Document:

exv4w3

EXHIBIT 4.3

EXECUTION COPY

 

 

FIRST SUPPLEMENTAL TRUST INDENTURE

THE INDUSTRIAL DEVELOPMENT AUTHORITY

OF THE COUNTY OF PIMA,

as Issuer

and

U.S. BANK NATIONAL ASSOCIATION,

as Trustee

$54,135,000

The Industrial Development Authority

of the County of Pima

Water and Wastewater Revenue Bonds

(Global Water Resources, LLC Project)

Series 2007

Dated as of November 1, 2007

 

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	Page
	 
	 	 	 	 	 	 
	ARTICLE I

SUPPLEMENTAL INDENTURE; DEFINITIONS

	 
	 	 	 	 	 	 
	Section 1.01.

	 	Supplemental Indenture
	 	 	2	 
	 
	 	 	 	 	 	 
	Section 1.02.

	 	Definitions
	 	 	2	 
	 
	 	 	 	 	 	 
	Section 1.03.

	 	Proposed Amendment to Definitions of “Debt Service Coverage
Ratio” and “Maximum Annual Debt Service”
	 	 	3	 
	 
	 	 	 	 	 	 
	ARTICLE II

AUTHORIZATION AND TERMS OF THE SERIES 2007 BONDS

	 
	 	 	 	 	 	 
	Section 2.01.

	 	The Series 2007 Bonds; Issuance and Terms
	 	 	5	 
	 
	 	 	 	 	 	 
	Section 2.02.

	 	Optional and Mandatory Redemption
	 	 	7	 
	 
	 	 	 	 	 	 
	Section 2.03.

	 	Partial Redemption
	 	 	10	 
	 
	 	 	 	 	 	 
	Section 2.04.

	 	Election to Redeem
	 	 	10	 
	 
	 	 	 	 	 	 
	Section 2.05.

	 	Notice of Redemption
	 	 	11	 
	 
	 	 	 	 	 	 
	Section 2.06.

	 	Payment of Redeemed Bonds
	 	 	11	 
	 
	 	 	 	 	 	 
	Section 2.07.

	 	Delivery of Moneys for Optional Redemption
	 	 	11	 
	 
	 	 	 	 	 	 
	Section 2.08.

	 	Variation of Redemption Provisions
	 	 	12	 
	 
	 	 	 	 	 	 
	Section 2.09.

	 	Initial Delivery of the Series 2007 Bonds; Deposit of Proceeds
	 	 	12	 
	 
	 	 	 	 	 	 
	Section 2.10.

	 	Creation of the Series 2007 Project Fund
	 	 	13	 
	 
	 	 	 	 	 	 
	Section 2.11.

	 	Disbursements from and Records of Series 2007 Project Fund
	 	 	13	 
	 
	 	 	 	 	 	 
	Section 2.12.

	 	Completion of the Series 2007 Project
	 	 	13	 
	 
	 	 	 	 	 	 
	ARTICLE III

REPRESENTATIONS; COVENANTS AND AGREEMENTS OF ISSUER

	 
	 	 	 	 	 	 
	Section 3.01.

	 	Covenants and Agreements of the Issuer
	 	 	14	 
	 
	 	 	 	 	 	 
	Section 3.02.

	 	Observance and Performance of Covenants, Agreements, Authority and Actions
	 	 	15	 
	 
	 	 	 	 	 	 
	Section 3.03.

	 	Enforcement of Issuer’s Obligations
	 	 	16	 
	 
	 	 	 	 	 	 
	Section 3.04.

	 	Reliance by Issuer on Facts or Certificates, Limitations on Actions
	 	 	16	 
	 
	 	 	 	 	 	 
	Section 3.05.

	 	Immunity of Issuer’s Directors, Officers, Counsel, Financial Advisors, and
Agents
	 	 	16	 
	 
	 	 	 	 	 	 
	Section 3.06.

	 	No Pecuniary Liability of the Issuer
	 	 	17	 
	 
	 	 	 	 	 	 
	Section 3.07.

	 	Acceptance by Trustee of Duties Under Agreement
	 	 	17	 

 

 

	 	 	 	 	 	 	 
	 	 	 	 	Page
	 
	 	 	 	 	 	 
	ARTICLE IV

MISCELLANEOUS

	 
	 	 	 	 	 	 
	Section 4.01.

	 	Effect of First Supplemental Indenture
	 	 	18	 
	 
	 	 	 	 	 	 
	Section 4.02.

	 	Severability
	 	 	18	 
	 
	 	 	 	 	 	 
	Section 4.03.

	 	Contrary Provisions Deleted
	 	 	18	 
	 
	 	 	 	 	 	 
	Section 4.04.

	 	Execution in Several Counterparts
	 	 	18	 
	 
	 	 	 	 	 	 
	Section 4.05.

	 	Conflict of Interest
	 	 	18	 
	 
	 	 	 	 	 	 
	Section 4.06.

	 	Binding Effect
	 	 	18	 
	 
	 	 	 	 	 	 
	EXHIBIT A

	 	FORM OF SERIES 2007 BOND	 	 	 	 

ii

 

FIRST SUPPLEMENTAL TRUST INDENTURE

     THIS FIRST SUPPLEMENTAL TRUST INDENTURE, dated as of November 1, 2007 (the “First Supplemental
Indenture”), is by and between THE INDUSTRIAL DEVELOPMENT AUTHORITY OF THE COUNTY OF PIMA (the
“Issuer”), a nonprofit corporation designated as a political subdivision of the State of Arizona
(the “State”) incorporated with the approval of the County of Pima (the “County”) pursuant to the
provisions of the Constitution of the State and under Title 35, Chapter 5, Arizona Revised
Statutes, as amended, and U.S. BANK NATIONAL ASSOCIATION (the “Trustee”), a national banking
association organized under the laws of the United States of America, and authorized to exercise
corporate trust powers in the State of Arizona, with a corporate trust office located in Phoenix,
Arizona, and supplements the Trust Indenture dated as of December 1, 2006 (the “2006 Indenture”) by
and between the Issuer and the Trustee ( the 2006 Indenture together with the First Supplemental
Indenture, collectively, the “Indenture”).

     WHEREAS, pursuant to the Industrial Development Financing Act, Title 35, Chapter 5 of Arizona
Revised Statues, as amended (the “Act”), and the Indenture, the Issuer has previously issued its
Industrial Development Authority of the County of Pima Water and Wastewater Revenue Bonds (Global
Water Resources, LLC Project) Series 2006 (the “Series 2006 Bonds”) in the original aggregate
principal amount of $36,495,000; and

     WHEREAS, the proceeds of the Series 2006 Bonds were used to fund a loan to Global Water
Resources LLC, an Arizona limited liability company (the “Company”) pursuant to a Loan Agreement
dated as of December 1, 2006 (the “Loan Agreement”), between the Issuer, the Company and the
Trustee to finance or refinance the costs of the acquisition, expansion, construction, improvement
and equipping of facilities for wastewater treatment and water treatment, as well as water
reclamation pipelines, water pipelines, and wastewater collection pipelines, consisting of water,
wastewater and reclaimed water infrastructure for water and wastewater treatment, including water
mains, sewer mains, reclaimed water mains, water treatment facilities, water distribution centers,
wastewater lift stations, wastewater treatment facilities, and reclaimed water mixing and
distribution centers as well as related information and management systems, located at 41265 West
Hiller Road, Maricopa, Arizona 85239 in the City of Maricopa, Arizona (collectively, the “Series
2006 Project”); and

     WHEREAS, the Act authorizes the Issuer to issue revenue bonds for the purpose of financing or
refinancing a “project” under the Act; and

     WHEREAS, Section 2.04 of the Indenture permits the issuance of Additional Bonds on a parity
with the Series 2006 Bonds, as to the assignment to the Trustee of the Issuer’s right, title and
interest in the Revenues and the Agreement (other than the Unassigned Issuer’s Rights) to provide
for the payment of Bond Service Charges on the Bonds (as such terms are defined in the Indenture);
and

