CADIZ INC. (NASDAQ:CDZI) Files An 8-K Entry into a Material Definitive Agreement

Item 1.01

Entry into Credit Agreement

On May 1, 2017 (the Signing Date), Cadiz Inc. (the Company) and
its wholly-owned subsidiary Cadiz Real Estate LLC (collectively,
the Borrowers), 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 (the Agent),
to which the Lenders will make secured term loans to the
Borrowers (the Loans) in an aggregate principal amount of
$60,000,000 (the Loan Transaction) on a closing date scheduled to
occur no later than 34 business days from the Signing Date unless
another date is agreed to in writing by the parties to the Credit
Agreement (the Closing Date).

Interest on the Loans will be due quarterly on each March 31,
June 30, September 30 and December 31 (each an Interest Date)
beginning on June 30, 2017. Interest on the Loans will (i)
accrete to the outstanding principal amount of the Loans at a
rate per annum equal to 6% (the PIK Rate) compounded quarterly on
each Interest Date from and including the Closing Date through
but excluding the date of payment or prepayment and (ii) accrue
on the outstanding principal amount of the Loans at a rate per
annum equal to 2% (the Cash Rate) from and including the Closing
Date through but excluding the date of payment or prepayment. The
Borrowers, in their discretion, may make any quarterly interest
payment in cash on the applicable Interest Date at the PIK Rate,
in lieu of accretion of such interest to the principal amount of
the Loans at the PIK Rate.

The Loans will mature on the earliest of (a) the four year
anniversary of the Closing Date, and (b) the Springing Maturity
Date, which is defined as the date which is 91 days prior to the
maturity date of the 7.00% Convertible Senior Notes of Cadiz due
2020 (the New Convertible Notes) that were issued on or around
December 10, 2015 and April 28, 2016 to the New Convertible Notes
Indenture, as defined in the Credit Agreement, if on the
91^st day preceding the maturity date of the New
Convertible Notes, the 5-Day VWAP, as defined in the Credit
Agreement, is less than 120% of the then applicable Conversion
Rate, as defined in the New Convertible Notes Indenture, and at
least $10,000,000 in original principal amount of the New
Convertible Notes is outstanding ((a) or (b), as applicable, the
Maturity Date).

The Accreted Loan Value plus the Applicable Prepayment Premium
will be due and payable on the Maturity Date. Accreted Loan Value
means, as of the date of determination, the outstanding principal
amount of the applicable Loan, plus all accreted interest as of
the calendar day immediately prior to such date of determination.
Applicable Prepayment Premium means with respect to any repayment
of the Loans (a) the Accreted Loan Value of the Loans being
prepaid or repaid, as applicable, multiplied by (b) 3.00%.

The Borrowers may prepay the Loans, in whole or in part, for an
amount equal to the Accreted Loan Value plus the Applicable
Prepayment Premium; provided that if the Springing Maturity Date
has not occurred, the Borrowers may not prepay the Loans, without
the prior written consent of the holders of more than 50% of the
aggregate unpaid principal amount of the Loans, during the period
commencing on the date that is 91 days prior to the maturity date
of the New Convertible Notes and ending on the maturity date of
the New Convertible Notes.

If all or a portion of the principal of or interest on any Loan
or any fee or other amount payable by the Borrowers is not paid
when due (whether at the stated maturity, by acceleration or
otherwise, after the expiration of any applicable grace period),
all outstanding amounts (whether or not overdue) will bear
interest at a rate per annum equal to the sum of the PIK Rate and
the Cash Rate plus 2.00%.

Subject to an exception for the sale of certain designated
property (the Approved Property), in the event of any Asset Sale,
as defined in the Credit Agreement, the Borrowers must, within
five business days after the receipt of Net Cash Proceeds, as
defined in the Credit Agreement, apply the Net Cash Proceeds of
the Asset Sale first to prepay all amounts due under the Loans
and the Applicable Prepayment Premium thereon. Notwithstanding
the foregoing and subject to certain requirements set forth in
the Credit Agreement, the Borrowers may (i) retain up to 50% of
the first $10,000,000 of Net Cash Proceeds from the sale of the
Approved Property for working capital and general corporate
purposes and (ii) retain any additional Net Cash Proceeds from
the sale of the Approved Property provided that the Borrowers
deposit such additional Net Cash Proceeds in an account under the
control of the Lenders and such additional Net Cash Proceeds are
used to pay cash interest on the Loans on each Interest Date or
otherwise prepay the Loans to the extent not used to pay
interest.

