SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
Current Report
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
September 13, 1996
CADIZ LAND COMPANY, INC.
(Exact name of issuer as specified in its charter)
Delaware
(State or other jurisdiction of incorporation)
0-12114 77-0313235
(Commission File Number) (IRS Employer Identification No.)
10535 Foothill Boulevard, Suite 150, Rancho Cucamonga, CA 91730
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (909) 980-2738
ITEM 2. ACQUISITION OF ASSETS
On September 13, 1996, Cadiz Land Company,
Inc. (the "Company") acquired all of the stock
of a reorganized Sun World International.,
Inc. ("Sun World") pursuant to a consensual
plan of reorganization (Debtors' Modified
Fourth Amended Consolidated Plan of
Reorganization dated June 3, 1996 (Modified))
which was confirmed by the U.S. Bankruptcy
Court at a hearing on July 12, 1996 (the
"Plan"). Total consideration was
approximately $175 million of which
approximately $153 million will be owed to Sun
World's existing secured lenders through a
restructuring of previously existing debt. In
addition, the Company made a capital
contribution of $15 million to Sun World, with
the intent of eliminating the requirement for
Sun World to have any additional debt
facilities beyond those owed to its existing
secured creditors.
The total cash requirements of the Company
related to the acquisition were funded from:
(i) the issuance by the Company of $27.579 million
of newly authorized Convertible Series A Preferred
Stock; (ii) the issuance by the Company of $7.6
million of newly authorized Convertible
Series B Preferred Stock; (iii) the issuance by
the company $2.6 million of newly authorized
6% Convertible Series C Preferred Stock; and (iv)
$1 million previously deposited by the Company from its
working capital in trust with the Official Committee
Holding Unsecured Claims. Of such funds, approximately
$35 million was applied to cash disbursements required
at closing under the Plan, including the $15 million
capital contribution referred to above and approximately
$5.5 million of principal reduction to secured lenders.
The remainder has been utilized by the Company
substantially for the payment of expenses relating to
the acquisition.
The consideration paid by the Company was
determined in arms-length negotiations between
the Company and the various constituents of
the Sun World bankruptcy case. As required
under the Plan, a total of $3 million in cash
and 829,090 shares of newly issued common
stock was delivered to the previous holders of
the stock of Sun World upon transfer of such
stock to the Company. These stockholders were
Howard P. Marguleas, Domenick T. Bianco,
Martin S. Gans, James R. Greenbaum, Sr., Carl
S. Maggio, Robert and Charlotte J. Nies
Revocable Trust dated June 15, 1988, the John
and Shirley Thomas Family Trust
U/D/T/September 6, 1988, and Tostado Family
Trust U/D/T/September 29, 1983, as amended
through September 20, 1992, Carl Sam Maggio,
Trustee. None of such holders were affiliates
of the Company at the time of the transaction.
Sun World is one of California's leading
fully-integrated agricultural companies with
agricultural landholdings of approximately 20,000 acres
primarily in the Central Valley of California. Sun World
ships fresh produce to nearly every state in the United
States and exports fresh fruits and vegetables
to over thirty foreign countries. Sun World's
farming operations produce approximately 7
million units of fruits and vegetables
annually, while its packing facilities handle
approximately 9 million units of produce
annually. Sun World's marketing operations
include selling, merchandising and promoting
Sun World grown products as well as providing
such services to a sizable and highly diverse
world-wide customer base which domestically
includes national retailers, club stores and
food service distributors. The Company
intends to continue operating Sun World within
the same markets in which it has been
historically engaged and does not contemplate
any significant change in the use of Sun
World's properties.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial statements of business
acquired. It is impractical at this time
to provide the financial statements
required by Item 7(a). None of such
required financial statements are
presently available; however, they will
be filed via amendment as soon as
practicable, but not later than sixty
(60) days after the date on which this
report is required to be filed.
(b) Pro forma financial information. It is
impractical at this time to provide the
pro forma financial statements required
by Item 7(b). None of such required pro
forma financial statements are presently
available; however, they will be filed
via amendment as soon as practicable, but
not later than sixty (60) days after the
date on which this report is filed.
(c) Exhibits.
2.1 Debtors' Modified Fourth Amended
Consolidated Plan of Reorganization
dated June 3, 1996 (as Modified)(1)
2.2 Plan Implementation Agreement dated
July 12, 1996(1)
2.3 Supplement to Plan Support Agreement
dated June 3, 1996(1)
2.4 Stock Purchase Agreement with Howard
Marguleas dated September 13, 1996
2.5 Form of Stock Purchase Agreement with
Minority Stockholders of Sun World
dated September 13, 1996
4.1 Certificate of Designations - Series
A Preferred Stock
4.2 Certificate of Designations - Series
C Preferred Stock
- ------------------
(1) Previously filed as Exhibit to the Company's Report on Form
10-Q for the quarter ended June 30, 1996.
Cadiz Land Company, Inc.
Signatures
Pursuant to the requirements of the Securities
Exchange Act of 1934, the Registrant has duly caused
this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
Cadiz Land Company, Inc.
(Registrant)
By: /s/ Susan K. Chapman
-----------------------
Susan K. Chapman
Chief Financial Officer
Dated: September 30, 1996
EXHIBIT 2.4
-----------
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT ("Agreement") is made
and entered into as of the 13th day of September,
1996, by and among Cadiz Land Company, Inc., a Delaware
corporation ("Cadiz"), as purchaser, and Howard P.
Marguleas ("Seller") as seller of the shares of capital
stock which are the subject of this Agreement.
R E C I T A L S
This Agreement is made with reference to the
following facts and circumstances:
A. Seller currently is the record and beneficial
owner of 19,405 shares of the issued and outstanding
common stock ("Seller's Common Stock") and 33,333 shares
of the issued and outstanding preferred stock ("Seller's
Preferred Stock") of Sun World International, Inc., a
Delaware corporation ("Sun World"). Seller's Common
Stock and Seller's Preferred Stock are collectively
referred to herein as "Seller's Shares". A total of
42,000 shares of the common stock and 38,501 shares of
the preferred stock of Sun World are currently issued and
outstanding.
B. Pursuant to that certain Banks Pledge Agreement
dated August 20, 1990, all of Seller's Shares are pledged
by Seller (the "Pledge") to The Governor and Company of
the Bank of Scotland ("Pledgeholder"), as collateral for
obligations arising from money loaned and unpaid interest
thereon. Certificate No. C-1, representing 19,132 shares
of Seller's Common Stock and Certificate No. PI-1,
representing 33,333 shares of Seller's Preferred Stock,
have been delivered to and are in the possession of
Pledgeholder. Certificate No. C-19, representing 273
shares of Seller's Common Stock, have not been delivered
to and are not in the possession of Pledgeholder. In
addition, pursuant to enforcement of judgment procedures,
all of Seller's Shares are arguably subject to a lien
(the "Zenith Lien") in favor of Zenith Insurance Company
("Zenith").
C. Sun World is the sole owner of all of the
issued and outstanding capital stock of Sun World, Inc.,
a Delaware corporation ("SWI"). On October 3, 1994, Sun
World and SWI filed for protection under Chapter 11 of
the United States Bankruptcy Code. On December 13, 1994,
Sun World's wholly owned subsidiary Sun Desert, Inc., a
Delaware corporation ("SDI"), SWI's wholly owned
subsidiary AAI Services, Inc. ("AAI") and SDI's wholly
owned subsidiary Coachella Growers ("CG") filed for
protection under Chapter 11 of the United States
Bankruptcy Code. The filings of Sun World, SWI, SDI, AAI
and CG (collectively, "Debtors") have been
administratively consolidated (Case No. SB 94-23212 DN,
U.S.B.C., C.D. Cal.) (the "Case").
D. Debtors have filed a plan of reorganization
entitled the Modified Fourth Amended Consolidated Plan of
Reorganization Dated June 3, 1996. The foregoing plan,
and any and all amendments, modifications and successors
thereto which provide for the acquisition by Cadiz of the
outstanding capital stock of Sun World, as reorganized
("Reorganized Sun World"), shall be referred to herein as
the "Plan".
E. In conformity with the requirements of the
Plan, Seller desires to sell to Cadiz and Cadiz desires
to purchase from Seller all of Seller's Shares on the
terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the
covenants and conditions contained herein and for other
valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereby agree
as follows:
1. SALE OF SELLER'S SHARES:
Subject to the terms and conditions set forth in
this Agreement and in the Plan and in reliance upon the
representations and warranties set forth herein, at the
Closing (as hereinafter defined), Seller shall sell to
Cadiz, by appropriate bills of sale and stock powers
separate from certificate, and Cadiz shall acquire from
Seller, all of Seller's right, title and interest in and
to Seller's Shares, free and clear of all liens,
mortgages, pledges, claims and security interests
(collectively, the "Liens"), at and for the purchase
price specified below.
2. CONSIDERATION:
As consideration for the purchase by Cadiz of
Seller's Shares and for the fulfillment by Seller of the
obligations of Seller set forth in this Agreement, at the
Closing, Cadiz shall issue and deliver to Seller Eight
Hundred Twenty Nine Thousand and Ninety (829,090) shares
of the authorized common stock of Cadiz (the "Cadiz
Stock"). The Cadiz Stock shall constitute restricted
securities subject to sale under Rule 144 and subject to
piggyback registration rights commencing two years
following issuance as provided in the Subscription
Agreement to be executed by Seller and Cadiz at Closing
in the form of Exhibit A attached hereto.
3. REPRESENTATIONS AND WARRANTIES OF SELLER: Seller
hereby represents and warrants to Cadiz as follows:
3.1 AUTHORIZATION. Except for the Pledge and the
Zenith Lien, Seller has good and marketable title to
Seller's Shares, and full legal right, power, authority
and legal capacity, without the consent of any other
person, to sell Seller's Shares, to execute and deliver
this Agreement, and to carry out the transactions
contemplated hereby. All action on the part of Seller
necessary for the authorization, execution, delivery and
performance of this Agreement and the consummation of the
transactions contemplated hereby has been taken, and this
Agreement (including exhibits) constitutes the legal,
valid and binding obligation of Seller, enforceable in
accordance with its terms, except as enforceability may
be restricted, limited or delayed by applicable
bankruptcy or other laws affecting creditor's rights
generally and except as enforceability is subject to
general principles of equity. Upon (i) the purchase of
Seller's Shares pursuant to this Agreement, (ii) the
release by Pledgeholder of the Pledge, and (iii) the
execution by Zenith of the Zenith Settlement Agreement
(as defined in the Plan) and concurrent release by Zenith
of the Zenith Lien, Cadiz shall acquire good and
marketable title to Seller's Shares free and clear of all
Liens.
3.2 AUTHORIZED AND OUTSTANDING SHARES. To the best
of Seller's knowledge, the authorized number of shares of
common stock of Sun World is Three Hundred Thousand
(300,000), $1.00 par value, of which Forty Two Thousand
(42,000) shares are issued and outstanding, fully paid
and nonassessable. To the best of Seller's knowledge,
the authorized number of shares of preferred stock of Sun
World is Seventy Five Thousand (75,000), $300.00 par
value, of which Thirty Eight Thousand Five Hundred and
One (38,501) shares are issued and outstanding, fully
paid and nonassessable. To the best of Seller's
knowledge, there are no options, warrants, convertible
securities or preemptive or other rights outstanding to
acquire any unissued shares of Sun World stock.
3.3 NO CONSENT REQUIRED; NO VIOLATIONS. Neither
the execution of this Agreement by Seller, nor the
performance by Seller of Seller's obligations under this
Agreement, requires the consent of any secured creditor
of Debtors, court, government authority or other third
party other than Pledgeholder and Zenith. Neither this
Agreement nor any of the transactions contemplated
hereunder violates or shall (i) violate any lease,
contract, document, understanding, agreement or
instrument to which Seller, Sun World or any affiliate of
Seller or Sun World is a party or by which they may be
bound, or any other lease, contract, document,
understanding, agreement or instrument affecting any of
them or (ii) impede the ability of Reorganized Sun World
or any affiliate of Reorganized Sun World to conduct its
operations in the manner presently conducted. To the
best of Seller's knowledge, neither this Agreement nor
any of the transactions contemplated hereunder violates,
shall violate, conflict with, result in a default under
or breach any legally protected right of any individual
or entity or the articles of incorporation or bylaws of
Sun World, or violate the terms of any license or
regulation to which Sun World or its affiliates is
subject. Other than this Agreement, the Pledge, and the
Zenith Lien, there is no contract, commitment or
agreement between Seller and any other person (including
any other shareholder of Sun World) with respect to the
disposition of any of Seller's Shares or any shareholder
actions or other corporate matters. To the best
knowledge of Seller, Seller shall, upon the Closing, be
in compliance with all rules and regulations applicable
to Seller under the Federal Bankruptcy Laws.
3.4 SECURITIES LAW COMPLIANCE. Subject to the
accuracy of the representations contained in paragraph
5.5, the sale of Seller's Shares pursuant to this
Agreement is (a) exempt from the registration
requirements of the Securities Act of 1933, as amended,
and (b) exempt from qualification under the California
Corporate Securities Law of 1968.