     WHEREAS, Section 8.03 of the Indenture permits the Issuer to supplement and amend the
Indenture with the consent of the Holders of not less than a majority in aggregate principal

 

 

amount of the Bonds at the time Outstanding and with the consent of the Company, the Issuer
and the Trustee; and

     WHEREAS, evidenced as provided in the Indenture, the Trustee has received the consent of the
Company, the Issuer and the Holders of a majority in aggregate principal amount of the Bonds; and

     WHEREAS, in order to provide funds to financing or refinancing the costs of the acquisition,
expansion, construction, improvement and equipping of water system major capital improvements,
including a water distribution center, surface water treatment facility, water production
facilities, and pipeline, and sewerage system major capital improvements, including a water
reclamation facility, sewage lift stations, reclaimed water recharge facilities and pipelines,
located in the City of Maricopa, Arizona and in an unincorporated area of Pinal County, Arizona
south of the Ak-Chin Indian Community in the City of Maricopa’s “Growing Smarter Planning Area”
(the “Series 2007 Project”), the Issuer has determined to make additional amounts available in
order to fund a loan to the Company in the principal amount of $54,135,000 as evidenced by the Loan
Agreement as amended by a First Amendment to Loan Agreement dated as of November 1, 2007 (the
“First Amendment to Loan Agreement”) between the Issuer and the Company;

     WHEREAS, in order to provide funds necessary to enable the Issuer to make the loan and pay
certain related costs, the Issuer, pursuant to the Act, has authorized the issuance of its revenue
bonds designated as “Water and Wastewater Revenue Bonds (Global Water Resources, LLC Project)
Series 2007” in the principal amount of $54,135,000 (the “Series 2007 Bonds,” together with the
Series 2006 Bonds and any Additional Bonds, the “Bonds”); and

ARTICLE I

SUPPLEMENTAL INDENTURE; DEFINITIONS

     Section 1.01. Supplemental Indenture. This First Supplemental Indenture is supplemental to,
and is executed in accordance with and pursuant to Article II of the Indenture.

     Section 1.02. Definitions. All terms which are defined in the Indenture, as heretofore
supplemented and amended, shall have the meanings, respectively, herein (including the use thereof
in the recitals and the granting clauses thereof) unless expressly given a different meaning or
unless the context clearly requires otherwise. All terms used herein which are defined in the
recitals hereto shall have the meanings therein given to the same unless the context requires
otherwise and, in addition, the following terms shall have the meanings specified below:

     “Authorized Denominations” means with respect to the Series 2007 Bonds, $100,000 or any
integral multiple of $1,000 in excess thereof.

     “Bond Reserve Requirement” means at the time of the issuance of the Series 2007 Bonds, the
least of (i) 10% of the stated principal amount of the Series 2006 Bonds, the Series 2007 Bonds and
any Additional Bonds; (ii) Maximum Annual Debt Service on the Series 2006 Bonds, the Series 2007
Bonds and any Additional Bonds; and (iii) 125% of the average annual debt service on the Series
2006 Bonds, the Series 2007 Bonds and any Additional Bonds.

2

 

     “Depository” means, with respect to the Series 2007 Bonds, The Depository Trust Company, New
York, New York, a limited-purpose trust company organized under the laws of the State of New York.

     “Intercreditor Agreement” means that Restated and Amended Intercreditor Agreement dated
November 28, 2007 among Wells Fargo, the Company and the Trustee.

     “Interest Payment Date” means, with respect to the Series 2007 Bonds, each June 1 and December
1, commencing June 1, 2008.

     “Security Agreement” means the Amended and Restated Security Agreement dated as of November 1,
2007 by and between the Company and the Trustee.

     “Series 2007 Bonds” means the Issuer’s Water and Wastewater Revenue Bonds (Global Water
Resources, LLC Project) Series 2007.

     “Series 2007 Project Fund” means the fund created pursuant to Section 2.10 hereof.

     “Series 2007 Project Note” means the promissory note of the Company, dated as of even date
with the Series 2007 Bonds, in the form attached to the First Amendment to the Loan Agreement and
in the principal amount of $54,135,000, evidencing the obligation of the Company to make Loan
Payments.

     Section 1.03. Proposed Amendment to Definitions of “Debt Service Coverage Ratio” and “Maximum
Annual Debt Service”.

     (a) The current definition of “Debt Service Coverage Ratio” in the Indenture, being
that set forth in Section 1.01 of the Indenture is as follows:

     “Debt Service Coverage Ratio” means, for any period of time, the ratio of Income
Available For Debt Service (with respect to Additional Bonds issued subsequent to the
issuance of the Series 2006 Bonds, such amount adjusted as provided in the next sentence) to
Maximum Annual Debt Service. For purposes of this definition only, with respect to
Additional Bonds issued subsequent to the issuance of the Series 2006 Bonds, Income
Available for Debt Service may be increased by including at the time of issuance of
Additional Bonds, anticipated annual earnings on additional moneys required to be deposited
in the Bond Reserve Fund as a result of the issuance of the Additional Bonds, provided that
at the time of delivery of the Additional Bonds:

     (i) All of such moneys have been deposited in an investment agreement meeting
the requirements of clause (vi) of the definition of “Eligible Investments”;

     (ii) such investment agreement has a term equal to the longest maturity of the
Additional Bonds, and is not subject to early termination at the option of the
investment agreement provider except upon the occurrence of an event of default
thereunder; and

3

 

     (iii) the Original Purchaser certifies the estimated annual earnings to be
derived from such deposit.

     The following amended and restated definition of “Debt Service Coverage Ratio” shall become
effective immediately upon the delivery of the Series 2007 Bonds, such delivery and acceptance
thereof by the purchasers to evidence the consent of the Holders of not less than a majority in
aggregate principal amount of the Bonds at the time outstanding and with the consent of the
Company, such consent evidenced as provided in the Indenture:

     “Debt Service Coverage Ratio” means, for any period of time, the ratio of Income
Available For Debt Service to Maximum Annual Debt Service.

     (b) The current definition of “Maximum Annual Debt Service” in the Indenture, being
that set forth in Section 1.01 of the Indenture is as follows:

     “Maximum Annual Debt Service” means the greatest scheduled amount of principal
(including mandatory sinking fund payments) and interest payable on Long Term Indebtedness
(but, excluding Subordinated Indebtedness incurred in compliance with the Agreement) of the
Company during the current or any future 12 month period ending December 1.”

     The following amended and restated definition of “Maximum Annual Debt Service” shall become
effective immediately upon the delivery of the Series 2007 Bonds, such delivery and acceptance
thereof by the purchasers to evidence the consent of the Holders of not less than a majority in
aggregate principal amount of the Bonds at the time outstanding and with the consent of the
Company, such consent evidenced as provided in the Indenture:

     “Maximum Annual Debt Service” means the greatest scheduled amount of principal
(including mandatory sinking fund payments) and interest payable on Long Term Indebtedness
(but excluding Subordinated Indebtedness incurred in compliance with the Loan Agreement) of
the Company, such amount to be reduced by the amount of all investment earnings derived from
the Bond Reserve Fund, provided, however, that investment earnings derived on the Bond
Reserve Fund shall be included in such reduction only to the extent that amounts on deposit
in the Bond Reserve Fund are no less than the Bond Reserve Requirement at the time of such
calculation, during the current or any future 12-month period ending December 1, provided,
however, for purposes of determining the amount of principal payable on each series of Bonds
issued for the 12-month period ending with the final retirement of such series, there shall
be excluded the amount by which the Bond Reserve Requirement may be reduced as a result of
the final retirement of such series of Bonds.”

4

 

ARTICLE II

AUTHORIZATION AND TERMS OF THE SERIES 2007 BONDS

     Section 2.01. The Series 2007 Bonds; Issuance and Terms.

     (a) The total aggregate principal amount of Series 2007 Bonds that may be issued
pursuant to this First Supplemental Indenture is limited to $54,135,000. The Series 2007
Bonds are Additional Bonds within the meaning of the Indenture.

