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<DESCRIPTION>DECEMBER 31, 2001
<TEXT>
                          UNITED STATES
               SECURITIES AND EXCHANGE COMMISSION
                     Washington, D. C. 20549

                            FORM 10-K

     (Mark One)

     [x] Annual Report Pursuant to Section 13 or 15(d) of the
        Securities Exchange Act of 1934

           For the Fiscal Year Ended December 31, 2001

                               OR

     [ ]Transition Report Pursuant to Section 13 or 15(d) of the
        Securities
          Exchange Act of 1934

              For the transition period from..to...

                 Commission File Number 0-12114
                      ---------------------
                           CADIZ INC.
       (Exact name of registrant specified in its charter)

           DELAWARE                          77-0313235
(State or other jurisdiction of           (I.R.S. Employer
incorporation or organization)          Identification No.)

100 Wilshire Boulevard, Suite 1600
       Santa Monica, CA                      90401-1111
(Address of principal executive offices)     (Zip Code)

                         (310) 899-4700
      (Registrant's telephone number, including area code)

                   --------------------------

Securities Registered Pursuant to Section 12(b) of the Act:  None


   Title of Each Class     Name of Each Exchange on Which Registered
   -------------------      ---------------------------------------
           None                               None

	Securities Registered Pursuant to Section 12(g) of the Act:
			Common Stock, par value $0.01 per share
					(Title of Class)

Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

                           Yes  X   No
                               ----   ----

Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K (220.405 of this chapter)
is not contained herein, and will not be contained to the best of
registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-
K or any amendment of this Form 10-K. /__/

As of March 26, 2002, the registrant had 36,230,241 shares of
common stock outstanding.  The aggregate market value of the
Common Stock held by nonaffiliates as of March 26, 2002 was
approximately $303,167,898 based on the closing price on that
date.

               DOCUMENTS INCORPORATED BY REFERENCE

Certain portions of Registrant's proxy statement for the annual
meeting to be held on May 6, 2002, to be filed with the
Securities and Exchange Commission pursuant to Regulation 14A not
later than 120 days after the close of the Registrant's fiscal
year, are incorporated by reference under Part III of this Form
10-K.


                        TABLE OF CONTENTS

PART I

Item 1, Business. . . . . . .  . . . . . . . . . . . . . . . 1

Item 2, Properties. . . . . . . . . . . . . . . . . . . . . 12

Item 3, Legal Proceedings. . . . . . . . . . . . . . . . . .14

Item 4, Submission of Matters to a
  Vote of Security Holders. . . . . . . . . . . . . . . . . 14

PART II

Item 5, Market for Registrant's Common Equity and
  Related Stockholder Matters. . . . . . . . . . . . . . .  15

Item 6, Selected Financial Data . . . . . . . . . . . . . . 17

Item 7, Management's Discussion and Analysis of
  Financial Condition and Results of Operations. . . . . . .17

Item 7A, Quantitative and Qualitative
  Disclosures about Market Risk. . . . . . . . . . . . . . .32

Item 8, Financial Statements and Supplementary Data. . . . .32

Item 9, Changes in and Disagreements with
 Accountants on Accounting and Financial Disclosure. . . . .32

PART III

Item 10, Directors and Executive Officers
  of the Registrant. . . . . . . . . . . . . . . . . . . . .32

Item 11, Executive Compensation. . . . . . . . . . . . . . .33

Item 12, Security Ownership of Certain
  Beneficial Owners and Management. . . . . . . . . . . . . 33

Item 13, Certain Relationships and Related Transactions. . .33

PART IV

Item 14, Exhibits, Financial Statements and
  Reports of Form 8-K. . . . . . . . . . . . . . . . . . . .33

                             Page i


                             PART I

ITEM 1.  BUSINESS

     Information presented in this Form 10-K that discusses
financial projections, proposed transactions such as those with
the Metropolitan Water District of Southern California and
Kingdom Agricultural Development Company, information or
expectations about our business strategies, results of
operations, products or markets, or otherwise makes statements
about future events, are forward-looking statements.   Forward-
looking statements can be identified by the use of words such as
"intends", "anticipates", "believes", "estimates", "projects",
"forecasts", "expects", "plans" and "proposes".  Although we
believe that the expectations reflected in these forward-looking
statements are based on reasonable assumptions, there are a
number of risks and uncertainties that could cause actual results
to differ materially from these forward-looking statements.
These include, among others, the cautionary statements under the
caption "Certain Trends and Uncertainties", as well as other
cautionary language contained in this Form 10-K.  These
cautionary statements identify important factors that could cause
actual results to differ materially from those described in the
forward-looking statements.  When considering forward-looking
statements in this Form 10-K, you should keep in mind the
cautionary statements described above.

OVERVIEW

     The combination of considerable population increases and
limited supplies are placing great demands on water resources
both in California and worldwide.  Compounding the issue, many
population centers are not located where significant
precipitation occurs.  We therefore believe that a competitive
advantage exists for those companies that possess or can provide
high quality, reliable and affordable water supply in locations
worldwide including California and its multi-billion dollar
agricultural industry, one of the largest users of water in the
state. Accordingly, Cadiz Inc., which is sometimes referred to as
"Cadiz", "we" or "us", has created an integrated and
complementary portfolio of assets encompassing landholdings with
high-quality groundwater resources and/or storage potential, as
well as agricultural properties located throughout central and
southern California with valuable water rights, and other
contractual water rights.  We believe that our access to water
will provide us with a competitive edge both as a major
agricultural concern and as a supplier of water, leading to
continued appreciation in the value of our portfolio.

     Additionally, product innovation from our fruit breeding
programs, international licensing programs, global marketing
reach, and highly regarded Sun World brand name, provides our
agricultural operations a strong position in the ongoing
consolidation in the global retail grocery industry.  Our
agricultural operations are provided through our wholly-owned
subsidiary, Sun World International, Inc. and its subsidiaries,
all of which together we sometimes refer to as "Sun World".  Sun
World is one of the largest developers, growers, producers and
marketers of proprietary fruits and vegetables in California,
specializing in high-value permanent crops.  Currently, Sun World
owns more than 19,000 acres of land primarily located in two
major growing areas of California:  the San Joaquin Valley and
the Coachella Valley.

     In addition to our Sun World properties, we hold
approximately 45,300 acres of land in eastern San Bernardino
County that are substantially underlain by high-quality
groundwater resources with demonstrated potential for various
applications, including water storage and

                             Page 1

supply programs, and agricultural, municipal, recreational
and industrial development.  Substantially all of our properties
are located in close proximity to California's major aqueduct
systems.  We expect to use our resources to participate in a broad
variety of water storage and supply, transfer, exchange and
conservation programs with public agencies and other parties.

     In December 1997, we commenced discussions with the
Metropolitan Water District of Southern California in order to
develop principles and terms for a long-term agreement related to
our Cadiz, California property.  In July 1998, Cadiz and
Metropolitan approved the Principles and Terms for Agreement for
the Cadiz Groundwater Storage and Dry-Year Supply Program, which
we sometimes refer to as the "Cadiz Program", authorized
preparation of a final agreement based on these principles and
initiated the environmental review process for the Cadiz Program.
Following extensive negotiations with Cadiz to further refine and
finalize these basic principles, Metropolitan's Board of
Directors approved definitive economic terms and responsibilities
at their April 2001 board meeting.  The Cadiz Program definitive
terms will serve as the basis for a final agreement to be
executed between Metropolitan and Cadiz.  Execution of this final
agreement will be subject to completion of the ongoing
environmental review process.

     Based upon our expertise in water and agricultural
resources, in June 1999, Sun World was appointed by Kingdom
Agricultural Development Company (KADCO), a company currently
100% controlled by His Royal Highness Prince Alwaleed Bin Talal
Bin Abdulaziz Alsaud, to develop and manage up to 100,000 acres
of agricultural land in southern Egypt, called the Tushka
Project.

     On January 16, 2002, we announced an agreement in principle
with KADCO to combine the businesses of Sun World and KADCO.
Following the proposed combination, KADCO's shareholders will
have a 49.75% interest in the combined business, and Cadiz will
retain an ownership interest of 50.25%.  Prior to the proposed
combination, KADCO expects to have cash resources in excess of
$80 million.

     On March 11, 2002, we announced our intent to create a new
subsidiary company that will provide an array of innovative
business solutions to the significant water problems facing the
Middle East.  Through the new subsidiary, we intend to build a
diversified water business with both direct investment and the
provision of economic, technical and management services.  Mr.
Bruce Babbitt, former U.S. Secretary of the Interior and Governor
of Arizona, has joined us to lead this new subsidiary as its
chairman and chief executive officer.

     We continually seek to develop and manage our water and
agricultural resources for their highest and best uses.  We also
continue to evaluate acquisition opportunities, which are
complementary to our current portfolio of water and agricultural
resources.

(a)  General Development of Business
     --------------------------------

     As part of our current business strategy, we conduct our
land acquisition, water development activities, agricultural
operations and search for international water and agricultural
opportunities for the purpose of enhancing the long-term
appreciation of our properties and future prospects.  See
"Narrative Description of Business" below.

     As the most populous state in the nation, California's
population is projected to swell to nearly 50 million people by
the year 2020.  This increasing population is placing great
demands on California's infrastructure, particularly its limited
water resources.  According to the California Department of Water
Resources, shortfalls of approximately seven million acre-feet
are forecasted in a dry year by the year 2020.  We therefore
believe that, with both the increasing scarcity of water supplies
in California and the increasing demand for water, our access to
water will provide us with a competitive advantage both as a
major agricultural concern and as a

                             Page 2

supplier of water which will lead to continued appreciation in
the value of our portfolio.

     The increasing scarcity of water supplies, coupled with
increased demand from population growth, is not just a California
issue but a worldwide issue.  Our California experience in water
resource management and development provides a strong foundation
for pursuing water resource opportunities internationally,
including opportunities in the Middle East.

     Sun World, which we acquired in September 1996, owns
approximately 19,000 acres of agricultural land primarily in the
San Joaquin and Coachella Valleys, giving us total landholdings
of approximately 64,400 acres. See Item 2, "Properties".

(b)  Financial Information about Industry Segments
     ---------------------------------------------

     During the year ended December 31, 2001, we operated our
agricultural resources segment and continued to develop our water
resource segment of the business. See Consolidated Financial
Statements.  Also, see Item 7, "Management's Discussion and
Analysis of Financial Condition and Results of Operations".

(c)  Narrative Description of Business
     ---------------------------------

     Pursuant to our business strategy, we continually seek to
develop and manage our portfolio of water and agricultural
resources for their highest and best uses.  Our development and
management activities are currently focused on agricultural
operations (primarily through Sun World) and water resource
development.  We also continue to evaluate acquisition
opportunities, which are complementary to our current portfolio
of water and agricultural resources.

WATER RESOURCE DEVELOPMENT

     Our portfolio of water resources, located in close proximity
to the Colorado River or the major aqueduct systems of central
and southern California, such as the State Water Project and the
Colorado River Aqueduct, provides us with the opportunity to
participate in a variety of water storage and supply programs,
exchanges and transfers.

(a)  Cadiz Groundwater Storage and Dry-Year Supply Program
     -----------------------------------------------------

     27,300 acres of our property located in the Cadiz and Fenner
Valleys of eastern California are underlain by a high-quality
groundwater basin.  Precipitation falls within a catchment area
of nearly 1,300 square miles and provides annual recharge to the
basin.  The catchment area is the area contributing surface and
groundwater recharge to the groundwater basin.  See Item 2,
"Properties  - The Cadiz/Fenner Property".

     In July 1998, Cadiz and Metropolitan entered into Principles
and Terms for Agreement for the Cadiz Program.  The principles
provide that Metropolitan will, during wet years or periods of
excess supply, store surplus water from its Colorado River
Aqueduct in the groundwater basin underlying our property located
in Cadiz, California.  During dry years or times of reduced
allocations from the Colorado River, the stored water will be
withdrawn and returned via conveyance facilities to the aqueduct
to meet Metropolitan's water supply needs.  In addition,
indigenous groundwater would also be transferred utilizing the
same facilities.  The Cadiz Program will have the capacity to
convey, either for storage or transfer, up to 150,000 acre-feet
in any given year during its 50-year term.

                             Page 3

     Metropolitan's Board of Directors, following extensive
negotiations with us to further refine and finalize these basic
principles and terms, approved definitive economic terms and
responsibilities for the Cadiz Program in April 2001.

     Pursuant to the approved definitive terms, during storage
operations, Metropolitan will pay a $50 fee per acre-foot for put
of Colorado River water into storage, and a $40 fee per acre-foot
for return of Colorado River water from storage, or a total of
$90 per acre-foot to cycle water into and out of the basin.  On
the transfer of indigenous water, Metropolitan will pay a base
rate of $230 per acre-foot, which will be adjusted according to a
fair market value adjustment procedure.  Metropolitan has
committed to minimum levels of utilization of the Cadiz Program
for both storage of Colorado River Aqueduct water (900,000 acre-
feet) and transfer of indigenous groundwater (up to 1,500,000
acre-feet).  In addition, the definitive terms for the Cadiz
Program provide Cadiz the option to sell a portion of the
indigenous groundwater (30,000 acre-feet per year for 25 years or
a total of 750,000 acre-feet) to outside third parties within
Metropolitan's service area at fair market value.

     The Cadiz Program facilities will include, among other
things:

      *  spreading basins, which are shallow ponds that
          percolate water from the ground surface to the water
          table;

      *  high yield extraction wells designed to extract stored
          Colorado River water and indigenous groundwater from
          beneath the Cadiz Program area;

      *  a 35-mile conveyance pipeline that will connect the
          spreading basins and wellfield to the Colorado River
          Aqueduct at Metropolitan's Iron Mountain pumping plant;
          and

      *  a pumping plant that will pump water through the
          conveyance pipeline from Metropolitan's Iron Mountain
          pumping plant to the spreading basins.

     The facilities are estimated to cost approximately $150
million, and both parties will jointly share these costs.  A
pilot spreading basin project was constructed to model and
analyze the storage and extraction of water.  All operational
costs of the Cadiz Program, including annual operations,
maintenance and energy costs, will be an obligation of
Metropolitan.  However, Cadiz will assume pro rata operational
costs associated with the sale of indigenous groundwater to third
parties.

     The definitive terms for the Cadiz Program call for the
establishment of a comprehensive groundwater monitoring and
management plan to ensure long-term protection of the groundwater
basin.  The final agreement may reflect adjustments to the
definitive terms in order to reflect information identified
during the environmental review process and will be subject to
approval by the respective boards of both parties.

     In October 2001, the environmental report was issued by
Metropolitan and the U.S. Bureau of Land Management, in
collaboration with the U.S. Geological Survey and the National
Park Service, and the related protest period has ended.  Before
construction and operation of the Cadiz Program can commence, the
environmental review process must be completed
including the issuance of final regulatory approvals by the
U.S. Bureau of Land Management and Metropolitan.  The process
for obtaining these approvals is often difficult and time
consuming as the process includes significant public review and
comment and often draws opposition from third parties including
litigation of the final regulatory approvals. We anticipate
final actions related to the environmental review process to
be completed by the end of the

                             Page 4

second quarter of 2002 after which construction of the Cadiz
Program facilities may commence.  Once construction is commenced,
the Cadiz Program is anticipated to be operational within 18 to
24 months.

(b)  Other Eastern Mojave Properties
     -------------------------------

     Our water development activities at our 6,000 acre Piute
property are located in eastern San Bernardino County
approximately 15 miles from the resort community of Laughlin,
Nevada and about 12 miles from the Colorado River town of
Needles, California.  Hydrological studies and testing of a full-
scale production well have demonstrated that this landholding is
underlain by recharging groundwater of high quality and
additional investigations are ongoing regarding the development
of the property for a variety of uses.

     Additionally, we own or control additional acreage located
throughout other areas of the eastern Mojave Desert, such as the
property we own near Danby Lake.  This area is located
approximately 30 miles southeast of our Cadiz/Fenner Valley
property and is 10 miles north of the Colorado River Aqueduct.
Our initial hydrological studies confirm that this property has
excellent storage and supply capabilities.

(c)  Sun World Water Resources
     -------------------------

     Sun World has valuable water rights in various parts of
central and southern California.  We believe that with increasing
water shortages in California, land with water rights will
increase in value.

     Sun World's landholdings and associated water resources are
located adjacent to the major aqueduct systems of central and
southern California, or are in close proximity to the Colorado
River.  These holdings complement our other groundwater resources
and will enhance our opportunities to participate in a broad
variety of water storage, supply, exchange or banking programs.
By way of example, we have identified more than 10,000 acre-feet
of excess water that we plan to either transfer to our other
properties or exchange or transfer to other water users without
affecting current agricultural production on an annual basis.

(d)  Proposed New Subsidiary
     -----------------------

     On March 11, 2002, we announced our intent to create a new
subsidiary company that will provide an array of innovative
business solutions to the significant water problems facing the
Middle East.  Through the new subsidiary, we intend to build a
diversified water business with both direct investment and the
provision of economic, technical and management services.  Mr.
Bruce Babbitt, former U.S. Secretary of the Interior and Governor
of Arizona, has joined us to lead this new subsidiary as its
chairman and chief executive officer.

     The new subsidiary will target opportunities in the Middle
East because of the region's growing need for managed water
resources, sound environmental planning, effective conservation
of water resources and the growing need for renewable water
resources proportionate to the growing population and the
burgeoning agricultural system.  We believe that the Middle East
has an arid environment similar to parts of California where our
operations are conducted.  Further, we believe that this project
complements the work we are conducting at the Tushka Project site
and our relationship with KADCO.

                             Page 5

AGRICULTURAL OPERATIONS

     Through Sun World, we are one of California's largest
vertically integrated agricultural companies due to our extensive
research and development program, our year-round sourcing of
fresh fruits and vegetables, our farming and packing activities
and our strong marketing capabilities.  For the 12 months ended
December 31, 2001, Sun World recorded revenues of $92.4 million.

(a)  Product Line
     ------------

     Sun World ships over 80 different varieties of fresh fruits
and vegetables throughout the United States and to more than 30
foreign countries.  Sun World is a leading grower and marketer of
table grapes, seedless watermelons, colored sweet peppers, citrus
(oranges and lemons) and stonefruit (plums, peaches, nectarines
and apricots).  It is also one of California's largest
independent marketers of grapefruit, tangerines, mandarins, navel
oranges and lemons.

     The breadth and diversity of the product line helps to
minimize the impact of individual crop earnings fluctuations.
Further, the breadth and diversity of its product offering
provides Sun World with greater presence and influence with its
grocery and food service customers.

     Although many fruits and vegetables are fungible
commodities, Sun World has adopted a strategy of developing and
acquiring specialty produce varieties with unique characteristics
which differentiate them from commodity produce varieties.  Most
of these varieties are harvested during favorable marketing
windows when available supply from competitors is limited.  These
specialty varieties typically command a price premium and are
less subject to the same price volatility than the commodity
varieties.  They also provide Sun World with a dominant position
in a number of product categories.  Examples of the branded
produce grown and marketed by Sun World include Superior
Seedless(R) table grapes, Midnight Beauty(R) table grapes, Black
Diamond(R) plums, Honeycot(R) apricots and Amber Crest(R)
peaches.  These products evolved through a combination of
internal development and acquisition.  Sun World's research and
development center is dedicated to developing additional high
value proprietary varieties.  See "Proprietary Product
Development" below.

(b)  Farming Operations
     ------------------

     Sun World's farming operations produced approximately seven
million units of fruits and vegetables during the year ended
December 31, 2001 from its approximately 13,400 planted acres of
which approximately 12,200 acres are owned by Sun World and 1,200
acres are leased.  Permanent crops are grown on approximately
11,000 of the owned acres of which 42% are proprietary varieties.
Sun World's principal agricultural lands are located in the San
Joaquin and Coachella Valleys of California.  See Item 2,
"Properties".

     Sun World properties are primarily dedicated to producing
permanent commercial crops and, to a lesser extent, annual (or
row) crops.  Over 1,500 acres are currently utilized for
developing crops (e.g., new vines and trees that have not yet
reached commercial maturity).  Sun World has implemented a crop
development plan with the intent of redeploying marginally
productive acreage to produce varieties of crops that possess
superior proprietary characteristics and/or are available for
delivery at peak pricing windows throughout the year.
Additionally, during 2001, Sun World completed the three-year
transition of approximately 400 acres of table grapes that are
certified organic for the 2001 growing season.

                             Page 6

(c)  Packing and Marketing Operations
     --------------------------------

     In addition to merchandising its own products, Sun World
provides marketing and packing services to third party growers.
For third party growers, Sun World provides three key benefits:

     * Sun World's brand name, proprietary products and
       reputation with wholesalers;

     * a full complement of handling services that include
       harvest, cooling, packing and shipping; and

     * an internal sales and marketing force servicing
       approximately 500 customers throughout the world.

     Sun World's packing facilities handled over eight million
units of produce during the year ended December 31, 2001.  These
facilities provide harvesting, packing, cooling and shipping
services for Sun World production, as well as for other
commercial clients.  Currently, Sun World owns three facilities,
two of which are located in the Coachella Valley and one of which
is located in the San Joaquin Valley.  See Item 2, "Properties".

     Sun World's vertically integrated operations enable it to
offer the market a continuous stream of new specialty products,
which receive a market premium.  As a large grower, Sun World is
able to manage the quality of its own product line, and as a
significant packer and marketer, Sun World works with other
growers to ensure product quality through packing and
distribution.  During fiscal 2001, we sold over 10 million units
with wholesale value of approximately $94.5 million.  This amount
includes the wholesale value for units sold on behalf of third
party growers for which only the sales commission and packing
revenues received by Sun World are included in Sun World's
reported revenues.

     Sun World's sourcing, both external and internal, is
diversified geographically throughout California.  Sun World's
owned and leased farming operations are located throughout the
major growing regions in California from the Coachella Valley in
the south to central California's San Joaquin Valley, as well as
operations near the coast.  Sun World sources externally produced
product from throughout California, from other areas of the
United States, and from international sources.  This geographic
diversification not only reduces the impact that unfavorable
weather conditions and infestations could have on Sun World's
operations, but also provides Sun World with longer selling
seasons for many crops since harvests occur at different times.
In addition, geographic diversification also allows Sun World the
ability to provide the quality and breadth of product throughout
the year demanded by retailers.

     Sun World's customer base consists of approximately 500
accounts including supermarket retailers, food service entities,
warehouse clubs, and international trading companies located in
approximately 30 countries.  Domestic customers include national
retailers such as Safeway Stores and Albertson's; club stores,
including Costco and Sam's; and food service distributors,
including Sysco and Alliant.  During 2001, approximately 12% of
Sun World's products were marketed internationally including in
Canada, Europe, Australia, Japan, Hong Kong, Singapore, Malaysia,
Taiwan, the Middle East and South Africa.  Only one national
retailer, Safeway Stores, (representing approximately 11%)
accounted for more than 10% of Sun World's revenues in 2001.  As
is consistent with industry practice, Sun World does not maintain
written agreements with Safeway Stores or its other significant
customers.

                             Page 7

(d)  Proprietary Product Development
     -------------------------------

     Sun World has a long history of product innovation, and its
research and development center maintains a fruit breeding
program that has introduced dozens of proprietary fruit varieties
in the last six years.  Recent product successes include the
Midnight Beauty(R) seedless black table grape, the Black
Diamond(R) plum, the Amber Crest(R) peach and the Honeycot(R)
apricot.  During 2001, Sun World filed for 12 new plant patents
in the United States, including six new varieties of table
grapes, three new varieties of plums and three new varieties of
peaches.  We believe that these products and several other
promising grape and stonefruit varieties will be planted
commercially in the near future, both domestically and
internationally.  Sun World also continually assesses the
strategic value of filing patents on its proprietary fruit
varieties internationally and files for patents in countries
where it deems strategic value will be obtained.  During 2001,
Sun World filed for 12 new plant patents internationally in
Argentina, Australia, Brazil, Chile, Egypt, European Union,
Mexico, Peru and South Africa.  The European Union countries
include Austria, Belgium, Denmark, Finland, France, Germany,
Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal,
Spain, Sweden and the United Kingdom.

     Sun World devotes approximately 200 acres to its research
and development center and crop experimentation.  The research
and development center facility houses tissue culture rooms,
growth rooms, four greenhouses and experimental growing crops.
The amounts expended by Sun World on its research and development
activities totaled $2,023,000 for the year ended December 31,
2001, $1,636,000 for the year ended December 31, 2000, and
$1,450,000 for the year ended December 31, 1999.

     As a result of over 20 years of research and development,
Sun World holds rights to 320 patents and trademarks around the
world and has 86 pending applications for additional patents and
trademarks domestically and internationally.  The patent
registrations exist in most major fruit producing countries and
the trademarks are held in both fruit producing and consuming
regions.   Sun World's patents have varying expiration dates
occurring within the next several years through 2024; however,
the expiration of any individual patent will not have a material
effect upon Sun World's operations.

     Enhancing the value of the proprietary product portfolio
through licensing is an integral part of Sun World's growth
strategy.  Sun World continues to seek licensing opportunities
with key strategic partners to introduce, trial and produce Sun
World's proprietary products in major production areas that have
appropriate plant protection rights and do not compete with Sun
World's own domestic production.  These licensing agreements will
provide Sun World with a long-term annual revenue stream based
upon a royalty fee for each box of proprietary fruit sold over
the lives of the licensed trees or vines approximating 25 to 40
years.  Currently, Sun World has licensing agreements in place in
Australia, Chile, Israel, Italy, Morocco, Namibia, New Zealand,
South Africa, Spain and the United States and expects to continue
to expand its licensing portfolio.  An example of Sun World's
licensing success is the definitive agreement entered into with
the South African fruit industry granting long-term license
agreements to South African fruit companies seeking to produce
and export Sun World's proprietary Sugraone grape variety (more
commonly known as Sun World's Superior Seedless(R) grape).  This
agreement also provided Sun World compensation for past Sugraone
grapevine plantings and fruit sales and granted Sun World
exclusive North American marketing rights for the Sugraone grape
variety.  We believe these licensing agreements have established
a precedent that will change the way new and improved varieties
of produce will be brought to market in the future.

                             Page 8

TUSHKA PROJECT WITH KADCO

     The combination of our innovative proprietary products and
expertise in desert farming and water resources management led to
Sun World's appointment by KADCO, a company currently 100%
controlled by His Royal Highness Prince Alwaleed Bin Talal Bin
Abdulaziz Alsaud, to develop and manage up to 100,000 acres of
agricultural land in southern Egypt, called the Tushka Project.
The Tushka Project is the cornerstone in the Egyptian
government's multi-billion dollar South Valley Project, an
immense infrastructure plan designed to irrigate more than
500,000 acres of desert land to foster urban and agricultural
development. The South Valley Project involves the construction
of one of the world's largest pumping stations and a 43-mile
canal that diverts water from Egypt's Lake Nasser, the reservoir
formed on the Nile River by the Aswan High Dam, to four separate
parcels of land - the first being the Tushka Project site.
Construction is well underway, with the main canal, pumping
station and branch canals slated to be complete and operational
by the end of 2002.  The initial commercial plantings of
permanent crops for the Tushka Project will follow in early 2003.
Concurrent to the development of necessary infrastructure, a
research site and nursery, including 300 acres of test plots
irrigated with local groundwater, have been established.

     As compensation for project development and management of
the Tushka Project, Sun World earns a quarterly equity interest
in KADCO based upon meeting certain developmental milestones and
has been granted an option to purchase additional shares.  The
combined equity interest is expected to equate to approximately
10% ownership of KADCO upon completion of the development.  In
addition, Sun World will receive annual marketing and licensing
fees equal to the greater of 1.5% of gross revenues or 5% of
earnings before interest, taxes, depreciation and amortization
(EBITDA) from the project. No capital investment is required by
Sun World, and KADCO reimburses Sun World for all expenses
incurred.  The management agreement, signed in October 1999, has
a four-year term with an option to extend for multiple further
terms.

PROPOSED BUSINESS COMBINATION OF SUN WORLD WITH KADCO

     On January 16, 2002, we announced an agreement in principle
with KADCO, to combine the businesses of Sun World and KADCO.
Following the proposed combination, KADCO's shareholders will
have a 49.75% interest in the combined business, and Cadiz will
retain an ownership interest of 50.25%.  Prior to the proposed
combination, KADCO expects to have cash resources in excess of
$80 million.

     We intend to utilize the cash resources of the combined
business both to recapitalize Sun World and to provide for future
business expansion.  The agreement in principle contemplates
that, in the future, KADCO shareholders will have an opportunity
to make an additional equity investment in the combined business.
Should KADCO shareholders make this additional investment, we may
choose to maintain a majority percentage ownership in the
combined business through a proportionate matching investment.

      The management of Sun World will continue to manage the
combined business with Keith Brackpool as chairman and Timothy
Shaheen as chief executive officer. The board of the combined
business will consist of seven board members.  As Cadiz will
initially hold a majority ownership in the combined business,
Cadiz will initially nominate four board members and
KADCO shareholders will initially nominate the remaining three
board members.  Should KADCO ever obtain a majority percentage
ownership of the combined business, the shareholders of KADCO
will then have the right to nominate a majority of board members.

                             Page 9

     The proposed combination is subject to the negotiation and
execution of definitive agreements and a number of other
important conditions, including, among others, procurement of
governmental, third-party and lender approvals or consents as
necessary, completion of confirmatory due diligence by both
parties and KADCO's completion of additional equity financing.

     We anticipate that the combination will be consummated
during the second quarter of 2002.  However, management cannot
assure that a definitive agreement with KADCO will be reached or
that the combination will be consummated.  See the discussion
under the caption "Certain Trends and Uncertainties" and Item 7,
"Management's Discussion and Analysis of Financial Condition and
Results of Operations".

SEASONALITY

     In connection with our water resource development
activities, we do not expect revenues to be seasonal in nature.

     Sun World's agricultural operations, however, are impacted
by the general seasonal trends that are characteristic of the
agricultural industry.  Sun World has historically received the
majority of its operating profit during the months of June to
October following the harvest and sale of its table grape and
stonefruit crops.  Due to this concentrated activity, we have,
therefore, historically incurred an operating loss with respect
to our agricultural operations in the other months during the
year.

COMPETITION

     We face competition for the acquisition, development and
sale of our properties from a number of competitors, some of
which have greater resources than us.  We may also face
competition in the development of water resources associated with
our properties.  Since California has scarce water resources and
an increasing demand for available water, we believe that
location, price and reliability of delivery are the principal
competitive factors affecting transfers of water in California.

     The agricultural business is highly competitive.  Sun
World's competitors include a limited number of large
international food companies, as well as a large number of
smaller independent growers and grower cooperatives.  No single
competitor has a dominant market share in this industry due to
the regionalized nature of these businesses.  In addition to
drawing from its proprietary base of products, Sun World utilizes
brand recognition, product quality, harvesting in favorable
production windows, effective customer service and consumer
marketing programs to enhance its position within the highly
competitive fresh food industry.  Consumer and institutional
recognition of the Sun World trademark and related brands and the
association of these brands with high quality food products
contribute to Sun World's ability to compete in the market for
fresh fruit and vegetables.

EMPLOYEES

     As of December 31, 2001, we employed approximately 550 full-
time employees (including all those individuals who work more
that 1,000 hours per year).  Sun World, throughout the year,
engages various part-time and seasonal employees, with a seasonal
high of approximately 1,200 part-time employees.  Additionally,
Sun World contracts with outside labor contractors for personnel
used in the farming operations with a seasonal high of
approximately 4,800 people.   Approximately 190 of our employees
are represented by a labor

                             Page 10

union pursuant to contracts renewed in 1999 that expire in 2002.
Generally, we believe that our employee relations are good.

REGULATION

     Certain areas of our operations are subject to varying
degrees of federal, state and local laws and regulations.  Our
agricultural operations are subject to a broad range of evolving
environmental laws and regulations.  These laws and regulations
include the Clean Air Act, the Clean Water Act, the Resource
Conservation and Recovery Act, the Federal Insecticide, Fungicide
and Rodenticide Act and the Comprehensive Environmental Response,
Compensation and Liability Act.  Compliance with these and other
foreign and domestic laws and related regulations is an ongoing
process, which is not currently expected to have a material
effect on our capital expenditures, earnings or competitive
position.  Environmental concerns are, however, inherent in most
major agricultural operations, including those conducted by us,
and there can be no assurance that the cost of compliance with
environmental laws and regulations in the future will not be
material.

     Our food operations are also subject to regulations enforced
by, among others, the U.S. Food and Drug Administration and
state, local and foreign equivalents and to inspection by the
U.S. Department of Agriculture and other federal, state, local
and foreign environmental and health authorities.  Among other
things, the U.S. Food and Drug Administration enforces statutory
standards regarding the safety of food products, establishes
ingredients and manufacturing procedures for certain foods,
establishes standards of identity for foods and determines the
safety of food substances in the United States.  Similar
functions are performed by state, local and foreign governmental
entities with respect to food products produced or distributed in
their respective jurisdictions.  Existing environmental
regulations have not, in the past, had a materially adverse
effect upon our operations, and we believe that existing
environmental regulations will not, in the future, have a
materially adverse effect upon our operations.  There can be no
assurances, however, as to the effect of any environmental
regulations, which may be adopted in the future.

     As we proceed with the development of our properties,
including the Cadiz Program, we will be required to satisfy
various regulatory authorities that we are in compliance with the
laws, regulations and policies enforced by such authorities.
Groundwater development, and the export of surplus groundwater
for sale to single entities such as public water agencies, is not
subject to regulation by existing statutes other than general
environmental statutes applicable to all development projects.
Additionally, we must obtain a variety of approvals and permits
from state and federal governments with respect to issues that
may include environmental issues, issues related to special
status species, issues related to the public trust, and others.
Because of the discretionary nature of these approvals and
concerns which may be raised by various governmental officials,
public interest groups and other interested parties during both
the approval and development process, our ability to develop
properties and realize income from our projects, including the
Cadiz Program, could be delayed, reduced or eliminated.


ITEM 2.  PROPERTIES

     We currently lease our executive offices in Santa Monica,
California which consist of approximately 10,400 square feet,
pursuant to a lease that expires in July 2004.  Current base rent
under the lease is approximately $38,000 per month.  We have one
five-year option to renew at fair market rate.  We also maintain
a development office in San Bernardino, California.  Sun World
owns its main packing facility (including sales and
administrative offices) in Bakersfield, California and owns two
packing facilities (including sales offices) in Coachella,

                             Page 11

California.  We believe that our property and equipment is
generally well maintained, in good operating condition and
adequate for their present needs.

     The following is a description of our significant
properties.

THE CADIZ/FENNER PROPERTY

     In 1984, we conducted an investigation of the feasibility of
the agricultural development of land located in the Mojave Desert
near Cadiz, California, and confirmed the availability of high-
quality water in commercial quantities appropriate for
agricultural development.  Since 1985, we have acquired
approximately 34,500 acres in the Cadiz and Fenner Valleys of
eastern San Bernardino County approximately 30 miles north of the
Colorado River Aqueduct, including approximately 7,000 acres
obtained as part of a litigation settlement with Waste Management
in April 2001.

     Additional numerous independent geotechnical and engineering
studies conducted since 1985 have confirmed that the Cadiz/Fenner
property overlies a natural groundwater basin which is ideally
suited for underground water storage and dry year transfers as
contemplated in the Cadiz Program.  See Item 1, "Business -
Narrative Description of Business - Water Resource Development".

     In November 1993, the San Bernardino County Board of
Supervisors unanimously approved a General Plan Amendment
establishing an agricultural land use designation for 9,600 acres
at Cadiz for which 1,600 acres have been developed and are leased
to Sun World.  This action also approved permits to construct
infrastructure and facilities to house as many as 1,150 seasonal
workers and 170 permanent residents (employees and their
families) and allows for the withdrawal of more than 1,000,000
acre-feet of groundwater from the groundwater basin underlying
our property.

     We hold substantially all Cadiz/Fenner acreage in fee
directly.

THE SUN WORLD PROPERTIES

(a)  Farm Properties
     ---------------

     Sun World owns approximately 19,000 acres and leases
approximately 2,800 acres of improved land in central and
southern California.  Concurrently with our acquisition of Sun
World in 1996, Sun World entered into a lease for approximately
1,600 acres of Cadiz/Fenner agricultural real property from
Cadiz.  The lease, as amended, has a 10-year term expiring in
September 2006 with annual rental of $250 per acre.  Sun World is
responsible for all costs associated with growing crops on the
leased property.  The majority of this land is used for the
cultivation of permanent and annual crops and support activities,
including packing facilities.

     Sun World-owned farming property is divided between six
distinct geographic regions:  Madera, Bakersfield, Tulare and
Arvin (located within the San Joaquin Valley), Coachella (located
in the state's southeastern corner near Palm Springs) and Blythe
(located approximately 100 miles east of the Coachella Valley
adjoining the Colorado River).

                             Page 12

(b)  Packing and Handling Facilities
     -------------------------------

     Sun World owns three packing and handling facilities:  one
facility located in the San Joaquin Valley at Kimberlina near
Bakersfield, a facility in the Coachella Valley and a third
facility also in the Coachella Valley that is leased to a third
party.

     The Kimberlina facility, located on an 83 acre parcel owned
by Sun World, consists of two highly automated production lines
for packing stonefruit and citrus, cold storage areas, and office
space.

     Sun World's Coachella Valley facilities consists of three
independent buildings located on 26 acres of land in Coachella,
California.  One building is used primarily for packing citrus,
receiving table grapes, cold storage and office space.  A second
building is used primarily for receiving, cooling and storing
table grapes and row crops.  The third building was used
primarily for packing lemons and for storage.

OTHER EASTERN MOJAVE PROPERTIES

     We also own approximately 10,900 additional acres in the
eastern Mojave Desert, including the Piute and Danby Lake
properties.

     The Piute property consists of approximately 6,000 acres and
is located approximately 60 miles northeast of Cadiz and
approximately 15 miles west of the Colorado River and Laughlin,
Nevada, a small, fast growing town with hotels, casinos and water
recreation facilities.  We identified the Piute property for
acquisition by a combination of satellite imaging and geological
techniques which we used to identify water at Cadiz.

     The Piute acreage adjoins Highway 95, approximately 60 miles
south of Las Vegas.  The Santa Fe Railroad passes through the
land and Interstate 40 is approximately 12 miles to the south.

DEBT SECURED BY PROPERTIES

     Of our outstanding debt at December 31, 2001, $117.5 million
represents loans secured by Sun World's properties and $25.1
million represents loans secured by the majority of our non-Sun
World properties. Information regarding interest rates and
principal maturities is provided in Note 9 to the consolidated
financial statements.


ITEM 3.  LEGAL PROCEEDINGS

     We are involved in legal and administrative proceedings and
claims and we actively pursue the protection of our intellectual
and proprietary property in the ordinary course of business.  In
the opinion of management, the ultimate outcome of each
proceeding or all such proceedings combined will not have a
material adverse impact on our financial position.


ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     No matters were submitted to a vote of our stockholders
during the fourth quarter of 2001.  The results of our Annual
Meeting of Stockholders held May 14, 2001 were reported in our
Quarterly Report on Form 10-Q for the quarterly period ended
March 31, 2001.

                             Page 13

                             PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
         STOCKHOLDER MATTERS

     Our common stock is traded on the Nasdaq National Stock
Market under the symbol "CLCI".  The following table reflects
actual sales transactions.  The high and low range of the sales
price of the common stock for the dates indicated have been
provided by Nasdaq.

                                     High     Low
                                    Sales     Sales
     Quarter Ended                  Price     Price
     -------------                  -----     -----

     2000:
       March 31                    $ 12.500  $ 7.313
       June 30                     $  8.875  $ 5.563
       September 30                $ 10.125  $ 7.750
       December 31                 $ 10.750  $ 6.938

     2001:
       March 31                    $ 10.500  $ 8.031
       June 30                     $ 10.180  $ 8.250
       September 30                $ 10.000  $ 7.150
       December 31                 $  8.980  $ 7.250

     On March 26, 2002, the high, low and last sales prices for
the shares, as reported by Nasdaq, were $8.840, $8.570 and
$8.780, respectively.

     Options in our stock trade under the symbol "QAZ".

     We also have an authorized class of 100,000 shares of
preferred stock.  To date, there are four series of preferred
stock designated for issuance including:

       *  40,259 shares of Series A Junior Participating
          Preferred Stock pursuant to a Stockholders' Rights
          Plan, of which none are issued and outstanding;

       *  5,000 shares of Series D Convertible Preferred Stock of
          which 5,000 shares are issued and outstanding;

       *  3,750 shares of Series E-1 Convertible Preferred Stock
          of which 3,750 shares are issued and outstanding; and

       *  3,750 shares of Series E-2 Convertible Preferred Stock
          of which 3,750 shares are issued and outstanding.

The Board of Directors has no present plans or arrangements for
the issuance of additional shares of preferred stock.

     On May 10, 1999 we adopted a Stockholders' Rights Plan.  In
connection with the Rights Plan, and as further described in the
Rights Plan, we declared a dividend of one preferred share
purchase right for each outstanding share of our common stock
outstanding at the close of business on June 1, 1999.

     As of March 26, 2002, the number of stockholders of record
of our common stock was 161 and the estimated number of
beneficial owners was approximately 2,604.

                             Page 14

     To date, we have not paid a cash dividend on our common
stock and we do not anticipate paying any cash dividends in the
foreseeable future.  Our ability to pay such dividends is subject
to covenants pursuant to agreements with our lenders that do not
allow for the payment of dividends other than out of our
cumulative net income.

     During the quarter ended December 31, 2001, we issued 40,000
shares of common stock and  warrants to purchase 215,000 shares
of our common stock at an exercise price of $7.50 per share.
These shares and warrants were issued in connection with our
issuance of an aggregate of $7.5 million of Series E-1 and E-2
preferred stock. The issuance of the warrants, common stock, and
the Series E-1 and E-2 preferred stock were not registered under
the Securities Act of 1933, as amended.  We believe that the
transactions described are exempt from the registration
requirements of the Securities Act by virtue of Section 4(2) of
the Securities Act as the transactions did not involve public
offerings.  All other securities sold by us during the year ended
December 31, 2001 which were not registered under the Securities
Act have previously been reported in our Quarterly Reports on
Form 10-Q.  In February 2002, we registered for resale the
warrants and shares issued in connection with the above
transactions by filing a Registration Statement on Form S-3.

                             Page 15

ITEM 6.  SELECTED FINANCIAL DATA

    The following selected financial data insofar as it relates
to the years ended December 31, 2001, 2000, 1999, 1998 and 1997
has been derived from financial statements audited by
PricewaterhouseCoopers LLP, independent accountants.  The
information that follows should be read in conjunction with the
audited consolidated financial statements and notes thereto for
each of the three years in the period ended December 31, 2001
included in Part IV of this Form 10-K.  See also Item 7,
"Management's Discussion and Analysis of Financial Condition and
Results of Operations".

($ in thousands, except for per share data)

                                Year Ended December 31,
                     ----------------------------------------------
                     2001       2000      1999       1998      1997
                     ----       ----      ----       ----      ----
Statement of
Operations Data:

 Total revenues   $  92,402  $ 107,745 $ 115,229 $ 106,544 $ 100,157

 Net loss           (25,722)   (22,458)   (8,594)   (7,470)   (8,538)

 Less:
  Preferred stock
   dividends            591          -         -         -    (1,213)
  Imputed dividend
   on preferred
   stock                441          -         -         -         -
                    -------    -------   -------  --------   -------

 Net loss
  applicable to
  common stock    $ (26,754) $ (22,458) $ (8,594) $ (7,470) $  (9,751)
                  =========  =========  ========  ========  =========

Per share:

 Net loss
 (basic and
  diluted)        $    (.75) $    (.64) $   (.25) $   (.23) $    (.33)
                  =========  =========  ========   =======  =========

Weighted-average
 common shares
 outstanding         35,854     35,344    34,678    33,173     29,485
                  =========  =========  ========   =======   ========

                                     December 31,
                        ---------------------------------------------
                        2001      2000       1999       1998     1997
                        ----      ----       ----       ----     ----
Balance Sheet Data:

 Total assets       $ 198,275  $ 203,617  $ 214,102  $ 214,359 $ 203,049
 Long-term debt     $ 141,429  $ 145,610  $ 142,089  $ 142,317 $ 131,689
 Redeemable
  preferred
  stock             $   9,958  $   3,950  $       -  $       - $       -
 Common stock and
  additional
  paid-in capital   $ 152,765  $ 143,063  $ 136,552  $ 127,998 $ 121,199
 Accumulated
  deficit          $ (135,062) $(109,340) $ (86,882) $ (78,288)$ (70,818)
 Stockholders'
  equity           $   17,703  $  33,723  $  49,670  $  49,710 $  50,381


ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

     The consolidated financial statements set forth herein for
each of the three years in the period ended December 31, 2001,
reflect the results of our operations and the operations of our
wholly-owned subsidiaries including Sun World.

                             Page 16

     A summary of the Sun World elements which our management
believes is essential to an analysis of the results of operations
for such periods is presented below.  For purposes of this
summary, the term Sun World will be used, when the context so
requires, with respect to the operations and activities of our
Sun World subsidiary, and the term Cadiz will be used, when the
context so requires, with respect to our operations and
activities that do not involve Sun World.

     Our net income or loss in future fiscal periods will be
largely reflective of (a) the operations of our water development
activities including the Cadiz Groundwater Storage and Dry-Year
Supply Program and (b) the operations of Sun World including its
international expansion.  Sun World conducts its operations
through four operating divisions:  farming, packing, marketing and
proprietary product development.  Net income from farming
operations varies from year to year primarily due to yield and
pricing fluctuations which can be significantly influenced by
weather conditions, and are, therefore, generally subject to
greater annual variation than Sun World's other divisions.
However, the geographic distribution of Sun World's farming
operations within California and the diversity of its crop mix
makes it unlikely that adverse weather conditions would affect
all of Sun World's properties or all of its crops in any single
year.  Nevertheless, net profit from Sun World's packing,
marketing and proprietary product development operations tends to
be more consistent from year to year than net profit from Sun
World's farming operations.  Packing and marketing revenues from
third party growers currently represent less than 10% of our
total revenues.  Sun World has entered into agreements
domestically and internationally to license selected proprietary
fruit varieties and continues to pursue additional domestic and
international licensing opportunities.  License revenues
currently represent less than 10% of our total revenues.

(a)  YEAR ENDED DECEMBER 31, 2001 COMPARED TO THE YEAR ENDED
     DECEMBER 31, 2000
     -------------------------------------------------------

     Our agricultural operations are impacted by the general
seasonal trends that are characteristic of the agricultural
industry.  Sun World has historically received the majority of
its net income during the months of June to October following the
harvest and sale of its table grape and stonefruit crops.  Due to
this concentrated activity, Sun World has, therefore,
historically incurred a loss with respect to its agricultural
operations in the other months during the year.

                             Page 17

     The table below sets forth, for the periods indicated, the
results of operations for Sun World's four main divisions (before
elimination of any interdivisional charges), as well as the
categories of costs and expenses we incurred which are not
included within the divisional results (in thousands):

                                                  Year Ended
                                                  December 31,
                                                 2001      2000
                                                 ----      ----
     Divisional net income (loss) :
       Farming                               $ (3,243)   $ 2,791
       Packing                                  8,320      7,193
       Marketing                                3,303      3,868

       Proprietary product development          2,891      4,331
                                             --------    -------

                                               11,271     18,183

     General and administrative                10,890     10,939
     Special litigation                        (7,929)       424
     Removal of underperforming crops             736      1,549
     Non-recurring compensation expense         5,537          -
     Depreciation and amortization              8,151      8,381
     Interest expense, net                     19,551     19,188
     Income tax expense                            57        160
                                              -------   --------

     Net loss                                $(25,722)  $(22,458)
                                             ========   ========

     FARMING OPERATIONS.  Net loss from farming operations
totaled $3.2 million for 2001 compared to a net profit of $2.8
million in 2000.  Farming revenues were $71.7 million and farming
expenses were $74.9 million for 2001.  For 2000, Sun World had
farming revenues of $86.4 million and farming expenses of $83.6
million.  Farming results were negatively impacted by a two-week
weather related delay in the table grape harvest in Coachella and
Mexico, which created an overlap with the early table grape
harvests in the San Joaquin Valley.  This overlap created
downward pressure on F.O.B. prices for table grapes that
continued through the entire San Joaquin Valley harvest.  Year-to-
date F.O.B. prices for table grapes were 3% below 2000 farming
results. Additionally, Sun World experienced lower table grape
yields as it sold 3.5 million boxes during 2001 compared to 3.9
million boxes during 2000.

     Results were also negatively impacted in 2001 compared to
2000 due to decreased prices for wine grapes, peppers and plums.
Average F.O.B. prices for wine grapes and peppers were down due
to oversupply in the industry by 45% and 29%, respectively,
compared to 2000.  Profits for plums were down due to lower
yields coupled with smaller sized fruit resulting from adverse
weather.  Sun World sold 0.8 million boxes of plums in 2001
compared to 1.0 million boxes in 2000. F.O.B. prices for plums
were 25% below 2000 prices.  2001 citrus results were $1.1
million higher than 2000 due to an 18% increase in production
yields coupled with a 9% increase in F.O.B. prices.  The decrease
in farming expenses is primarily due to the removal of certain
underperforming stonefruit and wine grape acreage at the
conclusion of the 2000 growing season and the reduction and
elimination of certain row crop acreage in 2001 for crops that
had become unprofitable. Sun World's proprietary table grape and
stonefruit products have allowed Sun World to continue to command
price premiums to the overall market.

     PACKING OPERATIONS.  Sun World's packing and handling
facilities contributed $8.3 million in profit during 2001
compared to $7.2 million in 2000.  The aggregate packing and
handling revenue for these operations of $21.4 million was offset
by $13.1 million of expenses for 2001.  Revenues totaled $21.9
million offset by expenses of $14.7 million for 2000.  Sun

                             Page 18

World packed 2.9 million units during 2001 and moved an additional
5.3 million units through the cold storage facilities for a total
of 8.2 million units processed through the packing operations in
2001 compared to 8.6 million units in 2000.  This decrease in
units is due primarily to lower Sun World-grown table grape and
plum yields as well as fewer units of third party citrus
partially offset by increased units of third party table grapes.
The increase in profits is due to increased profits per unit
resulting from a price increase in storage and handling revenues
for table grapes, stonefruit and peppers that was implemented in
2001 to offset increased energy and labor costs.  Units packed
and handled during 2001 consisted primarily of Sun World-grown
table grapes, peppers and seedless watermelons in the Coachella
Valley; table grapes and citrus products packed for third party
growers; and Sun World-grown table grapes, stonefruit, citrus,
and peppers from the San Joaquin Valley.

     MARKETING OPERATIONS.  During 2001, a total of 10.1 million
units were sold consisting primarily of Sun World-grown table
grapes, peppers and watermelons from the Coachella Valley; table
grapes and citrus from domestic third party growers; and Sun
World-grown table grapes, stonefruit, citrus, and peppers from
the San Joaquin Valley.   These unit sales resulted in marketing
revenue of $7.5 million.  Marketing expenses totaled $4.2 million
for 2001 resulting in net income from marketing operations of
$3.3 million.  During 2000, 11.5 million units were sold
resulting in revenues of $8.6 million offset by expenses of $4.7
million for net income of $3.9 million.  The decrease in
revenues, marketing profits and units sold is primarily due to
lower F.O.B. prices for table grapes, plums and peppers,
decreased units of Sun World-grown table grapes and plums, and
the elimination of certain underperforming stonefruit and row
crops from production in 2001.

     PROPRIETARY PRODUCT DEVELOPMENT.  Sun World has a long
history of product innovation, and its research and development
center maintains a fruit breeding program that has introduced
dozens of proprietary fruit varieties.  Additionally, Sun World
continues to expand its licensing program with key strategic
partners worldwide to introduce, trial and produce Sun World's
proprietary varieties, which provides Sun World with a long-term
annual revenue stream based upon a royalty fee for each box of
proprietary fruit sold during the life of the tree or vine.
During 2001, net income from proprietary product development was
$2.9 million consisting of revenues of $4.9 million offset by
expenses of $2.0 million.  For 2000, net income was $4.3 million
consisting of revenues of $6.0 million offset by expenses of $1.7
million.  The decrease in proprietary product development net
income is primarily due to decreased intercompany royalties due
to lighter yields, additional costs associated with the expansion
of Sun World's licensing distribution structure, and a timing
difference for international royalties due to harvest delays in
South Africa.   Revenues include $1.3 million related to project
development and management fees payable in equity of KADCO for
both 2001 and 2000.  During 2001, Sun World expanded its acreage
under license with its strategic partners by 15% to over 7,000
acres.

     GENERAL AND ADMINISTRATIVE EXPENSES.  General and
administrative expenses totaled $10.9 million for 2001 and 2000.

     SPECIAL LITIGATION.  We were engaged in lawsuits against
Waste Management seeking monetary damages arising from activities
adverse to us in connection with a landfill, which until its
defeat by the voters of San Bernardino County in 1996, was
proposed to be located adjacent to our Cadiz/Fenner Valley
properties.  In March 2001, we executed a settlement agreement
with Waste Management related to these lawsuits.   Pursuant to
the settlement agreement, Waste Management paid Cadiz $6 million
in cash and granted to Cadiz an exclusive option to
receive, at no cost to Cadiz, up to approximately 7,000 acres of
real property in eastern San Bernardino County primarily adjacent
to the Cadiz Program property.  In April 2001, we

                             Page 19

exercised the option and as a consequence acquired the subject
property.  The settlement resulted in net proceeds of $7.9 million
for 2001.  During 2000, expenses including litigation costs and professional
fees related to this matter totaled $0.4 million.

     NON-RECURRING COMPENSATION.  In March 2001, we issued
564,163 deferred stock units to certain senior managers of Cadiz
and Sun World.  These deferred stock units were issued in
exchange for the cancellation of 1,055,000 fully vested options
to purchase our common stock held by the senior managers.  The
number of the deferred stock units issued was calculated based on
the average closing price for the 10 business days following the
filing of our Annual Report on Form 10-K for the year ended
December 31, 2000 on March 29, 2001.  We recorded a one-time
charge of $5,537,000 and no cash was expended in connection with
the issuance of the deferred stock units.

     REMOVAL OF UNDERPERFORMING CROPS.  During 2001, management
decided to remove approximately 40 acres of citrus at the Cadiz
ranch and Sun World removed approximately 700 acres of wine
grapes, citrus, and stonefruit.  We recorded a charge of $0.7
million in connection with the removal of these crops.  In
December 2000, we recorded a $1.5 million charge to remove
certain underperforming crops, primarily 600 acres of wine grapes
and stonefruit.

     DEPRECIATION AND AMORTIZATION.  Depreciation and
amortization expenses for the year ended December 31, 2001
totaled $8.2 million compared to $8.4 million for the year ended
December 31, 2000. The decrease is primarily attributable to
certain assets being sold or removed in 2001 and other assets
becoming fully depreciated.

     INTEREST EXPENSE.  Net interest expense totaled $19.6 million
during the year ended December 31, 2001 compared to $19.2 million
during the year ended December 31, 2000.  The following table
summarizes the components of net interest expense for the two
periods (in thousands):
                                                     Year Ended
                                                     December 31,
                                                  2001        2000
                                                  ----        ----

     Interest on outstanding debt - Sun World  $ 14,574    $ 14,546
     Interest on outstanding debt - Cadiz         1,347       2,319
     Amortization of financing costs              3,748       2,546
     Interest income                               (118)       (223)
                                               --------    --------

                                               $ 19,551    $ 19,188
                                               ========    ========

     The increase in interest on outstanding debt during 2001 is
primarily due to (a) increased average borrowings under Sun
World's revolving credit facility; (b) increased interest and
financing costs related to the debt added by Sun World in
December 2000, and (c) amortization of warrants issued for the
extension of Cadiz' revolving credit facility and term loan
facility, which total increase is partially offset by the savings
from lower prime and LIBOR interest rates on our variable rate
debt.  Financing costs, which include legal fees, loan fees and
warrants, are amortized over the life of the debt agreement.

                             Page 20

(b)  YEAR ENDED DECEMBER 31, 2000 COMPARED TO THE YEAR ENDED
     DECEMBER 31, 1999
     -------------------------------------------------------

     The table below sets forth, for the periods indicated, the
results of operations for Sun World's four main divisions (before
elimination of any interdivisional charges), as well as the
categories of costs and expenses incurred which are not included
within the divisional results (in thousands):

                                                Year Ended
                                                December 31,
                                             2000        1999
                                             ----        ----
     Divisional net income
       Farming                             $  2,791   $  14,542
       Packing                                7,193       7,656
       Marketing                              3,868       4,573
       Proprietary product development        4,331       3,187
                                           --------   ---------

                                             18,183      29,958

     General and administrative              10,939      10,913
     Special litigation                         424         937
     Removal of underperforming crops         1,549           -
     Depreciation and amortization            8,381       8,891
     Interest expense, net                   19,188      17,811
     Income tax expense                         160           -
                                           --------   ---------

     Net loss                              $(22,458) $   (8,594)
                                           ========  ==========

     FARMING OPERATIONS.  Net income from farming operations
totaled $2.8 million for 2000 compared to $14.5 million in 1999.
Farming revenues were $86.4 million and farming expenses were
$83.6 million for 2000.  For 1999, we had farming revenues of
$94.9 million and farming expenses of $80.4 million. The decrease
in farming results in 2000 compared to 1999 were primarily due to
decreased prices on table grapes, wine grapes, stonefruit and
citrus due to an oversupply of products in the industry.  Average
F.O.B. prices for 2000 were down 13%. The increase in farming
expenses is primarily due to costs to grow and harvest citrus in
the San Joaquin Valley in 2000 that were not incurred in 1999 due
to the December 1998 freeze.  Sun World's proprietary table grape
and stonefruit products have allowed Sun World to continue to
command a price premium to the overall market that helped offset
some of the losses incurred from its commodity products.

     PACKING OPERATIONS.  Sun World's packing and handling
facilities contributed $7.2 million in profit during 2000
compared to $7.7 million in 1999.  We packed 3.6 million units
and moved an additional 5.0 million units through the cold
storage facilities for a total of 8.6 million units processed
through the packing operations in 2000 compared to the same total
of 8.6 million units in 1999.  Packing results were negatively
impacted by a significant increase in corrugated box costs and
temporary use of third party storage facilities during July 2000
due to capacity constraints.  Units packed and handled during
2000 primarily consisted of Sun World-grown table grapes,
stonefruit, citrus, peppers and seedless watermelons as well as
table grapes, citrus and stonefruit products packed for third
party growers.  Packing and handling revenue for these operations
of $21.9 million was offset by $14.7 million of expenses for
2000.  Revenues totaled $20.5 million offset by expenses of $12.8
million for 1999.

     MARKETING OPERATIONS.  Sun World's marketing operations
include selling, merchandising and promoting Sun World-grown
products, as well as providing these services for third party
growers.  During 2000, a total of 11.5 million units were sold
consisting primarily of Sun World-grown table grapes, stonefruit,
citrus, peppers and watermelons as well as table

                             Page 21

grapes, watermelons, citrus and stonefruit from domestic
third party growers.  These unit sales resulted in marketing
revenue of $8.6 million.  Marketing expenses totaled $4.7 million
for 2000 resulting in net income from marketing operations of $3.9
million.  During 1999, 11.1 million units were sold resulting in
revenues of $9.4 million offset by expenses of $4.8 million for
net income of $4.6 million.  The increase in units sold is
primarily due to increased units of Sun World-grown plums and
stonefruit marketed for third parties.  Average commissions for
2000 were down 12% from average commissions in 1999 due to the
lower F.O.B. prices noted above.

     PROPRIETARY PRODUCT DEVELOPMENT.  Sun World has a long
history of product innovation, and its research and development
center maintains a fruit breeding program that has introduced
dozens of proprietary fruit varieties including twelve new
varieties for which plant patents were applied for in 2000.
During 2000, net income from proprietary product development
totaled $4.3 million consisting of revenues of $6.0 million
offset by expenses of $1.7 million.  For 1999, net income from
proprietary product development was $3.2 million consisting of
revenues of $4.6 million offset by expenses of $1.4 million.  The
increase in revenues resulted from international royalties
primarily related to our licensing agreements for Sugraone table
grapes and consulting income from KADCO.

     GENERAL AND ADMINISTRATIVE EXPENSES.  General and
administrative expenses totaled $10.9 million for both 2000 and
1999.

     SPECIAL LITIGATION.  We were engaged in lawsuits seeking
monetary damages in connection with the prevention of a landfill
which was proposed to be located adjacent to our Cadiz/Fenner
Valley properties.  In March 2001, we entered into a settlement
agreement with Waste Management related to these lawsuits.
During the year ended December 31, 2000, expenses including
litigation costs and professional fees totaled $0.4 million as
compared to $0.9 million during the year ended December 31, 1999.

     REMOVAL OF UNDERPERFORMING CROPS.  In December 2000, we
accrued costs to remove certain underperforming crops, primarily
600 acres of wine grapes and stonefruit.  We recorded a charge of
$1.5 million in connection with these removals.

     DEPRECIATION AND AMORTIZATION.  Depreciation and
amortization expenses for the year ended December 31, 2000
totaled $8.4 million compared to $8.9 million for the year ended
December 31, 1999. The decrease is primarily attributable to
certain assets being sold or removed and other assets becoming
fully depreciated.

