MUTUAL GENERAL RELEASE
THIS MUTUAL GENERAL RELEASE (the "Release") is entered
into by and between Sun World International, Inc., a Delaware
corporation ("SWI"), Sun Desert, Inc., a Delaware corporation,
Coachella Growers, a California Agricultural Cooperative, and Sun
World/Rayo, a California corporation, debtors and debtors in
possession (collectively, the "Sun World Entities"), on the one
hand; and Cadiz Inc., a Delaware corporation ("Cadiz") on the
other hand; with reference to the following facts and
recitations:
A. The Sun World Entities are the debtors and debtors
in possession in chapter 11 cases (the "Chapter 11 Cases")
pending in the United States Bankruptcy Court for the Central
District of California, Riverside Division (the "Bankruptcy
Court") as case numbers RS-03-11370-DN, RS-03-11369-DN, RS-03-
11371-DN, and RS-03-11374-DN. The Sun World Entities filed their
respective Voluntary Petitions commencing the Chapter 11 Cases on
January 30, 2003.
B. The Sun World Entities have asserted various
potential claims and causes of action of their respective
bankruptcy estates (collectively, the "Estates") against Cadiz;
Cadiz has asserted various potential claims and causes of action
against the Estates and has filed seven proofs of claim against
the Estates. These claims and causes of action are, except as
otherwise provided in this Release, denied and disputed.
C. The Sun World Entities and Cadiz have undertaken
such investigation of the potential claims and causes of action
as they and their respective counsel deem appropriate and
practicable under the circumstances.
D. After negotiations, the Sun World Entities and
Cadiz have reached a settlement and compromise of the potential
claims and causes of action on the terms set forth in the "Sun
World-Bondholder-Cadiz Term Sheet and Agreement in Principle"
dated October 13, 2003 (the "Settlement Agreement"), which is
attached to the "Motion for Order Authorizing Debtors to Enter
into Initial Settlement with Cadiz Inc." (the "Motion") filed in
the Chapter 11 Cases on October 15, 2003 by the Sun World
Entities.
E. The Motion has been granted, and the Settlement
Agreement has been duly approved by the Bankruptcy Court in the
"Order Authorizing Debtors to Enter into Initial Settlement with
Cadiz Inc." (the "Settlement Order") entered in the Chapter 11
Cases on November 7, 2003.
F. In furtherance of the Settlement Agreement and the
Settlement Order, this Release is executed effective as of the
Closing Date (the "Closing Date"), as defined in the Settlement
Agreement.
NOW, THEREFORE, in consideration of the foregoing, the
mutual covenants herein, and other good and valuable
consideration, the parties hereby agree as follows:
1. As of the Closing Date, the Sun World Entities and
the Estates shall be deemed to forever release, relieve, and
discharge Cadiz and (with respect only to matters arising out of
or related to any potential claims and causes of action of the
Sun World Entities and the Estates against Cadiz) its successors
and assigns, from any and all claims, liabilities, demands,
causes of action, debts, obligations, promises, acts, agreements,
and damages, of whatever kind or nature, whether known or
unknown, suspected or unsuspected, contingent or fixed,
liquidated or unliquidated, matured or unmatured, whether at law
or in equity, which the Sun World Entities or the Estates ever
had, now have, or may, shall, or can hereafter have, directly or
indirectly arising out of or in any way based upon, connected
with, or related to matters, things, acts, conduct, and/or
omissions at any time from the beginning of the world through and
including the Closing Date, including without limitation any and
all claims arising under or related to the Bankruptcy Code,
including without limitation sections 541, 542, 544, 545, 547,
548, 549, and/or 553 thereof.
2. As of the Closing Date, Cadiz shall be deemed to
forever release, relieve, and discharge the Sun World Entities
and the Estates and (with respect only to matters arising out of
or related to any potential claims and causes of action of Cadiz
against the Sun World Entities and the Estates) their successors
and assigns, from any and all claims, liabilities, demands,
causes of action, debts, obligations, promises, acts, agreements,
and damages, of whatever kind or nature, whether known or
unknown, suspected or unsuspected, contingent or fixed,
liquidated or unliquidated, matured or unmatured, whether at law
or in equity, which Cadiz ever had, now has, or may, shall, or
can hereafter have, directly or indirectly arising out of or in
any way based upon, connected with, or related to matters,
things, acts, conduct, and/or omissions at any time from the
beginning of the world through and including the Closing Date.
3. As of the Closing Date, all contracts and
agreements between Cadiz and any of the Sun World Entities,
whether written or oral, of whatever kind or nature (including
without limitation the "Credit Agreement among Sun World
International, Inc., as Borrower, and Cadiz Land Company, Inc.,
as Lender, Dated as of March 31, 1998," the "Services Agreement,"
as amended, and the "Tax Sharing Agreement"), shall be deemed
terminated and rejected, and any and all claims, liabilities,
demands, causes of action, debts, obligations, promises, acts,
agreements, and damages directly or indirectly arising out of or
in any way based upon, connected with, or related to such
contracts and agreements shall be included in the matters
released under paragraphs 1 and 2 above.