     (b) The Series 2007 Bonds are being issued as fully registered Additional Bonds in
the total principal amount of $54,135,000 and are hereby designated as “The Industrial
Development Authority of the County of Pima Water and Wastewater Revenue Bonds (Global
Water Resources, LLC Project) Series 2007”, substantially in the form set forth as
Exhibit A hereto. Proceeds of the Series 2007 Bonds shall be used only for the purposes
set forth in this First Supplemental Indenture.

     (c) The Series 2007 Bonds shall be issued in fully registered form in a minimum
denominations of $100,000 and in multiple integrals of $1,000 in excess thereof. The
Series 2007 Bonds shall be dated the date of initial delivery thereof.

     (d) The Series 2007 Bonds shall (i) bear interest from their date of issuance,
payable on June 1 and December 1 of each year commencing June 1, 2008, (ii) be in the
principal amounts and (iii) mature as follows:

	 	 	 	 	 	 	 	 	 
	Maturity Date	 	Principal Amount	 	Interest Rate
	 
	December 1, 2013
	 	$	1,635,000	 	 	5.50% per annum
	December 1, 2037
	 	$	52,500,000	 	 	6.55% per annum

     (e) The Series 2007 Bonds may only be sold or transferred to a purchaser or
transferee who is either a qualified institutional buyer (“Qualified Institutional
Buyer”) within the meaning of Rule 144A of the Securities Act of 1933 or an accredited
investor as defined in Rule 501 of Regulation D of the United States Securities and
Exchange Commission (“Accredited Investor” and together with a Qualified Institutional
Buyer, jointly, a “Qualified Investor”).

     (f) The Depository Trust Company, New York, New York (“DTC”) will act as securities
depository for the Series 2007 Bonds. The Series 2007 Bonds shall be initially issued in
the form of a separate single fully registered, Series 2007 Bond for each separate Stated
Maturity. Upon initial issuance the ownership of such Series 2007 Bonds shall be
registered in the Bond Register in the name of Cede & Co., as the nominee of DTC. So
long as Cede & Co. is the registered owner of the Series 2007 Bonds, as nominee of DTC,
references herein to the Series 2007 Bondholders or registered owners of the Series 2007
Bonds shall mean Cede & Co. and shall not mean the beneficial owners of the Series 2007
Bonds.

5

 

     With respect to Series 2007 Bonds registered in the Bond Register kept by the Trustee in the
name of Cede & Co. as nominee of DTC, the Issuer, the Company and the Trustee shall have no
responsibility or obligation to any participant of DTC (each, a “Participant”) or to any Person for
whom a Participant acquires an interest in the Series 2007 Bonds (a “Beneficial Owner”). Without
limiting the immediately preceding sentence, the Issuer, the Company and the Trustee shall have no
responsibility or obligation with respect to (i) the accuracy of the records of DTC, Cede & Co. or
any Participant with respect to any ownership interest in the Series 2007 Bonds, (ii) the delivery
to any Participant, any Beneficial Owner or any other Person, other than DTC, of any notice with
respect to the Series 2007 Bonds, including any notice of redemption, or (iii) the payment to any
Participant, any Beneficial Owner or any other Person, other than DTC, of any amount with respect
to the principal of or premium, if any, or interest on the Series 2007 Bonds.

     The Issuer, the Company and the Trustee may treat as and deem DTC, to be the absolute owner of
each Series 2007 Bond for the purpose of payment of the principal of and premium, if any, and
interest on such Series 2007 Bond, for the purpose of giving notices of redemption and other
matters with respect to such Series 2007 Bond, for the purpose of registering transfers with
respect to such Series 2007 Bonds, and for all other purposes whatsoever. The Trustee shall pay
all principal of and premium, if any, and interest on the Series 2007 Bonds only to or upon the
order of the Series 2007 Bondholders as shown on the Bond Register kept by the Trustee, and all
such payments shall be valid and effective to fully satisfy and discharge the Issuer’s obligations
with respect to the principal of and premium, if any, and interest on the Series 2007 Bonds to the
extent of the sum or sums so paid.

     No Person other than a Series 2007 Bondholder, as shown on the registration books kept by the
Trustee, shall receive a Series 2007 Bond certificate evidencing the obligation of the Issuer to
make payments of principal, and premium, if any, and interest pursuant to the Indenture. Upon
delivery by DTC to the Trustee of written notice to the effect that DTC has determined to
substitute a new nominee in place of Cede & Co., and subject to the transfer provisions in Section
3.06 of the Indenture, references to “Cede & Co.” in this section shall refer to such new nominee
of DTC.

     DTC may determine to discontinue providing its services with respect to the Series 2007 Bonds
at any time by giving written notice to the Company and discharging its responsibilities with
respect thereto under applicable law. The Company may terminate the services of DTC with respect
to the Series 2007 Bonds.

     Upon the termination of the services of DTC as provided in the preceding paragraph, and if no
substitute securities depository willing to undertake the functions of DTC hereunder can be found
which, in the opinion of the Company, is willing and able to undertake such functions upon
reasonable or customary terms, or if the Company determines not to continue a book-entry only
system for the Series 2007 Bonds, then the Series 2007 Bonds shall no longer be restricted to being
registered in the Bond Register kept by the Trustee in the name of Cede & Co., as nominee of DTC,
but may be registered in whatever name or names the Series 2007 Bondholders shall designate at that
time, in accordance with of the Indenture. To the extent that the Beneficial Owners are designated
as the transferee by the Series 2007 Bondholders, in accordance with the Indenture, the Series 2007
Bonds will be delivered to the Beneficial Owners.

6

 

     Notwithstanding any other provision of this First Supplemental Indenture to the contrary, so
long as any Series 2007 Bond is registered in the name of Cede & Co., as nominee of DTC, all
payments with respect to the principal of and premium, if any, and interest on such Series 2007
Bond and all notice with respect to such Series 2007 Bond shall be made and given, respectively, to
DTC as provided in the terms of any agreement between DTC and the Issuer and Trustee.

     Section 2.02. Optional and Mandatory Redemption. The Series 2007 Bonds are subject to
redemption as follows:

     (a) Mandatory Sinking Fund Redemption. The Series 2007 Bonds maturing on December 1
of the following years are subject to mandatory redemption pursuant to mandatory sinking
fund requirements, at a redemption price of 100 percent of the principal amount redeemed
plus interest accrued to the redemption date, on December 1, in the following principal
amounts in the years specified:

Bonds Maturing December 1, 2013

	 	 	 	 	 
	Year
	 	Principal Amount
	(December 1)	 	($)
	2011
	 	 	515,000	 
	2012
	 	 	545,000	 
	2013*
	 	 	575,000	 

 

			
	*	 	Maturity Date

Bonds Maturing December 1, 2037

	 	 	 	 	 
	Year
	 	Principal Amount
	(December 1)	 	($)
	 
	2014
	 	 	625,000	 
	2015
	 	 	660,000	 
	2016
	 	 	700,000	 
	2017
	 	 	745,000	 
	2018
	 	 	795,000	 
	2019
	 	 	835,000	 
	2020
	 	 	885,000	 
	2021
	 	 	940,000	 
	2022
	 	 	1,000,000	 
	2023
	 	 	1,055,000	 
	2024
	 	 	1,120,000	 
	2025
	 	 	1,180,000	 
	2026
	 	 	1,245,000	 

7

 

	 	 	 	 	 
	Year
	 	Principal Amount
	(December 1)	 	($)
	 
	2027
	 	 	1,320,000	 
	2028
	 	 	1,405,000	 
	2029
	 	 	1,480,000	 
	2030
	 	 	1,560,000	 
	2031
	 	 	1,645,000	 
	2032
	 	 	1,680,000	 
	2033
	 	 	4,600,000	 
	2034
	 	 	4,900,000	 
	2035
	 	 	5,225,000	 
	2036
	 	 	5,565,000	 
	2037*
	 	 	11,335,000	 

 

			
	*
	 	Maturity Date

     The aggregate of the Loan Payments specified in Section 4.01 of the Loan Agreement, which is
to be deposited in the Loan Payment Account in the Bond Fund on each Loan Payment Date, as defined
in the Loan Agreement, shall include amounts sufficient to redeem the principal amount of Series
2007 Bonds set forth opposite the respective dates in the applicable tables above (less the amount
of any credit as provided below).

