EXHIBIT 3.7
CERTIFICATE OF DESIGNATIONS OF
SERIES F PREFERRED STOCK
OF
CADIZ INC.
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
CADIZ 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 and (ii) the
provisions of Section 151 of said General Corporation Law, the Board of
Directors duly adopted a resolution on December 11, 2003, which resolution is 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 One Hundred Thousand (100,000) shares
of Preferred Stock, par value $.01 per share, of the Corporation, to be
designated "SERIES F PREFERRED STOCK" of the presently authorized shares of
Preferred Stock. The voting powers, designations, preferences, and other rights
of the Series F Preferred Stock authorized hereunder and the qualifications,
limitations and restrictions of such preferences and rights are as follows:
1. RANKING. The Series F Preferred Stock shall, with respect to
the payment of dividends and upon liquidation, dissolution, or winding up, rank
senior and prior to all other capital stock issued by the Corporation. No other
class of capital stock of the Corporation, preferred or otherwise, shall at any
time rank pari passu with the Series F Preferred Stock.
2. DIVIDENDS.
(a) In the event any dividends are declared or paid or any other
distribution is made on or with respect to the common stock, par value $.01 per
share ("COMMON STOCK") of the Corporation, the holders of the Series F Preferred
Stock as of the record date established by the Board of Directors for such
dividend or distribution on the Common Stock shall be entitled to receive as
additional dividends (the "ADDITIONAL DIVIDENDS") an amount (whether in the form
of cash, securities or other property) equal to the amount (and in the form) of
the dividends or distribution that such holders would have received had the
Series F Preferred Stock been converted into Common Stock as of the date
immediately prior to the record date of such dividend or distribution on the
Common Stock, such Additional Dividends to be payable on the same payment date
as the payment date for the dividend on the Common Stock established by the
Board of Directors; provided, however, that if the Corporation declares and pays
a dividend or makes a distribution on the Common Stock consisting in whole or in
part of Common Stock, then no such dividend or distribution shall be payable in
respect of the Series F Preferred Stock on account of the portion of such
dividend or distribution on the Common Stock payable in Common Stock and in lieu
thereof the anti-dilution adjustment in Section 5(c)(ii) below shall apply. The
record date for any such Additional Dividends shall be the record date for the
applicable dividend or distribution on the Common Stock, and any such Additional
Dividends shall be payable to the individual, entity or group (a "PERSON") in
whose name the Series F Preferred Stock is registered at the close of business
on the applicable record date.
(b) No dividend shall be paid or declared on any share of Common
Stock (other than dividends payable in Common Stock for which an adjustment is
made pursuant to Section 5(c)(ii) hereof), unless a dividend, payable in the
same consideration and manner, is simultaneously paid or declared, as the case
may be, on each share of Series F Preferred Stock in an amount determined as set
forth in paragraph (a) above. For purposes hereof, the term "DIVIDENDS" shall
include any pro rata distribution by the Corporation, out of funds of the
Corporation legally available therefor, of cash, property, securities
(including, but not limited to, rights, warrants or options) or other property
or assets to the holders of the Common Stock, whether or not paid out of
capital, surplus or earnings.
(c) Upon the conversion of any shares of Series F Preferred Stock
to shares of Common Stock pursuant to Section 5, the Corporation will
immediately pay such holder who converted shares of Series F Preferred Stock
into shares of Common stock all dividends which the holder of such shares as of
the record date for such dividends would have received had that holder held the
Common Stock for the applicable period to the extent not already received by
that holder.
3. LIQUIDATION PREFERENCE.
(a) In the event of any liquidation, dissolution or winding up of
the Corporation, either voluntary or involuntary, the holders of Series F
Preferred Stock shall be entitled to receive (x) prior and in preference to any
distribution of any of the assets or surplus funds of the Corporation to the
holders of the Common Stock or to any other series or class of capital stock of
the Corporation, all accrued or declared but unpaid dividends on such shares and
(y) after the payment referred to in the foregoing clause (x) has been received,
such assets in amount equal to the amount (and in the form) of the assets that
such holders would have received had the Series F Preferred Stock been converted
into Common Stock as of the date immediately prior to the distribution of assets
of the Corporation pursuant to the liquidation, dissolution of winding up of the
Corporation sharing parri passu (on a pro rata basis) with all holders of Common
Stock.
