EXHIBIT 10.6
PLEDGE AND SECURITY AGREEMENT
WEST MARICOPA COMBINE, LLC
THIS PLEDGE AND SECURITY AGREEMENT (this “Agreement”) dated for identification
as of April 30, 2020, is made by: (a) WEST MARICOPA COMBINE, LLC, an Arizona
limited liability company (“Pledgor”); in favor of (b) U.S. BANK NATIONAL
ASSOCIATION, a national banking association, in its capacity as collateral agent
(with its successors and permitted assigns in such capacity the “Collateral
Agent”); for the benefit of (c) The Northern Trust Company, an Illinois banking
corporation (the “Bank” and/or any other holder of the Revolver Note at any
relevant time the “Holder”), pursuant to the Amended and Restated Collateral
Agency Agreement of even date herewith (the “Collateral Agency Agreement”) among
and/or approved by the Collateral Agent, Noteholders, Bank and Global Water
Resources, Inc., a Delaware corporation (“Company”).
PRELIMINARY STATEMENT
WHEREAS, Company and Bank are parties to a Loan Agreement of even date herewith
(as amended, supplemented or restated at any relevant time the “Loan
Agreement”), pursuant to which Bank has agreed to provide Company a multiple
advance revolving credit facility in the initial maximum principal amount of
$10,000,000 (the “Revolver”); and
WHEREAS, pursuant to Guaranty Agreements (the “Guaranty Agreements”) of even
date herewith, Pledgor and Global Water, LLC, a Delaware limited liability
company, have guaranteed the Obligations of Company under the Loan Agreement and
Revolver Note; and
WHEREAS, Pledgor is the owner and holder of all of the Equity Interests of the
Persons described in Schedule I hereto (the “Pledged Companies”); and
WHEREAS, it is a condition precedent to the obligation of Bank to provide the
Revolver pursuant to the Commitment that Pledgor execute and deliver this
Agreement to the Collateral Agent for the benefit of the Secured Parties; and
WHEREAS, Pledgor desires to execute this Agreement to satisfy such condition
precedent and to secure its Obligations under its Guaranty Agreement;
NOW THEREFORE, to induce Bank to provide the Commitment pursuant to the Loan
Agreement, Pledgor and the Collateral Agent agree as follows:
SECTION 1.DEFINED TERMS.
(a)Capitalized terms used at any place but not defined herein have the meanings
set forth in the Loan Agreement.
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(b)“ACC Regulations” means the applicable regulations, orders and requirements
of the Arizona Corporation Commission and applicable statutes administered by
the Arizona Corporation Commission.
(c)“Applicable Law” means all applicable Laws, including all applicable
provisions of constitutions, statutes, rules, ordinances, regulations and orders
of all Governmental Authorities and all orders, rulings, writs and decrees of
all courts, tribunals and arbitrators.
(d)“Equity Interests” means with respect to any Person, all capital stock of (or
other ownership or profit interest in) such Person, all warrants, options or
other rights for the purchase or acquisition from such Person of capital stock
of (or other ownership or profit interest in) such Person, all securities
convertible into or exchangeable for capital stock of (or other ownership or
profit interests in) such Person or warrants, rights or options for the purchase
or acquisition from such Person of such shares (or other interests), and all
other ownership or profit interests in such Person (including partnership,
membership and trust interests therein), voting or nonvoting, whether or not
such shares, warrants, options, rights or other interests are outstanding on any
date.
(e)“Indemnified Liabilities” means, collectively, all liabilities, obligations,
losses, damages, penalties, claims (including under Environmental Laws),
actions, judgments, suits, costs (including reasonable costs of investigation,
study, sampling, testing, abatement, cleanup, removal, remediation or other
response necessary to remove, remediate, clean up or abate Hazardous Materials),
expenses and disbursements of any kind (including reasonable fees and
disbursements of counsel for Indemnitees in connection with any investigative,
administrative or judicial proceeding or hearing commenced or threatened by any
Person, whether or not such Indemnitees are designated as a party or potential
party thereto, and any reasonable fees or expenses incurred by Indemnitees in
enforcing this indemnity), whether direct or indirect and whether based on any
applicable Laws (including Environmental Laws), on common law or equitable cause
or on contract or otherwise, imposed on, incurred by, or asserted against any
such Indemnitee (regardless of whether any Indemnitee is a party thereof), in
any manner relating to or arising out of: (i) this Agreement or any other
Revolver Document or transactions contemplated hereby or thereby (including the
use or intended use of the proceeds of the Revolver, or any enforcement of any
of the Revolver Documents (including any sale of, collection from, or other
realization on any Collateral)); or (ii) any claim under Environmental Laws or
Hazardous Materials liability relating to or arising from, directly or
indirectly, any past or present activity, operation, land ownership or practice
of Pledgor or any of its Subsidiaries.
(f)“Noteholders” means the holders at any relevant time of the Notes.
(g)“Pledged Companies” has the meaning set forth in the above preliminary
statement.
(h)“Secured Obligations” has the meaning provided by Section 2(c).
(i)“Secured Parties” means all Holders and the Collateral Agent.