     INTEREST EXPENSE. Net interest expense totaled $19.2 million
during the year ended December 31, 2000 compared to $17.8 million
during the year ended December 31, 1999.  The following table
summarizes the components of net interest expense for the two
periods (in thousands):
                                                  Year Ended
                                                  December 31,
                                                 2000      1999
                                                 ----      ----

     Interest on outstanding debt - Sun World  $14,546    $14,204
     Interest on outstanding debt - Cadiz        2,319      1,785
     Amortization of financing costs             2,546      2,176
     Interest income                             (223)      (354)
                                               --------  --------

                                               $19,188    $17,811
                                               =======    =======

                             Page 22

     The increase in interest on outstanding debt during 2000 is
primarily due to (a) increased borrowings on Sun World's
revolving credit facility to meet seasonal working capital needs
and (b) amortization of warrants issued for the extension of
Cadiz' revolving credit facility and term loan facility.
Financing costs, which include legal fees, loan fees and
warrants, are amortized over the life of the debt agreement.

LIQUIDITY AND CAPITAL RESOURCES

(a)  Current Financing Arrangements
     ------------------------------

     CADIZ OBLIGATIONS.  As Cadiz has not received significant
revenues from our water resource activity to date, Cadiz has been
required to obtain financing to bridge the gap between the time
water resource development expenses are incurred and the time
that revenue will commence.  Historically, Cadiz has addressed
these needs primarily through secured debt financing arrangements
with our lenders, private equity placements and the exercise of
outstanding stock options.

     As of December 31, 2001, we were obligated for approximately
$10.1 million under a senior term loan facility and $15 million
under a $15 million revolving credit facility with the same
lender.  In the first quarter of 2002, we completed an extension
of both facilities to a maturity date of January 31, 2003 and
increased Cadiz' revolving credit facility to $25 million.  $10
million of Cadiz' revolving credit facility is convertible into
1,250,000 shares of our stock any time prior to January 2003 at
the election of the lender.  Currently, the lender holds a senior
deed of trust on substantially all of our non-Sun World assets
under the term loan facility and a second lien on our non-Sun
World assets under Cadiz' revolving credit facility.  We have
historically structured our financing arrangement with the lender
with a view toward effective implementation of the Cadiz Program.
While we currently anticipate repayment of these facilities with
monies to be received under the Cadiz Program, we may, if we deem
appropriate, replace or renegotiate the terms of these facilities
to accommodate other developments such as delays in the timetable
for regulatory approvals or litigation related to regulatory
approvals of the Cadiz Program.  We retain the right to maintain
$25.5 million of senior debt secured by the Cadiz Program area
lands pursuant to the definitive economic terms for the Cadiz
Program agreed with Metropolitan, as described under "Outlook"
below.

     In December 2000, we issued $5 million of Series D
Convertible Preferred Stock.  The stock is convertible into
625,000 shares of our common stock any time prior to July 2004 at
the election of the holder. We also have the right to convert the
preferred stock, but only when the closing price of our common
stock has exceeded $12 per share for 30 consecutive trading days.
The preferred stock will be redeemed in July 2004 if it is still
outstanding.

     In October and November 2001, we issued an aggregate of $7.5
million of Series E-1 and E-2 Convertible Preferred Stock in
$3.75 million issuances respectively.  The Series E-1 and E-2
preferred stock is convertible into an aggregate of 1,000,000
shares of our common stock at any time prior to July 2004 at the
election of the holder.  We also have the right to convert the
Series E-1 and E-2 preferred stock, but only when the closing
price of our common stock has exceeded $10.50 per share for 30
consecutive trading days.  The preferred stock will be redeemed
in July 2004 if still outstanding.

     As we continue to actively pursue our business strategy,
additional financing specifically in connection with our water
programs will be required.  Responsibility for funding the
design, construction and program implementation costs of the
capital facilities for the Cadiz Program will, under currently
developed principles and terms, be shared equally by Cadiz and

                             Page 23

Metropolitan.  We plan to use monies to be received from Metropolitan
for its initial payment for 600,000 acre-feet of groundwater
storage as well as long-term financing arrangements currently
under negotiation, to fund Cadiz' share of the estimated $150
million cost of the program capital facilities.

     SUN WORLD OBLIGATIONS.  Under Sun World's historical working
capital cycle, working capital is required primarily to finance
the costs of growing and harvesting crops, which generally occur
from January through September with a peak need in June.  Sun
World harvests and sells the majority of its crops during the
period from June through October, when it receives the majority
of its revenues.  In order to bridge the gap between incurrence
of expenditures and receipt of revenues, large cash outlays are
required each year which are financed through a $30 million
revolving credit agreement guaranteed by Cadiz.

     In November 2001, Sun World renewed its revolving credit
facility through the 2002 growing season with a maturity date of
November 2002.  Amounts eligible to be borrowed under the
revolving credit facility are based upon a borrowing base of
eligible accounts receivable and inventory balances.  Maximum
availability under the revolving credit facility varies
throughout the year with a maximum of $30 million available
during the peak borrowing periods of April to July.  The
revolving credit facility is secured by accounts receivable,
inventory, and the proceeds thereof, requires Sun World to meet
certain financial covenants, and is guaranteed by Cadiz.  Amounts
borrowed under the facility will accrue interest at either prime
plus 1.0% or LIBOR plus 2.50% at our election.  No amounts were
outstanding under the revolving credit facility at December 31,
2001.

     In addition, Sun World has outstanding $115 million of First
Mortgage Notes which will mature on April 15, 2004 and are
publicly traded and registered under the Securities Act of 1933.
The Sun World notes became redeemable at the option of Sun World,
in whole or in part, at any time on or after April 15, 2001.
Interest accrues at the rate of 11-1/4%per annum and is payable
semi-annually on April 15th and October 15th of each year. The
Sun World notes are secured by a first lien (subject to certain
permitted liens) on substantially all of the assets of Sun World
and its subsidiaries, other than growing crops, crop inventories
and accounts receivable and proceeds thereof, which secure Sun
World's revolving credit facility, and certain real property
pledged to third parties.  The Sun World notes are also secured
by the guarantee of Cadiz and the pledge by Cadiz of all of the
stock of Sun World.  The Sun World notes include covenants that
do not allow for the payment of dividends by us or by Sun World
other than out of cumulative net income.

     CASH USED FOR OPERATING ACTIVITIES.  Cash used for operating
activities totaled $4.3 million for the year ended December 31,
2001, as compared to cash used for operating activities of $9.1
million for the year ended December 31, 2000. The decrease in
cash used for operating activities is primarily due to the $6
million of cash received as part of the special litigation
recovery in 2001 coupled with higher accounts payable balances at
December 31, 2001.

     CASH USED FOR INVESTING ACTIVITIES.  Cash used for investing
activities totaled $5.5 million for the year ended December 31,
2001, as compared to $2.7 million for the same period in 2000.
The increase is cash used was primarily due to reduced sales of
property, plant and equipment, and the non reoccurrence of a $1.6
million final partnership distribution in 2000, partially offset
by decreased expenditures for developing crops.

                             Page 24

     CASH PROVIDED BY FINANCING ACTIVITIES.  Cash provided by
financing activities totaled $7.9 million for the year ended
December 31, 2001 as compared to $10.6 million for the same
period in 2000.  Cadiz issued $7.5 million of preferred stock in
2001 compared to $5.0 million in 2000.  Net proceeds from stock
options exercised totaled $1.6 million in 2001 compared to $1.0
million in 2000 and principal payments on long-term debt totaled
$1.6 million in 2001 compared to $0.7 million in 2000.  In
addition, Sun World issued $5.2 million of long-term debt in
2000.

(b)  Outlook
     -------

     We are actively pursuing the development of our water
resources.  Specifically, in April 2001, Cadiz and Metropolitan
approved definitive economic terms and responsibilities for a 50-
year agreement for the Cadiz Program.  Under the Cadiz Program,
Metropolitan will, during wet years or periods of excess supply,
store surplus water from the Colorado River Aqueduct in the
groundwater basin underlying our property.  During dry years or
times of reduced allocations from the Colorado River, the
previously imported water, together with additional existing
groundwater, will be extracted and delivered, via a conveyance
pipeline, back to the aqueduct.  The definitive terms will serve
as the basis for a final agreement to be executed between
Metropolitan and Cadiz.  Execution of this final agreement will
be subject to completion of the ongoing environmental review
process for the Cadiz Program.

     Key provisions of the approved definitive terms for the
Cadiz Program are as follows:

     * Over the 50-year term of the agreement, Metropolitan will
       store a minimum of 900,000 acre-feet of Colorado River
       Aqueduct water in our groundwater basin and purchase up
       to a minimum of 1,500,000 acre-feet of existing
       groundwater for transfer during dry years.  The Cadiz
       Program will have the capacity to convey, either for
       storage or transfer, up to approximately 150,000 acre-
       feet in any given year.

     * During storage operations, Metropolitan will pay $50 per
       acre-foot for put of Colorado River water into storage
       and $40 per acre-foot for return of Colorado River water
       from storage, or a total of $90 per acre-foot to cycle
       water into and out of the basin.  These fees will be
       adjusted by the Consumer Price Index (CPI).

     * As outlined above, Metropolitan's total minimum
       commitment for storage is 900,000 acre-feet.
       Metropolitan will pay for the initial 600,000 acre-feet
       of put and take activity upon final contract execution
       and completion of the environmental review process ($54
       million before CPI adjustment).  Metropolitan will pay
       for an additional 300,000 acre-feet of put and take
       activity at the earlier of actual usage or 30,000 acre-
       foot annual increments during years 5-14 of Cadiz Program
       operations ($2,700,000 per year before CPI adjustment).

     * For transfer operations, Metropolitan shall purchase
       30,000 acre-feet per year of indigenous groundwater for
       25 years at a $230 per acre-foot transfer fee, subject to
       a fair market value adjustment as described below.  In
       addition, Cadiz may elect to either sell up to an
       additional 30,000 acre-feet per year of indigenous
       groundwater to third parties in Metropolitan's service
       area at fair market value, or require Metropolitan to
       purchase that amount of water at a fixed transfer fee of
       $230 per acre-foot.  Accordingly, Metropolitan's total
       potential minimum commitment for the life of the Cadiz
       Program will be 1,500,000 acre-feet of indigenous
       groundwater.  All transfers of indigenous groundwater,
       whether to Metropolitan or third parties, will be made in
       accordance with the terms and conditions of a Groundwater
       Monitoring and Management Plan.

	                             Page 25

     * The transfer fee will reflect a "fair market value"
       adjustment, which shall be determined up to once a year.
       The transfer fee will be adjusted by one-half of any
       increase or decrease in the fair market value, above or
       below the transfer fee currently in place ($230 per acre-
       foot initially).  Each increase or decrease in the
       transfer fee paid by Metropolitan may not exceed 15%.
       For example, if the fair market value at the first
       redetermination is $350 per acre-foot, then the adjusted
       transfer fee shall be $264 [the lesser of (a) $230 + 50%
       * ($350-$230) = $290 per acre-foot or (b) $230 * 15% =
       $264.50 per acre-foot].

     * Our right to sell to third parties within Metropolitan's
       service area includes scheduled access to Metropolitan's
       system at the rate charged by Metropolitan for conveying
       water through its aqueduct and pipeline system (the
       wheeling rate) charged for "as available capacity", plus
       power costs and any standard water stewardship fee that
       is uniformly charged to Metropolitan member agencies or
       third parties.  Depending on availability of system
       capacity, Metropolitan may elect to exchange other water
       for delivery to our customers and "bank" the water we
       have sold.

     * If indigenous water supplies are determined to exceed
       1,700,000 acre-feet, Metropolitan shall have the first
       right of refusal to purchase one-half of that excess
       yield.

     * Cadiz groundwater meets all existing federal and state
       water quality standards.  Metropolitan's Colorado River
       Aqueduct water meets all existing federal and state water
       quality standards.  Metropolitan shall be responsible to
       ensure, at its expense, that Colorado River Aqueduct
       water introduced into our groundwater basin shall, at a
       minimum, meet all existing and potential future federal
       and state water quality standards applicable to the
       Colorado River Aqueduct.  We shall be responsible to
       ensure, at our expense, that indigenous groundwater
       introduced into the Metropolitan delivery system shall at
       a minimum, meet all existing and potential future federal
       and state water quality standards.  If both indigenous
       groundwater and stored Colorado River water exceed any
       future federal or state water quality standard, then the
       parties will share compliance with the new standard based
       pro rata on the contribution to exceeding the standard.

     * The Cadiz Program facilities, including spreading basins,
       extraction wells, conveyance pipeline and a pumping plant
       are estimated to cost approximately $150 million, and
       both parties will equally share these costs.  Each party
       will be responsible for financing its portion of the
       capital costs.

     * Metropolitan will be responsible for operational costs of
       the Cadiz Program.  However, we will assume pro rata
       operational costs associated with the sale of indigenous
       groundwater to third parties.

     * We and Metropolitan shall share equally the capital costs
       required for mitigation at the outset of the Cadiz
       Program.  We shall assume the ongoing annual costs of
       operating the Groundwater Monitoring and Management Plan
       and of maintaining the right to withdraw water from the
       basin underlying the Cadiz Program area.

     Metropolitan and the U.S. Bureau of Land Management, in
cooperation with the U.S. Geological Survey and the National Park
Service, issued the Final Environmental Impact
Report/Environmental Impact Statement for the Cadiz Program in
October 2001.  Issuance of

                             Page 26

the environmental report is a significant milestone in the
environmental review process as it represents the last step prior
to final actions from the U.S. Bureau of Land Management and
Metropolitan.  We anticipate final actions related to the
environmental review process to be completed by the end of the
second quarter of 2002 after which construction of the Cadiz
Program facilities may commence.

     In addition to the development of our water resources, we
are actively involved in further agricultural development and
reinvestment in our landholdings.  Such development will be
systematic and in furtherance of our business strategy to provide
for maximization of the value of our assets.  We also continually
evaluate acquisition opportunities that are complimentary to our
current portfolio of water and agricultural resources.

     In January 2002, we announced an agreement in principle with
KADCO to combine the businesses of Sun World and KADCO.
Following the proposed combination, KADCO's shareholders will
have a 49.75% interest in the combined business, and Cadiz will
retain an ownership interest of 50.25%.  Prior to the proposed
combination, KADCO expects to have cash resources in excess of
$80 million.

     We intend to use the cash resources of the combined business
both to recapitalize Sun World and to provide for future business
expansion.  The agreement in principle contemplates that, in the
future, KADCO shareholders will have an opportunity to make an
additional equity investment in the combined business.  Should
KADCO shareholders make this additional investment, we may choose
to maintain a majority percentage ownership in the combined
business through a proportionate matching investment.  We believe
that additional investment will help position the combined
business for its planned future transformation into a publicly-
traded company.  The proposed combination is subject to the
negotiations of definitive agreements and a number of other
important conditions.  See "Certain Trends and Uncertainties -
Proposed Combination of Sun World with KADCO" below.

     Historically, Sun World has serviced its indebtedness and
met its seasonal working capital needs using available internal
cash, its revolving credit facility and through an intercompany
revolver with Cadiz.  Cadiz has met its ordinary working capital
needs through a combination of available internal cash, quarterly
management fee payments from Sun World, payments from Sun World
under an agricultural lease whereby Sun World now operates Cadiz'
1,600 acres of developed agricultural property at Cadiz,
California, Cadiz' revolving credit facility, the exercise of
outstanding stock options, and equity placements. Except for the
foregoing, additional intercompany cash payments between Sun
World and Cadiz are subject to certain restrictions under their
current lending arrangements.

     We may require additional cash beyond the amounts described
in this section although we are not looking to raise additional
working capital at this time.  We may meet any such future
requirements through a variety of means to be determined at the
appropriate time.  Such means may include equity or debt
placements, or the sale or other disposition of assets.  Equity
placements would be undertaken only to the extent necessary so as
to minimize the dilutive effect of any such placements upon our
existing stockholders.

(c)  Certain Trends and Uncertainties
     --------------------------------

     In connection with the "safe harbor" provisions of the
Private Securities Litigation Reform Act of 1995, we are filing
cautionary statements identifying important risk factors that
could cause our actual results to differ materially from those
projected in our forward-looking statements made by or on our
behalf.

                             Page 27

     We wish to caution readers that these factors, among others,
could cause our actual results to differ materially from those
expressed in any projected, estimated or forward-looking
statements relating to us.  The following factors should be
considered in conjunction with any discussion of operations or
results by us or our representatives, including any forward-
looking discussion, as well as comments contained in press
releases, presentations to securities analysts or investors, or
other communications by us.

     In making these statements, we are not undertaking to
address or update each factor in future filings or communications
regarding our business or results, and are not undertaking to
address how any of these factors may have caused changes to
discussions or information contained in previous filings or
communications.  In addition, certain of these matters may have
affected our past results and may affect future results.

     RISKS INHERENT IN AGRICULTURAL OPERATIONS.  We are subject
to risks associated with our agricultural operations.  Numerous
factors can affect the price, yield and marketability of the
crops grown on our properties.  Crop prices may vary greatly from
year to year as a result of the relationship between production
and market demand.  For example, the production of a particular
crop in excess of demand in any particular year will depress
market prices, and inflationary factors and other unforeseeable
economic changes may also, at the same time, increase operating
costs with respect to such crops.  In addition, the agricultural
industry in the United States is highly competitive, and domestic
growers and produce marketers are facing increased competition
from abroad, particularly from Mexico.  There are also a number
of factors outside of our control that could, alone or in
combination, materially adversely affect our agricultural
operations, such as adverse weather conditions, insects, blight
or other diseases, labor problems such as boycotts or strikes and
shortages of competent laborers.  Our operations may also be
adversely affected by changes in governmental policies including
food safety and environmental regulations, social and economic
conditions, and industry production levels.

     PROPOSED COMBINATION OF SUN WORLD WITH KADCO.  The proposed
combination of Sun World with KADCO may not occur in the second
quarter of 2002, or at all, if various conditions are not met.
These conditions include final negotiation and execution of
definitive agreements and a number of other conditions such as
obtaining consents of governmental authorities and third parties
with whom we have contracts, including lenders, completing a "due
diligence" review of the other's operations, and KADCO obtaining
additional equity financing in order to complete the transaction.

     RISKS OF WATER DEVELOPMENT PROJECTS.   We anticipate that we
will continue to incur operating losses from our non-Sun World
operations until such time as we are able to receive significant
revenues from the development of our water development projects,
including the Cadiz Program.  In addition to the risks associated
with receiving all necessary regulatory approvals and permits
with respect to our water development projects, including
litigation by environmental or other groups which may delay or
even prevent implementation of the Cadiz Program, we may also
encounter unforeseen technical difficulties, which could result in
construction delays, and cost increases or determination that
a project is not feasible.  We are continuing to negotiate the
terms and conditions of water storage and supply programs with
various California water agencies (including Metropolitan with
respect to preparing the final agreement for the Cadiz Program).
However, the outcome of these negotiations cannot be predicted
with any degree of certainty.  The circumstances under which
transfers or storage of water can be made and the profitability
of any transfers or storage are subject to significant
uncertainties, including hydrologic risks of variable water
supplies, risks presented by allocations of water under existing
and prospective priorities, and risks of adverse changes to or

                             Page 28

interpretations of U.S. federal, state and local laws,
regulations and policies.

     RISKS OF NOT BEING ABLE TO PAY DIVIDENDS.  We are restricted
by contract from paying dividends and we do not intend to pay
dividends in the foreseeable future.  As a result, any return on
investment on our common stock will depend primarily upon
appreciation in the price of the common stock.  To date, we have
never paid a cash dividend on our common stock.  The ability to
receive distributions from Sun World's cash flow and to pay
dividends in turn to stockholders is restricted by a series of
covenants in the indenture governing the Sun World notes.  These
covenants do not allow for the payment of dividends by us or by
Sun World other than out of cumulative net income.  Similar
restrictions are contained in the loan documents governing Sun
World's secured $30 million revolving credit facility, Sun
World's $5 million unsecured term loan and Cadiz' $25 million
revolving credit facility.  As we have a history of operating
losses, we have been unable to date to pay dividends.

     Other important risk factors that could cause our actual
results to differ materially from those expressed or implied by
or on our behalf are discussed elsewhere within this Form 10-K in
the sections entitled: "Outlook", "Seasonality", "Regulation",
"Competition" and "Liquidity and Capital Resources".

(d)  Critical Accounting Policies
     ----------------------------

     As discussed in Note 2 to the Consolidated Financial
Statements of Cadiz, the preparation of financial statements in
conformity with accounting principles generally accepted in the
United States requires management to make estimates and
assumptions in certain circumstances that affect amounts reported
in the accompanying consolidated financial statements and related
footnotes. In preparing these financial statements, management
has made its best estimates and judgments of certain amounts
included in the financial statements based on all relevant
information available at the time and giving due consideration to
materiality.  We do not believe there is a great likelihood that
materially different amounts would be reported related to the
accounting policies described below.  However, application of
these policies involves the exercise of judgment and use of
assumptions as to future uncertainties and, as a result, actual
results could differ from these estimates.  Management has
concluded that the following critical accounting policies
described below affect the most significant judgments and
estimates used in the preparation of the consolidated financial
statements.

     REVENUE RECOGNITION.  To date we have not had significant
revenue earned from our water development programs.  As such,
virtually all of our revenue has come from Sun World's
agricultural operations.  The Securities and Exchange
Commission's Staff Accounting Bulletin (SAB) No. 101, "Revenue
Recognition" provides guidance on the application of generally
accepted accounting principles to selected revenue recognition
issues.  Sun World's revenues consist primarily of sales of fresh
fruits and vegetables to large domestic national and regional
supermarket chain stores and produce brokers, sales of juice to
wineries and juice cooperatives, sales of raisins to processors,
packing and marketing for third party growers,
international licensing, project development and management
services, and other miscellaneous receivables.  Revenue is
recognized when product has been shipped and risk of loss has
been transferred to the customer and collection of the resulting
receivable is reasonably assured.  Packing revenues and marketing
commissions from third party growers are recognized when the
related services are provided.  For licensing, revenue is recognized
when the licensee's product has been sold.  Project development and
management fees are recorded when earned under the terms of the
related agreement.  At the time revenue is recognized, we provide
for costs associated with any estimated returns or allowances
which occur in the produce industry given the perishable nature
of Sun World's products.  We have

                             Page 29

concluded that our revenue recognition policy is appropriate
and in accordance with generally accepted accounting principles
and SAB No. 101.

     INVENTORIES AND RELATED ALLOWANCE FOR OBSOLETE AND EXCESS
INVENTORY.  Inventories are valued at the lower of cost or
market.  Management estimates what market conditions will be for
produce based on the age, size, quality and overall market for
fresh product held in inventory at the end of each reporting
period.  When future market conditions indicate that the cost of
the inventory plus any additional selling expenses exceed the
expected net revenues to be received, we provide a reserve for
the amount of estimated costs in excess of estimated net
revenues.  Management also regularly conducts a review of non-
product inventory that consists primarily of corrugated boxes,
chemicals and seed.  Appropriate allowances are made based on
management's review for all excess and obsolete inventory
compared to estimated future usage and sales.

     GOODWILL, INTANGIBLE AND OTHER LONG-LIVED ASSETS.  Property,
plant and equipment, goodwill, intangible and certain other long-
lived assets are amortized over their useful lives.  Useful lives
are based on management's estimates of the period that the assets
will generate revenue.  Long-lived assets are reviewed for
impairment whenever events or changes in circumstances indicate
that the carrying amount of an asset may not be recoverable.  At
Sun World, management regularly reviews crop portfolios in an
attempt to identify crops that are underperforming generally at
the conclusion of each growing season.   As a result of these
reviews, management determines which crops will be removed
immediately or at the conclusion of the next growing season.  As
such, appropriate writedowns and accruals for estimated removal
costs are made and where appropriate, remaining useful lives are
shortened to correspond to the estimated period that the assets
will are expected to generate future revenues.

     DEFERRED TAX ASSETS AND VALUATION ALLOWANCES.  To date, we
have had a history of net operating losses as we have not
generated significant revenue from our water development programs
and Sun World has experienced losses from its agricultural
operations.  As such, we have generated significant deferred tax
assets, including large net operating loss carry forwards for
federal and state income taxes for which we have a full valuation
allowance.  Management is currently working on initiatives at
Cadiz and Sun World that are designed to generate future taxable
income, although there can be no guarantee that this will occur.
As taxable income is generated, some portion or all of the
valuation allowance will be reversed and an increase in net
income would consequently be reported in future years.

(e)  New Accounting Pronouncements
     -----------------------------

     See Footnote 2, Summary of Significant Accounting Policies,
to Cadiz Inc. Financial Statements.


ITEM 7A.   Quantitative and Qualitative Disclosures about Market
           Risk

     We are exposed to market risk from changes in interest rates
on long-term debt obligations that impact the fair value of these
obligations.  Our policy is to manage interest rates through the
use of a combination of fixed and variable rate debt.  Our
interest rate risk management objective is to limit the impact of
interest rate changes on earnings and cash flows and to lower our
overall borrowing costs.  Other instruments, such as interest
rate swaps, options, floors, caps or collars may also be used
depending upon market conditions.  No such instruments were used
in 2001.

                             Page 30

     The table below presents the principal amounts, weighted-
average interests rates, and fair values by year of scheduled
maturities to evaluate the expected cash flows and sensitivity to
interest rate changes (in thousands of dollars).  Circumstances
could arise which may cause interest rates and the timing and
amount of actual cash flows to differ materially from the
schedule below:

                                  Long-Term Debt
             -------------------------------------------------
                                         Variable     Average
 Expected    Fixed Rate     Average         Rate      Interest
 Maturity    Maturities  Interest Rate   Maturities     Rate
------------ ----------  -------------   ----------     -----

  2002       $      476       7.7%       $   5,286       4.9%
  2003              394       7.8%          25,951       4.0%
  2004          115,419      11.2%               -         -
  2005               23       8.8%               -         -
  2006                5      10.2%               -         -

  Total      $  116,317      11.2%       $  31,237       4.1%
             ==========     ======       =========      =====

  Fair
   Value
   at
   12/31/01  $  107,417                  $  31,237
             ==========                  =========

ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

      The information required by this item is submitted in
response to Part IV below.  See the Index to Consolidated
Financial Statements.


ITEM 9.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
          ACCOUNTING AND FINANCIAL DISCLOSURE

       Not applicable.

                            PART III

ITEM 10.    DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

       The information called for by this item is incorporated
herein by reference to the definitive proxy statement involving
the election of directors which we intend to file with the SEC
pursuant to Regulation 14A under the Securities and Exchange Act
of 1934 not later than 120 days after December 31, 2001.


ITEM 11.  EXECUTIVE COMPENSATION

       The information called for by this item is incorporated
herein by reference to the definitive proxy statement involving
the election of directors which we intend to file with the SEC
pursuant to Regulation 14A under the Securities and Exchange Act
of 1934 not later than 120 days after December 31, 2001.

                             Page 31

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT

       The information called for by this item is incorporated
herein by reference to the definitive proxy statement involving
the election of directors which we intend to file with the SEC
pursuant to Regulation 14A under the Securities and Exchange Act
of 1934 not later than 120 days after December 31, 2001.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

       The information called for by this item is incorporated
herein by reference to the definitive proxy statement involving
the election of directors which we intend to file with the
Commission pursuant to Regulation 14A under the Securities and
Exchange Act of 1934 not later than 120 days after December 31,
2001.

                             PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
          FORM 8-K

       (a) 1.  Financial Statements.  See Index to Consolidated
               Financial Statements.

           2.  Financial Statement Schedules.  See Index to
               Consolidated Financial Statements.

           3.   Exhibits.

     The following exhibits are filed or incorporated by
reference as part of this Form 10-K.

       3.1  Cadiz Certificate of Incorporation, as amended(1)

       3.2  Amendment to Cadiz Certificate of Incorporation dated
            November 12, 1996(2)

       3.3  Amendment to Cadiz Certificate of Incorporation
            dated September 1, 1998(3)

       3.4  Cadiz Bylaws, as amended(4)

       3.5  Cadiz Certificate of Designations of Series A Junior
            Participating Preferred Stock(5)

       3.6  Cadiz Certificate of Designations of Series D Convertible
            Preferred Stock dated December 28, 2000(6)

       3.7  Cadiz Certificate of Correction Filed to Correct the
            Certificate of Designations of Series D Preferred
            Stock of Cadiz Inc. dated December 28, 2000(6)

       3.8  Cadiz Certificate of Designations of Series E-1
            Convertible Preferred Stock dated October 22, 2001(7)

       3.9  Cadiz Certificate of Designations of Series E-2 Convertible
            Preferred Stock dated November 28, 2001(8)

                             Page 32

       4.1  Specimen Form of Stock Certificate for Cadiz registered stock(3)

       4.2  Indenture, dated as of April 16, 1997 among Sun World as
            issuer, Sun World and certain subsidiaries of Sun World
            as guarantors, and IBJ Whitehall Bank & Trust Company as
            trustee, for the benefit of holders of 11-1/4%First
            Mortgage Notes due 2004 (including as Exhibit A to the
            Indenture, the form of the Global Note and the form of
            each Guarantee)(9)

       4.3  Amendment to Indenture dated as of October 9, 1997(10)

       4.4  Amendment to Indenture dated as of January 23, 1998(11)

      10.1  Cadiz' 1996 Stock Option Plan(4)

      10.2  Amendment to Cadiz' 1996 Stock Option Plan

      10.3  Cadiz' Amended and Restated 1998 Non-Qualified Stock
            Option Plan

      10.4  Cadiz 2000 Stock Award Plan(12)

      10.5  Employment Agreement between Cadiz and Keith Brackpool
            dated February 1, 1998(11)

      10.6  Employment Agreement dated September 13, 1996
            between Sun World, Cadiz and Timothy J. Shaheen(13)

      10.7  Employment Agreement dated September 13, 1996
             between Sun World, Cadiz and Stanley E. Speer(13)

      10.8  Form of Sun World Executive Officer Employment
            Agreement(14)

      10.9  Fifth Amended and Restated Credit Agreement,
            dated as of March 7, 2002, by and between Cadiz and
            ING Baring (U.S.) Capital LLC

      10.10 Revolving Credit Note, dated as of November 25, 1997,
            by and between Cadiz and ING Baring (U.S.) Capital
            Corporation (11)

      10.11 The Cadiz Groundwater Storage and Dry-Year Supply Program
            Definitive Economic Terms and Responsibilities between
		Metropolitan Water District of Southern California and
            Cadiz dated March 6, 2001

      21.1  Subsidiaries of the Registrant

      23.1  Consent of Independent Accountants
----------------------

           (1) Previously filed as an Exhibit to our Registration
               Statement of Form S-1 (Registration No. 33-75642)
               declared effective May 16, 1994 filed on February
               23, 1994

          (2)  Previously filed as an Exhibit to our Report on
               Form 10-Q for the quarter ended September 30, 1996
               filed on  November 13, 1996

                             Page 33

          (3)  Previously filed as an Exhibit to our Quarterly
               Report on Form 10-Q for the quarter ended
               September 30, 1998 filed on November 13, 1998

          (4)  Previously filed as an Exhibit to our Quarterly
               Report on Form 10-Q for the quarter ended June 30,
               1999 filed on August 13, 1999

          (5)  Previously filed as an Exhibit to our Report on
               Form 8-K dated May 10, 1999 filed on May 18, 1999

          (6)  Previously filed as an Exhibit to our Report on
               Form 8-K dated December 29, 2000 filed on January
               3, 2001

          (7)  Previously filed as an Exhibit to our Quarterly
               Report on Form 10-Q for the quarter ended
               September 30, 2001 filed on November 14, 2001

          (8)  Previously filed as an Exhibit to our Registration
               Statement on Form S-3 (Registration Statement No.
               333-75006 filed on December 13, 2001

          (9)  Previously filed as an Exhibit to Amendment No. 1
               to our Form S-1 Registration Statement No. 333-
               19109 filed on April 29, 1997

          (10) Previously filed as an Exhibit to Amendment No. 2
               to Sun World's Form S-4 Registration Statement No.
               333-31103 filed on October 10, 1997

          (11) Previously filed as an Exhibit to our Annual
               Report on Form 10-K for the fiscal year ended
               December 31, 1997 filed on March 26, 1998

          (12) Previously filed as Appendix A to our Proxy
               Statement dated April 5, 2000, filed on March 29,
               2000

          (13) Previously filed as an Exhibit to our Transition
               Report on Form 10-K for the nine months ended
               December 31, 1996 filed on April 14, 1997

          (14) Previously filed as an Exhibit to our
               Quarterly Report on Form 10-Q for the quarter
               ended March 31, 1997 filed on May 14, 1997

     (b)  Reports on Form 8-K

          1.   Report on Form 8-K filed October 26, 2001
               describing our issuance of an aggregate of
               $7,500,000 in newly authorized Series E-1 and E-2
               Convertible Preferred Stock.

          2.   Report on Form 8-K filed January 18, 2002
               reporting that Cadiz had reached an agreement in
               principle with Kingdom Agricultural Development
               Company (KADCO), to combine the businesses of Sun
               World International, Inc. and KADCO.

          3.   Report on Form 8-K filed March 13, 2002 reporting
               that Cadiz and ING Baring (U.S.) Capital LLC had
               amended the terms of their revolving credit and
               senior term facilities to extend the maturity
               dates to January 31, 2003 and to increase the
               revolving credit facility from $15 million to $25
               million.

                             Page 34

                           SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereto duly authorized.

CADIZ INC.

By:  /s/  Keith Brackpool             By:  /s/  Stanley E. Speer
    -------------------------------       -----------------------
   Keith Brackpool,                       Stanley E. Speer,
   Chairman and Chief Executive Officer   Chief Financial Officer

   Date:  March 27, 2002               Date:  March 27, 2002

Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed by the following persons in the
capacities and on the dates indicated.

     Name and Position                      Date
-------------------------------             -------------------


/s/  Keith Brackpool                         March 27, 2002
--------------------------------
Keith Brackpool, Chairman and
Chief Executive Officer
(Principal Executive Officer)


/s/  Anthony L. Coelho                       March 27, 2002
----------------------------------
Anthony L. Coelho, Director


/s/  Murray H. Hutchison                     March 27, 2002
-----------------------------------
Murray H. Hutchison, Director


/s/  Dwight W. Makins                        March 27, 2002
------------------------------------
Dwight Makins, Director


/s/  Timothy J. Shaheen                      March 27, 2002
-------------------------------------
Timothy J. Shaheen, Director


/s/  Stanley E. Speer                        March 27, 2002
-----------------------------------------
Stanley E. Speer, Chief Financial Officer
(Principal Financial and
Accounting Officer)

                            Page 35

                  INDEX TO FINANCIAL STATEMENTS

                                                         Page

CADIZ INC. FINANCIAL STATEMENTS
-------------------------------

Report of Independent Accountants. . . . . . . . . . . . .40

Consolidated Statement of Operations for the
  three years ended December 31, 2001. . . . . . . . . . .41

Consolidated Balance Sheet as of
 December 31, 2001 and 2000. . . . . . . . . . . . . . . .42

Consolidated Statement of Cash Flows for the
  three years ended December 31, 2001. . . . . . . . . . .43

Consolidated Statement of Stockholders' Equity for
  the three years ended December 31, 2001. . . . . . . . .44

Notes to the Consolidated Financial Statements. . . . . . 45


CADIZ INC. FINANCIAL STATEMENT SCHEDULES
----------------------------------------

Schedule I - Condensed Financial Information of
  Registrant for the three years ended December 31, 2001..69

Schedule II - Valuation and Qualifying Accounts for the
  three years ended December 31, 2001. . . . . . . . . . .72


SUN WORLD INTERNATIONAL, INC. FINANCIAL STATEMENTS
--------------------------------------------------

Report of Independent Accountants. . . . . . . . . . . . .73

Consolidated Statement of Operations
  for the three years ended December 31, 2001. . . . . . .74

Consolidated Balance Sheet as of
  December 31, 2001 and 2000. . . . . . . . . . . . . . . 75

Consolidated Statement of Cash Flows for the
   three years ended December 31, 2001. . . . . . . . . . 76

Consolidated Statement of Stockholder's Equity
       for the three years ended December 31, 2001. . . . 77

Notes to the Consolidated Financial Statements. . . . . . 78

(Schedules other than those listed above have been omitted since
they are either not required, inapplicable, or the required
information is included on the financial statements or notes
thereto.)

                             Page 36

                REPORT OF INDEPENDENT ACCOUNTANTS


To the Board of Directors and Stockholders of Cadiz Inc.

     In our opinion, the accompanying consolidated balance sheet
and the related consolidated statements of operations, cash flows
and stockholders' equity present fairly, in all material
respects, the financial position of Cadiz Inc. and its
subsidiaries at December 31, 2001 and 2000, and the results of
their operations and their cash flows for each of the three years
in the period ended December 31, 2001 in conformity with
accounting principles generally accepted in the United States of
America.  In addition, in our opinion, the financial statement
schedules listed in the accompanying index present fairly, in all
material respects, the information set forth therein when read in
conjunction with the related consolidated financial statements.
These financial statements and financial statement schedules are
the responsibility of the Company's management; our
responsibility is to express an opinion on these financial
statements and financial statement schedules based on our audits.
We conducted our audits of these statements in accordance with
auditing standards generally accepted in the United States of
America, which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial
statements are free of material misstatement.  An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting
principles used and significant estimates made by management, and
evaluating the overall financial statement presentation.  We
believe that our audits provide a reasonable basis for our
opinion.


/s/  PricewaterhouseCoopers LLP
-------------------------------
PricewaterhouseCoopers LLP


Los Angeles, California
February 21, 2002, except as to
Note 9, which is as of March 8, 2002

                             Page 37

                           CADIZ INC.

              CONSOLIDATED STATEMENT OF OPERATIONS

                                        Year Ended December 31,
                                    ----------------------------
                                     2001       2000        1999
                                     ----       ----        ----
(In thousands, except per share data)

Revenues                          $  92,402   $ 107,745   $ 115,229
Special litigation recovery           7,929           -           -
                                  ---------   ---------    --------
 Total revenues and special
   litigation recovery              100,331     107,745     115,229
                                  ---------   ---------    --------

Costs and expenses:
 Cost of sales                       79,108      87,925      83,821
 General and administrative          12,913      12,576      12,363
 Non-recurring compensation expense   5,537           -           -
 Special litigation                       -         424         937
 Removal of underperforming crops       736       1,549           -
 Depreciation and amortization        8,151       8,381       8,891
                                  ---------   ---------    --------

 Total costs and expenses           106,445     110,855     106,012
                                  ---------   ---------    --------

Operating profit (loss)              (6,114)     (3,110)      9,217

Interest expense, net                19,551      19,188      17,811
                                  ---------   ---------    --------

Net loss before income taxes        (25,665)    (22,298)     (8,594)

Income tax expense                       57         160           -
                                  ---------   ---------    --------

Net loss                            (25,722)    (22,458)     (8,594)

Less:  Preferred stock dividends        591           -           -
       Imputed dividend on
        preferred stock                 441           -           -
                                  ---------   ---------    --------

Net loss applicable
  to common stock                $  (26,754)  $ (22,458)  $  (8,594)
                                 ==========   =========   =========

Basic and diluted net
  loss per share                 $     (.75)  $    (.64)  $    (.25)
                                 ==========   =========   =========

Weighted-average
  shares outstanding                 35,854      35,344      34,678
                                 ==========   =========   =========

See accompanying notes to the consolidated financial statements.

                             Page 38


                           CADIZ INC.

                   CONSOLIDATED BALANCE SHEET


                                                  December 31,
($ in thousands)                               2001         2000
                                               ----         ----

ASSETS

Current assets:
Cash and cash equivalents                   $   1,458   $   3,291
Accounts receivable, net                        6,327       7,884
Inventories                                    13,027      15,203
Prepaid expenses and other                        788         631
                                               -------    -------

  Total current assets                         21,600      27,009


Property, plant, equipment
  and water programs,  net                    165,297     164,824
Other assets                                   11,378      11,784
                                               -------    -------

                                            $ 198,275   $ 203,617
                                             ========    ========

LIABILITIES, REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY

Current liabilities:
 Accounts payable                           $  11,758   $   7,900
 Accrued liabilities                            5,680       5,815
 Bank overdraft                                   410           -
 Long-term debt, current portion                4,960         859
                                               -------    -------

  Total current liabilities                    22,808      14,574

Long-term debt                                 141,429    145,610
Deferred income taxes                           5,447       5,447
Other liabilities                                 930         313

Contingencies

Series D redeemable convertible
  preferred stock - $0.01 par value:
  5,000 shares authorized;
   shares issued and outstanding -
  5,000 at December 31, 2001 and
   December 31, 2000                            4,243       3,950

Series E-1 and E-2 redeemable
  convertible preferred stock -
  $0.01 par value:
  7,500 shares authorized; shares
    issued and outstanding -
  7,500 at December 31, 2001 and
    none at December 31, 2000                   5,715           -

Stockholders' equity:

 Common stock - $0.01 par value;
  70,000,000 shares
 authorized; shares issued
 and outstanding 36,070,834
 at December 31, 2001 and
 35,674,674 at
 December 31, 2000                                361         357

Additional paid-in capital                     152,404    142,706

Accumulated deficit                           (135,062)  (109,340)
                                               -------    -------

  Total stockholders' equity                    17,703     33,723
                                               -------    -------

                                             $ 198,275  $ 203,617
                                             =========   ========

See accompanying notes to the consolidated financial statements.

                             Page 39

                           CADIZ INC.

              CONSOLIDATED STATEMENT OF CASH FLOWS


                                         Year Ended December 31,
                                        -------------------------
($ in thousands)                        2001      2000       1999
                                        ----      ----       ----
Cash flows from
  operating activities:
 Net loss                            $ (25,722) $ (22,458)  $ (8,594)
 Adjustments to reconcile
   net loss to net cash
  used for operating activities:
   Depreciation and amortization        11,664     10,926     11,060
   Issuance of stock for services            -          -         28
   Gain on disposal of assets             (421)       (96)      (104)
   Removal of underperforming crops        736      1,549          -
   Land received in
    litigation recovery                 (2,000)         -          -
   Shares of KADCO stock earned
     for services                       (1,250)    (1,250)      (313)
   Share of partnership operations           -        (71)      (328)
   Compensation charge for deferred
     stock units                           566        237          -
   Non-recurring compensation expense    5,537          -          -
   Changes in operating assets
   and liabilities:
     Decrease (increase) in
       accounts receivable               1,557        552     (2,141)
     Decrease (increase) in
      inventories                        1,830      2,740     (3,318)
     (Increase) decrease in prepaid
       expenses and other                 (157)       286         75
     Increase (decrease) in
       accounts payable                  3,858       (133)      (720)
     (Decrease) increase in
       accrued liabilities                (551)    (1,039)     1,668
     Increase (decrease) increase
       in other liabilities                 51       (297)      (298)
                                       -------    -------     ------

   Net cash used for
     operating activities               (4,302)    (9,054)    (2,985)
                                       -------    -------     ------

Cash flows from investing activities:
 Additions to property,
   plant and equipment                  (1,583)    (1,252)    (4,835)
 Additions to water programs            (1,359)    (1,595)    (3,177)
 Additions to developing crops          (3,124)    (3,844)    (3,531)
 Proceeds from disposal of property,
   plant and equipment                     452      2,956        233
 Partnership distributions                   -      1,568          -
 Decrease (increase) in other assets       154       (525)      (998)
                                       -------    -------     ------

   Net cash used for
     investing activities               (5,460)    (2,692)   (12,308)
                                       -------    -------     ------

Cash flows from financing activities:
 Net proceeds from issuance of stock     1,583      1,032      6,803
 Proceeds from issuance of
   preferred stock                       7,500      5,000          -
 Proceeds from issuance of
   long-term debt                            -      5,231          -
 Principal payments on
   long-term debt                       (1,564)      (686)      (685)
 Bank overdraft                            410          -          -
                                       -------    -------     ------

   Net cash provided by
     financing activities                7,929      10,577     6,118
                                       -------    -------     ------

Net decrease in cash and
  cash equivalents                      (1,833)     (1,169)   (9,175)

Cash and cash equivalents,
  beginning of period                    3,291       4,460    13,635
                                       -------    -------     -------

Cash and cash equivalents,
  end of period                      $   1,458    $  3,291  $  4,460
                                     =========    ========  ========


See accompanying notes to the consolidated financial statements.

                             Page 40

         CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

For the Years Ended December 31, 2001, 2000 and 1999
($ in thousands)

                                                                    Total
                                           Additional               Stock-
                          Common Stock      Paid-in  Accumulated   holders'
                        Shares     Amount   Capital    Deficit      Equity
                        ------     -----   --------    -------      ------
Balance as of
 December 31, 1998    33,592,261   $ 336   $ 127,662  $ (78,288)  $ 49,710

Exercise of
 stock options         1,513,150      15       6,788          -      6,803
Issuance of
 warrants to a lender          -       -       1,335          -      1,335
Stock issued
 for services             61,250       1         415          -        416
Net loss                       -       -           -     (8,594)    (8,594)
                       ---------   -----   ---------   --------   --------

Balance as of
 December 31, 1999    35,166,661     352     136,200    (86,882)    49,670

Exercise of stock
 options and warrants    246,149       2       1,030          -      1,032
Issuance of
 warrants to lenders           -       -       2,126          -      2,126
Interest paid
 with stock              111,864       1         831          -        832
Stock issued
 for services            150,000       2       1,469          -      1,471
Issuance of
 warrants and
 beneficial conversion
 feature for Series D
 convertible preferred
  stock                        -       -       1,050          -      1,050
Net loss                       -       -           -    (22,458)   (22,458)
                       ---------   -----    -------    --------   --------
Balance as of
  December 31, 2000   35,674,674     357     142,706   (109,340)    33,723

Exercise of
 stock options
 and stock
 awards                  331,176       3       1,580          -      1,583
Issuance of
 warrants to lenders           -       -       1,435          -      1,435
Payment of
 preferred stock
 dividends with
 common stock             24,984       -         245          -        245
Preferred stock
 dividend                      -       -        (591)         -       (591)
Non-recurring
 compensation                  -       -       5,537          -      5,537
Stock issued
 in connection
 with Series E-1
 and E-2 convertible
  preferred stock         40,000       1         319          -        320
Issuance of warrants
 and beneficial
 conversion feature
 for Series E-1 and E-2
 convertible
 preferred stock               -       -       1,614          -      1,614
Imputed dividend
  from warrants
  and deferred
  beneficial conversion
  feature                      -       -        (441)         -       (441)

Net loss                       -       -           -    (25,722)   (25,722)
                       ---------   -----   ---------   --------   --------

Balance as of
  December 31, 2001   36,070,834  $  361  $  152,404  $ (135,062) $ 17,703
                      ==========  ======  =========   ==========  ========

 See accompanying notes to the consolidated financial statements

                             Page 41

                           CADIZ INC.

         NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1 - DESCRIPTION OF BUSINESS
--------------------------------

     The Company currently has agricultural operations through its
wholly-owned subsidiary, Sun World International, Inc. and its
subsidiaries, collectively referred to as "Sun World," and is
developing the water resource segment of its business, which is not
yet significant to the operations or the balance sheet of the
Company. The primary business of the Company is to acquire and
develop water and agricultural resources.  The Company has created a
complementary portfolio of assets encompassing undeveloped land with
high-quality groundwater resources and/or storage potential,
agricultural properties located throughout central and southern
California with valuable water rights, and other contractual water
rights.  Management believes that, with both the increasing scarcity
of water supplies in California and an increasing population, the
Company's access to water will provide it with a competitive
advantage both as a major agricultural concern and as a supplier of
water.

     Sun World is a large vertically integrated agricultural company
that owns more than 19,000 acres of land, primarily located in two
major growing areas of California: the San Joaquin Valley and the
Coachella Valley.  Fresh produce, including table grapes, stonefruit,
citrus, peppers and watermelons, is marketed and shipped to food
wholesalers and retailers throughout the United States and to more
than 30 foreign countries.  Sun World owns three cold storage and/or
packing facilities in California, of which two are operated and one
is leased to a third party.

     Sun World provides the Company with additional water rights
throughout central and southern California.  The Company's
landholdings, which total approximately 64,400 acres, are located
adjacent to the Colorado River and the major aqueduct systems of
central and southern California.  The Company expects to utilize its
resources to participate in a broad variety of water storage and
supply, transfer, exchange, and conservation programs with public
agencies and other parties.

     In 2001, the Company and the Metropolitan Water District of
Southern California ("Metropolitan") approved definitive economic
terms and responsibilities for a water storage and supply program at
its Cadiz, California property.  The Cadiz Groundwater Storage and
Dry-Year Supply Program (the "Cadiz Program") will enhance southern
California water supply reliability in two ways, providing a new dry-
year water supply and much-needed storage.  During wet years or
periods of excess supply, Metropolitan will store surplus Colorado
River water in the aquifer system underlying the Company's Cadiz
property.  During dry years, the previously imported water, together
with additional existing groundwater, will be extracted and
delivered, via a 35-mile conveyance pipeline, to Metropolitan's
service area.  Implementation of the Cadiz Program is subject to
completion and approval of a final agreement and an environmental
review process which currently is in its final stages and is expected
to be completed during 2002.

     In January 2002, the Company announced an agreement in principle
with KADCO to combine the businesses of Sun World and KADCO.
Following the proposed combination, KADCO's shareholders will have a
49.75% interest in the combined business, and Cadiz will retain an
ownership interest of 50.25%.  Prior to the proposed combination,
KADCO expects to have cash resources in excess of $80 million which
will be used to recapitalize Sun World and

                             Page 42

provide for future business expansion.

     Although the development and management activities of the
Company are currently focused on agricultural operations (primarily
through its wholly-owned subsidiary, Sun World) and water resource
development, the Company will continue to develop and manage its
land, water and agricultural resources for their highest and best
uses.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
---------------------------------------------------

PRINCIPLES OF CONSOLIDATION

     The consolidated financial statements include the accounts of
the Company and Sun World. All material intercompany balances and
activity have been eliminated from the consolidated financial
statements.

RECLASSIFICATIONS

     These financial statements reflect certain reclassifications
made to the prior period balances to conform to the current year
presentation.

USE OF ESTIMATES IN PREPARATION OF FINANCIAL STATEMENTS

     The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period.  In preparing
these financial statements, management has made estimates with regard
to revenue recognition and the valuation of inventory, goodwill and
other long-lived assets, and deferred tax assets.  Actual results
could differ from those estimates.

REVENUE RECOGNITION

     The Company recognizes crop sale revenue upon shipment and
transfer of title to customers.  Packing revenues and marketing
commissions from third party growers are recognized when the related
services are provided.  Proprietary product development revenues are
recognized based upon product sales by licensees.  Project
development and management fees are recorded when earned under the
terms of the related agreement.

     Revenues attributable to one national retailer totaled $10.5
million in 2001, $12.8 million in 2000 and $14.4 million in 1999.
Export sales accounted for approximately 8.4%, 9.9% and 10.3% of the
Company's revenues for the years ended December 31, 2001, 2000 and
1999, respectively.

                             Page 43

RESEARCH AND DEVELOPMENT

     Sun World incurs costs to research and develop new varieties of
proprietary products.  Research and development costs are expensed as
incurred.  Such costs were approximately  $2,023,000 for the year
ended December 31, 2001, $1,636,000 for the year ended December 31,
2000, and $1,450,000 for the year ended December 31, 1999.

NET LOSS PER COMMON SHARE

     Basic Earnings Per Share (EPS) is computed by dividing the net
loss, after deduction for preferred dividends either accrued or
imputed, if any, by the weighted-average common shares outstanding.
Options, deferred stock units, warrants and preferred stock
convertible into or exercisable for certain shares of the Company's
common stock, were not considered in the computation of diluted EPS
because their inclusion would have been antidilutive.  Had these
instruments been included, the fully diluted weighted average shares
outstanding would have increased by approximately 2.3 million shares,
1.5 million shares, and 1.2 million shares for the years ended
December 31, 2001, 2000 and 1999, respectively.

CASH AND CASH EQUIVALENTS

     The Company considers all short-term deposits with an original
maturity of three months or less to be cash equivalents.  The Company
invests its excess cash in deposits with major international banks
and short-term commercial paper and, therefore, bears minimal risk.
Such investments are stated at cost, which approximates fair value,
and are considered cash equivalents for purposes of reporting cash
flows.  At December 31, 2001, the Company had a bank overdraft
totaling $410,000 which is disclosed separately within current
liabilities.

INVENTORIES

     Growing crops, pepper seed, and materials and supplies are
stated at the lower of cost or market, on a first-in, first-out
(FIFO) basis.  Growing crop inventory includes direct costs and an
allocation of indirect costs.

INVESTMENT IN PARTNERSHIP

     Sun World, through a wholly-owned subsidiary, owned a 50%
interest in ASC/SWB Partnership, formerly named American SunMelon
(the "Partnership"). In October 1998, the Partnership sold
substantially all of its assets.  In November 2000, Sun World
received a final distribution of $1.6 million in connection with the
liquidation of the Partnership.  Sun World had accounted for its
investment in the Partnership using the equity method.

PROPERTY, PLANT, EQUIPMENT AND WATER PROGRAMS

     Property, plant, equipment and water programs are stated at
cost.

                             Page 44

     The Company capitalizes direct and certain indirect costs of
planting and developing orchards and vineyards during the development
period, which varies by crop and generally ranges from three to
seven years.  Depreciation commences in the year commercial
production is achieved.

     Permanent land development costs, such as acquisition costs,
clearing, initial leveling and other costs required to bring the land
into a suitable condition for general agricultural use, are
capitalized and not depreciated since these costs have an indefinite
useful life.

     Depreciation is provided using the straight-line method over the
estimated useful lives of the assets, generally ten to forty-five
years for land improvements and buildings, three to twenty-five years
for machinery and equipment, and five to thirty years for permanent
crops.

     Water rights and water storage and supply programs are stated at
cost.  All costs directly attributable to the development of such
programs are being capitalized by the Company.  These costs, which
are expected to be recovered through future revenues, consist of
direct labor, drilling costs, consulting fees for various
engineering, hydrological, environmental and feasibility studies, and
other professional and legal fees.

IMPAIRMENT OF LONG-LIVED ASSETS

     The Company annually evaluates its long-lived assets, including
intangibles, for potential impairment.  When circumstances indicate
that the carrying amount of the asset may not be recoverable, as
demonstrated by estimated future cash flows, an impairment loss would
be recorded based on estimated fair value.

     During the year ended December 31, 2001 and 2000, the Company
incurred costs to remove certain underperforming crops, primarily
stonefruit, citrus, and wine grapes. The Company recorded a charge of
$736,000 and $1,549,000 in 2001 and 2000, respectively, in connection
with the removal of these crops which is shown under the heading
"Removal of underperforming crops" on the Consolidated Statement of
Operations.

OTHER ASSETS

     As a result of a merger in May 1988 between two companies, which
eventually became known as Cadiz Inc., goodwill in the amount of
$7,006,000 was recorded.  This amount is being amortized on a
straight-line basis over thirty years.  Accumulated amortization was
$3,193,000 and $2,960,000 at December 31, 2001 and December 31, 2000,
respectively.

     Capitalized loan fees represent costs incurred to obtain debt
financing.  Such costs are amortized over the life of the related
loan.  At December 31, 2001, the majority of capitalized loan fees
relate to the issuance of the First Mortgage Notes described in Note
9.

     Trademark development costs represent legal costs incurred to
obtain and defend patents and trademarks related to the Company's
proprietary products throughout the world.  Such costs are
capitalized and amortized over their estimated useful life, which
range from 10 to 20 years.

                             Page 45

INCOME TAXES

     Income taxes are provided for using an asset and liability
approach which requires the recognition of deferred tax assets and
liabilities for the expected future tax consequences of temporary
differences between the financial statement and tax bases of assets
and liabilities at the applicable enacted tax rates.  A valuation
allowance is provided when it is uncertain that some portion or all
of the deferred tax assets will be realized.

SUPPLEMENTAL CASH FLOW INFORMATION

     Cash paid for interest during the years ended December 31, 2001,
2000 and 1999 was $16,020,000, $16,328,000, and $15,988,000,
respectively.

NEW ACCOUNTING PRONOUNCEMENTS

SFAS 141 and 142
----------------

     In June 2001, the Financial Accounting Standards Board ("FASB")
issued Statement of Financial Accounting Standards No. 141 ("SFAS
141"), "Accounting for Business Combinations" and No. 142 ("SFAS
142"), "Goodwill and Other Intangibles", effective for fiscal years
beginning after December 15, 2001.  Under the new rules, goodwill and
intangible assets deemed to have indefinite lives will no longer be
amortized but will be subject to annual impairment tests in
accordance with the Statements.  Other intangible assets will
continue to be amortized over their estimated useful lives.

     The Company will apply the new rules on accounting for goodwill
and other intangible assets beginning January 1, 2002.  Application
of the non-amortization provisions of SFAS 142 is expected to result
in a decrease in amortization expense of approximately $233,000 due
to goodwill no longer being amortized.  The Company's current policy
for measuring goodwill impairment is based upon an analysis of future
undiscounted cash flows, which does not result in an indicated
impairment as of December 31, 2001.  Under SFAS 142, goodwill must be
assigned to reporting units and measured for impairment based upon
fair value of the reporting units.  The goodwill carried on the
Company's books at December 31, 2001 relates to the Cadiz water
resource development segment of the business and the Cadiz Program.
Management does not anticipate that the adoption of these standards
will have a material adverse effect on the Company's financial
position or results of operations.

SFAS 144
--------

     In August 2001, the FASB issued Statement of Financial
Accounting Standards No. 144 ("SFAS 144"), "Accounting for the
Impairment or Disposal of Long-Lived Assets" which supersedes SFAS
121, "Accounting for the Impairment of Long-Lived Assets and for Long-
Lived Assets to Be Disposed Of".  SFAS 144 retains the fundamental
provisions of SFAS 121 for (a) recognition and measurement of the
impairment of long-lived assets to be held and used and (b)
measurement of long-lived assets to be disposed of by sale.  The
adoption of SFAS 144 is not anticipated to have a material adverse
effect on the Company's financial position or results of operations.

                             Page 46

NOTE 3 - ACCOUNTS RECEIVABLE
----------------------------

      Accounts  receivable  consist  of  the  following  (dollars  in
thousands):

                                                  December 31,
                                                 2001       2000
                                                 ----       ----

          Trade receivables                    $4,294     $ 4,190
          Due from unaffiliated growers           448         541
          Other                                 2,091       3,675
                                               ------     -------

                                                6,833       8,406
          Less allowance for doubtful accounts   (506)       (522)
                                               ------     -------

                                               $6,327     $ 7,884
                                               =======    =======

     Substantially all trade receivables are from large domestic
national and regional supermarket chain stores and produce brokers
and are unsecured.  Amounts due from unaffiliated growers represent
receivables for harvest advances and for services (harvest, haul and
pack) provided on behalf of growers under agreement with Sun World
and are recovered from proceeds of product sales.  Other receivables
primarily include wine grape and raisin sales, proceeds due from
third party marketers, receivables for international licensing, and
other miscellaneous receivables.


NOTE 4 - INVENTORIES
--------------------

     Inventories consist of the following (dollars in thousands):

                                                December 31,
                                               2001       2000
                                               ----       ----

          Growing crops                      $10,174     $11,538
          Materials and supplies               2,621       2,880
          Harvested product                      218         528
          Pepper seed                             14         257
                                             -------     -------

                                             $13,027     $15,203
                                             =======     =======

                             Page 47

NOTE 5 - PROPERTY, PLANT, EQUIPMENT AND WATER PROGRAMS
------------------------------------------------------

     Property, plant, equipment and water programs consist of the
following (dollars in thousands):
                                                  December 31,
                                                 2001       2000
                                                 ----       ----

          Land                                $69,068     $67,034
          Permanent crops                      66,300      67,278
          Developing crops                     12,997       9,779
          Water programs                       16,181      14,433
          Buildings                            22,544      22,113
          Machinery and equipment              20,588      20,042
                                              -------     -------

                                              207,678     200,679
          Less accumulated depreciation       (42,381)    (35,855)
                                              -------     -------

                                             $165,297    $164,824
                                             ========    ========

     Depreciation expense during the years ended December 31, 2001,
2000 and 1999 was $7,699,000, $7,971,000, and $8,460,000,
respectively.

NOTE 6 - OTHER ASSETS
---------------------

     Other assets consist of the following (dollars in thousands):

                                                   December 31,
                                                 2001       2000
                                                 ----       ----

     Goodwill, net                             $3,813     $ 4,046
     Deferred loan costs, net                   2,400       2,662
     Long-term receivables                        342       1,799
     Capitalized trademark
       development, net                         2,000       1,713
     Receivable from KADCO to be
       paid in common shares                    2,813       1,563
     Other                                         10           1
                                              -------     -------

                                              $11,378     $11,784
                                              =======     =======

NOTE 7 - ACCRUED LIABILITIES
----------------------------

     Accrued liabilities consist of the following (dollars in
thousands):

                                                  December 31,
                                                 2001       2000
                                                 ----       ----

          Interest                             $2,736     $ 2,835
          Payroll and benefits                  1,907       1,754
          Preferred stock dividends               345           -
          Other                                   692       1,226
                                               ------     -------

                                               $5,680     $ 5,815
                                               ======     =======

                             Page 48

NOTE 8 - REVOLVING CREDIT FACILITY
----------------------------------

     In November 2001, Sun World renewed its Revolving Credit
Facility through the 2002 growing season with a maturity date of
November 2002.  Amounts eligible to be borrowed under the Revolving
Credit Facility are based upon a borrowing base of eligible accounts
receivable and inventory balances.  Maximum availability under the
Revolving Credit Facility varies throughout the year with a maximum
of $30 million available during the peak borrowing periods of April
to July.  The Revolving Credit Facility is secured by accounts
receivable, inventory, and the proceeds thereof, requires Sun World
to meet certain financial covenants, and is guaranteed by the
Company.  Amounts borrowed under the facility will accrue interest at
either prime plus 1.0% or LIBOR plus 2.50% at the Company's election.
No amounts were outstanding under the Revolving Credit Facility at
December 31, 2001 and 2000.