3.5 STATUS OF SELLER. Seller is an "accredited
investor," as that term is defined in Rule 501(a) under
the Securites Act of 1933, as amended.
3.6 AFFILIATED RANCHES. Attached hereto as Exhibit
"B" is a true and correct list of Seller's Affiliated
Ranches as of the date hereof, which list shall include,
in each case, a legal description of the ranch property.
For purposes of this Agreement, "Affiliated Ranches"
shall mean all agricultural properties growing fruits and
vegetables within California as to which Seller (or any
entity controlled by or under common control with Seller)
either (i) owns a majority of the equity interests; (ii)
leases; (iii) leases and sub lets to a third party
grower; or (iv) exercises direct or indirect management
control.
4. COVENANTS OF SELLER: Seller hereby covenants to
Cadiz as follows:
4.1 FULFILLMENT OF CONDITIONS AND COVENANTS.
Seller shall not voluntarily undertake any course of
action inconsistent with the satisfaction of the
requirements or conditions applicable to Seller as set
forth in this Agreement and in the Plan and shall
promptly do all acts and take all such steps as Seller
deems necessary or appropriate to enable Seller to
perform as early as possible the obligations herein and
therein provided.
4.2 NO SALE OR TRANSFER. Prior to the Closing,
Seller shall not, except pursuant to the terms and
conditions of this Agreement, cause Seller's Shares to be
sold, assigned, transferred, encumbered, become subject
to any security interest, lien, levy or attachment or
become subject to any restriction upon transfer.
Seller's ownership and title to Seller's Shares shall be
maintained and preserved at all times in strict
accordance with the representations and warranties of
Seller herein.
4.3 NO REORGANIZATION OR ADDITIONAL ISSUANCES. At
all times during the term of this Agreement, Seller shall
use his best efforts to ensure that, except as
contemplated by the Plan, neither Sun World nor any
subsidiary of Sun World: (a) issues any shares of its
capital stock; issues or creates any warrants,
obligations, subscriptions, options, convertible
securities, or other commitments under which any
additional shares of its capital stock of any class or
any other of its securities, might be directly or
indirectly authorized, issued, or transferred from
treasury; or (b) engages in any reorganization,
consolidation, merger, or sale, disposition or other
conveyance of a material part of such entities capital
stock or assets; or (c) enters into any agreement
obligating it to do any of the foregoing prohibited acts.
Notwithstanding the foregoing, Sun World may,
concurrently with or immediately prior to the Closing,
merge into SWI, and if SWI is the surviving entity then
the term "Seller's Shares" shall be deemed, for purposes
of this Agreement, to include any securities of SWI which
may be issued or issuable with respect to Seller's Shares
as a consequence of such merger.
4.4 SUPPORT FOR PLAN OF REORGANIZATION. During the
term of this Agreement, Seller shall support confirmation
of the Plan (so long as it is not modified or amended in
a manner adverse to Seller) and shall take reasonable
steps to assist Cadiz in securing confirmation of the
Plan including, without limitation, the casting of
ballots in favor of the Plan, the delivery of lawfully
permissible letters of support for the Plan and/or the
filing of pleadings in support of the Plan. Without
limitation of the foregoing, Seller shall also use his
best efforts in good faith (including, where appropriate,
the exercise of his rights as the holder of a majority of
the outstanding capital stock of Sun World) to support
any lawfully permissible actions taken by Cadiz in
furtherance of its efforts to acquire control over the
operations and/or assets of Sun World.
4.5 SECURITIES LAW COMPLIANCE. Seller shall
cooperate with Cadiz in executing all documents,
certificates, notices, filings and the like, including
without limitation, a Subscription Agreement in the form
of Exhibit A containing such representations and
warranties as may, in the opinion of counsel to Cadiz and
agreed to by Seller's counsel, be required to ensure that
the issuance by Cadiz of the Cadiz Shares is in
compliance with the Securities Act, the securities laws
of any state, or any other applicable law, regulation, or
rule of any governmental agency.
4.6 INSURANCE. If Reorganized Sun World should
desire to maintain or obtain any form of insurance
(including, without limitation, key man life insurance)
on or with respect to Seller, Seller agrees to cooperate
with Reorganized Sun World in obtaining such insurance
and agrees to submit to the usual and customary medical
and other examinations requisite therefor; provided,
however, Seller shall not be responsible for the payment
of any premiums or other associated costs with respect to
such insurance. Seller agrees that any such insurance
policies may be pledged as collateral by Reorganized Sun
World to its secured lenders.
4.7 ZENITH SETTLEMENT AGREEMENT. Seller shall
cooperate with Cadiz and Reorganized Sun World as
necessary in order to consummate the Zenith Settlement
Agreement upon the terms set forth in the Plan.
5. REPRESENTATIONS AND WARRANTIES OF CADIZ:
Cadiz hereby represents and warrants to Seller that:
5.1 ORGANIZATION. Cadiz is a corporation validly
existing and in good standing under the laws of the State
of Delaware.
5.2 AUTHORITY. Cadiz has the corporate power and
authority to enter into this Agreement and to consummate
the transactions contemplated hereby. All action on the
part of Cadiz necessary for the authorization, execution,
delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby has
been taken, and this Agreement (including exhibits)
constitutes the legal, valid and binding obligation of
Cadiz, enforceable in accordance with its terms, except
as enforceability may be restricted, limited or delayed
by applicable bankruptcy or other laws affecting
creditor's rights generally and except as enforceability
is subject to general principles of equity.
5.3 NO VIOLATION OF OTHER OBLIGATIONS. Neither
this Agreement nor any of the transactions contemplated
hereunder violates or shall violate any lease, contract,
document, understanding, agreement or instrument to which
Cadiz is a party or by which it may be bound, or any
lease, contract, document, understanding, agreement or
instrument affecting Cadiz.
5.4 FULFILLMENT OF CONDITIONS AND COVENANTS. Cadiz
shall not voluntarily undertake any course of action
inconsistent with the satisfaction of the requirements
and conditions applicable to it as set forth in this
Agreement and in the Plan and Cadiz shall promptly do all
acts and take all such measures as may be necessary or
appropriate to enable it to perform as early as possible
the obligations herein and therein provided.
5.5 INVESTMENT REPRESENTATIONS. Cadiz understands
that Seller's Shares will not be registered under the
Securities Act of 1933, as amended or qualified under the
California Corporate Securities Law of 1968, as amended,
and will be sold to Cadiz pursuant to exemptions to such
registration and qualification requirements. Cadiz has
the knowledge and experience in financial and business
matters in general, and investments in particular, to
properly evaluate the merits and risks of purchasing the
Seller's Shares from Seller. Cadiz intends to acquire
Seller's Shares solely for its own account, for
investment, and not with a view to offer or sell Seller's
Shares to any other person or entity.
6. EMPLOYMENT ARRANGEMENTS: In order that Reorganized
Sun World may obtain the benefits of Seller's services
following the Closing, Cadiz shall cause Reorganized Sun
World to enter into an employment agreement with Seller,
effective as of the date of Closing, whereby Seller shall
be employed by Reorganized Sun World for a period of
three years at an annual salary of $175,000. The terms of
this employment agreement (the "Employment Agreement")
shall be mutually satisfactory to Seller and Cadiz;
however, Seller shall not be appointed an officer or
director of Reorganized Sun World or Cadiz.
7. AGREEMENT REGARDING PACKING AND MARKETING: As
consideration for the delivery and effectiveness at
Closing of the releases in Seller's favor described in
Section 8 below, Seller hereby agrees that, at the
Closing, Seller shall cause all of his Affiliated Ranches
as listed on Exhibit "B" hereto to enter into five (5)
year citrus, lemon, mango and date marketing agreements,
as appropriate ("Marketing Agreements") with Reorganized
Sun World in the manner provided in the Plan. Further,
in the event that subsequent to the date of Closing but
prior to five years from the date of Closing either (i)
Seller acquires an interest in any agricultural property,
and as a result of such acquistion such property becomes
an Affiliated Ranch, or (ii) any property becomes an
Affiliated Ranch for any other reason with Seller having
sufficient management authority to enter into annual and
multi year marketing agreements with Reorganized Sun
World similar to the Marketing Agreements; then, in
either case, Seller shall cause such Affiliated Ranch to
enter into a similar Marketing Agreement with Reorganized
Sun World, with an expiration date coextensive with the
Marketing Agreements executed at Closing. On or before
Closing, Marguleas shall have delivered to Cadiz and to
Caisse Nationale de Credite Agricole ("Credit Agricole")
(i) copies of the partnership agreement or other
organizational documents of each Affiliated Ranch,
certified by Marguleas as a true and correct copy of the
original thereof, (ii) in the case of any Affiliated
Ranch that is a limited partnership, a copy of such
partnership's Form LP-1, certified by the California
Secretary of State, and (iii) evidence, in form and
substance reasonably acceptable to Cadiz and to Credit
Agricole, of the due authorization and execution by such
Affiliated Ranch of both the Marketing Agreement and the
release in favor of Credit Agricole to which such
Affiliated Ranch is a party.
8. RELEASES: Cadiz and Seller specifically acknowledge
and agree that following the Closing, they each shall be
bound by, be subject to and have the benefit of the
Releases provided under paragraph VIII X of the Plan,
which Releases (as they pertain to Cadiz and Seller,
respectively) are hereby incorporated by reference into
this Agreement. Without limitation of the foregoing, the
Releases shall include the release by Seller of his
approximately $13 million claim against Debtors. Seller
shall execute and deliver such additional or confirmatory
instruments to any person who is the beneficiary of a
Release as such person may reasonably require in order to
evidence such Release. Seller further covenants and
agrees that, in the event of the prosecution by any party
of any claim or cause of action which is identified as a
Shareholder Reserved Claim on Exhibit "A" to the Plan,
and as a consequence of any affirmative action or request
taken or made by Seller (or any entity controlled by
Seller) in connection with the prosecution or defense of
such claim which requires action to be taken by Cadiz or
any affiliate of Cadiz (including Sun World)
(individually, an "Indemnified Party" and collectively,
the "Indemnified Parties") with respect thereto
(including, without limitation, responding to requests
for information or depositions in the course of
discovery), an Indemnified Party incurs any expenses,
losses or damages, then Seller shall indemnify and hold
harmless such Indemnified Party against any such
expenses, losses or damages; provided, however, that no
action shall be taken by an Indemnified Party which is
subject to indemnification under this paragraph unless,
prior to such action, Seller and the Indemnified Party
shall have negotiated, in good faith, an agreement as to
the reasonable amount of costs to be paid by Seller to
the Indemnified Party with respect to such action (except
to the extent that any action of an Indemnified Party is
mandated by law, in which case the Indemnified Party
shall be entitled to full reimbursement of all reasonable
costs incurred). In any event, Seller's liability with
respect to the foregoing shall not exceed $25,000.
9. CONDITIONS PRECEDENT IN FAVOR OF SELLER
The obligations of Seller contemplated herein are
subject to the satisfaction, at or before the Closing, of
all of the conditions set out hereinbelow. Seller may
waive any or all of these conditions in whole or in part
without prior notice.
9.1 ACCURACY OF AND CERTIFICATE AS TO
REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Cadiz contained herein and in all documents
to be delivered pursuant hereto shall be true and
complete as of the Closing, as if made at such time.
9.2 COMPLIANCE WITH COVENANTS. Cadiz shall have
performed and complied with all covenants, agreements and
conditions required by this Agreement or the Plan to be
performed by Cadiz.
9.3 BANKRUPTCY COURT ORDER. The United States
Bankruptcy Court for the Central District of California
shall have issued its order confirming the Plan under
Section 1129 of the Bankruptcy Code not later than August
15, 1996, and the Closing shall have occurred not later
than the Effective Date (as defined in the Plan) or any
Court approved extension thereof.
9.4 RELEASE OF FAIRCHILD LIEN. Hancock and Credit
Agricole shall have released their respective liens on
Fairchild Acres (all as defined in the Plan).
9.5 EXERCISE OF RAYO WATER OPTION. Cadiz shall
have exercised its option to purchase the Marguleas Rayo
Water Rights (as defined in the Plan) pursuant to an
option agreement entered into between Cadiz and Seller.
9.6 ZENITH SETTLEMENT AGREEMENT. The Zenith
Settlement Agreement shall have been executed upon terms
as set forth in the Plan.
9.7 SATISFACTION OF PLAN CONDITIONS. All of the
conditions to the obligations of Seller to consummate the
sale of Seller's Shares to Cadiz under the Plan shall
have been satisfied.
9.8 RELEASE OF PLEDGE. Pledgeholder shall have
released its lien on Seller's Shares.
10. CONDITIONS PRECEDENT IN FAVOR OF CADIZ
The obligations of Cadiz contemplated herein are
subject to the satisfaction, at or before the Closing, of
all of the conditions set out hereinbelow. Cadiz may
waive any or all of these conditions in whole or in part
without prior notice.
