Document:

exv10w5w5

Exhibit 10.5.5

FOURTH MODIFICATION AGREEMENT

	 	 	 	 	 
	DATE:

	 	 	 	February 28, 2008
	 
	 	 	 	 
	PARTIES:
	 	 	 	 
	 
	 	 	 	 
	 

	 	Borrower:
	 	GLOBAL WATER RESOURCES, LLC, a
Delaware limited liability company,
GLOBAL WATER MANAGEMENT, LLC, a Delaware limited liability company, and
GLOBAL WATER, INC. (f/k/a GLOBAL WATER
RESOURCES, INC.), a Delaware corporation
	 
	 	 	 	 
	 

	 	Borrower
	 	21410 N. 19th Avenue, Suite 201
	 

	 	Address:
	 	Phoenix, AZ 85027
	 

	 	 	 	Attn: Trevor Hill
	 
	 	 	 	 
	 

	 	Bank:
	 	WELLS FARGO BANK, NATIONAL ASSOCIATION, a

national banking association
	 
	 	 	 	 
	 

	 	Bank
	 	100 W. Washington Street
	 

	 	Address:
	 	MAC S4101-251
	 

	 	 	 	Phoenix, AZ 85003
	 

	 	 	 	Attn: Keri Tignini, Vice President
	 
	 	 	 	 
	RECITALS:
	 	 	 	 

          A. Bank has extended to Borrower a revolving line of credit (the “Line of
Credit”) in the maximum principal amount of Sixty Million and No/100 Dollars
($60,000,000.00), pursuant to that certain Amended and Restated Credit Agreement, dated
December 9, 2005, as modified by that certain First Modification Agreement, dated July 1,
2006,
that certain Second Modification Agreement, dated December 1, 2006 and that certain Third
Modification Agreement, dated April 20, 2007 (as modified, the “Credit Agreement”),
and
evidenced by that certain $80,000,000 Third Amended and Restated Revolving Line of Credit
Note dated April 20, 2007 (the “Note”). The maximum available amount of the Line of
Credit
was reduced from $80,000,000.00 to $60,000,000.00 upon the 2007 Revenue Bond Closing as
more particularly referenced in Section 1.1(b) of the Credit Agreement. The unpaid
principal
outstanding under the Note as of the date hereof is $42,368,163.47. Capitalized terms not
otherwise defined herein shall have the same meaning as set forth in the Credit Agreement.

          B. The Line of Credit is secured by, among other things, the collateral as
more particularly referenced in Section 1.3 of the Credit Agreement.

 

 

          C. Borrower has requested that Bank modify the Line of Credit and the Loan Documents as
provided herein to, inter alia, (i) extend the Maturity Date to March 31, 2009 and (iv) modify the
Rolling Four Quarter EBITDA Coverage Ratio. Bank is willing to so modify the Line of Credit and the
Loan Documents, subject to the terms and conditions herein.

AGREEMENT:

For good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Borrower and Bank agree as follows:

1. ACCURACY OF RECITALS.

     Borrower acknowledges the accuracy of the Recitals.

2. MODIFICATION OF LOAN DOCUMENTS.

     2.1 The Loan Documents are modified as follows:

          2.1.1 The Maturity Date of the Line of Credit is hereby extended from March 31, 2008 to March
31, 2009. On the Maturity Date, Borrower shall pay to Bank the unpaid principal, accrued and
unpaid interest, and all other amounts payable by Borrower under the Loan Documents as modified
herein.

          2.1.2 Section 4.9(b) of the Credit Agreement is hereby deleted in its entirety and
the following is inserted in place thereof:

