (b) the
Transferee is capable, by reason of knowledge and experience in
financial and business matters in general, and investments in
particular, of evaluating the merits and risks of an investment in the
Securities;
3. The Transferee hereby acknowledges the applicability to the Transferee
and to the Securities of that certain Preferred Stock Exchange
Agreement dated as of October _____, 2003 by and among the Company, OZ
Master Fund, Ltd. and OZF Credit Opportunities Master Fund, Ltd (the
"Exchange Agreement"). In particular, the Transferee acknowledges that,
as of the effective date of the transfer of the Securities, the
Transferee (a) is subject to and bound by those certain representations
and warranties set forth in Article III of the Exchange Agreement as
though such representations and warranties had been made directly by
the Transferee to the Company and (b) has assumed all obligations of
the Transferor under the Exchange Agreement with respect to the
Securities;
4. The Closing Date of the Exchange with respect to the Securities
transferred, as calculated in accordance with Section 4.3 of the
Exchange Agreement, shall be ____________________, 2003.
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5. The undersigned are requesting that the shares of Common Stock to be
issued in exchange for the [CHECK AS APPLICABLE]
[____] Series D Preferred Stock
[____] Series E-1 Preferred Stock
[____] Series E-2 Preferred Stock
(collectively, the "Rule 144(k) Preferred Stock") be issued without
restrictive legend in reliance upon Rule 144(k) promulgated under the
Securities Act of 1933, as amended. In order that such shares of Common
Stock be issued without restrictive legend, the Transferor and
Transferee represent that:
(a) Neither Transferee nor Transferor is an affiliate of Cadiz and
neither has been an affiliate of Cadiz in the last three
months.
(b) Transferor fully paid all consideration for, was the
beneficial owner of and bore the full risk of ownership of all
of the Rule 144(k) Preferred Stock at least two years prior to
the date hereof.
(c) Transferor and Transferee are familiar with Rule 144(k) and
agree that in preparing a legal opinion with respect to the
matters set forth above, Cadiz and its counsel may rely upon
the representations set forth herein.
Dated: __________________ , 2003 Very truly yours,
"TRANSFEROR" "TRANSFEREE"
-------------------------------- ------------------------------
(Name of Transferor) (Name of Transferee)
By: ____________________________ By: __________________________
(Authorized Signature) (Authorized Signature)
15
APPENDIX A
WARRANTS
OZ WARRANTS(1)
NUMBER OF CANCELLATION OR
NAME OF WARRANT WARRANT SHARES EXPIRATION DATE
Series D Initial Warrant - A 45,000 12/29/03
Term Loan First Warrant - A 135,000 12/29/03
Term Loan Second Warrant - A 67,500 12/31/04
Series E Initial Warrant - A 46,667 12/22/04
Series E Commitment Exercise Warrant - A 46,667 11/28/04
-------
Total: 340,834
OZF WARRANTS(2)
NUMBER OF CANCELLATION OR
NAME OF WARRANT WARRANT SHARES EXPIRATION DATE
Series D Initial Warrant - B 5,000 12/29/03
Term Loan First Warrant - B 15,000 12/29/03
Term Loan Second Warrant - B 7,500 12/31/04
Series E Initial Warrant - B 23,333 12/22/04
Series E Commitment Exercise Warrant - B 23,333 11/28/04
-------
Total: 74,166
--------------------------------------------------------------------------------
(1) Does not include 95,000 Warrants previously granted which have expired
or been cancelled
(2) Does not include 30,000 Warrants previously granted which have expired
or been cancelled
00
XXXXXXXX X
FORM OF RULE 144(K) REPRESENTATIONS
RULE 144(K) REPRESENTATIONS REGARDING SERIES [ ] PREFERRED STOCK In
order that the Series [__] Exchange Shares be issued on the Closing Date without
restrictive legend in reliance upon Rule 144(k) promulgated under the Securities
Act of 1933, as amended, the Preferred Stockholder represents that:
(a) Such Preferred Shareholder is not an affiliate of Cadiz
and has not been an affiliate of Cadiz in the last three months.
(b) Such Preferred Shareholders fully paid all consideration
for, was the beneficial owner of and bore the full risk of ownership of all of
the securities represented by the Series [__] Preferred Stock at least two years
prior to the date hereof.
(c) Such Preferred Shareholder is familiar with Rule 144(k)
and agrees that in preparing a legal opinion with respect to the matters set
forth above, Cadiz and its counsel may rely upon the representations set forth
herein.
(d) Such Preferred Shareholder shall advise Cadiz immediately
if any of the representations set forth herein ceases to be true and accurate
prior to the Closing Date.
17