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(j)“Specified Account” means the segregated account of Company maintained with
The Northern Trust Company, with the last four digits of such account number
being 3138, established to receive payments of dividends and distributions on
Equity Interests owned by Company or any Subsidiary Guarantor, and all
replacements or substitutions for such account established by the Company or any
Subsidiary Guarantor, whether in the form of a deposit account or securities
account. For the avoidance of doubt, a “Specified Account” shall not include any
“collection account,” deposit account, securities account or other account in
which the revenues of Utility Subsidiaries are remitted or consolidated.
(k)“UCC” means the Uniform Commercial Code as in effect on the date hereof in
the State of New York; provided that if by mandatory provisions of Law, the
perfection or the effect of perfection or non-perfection of the security
interests granted pursuant to Section 2, as well as all other security interests
created or assigned as additional security for the Secured Obligations pursuant
to this Agreement, in any Collateral is governed by the UCC as in effect in any
jurisdiction other than the State of New York, “UCC” means the UCC as in effect
in such other jurisdiction for purposes of the provisions hereof relating to
such perfection or effect of perfection or non-perfection.
SECTION 2.GRANT OF SECURITY INTEREST.
(a)To secure the Secured Obligations, Pledgor grants to the Collateral Agent,
for the benefit of the Secured Parties, a security interest in, and acknowledges
and agrees that the Collateral Agent has and will continue to have a continuing
security interest in, all right, title and interest of Pledgor, whether now
owned or existing or hereafter created, acquired or arising, and regardless of
where located, in and to all the following (collectively the “Collateral”):
(i)all Equity Interests, including all Equity Interests in the Pledged Companies
and all shares, ownership, economic and management interests, membership
interests and/or partnership interests in any Person owned or held by Pledgor,
all payments and distributions of whatever kind or character, in cash or other
property, at any time made, owing or payable to Pledgor in respect of or on
account of its present or hereafter acquired Equity Interests, whether due or to
become due and whether representing profits, distributions pursuant to complete
or partial liquidation or dissolution of the issuer of such Equity Interests,
distributions representing the complete or partial redemption of Pledgor’s
Equity Interests in any Person or complete or partial withdrawal of Pledgor from
any Person, repayment of capital contributions made to or with respect to any
Person in respect of Equity Interests in such Person held by Pledgor and the
right to receive, receipt for, use, and enjoy all such payments and
distributions, and all other rights and privileges incident to Pledgor’s
interest in such Equity Interests, provided that prior to the occurrence of an
Event of Default, Pledgor shall retain certain rights pursuant to Section 7;
(ii)the Specified Account;

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(iii)all interest, dividends, cash, instruments, investment property, general
intangibles and other property from time to time received, receivable or
otherwise payable in respect of,·or in exchange for, any of the foregoing;
(iv)supporting evidence and documentation relating to any of the above-
described property, including computer programs, disks, tapes, electronic
archives, clouds and related data processing media, and all rights of Pledgor to
retrieve the same from third parties, written applications, credit information,
account cards, payment records, correspondence, delivery and installation
certificates, invoice copies, delivery receipts, notes, and other evidences of
indebtedness, insurance certificates and the like, together with all books of
account, ledgers and cabinets in which the same are reflected or maintained; and
(v)to the extent not covered by Sections 2(a)(i) through 2(a)(iv), all proceeds
(as defined in the UCC) of any or all of the foregoing.
(b)The Collateral Agent shall have with respect to the Collateral, in addition
to the rights and remedies set forth herein and in the other Revolver Documents,
all rights and remedies of a secured party under the UCC as if fully set forth
herein.
(c)The security interest herein granted is made and given to secure, and shall
secure, the payment and performance of: (i) all Obligations of Pledgor to the
Secured Parties (whether arising before or after the filing of a petition in
bankruptcy), whether direct or indirect, absolute or contingent, due or to
become due, now existing or hereafter arising, however held, evidenced or
acquired, and whether several, joint, or joint and several; and (ii) all
expenses and charges, legal or otherwise, suffered or incurred by the Secured
Parties in collecting or enforcing any such Obligations or realizing on or
protecting or preserving any Collateral or other security therefor, including
the lien and security interest granted hereby (all of the foregoing being the
“Secured Obligations”).
(d)For the avoidance of doubt and notwithstanding anything in any Revolver
Document to the contrary: (i) no Subsidiary of Pledgor that is now a regulated
utility is a borrower or guarantor under any Revolver Document, nor is any such
Subsidiary pledging any of its property as collateral for the Secured
Obligations; and (ii) no regulated utility may declare distributions or
dividends to its equity holders except in accordance with applicable Law
(including ACC Regulations), and subject to each regulated utility’s obligations
to maintain revenues and funds sufficient to fund direct and indirect operating
and maintenance expenses (including general and administrative expenses and
reasonable and necessary costs, fees and expenses for operation and maintenance
of system utilities).
SECTION 3.CERTIFICATES OR INSTRUMENTS. Any certificates or instruments
representing or evidencing Collateral shall be delivered to and held by or on
behalf of the Collateral Agent for the benefit of the Secured Parties pursuant
hereto and to the Collateral Agency Agreement and be in suitable form for
transfer by delivery or accompanied by duly executed instruments of transfer or
assignment in blank, all in form reasonably satisfactory to the Collateral Agent
and in form and substance reasonably satisfactory to Bank. Upon the