     (b) Rolling Four Quarter EBITDA Coverage.
Rolling Four Quarter EBITDA Coverage Ratio as of each fiscal
quarter end not less than 1.35 to 1.0, with “Rolling Four Quarter
EBITDA” defined as net profit before tax plus interest expense
(net of capitalized interest expense), depreciation expense and
amortization expense for the most recent four (4) quarters;
provided, however, Bank shall exclude from the foregoing
calculation the amount of any “impact fees” and any expenses
related thereto, any cash flows pledged to any entity other than
Bank (except for cash flows pledged in connection with the Revenue
Bonds) and any non-recurring income (including, but not limited
to, interest income and gains (or losses) on the sale of any
utility company). “Rolling Four Quarter EBITDA Coverage Ratio”
defined as Rolling Four Quarter EBITDA divided by the aggregate of
interest expense based on the most recent four (4) quarters plus
current maturities of long-term debt. “Revenue Bonds” defined as
the “Bonds” as such term is defined in Section 5.7 of the
Credit Agreement and the revenue bonds issued pursuant to the 2007
Revenue Bond Closing. If Borrower either (i) acquires a utility
company during the term of any credit hereunder and/or (ii)
divests itself of a utility

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company during the term of any credit hereunder, Borrower’s
Rolling Four Quarter EBITDA shall be adjusted to either include
the Rolling Four Quarter EBITDA of the acquired entity or exclude
the Rolling Four Quarter EBITDA of the divested entity, as
applicable, which shall be subject to adjustment and
qualification by Bank.

     2.2 Each of the Loan Documents is modified to provide that it shall be a default or an event
of default thereunder if Borrower shall fail to comply with any of the covenants of Borrower herein
or if any representation or warranty by Borrower herein or by any guarantor in any related Consent
and Agreement of Guarantor(s) is materially incomplete, incorrect, or misleading as of the date
hereof.

     2.3 Each reference in the Loan Documents to any of the Loan Documents shall be a reference to
such document as modified herein.

3. RATIFICATION OF LOAN DOCUMENTS AND COLLATERAL

     The Loan Documents are ratified and affirmed by Borrower and shall remain in full force and
effect as modified herein. Any property or rights to or interests in property granted as security
in the Loan Documents shall remain as security for the Line of Credit and the obligations of
Borrower in the Loan Documents.

4. BORROWER REPRESENTATIONS AND WARRANTIES.

     Borrower represents and warrants to Bank:

     4.1 No default or event of default under any of the Loan Documents as modified herein, nor
any event, that, with the giving of notice or the passage of time or both, would be a default or
an event of default under the Loan Documents as modified herein has occurred and is continuing.

     4.2 There has been no material adverse change in the financial condition of Borrower or any
other person whose financial statement has been delivered to Bank in connection with the Line of
Credit from the most recent financial statement received by Bank.

     4.3 Each and all representations and warranties of Borrower in the Loan Documents are
accurate on the date hereof.

     4.4 Borrower has no claims, counterclaims, defenses, or set-offs with respect to the Line of
Credit or the Loan Documents as modified herein.

     4.5 The Loan Documents as modified herein are the legal, valid, and binding obligation of
Borrower, enforceable against Borrower in accordance with their terms.

     4.6 Borrower is validly existing under the laws of the State of its formation or
organization and has the requisite power and authority to execute and deliver this Agreement and
to perform the Loan Documents as modified herein. The execution and delivery of this

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Agreement and the performance of the Loan Documents as modified herein have been duly authorized
by all requisite action by or on behalf of Borrower. This Agreement has been duly executed and
delivered on behalf of Borrower. The certifications, representations and warranties made to Bank
in those certain Corporate Resolutions and Limited Liability Certificates of Borrower, dated
December 9, 2005 remain true and correct as of the date of this Agreement.

5. BORROWER COVENANTS.

     Borrower covenants with Bank:

     5.1 Borrower shall execute, deliver, and provide to Bank such additional agreements,
documents, and instruments as reasonably required by Bank to effectuate the intent of this
Agreement.

     5.2 Borrower fully, finally, and forever releases and discharges Bank and its successors,
assigns, directors, officers, employees, agents, and representatives from any and all actions,
causes of action, claims, debts, demands, liabilities, obligations, and suits, of whatever kind or
nature, in law or equity of Borrower, whether now known or unknown to Borrower, (i) in respect of
the Line of Credit, the Loan Documents, or the actions or omissions of Bank in respect of the Line
of Credit or the Loan Documents and (ii) arising from events occurring prior to the date of this
Agreement.