4. VOTING.
(a) Except as otherwise provided by applicable law and in addition
to any voting rights provided by law, for so long as the Series F Preferred
Stock is outstanding, the holders of outstanding shares of the Series F
Preferred Stock:
(i) shall be entitled to vote together with the holders of the
Common Stock as a single class on all matters submitted for a vote of
holders of Common Stock, including, without limitation, the election of
directors;
(ii) shall have such other voting rights as are specified in the
Certificate of Incorporation or as otherwise provided by Delaware law;
and
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(iii) shall be entitled to receive notice of any stockholders'
meeting in accordance with the Certificate of Incorporation and By-laws
of the Corporation.
For purposes of the voting rights set forth in this Section 4(a), each
share of Series F Preferred Stock shall entitle the holder thereof to cast one
vote for each whole vote that such holder would be entitled to cast had such
holder converted its Series F Preferred Stock into shares of Common Stock as of
the date immediately prior to the record date for determining the stockholders
of the Corporation eligible to vote on any such matter.
(b) From the date this certificate is filed until the third
anniversary thereof, the holders of the Series F Preferred Stock shall have the
exclusive right, voting separately as a single class, to elect two (2) members
of the Board of Directors of the Corporation (each such member elected by the
holders of Series F Preferred Stock, a "SERIES F PREFERRED DIRECTOR"). Following
the third anniversary of the filing of this certificate, the holders of the
Series F Preferred Stock will be entitled to the following number of Series F
Directors (all to be elected pursuant to the terms of the previous sentence): If
the then outstanding Series F Preferred Stock is convertible into greater than
10% of the common stock (on a Fully-Diluted Basis) there shall be 2 Series F
Directors, if the outstanding Series F Preferred Stock is convertible into
5%-10% of the common stock on a Fully Diluted Basis, there will be one Series F
Director and, if the outstanding Series F Preferred Stock is convertible into
less than 5% of the common stock on a Fully-Diluted Basis, there shall be no
Series F Directors. The initial Series F Preferred Directors shall be as
designated by written notice to the Corporation from a majority-in-interest of
the Series F Preferred Stock and they shall be elected to serve for so long as
the shares of Series F Preferred Stock are outstanding. The Series F Preferred
Directors shall have the right to nominate their successors upon their
resignation from the Board of Directors of the Corporation. A Series F Preferred
Director may only be removed by the written consent or affirmative vote of at
least a majority-in-interest of the Series F Preferred Stock. The holders of at
least a majority-in-interest of the Series F Preferred Stock shall have the
right to appoint the successor to any Series F Preferred Director who is removed
from the Board of Directors of the Corporation. At the option of at least a
majority-in-interest of the Series F Preferred Stock, the Series F Preferred
Directors shall be seated on any and/or all of the audit, nominating and/or
compensation committees of the Corporation, subject to any restrictions under
applicable law or the rules and requirements of any securities exchange upon
which any of the Corporation's securities may be listed; provided, however, that
the Corporation shall not list its securities on any securities exchange without
the consent of at least one of the Series F Preferred Directors. Any Series F
Preferred Director seated on any committee pursuant to the terms of this Section
4(b) may not be removed from any such committee without the consent or
affirmative vote of at least a majority-in-interest of the Series F Preferred
Stock.
(c) For so long as the Series F Preferred Stock is outstanding,
the Board of Directors of the Corporation shall not take any action to increase
or decrease the number of directors of the Corporation (or the number of members
of any committee of the Board of Directors of the Corporation) without the
consent or affirmative vote of at least a majority-in-interest of the Series F
Preferred Stock; provided, however, that immediately upon full repayment of the
New Note, the number of directors of the Corporation may be increased to not
more than seven (7) without the consent or affirmative vote of the holders of
the Series F Preferred Stock; provided further that such increase shall not
result in the removal of either of the
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Series F Preferred Directors from the Board of Directors of the Corporation or
any committee thereof.
(d) For so long as the Series F Preferred Stock is outstanding,
the Corporation shall not, without the written consent or affirmative vote of at
least one of the Series F Preferred Directors, create, authorize or issue any
class, series or shares of Preferred Stock or any other class of capital stock.
5. CONVERSION. The holders of Series F Preferred Stock shall have
conversion rights as follows:
(a) The shares of Series F Preferred Stock shall, immediately
after issuance, be convertible into 1,728,955 shares of Common Stock of the
Corporation which represents, as of the date of filing of this Certificate, 25%
of the Common Stock of the Corporation, on a Fully-Diluted Basis.