10.1 ACCURACY OF AND CERTIFICATE AS TO
REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Seller contained herein and in all
documents to be delivered pursuant hereto shall be true
and correct as of the Closing, as if made at such time.
10.2 COMPLIANCE WITH COVENANTS. Seller shall have
performed and complied with all covenants, agreements and
conditions required by this Agreement or by the Plan to
be performed or satisfied by Seller.
10.3 COMPLIANCE WITH LAW. There shall have been
obtained any and all permits, approvals and consents of
all governmental bodies or agencies which counsel for
Cadiz may reasonably deem necessary or appropriate so
that consummation of the transactions contemplated by
this Agreement and continuance by Reorganized Sun World
of the conduct of the business of Sun World after the
Closing will be in compliance in all material respects
with applicable laws.
10.4 BANKRUPTCY COURT ORDER. The United States
Bankruptcy Court for the Central District of California
shall have issued its order confirming the Plan under
Section 1129 of the Bankruptcy Code not later than August
15, 1996, and the Closing shall have occurred not later
than the Effective Date (as defined in the Plan) or any
Court approved extension thereof.
10.5 RAYO WATER OPTION. Cadiz and Seller shall have
entered into an option agreement for the purchase by
Cadiz in the manner provided in the Plan of the Marguleas
Rayo Water Rights (as defined in the Plan).
10.6 SATISFACTION OF PLAN CONDITIONS. All of the
conditions to the obligations of Cadiz to consummate the
acquisition of Seller's Shares under the Plan shall have
been satisfied, including, without limitation, the
purchase by Cadiz of all of the outstanding capital stock
of Sun World not held by Seller and not cancelled
pursuant to the Plan and the entry by Reorganized Sun
World into restructured credit arrangements with Sun
World's secured lenders.
10.7 RELEASE OF PLEDGE. Pledgeholder shall have
released its lien on Seller's Shares.
11. CLOSING
11.1 CLOSING DATE. The transfer of Seller's Shares
and the consummation of the transactions contemplated by
this Agreement (the "Closing") shall take place on the
Effective Date, as defined in the Plan.
11.2 DELIVERIES AT CLOSING. At the Closing:
(a) Seller shall execute and deliver (or cause
to be executed and delivered) to Cadiz:
(i) any appropriate bills of sale,
assignments, endorsements and such other instruments of
title and other documents of Seller (including, without
limitation, evidence satisfactory to Cadiz of the release
of the Pledge and the Zenith Lien) as are necessary to
vest title to Seller's Shares in Cadiz, free and clear of
all liens and adverse claims to title;
(ii) the Marketing Agreements;
(iii) the Employment Agreement;
(iv) the Subscription Agreement;
(v) any share certificates representing
Seller's Shares which are in the possession of Seller;
and
(vi) any additional documents or
instruments required pursuant to subsection (c) below.
(b) Cadiz shall deliver (or cause to be
executed and delivered) to Seller:
(i) share certificates representing the
Cadiz Stock; provided, however, that in the event that as
of the date of Closing Seller's Shares remain subject to
the Pledge for the benefit of Pledgeholder, and
Pledgeholder requires same as a condition to the release
of the Pledge, then the parties agree that (a) Cadiz
shall deliver the Cadiz Stock directly to Pledgeholder to
act as substitute collateral for Seller's Shares and (b)
Pledgeholder shall deliver the share certificates
representing Seller's Shares which are in its possession
to Cadiz, free and clear of any security interest of
Pledgeholder therein;
(ii) the Employment Agreement; and
(iii) any additional documents or
instruments required pursuant to subsection (c) below.
(c) Cadiz and Seller shall execute and deliver
such other documents and instruments as may be required
under the Plan as a condition to the transfer of Seller's
Shares to Cadiz and/or the issuance of the Cadiz Stock to
Seller.
11.3 FURTHER ASSURANCES. At the request of Cadiz,
from time to time after the Closing, Seller shall execute
and deliver such additional or confirmatory instruments
and take such other action as Cadiz may reasonably
require in order to evidence or perfect the transfer to
Cadiz of Seller's Shares or to vest title thereto in
Cadiz or to obtain possession thereof for Cadiz.
12. REMEDIES:
12.1 AVAILABLE REMEDIES The parties acknowledge
that Seller's Shares cannot be readily purchased in the
open market and for that reason, among others, Cadiz will
be irreparably damaged in the event it is unable or
unwilling to consummate the purchase of Seller's Shares
as a consequence of any breach of any representation,
warranty or any other material covenant, term or
condition hereof by Seller. Therefore, in the event of
any such breach by Seller of this Agreement, Cadiz shall
have the right, at its election, to obtain an order for
specific performance of this Agreement. The election by
Cadiz of any remedy available to it hereunder shall not
limit any other rights or remedies otherwise available to
Cadiz in respect of any such breach, including claims for
direct and consequential damages.
12.2 DISPUTE RESOLUTION. The parties hereto hereby
consent to the jurisidication of the United States
Bankruptcy Court for the Central District of California
(or such other court as may exercise jurisdiction over
the Case or any part thereof) to enforce the terms of
this Agreement, including entry of orders to compel one
or all of the parties to perform in accordance with the
terms hereof.
13. AGREEMENT TO PERFORM NECESSARY ACTS: The parties
hereto agree to cooperate fully with one another in
executing all documents, certificates, notices, filings
and the like and performing all acts reasonably necessary
to carry out the intent of this Agreement.
14. MISCELLANEOUS:
14.1 ENTIRE AGREEMENT. This Agreement, together
with all exhibits hereto, and all documents referred to
herein, constitute the entire agreement between the
parties with respect to the subject matter hereof,
supersedes all other and prior agreements on the same
subject, whether written or oral, and contains all of the
covenants and agreements between the parties with respect
to the subject matter hereof. Each party to this
Agreement acknowledges that no representations,
inducements, promises, or agreements, orally or
otherwise, have been made by the other party(ies), or by
anyone acting on behalf of any party, that are not
embodied herein, and that no other agreement, statement,
or promise not contained in this Agreement shall be valid
or binding.
14.2 SUCCESSORS AND ASSIGNS. This Agreement shall
be binding upon and shall inure to the benefit of the
parties and their respective heirs (as applicable), legal
representatives, and permitted successors and assigns.
No party may assign this Agreement or the rights,
interests or obligations hereunder; provided, however,
Cadiz may, (i) assign any or all of its rights and
interests hereunder to one or more of its subsidiaries
and (ii) designate one or more of its subsidiaries to
perform its obligations hereunder (in any or all of which
cases Cadiz shall remain liable and responsible for the
issuance of the Cadiz Stock and the performance of all of
its obligations hereunder). Any assignment or delegation
in contravention of this Section shall be null and void.
14.3 EFFECT OF MERGER. Sun World may, concurrently
with or immediately prior to the Closing, merge into SWI,
and if SWI is the surviving entity then the term
"Seller's Shares" shall be deemed, for purposes of this
Agreement, to include any securities of SWI which may be
issued or issuable with respect to Seller's Shares as a
consequence of such merger.
14.4 COUNTERPARTS. This Agreement, and any
amendments thereto, may be executed in counterparts, each
of which shall constitute an original document, but which
together shall constitute one and the same instrument.
14.5 HEADINGS. The section headings contained in
this Agreement are inserted for convenience only and
shall not affect in any way the meaning or interpretation
of this Agreement.
14.6 NOTICES. Any notices required or permitted to
be given hereunder by any party to the other shall be in
writing and shall be deemed delivered upon personal
delivery; twenty four (24) hours following deposit with
a courier for overnight delivery; or seventy two (72)
hours following deposit in the U.S. Mail, registered or
certified mail, postage prepaid, return receipt
requested, addressed to the parties at the last known
address of such party or such other addresses as the
parties may specify in writing.
14.7 GOVERNING LAW. This Agreement shall be
governed by and construed in accordance with the laws of
the State of California.
14.8 AMENDMENT. This Agreement may be amended at
any time by agreement of the parties, provided that any
amendment shall be in writing and executed by all
parties; provided, however, that no amendment may contain
provisions in conflict with or inconsistent with the
rights and obligations of the parties hereto under the
Plan.
14.9 SEVERABILITY. If any provision of this
Agreement is held by a court of competent jurisdiction to
be invalid or unenforceable, the remaining provisions
will nevertheless continue in full force and effect,
unless such invalidity or unenforceability would defeat
an essential business purpose of this Agreement.
14.10 FEES AND EXPENSES. Unless specifically
provided to the contrary herein, each party agrees to
bear its own expenses including, without limitation,
attorneys' and accountants' fees in connection with the
preparation of this Agreement and the transactions
contemplated hereby.
14.11 EXHIBITS AND SCHEDULES. All exhibits attached
to this Agreement are incorporated herein by this
reference and all references herein to "Agreement" shall
mean this Agreement together with all such exhibits, and
all ancillary agreements to be delivered at Closing.
14.12 TIME OF ESSENCE. Time is expressly made of
the essence of this Agreement and each and every
provision hereof of which time of performance is a
factor.
14.13 ATTORNEYS' FEES. Should either Cadiz or
Seller institute any action or procedure to enforce this
Agreement or any provision hereof, or for damages by
reason of any alleged breach of this Agreement or of any
provision hereof, or for a declaration of rights
hereunder, the prevailing party in any such action or
proceeding shall be entitled to receive from the other
party all costs and expenses, including without
limitation reasonable attorneys' fees, incurred by the
prevailing party in connection with such action or
proceeding.
14.14 CONSTRUCTION. The parties have participated
jointly in the negotiation and drafting of this Agreement
and in the event of any ambiguity or question of intent
or interpretation, no presumption or burden of proof
shall arise favoring or disfavoring any party by virtue
of the authorship of any of the provisions of this
Agreement.
14.15 FURTHER ASSURANCES. The parties shall take
such actions and execute and deliver such further
documentation as may reasonably be required in order to
give effect to the transactions contemplated by this
Agreement and the intentions of the parties hereto.
IN WITNESS WHEREOF, the undersigned have
executed this Agreement as of the date first written
above.
"Cadiz"
CADIZ LAND COMPANY, INC.,
a Delaware corporation
By: /s/ Keith Brackpool
--------------------
Keith Brackpool
Chief Executive Officer
"SELLER"
/s/ Howard P. Marguleas
_______________________
Howard P. Marguleas
SPOUSAL JOINDER AND CONSENT
I am the spouse of Howard P. Marguleas. To the extent
that I have any interest in any of Seller's Shares (as
that term is defined in the Agreement), I hereby join in
the Agreement and agree to be bound by its terms and
conditions to the same extent as my spouse. I have read
the Agreement, understand its terms and conditions, and
to the extent that I have felt it necessary, I have
retained independent legal counsel to advise me
concerning the legal effect of this Agreement and this
Spousal Joinder and Consent.
I understand and acknowledge that Cadiz is significantly
relying on the validity and accuracy of this Spousal
Joinder and Consent in entering into this Agreement.
Executed this 13th day of September,1996.
Signature: /s/ Ardith Beth Marguleas
__________________________
Printed or Typed Name: Ardith Beth Marguleas
EXHIBIT A - SUBSCRIPTION AGREEMENT
[Not reproduced]
EXHIBIT B - LIST OF AFFILIATED RANCHES
(Name and Legal Description)
Ranches owned or controlled by Howard P. Marguleas
- --------------------------------------------------
Citrus Ranches
- --------------
C.M.& S. Associates Managing Partner
Cain Ranch Managing Partner
Debonne Ranch Management (tenant) -
Rancho Oasis (owner) Managing Partner
Fairchild Acres Managing Partner
Gless Ranch (tenant) Tierra del Mar (owner) Managing Partner
Huerta del Mar Managing Partner
Newman Ranch Manager
Rancho Buena Vista I Managing Partner
Rancho Keleen Managing Partner
Rancho Ten Managing Partner
Sea Vista Ranch Manager
Shogun Ranch Manager
Soboba Citrus, Inc. Secretary
Date Ranches
- ------------
C.M.& S. Associates Managing Partner
Huerta del Mar Managing Partner
Lemon Ranches
- -------------
C.M.& S. Associates Managing Partner
Rancho Buena Vista I Managing Partner
Huerta del Mar Managing Partner
Mango Ranches
- -------------
C.M.& S. Associates Managing Partner
[Legal Descriptions not provided]
EXHIBIT 2.5
-----------
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT ("Agreement") is
made and entered into as of the 13th day of
September, 1996, by and among Cadiz Land Company,
Inc., a Delaware corporation ("Cadiz"), as purchaser,
and______________________ ("Seller")as seller.
R E C I T A L S
This Agreement is made with reference to the
following facts and circumstances:
A. Seller is the record and beneficial owner of
that number of shares of the issued and outstanding
common stock ("Common Stock") and the issued and
outstanding preferred stock ("Preferred Stock") of Sun
World International, Inc., a Delaware corporation
("Sun World") as set forth on Exhibit "A" hereto
(collectively referred to herein as "Seller's
Shares"). A total of 42,000 shares of Common Stock
and 38,501 shares of Preferred Stock are currently
issued and outstanding.