     Whenever Series 2007 Bonds that are Term Bonds are redeemed pursuant to subsection (d) below,
there shall be credited by the Trustee, subject to the requirement that no Series 2007 Bonds may be
in a denomination less than $5,000, towards the amount of each annual mandatory sinking fund
requirement (“Sinking Fund Amount”) to become due on such Term Bond after such redemption, an
amount, in so far as practicable, bearing the same ratio to each annual Sinking Fund Amount as the
total principal amount of such Term Bonds so redeemed bears to the total principal amount of such
Term Bonds Outstanding before such redemption (after the deduction of any such amounts previously
credited toward the same or the original amount of any such Sinking Fund Amount if no such amount
shall have been credited toward the same). After giving effect to all such credits, the Trustee
shall advise the Company of the unsatisfied balance of Sinking Fund Amount for each future December 1.

     The Issuer at the request of the Company, or the Company on behalf of the Issuer, shall have
the option to deliver to the Registrar for cancellation Series 2007 Bonds that are Term Bonds, in
any aggregate principal amount and to receive a credit against the then current mandatory sinking
fund requirement (and corresponding mandatory redemption obligation) of the Issuer as set forth in
the applicable table above for such Term Bonds. That option shall be exercised by the Issuer at
the request of the Company, or the Company on behalf of the Issuer, if at all, on or before the
45th day preceding the applicable mandatory redemption date, by furnishing the Trustee a
certificate, executed by the Authorized Official or the Authorized Company Representative, as the
case may be, setting forth the extent of the credit to be applied with respect to the then current
mandatory sinking fund requirement. If the certificate is not timely furnished to the Trustee, the
mandatory sinking fund requirement (and corresponding mandatory redemption obligation) shall not be
reduced. A credit against the then current

8

 

mandatory sinking fund requirement (and corresponding mandatory redemption obligation) also
shall be received by the Issuer for any Bond that is a Term Bond, which prior thereto have been
redeemed (other than through the operation of the mandatory sinking fund requirements) or purchased
for cancellation and canceled by the Trustee, to the extent not applied theretofore as a credit
against any redemption obligation.

     Each Series 2007 Bond so delivered, or previously redeemed, or purchased and canceled, shall
be credited by the Trustee at 100 percent of the principal amount thereof against the then current
mandatory sinking fund obligation relating thereto. Any excess of that amount over the then
current mandatory sinking fund requirement shall be credited against subsequent mandatory sinking
fund redemption obligations in the order directed by the Company.

     (b) Extraordinary Optional Redemption. The Series 2007 Bonds are also subject to
redemption by the Issuer in the event of the exercise by the Company of its option to
direct redemption upon occurrence of any of the events described in Section 6.2 of the
Agreement, (i) at any time in whole, or (ii) on any Interest Payment Date in inverse
order of maturity, in part, as provided in Section 6.2 of the Agreement, at a redemption
price of 100% of the principal amount redeemed, plus interest accrued to the redemption
date.

     (c) Mandatory Redemption upon a Determination of Taxability. Upon the occurrence of
a Determination of Taxability for any reason, the Series 2007 Bonds are subject to
mandatory redemption in whole by the Issuer from the proceeds of the Company paying
advance Loan Payments pursuant to Sections 4.1 and 6.3 of the Agreement at a redemption
price equal to 103 percent (103%) of the outstanding principal amount thereof, plus
interest accrued to the redemption date, at the earliest practicable date selected by the
Trustee, after consultation with the Company, but in no event later than 180 days
following the Trustee’s notification of the Determination of Taxability.

     Promptly following its receipt of notice of the occurrence of a Determination of Taxability,
the Trustee shall notify the Company and the Issuer of the Company’s obligations under the
Agreement and as to the existence of said event and shall demand payment of the additional amount
with respect to such event. Upon receipt by the Trustee from the Company or the Issuer of such
additional amount, the Trustee shall pay such additional amount to the former Holders entitled
thereto by check or draft mailed to those Holders at their addresses as they last appeared on the
Register.

     The Company’s obligations to make payments under the Agreement to provide funds therefor to
the Trustee for the account of the Issuer shall survive the discharge and satisfaction of this
First Supplemental Indenture and the expiration, termination, discharge or satisfaction of the
Agreement. The duties of the Trustee under this Subsection (and all powers provided for herein
which are necessary to carry out the intention of this Subsection) shall survive the discharge and
satisfaction of this First Supplemental Indenture, and the Company shall be obligated to pay to the
Trustee, on behalf of the Issuer, the reasonable fees and actual expenses of the Trustee with
respect to the performance of such duties. Following the discharge and satisfaction of this First
Supplemental Indenture and prior to the expiration of a 365 day-period, any former Holder (to

9

 

the extent adversely affected by the Determination of Taxability) shall be entitled to enforce
its rights under this Subsection directly against the Company and the Issuer if the Trustee fails
to perform the duties described in this First Supplemental Indenture, provided that recovery may be
had against the Issuer only out of the sources specified in the Bonds and this First Supplemental
Indenture.

     All of the Series 2007 Bonds outstanding on the redemption date selected shall be redeemed by
the Issuer on that date, except that Series 2007 Bonds maturing prior to that date, but after
selection of the redemption date, shall be retired on their maturity date at the same price as if
they had been called for redemption on the redemption date, and Series 2007 Bonds for the payment
or redemption of which sufficient moneys or investments are held by the Trustee as provided in
Section 9.02 of the Indenture, shall be redeemed on the redemption date, or paid at earlier
maturity, in accordance with this paragraph and not otherwise.

     (d) Optional Redemption. The Series 2007 Bonds maturing on December 1, 2013 are not
subject to optional redemption prior to their stated maturity. Unless previously
redeemed, the Series 2007 Bonds maturing on December 1, 2037 are subject to redemption at
the option of the Issuer, upon the direction of the Company in whole at any time or in
part on any Interest Payment Date on or after December 1, 2017 (from funds other than
those deposited in accordance with the mandatory sinking fund requirements of Section
2.02 hereof, at redemption price equal to the principal amount redeemed, plus interest
accrued to the redemption date.

     Section 2.03. Partial Redemption. (a) If fewer than all of the Bonds of a single maturity
are to be redeemed, the selection of Bonds to be redeemed, or portions thereof in amounts of $5,000
or any integral multiple of $5,000 shall be made by lot by the Trustee in any manner which the
Trustee may determine.

     In the case of a partial redemption of Bonds when Bonds of denominations greater than $100,000
are then outstanding, each $5,000 unit of face value of principal thereof shall be treated as
though it were a separate Bond of the denomination of $5,000.

     (b) If it is determined that less than all of the principal amount of a Bond is to
be called for redemption, then upon notice of redemption, the Holder of that Bond shall
surrender the Bond to the Trustee (a) for payment of the redemption price of the portion
of the Bond in $5,000 multiples called for redemption (including without limitation, the
interest accrued to the date fixed for redemption and any premium), and (b) for issuance,
without charge to the Holder thereof, of a new Bond or Bonds of the same series, of any
authorized denomination or denominations in an aggregate principal amount equal to the
unmatured and unredeemed portion of, and bearing interest at the same rate and maturing
on the same date as, the Bond surrendered.