(b) The outstanding shares of Series F Preferred Stock shall
thereafter be convertible from time to time, on a pro-rata basis, into such
number of shares of Common Stock of the Corporation as is calculated as of the
date of any such conversion by:
(i) First, calculating the number of shares of Common Stock of the
Corporation which, at the applicable time of conversion, represents 25%
of the Common Stock of the Corporation on a Fully-Diluted Basis, and
(ii) Second, multiplying the number obtained under subsection (i)
above by a fraction, the numerator of which is the number of shares of
Series F Preferred Stock outstanding as of the date of such calculation
and the denominator of which is the sum of (x) the number of shares of
Series F Preferred Stock outstanding as of the date of such calculation
plus (y) number of shares of Series F Preferred Stock which had
previously been issued by the Corporation but converted into shares of
Common Stock prior to the date of such calculation (the result so
calculated, the "Conversion Number"); provided, however, that at such
time that is three years after the payment in full of the New Note, the
shares of Series F Preferred Stock outstanding as of such date shall
not be adjusted pursuant to this Section 5(b) but shall continue to be
adjusted pursuant to Section 5(c) below.
(c) Reorganization, Reclassification, Consolidation, Merger or
Sale, etc.
(i) If the Corporation at any time subdivides (by any stock split,
stock dividend (other than stock dividends as to which a dividend is
simultaneously paid or declared with respect to Series F Preferred
Stock pursuant to Section 2(b) hereof) recapitalization or otherwise)
its outstanding shares of its Common Stock into a greater number of
shares, the Conversion Number in effect immediately prior to such
subdivision will be proportionately increased, and if the Corporation
at any time combines (by reverse stock split or otherwise) one or more
classes of its outstanding shares of its Common Stock, the Conversion
Number in effect immediately prior to such combination will be
proportionately decreased concurrently with the effectiveness of such
event.
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(ii) In case the Corporation shall declare a dividend or make any
other distribution upon any stock of the Corporation payable in Common
Stock or options to purchase shares of Commons Stock or securities
convertible into shares of Common Stock for no consideration without
making a ratable distribution thereof to holders of Series F Preferred
Stock (based upon the number of shares of Common Stock into which such
Series F Preferred Stock would be convertible, assuming conversion of
the Series F Preferred Stock), then the Conversion Number in effect
immediately prior to the declaration of such dividend or distribution
shall be proportionately increased, concurrently with the effectiveness
of such declaration.
(iii) Any capital reorganization, reclassification, consolidation,
merger or sale of all or substantially all of the Corporation's assets
to another Person which is effected in such a way that holders of
Common Stock are entitled to receive (either directly or upon
subsequent liquidation) stock, securities or assets with respect to or
in exchange for Common Stock is referred to herein as an "Organic
Change." Prior to the consummation of any Organic Change, the
Corporation will make appropriate provisions to insure that each of the
holders of Series F Preferred Stock will thereafter have the right to
acquire and receive such shares of stock, securities or assets as such
holder would have received in connection with such Organic Change if
such holder had converted its Series F Preferred Stock into shares of
Common Stock immediately prior to such Organic Change. The Corporation
will not effect any such consolidation, merger or sale, unless prior to
the consummation thereof, the successor corporation (if other than the
Corporation) resulting from consolidation or merger or the Corporation
purchasing such assets assumes by written instrument the obligation to
deliver to each such holder such shares of stock, securities or assets
as, in accordance with the foregoing provisions, such holder may be
entitled to acquire.
(d) No fractional shares of Common Stock shall be issued upon
conversion of the shares of Series F Preferred Stock. In lieu of any fractional
shares to which the holder of Series F Preferred Stock would otherwise be
entitled, the Corporation shall pay cash equal to such fraction multiplied by
the then effective fair market value of the Common Stock (which shall be
determined in good faith by the Board of Directors if there is then no current
market for the Common Stock). Conversion of the shares of Series F Preferred
Stock shall be effected by delivery, to the office of the Corporation or to any
transfer agent for such shares, of duly endorsed certificates for the shares
being converted and of written notice to the Corporation that the holder elects
to convert such shares. Conversion of the shares of Series F Preferred Stock
shall be deemed to occur immediately prior to the close of business on the date
the latter of the shares and the notice are delivered. Holders of Series F
Preferred Stock entitled to receive Common Stock upon conversion of the Series F
Preferred Stock shall be treated for all purposes as the record holders of such
shares of Common Stock on the date conversion is deemed to occur. The
Corporation shall not be obligated to issue certificates evidencing shares of
Common Stock issuable upon conversion of the Series F Preferred Stock unless the
certificates evidencing such shares of Series F Preferred Stock being converted
are either delivered to the Corporation or its transfer agent as provided above,
or the holder notifies the Corporation or its transfer agent that such
certificates have been lost, stolen or destroyed and executes an agreement, and
at the Corporation's election provides a surety bond or other security,
satisfactory to the Corporation to indemnify the Corporation from any loss
incurred by it in connection with such certificates. The
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Corporation shall, as soon as practicable after such delivery, or such agreement
and indemnification in the case of a lost certificate, issue and deliver at such
office a certificate or certificates for the number of shares of Common Stock to
which the holder of Series F Preferred Stock is entitled and a check payable to
the holder of Series F Preferred Stock for any cash due with respect to
fractional shares.