                             Page 49

NOTE 9 - LONG-TERM DEBT
------------------------

   Management estimates that the fair value of the Company's long-
term debt approximates the carrying value for all debt instruments
except for the Series B First Mortgage Notes ("First Mortgage
Notes").  The fair value of the First Mortgage Notes is estimated to
be approximately $106.1 million based on quoted market prices as of
December 31, 2001.  At December 31, 2001 and December 31, 2000, the
carrying amount of the Company's outstanding debt is summarized as
follows (dollars in thousands):
                                                   December 31,
                                                2001         2000
                                                ----         ----
  Cadiz obligations:

   Senior term bank loan,
     interest payable
     quarterly, variable
     interest rate based
     upon LIBOR plus 2%
     (4.6% at December 31, 2001
     and 8.5% at December 31, 2000),
     due January 31, 2003                    $ 10,095    $ 10,345


   $15 million revolving line
     of credit, interest
     payable quarterly,
     variable interest rate
     based upon LIBOR plus 2%
     (4.6% at December 31, 2001
     and 8.5% at December 31, 2000),
     due January 31, 2003                      15,000      15,000

   Debt discount                                 (363)     (1,433)
                                              -------     -------

                                               24,732      23,912
                                               ------     -------

  Sun World obligations:

   Series B First
     Mortgage Notes, interest
      payable semi-annually
      with principal due in
      April 2004, interest at 11.25%          115,000    115,000

   Senior unsecured term loan,
     interest payable
     quarterly, due December 31, 2002,
     interest at LIBOR plus 3%
     (5.60% at December 31, 2001
     and 9.40% at December 31, 2000)            5,000      5,000


   Note payable to bank, quarterly
     principal installments of $72 plus
     interest payable monthly, due
     December 31, 2003, interest at
     prime (4.75% at December  31, 2001
     and 9.50% at December 31, 2000)            1,142      1,500

   Note payable to insurance company,
     quarterly installments of $120
     (including interest), due
      January 1, 2005, interest at 7.75%          945      1,639

   Note payable to finance company,
     monthly installments of $18
     (including interest), due
     July 1, 2002, interest at 7.50%              103        305


   Other                                          269        255

   Debt discount                                 (802)    (1,142)
                                               ------    -------

                                              121,657    122,557
                                              -------    -------

                                              146,389    146,469

  Less current portion                         (4,960)      (859)
                                             --------    -------

                                             $141,429   $145,610
                                             ========   ========

                             Page 50

     Annual maturities of long-term debt outstanding (in thousands),
excluding $1,165 representing the unamortized portion of warrants, on
December 31, 2001 are as follows: 2002 - $5,762; 2003 - $26,345; 2004
- $115,419; 2005 - $23; and 2006 - $5.

CADIZ OBLIGATIONS

     The senior term bank loan is secured by substantially all of the
Company's non-Sun World related property.   During 2001, pursuant to
the loan agreement, the Company repriced certain warrants previously
issued.  In February 2002, the Company completed an amendment to the
loan that extended the maturity date of the obligation to January 31,
2003.  The interest rate is LIBOR plus 300 basis points, payable
quarterly.

     The $15 million revolving credit facility was fully drawn at
December 31, 2001 and 2000,  and is secured by a second lien on
substantially all of the non-Sun World assets of the Company. During
2001, pursuant to the loan agreement, the Company repriced certain
warrants previously issued.  In February 2002, the Company completed
an amendment to the facility that extended the maturity date of the
obligation to January 31, 2003.  The interest rate can either be
LIBOR plus 300 basis points if paid in cash or LIBOR plus 700 basis
points if paid in common stock.  In March 2002, the revolving credit
facility was increased to $25 million, with $10 million of the $25
million revolver convertible into 1,250,000 of the Company's common
stock any time prior to January 2003 at the election of the lender.
In connection with obtaining the extension of the term loan and
revolver and the increase in the revolver, the Company repriced
certain warrants previously issued and issued certain additional
warrants to purchase shares of the Company's common stock. The
estimated fair value of the warrants issued and repriced was
calculated using the Black Scholes option pricing model and was
recorded as a debt discount and is being amortized over the remaining
term of the loan.

SUN WORLD OBLIGATIONS

     In April 1997, Sun World issued $115 million of Series A First
Mortgage Notes through a private placement.  The notes have
subsequently been exchanged for Series B First Mortgage Notes, which
are registered under the Securities Act of 1933 and are publicly
traded.  The First Mortgage Notes are secured by a first lien
(subject to certain permitted liens) on substantially all of the
assets of Sun World and its subsidiaries other than growing crops,
crop inventories and accounts receivable and proceeds thereof, which
secure the Revolving Credit Facility.  The First Mortgage Notes
mature April 15, 2004, but became redeemable at the option of Sun
World, in whole or in part, at any time on or after April 15, 2001.
The First Mortgage Notes include covenants that do not allow for the
payment of dividends by the Company or by Sun World other than out of
cumulative net income.

     The First Mortgage Notes are also secured by the guarantees of
Coachella Growers, Inc., Sun Desert, Inc., Sun World/Rayo, and Sun
World International de Mexico S.A. de C.V. (collectively, the "Sun
World Subsidiary Guarantors") and by the Company.  The Company also
pledged all of the stock of Sun World as collateral for its
guarantee.  Sun World and the Sun World Subsidiary Guarantors are all
direct and indirect wholly-owned subsidiaries of the Company.  The
guarantees by the Sun World Subsidiary Guarantors are full,
unconditional, and joint and several.  Sun World and the Sun World
Subsidiary Guarantors comprise all of the

                             Page 51

direct and indirect subsidiaries of the Company other than inconsequential
subsidiaries.  Additionally, management believes that the direct and
indirect non-guarantor subsidiaries of Cadiz are inconsequential, both
individually and in the aggregate, to the financial statements of the
Company for all periods presented.

     In December 2000, Sun World entered into a two-year $5 million
senior unsecured term loan. In connection with obtaining the loan,
the Company issued 50,000 shares of the Company's common stock as
well as certain warrants to purchase shares of the Company's common
stock. The fair values of the stock and the warrants were recorded as
a debt discount and are being amortized over the life of the loan.

CONDENSED CONSOLIDATING FINANCIAL INFORMATION

     Condensed consolidating financial information as of December 31,
2001 and 2000 and for the three years ended December 31, 2001 for the
Company is as follows (in thousands):

Consolidating
Statement
of Operations
Information
Year Ended
December 31, 2001          Cadiz  Sun World  Eliminations  Consolidated
                           -----  ---------  ------------  ------------

Revenues                   $ 1,903  $ 92,399  $ (1,900)   $  92,402
Special litigation
 recovery                    7,929         -         -        7,929
                           -------  --------   -------     --------

  Total revenues and
    special litigation
    recovery                9,832     92,399    (1,900)     100,331
                          -------    -------   -------     --------

Costs and expenses:
  Cost of sales               118     79,390      (400)      79,108
  General and
  administrative            5,433      8,980    (1,500)      12,913
  Non-recurring
   compensation             2,584      2,953         -        5,537
  Removal of
   underperforming crops      222        514         -          736
  Depreciation and
   amortization             1,137      7,014         -        8,151
                          -------    -------   -------     --------

  Total costs and expenses  9,494     98,851    (1,900)     106,445
                          -------    -------   -------     --------

Operating profit (loss)       338     (6,452)        -       (6,114)

Interest expense, net       3,718     15,598       235       19,551
                          -------    -------   -------     --------

Loss before income taxes   (3,380)   (22,050)     (235)     (25,665)

Income tax expense              -         57         -           57
                          -------    -------   -------     --------

 Net loss                  (3,380)   (22,107)     (235)     (25,722)

Less:
  Preferred stock
   dividends                  591          -         -          591
  Imputed dividend
   on preferred stock         441          -         -          441
                          -------    -------   -------     --------

Net loss applicable
  to common stock        $ (4,412) $ (22,107)  $  (235)   $ (26,754)
                         ========   ========   =======    =========

                             Page 52

Consolidating
Balance Sheet Information
December 31, 2001          Cadiz  Sun World  Eliminations  Consolidated
                           -----  ---------  ------------  ------------

ASSETS

Current assets:
  Cash and cash
   equivalents           $    400  $  1,058    $     -     $  1,458
  Accounts
   receivable, net              1     6,326          -        6,327
  Due from affiliate       11,254         -    (11,254)           -
  Inventories                   -    13,229       (202)      13,027
  Prepaid expenses
   and other                  210       578          -          788
                           ------   -------    -------     --------

    Total current
     assets                11,865    21,191    (11,456)    21,600

Property, plant,
   equipment and
   water programs, net     41,266   124,031          -    165,297
Other assets                4,432     6,946          -     11,378
                          -------   -------    -------   --------

                         $ 57,563  $152,168   $(11,456)  $198,275
                         ========  ========   ========   ========

LIABILITIES, REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY

Current liabilities:
  Accounts payable       $  1,330  $ 10,428  $       -   $ 11,758
  Accrued liabilities         791     4,889          -      5,680
  Due to affiliate              -    11,254    (11,254)         -
  Bank overdraft              410         -          -        410
  Long-term debt,
   current portion              -     4,960          -      4,960
                          -------   -------    -------   --------

     Total current
      liabilities           2,531    31,531    (11,254)    22,808

Long-term debt             24,732   116,697          -    141,429
Deferred income taxes           -     5,447          -      5,447
Other liabilities             371       559          -        930
Losses in excess of
  investment in affiliate   2,066         -     (2,066)         -
Series D redeemable
  preferred stock           4,243         -          -      4,243
Series E-1 and E-2
  redeemable
  preferred stock           5,715         -          -      5,715
Stockholders' equity:
Common stock                  361         -          -        361
Additional
  paid-in capital         152,404    38,273    (38,273)   152,404
Accumulated deficit      (134,860)  (40,339)    40,137   (135,062)
                         --------   -------   --------   --------

  Total stockholders'
   equity                  17,905    (2,066)     1,864     17,703
                          -------   -------    -------   --------

                         $ 57,563  $152,168  $ (11,456)  $198,275
                         ========  ========  =========   ========

                             Page 53
Consolidating
Statement of
Cash Flow Information
Year Ended
December 31, 2001          Cadiz  Sun World  Eliminations  Consolidated
                           -----  ---------  ------------  ------------

Net cash provided by
 (used for) operating
 activities              $  1,442  $ (5,509)   $   (235)    $  (4,302)
                          -------   -------    --------     ---------

Cash flows from
 investing activities:
 Additions to property,
  plant and equipment         (88)   (1,495)          -        (1,583)
 Additions to
  water programs           (1,359)        -           -        (1,359)
 Additions to
  developing crops           (109)   (3,015)          -        (3,124)
 Proceeds from disposal
   of property,
  plant and equipment           2       450           -           452
 (Increase) decrease
  in other assets            (575)      494         235           154
                           -------   -------    -------     ---------

Net cash (used for)
 provided by investing
 activities                (2,129)   (3,566)        235        (5,460)
                          -------   -------     -------     ---------

Cash flows from
  financing activities:
 Net proceeds from
  issuance of stock         1,583         -           -         1,583
 Proceeds from issuance
  of preferred stock        7,500         -           -         7,500
 Borrowings from
  intercompany revolver   (11,254)   11,254           -             -
 Principal payments
  on long-term debt          (251)   (1,313)          -        (1,564)
 Bank overdraft               410         -           -           410
                          -------   -------    --------     ---------

Net cash (used for)
 provided by
 financing activities      (2,012)    9,941           -         7,929
                          -------   -------    --------     ---------

Net (decrease) increase
 in cash and
 cash equivalents          (2,699)      866           -        (1,833)

Cash and cash
 equivalents,
 beginning of period        3,099       192           -         3,291
                          -------   -------    --------     ---------

Cash and cash
 equivalents,
 end of period             $  400    $1,058    $      -     $   1,458
                           ======    ======   ========      =========

                             Page 54
Consolidating
Statement
of Operations
Information
Year Ended
December 31, 2000          Cadiz  Sun World  Eliminations  Consolidated
                           -----  ---------  ------------  ------------


Revenues                 $  1,920   $ 107,727  $ (1,902)    $  107,745
                         --------   ---------  --------     ----------

Costs and expenses:
  Cost of sales               124      88,203      (402)        87,925
  General and
   administrative           4,355       9,721    (1,500)        12,576
  Special litigation          424           -         -            424
  Removal of
   underperforming crops        -       1,549         -          1,549
Depreciation and
    amortization            1,174       7,207         -          8,381
                          -------     -------   -------       --------

  Total costs and
   expenses                 6,077     106,680    (1,902)       110,855
                          -------     -------   -------       --------

Operating profit (loss)    (4,157)      1,047         -         (3,110)

Interest expense, net       4,085      15,103         -         19,188
                          -------     -------   -------       --------

Loss before income taxes   (8,242)    (14,056)        -        (22,298)

Income tax expense              -         160         -            160
                          -------     -------   -------       --------

Net loss                 $ (8,242)  $(14,216)  $     -      $  (22,458)
                         ========   ========   =======      ==========

                             Page 55
Consolidating
Balance Sheet Information
December 31, 2000          Cadiz  Sun World  Eliminations  Consolidated
                           -----  ---------  ------------  ------------

ASSETS

Current assets:
  Cash and cash
   equivalents           $  3,099   $    192   $     -      $  3,291
  Accounts
   receivable, net              7      7,879        (2)        7,884
  Inventories                   -     15,405      (202)       15,203
  Prepaid expenses
   and other                  212        419         -           631
                          -------    -------   -------      --------

    Total current
     assets                 3,318     23,895      (204)       27,009

Investment in
  subsidiary               17,093          -   (17,093)            -
Property, plant,
   equipment and
   water programs, net     38,842    125,982         -       164,824
Other assets                4,199      7,585         -        11,784
                          -------    -------   -------      --------

                         $ 63,452   $157,462  $(17,297)   $  203,617
                         ========   ========  ========    ==========

LIABILITIES, REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY

Current liabilities:
  Accounts payable       $  1,209   $  6,693  $     (2)   $     7,900
  Accrued liabilities         349      5,466         -          5,815
  Due to affiliate            202          -      (202)             -
  Long-term debt,
    current portion             -        859         -            859
                          -------    -------   -------     ----------

     Total current
	liabilities           1,760     13,018      (204)        14,574

Long-term debt             23,912    121,698         -        145,610
Deferred income taxes           -      5,447         -          5,447
Other liabilities             107        206         -            313
Series D redeemable
  preferred stock           3,950         -          -          3,950

Stockholders' equity:
Common stock                  357         -          -            357
Additional paid-in
  capital                 142,706    35,325    (35,325)       142,706
Accumulated deficit      (109,340)  (18,232)    18,232       (109,340)
                         --------   -------    -------      ---------

  Total
   stockholders'
   equity                  33,723    17,093    (17,093)        33,723
                          -------   -------    -------      ---------

                         $ 63,452  $157,462   $(17,297)   $   203,617
                         ========  ========   ========    ===========

                             Page 56

Consolidating
Statement of
Cash Flow
Information
Year Ended
December 31, 2000          Cadiz  Sun World  Eliminations  Consolidated
                           -----  ---------  ------------  ------------

Net cash used for
 operating activities    $ (4,849) $ (4,205)  $      -    $   (9,054)
                          -------   -------    -------    ----------

Cash flows from
 investing activities:
 Additions to property,
  plant and equipment        (293)     (959)         -        (1,252)
 Additions to
   water programs          (1,595)        -          -        (1,595)
 Additions to
   developing crops          (159)   (3,685)         -        (3,844)
 Proceeds from disposal
  of property,
  plant and equipment           1     2,955          -         2,956
 Partnership
  distributions                 -     1,568          -         1,568
 Increase in
  other assets               (162)     (363)         -          (525)
                          -------   -------    -------      --------

Net cash used for
 investing activities      (2,208)     (484)         -        (2,692)
                          -------   -------    -------      --------

Cash flows from
  financing activities:
 Net proceeds from
  issuance of stock         1,032         -          -         1,032
 Proceeds from issuance
  of preferred stock        5,000         -          -         5,000
 Proceeds from issuance
  of long-term debt             -     5,231          -         5,231
 Principal payments on
  long-term debt              (21)     (665)         -          (686)
                          -------   -------    -------      --------

Net cash provided by
 financing activities       6,011     4,566          -        10,577
                          -------   -------    -------      --------

Net decrease in cash
 and cash equivalents      (1,046)     (123)         -        (1,169)

Cash and cash equivalents,
 beginning of period        4,145       315          -         4,460
                          -------   -------    -------      --------

Cash and cash equivalents,
 end of period            $ 3,099    $  192    $     -     $   3,291
                          =======    ======    =======     =========

Consolidating
Statement
of Operations
Information
Year Ended
December 31, 1999          Cadiz  Sun World  Eliminations  Consolidated
                           -----  ---------  ------------  ------------

Revenues                  $ 1,829  $ 115,218   $ (1,818)   $  115,229
                          -------   --------   --------    ----------

Costs and expenses:
  Cost of sales               132     84,140       (451)       83,821
  General and
   administrative           4,672      9,058     (1,367)       12,363
  Special litigation          937          -          -           937
  Depreciation and
    amortization            1,179      7,712          -         8,891
                          -------   --------   --------     ---------

  Total costs
   and expenses             6,920    100,910     (1,818)      106,012
                          -------   --------   --------     ---------

Operating profit (loss)    (5,091)    14,308          -         9,217

Interest expense, net       2,932     14,879          -        17,811
                          -------   --------   --------     ---------

Net loss                  $(8,023)  $   (571)  $      -    $   (8,594)
                          =======   ========   ========    ==========

                             Page 57

Consolidating
Statement of
Cash Flow
Information
Year Ended
December 31, 1999          Cadiz  Sun World  Eliminations  Consolidated
                           -----  ---------  ------------  ------------

Net cash (used for)
  provided by
  operating activities  $ (4,746)  $  1,761    $     -     $    (2,985)
                        --------   --------    -------     -----------

Cash flows from
 investing activities:
 Additions to property,
  plant and equipment     (3,645)    (2,680)     1,490          (4,835)
 Additions to
  water programs          (3,177)         -          -          (3,177)
 Additions to
  developing crops             -     (3,531)         -          (3,531)
 Proceeds from
  disposal of
  property, plant and
  equipment                1,490        233     (1,490)            233
 Increase in other
  assets                     (64)      (934)         -            (998)
                        --------   --------    -------       ---------

Net cash used for
 investing activities     (5,396)    (6,912)         -         (12,308)
                        --------   --------    -------       ---------

Cash flows from
 financing activities:
 Net proceeds from
  issuance of stock        6,803          -          -           6,803
 Principal payments on
  long-term debt              (9)      (676)         -            (685)
                        --------   --------    -------       ---------

Net cash provided
 by (used for)
 financing activities      6,794       (676)         -           6,118
                        --------   --------    -------       ---------

Net decrease in cash
 and cash equivalents     (3,348)    (5,827)         -          (9,175)

Cash and cash equivalents,
 beginning of period       7,493      6,142          -          13,635
                        --------   --------    -------       ---------

Cash and cash equivalents,
 end of period           $ 4,145    $   315    $     -      $    4,460
                         =======    =======    =======      ==========

                             Page 58

NOTE 10 - INCOME TAXES
----------------------

     Deferred taxes are recorded based upon differences between the
financial statement and tax bases of assets and liabilities and
available carryforwards.  Temporary differences and carryforwards
which gave rise to a significant portion of deferred tax assets and
liabilities as of December 31, 2001 and 2000 are as follows (in
thousands):
                                                  December 31,
                                                 2001       2000
                                                 ----       ----

          Deferred tax liabilities:
            Fixed asset basis difference       $7,987     $ 7,550
            Other                                  48          48
                                               ------     -------

               Total deferred tax liabilities   8,035       7,598
                                               ------     -------

          Deferred tax assets:
            Net operating losses               49,437      38,560
            Reserve for notes receivable            -       1,178
            Fixed asset basis difference        6,300       6,300
            State taxes                         1,855       1,855
            Reserves and accruals               3,466       1,372
            Other                                 935         535
                                               ------     -------

               Total deferred tax assets       61,993      49,800

            Valuation allowance for
              deferred tax assets             (59,405)    (47,649)
                                              -------    --------

               Net deferred tax liability     $ 5,447     $ 5,447
                                              =======     =======

     As of December 31, 2001, the Company had net operating loss
(NOL) carryforwards of approximately $136.3 million for federal
income tax purposes.  Such carryforwards expire in varying amounts
through the year 2021.  At December 31, 2001, the Company has state
NOL carryforwards of $35.1 million.  These NOL carryforwards expire
in varying amounts through the year 2011.

     A reconciliation of the income tax benefit to the statutory
federal income tax rate is as follows (dollars in thousands):

                                        Year Ended December 31,
                                        -----------------------
                                       2001      2000       1999
                                       ----      ----       ----

     Expected federal income
       tax benefit at 34%          $  (8,726)  $ (7,581)  $ (2,922)
      Loss with no tax
        benefit provided               8,541      7,380      2,718
     State income tax                      6        147          -
     Foreign withholding taxes            51         79          -
     Amortization                         79         79         79
     Other non-deductible expenses       106         56        125
                                     --------  --------   --------

       Income tax expense            $    57    $   160    $     -
                                     ========  ========   ========

                             Page 59

NOTE 11 - EMPLOYEE BENEFIT PLANS
--------------------------------

     The Company has a 401(k) Plan for its salaried employees.
Employees must work 1,000 hours and have completed one year of
service to be eligible to participate in this plan.  The Company
matches 75% of the first four percent deferred by an employee up to
$1,600 per year.  In addition, Sun World maintains a defined
contribution pension plan covering its employees who (i) are not
covered by a collective bargaining agreement, (ii) have at least one
year of service and (iii) have worked at least 1,000 hours per year.
Contributions are 2% of each covered employee's salary.  For those
hourly employees covered under a collective bargaining agreement,
contributions are made to a multi-employer pension plan in accordance
with negotiated labor contracts and are generally based on the number
of hours worked.


NOTE 12 - PREFERRED AND COMMON STOCK
-------------------------------------

SERIES D CONVERTIBLE PREFERRED STOCK

     The Company has an authorized class of 100,000 shares of
preferred stock.  On December 29, 2000, the Company issued 5,000
shares of Series D Convertible Preferred Stock ("Series D Preferred
Stock") for $5,000,000.  The holders of the Preferred Stock are
entitled to receive dividends, payable semi-annually, at a rate of 7%
if paid in cash or 9% if paid in the Company's common stock.  The
Series D Preferred Stock is convertible into 625,000 shares of the
Company's common stock any time prior to July 2004 at the election of
the holder.  The Company also has the right to convert the Series D
Preferred Stock, but only when the closing price of the Company's
common stock has exceeded $12 per share for 30 consecutive trading
days.  Holders are entitled to a liquidation preference equal to the
initial purchase of $1,000 per share plus any accrued and unpaid
dividends.  The Series D Preferred Stock will be redeemable in July
2004 if still outstanding.

     The Company issued certain warrants to purchase shares of the
Company's common stock in connection with the issuance of the Series
D Preferred Stock.  The fair market value of the Company's common
stock at the time of issuance was above the accounting conversion
price resulting in an imputed dividend (beneficial conversion
feature).  The estimated fair value of the warrants issued
(calculated using the Black Scholes option pricing model) and the
imputed dividend totaled $1,050,000 which was recorded as a discount
to the Series D Preferred Stock.  The discount is being amortized
through the redemption date of the stock and treated as a reduction
to earnings for earnings per share calculations although no assets of
the Company will ever be expended.

SERIES E-1 AND E-2 CONVERTIBLE PREFERRED STOCK

     During the fourth quarter of 2001, the Company issued 7,500
shares of Series E-1 and E-2 Convertible Preferred Stock (the "Series
E Preferred Stock") for an aggregate of $7,500,000.  The holders of
the Preferred Stock are entitled to receive dividends, payable semi-
annually, at a rate of 7% if paid in cash or 9% if paid in the
Company's common stock.  The Series E Preferred Stock is convertible
into 1,000,000 shares of the Company's common stock any time prior to
July 2004 at the election of the holder.  The Company also has the
right to

                             Page 60

convert the Series E Preferred Stock, but only when the
closing price of the Company's common stock has exceeded $10.50 per
share for 30 consecutive trading days.  Holders are entitled to a
liquidation preference equal to the initial purchase of $1,000 per
share plus any accrued and unpaid dividends.  The Series E Preferred
Stock will be redeemable in July 2004 if still outstanding.

     The Company issued 40,000 shares of the Company's common stock
and certain warrants to purchase shares of the Company's common stock
in connection with the issuance of the Series E Preferred Stock.  The
fair market value of the Company's common stock at the time of
issuance was above the accounting conversion price resulting in an
imputed dividend (beneficial conversion feature).  The estimated fair
value of the warrants issued (calculated using the Black Scholes
option pricing model) and the imputed dividend totaled $1,614,000
which was recorded as a discount to the Series E Preferred Stock.
The discount is being amortized through the redemption date of the
stock and treated as a reduction to earnings for earnings per share
calculations although no assets of the Company will ever be expended.

COMMON STOCK

     In March 2000, the Company issued 100,000 shares of common stock
to a hydrological research company upon the deemed satisfaction of
certain contingencies with respect to the issuance of such shares
established in connection with the Company's 1998 acquisition of all
of such company's assets.

NOTE 13 - STOCK-BASED COMPENSATION PLANS AND WARRANTS
-----------------------------------------------------

STOCK OPTIONS AND WARRANTS

     The Company issues options pursuant to its 1996 Stock Option
Plan (the "1996 Plan") and the 1998 Non-Qualified Stock Option Plan
(the "1998 Plan") approved by the Board of Directors in February
1998.  The Company also grants stock awards pursuant to its 2000
Stock Award Plan described below.  Collectively, the plans provide
for the granting of up to 4,000,000 shares.  At December 31, 2001,
the Company has approximately 524,000 shares remaining that can be
granted under the plans.  All options are granted at a price
approximating fair market value at the date of grant, have vesting
periods ranging from issuance date to five years, have maximum terms
ranging from five to seven years and are issued to directors,
officers, consultants and employees of the Company.

     Compensation cost for stock options is measured as the excess,
if any, of the quoted market price of the Company's stock at the date
of the grant over the amount an employee must pay to acquire the
stock.  Had compensation cost for these plans been determined using
fair value, as explained below, the Company's net loss and net loss
per common share would have increased to the following pro forma
amounts (dollars in thousands):

                             Page 61

                                       Year Ended December 31,
                                       -----------------------
                                       2001      2000       1999
                                       ----      ----       ----

 Net loss applicable
   to common stock:  As reported     $(26,754) $(22,458) $ (8,594)
                      Pro  forma     $(27,670) $(23,450) $(12,134)
 Net loss per common share:
                     As reported     $   (.75) $   (.64) $   (.25)
                      Pro  forma     $   (.77) $   (.66) $   (.35)

     The fair value of each option granted during the periods
reported was estimated on the date of grant using the Black Scholes
option pricing model based on the weighted-average assumptions of:
risk-free interest rate of 4.54% for 2001, 4.94% for 2000, and 6.67%
for 1999; expected volatility of 40.0% for 2001, 66.7% for 2000, and
46.9% for 1999; expected life of  three years for 2001 and 2000 and
five years for 1999; and an expected dividend yield of zero for all
three years.

     The following table summarizes stock option activity for the
periods noted.  All options listed below were issued to officers,
directors, employees and consultants.

                                                        Weighted-
                                                         Average
                                                         Exercise
                                               Amount      Price
                                           ----------     -------

  Outstanding at December 31, 1998          3,891,900     $  5.26
     Granted                                  800,000     $  7.58
     Expired or canceled                      (66,000)    $  7.20
     Exercised                             (1,513,150)    $  4.50
                                           ----------

  Outstanding at December 31, 1999          3,112,750     $  6.21
     Granted                                  132,500     $  9.76
     Expired or canceled                      (19,500)    $  8.56
     Exercised                               (215,152)    $  4.80
                                           ----------

  Outstanding at December 31, 2000          3,010,598     $  6.45
     Granted                                  266,250     $  9.62
     Expired or canceled                   (1,096,000)    $  4.76
     Exercised                               (330,098)    $  4.78
                                           ----------

  Outstanding at December 31, 2001          1,850,750(a)  $  8.05
                                           ==========

  Options exercisable at
   December 31, 1999                        2,306,500     $  5.64
                                           ==========

  Options exercisable at
   December 31, 2000                        2,549,098     $  5.98
                                           ==========

  Options exercisable at
     December 31, 2001                      1,446,750     $  7.86
                                           ==========

  Weighted-average years of remaining
    contractual life of options
    outstanding at December 31, 2001             2.85
                                                =====

      (a) Exercise prices vary from $4.75 to $11.75 and expiration
      dates vary from March 2002 to October 2008.

                             Page 62

     The weighted-average fair value of options granted during the
years 2001, 2000 and 1999 were $3.44, 5.37, and $3.71, respectively.

     The Company accounts for equity securities issued to non-
employees in accordance with the provisions of SFAS 123 and Emerging
Issues Task Force 96-18.  During the years ended December 31, 2001,
2000 and 1999, the Company issued 215,000, 350,000, and 250,000
warrants with weighted-average exercise prices of $7.59, $6.46, and
$6.50, respectively.  During the year ended December 31, 2000, 75,000
warrants with a weighted-average exercise price of $5.03 were
exercised in a cashless transaction resulting in the issuance of
30,997 shares of common stock.  No warrants expired or were canceled
during any of the three periods discussed.  During 2001, in
connection with the loan amendments for the Cadiz obligations
described in Note 9, the Company repriced certain warrants previously
issued resulting in a reduction in the weighted-average exercise
price.  At December 31, 2001, there were 1,240,000 warrants
outstanding with a weighted-average exercise price of $4.40 per
share, which expire through 2005.

2000 STOCK AWARD PLAN

     The Cadiz Inc. 2000 Stock Award Plan ("Stock Award Plan") was
approved by the Company's shareholders in May 2000.  Under the Stock
Award Plan, the Company may issue various forms of stock awards
including restricted stock and deferred stock units to attract,
retain and motivate key employees or other eligible persons.  As of
December 31, 2001, the Company had outstanding 817,325 deferred stock
units granted under the Stock Award Plan of which 253,162 deferred
stock units entitle the holder to receive one share of the Company's
common stock for each deferred stock unit three years from the date
of grant and 564,163 deferred stock units were granted pursuant to
the exchange noted under Non-Recurring Compensation Expense below.
During the year ended December 31, 2001, 1,078 stock units were
exchanged for shares of the Company's common stock.  The Company
charged $566,000 and $237,000 to expense during the years ended
December 31, 2001 and 2000, respectively, in connection with the
Stock Award Plan.

NON-RECURRING COMPENSATION EXPENSE

     In 2001, the Company issued 564,163 deferred stock units to
certain senior managers of Cadiz and Sun World.  These deferred stock
units were issued in exchange for the cancellation of 1,055,000 fully
vested options to purchase the Company's common stock held by senior
managers.  In accordance with the terms of Stock Option Exchange
Agreements, the number of the deferred stock units issued was
calculated based on the average closing price for the 10 business
days following the filing of the Company's Annual Report on Form 10-K
for the year ended December 31, 2000 on March 29, 2001.  Each
deferred stock unit is exchangeable for one share of the Company's
common stock at the end of the deferral period elected by the holder.
The Company recorded a one-time charge of $5,537,000 in 2001 and no
cash was expended in connection with the issuance of the deferred
stock units.

                             Page 63
RESTRICTED STOCK AWARD

      Following  the acquisition of Sun World in 1996, the  Company's
Chief  Executive Officer was awarded a stock bonus of 125,000  shares
of  restricted common stock at no cost.  The Company issued the final
25,000  of  these  shares during the year ended  December  31,  1999.
Compensation  expense was recognized as earned  over  the  period  of
service.

NOTE 14 - CONTINGENCIES
-----------------------

     In December 1995, the Company filed an action relative to the
proposed construction and operation of a landfill (the "Rail-Cycle
Project") which was to be located adjacent to the Company's Cadiz
property with the Superior Court in San Bernardino County,
California.  The action challenged the various decisions by the
County of San Bernardino relative to the proposed Rail-Cycle Project
and sought compensatory damages.  In September 1998, the Court
granted defendants' motion for summary judgment.  The Company
appealed this decision and in August 2000, the California Court of
Appeals granted, in part, the Company's appeal.  The Court's decision
revoked all environmental and land-use approvals, and thus
effectively terminated the Rail-Cycle Project, as proposed.

     The Company filed other civil actions against Waste Management,
Inc., which asserted claims arising from alleged criminal and
fraudulent conduct against the Company engaged in by Waste Management
in connection with the Rail-Cycle Project.

     In March 2001, the Company and Waste Management executed a
settlement agreement intended to fully and finally compromise and
settle the claims asserted by the Company against Waste Management in
all of the outstanding civil actions.  Pursuant to the Settlement
Agreement, Waste Management paid the Company $6 million in cash and
granted to the Company an exclusive option to receive, at no cost to
the Company, up to approximately 7,000 acres of real property in
eastern San Bernardino County primarily adjacent to the Cadiz Program
property.   In April 2001, the Company exercised the option and has
acquired the subject property.  Net proceeds from the settlement are
included in the Company's statement of operations under the caption
"Special Litigation Recovery".

     In the normal course of its agricultural operations, the Company
handles, stores, transports and dispenses products identified as
hazardous materials.  Regulatory agencies periodically conduct
inspections and, currently, there are no pending claims with respect
to hazardous materials.

     The Company is involved in other legal and administrative
proceedings and claims.  In the opinion of management, the ultimate
outcome of each proceeding or all such proceedings combined will not
have a material adverse impact on the Company's financial statements.

                             Page 64

NOTE 15 - QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
-----------------------------------------------------

(In thousands except per share data)
                                      Quarter Ended
                        ------------------------------------------------
                        March 31,  June 30,   September 30,  December 31,
                          2001       2001         2001          2001
                          ----      ----          ----          ----

Revenues               $  7,371   $  20,371    $  48,683    $  15,977
Gross profit (loss)        (570)      4,927        7,611        1,326
Net loss applicable
  to common stock        (7,165)     (5,030)      (5,267)      (9,292)
Net loss
 per common share      $   (.20)  $    (.14)   $    (.15)   $    (.26)

                                      Quarter Ended
                        ------------------------------------------------
                        March 31,  June 30,   September 30,  December 31,
                          2000       2000        2000          2000
                          ----       ----        ----          ----

Revenues               $  7,936   $  26,928    $  55,376    $  17,505
Gross profit (loss)        (530)      3,698       12,009        4,643
Net loss                 (8,842)     (6,282)        (342)      (6,992)
Net loss per
  common share         $   (.25)  $    (.18)   $    (.01)   $    (.20)


                            Page 65

                           CADIZ INC.

   SCHEDULE I - CONDENSEND FINANCIAL INFORMATION OF REGISTRANT

                                                  December 31,
BALANCE SHEET ($ in thousands):                  2001       2000
                                                 ----       ----

ASSETS

Current assets:
 Cash and cash equivalents                   $    400   $   3,099
 Accounts receivable, net                           1           7
 Due from subsidiary                           11,254           -
 Prepaid expenses and other                       210         212
                                               -------    -------

  Total current assets                         11,865       3,318

Investment in subsidiary                            -      17,093
Property, plant, equipment
  and water programs, net                      41,266      38,842
Other assets                                    4,432       4,199
                                               -------    -------

                                             $ 57,563    $ 63,452
                                              =======    ========

LIABILITIES, REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY

Current liabilities:
 Accounts payable                            $  1,330    $  1,209
 Accrued liabilities                              791         349
 Due to subsidiary                                  -         202
 Bank overdraft                                   410           -
                                               -------    -------

  Total current liabilities                     2,531       1,760

Long-term debt                                 24,732      23,912
Other liabilities                                 371         107
Losses in excess of
  investment in subsidiary                      2,066           -

Contingencies

Series D redeemable convertible
  preferred stock - $0.01 par value:
  5,000 shares authorized; shares
  issued and outstanding -
  5,000 at December 31, 2001
  and December 31, 2000                         4,243     3,950

Series E-1 and E-2
  redeemable convertible
  preferred stock - $0.01 par value:
  7,500 shares authorized; shares
  issued and outstanding -
  7,500 at December 31, 2001 and
  none at December 31, 2000                     5,715          -

Stockholders' equity:
 Common stock - $0.01 par value;
  70,000,000 shares
 authorized; shares issued and
  outstanding 36,070,834
 at December 31, 2001 and 35,674,674 at
 December 31, 2000                                361         357

Additional paid-in capital                     152,404    142,706
Accumulated deficit                           (134,860)  (109,340)
                                               -------    -------

 Total stockholders' equity                    17,905      33,723
                                               -------    -------

                                             $  57,563   $ 63,452
                                               =======    =======
                            Page 66

                           CADIZ INC.

    SCHEDULE I - CONDENSED FINANCIAL INFORMATON OF REGISTRANT

STATEMENT OF OPERATIONS                Year Ended December 31,
($ in thousands)                      2001      2000       1999
                                      ----      ----       ----



Revenues                           $  1,903  $  1,920     $ 1,829
Special litigation recovery           7,929         -           -
                                   --------   -------     -------

Total revenues and special
  litigation recovery                 9,832     1,920       1,829
                                   --------   -------     -------
Costs and expenses:
 Cost of sales                          118       124         132
 General and administrative           5,433     4,355       4,672
 Special litigation                       -       424         937
 Non-recurring compensation expense   2,584         -           -
 Removal of underperforming crops       222         -           -
 Depreciation and amortization        1,137     1,174       1,179
                                   --------   -------     -------

 Total costs and expenses             9,494     6,077       6,920
                                   --------   -------     -------

Operating profit (loss)                 338    (4,157)    (5,091)

Loss from subsidiaries              (22,107)  (14,216)      (571)

Interest expense, net                 3,718     4,085       2,932
                                   --------   -------     -------

Net loss                            (25,487)  (22,458)     (8,594)

Less:  Preferred stock dividends        591         -           -
       Imputed dividend on
         preferred stock                441         -           -
                                   --------   -------     -------

Net loss applicable to
  common stock                   $  (26,519) $(22,458)  $  (8,594)
                                 ==========   =======   ==========

                            Page 67

				   CADIZ INC.

   SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT

                                          Year Ended December 31,
STATEMENT OF CASH FLOWS                  2001       2000       1999
                                         ----       ----       ----

($ in thousands)

Cash flows from operating activities:
 Net loss                            $ (25,487) $ (22,458)  $  (8,594)
 Adjustments to reconcile net
   loss to net cash provided by
   (used for) operating activities:
  Depreciation and amortization          3,521      2,956       2,498
  Issuance of stock for services             -          -          28
  Loss from subsidiaries                22,107     14,216         571
  (Gain) loss on disposal of assets          5         (1)          6
  Removal of underperforming crops         222          -           -
  Land received from litigation
    settlement                          (2,000)         -           -
  Compensation charge for
    deferred stock units                   271        100           -
  Non-recurring compensation expense     2,584          -           -
  Changes in operating assets
    and liabilities:
   Decrease in accounts receivable           6          9          61
   Increase in due to subsidiary             -          -         274
   Decrease (increase) in prepaid
     expenses and other                      2        174       (133)
   Increase in accounts payable            121        504           4
   Increase (decrease) in
     accrued liabilities                    97       (356)        539
   (Decrease) increase in
     other liabilities                      (7)         7           -
                                       -------   --------     -------

  Net cash provided by
   (used for) operating activities       1,442     (4,849)     (4,746)
                                       -------   --------     -------
Cash flows from investing activities:
 Additions to property,
   plant and equipment                    (88)       (293)     (3,645)
 Additions to developing crops           (109)       (159)           -
 Additions to water programs           (1,359)     (1,595)     (3,177)
 Proceeds from disposal of
   property, plant and equipment            2           1       1,490
 Increase in other assets                (575)       (162)        (64)
                                      -------    --------     -------
  Net cash used for
    investing activities               (2,129)     (2,208)     (5,396)
                                      -------    --------     -------

Cash flows from financing activities:
 Net proceeds from issuance of stock    1,583       1,032       6,803
 Proceeds from issuance of
  preferred stock                       7,500       5,000           -
 Intercompany revolver
  with subsidiary                    (11,254)          -           -
 Principal payments on
   long-term debt                        (251)        (21)         (9)
 Bank overdraft                           410           -           -
                                      -------    --------     -------

  Net cash (used for) provided
    by financing activities            (2,012)      6,011       6,794
                                      -------    --------     -------

Net decrease in cash and
  cash equivalents                     (2,699)     (1,046)     (3,348)

Cash and cash equivalents,
  beginning of period                   3,099       4,145       7,493
                                      -------    --------     -------
Cash and cash equivalents,
  end of period                       $   400    $  3,099     $ 4,145
                                      =======    ========     =======

                            Page 68

                           CADIZ INC.

         SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

For the years ended December 31, 2001, 2000 and 1999

($ in thousands)
                   Balance         Additions                Balance
                      at           Charged to                at End
Year ended         Beginning   Costs and   Other                of
December 31, 2001  of Period   Expenses  Accounts  Deductions Period
-----------------  ---------   --------  --------  ---------- ------

 Allowance for
   doubtful accounts $    522  $    -   $      -  $  16   $    506
                     ========  =======  ========  ======  ========

 Tax valuation
   allowance         $ 47,649  $    -   $ 11,756  $   -   $ 59,405
                     ========  =======  ========  ======  ========

Year ended
December 31, 2000
------------------

 Allowance for
   doubtful accounts $    224  $  308   $      -  $  10   $    522
                     ========  =======  ========  ======  ========

 Tax valuation
   allowance         $ 39,665  $    -    $ 7,984  $   -   $ 47,649
                     ========  =======  ========  ======  ========

Year ended
December 31, 1999
------------------

 Allowance for
   doubtful accounts $    285  $    -    $     -  $  61   $    224
                     ========  =======  ========  ======  ========

 Tax valuation
   allowance         $ 35,319  $    -    $ 4,346  $   -   $ 39,665
                     ========  =======  ========  ======  ========


                             Page 69

                REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Stockholder of
Sun World International, Inc.

     In our opinion, the accompanying consolidated balance sheet
and the related consolidated statements of operations, cash flows
and stockholder's equity present fairly, in all material
respects, the financial position of Sun World International,
Inc., a wholly-owned subsidiary of Cadiz Inc., and its
subsidiaries at December 31, 2001 and 2000 and the results of
their operations and their cash flows for each of the three years
in the period ended December 31, 2001 in conformity with
accounting principles generally accepted in the United States of
America.  These financial statements are the responsibility of
the Company's management; our responsibility is to express an
opinion on these financial statements based on our audits.  We
conducted our audits of these statements in accordance with
auditing standards generally accepted in the United States of
America, which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial
statements are free of material misstatement.  An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting
principles used and significant estimates made by management, and
evaluating the overall financial statement presentation.  We
believe that our audits provide a reasonable basis for our
opinion.

/s/  PricewaterhouseCoopers LLP
--------------------------------
      PricewaterhouseCoopers LLP


Los Angeles, California
February 21, 2002

                             Page 70

SUN WORLD INTERNATIONAL, INC.
(A WHOLLY-OWNED SUBSIDIARY OF CADIZ INC.)

CONSOLIDATED STATEMENT OF OPERATIONS

                                       Year Ended December 31,
($ in thousands)                     2001       2000        1999
                                     ----        ----       ----

Revenues                          $  92,399   $ 107,727   $ 115,218
                                   --------    --------  ---------
Costs and expenses:
 Cost of sales                       79,390      88,203      84,140
 General and administrative           8,980       9,721       9,058
 Non-recurring compensation expense   2,953           -           -
 Removal of underperforming crops       514       1,549           -
 Depreciation and amortization        7,014       7,207       7,712
                                   --------    --------    --------

                                     98,851     106,680     100,910
                                   --------    --------    --------

Operating income (loss)              (6,452)      1,047      14,308

Interest expense, net                15,598      15,103      14,879

Net loss before income taxes        (22,050)    (14,056)       (571)

Income tax expense                       57         160           -
                                   --------    --------    --------

Net loss                          $ (22,107)  $ (14,216)   $   (571)
                                  =========   =========    ========


See accompanying notes to the consolidated financial statements.

                             Page 71

SUN WORLD INTERNATIONAL, INC.
(A WHOLLY-OWNED SUBSIDIARY OF CADIZ INC.)

CONSOLIDATED BALANCE SHEET

                                                December 31,
($ in thousands)                               2001      2000
                                               ----      ----

ASSETS

Current assets:
 Cash and cash equivalents                    $  1,058    $  192
 Accounts receivable, net                        6,326     7,879
 Inventories                                    13,229    15,405
 Prepaid expenses and other                        578       419
                                              --------  --------

    Total current assets                        21,191    23,895


Property, plant, equipment, and
  water programs, net                          124,031   125,982

Other assets                                     6,946     7,585
                                              --------  --------

 Total assets                                $ 152,168  $157,462
                                              ========  ========

LIABILITIES AND STOCKHOLDER'S EQUITY

Current liabilities:
 Accounts payable                            $  10,428  $  6,693
 Accrued liabilities                             4,889     5,466
 Due to parent company                          11,254         -
 Long-term debt, current portion                 4,960       859
                                              --------  --------

     Total current liabilities                  31,531    13,018

Long-term debt                                 116,697   121,698

Deferred income taxes                            5,447     5,447

Other liabilities                                  559       206

Contingencies

Stockholder's equity:
 Common stock, $0.01 par value,
  300,000 shares authorized;
  42,000 shares issued and outstanding               -        -
 Additional paid-in capital                     38,273    35,325
 Accumulated deficit                           (40,339)  (18,232)
                                              --------  --------

  Total stockholder's equity                    (2,066)   17,093
                                              --------  --------

 Total liabilities and stockholder's equity  $ 152,168 $ 157,462
                                              ========  ========

                             Page 72

See accompanying notes to the consolidated financial statements.


SUN WORLD INTERNATIONAL, INC.
(A WHOLLY-OWNED SUBSIDIARY OF CADIZ INC.)

CONSOLIDATED STATEMENT OF CASH FLOWS

                                          Year Ended December 31,
($ in thousands)                        2001         2000      1999
                                        ----         ----      ----


Cash flows from
  operating activities:
Net loss                            $  (22,107) $  (14,216) $   (571)
Adjustments to reconcile
 net loss to net
cash (used for) provided
by operating activities:
  Depreciation and
    amortization                         8,143       7,970     8,570
  Gain on disposal of assets              (426)        (95)     (110)
  Removal of underperforming crops         514       1,549         -
  Shares of KADCO stock
  earned for services                   (1,250)     (1,250)     (313)
  Share of partnership operations            -         (71)     (328)
  Compensation charge for
    deferred stock units                   296         137         -
  Non-recurring compensation
   expense                               2,953           -         -
  Changes in operating assets
  and liabilities:
   Decrease (increase) in
     accounts receivable                 1,553         552    (2,213)
    Decrease (increase)in
     inventories                         1,830       2,740    (3,405)
   (Increase) decrease
     in prepaid
     expenses and other                   (160)        112       207
   Increase (decrease)in
     accounts payable                    3,734        (645)     (714)
   (Decrease) increase in
     accrued liabilities                  (647)       (683)    1,129
   Decrease in due to parent                 -           -      (193)
   Increase (decrease) in
     other liabilities                      58        (305)     (298)
                                       -------    --------  --------

  Net cash (used for) provided
    by operating activities             (5,509)     (4,205)    1,761
                                       -------    --------  --------

Cash flows from investing activities:
Additions to property, plant,
equipment, and water programs           (1,495)       (959)   (2,680)
Additions to developing crops           (3,015)     (3,685)   (3,531)
Proceeds from disposal of property,
plant and equipment                        450       2,955       233
Partnership distributions                    -       1,568         -
Decrease (increase) in other assets        494        (363)     (934)
                                       -------    --------  --------
  Net cash used for
  investing activities                  (3,566)       (484)   (6,912)
                                       -------    --------  --------

Cash flows from financing activities:
Proceeds from issuance of
  long-term debt                             -       5,231         -
Principal  payments on
  long-term debt                        (1,313)       (665)     (676)
Intercompany revolver with parent       11,254           -         -
                                       -------    --------  --------

  Net cash provided by (used for)
  financing activities                   9,941       4,566      (676)
                                       -------    --------  --------

Net increase (decrease) in cash
 and cash equivalents                      866        (123)   (5,827)

Cash and cash equivalents at
 beginning of period                       192         315     6,142
                                       -------    --------  --------

Cash and cash equivalents at
 end of period                       $   1,058    $    192    $  315
                                     =========    ========    ======

See accompanying notes to the consolidated financial statements.

                             Page 73

SUN WORLD INTERNATIONAL, INC.
(A WHOLLY-OWNED SUBSIDIARY OF CADIZ INC.)

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

($ in thousands)

                                         Additional                 Total
                         Common Stock     Paid-in  Accumulated  Stockholders'
                       Shares    Amount   Capital     Deficit      Equity
                       ------   ------    -------     -------      ------

Balance as of
 December 31, 1998      42,000   $   -    $ 34,183   $  (3,445)   $  30,738
Net loss                     -       -           -        (571)        (571)
                        ------   -----    --------   ---------    ---------

Balance as of
 December 31, 1999      42,000       -      34,183      (4,016)      30,167

Capital contribution
  from parent for the
  value of shares and
  warrants issued
  in connection with
  obtaining the senior
  unsecured term loan
  financing                  -       -        1,142          -        1,142

Net loss                     -       -            -    (14,216)     (14,216)
                        ------   -----     --------   --------     --------

Balance as of
  December 31, 2000     42,000       -       35,325    (18,232)      17,093

Capital contribution
  from parent for the
  value of the
  non-recurring
  compensation               -       -        2,953          -        2,953

Revaluation of
  derivative for warrants
  issued by parent           -       -         (235)         -         (235)

Capital contribution
  from parent for
  warrants issued relating
  to senior unsecured
  term loan                  -       -          230          -          230


Net loss                     -       -            -    (22,107)     (22,107)
                        ------   -----     --------   --------     --------

Balance as of
  December 31, 2001     42,000  $    -   $   38,273  $ (40,339)   $  (2,066)
                        ======  ======   ==========  =========    =========


See accompanying notes to the consolidated financial statements.

                             Page 74


                  SUN WORLD INTERNATIONAL, INC.
            (A WHOLLY-OWNED SUBSIDIARY OF CADIZ INC.)

         NOTES TO THE CONSOLDIATED FINANCIAL STATEMENTS

NOTE 1 - NATURE OF OPERATIONS
-----------------------------

     Founded in 1975, Sun World International, Inc. ("SWII") and
its subsidiaries (collectively, the "Company") operate as the
agricultural segment of Cadiz Inc. ("Cadiz").  The Company is an
integrated agricultural operation that owns more than 19,000
acres of land, primarily located in two major growing areas of
California:  the San Joaquin Valley and the Coachella Valley.
Fresh produce, including table grapes, stonefruit, citrus,
peppers and watermelons is marketed, packed and shipped to food
wholesalers and retailers located throughout the United States
and to more than 30 foreign countries.  The Company owns and
operates three cold storage and/or packing facilities located in
California, of which two are operated and one is leased to a
third party.

     In January 2002, Cadiz announced an agreement in principle
with KADCO to combine the businesses of Sun World and KADCO.
Following the proposed combination, KADCO's shareholders will
have a 49.75% interest in the combined business, and Cadiz will
retain an ownership interest of 50.25%.  Prior to the proposed
combination, KADCO expects to have cash resources in excess of
$80 million which will be used to recapitalize Sun World and
provide for future business expansion.


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
---------------------------------------------------

PRINCIPLES OF CONSOLIDATION

     The consolidated financial statements include the accounts of
SWII and its subsidiaries, all of which are wholly-owned.  All
significant intercompany transactions have been eliminated.

RECLASSIFICATIONS

     These financial statements reflect certain reclassifications
made to the prior period balances to conform to the current year
presentation.

USE OF ESTIMATES IN PREPARATION OF FINANCIAL STATEMENTS

     The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting
period.  In preparing these financial statements, management has
made estimates with regard to revenue recognition and valuation
of inventory, long-lived assets, and deferred tax assets.  Actual
results could differ from those estimates.

REVENUE RECOGNITION

     The Company recognizes crop sale revenue upon shipment and
transfer of title to customers.  Packing revenues and marketing
commissions from third party growers are recognized when the
related services are provided.  Proprietary product development
revenues are recognized based upon product sales by licensees.
Project development and management

                             Page 75

fees are recorded when earned under the terms of the related
agreement.

     Revenues attributable to one national retailer totaled $10.5
million in 2001, $12.8 million in 2000 and $14.4 million in 1999.
Export sales accounted for approximately 8.4%, 9.9% and 10.3%, of
the Company's revenues for the years ended December 31, 2001,
2000 and 1999, respectively.

RESEARCH AND DEVELOPMENT

     The Company incurs costs to research and develop new
varieties of proprietary products.  Research and development
costs are expensed as incurred.  Such costs were approximately
$2,023,000 for the year ended December 31, 2001, $1,636,000 for
the year ended December 31, 2000 and $1,450,000 for the year
ended December 31, 1999.

CASH AND CASH EQUIVALENTS

     The Company considers all short-term deposits with an
original maturity of three months or less to be cash equivalents.
The Company invests its excess cash in deposits with major
international banks and short-term commercial paper and,
therefore, bears minimal risk.  Such investments are stated at
cost, which approximates fair value, and are considered cash
equivalents for purposes of reporting cash flows.

INVENTORIES

     Growing crops, pepper seed, and materials and supplies are
stated at the lower of cost or market, on a first-in, first-out
(FIFO) basis.  Growing crops inventory includes direct costs and
an allocation of indirect costs.

INVESTMENT IN PARTNERSHIPS

     The Company, through a wholly-owned subsidiary, owned a 50%
interest in ASC/SWB Partnership, formerly named American SunMelon
(the "Partnership"). In October 1998, the Partnership sold
substantially all of its assets.  In November 2000, the Company
received a final distribution of $1.6 million in connection with
the liquidation of the Partnership.  The Company had accounted
for its investment in the Partnership using the equity method.

PROPERTY, PLANT, EQUIPMENT, AND WATER PROGRAMS

     Property, plant, equipment, and water programs are stated
at cost.

     The Company capitalizes direct and certain indirect costs
of planting and developing orchards and vineyards during the
development period, which varies by crop and usually ranges from
three to seven years.  Depreciation commences in the year
commercial production is achieved.

                             Page 76

     Permanent land development costs, such as acquisition costs,
clearing, initial leveling and other costs required to bring the
land into a suitable condition for general agricultural use, are
capitalized and not depreciated since these costs have an
indefinite useful life.

     Depreciation is provided using the straight-line method over
the estimated useful lives of the assets, generally ten to forty-
five years for land improvements and buildings, three to twenty-
five years for machinery and equipment, and five to thirty years
for permanent crops.

     Water programs are stated at cost.  All costs directly
attributable to the development of such programs are being
capitalized by the Company.

IMPAIRMENT OF LONG-LIVED ASSETS

     The Company annually evaluates its long-lived assets,
including intangibles, for potential impairment.  When
circumstances indicate that the carrying amount of the asset may
not be recoverable, as demonstrated by estimated future cash
flows, an impairment loss would be recorded based on fair value.

     During the year ended December 2001 and 2000, the Company
incurred costs to remove certain underperforming crops, primarily
stonefruit, citrus, and wine grapes. The Company recorded charges
of $514,000 and $1,549,000 in 2001 and 2000, respectively, in
connection with the removal of these crops which is shown under
the heading "Removal of underperforming crops" on the
Consolidated Statement of Operations.

OTHER ASSETS

     Capitalized loan fees represent costs incurred to obtain debt
financing.  Such costs are amortized over the life of the related
loan.  At December 31, 2001, the majority of capitalized loan
fees relate to the issuance of the First Mortgage Notes described
in Note 9.

     Trademark development costs represent legal costs incurred to
obtain and defend patents and trademarks related to the Company's
proprietary products throughout the world.  Such costs are
capitalized and amortized over their estimated useful life, which
range from 10 to 20 years.

INCOME TAXES

     The Company is included in the consolidated federal and
combined state tax returns of Cadiz. The Company and Cadiz have a
tax sharing agreement which provides that the Company's current
tax liability is determined as though the Company filed its own
returns.  Income taxes are provided for using an asset and
liability approach which requires the recognition of deferred tax
assets and liabilities for the expected future tax consequences
of temporary differences between the financial statement and tax
bases of assets and liabilities at the applicable enacted tax
rates.  A valuation allowance is provided when it is uncertain
that some portion or all of the deferred tax assets will be
realized.

                             Page 77

SUPPLEMENTAL CASH FLOW INFORMATION

     Cash payments for interest for the years ended December
31, 2001, 2000 and 1999 were $14,660,000, $14,497,000 and
$14,204,000, respectively.

NEW ACCOUNTING PRONOUNCEMENTS

SFAS 141 and 142
----------------

     In June 2001, the Financial Accounting Standards Board
("FASB") issued Statement of Financial Accounting Standards No.
141 ("SFAS 141"), "Accounting for Business Combinations" and No.
142 ("SFAS 142"), "Goodwill and Other Intangibles", effective for
fiscal years beginning after December 15, 2001.  Under the new
rules, goodwill and intangible assets deemed to have indefinite
lives will no longer be amortized but will be subject to annual
impairment tests in accordance with the Statements.  Other
intangible assets will continue to be amortized over their
estimated useful lives.  The Company will apply the new rules on
accounting for other intangible assets beginning January 1, 2002.
Management does not anticipate that the adoption of these
standards will have a material adverse effect on the Company's
financial position or results of operations.

SFAS 144
--------

     In August 2001, the FASB issued Statement of Financial
Accounting Standards No. 144 ("SFAS 144"), "Accounting for the
Impairment or Disposal of Long-Lived Assets" which supersedes
SFAS 121, "Accounting for the Impairment of Long-Lived Assets and
for Long-Lived Assets to Be Disposed Of".  SFAS 144 retains the
fundamental provisions of SFAS 121 for (a) recognition and
measurement of the impairment of long-lived assets to be held and
used and (b) measurement of long-lived assets to be disposed of
by sale.  The adoption of SFAS 144 is not anticipated to have a
material adverse effect on the Company's financial position or
results of operations.


NOTE 3 - ACCOUNTS RECEIVABLE
----------------------------

         Accounts receivable consist of the following (dollars in
thousands):

                                              December 31,
                                             2001       2000
                                             ----      ----

        Trade receivables                 $ 4,294     $ 4,190
        Due from unaffiliated growers         448         541
        Other                               2,090       3,670
                                          -------     -------

                                            6,832       8,401

          Less allowance for
           doubtful accounts                 (506)       (522)
                                          -------     -------

                                          $ 6,326     $ 7,879
                                          =======     =======

                             Page 78

   Substantially all trade receivables are from large domestic
national and regional supermarket chain stores and produce
brokers and are unsecured.  Amounts due from unaffiliated growers
represent receivables for harvest advances and for services
(harvest, haul and pack) provided on behalf of growers under
agreement with the Company and are recovered from proceeds of
product sales.  Other receivables primarily include wine grape
and raisin sales, proceeds due from third party marketers,
receivables for international licensing, and other miscellaneous
receivables.


NOTE 4 - INVENTORIES
--------------------

   Inventories consist of the following (dollars in thousands):

                                             December 31,
                                            2001      2000
                                            ----      ----

        Growing crops                    $ 10,376   $ 11,740
        Materials and supplies              2,621      2,880
        Harvested product                     218        528
        Pepper seed                            14        257
                                          --------  -------

                                         $ 13,229   $ 15,405
                                         ========   ========


NOTE 5 - PROPERTY, PLANT, EQUIPMENT AND WATER PROGRAMS
------------------------------------------------------

   Property, plant, equipment and water programs consist of the
following (dollars in thousands):

                                                 December 31,
                                                2001      2000
                                                ----      ----

        Land                                $ 49,178  $ 49,196
        Permanent crops                       58,489    58,860
        Developing crops                      12,486     9,546
        Buildings                             21,182    20,496
        Machinery and equipment               14,760    14,025
        Water programs                         2,525     2,135
                                            --------  --------

                                             158,620   154,258
       Less accumulated depreciation         (34,589)  (28,276)
                                            --------  --------

                                            $124,031  $125,982
                                            ========  ========

                             Page 79

NOTE 6 - OTHER ASSETS
---------------------

     Other assets consist of the following (dollars in
thousands):

                                                   December 31,
                                                  2001      2000
                                                  ----      ----

        Deferred loan costs, net                 $ 1,781   $ 2,510
        Long-term receivables                        342     1,799
        Capitalized trademark development, net     2,000     1,713
        Receivable from KADCO to be
          paid in common shares                    2,813     1,563
        Other                                         10         -
                                                 -------   -------

                                                 $ 6,946   $ 7,585
                                                 =======   =======

NOTE 7 - ACCRUED LIABILITIES
----------------------------

     Accrued liabilities consist of the following (dollars in
thousands):

                                                 December 31,
                                                2001      2000
                                                ----      ----

        Interest                              $ 2,695    $ 2,780
        Payroll and benefits                    1,743      1,609
        Other                                     451      1,077
                                              -------    -------

                                              $ 4,889    $ 5,466
                                              =======    =======


NOTE 8 - REVOLVING CREDIT FACILITIES
------------------------------------

     In November 2001, Sun World renewed its Revolving Credit
Facility through the 2002 growing season with a maturity date of
November 2002.  Amounts eligible to be borrowed under the
Revolving Credit Facility are based upon a borrowing base of
eligible accounts receivable and inventory balances.  Maximum
availability under the Revolving Credit Facility varies
throughout the year with a maximum of $30 million available
during the peak borrowing periods of April to July.  The
Revolving Credit Facility is secured by accounts receivable,
inventory, and the proceeds thereof, requires Sun World to meet
certain financial covenants, and is guaranteed by the Company.
Amounts borrowed under the facility accrue interest at either
prime plus 1.0% or LIBOR plus 2.50% at the Company's election.
No amounts were outstanding under the Revolving Credit Facility
at December 31, 2001 and 2000.