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occurrence and during the continuance of any Event of Default, the Collateral
Agent will have the right at any time in its sole discretion and without notice
to Pledgor to transfer to or to register in the name of the Collateral Agent or
its nominees any or all of the Collateral, subject only to the revocable rights
specified in Section 7(a) and compliance with ACC Regulations. In addition, on
the occurrence and during the continuance of any Event of Default, the
Collateral Agent will have the right to exchange certificates or instruments
representing or evidencing Collateral for certificates or instruments of smaller
or larger denominations.
SECTION 4.SPECIFIED ACCOUNT COLLATERAL.
(a)The Company has established the Specified Account as a deposit account
(within the meaning of Section 9-102 of the UCC), with The Northern Trust
Company. Pledgor shall promptly notify the Collateral Agent of any other
Specified Account opened or maintained by the Company or Pledgor after the date
hereof. To the extent requested by the Collateral Agent following the occurrence
and continuation of any Default or the occurrence of any Event of Default,
Pledgor shall, and shall cause the applicable depository or other institution
to, execute and deliver to the Collateral Agent an account control agreement in
form reasonably satisfactory to the Collateral Agent and in form and substance
reasonably satisfactory to the Holder which provides among other things for the
depository or other institution’s agreement that it will comply with:
(i) instructions originated by the Collateral Agent directing the disposition of
the funds in each such Specified Account that is a deposit account; or (ii)
entitlement orders originated by the Collateral Agent with respect to each such
Specified Account that is a securities account, in each case without further
consent by Pledgor. Notwithstanding the foregoing, any account control agreement
which requires the Collateral Agent in its individual capacity to indemnify the
depository or other institution other than out of the Collateral will not be
reasonably satisfactory to the Collateral Agent.
(b)Subject to Section 2(d), Pledgor covenants and agrees that upon declaration
and payment of any dividend or distribution by any Subsidiary, it will cause
such dividend or distribution to be paid and segregated into the Specified
Account. Prior to the occurrence and continuance of an Event of Default, amounts
so deposited in the Specified Account may be withdrawn and used for corporate
purposes, including investments in or loans to Subsidiaries permitted under the
Loan Agreement.
SECTION 5.REPRESENTATIONS, WARRANTIES AND CERTAIN COVENANTS. Pledgor represents,
warrants and covenants as follows:
(a)The Equity Interests have been duly authorized and validly issued and are
fully paid and non-assessable. No Equity Interests constituting interests in
limited liability companies constitute or are evidenced by certificated
securities, unless such certificates have been delivered to the Collateral
Agent.
(b)Pledgor is the legal and beneficial owner of the Collateral free and clear of
any Lien or other encumbrance except for the Lien created by this Agreement and
any other Liens created in favor of the Collateral Agent and described in the
Collateral Agency Agreement. There is no existing agreement, option, right or
privilege capable of becoming an agreement or

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option pursuant to which Pledgor would be required to sell or otherwise dispose
of any Equity Interest, except as described in the Collateral Agency Agreement.
(c)Except for the delivery of any certificates or instruments representing
Collateral to the Collateral Agent pursuant to this Agreement, filing of an
appropriate financing statement with the Arizona Secretary of State, and any
control agreement contemplated by Section 4(a), no other action is required to
create or maintain the Lien of the Collateral Agent as a valid and perfected
first priority Lien (pari passu with the Noteholders) in the Collateral to
secure the Secured Obligations.
(d)No authorization, approval or other action by, and no notice to or filing
with, any Governmental Authority or regulatory body (except as set forth in
Section 5(c)) is required either: (i) for the pledge by Pledgor of the
Collateral pursuant to this Agreement or for the execution, delivery or
performance of this Agreement by the Pledgor; or (ii) for the exercise by the
Collateral Agent of its rights and the rights of any other Secured Parties
provided for in this Agreement and the Collateral Agency Agreement or the
remedies in respect of the Collateral pursuant to this Agreement and the
Collateral Agency Agreement (except as may be required in connection with such
disposition by Laws affecting the offering and sale of securities generally and
except for compliance with requirements of the ACC Regulations as set forth in
Sections 7(b) and 8).
(e)The execution, delivery and performance of this Agreement does not and will
not: (i) violate any provision of any Law (including Regulations T, U and X of
the Board of Governors of the Federal Reserve System), order, writ, judgment,
injunction, decree, determination or award applicable to Pledgor; (ii) result in
breach of, or constitute a default under, any indenture, credit or loan or note
agreement or any other agreement, lease or instrument to which Pledgor presently
is a party, or·by which it or its properties are bound or affected; or
(iii) result in or require (other than pursuant to this Agreement) the creation
or imposition of any Lien or other share or encumbrance upon or with respect to
any properties now owned or hereafter acquired by Pledgor. Pledgor is not in
violation of or default under any such Law or material provision of any such
indenture, agreement, lease or instrument.
(f)Schedule I correctly sets forth the name of the issuer and the percentage of
Equity Interests of certain Equity Interests owned by Pledgor and pledged by
this Agreement.
(g)Except for any such agreements in favor of the Collateral Agent for the
benefit of the Secured Parties and Noteholders, Pledgor shall not enter into any
agreement providing any Person with “control” (within the meaning of Sections
9-104 or 9-106 of the applicable UCC) of any Specified Account.
(h)Pledgor is a limited liability company duly formed under the laws of Arizona,
and is validly existing and in good standing under the laws of such
jurisdiction. Pledgor has its chief executive office in the State of Arizona.
Pledgor agrees to give the Collateral Agent at least 30 days’ prior written
notice before changing the state in which its chief executive office is located
or the state in which it is organized, and prior to the effectiveness of any
such change shall take all steps necessary to maintain the security interest
provided for herein as a first-priority (pari