(e) The issuance of certificates for shares of Common Stock upon
conversion of the Series F Preferred Stock shall be made without charge to the
holders thereof for any issuance tax in respect thereof, provided that the
Corporation shall not be required to pay any income or similar taxes of a holder
arising in connection with a conversion or any tax that may be payable in
respect of any transfer involved in the issuance and delivery of any
certificates in a name other than that of the holder of the Series F Preferred
Stock which is being converted.
(f) The Corporation will not, by amendment of its Certificate of
Incorporation or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms to be
observed or performed hereunder by the Corporation but will at all times in good
faith assist in the carrying out of all the provisions of this Section 5 and in
the taking of all such action as may be necessary or appropriate in order to
protect the conversion rights of the holders of the Series F Preferred Stock
against impairment.
(g) In the event of any taking by the Corporation of a record of
the holders of any class of securities of the Corporation for the purpose of
determining the holders thereof who are entitled to receive any dividend or
distribution, the Corporation shall mail to each holder of Series F Preferred
Stock at least ten (10) days prior to the date specified therein, a notice
specifying the date on which any such record is to be taken for the purpose of
such dividend or distribution.
(h) The Corporation shall reserve and keep available out of its
authorized but unissued Common Stock such number of shares of Common Stock as
shall from time to time be sufficient to effect conversion of the Series F
Preferred Stock and the issuance of Common Stock to the holders of the Series F
Preferred Stock.
(i) No shares of the Series F Preferred Stock acquired by the
Corporation by reason of purchase, conversion or otherwise shall be reissued,
and all such shares shall be cancelled, retired and eliminated from the shares
of capital stock which the Corporation shall be authorized to issue.
6. NO RIGHT OF REDEMPTION. The Corporation shall have no right
whatsoever to redeem all or any number of the outstanding shares of the Series F
Preferred Stock at any time.
7. PREEMPTIVE RIGHTS.
(a) Subject to paragraphs (c) and (d), for so long as any shares
of the Series F Preferred Stock are outstanding, the Corporation shall not,
subsequent to the completion of the New Equity Financing (as defined in Section
8(f)), issue, sell, or exchange, or agree to issue, sell,
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or exchange, to any Person or entity, whether from treasury shares, from the
issuance of authorized but unissued shares, or otherwise, any equity securities
(or any securities convertible into or excercisable or exchangeable therefor)
(any of which, the "CORPORATION EQUITY SECURITIES"), unless the Corporation
shall have first offered to sell (the "CORPORATION OFFER") to holders of Series
F Preferred Stock such number of securities at the same price and on the same
terms (the "CORPORATION OFFER SALE PRICE") and in such quantity as will enable
holders of Series F Preferred Stock to maintain their percentage ownership of
Common Stock of the Corporation on a Fully-Diluted Basis. The Corporation Offer
by its terms shall remain open and irrevocable for a period of thirty (30) days
from the date it is delivered by the Corporation to holders of Series F
Preferred Stock (the "PREEMPTIVE RIGHTS OFFER PERIOD").
(b) Notice of the intention of the holders of the Series F
Preferred Stock to accept a Corporation Offer made pursuant to this Section 7
shall be evidenced by a writing signed by holders of Series F Preferred Stock
and delivered to the Corporation prior to the end of the Preemptive Rights Offer
Period, setting forth the portion of the Corporation Equity Securities which the
holders of Series F Preferred Stock elect to purchase (the "NOTICE OF
ACCEPTANCE").