Any prepayment made by the Borrowers and any payment made in the
event of the Asset Sale will be applied (i) first, to pay all
outstanding fees and other amounts owed to the Agent and (ii)
second, on a pro rata basis, to all amounts due under the Loans
and the Prepayment Premium thereon.

The Borrowers will pay to the Agent on the Closing Date for the
ratable benefit of the Lenders an upfront fee of 2.00% of the
aggregate principal amount of the Loans funded on the Closing
Date. The Borrowers also agreed to pay the Agent all fees
specified in the agency fee letter which will be dated as of the
Closing Date in the amounts and at the times specified therein.

The Borrowers must use the proceeds of the Loans as follows: (i)
approximately $45,000,000 to fund the refinancing of the Amended
and Restated Credit Agreement, dated as of October 30, 2013 (as
amended prior to the Signing Date), among the Borrowers, the
lenders party thereto and the Agent, and (ii) approximately
$15,000,000 for the purpose of financing, in part, the cost of
construction or improvement of the Qualified Water Project, as
defined in Item 8.01 below, including out-of-pocket costs and
expenses incurred by the Borrowers or any of their subsidiaries
in connection with such construction or improvement.

The Credit Agreement includes customary representations and
warranties and affirmative and negative covenants made by the
Borrowers. The Credit Agreement also includes standard and
customary events of default that include, but are not limited to,
failure to pay the Loans as required by the Credit Agreement; a
material inaccuracy of one or more of the Borrowers
representations or warranties; certain events of default in other
of the Borrowers material agreements or commitments; the entry of
a judgment against the Borrowers involving in the aggregate a
liability (not paid or fully covered by insurance as to which the
relevant insurance company has acknowledged coverage) of $500,000
or more; any of the documents securing the Loans cease, for any
reason, to be in full force and effect or any lien created by any
of the documents securing the Loans ceases to be enforceable and
of the same effect and priority purported to be created thereby;
or a Change of Control as defined in the Credit Agreement.

Issuance of Warrants

In connection with entering into the Credit Agreement, on the
Closing Date the Company will issue to the Lenders, in accordance
with their respective pro rata interests of the Loans, warrants
to purchase an aggregate 357,500 shares of its common stock (that
may, subject to agreement by the parties, be increased to
warrants for the purchase of an aggregate 362,500 shares of its
common stock). The warrants will be offered to the Lenders to an
effective registration statement on Form S-3 (File No.
333-214318). The shares of common stock underlying the warrants
will be offered under such foregoing or similar registration
statement, as available at exercise, as applicable.

The warrants will have a five year term and an exercise price of
$14.94 per share, subject to adjustment for corporate actions
including, but not limited to, stock dividends, stock splits,
reverse stock splits, corporate reorganizations and mergers. The
exercise price of the warrants will be reduced based on a
weighted average formula in the following instances:

(i)if, at any time after the warrants are issued, the Company
issues any shares of common stock, options to purchase or rights
to subscribe for common stock, securities by their terms
convertible into or exchangeable for common stock, or options to
purchase or rights to subscribe for such convertible or
exchangeable securities without consideration or for
consideration per share less than the greater of (x) the exercise
price in effect immediately prior to the issuance of such common
stock or securities and (y) the Fair Market Value (as defined in
the warrants) per share of common stock immediately prior to such
issuance, or

(ii)if the Company directly or indirectly redeems, purchases or
otherwise acquires any shares of its common stock, options to
purchase or rights to subscribe for its common stock, securities
by their terms convertible into or exchangeable for shares of its
common stock, or options to purchase or rights to subscribe for
such convertible or exchangeable securities, for a consideration
per share (plus, in the case of such options, rights, or
securities, the additional consideration required to be paid to
the Company upon exercise, conversion or exchange) greater than
the Fair Market Value per share of common stock immediately prior
to the earlier of (x) the announcement of such event or (y) such
event.

The exercise price may be paid (i) with cash, (ii) by instructing
the Company to withhold a number of shares of common stock then
issuable upon exercise of the warrant with an aggregate Fair
Market Value equal to the exercise price, (iii) by surrendering
to us shares of common stock previously acquired by the warrant
holder with an aggregate Fair Market Value equal to the exercise
price, or (iv) any combination of the foregoing.