     5.3 Contemporaneously with the execution and delivery of this Agreement, Borrower has paid to
Bank:

          5.3.1 All the external costs and expenses incurred by Bank in connection with this
Agreement (including, without limitation, outside attorneys’ fees).

6. EXECUTION AND DELIVERY OF AGREEMENT BY BANK.

     Bank shall not be bound by this Agreement until (i) Bank has executed and delivered this
Agreement, (ii) Borrower has performed all of the obligations of Borrower under this Agreement to
be performed contemporaneously with the execution and delivery of this Agreement, if any, and
(iii) each guarantor of the Line of Credit and each pledgor of collateral has executed and
delivered to Bank a Consent and Agreement of Guarantor(s) and Pledgor(s).

7. INTEGRATION, ENTIRE AGREEMENT, CHANGE, DISCHARGE, TERMINATION, OR WAIVER.

     The Loan Documents as modified herein contain the complete understanding and agreement of
Borrower and Bank in respect of the Line of Credit and supersede all prior representations,
warranties, agreements, arrangements, understandings, and negotiations. No provision of the Loan
Documents as modified herein may be changed, discharged, supplemented, terminated, or waived
except in a writing signed by the parties thereto.

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8. BINDING EFFECT.

     The Loan Documents, as modified herein, shall be binding upon and shall inure to the benefit
of Borrower and Bank and their successors and assigns and the executors, legal administrators,
personal representatives, heirs, devisees, and beneficiaries of Borrower; provided, however,
Borrower may not assign any of its rights or delegate any of its obligations under the Loan
Documents and any purported assignment or delegation shall be void.

9. CHOICE OF LAW.

     This Agreement shall be governed by and construed in accordance with the laws of the State
of Arizona, without giving effect to conflicts of law principles.

10. COUNTERPART EXECUTION.

     This Agreement may be executed in one or more counterparts, each of which shall be deemed an
original and all of which together shall constitute one and the same document. Signature pages may
be detached from the counterparts and attached to a single copy of this Agreement to physically
form one document.

DATED as of the date first above stated.

	 	 	 	 	 	 	 	 	 	 	 
	GLOBAL WATER RESOURCES, L.L.C.

a Delaware limited liability company	 	 	 	WELLS FARGO BANK,

NATIONAL ASSOCIATION	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ William S. Levine
	 	 	 	By:
	 	/s/ Keri Tignini	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 

	 	William S. Levine, Manager
	 	 	 	 	 	Keri Tignini, Vice President	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	GLOBAL WATER
MANAGEMENT, LLC. 

a Delaware limited liability company	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ William S. Levine	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	William S. Levine, Manager	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	GLOBAL WATER, INC.,

a Delaware corporation	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Trevor Hill	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	Trevor Hill, President	 	 	 	 	 	 	 	 

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CONSENT AND AGREEMENT OF GUARANTORS AND PLEDGORS

     With respect to the Fourth Modification Agreement, dated February 28, 2008
(“Agreement”), among GLOBAL WATER RESOURCES, LLC, a Delaware limited liability company,
GLOBAL WATER MANAGEMENT, LLC, a Delaware limited liability company, and GLOBAL WATER, INC., (f/k/a
GLOBAL WATER RESOURCES, INC.), a Delaware corporation (collectively, “Borrower”), and WELLS
FARGO BANK, NATIONAL ASSOCIATION, a national banking association
(“Bank”), WILLIAM S. LEVINE and
LEVINE INVESTMENTS LIMITED PARTNERSHIP, an Arizona limited partnership (collectively,
“Guarantors”) and TREVOR HILL, LEO COMMANDEUR, DANIEL CRACCHIOLO, ANDREW COHN, GRAHAM
SYMMONDS and CINDY LILES (collectively, “Pledgors”) agree for the benefit of Bank as
follows:

     1. Guarantors acknowledge (i) receiving a copy of and reading the Agreement, (ii)
the accuracy of the Recitals in the Agreement, and (iii) the effectiveness of (A) those certain
Continuing Guaranties dated December 9, 2005 (collectively the “Guaranty”), by the
undersigned Guarantors for the benefit of Bank, as modified herein, and (B) any other agreements,
documents, or instruments securing or otherwise relating to the Guaranty, as modified herein. The
Guaranty and such other agreements, documents, and instruments, as modified herein, are referred
to individually and collectively as the “Guarantor Documents”. All capitalized terms used
herein and not otherwise defined shall have the meaning given to such
terms in the Agreement.