B. Sun World is the sole owner of all of the
issued and outstanding capital stock of Sun World,
Inc., a Delaware corporation ("SWI"). On October 3,
1994, Sun World and SWI filed for protection under
Chapter 11 of the United States Bankruptcy Code. On
December 13, 1994, Sun World's wholly owned subsidiary
Sun Desert, Inc., a Delaware corporation ("SDI"),
SWI's wholly owned subsidiary AAI Services, Inc.
("AAI") and SDI's wholly owned subsidiary Coachella
Growers ("CG") filed for protection under Chapter 11
of the United States Bankruptcy Code. The filings of
Sun World, SWI, SDI, AAI and CG (collectively,
"Debtors") have been administratively consolidated
(Case No. SB 94 23212 DN, U.S.B.C., C.D. Cal.) (the
"Case").
C. Debtors have filed a plan of reorganization
entitled the Modified Fourth Amended Consolidated Plan
of Reorganization Dated June 3, 1996. The foregoing
plan, and any and all amendments, modifications and
successors thereto which provide for the acquisition
by Cadiz of the outstanding capital stock of Sun
World, as reorganized ("Reorganized Sun World"), shall
be referred to herein as the "Plan".
D. In conformity with the requirements of the
Plan, Seller desires to sell to Cadiz and Cadiz
desires to purchase from Seller all of Seller's Shares
on the terms and conditions set forth in this
Agreement.
NOW, THEREFORE, in consideration of the
covenants and conditions contained herein and for
other valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the
parties hereby agree as follows:
1. SALE OF SELLER'S SHARES:
Subject to the terms and conditions set forth in
this Agreement and in the Plan and in reliance upon
the representations and warranties set forth herein,
at the Closing (as hereinafter defined), Seller shall
sell to Cadiz, by appropriate deeds, bills of sale,
assignments and other instruments reasonably
satisfactory to Cadiz and its counsel, and Cadiz shall
acquire from Seller, all of Seller's right, title and
interest in and to Seller's Shares, free and clear of
all liens, mortgages, pledges, claims, security
interests, title defects, encumbrances, charges and
other restrictions of every kind (collectively, the
"Liens"), at and for the purchase price specified
below.
2. CONSIDERATION:
As consideration in full for the purchase by
Cadiz of Seller's Shares and for the fulfillment by
Seller of the obligations of Seller set forth in this
Agreement, at the Closing, Cadiz shall deliver to
Seller cash in the amount set forth on Exhibit "A"
(the "Purchase Price"), to be allocated between
Seller's Common Stock and Preferred Stock as set forth
in Exhibit "A".
3. REPRESENTATIONS AND WARRANTIES OF SELLER: Seller
hereby represents and warrants to Cadiz as follows:
3.1 AUTHORIZATION. Seller has good and
marketable title to Seller's Shares, and full legal
right, power, authority and legal capacity, without
the consent of any other person, to sell Seller's
Shares, to execute and deliver this Agreement, and to
carry out the transactions contemplated hereby. All
action on the part of Seller necessary for the
authorization, execution, delivery and performance of
this Agreement and the consummation of the
transactions contemplated hereby has been taken, and
this Agreement (including exhibits) constitutes the
legal, valid and binding obligation of Seller,
enforceable in accordance with its terms, except as
enforceability may be restricted, limited or delayed
by applicable bankruptcy or other laws affecting
creditor's rights generally and except as
enforceability is subject to general principles of
equity. Upon purchase of Seller's Shares pursuant to
this Agreement, Cadiz shall acquire good and
marketable title to Seller's Shares free and clear of
all Liens.
3.2 OUTSTANDING SHARES. Other than Seller's
Shares, Seller has no right, title or interest in any
oustanding shares of Common Stock or Preferred Stock.
Seller holds no options, warrants, convertible
securities or preemptive or other rights outstanding
to acquire any unissued shares of Common Stock,
Preferred Stock, or any other Sun World stock.
3.3 NO CONSENT REQUIRED; NO VIOLATIONS. Neither
the execution of this Agreement by Seller, nor the
performance by Seller of Seller's obligations under
this Agreement, requires the consent of any secured
creditor of Debtors, court, government authority or
other third party. Neither this Agreement nor any of
the transactions contemplated hereunder violates or
shall violate any lease, contract, document,
understanding, agreement or instrument to which Seller
or any affiliate of Seller is a party or by which they
may be bound, or any other lease, contract, document,
understanding, agreement or instrument affecting any
of them. Other than this Agreement and the Plan,
there is no contract, commitment or agreement between
Seller and any other person (including any other
shareholder of Sun World) with respect to the
disposition of any of Seller's Shares or any
shareholder actions or other corporate matters.
3.4 SECURITIES LAW COMPLIANCE. The sale of
Seller's Shares pursuant to this Agreement is (a)
exempt from the registration requirements of the
Securities Act of 1933, as amended, and (b) exempt
from qualification under the California Corporate
Securities Law of 1968.
4. COVENANTS OF SELLER: Seller hereby covenants to
Cadiz as follows:
4.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES.
The representations and warranties of Seller hereunder
shall be true and correct in all material respects at
the Closing.
4.2 FULFILLMENT OF CONDITIONS AND COVENANTS.
Seller shall not voluntarily undertake any course of
action inconsistent with the satisfaction of the
requirements or conditions applicable to Seller as set
forth in this Agreement and in the Plan and shall
promptly do all acts and take all such steps as Seller
reasonably deems necessary or appropriate to enable
Seller to perform as early as possible the obligations
herein and therein provided.
4.3 NO SALE OR TRANSFER. Prior to the Closing,
Seller shall not, except pursuant to the terms and
conditions of this Agreement, cause, suffer or permit
Seller's Shares to be sold, assigned, transferred,
encumbered, become subject to any security interest,
lien, levy or attachment or become subject to any
restriction upon transfer. Seller's ownership and
title to Seller's Shares shall be maintained and
preserved at all times in strict accordance with the
representations and warranties of Seller herein.
4.4 SUPPORT FOR PLAN. During the term of this
Agreement, Seller shall support confirmation of the
Plan and shall take reasonable steps to assist Cadiz
in securing confirmation of the Plan. Without
limitation of the foregoing, Seller shall also use
Seller's best efforts in good faith to support any
actions taken by Cadiz in furtherance of its efforts
to acquire control over the operations and/or assets
of Sun World pursuant to the Plan.
4.5 TAXES. Seller shall be individually
responsible for all federal, state and local taxes,
transfer tax and documentary stamps, if any,
attributable to or arising out of the sale of Seller's
Shares to Cadiz.
5. REPRESENTATIONS AND WARRANTIES OF CADIZ:
Cadiz hereby represents and warrants to Seller
that:
5.1 ORGANIZATION. Cadiz is a corporation
validly existing and in good standing under the laws
of the State of Delaware.
5.2 AUTHORITY. Cadiz has the corporate power
and authority to enter into this Agreement and to
consummate the transactions contemplated hereby. All
action on the part of Cadiz necessary for the
authorization, execution, delivery and performance of
this Agreement and the consummation of the
transactions contemplated hereby has been taken, and
this Agreement (including exhibits) constitutes the
legal, valid and binding obligation of Cadiz,
enforceable in accordance with its terms, except as
enforceability may be restricted, limited or delayed
by applicable bankruptcy or other laws affecting
creditor's rights generally and except as
enforceability is subject to general principles of
equity.
5.3 NO VIOLATION OF OTHER OBLIGATIONS. Neither
this Agreement nor any of the transactions
contemplated hereunder violates or shall violate any
lease, contract, document, understanding, agreement or
instrument to which Cadiz is a party or by which it
may be bound, or any lease, contract, document,
understanding, agreement or instrument affecting
Cadiz.
5.4 FULFILLMENT OF CONDITIONS AND COVENANTS.
Cadiz shall not voluntarily undertake any course of
action inconsistent with the satisfaction of the
requirements and conditions applicable to it as set
forth in this Agreement and in the Plan and Cadiz
shall promptly do all acts and take all such measures
as may be necessary or appropriate to enable it to
perform as early as possible the obligations herein
and therein provided; provided, however, that in the
event Cadiz determines prior to either the
Confirmation Date or Effective Date (as defined in the
Plan) to terminate its proposed acquisition of Sun
World, and so notifies Seller in writing, then upon
delivery of such notice this Agreement shall be
terminated and the parties shall have no further
obligations towards each other hereunder.
5.5 INVESTMENT REPRESENTATIONS. Cadiz
understands that Seller's Shares will not be
registered under the Securities Act of 1933, as
amended or qualified under the California Corporate
Securities Law of 1968, as amended, and will be sold
to Cadiz pursuant to exemptions to such registration
and qualification requirements. Cadiz has the
knowledge and experience in financial and business
matters in general, and investments in particular, to
properly evaluate the merits and risks of purchasing
Seller's Shares from Seller. Cadiz intends to acquire
Seller's Shares solely for its own account, for
investment, and not with a view to offer or sell
Seller's Shares to any other person or entity. Cadiz
represents and warrants that it has relied solely on
its own due diligence investigations with respect to
all matters related to Sun World and/or Seller's
Shares. Cadiz acknowledges that (a) Seller has not
made any statements or representations with respect to
any matters related to Sun World and/or Seller's
Shares, (b) all documents and instruments delivered to
or made available to Cadiz have been provided by third
parties and not by or on behalf of Seller, and (c)
Cadiz hereby represents to Seller that Cadiz is a
sophisticated business investor and has or has
available to it the expertise to properly and fully
investigate all matters related to Sun World and/or
Seller's Shares. Cadiz further represents and
warrants to Seller that the only representations and
warranties of Seller to Cadiz are as set forth and
limited in this Agreement.
6. RELEASES: Cadiz and Seller specifically
acknowledge and agree that following the Closing, they
each shall be bound by, be subject to and have the
benefit of the Releases provided under paragraph VIII
X of the Plan, which Releases (as they pertain to
Cadiz and Seller, respectively) are hereby
incorporated by reference into this Agreement. In
this regard, Seller covenants and agrees that Seller
will not mark the "Withhold Release" box on Seller's
ballot submitted to vote on the Plan. Seller shall
execute and deliver such additional or confirmatory
instruments to any person who is the beneficiary of a
Release as such person may require in order to
evidence such Release. Seller further covenants and
agrees that, in the event of the prosecution by any
party of any claim or cause of action which is
identified as a Shareholder Reserved Claim on Exhibit
"A" to the Plan, and as a consequence of any
affirmative action or request taken or made by Seller
(or any entity controlled by Seller) in connection
with the prosecution or defense of such claim which
requires action to be taken by Cadiz or any affiliate
of Cadiz (including Sun World) (individually, an
"Indemnified Party" and collectively, the "Indemnified
Parties") with respect thereto (including, without
limitation, responding to requests for information or
depositions in the course of discovery), an
Indemnified Party incurs any expenses, losses or
damages, then Seller shall indemnify and hold harmless
such Indemnified Party against any such expenses,
losses or damages; provided, however, that no action
shall be taken by an Indemnified Party which is
subject to indemnification under this paragraph
unless, prior to such action, Seller and the
Indemnified Party shall have negotiated, in good
faith, an agreement as to the reasonable amount of
costs to be paid by Seller to the Indemnified Party
with respect to such action (except to the extent that
any action of an Indemnified Party is mandated by law,
in which case the Indemnified Party shall be entitled
to full reimbursement of all reasonable costs
incurred). Notwithstanding the foregoing, under no
circumstances will Seller be liable for any liability
imposed on an Indemnified Party after a trial on the
merits of any claim by Howard Marguleas or a Marguleas
Releasee (as defined in the Plan) against an
Indemnified Party, nor shall Seller be liable for: a)
the costs of an Indemnified Party in defending any
such claim; or b) any settlement that may be agreed to
between an Indemnified Party and Howard Marguleas or
a Marguleas Releasee. In any event, Seller's
liability with respect to the foregoing shall not
exceed $25,000.
7. CONDITIONS PRECEDENT IN FAVOR OF SELLER
The obligations of Seller contemplated herein are
subject to the satisfaction, at or before the Closing,
of all of the conditions set out hereinbelow. Seller
may waive any or all of these conditions in whole or
in part without prior notice.
7.1 ACCURACY OF AND CERTIFICATE AS TO
REPRESENTATIONS AND WARRANTIES. The representations
and warranties of Cadiz contained herein and in all
documents to be delivered pursuant hereto shall be
true and complete as of the Closing, as if made at
such time.
7.2 COMPLIANCE WITH COVENANTS. Cadiz shall have
performed and complied with all covenants, agreements
and conditions required by this Agreement or the Plan
to be performed by Cadiz.
7.3 BANKRUPTCY COURT ORDER. The United States
Bankruptcy Court for the Central District of
California shall have issued its order confirming the
Plan under Section 1129 of the Bankruptcy Code not
later than August 15, 1996, and the Closing shall have
occurred not later than the Effective Date (as defined
in the Plan) or any Court approved extension thereof.