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passu with the Noteholders) perfected security interest, including filing
additional UCC financing statements or amendments as may be necessary or
requested by (and subject to the rights of) the Collateral Agent.
(i)Pledgor shall not: (i) sell, assign (by agreement, operation of law or
otherwise) or otherwise dispose of, or grant any option with respect to, any
Collateral; or (ii) create or permit to exist any Lien or security interest on
or with respect to any Collateral, except for the Lien·created by this Agreement
and any other Lien in favor of the Collateral Agent for the benefit of the
Secured Parties.
(j)Pledgor shall not permit or cause to be issued any Equity Interests: (i) in
substitution for any existing Equity Interests; and (ii) in addition to the
existing Equity Interests, except following notice to the Collateral Agent and
provided that immediately upon its acquisition (directly or indirectly) of any
such substitute or additional securities, Pledgor will execute such
documentation as is necessary to pledge or evidence the pledge or as may be
requested by Collateral Agent or the Holder pledging, and evidencing the pledge
hereunder of, such Equity Interests.
(k)Pledgor shall, at its expense, protect and defend this Agreement, all rights
of the Collateral Agent hereunder, and the Collateral against all claims and
demands of other parties. Pledgor shall pay all Claims and charges that in the
reasonable opinion of the Collateral Agent or the Holder might prejudice,
imperil or otherwise affect Collateral or the security interest therein. Pledgor
shall promptly notify the Collateral Agent of any levy, distraint or other
seizure by legal process or otherwise of any Collateral and of any threatened or
filed claims or proceedings that might affect or impair this Agreement.
SECTION 6.FURTHER ASSURANCES. Pledgor authorizes the Collateral Agent to file
any financing statements covering the Collateral or any part thereof as the
Collateral Agent may desire. Pledgor agrees that from time to time, at the
expense of Pledgor, Pledgor will promptly execute and deliver all further
documentation and take all further actions that the Collateral Agent or Holder
may reasonably request, in order to perfect and protect any security interest
granted or purported to be granted hereby or to enable the Collateral Agent to
exercise and enforce its rights and remedies hereunder with respect to any
Collateral. Pledgor will furnish to the Collateral Agent from time to time
statements and schedules further identifying and describing the Collateral and
such other reports in connection with the Collateral as the Collateral Agent or
Holder may reasonably request, all in reasonable detail, Pledgor agrees, and
agrees to cause each issuer of Equity Interests included in the Collateral, to
mark its books and records to reflect the Lien of the Collateral Agent in the
Collateral.
SECTION 7.VOTING AND DIVIDENDS.
(a)So long as no Event of Default has occurred and is continuing:
(i)Pledgor will be entitled to exercise any voting and other consensual rights
pertaining to any Collateral for any purpose not inconsistent with this
Agreement or any other Revolver Documents.

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(ii)Pledgor will be entitled to receive and retain any dividends or
distributions paid in respect of the Collateral; provided however, except as
expressly permitted by the Loan Agreement, any (A) dividends or distributions
paid or payable other than in cash in respect of, and instruments and other
property received, receivable or otherwise distributed in respect of, or in
exchange for, any Collateral, (B) dividends and other distributions paid or
payable in cash in respect of any Collateral in connection with a partial or
total liquidation or dissolution, and (C) cash paid, payable or otherwise
distributed in redemption of, or in exchange for, any Collateral, shall be
forthwith delivered to the Col1ateral Agent to hold as Collateral and shall, if
received by Pledgor, be received in trust for the benefit of the Collateral
Agent, be segregated from the other property or funds of Pledgor, and be
forthwith delivered to the · Collateral Agent as Collateral in the same form as
so received (with any necessary endorsement).
(iii)The Collateral Agent shall execute and deliver (or cause to be executed and
delivered) to Pledgor all such proxies and other instruments as Pledgor may
reasonably request for the purpose of enabling Pledgor to exercise the voting
and other rights it is entitled to exercise pursuant to Section7(a)(i) and to
receive dividends it is authorized to receive and retain pursuant to
Section7(a)(ii).
(b)Subject to any requirements of ACC Regulations, on the occurrence and during
the continuation of an Event of Default:
(i)All rights of Pledgor to exercise voting and other consensual rights it would
otherwise be entitled to exercise pursuant to Section 7(a)(i) will automatically
cease, and the Collateral Agent will thereupon have the sole right to exercise
such rights.
(ii)All rights of Pledgor to receive the distributions and dividends it would
otherwise be entitled to receive and retain pursuant to Section 7(a)(ii) will
automatically cease, and the Collateral Agent will thereupon have the sole right
to receive and hold as Collateral such dividends, distributions and interest.
(iii)Any distributions and dividends received by Pledgor contrary to the
provisions of Section 7(b)(ii) will be received in trust for the benefit of the
Collateral Agent on behalf of the Secured Parties, shall be segregated from
other funds of Pledgor and shall be forthwith paid over to the Collateral Agent
on behalf of the Secured Parties as Collateral in the same form as received
(with any necessary endorsement).
SECTION 8.REMEDIES. Subject to any requirements of ACC Regulations:
(a)The Collateral Agent may exercise in respect of any Collateral, in addition
to other rights and remedies provided for herein or otherwise available to it,
all rights and remedies of a secured party on default under the UCC (whether or
not the UCC applies to the affected Collateral), and the Collateral Agent may
also, without notice except as specified below, sell the Collateral or any part
thereof in one or more parcels at public or private sale, at any exchange,
broker’s board or at any of the Collateral Agent’s offices or elsewhere, for
cash, on credit or for future delivery, and on such other terms as the
Collateral Agent may claim commercially reasonable. Pledgor agrees that at least
ten days’ notice to Pledgor of the time and place of any