     2. Pledgors acknowledge (i) receiving a copy of and reading the Agreement, (ii) the
accuracy of the Recitals in the Agreement, and (iii) the effectiveness of (A) those certain
Collateral Assignments of Member Interest dated December 9, 2005 (collectively the
“Assignment”), by the undersigned Pledgors for the benefit of Bank, as modified herein,
and (B) any other agreements, documents, or instruments relating to the Assignment, as modified
herein. The Assignment and such other agreements, documents, and instruments, as modified herein,
are referred to individually and collectively as the “Pledgor Documents”. All capitalized
terms used herein and not otherwise defined shall have the meaning given to such terms in the
Agreement.

     3. Guarantors and Pledgors consent to the modification of the Loan Documents and all other
matters in the Agreement.

     4. Guarantors and Pledgors fully, finally, and forever release and discharge Bank and its
successors, assigns, directors, officers, employees, agents, and representatives from any and all
actions, causes of action, claims, debts, demands, liabilities, obligations, and suits of whatever
kind or nature, in law or equity, that Guarantor has or in the future may have, whether known or
unknown, (i) in respect of the Line of Credit, the Loan Documents, the Guarantor Documents, the
Pledgor Documents or the actions or omissions of Bank in respect of the Line of Credit, the Loan
Documents, the Guarantor Documents or the Pledgor Documents and (ii) arising from events occurring
prior to the date hereof.

     5. Guarantors and Pledgors agree that all references, if any, to the Note, the Credit
Agreement, and the other Loan Documents in the Guarantor Documents and the Pledgor

 

 

Documents shall be deemed to refer to such agreements, documents, and instruments as modified by
the Agreement.

     6. Guarantors reaffirm the Guarantor Documents and agree that the Guarantor Documents continue
in full force and effect and remain unchanged, except as specifically modified by this Consent and
Agreement of Guarantors and Pledgors. Any property or rights to or interests in property granted as
security in the Guarantor Documents shall remain as security for the Line of Credit, the Guaranty
and the obligations of Guarantors in the Guaranty.

     7. Pledgors reaffirms the Pledgor Documents and agrees that the Pledgor Documents continue in
full force and effect and remain unchanged, except as specifically modified by this Consent and
Agreement of Guarantors and Pledgors. Any property or rights to or interests in property granted as
security in the Pledgor Documents shall remain as security for the Line of Credit.

     8. Guarantors represent and warrant that the Loan Documents, as modified by the Agreement,
and the Guarantor Documents, as modified by this Consent and Agreement of Guarantors and Pledgors,
are the legal, valid, and binding obligations of Borrower and the Guarantors, respectively,
enforceable in accordance with their terms against Borrower and Guarantors, respectively.

     9. Pledgors represent and warrant that the Loan Documents, as modified by the Agreement, and
the Pledgor Documents, as modified by this Consent and Agreement of Guarantors and Pledgors, are
the legal, valid, and binding obligations of Borrower and the Pledgors, respectively, enforceable
in accordance with their terms against Borrower and Pledgors, respectively.

     10. Guarantors represent and warrant that Guarantors have no claims, counterclaims, defenses,
or off sets with respect to the enforcement against Guarantors of the Guarantor Documents.

     11. Pledgors represent and warrant that Pledgors have no claims, counterclaims, defenses, or
offsets with respect to the enforcement against Pledgors of the Pledgor Documents.

     12. Guarantors and Pledgors represent and warrant that there has been no material adverse
change in the financial condition of any Guarantor or Pledgor from the most recent financial
statement received by Bank.

     13. Guarantors and Pledgors agree that this Consent and Agreement of Guarantors and Pledgors
may be executed in one or more counterparts, each of which shall be deemed an original and all of
which together shall constitute one and the same document. Signature and acknowledgment pages may
be detached from the counterparts and attached to a single copy of this Consent and Agreement of
Guarantors and Pledgors to physically form one document.