A warrant holder generally will not receive shares of our common
stock upon exercise of a warrant to the extent that such exercise
or receipt would cause the warrant holder (or the Holder Group,
as defined in the warrants) to, directly or indirectly,
beneficially own a number of shares of common stock that exceeds
4.99% of the outstanding shares of our common stock, which
percentage may be increased or decreased by the warrant holder.
In no event, however, may the warrant holder increase the
beneficial ownership limitation in excess of 19.99% as of any
date from the date of the warrant through the expiration date of
the warrant.

The Security Agreement

On the Closing Date, the Borrowers will enter into a Security
Agreement and Mortgage in the forms attached as exhibits to the
Credit Agreement whereby the Borrowers will grant, 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 as
collateral security for the prompt and complete payment and
performance when due (whether at the stated maturity, by
acceleration or otherwise) of the Borrower Obligations and each
Loan Partys Obligations, each as defined in the form of Security
Agreement. The form of Security Agreement also includes customary
representations and warranties, covenants and remedial
provisions.

The discussion above does not purport to be a complete
description of the Credit Agreement, the warrants, the Security
Agreement or deed of trust described in this Current Report and
discussion of each is qualified in its entirety by reference to
the full text of such document, each of which is attached as an
exhibit to this Current Report (or as an exhibit to the Credit
Agreement) and is incorporated herein by reference.

On May 2, 2017, the Company issued a press release regarding its
entry into the Credit Agreement and the Conditional Commitment
Letter. A copy of the press release is furnished herewith as
Exhibit 99.2 and incorporated by reference in this Item 7.01.

The information disclosed under this Item 7.01, including Exhibit
99.2 hereto, shall not be deemed filed for purposes of Section 18
of the Securities Exchange Act of 1934, as amended, and shall not
be deemed filed with the U.S. Securities and Exchange Commission
(the SEC) nor incorporated by reference into any filing made
under the Securities Act of 1933, as amended, except as expressly
set forth by specific reference in such filing.

Entry into Construction Loan Commitment
Letter

On the Signing Date, Apollo Management Holdings, L.P. (Apollo
Management), on behalf of one or more of its affiliated
investment funds (the Construction Lenders) and the Borrowers
executed a conditional commitment letter (the Conditional
Commitment Letter) for up to $240,000,000 of construction
financing (the Construction Loan) for a Qualified Water Project
which is defined as a water conservation project, consistent with
the water conservation project contemplated by the Final
Environmental Impact Report for the Cadiz Valley Water
Conservation, Recovery Storage Project SCH# 2011031002 and
certified by the Santa Margarita Water District on July 31, 2012,
but that would transfer an average of not less than 20,000
acre-feet of water per annum to and/or from the groundwater basin
underlying the Cadiz Valley portion of certain designated
properties located in the eastern Mojave Desert portion of San
Bernardino County, California and that requires the conversion of
existing facilities and the construction of certain necessary
facilities including an expansion of an existing wellfield on the
property, a manifold system (including connecting piping and
natural gas power supply), monitoring wells, pumping facilities,
power facilities, pipelines and/or related buildings and
appurtenances.

The Construction Loan, if made, will be a first lien (together
with the Loans) senior secured term loan facility with a maturity
date five years from the initial draw down. However, such
maturity will be subject to a springing maturity in form
substantially similar to that of the Credit Agreement. Proceeds
from the Construction Loan, if made, will be used to pay for (i)
engineering, procurement and construction of the Qualified Water
Project and (ii) related fees and expenses. The Borrowers will be
permitted to draw down amounts under the Construction Loan, if
made, subject to (x) achievement of technical and developmental
milestones, (y) approval of a quarterly pre-development budget,
and (z) other conditions required by the Construction Lenders.
Interest on the Construction Loan, if made, will accrue at LIBOR
7.0% to 9.0%, subject to adjustment based on (A) review of
economic and other terms of the water supply agreements entered
into by the Borrowers and (B) then-prevailing market conditions.
The Construction Loan, if made, must be repaid from, among other
things, 100% of the net proceeds from debt issuances, assets
sales, tax refunds, liquidated damages under material contracts,
other extraordinary receipts and insurance or condemnation
proceeds. The Construction Loan documentation is expected to
include customary representations and warranties and events of
default, including those that are consistent with those included
in the Credit Agreement.

All accepted commitments and undertakings of the Construction
Lenders under the Conditional Commitment Letter will expire on
the earliest to occur of (i) May 1, 2018, unless the closing of
the Construction Loan occurs on or prior to that date and (ii)
the consummation of the construction of the Qualified Water
Project or any component thereof without the use of the
Construction Loan.