     Section 2.04. Election to Redeem. Except in the case of redemption pursuant to any mandatory
sinking fund requirements or pursuant to other mandatory redemption provisions, Bonds shall be
redeemed only by written notice from the Issuer to the Trustee, given at the direction of the
Company, or by written notice from the Company to the Trustee on behalf of the Issuer. That notice
shall specify the redemption date and the principal amount of each maturity

10

 

of Bonds to be redeemed, and shall be given at least 45 days prior to the redemption date or
such shorter period as shall be acceptable to the Trustee. In the event that notice of redemption
shall have been given by the Trustee to the Holders as provided in Section 2.05 hereof, there shall
be deposited with the Trustee prior to the redemption date, funds which, in addition to any other
moneys available therefor and held by the Trustee, will be sufficient to redeem at the redemption
price thereof, plus interest accrued to the redemption date, all of the redeemable Bonds for which
notice of redemption has been given.

     Section 2.05. Notice of Redemption. The notice of the call for redemption of Series 2007
Bonds shall identify (i) by designation, letters, numbers or other distinguishing marks, the Bonds
or portions thereof to be redeemed, (ii) the redemption price to be paid, (iii) the date fixed for
redemption, and (iv) the place or places where the amounts due upon redemption are payable.

     The notice shall be given by the Trustee on behalf of the Issuer by mailing a copy of the
redemption notice by first class mail, postage prepaid, at least 30 days prior to the date fixed
for redemption, to the Holder of each Bond subject to redemption in whole or in part at the
Holder’s address shown on the Register on the fifteenth day preceding that mailing. Failure to
receive notice so mailed or any defect in that notice regarding any Bond, however, shall not affect
the validity of the proceedings for the redemption of any Bond. Any notice of redemption may state
conditions to such redemption not inconsistent with the Indenture.

     Section 2.06. Payment of Redeemed Bonds. Notice having been mailed in the manner provided in
Section 2.05 hereof, the Series 2007 Bonds and portions thereof called for redemption shall become
due and payable on the redemption date, and upon presentation and surrender thereof at the place or
places specified in that notice, shall be paid at the redemption price, plus interest accrued to
the redemption date.

     If money for the redemption of all of the Bonds and portions thereof to be redeemed, together
with interest accrued thereon to the redemption date, is held by the Trustee on the redemption
date, so as to be available therefor on that date and if notice of redemption has been deposited in
the mail as aforesaid, then from and after the redemption date those Bonds and portions thereof
called for redemption shall cease to bear interest and no longer shall be considered to be
outstanding hereunder. If those moneys shall not be so available on the redemption date, or that
notice shall not have been deposited in the mail as aforesaid, those Bonds and portions thereof
shall continue to bear interest, until they are paid, at the same rate as they would have borne had
they not been called for redemption.

     All moneys deposited in the Bond Fund and held by the Trustee for the redemption of particular
Bonds shall be held in trust for the account of the Holders thereof and shall be paid to them,
respectively, upon presentation and surrender of those Bonds.

     Section 2.07. Delivery of Moneys for Optional Redemption. Nothing herein or in the Agreement
is intended to prevent the Company from delivering moneys to the Trustee for the purchase or
redemption of Bonds in accordance herewith.

     Subject to the provisions of Section 2.04 of the Indenture, if the Trustee is provided at any
time with moneys (i) which are sufficient, together with moneys, including without

11

 

limitation, investments, then in the Bond Fund, Bond Reserve Fund and Project Fund to redeem a
principal amount of Outstanding Bonds which will be subject to redemption on the next available
date on which Bonds may be redeemed; and (ii) which in the aggregate, together with those other
moneys, are not less than $100,000, then the Trustee upon the written request of the Authorized
Company Representative shall make available from such Funds the amount required to accomplish the
redemption, together with the other moneys provided, so long as the balance remaining thereafter in
each Fund, and each Account therein, is not reduced thereby below the amount which would be
required hereby to be on deposit therein on the redemption date with respect to the Bonds which
will not be redeemed.

     Section 2.08. Variation of Redemption Provisions. The provisions of this Article II, insofar
as they apply to any series of Additional Bonds, may be varied by the Supplemental Indenture
providing for that series, subject to the requirements of Section 8.03(b) of the Indenture if any
such amendment creates a priority of any one Bond over another Bond for purposes of a redemption
pursuant to Section 2.02(d) hereof.

     Section 2.09. Initial Delivery of the Series 2007 Bonds; Deposit of Proceeds. (a) Upon the
execution and delivery of this First Supplemental Indenture and satisfaction of the conditions
established by the Issuer and in the Purchase Contract for delivery of the Series 2007 Bonds, the
Issuer shall execute (but need not prepare) the Series 2007 Bonds in typewritten form and deliver
them to the Trustee. Thereupon, the Trustee shall authenticate the Series 2007 Bonds and deliver
them to, or on the order of, the Original Purchaser thereof, as directed by the Issuer in
accordance with this Section 2.09.

     (b) Before the Trustee delivers any Series 2007 Bonds, the Trustee shall have
received:

     (i) a request and authorization to the Trustee on behalf of the Issuer, signed
by the Authorized Official, to authenticate and deliver the Series 2007 Bonds to, or
on the order of, the Original Purchaser upon payment to the Trustee of the amount
specified therein, any accrued interest, which amount shall be deposited as provided
below;

     (ii) a copy of the Bond Legislation, certified by an officer of the Legislative
Authority;

     (iii) executed counterpart of the First Supplemental Indenture, the First
Amendment to the Loan Agreement and the Intercreditor Agreement;

     (iv) an original executed Series 2007 Project Note;

     (v) Opinion of Kutak Rock LLP, Bond Counsel, to the effect that the interest on
the Series 2007 Bonds is excluded from the gross income for federal income tax
purposes and such other matters as shall be reasonably required by the Issuer and
the Original Purchaser;

12

 

     (vi) an amount of money so that the Reserve Fund Value shall be at least equal
to the Reserve Fund Requirement or in lieu thereof a Reserve Fund Surety; and

     (vii) executed counterpart of the Amended and Restated Security Agreement.

     (c) The Trustee shall deposit the proceeds of the Series 2007 Bonds ($52,812,150,
representing $54,135,000 principal amount of Series 2007 Bonds, less original issue
discount of $510,825 and less Underwriter’s discount of $812,025) as follows:

     (i) $250,000, from proceeds of the Series 2007 Bonds into the Cost of Issuance
Account of the Series 2007 Project Fund, which shall be used by the Trustee to pay
the costs of issuance associated with the initial issuance, sale and delivery of the
Series 2007 Bonds as shown on Exhibit B hereto, upon receipt of an invoice from the
payee;

     (ii) $5,413,500 into the Bond Reserve Fund; and

     (iii) the balance, $47,148,650 into the Construction Account of the Series 2007
Project Fund.

     The Trustee shall be permitted to rely upon the opinions described in (vi) above.

     Section 2.10. Creation of the Series 2007 Project Fund. There is created and ordered
maintained as a separate deposit (except when invested as provided in the Indenture) in the custody
of the Trustee, a trust fund designated “The Industrial Development Authority of the County of Pima
— Global Water Resources, LLC Series 2007 Project Fund” and the “Construction Account” and the
“Cost of Issuance Account” therein.

     Section 2.11. Disbursements from and Records of Series 2007 Project Fund. Moneys in the
Series 2007 Project Fund shall be disbursed in accordance with the provisions of the Agreement and
Section 2.09(c) hereof. The Trustee shall cause to be kept and maintained adequate records
pertaining to the Series 2007 Project Fund and all disbursements therefrom and shall provide
monthly statements as to the accounts held hereunder to the Company. After ninety (90) days from
the date hereof, any amounts still on deposit in the Cost of Issuance Account shall be transferred
to the Bond Fund.

     Unless otherwise provided in the applicable Bond Legislation or Supplemental Indenture, this
Section shall apply to the disbursement of the proceeds of any issue of Additional Bonds

     Section 2.12. Completion of the Series 2007 Project. The completion of the Series 2007
Project and payment of all costs and expenses incident thereto shall be evidenced by the filing
with the Trustee of

     (a) the certificate of the Authorized Company Representative required by Section 3.6
of the Agreement, and

13

 

     (b) a certificate signed by the Authorized Company Representative stating that all
obligations and costs in connection with the Series 2007 Project and payable out of the
Construction Account have been paid and discharged, except for amounts retained by the
Trustee as provided under the Agreement for the payment of costs of the Series 2007
Project not then due and payable.