                             Page 80


NOTE 9 - LONG-TERM DEBT
-----------------------

     Management estimates that the fair value of the Company's
long-term debt approximates the carrying value for all debt
instruments except the Series B First Mortgage Notes ("First
Mortgage Notes"). The fair value of the First Mortgage Notes is
estimated to be approximately $106.1 million based on quoted
market prices as of December 31, 2001.   At December 31, 2001 and
December 31, 2000, the carrying amount of the Company's
outstanding debt is summarized as follows (dollars in thousands):

                                                   December 31,
                                                 2001        2000
                                                 ----        ----
   Series B First Mortgage Notes,
     interest payable
     semi-annually, with principal
     due in April 2004,
     interest at 11.25%                        $ 115,000  $ 115,000

   Senior unsecured term loan,
      interest payable
      quarterly, due
      December 31, 2002, interest
      at LIBOR plus 3% (5.60% at
      December 31, 2001 and
      9.40% at December 31, 2000)                  5,000      5,000

   Note payable to bank,
      quarterly principal installments
      of $72 plus interest
      payable monthly, due
      December 31, 2003, interest at prime
      (4.75% at December 31, 2001 and
      9.50% at December 31, 2000)                  1,142      1,500

   Note payable to insurance company,
    Quarterly installments of $120
    (including interest), due
      January 1, 2005, interest at 7.75%             945      1,639

   Note payable to finance company,
     monthly installments
      of $18 (including interest),
      due July 1, 2002,
      interest at 7.50%                              103        305

   Other                                             269        255

Debt discount                                       (802)    (1,142)
                                                --------   --------

                                                 121,657    122,557

   Less: current portion                          (4,960)      (859)
                                                --------   --------

                                               $ 116,697  $ 121,698
                                               =========  =========

     Annual maturities of long-term debt outstanding (in
thousands), excluding $802 representing the unamortized portion
of warrants on December 31, 2001 are as follows: 2002 - $5,762;
2003 - $1,250; 2004 - $115,419, 2005 - $23, and 2006 - $5.

                             Page 81

     In April 1997, the Company issued $115 million of Series A
First Mortgage Notes through a private placement.  The notes have
subsequently been exchanged for Series B First Mortgage Notes,
which are registered under the Securities Act of 1933 and are
publicly traded.  The First Mortgage Notes are secured by a first
lien (subject to certain permitted liens) on substantially all of
the assets of the Company and its subsidiaries other than growing
crops, crop inventories and accounts receivable and proceeds
thereof, which secure the Revolving Credit Facility.  The First
Mortgage Notes mature April 15, 2004, but are redeemable at the
option of the Company, in whole or in part, at any time on or
after April 15, 2001. The First Mortgage Notes include covenants
that do not allow for the payment of dividends by the Company
other than out of cumulative net income.

     The First Mortgage Notes are also secured by the guarantees
of Coachella Growers, Inc., Sun Desert, Inc., Sun World/Rayo, and
Sun World International de Mexico S.A. de C.V. (collectively, the
"Sun World Subsidiary Guarantors") and by the Company.  Cadiz
also pledged all of the stock of Sun World as collateral for its
guarantee.

     In December 2000, Sun World entered into a two-year $5
million senior unsecured term loan.  In connection with obtaining
the loan, the Company issued 50,000 shares of Cadiz' common stock
as well as certain warrants to purchase shares of Cadiz' common
stock. The fair value of the stock and the warrants were recorded
as a debt discount and are being amortized over the life of the
loan.

     Pursuant to Statement of Financial Accounting Standards No.
133, "Accounting for Derivative Instruments and Hedging
Activities", the warrants meet the definition of a derivative for
the Company as the value of the warrants is tied to the market
value of Cadiz stock.  As such, the value of the warrants will be
adjusted to fair value at each reporting date with the
corresponding gain or loss being included in the Statement of
Operations.

                             Page 82


NOTE 10 - INCOME TAXES
----------------------

     Significant components of the Company's deferred income tax
assets and liabilities as of December 31, 2001 and 2000 are as
follows (dollars in thousands):

                                                 December 31,
                                              2001        2000
                                              ----        ----
   Deferred tax liabilities:
        Net fixed assets basis difference   $  8,490  $  8,077
        Other                                     48        48
                                            --------  --------


          Total deferred tax liabilities       8,538     8,125
                                            --------  --------

   Deferred tax assets:
        Net operating losses                  19,280     9,811
        Reserve for notes receivable               -     1,178
   State taxes                                 1,854     1,854
        Reserves and accruals                  2,098     1,215
        Other                                    894       513

          Total deferred tax assets           24,126    14,571

   Valuation allowance for
    deferred tax assets                      (21,035)  (11,893)
                                            --------  --------


          Net deferred tax liability       $   5,447  $  5,447
                                            ========  ========

     As of December 31, 2001, the Company has net operating loss
(NOL) carryforwards of approximately $48.5 million for federal
income tax purposes.  Such carryforwards expire in varying
amounts through the year 2021.  As of December 31, 2001, the
Company has state NOL carryforwards of approximately $31.7
million.  These NOL carryforwards expire in varying amounts
through the year 2011.

     A reconciliation of the income tax expense to the statutory
federal income tax rate is as follows (dollars in thousands):

                                                Year Ended
                                                December 31,
                                          2001       2000      1999
                                          ----       ----      ----

  Expected federal income
     tax benefit at 34%              $  (7,497) $  (4,779) $  (194)
  Loss with no tax benefit provided      7,531      4,663       131
  State income tax                           6        147         8
  Foreign withholding taxes                 51         79         -
  Other non-deductible expenses            (34)        50        55
                                      --------   --------  --------

       Income tax expense            $      57   $   160    $     -
                                     =========   =======    =======

                             Page 83


NOTE 11 - EMPLOYEE BENEFIT PLANS
--------------------------------

     The Company participates in the Cadiz Inc. 401(k) Plan for its
salaried employees. Employees must work 1,000 hours annually and
have completed one year of service to be eligible to participate
in this plan.  The Company matches 75% of the first four percent
deferred by an employee up to $1,600 per year.  In addition, the
Company maintains a defined contribution pension plan covering
its employees who (i) are not covered by a collective bargaining
agreement, (ii) have at least one year of service and (iii) have
worked at least 1,000 hours annually.  Contributions are 2% of
each covered employee's salary.  For those hourly employees
covered under a collective bargaining agreement, contributions
are made to a multi-employer pension plan in accordance with
negotiated labor contracts and are generally based on the number
of hours worked.


NOTE 12 - RELATED PARTY TRANSACTIONS
-------------------------------------

     Cadiz owns approximately 1,600 acres of irrigated farmland in
San Bernardino County consisting primarily of citrus and grapes.
Pursuant to a 10-year lease entered into as of the acquisition
date, the Company is responsible for the production, packing,
handling, and marketing of the products on the Cadiz property.
Pursuant to the lease as amended in April 1997, Cadiz is to
receive annual land rent of $250 per acre, or $400,000.  In
addition, the Company entered into a service agreement with Cadiz
in which Cadiz provides management and financial services to the
Company.  The term of the agreement is 10 years with an annual
fee of $1.5 million.  The agreement provides for certain other
reimbursement of expenses incurred on behalf of the Company.  The
Company made payments to Cadiz of $2.4 million for 2001, $2.3
million for 2000, and $2.4 million for 1999 pursuant to the
services agreement and the lease agreement mentioned above. In
addition, the Company purchased a citrus ranch from Cadiz at book
value of $1.5 million in January 1999.

     The Company has intercompany revolving credit agreements
whereby the Company can loan or borrow from Cadiz as needed.
Under the intercompany revolving credit agreement, $11.3 million
was outstanding as of December 31, 2001 and no amount was
outstanding as of December 31, 2000.


NOTE 13 - NON-RECURRING COMPENSATION EXPENSE
--------------------------------------------

     In 2001, Cadiz issued 300,860 deferred stock units to
certain senior managers of Sun World.  These deferred stock units
were issued in exchange for the cancellation of 565,000 fully
vested options to purchase the Cadiz common stock held by senior
managers. In accordance with the terms of the Stock Option
Exchange Agreements, the number of the deferred stock units
issued was calculated based on the average closing price for the
10 business days following the filing of the Cadiz Annual Report
on Form 10-K for the year ended December 31, 2000 on March 29,
2001.  Each deferred stock unit is exchangeable for one share of
Cadiz common stock at the end of the deferral period elected by
the holder.  The Company recorded a one-time charge of $2,953,000
in 2001 and no cash was expended in connection with the issuance
of the deferred stock units.

                             Page 84

NOTE 14 - CONTINGENCIES
-----------------------

     In the normal course of its agricultural operations, the
Company handles, stores, transports and dispenses products
identified as hazardous materials.  Regulatory agencies
periodically conduct inspections and, currently, there are no
pending claims with respect to hazardous materials.

     The Company is involved in other legal and administrative
proceedings and claims.  In the opinion of management, the
ultimate outcome of each proceeding or all such proceedings
combined will not have a material adverse impact on the Company's
financial statements.

                             Page 85

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.2
<SEQUENCE>3
<FILENAME>exhibit10-2.txt
<DESCRIPTION>AMENDMENT TO THE CADIZ 1996 STOCK OPTION PLAN
<TEXT>
                                                EXHIBIT 10.2
                                                ------------


                 AMENDMENT TO THE CADIZ INC.
                   1996 STOCK OPTION PLAN


The Cadiz Inc. 1996 Stock Option Plan is hereby amended as
follows:

  1.     Section 5.1.10 shall be amended by adding the
          following at the end of Section 5.1.10:

          "Notwithstanding the foregoing, the Participant,
          upon written notice to the Committee, may elect
          irrevocably, prior to exercise thereof, to
          voluntarily disqualify any ISO held by the
          Participant and to treat such Option for all
          purposes as a NQSQ.  The Company hereby consents
          to any such valid disqualification of an ISO by a
          Participant and agrees to characterize such Option
          as a NQSQ after receipt of a valid
          disqualification election."

  2.     Section 6.1 shall be amended by adding the
          following at the end of Section 6.1:

          "Notwithstanding the foregoing, if the payment for
          Shares purchased pursuant to the Plan with respect
          to  the  exercise of any Options by a  Participant
          who  has  a deferral election in effect under  the
          Company's   Deferred   Compensation   Plan    (the
          "Deferral  Plan") is paid solely  by  surrendering
          Common  Stock  (which meets the  requirements  set
          forth  in  the  Deferral Plan), the Company  shall
          deliver  to  the  trustee of the  trust,  if  any,
          established under the Deferral Plan, a certificate
          or certificates representing such number of shares
          of  Common  Stock determined by dividing  (i)  the
          excess  of (A) the Fair Market Value of the shares
          of  Common Stock purchased pursuant to such Option
          exercise, over (B) the aggregate exercise price of
          the  shares of Common Stock purchased, by (ii) the
          Fair  Market  Value of one share of Common  Stock.
          In  addition, as soon as practicable after receipt
          of  the  shares  of Common Stock representing  the
          Option  exercise price, the Company shall  deliver
          to  the  Participant a certificate or certificates
          representing shares with a Fair Market Value equal
          to  the aggregate option exercise price paid.  For
          purposes  of  the foregoing, the exercise  of  any
          Option  will  be deemed to have occurred  at  5:00
          p.m.  Pacific  Standard time  on  the  immediately
          preceding business day and Fair Market Value shall
          be determined as of such time."

  3.     Section 7.1 shall be replaced in its entirety  with
          the following:

          "TAX  WITHHOLDING.  The Company may  withhold,  at
          the election of the Participant, from Common Stock
          to  be  issued or cash to be paid under the  Plan,
          the number of shares of Common Stock having a Fair
          Market  Value equal to, or cash in the amount  of,
          or  a combination of shares and cash equal to, the
          amount   of   tax  required  by  any  governmental
          authority  to be withheld to cover any  applicable
          withholding   and   employment  taxes;   provided,
          however, that in the event a deferral election  is
          in  effect  with respect to the shares  of  Common
          Stock deliverable upon exercise of an Option, then
          the   Participant  may  elect  to  have  any  such
          withholding made from the Common Stock tendered to
          exercise    such    Option.    Alternatively,    a
          Participant may pay to the Company the  amount  of
          cash  required  to  be withheld  in  lieu  of  any
          withholding of distribution under the Plan."

     In accordance with authorizations and directions of the
     Board   of  Directors  of  Cadiz  Inc.,  the  foregoing
     amendment to the Cadiz Inc. 1996 Stock Option  Plan  is
     hereby  adopted effective as of March 14, 2001, by  the
     undersigned duly authorized officers.



                         ___________________________________
                              Title:

     _______________________________
     Title:  Secretary

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.3
<SEQUENCE>4
<FILENAME>exhibit10-3.txt
<DESCRIPTION>CADIZ AMENDED AND RESTATED 1998 STOCK OPTION PLAN
<TEXT>
                                                     EXHIBIT 10.3
                                                     ------------



                           CADIZ INC.

                      AMENDED AND RESTATED

              1998 NON-QUALIFIED STOCK OPTION PLAN


1.   PURPOSE
     -------

     The purpose of the Plan is to provide incentives to attract,
retain and motivate eligible persons whose present and potential
contributions are important to the success of the Company and its
Subsidiaries and Affiliates, by offering them an opportunity to
participate in the Company's future performance through awards of
Options.

     It is intended that Options issued pursuant to this Plan
shall constitute non-qualified stock options ("NQSOs") as
described in Treasury Regulation Section 1.83-7 to which Section
421 does not apply.

     Capitalized terms not defined in the text are defined in
Section 20.

2.   SHARES SUBJECT TO THE PLAN
     --------------------------

     2.1  NUMBER OF SHARES AVAILABLE.  Subject to Sections 2.2
and 14, the total number of Shares reserved and available for
grant and issuance pursuant to the Plan shall be 792,500 Shares;
provided, however, that the total number of options granted under
the Plan, when combined with the total number of options granted
(and not subsequently cancelled) by the Company under its 1996
Stock Option Plan, shall at no time exceed 4,000,000.  Subject to
Sections 2.2 and 14, Shares reserved for issuance pursuant to
Options granted under this Plan shall again be available for
grant and issuance, in connection with future Options under the
Plan, that: (a) are subject to issuance upon exercise of an
Option, but cease to be subject to such Option for any reason
other than exercise of such Option, or (b) are subject to an
Option that otherwise terminates without such Shares being issued
and for which the participant did not receive any benefits of
ownership.

     2.2  ADJUSTMENT OF SHARES.  In the event that the number of
outstanding shares of the Company's Common Stock is changed by a
stock dividend, recapitalization, stock split, reverse stock
split, subdivision, combination, reclassification or similar
change in the capital structure of the Company without
consideration, then: (a) the number of Shares reserved for
issuance under the Plan, and (b) the Exercise Prices of and
number of Shares subject to outstanding Options, shall be
proportionately adjusted, subject to any required action by the
Board or the stockholders of the Company and compliance with
applicable securities laws; provided, however, that fractions of
a Share shall not be issued, but shall either be paid in cash at
Fair Market Value or shall be rounded up to the nearest Share, as
determined by the Committee; and provided, further, that the
Exercise Price of any Option may not be decreased to below the
par value of the Shares.

                             Page 1

3.   ELIGIBILITY
     -----------

     3.1  ELIGIBILITY OF EMPLOYEES, CONSULTANTS AND INDEPENDENT
CONTRACTORS; NON-ELIGIBILITY OF INSIDERS.  NQSOs may be granted
to employees, consultants, independent contractors and advisers
of the Company or any Subsidiary or Affiliate of the Company
(other than Insiders, who shall not be eligible to receive
Options under the Plan); provided, however, that such
consultants, contractors and advisers render bona fide services
not in connection with the offer and sale of securities in a
capital-raising transaction.

4.   ADMINISTRATION.
     --------------

     4.1  COMMITTEE AUTHORITY.  The Plan shall be administered by
the Committee or the Board acting as the Committee.  Subject to
the purposes, terms and conditions of the Plan, and to the
direction of the Board, the Committee shall have full power to
implement and carry out the Plan.  The Committee shall have the
authority to:

          (a)  construe and interpret the Plan, any Option
     Agreement and any other agreement or document executed
     pursuant to the Plan;

          (b)    prescribe, amend and rescind rules and
       regulations relating to the Plan;

          (c)  select persons to receive Options;

          (d)  determine the form and terms of Options;

          (e)    determine the number of Shares or other
       consideration subject to Options;

          (f)    determine whether Options will be granted
       singly, in combination or in tandem with, in replacement
       of, or as alternatives to, other Options under the Plan
       or any other incentive or compensation plan of the
       Company or any Subsidiary or Affiliate of the Company;

          (g)    grant waivers of Plan or Option conditions;

          (h)    determine the vesting, exercisability and
       payment of Options and to accelerate the vesting and/or
       exercisability of Options, as provided herein;

          (i)    correct, any defect, supply any omission, or
       reconcile any inconsistency in the Plan, any Option or
       any Option Agreement;

          (j)    determine whether an Option has been earned;
       and

          (k)    make all other determinations necessary or
       advisable for the administration of the Plan.

                             Page 2

     4.2  COMMITTEE DISCRETION.  Any determination permitted to
be made by the Committee under the Plan with respect to any
Option shall be made in its sole discretion at the time of grant
of the Option or, unless in contravention of any express term of
the Plan or Option, at any later time, and such determination
shall be final and binding on the Company and all persons having
an interest in any Option under the Plan.

     4.3  COMPOSITION OF COMMITTEE.  The Committee shall be
comprised of either (i) at least two members of the Board; or
(ii) the Board acting as the Committee.

5.   GRANT AND EXERCISE OF OPTIONS
     -----------------------------

     5.1  GRANT OF OPTIONS.  Except as otherwise limited herein,
the Committee may grant Options to eligible persons pursuant to
this Section 5.1 and shall determine the number of Shares subject
to the Option, the Exercise Price of the Option, the period
during which the Option may be exercised, and all other terms and
conditions of the Option, subject to the following:

       5.1.1   FORM OF OPTION GRANT.  Each Option granted shall
be evidenced by an Option Agreement, which shall expressly
identify the Option as an NQSO ("Stock Option Agreement"), and be
in such form and contain such provisions (which need not be the
same for each Participant receiving an Option) as the Committee
shall from time to time approve, and which shall comply with and
be subject to the terms and conditions of the Plan.  The
Committee may in its discretion include in any NQSO granted under
the Plan a condition that the Participant shall agree to remain
in the employ of, and to render services to, the Company or any
of its Subsidiaries for a period of time (specified in the
agreement) following the date the NQSO is granted.

       5.1.2   DATE OF GRANT.  The date of grant of an Option
shall be the date on which the Committee makes the determination
to grant such Option. The Stock Option Agreement and a copy of
the Plan will be delivered to the Participant within a reasonable
time after the granting of such Option.

       5.1.3   EXERCISE PERIOD.  Options shall be exercisable
within the times or upon the events determined by the Committee
as set forth in the Stock Option Agreement; provided, however
that no Option shall be exercisable after the expiration of ten
(10) years from the date the Option is granted.

       5.1.4   EXERCISE PRICE.  The Exercise Price shall be
determined by the Committee when an Option is granted and may be
not less than the greater of (i) 100% of the Fair Market Value of
the Shares on the date of grant, or (ii) the par value of the
Shares.  Payment for the Shares purchased may be made in
accordance with Section 6 of the Plan.

                             Page 3

       5.1.5   METHOD OF EXERCISE.  Options may be exercised only
by delivery to the Company of a written stock option exercise
agreement (the "Exercise Agreement") in a form approved by the
Committee (which need not be the same for each Participant
receiving an Option pursuant to the Plan), stating the number of
Shares being purchased, the restrictions imposed on the Shares,
if any, and such representations and agreements regarding
Participant's investment intent, access to information and other
matters, if any, as may be required or desirable by the Company
to comply with applicable securities laws, together with payment
in full of the Exercise Price for the number of Shares being
purchased.

       5.1.6   TERMINATION.  Notwithstanding the exercise periods
set forth in the Stock Option Agreement, exercise of an Option
shall always be subject to the following:

          (a)    If the Participant is Terminated for any reason
       except death or Disability, then the Participant may
       exercise such Participant's Options, only to the extent
       that such Options would have been exercisable upon the
       Termination Date, no later than ninty (90) days after the
       Termination Date, but in any event, no later than the
       expiration date of the Options.

          (b)    If the Participant is terminated because of
       death or Disability, then the Participant's Options may
       be exercised, only to the extent that such Options would
       have been exercisable by Participant on the Termination
       Date (whether through prior vesting or accelerated
       vesting pursuant to Section 5.2.3 of the Plan), and must
       be exercised by Participant (or Participant's legal
       representative or authorized assignee) no later than one
       hundred eighty (180) days after the Termination Date, but
       in any event no later than the expiration date of the
       Options.

       5.1.7   LIMITATIONS ON EXERCISE.  The Committee may
specify a reasonable minimum number of Shares that may be
purchased on any exercise of an Option, provided that such
minimum number will not prevent Participant from exercising the
Option for the full number of Shares for which it is then
exercisable.

       5.1.8   MODIFICATION, EXTENSION OR RENEWAL.  The Committee
may modify, extend or renew outstanding Options and authorize the
grant of new Options in substitution therefor, provided that any
such action may not, without the written consent of a
Participant, impair any of such Participant's rights under any
Option previously granted.

     5.2  ACCELERATED VESTING.

       5.2.1   The Committee shall have the authority to
accelerate the exercisability of Options granted pursuant to the
terms of this Plan.

       5.2.2   Notwithstanding anything herein to the contrary,
if a Change in Control of the Company occurs or if the Committee
determines in its sole discretion that an Acceleration Event has
occurred, then all Options shall become fully exercisable as of
the date such Change in Control occurred or the Committee
determines that an Acceleration Event has occurred.

                             Page 4

       5.2.3  Notwithstanding anything herein to the contrary,
any Options granted under the Plan, the vesting of which are
conditioned solely upon the passage of time and continued
employment of the Option holder, shall be accelerated and shall
be immediately exercisable upon the death or disability of such
Option holder (subject only to the limitations on exercise set
forth in Section 5.1.6 of the Plan).

6.   PAYMENT FOR SHARE PURCHASES
     ---------------------------

     6.1  PAYMENT.  Payment for Shares purchased pursuant to the
Plan may be made in cash (by check or equivalent) or, where
expressly approved by the Committee and permitted by law by:

          (a)    by cancellation of indebtedness of the Company
       to the Participant;

          (b)    by surrender of shares of the Company's Common
       Stock that either: (1) have been owned by Participant for
       more than six (6) months and have been paid for within
       the meaning of Rule 144 of the Securities Act; or were
       obtained by Participant in the public market; and, (2)
       are clear of all liens, claims, encumbrances or security
       interests;

          (c)    by waiver of compensation due or accrued to
       Participant for services rendered;

          (d)    provided that a public market for the Company's
       stock exists and subject to the ability of the
       Participant to sell Shares in compliance with applicable
       securities laws:

               (i)  through a "same day sale" commitment from the
          Participant and a broker-dealer that is a member of the
          National Association of Securities Dealers (an "NASD
          Dealer") whereby the Participant irrevocably elects to
          exercise the Option and to sell a portion of the Shares
          so purchased in order to pay the Exercise Price, and
          whereby the NASD Dealer irrevocably commits upon
          receipt of such Shares to forward the Exercise Price
          directly to the Company; or

               (ii) through a "margin" commitment from the
          Participant and an NASD Dealer whereby Participant
          irrevocably elects to exercise the Option and to pledge
          the Shares so purchased to the NASD Dealer in a margin
          account as security for a loan from the NASD Dealer in
          the amount of the Exercise Price, and whereby the NASD
          Dealer irrevocably commits upon receipt of such Shares
          to forward the Exercise Price directly to the Company;
          or

          (e)  by any combination of the foregoing.

     Notwithstanding the foregoing, if the payment for Shares
purchased pursuant to the Plan with respect to the exercise of any
Options by a Participant who has a deferral election in effect
under the Company's Deferred Compensation Plan (the "Deferral
Plan") is paid solely by surrendering Common Stock (which meets
the requirements set forth in the Deferral Plan), the Company
shall deliver to the trustee of the trust, if any, established
under the Deferral Plan, a certificate or certificates
representing such number of shares of

                                  Page 5

Common Stock determined by dividing (i) the excess of
(A) the Fair Market Value of the shares of Common Stock purchased
pursuant to such Option exercise, over (B) the aggregate exercise
price of the shares of Common Stock purchased, by (ii) the Fair
Market Value of one share of Common Stock.  In addition, as soon
as practicable after receipt of the shares of Common Stock representing
the Option exercise price, the Company shall deliver to the
Participant a certificate or certificates representing shares with
a Fair Market Value equal to the aggregate option exercise price
paid.  For purposes of the foregoing, the exercise of any Option
will be deemed to have occurred at 5:00 p.m. Pacific Standard time
on the immediately preceding business day and Fair Market Value shall
be determined as of such time.

7.   WITHHOLDING TAXES
     -----------------

     7.1  TAX WITHHOLDING.  The Company may withhold, at the election
of the Participant, from Common Stock to be issued or cash to be paid
under the Plan, the number of shares of Common Stock having a Fair
Market Value equal to, or cash in the amount of, or a combination of
shares and cash equal to, the amount of tax required by any governmental
authority to be withheld to cover any applicable withholding and
employment taxes; provided, however, that in the event a deferral
election is in effect with respect to the shares of Common Stock
deliverable upon exercise of an Option, then the Participant may elect
to have any such withholding made from the Common Stock tendered to
exercise such Option.  Alternatively, a Participant may pay to the
Company the amount of cash required to be withheld in lieu of any
withholding of distribution under the Plan.

8.   PRIVILEGES OF STOCK OWNERSHIP
     -----------------------------

     8.1  VOTING AND DIVIDENDS.  No Participant shall have any of
the rights of a stockholder with respect to any Shares until the
Shares are issued to the Participant.  After Shares are issued to
the Participant, the Participant shall be a stockholder and have
all the rights of a stockholder with respect to such Shares,
including the right to vote and receive all dividends or other
distributions made or paid with respect to such Shares.

     8.2  FINANCIAL STATEMENTS.  The Company shall provide
financial statements to each Participant annually during the
period such Participant has Options outstanding, provided,
however, that the Company shall not be required to provide such
financial statements to Participants whose services in connection
with the Company assure them access to equivalent information.

9.   TRANSFERABILITY
     ---------------

     Options granted under the Plan, and any interest therein,
shall not be transferable or assignable by Participant, and may
not be made subject to execution, attachment or similar process,
otherwise than by will or by the laws of descent and distribution
or as consistent with the specific Plan and Option Agreement
provisions relating thereto.  During the lifetime of the
Participant, an Option shall be exercisable only by the
Participant, and any elections with respect to an Option, may be
made only by the Participant.

10.  CERTIFICATES
     ------------

     All certificates for Shares or other securities delivered
under the Plan shall be subject to such stock transfer orders,
legends and other restrictions as the Committee may deem

                             Page 6

necessary or advisable, including restrictions under any
applicable federal, state or foreign securities law, or any
rules, regulations and other requirements of the SEC or any stock
exchange or automated quotation system upon which the Shares may
be listed.

11.  EXCHANGE AND BUYOUT OF OPTIONS
     ------------------------------

     The Committee may, at any time or from time to time,
authorize the Company, with the consent of the respective
Participants, to issue new Options in exchange for the surrender
and cancellation of any or all outstanding Options. The Committee
may at any time buy from a Participant an Option previously
granted with payment in cash, Shares or other consideration,
based on such terms and conditions as the Committee and the
Participant shall agree.

12.  SECURITIES LAW AND OTHER REGULATORY COMPLIANCE
     ----------------------------------------------

     An Option shall not be effective unless such Option is in
compliance with all applicable federal and state securities laws,
rules and regulations of any governmental body, and the
requirements of any stock exchange or automated quotation system
upon which the Shares may then be listed, as they are in effect
on the date of grant of the Option and also on the date of
exercise or other issuance.  Notwithstanding any other provision
in the Plan, the Company shall have no obligation to issue or
deliver certificates for Shares under the Plan prior to: (a)
obtaining any approvals from governmental agencies that the
Company determines are necessary or advisable, and/or (b)
completion of any registration or other qualification of such
Shares under any state or federal law or ruling of any
governmental body that the Company determines to be necessary or
advisable.  The Company shall be under no obligation to register
the Shares with the SEC or to effect compliance with the
registration, qualification or listing requirements of any state
securities laws, stock exchange or automated quotation system,
and the Company shall have no liability for any inability or
failure to do so.

13.  NO OBLIGATION TO EMPLOY
     -----------------------

     Nothing in the Plan or any Option granted under the Plan
shall confer or be deemed to confer on any Participant any right
to continue in the employ of, or to continue any other
relationship with, the Company, or  any Subsidiary or Affiliate
of the Company or limit in any way the right of the Company or
any Subsidiary or Affiliate of the Company to terminate
Participant's employment or other relationship at any time, with
or without cause.

14.  CHANGES IN THE COMPANY'S CAPITAL STRUCTURE
     ------------------------------------------

     The existence of outstanding Options shall not affect in any
way the right or power of the Company or its stockholders to make
or authorize  all adjustments, recapitalizations, reorganizations
or other changes in the Company's capital structure or its
business, or any merger or consolidation of the Company, or any
issue of bonds, debentures, preferred or prior preference stock
ahead of or affecting the Common Stock or the rights thereof, or
the dissolution or liquidation of the Company, or any other
corporate act or proceeding, whether of a similar character or
otherwise.

     If the Company shall effect a subdivision or consolidation
of shares or other capital readjustment, the payment of a stock
dividend, or other increase or reduction of the number of shares
of its Common Stock outstanding, without receiving compensation
therefor in money, services or property, then (i) the number,
class, and per share price of Shares subject to outstanding
Options hereunder shall be appropriately adjusted in such a
manner as to entitle a

                             Page 7

Participant to receive upon exercise thereof (and, if relevant,
for the same aggregate cash consideration), the same total number
and class of shares as such Participant would have received had
such Participant exercised such Option in full immediately prior
to such event; and (ii) the number and class of shares with
respect to which Options may be granted under the Plan shall be
adjusted by substituting for the total number of shares of Common
Stock then reserved that number and class of shares of stock that
would have been received by the owner of an equal number of
outstanding shares of Common Stock as the result of the event
requiring the adjustment.

     After a merger of one or more corporations into the Company,
or after a consolidation of the Company and one or more
corporations in which the Company shall be the surviving
corporation, each holder of an outstanding Option shall, at no
additional cost, be entitled to receive upon exercise of such
Option (subject to any required action by stockholders of the
Company) in, lieu of the number of Shares as to which such Option
shall then be so exercisable, the number and class of shares of
stock or other securities to which such holder would have been
entitled pursuant to the terms of the agreement of merger or
consolidation if, immediately prior to such merger or
consolidation, such holder had been the holder of record of a
number of shares of Common Stock equal to the number of shares as
to which such Option shall be so exercised.

     If the Company is merged into or consolidated with another
corporation under circumstances where the Company is not the
surviving corporation, or if the Company is liquidated, or sells
or otherwise disposes of substantially all its assets to another
corporation while unexercised Options remain outstanding under
the Plan, (i) subject to the provisions of clause (ii) below,
after the effective date of such merger, consolidation or sale,
as the case may be, each holder of an outstanding Option shall be
entitled to receive upon exercise of such Option in lieu of
shares of Common Stock, shares of such stock or other securities,
cash or property as the holders of shares of Common Stock
received pursuant to the terms of the merger, consolidation or
sale; or (ii) all outstanding Options may be canceled by the
Board as of the effective date of any such merger, consolidation,
liquidation or sale provided that: (x) notice of such
cancellation shall be given to each holder of an Option, and (y)
each holder of an Option shall have the right to exercise such
Option to the extent that the same is then exercisable or, if the
Board shall have accelerated the time for exercise of all
unexercised and unexpired Options, in full during the 30-day
period preceding the effective date of such merger,
consolidation, liquidation or sale.

     Except as expressly provided above, the issue by the Company
of shares of stock of any class, securities convertible into
shares of stock of any class, for cash, property or services,
either upon direct sale or upon the exercise of rights or
warrants to subscribe therefor, or upon conversion of shares or
obligations of the Company convertible into such shares or other
securities, shall not affect, and no adjustment by reason thereof
shall be made with respect to, the number or price of Shares then
subject to outstanding Options.

15.  ADOPTION
     --------

     The Plan shall become effective on the date that it is
adopted by the Board (the "Effective Date").

16.  TERM OF PLAN
     ------------

     The Plan will terminate ten (10) years from the Effective Date.

                             Page 8

17.  AMENDMENT OR TERMINATION OF PLAN
     --------------------------------

     The Board may at any time terminate or amend the Plan in any
respect, including without limitation amendment of any form of
Option Agreement or instrument to be executed pursuant to the
Plan; provided, however, that no termination or amendment to this
Plan may, without the consent of the holder of an outstanding
Option, terminate such Option or materially adversely affect the
rights of the holder under such Option.

18.  NONEXCLUSIVITY OF THE PLAN
     --------------------------

     Neither the adoption of the Plan by the Board nor any
provision of the Plan shall be construed as creating any
limitations on the power of the Board to adopt such additional
compensation arrangements as it may deem desirable, including,
without limitation, the granting of stock options and bonuses
otherwise than under the Plan, and such arrangements may be
either generally applicable or applicable only in specific cases.

19.  GOVERNING LAW
     -------------

     The Plan and all agreements, documents and instruments
entered into pursuant to the Plan shall be governed by and
construed in accordance with the internal laws of the State of
California, excluding that body of law pertaining to conflict of
laws.

20.  DEFINITIONS
     -----------

     As used in the Plan, the following terms shall have the
following meanings:

     "ACCELERATION EVENT" means but is not limited to, any Change
of Control of the  Company or other event determined in the
discretion of the Committee.

     "AFFILIATE" means any corporation that directly, or
indirectly through one or more intermediaries, controls or is
controlled by, or is under common control with, another
corporation, where "control" (including the terms "controlled by"
and "under common control with" means the possession, direct or
indirect, of the power to cause the direction of the management
and policies of the corporation, whether through the ownership of
voting securities, by contract or otherwise.

     "BOARD" means the Board of Directors of the Company.

     "CHANGE IN CONTROL" means the occurrence of any of the
following events:

     (a)  when the Company acquires actual knowledge that any
person (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act) is or becomes the beneficial owner (as defined in
Rule 13d-3 of the Exchange Act) directly or indirectly, of
securities of the Company representing 25% or more of the
combined voting power of the Company's then-outstanding
securities;

     (b)  upon the first purchase of Common Stock pursuant to a
tender or exchange offer (other than a tender or exchange offer
made by the Company);

     (c)  upon the approval by the Company's shareholders of: (i)
a merger or consolidation of the Company with or into another
corporation, which does not result in any capital reorganization
or reclassification or other change in the Company's then-
outstanding shares of

                             Page 9

Common Stock), (ii) a sale or disposition of all or substantially
all of the Company's assets, or (iii) a plan of liquidation or
dissolution of the Company;

     (d)  if during any period of two consecutive years, the
individuals who at the beginning of such period constitute the
Board of Directors of the Company cease for any reason to
constitute at least a majority thereof, unless the election, or
the nomination for election by the Company's shareholders, of
each new director is approved by a vote of at least two-thirds of
the directors then still in office who were directors at the
beginning of the period; or

     (e)  if the Board of Directors or any designated committee
determines, in its sole discretion, that any person (such as that
term is used in Sections 13(d) and 14(d) of the Exchange Act)
directly or indirectly exercises a controlling influence over the
management or policies of the Company.

     "CODE" means the Internal Revenue Code of 1986, as amended.

     "COMMITTEE" means the committee appointed by the Board to
administer the Plan, or if no committee is appointed, the Board.

     "COMPANY" means Cadiz Inc., a corporation organized under
the laws of the State of Delaware, or any successor corporation.

     "DISABILITY" means a disability, whether temporary or
permanent, partial or total, within the meaning of Section
22(e)(3) of the Code, as determined by the Committee.

     "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.

     "EXERCISE PRICE" means the price at which a holder of an
Option may purchase the Shares issuable upon exercise of the
Option, but in no event shall such price be less than the par
value of the Common Stock.

     "FAIR MARKET VALUE" means, as of any date, the value of a
share of the Company's Common Stock determined as follows:

     (a)  if such Common Stock is then quoted on the Nasdaq
National Market System, its last reported sale price on the
Nasdaq National Market or, if no such reported sale takes place
on such date, the average of the closing bid and asked prices;

     (b)  if such Common Stock is publicly traded and is then
listed on a national securities exchange, the last reported sale
price or, if no such reported sale takes place on such date, the
average of the closing bid and asked prices on the principal
national securities exchange on which the Common Stock is listed
or admitted to trading;

     (c)  if such Common Stock is publicly traded but is not
quoted on the Nasdaq National Market nor listed or admitted to
trading on a national securities exchange, the average of the
closing bid and asked prices on such date, as reported by the
Wall Street Journal, for the over-the-counter market; or

     (d)  if none of the foregoing is applicable, by the Board of
Directors of the Company in good faith.

                             Page 10

     "INSIDER" means an officer or director of the Company or
other person whose transactions in the Company's Common Stock are
subject to Section 16 of the Exchange Act.

     "OPTION" means an option to purchase Shares of Common Stock
of the Company pursuant to Section 5.

     "OPTION AGREEMENT" means, with respect to each Option, the
signed written agreement between the Company and the Participant
setting forth the terms and conditions of the Option.

     "PARTICIPANT" means a person who receives an Option under
the Plan.

     "PLAN" means this Cadiz Inc., 1998 Non-Qualified Stock
Option Plan, as amended from time to time.

     "SECURITIES ACT" means the Securities Act of 1933, as
amended.

     "SHARES" means shares of the Company's Common Stock, $0.01
par value, reserved for issuance under the Plan, as adjusted
pursuant to Sections 2 and 14, and any security issued in respect
thereto or in replacement therefor.

     "SUBSIDIARY" means any corporation (other than the Company)
in an unbroken chain of corporations beginning with the Company
if, at the time of granting of the Option, each of the
corporations other than the last corporation in the unbroken
chain owns stock possessing 50% or more of the total combined
voting power of all classes of stock in one of the other
corporations in such chain.

     "TERMINATION" or "TERMINATED" means, for purposes of the
Plan with respect to a Participant, that the Participant has
ceased to provide services as an employee, director, consultant,
independent contractor or adviser, to the Company or a Subsidiary
or Affiliate of the Company, except in the case of sick leave,
military leave, or any other leave of absence approved by the
Committee, provided, that such leave is for a period of not more
than ninety (90) days, or reinstatement upon the expiration of
such leave is guaranteed by contract or statute.  The Committee
shall have sole discretion to determine whether a Participant has
ceased to provide services and the effective date on which the
Participant ceased to provide services (the "Termination Date").

                             Page 11


                        TABLE OF CONTENTS

1.   PURPOSE. . . . . . . . .  . . . . . . . . . . . . . . . . .1

2.   SHARES SUBJECT TO THE PLAN. . . . . . . . . . . . . . . . .1

     2.1  Number of Shares Available. . . . . . . . . . . . . . 1
     2.2  Adjustment of Shares. . . . . . . . . . . . . . . . . 1

3.   ELIGIBILITY. . . . . . . . . . . . . . . . . . . . . . . . 2

     3.1  Eligibility of Employees, Consultants
          and Independent Contractors;
          Non-Eligibility of Insiders. . . . . . . . . . . . . .2

4.   ADMINISTRATION. . . . . . . . . . . . . . . . . . . . . . .2

     4.1  Committee Authority. . . . . . . . . . . . . . . . . .2
     4.2  Committee Discretion . . . . . . . . . . . . . . . . .3
     4.3  Composition of Committee . . . . . . . . . . . . . . .3

5.   GRANT AND EXERCISE OF OPTIONS. . . . . . . . . . . . . . . 3

     5.1  Grant of Options. . . . . . . . . . . . . . . . . . . 3

          5.1.1Form of Option Grant. . . . . . . . . . . . . . .3
          5.1.2Date of Grant . . . . . . . . . . . . . . . . . .3
          5.1.3Exercise Period. . . . . . . . . . . . . . . . . 3
          5.1.4Exercise Price. . . . . . . . . . . . . . . . . .3
          5.1.5Method of Exercise. . . . . . . . . . . . . . . .4
          5.1.6Termination. . . . . . . . . . . . . . . . . . . 4
          5.1.7Limitations on Exercise. . . . . . . . . . . . . 4
          5.1.8Modification, Extension or Renewal. . . . . . . .4

     5.2  Accelerated Vesting. . . . . . . . . . . . . . . . . .4

6.   PAYMENT FOR SHARE PURCHASES. . . . . . . . . . . . . . . . 5

     6.1  Payment. . . . . . . . . . . . . . . . . . . . . . . .5

7.   TAX WITHHOLDING. . . . . . . . . . . . . . . . . . . . . . 6

     7.1  Withholding Generally. . . . . . . . . . . . . . . . .6

8.   PRIVILEGES OF STOCK OWNERSHIP. . . . . . . . . . . . . . . 6

     8.1  Voting and Dividends. . . . . . . . . . . . . . . . . 6
     8.2  Financial Statements. . . . . . . . . . . . . . . . . 6

9.   TRANSFERABILITY. . . . . . . . . . . . . . . . . . . . . . 6

10.  CERTIFICATES. . . . . . . . . . . . . . . . . . . . . . . .6

11.  EXCHANGE AND BUYOUT OF OPTIONS. . . . . . . . . . . . . . .7

12.  SECURITIES LAW AND OTHER REGULATORY COMPLIANCE. . . . . . .7

13.  NO OBLIGATION TO EMPLOY. . . . . . . . . . . . . . . . . . 7

14.  CHANGES IN THE COMPANY'S CAPITAL STRUCTURE. . . . . . . . .7

15.  ADOPTION. . . . . . . . . . . . . . . . . . . . . . . . . .8

16.  TERM OF PLAN. . . . . . . . . . . . . . . . . . . . . . . .8

17.  AMENDMENT OR TERMINATION OF PLAN. . . . . . . . . . . . . .9

18.  NONEXCLUSIVITY OF THE PLAN. . . . . . . . . . . . . . . . .9

19.  GOVERNING LAW. . . . . . . . . . . . . . . . . . . . . . . 9

20.  DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . 9

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.9
<SEQUENCE>5
<FILENAME>exhibit10-9.txt
<DESCRIPTION>5TH AMENDMENT TO ING LOAN
<TEXT>

                                                     EXHIBIT 10.9
                                                     ------------


           FIFTH AMENDED AND RESTATED CREDIT AGREEMENT

                           dated as of

                          March 7, 2002

         for Credit Agreement originally executed as of

                        November 25, 1997

                              among

                           CADIZ INC.,

                    The Lenders Party Hereto

                               and

                 ING BARING (U.S.) CAPITAL LLC,

                     as Administrative Agent


                        TABLE OF CONTENTS
                                                             Page

SECTION 1.01 Defined terms. . . . . . . . . . . . . . . . . . . . . . . . ..2
SECTION 1.02 [Intentionally Omitted]. . . . . . . . . . . . . . . . . . . .18
SECTION 1.03 Terms Generally. . . . . . . . . . . . . . . . . . . . . . . .18
SECTION 1.04 Accounting Terms; GAAP. . . . . . . . . . . . . . . . . . . . 18
SECTION 2.01 Commitments. . . . . . . . . . . . . . . . . . . . . . . . . .19
SECTION 2.02 Loans and Borrowings. . . . . . . . . . . . . . . . . . . . . 19
SECTION 2.03 Requests for Borrowings. . . . . . . . . . . . . . . . . . . .20
SECTION 2.04 Borrowing. . . . . . . . . . . . . . . . . . . . . . . . . . .20
SECTION 2.05 [Intentionally Omitted] . . . . . . . . . . . . . . .. . . . .20
SECTION 2.06 Funding of Borrowings. . . . . . . . . . . . . . . . . . . . .20
SECTION 2.07 Conversion of Rights for Holders of Tranche B Loans. . . . . .21
SECTION 2.08 Security. . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 2.09 Termination and Reduction of Commitments. . . . . . . . . . . 28
SECTION 2.10 Repayment of Loans; Evidence of Debt. . . . . . . . . . . . . 29
SECTION 2.11 Prepayment of Loans; Reborrowings. . . . . . . . . . . . . . .30
SECTION 2.12 Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 2.13 Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 2.14 Stock Payment Election. . . . . . . . . . . . . . . . . . . . 31
SECTION 2.15 Increased Costs. . . . . . . . . . . . . . . . . . . . . . . .32
SECTION 2.16 Increased Costs; Problems Ascertaining
             Applicable Interest Rate. . . . . . . . . . . . . . .. . . . .33
SECTION 2.17 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . .33
SECTION 2.18 Payments Generally; Pro Rata Treatment;
             Sharing of Set-offs. . . . . . . . . . . . . . . . . . . . . .34
SECTION 2.19 Mitigation Obligations; Replacement of Lenders. . . . . . . . 35
SECTION 2.20 Break Funding Payments. . . . . . . . . . . . . . . . . . . . 36
SECTION 2.21 Certain Mandatory Prepayments . . . . . . . . . . . . . . . . 37
SECTION 2.22 Registration Rights . . . . . . . . . . . . . . . . . . . . . 38
SECTION 3.01 Organization Powers . . . . . . . . . . . . . . . . . . . . . 39
SECTION 3.02 Authorization; Enforceability . . . . . . . . . . . . . . . . 39
SECTION 3.03 Governmental Approvals; No Conflicts . . . . . . . . . . . . .39
SECTION 3.04 Financial Condition; No Material Adverse Change . . . . . . . 39
SECTION 3.05 Properties . . . . . . . . . . . . . . . . . . . . . . . . . .40
SECTION 3.06 Litigation and Environmental Matters . . . . . . . . . . . . .40
SECTION 3.07 Compliance with Laws and Agreements . . . . . . . . . . . . . 40
SECTION 3.08 Investment and Holding Company Status . . . . . . . . . . . . 41
SECTION 3.09 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 3.10 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 3.11 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . .41
SECTION 3.12 Security Interests . . . . . . . . . . . . . . . . . . . . . .41
SECTION 3.13 Participating Subsidiaries . . . . . . . . . . . . . . . . . .42
SECTION 3.14 Inactive Subsidiaries . . . . . . . . . . . . . . . . . . . . 42
SECTION 3.15 Solvency . . . . . . . . . . . . . . . . . . . . . . . . . . .42
SECTION 3.16 Excluded Items . . . . . . . . . . . . . . . . . . . . . . . .42
SECTION 3.17 Equity Acquisition Assets . . . . . . . . . . . . . . . . . . 42

                             Page i

SECTION 3.18 Rolling Stock. . . . . . . . . . . . . . . . . . . . . . . . .42
SECTION 3.19 Certain Acknowledgements . . . . . . . . . . . . . . . . . . .43
SECTION 3.20 No Satisfaction. . . . . . . . . . . . . . . . . . . . . . . .43
SECTION 4.01 Effective Date . .. . . . . . . . . . . . . . . . . . . . . . 44
SECTION 4.02 Each Credit Event . . .. . . . . . . . . . . . . . . . . . . .48
SECTION 5.01 Financial Statements and Other Information. . . . . . . . . . 48
SECTION 5.02 Notices of Material Events. . . . . . . . . . . . . . . . . . 49
SECTION 5.03 Existence; Conduct of Business. . . . . . . . . . . . . . . . 50
SECTION 5.04 Payment of Obligations. . . . . . . . . . . . . . . . . . . . 50
SECTION 5.05 Maintenance of Properites; Insurance. . . . . . . . . . . . . 50
SECTION 5.06 Books and Records; Inspection Rights. . . . . . . . . . . . . 50
SECTION 5.07 Compliance with Laws. . . . . . . . . . . . . . . . . . . . . 50
SECTION 5.08 Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . . .50
SECTION 5.09 New Subsidiaries. . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 5.10 Acquisition by Borrower. . . . . . . . . . . . . . . . . . . .51
SECTION 5.11 Acquisitions with Proceeds of Loans . . . . . . . . . . . . . 52
SECTION 5.12 Revolving Credit Agreement Warrants . . . . . . . . . . . . . 52
SECTION 5.13 Stock Payment Common Stock. . . . . . . . . . . . . . . . . . 53
SECTION 5.14 Conversion Shares. . . . . . . . . . . . . . . . . . . . . . .53
SECTION 6.01 Indebtedness. . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 6.02 Liens. . . . . . . . . . . . . . . . . . . . . . . . . . . . .54
SECTION 6.04 Fundamental Changes. . . . . . . . . . . . . . . . . . . . . .55
SECTION 6.04 Investments, Loans, Advances, Guarantees and Acquisitions . . 56
SECTION 6.05 Hedging Agreements. . . . . . . . . . . . . . . . . . . . . . 56
SECTION 6.06 Restricted Payments. . . . . . . . . . . . . . . . . . . . . .56
SECTION 6.07 Transactions with Affiliates. . . . . . . . . . . . . . . . . 56
SECTION 6.08 Restrictive Agreements. . . . . . . . . . . . . . . . . . . . 57
SECTION 6.09 Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . . .57
SECTION 6.10 Management Fees from Sun World. . . . . . . . . . . . . . . . 57
SECTION 8.01 Appointment, Powers and Immunities . . . . . . . . . . . . . .61
SECTION 8.02 Administrative Agent in its Individual Capacity. . . . . . . .61
SECTION 8.03 Nature of Duties of Administrative Agent. . . . . . . . . . . 62
SECTION 8.04 Certain Rights of Administrative Agent. . . . . . . . . . . . 62
SECTION 8.05 Reliance by Administrative Agent. . . . . . . . . . . . . . . 62
SECTION 8.06 Sub-Agents. . . . . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 8.07 Resignation by Administrative Agent. . . . . . . . . . . . . .63
SECTION 8.08 Non-Reliance on Administrative Agent and Other Lenders. . . . 63
SECTION 8.09 Security Documents. . . . . . . . . . . . . . . . . . . . . . 64
SECTION 9.01 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . .64
SECTION 9.02 Waivers; Amendments. . . . . . . . . . . . . . . . . . . . . .66
SECTION 9.03 Expenses; Indemnity; Damage Waiver. . . . . . . . . . . . . . 67
SECTION 9.04 Successors and Assigns. . . . . . . . . . . . . . . . . . . . 68
SECTION 9.05 Survival. . . . . . . . . . . . . . . . . . . . . . . . . . . 70
SECTION 9.06 Counterparts; Integration, Effectiveness . . . . . . . . . . .70
SECTION 9.07 Severability. . . . . . . . . . . . . . . . . . . . . . . . . 70
SECTION 9.08 Right of Setoff. . . . . . . . . . . . . . . . . . . . . . . .70

                             Page ii

SECTION 9.09 Governing Law; Jurisdiction;
             Consent to Service of Process. . . . . . . . . . . . . . . . .71
SECTION 9.10 Waiver of Jury Trial. . . . . . . . . . . . . . . . . . . . . 71
SECTION 9.11 Headings. . . . . . . . . . . . . . . . . . . . . . . . . . . 72
SECTION 9.12 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . 72
SECTION 9.13 Foreclosure of Cadiz/Sun World Lease. . . . . . . . . . . . . 72
SECTION 9.14 Waiver of Anti-Deficiency Protection. . . . . . . . . . . . . 73
SECTION 9.15 Costs Borne by Non-Prevailing Party . . . . . . . . . . . . . 73
SECTION 9.16 Interest Rate Limitation. . . . . . . . . . . . . . . . . . . 73
SECTION 9.17 Status of ING . . . . . . . . . . . . . . . . . . . . . . . . 73
SECTION 9.18 Amendments to Sun World Indenture . . . . . . . . . . . . . . 73
SECTION 9.19 General Release . . . . . . . . . . . . . . . . . . . . . . . 74

SCHEDULES:

Schedule 2.01 -- Commitments
Schedule 2.04 -- Borrower's Wire Instructions for Initial Borrowing
Schedule 3.13 -- Borrower's Participating Subsidiaries
Schedule 3.14 -- Borrower's Inactive Subsidiaries
Schedule 6.01 -- Existing Indebtedness
Schedule 6.02 -- Existing Liens
Schedule 6.08 -- Existing Restrictions

EXHIBITS:
Exhibit A - Additional Stock Letter Agreement
Exhibit B - Form of Assignment and Acceptance
Exhibit C - Cadiz Reaffirmation Agreement
Exhibit D - Fee Warrant Certificate
Exhibit E - Tranche A Note, with Amendments thereto (previously executed)
Exhibit F - Tranche B Note
Exhibit G - Purchaser Certificate
Exhibit H - Registration Rights Addendum
Exhibit I -  Fourth Amendment to Revolving Credit Note
Exhibit J -  Fourth Modification of Pledge and Security Agreement
Exhibit K - Fourth Modification of Revolver Deed of Trust
Exhibit L - Fourth Modification of Revolver SWFG Deed of Trust
Exhibit M - Fourth Modification of Revolver Piute Deed of Trust
Exhibit N - Form of Opinion of Borrower's Counsel

                            Page iii

          FIFTH AMENDED AND RESTATED CREDIT AGREEMENT dated as of
March 7, 2002, among CADIZ INC. (f/k/a Cadiz Land Company, Inc.),
the LENDERS party hereto, and ING BARING (U.S.) CAPITAL LLC.
(f/k/a ING Baring (U.S.) Capital Corporation), as Administrative
Agent.

                      W I T N E S S E T H:

          WHEREAS,  pursuant  to  that certain  Revolving  CrediL
Agreement,  dated  as of November 25, 1997 (the  "1997  Revolving
Credit Agreement"), among Borrower, the Lenders party thereto and
the Administrative Agent, as agent for such Lenders, such Lenders
agreed to provide a revolving credit facility to Borrower;

          WHEREAS,  pursuant to that certain First  Amendment  to
Credit  Agreement, dated as of September 28, 1999, by and between
Borrower,  Lenders  and  the  Administrative  Agent  (the  "First
Amendment Agreement"), the parties agreed to amend certain  terms
of the 1997 Revolving Credit Agreement;

          WHEREAS,  pursuant to that certain Second Amendment  to
Credit  Agreement, dated as of December 22, 1999, by and  between
Borrower,  Lenders  and  the Administrative  Agent  (the  "Second
Amendment  Agreement"), and the other Second Amendment Documents,
as  defined in the Second Amendment Agreement (collectively,  the
"Second  Amendment  Documents"),  the  parties  agreed  to  amend
certain  terms of the 1997 Revolving Credit Agreement, as amended
and in effect at that time;

          WHEREAS,  pursuant to that certain Third  Amendment  to
Credit  Agreement, dated as of December 22, 2000, by and  between
Borrower,  Lenders  and  the  Administrative  Agent  (the  "Third
Amendment Agreement"), as amended by that certain First Amendment
to  Third  Amendment to Credit Agreement dated as of October  22,
2001 between Borrower, Lenders and the Administrative Agent,  and
the  other  Third Amendment Documents, as defined  in  the  Third
Amendment   Agreement   (collectively,   the   "Third   Amendment
Documents"),  the parties agreed to amend certain  terms  of  the
1997 Revolving Credit Agreement, as amended and in effect at that
time;

          WHEREAS,  pursuant to that certain Fourth Amendment  to
Credit  Agreement, dated as of January 31, 2002, by  and  between
Borrower,  Lenders  and  the Administrative  Agent  (the  "Fourth
Amendment  Agreement"), and the other Fourth Amendment Documents,
as  defined in the Fourth Amendment Agreement (collectively,  the
"Fourth  Amendment  Documents"),  the  parties  agreed  to  amend
certain  terms of the 1997 Revolving Credit Agreement, as amended
and in effect at that time;

          WHEREAS,  the  Borrower  has requested  that  the  1997
Revolving  Credit  Agreement, as amended and in  effect  at  this
time, be amended and restated in its entirety and that

                             Page 1

          an  additional  new  $10 million convertible  revolving
facility be added to the existing credit facility;

          WHEREAS,  the Lenders and the Administrative Agent  are
willing to amend and restate the 1997 Revolving Credit Agreement,
as  amended  and in effect at this time, in its entirety  on  the
terms and subject to the conditions and requirements set forth in
this Agreement.

          NOW  THEREFORE,  in consideration of the  premises  and
mutual  covenants contained herein, the parties to this Agreement
hereby  agree  to  amend  and restate the 1997  Revolving  Credit
Agreement, as amended and in effect at this time, in its entirety
as follows:

                            ARTICLE I

                           DEFINITIONS
                           -----------

          SECTION 1.01.  DEFINED TERMS.  As used in this
Agreement, the following terms have the meanings specified below:

           "ADDITIONAL STOCK LETTER AGREEMENT" means that certain
letter agreement between Borrower and Administrative Agent in the
form as attached hereto in Exhibit A that provides that Borrower
shall issue 25,000 shares of Borrower's common stock to the
Administrative Agent if at least the principal amount of
$10,000,000 of Term Loan Obligations and/or Tranche A Loans are
not prepaid (and, to the extent that Tranche A Loans are prepaid,
with the termination and permanent reduction of Tranche A
Commitments in such amount) between the Effective Date and on or
prior to July 31, 2002.

          "ADMINISTRATIVE AGENT" means ING Baring (U.S.) Capital
LLC, in its capacity as administrative agent for the Lenders
hereunder.

          "ADMINISTRATIVE QUESTIONNAIRE" means an Administrative
Questionnaire in a form supplied by the Administrative Agent.

          "AFFILIATE" means, with respect to a specified Person,
another Person that directly, or indirectly through one or more
intermediaries, Controls or is Controlled by or is under common
Control with the Person specified.

          "AGREEMENT" means this Fifth Amended and Restated
Credit Agreement, dated as of the date set forth above, among
Borrower, the Lenders party hereto, and the Administrative Agent.

          "APPLICABLE INTEREST RATE" means, with respect to any
Borrowing for any Interest Period, either (a) if the Borrower
does not elect the Stock Payment Election, the Cash Payment Rate,
or (b) if the Borrower elects the Stock Payment Election, the
Stock Payment Rate.

          "APPLICABLE PERCENTAGE" means, with respect to any
Lender, the percentage of the total Commitments represented by
such Lender's Commitment.  If the Commitments have

                             Page 2

terminated or expired, the Applicable Percentages shall
be determined based upon the Commitments most recently in effect,
giving effect to any assignments.

          "ASSIGNMENT AND ACCEPTANCE" means an assignment and
acceptance entered into by a Lender and an assignee (with the
consent of any party whose consent is required by Section 9.04),
and accepted by the Administrative Agent, in the form of
Exhibit B or any other form approved by the Administrative Agent.

          "AVAILABILITY PERIOD" means the period from and
including the Effective Date to but excluding the earlier of the
Maturity Date and the date of termination of the Commitments.

          "BOARD" means the Board of Governors of the Federal
Reserve System of the United States of America.

          "BORROWER" means Cadiz Inc., a Delaware corporation.

          "BORROWING" means Loans of a Lender made, converted or
continued on the same date.

          "BORROWING REQUEST" means a request by the Borrower for
a Borrowing in accordance with Section 2.03.

          "BUSINESS DAY" means any day that is not a Saturday,
Sunday or other day on which commercial banks in New York City
are authorized or required by law to remain closed.

          "CADIZ REAFFIRMATION AGREEMENT" means the agreement
evidencing Borrower's assumption and reaffirmation of all
liabilities and obligations of Cadiz Valley Development
Corporation in the form as attached hereto in Exhibit C.

          "CADIZ/SUN WORLD LEASE" means that certain Agricultural
Lease by and between Southwest Fruit Growers, L.P. and the
Borrower (both in its own capacity and as successor by merger to
Cadiz Valley Development Corporation), the lessors, and Sun
World, as lessee, dated as of September 13, 1996, as amended by
that certain Amendment to Lease with Lender Cure Rights between
Southwest Fruit Growers, L.P., Cadiz, Sun World and Credit
Agricole, dated as of September 13, 1996, as further amended by
that certain Amendment to Agricultural Lease, dated as of April
16, 1997, as further amended from time to time.

          "CADIZ/SUN WORLD SERVICES AGREEMENT" means that certain
Services Agreement between Borrower and Sun World, dated
September 13, 1996, as amended by that certain Amendment dated as
of April 16, 1997, as further amended from time to time.

          "CAPITAL LEASE OBLIGATIONS" of any Person means the
obligations of such Person to pay rent or other amounts under any
lease of (or other arrangement conveying the right to use) real
or personal property, or a combination thereof, which obligations
are required to be classified and accounted for as capital leases
on a balance sheet of such Person under GAAP, and the amount of
such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.

                             PAGE 3

          "CASH EQUIVALENT" has the meaning assigned to such term
in the Sun World Indenture.

          "CASH PAYMENT RATE" means the sum of (a) the LIBO Rate,
computed in accordance with Section 2.13, plus (b) 3.0%.