7.4 SATISFACTION OF PLAN CONDITIONS. All of the
conditions to the obligations of Seller to consummate
the sale of Seller's Shares to Cadiz under the Plan
shall have been satisfied.
8. CONDITIONS PRECEDENT IN FAVOR OF CADIZ
The obligations of Cadiz contemplated herein are
subject to the satisfaction, at or before the Closing,
of all of the conditions set out hereinbelow. Cadiz
may waive any or all of these conditions in whole or
in part without prior notice.
8.1 ACCURACY OF AND CERTIFICATE AS TO
REPRESENTATIONS AND WARRANTIES. The representations
and warranties of Seller contained herein and in all
documents to be delivered pursuant hereto shall be
true and correct as of the Closing, as if made at such
time.
8.2 COMPLIANCE WITH COVENANTS. Seller shall
have performed and complied with all covenants,
agreements and conditions required by this Agreement
or by the Plan to be performed or satisfied by Seller.
8.3 COMPLIANCE WITH LAW. There shall have been
obtained any and all permits, approvals and consents
of all governmental bodies or agencies which counsel
for Cadiz may reasonably deem necessary or appropriate
so that consummation of the transactions contemplated
by this Agreement and continuance by Reorganized Sun
World of the conduct of the business of Sun World
after the Closing will be in compliance in all
material respects with applicable laws.
8.4 BANKRUPTCY COURT ORDER. The United States
Bankruptcy Court for the Central District of
California shall have issued its order confirming the
Plan under Section 1129 of the Bankruptcy Code not
later than August 15, 1996, and the Closing shall have
occurred not later than the Effective Date (as defined
in the Plan) or any Court approved extension thereof.
8.5 SATISFACTION OF PLAN CONDITIONS. All of the
conditions to the obligations of Cadiz to consummate
the acquisition of Seller's Shares under the Plan
shall have been satisfied, including, without
limitation, the acquisition by Cadiz of all of the
outstanding capital stock of Sun World not held by
Seller and the entry by Reorganized Sun World into
restructured credit arrangements with Sun World's
secured lenders.
9. CLOSING
9.1 CLOSING DATE. The transfer of Seller's
Shares and the consummation of the transactions
contemplated by this Agreement (the "Closing") shall
take place on the Effective Date, as defined in the
Plan.
9.2 DELIVERIES AT CLOSING. At the Closing:
(a) Seller shall execute and deliver to
Cadiz any appropriate deeds, bills of sale,
assignments, endorsements and such other instruments
of title and other documents of Seller as are
necessary to vest title to Seller's Shares in Cadiz,
free and clear of all liens and adverse claims to
title; and
(b) Cadiz shall deliver the Purchase Price
to Seller.
(c) Cadiz and Seller shall execute and
deliver such other instruments to the other as may be
required under the Plan as a condition to the transfer
of Seller's Shares to Cadiz and/or the delivery of the
Purchase Price to Seller.
9.3 FURTHER ASSURANCES. At the request of
Cadiz, from time to time after the Closing, Seller
shall execute and deliver such additional or
confirmatory instruments and take such other action as
Cadiz may reasonably require in order to evidence or
perfect the transfer to Cadiz of Seller's Shares or to
vest title thereto in Cadiz or to obtain possession
thereof for Cadiz.
10. REMEDIES: The parties hereto hereby consent to
the jurisidication of the United States Bankruptcy
Court for the Central District of California (or such
other court as may exercise jurisdiction over the Case
or any part thereof) to enforce the terms of this
Agreement, including entry of orders to compel one or
all of the parties to perform in accordance with the
terms hereof.
11. AGREEMENT TO PERFORM NECESSARY ACTS: The parties
hereto agree to cooperate fully with one another in
executing all documents, certificates, notices,
filings and the like and performing all acts
reasonably necessary to carry out the intent of this
Agreement.
12. MISCELLANEOUS:
12.1 ENTIRE AGREEMENT. This Agreement, together
with all exhibits hereto, and all documents referred
to herein (including the Plan), constitute the entire
agreement between the parties with respect to the
subject matter hereof, supersedes all other and prior
agreements on the same subject, whether written or
oral, and contains all of the covenants and agreements
between the parties with respect to the subject matter
hereof. Each party to this Agreement acknowledges
that no representations, inducements, promises, or
agreements, orally or otherwise, have been made by the
other party(ies), or by anyone acting on behalf of any
party, that are not embodied herein, and that no other
agreement, statement, or promise not contained in this
Agreement shall be valid or binding.
12.2 SUCCESSORS AND ASSIGNS. This Agreement
shall be binding upon and shall inure to the benefit
of the parties and their respective heirs (as
applicable), legal representatives, and permitted
successors and assigns. No party may assign this
Agreement or the rights, interests or obligations
hereunder; provided, however, Cadiz may, (i) assign
any or all of its rights and interests hereunder to
one or more of its subsidiaries and (ii) designate one
or more of its subsidiaries to perform its obligations
hereunder (in any or all of which cases Cadiz shall
remain liable and responsible for the performance of
all of its obligations hereunder). Any assignment or
delegation in contravention of this Section shall be
null and void.
12.3 EFFECT OF MERGER. Sun World may,
concurrently with or immediately prior to the Closing,
merge into SWI, and if SWI is the surviving entity
then the term "Seller's Shares" shall be deemed, for
purposes of this Agreement, to include any securities
of SWI which may be issued or issuable with respect to
Seller's Shares as a consequence of such merger.
12.4 COUNTERPARTS. This Agreement, and any
amendments thereto, may be executed in counterparts,
each of which shall constitute an original document,
but which together shall constitute one and the same
instrument.
12.5 HEADINGS. The section headings contained in
this Agreement are inserted for convenience only and
shall not affect in any way the meaning or
interpretation of this Agreement.
12.6 NOTICES. Any notices required or permitted
to be given hereunder by any party to the other shall
be in writing and shall be deemed delivered upon
personal delivery; twenty four (24) hours following
deposit with a courier for overnight delivery; or
seventy two (72) hours following deposit in the U.S.
Mail, registered or certified mail, postage prepaid,
return receipt requested, addressed to the parties at
the last known address of such party or such other
addresses as the parties may specify in writing.
12.7 GOVERNING LAW. This Agreement shall be
governed by and construed in accordance with the laws
of the State of California.
12.8 AMENDMENT. This Agreement may be amended
at any time by agreement of the parties, provided that
any amendment shall be in writing and executed by all
parties; provided, however, that no amendment may
contain provisions in conflict with or inconsistent
with the rights and obligations of the parties hereto
under the Plan.
12.9 SEVERABILITY. If any provision of this
Agreement is held by a court of competent jurisdiction
to be invalid or unenforceable, the remaining
provisions will nevertheless continue in full force
and effect, unless such invalidity or unenforceability
would defeat an essential business purpose of this
Agreement.
12.10 FEES AND EXPENSES. Unless specifically
provided to the contrary herein, each party agrees to
bear its own expenses including, without limitation,
attorneys' and accountants' fees in connection with
the preparation of this Agreement and the transactions
contemplated hereby.
12.11 EXHIBITS AND SCHEDULES. All exhibits
attached to this Agreement are incorporated herein by
this reference and all references herein to
"Agreement" shall mean this Agreement together with
all such exhibits, and all ancillary agreements to be
delivered at Closing.
12.12 TIME OF ESSENCE. Time is expressly made of
the essence of this Agreement and each and every
provision hereof of which time of performance is a
factor.
12.13 ATTORNEYS' FEES. Should either Cadiz or
Seller institute any action or procedure to enforce
this Agreement or any provision hereof, or for damages
by reason of any alleged breach of this Agreement or
of any provision hereof, or for a declaration of
rights hereunder, the prevailing party in any such
action or proceeding shall be entitled to receive from
the other party all costs and expenses, including
without limitation reasonable attorneys' fees,
incurred by the prevailing party in connection with
such action or proceeding.
12.14 CONSTRUCTION. The parties have
participated jointly in the negotiation and drafting
of this Agreement and in the event of any ambiguity or
question of intent or interpretation, no presumption
or burden of proof shall arise favoring or disfavoring
any party by virtue of the authorship of any of the
provisions of this Agreement.
12.15 FURTHER ASSURANCES. The parties shall take
such actions and execute and deliver such further
documentation as may reasonably be required in order
to give effect to the transactions contemplated by
this Agreement and the intentions of the parties
hereto.
IN WITNESS WHEREOF, the undersigned have
executed this Agreement as of the date first written
above.
"Cadiz"
CADIZ LAND COMPANY, INC.,
a Delaware corporation
By: /s/ Keith Brackpool
------------------------
Keith Brackpool
Chief Executive Officer
"SELLER"
______________________________
SPOUSAL JOINDER AND CONSENT
I am the spouse of________________________. To the
extent that I have any interest in any of Seller's
Shares (as that term is defined in the Agreement), I
hereby join in the Agreement and agree to be bound by
its terms and conditions to the same extent as my
spouse. I have read the Agreement, understand its
terms and conditions, and to the extent that I have
felt it necessary, I have retained independent legal
counsel to advise me concerning the legal effect of
this Agreement and this Spousal Joinder and Consent.
I understand and acknowledge that Cadiz is
significantly relying on the validity and accuracy of
this Spousal Joinder and Consent in entering into this
Agreement.
Executed this _____ day of______________, 199___.
Signature:__________________________________________
Printed or Typed Name: _____________________________
EXHIBIT A SELLER'S SHARES AND PURCHASE PRICE
No. of Common Shares: ________________
Common Share
Purchase Price $___________
No. of Preferred Shares: __________________
Preferred Share
Purchase Price $_____________
Total Purchase Price $
==============
LIST OF SELLERS
NAME Common Shares Preferred Shares
Carl S. Maggio 10,050 -0-
Domenick T. Bianco 2,445 3,501
Martin S. Gans 5,550 -0-
The John and Shirley Thomas
Family Trust U/D/T/9-6-88 3,112 -0-
James R. Greenbaum, Sr. -0- 1,667
Tostado Family Trust
U/D/T/9-29-83, as amended
through 9-20-92, Carl Sam
Maggio, Trustee 788 -0-
Robert and Charlotte J. Nies
Revocable Trust dated 6-15-88 650 -0-
EXHIBIT 4.1
------------
CERTIFICATE OF DESIGNATIONS OF
SERIES A PREFERRED STOCK
OF
CADIZ LAND COMPANY, INC.
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
CADIZ LAND COMPANY, INC., a corporation organized and
existing under the General Corporation Law of the State of
Delaware (the "Corporation"), hereby certifies that,
pursuant to (i) the authority conferred upon the Board of
Directors by the Certificate of Incorporation of the
Corporation, (ii) the provisions of Section 151 of said
General Corporation Law, and (iii) the resolutions
unanimously adopted by the Board of Directors of the
Corporation by action taken at a meeting on June 24, 1996,
the Board of Directors duly adopted resolutions providing
for authorization for issuance of 60,000 shares of the
Corporation's Preferred Stock, par value $.01 per share,
designated Series A Preferred Stock, which resolutions are
as follows:
RESOLVED, that pursuant to the authority
vested in the Board of Directors of the
Corporation by the Certificate of
Incorporation, the Board of Directors does
authorize for issuance Sixty Thousand (60,000)
shares of Preferred Stock, par value $.01 per
share, of the Corporation, to be designated
"Series A Preferred Stock" of the presently
authorized shares of Preferred Stock. The
voting powers, designations, preferences, and
other rights of the Series A Preferred Stock
authorized hereunder and the qualifications,
limitations and restrictions of such
preferences and rights are as follows:
1. RANKING. The Series A Preferred Stock
shall, with respect to the payment of
dividends and upon liquidation, dissolution,
or winding up, rank (1) senior and prior to
the Corporation's Common Stock, $0.01 par
value per share (the "Common Stock"), and all
other capital stock issued by the Corporation
and designated as junior to the Series A
Preferred Stock (collectively herein called
the "Junior Securities"), and (2) on a parity
with any other class or series of Preferred
Stock of the Corporation (the "Parity
Securities"). The Corporation shall not issue
any capital stock, or any class or series,
which shall rank senior to the Series A
Preferred Stock with respect to the payment of
dividends, redemption or other purchase of
capital stock or upon liquidation,
dissolution, or winding up.