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	 	GUARANTORS:

 	 
	 	/s/ WILLIAM S. LEVINE
 	 
	 	WILLIAM S. LEVINE 	 
	 
	 	LEVINE INVESTMENTS LIMITED PARTNERSHIP, an Arizona limited partnership

 	 
	 	By:  	/s/ William S. Levine
 	 
	 	 	Name:  	William S. Levine 	 
	 	 	Title:  	General Partner 	 
	 
	 	PLEDGORS:

 	 
	 	/s/ Trevor Hill
 	 
	 	Trevor Hill 	 
	 
	 	               /s/ Leo Commandeur
 	 
	 	Leo Commandeur 	 
	 
	 	               /s/ Daniel Cracchiolo
 	 
	 	Daniel Cracchiolo 	 
	 
	 	               /s/ Andrew Cohn
 	 
	 	Andrew Cohn 	 
	 
	 	               /s/ Graham Symmonds
 	 
	 	Graham Symmonds 	 
	 
	 	               /s/ Cindy Liles
 	 
	 	Cindy Liles 	 
	 	 	 
	 

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AMENDED AND RESTATED REVOLVING LINE OF CREDIT NOTE

			
	$35,000,000.00
	 	Phoenix, Arizona
	 
	 	December 9, 2005

     FOR VALUE RECEIVED, the undersigned GLOBAL WATER RESOURCES, LLC, GLOBAL WATER MANAGEMENT, LLC
AND GLOBAL WATER RESOURCES, INC. (each individually and collectively, the “Borrower”) promise to
pay to the order of WELLS FARGO BANK, NATIONAL ASSOCIATION (“Bank”) at its office at 100 West
Washington, Phoenix, Arizona 85003, or at such other place as the holder hereof may designate, in
lawful money of the United States of America and in immediately available funds, the principal sum
of Thirty-Five Million Dollars ($35,000,000.00), or so much thereof as may be advanced and be
outstanding, with interest thereon, to be computed on each advance from the date of its
disbursement as set forth herein.

DEFINITIONS:

     As used herein, the following terms shall have the meanings set forth after each, and any
other term defined in this Note shall have the meaning set forth at the place defined:

     (a) “Business Day” means any day except a Saturday, Sunday or any other day on which
commercial banks in Arizona are authorized or required by law to close.

     (b) “Fixed Rate Term” means a period commencing on a Business Day and continuing for 1, 2,
3, 6 or 12 months, as designated by Borrower, during which all or a portion of the outstanding
principal balance of this Note bears interest determined in relation to LIBOR; provided however,
that no Fixed Rate Term may be selected for a principal amount less than Five Hundred Thousand
Dollars ($500,000.00); and provided further, that no Fixed Rate Term shall extend beyond December
9, 2007 (the “Maturity Date”). If any Fixed Rate Term would end on a day which is not a Business
Day, then such Fixed Rate Term shall be extended to the next succeeding Business Day.

     (c) “LIBOR” means the rate per annum (rounded upward, if necessary, to the nearest whole 1/8
of 1%) and determined pursuant to the following formula:

	 	 	 	 	 
	LIBOR =

	 	Base LIBOR
 

100% — LIBOR Reserve Percentage
	 	 

     (i) “Base LIBOR” means the rate per annum for United States dollar deposits quoted by Bank as
the Inter-Bank Market Offered Rate, with the understanding that such rate is quoted by Bank for
the purpose of calculating effective rates of interest for loans making reference thereto, on the
first day of a Fixed Rate Term for delivery of funds on said date for a period of time
approximately equal to the number of days in such Fixed Rate Term and in an amount approximately
equal to the principal amount to which such Fixed Rate Term applies. Borrower understands and
agrees that Bank may base its quotation of the Inter-Bank Market Offered Rate upon such offers or
other market indicators of the Inter-Bank Market as Bank in its discretion deems appropriate
including, but not limited to, the rate offered for U.S. dollar deposits on the London Inter-Bank
Market.