          "CHANGE IN CONTROL" means (a) the acquisition of
ownership, directly or indirectly, beneficially or of record, by
any Person or group (within the meaning of the Securities
Exchange Act of 1934 and the rules of the Commission thereunder
as in effect on the date hereof), of shares representing more
than 35% of the aggregate ordinary voting power represented by
the issued and outstanding capital stock of the Borrower;
(b) occupation of a majority of the seats (other than vacant
seats) on the board of directors of the Borrower by Persons who
were neither (i) nominated by the board of directors of the
Borrower nor (ii) appointed by directors so nominated; or (c) the
acquisition of direct or indirect Control of the Borrower by any
Person or group.

          "CHANGE IN LAW" means (a) the adoption of any law, rule
or regulation after the date of this Agreement, (b) any change in
any law, rule or regulation or in the interpretation or
application thereof by any Governmental Authority after the date
of this Agreement or (c) compliance by any Lender (or, for
purposes of Section 2.15(b), by any lending office of such Lender
or by such Lender's holding company, if any) with any request,
guideline or directive (whether or not having the force of law)
of any Governmental Authority made or issued after the date of
this Agreement.

          "CHARGES" has the meaning ascribed to such term in
Section 9.16 hereof.

          "CLOSING PRICE" means the last sale price per share of
Common Stock regular way or, in the case no such reported sale
takes place on such day, the average of the last reported bid and
asked prices regular way, in either case on the principal
national securities exchange on which the Common Stock is
admitted to trading on such exchange, the average of the last
reported bid and asked prices as reported by Nasdaq, or other
similar organization if Nasdaq is no longer reporting such
information, or if not so available, the fair market price, as
determined in good faith by the Administrative Agent.

          "CODE" means the Internal Revenue Code of 1986, as
amended from time to time.

          "COMMISSION" means the Securities and Exchange
Commission.

          "COMMITMENT" means, with respect to each Lender, the
sum of such Lenders' Tranche A Commitments and Tranche B
Commitments, as such commitments may be (a) reduced from time to
time pursuant to Section 2.09 and (b) reduced or increased from
time to time pursuant to assignments by or to such Lender
pursuant to Section 9.04.  The aggregate amount of all of the
Lenders' Commitments on the Effective Date will be $25,000,000.

          "COMMON STOCK" means authorized common stock, $0.01 par
value, of the Borrower.

                             Page 4

          "CONTROL" means the possession, directly or indirectly,
of the power to direct or cause the direction of the management
or policies of a Person, whether through the ability to exercise
voting power, by contract or otherwise.  "CONTROLLING" and
"CONTROLLED" have meanings correlative thereto.

          "CONVERSION LOAN AMOUNT" shall have the meaning
ascribed to such term in Section 2.07(a) hereof.

          "CONVERSION PRICE" shall have the meaning ascribed to
such term in Section 2.07(a) hereof.

          "CONVERSION SHARES" shall have the meaning ascribed to
such term in Section 2.07(b) hereof.

          "DEFAULT" means any event or condition which
constitutes an Event of Default or which upon notice, lapse of
time or both would, unless cured or waived, become an Event of
Default.

          "DISCLOSED MATTERS" means the actions, suits and
proceedings and the environmental matters disclosed in any
periodic and other reports, proxy statements and other materials
filed by the Borrower or any Subsidiary with the Commission that
are publicly available.

          "Dollars" or "$" refers to lawful money of the United
States of America.

          "EFFECTIVE DATE" means the date on which the conditions
specified in Section 4.01 are satisfied (or waived in accordance
with Section 9.02).

          "EIGHTH WARRANT CERTIFICATE" means the Eight Warrant
Certificate issued in connection with the Fourth Amendment
Agreement.

          "ELEVENTH WARRANT CERTIFICATE" means the Eleventh
Warrant Certificate issued in connection with the Fourth
Amendment Agreement.

          "ENVIRONMENTAL LAWS" means all laws, rules,
regulations, codes, ordinances, orders, decrees, judgments,
injunctions, notices or binding agreements issued, promulgated or
entered into by any Governmental Authority, relating in any way
to the environment, preservation or reclamation of natural
resources, the management, release or threatened release of any
Hazardous Material or to health and safety matters.

          "ENVIRONMENTAL LIABILITY" means any liability,
contingent or otherwise (including any liability for damages,
costs of environmental remediation, fines, penalties or
indemnities), of the Borrower or any Subsidiary directly or
indirectly resulting from or based upon (a) violation of any
Environmental Law, (b) the generation, use, handling,
transportation, storage, treatment or disposal of any Hazardous
Materials, (c) exposure to any Hazardous Materials, (d) the
release or threatened release of any Hazardous Materials into the
environment or (e) any contract, agreement or other consensual
arrangement pursuant to which liability is assumed or imposed
with respect to any of the foregoing.

                             Page 5

          "EQUITY ACQUISITION ASSET" has the meaning set forth in
Section 5.10(c) hereof.

          "EQUITY ACQUISITION THRESHOLD" has the meaning set
forth in Section 5.10(c) hereof.

          "ERISA" means the Employee Retirement Income Security
Act of 1974, as amended from time to time.

          "ERISA AFFILIATE" means any trade or business (whether
or not incorporated) that, together with the Borrower, is treated
as a single employer under Section 414(b) or (c) of the Code or,
solely for purposes of Section 302 of ERISA and Section 412 of
the Code, is treated as a single employer under Section 414 of
the Code.

          "ERISA EVENT" means (a) any "reportable event", as
defined in Section 4043 of ERISA or the regulations issued
thereunder with respect to a Plan (other than an event for which
the 30-day notice period is waived); (b) the existence with
respect to any Plan of an "accumulated funding deficiency" (as
defined in Section 412 of the Code or Section 302 of ERISA),
whether or not waived; (c) the filing pursuant to Section 412(d)
of the Code or Section 303(d) of ERISA of an application for a
waiver of the minimum funding standard with respect to any Plan;
(d) the incurrence by the Borrower or any of its ERISA Affiliates
of any liability under Title IV of ERISA with respect to the
termination of any Plan; (e) the receipt by the Borrower or any
ERISA Affiliate from the PBGC or a plan administrator of any
notice relating to an intention to terminate any Plan or Plans or
to appoint a trustee to administer any Plan; (f) the incurrence
by the Borrower or any of its ERISA Affiliates of any liability
with respect to the withdrawal or partial withdrawal from any
Plan or Multiemployer Plan; or (g) the receipt by the Borrower or
any ERISA Affiliate of any notice, or the receipt by any
Multiemployer Plan from the Borrower or any ERISA Affiliate of
any notice, concerning the imposition of Withdrawal Liability or
a determination that a Multiemployer Plan is, or is expected to
be, insolvent or in reorganization, within the meaning of Title
IV of ERISA.

          "EVENT OF DEFAULT" has the meaning assigned to such
term in Article VII.

          "EXCHANGE ACT" has the meaning set forth in
Section 9.17 hereof.

          "EXCLUDED ITEM" has the meaning set forth in
Section 5.10(b) hereof.

          "EXCLUDED ITEMS/ROLLING STOCK THRESHOLD" has the
meaning set forth in Section 5.10(b) hereof.

          "EXCLUDED TAXES" means, with respect to the
Administrative Agent, any Lender, any other recipient of any
payment to be made by or on account of any obligation of the
Borrower hereunder, (a) income or franchise taxes imposed on (or
measured by) its net income by the United States of America, or
by the jurisdiction under the laws of which such recipient is
organized or in which its principal office is located or, in the
case of any Lender, in which its applicable lending office is
located, (b) any branch profits taxes imposed by the United
States of America or any similar tax imposed by any other
jurisdiction in which the Borrower is located and (c) in the case
of a Foreign Lender (other than an assignee pursuant to a request
by the Borrower under Section 2.19(b)), any withholding tax that
is imposed on amounts payable to

                             Page 6

such Foreign Lender at the time such Foreign Lender becomes a
party to this Agreement (or designates a new lending office) or
is attributable to such Foreign Lender's failure to comply with
Section 2.17(e), except to the extent that such Foreign Lender
(or its assignor, if any) was entitled, at the time of
designation of a new lending office (or assignment), to receive
additional amounts from the Borrower with respect to such
withholding tax pursuant to Section 2.17(a).

          "FEDERAL FUNDS EFFECTIVE RATE" means, for any day, the
weighted average (rounded upwards, if necessary, to the next
1/100 of 1%) of the rates on overnight Federal funds transactions
with members of the Federal Reserve System arranged by Federal
funds brokers, as published on the next succeeding Business Day
by the Federal Reserve Bank of New York, or, if such rate is not
so published for any day that is a Business Day, the average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the
quotations for such day for such transactions received by the
Administrative Agent from three Federal funds brokers of
recognized standing selected by it.

          "FEE WARRANT CERTIFICATE" means the three-year warrants
that will vest and become exercisable commencing on August 1,
2002 if at least the principal amount of $10,000,000 of Term Loan
Obligations and/or Tranche A Loans are not prepaid (and, to the
extent that Tranche A Loans are prepaid, with the termination and
permanent reduction of Tranche A Commitments in such amount)
between the Effective Date and on or prior to July 31, 2002, for
the purchase up to 100,000 shares of Cadiz's common stock with an
exercise price equal to the average closing price for all trading
days in July 2002, that entitles the holder thereof to purchase
up to 100,000 shares based upon the terms and conditions set
forth therein, in the form as attached hereto in Exhibit D.

          "FINANCIAL OFFICER" means the chief financial officer,
principal accounting officer, treasurer or controller of the
Borrower.

          "FIRST AMENDMENT AGREEMENT" has the meaning ascribed to
such term in the recitals hereto.

          "FIXED RATE" means, with respect to any Borrowing for
any Interest Period, either (a) if the Borrower does not elect
the Stock Payment Election, the Cash Payment Rate or (b) if the
Borrower elects the Stock Payment Election, the Stock Payment
Rate.

          "FOREIGN LENDER" means any Lender that is organized
under the laws of a jurisdiction other than that in which the
Borrower is located.  For purposes of this definition, the United
States of America, each State thereof and the District of
Columbia shall be deemed to constitute a single jurisdiction.

          "FOURTH AMENDMENT AGREEMENT" has the meaning ascribed
to such term in the recitals hereto.

          "FOURTH AMENDMENT DOCUMENTS" has the meaning ascribed
to such term in the recitals hereto.

          "GAAP" means generally accepted accounting principles
in the United States of America.

                             Page 7

           "GOVERNMENTAL AUTHORITY" means the government of the
United States of America, any other nation or any political
subdivision thereof, whether state or local, and any agency,
authority, instrumentality, regulatory body, court, central bank
or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or
pertaining to government.

          "GUARANTEE" of or by any Person (the "GUARANTOR") means
any obligation, contingent or otherwise, of the guarantor
guaranteeing or having the economic effect of guaranteeing any
Indebtedness or other obligation of any other Person (the
"PRIMARY OBLIGOR") in any manner, whether directly or indirectly,
and including any obligation of the guarantor, direct or
indirect, (a) to purchase or pay (or advance or supply funds for
the purchase or payment of) such Indebtedness or other obligation
or to purchase (or to advance or supply funds for the purchase
of) any security for the payment thereof, (b) to purchase or
lease property, securities or services for the purpose of
assuring the owner of such Indebtedness or other obligation of
the payment thereof, (c) to maintain working capital, equity
capital or any other financial statement condition or liquidity
of the primary obligor so as to enable the primary obligor to pay
such Indebtedness or other obligation or (d) as an account party
in respect of any letter of credit or letter of guaranty issued
to support such Indebtedness or obligation; provided, that the
term Guarantee shall not include endorsements for collection or
deposit in the ordinary course of business.

          "HAZARDOUS MATERIALS" means all explosive or
radioactive substances or wastes and all hazardous or toxic
substances, wastes or other pollutants, including petroleum or
petroleum distillates, asbestos or asbestos containing materials,
polychlorinated biphenyls, radon gas, infectious or medical
wastes and all other substances or wastes of any nature regulated
pursuant to any Environmental Law.

          "HEDGING AGREEMENT" means any interest rate protection
agreement, foreign currency exchange agreement, commodity price
protection agreement or other interest or currency exchange rate
or commodity price hedging arrangement.

          "INACTIVE SUBSIDIARIES" means all Subsidiaries of the
Borrower, excluding Sun World Entities, that (a) do not conduct
any business activities and (b) hold no assets or properties
(either tangible or intangible).

          "INDEBTEDNESS" of any Person means, without
duplication, (a) all obligations of such Person for borrowed
money or with respect to deposits or advances of any kind,
(b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of
such Person upon which interest charges are customarily paid,
(d) all obligations of such Person under conditional sale or
other title retention agreements relating to property acquired by
such Person, (e) all obligations of such Person in respect of the
deferred purchase price of property or services (excluding
current accounts payable incurred in the ordinary course of
business), (f) all Indebtedness of others secured by (or for
which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien on property
owned or acquired by such Person, whether or not the Indebtedness
secured thereby has been assumed, (g) all Guarantees by such
Person of Indebtedness of others, (h) all Capital Lease
Obligations of such Person, (i) all obligations, contingent or
otherwise, of such Person as an

                             Page 8

account party in respect of letters of credit and letters of
guaranty and (j) all obligations, contingent or otherwise, of
such Person in respect of bankers' acceptances.  The Indebtedness
of any Person shall include the Indebtedness of any other entity
(including any partnership in which such Person is a general
partner) to the extent such Person is liable therefor as a result
of such Person's ownership interest in or other relationship with
such entity, except to the extent the terms of such Indebtedness
provide that such Person is not liable therefor.

          "INDEMNIFIED TAXES" means Taxes other than Excluded
Taxes.

          "INDEMNITEE" has the meaning ascribed to such term in
Section 9.03(b) hereof.

          "ING" means ING Baring (U.S.) Capital LLC, a Delaware
company.

          "ING COLLATERAL" means the collateral security granted,
pledged or hypothecated to the Administrative Agent or the
Lenders under the Security Documents to secure the payment and
satisfaction of the obligations hereunder and under the other
Loan Documents, including the Revolving Loan Obligations.

          "INTEREST PAYMENT DATE" means the last day of the
Interest Period applicable to the Borrowing of which such Loan is
a part.

          "INTEREST PERIOD" means each period commencing on the
date of such Borrowing or the last day of the next preceding
Interest Period for such Borrowing and ending thereafter on the
first to occur of March 15, June 15, September 15 and December 15
in each year, provided, that (i) except as provided in clauses
(ii) and (iii) below, if any Interest Period would end on a day
other than a Business Day, such Interest Period shall be extended
to the next succeeding Business Day, (ii) any Interest Period
that commences on the last Business Day of a calendar month (or
on a day for which there is no numerically corresponding day in
the last calendar month of such Interest Period) shall end on the
last Business Day of the last calendar month of such Interest
Period, and (iii) if any Interest Period would end after the
Maturity Date, such Interest Period shall end on the Maturity
Date.  For purposes hereof, the date of a Borrowing initially
shall be the date on which such Borrowing is made.

          "LENDERS" means the Person or Persons, as the case may
be, listed on Schedule 2.01 and any other Person that shall have
become a party hereto pursuant to an Assignment and Acceptance,
other than any such Person that ceases to be a party hereto
pursuant to an Assignment and Acceptance.

          "LIBO RATE" means, with respect to any Borrowing for
any Interest Period, the rate per annum at which the
Administrative Agent is offered dollar deposits in the London
interbank market at approximately 11:30 a.m. (London time) of the
first day of the relevant Interest Period, for the number of
months comprised therein and in an amount equal to the amount of
the indebtedness to be outstanding hereunder for such Borrowing
during such Interest Period.

          "LIEN" means, with respect to any asset, (a) any
mortgage, deed of trust, lien, pledge, hypothecation,
encumbrance, charge or security interest in, on or of such asset,
(b) the interest of a vendor or a lessor under any conditional
sale agreement, capital lease or title

                             Page 10

retention agreement (or any financing lease having substantially
the same economic effect as any of the foregoing) relating to
such asset and (c) in the case of securities, any purchase
option, call or similar right of a third party with respect to
such securities.

          "LOAN DOCUMENTS" means this Agreement, each Security
Document, each Note, the First Amendment Agreement, the Second
Amendment Documents, the Third Amendment Documents, the Fourth
Amendment Documents, and any other document, instrument or
agreement delivered, executed or to be executed under or in
connection with any of the foregoing.

          "LOAN OBLIGATIONS" means collectively, the Revolving
Loan Obligations and the Term Loan Obligations.

          "LOANS" OR "REVOLVING LOANS" means, collectively, the
Tranche A Loans and the Tranche B Loans, each as made pursuant to
Section 2.03 or 2.04 hereof.

          "MATERIAL ADVERSE EFFECT" means a material adverse
effect on (a) the business, assets, operations, prospects or
condition, financial or otherwise, of the Borrower and the
Subsidiaries taken as a whole, (b) the ability of the Borrower to
perform any of its obligations under this Agreement or any other
Loan Document, (c) the rights of or benefits available to the
Lenders under this Agreement or any other Loan Document, or
(d) the Transactions.

          "MATERIAL INDEBTEDNESS" means Indebtedness (other than
the Loans), or obligations in respect of one or more Hedging
Agreements, of any one or more of the Borrower and its
Subsidiaries, but excluding SWFG and PSWRI, in an aggregate
principal amount exceeding $500,000.  For purposes of determining
Material Indebtedness, the "principal amount" of the obligations
of the Borrower or any Subsidiary in respect of any Hedging
Agreement at any time shall be the maximum aggregate amount
(giving effect to any netting agreements) that the Borrower or
such Subsidiary would be required to pay if such Hedging
Agreement were terminated at such time.

          "MATURITY DATE" means January 31, 2003.

          "MAXIMUM RATE" has the meaning ascribed to such term in
Section 9.16 hereof.

          "MOODY'S" means Moody's Investors Service, Inc.

          "MORTGAGES" means, collectively, (a) any mortgage
agreement or deed of trust dated as of the Effective Date for the
benefit of Mortgagee pursuant to Section 2.08 and (b) each other
mortgage granted to Mortgagee pursuant to Sections 2.08, 5.10 and
5.11, each substantially in the form as annexed to the 1997
Revolving Credit Agreement.

          "MORTGAGEE" means, with respect to any Mortgage, the
Administrative Agent as mortgagee or beneficiary thereof, for
itself and on behalf of the Lenders, under such Mortgage.

          "MULTIEMPLOYER PLAN" means a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.

                             Page 10

          "1997 REVOLVING CREDIT AGREEMENT" has the meaning
ascribed to such term in the recitals hereto.

          "NINTH WARRANT CERTIFICATE" means the Ninth Warrant
Certificate issued in connection with the Fourth Amendment
Agreement.

          "NON-ADVERSE AMENDMENT" has the meaning set forth in
Section 9.19 hereof.

          "NOTES" means, collectively, the Tranche A Notes and
the Tranche B Notes.

          "OBLIGORS"  has the meaning assigned to such term in
the Pledge and Security Agreement.

          "OTHER TAXES" means any and all present or future stamp
or documentary taxes or any other excise or property taxes,
charges or similar levies arising from any payment made hereunder
or from the execution, delivery or enforcement of, or otherwise
with respect to, this Agreement.

          "PARTICIPANTS" has the meaning ascribed to such term in
Section 9.04(e) hereof.

          "PARTICIPATING SUBSIDIARIES" means the Subsidiaries
excluding (a)the Inactive Subsidiaries, (b) the Sun World
Entities, and (c) SWFG.

          "PBGC" means the Pension Benefit Guaranty Corporation
referred to and defined in ERISA and any successor entity
performing similar functions.

          "PERMITTED ENCUMBRANCES" means:

          (a)  Liens imposed by law for taxes that are not yet
     due or are being contested in compliance with Section 5.04;

          (b)  carriers', warehousemen's, mechanics',
     materialmen's, repairmen's and other like Liens imposed by
     law, arising in the ordinary course of business and securing
     obligations that are not overdue by more than 30 days or are
     being contested in compliance with Section 5.04;

          (c)  pledges and deposits made in the ordinary course
     of business in compliance with workers' compensation,
     unemployment insurance and other social security laws or
     regulations;

          (d)  deposits to secure the performance of bids, trade
     contracts, leases, statutory obligations, surety and appeal
     bonds, performance bonds and other obligations of a like
     nature, in each case in the ordinary course of business;

          (e)  easements, zoning restrictions, rights-of-way and
     similar encumbrances on real property imposed by law or
     arising in the ordinary course of business that do not
     secure any monetary obligations and do not materially
     detract from the value of the

                             Page 11

     affected property or interfere with the ordinary conduct of
     business of the Borrower or any Participating Subsidiary;

          (f)  Liens arising out of any judgment awarded against
     the Borrower which have been discharged, vacated, reversed
     or execution thereof stayed pending appeal;

          (g)  any other Lien with respect to which the Borrower
     or related lessee shall have provided a bond or other
     security in an amount and under terms reasonably
     satisfactory to the Required Lenders and which does not
     involve any material risk of the sale, forfeiture or loss of
     any interest in Borrower's real or personal property; and

          (h)    the Liens of the Security Documents;

     provided that the term "Permitted Encumbrances" shall not
     include any Lien securing Indebtedness.

               "PERMITTED INVESTMENTS" means:

          (a)  Cash Equivalents; and

          (b)  transactions permitted pursuant to the provisions
     of Sections 5.10 and 5.11 hereof.

          "PERSON" means any natural person, corporation, limited
liability company, trust, joint venture, association, company,
partnership, Governmental Authority or other entity.

          "PLAN" means any employee pension benefit plan (other
than a Multiemployer Plan) subject to the provisions of Title IV
of ERISA or Section 412 of the Code or Section 302 of ERISA, and
in respect of which the Borrower or any ERISA Affiliate is (or,
if such plan were terminated, would under Section 4069 of ERISA
be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.

          "PLEDGE AND SECURITY AGREEMENTS" means, collectively,
(a) any security agreement dated as of the Effective Date for the
benefit of the Administrative Agent, for itself and on behalf of
the Lenders, pursuant to Section 2.08, (b) any stock pledge
agreement pursuant to which the shares of capital stock of each
Participating Subsidiary are pledged to the Administrative Agent,
and (c) each other security agreement executed pursuant to
Sections 2.08, 5.10 and 5.11, each substantially (to the extent
applicable) in the form as annexed to the 1997 Revolving Credit
Agreement, as amended from time to time thereafter.

          "PREPAYMENT DATE" has the meaning set forth in
Section 2.11 hereof.

          "PSWRI" means P.S.W.R.I. Limited, a Guernsey
corporation.

          "PURCHASER CERTIFICATE" means the Purchaser Certificate
in the form as attached hereto in Exhibit G.

          "REGISTER" has the meaning set forth in Section 9.04.

                             Page 12

          "REGISTRABLE COMMON STOCK" means (a) Stock Payment
Common Stock and (b) any additional shares of Common Stock issued
or distributed by way of dividend, stock split or other
distribution in respect of the Stock Payment Common Stock, or
acquired by way of any rights offering or similar offering made
in respect of the Stock Payment Common Stock or any of the
foregoing.

          REGISTRATION RIGHTS ADDENDUM means the Registration
Rights Addendum agreed to by Borrower in favor of ING in the form
attached hereto as Exhibit H.

          "RELATED PARTIES" means, with respect to any specified
Person, such Person's Affiliates and the respective directors,
officers, employees, agents and advisors of such Person and such
Person's Affiliates.

          "RELEASED PARTIES" has the meaning ascribed to such
term in Section 9.19 hereof.

          "REQUIRED LENDERS" means, at any time, Lenders having
Revolving Credit Exposures and unused Commitments representing at
least 66 2/3% of the sum of the total Revolving Credit Exposures
and unused Commitments at such time.

          "RESTRICTED PAYMENT" means any dividend or other
distribution (whether in cash, securities or other property) with
respect to any shares of any class of capital stock of the
Borrower or any Subsidiary, or any payment (whether in cash,
securities or other property), including any sinking fund or
similar deposit, on account of the purchase, redemption,
retirement, acquisition, cancellation or termination of any such
shares of capital stock of the Borrower or any option, warrant or
other right to acquire any such shares of capital stock of the
Borrower.

          "REVISED AND RESTATED ADDITIONAL DRAW WARRANT
CERTIFICATE" means the Revised and Restated Additional Draw
Certificate issued in connection with the Fourth Amendment
Agreement.

          "REVISED AND RESTATED INITIAL DRAW CERTIFICATE" means
the Revised and Restated Initial Draw Certificate issued in
connection with the Fourth Amendment Agreement.

          "REVOLVER DEED OF TRUST" means that certain Deed of
Trust, Assignment of Rents, Security Agreement, Financing
Statement and Fixture Filing, dated November 25, 1997, as amended
from time to time, executed by Borrower in favor of the
Administrative Agent for the benefit of itself and the Lenders,
which was recorded on November 26, 1997, as Instrument No.
19970434910 in the Official Records of San Bernardino County
California.

          "REVOLVER (PIUTE) DEED OF TRUST" means that certain
Deed of Trust, Assignment of Rents, Security Agreement, Financing
Statement and Fixture Filing, dated as of July 1, 1999, as
amended from time to time, executed by Borrower in favor of the
Administrative Agent for the benefit of itself and the Lenders,
which was recorded on December 23, 1999, as Instrument No. 524213
in the Official Records of San Bernardino County California.

           "REVOLVER (SWFG) DEED OF TRUST" means that certain
Deed of Trust, Assignment of Rents, Security Agreement, Financing
Statement and Fixture Filing, dated October 30, 1998,

                             Page 13

as amended from time to time, executed by Borrower in favor of
the Administrative Agent for the benefit of itself and the
Lenders, which was recorded on November 4, 1998, as Instrument
No. 19980473321 in the Official Records of San Bernardino County
California.

          "REVOLVER DEEDS OF TRUST" means, collectively, the
Revolver Deed of Trust, the Revolver (Piute) Deed of Trust, the
Revolver (SWFG) Deed of Trust and any and all mortgages and deeds
of trust delivered pursuant to Sections 5.10 and 5.11 hereof.

          "REVOLVING CREDIT EXPOSURE" means, with respect to any
Lender at any time, the sum of the outstanding principal amount
of such Lender's Tranche A Loans and Tranche B Loans.

          "REVOLVING CREDIT AGREEMENT WARRANTS" collectively, the
Revised and Restated Initial Draw Warrant Certificate, the
Revised and Restated Additional Draw Warrant Certificate, the
Eighth Warrant Certificate, the Ninth Warrant Certificate, the
Tenth Warrant Certificate, the Eleventh Warrant Certificate and
the Fee Warrant Certificate, each as revised, restated and in
effect from time to time.

          "REVOLVING LOAN OBLIGATIONS" means the obligations of
Borrower to the Administrative Agent and/or the Lenders under the
Loan Documents, as amended and in effect from time to time.

          "ROLLING STOCK":  has the meaning assigned to such term
in the Pledge and Security Agreement.

          "S&P" means Standard & Poor's.

          "SECOND AMENDMENT AGREEMENT" has the meaning ascribed
to such term in the recitals hereto.

          "SECOND AMENDMENT DOCUMENTS" has the meaning ascribed
to such term in the recitals hereto.

          "SECURITIES ACT" has the meaning set forth in
Section 9.17 hereof.

          "SECURITY DOCUMENTS" means, collectively, the Mortgages
and the Pledge and Security Agreement.

          "STOCK PAYMENT" has the meaning set forth in
Section 2.14 hereof.

          "STOCK PAYMENT COMMON STOCK" has the meaning set forth
in Section 5.13 hereof.

          "STOCK PAYMENT ELECTION" has the meaning set forth in
Section 2.14 hereof.

                             Page 14

          "STOCK PAYMENT ELECTION DEADLINE" has the meaning set
forth in Section 2.14 hereof.

          "STOCK PAYMENT ELECTION REQUEST" means a request by
Borrower to make a payment of accrued interest for a Borrowing
through the remittance of the Stock Payment in accordance with
Section 2.14.

          "STOCK PAYMENT RATE" means the sum of (a) the LIBO
Rate, computed in accordance with Section 2.13, plus (b) 7.0%.

          "SUBSIDIARY" means, with respect to any Person (the
"parent") at any date, any corporation, limited liability
company, partnership, association or other entity the accounts of
which would be consolidated with those of the parent in the
parent's consolidated financial statements if such financial
statements were prepared in accordance with GAAP as of such date,
as well as any other corporation, limited liability company,
partnership, association or other entity (a) of which securities
or other ownership interests representing more than 50% of the
equity or more than 50% of the ordinary voting power or, in the
case of a partnership, more than 50% of the general partnership
interests are, as of such date, owned, controlled or held, or
(b) that is, as of such date, otherwise Controlled, by the parent
or one or more subsidiaries of the parent or by the parent and
one or more subsidiaries of the parent.

          "SUBSIDIARY" means any subsidiary of the Borrower.

          "SUN WORLD" means Sun World International, Inc., a
Subsidiary of the Borrower.

          "SUN WORLD DOCUMENTS" has the meaning assigned to such
term in the Term Fifth Global Amendment Agreement.

          "SUN WORLD ENTITIES" means Sun World and its
subsidiaries.

          "SUN WORLD INDENTURE" means that certain Indenture,
dated as of April 16, 1997, among Sun World, Borrower, the
Subsidiary Guarantors thereto, and the Sun World Trustee, as
amended by that certain Amendment to Indenture, dated as of
October 9, 1997, as further amended by any Non-Adverse
Amendments.

          "SUN WORLD NOTES" means the $115,000,000 of 11 1/4%
First Mortgage Notes due April 15, 2004 issued pursuant to the
Sun World Indenture.

          "SUN WORLD TRUSTEE" means IBJ Schroder Bank & Trust
Company in its capacity as the trustee under the Sun World
Indenture.

          "SWFG" means Southwest Fruit Growers, L.P., a Delaware
limited partnership.

          "TAXES" means any and all present or future taxes,
levies, imposts, duties, deductions, charges or withholdings
imposed by any Governmental Authority.

          "TENTH WARRANT CERTIFICATE" means the Tenth Warrant
Certificate issued in connection with the Fourth Amendment
Agreement.

          "TERM LOAN OBLIGATIONS" means the obligations of
Borrower to ING under the Term Loan Documents.
                             Page 15

          "TERM LOAN DOCUMENTS" means collectively, the Credit
Documents (as defined in the Term Fifth Global Amendment
Agreement), each as amended and modified from time to time.

          "TERM FIFTH GLOBAL AMENDMENT AGREEMENT" means that
certain Fifth Global Amendment Agreement, dated as of January 31,
2002, between Cadiz, as borrower, and ING, as lender, as amended
and modified from time to time.

          "THRESHOLD" has the meaning assigned to such term in
Section 2.11(c).

          "THIRD AMENDMENT AGREEMENT" has the meaning ascribed to
such term in the recitals hereto.

          "THIRD AMENDMENT DOCUMENTS" has the meaning ascribed to
such term in the recitals hereto.

          "TITLE POLICIES" has the meaning ascribed to such term
in Section 4.01(r) hereof.

          "TRANCHE A COMMITMENT" means, with respect to each
Lender, the commitment of such Lender to make Tranche A Loans,
expressed as an amount representing the maximum aggregate amount
of such Lender's Tranche A Revolving Credit Exposure hereunder,
as such commitment may be (a) reduced from time to time pursuant
to Section 2.09 and (b) reduced or increased from time to time
pursuant to assignments by or to such Lender pursuant to
Section 9.04.  The initial amount of each Lender's Tranche A
Commitment is set forth on Schedule 2.01, or in the Assignment
and Acceptance pursuant to which such Lender shall have assumed
its Tranche A Commitment, as applicable.  The aggregate amount of
the Tranche A Commitments on the Effective Date will be
$15,000,000, which amount has been fully drawn and is
outstanding.

          "TRANCHE A LENDERS" means the Lenders listed on
Schedule 2.01 who have a Tranche A Commitment greater than zero
set forth under their names, subject to the provisions of
Section 9.04 hereof pertaining to Persons becoming or ceasing to
be Lenders; "Tranche A Lender" shall mean any one of them.

          "TRANCHE A LOANS" shall have the meaning ascribed to
such term in Section 2.01(a) hereof.

          "TRANCHE A NOTES" means the Notes issued by Borrower
and payable to the order of the Lenders, as evidence of the
Tranche A Loans, each in the form of Exhibit E hereto, and any
extensions, renewals, modifications or replacements thereof or
therefor.

          "TRANCHE A REVOLVING CREDIT EXPOSURE" means, with
respect to any Tranche A Lender at any time, the sum of the
outstanding principal amount of such Lender's Tranche A Loans.

          "TRANCHE B COMMITMENT" means, with respect to each
Lender, the commitment of such Lender to make Tranche B Loans,
expressed as an amount representing the maximum aggregate amount
of such Lender's Tranche B Revolving Credit Exposure hereunder,
as such

                             Page 16

commitment may be (a) reduced from time to time pursuant to
Section 2.09 and (b) reduced or increased from time to time
pursuant to assignments by or to such Lender pursuant to
Section 9.04.  The initial amount of each Lender's Tranche B
Commitment is set forth on Schedule 2.01, or in the Assignment
and Acceptance pursuant to which such Lender shall have assumed
its Tranche B Commitment, as applicable.  The aggregate amount of
the Tranche B Commitments on the Effective Date will be
$10,000,000.

          "TRANCHE B LENDERS" means the Lenders listed on
Schedule 2.01 who have a Tranche B Commitment greater than zero
set forth opposite their names, subject to the provisions of
Section 9.04 hereof pertaining to Persons becoming or ceasing to
be Lenders; "Tranche B Lender" shall mean any one of them.

          "TRANCHE B LOANS" shall have the meaning ascribed to
such term in Section 2.01(b) hereof.

          "TRANCHE B NOTES" means the Notes issued by Borrower
and payable to the order of the Lenders, as evidence of the
Tranche B Loans, each in the form of Exhibit F hereto, and any
extensions, renewals, modifications or replacements thereof or
therefor.

          "TRANCHE B REVOLVING CREDIT EXPOSURE" means, with
respect to any Tranche B Lender at any time, the sum of the
outstanding principal amount of such Lender's Tranche B Loans.

          "TRANSACTIONS" means the execution, delivery and
performance by the Borrower of this Agreement, the other Loan
Documents, the transactions contemplated herein and therein, the
borrowing of Loans, and the use of the proceeds thereof.

          "WITHDRAWAL LIABILITY" means liability to a
Multiemployer Plan as a result of a complete or partial
withdrawal from such Multiemployer Plan, as such terms are
defined in Part I of Subtitle E of Title IV of ERISA.

          "WHOLLY OWNED SUBSIDIARY" means, with respect to any
Person, any corporation, partnership, or other entity of which
all of the equity securities or other ownership interests (other
than, in the case of a corporation, directors' qualifying shares)
are directly or indirectly owned or controlled by such Person or
one or more Wholly Owned Subsidiaries of such Person or by such
Person and one or more Wholly Owned Subsidiaries of such Person.

          SECTION 1.02   [Intentionally Omitted]

          SECTION 1.03   TERMS GENERALLY.  The definitions of
     terms herein shall apply equally to the singular and plural
     forms of the terms defined.  Whenever the context may
     require, any pronoun shall include the corresponding
     masculine, feminine and neuter forms.  The words "include",
     "includes" and "including" shall be deemed to be followed by
     the phrase "without limitation".  The word "will" shall be
     construed to have the same meaning and effect as the word
     "shall".  Unless the context requires otherwise (a) any
     definition of or reference to any agreement, instrument or
     other document herein shall be construed as referring to
     such agreement, instrument or other document as from time to
     time amended, supplemented or otherwise modified (subject to
     any restrictions on such amendments, supplements or

                             Page 17

     modifications set forth herein), (b) any reference herein to
     any Person shall be construed to include such Person's
     successors and assigns, (c) the words "herein", "hereof" and
     "hereunder", and words of similar import, shall be construed
     to refer to this Agreement in its entirety and not to any
     particular provision hereof, (d) all references herein to
     Articles, Sections, Exhibits and Schedules shall be
     construed to refer to Articles and Sections of, and Exhibits
     and Schedules to, this Agreement and (e) the words "asset"
     and "property" shall be construed to have the same meaning
     and effect and to refer to any and all tangible and
     intangible assets and properties, including cash,
     securities, accounts and contract rights.

          SECTION 1.04   ACCOUNTING TERMS; GAAP.  Except as
     otherwise expressly provided herein, all terms of an
     accounting or financial nature shall be construed in
     accordance with GAAP, as in effect from time to time;
     provided that, if the Borrower notifies the Administrative
     Agent that the Borrower requests an amendment to any
     provision hereof to eliminate the effect of any change
     occurring after the date hereof in GAAP or in the
     application thereof on the operation of such provision (or
     if the Administrative Agent notifies the Borrower that the
     Required Lenders request an amendment to any provision
     hereof for such purpose), regardless of whether any such
     notice is given before or after such change in GAAP or in
     the application thereof, then such provision shall be
     interpreted on the basis of GAAP as in effect and applied
     immediately before such change shall have become effective
     until such notice shall have been withdrawn or such
     provision amended in accordance herewith.

                           ARTICLE II

                           THE CREDITS

          SECTION 2.01   COMMITMENTS.

          (a)  TRANCHE A LOANS.  Subject to the terms and
     conditions set forth herein, each Lender severally agrees,
     upon Borrower's request, to make loans (the "Tranche A
     Loans") to the Borrower from time to time during the
     Availability Period in an aggregate principal amount that
     will not result in such Lender's Tranche A Revolving Credit
     Exposure exceeding such Lender's Tranche A Commitment.
     Within the foregoing limits and subject to the terms and
     conditions set forth herein, and only if the full
     $10,000,000 in principal amount of the Tranche B Loans is
     outstanding and/or has been converted into Conversion Shares
     in accordance with Section 2.07 hereof, the Borrower may
     borrow, prepay and reborrow Tranche A Loans.

          (b)  TRANCHE B LOANS. Subject to the terms and
     conditions set forth herein, each Lender severally agrees,
     upon Borrower's request, to make loans (the "Tranche B
     Loans") to the Borrower from time to time during the
     Availability Period in an aggregate principal amount that
     will not result in such Lender's Tranche B Revolving Credit
     Exposure exceeding such Lender's Tranche B Commitment.
     Within the foregoing limits and subject to the terms and
     conditions set forth herein, the Borrower may borrow, prepay
     and reborrow Tranche B Loans.

          SECTION 2.02   LOANS AND BORROWINGS.

          (a)  Each Tranche A Loan shall be made as part of a
     Borrowing consisting of Tranche A Loans made by the Lenders
     ratably in accordance with their respective Tranche A

                             Page 18

     Commitments.  The failure of any Lender to make any Tranche
     A Loan required to be made by it shall not relieve any other
     Lender of its obligations hereunder; provided that the
     Tranche A Commitments of the Lenders are several and no
     Lender shall be responsible for any other Lender's failure
     to make Tranche A Loans as required.

          (b)  Each Tranche B Loan shall be made as part of a
     Borrowing consisting of Tranche B Loans made by the Lenders
     ratably in accordance with their respective Tranche B
     Commitments.  The failure of any Lender to make any Tranche
     B Loan required to be made by it shall not relieve any other
     Lender of its obligations hereunder; provided that the
     Tranche B Commitments of the Lenders are several and no
     Lender shall be responsible for any other Lender's failure
     to make Tranche B Loans as required.

          (c)  Each Borrowing shall be comprised entirely of
     Applicable Interest Rate Loans as the Borrower may request
     in accordance herewith.  Each Borrowing shall be in an
     aggregate amount equal to $2,500,000 or a larger multiple of
     $100,000 (provided that a Borrowing may be in an aggregate
     amount that is equal to the entire unused balance of the
     total Commitments).

          (d)  The Borrower shall not be entitled to request, or
     to elect to convert or continue, any Borrowing if the
     Interest Period requested with respect thereto would end
     after the Maturity Date.

          SECTION 2.03   REQUESTS FOR BORROWINGS.  Except for the
     Tranche B Loan Borrowing described in Section 2.04, the
     Borrower shall notify the Administrative Agent of such
     request by telephone not later than 1 p.m., New York City
     time, three Business Days before the date of the proposed
     Borrowing.  Any such notices received after 1 p.m., New York
     time, shall be deemed received on the next Business Day,
     Each such telephonic Borrowing Request shall be irrevocable
     and shall be confirmed promptly by hand delivery or telecopy
     to the Administrative Agent of a written Borrowing Request
     in a form approved by the Administrative Agent and signed by
     the Borrower.  Each such telephonic and written Borrowing
     Request shall specify the following information in
     compliance with Section 2.02:

      (i)        the aggregate amount of the requested
   Borrowing;

      (ii) the date of such Borrowing, which shall be a Business
 Day;

      (iii)   whether such Borrowing is a Tranche A Loan or a
               Tranche B Loan; and

      (iv)    the location and number of the Borrower's account
               to which funds are to be disbursed.

Promptly following receipt of a Borrowing Request in accordance
with this Section 2.03, the Administrative Agent shall (a) advise
each Lender of the details thereof and of the amount of such
Lender's Loan to be made as part of the requested Borrowing and
(b) as applicable, advise the Borrower of the number of shares of
the Borrower's Common Stock that may be purchased as a result of
the requested Borrowing through the exercise of the Revolving
Credit Agreement Warrants.

                             Page 19

          SECTION 2.04   BORROWING.  As of the Effective Date,
the Borrower shall be deemed to have requested a Tranche B Loan
Borrowing in the aggregate amount of $10,000,000, with the
Effective Date being the date of such Borrowing.  The location
and number of the Borrower's account to which these funds are to
be disbursed are set forth in Schedule 2.04 hereto.

          SECTION 2.05   [INTENTIONALLY OMITTED]

          SECTION 2.06   FUNDING OF BORROWINGS.

          (a)  Each Lender shall make each Loan to be made by it
     hereunder on the proposed date thereof by wire transfer of
     immediately available funds by 1 p.m., New York City time,
     to the account of the Administrative Agent most recently
     designated by it for such purpose by notice to the Lenders.
     The Administrative Agent will make such Loans available to
     the Borrower by promptly crediting the amounts so received,
     in like funds, to an account maintained and designated by
     the Borrower in the applicable Borrowing Request (or in the
     case of the Borrowing on the Effective Date, as set forth in
     Schedule 2.04 hereof).

          (b)  Unless the Administrative Agent shall have
     received notice from a Lender prior to the proposed date of
     any Borrowing that such Lender will not make available to
     the Administrative Agent such Lender's share of such
     Borrowing, the Administrative Agent may assume that such
     Lender has made such share available on such date in
     accordance with paragraph (a) of this Section 2.06 and may,
     in reliance upon such assumption, make available to the
     Borrower a corresponding amount.  In such event, if a Lender
     has not in fact made its share of the applicable Borrowing
     available to the Administrative Agent, then the applicable
     Lender hereby agrees to pay to the Administrative Agent
     forthwith on demand such corresponding amount with interest
     thereon, for each day from and including the date such
     amount is made available to the Borrower to but excluding
     the date of payment to the Administrative Agent, at the
     interest rate applicable to that Loan.  If such Lender pays
     such amount to the Administrative Agent, then such amount
     shall constitute such Lender's Loan included in such
     Borrowing.

          SECTION 2.07   CONVERSION RIGHTS FOR HOLDERS OF TRANCHE
          B LOANS.

          (a)  CONVERSION RIGHTS.  Each Tranche B Lender shall at
     any time have the right (at its sole option) to convert the
     unpaid principal and interest thereof, up to a maximum of
     (x) such Tranche B Lender's pro rata share of the Tranche B
     Loans plus (y) all accrued and unpaid interest thereon that
     is in arrears and delinquent at the time of such conversion
     (collectively, such amount a Tranche B Lender's "Conversion
     Loan Amount"), into the common stock of Borrower pursuant to
     the terms hereof.  The number of shares of Common Stock to
     be issued to such Tranche B Lender upon such conversion
     shall equal (x) such Tranche B Lender's Conversion Loan
     Amount as of such conversion date, divided by (y) a price
     per share initially equal to $8.00 (the "Conversion Price").
     The Conversion Price is subject to certain anti-dilution
     adjustments provided for below.  Within seven (7) Business
     Days of its receipt of a written notice from a Tranche B
     Lender that sets forth the Conversion Loan Amount that the
     Tranche B Loans is electing to be converted in accordance
     with the terms of this Section 2.07, Borrower shall issue
     the Conversion Shares relating to such election to such
     Tranche B Lender, provided

                             Page 20

     that Borrower shall make good faith efforts to issue and
     deliver such certificate prior to the expiration of such
     seven Business Day Period.

          (b)  ANTI-DILUTION PROVISIONS.  The Conversion Price
     and the number and kind of securities purchasable upon the
     exercise of the conversion rights set forth above (the
     "Conversion Shares") shall be subject to adjustment from
     time to time upon the happening of certain events as
     hereinafter provided in this Section 2.07.  The Conversion
     Price in effect at any time and the Conversion Shares shall
     be subject to adjustment as follows:

          (1)  In case the Borrower shall (i) pay a dividend or
     make a distribution on its shares of Common Stock in shares
     of Common Stock, (ii) subdivide or reclassify its
     outstanding Common Stock in shares of Common Stock into a
     greater number of shares, or (iii) combine or reclassify its
     outstanding Common Stock into a smaller number of shares,
     then the Conversion Price in effect at the time of the
     record date (and thereafter) for such dividend or
     distribution or of the effective date of such subdivision,
     combination or reclassification shall be adjusted so that
     such Conversion Price shall equal the price determined by
     multiplying the Conversion Price in effect immediately prior
     to such record date or effective date by a fraction, the
     numerator of which is the number of shares of Common Stock
     outstanding on such record date or effective date, and the
     denominator of which is the number of shares of Common stock
     outstanding immediately after such dividend, distribution,
     subdivision, combination or reclassification.  For example,
     if the Borrower declares a 2 for 1 stock dividend or stock
     split and the Conversion Price immediately prior to such
     event was $8.00 per share, the adjusted Conversion Price
     immediately after such event would be $4.00 per share.

     Such adjustment shall be made successively whenever any
     event listed in this Subsection (1) shall occur.

          (2)  In case the Borrower shall hereafter issue rights
     or warrants to all holders of its Common Stock entitling
     them to subscribe for or purchase shares of Common Stock (or
     securities convertible into Common Stock) at a price (or
     having a conversion price or exercise price per share) less
     than the current market price of the Common Stock (as
     defined below) on the record date mentioned below, then the
     Conversion Price shall be adjusted so that the Conversion
     Price shall equal the price determined by multiplying the
     Conversion Price in effect immediately prior to the record
     date mentioned below by a fraction, the numerator of which
     shall be the sum of the number of shares of Common Stock
     outstanding on the record date mentioned below and the
     number of additional shares of Common Stock which the
     aggregate offering price of the total number of shares of
     Common Stock so offered (or the aggregate conversion or
     exercise price of the securities so offered) would purchase
     at such current market price per share of the Common Stock,
     and the denominator of which shall be the sum of the number
     of shares of Common Stock outstanding on such record date
     and the number of additional shares of Common Stock offered
     for subscription or purchase (or into which the convertible
     securities so offered are convertible).  Such adjustment
     shall be made successively whenever such rights or warrants
     are issued and shall become effective immediately after the
     record date for the determination of shareholders entitled
     to receive such rights or warrants; and to the extent that
     shares of Common Stock are not delivered

                             Page 21

     (or securities convertible or exercisable into Common Stock
     are not delivered) after the expiration of such rights or
     warrants the Conversion Price shall be readjusted to the
     Conversion Price which would then be in effect had the
     adjustments made upon the issuance of such rights or
     warrants been made upon the basis of delivery of only the
     number of shares of Common Stock (or securities convertible
     into or exercisable for Common Stock) actually delivered.

          (3)  In case the Borrower shall hereafter distribute to
     all holders of its Common Stock evidences of its
     indebtedness or assets (excluding regular cash dividends or
     distributions and dividends or distributions referred to in
     Subsection (1) above) or subscription rights or warrants
     (excluding those referred to in Subsection (2) above), then
     in each such case the Conversion Price in effect thereafter
     shall be determined by multiplying the Conversion Price in
     effect immediately prior thereto by a fraction, the
     numerator of which shall be the total number of shares of
     Common Stock outstanding multiplied by the current market
     price per share of Common Stock (as defined in
     Subsection (8) below), less the aggregate fair market value
     (as determined in good faith by the Borrower's Board of
     Directors and reasonably acceptable to the Administrative
     Agent on behalf of the Tranche B Lenders) of said assets or
     evidences of indebtedness so distributed or of such rights
     or warrants, and the denominator of which shall be the total
     number of shares of Common Stock outstanding multiplied by
     such current market price per share of Common Stock.

     Such adjustment shall be made successively whenever any such
     distribution is made and shall become effective immediately
     after the record date for the determination of shareholders
     entitled to receive such distribution.

          (4)  In case the Borrower shall issue shares of its
     Common Stock (excluding shares issued (a) in any of the
     transactions described in Subsection (1) above, (b) upon
     exercise of options granted to the Borrower's employees
     under a plan or plans adopted by the Borrower's Board of
     Directors and approved by its shareholders, if such shares
     would otherwise be included in this Subsection (4), (but
     only to the extent that the aggregate number of shares
     excluded hereby and issued after the date hereof, shall not
     exceed 5% of the Borrower's Common Stock outstanding at the
     time of any issuance), (c) upon exercise of options and
     warrants outstanding at the date hereof, and conversion of
     the loan amounts provided for herein, (d) upon the exercise
     or conversion of any security as to which the Conversion
     Price has already been adjusted pursuant to Subsection (5)
     below, and (e) to shareholders of any corporation which
     merges into the Borrower in proportion to their stock
     holdings of such corporation immediately prior to such
     merger, upon such merger, or issued in a bona fide public
     offering pursuant to a firm commitment underwriting, but
     only if no adjustment is required pursuant to any other
     provision of this Section 2.07(b) (without regard to
     Subsection (9) below) with respect to the transaction giving
     rise to such rights) for a consideration per share less than
     the current market price per share defined in Subsection (8)
     below, then on the date the Borrower fixes the offering
     price of such additional shares, the Conversion Price shall
     be adjusted immediately thereafter so that it shall equal
     the price determined by multiplying the Conversion Price in
     effect immediately prior thereto by a fraction, the
     numerator of which shall be the sum of the number of shares
     of Common Stock outstanding

                             Page 22

     immediately prior to the issuance of such additional shares
     and the number of shares of Common Stock which the aggregate
     consideration received (determined as provided in
     Subsection (7) below) for the issuance of such additional
     shares would purchase at such current market price per share
     of Common Stock, and the denominator of which shall be the
     number of shares of Common Stock outstanding immediately
     after the issuance of such additional shares.

     Such adjustment shall be made successively whenever such an
     issuance is made; provided, however, that no such adjustment
     shall be made unless, in such issuance, the Borrower issues
     shares of Common Stock in an amount which, when combined
     with all other issuances of Common Stock after the date
     hereof and all other issuances of securities convertible
     into or exchangeable for its Common Stock after the date
     hereof, which securities are excluded from Subsections (4)
     or (5) by operation of this proviso or the proviso in the
     last Section of Subsection (5), would exceed 20% of the
     Borrower's Common Stock outstanding immediately prior to the
     time of such issuance.

          (5)  In case the Borrower shall issue any securities
     convertible into or exercisable or exchangeable for its
     Common Stock (excluding securities issued in transactions
     described in Subsections (2) and (3) above) for a
     consideration per share of Common Stock initially
     deliverable upon conversion, exercise or exchange of such
     securities (determined as provided in Subsection (7) below)
     less than the current market price per share (as defined in
     Subsection (8) below) in effect immediately prior to the
     issuance of such securities, then the Conversion Price shall
     be adjusted immediately thereafter so that it shall equal
     the price determined by multiplying the Conversion Price in
     effect immediately prior thereto by a fraction, the
     numerator of which shall be the sum of the number of shares
     of Common Stock outstanding immediately prior to the
     issuance of such securities and the number of shares of
     Common Stock which the aggregate consideration received
     (determined as provided in Subsection (7) below) for such
     securities would purchase at such current market price per
     share of Common Stock, and the denominator of which shall be
     the sum of the number of shares of Common Stock outstanding
     immediately prior to such issuance and the maximum number of
     shares of Common Stock of the Borrower deliverable upon
     conversion or exercise of, or in exchange for, such
     securities at the initial conversion or exchange price or
     rate.

     Such adjustment shall be made successively whenever such an
     issuance is made; provided, however, that no such adjustment
     shall be made unless, in such issuance, the Borrower issues
     securities convertible into or exercisable or exchangeable
     for a number of shares of its Common Stock in an amount
     which, when combined with all other issuances of Common
     Stock after the date hereof and all other issuances of
     securities convertible into or exercisable or exchangeable
     for its Common Stock after the date hereof, which securities
     are excluded from Subsections (4) or (5) by operation of
     this proviso or the proviso in the last Section of
     Subsection (4), would exceed 20% of the Borrower's Common
     Stock outstanding immediately prior to the time of such
     issuance.

          (6)  Whenever the Conversion Price is adjusted pursuant
     to Subsections (1), (2), (3), (4) and (5) above, the number
     of Conversion Shares purchasable pursuant to the terms
     hereof shall simultaneously be adjusted by multiplying the
     number of

                             Page 23

     Conversion Shares issuable upon conversion pursuant to the
     terms hereof immediately prior to such adjustment by the
     Conversion Price in effect immediately prior to such
     adjustment and dividing the product so obtained by the
     Conversion Price, as adjusted.

          (7)  For purposes of any computation respecting
     consideration received pursuant to Subsections (4) and (5)
     above, the following shall apply:

          (A)  in the case of the issuance of shares of Common
     Stock for cash, the consideration shall be the amount of
     such cash, provided that in no case shall any deduction be
     made for any commissions, discounts or other expenses
     incurred by the Borrower for any underwriting of the issue
     or otherwise in connection therewith:

          (B)  in the case of the issuance of shares of Common
     Stock for a consideration in whole or in part other than
     cash, the consideration other than cash shall be deemed to
     be the fair market value thereof as determined in good faith
     by the Board of Directors of the Borrower (irrespective of
     the accounting treatment thereof) and reasonably acceptable
     to the Administrative Agent on behalf of the Tranche B
     Lenders; and

          (C) in the case of the issuance of securities
     convertible into or exchangeable or exercisable for shares
     of Common Stock, the aggregate consideration received
     therefor shall be deemed to be the consideration received by
     the Borrower for the issuance of such securities plus the
     additional minimum consideration, if any, to be received by
     the Borrower upon the conversion, exercise or exchange
     thereof (the consideration in each case to be determined in
     the same manner as provided in clauses (A) and (B) of this
     Subsection (7)).

          (8)  For the purpose of any computation under
Subsections (2), (3), (4) and (5) above, the current market price
per share of Common Stock at any date shall be deemed to be the
average of the daily closing prices for 30 consecutive business
days before such date.  The closing price for each day shall be
the last sale price regular way or, in case no such reported sale
takes place on such day, the average of the last reported bid and
asked prices regular way, in either case on the principal
national securities exchange on which the Common Stock is
admitted to trading or listed, or if not listed or admitted to
trading on such exchange, the average of the last reported bid
and asked prices as reported by NASDAQ, or other similar
organization if NASDAQ is no longer reporting such information,
of if not so available, the fair market price as determined in
good faith by the Board of Directors and reasonably acceptable to
the Administrative Agent on behalf of the Tranche B Lenders.

          (9)  No adjustment in the Conversion Price shall be
required unless such adjustment would require an increase or
decrease of at least five cents ($0.05) in such price; provided,
however, that any adjustments which by reason of this
Subsection (9) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment
required to be made hereunder.  All calculations pursuant to the
terms hereof shall be made to the nearest cent or to the nearest
one-

                             Page 24

hundredth of a share, as the case may be.  Anything herein to the
contrary notwithstanding, the Borrower shall be entitled, but
shall not be required, to reduce the Conversion Price, in
addition to those changes required by the terms and provisions
hereof, as it, in its sole discretion, shall determine to be
advisable in order that any dividend or distribution in shares of
Common Stock, subdivision, reclassification or combination of
Common Stock, issuance of warrants to purchase Common Stock or
distribution or evidences of indebtedness or other assets
(excluding cash dividends) referred to hereinabove in the terms
and provisions hereof hereafter made by the Borrower to the
holders of its Common Stock shall not result in any tax to such
holders of its Common Stock or securities convertible into or
exercisable or exchangeable Common Stock.

          (10) In the event that at any time, as a result of an
adjustment made pursuant to Subsection (1) above, a Tranche B
Lender shall become entitled to receive any shares of the
Borrower, other than Common Stock, thereafter the number of such
other shares so receivable upon conversion pursuant to the terms
hereof shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the
provisions with respect to the Common Stock contained in
Subsections (1) to (9), inclusive above. The Borrower may retain
a firm of independent certified public accountants selected by
the Board of Directors (who may be the regular accountants
employed by the Borrower) to make any computation required
pursuant to the terms hereof, and a certificate signed by such
firm shall be conclusive evidence of the correctness of such
adjustment absent manifest error or negligence.

          (c)  OFFICER'S CERTIFICATE.  Whenever the Conversion
     Price or number of Conversion Shares shall be adjusted as
     required by the provisions of this Section 2.07, the
     Borrower shall forthwith file in the custody of its
     Secretary or an Assistant Secretary at its principal office
     and with its stock transfer agent, if any, an officer's
     certificate showing the adjusted Conversion Price or number
     of Conversion Shares determined as herein provided, setting
     forth in reasonable detail the facts requiring such
     adjustment, including a statement of the number of
     additional shares of Common Stock, if any, and such other
     facts as shall be necessary to show the reason for and the
     manner of computing such adjustment.  Each such officer's
     certificate shall be made available at all reasonable times
     for inspection by any Tranche B Lender and the Borrower
     shall, forthwith after each such adjustment, mail a copy by
     certified mail of such certificate to such Tranche B Lender.

          (d)  NOTICES TO TRANCHE B LENDERS.  So long any Tranche
     B Lender shall have the conversion rights set forth herein,
     (i) if the Borrower shall pay any dividend or make any
     distribution upon the Common Stock or (ii) if the Borrower
     shall offer to the holders of Common Stock for subscription
     or purchase by them any share of or class of its capital
     stock or any other rights or (iii) if any capital
     reorganization of the Borrower, reclassification of the
     capital stock of the Borrower, consolidation or merger of
     the Borrower with or into another entity, sale, lease, or
     transfer of all or substantially all of the property and
     assets of the Borrower to another entity, or voluntary or
     involuntary dissolution, liquidation or winding up of the
     Borrower shall be effected, then in any such case, the
     Borrower shall cause to be mailed by certified mail to such
     Tranche B Lender, at least fifteen days prior the record
     date specified in (x) or (y) below, as the case may be, a
     notice containing a brief description of the proposed action
     and stating the date on which

                             Page 25

     (x) a record is to be taken for the purpose of such
     dividend, distribution or offer of rights, or (y) such
     reclassification, reorganization, consolidation, merger,
     conveyance, lease, transfer, sale dissolution, liquidation
     or winding up is to take place and the date, if any is to be
     fixed, as of which the holders of Common Stock or other
     securities shall be entitled to receive cash or other
     property deliverable upon such reclassification,
     reorganization, consolidation, merger, conveyance, lease,
     transfer, sale, dissolution, liquidation or winding up.

          (e)  RECLASSIFICATION, REORGANIZATION OR MERGER.  In
     case of any reclassification, capital reorganization or
     other change of outstanding shares of Common Stock of the
     Borrower, or in case of any consolidation or merger of the
     Borrower with or into another entity (other than a merger
     with a subsidiary in which merger the Borrower is the
     continuing corporation and which does not result in any
     reclassification, capital reorganization or other change of
     outstanding shares of Common Stock of the class issuable
     upon conversion of Conversion Loan Amounts pursuant to the
     terms hereof) or in case of any sale, lease, or conveyance
     to another entity of all or substantially all of the
     property and assets of the Borrower, the Borrower shall, as
     a condition precedent to such transaction, cause effective
     provisions to be made so that each Tranche B Lender shall
     have the right thereafter by conversion of Conversion Loan
     Amounts pursuant to the terms hereof, to purchase the kind
     and amount of shares of stock and other securities and
     property receivable upon such reclassification, capital
     reorganization and other change, consolidation, merger,
     sale, lease or conveyance by a holder of the number of
     shares of Common Stock which might have been purchased upon
     conversion of Conversion Loan Amounts pursuant to the terms
     hereof immediately prior to such reclassification, change,
     consolidation, merger, sale, lease or conveyance.  Any such
     provision shall include provision for adjustments which
     shall be as nearly equivalent as may be practicable to the
     adjustments provided for herein.  The Borrower shall not
     effect any such reorganization, consolidation, merger, sale
     or conveyance unless prior to or simultaneously with the
     consummation thereof the survivor or successor corporation
     (if other than the Borrower) resulting from such
     reorganization, consolidation or merger or the corporation
     purchasing such assets shall assume by written instrument
     executed and sent to each Tranche B Lender of the obligation
     to deliver to such Tranche B Lender such shares of stock,
     securities or assets as, in accordance with the foregoing
     provisions, such Tranche B Lender may be entitled to
     receive, and containing the express assumption by such
     successor corporation of the due and punctual performance
     and observance of every provision herein to be performed and
     observed by the Borrower and of all liabilities and
     obligations of the Borrower hereunder.  The foregoing
     provisions of this Section 2.07(e) shall similarly apply to
     successive reclassifications, capital reorganizations, and
     changes of shares of Common Stock and to successive
     consolidations, mergers, sales, leases or conveyances.  In
     the event that in connection with any such capital
     reorganization or reclassification, consolidation,  merger,
     sale, lease or conveyance, additional shares of Common Stock
     shall be issued in exchange, conversion, substitution, or
     payment, in whole or in part, for a security of the Borrower
     other than Common Stock, any such issue shall be treated as
     an issue of Common Stock covered by the provisions of
     Subsection 2.07(b)(1) hereof.