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public sale or time after which any private sale is to be made will constitute
reasonable notification. The Collateral Agent will not be obligated to make any
sale of Collateral regardless of notice of sale having been given. The
Collateral Agent may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was so adjourned.
(b)Any cash held by the Collateral Agent as Collateral and all cash proceeds
received by the Collateral Agent in respect of any sale of, collection from, or
other realization on any Collateral shall be applied by the Collateral Agent
against the Secured Obligations in such order as the Collateral Agent may elect,
subject to the requirements of the Loan Agreement and Collateral Agency
Agreement. Any surplus of such cash or cash proceeds held by the Collateral
Agent and remaining after payment in full of all Secured Obligations and Notes
shall be paid over to the Pledgor or to whomsoever may be lawfully entitled to
receive such surplus.
(c)All rights and remedies of the Collateral Agent expressed herein are in
addition to all other rights and remedies possessed by the Collateral Agent or
the Holder in the Revolver Documents and any other agreement or instrument
relating to the Secured Obligations.
(d)In connection with a public or private sale of any Collateral, the Collateral
Agent may disclose to prospective purchasers any non-public information
available to the Collateral Agent which pertains to: (i) the issuer of any
Collateral; or (ii) Pledgor, provided in the case of Pledgor such non-public
information is material to said issuer, its financial condition or the
Collateral.
(e)Without in any way limiting the foregoing, on the occurrence and during the
continuation of any Event of Default, the Collateral Agent shall have the right,
in addition to all other rights provided herein or by Law, to direct the
disposition of the funds in any Specified Account that is a deposit account, or
entitlement orders originated by the secured party with respect to each such
Specified Account that is a securities account, in each case without further
consent by Pledgor.
(f)If the Collateral Agent exercises its right to take possession of any
Collateral, Pledgor shall also at its expense perform any other steps requested
by the Collateral Agent or Holder to preserve and protect the security interest
hereby granted in the Collateral, such as maintaining Collateral records and
filing UCC financing and continuation statements.
SECTION 9.WAIVERS; PRIVATE SALES.
(a)Pledgor waives any right to require the Collateral Agent or Holder to:
(i) proceed against any Person, including any other Obligor; or (ii) proceed
against or exhaust any Collateral, or (iii) pursue any other remedy in
Collateral Agent’s or the Holder’s power; and waives any defense arising by
reason of any disability of Pledgor or any other Person. Until the Secured
Obligations have been paid in full, Pledgor waives any right of subrogation,
reimbursement, indemnification, and contribution (contractual, statutory or
otherwise), including any right of subrogation under the Bankruptcy Code (Title
11, United States Code) or any successor statute, arising from the existence or
performance of this Agreement, and Pledgor waives any right to

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enforce any remedy which the Collateral Agent now has or may hereafter have
against Pledgor or any other Person, and waives any benefit of, and any right to
participate in, any security now or hereafter held by the Collateral Agent.
Pledgor authorizes the Collateral Agent, without notice or demand and without
affecting Pledgor’s liability hereunder, from time to time to: (a) renew,
compromise, extend, accelerate or otherwise change the time for payment of, or
otherwise change the terms of, any Secured Obligations, including increase or
decrease of any rate of interest thereon; (b) receive and hold security, other
than the Collateral herein described, for the payment of any Secured
Obligations, and exchange, enforce, waive, release, fail to perfect, sell, or
otherwise dispose of any Collateral or other security; and (c) release or
substitute the Company, or any other guarantors of such Secured Obligations or
any part thereof, or any other parties thereto.
(b)Pledgor recognizes that the Collateral Agent may be unable to effect a public
sale of any of the Collateral by reason of ACC Regulations and/or certain
prohibitions contained in the Laws of any jurisdiction outside the United States
or in the Securities Act and applicable state securities Laws, but may instead
be compelled to resort to one or more private sales thereof to a restricted
group of purchasers who will be obliged to agree, among other things, to acquire
such Collateral for their own account for investment and not with a view to the
distribution or resale thereof, or otherwise in accordance with the ACC
Regulations. Pledgor agrees that any private sale may result in prices and other
terms less favorable to the seller than if such sale were a public sale and,
notwithstanding such circumstances, agrees that any such private sale shall, to
the extent permitted by Law, be made in a commercially reasonable manner. The
Collateral Agent will not be under any obligation to delay a sale of any
Collateral for the period of time necessary to permit the issuer of such
securities to register such securities under the Laws of any jurisdiction
outside the United States, under the Securities Act or under any applicable
state securities Laws, even if the issuer would agree to do so. If the
Collateral Agent is able to lawfully effect a public sale without registration
of the Collateral under the laws of any jurisdiction outside the United States,
under the 1933 Act or under any applicable state securities Laws, then, subject
to any applicable ACC Regulations, the Collateral Agent may, but will not be
required to, conduct a public sale of the Collateral, rather than a private
sale, if the Collateral Agent reasonably believes it would realize a higher
sales price in a public sale.
SECTION 10.COLLATERAL AGENT’S DUTIES.
(a)The powers conferred on the Collateral Agent hereunder are solely to protect
the interests of the Secured Parties in the Collateral and shall not impose any
duty on the Collateral Agent to exercise any such powers. Except for reasonable
care in the custody of any Collateral in its possession and accounting for
moneys actually received by it hereunder, the Collateral Agent will have no duty
as to any Collateral or as to the taking of any necessary steps to preserve
rights against prior parties or any other rights pertaining to any Collateral.
The Collateral Agent will have exercised reasonable care in the custody and
preservation of Collateral in its possession if the Collateral is accorded
treatment substantially equal to that which the Collateral Agent accords its own
property and collateral held for others in its capacity as a collateral agent,
it being understood that the Collateral Agent will not have any responsibility
for: (i) ascertaining or taking action with respect to calls, conversions,
exchanges, maturities, tenders or other matters