(c) In the event that a Notice of Acceptance is not given by
holders of Series F Preferred Stock in respect of all or any part of the
Corporation Equity Securities, the Corporation shall have sixty (60) days from
the expiration of the Preemptive Rights Offer Period to sell or enter into an
agreement to sell all or the part of the Corporation Equity Securities set forth
in the Corporation Offer not purchased by the holders of Series F Preferred
Stock, as the case may be, to any other person or persons, on terms and
conditions, including, without limitation, price, which are no more favorable to
such other person or persons or less favorable to the Corporation or the holders
of Series F Preferred Stock than the Corporation Offer Sale Price. Upon the
earlier of (i) sixty (60) days from delivery of a Notice of Acceptance or (ii)
the closing of the sale of the securities not accepted in the Notice of
Acceptance, the Corporation shall sell to the holders of Series F Preferred
Stock the Corporation Equity Securities in respect of which a Notice of
Acceptance was delivered to the Corporation by the holders of Series F Preferred
Stock, and which were not sold to any other person, on the terms specified in
the Notice of Acceptance.
(d) Any Corporation Equity Securities not purchased by the holders
of Series F Preferred Stock or other person or persons in accordance with
paragraph (c) above may not be sold or otherwise disposed of until they are
again offered to the holders of Series F Preferred Stock under the procedures
specified in paragraphs (a), (b) and (c).
(e) The rights of holders of Series F Preferred Stock under
paragraphs (a), (b), (c) and (d) shall not apply to the following securities:
(i) Corporation Equity Securities issued in any transaction
described in Section 5(c);
(ii) Corporation Equity Securities issued by the Corporation upon
the conversion of any securities which are convertible or exchangeable
into capital stock of the Corporation and which are outstanding as of
the date hereof;
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(iii) Corporation Equity Securities issued by the Corporation upon
the conversion of any securities which (x) are convertible or
exchangeable into capital stock of the Corporation and (y) were issued
under the procedures specified in paragraphs (a), (b) and (c);
(iv) Corporation Equity Securities issued by the Corporation under
the Management Incentive Plan;
(v) Corporation Equity Securities issued by the Corporation to any
officer, director or employee of the Corporation as remuneration for
services rendered to the Corporation; provided, however, that at least
one of the Series F Preferred Directors voted to authorize such
issuance;
(vi) Corporation Equity Securities issued by the Corporation to any
consultant pursuant to compensation procedures approved by the Board of
Directors of the Corporation including the consent of at least one of
the Series F Preferred Directors;
(vii) Corporation Equity Securities issued in connection with the
acquisition of all or part of another entity or in connection with a
joint venture or such other strategic investment, which transaction is
approved by at least one of the Series F Preferred Directors;
(viii) Corporation Equity Securities issued pursuant to the
conversion of the Series F Preferred Stock pursuant to the terms
hereof; and
(ix) Corporation Equity Securities to the extent that such
Corporation Equity Securities (and/or any Common Stock issued or
issuable with respect to such Corporation Equity Securities) are
included within the calculation of "Fully-Diluted Basis" as defined in
Section 8(d) hereof (i.e., do not meet the requirements for exclusion
from such calculation as set forth in the final paragraph of Section
8(d)).
(f) Without limitation of the foregoing, if the Corporation sells
any Corporation Equity Securities to any person or persons and if, after giving
effect to such transaction and after giving effect to any election by the
holders of the Series F Preferred Stock to exercise the preemptive rights
granted herein, the Conversion Number would be less than such number of shares
of Common Stock of the Corporation as is calculated as of the applicable date
by:
(i) First, calculating the number of shares of Common Stock of the
Corporation which, at the applicable date represents 12.5% of the
Common Stock of the Corporation on a Fully-Diluted Basis, and
(ii) Second, multiplying the number obtained under subsection (i)
above by a fraction, the numerator of which is the number of shares of
Series F Preferred Stock outstanding as of the date of such calculation
and the denominator of which is the sum of (x) the number of shares of
Series F Preferred Stock outstanding as of the date of such calculation
plus (y) number of shares of Series F Preferred Stock which had
previously
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been issued by the Corporation but converted into shares of Common
Stock prior to the date of such calculation (the number so calculated,
the "MINIMUM CONVERSION NUMBER");
then the Conversion Number shall automatically be adjusted as of the applicable
date so that it is equal to the Minimum Conversion Number.
8. DEFINITIONS:
(a) "BANK" means ING Capital, LLC, a Delaware limited liability
company.
(b) "CASH COLLATERAL ACCOUNT" means an interest-bearing cash
collateral account established under the terms of the New Note.