          SECTION 2.08   SECURITY.  The Borrower's obligations
     under this Agreement shall be secured in accordance with
     and/or have the benefit of the Pledge and Security
     Agreement, the Mortgages, any other Security Document, and
     each other mortgage, security interest, pledge agreement or
     other document granted pursuant to Sections 5.09, 5.10 and
     5.11.

                             Page 26

          SECTION 2.09   TERMINATION AND REDUCTION OF
     COMMITMENTS.

          (a)  Unless previously terminated, the Commitments
     shall terminate on the Maturity Date.

          (b)  The Borrower may at any time terminate, or from
     time to time reduce, the Tranche A Commitments; provided
     that (i) each reduction of the Tranche A Commitments shall
     be in an amount that is an integral multiple of $500,000 and
     not less than $2,500,000 and (ii) the Borrower shall not
     terminate or reduce the Tranche A Commitments if, after
     giving effect to any concurrent prepayment of the Loans in
     accordance with Section 2.11, the sum of the Tranche A
     Revolving Credit Exposures would exceed the total Tranche A
     Commitments.

          (c)  Subject to the Tranche B Lenders right to exercise
     its conversion rights under Section 2.07 hereof, the
     Borrower may at any time terminate, or from time to time
     reduce, the Tranche B Commitments; provided that (i) each
     reduction of the Tranche B Commitments shall be in an amount
     that is an integral multiple of $500,000 and not less than
     $2,500,000, (ii) the Borrower shall not terminate or reduce
     the Tranche B Commitments unless the Tranche A Commitments
     have been reduced to zero and all other Loan Obligations
     (excluding the principal of the Tranche B Loans) have been
     repaid in full, and (iii) the Borrower shall not terminate
     or reduce the Tranche B Commitments if, after giving effect
     to any concurrent prepayment of the Loans in accordance with
     Section 2.11, the sum of the Tranche B Revolving Credit
     Exposures would exceed the total Tranche B Commitments.

          (d)  The Borrower shall notify the Administrative Agent
     of any election to terminate or reduce the Tranche A
     Commitments under paragraph (b) of this Section at least six
     (6) Business Days prior to the effective date of such
     termination or reduction, specifying such election and the
     effective date thereof.  The Borrower shall notify the
     Administrative Agent of any election to terminate or reduce
     the Tranche B Commitments under paragraph (c) of this
     Section at least ten (10) Business Days prior to the
     effective date of such termination or reduction, specifying
     such election and the effective date thereof, which
     termination or reduction shall be subject to the Tranche B
     Lenders rights to exercise the conversion rights under
     Section 2.07 hereof at any time prior to the expiration of
     such ten (10) Business Day period.  Promptly following
     receipt of any notice, the Administrative Agent shall advise
     the Lenders of the contents thereof.  Each notice delivered
     by the Borrower pursuant to this Section 2.09 shall be
     irrevocable; provided that a notice of termination of the
     Tranche A Commitments or Tranche B Commitments delivered by
     the Borrower may state that such notice is conditioned upon
     the effectiveness of other credit facilities, in which case
     such notice may be revoked by the Borrower (by notice to the
     Administrative Agent on or prior to the specified effective
     date) if such condition is not satisfied.  Any termination
     or reduction of the Tranche A Commitments or Tranche B
     Commitments shall be permanent.  Each reduction of the
     Tranche A Commitments or Tranche B Commitments shall be made
     ratably among the Lenders in accordance with their
     respective Tranche A Commitments or Tranche B Commitments.

          (e)  If at any time the aggregate outstanding principal
     amount of all of the Loans made by any Lender shall exceed
     the amount of the Commitment of such Lender, the Borrower
     shall immediately upon receipt of notice thereof from the
     Administrative Agent or

                             Page 27

     such Lender, or immediately upon the Borrower's acquiring
     actual knowledge thereof, prepay the Loans of such Lender to
     the extent necessary to eliminate such excess.

          (f)  Notwithstanding anything herein to the contrary,
     the sum of the aggregate outstanding principal balance of
     all Loans made by all Lenders at any one time shall not
     exceed the aggregate amount of all Commitments as then in
     effect.  If at any time the aggregate outstanding principal
     balance of the Loans exceeds the applicable limit stated in
     the immediately preceding sentence, the Borrower shall
     immediately upon receipt of notice thereof from the
     Administrative Agent or such Lender, or immediately upon the
     Borrower's acquiring actual knowledge thereof, prepay the
     Loans to the extent necessary to eliminate such excess.

          (g)  Any reduction of the Commitments under this
     Section 2.09 shall apply as a proportional and permanent
     reduction of the Commitments of each of the Lenders.  If the
     aggregate outstanding principal balance of the Loans exceeds
     any applicable limit specified hereunder after giving effect
     to any such reduction of the Commitments, Borrower shall
     immediately prepay such Loans to the extent necessary to
     eliminate such excess.

          (h)  In the event any reduction in the Commitments is
     made in accordance with this Section 2.09, the
     Administrative Agent will issue to the Borrower and each
     Lender a revised Schedule 2.01 to this Agreement reflecting
     such reduction, which revised Schedule 2.01 shall supersede
     and replace the prior version thereof and shall be
     substituted by each party in lieu thereof.

          SECTION 2.10   REPAYMENT OF LOANS; EVIDENCE OF DEBT.

          (a)  The Borrower hereby unconditionally promises to
     pay to the Administrative Agent for the account of each
     Lender the then unpaid principal amount of each Loan on the
     Maturity Date.

          (b)  Each Lender shall maintain in accordance with its
     usual practice an account or accounts evidencing the
     indebtedness of the Borrower to such Lender resulting from
     each Loan made by such Lender, including the amounts of
     principal and interest payable and paid to such Lender from
     time to time hereunder.

          (c)  The Administrative Agent shall maintain accounts
     in which it shall record (i) the amount of each Loan made
     hereunder and the Interest Period applicable thereto,
     (ii) the amount of any principal or interest due and payable
     or to become due and payable from the Borrower to each
     Lender hereunder and (iii) the amount of any sum received by
     the Administrative Agent hereunder for the account of the
     Lenders and each Lender's share thereof.

          (d)  The entries made in the accounts maintained
     pursuant to paragraph (b) or (c) of this Section shall be
     prima facie evidence of the existence and amounts of the
     obligations recorded therein; provided that the failure of
     any Lender or the Administrative Agent to maintain such
     accounts or any error therein shall not in any manner affect
     the obligation of the Borrower to repay the Loans in
     accordance with the terms of this Agreement.

          (e)  To further evidence the existence and amounts of
     the Borrower's obligations to pay principal and interest on
     each Loan made by a Lender hereunder, (i) with

                             Page 28

     respect to each Tranche A Loan, the Borrower shall execute
     and deliver to that Lender a Tranche A Note payable to the
     Lender, with all blanks therein appropriately filled, with
     the face amount equal to the principal amount of such
     Lender's Tranche A Commitment, and (ii) with respect to each
     Tranche B Loan, the Borrower shall execute and deliver to
     that Lender a Tranche B Note payable to the Lender, with all
     blanks therein appropriately filled, with the face amount
     equal to the principal amount of such Lender's Tranche B
     Commitment.  The Borrower shall prepare, execute and deliver
     each such Note payable to the order of such Lender (or, if
     requested by such Lender, to such Lender and its registered
     assigns).  Thereafter, the Loans evidenced by such Note and
     interest thereon shall at all times (including after
     assignment pursuant to Section 9.04) be represented by one
     or more Notes payable to the order of the payee named
     therein (or, if such Note is a registered note, to such
     payee and its registered assigns).

          SECTION 2.11   PREPAYMENT OF LOANS; REBORROWINGS.

          (a)  Subject to Section 2.11(d) hereof, the Borrower
     shall have the right at any time and from time to time to
     prepay any Borrowing in whole or in part, subject to prior
     notice in accordance with paragraph (b) of this Section;
     provided that unless all outstanding amounts are being
     repaid, each prepayment of Borrowing shall be in an amount
     that is an integral multiple of $100,000 and not less than
     $2,500,000.00.

          (b)  The Borrower shall notify the Administrative Agent
     by telephone (confirmed by telecopy) of any prepayment
     hereunder not later than 1 p.m., New York City time, (the
     following date, as applicable, the "Prepayment Date") (i)
     with respect to Tranche A Loans, six Business Days before
     the date of prepayment or (ii) with respect to Tranche B
     Loans, ten (10) Business Days before the date of prepayment.
     Each such notice shall be irrevocable and shall specify the
     prepayment date and the principal amount of each Borrowing
     or portion thereof to be prepaid; provided that, if a notice
     of prepayment is given in connection with a conditional
     notice of termination of the Commitments as contemplated by
     Section 2.09, then such notice of prepayment may be revoked
     if such notice of termination is revoked in accordance with
     Section 2.09; provided further that any prepayment of
     Tranche B Loans shall be subject to the Tranche B Lenders
     rights to exercise the conversion rights under Section 2.07
     hereof at any time prior to the expiration of the ten (10)
     Business Day notice period.  Promptly following receipt of
     any such notice relating to a Borrowing, the Administrative
     Agent shall advise the Lenders of the contents thereof.
     Each partial prepayment of any Borrowing shall be in an
     amount that would be permitted in the case of an advance of
     a Borrowing as provided in Section 2.02.  Each prepayment of
     a Borrowing shall be applied ratably to the Loans included
     in the prepaid Borrowing.  Prepayments shall be accompanied
     by accrued interest to the extent required by Section 2.13
     and Section 2.14.  At its discretion, Borrower may elect to
     make such payment of accrued interest on the date of a
     prepayment through a Stock Payment in accordance with
     Section 2.14 hereof.

          (c)  The Borrower may reborrow any principal amount
     repaid under this Section 2.11 in accordance with the
     provisions of this Article II, provided that the Borrower
     can satisfy the requirements for obtaining a Loan set forth
     in Section 4.02 hereof, and provided further that with
     respect to Tranche A Loans, Borrower may not reborrow any
     amounts repaid unless the full $10,000,000 in principal
     amount of the Tranche B Loans is outstanding and/or has

                             Page 29

     been converted into Conversion Shares in accordance with
     Section 2.07 hereof.  Each such reborrowing shall be treated
     as a Borrowing for all purposes hereunder.

          (d)  Notwithstanding any other provision of this
     Agreement, any provision in any other Loan Documents or any
     provision of the Term Loan Documents, no prepayment or
     repayments of the Tranche B Loans may be made until all
     other Loan Obligations (excluding the outstanding principal
     of the Tranche B Loans)  have been paid in full to the
     Lenders and the Administrative Agent.  Mandatory or optional
     prepayments by Borrower shall first apply to currently
     outstanding Tranche A Loans or the Term Loan Obligations
     (excluding the principal of the Tranche B Loans) (as
     allocated between such Loan Obligations within the sole
     discretion of the Administrative Agent).  Further, the
     Administrative Agent and the Lenders shall have right to
     exercise their conversion rights prior to any prepayment of
     the Tranche B Loans in accordance with Sections 2.07 and
     2.11(b) hereof.

          SECTION 2.12   FEES.

          (a)  As a fee for this amended and restated facility
     and the Loans to Borrower hereunder, on the Effective Date,
     the Borrower shall execute and deliver to the Administrative
     Agent for the account of each Lender (i) the Fee Warrant
     Certificate, (ii) the Purchaser Certificate, and (iii) the
     Additional Stock Letter Agreement, each in form and
     substance satisfactory to the Administrative Agent (in
     Administrative Agent's absolute discretion).

          (b)  All fees payable hereunder shall be paid on the
     date due to the Administrative Agent for distribution to the
     Lenders.  Fees paid shall not be refundable under any
     circumstances.

          SECTION 2.13   INTEREST.

          (a)  The Loans comprising each Borrowing shall bear
     interest at a rate per annum equal to the Applicable
     Interest Rate for the Interest Period in effect for such
     Borrowing.

          (b)  Notwithstanding the foregoing, if any principal of
     or interest on any Loan or any fee or other amount payable
     by the Borrower hereunder is not paid when due, whether at
     stated maturity, upon acceleration or otherwise, such
     overdue amount shall bear interest, after as well as before
     judgment, at a rate per annum equal to (i) in the case of
     overdue principal of any Loan, 2% plus the rate otherwise
     applicable to such Loan as provided in the preceding
     paragraph of this Section or (ii) in the case of any other
     amount, 2% plus the rate applicable to Loans as provided in
     paragraph (a) of this Section.

          (c)  Accrued interest on each Loan shall be payable in
     arrears on each Interest Payment Date for such Loan and upon
     termination of the Commitments; provided that (i) interest
     accrued pursuant to paragraph (b) of this Section shall be
     payable on demand and (ii) in the event of any repayment or
     prepayment of any Loan, accrued interest on the principal
     amount repaid or prepaid shall be payable on the date of
     such repayment or prepayment.

          (d)  All interest hereunder shall be computed on the
     basis of a year of 360 days, and shall be payable for the
     actual number of days elapsed (including the first day but

                             Page 30

     excluding the last day).  The LIBO Rate shall be determined
     by the Administrative Agent, and such determination shall be
     conclusive absent manifest error.

          SECTION 2.14   STOCK PAYMENT ELECTION.

          (a)  In its sole discretion, as provided in this
     section, Borrower may elect to pay accrued interest on a
     Borrowing on an Interest Payment Date (or, in the case of a
     prepayment under Section 2.11, on the Prepayment Date) for
     such Borrowing through the remittance of the Stock Payment
     (instead of immediately available funds) (such election a
     "Stock Payment Election").

          (b)  To make a Stock Payment Election pursuant to this
     Section 2.14 with respect to any Borrowing for any Interest
     Period (or in the case of a prepayment under Section 2.11,
     the portion of an Interest Period ending on the Prepayment
     Date), the Borrower shall notify the Administrative Agent of
     such election by telephone not later than 1:00 p.m., New
     York time, six (6) Business Days before the Interest Payment
     Date (or, in the case of a prepayment under Section 2.11,
     six (6) Business Days before the Prepayment Date) for the
     current Interest Period for such Borrowing (the "Stock
     Payment Election Deadline").  Each telephone Stock Payment
     Election Request shall be irrevocable and shall be confirmed
     promptly by hand delivery or telecopy to the Administrative
     Agent of a written Stock Payment Election Request in a form
     approved by the Administrative Agent and signed by the
     Borrower.  Promptly upon receipt of the written Stock
     Payment Election Request, the Administrative Agent shall
     give notice of such Stock Payment Election Request to the
     Lenders.

          (c)  Each telegraphic and written Stock Payment
     Election Request shall specify the Borrowing to which such
     Stock Payment Election Request applies;

          (d)  Following receipt of a Stock Payment Election
     Request, the Administrative Agent shall advise each Lender
     and the Borrower by 11 a.m., New York time, on the Interest
     Payment Date (or, in the case of a prepayment under
     Section 2.11, on the Prepayment Date) relating to such Stock
     Payment Election Request of the details thereof, including
     the Administrative Agent's determination of the Stock
     Payment (including its calculation thereof) as determined
     pursuant to Subsection (g) hereof.

          (e)  If the Borrower fails to deliver a timely Stock
     Payment Election Request with respect to any Borrowing prior
     to the Stock Payment Election Deadline applicable thereto
     and in accordance with requirements of this section, then
     (a) the Borrower shall be deemed to have decided not to
     elect the Stock Payment Election for that Borrowing for that
     Interest Period and (b) the Applicable Interest Rate for
     that Borrowing for that Interest Period shall be the Cash
     Payment Rate.

          (f)  Notwithstanding any other provision of this
     Agreement, the Borrower shall not be entitled to make the
     Stock Payment Election or notify the Administrative Agent of
     a Stock Payment Election Request if a Default or an Event of
     Default has occurred and is continuing (unless this
     requirement is waived by the Required Lenders).

          (g)  With respect to any Borrowing for which a Stock
     Payment Election has been made in accordance with this
     Section 2.14, the Stock Payment shall mean the quantity of

                             Page 31

     shares of the Borrower's Common Stock (with any fractional
     amount rounded to the next highest integer) that has a value
     at least equal to the amount of accrued interest at the
     Stock Payment Rate for that Borrowing for the Interest
     Period (or, in the case of a prepayment under Section 2.11,
     the portion of an Interest Period ending on the Prepayment
     Date) for which the Stock Payment Election has been made
     (the "Stock Payment").  For purposes of this Section 2.14,
     the value of each share of Common Stock shall equal the
     average daily Closing Price of the Common Stock over the
     five (5) Business Days immediately prior to the Interest
     Payment Date (or, in the case of a prepayment under
     Section 2.11, over the five (5) Business Days immediately
     prior to the Prepayment Date) for the Borrowing for which
     the Stock Payment Election has been made.

          SECTION 2.15   INCREASED COSTS.

          (a)  If any Change in Law shall:

          (i)  impose, modify or deem applicable any reserve,
     special deposit or similar requirement against assets of,
     deposits with or for the account of, or credit extended by,
     any Lender; or

          (ii) impose on any Lender any other condition affecting
     this Agreement or Applicable Interest Rate Loans made by
     such Lender or participation therein;

and the result of any of the foregoing shall be to increase the
cost to such Lender of making or maintaining any Applicable
Interest Rate Loan (or of maintaining its obligation to make any
such Loan) or to increase the cost to such Lender or to reduce
the amount of any sum received or receivable by such Lender
hereunder (whether of principal, interest or otherwise), then the
Borrower will pay to such Lender such additional amount or
amounts as will compensate such Lender for such additional costs
incurred or reduction suffered.

          (b)  If any Lender determines that any Change in Law
regarding capital requirements has or would have the effect of
reducing the rate of return on such Lender's capital or on the
capital of such Lender's holding company, if any, as a
consequence of this Agreement or the Loans made by such Lender to
a level below that which such Lender or such Lender's holding
company could have achieved but for such Change in Law (taking
into consideration such Lender's policies and the policies of
such Lender's holding company with respect to capital adequacy),
then from time to time the Borrower will pay to such Lender such
additional amount or amounts as will compensate such Lender or
such Lender's holding company for any such reduction suffered.

          (c)  A certificate of a Lender setting forth the amount
or amounts necessary to compensate such Lender or its holding
company, as the case may be, as specified in paragraph (a) or (b)
of this Section shall be delivered to the Borrower and shall be
conclusive absent manifest error.  The Borrower shall pay such
Lender the amount shown as due on any such certificate within 10
days after receipt thereof.

          (d)  Failure or delay on the part of any Lender to
demand compensation pursuant to this Section 2.15 shall not
constitute a waiver of such Lender's right to demand such
compensation; provided that the Borrower shall not be required to
compensate a Lender pursuant

                             Page 32

to this Section 2.15 for any increased costs or reductions
incurred more than 270 days prior to the date that such Lender
notifies the Borrower of the Change in Law giving rise to such
increased costs or reductions and of such Lender's intention to
claim compensation therefor; provided further that, if the Change
in Law giving rise to such increased costs or reductions is
retroactive, then the 270-day period referred to above shall be
extended to include the period of retroactive effect thereof.

          SECTION 2.16   INCREASED COSTS; PROBLEMS ASCERTAINING
     APPLICABLE INTEREST RATE.  If prior to the commencement of
     the Interest Period for a Borrowing:

          (a)  the Administrative Agent determines (which
     determination shall be conclusive absent manifest error)
     that adequate and reasonable means do not exist for
     ascertaining the LIBO Rate for such Interest Period; or

          (b)  if Administrative Agent determines that the LIBO
     Rate for such Interest Period will not adequately and fairly
     reflect the cost to the Lenders (or Lender) of making or
     maintaining their Loans (or its Loan) included in such
     Borrowing for such Interest Period;

then the Administrative Agent shall give notice thereof to the
Borrower and the Lenders by telephone or telecopy as promptly as
practicable thereafter and, until the Administrative Agent
notifies the Borrower and the Lenders that the circumstances
giving rise to such notice no longer exist, any Borrowing Request
that requests such Borrowing shall be ineffective.

          SECTION 2.17   TAXES.

          (a)  Any and all payments by or on account of any
     obligation of the Borrower hereunder shall be made free and
     clear of and without deduction for any Indemnified Taxes or
     Other Taxes; provided that if the Borrower shall be required
     to deduct any Indemnified Taxes or Other Taxes from such
     payments, then (i) the sum payable shall be increased as
     necessary so that after making all required deductions
     (including deductions applicable to additional sums payable
     under this Section) the Administrative Agent or Lender (as
     the case may be) receives an amount equal to the sum it
     would have received had no such deductions been made,
     (ii) the Borrower shall make such deductions and (iii) the
     Borrower shall pay the full amount deducted to the relevant
     Governmental Authority in accordance with applicable law.

          (b)  In addition, the Borrower shall pay any Other
     Taxes to the relevant Governmental Authority in accordance
     with applicable law.

          (c)  The Borrower shall indemnify the Administrative
     Agent and each Lender, within 10 days after written demand
     therefor, for the full amount of any Indemnified Taxes or
     Other Taxes paid by the Administrative Agent or such Lender,
     as the case may be, on or with respect to any payment by or
     on account of any obligation of the Borrower hereunder
     (including Indemnified Taxes or Other Taxes imposed or
     asserted on or attributable to amounts payable under this
     Section) and any penalties, interest and reasonable expenses
     arising therefrom or with respect thereto, whether or not
     such Indemnified Taxes or Other Taxes were correctly or
     legally imposed or asserted by the relevant Governmental
     Authority.  A certificate as to the amount of

                             Page 33

     such payment or liability delivered to the Borrower by a
     Lender, or by the Administrative Agent on its own behalf or
     on behalf of a Lender, shall be conclusive absent manifest
     error.

          (d)  As soon as practicable after any payment of
     Indemnified Taxes or Other Taxes by the Borrower to a
     Governmental Authority, the Borrower shall deliver to the
     Administrative Agent the original or a certified copy of a
     receipt issued by such Governmental Authority evidencing
     such payment, a copy of the return reporting such payment or
     other evidence of such payment reasonably satisfactory to
     the Administrative Agent.

          (e)  Any Foreign Lender that is entitled to an
     exemption from or reduction of withholding tax under the law
     of the jurisdiction in which the Borrower is located, or any
     treaty to which such jurisdiction is a party, with respect
     to payments under this Agreement shall deliver to the
     Borrower (with a copy to the Administrative Agent), at the
     time or times prescribed by applicable law, such properly
     completed and executed documentation prescribed by
     applicable law or reasonably requested by the Borrower as
     will permit such payments to be made without withholding or
     at a reduced rate.

          SECTION 2.18   PAYMENTS GENERALLY; PRO RATA TREATMENT;
     SHARING OF SET-OFFS.

          (a)  The Borrower shall make each payment required to
     be made by it hereunder (whether of principal, interest,
     fees or reimbursements, or of amounts payable under
     Section 2.15, 2.17 or 2.20, or otherwise) prior to 2:00
     p.m., New York City time, on the date when due, in
     immediately available funds (or (a) with respect to accrued
     interest for a Borrowing for which the Borrower has made the
     Stock Payment Election in accordance with Section 2.14,
     Common Stock, or (b) with respect to fees under
     Section 2.12, the Fee Warrant Certificate), without set-off
     or counterclaim.  Any amounts received after such time on
     any date may, in the discretion of the Administrative Agent,
     be deemed to have been received on the next succeeding
     Business Day for purposes of calculating interest thereon.
     All such payments shall be made to the Administrative Agent
     at its offices at c/o ING Baring (U.S.) Capital LLC, 135
     East 57th Street, New York, New York 10022 Attention:  Joan
     Chiappe, Vice President, except that payments pursuant to
     Sections 2.15, 2.17, 2.20 and 9.03 shall be made directly to
     the Persons entitled thereto.  The Administrative Agent
     shall distribute any such payments received by it for the
     account of any other Person to the appropriate recipient
     promptly following receipt thereof.  If any payment
     hereunder shall be due on a day that is not a Business Day,
     the date for payment shall be extended to the next
     succeeding Business Day, and, in the case of any payment
     accruing interest, interest thereon shall be payable for the
     period of such extension.  All payments hereunder shall be
     made in dollars (or, (a) in the case of a Stock Payment
     Election, Common Stock, or (b) in the case of the fees under
     Section 2.12, the Fee Warrant Certificate).

          (b)  If at any time insufficient funds or property are
     received by and available to the Administrative Agent to pay
     fully all amounts of principal, interest and fees then due
     hereunder, such funds or property shall be applied
     (i) first, towards payment of interest and fees then due
     hereunder, ratably among the parties entitled thereto in
     accordance with the amounts of interest and fees then due to
     such parties, (ii) second, towards payment of principal on
     the Tranche A Loans then due hereunder, ratably among the
     parties entitled thereto in accordance with the amounts of
     principal then due to such parties, and (iii) third, towards
     payment of

                             Page 34

     principal on the Tranche B Loans then due hereunder, ratably
     among the parties entitled thereto in accordance with the
     amounts of principal then due to such parties.

          (c)  If any Lender shall, by exercising any right of
     set-off or counterclaim or otherwise, obtain payment in
     respect of any principal of or interest on any of its Loans
     resulting in such Lender receiving payment of a greater
     proportion of the aggregate amount of its Loans and accrued
     interest thereon than the proportion received by any other
     Lender, then the Lender receiving such greater proportion
     shall purchase (for cash at face value) participations in
     the Loans of other Lenders to the extent necessary so that
     the benefit of all such payments shall be shared by the
     Lenders ratably in accordance with the aggregate amount of
     principal of and accrued interest on their respective Loans;
     provided that (i) if any such participations are purchased
     and all or any portion of the payment giving rise thereto is
     recovered, such participations shall be rescinded and the
     purchase price restored to the extent of such recovery,
     without interest, and (ii) the provisions of this paragraph
     shall not be construed to apply to any payment made by the
     Borrower pursuant to and in accordance with the express
     terms of this Agreement or any payment obtained by a Lender
     as consideration for the assignment of or sale of a
     participation in any of its Loans to any assignee or
     participant, other than to the Borrower or any Subsidiary or
     Affiliate thereof (as to which the provisions of this
     paragraph shall apply).  The Borrower consents to the
     foregoing and agrees, to the extent it may effectively do so
     under applicable law, that any Lender acquiring a
     participation pursuant to the foregoing arrangements may
     exercise against the Borrower rights of set-off and
     counterclaim with respect to such participation as fully as
     if such Lender were a direct creditor of the Borrower in the
     amount of such participation.

          (d)  Unless the Administrative Agent shall have
     received notice from the Borrower prior to the date on which
     any payment is due to the Administrative Agent for the
     account of the Lenders hereunder that the Borrower will not
     make such payment, the Administrative Agent may assume that
     the Borrower has made such payment on such date in
     accordance herewith and may, in reliance upon such
     assumption, distribute to the Lenders the amount due.  In
     such event, if the Borrower has not in fact made such
     payment, then each of the Lenders severally agrees to repay
     to the Administrative Agent forthwith on demand the amount
     so distributed to such Lender with interest thereon, for
     each day from and including the date such amount is
     distributed to it to but excluding the date of payment to
     the Administrative Agent, at the greater of the Federal
     Funds Effective Rate and a rate determined by the
     Administrative Agent in accordance with banking industry
     rules on interbank compensation.

          (e)  If any Lender shall fail to make any payment
     required to be made by it to the Administrative Agent
     pursuant to the terms of this Agreement, then the
     Administrative Agent may, in its discretion (notwithstanding
     any contrary provision hereof), apply any amounts thereafter
     received by the Administrative Agent for the account of such
     Lender to satisfy such Lender's obligations under such
     Sections until all such unsatisfied obligations are fully
     paid.

          SECTION 2.19   MITIGATION OBLIGATIONS; REPLACEMENT OF
     LENDERS.

          (a)  If any Lender requests compensation under
     Section 2.15, or if the Borrower is required to pay any
     additional amount to any Lender or any Governmental
     Authority for the account of any Lender pursuant to
     Section 2.17, then such Lender shall use reasonable

                             Page 35

     efforts to designate a different lending office for funding
     or booking its Loans hereunder or to assign its rights and
     obligations hereunder to another of its offices, branches or
     affiliates, if, in the judgment of such Lender, such
     designation or assignment (i) would eliminate or reduce
     amounts payable pursuant to Section 2.15 or 2.17, as the
     case may be, in the future and (ii) would not subject such
     Lender to any unreimbursed cost or expense and would not
     otherwise be disadvantageous to such Lender.  The Borrower
     hereby agrees to pay all reasonable costs and expenses
     incurred by any Lender in connection with any such
     designation or assignment.

          (b)  If any Lender requests compensation under
     Section 2.15, or if the Borrower is required to pay any
     additional amount to any Lender or any Governmental
     Authority for the account of any Lender pursuant to
     Section 2.17, or if any Lender defaults in its obligation to
     fund Loans hereunder, then the Borrower may, at its sole
     expense and effort, upon notice to such Lender and the
     Administrative Agent, require such Lender to assign and
     delegate, without recourse (in accordance with and subject
     to the restrictions contained in Section 9.04), all its
     interests, rights and obligations under this Agreement to an
     assignee that shall assume such obligations (which assignee
     may be another Lender, if a Lender accepts such assignment);
     provided that (i) the Borrower shall have received the prior
     written consent of the Administrative Agent, which consent
     shall not unreasonably be withheld, (ii) such Lender shall
     have received payment of an amount equal to the outstanding
     principal of its Loans, accrued interest thereon, accrued
     fees and all other amounts payable to it hereunder, from the
     assignee (to the extent of such outstanding principal and
     accrued interest and fees) or the Borrower (in the case of
     all other amounts) and (iii) in the case of any such
     assignment resulting from a claim for compensation under
     Section 2.15 or payments required to be made pursuant to
     Section 2.17, such assignment will result in a reduction in
     such compensation or payments.  A Lender shall not be
     required to make any such assignment and delegation if,
     prior thereto, as a result of a waiver by such Lender or
     otherwise, the circumstances entitling the Borrower to
     require such assignment and delegation cease to apply.

          SECTION 2.20   BREAK FUNDING PAYMENTS.  In the event of
     (a) the payment of any principal of any Loan other than on
     the last day of an Interest Period therefor (including as a
     result of an Event of Default), or (b) the failure to
     borrow, continue or prepay any Loan on the date specified in
     any notice delivered pursuant hereto, then, in such event,
     the Borrower shall compensate each Lender for the loss, cost
     and expense attributable to such event.  In the case of any
     Loan, the loss to any Lender attributable to any such event
     shall be deemed to include an amount determined by such
     Lender to be equal to the excess, if any, of (i) the amount
     of interest that such Lender would pay for a deposit equal
     to the principal amount of such Loan for the period from the
     date of such payment to the last day of the then current
     Interest Period for such Loan if the interest rate payable
     on such deposit were equal to the Cash Payment Rate for such
     Interest Period, over (ii) the amount of interest that such
     Lender would earn on such principal amount for such period
     if such Lender were to invest such principal amount for such
     period at the interest rate that would be bid by such Lender
     (or an affiliate of such Lender) for deposits from other
     banks in the eurocurrency market at the commencement of such
     period.  A certificate of any Lender setting forth any
     amount or amounts that such Lender is entitled to receive
     pursuant to this Section shall be delivered to the Borrower
     and shall be conclusive absent manifest error.  The Borrower
     shall pay such Lender the amount shown as due on any such
     certificate within 10 days after receipt thereof.

                             Page 36

          SECTION 2.21   CERTAIN MANDATORY PREPAYMENTS.  In
     addition to any other prepayments required under the Loan
     Documents, prepayments of the Loan Obligations shall be
     required as follows (any prepayment of the Revolver Loan
     Obligations set forth in (a) and (b) of this
     Subsection shall be effected in each case in the manner and
     to the extent specified in Subsection (c) of this
     Section 2.21).

          (a)  Certain Mandatory Prepayments for Equity
     Contribution.  To the extent, if any, that Borrower raises,
     collects, or receives, in any manner, a cumulative amount
     after September 30, 2001 equal to or greater than $7,500,000
     from the Net Available Proceeds from, relating to, or
     arising from any Equity Issuance, then the Borrower shall
     prepay the Loan Obligations an aggregate amount equal to 25%
     of such cumulative proceeds in excess of $7,500,000 to
     prepay the Lender's outstanding loans (as allocated between
     the Revolving Loan Obligations and the Term Loan Obligations
     as determined by ING in its sole discretion).

          (b)  Payments from the Metropolitan Water District of
     Southern California.  If the Borrower or its Subsidiaries
     receives any Metropolitan Water District Payments, then the
     Borrower shall prepay the Loan Obligations in an aggregate
     amount equal to 100% of the Net Available Proceeds thereof
     (as allocated between the Revolving Loan Obligations and the
     Term Loan Obligations as determined by the ING in its sole
     discretion).

          (c)  Application.  Prepayments to the Revolving Loan
     Obligations described in the above subsections of
     Section 2.21 and allocated, in accordance with subsections
     2.21(a) and (b) for the prepayment of Revolving Loan
     Obligations, shall be applied in the following order:

           (i) then due and payable interest and fees under the
      Revolving Loan Documents; and

           (ii) then the principal amounts outstanding under the
      Tranche A Loans, and

           (iii) then the principal amounts outstanding under
      the Tranche B Loans, and

           (iv)  then all other Revolving Loan Obligations and
      other amounts due under the Revolving Loan Documents.

          (d)  For purposes of this Section 2.21, the following
     terms shall have the following meanings:

          "EQUITY ISSUANCE" shall mean (a) any issuance or sale
          by the Borrower or any of its Subsidiaries after
          September 30, 2001 of (i) any capital stock, (ii) any
          warrants or options exercisable in respect of capital
          stock (other than any warrants or options issued to
          directors, officers or employees of the Borrower or any
          of its Subsidiaries pursuant to employee benefit plans
          established in the ordinary course of business and any
          capital stock of the Borrower issued upon the exercise
          of such warrants or options) or (iii) any other
          security or instrument representing an equity interest
          (or the right to obtain any equity interest), in the
          Borrower or any of its Subsidiaries, or (iv) to the
          extent not covered in subsections (a)(i) through (iii)
          above, the proceeds from convertible debt or debt with
          warrants attached thereto that

                             Page 37

          provides the lender with an effective annual yield in
          excess of 18% (as reasonably determined by the Lender
          using Black-Scholl's pricing methodology), or (b) the
          receipt by the Borrower or any of its Subsidiaries
          after September 30, 2001 of any capital contribution
          (whether or not evidenced by any equity security issued
          by the recipient of such contribution); provided that
          Equity Issuance shall not include (x) any such issuance
          or sale by any Subsidiary of the Borrower to the
          Borrower or any Subsidiary of the Borrower, (y) any
          capital contribution by the Borrower or any Wholly
          Owned Subsidiary of the Borrower to any Subsidiary of
          the Borrower, or (z) the issuance or sale of any
          securities described in subsection (a) above of any of
          the Sun World Entities if, under the terms of the Sun
          World Indenture (1) the Net Available Proceeds of such
          issuance or sale are required to be offered to the
          holders of pre-existing debt obligations of any of the
          Sun World Entities, or (2) any of the Sun World
          Entities are prohibited from distributing or otherwise
          transferring the Net Available Proceeds to Borrower or
          from directly applying the Net Available Proceeds to
          the payment of the obligations of the Borrower .

          "METROPOLITAN WATER DISTRICT PAYMENTS" shall mean, any
          payments received by the Borrower or any of its
          Subsidiaries or Affiliates from or on account of the
          Metropolitan Water District of Southern California
          and/or the Cadiz Groundwater Storage and Dry-Year
          Supply Program.

          "NET AVAILABLE PROCEEDS" shall mean, (1) in the case of
          any Equity Issuance, the aggregate amount of all cash
          received by the Borrower and its Subsidiaries in
          respect of such Equity Issuance net of reasonable
          expenses incurred by the Borrower and its Subsidiaries
          in connection therewith, and (2) in the case of any
          Metropolitan Water District Payments, the aggregate
          amount of all cash received by the Borrower and its
          Subsidiaries in respect of such Metropolitan Water
          District Payments, but excluding out-of-pocket expense
          reimbursements paid to the Borrower or its subsidiaries
          by the Metropolitan Water District of Southern
          California and/or the Cadiz Groundwater Storage and Dry-
          Year Supply Program in an aggregate amount not to
          exceed $5,000,000.

          SECTION 2.22   REGISTRATION RIGHTS.  Borrower hereby
     agrees that all Common Stock of Borrower, each of the
     Revolving Credit Agreement Warrants and their respective
     underlying shares and/or issued at any time, whether before
     or after the date hereof, under any of the Loan Documents,
     including stock issued pursuant to a Stock Payment Election
     in accordance with Section 2.14 of this Agreement, shall be
     accorded registration rights by the Borrower as set forth in
     the Registration Rights Addendum.

                             Page 38

                           ARTICLE III

                 REPRESENTATIONS AND WARRANTIES

          The Borrower represents and warrants to the Lenders
that the following representations and warranties are true and
correct on the date hereof as if made on the date hereof (except,
to the extent any such representations and warranties
specifically refer to an earlier date, in which case, such
representations or warranties are represented and warranted to be
true and correct as of such earlier specified date):

          SECTION 3.01   ORGANIZATION; POWERS.  Each of the
     Borrower and its Participating Subsidiaries is duly
     organized, validly existing and in good standing under the
     laws of the jurisdiction of its organization, has all
     requisite power and authority to carry on its business as
     now conducted and, except where the failure to do so,
     individually or in the aggregate, could not reasonably be
     expected to result in a Material Adverse Effect, is
     qualified to do business in, and is in good standing in,
     every jurisdiction where such qualification is required.

          SECTION 3.02   AUTHORIZATION; ENFORCEABILITY.  The
     Transactions are within the Borrower's corporate powers and
     have been duly authorized by all necessary corporate and, if
     required, stockholder action.  This Agreement has been duly
     executed and delivered by the Borrower and constitutes a
     legal, valid and binding obligation of the Borrower,
     enforceable in accordance with its terms, subject to
     applicable bankruptcy, insolvency, reorganization,
     moratorium or other laws affecting creditors' rights
     generally and subject to general principles of equity,
     regardless of whether considered in a proceeding in equity
     or at law.

          SECTION 3.03   GOVERNMENTAL APPROVALS; NO CONFLICTS.
     The Transactions (a) do not require any consent or approval
     of, registration or filing with, or any other action by, any
     Governmental Authority, except such as have been obtained or
     made and are in full force and effect, (b) will not violate
     any applicable law or regulation or the charter, by-laws or
     other organizational documents of the Borrower or any of its
     Subsidiaries or any order of any Governmental Authority,
     (c) will not violate or result in a default under any
     indenture, agreement or other instrument binding upon the
     Borrower or any of its Subsidiaries or its assets, or give
     rise to a right thereunder to require any payment to be made
     by the Borrower or any of its Subsidiaries, and (d) will not
     result in the creation or imposition of any Lien on any
     asset of the Borrower or any of its Subsidiaries (except
     those imposed by the Loan Documents).

          SECTION 3.04   FINANCIAL CONDITION; NO MATERIAL ADVERSE
     CHANGE.

          (a)  The Borrower has heretofore furnished to the
     Administrative Agent its consolidated balance sheet and
     statements of income, stockholders equity and cash flows
     (i) as of and for the fiscal year ended December 31, 2000,
     reported on by PricewaterhouseCoopers LLP, independent
     public accountants, and (ii) as of and for the fiscal
     quarter and the portion of the fiscal year ended September
     30, 2001, certified by its chief financial officer.  Such
     financial statements present fairly, in all material
     respects, the financial position and results of operations
     and cash flows of the Borrower and its consolidated
     Subsidiaries as of such dates and for such periods in
     accordance with GAAP, subject to year-end audit adjustments
     and the absence of footnotes in the case of the statements
     referred to in clause (ii) above.

                             Page 39

          (b)  Since September 30, 2001, there has been no
     material adverse change in the business, assets, operations,
     prospects or condition, financial or otherwise, of the
     Borrower and its Subsidiaries, taken as a whole.

          SECTION 3.05   PROPERTIES.

          (a)  Each of the Borrower and its Participating
     Subsidiaries has good title to, or valid leasehold interests
     in, all its real and personal property material to its
     business, except for Permitted Encumbrances and minor
     defects in title that do not interfere with its ability to
     conduct its business as currently conducted or to utilize
     such properties for their intended purposes.

          (b)  Each of the Borrower and its Participating
     Subsidiaries owns, or is licensed to use, all trademarks,
     tradenames, copyrights, patents and other intellectual
     property material to its business, and the use thereof by
     the Borrower and its Participating Subsidiaries does not
     infringe upon the rights of any other Person, except for any
     such infringements that, individually or in the aggregate,
     could not reasonably be expected to result in a Material
     Adverse Effect.

          SECTION 3.06   LITIGATION AND ENVIRONMENTAL MATTERS.

          (a)  There are no actions, suits or proceedings by or
     before any arbitrator or Governmental Authority pending
     against or, to the knowledge of the Borrower, threatened
     against or affecting the Borrower or any of its Subsidiaries
     (i) as to which there is a reasonable possibility of an
     adverse determination and that, if adversely determined,
     could reasonably be expected, individually or in the
     aggregate, to result in a Material Adverse Effect (other
     than the Disclosed Matters) or (ii) that involve this
     Agreement or the Transactions.

          (b)  Except for the Disclosed Matters and except with
     respect to any other matters that, individually or in the
     aggregate, could not reasonably be expected to result in a
     Material Adverse Effect, neither the Borrower nor any of its
     Subsidiaries (i) has failed to comply with any Environmental
     Law or to obtain, maintain or comply with any permit,
     license or other approval required under any Environmental
     Law, (ii) has become subject to any Environmental Liability,
     (iii) has received notice of any claim with respect to any
     Environmental Liability or (iv) knows of any basis for any
     Environmental Liability.

          (c)  Since the date of this Agreement, there has been
     no change in the status of the Disclosed Matters that,
     individually or in the aggregate, has resulted in, or
     materially increased the likelihood of, a Material Adverse
     Effect.

          SECTION 3.07   COMPLIANCE WITH LAWS AND AGREEMENTS.
     Each of the Borrower and the Participating Subsidiaries is
     in compliance with all laws, regulations and orders of any
     Governmental Authority applicable to it or its property and
     all indentures, agreements and other instruments binding
     upon it or its property, except where the failure to do so,
     individually or in the aggregate, could not reasonably be
     expected to result in a Material Adverse Effect.  No Default
     has occurred and is continuing.

                             Page 40

          SECTION 3.08   INVESTMENT AND HOLDING COMPANY STATUS.
     Neither the Borrower nor any of its Subsidiaries is (a) an
     "investment company" as defined in, or subject to regulation
     under, the Investment Company Act of 1940 or (b) a "holding
     company" as defined in, or subject to regulation under, the
     Public Utility Holding Company Act of 1935.

          SECTION 3.09   TAXES.  Each of the Borrower and its
     Participating Subsidiaries has timely filed or caused to be
     filed all tax returns and reports required to have been
     filed and has paid or caused to be paid all Taxes required
     to have been paid by it, except (a) Taxes that are being
     contested in good faith by appropriate proceedings and for
     which the Borrower or such Participating Subsidiary, as
     applicable, has set aside on its books adequate reserves or
     (b) to the extent that the failure to do so could not
     reasonably be expected to result in a Material Adverse
     Effect.

          SECTION 3.10   ERISA.  No ERISA Event has occurred or
     is reasonably expected to occur that, when taken together
     with all other such ERISA Events for which liability is
     reasonably expected to occur, could reasonably be expected
     to result in a Material Adverse Effect.  The present value
     of all accumulated benefit obligations under each Plan
     (based on the assumptions used for purposes of Statement of
     Financial Accounting Standards No. 87) did not, as of the
     date of the most recent financial statements reflecting such
     amounts, exceed by more than $500,000 the fair market value
     of the assets of such Plan, and the present value of all
     accumulated benefit obligations of all underfunded Plans
     (based on the assumptions used for purposes of Statement of
     Financial Accounting Standards No. 87) did not, as of the
     date of the most recent financial statements reflecting such
     amounts, exceed by more than $500,000 the fair market value
     of the assets of all such underfunded Plans.

          SECTION 3.11   DISCLOSURE.  The Borrower has disclosed
     to the Administrative Agent all agreements, instruments and
     corporate or other restrictions to which it or any of its
     Subsidiaries is subject, and all other matters known to it,
     that, individually or in the aggregate, could reasonably be
     expected to result in a Material Adverse Effect.  None of
     the reports, financial statements, certificates or other
     information furnished by or on behalf of the Borrower to the
     Administrative Agent or any Lender in connection with the
     negotiation of this Agreement or delivered hereunder (as
     modified or supplemented by other information so furnished)
     contains any material misstatement of fact or omits to state
     any material fact necessary to make the statements therein,
     in the light of the circumstances under which they were
     made, not misleading; provided that, with respect to
     projected financial information, the Borrower represents
     only that such information was prepared in good faith based
     upon assumptions believed to be reasonable at the time.

          SECTION 3.12   SECURITY INTERESTS.  Except for (a) the
     filing of UCC financing statements in respect of the
     collateral covered by the Security Documents in the States
     of Delaware and California and such other applicable
     jurisdictions in the United States of America and (b) filing
     and recording of Mortgages in respect of the real property
     collateral in the county in which the real property is
     located, which filings shall have been made and be in effect
     on (or simultaneously with) the Effective Date, the taking
     of possession by the Administrative Agent of the
     certificates representing the shares of capital stock of the
     Participating Subsidiaries and various instruments pledged
     to it pursuant to the Pledge and Security Agreement, and the
     delivery of notice of the security interests granted in the
     accounts covered by the Pledge and

                             Page 41

     Security Agreement to the bank or banks whereat such
     accounts are maintained and receipt of acknowledgements of
     such notices by such banks (which actions shall be effected
     as of or promptly following the Effective Date), no further
     filing or recording of any document and no other action is
     necessary or advisable in the States of Delaware or
     California or any other applicable jurisdiction in the
     United States of America in order to establish and perfect,
     under the laws of Delaware or California or such other
     applicable jurisdiction in the United States of America, the
     Administrative Agent's security interest in such collateral,
     to the extent required by the applicable Security Documents,
     on behalf of the Lenders.

          SECTION 3.13   PARTICIPATING SUBSIDIARIES.  The
     Borrower has no Participating Subsidiaries except as set
     forth on Schedule 3.13 hereto.

          SECTION 3.14   INACTIVE SUBSIDIARIES.  The Borrower has
     no Inactive Subsidiaries except as set forth on Schedule
     3.14 hereto.  The Inactive Subsidiaries (a) do not conduct
     any business activities of any type or nature, and (b) do
     not own or have any interest in any assets or property of
     any type or nature.

          SECTION 3.15    SOLVENCY.  After giving effect to
     the Transactions, (i) the assets of the Borrower, at a fair
     valuation, will exceed its debts, (ii) the Borrower's
     capital will not be unreasonably small to conduct its
     business, (iii) the Borrower will not have incurred debts,
     or have intended to incur debts, beyond its ability to pay
     such debts as they mature, and (iv) the then-current fair
     salable value of the Borrower's assets will be greater than
     the amount that will be required to pay its probable
     liabilities (including debts) as they become absolute and
     matured.  For purposes of this Section, "debt" means any
     liability on a claim, and "claim" means (x) the right to
     payment, whether or not such right is reduced to judgment,
     liquidated, unliquidated, fixed, contingent, matured,
     unmatured, disputed, undisputed, legal, equitable, secured
     or unsecured, or (y) the right to an equitable remedy for
     breach of performance if such breach gives rise to a right
     to payment, whether or not such right to an equitable remedy
     is reduced to judgment, fixed, contingent, matured,
     unmatured, disputed, undisputed, secured or unsecured.  For
     purposes of this Section, the Borrower may assume that the
     Loans will be refinanced on the Maturity Date.

          SECTION 3.16   EXCLUDED ITEMS.  The aggregate
     acquisition cost of (i) all Excluded Items plus (ii) all
     Rolling Stock (in existence as of the Effective Date or
     thereafter acquired) for which the Borrower or other
     Obligor, as the case may be, has not granted Liens in favor
     of the Administrative Agent, for itself and on behalf of the
     Lenders, is not more than $2,000,000.

          SECTION 3.17   EQUITY ACQUISITION ASSETS.  The
     aggregate acquisition cost of all Equity Acquisition Assets
     for which the Borrower or other Obligor, as the case may be,
     has not granted Liens in favor of the Administrative Agent,
     for itself and on behalf of the Lenders, is not more than
     $2,000,000.

          SECTION 3.18   ROLLING STOCK.  The aggregate
     acquisition cost of all Rolling Stock for which the
     Borrower, without the consent of the Administrative Agent,
     has not granted Liens in favor of the Administrative Agent,
     for itself and on behalf of the Lenders, is not more than
     $2,000,000.

                             Page 42

          SECTION 3.19   CERTAIN ACKNOWLEDGEMENTS.  The Borrower
     hereby expressly acknowledges and agrees that as of the
     Effective Date (and prior to any draw on the Tranche B
     Loans), the outstanding principal under the Loan Documents
     is in the amount of $15,000,000.00, representing the full
     Tranche A Commitments.  The foregoing amount does not
     include accrued and unpaid interest from and after January
     31, 2002.  Further, the Borrower hereby confirms that (a)
     the following documents remain valid and binding agreements
     and/or instruments, and (b) the Borrower and, as applicable,
     its Participating Subsidiaries remain bound by the terms and
     provisions of the following documents:

          (i)  the Pledge and Security Agreement (together with
     the share certificates representing all of the issued and
     outstanding shares of the Participating Subsidiaries,
     endorsed in blank), and the Mortgages, and/or any amendments
     to any such existing Loan Documents;

          (ii) the Revised and Restated Initial Draw Warrant
     Certificate;

          (iii)     the Revised and Restated Additional Draw
     Warrant Certificate;

          (iv) the Eighth Warrant Certificate;

          (v)  the Ninth Warrant Certificate;

          (vi) the Tenth Warrant Certificate;

          (vii)     the Eleventh Warrant Certificate;

          (viii) the Cadiz Reaffirmation Agreement; and

          (ix) the other Loan Documents, as amended from time to
     time.

          SECTION 3.20   NO SATISFACTION.  The Borrower hereby
     expressly represents, warrants, acknowledges and agrees that
     nothing in this Agreement or in any document or instrument
     executed in connection with or pursuant to this Agreement
     shall constitute a satisfaction of or a novation as to all
     or any portion of Borrower's indebtedness under the Loan
     Documents.  Borrower hereby unconditionally reaffirms,
     reconfirms and restates its obligation to pay in full the
     Revolving Loan Obligations arising under the Loan Documents
     and all other Loan Obligations to the Administrative Agent
     and/or the Lenders, as the case may be.  Borrower hereby
     further acknowledges and agrees that it has no defenses to
     the enforcement of the Revolving Loan Obligations (or any
     portion thereof), or the other Loan Obligations, nor any
     counter-claims or claims of offset whatsoever and that
     neither this Agreement nor the consummation of the
     transactions contemplated herein will give rise to any such
     defenses, counter-claims or claims of offset.

                             Page 43

                           ARTICLE IV

                           CONDITIONS

          SECTION 4.01   EFFECTIVE DATE.  The obligations of the
     Lenders to make Loans hereunder shall not become effective
     until the date on which each of the following conditions is
     satisfied (or waived in accordance with Section 9.02):

          (a)  The Administrative Agent shall have received the
     following documents, each in form and substance satisfactory
     to the Administrative Agent , duly executed and delivered by
     all the parties thereto:

          (i)  this Agreement;

          (ii) the Borrower filed or registered certificate of
     incorporation, as amended, modified, restated or
     supplemented to the date hereof and certified as of the
     Effective Date as being a true and correct copy thereof by
     an officer of the Borrower;

          (iii)     a copy, certified as of the Effective Date of
     the resolutions of the board of directors of the Borrower
     duly authorizing the execution, delivery and performance by
     the Borrower of this Agreement and the other Loan Documents
     to which it is a party, and each other document required to
     be executed and delivered by the Borrower pursuant to this
     Agreement;

          (iv) a certificate, dated the Effective Date and signed
     by the President, a Vice President or a Financial Officer of
     the Borrower, confirming compliance with the conditions set
     forth in paragraphs (o) and (q) of this Section 4.01;

          (v)  Fourth Amendment to the Revolving Credit Note, in
     the form as attached hereto in Exhibit I;

          (vi) Fourth Modification of the Pledge and Security
     Agreement, in the form as attached hereto in Exhibit J;

          (vii) Fourth Modification of the Revolver Deed of
     Trust, in the form as attached hereto in Exhibit K;

          (viii) Fourth Modification of the Revolver SWFG Deed of
     Trust, in the form as attached hereto in Exhibit L;

          (ix) Fourth Modification of the Revolver Piute Deed of
     Trust, in the form as attached hereto in Exhibit M;

          (x)  the Registration Rights Addendum, in the form as
     attached hereto in Exhibit H;

          (xi) the Fee Warrant Certificate, in the form as
     attached hereto in Exhibit D;

                             Page 44

          (xii) the Purchaser Certificate in the form as
     attached hereto in Exhibit G;

          (xiii) the Additional Stock Letter Agreement, in the
     form as attached hereto in Exhibit A.

          (b)  The Borrower shall have confirmed in writing that
     the following documents remain valid and binding agreements
     and/or instruments, which written confirmation is in form
     and substance satisfactory to the Administrative Agent, in
     its sole discretion, and that Borrower and, as applicable,
     its Participating Subsidiaries remain bound by the terms and
     provisions of the following documents:

          (i)  the Pledge and Security Agreement (together with
     the share certificates representing all of the issued and
     outstanding shares of the Participating Subsidiaries,
     endorsed in blank), and the Mortgages, and/or any amendments
     to any such existing Loan Documents;

          (ii)   the Revised and Restated Initial Draw Warrant
     Certificate;

          (iii)  the Revised and Restated Additional Draw
     Warrant Certificate;

          (iv)   the Eighth Warrant Certificate;

          (v)    the Ninth Warrant Certificate;

          (vi)   the Tenth Warrant Certificate;

          (vii)  the Eleventh Warrant Certificate;

          (viii) the Cadiz Reaffirmation Agreement; and

          (ix)   the other Loan Documents, as amended from time to
          time.

          (c)  The Administrative Agent shall have received an
     opinion from the Borrower's counsel in form and substance
     satisfactory to the Administrative Agent (A) that Borrower
     is in good standing in the States of Delaware and
     California, (B) as to the due authorization, execution and
     delivery of this Agreement and the other Loan Documents,
     (C) that this Agreement and the other Loan Documents
     constitute valid, binding and enforceable obligations of
     Borrower, and (D) as to such other matters as the
     Administrative Agent shall reasonably request.

          (d)  The Administrative Agent shall have received
     certified copies of the resolutions (in form and content
     satisfactory to Administrative Agent) of the Board of
     Directors of Borrower approving and authorizing this
     Agreement and the other documents executed and/or delivered
     in connection herewith (including each of the exhibits
     hereto), and the effectuation of the transactions
     contemplated herein and/or therein, as the case may be, and
     any and all actions to be taken by Borrower in furtherance
     and in connection with this Agreement and/or the other
     documents executed and/or delivered in connection herewith.

                             Page 45

          (e)  The Administrative Agent shall have received from
     the Delaware Secretary of State a Certificate of Good
     Standing with respect to Borrower and a certificate
     evidencing that Borrower is qualified to do business in
     California, all of which certificates must be in form and
     content satisfactory to Administrative Agent.

          (f)  The Administrative Agent shall have received
     certificates (in form and content satisfactory to
     Administrative Agent) of the Secretary of Borrower,
     certifying as to the names and signatures of the officers
     authorized to sign this Agreement and the other documents to
     be executed and delivered on its behalf pursuant to this
     Agreement.

          (g)  To the best of Borrower's knowledge, all real
     property taxes with respect to the property encumbered by
     any of the ING Collateral, as well as all real property
     taxes affecting the property encumbered by any and all deeds
     of trust pledged or assigned to Administrative Agent as
     security for the Revolving Loan Obligations (or any of
     them), shall have been paid prior to the date any fine,
     penalty, interest, late-charge or loss may be added to such
     taxes or charged against such real property or other ING
     Collateral for the non-payment or late-payment of such
     taxes.

          (h)  The Borrower shall have caused appropriate
     officers of Borrower to execute and deliver to
     Administrative Agent such additional certificates with
     respect to matters relating to the transactions contemplated
     herein as Administrative Agent may reasonably require.

          (i)  The Borrower shall have executed and delivered or
     caused the appropriate third parties to execute and/or
     deliver (in recordable form, where appropriate, and
     otherwise in form and content satisfactory to Administrative
     Agent) such other documents, instruments, agreements and
     writings as Administrative Agent may reasonably require in
     connection with the creation or continuation of any security
     interest(s) granted to Administrative Agent in furtherance
     of the transactions contemplated by this Agreement or as
     Administrative Agent may otherwise require in connection
     with the consummation of such transactions (including,
     without limitation, estoppel certificates, guaranty waivers,
     security agreements, pledges, assignments, subordination
     agreements, endorsements, certificates, certifications,
     reports, and studies).

          (j)  as of the date hereof, or as soon as practicable
     hereafter, but in no event later than ten (10) days
     hereafter, UCC financing statements covering all the
     security interests created by or pursuant to the Pledge and
     Security Agreements in the collateral pledged pursuant
     thereto, shall have been executed and delivered by the
     Borrower to the Administrative Agent and such financing
     statements, or other statements or documents to the same
     purposes, shall have been duly filed in all other applicable
     jurisdictions in the United States of America necessary or
     desirable to perfect said security interests and there shall
     have been taken all other action as the Administrative Agent
     or any Lender through the Administrative Agent may
     reasonably request or as shall be necessary to perfect such
     security interests to the extent required by the applicable
     Security Documents.

          (k)  [Intentionally omitted].

                             Page 46

          (l)  The representations and warranties of the Borrower
     set forth in this Agreement and each other Loan Document
     shall be true and correct on and as of the Effective Date of
     such Borrowing.

          (m)  No Default shall have occurred and be continuing.

          (n)  The Borrower shall have performed or observed and
     be continuing to perform each term, covenant or agreement
     contained in any Loan Document.

          (o)  The Administrative Agent shall have received a
     certificate, dated the Effective Date and signed by the
     President, a Vice President or a Financial Officer of the
     Borrower, confirming compliance with the conditions set
     forth in paragraphs (a) and (b) of Section 4.02.

          (p)  The Administrative Agent shall have received all
     fees and other amounts due and payable on or prior to the
     Effective Date, including, to the extent invoiced,
     reimbursement or payment of all out-of-pocket expenses
     required to be reimbursed or paid by the Borrower hereunder.

          (q)  All governmental and third party approvals
     necessary or, in the discretion of the Administrative Agent,
     advisable in connection with the Transaction, the financing
     contemplated hereby and the continuing operations of the
     Borrower shall have been obtained and be in full force and
     effect, and all applicable waiting periods shall have
     expired without any action being taken or threatened by any
     competent authority which would restrain, prevent or
     otherwise impose adverse conditions on the Transactions or
     the financing thereof.

          (r)  The Administrative Agent shall have received a
     "date down and modification" endorsement to each of the
     mortgagee title insurance policies (collectively, the "Title
     Policies") issued for the benefit of the Lender with respect
     to the Revolver Deeds of Trust, which endorsements shall
     (i) be issued by the Chicago Title Insurance Company for the
     benefit of the Lender and its successors and assigns,
     (ii) insure the amendments to the Revolver Deeds of Trust
     required to be delivered pursuant to this Section 4.01 of
     this Agreement and the continued priority of Revolver Deeds
     of Trust granted to the Lender, (iii) confirm that all real
     property taxes with respect to the property encumbered by
     the Revolver Deeds of Trust have been paid prior to the date
     any fine, penalty, interest, late charge or similar fine or
     penalty shall accrue with respect to the payment of such
     taxes, (iv) be otherwise in form and substance satisfactory
     to the Lender in its sole discretion.

          (s)  The Lender shall have received confirmation, in
     form and substance satisfactory to the Lender, that
     (i) Borrower has paid (a) all premiums for the endorsements
     to the Title Policies required pursuant to Section 4.01(r)
     hereof and (b) all recording and filing fees relating to the
     recording of the amendment to the Revolver Deeds of Trust
     required to be delivered pursuant to this Section 4.01 of
     this Agreement and (ii) all amendments to the Revolver Deeds
     of Trust required to be delivered pursuant to this Section
     4.01 of this Agreement have been duly accepted for
     recording.

          (t)  The Administrative Agent shall have received such
     other documents as the Administrative Agent may reasonably
     request.

                             Page 47

     The Administrative Agent shall notify the Borrower and the
     Lenders of the Effective Date, and such notice shall be
     conclusive and binding.  Notwithstanding the foregoing, the
     obligations of the Lenders to make Loans hereunder shall not
     become effective unless each of the foregoing conditions is
     satisfied (or waived pursuant to Section 9.02) at or prior
     to 3:00 p.m., New York City time, on March 20, 2002 (and, in
     the event such conditions are not so satisfied or waived,
     the Commitments shall terminate at such time).

          SECTION 4.02   EACH CREDIT EVENT.  The obligation of
     each Lender to make a Loan on the occasion of any Borrowing
     is subject to the satisfaction of the following conditions:

          (a)  The representations and warranties of the Borrower
     set forth in this Agreement shall be true and correct on and
     as of the date of such Borrowing.

          (b)  At the time of and immediately after giving effect
     to such Borrowing, no Default shall have occurred and be
     continuing.

