On February 28, 2024, Cadiz Inc. entered into an Agreement for the Delivery of Water Made Available by Cadiz Inc. and Fenner Gap Mutual Water Company to Public Water Systems, among Cadiz, Cadiz Real Estate LLC, a wholly-owned subsidiary of Cadiz, Fenner Gap Mutual Water Company and Fontana Water Company, an investor-owned utility serving the City of Fontana, California, and (ii) a Term Sheet for the Delivery of Water Made Available by Cadiz Inc. and Fenner Gap Mutual Water Company to Santa Margarita Water District in the Northern Pipeline, among Cadiz, FGMWC and Santa Margarita Water District. The Agreements provide for the purchase of a cumulative annual supply of 10,000 acre-feet of water from the Company?s Water Conservation, Supply and Storage project with conveyance through the Company?s 30-inch diameter, 220-mile, existing steel pipeline originating at Cadiz with a terminus at Wheeler Ridge. The FWC Agreement provides that FWC will purchase 5,000 acre-feet per year (AFY) of water from the Project made available to FWC via the East Branch of the State Water Project through an exchange with one or more contractors under the California State Water Project, a state water management project under the supervision of the California Department of Water Resources.

The SMWD Term Sheet provides that SMWD will exercise its right to purchase 5,000 AFY pursuant to a Purchase & Sale Agreement entered into by the Company and SMWD in 2012 and that the Company will facilitate delivery to SMWD through the Company?s Northern Pipeline via an exchange of water with a State Water Project contractor. Under the terms of the Agreements, FWC and SMWD will each pay a maximum of $1,650 per AFY as the ?as delivered? price for Project water delivered to designated points of delivery.

The payments will be subject to an agreed upon annual adjustment pegged to an agreed upon index (e.g., CPI Water and Sewer Index). In addition, SMWD will reserve the right to acquire specified carry-over storage in the Project for $1,500 per AF and an annual management fee of $20 per AF of acquired storage capacity. Under both Agreements, the parties have agreed to exercise good faith and reasonable best efforts to jointly pursue federal, state, and local grant funding to offset the capital costs for development of pipeline conveyance and appurtenant facilities.

Any grant funding received by public water systems will be credited against the ?as delivered? price for water to the purchasers. The target price to public water systems, including incremental capital and operating costs for conveyance, less grant funding, is $1,000 and in any event, will not exceed $1,650 per AFY.