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     (ii) “LIBOR Reserve Percentage” means the reserve percentage prescribed by the Board of
Governors of the Federal Reserve System (or any successor) for “Eurocurrency Liabilities” (as
defined in Regulation D of the Federal Reserve Board, as amended), adjusted by Bank for expected
changes in such reserve percentage during the applicable Fixed Rate Term.

     (d) “Prime Rate” means at any time the rate of interest most recently announced within Bank at
its principal office as its Prime Rate, with the understanding that the Prime Rate is one of Bank’s
base rates and serves as the basis upon which effective rates of interest are calculated for those
loans making reference thereto, and is evidenced by the recording thereof after its announcement in
such internal publication or publications as Bank may designate.

INTEREST:

     (a) Interest. The outstanding principal balance of this Note shall bear interest
(computed on the basis of a 360-day year, actual days elapsed) either (i) at a fluctuating rate per
annum equal to the Prime Rate in effect from time to time minus 1.25%, or (ii) at a fixed rate per
annum determined by Bank to be 1.25% above LIBOR in effect on the first day of the applicable Fixed
Rate Term. When interest is determined in relation to the Prime Rate, each change in the rate of
interest hereunder shall become effective on the date each Prime Rate change is announced within
Bank. With respect to each LIBOR selection hereunder, Bank is hereby authorized to note the date,
principal amount, interest rate and Fixed Rate Term applicable thereto and any payments made
thereon on Bank’s books and records (either manually or by electronic entry) and/or on any schedule
attached to this Note, which notations shall be prima facie evidence of the accuracy of the
information noted.

     (b) Selection of Interest Rate Options. At any time any portion of this Note bears
interest determined in relation to LIBOR, it may be continued by Borrower at the end of the Fixed
Rate Term applicable thereto so that all or a portion thereof bears interest determined in relation
to the Prime Rate or to LIBOR for a new Fixed Rate Term designated by Borrower. At any time any
portion of this Note bears interest determined in relation to the Prime Rate, Borrower may convert
all or a portion thereof so that it bears interest determined in relation to LIBOR for a Fixed Rate
Term designated by Borrower. At such time as Borrower requests an advance hereunder or wishes to
select a LIBOR option for all or a portion of the outstanding principal balance hereof, and at the
end of each Fixed Rate Term, Borrower shall give Bank notice specifying: (i) the interest rate
option selected by Borrower; (ii) the principal amount subject thereto; and (iii) for each LIBOR
selection, the length of the applicable Fixed Rate Term. Any such notice may be given by telephone
(or such other electronic method as Bank may permit) so long as, with respect to each LIBOR
selection, (A) if requested by Bank, Borrower provides to Bank written confirmation thereof not
later than three (3) Business Days after such notice is given, and (B) such notice is given to Bank
prior to 10:00 a.m. on the first day of the Fixed Rate Term, or at a later time during any Business
Day if Bank, at it’s sole option but without obligation to do so, accepts Borrower’s notice and
quotes a fixed rate to Borrower. If Borrower does not immediately accept a fixed rate when quoted
by Bank, the quoted rate shall expire and any subsequent LIBOR request from Borrower shall be
subject to a redetermination by Bank of the applicable fixed rate. If no specific designation of
interest is made at the time any advance is requested hereunder or at the end of any Fixed Rate
Term, Borrower shall be deemed to have made a Prime Rate interest selection for such advance or the
principal amount to which such Fixed Rate Term applied.

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     (c) Taxes and Regulatory Costs. Borrower shall pay to Bank immediately upon demand,
in addition to any other amounts due or to become due hereunder, any and all (i) withholdings,
interest equalization taxes, stamp taxes or other taxes (except income and franchise taxes) imposed
by any domestic or foreign governmental authority and related in any manner to LIBOR, and (ii)
future, supplemental, emergency or other changes in the LIBOR Reserve Percentage, assessment rates
imposed by the Federal Deposit Insurance Corporation, or similar requirements or costs imposed by
any domestic or foreign governmental authority or resulting from compliance by Bank with any
request or directive (whether or not having the force of law) from any central bank or other
governmental authority and related in any manner to LIBOR to the extent they are not included in
the calculation of LIBOR. In determining which of the foregoing are attributable to any LIBOR
option available to Borrower hereunder, any reasonable allocation made by Bank among its operations
shall be conclusive and binding upon Borrower.