Each Borrowing shall be deemed to constitute a representation and
warranty by the Borrower on the date thereof as to the matters
specified in paragraphs (a) and (b) of this Section.

                            ARTICLE V

                      AFFIRMATIVE COVENANTS

          Until the Commitments have expired or been terminated
and the principal of and interest on each Loan and all fees
payable hereunder shall have been paid in full, the Borrower
covenants and agrees with the Lenders that:

          SECTION 5.01   FINANCIAL STATEMENTS AND OTHER
INFORMATION.  The Borrower will furnish to the Administrative
Agent and each Lender:

          (a)  within 15 days following Borrower's filing each
     Annual Report on Form 10-K with the Commission, its audited
     consolidated balance sheet and related statements of
     operations, stockholders' equity and cash flows as of the
     end of and for such year, setting forth in each case in
     comparative form the figures for the previous fiscal year,
     all reported on by PricewaterhouseCoopers LLP or other
     independent public accountants of recognized national
     standing (without a "going concern" or like qualification or
     exception and without any qualification or exception as to
     the scope of such audit) to the effect that such
     consolidated financial statements present fairly in all
     material respects the financial condition and results of
     operations of the Borrower and its consolidated Subsidiaries
     on a consolidated basis in accordance with GAAP consistently
     applied;

          (b)  within 15 days following Borrower's filing each
     Quarterly Report on Form 10-Q with the Commission, its
     consolidated balance sheet and related statements of
     operations, stockholders' equity and cash flows as of the
     end of and for such fiscal quarter and the then elapsed
     portion of the fiscal year, setting forth in each case in
     comparative form the figures for the corresponding period or
     periods of (or, in the case of

                             Page 48

     the balance sheet, as of the end of) the previous fiscal
     year, all certified by one of its Financial Officers as
     presenting fairly in all material respects the financial
     condition and results of operations of the Borrower and its
     consolidated Subsidiaries on a consolidated basis in
     accordance with GAAP consistently applied, subject to normal
     year-end audit adjustments and the absence of footnotes;

          (c)  concurrently with any delivery of financial
     statements under Subsection (a) or (b) above, a certificate
     of a Financial Officer of the Borrower (i) certifying as to
     whether a Default has occurred and, if a Default has
     occurred, specifying the details thereof and any action
     taken or proposed to be taken with respect thereto, and
     (ii) stating whether any change in GAAP or in the
     application thereof has occurred since the date of the
     audited financial statements referred to in Section 3.04
     and, if any such change has occurred, specifying the effect
     of such change on the financial statements accompanying such
     certificate;

          (d)  [Intentionally omitted]

          (e)  promptly after the same become publicly available,
     copies of all periodic and other reports, proxy statements
     and other materials filed by the Borrower or any Subsidiary
     with the Commission, or any Governmental Authority
     succeeding to any or all of the functions of said
     Commission, or with any national securities exchange, or
     distributed by the Borrower to its shareholders generally,
     as the case may be; and

          (f)  promptly following any request therefor, such
     other information regarding the operations, business affairs
     and financial condition of the Borrower or any Subsidiary,
     or compliance with the terms of this Agreement, as the
     Administrative Agent or any Lender may reasonably request.

          SECTION 5.02   NOTICES OF MATERIAL EVENTS.  The
     Borrower will furnish to the Administrative Agent and each
     Lender prompt written notice of the following:

          (a)  the occurrence of any Default;

          (b)  the filing or commencement of any action, suit or
     proceeding by or before any arbitrator or Governmental
     Authority against or affecting the Borrower or any Affiliate
     thereof that, if adversely determined, could reasonably be
     expected to result in a Material Adverse Effect;

          (c)  the occurrence of any ERISA Event that, alone or
     together with any other ERISA Events that have occurred,
     could reasonably be expected to result in a Material Adverse
     Effect; and

          (d)  any other development that results in, or could
     reasonably be expected to result in, a Material Adverse
     Effect.

Each notice delivered under this Section 5.02 shall be
accompanied by a statement of a Financial Officer or other
executive officer of the Borrower setting forth the details of
the event or

                             Page 49

development requiring such notice and any action taken or
proposed to be taken with respect thereto.

          SECTION 5.03   EXISTENCE; CONDUCT OF BUSINESS.  The
     Borrower will, and will cause each of its Subsidiaries
     (including Sun World, but excluding Borrower's Inactive
     Subsidiaries and the subsidiaries of Sun World) to, do or
     cause to be done all things necessary to preserve, renew and
     keep in full force and effect its legal existence and the
     rights, licenses, permits, privileges and franchises
     material to the conduct of its business; provided that the
     foregoing shall not prohibit any merger, consolidation,
     liquidation or dissolution permitted under Section 6.03.

          SECTION 5.04   PAYMENT OF OBLIGATIONS.  The Borrower
     will, and will cause each of its Subsidiaries to, pay its
     obligations, including tax liabilities, that, if not paid,
     could result in a Material Adverse Effect before the same
     shall become delinquent or in default, except where (a) the
     validity or amount thereof is being contested in good faith
     by appropriate proceedings, (b) the Borrower or such
     Subsidiary has set aside on its books adequate reserves with
     respect thereto in accordance with GAAP and (c) the failure
     to make payment pending such contest could not reasonably be
     expected to result in a Material Adverse Effect.

          SECTION 5.05   MAINTENANCE OF PROPERTIES; INSURANCE.
     The Borrower will, and will cause each of its Participating
     Subsidiaries and SWFG to, (a) keep and maintain all property
     material to the conduct of its business in good working
     order and condition, ordinary wear and tear excepted, and
     (b) maintain, with financially sound and reputable insurance
     companies, insurance in such amounts and against such risks
     as are customarily maintained by companies engaged in the
     same or similar businesses operating in the same or similar
     locations.  Further, within ten (10) Business Days after the
     Effective Date, the Borrower shall provide evidence to the
     Administrative Agent of the insurance required to be carried
     pursuant to the foregoing sentence, which evidence shall be
     in form and substance satisfactory to, in form and substance
     satisfactory the Administrative Agent.

          SECTION 5.06   BOOKS AND RECORDS; INSPECTION RIGHTS.
     The Borrower will, and will cause each of its Subsidiaries
     to, keep proper books of record and account in which full,
     true and correct entries are made of all dealings and
     transactions in relation to its business and activities.
     The Borrower will, and will cause each of its Subsidiaries
     (excluding the Sun World Entities) to, permit any
     representatives designated by the Administrative Agent or
     any Lender, upon reasonable prior notice, to visit and
     inspect its properties, to examine and make extracts from
     its books and records, and to discuss its affairs, finances
     and condition with its officers and independent accountants,
     all at such reasonable times and as often as reasonably
     requested.

          SECTION 5.07   COMPLIANCE WITH LAWS.  The Borrower
     will, and will cause each of its Subsidiaries to, comply
     with all laws, rules, regulations and orders of any
     Governmental Authority applicable to it or its property,
     except where the failure to do so, individually or in the
     aggregate, could not reasonably be expected to result in a
     Material Adverse Effect.

          SECTION 5.08   USE OF PROCEEDS.  Subject to the terms
     and restrictions set forth herein, the proceeds of the Loans
     will be used solely for the purpose of (a) financing a

                             Page 50

     Permitted Investment and (b) financing the working capital
     and general corporate needs of the Borrower.  No part of the
     proceeds of any Loan will be used, whether directly or
     indirectly, for any purpose that entails a violation of any
     of the Regulations of the Board, including Regulations G, U
     and X.  Notwithstanding the foregoing, to the extent that
     the Borrower transfers any proceeds of the Loans to any of
     its Affiliates, such transfer must be a loan evidenced by a
     note and as properly authorized by the Board of Directors of
     the Borrower and the board of directors for such Affiliate;
     which note shall be pledged to the Borrower and constitute
     ING Collateral.

          SECTION 5.09   NEW SUBSIDIARIES.  In the event that any
     Person shall become a Participating Subsidiary of Borrower
     after the date hereof, Borrower shall execute (or cause such
     other Participating Subsidiary as may be the direct parent
     company of the new Participating Subsidiary to execute) a
     Pledge and Security Agreement, as the case may be,
     sufficient to subject all of the capital stock of such new
     or additional Participating Subsidiary to a Lien in favor of
     the Administrative Agent, on behalf of the Lenders, and any
     other documents as the Administrative Agent may reasonably
     request from time to time in order to perfect or maintain
     the perfection of the Administrative Agent's Liens
     thereunder, each in form and substance reasonably
     satisfactory to the Administrative Agent.

          SECTION 5.10   ACQUISITIONS BY BORROWER.

          (a)  In the event that after the date of this Agreement
     the Borrower acquires ownership of any additional real or
     personal property of any type or nature (including, but not
     limited to, notes or other obligations from a Subsidiary or
     Affiliate to Borrower), the Borrower shall promptly give
     written notice of such acquisition to the Administrative
     Agent, and if requested by the Administrative Agent at the
     direction of the Required Lenders, Borrower shall execute
     and deliver any and all Security Documents or collateral
     assignments, security agreements, mortgages, deeds of trust,
     pledge agreements, financing statements, fixture filings,
     notice filings or other documents as the Administrative
     Agent may reasonably request from time to time in order for
     the Administrative Agent to acquire a Lien on the property
     so acquired by Borrower as additional security for the
     obligations under this Agreement or to perfect or maintain
     the perfection of such Lien.

          (b)  Notwithstanding paragraph (a) of this
     Section 5.10, so long as no Event of Default is then in
     existence, Borrower shall not be required to deliver to the
     Administrative Agent any Security Documents or collateral
     assignments, security agreements, mortgages, deeds of trust,
     pledge agreements, financing statements, fixture filings,
     notice filings or other documents for any item of real or
     personal property acquired by Borrower on or after the
     Effective Date if both (i) the acquisition cost of each such
     item of real or personal property (including, but not
     limited to, Rolling Stock) is less than $250,000 and
     (ii) the aggregate acquisition cost of (A) all such real or
     personal property (including, but not limited to, Rolling
     Stock) in which no Lien has been granted in favor of the
     Administrative Agent pursuant to this paragraph (b) of this
     Section (collectively, the "Excluded Items") plus
     (B) Rolling Stock in existence as of the Effective Date is
     not more than $2,000,000.  To the extent that the aggregate
     acquisition cost of (i) all Excluded Items plus (ii) Rolling
     Stock in existence as of the Effective Date is more than
     $2,000,000 (the "Excluded Items/Rolling Stock Threshold"),
     Borrower will, and will cause its Subsidiaries to, grant
     (and such Liens shall be deemed immediately to have

                             Page 51

     been granted) Liens on such assets to the extent in excess
     of the Excluded Items/Rolling Stock Threshold in favor of
     the Administrative Agent, for itself and on behalf of the
     Lenders.

          (c)  Notwithstanding paragraph (a) and (b) of this
     Section 5.10, so long as no Event of Default is then in
     existence, Borrower also shall not be required to deliver to
     the Administrative Agent any Security Documents or
     collateral assignments, security agreements, mortgages,
     deeds of trust, pledge agreements, financing statements,
     fixture filings, notice filings or other documents for any
     item of real or personal property acquired on or after the
     Effective Date if each of the following conditions are
     satisfied: (a) each such item of real or personal property
     is acquired or purchased on or after the Effective Date
     solely in exchange for the Common Stock or other equity
     interest in the Borrower (an "Equity Acquisition Asset"),
     (b) no Lien is created, imposed, or permitted to exist on
     any Equity Acquisition Asset, and (c) the aggregate
     acquisition value of all Equity Acquisition Assets does not
     exceed $2,000,000.  To the extent that the aggregate
     acquisition value of all Equity Acquisition Assets is more
     than $2,000,000 ("Equity Acquisition Threshold"), Borrower
     will, and will cause its Subsidiaries to, grant Liens (and
     such Liens shall be deemed immediately to have been granted)
     on such assets to the extent in excess of the Equity
     Acquisition Threshold in favor of the Administrative Agent,
     for itself and on behalf of the Lenders.

          SECTION 5.11   ACQUISITIONS WITH PROCEEDS OF LOANS.  In
     the event that after the date of this Agreement, a
     Subsidiary or Borrower's Affiliate utilizes the proceeds of
     any Loans, which are either directly or indirectly
     transferred or otherwise forwarded to such Subsidiary or
     Borrower's Affiliate from Borrower, to acquire real or
     personal property of any type or nature, Borrower shall
     promptly give written notice of such acquisition to the
     Administrative Agent, and if requested by the Administrative
     Agent at the direction of the Required Lenders, Borrower
     shall cause such Subsidiary or Borrower's Affiliate to
     execute and deliver Security Documents or collateral
     assignments, security agreements, mortgages, deeds of trust,
     pledge agreements, financing statements, fixture filings,
     notice filings or other documents the Administrative Agent
     may reasonably request from time to time in order for the
     Administrative Agent to acquire a Lien on the property so
     acquired by the Subsidiary or Borrower's Affiliate as the
     case may be, as additional security for the obligations
     under this Agreement or to perfect or maintain the
     perfection of such Lien.

          SECTION 5.12   REVOLVING CREDIT AGREEMENT WARRANTS.  On
     the date hereof, the Borrower shall issue the Fee Warrant
     Certificate and the Purchaser Certificate.  The Fee Warrant
     Certificate shall be duly executed and registered in such
     name or names and in such denominations as each Lender shall
     have notified the Borrower and shall be deemed earned in
     accordance with Section 2.12 hereof and the terms and
     conditions of the Fee Warrant Certificate.  The Borrower
     shall keep available for issuance upon exercise of the Fee
     Warrant Certificate and the other Revolving Credit Agreement
     Warrants a sufficient quantity of Common Stock to satisfy
     the exercise in full of the Revolving Credit Agreement
     Warrants from time to time outstanding.  The Borrower will
     comply in all respects with its obligations under the
     Revolving Credit Agreement Warrants and shall take all steps
     as shall be necessary to insure that the Lenders and any
     subsequent holders of the Revolving Credit Agreement
     Warrants receive all of the benefits which they are intended
     to receive thereunder.

                             Page 52

          SECTION 5.13   STOCK PAYMENT COMMON STOCK.  On each
     Interest Payment Date that the Borrower has made a Stock
     Payment Election on account of a Borrowing, the Borrower
     shall issue Common Stock to the Lenders equal to the
     applicable Stock Payment ("Stock Payment Common Stock").
     All shares of Common Stock issued pursuant to a Stock
     Payment shall be duly authorized, validly issued, fully
     paid, non-assessable, and free and clear of all Liens and
     other encumbrances.

          SECTION 5.14   CONVERSION SHARES.  The Borrower shall
     keep available for issuance a sufficient quantity of Common
     Stock to satisfy, at all times, the exercise by any Tranche
     B Lender of such Tranche B Lenders' conversion rights
     pursuant to Section 2.07 hereof. All shares of Common Stock
     issued pursuant to the exercise of conversion rights under
     Section 2.07 hereof shall be duly authorized, validly
     issued, fully paid, non-assessable, and free and clear of
     all Liens and other encumbrances.

                           ARTICLE VI

                       NEGATIVE COVENANTS

          Until the Commitments have expired or terminated and
the principal of and interest on each Loan and all fees payable
hereunder have been paid in full, the Borrower covenants and
agrees with the Lenders that:

          SECTION 6.01   INDEBTEDNESS.  The Borrower will not,
     and will not permit any Participating Subsidiary or SWFG to,
     create, incur, assume or permit to exist any Indebtedness of
     Borrower, the Participating Subsidiaries or SWFG, except:

          (a)  Indebtedness created hereunder;

          (b)  Indebtedness existing on November 25, 1997 and set
     forth in Schedule 6.01 and extensions, renewals and
     replacements of any such Indebtedness that do not increase
     the outstanding principal amount thereof;

          (c)  Indebtedness of the Borrower to any Subsidiary and
     of any Subsidiary to the Borrower or any other Subsidiary;

          (d)  Guarantees by the Borrower of Indebtedness of any
     Subsidiary and by any Subsidiary of Indebtedness of the
     Borrower or any other Subsidiary;

          (e)  Indebtedness of the Borrower or any Subsidiary
     incurred to finance the acquisition, construction or
     improvement of any assets, including Capital Lease
     Obligations and any Indebtedness assumed in connection with
     the acquisition of any such assets or secured by a Lien on
     any such assets prior to the acquisition thereof, and
     extensions, renewals and replacements of any such
     Indebtedness that do not increase the outstanding principal
     amount thereof; provided that (i) such Indebtedness is
     incurred prior to or within 90 days after such acquisition
     or the completion of such construction or improvement and
     (ii) the aggregate principal amount of Indebtedness
     permitted by this Subsection (e) shall not exceed $135
     million at any time outstanding;

                             Page 53

          (f)  Indebtedness of the Borrower or any Subsidiary as
     an account party in respect of trade letters of credit;

          (g)  "Parent Permitted Debt" (as defined in the Sun
     World Indenture), to the extent such debt may be incurred by
     Borrower pursuant to the terms of the Sun World Indenture
     without any action or authorization by the Sun World Trustee
     under the Sun World Indenture or by the holders of the Sun
     World Notes; provided, however, no "Parent Permitted Debt"
     (as defined in the Sun World Indenture) may be created,
     incurred, assumed or permitted to exist that would have a
     Material Adverse Effect upon Borrower's ability to satisfy
     the Borrower's obligations hereunder and under the other
     Loan Documents;

          (h)  intercompany loans payable to the Borrower that
     evidences the intercompany transfer of the proceeds of the
     Loans to affiliates of the Borrower, provided, however, that
     any such intercompany loan is evidenced by a note that is
     pledged by Borrower to and for the benefit of the
     Administrative Agent for account of the Lenders.

          SECTION 6.02   LIENS.  The Borrower will not, and will
     not permit any Subsidiary (excluding the Sun World Entities)
     to, create, incur, assume or permit to exist any Lien on any
     property or asset now owned or hereafter acquired by it, or
     assign or sell any income or revenues (including accounts
     receivable) or rights in respect of any thereof, except:

          (a)  Permitted Encumbrances;

          (b)  any Lien on any property or asset of the Borrower
     or any Subsidiary (excluding the Sun World Entities)
     existing on November 25, 1997 and set forth in Schedule
     6.02; provided that (i) such Lien shall not apply to any
     other property or asset of the Borrower or any Subsidiary
     and (ii) such Lien shall secure only those obligations which
     it secured on November 25, 1997 and extensions, renewals and
     replacements thereof that do not increase the outstanding
     principal amount thereof;

          (c)  any Lien existing on any property or asset prior
     to the acquisition thereof by the Borrower or any Subsidiary
     or existing on any property or asset of any Person that
     becomes a Subsidiary after the date hereof prior to the time
     such Person becomes a Subsidiary; provided that (i) such
     Lien is not created in contemplation of or in connection
     with such acquisition or such Person becoming a Subsidiary,
     as the case may be, (ii) such Lien shall not apply to any
     other property or assets of the Borrower or any Subsidiary
     and (iii) such Lien shall secure only those obligations
     which it secures on the date of such acquisition or the date
     such Person becomes a Subsidiary, as the case may be and
     extensions, renewals and replacements thereof that do not
     increase the outstanding principal amount thereof;

          (d)  Liens on assets acquired, constructed or improved
     by the Borrower or any Subsidiary; provided that (i) such
     security interests secure Indebtedness permitted by
     Subsection (e) of Section 6.01, (ii) such security interests
     and the Indebtedness secured thereby are incurred prior to
     or within 90 days after such acquisition or the completion
     of

                             Page 54

     such construction or improvement, (iii) the Indebtedness
     secured thereby does not exceed 90% of the cost of
     acquiring, constructing or improving such assets and
     (iv) such security interests shall not apply to any other
     property or assets of the Borrower or any Subsidiary;

          (e)  Liens to the extent permitted pursuant to the
     terms of the Sun World Indenture without any action or
     authorization by the Sun World Trustee under the Sun World
     Indenture or by the holders of the Sun World Notes; provided
     that such Liens do not include any Liens on the ING
     Collateral; and

          (f)  Liens on the Excluded Items or any portion
     thereof;
notwithstanding the foregoing, the Borrower will not, and will
not permit any Subsidiary to, create, incur, assume or permit to
exist any Lien on any Equity Acquisition Asset now owned or
hereafter acquired, or any proceeds thereof.

          SECTION 6.03   FUNDAMENTAL CHANGES.

          (a)  The Borrower will not, and will not permit any
     Subsidiary, excluding the Sun World Entities, to, merge into
     or consolidate with any other Person, or permit any other
     Person to merge into or consolidate with it, or sell,
     transfer, lease or otherwise dispose of (in one transaction
     or in a series of transactions) any substantial part of its
     assets, or all or substantially all of the stock of any of
     its Subsidiaries (in each case, whether now owned or
     hereafter acquired), or liquidate or dissolve, except that,
     if at the time thereof and immediately after giving effect
     thereto no Default shall have occurred and be continuing
     (i) any Subsidiary/Person may merge into the Borrower in a
     transaction in which the Borrower is the surviving
     corporation, (ii) any Subsidiary/Person may merge into any
     Subsidiary in a transaction in which the surviving entity is
     a Subsidiary, (iii) any Subsidiary may sell, transfer, lease
     or otherwise dispose of its assets to the Borrower or to
     another Subsidiary and (iv) any Subsidiary may liquidate or
     dissolve if the Borrower determines in good faith that such
     liquidation or dissolution is in the best interests of the
     Borrower and is not materially disadvantageous to the
     Lenders; provided that any such merger involving a Person
     that is not a wholly owned Subsidiary immediately prior to
     such merger shall not be permitted unless also permitted by
     Section 6.04.

          (b)  The Borrower will not, and will not permit any of
     its Subsidiaries (excluding the Sun World Entities) to,
     engage to any material extent in any business other than
     businesses of the type conducted by the Borrower and its
     Subsidiaries on the date of execution of this Agreement and
     businesses reasonably related thereto.

          (c)  Notwithstanding the foregoing, the Borrower may
     sell assets to the extent such sale may be consummated
     pursuant to the terms of the Sun World Indenture without any
     action or authorization by the Sun World Trustee under the
     Sun World Indenture or the holders of the Sun World Notes;
     provided that such sales do not include or affect in any
     manner the ING Collateral.

          (d)  Unless an Inactive Subsidiary shall comply with
     each and every obligation that Participating Subsidiaries
     (either directly or indirectly) have hereunder or under any
     of the Loan Documents, (a) the Borrower will not permit such
     Inactive Subsidiary to engage in any

                             Page 55

     business of any type or nature, (b) the Borrower will not
     permit the Inactive Subsidiaries, and will cause the
     Inactive Subsidiaries to refrain from, obtaining any assets
     or properties of any type or nature, (c) the Borrower will
     not permit any Inactive Subsidiary to, create, incur, assume
     or permit to exist any Indebtedness, and (d) the Borrower
     will not permit any Inactive Subsidiary to, create, incur,
     assume or permit to exist any Lien on any property or asset
     now owned or hereafter acquired by it, or assign or sell any
     income or revenues.

          SECTION 6.04   INVESTMENTS, LOANS, ADVANCES, GUARANTEES
     AND ACQUISITIONS.  The Borrower will not, and will not
     permit any of its Subsidiaries (excluding the Sun World
     Entities) to, purchase, hold or acquire (including pursuant
     to any merger with any Person that was not a wholly owned
     Subsidiary prior to such merger) any capital stock,
     evidences of indebtedness or other securities (including any
     option, warrant or other right to acquire any of the
     foregoing) of, make or permit to exist any loans or advances
     to, Guarantee any obligations of, or make or permit to exist
     any investment or any other interest in, any other Person,
     or purchase or otherwise acquire (in one transaction or a
     series of transactions) any assets of any other Person
     constituting a business unit, except:

          (a)  Permitted Investments;

          (b)  investments by the Borrower existing on the date
     hereof in the capital stock, other securities or equity
     interests of its Subsidiaries;

          (c)  loans or advances made by the Borrower to any
     Subsidiary and made by any Subsidiary to the Borrower or any
     other Subsidiary;

          (d)  Guarantees constituting Indebtedness permitted by
     Section 6.01; and

          (e)  assets acquired by Borrower solely in exchange for
     the equity interests of the Borrower.

          SECTION 6.05   HEDGING AGREEMENTS.  The Borrower will
     not, and will not permit any of its Subsidiaries (excluding
     the Sun World Entities) to, enter into any Hedging
     Agreement, other than Hedging Agreements entered into in the
     ordinary course of business to hedge or mitigate risks to
     which the Borrower or any Subsidiary is exposed in the
     conduct of its business or the management of its
     liabilities.

          SECTION 6.06   RESTRICTED PAYMENTS.  The Borrower will
     not, and will not permit any of its Subsidiaries to, declare
     or make, or agree to pay or make, directly or indirectly,
     any Restricted Payment; except that the Borrower and its
     Affiliates may make "Restricted Payments" (as defined in the
     Sun World Indenture) to the extent such payments may be
     effected pursuant to the terms of the Sun World Indenture
     without any action or authorization by the Sun World Trustee
     under the Sun World Indenture or by the holders of the Sun
     World Notes, provided, however, that no such "Restricted
     Payments" (as defined in the Sun World Indenture) may be
     made that would have a Material Adverse Effect upon
     Borrower's ability to satisfy the Borrower's obligations
     hereunder and under the other Loan Documents.

          SECTION 6.07   TRANSACTIONS WITH AFFILIATES.  The
     Borrower will not, and will not permit any of its
     Subsidiaries to, sell, lease or otherwise transfer any
     property or assets

                             Page 56

     to, or purchase, lease or otherwise acquire any property or
     assets from, or otherwise engage in any other transactions
     with, any of its Affiliates, except (a) in the ordinary
     course of business at prices and on terms and conditions not
     less favorable to the Borrower or such Subsidiary than could
     be obtained on an arm's-length basis from unrelated third
     parties, (b) transactions between or among the Borrower and
     its Subsidiaries not involving any other Affiliate, (c) any
     Restricted Payment permitted by Section 6.06, and
     (d) "Affiliate Transactions" (as defined in the Sun World
     Indenture), to the extent such transactions may be incurred
     by Borrower and its Subsidiaries pursuant to the terms of
     the Sun World Indenture without any action or authorization
     by the Sun World Trustee under the Sun World Indenture or by
     the holders of the Sun World Notes, provided, however, that
     no such "Affiliate Transactions" (as defined in the Sun
     World Indenture) may be undertaken that would have a
     Material Adverse Effect upon Borrower's ability to satisfy
     the Borrower's obligations hereunder and under the other
     Loan Documents.

          SECTION 6.08   RESTRICTIVE AGREEMENTS.  The Borrower
     will not, and will not permit any of its Subsidiaries
     (excluding the Sun World Entities) to, directly or
     indirectly, enter into, incur or permit to exist any
     agreement or other arrangement that prohibits, restricts or
     imposes any condition upon (a) the ability of the Borrower
     or any Subsidiary (excluding the Sun World Entities) to
     create, incur or permit to exist any Lien upon any of its
     property or assets, or (b) the ability of any Subsidiary
     (excluding the Sun World Entities) to pay dividends or other
     distributions with respect to any shares of its capital
     stock or to make or repay loans or advances to the Borrower
     or any other Subsidiary or to Guarantee Indebtedness of the
     Borrower or any other Subsidiary; provided that (i) the
     foregoing shall not apply to restrictions and conditions
     imposed by law or by this Agreement or any other Loan
     Document, (ii) the foregoing shall not apply to restrictions
     and conditions existing on November 25, 1997 identified on
     Schedule 6.08 (but shall apply to any amendment or
     modification expanding the scope of any such restriction or
     condition), (iii) except as may be required pursuant to
     Section 5.10 hereof, the foregoing shall not apply to
     customary restrictions and conditions contained in
     agreements relating to the sale of a Subsidiary pending such
     sale, provided such restrictions and conditions apply only
     to the Subsidiary that is to be sold and such sale is
     permitted hereunder, (iv) except as may be required pursuant
     to Section 5.10 hereof, Subsection (a) of the foregoing
     shall not apply to restrictions or conditions imposed by any
     agreement relating to secured Indebtedness permitted by this
     Agreement if such restrictions or conditions apply only to
     the property or assets securing such Indebtedness and
     (v) except as may be required pursuant to Section 5.10
     hereof, Subsection (a) of the foregoing shall not apply to
     customary provisions in leases and other contracts
     restricting the assignment thereof.

          SECTION 6.09   USE OF PROCEEDS.  Borrower shall not use
     the proceeds of any of the Loans for any purpose other than
     as and to the extent permitted by Section 5.08 hereof.

          SECTION 6.10   MANAGEMENT FEES FROM SUN WORLD.
     Borrower shall not, and will cause Sun World to refrain from
     taking any action to, either directly or indirectly, amend,
     modify, alter or voluntary terminate or suspend the
     Borrower/Sun World Services Agreement in any manner that
     would restrict, limit, affect, modify, suspend or terminate
     Borrower's right to receive at least $1,500,000.00 annually
     for management fees paid by Sun World to Cadiz under the
     terms of the Cadiz/Sun World Services Agreement.

                             Page 57

                           ARTICLE VII

                        EVENTS OF DEFAULT

     If any of the following events ("Events of Default") shall
occur:

          (a)  the Borrower shall fail to pay any principal of,
     or interest on, any Loan or any fee or any other amount
     payable under this Agreement or any other Loan Document when
     and as the same shall become due and payable, whether at the
     due date thereof or at a date fixed for prepayment thereof
     or otherwise;

          (b)  any representation or warranty made or deemed made
     by or on behalf of the Borrower or any Subsidiary in or in
     connection with this Agreement or any other Loan Document or
     any amendment or modification hereof or waiver hereunder, or
     in any report, certificate, financial statement or other
     document furnished pursuant to or in connection with this
     Agreement or any other Loan Document or any amendment or
     modification hereof or waiver hereunder, shall prove to have
     been incorrect in any material respect when made or deemed
     made;

          (c)  the Borrower shall fail to observe or perform any
     covenant, condition or agreement contained in Section 5.02,
     5.03 (with respect to the Borrower's existence) or 5.08 or
     in Article VI;

          (d)  the Borrower shall fail to observe or perform any
     covenant, condition or agreement contained in this Agreement
     (other than those specified in clauses (a), (b) or (c) of
     this Article), and such failure shall continue unremedied
     for a period of 30 days after notice thereof from the
     Administrative Agent to the Borrower (which notice will be
     given at the request of any Lender);

          (e)  the Borrower or any Subsidiary shall fail to make
     any payment (whether of principal or interest and regardless
     of amount) in respect of any Material Indebtedness, when and
     as the same shall become due and payable; provided that this
     clause (e) shall not apply solely by reason of a failure to
     make a payment when and as the same shall become due and
     payable under the Sun World Indenture or other Sun World
     Documents unless (i) such failure would cause an Event of
     Default hereunder pursuant to a Section other than this
     Section (e), (ii) the Sun World Notes or any of the
     obligations under the Sun World Documents to the Sun World
     Trustee or the holders of the Sun World Notes have been
     accelerated pursuant to the provisions of the Sun World
     Indenture or otherwise, (iii) the Sun World Trustee and/or
     any of the holders of the Sun World Notes have instituted
     legal proceedings to enforce the Sun World Notes, the Sun
     World Indenture, or any obligations referred to in any of
     the Sun World Documents, (iv) the Sun World Trustee and/or
     any of the holders of the Sun World Notes have commenced
     foreclosure proceedings (judicial or nonjudicial) with
     respect to any collateral held as security for the
     obligations under the Sun World Documents, or (v) such
     failure to make payments has a Material Adverse Effect upon
     Borrower's ability to satisfy its obligations under this
     Agreement or any other Loan Document (as determined solely
     in the Administrative Agent's reasonable judgment); provided
     further

                             Page 58

     that this clause (e) shall not apply solely by reason of a
     failure to make a payment when and as the same shall become
     due and payable under any other Sun World Indebtedness
     unless (i) such failure would cause an Event of Default
     hereunder pursuant to a Section other than this Section (e),
     (ii) such Sun World Indebtedness have been accelerated
     pursuant to the terns thereof or otherwise, (iii) the
     holders of such Sun World Indebtedness or any agent therefor
     have instituted legal proceedings to enforce such Sun World
     Indebtedness, (iv) the holders of such Sun World
     Indebtedness or any agent therefor have commenced
     foreclosure proceedings (judicial or nonjudicial) with
     respect to any collateral held as security for such
     Indebtedness, or (v) such failure to make payments has a
     Material Adverse Effect upon Borrower's ability to satisfy
     its obligations under this Agreement or any other Loan
     Document (as determined solely in the Administrative Agent's
     reasonable judgment).

          (f)  any event or condition occurs that results in any
     Material Indebtedness becoming due prior to its scheduled
     maturity or that enables or permits (with or without the
     giving of notice, the lapse of time or both) the holder or
     holders of any Material Indebtedness or any trustee or agent
     on its or their behalf to cause any Material Indebtedness to
     become due, or to require the prepayment, repurchase,
     redemption or defeasance thereof, prior to its scheduled
     maturity; provided that this clause (f) shall not apply to
     secured Indebtedness that becomes due as a result of the
     voluntary sale or transfer of the property or assets
     securing such Indebtedness; provided further that this
     clause (f) shall not apply solely by reason of an "Event of
     Default" under the Sun World Indenture or other Sun World
     Documents unless (i) such event would cause an Event of
     Default hereunder regardless of its classification as an
     "Event of Default" under the Sun World Indenture or other
     Sun World Documents, (ii) the Sun World Notes or any of the
     obligations under the Sun World Documents to the Sun World
     Trustee or the holders of the Sun World Notes have been
     accelerated pursuant to the provisions of the Sun World
     Indenture or otherwise, (iii) the Sun World Trustee and/or
     any of the holders of the Sun World Notes have instituted
     legal proceedings to enforce the Sun World Notes, the Sun
     World Indenture, or any obligations referred to in any of
     the Sun World Documents, (iv) the Sun World Trustee and/or
     any of the holders of the Sun World Notes have commenced
     foreclosure proceedings (judicial or nonjudicial) with
     respect to any collateral held as security for the
     obligations under the Sun World Documents, or (v) such event
     has a Material Adverse Effect upon Borrower's ability to
     satisfy its obligations under this Agreement or any other
     Loan Document (as determined solely in the Administrative
     Agent's reasonable judgment); provided further that this
     clause (f) shall not apply solely by reason of an "Event of
     Default" under any other Sun World Indebtedness unless
     (i) such event would cause an Event of Default hereunder
     regardless of its classification as an "Event of Default"
     for such other Sun World Indebtedness, (ii) such Sun World
     Indebtedness has been accelerated pursuant to the terms
     thereof or otherwise, (iii) the holders of such Sun World
     Indebtedness or any agent therefor have instituted legal
     proceedings to enforce the Sun World Indebtedness, (iv) the
     holders of such Sun World Indebtedness or any agent therefor
     have commenced foreclosure proceedings (judicial or
     nonjudicial) with respect to any collateral held as security
     for such Indebtedness, or (v) such event has a Material
     Adverse Effect upon Borrower's ability to satisfy its
     obligations under this Agreement or any other Loan Document
     (as determined solely in the Administrative Agent's
     reasonable judgment).

                             Page 59

          (g)  an involuntary proceeding shall be commenced or an
     involuntary petition shall be filed seeking (i) liquidation,
     reorganization or other relief in respect of the Borrower or
     any Subsidiary or its debts, or of a substantial part of its
     assets, under any Federal, state or foreign bankruptcy,
     insolvency, receivership or similar law now or hereafter in
     effect or (ii) the appointment of a receiver, trustee,
     custodian, sequestrator, conservator or similar official for
     the Borrower or any Subsidiary or for a substantial part of
     its assets, and, in any such case, such proceeding or
     petition shall continue undismissed for 60 days or an order
     or decree approving or ordering any of the foregoing shall
     be entered;

          (h)  the Borrower or any Subsidiary shall
     (i) voluntarily commence any proceeding or file any petition
     seeking liquidation, reorganization or other relief under
     any Federal, state or foreign bankruptcy, insolvency,
     receivership or similar law now or hereafter in effect,
     (ii) consent to the institution of, or fail to contest in a
     timely and appropriate manner, any proceeding or petition
     described in clause (g) of this Article, (iii) apply for or
     consent to the appointment of a receiver, trustee,
     custodian, sequestrator, conservator or similar official for
     the Borrower or any Subsidiary or for a substantial part of
     its assets, (iv) file an answer admitting the material
     allegations of a petition filed against it in any such
     proceeding, (v) make a general assignment for the benefit of
     creditors or (vi) take any action for the purpose of
     effecting any of the foregoing;

          (i)  the Borrower or any Subsidiary (other than PSWRI
     and SWFG) shall become unable, admit in writing or fail
     generally to pay its debts as they become due;

          (j)  one or more judgments for the payment of money in
     excess of insurance coverage in an aggregate amount in
     excess of $500,000 shall be rendered against the Borrower,
     any Participating Subsidiary, SWFG or any combination
     thereof and the same shall remain undischarged for a period
     of 30 consecutive days during which execution shall not be
     effectively stayed, or any action shall be legally taken by
     a judgment creditor to attach or levy upon any assets of the
     Borrower or any Participating Subsidiary to enforce any such
     judgment;

          (k)  an ERISA Event shall have occurred that, in the
     opinion of the Required Lenders, when taken together with
     all other ERISA Events that have occurred, could reasonably
     be expected to result in a Material Adverse Effect;

          (l)  a Change in Control shall occur;

          (m)  any of the Security Documents shall for any reason
     cease to be a valid perfected security interest in favor of
     the Administrative Agent, for itself and on behalf of the
     Lenders, in the Borrower's right, title and interest in and
     to the collateral subject thereto (subject only to Permitted
     Encumbrances), to the extent required by such Security
     Document, and in the case of any Mortgage, such cessation
     continues unremedied for more than 10 days; or

          (n)  an "Event of Default" shall have occurred and be
     continuing under any other Loan Document;

                             Page 60

then, and in every such event (other than an event with respect
to the Borrower described in clause (g) or (h) of this Article),
and at any time thereafter during the continuance of such event,
the Administrative Agent may, and at the request of the Required
Lenders shall, by notice to the Borrower, take either or both of
the following actions, at the same or different times:
(i) terminate the Commitments, and thereupon the Commitments
shall terminate immediately, and (ii) declare the Loans then
outstanding to be due and payable in whole (or in part, in which
case any principal not so declared to be due and payable may
thereafter be declared to be due and payable), and thereupon the
principal of the Loans so declared to be due and payable,
together with accrued interest thereon and all fees and other
obligations of the Borrower accrued hereunder, shall become due
and payable immediately, without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the
Borrower; and in case of any event with respect to the Borrower
described in clause (g) or (h) of this Article, the Commitments
shall automatically terminate and the principal of the Loans then
outstanding, together with accrued interest thereon and all fees
and other obligations of the Borrower accrued hereunder, shall
automatically become due and payable, without presentment,
demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower.  In addition to any other remedies
available to the Administrative Agent and the Lenders hereunder
or at law or otherwise, if an Event of Default shall have
occurred and so long as the same shall be continuing unremedied,
then and in every such case, the Administrative Agent and the
Required Lenders may exercise any or all of the rights and powers
and pursue any and all of the remedies set forth in any Security
Document in accordance with terms thereof.

                          ARTICLE VIII

                    THE ADMINISTRATIVE AGENT


          SECTION 8.01   APPOINTMENT, POWERS AND IMMUNITIES.
Each of the Lenders hereby irrevocably appoints the
Administrative Agent as its agent and authorizes the
Administrative Agent to take such actions on its behalf and to
exercise such powers as are delegated to the Administrative Agent
by the terms hereof and by the other Loan Documents, together
with such actions and powers as are reasonably incidental
thereto.

          SECTION 8.02   ADMINISTRATIVE AGENT IN ITS INDIVIDUAL
CAPACITY.  The Lender serving as the Administrative Agent
hereunder and under the other Loan Documents shall have the same
rights and powers in its capacity as a Lender as any other Lender
and may exercise the same as though it were not the
Administrative Agent, and such Lender and its Affiliates may lend
money to and generally engage in any kind of business with the
Borrower or any Subsidiary or other Affiliate thereof as if it
were not the Administrative Agent hereunder.  In that regard, the
terms "Lenders", "Required Lenders", or any similar terms used
herein shall, unless the context clearly otherwise indicates,
include the Administrative Agent in its individual capacity.  The
Administrative Agent may lend money to, and generally engage in
any kind of financial, financial advisory or other business with
the Borrower or any Affiliate of the Borrower as if it were not
performing the duties specified herein, and may accept fees and
other consideration from the Borrower for services in connection
with this Agreement and otherwise without having to account for
the same to the Lenders.

                             Page 61

          SECTION 8.03   NATURE OF DUTIES OF ADMINISTRATIVE
AGENT.  The Administrative Agent shall not have any duties or
obligations except those expressly set forth herein and in the
other Loan Documents.  Without limiting the generality of the
foregoing (a) the Administrative Agent shall not be subject to
any fiduciary or other implied duties, regardless of whether a
Default has occurred and is continuing, (b) the Administrative
Agent shall not have any duty to take any discretionary action or
exercise any discretionary powers, except discretionary rights
and powers expressly contemplated hereby that the Administrative
Agent is required to exercise in writing by the Required Lenders
(or such other number or percentage of the Lenders as shall be
necessary under the circumstances as provided in Section 9.02),
and (c) except as expressly set forth herein or in any other Loan
Document, the Administrative Agent shall not have any duty to
disclose, and shall not be liable for the failure to disclose,
any information relating to the Borrower or any of its
Subsidiaries that is communicated to or obtained by the Lender
serving as Administrative Agent or any of its Affiliates in any
capacity.  The Administrative Agent shall not be liable for any
action taken or not taken by it with the consent or at the
request of the Required Lenders (or such other number or
percentage of the Lenders as shall be necessary under the
circumstances as provided in Section 9.02) or in the absence of
its own gross negligence or willful misconduct.  The
Administrative Agent shall be deemed not to have knowledge of any
Default unless and until written notice thereof is given to the
Administrative Agent by the Borrower or a Lender, and the
Administrative Agent shall not be responsible for or have any
duty to ascertain or inquire into (i) any statement, warranty or
representation made in or in connection with this Agreement,
(ii) the contents of any certificate, report or other document
delivered hereunder or in connection herewith, (iii) the
performance or observance of any of the covenants, agreements or
other terms or conditions set forth herein, (iv) the validity,
enforceability, effectiveness or genuineness of this Agreement or
any other agreement, instrument or document, or (v) the
satisfaction of any condition set forth in Article IV or
elsewhere herein, other than to confirm receipt of items
expressly required to be delivered to the Administrative Agent.

          SECTION 8.04   CERTAIN RIGHTS OF ADMINISTRATIVE AGENT.
If the Administrative Agent shall request instructions from the
Required Lenders with respect to any act or action (including the
failure to act) in connection with this Agreement or any other
Credit Document, the Administrative Agent shall be entitled to
refrain from such act or taking such action unless and until the
Administrative Agent shall have received instructions from the
Required Lenders; and the Administrative Agent shall not incur
liability to any Person by reason of so refraining.  Without
limiting the foregoing, but subject to the terms of Section 9.02
hereof, no Lender shall have any right of action whatsoever
against the Administrative Agent as a result of the
Administrative Agent acting or refraining from acting hereunder
in accordance with the instructions of the Required Lenders.

          SECTION 8.05   RELIANCE BY ADMINISTRATIVE AGENT.  The
Administrative Agent shall be entitled to rely upon, and shall
not incur any liability for relying upon, any notice, request,
certificate, consent, statement, instrument, document or other
writing believed by it to be genuine and to have been signed or
sent by the proper Person.  The Administrative Agent also may
rely upon any statement made to it orally or by telephone and
believed by it to be made by the proper Person, and shall not
incur any liability for relying thereon.  The Administrative
Agent may consult with legal counsel (who may be counsel for the
Borrower), independent accountants and other experts selected by
it, and shall not be liable for any action taken or not
                             Page 62

taken by it in accordance with the advice of any such counsel,
accountants or experts.  The Administrative Agent may deem and
treat the payee of any Note as the owner thereof for all purposes
hereof unless and until a written notice of the assignment or
transfer thereof shall have been filed with the Administrative
Agent pursuant to Section 9.04 below.  Any request, authority or
consent of any Person who, at the time of making such request or
giving such authority or consent, is the holder of any Note shall
be conclusive and binding on any subsequent holder, transferee or
assignee of such Note or any Note issued in exchange therefor.

          SECTION 8.06   SUB-AGENTS.  The Administrative Agent
may perform any and all its duties and exercise its rights and
powers by or through any one or more sub-agents appointed by the
Administrative Agent.  The Administrative Agent and any such
sub-agent may perform any and all its duties and exercise its
rights and powers through their respective Related Parties.  The
exculpatory provisions of the preceding paragraphs shall apply to
any such sub-agent and to the Related Parties of the
Administrative Agent and any such sub-agent, and shall apply to
their respective activities in connection with the syndication of
the credit facilities provided for herein as well as activities
as Administrative Agent.

          SECTION 8.07   RESIGNATION BY ADMINISTRATIVE AGENT.
Subject to the appointment and acceptance of a successor
Administrative Agent as provided in this paragraph, the
Administrative Agent may resign at any time by notifying the
Lenders and the Borrower.  Upon any such resignation, the
Required Lenders shall have the right, in consultation with the
Borrower, to appoint a successor.  If no successor shall have
been so appointed by the Required Lenders and shall have accepted
such appointment within 30 days after the retiring Administrative
Agent gives notice of its resignation, then the retiring
Administrative Agent may, on behalf of the Lenders, appoint a
successor Administrative Agent.  Upon the acceptance of its
appointment as Administrative Agent hereunder by a successor,
such successor shall succeed to and become vested with all the
rights, powers, privileges and duties of the retiring
Administrative Agent and the retiring Administrative Agent shall
be discharged from its duties and obligations hereunder and under
the other Loan Documents.  The fees payable by the Borrower to a
successor Administrative Agent shall be the same as those payable
to its predecessor unless otherwise agreed between the Borrower
and such successor.  After the Administrative Agent's resignation
hereunder, the provisions of this Article and Section 9.03 shall
continue in effect for the benefit of such retiring
Administrative Agent, its sub-agents and their respective Related
Parties in respect of any actions taken or omitted to be taken by
any of them while it was acting as Administrative Agent.

          SECTION 8.08   NON-RELIANCE ON ADMINISTRATIVE AGENT AND
OTHER LENDERS.  Each Lender acknowledges that it has,
independently and without reliance upon the Administrative Agent
or any other Lender and based on such documents and information
as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement.  Each Lender also
acknowledges that it will, independently and without reliance
upon the Administrative Agent or any other Lender and based on
such documents and information as it shall from time to time deem
appropriate, continue to make its own decisions in taking or not
taking action under or based upon this Agreement, any related
agreement or any document furnished hereunder or thereunder.

                             Page 63

          SECTION 8.09   SECURITY DOCUMENTS.

          (a)  Each Lender hereby authorizes the Administrative
     Agent to enter into each of the Security Documents and to
     take all actions contemplated thereby.  All rights and
     remedies under the Security Documents may be exercised by
     the Administrative Agent for the benefit of the Lenders and
     the other beneficiaries thereof upon the terms thereof.
     With the consent of the Required Lenders, the Administrative
     Agent may assign its rights and obligations as
     Administrative Agent under any of the Security Documents to
     any Affiliate of the Administrative Agent, and such
     Affiliate thereafter shall be entitled to (i) all the rights
     of the Administrative Agent under the applicable Security
     Document and (ii) all rights hereunder of the Administrative
     Agent with respect to the applicable Security Document.

          (b)  In each circumstance where, under any provision of
     any Security Document, the Administrative Agent shall have
     the right to grant or withhold any consent, exercise any
     remedy, make any determination or direct any action by the
     Administrative Agent under such Security Document, the
     Administrative Agent shall act in respect of such consent,
     exercise of remedies, determination or action, as the case
     may be, with the consent of and at the direction of the
     Required Lenders; provided, however, that no such consent of
     the Required Lenders shall be required with respect to any
     consent, determination or other matter that is, in the
     Administrative Agent's judgment, ministerial or
     administrative in nature.  In each circumstance where any
     consent of or direction from the Required Lenders is
     required, the Administrative Agent shall send to the Lenders
     a written notice setting forth a description in reasonable
     detail of the matter as to which consent or direction is
     requested and the Administrative Agent's proposed course of
     action with respect thereto.  In the event the
     Administrative Agent shall not have received a response from
     any Lender within five (5) Business Days after the giving of
     such notice, such Lender shall be deemed to have agreed to
     the course of action proposed by the Administrative Agent.

                           ARTICLE IX

                          MISCELLANEOUS


          SECTION 9.01   NOTICES.  Except in the case of notices
     and other communications expressly permitted to be given by
     telephone, all notices and other communications provided for
     herein shall be in writing and shall be delivered by hand or
     overnight courier service, mailed by certified or registered
     mail or sent by telecopy, as follows:

          (a)  if to the Borrower, to it at:

               Cadiz Inc.
               Attn:  Chief Financial Officer
               100 Wilshire Blvd.
               Sixteenth Floor
               Santa Monica, CA 90401-1111
               Telephone No.:  310-899-4700
               Facsimile No.:  310-899-4752

                             Page 64

with a copy to:

Howard Unterberger, Esq.
Miller & Holguin
               1801 Century Park East
               Seventh Floor
               Los Angeles, CA 90067
               Telephone No.:  310-556-1990
               Facsimile No.:  310-557-2205

          (b)  if to the Administrative Agent, to it at:

               ING Baring (U.S.) Capital LLC
               135 E. 57th Street
               New York, NY 10022-2101
               Attention:  Joan Chiappe, Vice President
               Reference:  Cadiz
               Telephone No.:  212-409-1742
               Facsimile No.:  212-371-9295

          with a copy to:

               Cadwalader, Wickersham & Taft
               100 Maiden Lane
               New York, New York 10038
               Attention: Michael J. Edelman, Esq.
               Telephone No.: 212-504-6000
               Facsimile No.:      212-504-6666

          (c)  if to ING, as a Lender, to it at:

               ING Baring (U.S.) Capital LLC
               135 E. 57th Street
               New York, NY 10022-2101
               Attention:  Joan Chiappe, Vice President
               Reference:  Cadiz
               Telephone No.:  212-409-1742
               Facsimile No.:  212-371-9295

          with a copy to:

               Cadwalader, Wickersham & Taft
               100 Maiden Lane
               New York, New York 10038
               Attention: Michael J. Edelman, Esq.
               Telephone No.: 212-504-6000
               Facsimile No.:      212-504-6666

                             Page 65

          (d)  if to any other Lender, to it at its address (or
     telecopy number) set forth in its Administrative
     Questionnaire.

Any party hereto may change its address or telecopy number for
notices and other communications hereunder by notice to the other
parties hereto.  All notices and other communications given to
any party hereto in accordance with the provisions of this
Agreement shall be deemed to have been given on the date of
receipt.


          SECTION 9.02   WAIVERS; AMENDMENTS.

          (a)  No failure or delay by the Administrative Agent or
     any Lender in exercising any right or power hereunder shall
     operate as a waiver thereof, nor shall any single or partial
     exercise of any such right or power, or any abandonment or
     discontinuance of steps to enforce such a right or power,
     preclude any other or further exercise thereof or the
     exercise of any other right or power.  The rights and
     remedies of the Administrative Agent and the Lenders
     hereunder are cumulative and are not exclusive of any rights
     or remedies that they would otherwise have.  No waiver of
     any provision of this Agreement or consent to any departure
     by the Borrower therefrom shall in any event be effective
     unless the same shall be permitted by paragraph (b) of this
     Section, and then such waiver or consent shall be effective
     only in the specific instance and for the purpose for which
     given.  Without limiting the generality of the foregoing,
     the making of a Loan shall not be construed as a waiver of
     any Default, regardless of whether the Administrative Agent
     or any Lender may have had notice or knowledge of such
     Default at the time.

          (b)  Neither this Agreement nor any provision hereof
     may be waived, amended or modified except pursuant to an
     agreement or agreements in writing entered into by the
     Borrower and the Required Lenders or by the Borrower and the
     Administrative Agent with the consent of the Required
     Lenders; provided that no such agreement shall (i) increase
     the Commitment of any Lender without the written consent of
     such Lender, (ii) reduce the principal amount of any Loan or
     reduce the rate of interest thereon, or reduce any fees
     payable hereunder, without the written consent of each
     Lender affected thereby, (iii) postpone the scheduled date
     of payment of the principal amount of any Loan or any
     interest thereon, or any fees payable hereunder, or reduce
     the amount of, waive or excuse any such payment, or postpone
     the scheduled date of expiration of any Commitment, without
     the written consent of each Lender affected thereby,
     (iv) change Section 2.18(b) or (c) in a manner that would
     alter the pro rata sharing of payments required thereby,
     without the written consent of each Lender, (v) change any
     of the provisions of this Section 9.02 or the definition of
     "Required Lenders" or any other provision hereof specifying
     the number or percentage of Lenders required to waive, amend
     or modify any rights hereunder or make any determination or
     grant any consent hereunder, without the written consent of
     each Lender, or (vi) release any security interest in any
     material collateral for the obligations evidenced by the
     Loan Documents (except in accordance with the Loan
     Documents) without the written consent of each Lender;
     provided further that no such agreement shall amend, modify
     or otherwise affect the rights or duties of the
     Administrative Agent hereunder without the prior written
     consent of the Administrative Agent.

                             Page 66

          SECTION 9.03   EXPENSES; INDEMNITY; DAMAGE WAIVER.

          (a)  The Borrower shall pay (i) all reasonable
     out-of-pocket expenses incurred by the Administrative Agent
     and its Affiliates, including the reasonable fees, charges
     and disbursements of counsel for the Administrative Agent,
     in connection with the syndication of the credit facilities
     provided for herein, the preparation and administration of
     this Agreement and the other Loan Documents or any
     amendments, modifications or waivers of the provisions
     hereof (whether or not the transactions contemplated hereby
     or thereby shall be consummated), (ii) all reasonable
     out-of-pocket expenses incurred by the Administrative Agent
     or any Lender, including the fees, charges and disbursements
     of any counsel for the Administrative Agent or any Lender,
     in connection with the enforcement or protection of its
     rights in connection with this Agreement or any other Loan
     Document, including its rights under this Section 9.03, or
     in connection with the Loans made hereunder, including all
     such out-of-pocket expenses incurred during any workout,
     restructuring or negotiations in respect of such Loans.

          (b)  The Borrower shall indemnify the Administrative
     Agent and each Lender, and each Related Party of any of the
     foregoing Persons (each such Person being called an
     "Indemnitee") against, and hold each Indemnitee harmless
     from, any and all losses, claims, damages, liabilities and
     related expenses, including the fees, charges and
     disbursements of any counsel for any Indemnitee, incurred by
     or asserted against any Indemnitee arising out of, in
     connection with, or as a result of (i) the execution or
     delivery of this Agreement or any other Loan Document or any
     agreement or instrument contemplated therein, the
     performance by the parties hereto of their respective
     obligations hereunder or the consummation of the
     Transactions or any other transactions contemplated hereby,
     (ii) any Loan or the use of the proceeds therefrom,
     (iii) any actual or alleged presence or release of Hazardous
     Materials on or from any property owned or operated by the
     Borrower or any of its Subsidiaries, or any Environmental
     Liability related in any way to the Borrower or any of its
     Subsidiaries, or (iv) any actual or prospective claim,
     litigation, investigation or proceeding relating to any of
     the foregoing, whether based on contract, tort or any other
     theory and regardless of whether any Indemnitee is a party
     thereto; provided that such indemnity shall not, as to any
     Indemnitee, be available to the extent that such losses,
     claims, damages, liabilities or related expenses are
     determined by a court of competent jurisdiction by final and
     nonappealable judgment to have resulted from the gross
     negligence or willful misconduct of such Indemnitee.

          (c)  To the extent that the Borrower fails to pay any
     amount required to be paid by it to the Administrative Agent
     under paragraph (a) or (b) of this Section, each Lender
     severally agrees to pay to the Administrative Agent such
     Lender's Applicable Percentage (determined as of the time
     that the applicable unreimbursed expense or indemnity
     payment is sought) of such unpaid amount; provided that the
     unreimbursed expense or indemnified loss, claim, damage,
     liability or related expense, as the case may be, was
     incurred by or asserted against the Administrative Agent in
     its capacity as such.

          (d)  To the extent permitted by applicable law, the
     Borrower shall not assert, and hereby waives, any claim
     against any Indemnitee, on any theory of liability, for
     special, indirect, consequential or punitive damages (as
     opposed to direct or actual damages) arising out of, in
     connection with, or as a result of, this Agreement or any
     agreement or instrument contemplated hereby, the
     Transactions, any Loan or the use of the proceeds thereof.

                             Page 67

          (e)  All amounts due under this Section 9.03 shall be
     payable promptly after written demand therefor.

          SECTION 9.04   SUCCESSORS AND ASSIGNS.

          (a)  The provisions of this Agreement shall be binding
     upon and inure to the benefit of the parties hereto and
     their respective successors and assigns permitted hereby,
     except that the Borrower may not assign or otherwise
     transfer any of its rights or obligations hereunder without
     the prior written consent of each Lender (and any attempted
     assignment or transfer by the Borrower without such consent
     shall be null and void).  Nothing in this Agreement,
     expressed or implied, shall be construed to confer upon any
     Person (other than the parties hereto, their respective
     successors and assigns permitted hereby and, to the extent
     expressly contemplated hereby, the Related Parties of each
     of the Administrative Agent and the Lenders) any legal or
     equitable right, remedy or claim under or by reason of this
     Agreement.

          (b)  Any Lender may assign to one or more assignees all
     or a portion of its rights and obligations under this
     Agreement (including all or a portion of its Commitment and
     the Loans at the time owing to it); provided that (i) except
     in the case of an assignment to a Lender or an Affiliate of
     a Lender, each of the Borrower and the Administrative Agent
     must give their prior written consent to such assignment
     (which consent shall not be unreasonably withheld),
     (ii) except in the case of an assignment to a Lender or an
     Affiliate of a Lender or an assignment of the entire
     remaining amount of the assigning Lender's Commitment, the
     amount of the Commitment of the assigning Lender subject to
     each such assignment (determined as of the date the
     Assignment and Acceptance with respect to such assignment is
     delivered to the Administrative Agent) shall not be less
     than $2,000,000 unless each of the Borrower and the
     Administrative Agent otherwise consents, (iii) each partial
     assignment shall be made as an assignment of a proportionate
     part of all the assigning Lender's rights and obligations
     under this Agreement, (iv) the parties to each assignment
     shall execute and deliver to the Administrative Agent an
     Assignment and Acceptance, together with a processing and
     recordation fee of $1,000, and (v) the assignee, if it shall
     not be a Lender, shall deliver to the Administrative Agent
     an Administrative Questionnaire; provided further that any
     consent of the Borrower otherwise required under this
     paragraph shall not be required if an Event of Default under
     clause (h) or (i) of Article VII has occurred and is
     continuing.  Subject to acceptance and recording thereof
     pursuant to paragraph (d) of this Section, from and after
     the effective date specified in each Assignment and
     Acceptance the assignee thereunder shall be a party hereto
     and, to the extent of the interest assigned by such
     Assignment and Acceptance, have the rights and obligations
     of a Lender under this Agreement, and the assigning Lender
     thereunder shall, to the extent of the interest assigned by
     such Assignment and Acceptance, be released from its
     obligations under this Agreement (and, in the case of an
     Assignment and Acceptance covering all of the assigning
     Lender's rights and obligations under this Agreement, such
     Lender shall cease to be a party hereto but shall continue
     to be entitled to the benefits of Sections 2.15, 2.17 and
     9.03).  Any assignment or transfer by a Lender of rights or
     obligations under this Agreement that does not comply with
     this paragraph shall be treated for purposes of this
     Agreement as a sale by such Lender of a participation in
     such rights and obligations in accordance with paragraph (e)
     of this Section.

                             Page 68

          (c)  The Administrative Agent, acting for this purpose
     as an agent of the Borrower, shall maintain at its offices
     in The City of New York a copy of each Assignment and
     Acceptance delivered to it and a register for the
     recordation of the names and addresses of the Lenders, and
     the Commitment of, and principal amount of the Loans owing
     to, each Lender pursuant to the terms hereof from time to
     time (the "Register").  The entries in the Register shall be
     conclusive, and the Borrower, the Administrative Agent and
     the Lenders may treat each Person whose name is recorded in
     the Register pursuant to the terms hereof as a Lender
     hereunder for all purposes of this Agreement,
     notwithstanding notice to the contrary.  The Register shall
     be available for inspection by the Borrower and any Lender,
     at any reasonable time and from time to time upon reasonable
     prior notice.

          (d)  Upon its receipt of a duly completed Assignment
     and Acceptance executed by an assigning Lender and an
     assignee, the assignee's completed Administrative
     Questionnaire (unless the assignee shall already be a Lender
     hereunder), the processing and recordation fee referred to
     in paragraph (b) of this Section and any written consent to
     such assignment required by paragraph (b) of this Section,
     the Administrative Agent shall accept such Assignment and
     Acceptance and record the information contained therein in
     the Register. No assignment shall be effective for purposes
     of this Agreement unless it has been recorded in the
     Register as provided in this paragraph.