As soon as practicable after the filing with the Trustee of the certificate to which reference is
made in clause (ii) above, any balance remaining in the Series 2007 Project Fund (other than the
amounts retained by the Trustee as described in the preceding sentence) shall be deposited or
applied in accordance with the direction of the Authorized Company Representative pursuant to
Section 3.4 of the Agreement.

     Unless otherwise provided in the applicable Bond Legislation or Supplemental Indenture, this
Section shall apply to any additional property financed with the proceeds of any issue of
Additional Bonds.

ARTICLE III

REPRESENTATIONS; COVENANTS

AND AGREEMENTS OF ISSUER

     Section 3.01. Covenants and Agreements of the Issuer. In addition to any other covenants and
agreements of the Issuer contained in this First Supplemental Indenture or the Bond Legislation,
the Issuer further covenants and agrees with the Holders and the Trustee as follows:

     (a) Payment of Bond Service Charges. The Issuer will cause all Bond Service Charges
to be paid, but solely from the sources provided herein, on the dates, at the places and
in the manner provided in this First Supplemental Indenture. The Issuer shall have no
liability or obligation with respect to the payment of the purchase price of the Series
2007 Bonds.

     (b) Revenues and Assignment of Revenues. The Issuer will not assign the Revenues or
create or authorize to be created any debt, lien or charge thereon, other than the
assignment thereof under this First Supplemental Indenture.

     (c) Inspection of Project Books. All books, instruments and documents in the
Issuer’s possession relating to the Project and the Revenues shall be open to inspection
at all times during the Issuer’s regular business hours by any accountants or other
agents of the Trustee which the Trustee may designate from time to time; provided, the
Trustee shall have no duty to cause such inspection.

     (d) Rights and Enforcement of the Agreement. The Trustee may enforce, in its name
or in the name of the Issuer, all rights of the Issuer for and on behalf of the Holders,
except for Unassigned Issuer’s Rights, and may enforce all covenants, agreements and
obligations of the Company under and pursuant to the Agreement, regardless of whether the
Issuer is in default in the pursuit or enforcement of those rights, covenants, agreements
or obligations. Upon receipt of the written request of the

14

 

Authorized Company Representative or of the Trustee and at the Company’s expense,
the Issuer, however, will do all things and take all actions on its part necessary to
comply with covenants, agreements, obligations, duties and responsibilities on its part
to be observed or performed under the Agreement, and will take all actions within its
authority to keep the Agreement in effect in accordance with the terms thereof.

     (e) Issuer Not to Adversely Affect Exclusion From Gross Income of Interest on Bonds.

     The Issuer agrees:

     (a) it shall neither make nor direct the Trustee to make any investment or other use
of the proceeds of the Bonds that would cause the Bonds to be “arbitrage bonds” as that
term is defined in Section 148(a) of the Code and that it shall comply with the
requirements of the Code throughout the term of the Bonds;

     (b) it (i) shall take, or use its best efforts to require to be taken, all actions
that may be required of the Issuer for the interest on the Bonds to be and remain not
included in gross income for federal income tax purposes and (ii) shall not take or
authorize to be taken any actions within its control that would adversely affect that
status under the provisions of the Code;

     (c) it shall enforce or cause to be enforced all obligations of the Borrower under
the Regulatory Agreement in accordance with its terms and seek to cause the Borrower to
correct any violation of the Regulatory Agreement within a reasonable period after any
such violation is first discovered.

     In furtherance of the covenants in this Section, the Issuer and the Borrower shall execute,
deliver and comply with the provisions of the Tax Certificate, which is by this reference
incorporated into this First Supplemental Indenture and made a part of this First Supplemental
Indenture, and by its acceptance of this First Supplemental Indenture the Trustee acknowledges
receipt of the Tax Certificate and acknowledges its incorporation into this First Supplemental
Indenture by this reference. The Trustee agrees that in those instances where it exercises
discretion over the investment of funds, it shall not knowingly make any investment inconsistent
with subsection (a).

     Section 3.02. Observance and Performance of Covenants, Agreements, Authority and Actions.
The Issuer covenants it will observe and perform faithfully at all times all covenants, agreements,
authority, actions, undertakings, stipulations and provisions to be observed or performed on its
part under the Agreement, this First Supplemental Indenture, the Bond Legislation and the Bonds
which are executed, authenticated and delivered under this First Supplemental Indenture, and under
all proceedings of its Legislative Authority pertaining thereto; provided, however, that (a) the
Issuer shall not be obligated to take any action or execute any instrument pursuant to any
provision hereof until it shall have been requested to do so by the Company or by the Trustee, and
(b) the Issuer shall have received the instrument to be executed, and at the Issuer’s option shall
have received from the Company assurance satisfactory to the

15

 

Issuer that the Issuer shall be reimbursed for its reasonable expenses incurred or to be
incurred in connection with taking such action or executing such instrument.

     The Issuer represents and warrants that it is duly authorized by the Constitution and laws of
the State, including particularly and without limitation the Act, to issue the Series 2007 Bonds,
to execute and deliver this First Supplemental Indenture and the Agreement and to provide the
security for payment of the Bond Service Charges in the manner and to the extent set forth in this
First Supplemental Indenture.

     The Issuer covenants that it will do, execute, acknowledge, and deliver, or cause to be done,
executed, acknowledged, and delivered by the parties within its control, such instruments
supplemental hereto and such further acts, instruments, and transfers as the Trustee may reasonably
require for the better assuring, transferring, mortgaging, conveying, pledging, assigning, and
confirming unto the Trustee, the Issuer’s interest in and to all interests, Revenues, proceeds, and
receipts pledged hereby to the payment of the principal of, premium, if any, and interest on the
Bonds in the manner and to the extent contemplated herein. The Issuer shall be under no obligation
to prepare, record, or file any such instruments or transfers.

     Section 3.03. Enforcement of Issuer’s Obligations. Each obligation of the Issuer required to
be undertaken pursuant to the Bond Legislation, this First Supplemental Indenture, the Agreement
and the Bonds is binding upon the Issuer, and upon each officer or employee thereof as may have
from time to time the authority under law to take any action on behalf of the Issuer which may be
necessary to perform all or any part of that obligation, as a duty of the Issuer and of each of
those officers and employees providing for enforcement by writ of mandamus.

     Section 3.04. Reliance by Issuer on Facts or Certificates, Limitations on Actions. Anything
in this First Supplemental Indenture to the contrary notwithstanding, it is expressly understood
and agreed by the parties hereto that (i) the Issuer may rely conclusively on the truth and
accuracy of any certificate, opinion, notice, or other instrument furnished to the Issuer by the
Trustee or the Company as to the existence of any fact or state of affairs required hereunder to be
noticed by the Issuer; (ii) the Issuer shall not be under any obligation hereunder to perform any
record keeping or to provide any legal services, it being understood that such services shall be
performed either by the Trustee or the Company and (iii) none of the provisions of this First
Supplemental Indenture shall require the Issuer to expend or risk its own funds or to otherwise
incur financial liability in the performance of any of its duties or in the exercise of any of its
rights or powers hereunder, unless it shall first have been adequately indemnified to its
satisfaction against the cost, expense, and liability which may be incurred thereby.

