CADIZ INC. Item 1.01 Entry into a Material Definitive Agreement.
Entry into Credit Agreement
On
In the event of certain asset sales, the incurrence of indebtedness or a casualty or condemnation event, in each case, under certain circumstances as described in the Credit Agreement, the Borrowers will be required to use a portion of the proceeds to prepay amounts under the Loans. In the event of an issuance of depositary receipts ("Depositary Receipts") representing interests in shares of 8.875% Series A Cumulative Perpetual Preferred Stock ("Series A Preferred Stock") by Cadiz, the Borrowers will be required to, within five business days after the receipt of the net cash proceeds, apply (i) 25%, in the case of an issuance within six months of the closing of the Loans, (ii) 50%, in the case of any issuance immediately following the six months anniversary of the closing of the Loans and up to and including the one year anniversary of the closing of the Loans and (iii) 75%, in the case of any issuance anytime thereafter, of the net cash proceeds to prepay amounts due under the Loans (including the applicable repayment fee described above).
The Credit Agreement includes customary affirmative and negative covenants binding on the Borrowers, including delivery of financial statements and other reports. The negative covenants limit the ability of the Borrowers to, among other things, incur debt, incur liens, make investments, sell assets, pay dividends and enter into transactions with affiliates. In addition, the Credit Agreement includes customary events of default and remedies.
While any amount remains outstanding under the Loans, the Lenders will have the
right to convert the outstanding principal, plus unpaid interest, on the Loans
into Depositary Receipts at the per share exchange price of
? on or before the 12-month anniversary of the closing of the Loans, up to 25% of
the outstanding principal and unpaid interest on the Loans may be exchanged
into Depositary Receipts;
? at any time after the 12-month anniversary of the closing of the Loans, and on
or before the 18-month anniversary of the closing of the Loans, up to 50% of
the principal and unpaid interest on the Loans may be exchanged into Depositary
Receipts;
? at any time after the 18-month anniversary of the closing of the Loans, and on
or before the 24-month anniversary of the closing of the Loans, up to 75% of
the principal and unpaid interest on the Loans may be exchanged into Depositary
Receipts; and
? at any time after the 24-month anniversary of the closing of the Loans, up to
100% of the principal and unpaid interest on the Loans may be exchanged for
Depositary Receipts.
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The proceeds of the Loans were used, together with the proceeds received from
our offering of 2,300,000 depositary shares evidenced by Depositary Receipts
each representing a 1/1000th fractional interest in a share of Series A
Preferred Stock for net proceeds of approximately
Issuance of Warrants
In connection with the Credit Agreement, on
The warrants have been offered to the Lenders pursuant to an effective registration statement on Form S-3 (File No. 333-257159) (the "Registration Statement"). The shares of common stock underlying the warrants have been offered under such foregoing or similar registration statement, as available at exercise, as applicable.
(i) if, at any time after the warrants are issued, we issue 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 we directly or indirectly redeem, purchase or otherwise acquire any shares of our common stock, options to purchase or rights to subscribe for our common stock, securities by their terms convertible into or exchangeable for shares of our 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 us 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 us 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 "
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The Security Agreement
In connection with the Credit Agreement, the
Deed of Trust
In conjunction with the closing of the Credit Agreement, the Borrowers entered
into a Deed of Trust, whereby the Borrowers granted, for the benefit and
security of the Lenders, a security interest in all of the property owned or at
any time acquired by the Borrowers, subject to certain exceptions, as collateral
security for the payment and performance when due (whether at the stated
maturity, by acceleration or otherwise) of the Borrower Obligations and each
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 and is incorporated herein by reference.
Attached as Exhibit 5.1 to this Current Report and incorporated herein by
reference is a copy of the opinion of
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Item 9.01 Financial Statements and Exhibits.
Exhibit No. Description
5.1 Opinion of Greenberg Traurig, LLP to Cadiz Inc.
10.1 Credit Agreement, dated as of July 2, 2021 , by and among Cadiz Inc.
and Cadiz Real Estate LLC as borrowers, the lenders from time to time
party thereto, and B. Riley Securities, Inc. , as administrative agent.
10.2 Security Agreement, dated as of July 2, 2021 made by Cadiz Inc. , Cadiz
Real Estate LLC , in favor of B. Riley Securities, Inc.
10.3 Deed of Trust, Assignment of Leases and Rents, Security Agreement,
Financing Statement and Fixture Filing, dated as of July 2, 2021 .
10.4 Warrant No. W-1 to Purchase Common Stock of Cadiz Inc. dated as of
July 2, 2021 .
10.5 Warrant No. W-2 to Purchase Common Stock of Cadiz Inc. dated as of
July 2, 2021 .
23.1 Consent of Greenberg Traurig, LLP to the filing of Exhibit 5.1
herewith (included in Exhibit 5.1).
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