(c) "CRE" means Cadiz Real Estate LLC, a Delaware limited
liability Corporation.
(d) "FULLY-DILUTED BASIS" means, with respect to the calculation
of the number of shares of Common Stock into which the Series F Preferred Stock
is convertible, the sum of (i) all Common Stock outstanding at the time of such
determination (including all Common Stock issued pursuant to the first $4
million of New Equity Financing), (ii) all Common Stock issuable upon the
exchange, exercise or conversion of all warrants, options, convertible
securities or other such instruments then outstanding (whether or not such
instruments are then exercisable) including, but not limited to, the equity
securities issued under the Management Equity Incentive Plan, but excluding (x)
16,600 shares of Common Stock issuable upon exercise of outstanding warrants
with an exercise price in excess of $25, (y) shares of Common Stock issuable
55,550 outstanding stock options with an exercise price in excess of $25, and
(z) 20,000 shares of Common Stock conditionally issuable to a consultant to the
Company upon achievement of certain financial targets, and (iii) all other
Common Stock issuable as a result of any anti-dilution adjustments and
pre-emptive or similar rights granted to any other holder of the Corporation's
Common Stock; provided, however, that such calculation shall not include:
(A) the issuance by the Corporation of the next $4.6
million in Corporation Equity Securities after the issuance by
the Corporation of the first $4 million of Corporation Equity
Securities pursuant to its New Equity Financing; provided
further that the $4.6 million of Corporation Equity Securities
shall be issued on terms no less favorable to the Corporation
than the first $4 million of New Equity Financing; and
(B) the issuance by the Corporation of any Corporation
Equity Securities subsequent to the consummation of the New
Equity Financing;
(C) the issuance by the Corporation of any Corporation
Equity Securities pursuant to the conversion of the Series F
Preferred Stock pursuant to the terms hereof; or
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(D) the issuance by the Corporation of any Corporation
Equity Securities concurrently with the New Equity Financing
in settlement of third party claims; and
provided that in each issuance of Corporation Equity Securities referred to in
(B) above, cash in the amount of at least 35% of the net proceeds from such
issuance of Corporation Equity Securities shall have been either paid directly
to the Bank on account of the New Note or deposited into the Cash Collateral
Account, which cash may be used by the Corporation or CRE to pay interest
payments next due on the New Note in their order of maturity or to prepay
principal outstanding under the New Note, provided further that the Corporation
shall not deposit cash into the Cash Collateral Account if, as a result of such
deposit, the amount on deposit would exceed 8% of the then-outstanding principal
balance on the New Note times the number of years from the date of such deposit
through September 30, 2006.
(e) "MANAGEMENT EQUITY INCENTIVE PLAN" means that certain plan
pursuant to which continuing employees of the Corporation shall be issued Common
Stock and/or granted securities convertible into Common Stock in an aggregate
amount of up to 15% of the outstanding capital of the Corporation, on a
fully-diluted basis, after giving effect to the issuance of the Series F
Preferred Stock and after the issuance by the Corporation of $8.6 million in
Common Stock in the New Equity Financing.
(f) "NEW EQUITY FINANCING" means at least $8.6 million equity
financing raised by the Corporation concurrently with or immediately prior to
the issuance of the New Note.
(g) "NEW NOTE" means that certain new note or new notes in the
principal amount of (i) $35 million, plus (ii) any remaining balance not fully
paid of the Bank' out-of-pocket expenses (including reasonable attorneys' fees)
incurred in connection with the restructuring of the Corporation's debt
obligations owed to the Bank.
9. TRANSFERABILITY. All outstanding shares of the Series F
Preferred Stock may be transferred to any one person or entity at any time and
it shall be the obligation of the Company to recognize and effectuate such
transfer. In the event that any holder of Series F Preferred Stock desires to
transfer less than 100% of the then outstanding Series F Preferred Stock, such
holder may only do so by first converting such shares of Series F Preferred
Stock to be sold into common stock pursuant to Section 5 hereof.
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IN WITNESS WHEREOF, CADIZ INC. has caused this Certificate to be signed
by Keith Brackpool, its Chief Executive Officer, and attested by Jennifer Hankes
Painter, its Secretary, this __ day of December, 2003.
CADIZ INC.
By: /s/ Keith Brackpool
-----------------------------------
Name: Keith Brackpool
Title: Chief Executive Officer
ATTEST:
By: /s/ Jennifer Hankes Painter
-----------------------------------
Name: Jennifer Hankes Painter
Title: Secretary
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