4. Notwithstanding paragraphs 1, 2, and 3 above,
nothing contained in this Release shall affect or release the
following:
(a) the allowed, general unsecured non-priority
claim of Cadiz in the Chapter 11 Cases in the amount of
$13,500,000 which, effective on the Closing Date, shall be
assigned by Cadiz to the Sun World Noteholder Trust pursuant
to the Settlement Agreement;
(b) the equity interest of Cadiz in SWI
representing 100% of the outstanding shares of SWI which,
effective on the Closing Date, shall be pledged by Cadiz to
the Sun World Noteholder Trust pursuant to the Settlement
Agreement;
(c) the "Amended and Restated Agricultural Lease
Agreement" dated June 6, 2003, between Cadiz, as lessor, and
SWI, as lessee, previously assumed by SWI pursuant to an
order of the Bankruptcy Court, and all of the parties'
respective rights and obligations thereunder; and
(d) the Settlement Agreement, the Settlement
Order, this Release, and other documents executed in
furtherance of the Settlement (collectively, the "Settlement
Documents") and the parties' respective rights and
obligations under the Settlement Documents.
5. On the Closing Date, the Sun World Entities, the
Estates, and Cadiz, and each of them, shall be deemed to waive
any and all rights or benefits which they have or may have under
Section 1542 of the Civil Code of the State of California, to the
full extent that they may waive such rights and benefits,
pertaining to the matters released herein. Section 1542 of the
Civil Code of the State of California provides as follows:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH
THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS
FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF
KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS
SETTLEMENT WITH THE DEBTOR.
In connection with such waiver and relinquishment, the parties
acknowledge that they are aware that they may hereafter discover
claims presently unknown or unsuspected, or facts in addition to
or different from those which they know or believe to be true,
with respect to the matters released herein. Nevertheless, it is
the intention of the Sun World Entities, the Estates, and Cadiz
through this Release, and with the advice of counsel, fully,
finally, and forever to settle and release all such matters, and
all claims relative thereto, which do now exist, or heretofore
have existed between the parties. In furtherance of such
intention, the releases herein given shall be and remain in
effect as a full and complete release of such matters
notwithstanding the discovery or existence of any such additional
or different claims or facts relative thereto.
6. The Sun World Entities, the Estates, and Cadiz
hereby represent and warrant to, and agree with, each other as
follows:
(a) Each party has received independent legal
advice from attorneys of its choice with respect to the
advisability of executing this Release and making the
settlement and releases provided herein.
(b) Except as expressly stated in this Release,
no party has made any statement or representation to any
other party regarding any fact relied upon by that party in
entering into this Release, and each party specifically does
not rely upon any statement, representation, or promise of
the other party in entering into this Release or in making
the settlement provided for herein, except as expressly
stated in this Release.
(c) Each party and its attorneys have made such
investigation of the facts pertaining to this Release and
all of the matters pertaining thereto as it deems necessary.
(d) This Release has been carefully read by, the
contents hereof are known and understood by, and it is
signed freely by each person executing this Release.
(e) Each party covenants and agrees not to bring
any claim, action, suit, or proceeding against any other
party hereto, directly or indirectly, regarding or related
in any manner to the matters released hereby, and further
covenants and agrees that this Release is a bar to any such
claim, action, suit, or proceeding.
7. Each party represents and warrants to each other
party that such party has not heretofore assigned or transferred,
or purported to assign or transfer, to any person or entity any
claims or other matters herein released, except (i) Cadiz
previously granted to its lender (the "Cadiz Lender") a security
interest in Cadiz's claims against the Sun World Entities and
(ii) effective as of the Closing, the Cadiz Lender consents to
this Release on terms approved by Sun World.
8. This Release effects the settlement of claims
which are denied and contested, and nothing contained herein
shall be construed as an admission by any party of any liability
or fact or a concession by any party of any question of law.
9. This Release shall inure to the benefit of, and
shall be binding upon, the successors and assigns of each of the
parties hereto, including without limitation any chapter 11
trustee, any chapter 7 trustee, any examiner, and any other
representative which may be appointed for any of the Sun World
Entities or the Estates.
10. All parties hereto agree to bear their own costs
and attorneys' fees regarding this Release.
11. This Release and the other Settlement Documents
express the entire agreement of the parties hereto relative to
the subject matter hereof. No covenants, agreements,
representations, or warranties of any kind whatsoever have been
made by any party hereto, except as specifically set forth in
this Release or in the other Settlement Documents. All prior
discussions and negotiations have been and are merged and
integrated into, and are superseded by, this Release and the
other Settlement Documents.
12. This Release shall be construed in accordance
with, and be governed by, the law of the State of California
(without reference to conflict of law provisions) and, to the
extent applicable, Federal bankruptcy law. The parties consent
to the jurisdiction of the Bankruptcy Court to enforce this
Release and to adjudicate any disputes which may arise under this
Release.
13. This Release may be executed and delivered in two
or more counterparts, which may be facsimile copies, each of
which, when so executed and delivered, shall be deemed an
original, but such counterparts together shall constitute but one
and the same instrument.
14. The warranties and representations of this Release
are deemed to survive the execution and effectiveness hereof.
EXECUTED THIS __ DAY OF DECEMBER, 2003.
SUN WORLD INTERNATIONAL, INC., a Delaware corporation,
SUN DESERT, INC., a Delaware corporation,
COACHELLA GROWERS, a California Agricultural Cooperative, and
SUN WORLD/RAYO, a California corporation,
As Debtors and Debtors in Possession and
Representatives of their Chapter 11 Estates
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Their Chief Financial Officer
CADIZ INC., a Delaware corporation
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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Its Chief Executive Officer