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relative to any Collateral, whether or not the Collateral Agent has or is deemed
to have knowledge of such matters; or (ii) taking any necessary steps to
preserve rights against any parties with respect to any Collateral.
(b)Upon the appointment of a replacement collateral agent pursuant to the
Collateral Agency Agreement, the Collateral Agent may transfer all of its
interest and Liens in or any of the Collateral and be fully discharged
thereafter from all liability and responsibility with respect to such Collateral
so transferred, and the transferee shall be vested with all the rights and
powers of the Collateral Agent hereunder with respect to such Collateral so
transferred; but with respect to any of its interest and liens in Collateral not
so transferred, the Collateral Agent will retain all rights and powers hereby
given.
SECTION 11.OTHER RIGHTS.
(a)The rights, powers and remedies given to the Collateral Agent by this
Agreement shall be in addition to all rights, powers and remedies given to the
Collateral Agent by virtue of any statute or rule of Law. Any forbearance or
failure or delay by the Collateral Agent in exercising any right, power or
remedy hereunder shall not be a waiver of such right, power or remedy, and any
single or partial exercise of any right, power or remedy hereunder shall not
preclude the further exercise thereof; and every right, power and remedy of the
Collateral Agent shall continue in full force and effect until such right, power
or remedy is specifically waived by a writing executed by the Collateral Agent.
The rights and remedies of the Collateral Agent under this Agreement shall be
cumulative and not exclusive of any other right or remedy which the Collateral
Agent or any Holder may have.
(b)This Agreement constitutes an assignment of rights only and not an assignment
of any duties or obligations of Pledgor in any way related to the Collateral,
and the Collateral Agent will have no duty or obligation to discharge any such
duty or obligation. The Collateral Agent will have no responsibility for taking
any necessary steps to preserve rights against any parties with respect to any
Collateral or initiating any action to protect any Collateral against the
possibility of a decline in market value. Neither the Collateral Agent nor any
party acting as attorney for the Collateral Agent will be liable for any acts or
omissions or for any error of judgment or mistake of fact or Law other than its
gross negligence or willful misconduct or negligence in the handling of funds.
(c)In addition to any other powers of attorney contained herein, Pledgor hereby
appoints the Collateral Agent, its nominee, and any other person whom the
Collateral Agent may designate, as Pledgor’s attorney-in-fact, with full power
and authority to sign Pledgor’s name on verifications of Collateral; to send
requests for verification of Collateral to obligors; to endorse Pledgor’s name
on any checks, notes, acceptances, money orders, drafts and other forms of
payment or security that may come into the Collateral Agent’s possession or on
any assignments, stock powers or other instruments of transfer relating to any
Collateral; to sign Pledgor’s name on claims to enforce collection of any
Collateral, on notices to and drafts against obligors, on schedules and
assignments of Collateral, on notices of assignment and on public records; on
the occurrence and during the continuance of an Event of Default to notify post
office authorities to change the address for delivery of Pledgor’s mail to an
address designated by the Collateral

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Agent; upon the occurrence and during the continuance of an Event of Default to
receive, open and dispose of all mail addressed to Pledgor; and to do all things
necessary to carry out this Agreement. Pledgor hereby ratifies and approves all
acts of any such attorney and agrees that neither the Collateral Agent nor any
such attorney will be liable for any acts or omissions nor for any error of
judgment or mistake of fact or Law other than such person’s gross negligence or
willful misconduct or negligence in the handling of funds. The foregoing powers
of attorney, being coupled with an interest, are irrevocable until the Secured
Obligations have been fully paid and satisfied and all agreements of any Secured
Party to extend credit to or for the account of Pledgor have expired or
otherwise been terminated.
SECTION 12.INDEMNITY; WAIVER.
(a)Pledgor agrees to indemnify, pay and hold harmless, the Collateral Agent and
each other Secured Party and any of their Related Parties (each an
“Indemnitee”), from and against any and all Indemnified Liabilities, IN ALL
CASES, WHETHER OR NOT CAUSED BY OR ARISING, IN WHOLE OR IN PART, OUT OF THE
COMPARATIVE OR CONTRIBUTORY NEGLIGENCE OF SUCH INDEMNITEE; provided, Pledgor
shall not have any obligation to any Indemnitee hereunder with respect to any
Indemnified Liabilities to the extent such Indemnified Liabilities (x) arise
from the gross negligence or willful misconduct, as determined by a court of
competent jurisdiction by final and nonappealable judgment, of that Indemnitee,
or (y) result from a claim brought by Pledgor against an Indemnitee for breach
in bad faith of such Indemnitee’s obligations hereunder or under any other
Revolver Document, as determined by a court of competent jurisdiction by final
and nonappealable judgment. To the extent the undertakings to indemnify, pay and
hold harmless in this Section 12 may be unenforceable in whole or in part
because they are violative of any Law or public policy, Pledgor shall contribute
the maximum portion it is permitted to pay and satisfy under applicable Laws to
the payment and satisfaction of all Indemnified Liabilities incurred by any
Indemnitees. All amounts due under this Section 12(a) shall be payable promptly
after demand therefor. For purposes hereof, “Related Parties” means, with
respect to any Person, such Person’s Affiliates and the partners, managers,
directors, trustees, officers, employees or other personnel, counsel, agents and
advisors of such Person and of such Person’s Affiliates.
(b)To the extent not prohibited by applicable Law, Pledgor shall not assert, and
Pledgor waives, any claim against the Collateral Agent and its respective
Related Parties, on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to direct or actual damages)
(whether or not the claim therefor is based on contract, tort or duty imposed by
any applicable legal requirement) arising out of, in connection with, as a
result of, or in any way related to, this Agreement or any other Revolver
Document or any agreement or instrument contemplated hereby or thereby or
referred to herein or therein, the transactions contemplated hereby or thereby,
or the use of the proceeds thereof or any act or omission or event occurring in
connection therewith, and Pledgor waives, releases and agrees not to sue on any
such claim or any such damages, whether or not accrued and whether or not known
or suspected to exist in its favor. No Indemnitee shall be liable for any
damages arising from the use by unintended recipients of any information or
other materials distributed to it through telecommunications, electronic or
other information transmission systems in connection with this Agreement or any