2. DIVIDENDS. (a) The holders of
outstanding shares of Series A Preferred Stock
shall be entitled to receive cumulative
dividends. Such dividends shall be payable at
the option of the Corporation in the form of
either (i) cash; or (ii) fully paid and
nonassessable shares of Common Stock (valued
at $4.50 per share for purposes of this
Section 2 only) at an annual rate, commencing
immediately following issuance, equal to six
percent (6%) of the Liquidation Preference (as
defined in Section 3 hereof). In the event
that, on or before December 31, 1996, the
stockholders of the Corporation have not
approved an amendment to the Corporation's
Certificate of Incorporation (the "Amendment")
which increases the number of authorized
shares of Common Stock available for issuance
by a number equal to or greater than
10,000,000 (subject to adjustment on the same
basis as the Conversion Rate under Section
6(c)), then such annual rate shall be
increased, commencing on January 1, 1997 to
twelve percent (12%) of the Liquidation
Preference, and shall remain at twelve percent
(12%) until such time as the stockholders of
the Company have approved the Amendment,
whereupon such annual rate shall immediately
be decreased to six percent (6%) of the
Liquidation Preference. Such dividends shall
be payable semiannually on March 31 and,
September 30 of each year (each of such dates
being a "Dividend Payment Date" and each
period between such dates (or the date of
issue, if earlier) being a "Dividend Period")
commencing on the first Dividend Payment Date
following the date of issuance of the Series A
Preferred Stock to stockholders of record of
Series A Preferred Stock on the respective
date, not exceeding 60 days preceding such
Dividend Payment Date, as shall be fixed for
this purpose by the Board or an authorized
committee of the Board ("Authorized Board
Committee") in advance of payment of each
particular dividend. Dividends payable on the
Series A Preferred Stock for the initial
Dividend Period and for any period less than a
full period shall be computed on the basis of
the actual number of days elapsed in a year of
365 days. All dividends paid in Common Stock
pursuant to this subparagraph (a) shall be
deemed issued on the applicable Dividend
Payment Date and paid pro rata to the holders
entitled thereto. All Common Stock which may
be issued as a dividend with respect to the
Series A Preferred Stock will thereupon be
duly authorized, validly issued, fully paid
and nonassessable and free of all liens and
charges.
(b) Dividends on Series A Preferred
Stock shall be fully cumulative and shall
accrue (whether or not accrued or declared)
from the date of issuance. All dividends on
the Series A Preferred Stock shall be declared
by the Board and paid by the Corporation to
the fullest extent permitted by law.
Accumulated unpaid dividends for any past
Dividend Periods may be declared by the Board
(or an Authorized Board Committee) and paid on
any date fixed by the Board (or an Authorized
Board Committee). Holders of Series A
Preferred Stock will not be entitled to any
dividends in excess of full cumulative
dividends. The Corporation may deduct and
withhold from dividends on Series A Preferred
Stock any amounts required to be deducted or
withheld by the Corporation under applicable
law. Except as provided above, no interest or
sum of money in lieu of interest shall be
payable in respect of any accumulated unpaid
dividends.
(c) In no event, so long as any shares
of Series A Preferred Stock are outstanding,
shall any dividend whatsoever be paid or
declared, nor shall any other distribution be
made (either in cash or property) on or in
respect of, nor shall any moneys or property
be expended for the redemption, retirement,
purchase or other acquisition of, outstanding
shares of Junior Securities by the
Corporation, nor shall any moneys or property
be paid into or set apart, or made available
for a sinking fund for the purchase or
redemption of any shares of Junior Securities
unless all dividends on all outstanding shares
of Series A Preferred Stock for all past
Dividend Periods shall have been paid in full
and the full dividends thereon for the then
current Dividend Period shall have been
declared and shares set apart sufficient for
the payment thereof. The provisions of the
preceding sentence shall not apply to a
dividend payable in shares of stock ranking
junior to shares of Series A Preferred Stock
both in respect of the payment of dividends
and in respect of all payments upon
liquidation, dissolution or winding up of the
Corporation.
3. LIQUIDATION PREFERENCE. In the
event of any voluntary or involuntary
liquidation, dissolution, or winding up of the
affairs of the Corporation, then, before any
distribution or payment shall be made to the
holders of any Junior Securities, and subject
to the rights of creditors, the holders of
Series A Preferred Stock shall be entitled to
be paid out of the assets of the Corporation
in an amount in cash equal to $1,000.00 for
each share outstanding (which amount is
hereinafter referred to as the "Liquidation
Preference"). If the assets of the Corporation
are not sufficient to pay in full the
Liquidation Preference as well as any
liquidation preference to holders of Parity
Securities, then the holders of the Series A
Preferred Stock and Parity Securities shall
share ratably in such distribution of assets
in accordance with the amount which would have
been payable on such distribution if the
amounts to which such holders were entitled
were paid in full. Except as provided in this
paragraph 3, holders of Series A Preferred
Stock shall not be entitled to any
distribution in the event of liquidation,
dissolution, or winding up of the affairs of
the Corporation.
4. REDEMPTION. (a) At the date which
is five (5) years following the date of the
original issuance of the Series A Preferred
Stock the Corporation shall redeem, subject to
the provisions of this paragraph 4, out of
funds legally available therefor, all
outstanding shares of Series A Preferred Stock
at a price of $1,000.00 per share.
(b) The Corporation shall cause to be
mailed to each holder of Series A Preferred
Stock, by overnight courier service or by
first class mail, postage prepaid, mailed not
fewer than 30 days nor more than 60 days prior
to the date of redemption pursuant to
subparagraph 4(a) above (the "Redemption
Date"), at such holder's address as the same
appears on the records of the Corporation (the
"Redemption Notice") stating the date on which
such redemption is to take place. Each such
notice shall specify (i) the Redemption Date,
(ii) the number of shares to be redeemed,
(iii) the consideration payable with respect
to such redemption, and (iv) the place or
places where certificates for such shares are
to be surrendered for payment of such
consideration.
(c) Series A Preferred Stock which has
been issued and reacquired in any manner,
including shares purchased, redeemed, or
converted shall (upon compliance with any
applicable provisions of the laws of the State
of Delaware) have the status of authorized and
unissued preferred stock undesignated as to
series, and such shares may be redesignated
and reissued as part of any series of
preferred stock.
5. VOTING. Except as provided herein
or as otherwise from time to time provided by
law, the holders of Series A Preferred Stock
shall not be entitled to any voting rights as
stockholders of the Corporation prior to
conversion pursuant to Section 6 hereof.
Notwithstanding the foregoing, the following
actions by the Corporation will require prior
approval by the holders of a majority of the
issued and outstanding shares of Series A
Preferred Stock: (a) a change in the rights,
preferences, privileges or restrictions
relating to Series A Preferred Stock so as to
adversely affect the holders of Series A
Preferred Stock; and (b) an increase or
decrease in the aggregate number of authorized
shares of Series A Preferred Stock or an
increase or decrease in the par value of
shares of Series A Preferred Stock.
6. CONVERSION. The Series A Preferred
Stock shall not be convertible when issued,
but shall automatically become convertible
into shares of Common Stock at the rate of One
(1) share of Common Stock for every $4.50 in
Liquidation Preference of the shares of Series
A Preferred Stock so converted (the
"Conversion Rate"), both (i) at the option of
the holder thereof, following the filing of an
amendment to the Corporation's Certificate of
Incorporation (the "Amendment") which
increases the number of authorized shares of
Common Stock available for issuance by a
number equal to or greater than 10,000,000
(subject to adjustment on the same basis as
the Conversion Rate under Section 6(c)); and
(ii) at the option of the Corporation (but
only as to the conversion of all outstanding
shares of Series A Preferred Stock, and not
any lesser number of such shares), at any time
between the filing of the Amendment and six
(6) months following the filing of the
Amendment. The following provisions shall
apply after the Series A Preferred Stock
becomes convertible:
(a) Any holder of shares of Series
A Preferred Stock electing to convert such
shares into Common Stock shall surrender the
certificate or certificates for such shares at
the office of the Corporation (or at such
other place as the Corporation may designate
by notice to the holders of shares of Series A
Preferred Stock) during regular business
hours, duly endorsed to the Corporation in
blank, or accompanied by instruments of
transfer to the Corporation in blank, in form
reasonably satisfactory to the Corporation and
shall give written notice to the Corporation
at such office that such holder elects to
convert such shares of Series A Preferred
Stock. Such written notice shall also
instruct the Corporation where to deliver the
certificate or certificates representing the
Common Stock issuable upon such conversion.
The Corporation shall, as soon as reasonably
practicable after such deposit of certificates
for shares of Series A Preferred Stock,
accompanied by the written notice above
prescribed, issue to the holder for whose
account such shares were surrendered, or to
his nominee, a certificate or certificates
representing the number of shares of Common
Stock to which such holder is entitled upon
such conversion, and shall deliver such
certificate or certificates in accordance with
the instructions of the holder. Conversion
shall be deemed to have been made as of the
date of surrender of certificates for the
shares of Series A Preferred Stock to be
converted and the delivery of written notice
as hereinabove provided; and the person
entitled to receive the Common Stock issuable
upon such conversion shall be treated for all
purposes as the record holder of such Common
Stock on such date.
(b) In the event of an election by
the Corporation to convert Series A Preferred
Stock into shares into Common Stock, the
outstanding shares of Series A Preferred Stock
shall be converted automatically without any
further action by the holders of such shares
and whether or not the certificates
representing outstanding shares are
surrendered to the Corporation or its transfer
agent; provided, however, that no such
mandatory conversion may occur prior to the
date which is one (1) year following the date
of the original issuance of the Series A
Preferred Stock unless, prior to the date of
mandatory conversion (the "Mandatory
Conversion Date"), the Corporation shall have
paid to the holder of the Series A Preferred
Stock so converted an amount equal to the
difference between (a) the total dividends
which the holder would have received during
the first full year following the date of
original issuance with respect to the Series A
Preferred Stock so converted, had such shares
not been converted; and (b) the amount of any
dividends accrued and/or received with respect
to such shares as of the Mandatory Conversion
Date. The Corporation shall not be obligated
to issue certificates evidencing the shares of
Common Stock issuable upon such conversion
unless the certificates evidencing such shares
of Series A Preferred Stock are either
delivered to the Corporation or its transfer
agent as provided below, or the holder
notifies the Corporation or its transfer agent
that such certificates have been lost, stolen
or destroyed and executes an agreement
satisfactory to the Corporation to indemnify
the Corporation from any loss incurred by it
in connection with such certificates. The
Corporation shall cause to be mailed to each
holder of Series A Preferred Stock, by
overnight courier service or by first class
mail, postage prepaid, mailed not fewer than
30 days nor more than 60 days prior to the
Mandatory Conversion Date, at such holder's
address as the same appears on the records of
the Corporation (the "Mandatory Conversion
Notice") stating the date on which such
conversion is to take place. Each such notice
shall specify (i) the Mandatory Conversion
Date, (ii) the number of shares to be
converted, and (iii) the place or places where
certificates for such shares are to be
surrendered for conversion. On or before the
Mandatory Conversion Date, each holder of
Series A Preferred Stock shall surrender the
certificate or certificates for such shares at
the office of the Corporation (or at such
other place as the Corporation may designate
by notice to the holders of shares of Series A
Preferred Stock) during regular business
hours, duly endorsed to the Corporation in
blank, or accompanied by instruments of
transfer to the Corporation in blank, in form
reasonably satisfactory to the Corporation.
Such written notice shall instruct the
Corporation where to deliver the certificate
or certificates representing the Common Stock
issuable upon such conversion. The
Corporation shall, as soon as reasonably
practicable following the Mandatory Conversion
Date and after such deposit of certificates
for shares of Series A Preferred Stock,
accompanied by the written notice above
prescribed, issue to the holder for whose
account such shares were surrendered, or to
his nominee, a certificate or certificates
representing the number of shares of Common
Stock to which such holder is entitled upon
such conversion, and shall deliver such
certificate or certificates in accordance with
the instructions of the holder. Conversion
shall be deemed to have been made as of the
Mandatory Conversion Date irrespective of the
date of surrender of certificates for the
shares of Series A Preferred Stock to be
converted and the delivery of written notice
as hereinabove provided; and the person
entitled to receive the Common Stock issuable
upon such conversion shall be treated for all
purposes as the record holder of such Common
Stock effective as of the Mandatory Conversion
Date. Following the Mandatory Conversion
Date, all authorized shares of Series A
Preferred Stock shall resume the status of
authorized but unissued shares of Preferred
Stock, without designation as to series, until
such shares are once more designated as part
of a particular series by the Board of
Directors.