     Section 3.05. Immunity of Issuer’s Directors, Officers, Counsel, Financial Advisors, and
Agents. No recourse shall be had for the enforcement of any obligation, covenant, promise, or
agreement of the Issuer contained in this First Supplemental Indenture, the Agreement, the Purchase
Contract, any Bond and any other agreement, certificate, contract or instrument to be executed by
the Issuer in connection with the issuance of the Bonds (collectively, the “Issuer Documents”) or
in any Bond or for any claim based hereon or otherwise in respect hereof or upon any obligation,
covenant, promise, or agreement of the Issuer contained in any agreement, instrument, or
certificate executed in connection with the Project or the issuance and sale of the

16

 

Bonds, against any Issuer Indemnified Parties, whether by virtue of any Constitutional
provision, statute, or rule of law, or by the enforcement of any assessment or penalty or
otherwise; it being expressly agreed and understood that no personal liability whatsoever shall
attach to, or be incurred by, any Issuer Indemnified Parties, either directly or by reason of any
of the obligations, covenants, promises, or agreements entered into between the Issuer and the
Trustee or Company to be implied therefrom as being supplemental hereto or thereto, and that all
personal liability of that character against every such director, officer, counsel, financial
advisor, or agent, is, by the execution of the Issuer Documents, and as part of the consideration
for, the execution of the Issuer Documents, expressly waived and released.

     Section 3.06. No Pecuniary Liability of the Issuer. No agreements or provisions contained
herein nor any agreement, covenant, or undertaking by the Issuer in connection with the Project or
the issuance, sale, and/or delivery of the Bonds shall give rise to any pecuniary liability of the
Issuer or a charge against its general credit, or shall obligate the Issuer financially in any way,
except as may be payable from the revenues pledged hereby for the payment of the Bonds and their
application as provided in the Agreement or this First Supplemental Indenture. No failure of the
Issuer to comply with any term, covenant, or agreement contained in the Bonds, the Agreement, this
First Supplemental Indenture, or in any document executed by the Issuer in connection with the
Project or the issuance and sale of the Bonds, shall subject the Issuer to liability for any claim
for damages, costs, or other financial or pecuniary charge, except to the extent that the same can
be paid or recovered from the Revenues pledged for the payment of the Bonds or other revenues
derived under the Agreement or this First Supplemental Indenture. Nothing herein shall preclude a
proper party in interest from seeking and obtaining, to the extent permitted by law, specific
performance against the Issuer for any failure to comply with any term, condition, covenant, or
agreement herein; provided that no costs, expenses, or other monetary relief shall be recoverable
from the Issuer, except as may be payable from the Revenues pledged in the Agreement or this First
Supplemental Indenture for the payment of the Bonds or other Revenue derived under the Agreement or
this First Supplemental Indenture. No provision, covenant, or agreement contained herein, or any
obligations imposed upon the Issuer, or the breach thereof, shall constitute an indebtedness of the
Issuer within the meaning of any State constitutional or statutory limitation or shall constitute
or give rise to a charge against its general credit. In making the agreements, provisions, and
covenants set forth in this First Supplemental Indenture, the Issuer has not obligated itself,
except with respect to the application of the Revenues pledged in the Indenture for the payment of
the Bonds or other revenues derived under the Agreement or this First Supplemental Indenture.

     Section 3.07. Acceptance by Trustee of Duties Under Agreement. By its execution hereof, the
Trustee approves and accepts hereby all rights, remedies, powers, privileges, duties and
obligations which are contemplated in the Agreement to be rights, remedies, powers, privileges,
duties or obligations of the Trustee with respect to the Bonds and covenants and agrees to observe
and perform those duties and obligations and to exercise those rights, remedies, powers and
privileges as contemplated in the Agreement and herein

17

 

ARTICLE IV

MISCELLANEOUS

     Section 4.01. Effect of First Supplemental Indenture. Except as specifically amended hereby,
the Indenture shall continue in full force and effect.

     Section 4.02. Severability. If any provision of this First Supplemental Indenture shall be
held or deemed to be or shall, in fact, be illegal, inoperative or unenforceable, the same shall
not affect any other provision or provisions herein contained or render the same invalid
inoperative or enforceable to any extent whatever

     Section 4.03. Contrary Provisions Deleted. Any provisions of the Indenture, prior to its
amendment by this First Supplemental Indenture, which conflict with this First Supplemental
Indenture are hereby deleted and of no force and effect.

     Section 4.04. Execution in Several Counterparts. This First Supplemental Indenture may be
executed in several counterparts, each of which shall be an original and is complete in itself and
may be introduced in evidence, proved, recorded or used for any other purpose without the
production of any other counterpart.

     Section 4.05. Conflict of Interest. To the extent A.R.S. §38-511 is applicable, all parties
acknowledge that the Issuer may, within three years after its execution, cancel this First
Supplemental Indenture, without penalty or further obligation, if any person significantly involved
in initiating, negotiating, securing, drafting, or creating of this First Supplemental Indenture on
behalf of the Issuer, is, at any time while this First Supplemental Indenture is in effect, an
employee or agent of any other party in any capacity or a consultant to any other party to this
First Supplemental Indenture with respect to the subject matter of this First Supplemental
Indenture and the Issuer may recoup any fee or commission paid or due any person significantly
involved in initiating, negotiating, securing, drafting, or creating this First Supplemental
Indenture on behalf of the Issuer, all as provided in Section §38-511, Arizona Revised Statutes, as
amended.

     Each party represents that to the best of its knowledge, it is not in violation of A.R.S.
§38-511 as of the date hereof. The Trustee covenants not to knowingly employ as an employee, an
agent, consultant, any person significantly involved in initiating, negotiating, securing, drafting
or creating this First Supplemental Indenture on behalf of the Issuer within 3 years from execution
of this First Supplemental Indenture, unless a waiver of A.R.S. §38-511 is provided by the Board
of Directors of the Issuer.

     Section 4.06. Binding Effect. This First Supplemental Indenture shall inure to the benefit
of and shall be binding upon the Issuer and the Trustee and their respective successors and
assigns, subject, however, to the limitations contained herein.

[Remainder of page intentionally left blank]

18

 

     IN WITNESS WHEREOF, the Issuer has caused this First Supplemental Indenture to be executed and
delivered for it and in its name and on its behalf by its duly authorized officers; in token of its
acceptance of the trusts created hereunder and the duties and obligations of the Trustee hereunder,
the Trustee has caused this First Supplemental Indenture to be executed and delivered for it and in
its name and on its behalf by its duly authorized officers all as of the day and year first above
written.

	 	 	 	 	 
	 	THE INDUSTRIAL DEVELOPMENT AUTHORITY OF THE
COUNTY OF PIMA, as Issuer

 	 
	 	By:  	 	 
	 	 	Name:  	Stanley Lehman 	 
	 	 	Title:  	Vice President 	 
	 
	 	U.S. BANK NATIONAL ASSOCIATION, as Trustee

 	 
	 	By:  	 	 
	 	 	Name:  	Deborah M. Scherer 	 
	 	 	Title:  	Assistant Vice President 	 
	 

CONSENT OF THE COMPANY

     The undersigned hereby consents to the execution and delivery of this First Supplemental Trust
Indenture and to the amendments made in Section 1.03 thereof.

	 	 	 	 	 
	Dated: November 28, 2007 	GLOBAL WATER RESOURCES, LLC

 	 
	 	By:  	 	 
	 	 	Name:  	Trevor T. Hill 	 
	 	 	Title:  	President/CEO 	 

 

 

	 	 	 	 	 

EXHIBIT A

FORM OF SERIES 2007 BOND

UNITED STATES OF AMERICA

STATE OF ARIZONA

COUNTY OF PIMA

$54,135,000

The Industrial Development Authority

of the County of Pima

Water and Wastewater Revenue Bonds

(Global Water Resources, LLC Project)

Series 2007

REGISTERED                     

No.

     UNLESS THIS BOND IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY
(“DTC”) TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY BOND
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS
IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE &
CO., HAS AN INTEREST HEREIN.

[THIS BOND IS ONLY TRANSFERABLE UPON COMPLIANCE

WITH THE RESTRICTED TERMS PROVIDED HEREIN]1

The Industrial Development Authority

of the County of Pima

Water and Wastewater Revenue Bond

(Global Water Resources, LLC Project)

Series 2007

	 	 	 	 	 	 	 
	Interest Rate:	 	Maturity Date:	 	Dated:	 	CUSIP:
	___% per annum

	 	December 1, 20___
	 	November 28, 2007	 	 

 

			
	1	 	Insert bracketed language in the Bonds until otherwise required as
provided in Section 3.06 of the Indenture.

 

 

REGISTERED OWNER: CEDE & CO.