The obligations of the Construction Lenders to provide the
Construction Loan under the Conditional Commitment Letter are
highly conditional and are subject to a number of conditions
(including conditions the satisfaction of which are not in the
Companys control), including, without limitation (1) a complete
review by Apollo Management of the Qualified Water Project and
the proposed Construction Loan, (2) approval by Apollo
Managements investment committee, in its sole discretion, of the
Qualified Water Project and the proposed Construction Loan, (3)
satisfactory completion of all customary business and legal due
diligence in form and substance satisfactory to Apollo Management
in its sole discretion, (4) completion of the underlying credit
documentation for the proposed Construction Loan in form and
substance satisfactory to Apollo Management in its sole
discretion, and (5) approval by Apollo Management, in its sole
discretion, of definitive water supply agreements, construction
agreements, supply contracts and other material contracts of the
Company. Given the highly conditional nature of the Conditional
Commitment Letter, Apollo Management may not be obligated to
provide the Construction Loan under the Conditional Commitment
Letter, and, as a result, the Company may not be able to
consummate such financing. Investors in the Company are cautioned
not to place any reliance upon the closing of the Construction
Loan contemplated by the Conditional Commitment Letter due to its
highly conditional nature.

The discussion above does not purport to be a complete
description of the Conditional Commitment Letter described in
this Current Report and the discussion of the Conditional
Commitment Letter is qualified in its entirety by reference to
the full text of such document, which is attached as an exhibit
to this Current Report and is incorporated herein by reference.

Cautionary Statement on Forward-looking
Information

Certain statements in this Current Report on Form 8-K contain
forward-looking statements within the meaning of Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, that may not be
based on historical fact, but instead relate to future events,
including without limitation statements containing the words
believe, may, plan, will, estimate, continue, anticipate, intend,
expect and similar expressions. All statements other than
statements of historical fact included in this report are
forward-looking statements, including statements describing the
Commitment Letter and the Construction Loan.

Such forward-looking statements are based on a number of
assumptions, including assumptions regarding the ability of the
Borrowers to satisfy the conditions contained in the Conditional
Commitment Letter.

Although the Companys management believes that the assumptions
made and expectations represented by such statements are
reasonable, there can be no assurance that a forward-looking
statement contained herein will prove to be accurate. Actual
results and developments may differ materially from those
expressed or implied by the forward-looking statements contained
herein and even if such actual results and developments are
realized or substantially realized, there can be no assurance
that they will have the expected consequences or effects. Factors
which could cause actual results to differ materially from
current expectations include, but are not limited to, an
inability to consummate the Construction Loan due to a failure by
the parties to agree to terms to be included in the Construction
Loan documentation, a failure by the Company to enter into
definitive water supply agreements, an inability by the Company
to find acceptable contractors and suppliers, an inability by the
Company to secure required approvals for the construction,
adverse changes in general economic conditions or applicable
laws, rules and regulations and other factors detailed from time
to time in the Companys periodic disclosure.

Given these risks, uncertainties and factors, you are cautioned
not to place undue reliance on such forward-looking statements
and information, which are qualified in their entirety by this
cautionary statement. All forward-looking statements and
information made herein are based on the Companys current
expectations and the Company undertakes no obligation to revise
or update such forward-looking statements and information to
reflect subsequent events or circumstances, except as required by
law.

About CADIZ INC. (NASDAQ:CDZI)

Cadiz Inc. is a land and water resource development company with approximately 45,000 acres of land in three areas of eastern San Bernardino County, California. The Company’s primary business is to acquire and develop land with water resources for various uses, including groundwater supply, groundwater storage and agriculture. It is focused on the development of the Cadiz Valley Water Conservation, Recovery and Storage Project, which captures and conserves millions of acre-feet of native groundwater being lost to evaporation from the aquifer system beneath its approximately 34,000-acre property in the Cadiz and Fenner valleys of eastern San Bernardino County and deliver it to water providers throughout Southern California. In addition to the Cadiz/Fenner Valley property, it also owns approximately 11,000 additional acres in the eastern Mojave Desert portion of San Bernardino County, California at two separate properties. It owns over 2,000 acres near Danby Dry Lake in Ward Valley.

CADIZ INC. (NASDAQ:CDZI) Recent Trading Information

CADIZ INC. (NASDAQ:CDZI) closed its last trading session 00.00 at 15.00 with 54,383 shares trading hands.