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other Revolver Documents or the transactions contemplated hereby or thereby. In
no event shall the Collateral Agent be responsible or liable for any failure or
delay in the performance of its obligations hereunder arising out of or caused
by; directly or indirectly, forces beyond its control, including strikes, work
stoppages, accidents, acts of war or terrorism, civil or military disturbances,
nuclear or natural catastrophes or acts of God, and interruptions, loss or
malfunctions of utilities, communications or computer (software and hardware)
services, it being understood that the Collateral Agent shall use reasonable
best efforts which are consistent with accepted ·practices in the banking
industry to resume performance as soon as practicable under the circumstances.
SECTION 13.INTERPRETATION.
(a)In this Agreement, unless a clear contrary intention appears:
(i)the singular number includes the plural number and vice versa;
(ii)reference to any gender includes each other gender;
(iii)the words “herein,” “hereof” and “hereunder” and words of similar import
refer to this Agreement as a whole and not to any particular Article, Section or
other subdivision;
(iv)reference to any Person includes such Person’s successors and assigns but,
if applicable, only if such successors and assigns are permitted by this
Agreement, and reference to a Person in a particular capacity excludes such
Person in any other capacity or individually, provided that nothing in this
Section 13(a)(iv) is intended to authorize any assignment not otherwise
permitted by this Agreement;
(v)reference to any agreement, document or instrument means such agreement,
document or instrument as amended, supplemented or modified and in effect from
time to time in accordance with the terms thereof and, if applicable, the terms
hereof, and reference to any note includes any note issued pursuant to any
Revolver Document in extension or renewal thereof and in substitution or
replacement therefor;
(vi)unless the context indicates otherwise, reference to any Article, Section or
Schedule means such Article or Section hereof or Schedule hereto;
(vii)“including” (with its correlative meaning “include”) means including,
without limiting the generality of any description preceding such term;
(viii)with respect to the determination of any period of time, the word “from”
means “from and including” and the word “to” means “to but excluding;”
(ix)reference to any Law means such as modified, codified or reenacted, in whole
or in part, and in effect from time to time; and

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(x)reference to the Collateral Agent are to it in its capacity as Collateral
Agent for the Secured Parties and Noteholders under and as provided in the
Collateral Agency Agreement.
(b)Article and Section headings herein are for convenience only and shall not
affect the construction hereof.
(c)No provision of this Agreement shall be interpreted or construed against any
Person because that Person or its legal representative drafted such provision.
SECTION 14.AMENDMENTS. No amendment or waiver of any provision of this
Agreement, nor consent to any departure by Pledgor herefrom, will be effective
unless in writing and signed by Pledgor and the Collateral Agent, and then only
in the specific instance and for the specific purpose for which given.
SECTION 15.NOTICES. All notices and other communications provided for hereunder
shall be in writing and sent: (a) by telecopy, facsimile or electronic mail if
the sender on the same day sends a confirming copy of such notice by a
nationally recognized overnight delivery service (charges prepaid); (b) by
registered or certified mail with return receipt requested (postage prepaid); or
(c) by a nationally recognized overnight delivery service (with charges
prepaid). Any such notice must be sent:
(i)if to the Bank or its nominee, to the Bank or nominee at the address
specified for such communications in the Loan Agreement, or at such other
address as the Bank or nominee shall have specified to the Company in writing;
(ii)if to any other Holder, to such Holder at such address as such Holder shall
have specified to the Company in writing;
(iii)if to Pledgor, to Pledgor at the following address: 21410 North 19th
Avenue, Suite 220, Phoenix, Arizona 85027 to the attention of: Michael J.
Liebman, or at such other address as Pledgor shall have specified to the
Collateral Agent and each Holder in writing; or
(iv)if to the Collateral Agent, at 101 North First Avenue, Suite 1600, Phoenix,
Arizona·85003, Attention: M. Ambriz-Reyes (Global Water Resources, Inc.),
E-mail: Mary.ambrizreyes@usbank.com, or at such other address as the Collateral
Agent shall have specified to Pledgor in writing.
Notices under this Section 15 will be effective only when actually received.