     (d) Payment of Interest. Interest accrued on this Note shall be payable on the first
day of each month, commencing January 1, 2006.

     (e) Default Interest. From and after the Maturity Date of this Note, or such earlier
date as all principal owing hereunder becomes due and payable by acceleration or otherwise, the
outstanding principal balance of this Note shall bear interest until paid in full at an increased
rate per annum (computed on the basis of a 360-day year, actual days elapsed) equal to four percent
(4%) above the rate of interest from time to time applicable to this Note.

BORROWING AND REPAYMENT:

     (a) Borrowing and Repayment. Borrower may from time to time during the term of this
Note borrow, partially or wholly repay its outstanding borrowings, and reborrow, subject to all of
the limitations, terms and conditions of this Note and of any document executed in connection with
or governing this Note; provided however, that the total outstanding borrowings under this Note
shall not at any time exceed the principal amount stated above. The unpaid principal balance of
this obligation at any time shall be the total amounts advanced hereunder by the holder hereof
less the amount of principal payments made hereon by or for any Borrower, which balance may be
endorsed hereon from time to time by the holder. The outstanding principal balance of this Note
shall be due and payable in full on the Maturity Date.

     (b) Advances. Advances hereunder, to the total amount of the principal sum stated
above, may be made by the holder at the oral or written request of (i) Williams S. Levine, acting
alone, or (ii) any two of the following Robert Carone, Andrew Cohn, Trevor Hill or Cindy Liles, so
long as William S. Levine, Robert Carone and/or Andrew Cohn is one of the two requesting an
advance, who are authorized to request advances and direct the disposition of any advances until
written notice of the revocation of such authority is received by the holder at the office
designated above, or (iii) any person, with respect to advances deposited to the credit of any
deposit account of any Borrower, which advances, when so deposited, shall be conclusively presumed
to have been made to or for the benefit of each Borrower regardless of the fact that persons other
than those authorized to request advances may have authority to draw against such account. The
holder shall have no obligation to determine whether any person requesting an advance is or has
been authorized by any Borrower.

     (c) Application of Payments. Each payment made on this Note shall be credited first,
to any interest then due and second, to the outstanding principal balance hereof. All

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payments credited to principal shall be applied first, to the outstanding principal balance of this
Note which bears interest determined in relation to the Prime Rate, if any, and second, to the
outstanding principal balance of this Note which bears interest determined in relation to LIBOR,
with such payments applied to the oldest Fixed Rate Term first.

PREPAYMENT:

     (a) Prime Rate. Borrower may prepay principal on any portion of this Note which
bears interest determined in relation to the Prime Rate at any time, in any amount and without
penalty.

     (b) LIBOR. Borrower may prepay principal on any portion of this Note which bears
interest determined in relation to LIBOR at any time and in the minimum amount of One Hundred
Thousand Dollars ($100,000.00); provided however, that if the outstanding principal balance of such
portion of this Note is less than said amount, the minimum prepayment amount shall be the entire
outstanding principal balance thereof. In consideration of Bank providing this prepayment option to
Borrower, or if any such portion of this Note shall become due and payable at any time prior to the
last day of the Fixed Rate Term applicable thereto by acceleration or otherwise, Borrower shall pay
to Bank immediately upon demand a fee which is the sum of the discounted monthly differences for
each month from the month of prepayment through the month in which such Fixed Rate Term matures,
calculated as follows for each such month:

	 	(i)	 	Determine the amount of interest which would have accrued each
month on the amount prepaid at the interest rate applicable to such amount had
it remained outstanding until the last day of the Fixed Rate Term applicable
thereto.
	 
	 	(ii)	 	Subtract from the amount determined in (i) above the amount of
interest which would have accrued for the same month on the amount prepaid for
the remaining term of such Fixed Rate Term at LIBOR in effect on the date of
prepayment for new loans made for such term and in a principal amount equal to
the amount prepaid.
	 
