CADIZ – WATER ASSET MANAGEMENT LEASE

EXHIBIT 10-1

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 ▇▇▇▇▇ Fargo Bank, N.A. (“▇▇▇▇▇ 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 ▇▇▇▇▇ 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/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇

Its: Manager

Address:

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Dated: December 23, 2015 CADIZ INC.

By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇

Its: Chief Financial Officer

Address:

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Dated: December 23, 2015 WATER ASSET MANAGEMENT, LLC

By: /s/ Water Asset Management, LLC

Its:

Address:

c/o Water Asset Management, LLC

▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇

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 ▇▇▇▇▇▇ 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/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇

		Its:	Manager

		Address:
		▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
		▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇

Dated:	February 3, ▇▇▇▇	▇▇▇▇▇▇▇▇▇ COMPANY

		By:	/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇

		Its:	CFO

		Address:
		▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
		▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇

CADIZ – WATER ASSET MANAGEMENT LEASE

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