SECTION 16.SEPARABILITY. If any clause, sentence, paragraph, subsection or
Section of this Agreement is judicially declared to be invalid, unenforceable or
void, such decision will not have the effect of invalidating or voiding the
remainder of this Agreement, and the part or parts of this Agreement so held to
be invalid, unenforceable or void will be deemed to have been

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stricken herefrom by the parties hereto, and the remainder of this Agreement
will have the same force and effect as if such stricken part or parts had never
been included herein
SECTION 17.COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by different parties in separate counterparts, each of which
when so executed will be an original and all of which taken together will
constitute one and the same Agreement. Signatures of parties transmitted by
facsimile or electronic transmission will be their original signatures for all
purposes.
SECTION 18.CONTINUING LIEN. This Agreement shall create a continuing security
interest in the Collateral and shall: (a) remain in effect until payment in full
of the Secured Obligations; (b) be binding on Pledgor, its successors and
assigns; and (c) inure to the benefit of the Collateral Agent and other Secured
Parties and their successors, transferees and assigns. Without limiting the
foregoing clause (c), any Holder may assign or otherwise transfer all or a
portion of its interests, rights and obligations under the Revolver Note in
accordance with the Revolver Documents. Upon the payment in full of the Secured
Obligations and Notes, Pledgor will be entitled to the return, on its request
and at its expense, of such Collateral as shall not have been disposed of.
SECTION 19.SURVIVAL. All representations and warranties in this Agreement or
made in writing by Pledgor in connection herewith will survive the execution and
delivery of this Agreement and repayment of the Secured Obligations. Any
investigation by any Secured Party will not diminish in any respect its right to
rely on such representations and warranties.
SECTION 20.LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF New York WITHOUT REGARD TO CONFLICT OF
LAWS PRINCIPLES THEREOF THAT WOULD REQUIRE OR PERMIT THE APPLICATION OF THE LAWS
OF ANOTHER JURISDICTION EXCEPT TO THE EXTENT THE PERFECTION OF THE SECURITY
INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR
COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF
New York.
SECTION 21.JURISDICTION WAIVER OF JURY TRIAL.
(a)Pledgor irrevocably submits to the non-exclusive jurisdiction of any New York
State or federal court sitting in the Borough of Manhattan, The City of New
York, over any suit, action or proceeding arising out of or relating to the
Revolver Documents. To the fullest extent permitted by applicable Law, Pledgor
irrevocably waives and agrees not to assert, by way of motion, as a defense or
otherwise, any claim that it is not subject to the jurisdiction of any such
court, any objection that it may now or hereafter have to the laying of the
venue of any such suit, action or proceeding brought in any such court and any
claim that any such suit, action or proceeding brought in any such court has
been brought in an inconvenient forum.

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(b)Pledgor consents to process being served by or on behalf of the Collateral
Agent or any Holder in any suit, action or proceeding of the nature referred to
in Section 21(a) by hand delivery, reputable overnight commercial delivery
service or by mailing a copy thereof by registered or certified or express mail
(or any substantially similar form of mail), postage prepaid; return receipt
requested, in each case to it at its address described in Section 15 or at such
other address of which the Collateral Agent or such Holder shall then have been
notified pursuant to Section 15. Pledgor agrees that such service upon receipt:
(i) will be in every respect effective service of process on it in any such
suit, action or proceeding; and (ii) will, to the fullest extent permitted by
applicable Law, be valid personal service on and personal delivery to it.
Notices hereunder will be conclusively presumed received as evidenced by a
delivery receipt furnished by the United States Postal Service or any reputable
commercial delivery service.
(c)Nothing in this Section 21 shall affect the right of the Collateral Agent or
any Holder to serve process in any manner permitted by Law, or limit any right
the Collateral Agent or Holder may have to bring proceedings against Pledgor in
the courts of any appropriate jurisdiction or to enforce in any lawful manner a
judgment obtained in one jurisdiction in any other jurisdiction.
(d)THE PARTIES HERETO HEREBY WAIVE TRIAL BY JURY IN ANY ACTION BROUGHT ON OR
WITH RESPECT TO OR RELATED TO ANY REVOLVER DOCUMENT.
SECTION 22.FINAL AGREEMENT. THIS AGREEMENT AND ANY OTHER REVOLVER DOCUMENTS
EXECUTED IN CONNECTION HEREWITH REPRESENT (WITH THE COLLATERAL AGENCY AGREEMENT)
THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE
OF ANY PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
SECTION 23.LLC INTERESTS. Pledgor represents and warrants that: (a) any Pledged
Company that is a limited liability company has not issued any certificate or
other instrument to evidence any of Pledgor’s limited liability company
interests in such Pledged Company; (b) the limited liability company interest in
any such Pledged Company have not been dealt in or traded on any securities
exchange or in securities markets; and (c) the operating agreement of any such
Pledged Company does not provide that any limited liability company interest in
any such Pledged Company shall be a security governed by Article 8 of the
Uniform Commercial Code. Pledgor will not: (A) permit any Pledged Company that
is a limited liability company to issue any certificate or other instrument to
evidence any of Pledgor’s limited liability company interests in such Pledged
Company; (B) permit the limited liability company interest in any such Pledged
Company to be dealt in or traded on any securities exchange or in securities
markets; or (C) allow the operating agreement of any such Pledged Company to
provide that any limited liability company interest in any such Pledged Company
shall be a security governed by Article 8 of the Uniform Commercial Code.

[SIGNATURE PAGE FOLLOWS]

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DATED as of the date first above written.

PLEDGOR:

WEST MARICOPA COMBINE, LLC

By: /s/ Michael J. Liebman   
Name: Michael J. Liebman
Title: Senior Vice President, Chief Financial
        Officer and Secretary

COLLATERAL AGENT:

U.S. BANK NATIONAL ASSOCIATION, as Collateral Agent

By: /s/ Mary Ambriz-Reyes   
Name: Mary Ambriz-Reyes    
Title: Vice President 

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Schedule 1
PLEDGED COMPANIES*
Valencia Water Company, LLC
Water Utility of Greater Buckeye, LLC
Water Utility of Greater Tonopah, LLC
Water Utility of Northern Scottsdale, LLC
Willow Valley Water Co., LLC

*All Arizona limited liability companies 100% owned by Pledgor.

Schedule I
4824-9676-2798