	 	(iii)	 	If the result obtained in (ii) for any month is greater than zero,
discount that difference by LIBOR used in (ii) above.

Each Borrower acknowledges that prepayment of such amount may result in Bank incurring additional
costs, expenses and/or liabilities, and that it is difficult to ascertain the full extent of such
costs, expenses and/or liabilities. Each Borrower, therefore, agrees to pay the above-described
prepayment fee and agrees that said amount represents a reasonable estimate of the prepayment
costs, expenses and/or liabilities of Bank. If Borrower fails to pay any prepayment fee when due,
the amount of such prepayment fee shall thereafter bear interest until paid at a rate per annum
2.0% above the Prime Rate in effect from time to time (computed on the basis of a 360-day year,
actual days elapsed). Each change in the rate of interest on any such past due prepayment fee
shall become effective on the date each Prime Rate change is announced within Bank.

-4-

 

EVENTS OF DEFAULT:

     This Note is made pursuant to and is subject to the terms and conditions of that certain
Amended and Restated Credit Agreement between Borrower and Bank dated as of December 9, 2005 as
amended from time to time (the “Credit Agreement”). Any default in the payment or performance of
any obligation under this Note, or any defined event of default under the Credit Agreement, shall
constitute an “Event of Default” under this Note.

MISCELLANEOUS:

     (a) Remedies. Upon the occurrence of any Event of Default, the holder of this Note, at the
holder’s option, may declare all sums of principal and interest outstanding hereunder to be
immediately due and payable without presentment, demand, notice of nonperformance, notice of
protest, protest or notice of dishonor, all of which are expressly waived by each Borrower, and the
obligation, if any, of the holder to extend any further credit hereunder shall immediately cease
and terminate. Each Borrower shall pay to the holder immediately upon demand the full amount of
all payments, advances, charges, costs and expenses, including reasonable attorneys’ fees (to
include outside counsel fees and all allocated costs of the holder’s in-house counsel), expended
or incurred by the holder in connection with the enforcement of the holder’s rights and/or
the collection of any amounts which become due to the holder under this Note, and the prosecution
or defense of any action in any way related to this Note, including without limitation, any action
for declaratory relief, whether incurred at the trial or appellate level, in an arbitration
proceeding or otherwise, and including any of the foregoing incurred in connection with any
bankruptcy proceeding (including without limitation, any adversary proceeding, contested matter or
motion brought by Bank or any other person) relating to any Borrower or any other person or entity.

     (b) Obligations Joint and Several. Should more than one person or entity sign this
Note as a Borrower, the obligations of each such Borrower shall be joint and several.

     (c) Governing Law. This Note shall be governed by and construed in accordance with
the laws of the State of Arizona.

AMENDMENT AND RESTATEMENT:

This Note constitutes an amendment and restatement of that certain Revolving Line of Credit Note,
dated July 7, 2005, in the original principal amount of TEN MILLION AND NO/100 Dollars
($10,000,000.00) (the “Original Note”) to the extent that the obligations covered by the Original
Note constitute a single, ongoing obligation of Borrower. The principal balance outstanding under
the Original Note as of the date hereof is $9,000,000.00. The Original Note is fully replaced by
this Note and the Original Note is of no further force or effect.

-5-

 

IN WITNESS WHEREOF, the undersigned has executed this Note as of the date first written above.

BORROWER:

	 	 	 	 	 
	GLOBAL WATER RESOURCES, L.L.C.,	 	 
	a Delaware limited liability company	 	 
	 
	 	 	 	 
	By:

	 	/s/ William S. Levine
 

William S. Levine, Manager
	 	 
	 
	 	 	 	 
	GLOBAL WATER MANAGEMENT, LLC,	 	 
	a Delaware limited liability company	 	 
	 
	 	 	 	 
	By:

	 	/s/ William S. Levine
 

William S. Levine, Manager
	 	 
	 
	 	 	 	 
	GLOBAL WATER RESOURCES, INC.,	 	 
	a Delaware corporation	 	 
	 
	 	 	 	 
	By:

	 	/s/ Trevor Hill
 

Trevor Hill, President
	 	 

-6-

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