Item 1.01 Entry into a Material Definitive Agreement
On December 19, 2014, Cadiz Inc. (“the Company”) and the San Luis Water District (“SLWD”) executed a Water Purchase and Sale Agreement (“PSA”) for an annual supply of 10,000 acre-feet of water from the Company’s Cadiz Valley Water Conservation, Recovery and Storage Project (“Project”).
Under the terms of the agreement, SLWD will pay nine hundred and sixty dollars ($960) per acre-foot (“AF”) of Project water delivered to its facilities each year. The payment will be adjusted annually in accordance with the Bureau of Labor Statistics Water and Sewer Maintenance Index up to a maximum of five percent (5%) per year. In addition, SLWD obtained the right to acquire specified carry-over storage rights in the Project for $1,500 per AF and an annual management fee of $20 per AF of acquired storage capacity.
Any delivery of the water from the Project to SLWD will require an exchange with the Metropolitan Water District of Southern California (“MWD”) or another eligible State Water Project contractor. Terms of any exchange will be finalized prior to commencement of Project construction in compliance with MWD’s specifications.
A copy of the agreement is attached hereto as Exhibit 10.1.