(c) The Conversion Rate shall be
adjusted from time to time as follows:
i) In case the average of the
closing bid prices for the Corporation's
Common Stock as reported by the Nasdaq
National Market System for the ninety day
period prior to the filing of the Amendment
shall be less than $5.25 per share (subject to
adjustment on the same basis as the Conversion
Rate under this Section 6(c)), then the
Conversion Rate as in effect upon the filing
of the Amendment shall be decreased to $3.75
per share.
ii) In case the Corporation
shall (A) subdivide its outstanding shares of
Common Stock, (B) combine its outstanding
shares of Common Stock into a smaller number
of shares or, (C) issue by capital
reorganization or reclassification of its
shares of Common Stock or otherwise (other
than a subdivision or combination of its
shares provided for above, or a
reorganization, merger, consolidation or sale
of assets provided for elsewhere in this
Section 6) any shares of capital stock of the
Corporation, the conversion right and each
Conversion Rate in effect immediately prior to
such action shall be adjusted so that the
holder of any shares of the Series A Preferred
Stock thereafter surrendered for conversion
shall be entitled to receive the number of
shares of capital stock of the Corporation
which such holder would have owned immediately
following such action had such shares of the
Series A Preferred Stock been converted
immediately prior thereto. An adjustment made
pursuant to this subparagraph shall become
effective retroactively immediately after the
record date in the case of a dividend or
distribution and shall become effective
immediately after the effective date in the
case of a subdivision, combination or
reclassification. If, as a result of an
adjustment made pursuant to this subparagraph,
the holder of any shares of the Series A
Preferred Stock thereafter surrendered for
conversion shall become entitled to receive
shares of two or more classes of capital stock
of the Corporation, the Board of Directors
(whose determination shall be conclusive)
shall determine the allocation of the adjusted
Conversion Rate between or among shares of
such classes of capital stock.
iii) Whenever an adjustment in
the Conversion Rate is required, the
Corporation shall forthwith place on file with
its Secretary a statement signed by its
Chairman of the Board, President or a Vice
President and by its Secretary or Treasurer or
one of its Assistant Secretaries or Assistant
Treasurers, stating the adjusted Conversion
Rate determined as provided herein. Such
statement shall set forth in reasonable detail
such facts as shall be necessary to show the
reason and the manner of computing such
adjustment. Promptly after the adjustment of
the Conversion Rate, the Corporation shall
mail a notice and copy of such statement to
each holder of shares of Series A Preferred
Stock.
iv) In case of either (A) any
reorganization, consolidation or merger to
which the Corporation is a party, other than a
reorganization, merger or consolidation in
which the Corporation is the surviving or
continuing corporation and which does not
result in any reclassification of, or change
(other than a change in par value or from par
value to no par value or from no par value to
par value, or as a result of a subdivision or
combination) in, outstanding shares of Common
Stock, or (B) any sale or conveyance to
another corporation of all or substantially
all of the assets of the Corporation, then the
Corporation, or such successor corporation, as
the case may be, shall make appropriate
provision so that the holder of each share of
Series A Preferred Stock then outstanding
shall have the right to convert such shares of
Series A Preferred Stock into the kind and
amount of shares or other securities and
property receivable upon such reorganization,
consolidation, merger, sale or conveyance by a
holder of the number of shares of Common Stock
into which such shares of Series A Preferred
Stock might have been converted immediately
prior to such reorganization, consolidation,
merger, sale or conveyance, subject to
adjustments which shall be as nearly
equivalent as may be reasonably practicable to
the adjustments provided for hereunder. The
provisions of this subparagraph shall apply
similarly to successive reorganizations,
consolidations, mergers, sales or conveyances.
(d) Any shares of Series A
Preferred Stock which shall at any time have
been converted shall resume the status of
authorized but unissued shares of Preferred
Stock, without designation as to series, until
such shares are once more designated as part
of a particular series by the Board of
Directors. At the time when the Series A
Preferred Stock first becomes convertible, and
at all times thereafter, the Corporation shall
reserve and keep available out of its
authorized but unissued stock, for the purpose
of effecting the conversion of the shares of
the Series A Preferred Stock, such number of
its duly authorized shares of Common Stock as
shall from time to time be sufficient to
effect the conversion of all outstanding
shares of the Series A Preferred Stock.
(e) The Corporation shall pay any
and all issue or transfer (but not income)
taxes that may be payable in respect of any
issuance or delivery of shares of Common Stock
on conversion of shares of Series A Preferred
Stock pursuant hereto.
(f) Before taking any action that
would result in the effective price of the
shares of Common Stock issuable upon
conversion of Series A Preferred Stock being
less than the then par value of the Common
Stock, the Corporation shall take any
corporate action which may, in the opinion of
its counsel, be necessary in order that the
Corporation may validly and legally issue
fully paid and nonassessable shares of Common
Stock.
(g) The Corporation shall not be
required to issue any fractional shares of
Common Stock upon conversion of any Series A
Preferred Stock, but in lieu thereof the
Corporation may pay a cash amount determined
by multiplying the fraction of a share
otherwise issuable by the Fair Market Value of
one share of Common Stock on the date such
conversion is deemed to have been made
hereunder. For purposes of this paragraph,
the "Fair Market Value" of the Common Stock as
of a particular date shall mean:
i) If the Common Stock is
listed or admitted to the unlisted trading
privileges on any national or regional
securities exchange on such date, then the
last reported sale price on such exchange on
the last business day prior to such date;
ii) If the Common Stock is not
listed or admitted to unlisted trading
privileges as provided in subparagraph i) and
sales prices therefor in the over the counter
market are reported by the Nasdaq National
Market System on such date, then the last
reported sales price so reported on the last
business day prior to such date;
iii) If the Common Stock is not
listed or admitted to unlisted trading
privileges as provided in subparagraph i) and
sales prices therefor are not reported by the
Nasdaq National Market System as provided in
subparagraph ii), and bid and asked prices
therefor in the over the counter market are
reported by Nasdaq (or, if not so reported, by
the National Quotation Bureau Incorporated) on
such date, then the average of the closing bid
and asked prices on the last business day
prior to such date; or
iv) If the Common Stock is not
listed or admitted to unlisted trading
privileges as provided in subparagraph i) and
sales prices or bid and asked prices therefor
are not reported by Nasdaq (or the National
Quotation Bureau Incorporated) as provided in
subparagraphs ii) and iii) on such date, then
the value as determined in good faith by the
Board.
7. FRACTIONAL SHARES. The Series A
Preferred Stock may be issued as fractional
shares in increments of 1/1,000 of a share
(subject to adjustment on the same basis as
the Conversion Rate under Section 3(c)). Each
fractional share of Series A Preferred Stock
shall be entitled to the same rights and
powers on a pro rata basis as a whole share of
Series A Preferred Stock.
RESOLVED, FURTHER, that the appropriate
officers of the Corporation are hereby
authorized to execute and acknowledge the
Certificate of Designations setting forth
these resolutions and to cause such
certificate to be filed and recorded, all in
accordance with the requirements of Section
151 of the Delaware General Corporation Law.
IN WITNESS WHEREOF, CADIZ LAND COMPANY, INC.,
has caused this Certificate to be signed by Keith
Brackpool, its Chief Executive Officer, and
attested by Susan K. Chapman, its Secretary, this
10th day of September, 1996.
CADIZ LAND COMPANY, INC.
By: /s/ Keith Brackpool
________________________
Keith Brackpool,
Chief Executive Officer
ATTEST:
By: /s/ Susan K. Chapman
____________________________
Susan K. Chapman, Secretary
EXHIBIT 4.2
------------
CERTIFICATE OF DESIGNATIONS OF
6% CONVERTIBLE SERIES C PREFERRED STOCK
OF
CADIZ LAND COMPANY, INC.
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
CADIZ LAND COMPANY, INC., a corporation organized and
existing under the General Corporation Law of the State of
Delaware (the "Corporation"), hereby certifies that,
pursuant to (i) the authority conferred upon the Board of
Directors by the Certificate of Incorporation of the
Corporation, (ii) the provisions of Section 151 of said
General Corporation Law, and (iii) the resolutions
unanimously adopted by the Board of Directors of the
Corporation by action taken by unanimous written consent on
September 10, 1996, the Board of Directors duly adopted
resolutions providing for authorization for issuance of 365
shares of the Corporation's Preferred Stock, par value $.01
per share, designated 6% Convertible Series C Preferred
Stock, which resolutions are as follows:
RESOLVED, that pursuant to the authority
vested in the Board of Directors of the
Corporation by the Certificate of
Incorporation, the Board of Directors does
hereby authorize for issuance three hundred
sixty five (365) shares of Preferred Stock,
par value $.01 per share, of the Corporation,
to be designated "6% Convertible Series C
Preferred Stock" (hereinafter "Series C
Preferred Stock") of the presently authorized
shares of Preferred Stock. The voting powers,
designations, preferences, and other rights of
the Series C Preferred Stock authorized
hereunder and the qualifications, limitations
and restrictions of such preferences and
rights are as follows:
1. RANKING. The Series C Preferred
Stock shall, with respect to the payment of
dividends and upon liquidation, dissolution,
or winding up, rank (1) senior and prior to
the Corporation's Common Stock, $0.01 par
value per share (the "Common Stock"), and all
other capital stock issued by the Corporation
and designated as junior to the Series C
Preferred Stock (collectively herein called
the "Junior Securities"), and (2) on a parity
with any other class or series of Preferred
Stock of the Corporation (the "Parity
Securities"). The Corporation shall not issue
any capital stock, or any class or series,
which shall rank senior to the Series C
Preferred Stock with respect to the payment of
dividends, redemption or other purchase of
capital stock or upon liquidation,
dissolution, or winding up.
2. DIVIDENDS. (a) The holders of
outstanding shares of Series C Preferred Stock
shall be entitled to receive cumulative
dividends through the date of conversion or
redemption, as the case may be. Such
dividends shall be payable at the option of
the Corporation in the form of either (i)
cash; or (ii) fully paid and nonassessable
shares of Common Stock (valued, for purposes
of this Section 2 only, at the Conversion
Price in effect on the date of payment of such
dividend, as defined in Section 6 hereof) at
an annual rate, commencing immediately
following issuance, equal to Six Hundred
Dollars ($600.00) per share of Series C
Preferred Stock. Such dividends shall be
payable only upon conversion of the shares of
Series C Preferred Stock. Dividends payable
on the Series C Preferred Stock for any
period less than a full year shall be computed
on the basis of the actual number of days
elapsed in a year of 365 days. All Common
Stock which may be issued as a dividend with
respect to the Series C Preferred Stock will
thereupon be duly authorized, validly issued,
fully paid and nonassessable and free of all
liens and charges.
(b) Dividends on Series C Preferred
Stock shall be fully cumulative and shall
accrue (whether or not accrued or declared)
from the date of issuance. All dividends on
the Series C Preferred Stock shall be declared
by the Board and paid by the Corporation to
the fullest extent permitted by law. Holders
of Series C Preferred Stock will not be
entitled to any dividends in excess of full
cumulative dividends. The Corporation may
deduct and withhold from dividends on Series C
Preferred Stock any amounts required to be
deducted or withheld by the Corporation under
applicable law. Except as provided above, no
interest or sum of money in lieu of interest
shall be payable in respect of any accumulated
unpaid dividends.
(c) In no event, so long as any shares
of Series C Preferred Stock are outstanding,
shall any dividend whatsoever be paid or
declared, nor shall any other distribution be
made (either in cash or property) on or in
respect of, nor shall any moneys or property
be expended for the redemption, retirement,
purchase or other acquisition of, outstanding
shares of Junior Securities by the
Corporation, nor shall any moneys or property
be paid into or set apart, or made available
for a sinking fund for the purchase or
redemption of any shares of Junior Securities.
The provisions of the preceding sentence shall
not apply to a dividend payable in shares of
stock ranking junior to shares of Series C
Preferred Stock both in respect of the payment
of dividends and in respect of all payments
upon liquidation, dissolution or winding up of
the Corporation.
3. LIQUIDATION PREFERENCE. In the
event of any voluntary or involuntary
liquidation, dissolution, or winding up of the
affairs of the Corporation, then, before any
distribution or payment shall be made to the
holders of any Junior Securities, and subject
to the rights of creditors, the holders of
Series C Preferred Stock shall be entitled to
be paid out of the assets of the Corporation
in an amount in cash equal to $10,000 for each
share outstanding (which amount is hereinafter
referred to as the "Liquidation Preference"),
together with accrued and unpaid dividends
payable thereon to the date fixed for payment
of such distribution. If the assets of the
Corporation are not sufficient to pay in full
the Liquidation Preference as well as any
liquidation preference to holders of Parity
Securities, then the holders of the Series C
Preferred Stock and Parity Securities shall
share ratably in such distribution of assets
in accordance with the amount which would have
been payable on such distribution if the
amounts to which such holders were entitled
were paid in full. Except as provided in this
paragraph 3, holders of Series C Preferred
Stock shall not be entitled to any
distribution in the event of liquidation,
dissolution, or winding up of the affairs of
the Corporation.
4. REDEMPTION.
(a) At any time following the date
of the original issuance of the Series C
Preferred Stock the Corporation may redeem,
subject to the provisions of this paragraph 4,
out of funds legally available therefor, the
whole or any part of the outstanding shares of
Series C Preferred Stock at a price of
$11,765.00 per share, plus accrued but unpaid
dividends thereon through the date fixed for
redemption. If less than all shares of Series
C Preferred Stock are to be redeemed, the
shares to be redeemed shall be selected by lot
or pro rata as may be determined by the Board
of Directors of the Corporation or by any
other method as shall be determined by the
Board of Directors in its sole discretion to
be equitable.
(b) The Corporation shall cause to
be mailed to each holder of Series C Preferred
Stock, by overnight courier service or by
first class mail, postage prepaid, mailed not
fewer than 5 days nor more than 30 days prior
to the date of redemption pursuant to
subparagraph 4(a) above (the "Redemption
Date"), at such holder's address as the same
appears on the records of the Corporation (the
"Redemption Notice") stating the date on which
such redemption is to take place. Each such
notice shall specify (i) the Redemption Date,
(ii) the number of shares to be redeemed,
(iii) the consideration payable with respect
to such redemption, (iv) the place or places
where certificates for such shares are to be
surrendered for payment of such consideration,
and (v) that shares may be converted at any
time prior to the close of business on the
Redemption Date. If less than all shares of
Series C Preferred Stock represented by any
certificate are redeemed, a new certificate,
representing the unredeemed shares, shall be
issued to the holder thereof.