          (e)  Any Lender may, without the consent of the
     Borrower or the Administrative Agent, sell participations to
     one or more banks or other financial institutions (a
     "Participant") in all or a portion of such Lender's rights
     and obligations under this Agreement (including all or a
     portion of its Commitment and the Loans owing to it);
     provided that (i) such Lender's obligations under this
     Agreement shall remain unchanged, (ii) such Lender shall
     remain solely responsible to the other parties hereto for
     the performance of such obligations and (iii) the Borrower,
     the Administrative Agent and the other Lenders shall
     continue to deal solely and directly with such Lender in
     connection with such Lender's rights and obligations under
     this Agreement.  Any agreement or instrument pursuant to
     which a Lender sells such a participation shall provide that
     such Lender shall retain the sole right to enforce this
     Agreement and to approve any amendment, modification or
     waiver of any provision of this Agreement; provided that
     such agreement or instrument may provide that such Lender
     will not, without the consent of the Participant, agree to
     any amendment, modification or waiver described in the first
     proviso to Section 9.02(b) that affects such Participant.
     Subject to paragraph (f) of this Section, the Borrower
     agrees that each Participant shall be entitled to the
     benefits of Sections 2.15 and 2.17 to the same extent as if
     it were a Lender and had acquired its interest by assignment
     pursuant to paragraph (b) of this Section.  To the extent
     permitted by law, each Participant also shall be entitled to
     the benefits of Section 9.08 as though it were a Lender,
     provided such Participant agrees to be subject to
     Section 2.18(c) as though it were a Lender.

          (f)  A Participant shall not be entitled to receive any
     greater payment under Section 2.15 or 2.17 than the
     applicable Lender would have been entitled to receive with
     respect to the participation sold to such Participant,
     unless the sale of the participation to such Participant is
     made with the Borrower's prior written consent.  A
     Participant that would be a Foreign Lender if it were a
     Lender shall not be entitled to the benefits of Section 2.17
     unless the Borrower is notified of the participation sold to
     such Participant and such Participant agrees, for the
     benefit of the Borrower, to comply with Section 2.17(e) as
     though it were a Lender.

                             Page 69

          (g)  Any Lender may at any time pledge or assign a
     security interest in all or any portion of its rights under
     this Agreement to secure obligations of such Lender,
     including any pledge or assignment to secure obligations to
     a Federal Reserve Bank, and this Section 9.04 shall not
     apply to any such pledge or assignment of a security
     interest; provided that no such pledge or assignment of a
     security interest shall release a Lender from any of its
     obligations hereunder or substitute any such pledgee or
     assignee for such Lender as a party hereto.

          SECTION 9.05   SURVIVAL.  All covenants, agreements,
     representations and warranties made by the Borrower herein
     and in the certificates or other instruments delivered in
     connection with or pursuant to this Agreement shall be
     considered to have been relied upon by the other parties
     hereto and shall survive the execution and delivery of this
     Agreement and the making of any Loans, regardless of any
     investigation made by any such other party or on its behalf
     and notwithstanding that the Administrative Agent or any
     Lender may have had notice or knowledge of any Default or
     incorrect representation or warranty at the time any credit
     is extended hereunder, and shall continue in full force and
     effect as long as the principal of or any accrued interest
     on any Loan or any fee or any other amount payable under
     this Agreement is outstanding and unpaid and so long as the
     Commitments have not expired or terminated.  The provisions
     of Sections 2.15, 2.17 and 9.03 and Article VIII shall
     survive and remain in full force and effect regardless of
     the consummation of the transactions contemplated hereby,
     the repayment of the Loans, the expiration of the
     Commitments or the termination of this Agreement or any
     provision hereof.

          SECTION 9.06   COUNTERPARTS; INTEGRATION;
     EFFECTIVENESS.  This Agreement may be executed in
     counterparts (and by different parties hereto on different
     counterparts), each of which shall constitute an original,
     but all of which when taken together shall constitute a
     single contract.  This Agreement and any separate letter
     agreements with respect to fees payable to the
     Administrative Agent constitute the entire contract among
     the parties relating to the subject matter hereof and
     supersede any and all previous agreements and
     understandings, oral or written, relating to the subject
     matter hereof.  Except as provided in Section 4.01, this
     Agreement shall become effective when it shall have been
     executed by the Administrative Agent and when the
     Administrative Agent shall have received counterparts hereof
     which, when taken together, bear the signatures of each of
     the other parties hereto, and thereafter shall be binding
     upon and inure to the benefit of the parties hereto and
     their respective successors and assigns.  Delivery of an
     executed counterpart of a signature page of this Agreement
     by telecopy shall be effective as delivery of a manually
     executed counterpart of this Agreement.

          SECTION 9.07   SEVERABILITY.  Any provision of this
     Agreement held to be invalid, illegal or unenforceable in
     any jurisdiction shall, as to such jurisdiction, be
     ineffective to the extent of such invalidity, illegality or
     unenforceability without affecting the validity, legality
     and enforceability of the remaining provisions hereof; and
     the invalidity of a particular provision in a particular
     jurisdiction shall not invalidate such provision in any
     other jurisdiction.

          SECTION 9.08   RIGHT OF SETOFF.  If an Event of Default
     shall have occurred and be continuing, each Lender and each
     of its Affiliates is hereby authorized at any time and from
     time to time, to the fullest extent permitted by law, to set
     off and apply any and all deposits (general or special, time
     or demand, provisional or final) at any time held and other
     obligations at any time owing by such Lender or Affiliate to
     or for the credit or the account of the Borrower

                             Page 70

     against any of and all the obligations of the Borrower now
     or hereafter existing under this Agreement held by such
     Lender, irrespective of whether or not such Lender shall
     have made any demand under this Agreement and although such
     obligations may be unmatured.  The rights of each Lender
     under this Section 9.08 are in addition to other rights and
     remedies (including other rights of setoff) which such
     Lender may have.

          SECTION 9.09   GOVERNING LAW; JURISDICTION; CONSENT TO
     SERVICE OF PROCESS.

          (a)  This Agreement shall be construed in accordance
     with and governed by the law of the State of California.

          (b)  The Borrower hereby irrevocably and
     unconditionally submits, for itself and its property, to the
     nonexclusive jurisdiction of (i) the Supreme Court of the
     State of New York sitting in New York County, (ii) the
     United States District Court of the Southern District of New
     York, (iii) any United States federal court sitting in the
     Central District of California, or (iv) any other court of
     appropriate jurisdiction sitting in the County of Los
     Angeles, City of Los Angeles, and any appellate court from
     any thereof, in any action or proceeding arising out of or
     relating to this Agreement, or for recognition or
     enforcement of any judgment, and each of the parties hereto
     hereby irrevocably and unconditionally agrees that all
     claims in respect of any such action or proceeding may be
     heard and determined in such New York State or California
     Court or, to the extent permitted by law, in such Federal
     court.  Each of the parties hereto agrees that a final
     judgment in any such action or proceeding shall be
     conclusive and may be enforced in other jurisdictions by
     suit on the judgment or in any other manner provided by law.
     Nothing in this Agreement shall affect any right that the
     Administrative Agent or any Lender may otherwise have to
     bring any action or proceeding relating to this Agreement
     against the Borrower or its properties in the courts of any
     jurisdiction.

          (c)  The Borrower hereby irrevocably and
     unconditionally waives, to the fullest extent it may legally
     and effectively do so, any objection which it may now or
     hereafter have to the laying of venue of any suit, action or
     proceeding arising out of or relating to this Agreement in
     any court referred to in paragraph (b) of this Section.
     Each of the parties hereto hereby irrevocably waives, to the
     fullest extent permitted by law, the defense of an
     inconvenient forum to the maintenance of such action or
     proceeding in any such court.

          (d)  Each party to this Agreement irrevocably consents
     to service of process in the manner provided for notices in
     Section 9.01.  Nothing in this Agreement will affect the
     right of any party to this Agreement to serve process in any
     other manner permitted by law.

          SECTION 9.10   WAIVER OF JURY TRIAL.  EACH PARTY HERETO
     HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
     LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL
     PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
     TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY
     (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).  EACH
     PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
     ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR
     OTHERWISE, THAT SUCH OTHER PARTY WOULD

                             Page 71

     NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
     FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
     PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS
     AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
     CERTIFICATIONS IN THIS SECTION 9.10.

          SECTION 9.11   HEADINGS.  Article and Section headings
     and the Table of Contents used herein are for convenience of
     reference only, are not part of this Agreement and shall not
     affect the construction of, or be taken into consideration
     in interpreting, this Agreement.

          SECTION 9.12   CONFIDENTIALITY.  Each of the
     Administrative Agent and the Lenders agrees to maintain the
     confidentiality of the Information (as defined below),
     except that Information may be disclosed (a) to its and its
     Affiliates' directors, officers, employees and agents,
     including accountants, legal counsel and other advisors (it
     being understood that the Persons to whom such disclosure is
     made will be informed of the confidential nature of such
     Information and instructed to keep such Information
     confidential), (b) to the extent requested by any regulatory
     authority, (c) to the extent required by applicable laws or
     regulations or by any subpoena or similar legal process,
     (d) to any other party to this Agreement, (e) in connection
     with the exercise of any remedies hereunder or any suit,
     action or proceeding relating to this Agreement or the
     enforcement of rights hereunder, (f) subject to an agreement
     containing provisions substantially the same as those of
     this Section, to any assignee of or Participant in, or any
     prospective assignee of or Participant in, any of its rights
     or obligations under this Agreement, (g) with the consent of
     the Borrower or (h) to the extent such Information
     (i) becomes publicly available other than as a result of a
     breach of this Section or (ii) becomes available to the
     Administrative Agent or any Lender on a nonconfidential
     basis from a source other than the Borrower; provided,
     however, that such information, to the Administrative
     Agent's or Lender's knowledge, without any duty of inquiry,
     has not been provided in violation of any obligation owed by
     the source thereof to the Borrower.  For the purposes of
     this Section, "Information" means all information received
     from the Borrower relating to the Borrower or its business,
     other than any such information that is available to the
     Administrative Agent or any Lender on a nonconfidential
     basis prior to disclosure by the Borrower; provided that, in
     the case of information received from the Borrower after the
     date hereof, such information is clearly identified at the
     time of delivery as confidential.  Any Person required to
     maintain the confidentiality of Information as provided in
     this Section shall be considered to have complied with its
     obligation to do so if such Person has exercised the same
     degree of care to maintain the confidentiality of such
     Information as such Person would accord to its own
     confidential information.

          SECTION 9.13   FORECLOSURE OF CADIZ/SUN WORLD LEASE.
     If, in enforcing remedies hereunder, the Administrative
     Agent or a Lender forecloses on the property subject to that
     certain Cadiz/Sun World Lease, whether judicially or non-
     judicially, or obtains title to such property by deed in
     lieu of foreclosure, by purchase, or otherwise, then (a) so
     long as Sun World is not in default under the Cadiz/Sun
     World Lease: (i) Sun World and the Sun World Trustee under
     the Sun World Indenture shall be named or joined in any
     foreclosure, trustee's sale or other proceeding only if
     required by law; and (ii) the enforcement of any remedies
     hereunder that effects a transfer of title to the property
     subject to the Cadiz/Sun World Lease shall not terminate the
     Cadiz/Sun World Lease nor terminate nor affect in any manner
     the lien of the Sun World Trustee thereon, nor disturb Sun
     World in the possession and use of the property subject
     thereto.

                             Page 72

          SECTION 9.14   WAIVER OF ANTI-DEFICIENCY PROTECTION.
     Borrower hereby waives, as to this Agreement and any and all
     Loan Documents heretofore or hereafter executed in
     connection with the Transactions any defense, protection or
     right under:

          (a)  California Code of Civil Procedure ("CCP")
               Section 580(d) concerning the bar against
               rendition of a deficiency judgment after
               foreclosure under a power of sale;

          (b)  CCP Section 580(a) purporting to limit the amount
               of a deficiency judgment which may be obtained
               following exercise of a power of sale under a deed
               of trust; and

          (c)  CCP Section 726 concerning exhaustion of
               collateral, the form of foreclosure proceedings
               with respect to real property security located in
               California and otherwise limiting the amount of a
               deficiency judgment which may be recovered
               following completion of judicial foreclosure by
               reference to the "fair value" of the foreclosed
               collateral.

          SECTION 9.15   COSTS BORNE BY NON-PREVAILING PARTY.  In
     the event of any dispute with respect to this Agreement or
     any other Loan Document, the prevailing party shall be
     entitled to recover from the non-prevailing party all costs
     and attorneys' fees.

          SECTION 9.16   INTEREST RATE LIMITATION.
     Notwithstanding anything herein to the contrary, if at any
     time the interest rate applicable to any Loan, together with
     all fees, charges and other amounts which are treated as
     interest on such Loan under applicable law (collectively the
     "Charges"), shall exceed the maximum lawful rate (the
     "Maximum Rate") which may be contracted for, charged, taken,
     received or reserved by the Lender holding such Loan in
     accordance with applicable law, the rate of interest payable
     in respect of such Loan hereunder, together with all Charges
     payable in respect thereof, shall be limited to the Maximum
     Rate and, to the extent lawful, the interest and Charges
     that would have been payable in respect of such Loan but
     were not payable as a result of the operation of this
     Section shall be cumulated and the interest and Charges
     payable to such Lender in respect of other Loans or periods
     shall be increased (but not above the Maximum Rate therefor)
     until such cumulated amount, together with interest thereon
     at the Federal Funds Effective Rate to the date of
     repayment, shall have been received by such Lender.

          SECTION 9.17   STATUS OF ING.  ING hereby represents to
     the Borrower that it is not a Foreign Lender.

          SECTION 9.18   AMENDMENTS TO SUN WORLD INDENTURE.  An
     amendment or modification of the Sun World Indenture will be
     a Non-Adverse Amendment only upon the satisfaction of each
     and every one of the following conditions (such amendment or
     modification that satisfies all of the following
     requirements, a "Non-Adverse Amendment"):

          (a)  the Borrower, in accordance with Section 9.01 of
               this Credit Agreement, gives notice of, and
               delivers to, the Administrative Agent, a true and
               correct copy of such amendment or modification;

                             Page 73

          (b)  as determined solely in the Administrative Agent's
               reasonable judgment, the terms of the amendment or
               modification of the Sun World Indenture do not,
               and will not, adversely affect either (i) the
               ability of the Borrower or the other Obligors to
               satisfy their respective obligations under this
               Credit Agreement and/or the other Loan Documents
               or (ii) the rights of the Administrative Agent or
               Lenders hereunder or under the other Loan
               Documents; and

          (c)  such amendment or modification of the Sun World
               Indenture is validly effected and becomes
               effective pursuant to the terms of the Sun World
               Indenture.

     The failure of the Borrower to notify, and deliver
to, the Administrative Agent any amendment or
modification of the Sun World Indenture will
preclude such amendment or modification from being
a Non-Adverse Amendment until each of the
requirements set forth in the previous sentence
are satisfied.  If, however,

          (x)  the Borrower gives notice of, and delivers to, the
               Administrative Agent, a true and correct copy of
               an amendment or modification to the Sun World
               Indenture; and

          (y)  the Administrative Agent does not notify the
               Borrower within five (5) Business Days after the
               Administrative Agent's receipt of the documents
               set forth in subclause (x) above that the
               amendment or modification (in the Administrative
               Agent's reasonable judgment) has or will have an
               adverse effect upon (i) the ability of the
               Borrower or the other Obligors to satisfy their
               respective obligations under this Credit Agreement
               and/or the other Loan Documents or (ii) the rights
               of the Administrative Agent or Lenders hereunder
               or under the other Loan Documents;

then such amendment or modification of the Sun World Indenture
shall be deemed to be a Non-Adverse Amendment for all purposes
hereunder.  Notwithstanding the foregoing, and without requiring
any action by the Borrower or the Administrative Agent, any
amendments or modifications of the Sun World Indenture that may
be validly effected pursuant to the terms of the Sun World
Indenture without any action or authorization by the holders of
the Sun World Notes (or any portion of such holders) shall also
be deemed to be a Non-Adverse Amendment provided that such
amendment or modification does not, and will not, in the
Administrative Agent's reasonable judgment, adversely affect
(i) Borrower's ability to satisfy the Borrower's obligations
hereunder and under the other Loan Documents or (ii) the rights
of the Administrative Agent or Lenders hereunder or under the
other Loan Documents.

          SECTION 9.19   GENERAL RELEASE.  In consideration of
the amendments, waivers, consents, and the other terms and
provisions of this Agreement and the other Loan Documents,
Borrower, on behalf of itself, its agents, successors, assigns,
subsidiaries, partners and Affiliates hereby fully release and
forever discharge the Administrative Agent, the Lenders and each
of their agents, consultants, heirs, successors, assigns,
Affiliates, directors, officers, employees, shareholders,
executives, servants, attorneys, accountants, representatives and
other

                             Page 74

related persons (collectively, the "Released Parties") from any
and all rights, claims, demands, actions, causes of action,
costs, losses, suits, liens, debts, damages, judgments,
executions and demands of every nature, kind and description
whatsoever, whether now known or unknown, either at law, in
equity or otherwise, which Borrower or any of its agents,
successors, assigns, subsidiaries, partners and/or Affiliates
ever had or may have against the Administrative Agent, the
Lenders or the other Released Parties, including, without
limitation, all claims arising under or in connection with the
Loan Documents, and/or in connection with the dealings between
the parties up to and including the closing of the transactions
contemplated in this Agreement and all claims which have arisen
or may arise in any other way whatsoever; provided that nothing
herein shall be deemed to release the Administrative Agent, the
Lenders or any other Released Party from any liability or
obligations arising in connection with facts or circumstances
which occur or arise for the first time after the Effective Date.

It is further understood and agreed that the foregoing general
release extends to all claims of every kind and nature
whatsoever, known, suspected or unsuspected, liquidated or
contingent, foreseen or unforeseen, and Borrower and its agents,
successors, assigns, subsidiaries, partners and Affiliates hereby
waive all rights under Section 1542 of the California Civil Code.
Section 1542 of the California Civil Code provides as follows:

"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR
DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF
EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY
AFFECTED HIS SETTLEMENT WITH DEBTOR."

                             Page 75


          IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized
officers as of the day and year first above written.

                              CADIZ INC.,
                              the Borrower
                              By: /s/ Stanley E. Speer
                              -------------------------
                                    Stanley E. Speer
                                    Chief Financial Officer

                              ING BARING (U.S.) CAPITAL LLC,
                              Individually and as
                              Administrative Agent

                              By:  /s/ William Soto
                                   ------------------------
                                   Name:  William Soto
                                   Title:  Vice PResident



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.11
<SEQUENCE>6
<FILENAME>exhibit10-11.txt
<DESCRIPTION>DEFINITIVE ECONOMIC TERMS & RESPONSIBILITIES
<TEXT>
                                                   EXHIBIT 10.11
                                                   -------------

  THE CADIZ GROUNDWATER STORAGE AND DRY-YEAR SUPPLY PROGRAM
   DEFINITIVE ECONOMIC TERMS AND RESPONSIBILITIES BETWEEN
METROPOLITAN WATER DISTRICT OF SOUTHERN CALIFORNIA AND CADIZ INC.

                        March 6, 2001

1.   General Provisions

     1.1  The Cadiz Groundwater Storage and Dry-Year Supply
          Program (Program) shall have a life of 50 years.

     1.2  Except where otherwise noted, Cadiz Inc. or its
          successors (Cadiz) and The Metropolitan Water
          District of Southern California (Metropolitan) may
          not contract with any third party for the use of
          the Capital Facilities or the Cadiz or Fenner
          groundwater basins for storage or exportation of
          water during the life of the Program.

     1.3  Except as otherwise provided, Metropolitan has
          exclusive use of the Cadiz Program Capital
          Facilities.

     1.4  Year one of the program shall begin the first day
          after completion of facilities necessary for the
          storage of Colorado River water in the Cadiz Basin
          and ending on December 31st of that year.  Year
          two and all-subsequent years of the program shall
          begin on January 1st.  Year fifty of the program
          shall extend beyond December 31st up to the
          fiftieth anniversary of the first day after
          completion of facilities necessary for the storage
          of Colorado River water in the Cadiz-Fenner
          Groundwater Basin (Basin).

     1.5  Except as otherwise provided, all payments shall
          be made in quarterly installments and be due on
          the first day of each calendar year quarter
          (January 2nd, April 1st, July 1st, and October
          1st).  Except that the first payment, pursuant to
          Section 4.1, shall be due no earlier than 45 days
          from completion of facilities necessary for the
          storage of Colorado River water in the Cadiz
          Basin.

2.   Capital Facilities

     2.1  Metropolitan and Cadiz shall share equally the
          actual cost of Capital Facilities (mutually agreed
          estimates, at the time of execution of the
          contract, not to exceed $150,000,000) including
          spreading and recovery facilities and a conveyance
          pipeline including pump

                                  Page 1

	    facilities (all having a capacity to transport
          150,000 AF per year to and from the Colorado
          River Aqueduct and the Basin)and including the
          costs of design, construction and Program
          implementation cost of the Capital
          Facilities (including estimated mitigation capital
          costs, provided that these costs do not cause the
          total capital cost to exceed $150,000,000).  If
          one party desires to modify the Capital
          Facilities, and that modification increases costs,
          the requesting party shall bear the increased
          costs. If, when Metropolitan's Board authorizes
          execution of the definitive contract, estimated
          Capital Facilities costs listed above exceed
          $150,000,000, because the environmental documents
          and permits require mitigation measures that are
          not anticipated as of the date of issuance of the
          Supplement to the Draft EIR/EIS, then
          Metropolitan's Board shall consider the impact of
          these costs in determining whether to proceed with
          the Program. Cadiz may assume such increased costs
          or the parties shall meet to renegotiate the
          agreement.  If, after execution of the contract,
          actual Capital Facilities costs listed above
          exceed estimates due to construction costs
          overruns then these costs shall be shared equally.

     2.2  Metropolitan shall finance its portion of the
          Capital Facilities, as Metropolitan deems
          appropriate.

     2.3  Any operation of the Capital Facilities after the
          end of the 50 year Program term shall be
          negotiated at a future date and shall give fair
          compensation to Cadiz for any indigenous water or
          storage beyond the terms of this agreement or to
          Metropolitan for the use of the Capital Facilities
          by Cadiz.

     2.4  Cadiz shall pay for its portion of the Capital
          Facilities.  Prior to any payments by Metropolitan
          to Cadiz, Metropolitan shall have the right to
          review and reasonably approve the terms of Cadiz'
          financing for Cadiz' one-half share of the costs
          of the Capital Facilities.  Any security interest
          in the Capital Facilities created by Cadiz
          financing shall not encumber Metropolitan's
          ownership interest in, or interfere with
          Metropolitan's right to operate, the Capital
          Facilities.

                                  Page 2

     2.5  The parties shall jointly own the Capital
          Facilities. Except as otherwise provided, the
          parties shall equally share the cost of replacing
          any portion of the Capital Facilities that
          requires replacement during the term of the
          contract unless the replacement is required due to
          normal wear and tear or as a result of improper
          maintenance, in which case these costs will be
          paid by Metropolitan.  Metropolitan shall use due
          care in providing necessary maintenance of the
          Capital Facilities pursuant to Section 3.1.  Each
          party shall insure its interest in the Capital
          Facilities with reasonably acceptable commercial
          insurance or, in the case of Metropolitan, self-
          insurance.

3.   O&M and Energy Costs

     3.1  Except as otherwise provided, Metropolitan shall
          be responsible for any and all O&M and energy
          costs during the term of the contract to operate
          the Capital Facilities.  Metropolitan shall use
          ordinary care in the operation and maintenance of
          the Capital Facilities.  Cadiz shall be
          responsible for any and all costs, including but
          not limited to O&M and energy, of the Groundwater
          Monitoring and Management Plan (GWMMP) of the
          Program beyond the capital costs shared pursuant
          to Section 2.1.

4.   Transfer Component Fees and Operations

     4.1  In years 1-5 of the Program (a total of 20
          calendar quarters), Metropolitan shall purchase a
          minimum of 30,000 acre-feet per year (7,500 AF per
          calendar quarter) of indigenous water for a
          minimum total of 150,000 acre-feet to be banked or
          withdrawn from the Cadiz basin at Metropolitan's
          option. This purchased indigenous water shall be
          guaranteed to Metropolitan in accordance with the
          provisions of Sections 4.8, 8.6, and 8.14,
          including through reduction in Cadiz' agricultural
          water production.  In years 6 through 25 of the
          Program (a total of 80 calendar quarters),
          Metropolitan shall purchase the balance of at
          least 750,000 AF of indigenous water not purchased
          by Metropolitan in years 1-5 of the Program,
          subject to adjustments as described in Sections
          4.6 and 4.8 (all water purchased by Metropolitan
          pursuant to this Section 4.1 shall hereafter be
          referred to as Firm Transfer Water).  Subject to
          Sections 4.6 and 4.8, Metropolitan shall build up
          a "water bank" by purchasing up to 30,000 AF per
          year (7,500 AF per quarter) of Firm

                                  Page 3

          Transfer Water.  Metropolitan shall pay Cadiz a
          "Transfer Fee" for the purchase of the Firm Transfer
          Water.

     4.2  The Transfer Fee shall initially be $230 per AF
          ("Base Rate") in year 1 of the Program and be
          redetermined to an "Adjusted Rate", if applicable,
          in years 2-25 of the Program as follows:

          4.2.1     Metropolitan and Cadiz shall determine a
     Fair Market Value through the process described in
     Attachment A, provided that the increase or decrease in
     the Fair Market Value shall not exceed 30% of the Fair
     Market Value in the immediately prior redetermination
     or 30% of the Base Rate in the initial redetermination;

          4.2.2     The Adjusted Rate shall equal the Base
     Rate plus one-half of the difference between the Fair
     Market Value and the Base Rate.  Example:  If the Fair
     Market Value is $350 per acre-foot, then the Transfer
     Fee would be $230 + .5* ($350 - $230) = $290 per acre-
     foot.  If the Fair Market Value is $130 per acre-foot,
     then the Transfer Fee would be $230 + .5* ($130 - $230)
     = $180 per acre-foot.

     4.3  The applicable Base Rate or Adjusted Rate shall be
          paid upon the earlier of (a) delivery of the Firm
          Transfer Water to the Colorado River Aqueduct or
          (b) in accordance with the payment schedule set
          forth in Section 4.1 in the year of payment,
          whichever is earlier. Any indigenous water for
          which Metropolitan has made payment but has not
          taken delivery shall become part of a Metropolitan
          "water bank" in the Basin and may be withdrawn by
          Metropolitan at any time during the Program.  Firm
          Transfer Water deliveries in excess of the above
          payment schedule shall be paid at the Base Rate or
          Adjusted Rate in effect in the year of delivery.
          Firm Transfer Water delivered and purchased ahead
          of the above payment schedule will directly offset
          subsequent scheduled purchases acre-foot for acre-
          foot with 50% applied to the next scheduled
          payment and 50% applied in inverse order from the
          last scheduled payment.

     4.4  Any payment for indigenous water constitutes the
          complete payment for such water and establishes a
          forward contract obligating Cadiz to deliver
          indigenous water on demand to

                                  Page 4

          the Capital Facilities, subject to Section 4.8.
          Deliveries of water shall be metered at the
          Colorado River Aqueduct.

     4.5  In each Program Year 1 through 25, Cadiz shall
          have the right to sell to third parties indigenous
          water (Third Party Indigenous Water) in an amount
          up to 30,000 AF per year (Potential Sale Option
          Amount) for sale and use in the Metropolitan
          service area, subject to Sections 4.6.1 and 8.11.
          Metropolitan shall deliver such water either
          through unused capacity in the Metropolitan
          conveyance system or through an Exchange (as
          described in Section 8.10) choosing the method of
          delivery at its sole discretion.  Cadiz shall pay
          a pro-rata share of direct O&M (O&M without
          overhead or G&A expense) costs of the Capital
          Facilities in the year of delivery to the Cadiz
          customer based on Cadiz' pro-rata use of the
          Capital Facilities to transfer indigenous water to
          a third party or, in the case of an Exchange, the
          amount that would have been paid for a third party
          transfer.

          4.5.1     In Program Years 1 through 25, Cadiz
     shall have the option (Put Option) to require
     Metropolitan to purchase in each year an amount of
     indigenous water (Put Transfer Water) that equals the
     difference between the Potential Sale Option Amount and
     the amount of Third Party Indigenous Water for such
     Program Year.  If required under this section,
     Metropolitan shall buy Put Transfer Water at a fixed
     rate of $230.00 per acre-foot.  Cadiz must inform
     Metropolitan in writing of its exercise of the Put
     Option no later than March 1st of each year.  In the
     event that Cadiz exercises the Put Option after January
     1st, Metropolitan shall not be required to make payment
     for the portion of Put Transfer Water delivered during
     the first quarter of that year until April 1st

          4.5.2     The annual Put Option shall expire if
     not exercised within the time allowed in this Section,
     and the Potential Sale Option Amount of water for sale
     shall not accumulate and carry-over from year to year.

     4.6  In years 1-5 of the Program, Metropolitan and
          Cadiz shall operate the Program in a manner that
          will assist in the continuing assessment of
          recharge, safe yield, total volume of indigenous
          water available for transfer during the life of
          the Program, and the best mode of operations
          consistent with the Groundwater Monitoring and
          Management Plan.
                                  Page 5

          Prior to signing of an agreement, Cadiz and Metropolitan
          shall agree on this 5-year operating plan within the
          parameters of the GWMMP.  During this five-year period,
          Cadiz shall not pump water from nor add water to the
          basin except in a manner consistent with its
          current agricultural activities.  Based on the
          information gathered pursuant to the GWMMP and
          through the initial five years of operations,
          Cadiz and Metropolitan shall jointly determine the
          total expected yield of the Cadiz indigenous water
          over the life of the Program by consulting the
          GWMMP and ensuring compliance with applicable
          permit requirements. If the parties cannot agree
          upon the expected yield, the dispute will be
          referred to binding arbitration. Expected yield of
          indigenous water from the Program shall be
          reassessed on an ongoing basis every subsequent
          two years for the life of the Program.  The
          expected yield of the Program shall be determined
          after excluding (a) Cadiz' projected use of
          indigenous water, unless Cadiz has agreed on terms
          reasonably acceptable to Metropolitan not to use
          such indigenous water, and (b) the amount of
          indigenous water that any third party has the
          legal right to use and is reasonably expected to
          use.

          4.6.1     If an adjustment is made under Section
     4.6 decreasing the expected yield below 1,500,000 AF,
     then the Potential Sale Option Amount shall equal
     30,000 AF per year up to the positive difference, if
     any, of the expected yield less 750,000 AF.  If an
     adjustment is made under Section 4.6 decreasing the
     expected yield below 750,000 AF, Metropolitan shall
     continue to make scheduled water bank program purchases
     of Firm Transfer Water spread equally over the
     remaining years beginning with the Program year
     following the yield adjustment and continuing through
     year 25 of the Program.

     4.7  Upon 12 months notice of Cadiz indigenous water
          supplies above 1.70 MAF based on the process in
          Section 4.6, Metropolitan has the option to
          purchase one-half of such supply of water in
          excess of 1.70 MAF starting in Program Year 26 at
          a rate of 30,000 AF per year at the Base Rate or
          Adjusted Rate in effect in the year of payment.
          If Metropolitan exercises such option, then Cadiz
          may market to third parties within Metropolitan's
          service area one-half of this supply in excess of
          1.70 MAF at a rate of
                                  Page 6

          30,000 AF per year starting in Year 26 pursuant to
          Section 8.12.  If Metropolitan does not exercise this
          option, then Cadiz may market to third parties within
          Metropolitan's service area the entire supply in
          excess of 1.70 MAF at a rate of 60,000 AF per year
          starting in Year 26 pursuant to Section 8.12.
          Cadiz shall be responsible for obtaining all
          required approvals for the transfer of such water
          to third parties under this Section 4.7.
          Metropolitan shall deliver such excess water
          through the Capital Facilities and Metropolitan
          conveyance system only if there is unused
          capacity.

     4.8  Payments of Transfer Fees shall be suspended if
          the expected Program yield agreed upon between
          Metropolitan and Cadiz or determined by
          arbitration (pursuant to Section 4.6), is the same
          or less than the amount of indigenous water for
          which Metropolitan has paid Cadiz. Cadiz shall be
          obligated to repay Metropolitan for the
          difference, up to a maximum of 300,000 AF which
          shall be secured by Cadiz' obligations pursuant to
          Sections 8.6 and 8.14.  This repayment obligation
          shall first offset any remaining payment
          obligations for Puts and Takes, pursuant to
          Section 5.3 with the remainder repaid to
          Metropolitan dollar for dollar, within twelve
          months of notice by Metropolitan.  In the event
          that the amount of water that Metropolitan is
          entitled to be repaid for, or otherwise
          compensated for, exceeds Metropolitan's unpaid
          obligations for Puts and Takes and repayment for
          300,000 AF, Metropolitan shall receive credits for
          additional storage of water pursuant to Section
          5.5 at the storage rates in effect at the time the
          payments of the Transfer Fees were made.

5.   Storage Component Fees and Operations


     5.1  Metropolitan shall pay Cadiz $90 per AF, adjusted
          by CPI commencing upon Metropolitan's Board of
          Directors approval of contract "as to form", of
          CRA water Metropolitan cycles through the Capital
          Facilities and storage.  This amount consists of a
          rate of $50, adjusted by CPI commencing upon
          Metropolitan's Board of Directors approval of
          contract "as to form", to Put such water ("Put
          Fee") and $40, adjusted by CPI commencing upon
          Metropolitan's Board of Directors approval of
          contract "as to form", to Take such water ("Take
          Fee").
                                  Page 7

     5.2  At contract execution and subject to provisions
          under Sections 2.4, 8.1 through 8.5 and 8.15,
          Metropolitan shall pay at the rate set forth in
          Section 5.1 for the operation of 600,000 AF of Put
          and Take activity entitling Metropolitan to
          600,000 AF of movement in and 600,000 AF of
          movement out of the storage program.

     5.3  In addition to amounts set forth in Section 5.2,
          Metropolitan's minimum commitment for storage
          shall include an additional 300,000 AF of Put and
          Take activity for which Metropolitan must pay
          Cadiz at the earlier of (a) delivery or
          withdrawal; or (b) in accordance with the
          following schedule:  In each of Program Years 5
          through 14, Metropolitan shall pay for the
          operation of 30,000 AF of Put and Take activity
          entitling Metropolitan to 30,000 AF of movement in
          and 30,000 AF of movement out of the storage
          program for each year of payment.

     5.4  Metropolitan's minimum commitment for storage is
          900,000 AF of Put and Take activity, provided that
          Metropolitan's storage obligations under the
          Program shall be in accordance with the GWMMP.

     5.5  Additional operations of the Program above amounts
          set forth in Sections 5.2 and 5.3 shall be paid at
          rates listed in Section 5.1.

     5.6  Program storage capacity shall be a minimum of
          1,000,000 AF at any one time.

     5.7  Evaporative and conveyance losses of stored water
          shall initially be set to 10% and shall be reset
          to actual losses through a biannual
          redetermination in accordance with the GWMMP.

6.   Water Quality Payment

     6.1  The Principles of Agreement anticipated an avoided
          cost payment to Cadiz for any benefit in reducing
          salinity in the Metropolitan service area.  In
          consideration of the other terms and conditions
          set forth herein, no water quality payment shall
          be made. Currently, all constituent levels of
          indigenous water in the Program area are below
          state and federal Maximum Contaminant Levels
          ("MCLs"). Except as provided below, Cadiz will pay
          the cost of treating all water introduced into the
          Metropolitan delivery system if necessary so that
          it meets all federal and state standards
          applicable to the Colorado River Aqueduct as

                                  Page 8

          established by the California Department of Health
          Services or other permitting authority.  Due to
          consideration of water quality benefits and
          increases in supply reliability and subject to
          approval through a public process for the
          introduction of water into the Metropolitan
          System, indigenous water introduced by Cadiz into
          the Metropolitan delivery system shall not be
          required to meet ambient conditions. With respect
          to the Cadiz Program, this public process shall
          take the form and run concurrently with the public
          review by Metropolitan's Board of the Cadiz
          Program.  Action by the Metropolitan Board
          approving the water quality provision of the Cadiz
          Program shall be determinative and shall not be
          subject to subsequent Board action establishing
          any general policies.  Further, Metropolitan shall
          not impose any future ambient quality standards if
          Cadiz continues to meet all federal and state
          water quality standards at Cadiz' expense.  Cadiz
          may elect to have Metropolitan provide any
          treatment required to meet federal and state water
          quality standards and requirements provided that
          Cadiz shall pay all costs incurred by Metropolitan
          for providing such treatment.  Metropolitan will
          ensure that water it delivers for storage in the
          Cadiz/Fenner groundwater basin shall, at a
          minimum, meet all federal and state standards
          applicable at the time of delivery to the Colorado
          River Aqueduct as established by the California
          Department of Health Services or other permitting
          authority.  If these federal or state standards
          change as to any constituent in the water
          Metropolitan delivered for storage so that the
          stored water would not have met the changed
          standards when it was delivered for storage, then
          Metropolitan and Cadiz shall share the cost of
          treatment for water withdrawn by Metropolitan from
          the basin for that particular constituent based on
          the proportion of the levels of the regulated
          constituent above the changed regulatory standard
          in Metropolitan's storage water to the levels of
          the regulated constituent above the changed
          regulatory standard in the indigenous groundwater
          in the basin, if any.

7.   Groundwater Management Plan

     7.1  All withdrawals of water from the Basin shall be
     made in accordance with the GWMMP.

                                  Page 9

8.   Other Provisions

     8.1  The legal structure of the agreement between Cadiz
          and Metropolitan shall have provisions to protect
          Metropolitan's interest in the program.  These
          provisions shall include appropriate security
          interests described in the attachment hereto
          (Attachment B).  Cadiz may propose alternative
          security interests or agreement structures that
          achieve the same results as those described in the
          attachment.  If Metropolitan determines that the
          alternatives proposed by Cadiz do not provide the
          same level of security as those described in the
          attachment, Metropolitan, in its sole reasonable
          discretion, may reject the proposed alternatives
          and require the security interests in the form
          described in the attachment as a condition to
          proceeding with the program.

     8.2  Any costs imposed by third parties for the use of
          the Cadiz or Fenner groundwater basins or
          exportation of transfer water shall be borne
          exclusively by Cadiz.

     8.3  Metropolitan shall have no obligation to make any
          payments to Cadiz, acquire any project lands or
          rights-of-way or pay for or perform any
          construction work on the Capital Facilities until
          the California Department of Health Services
          approves the introduction of Program water into
          the Colorado River Aqueduct.

     8.4  Metropolitan shall have no obligation to make any
          payments to Cadiz, pay for or perform any
          construction work on the Capital Facilities until
          all rights-of-way, use permits, or easements
          necessary for the construction and maintenance of
          the Capital Facilities have been obtained from the
          Bureau of Land Management.

     8.5  Metropolitan shall not execute the contract for
          the Program prior to thirty (30) days after the
          filing of a Notice of Determination by
          Metropolitan as required by the California
          Environmental Quality Act or the issuance of a
          Record of Decision by the Bureau of Land
          Management as required by the National
          Environmental Policy Act, whichever is later.  In
          the event any litigation is filed challenging any
          aspect of the Program's environmental compliance
          or the authority or right of any party to perform
          its obligations under the contract, then
          Metropolitan and Cadiz shall jointly defend such
          litigation.  Counsel shall be selected by mutual
          agreement, and all costs of litigation shall be
          shared equally.

                                  Page 10

          8.5.1     If litigation challenging any aspect of
     the Program's environmental compliance or the authority
     or right of a party to perform its obligations under
     the contract has been commenced, and the issuance of
     any permits required for the Program or the performance
     of any obligation required under the contract is
     enjoined or withheld by a court or agency with
     authority to do so, the performance of all other
     obligations under the contract shall be suspended until
     such permits are issued or such injunction is
     permanently lifted.  If such suspension is not lifted
     within five years the parties' shall meet to negotiate
     in good faith any future obligation under the contract.

          8.5.2     If litigation challenging any aspect of
     the Program's environmental compliance or the authority
     or right of any party to perform its obligations under
     the contract has commenced, but the issuance of any
     permits required for the Program or the performance of
     any obligations required under the contract has not
     been enjoined or withheld by a court or agency with
     authority to do so, the parties shall confer to
     determine reasonably and in good faith whether there is
     merit to the legal challenges which requires further
     environmental review or other legal authority to
     proceed with the Program.  Either party may elect, if
     it is reasonable to do so under all the circumstances,
     to suspend performance of the contract pending
     resolution of such legal challenge.  If such suspension
     exceeds five years from the election to suspend
     performance, the parties' shall meet to negotiate in
     good faith any future obligations under the contract.

          8.5.3     If, after the parties have commenced
     performance under the contract, the Program or any
     permit required for the Program is permanently
     suspended or terminated by the action of a court or
     agency with authority to do so, then Metropolitan shall
     not be required to proceed with further obligations
     without the prior approval of its Board of Directors.
     If the litigation or other legal challenge results in a
     final determination that precludes the operation of the
     Program, then:

               8.5.3.1   Cadiz shall reimburse Metropolitan
          the amount paid by Metropolitan for the right to
          transfer indigenous water that Metropolitan has
          paid for or banked and cannot transfer up to
          300,000 AF of water;

                                  Page 11

               8.5.3.2   Cadiz shall reimburse Metropolitan
          the amount paid by Metropolitan for the right to
          store water that Metropolitan cannot store or that
          Metropolitan has stored but cannot retrieve from
          the basin; and

               8.5.3.3   Such reimbursement shall be paid by
          Cadiz to Metropolitan within twelve (12) months
          following the final determination.

     8.6  If, for any reason, Cadiz is unable or unwilling
          to perform under the term of the agreement then
          Metropolitan shall have the right to operate the
          Program at its discretion without further payment
          to Cadiz.  This right shall include the right to
          enter upon Cadiz land for operation and
          maintenance of Capital Facilities.  If the lack of
          performance includes unrealizable water supplies
          or moneys due to Metropolitan, then Metropolitan
          shall have the right to take all or partial
          possession and ownership of Cadiz lands in the
          Cadiz and Fenner Valleys.  Offsets as expressed in
          Section 4.8 shall also apply.  Cadiz shall provide
          Metropolitan with a security interest in the Cadiz
          share of the Capital Facilities and its land,
          improvements and water rights related to the
          groundwater basin in a form reasonably acceptable
          to Metropolitan as a condition to Metropolitan's
          performance of its obligations; provided, however,
          that upon termination of the Program and
          satisfaction of any surviving Cadiz obligations
          such security interest shall be terminated.  The
          security interest in the Cadiz share of the
          Capital Facilities shall be subordinate only to
          direct construction liens on the Capital
          Facilities and the security interest in the Cadiz
          lands, improvements and water rights shall be
          subordinate only to liens approved in accordance
          with Section 8.8 and in an amount that shall not
          exceed $25,500,000 during the term of the Program.

     8.7  If Metropolitan executes the contract for the
     Program:

          8.7.1     Cadiz shall not increase its use of
     Colorado River water on lands that it owns or controls
     within the Palo Verde Mesa or Valley without the
     consent of Metropolitan.

          8.7.2     Cadiz shall take no action, and shall
     use its reasonable good faith efforts to cause its
     subsidiaries, affiliates, successors, directors,
     officers, employees, shareholders and

                                  Page 12

     agents to refrain from taking any action, to interfere
     with any cooperative water supply program between Palo
     Verde Irrigation District and Metropolitan.

          8.7.3     Cadiz shall take no action, and shall
     use its reasonable good faith efforts to cause its
     subsidiaries, affiliates, successors, directors,
     officers, employees, shareholders and agents to refrain
     from taking any action, to reduce or cause the
     reduction of Colorado River water available to
     Metropolitan or to increase the cost of Colorado River
     water to Metropolitan with respect to:  (1) Priority 1,
     2 and 3(b) (Palo Verde Mesa lands) lands; (2) Present
     Perfected Rights lands (miscellaneous rights holders or
     tribal lands); and (3) Surplus Criteria.

     8.8  Cadiz shall not deed or encumber ownership of its
          properties in the Cadiz or Fenner Valleys, during
          the life of the Program, without the written
          permission of Metropolitan except as allowed under
          Section 8.6.  Such permission shall not be
          unreasonably withheld.

     8.9  Section 4.5 permits Metropolitan to perform an
          exchange in response to a Cadiz request for
          delivery of indigenous water to a third party.
          Metropolitan may instead deliver water other than
          indigenous water to such third party ("Exchange").
          In such an event, an amount of indigenous water
          equal to the amount of water subject to the
          Exchange ("Exchange Water") shall be banked in the
          Cadiz basin for later extraction by Metropolitan
          without additional Transfer or Storage Fees.
          Cadiz shall be responsible to deliver Metropolitan
          banked Exchange Water upon demand.  If Exchange
          Water is not available and it is concluded through
          subsequent determinations of the GWMMP that the
          Exchange Water was not available for transfer,
          Cadiz shall have the obligation to repay
          Metropolitan for such Exchange Water.
          Notwithstanding the above, if the Exchange Water
          is not available due to a subsequent event, not
          the result of Cadiz' intentional or negligent act
          or omission, but in accordance with the GWMMP was
          available for transfer at the time of Exchange,
          Cadiz shall not be obligated to repay Metropolitan
          for the Exchange Water.  Cadiz shall provide
          Metropolitan with a property interest in a form
          reasonably acceptable to Metropolitan for the
          purpose of recovering any exchange water.

                                  Page 13

     8.10 The rate charged to Cadiz for the use of the
          Metropolitan conveyance system for the delivery at
          Cadiz' request of indigenous water pursuant to
          Section 4.5, either through conveyance or
          Exchange, shall be Metropolitan's posted wheeling
          rate for "as available" capacity.  In addition,
          Cadiz shall pay power costs as charged to member
          agencies for wheeling or to third parties in long-
          term (greater than 12 months) wheeling agreements,
          and any water treatment costs for delivery of
          treated water (which shall be provided, if
          requested, at the water treatment rates as
          uniformly charged to all purchasers of water
          treated by Metropolitan's same treatment plant).
          Cadiz shall also pay any water stewardship fees
          that are uniformly charged on water delivered
          through the Metropolitan conveyance system by
          Metropolitan to all member agencies and third
          party wheelers, excluding agreements negotiated
          prior to the approval by Metropolitan's Board of
          this Proposal "as to form."

     8.11 The rate charged to Cadiz for the use of the
          Metropolitan conveyance system for the delivery at
          Cadiz' request of indigenous water pursuant to
          Section 4.7, shall be Metropolitan's best
          available wheeling rate offered to third parties
          under equivalent terms and conditions.  In
          addition, Cadiz shall pay power costs as charged
          to member agencies for wheeling or to third
          parties in long-term (greater than 12 months)
          wheeling agreements, and any water treatment costs
          for delivery of treated water (which shall be
          provided, if requested, at the water treatment
          rates as uniformly charged to purchasers of water
          treated by Metropolitan's same treatment plant).
          Cadiz shall also pay any water stewardship fees
          that are uniformly charged on water delivered
          through the Metropolitan conveyance system by
          Metropolitan to all member agencies and third
          party wheelers excluding agreements negotiated
          prior to the approval by Metropolitan's Board of
          this Proposal "as to form."

     8.12 Metropolitan shall take no action, and shall use
          its reasonable good faith efforts to cause its
          directors, officers, employees, agents and member
          agencies to refrain from taking action, to
          interfere with Cadiz' ability to market and
          deliver the newly developed water supply as
          described in Sections 4.5 and 4.7; provided that
          the discretion and authority of

                                  Page 14

          Metropolitan, its directors, officers, and employees
          to perform their duties and obligations authorized
          by law shall not be impaired in any way.  Actions taken
          by Metropolitan within its authority, and actions
          taken by its directors, officers, and employees
          within the scope of their office or employment,
          shall not be considered as actions which interfere
          with Cadiz' ability to market and deliver the
          newly developed water supply.  However,
          interference in breach of this provision shall
          include actions taken by Metropolitan's directors,
          officers, employees and agents acting
          independently of the policy or direction of
          Metropolitan's Board to prevent a purchaser from
          entering into a transaction to purchase Cadiz
          indigenous water.

     8.13 At Metropolitan's option, and in accordance with
          the expected Program yield as determined under
          Section 4.6 and security interest under Section
          4.8, Cadiz shall manage agricultural production in
          the Cadiz/Fenner Valleys to ensure the
          availability of at least the first 300,000 AF of
          transfer water (including by adjusting the amount
          of agricultural production).  Cadiz shall not
          increase its use of water for agricultural
          production or other purposes in the Cadiz or
          Fenner Valleys without the consent of
          Metropolitan.

     8.14 Cadiz shall grant to Metropolitan rights of
          easement necessary for the construction and
          maintenance of the Capital Facilities.

     8.15 A final contract for the Project would be subject
          to approval of Metropolitan's Board of Directors
          and shall be in conformance with the terms and
          conditions of any mitigation plan adopted by
          Metropolitan's Board pursuant to CEQA.

                                  Page 15

                                                ATTACHMENT A

           TRANSFER FEE REDETERMINATION PROCEDURE

1.   GENERAL

  To ensure that payments for indigenous water made under
  the Cadiz Groundwater Storage and Dry-Year Supply Program
  ("Program") represent the fair market value for
  transfers, a Transfer Fee Redetermination provision is
  included as part of this Agreement.  The purpose of this
  provision is to adjust on a periodic basis the Transfer
  Fee for Cadiz indigenous groundwater to ensure
  consistency with prevailing market values for water
  transfers with reasonably equivalent long term supply
  reliability benefits to Metropolitan's Service Area.

2.   TIMING AND FREQUENCY

  In any year 2 through 25 of the Program in which
  Metropolitan purchases indigenous groundwater from Cadiz,
  either party may request a Transfer Fee Redetermination.
  Such request shall be made in writing ("Transfer Fee
  Redetermination Notice").  Within ninety (90) days
  following such request, the parties shall exchange any
  and all data relied upon by each party to calculate or
  support the fair market value of transfers.  Within
  thirty (30) days following the exchange of data, the
  parties shall negotiate in good faith to establish the
  fair market value of Cadiz indigenous groundwater
  purchased under this Program ("FMV").  The increase or
  decrease in the FMV shall not exceed thirty-percent (30%)
  from the FMV in the immediately prior redetermination, or
  from the Base Rate in the initial redetermination.  The
  Adjusted Rate, calculated in accordance with Section
  4.2.2, shall become effective as of January 1 of the year
  in which the applicable Transfer Fee Redetermination
  Notice is delivered.

  Both parties agree the following guidelines should be
  considered (including by any arbitration panel) in
  establishing the FMV.

3.   ELIGIBILITY CRITERIA

   (a)  INFORMATION AVAILABILITY: The data exchanged by each
        party must include a complete copy of any underlying
        contract, financial information, and similar
        documents reflecting the terms, conditions and
        costs, of water supplies upon which each party
        relied as a basis for the Transfer Fee
        Redetermination.

   (b)  VOLUNTARY NEGOTIATED TRANSFER: Each transfer must be
        the result of a voluntary process between willing
        participants establishing the terms, conditions and
        costs of such transfer.

   (c)  AG-TO-AG WATER TRANSFERS: Transactions between
        agricultural water users are eligible when either of
        the following two conditions are met: 1) the ag-to-
        ag transfer is the result of a general offer to sell
        and the seller's water district has made general
        offers to sell that resulted in a transaction
        between the seller and a municipal and industrial
        user or supplier in the past five years; or 2) the
        area of origin is outside of Metropolitan's Service
        Area and the transferred water will be applied to
        agricultural operations within the Service Area.

   (d)  GEOGRAPHY: The source of water or water rights must
        be capable of being used for domestic, municipal and
        industrial, or agricultural use within
        Metropolitan's Service Area.

   (e)  WATER QUALITY: The quality of the source of water,
        when subjected to ordinary and customary treatment
        in the Metropolitan Service Area, would fall within
        the controlling Federal and State maximum
        contaminant levels for potable water.

   (f)  WATER TRANSFERS: Transactions must be water transfer
        agreements between arms-length participants executed
        within five years of the price redetermination, but
        not prior to the execution of this agreement.  This
        specifically excludes, groundwater conjunctive use
        projects in

                                  Page 16

        Metropolitan's service area, desalination projects,
        or water recycling projects.


   (g)  SIZE AND DURATION: Eligible transactions must be
        sales of at least 20,000 acre-feet per transaction
        and last a minimum duration of 4 years.

4.   CALCULATION OF TRANSFER FEE

     The initial FMV is a firm non-escalating $230 per acre-
     foot until sufficient evidence is found to redetermine
     the FMV. Sufficient evidence is defined as at least
     five (5) transactions meeting the eligibility criteria
     in Section 3 in the five years immediately preceding
     redetermination.  If sufficient information is found
     then the FMV shall be calculated as the five-year
     volume-weighted rolling average of eligible
     transactions.  Once a FMV has been established, it
     shall persist for five years or until further
     information exists to redetermine the FMV.  If, five
     years after a price redetermination has occurred, there
     is insufficient information to re-estimate a FMV then
     the parties shall negotiate to establish the FMV or
     submit to arbitration to determine the appropriate
     methodology for determining FMV.

     A methodology for determining the delivered cost per
     acre-foot, including necessary adjustments to reflect
     differences in payment schedules, transport costs (1),
     and treatment costs shall be developed and mutually
     agreed to by both parties prior to the first price
     redetermination.  This methodology shall be adhered to
     for all subsequent price redeterminations to ensure
     consistency over time in the estimates of the delivered
     cost per acre-foot of comparable transfers.

     FN (1)  For the purposes of the Cadiz transactions,
     transportation costs shall include, among other costs,
     1/2 of the capital cost paid by Metropolitan for the
     development and construction of the Cadiz Program

5.   FMV DISPUTE RESOLUTION

     In the event the parties are not able to agree upon the
     FMV within 90 days of entering into good faith
     negotiations as described in Section 2, then the FMV
     shall be resolved by arbitration in accordance with the
     Commercial Arbitration Rules of the American
     Arbitration Association ("AAA").

     Any such dispute will be referred to one (1) arbitrator
     agreed to by the parties within fifteen (15) days after
     submission of the dispute to arbitration; provided,
     however, that if the parties are unable to agree upon
     the selection of an arbitrator, such dispute will be
     referred to three (3) arbitrators.  In such an event,
     each party shall select one of the three arbitrators.
     The third arbitrator will be selected by the two party-
     appointed arbitrators; provided, however, if the two
     party-appointed arbitrators are unable to agree upon
     the third arbitrator, then the third arbitrator shall
     be appointed by the AAA.  Each arbitrator must have
     expertise in California water issues and natural
     resource valuation.  Each arbitrator, including party-
     appointed arbitrators, is subject to disclosure and
     disqualification pursuant to Rule R-19 of the
     Commercial Arbitration Rules.

     Based on a schedule to be set by the arbitrator(s),
     Cadiz and Metropolitan will each prepare a written
     claim specifying its proposal for the FMV (denominated
     in dollars per acre-foot of water) and written
     documentation supporting its proposal, not to exceed
     100 pages.  No party may submit data or documentation
     for any transfer that was not exchanged during the
     negotiations between the parties.  Metropolitan and
     Cadiz each may also file a rebuttal to the other
     party's submission, which shall not exceed 25 pages.
     Except for disputes arising out of Section 6 below, the
     only issue to be decided by the arbitrator(s) is which
     of the two proposed amounts for the FMV (i.e., the
     amount proposed by Metropolitan or the amount proposed
     by Cadiz) is closest to the actual FMV.  The proposed
     amount chosen by the arbitration panel shall be the FMV
     for purposes of calculating the Adjusted Rate for the
     Transfer Fee as described in Sections 2 and 4.

                                  Page 17

6.   RE-FORMULATION OF THE TRANSFER FEE REDETERMINATION METHODOLOGY

     If at any time during the course of this Agreement a
     regularly published water transfer market index
     accurately representing the relevant markets of
     transfers for Metropolitan becomes available, either
     party has the option to request the use of this index.
     If both parties agree to the use of the index, it shall
     replace the Transfer Fee Redetermination procedure set
     forth in this Attachment.  Disputes arising over the
     substitution of an index meeting the above conditions
     shall be addressed under the dispute resolution
     provisions of this Agreement.

                                  Page 18

                                                ATTACHMENT B

         ATTACHMENT RE FINANCING AND SECURITY ISSUES
           FOR A METROPOLITAN-CADIZ WATER STORAGE
                 AND DRY-YEAR SUPPLY PROGRAM

1.   Bankruptcy Remoteness.  Cadiz shall establish a
     separate single-purpose, "bankruptcy remote" corporate
     entity for the purpose of owning its interest in the
     Capital Facilities and the Program Agreement, the
     property, water rights and other appurtenant rights
     related to the Program and securing its obligations
     under the Agreement.  Cadiz would also guarantee
     performance and payment of such subsidiary's
     obligations under the Agreement.  In connection with
     the above, Cadiz shall comply with "bankruptcy remote"
     structures by limiting the activities and liabilities
     of the subsidiary, appointing an independent director
     to the subsidiary's board of directors, and requiring
     unanimous director approval to borrow money, dissolve,
     sell all or substantially all of its assets, merge or
     reorganize, file bankruptcy, or amend the articles of
     incorporation.

     *  Single purpose subsidiary:
          - No other liabilities.
          - No other activities.
          - Independent director.
          - Unanimous vote for bankruptcy/winding-up/dissolution.

     *  Consent by senior Cadiz lender to assignment.

     *  Guarantee of performance by Cadiz:
          - limit on other indebtedness of Cadiz/Cadiz subsidiary.
          - Material Adverse Change standard.
          - Limitation on other transactions.

     * Title insurance/project-easement absolute.

2.   SECURITY FOR PERFORMANCE.  As collateral security for
     Cadiz' performance of all contract provisions (to
     deliver water and storage), a deed of trust on its
     interests would be a condition of the Program.  The
     deed of trust would address:

     *  A junior lien on Cadiz' share of improvements.

     *  A junior lien on land.

     *  The priority to be determined, depends on other lenders
        rights/agreements in the event of default and termination.

3.   SEPARATE PROFITS AND EASEMENTS.  The Program documents
     should be separated into discrete packages of rights
     and obligations for:

     *  Purchase of indigenous ground water.

     *  Storage of Colorado River surplus water.

     This would keep the rights and conditions separate and
     clean in case for any reason the supply arrangement was
     terminated but the storage continued or was taken over
     by MWD.

4.   CONDITIONS PRECEDENT - The Program shall be subject to
     the satisfaction of specific conditions precedent,
     including:

     *   Obtaining environmental clearance for the Program
         and all aspects of the removal and storage of water.

     *   The negotiation, approval and concurrent effectiveness
         of all collateral security documents.

     *   The satisfaction of all Cadiz senior lender issues:

          - The consent by Cadiz senior lender of the Program,
            including the single-purpose entity and the easement
            and profit.

          - Dollar limitation on the senior indebtedness.

          - Notice/cure rights granted in favor of MWD.

          - Off-set rights.

          - A purchase option granted in favor of MWD to
            acquire the senior loan at a predetermined price.

     *  The availability and approval of Cadiz' project financing commitment.

                                  Page 19

     *  The receipt of all permits and easements necessary or desirable
        for the project.

     *  Joint approval of the Plan:

          - To build the project, the EPC contract, Plans for the
            project, the budget for the project.

          - To operate the storage and removal Program, the
            groundwater management plan

     *  No Material Adverse Change.

     *  The truthfulness of all representations, warranties
        and covenants regarding the Program.

5.   CADIZ PROJECT FINANCING.  MWD's right to review and
     approve the Cadiz financing shall include the right to
     review and approve the establishment and structure of
     the separate corporate entity and to obtain consent
     from Cadiz' project lender on terms approved by MWD.
     Any security interest in the Capital Facilities created
     by Cadiz financing shall not encumber MWD's ownership
     interest in, or interfere with MWD's right to operate,
     the Capital Facilities, and shall acknowledge MWD's
     rights under and in this Agreement.  Cadiz's project
     loan shall also:

     *  Be adequate to cover Cadiz's share of capital budget.

     *  Provide for an outside dollar limitation and set
        forth the requirements for any equity investment.

     *  Be secured by a lien on Cadiz contract payments and
        other Cadiz assets

     *  Be a firm commitment - ready to close.

     *  MWD protections to include:
          - Subordination/acknowledgment of MWD rights in
            contract and non-disturbance.

          - Provide for notice/cure rights in favor of MWD.

          - Provide for off-set rights.

           - Acknowledge MWD's right to take over facilities
             in certain circumstances, free of project lien.

                                  Page 20

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-21.1
<SEQUENCE>7
<FILENAME>exhibit21-1.txt
<DESCRIPTION>SUBSIDIARIES
<TEXT>

                                 EXHIBIT 21.1
                                 ------------





                 CADIZ INC.

         SUBSIDIARIES OF THE COMPANY


Rancho Cadiz Mutual Water Company
Sun World International, Inc.



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.1
<SEQUENCE>8
<FILENAME>exhibit23-1.txt
<DESCRIPTION>CONSENT OF INDEPENDENT ACCOUNTANTS
<TEXT>

                                                 EXHIBIT 23.1
                                                 ------------



             CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the incorporation by reference in the
Registration Statements on Form S-8 (Nos. 33-83360, 33-63065,
333-35491, 333-41367, 333-74699, 333-81805, and 333-63990)
and on Form S-3 (Nos. 333-53069, 333-53768 and 333-75006) of
Cadiz Inc. of our reports dated February 21, 2002, except as
to Note 9 for Cadiz Inc., which is as of March 8, 2002,
relating to the financial statements and financial statements
schedules, which appear in this Form 10-K. We also consent to
the reference to us under the heading "Selected Financial Data,"
which appears in this Form 10-K.



/s/  PricewaterhouseCoopers LLP


Los Angeles, California
March 26, 2002



</TEXT>
</DOCUMENT>
</SUBMISSION>