(c) Notwithstanding anything in
this paragraph 4 to the contrary, no shares of
Series C Preferred Stock may be redeemed by
the Corporation pursuant to subparagraph 4(a)
above in the event that prior to the
Redemption Date, the holder thereof shall have
surrendered such shares to the Corporation for
conversion in accordance with the provision of
paragraph 6 hereof.
(d) Series C Preferred Stock which
has been issued and reacquired in any manner,
including shares purchased, redeemed, or
converted shall (upon compliance with any
applicable provisions of the laws of the State
of Delaware) have the status of authorized and
unissued preferred stock undesignated as to
series, and such shares may be redesignated
and reissued as part of any series of
preferred stock.
5. VOTING. Except as provided herein
or as otherwise from time to time provided by
law, the holders of Series C Preferred Stock
shall not be entitled to any voting rights as
stockholders of the Corporation prior to
conversion pursuant to Section 6 hereof.
Notwithstanding the foregoing, the following
actions by the Corporation will require prior
approval by the holders of a majority of the
issued and outstanding shares of Series C
Preferred Stock: (a) a change in the rights,
preferences, privileges or restrictions
relating to Series C Preferred Stock so as to
adversely affect the holders of Series C
Preferred Stock; and (b) an increase or
decrease in the aggregate number of authorized
shares of Series C Preferred Stock or an
increase or decrease in the par value of
shares of Series C Preferred Stock.
6. OPTIONAL CONVERSION. Each share of
Series C Preferred Stock may be converted at
any time following issuance, at the option of
the holder thereof, into fully paid and
nonassessable shares of Common Stock, with the
number of shares of Common Stock issuable per
share of Series C Preferred Stock to be
determined by dividing the Liquidation
Preference by the conversion price (the
"Conversion Price), which shall be equal to
the lesser of (i) $5.8125 (the "Fixed
Conversion Price") or (ii) eighty five percent
(85%) of the average of the closing bid prices
for the Corporation's Common Stock as reported
by the Nasdaq National Market System over the
ten trading day period ending on the day prior
to submission of notice of conversion (the
"Variable Conversion Price"). The following
provisions shall apply to the conversion of
shares of Series C Preferred Stock:
(a) Any holder of shares of Series
C Preferred Stock electing to convert such
shares into Common Stock may exercise the
conversion right as to any part thereof by
delivering to the office of the Corporation
(or at such other place as the Corporation may
designate by notice to the holders of shares
of Series C Preferred Stock) during regular
business hours, a written notice of conversion
(the "Conversion Notice") which shall state
(i) the number of shares of Series C Preferred
Stock which the holder elects to convert; and
(ii) subject to applicable securities laws,
the name(s) in which the certificates
representing the shares of Common Stock
issuable upon conversion (the "Conversion
Shares") are to be issued, and (iii) the
telecopier number to which the Corporation
shall telecopy its confirmation described
below. Notice given by telecopier shall be
deemed notice for purposes of this paragraph
and shall be deemed given when receipt is
acknowledged by transmit confirmation report.
Immediately upon receipt of an Conversion
Notice, the Corporation shall, by telecopier,
confirm receipt thereof at the telecopier
number included thereon, which confirmation
shall set forth the number of Conversion
Shares to be issued by the Corporation as a
result of such conversion. The Conversion
Notice shall be deemed accepted by the
Corporation provided the holder surrenders, or
causes any agent for the holder to surrender,
the certificate or certificates for such
shares duly endorsed to the Corporation in
blank, or accompanied by instruments of
transfer to the Corporation in blank, in form
reasonably satisfactory to the Corporation, at
any location set forth above, within seven (7)
business days after delivery of the Conversion
Notice. Provided that the certificate(s) are
delivered in accordance with the preceding
sentence, the conversion shall be deemed to
have been effected on the date of delivery of
the Conversion Notice by telecopier, and such
date is referred to herein as the "Conversion
Date." Within three (3) business days of
receipt by the Corporation of the certificates
for the shares of Series C Preferred Stock to
be converted, the Corporation shall issue to
such holder a certificate or certificates
representing the number of Conversion Shares
which such holder is entitled to receive
together with a check or cash in respect of
any fractional interest in a share of Common
Stock as provided in Section 6(f) hereof.
(b) The Conversion Price shall be
adjusted from time to time as follows:
i) In case the Corporation
shall (A) subdivide its outstanding shares of
Common Stock (including by means of a dividend
or distribution on the Common Stock payable in
Common Stock), (B) combine its outstanding
shares of Common Stock into a smaller number
of shares, or (C) issue by capital
reorganization or reclassification of its
shares of Common Stock or otherwise (other
than a subdivision or combination of its
shares provided for above, or a
reorganization, merger, consolidation or sale
of assets provided for elsewhere in this
Section 6) any shares of capital stock of the
Corporation, the Fixed Conversion Price in
effect immediately prior to such action shall
be adjusted so that the holder of any shares
of the Series C Preferred Stock thereafter
surrendered for conversion shall be entitled
to receive the number of shares of capital
stock of the Corporation which such holder
would have owned immediately following such
action had such shares of the Series C
Preferred Stock been converted immediately
prior thereto. An adjustment made pursuant to
this subparagraph shall become effective
retroactively immediately after the effective
date in the case of a subdivision, combination
or reclassification.
ii) In case the Corporation
shall, during the ten trading day period
ending on the day prior to submission of any
notice of conversion (A) subdivide its
outstanding shares of Common Stock (including
by means of a dividend or distribution on the
Common Stock payable in Common Stock), (B)
combine its outstanding shares of Common Stock
into a smaller number of shares or, (C) issue
by capital reorganization or reclassification
of its shares of Common Stock or otherwise
(other than a subdivision or combination of
its shares provided for above, or a
reorganization, merger, consolidation or sale
of assets provided for elsewhere in this
Section 6) any shares of capital stock of the
Corporation, then, for purposes of calculating
the Variable Conversion Price applicable to
such conversion, the closing bid price for the
Corporation's Common Stock as reported by the
Nasdaq National Market System for any day
prior to such action which falls within the
ten trading day period ending on the day prior
to submission of notice of conversion
applicable to such conversion shall be
adjusted to a price per share giving effect to
such action.
iii) Whenever an adjustment in
the Conversion Price is required, the
Corporation shall forthwith place on file with
its Secretary a statement signed by its
Chairman of the Board, President or a Vice
President and by its Secretary or Treasurer or
one of its Assistant Secretaries or Assistant
Treasurers, stating the adjusted Conversion
Price determined as provided herein. Such
statement shall set forth in reasonable detail
such facts as shall be necessary to show the
reason and the manner of computing such
adjustment. Promptly after the adjustment of
the Conversion Price, the Corporation shall
mail a notice and copy of such statement to
each holder of shares of Series C Preferred
Stock.
iv) In case of either (A) any
reorganization, consolidation or merger to
which the Corporation is a party, other than a
reorganization, merger or consolidation in
which the Corporation is the surviving or
continuing corporation and which does not
result in any reclassification of, or change
(other than a change in par value or from par
value to no par value or from no par value to
par value, or as a result of a subdivision or
combination) in, outstanding shares of Common
Stock, or (B) any sale or conveyance to
another corporation of all or substantially
all of the assets of the Corporation, then the
Corporation, or such successor corporation, as
the case may be, shall make appropriate
provision so that the holder of each share of
Series C Preferred Stock then outstanding
shall have the right to convert such shares of
Series C Preferred Stock into the kind and
amount of shares or other securities and
property receivable upon such reorganization,
consolidation, merger, sale or conveyance by a
holder of the number of shares of Common Stock
into which such shares of Series C Preferred
Stock might have been converted immediately
prior to such reorganization, consolidation,
merger, sale or conveyance, subject to
adjustments which shall be as nearly
equivalent as may be reasonably practicable to
the adjustments provided for hereunder. The
provisions of this subparagraph shall apply
similarly to successive reorganizations,
consolidations, mergers, sales or conveyances.
v) No adjustment in the
Conversion Price shall be required unless such
adjustment would require an increase or
decrease of at least five percent (5%) in such
conversion price; provided, however, that any
adjustment which by reason of this paragraph
(v) is not required to be made shall be
carried forward and taken into account in any
subsequent adjustment.
(c) Any shares of Series C
Preferred Stock which shall at any time have
been converted shall resume the status of
authorized but unissued shares of Preferred
Stock, without designation as to series, until
such shares are once more designated as part
of a particular series by the Board of
Directors. At all times, the Corporation
shall reserve and keep available out of its
authorized but unissued stock, for the purpose
of effecting the conversion of the shares of
the Series C Preferred Stock (including shares
of Common Stock issuable in payment of
dividends), such number of its duly authorized
shares of Common Stock as shall from time to
time be sufficient to effect the conversion of
all outstanding shares of the Series C
Preferred Stock (including shares of Common
Stock issuable in payment of dividends). All
shares of Common Stock which shall be so
issuable shall, when issued upon conversion of
all or any portion of the Series C Preferred
Stock, be duly and validly issued and fully
paid and non assessable and free from all
taxes, liens and charges with respect to the
issuance thereof.
(d) The Corporation shall pay any
and all issue or transfer (but not income)
taxes that may be payable in respect of any
issuance or delivery of shares of Common Stock
on conversion of shares of Series C Preferred
Stock pursuant hereto.
(e) Before taking any action that
would result in the effective price of the
shares of Common Stock issuable upon
conversion of Series C Preferred Stock being
less than the then par value of the Common
Stock, the Corporation shall take any
corporate action which may, in the opinion of
its counsel, be necessary in order that the
Corporation may validly and legally issue
fully paid and nonassessable shares of Common
Stock.
(f) The Corporation shall not be
required to issue any fractional shares of
Common Stock upon conversion of any Series C
Preferred Stock, but in lieu thereof the
Corporation may pay a cash amount determined
by multiplying the fraction of a share
otherwise issuable by the Fair Market Value of
one share of Common Stock on the date such
conversion is deemed to have been made
hereunder. For purposes of this paragraph,
the "Fair Market Value" of the Common Stock as
of a particular date shall mean:
i) If the Common Stock is
listed or admitted to the unlisted trading
privileges on any national or regional
securities exchange on such date, then the
last reported sale price regular way on such
exchange on the last business day prior to
such date;
ii) If the Common Stock is not
listed or admitted to unlisted trading
privileges as provided in subparagraph i) and
sales prices therefor in the over the counter
market are reported by the Nasdaq National
Market System or Nasdaq SmallCap Market on
such date, then the last reported sales price
so reported on the last business day prior to
such date;
iii) If the Common Stock is not
listed or admitted to unlisted trading
privileges as provided in subparagraph i) and
sales prices therefor are not reported by the
Nasdaq National Market System or Nasdaq Small
Cap Market as provided in subparagraph ii),
and bid and asked prices therefor in the over
the counter market are reported by Nasdaq (or,
if not so reported, by the National Quotation
Bureau Incorporated) on such date, then the
average of the closing bid and asked prices
regular way on the last business day prior to
such date; or
iv) If the Common Stock is not
listed or admitted to unlisted trading
privileges as provided in subparagraph i) and
sales prices or bid and asked prices therefor
are not reported by Nasdaq (or the National
Quotation Bureau Incorporated) as provided in
subparagraphs ii) and iii) on such date, then
the value as determined in good faith by the
Board.
(g) If a state of facts shall occur
which, without being specifically controlled
by the other provisions of this Section 6,
would not fairly protect the conversion rights
of the Series C Preferred Stock in accordance
with the essential intent and principles of
such provisions, then the Board of Directors
of the Corporation shall in good faith make an
adjustment in the application of such
provisions, in accordance with such essential
intent and principles, so as to protect such
conversion rights.
7. MANDATORY CONVERSION. The Series C
Preferred Stock shall mature one year after
issuance (the "Maturity Date") and shall
automatically convert into Conversion Shares
at the then current Conversion Price on the
Maturity Date.
RESOLVED, FURTHER, that the appropriate
officers of the Corporation are hereby
authorized to execute and acknowledge the
Certificate of Designations setting forth
these resolutions and to cause such
certificate to be filed and recorded, all in
accordance with the requirements of Section
151 of the Delaware General Corporation Law.
IN WITNESS WHEREOF, CADIZ LAND COMPANY, INC.,
has caused this Certificate to be signed by Keith
Brackpool, its Chief Executive Officer, and
attested by Susan K. Chapman, its Secretary, this
10th day of September, 1996.
CADIZ LAND COMPANY, INC.
By:/s/ Keith Brackpool
___________________
Keith Brackpool,
Chief Executive Officer
ATTEST:
By:/s/ Susan K. Chapman
__________________
Susan K. Chapman,
Secretary