PRINCIPAL AMOUNT:

     The Industrial Development Authority of the County of Pima (the “Issuer”), a nonprofit
corporation designated a political subdivision of the State of Arizona (the “State”), pursuant to
the provisions of the Constitution of the State and under Title 35, Chapter 5, Arizona Revised
Statutes, as amended and supplemented (the “Act”), for value received, promises to pay to
“Registered Owner” specified above or registered assigns, but solely from the sources and in the
manner referred to herein, the “Principal Amount” specified above on the Maturity Date set forth
above, unless this Bond is called for earlier redemption, and to pay from those sources interest
thereon at the aforesaid Interest Rate on June 1 and December 1 of each year, commencing June 1,
2008 (the “Interest Payment Dates"), until the principal amount is paid or duly provided for. This
Bond will bear interest from the most recent date to which interest has been paid or duly provided
for or, if no interest has been paid or duly provided for, from the date of its original issuance
and delivery. Interest on this Bond shall be calculated on the basis of a 360 day year consisting
of twelve (12) months of thirty (30) days.

     The principal of and any premium on this Bond are payable upon presentation and surrender
hereof at the principal corporate trust office of the trustee, initially U.S. Bank National
Association, Phoenix, Arizona (the “Trustee”). Interest is payable on each Interest Payment Date
by check or draft mailed to the person in whose name this Bond (or one or more predecessor bonds)
is registered (the “Holder”) at the close of business. on the 15th day of the calendar month next
preceding that Interest Payment Date (the “Regular Record Date”) on the registration books for this
issue maintained under the Trust Indenture dated as of December 1, 2006, between the Issuer and the
Trustee, as supplemented by the First Supplemental Trust Indenture, dated as of November 1, 2007
(the “Indenture”). Any payment of principal of, premium and interest on the Series 2007 Bonds
shall be made by the Trustee by wire transfer to any Holder of $1,000,000 or more in aggregate
principal amount of Series 2007 Bonds upon receipt of written notice from such a Holder requesting
such payment at least 15 days prior to the payment date. Any interest which is not timely paid or
duly provided for shall cease to be payable to the Holder hereof (or of one or more predecessor
bonds) as of the Regular Record Date, and shall be payable to the Holder hereof (or of one or more
predecessor bonds) at the close of business on a Special Record Date to be fixed by the Trustee for
the payment of that overdue interest. Notice of the Special Record Date shall be mailed to Holders
not less than ten days prior thereto. The principal of and interest and any premium on this Bond
are payable in lawful money of the United States of America, without deduction for the services of
the paying agent.

     This Bond is one of a duly authorized issue of the Issuer’s Water and Wastewater Revenue Bonds
(Global Water Resources, LLC Project) Series 2007 (the “Series 2007 Bonds”), issuable under the
Indenture, as supplemented, aggregating in principal amount $54,135,000 and issued for the purpose
of making a loan (the “Loan”) to assist Global Water Resources, LLC (the “Company”) in the
financing of costs of the Series 2007 Project, as defined in the Loan Agreement dated as of
December 1, 2006 among the Issuer, the Trustee and the Company, as

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amended by the First Amendment to Loan Agreement, dated as of November 1, 2007 (the “Loan
Agreement”). The Series 2007 Bonds are secured under the Indenture, as supplemented, on a parity
with the $36,495,000 principal amount of the Issuer’s Water and Wastewater Revenue Bonds (Global
Water Resources, LLC Project) Series 2006 (the “Series 2006 Bonds”) previously issued thereunder.
The Series 2006 Bonds, the Series 2007 Bonds, together with any Additional Bonds which may be
issued on a parity therewith under the Indenture (collectively, the “Bonds”), are special limited
obligations of the Issuer, issued or to be issued under and are to be secured and entitled equally
and ratably to the protection given by the Indenture, as supplemented by the First Supplemental
Indenture. The Series 2007 Bonds are issued pursuant to Title 35, Chapter 5 of the Arizona Revised
Statutes, as amended, and to the laws of that State, and to a resolution duly enacted by the Board
of Directors of the Issuer.

     NEITHER THE BOARD MEMBERS OF THE ISSUER NOR ANY PERSON EXECUTING THE BONDS IS PERSONALLY
LIABLE ON THE BONDS OR SUBJECT TO ANY PERSONAL LIABILITY OR ACCOUNTABILITY BY REASON OF THEIR
ISSUANCE. THE BONDS AND THE INTEREST THEREON ARE SPECIAL LIMITED OBLIGATIONS OF THE ISSUER PAYABLE
EXCLUSIVELY FROM REVENUES AND RECEIPTS PLEDGED UNDER THE INDENTURE. THIS BOND DOES NOT CONSTITUTE
AN INDEBTEDNESS, AN OBLIGATION OR A LOAN OF CREDIT OR A PLEDGE OF THE FULL FAITH, AND CREDIT OR
TAXING POWER OF THE ISSUER OR THE STATE OF ARIZONA, COUNTY OF PIMA OR ANY OTHER MUNICIPALITY, CITY
OR OTHER MUNICIPAL OR POLITICAL CORPORATION OR SUBDIVISION OF THE STATE OF ARIZONA WITHIN THE
MEANING OF ANY STATUTORY OR CONSTITUTIONAL PROVISION AND SHALL NEVER CONSTITUTE NOR GIVE RISE TO
ANY PECUNIARY LIABILITY OF THE STATE OF ARIZONA, COUNTY OF PIMA OR ANY OTHER MUNICIPALITY, CITY, OR
ANY OTHER MUNICIPAL OR POLITICAL CORPORATION OR SUBDIVISION OF THE STATE OF ARIZONA. THIS BOND
DOES NOT DIRECTLY, INDIRECTLY, OR CONTINGENTLY OBLIGATE OR OTHERWISE CONSTITUTE A GENERAL
OBLIGATION OF OR A CHARGE AGAINST THE GENERAL CREDIT OF THE ISSUER, BUT SHALL BE A SPECIAL LIMITED
OBLIGATION OF THE ISSUER PAYABLE SOLELY FROM THE SOURCES DESCRIBED HEREIN AND IN THE INDENTURE, BUT
NOT OTHERWISE. THE ISSUER HAS NO TAXING POWER.

     NO RECOURSE SHALL BE HAD FOR THE PAYMENT OF THE PRINCIPAL, PREMIUM, IF ANY, OR INTEREST ON
THIS BOND OR ANY CLAIM BASED THEREON OR UPON ANY OBLIGATION, COVENANT, OR AGREEMENT IN THE
INDENTURE, OR LOAN AGREEMENT AGAINST ANY PAST, PRESENT, OR FUTURE OFFICER, DIRECTOR, COUNSEL,
FINANCIAL ADVISOR, OR AGENT OF THE ISSUER OR ANY SUCCESSOR THERETO, AS SUCH, EITHER DIRECTLY OR
THROUGH THE ISSUER, OR ANY SUCCESSOR THERETO, UNDER ANY RULE OF LAW OR EQUITY, STATUTE, OR
CONSTITUTION OR BY THE ENFORCEMENT OF ANY ASSESSMENT OR PENALTY OR OTHERWISE, AND ALL SUCH
LIABILITY OF ANY SUCH OFFICER, DIRECTOR, COUNSEL, FINANCIAL ADVISOR, OR AGENT, AS SUCH IS HEREBY
EXPRESSLY WAIVED AND RELEASED AS A CONDITION OF AND IN CONSIDERATION FOR THE EXECUTION OF THE
INDENTURE AND THE LOAN AGREEMENT AND THE ISSUANCE OF THIS BOND.

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     Capitalized terms not defined herein have the meaning set forth in the Indenture, as
supplemented by the First Supplemental Indenture. As described below, the Indenture, as
supplemented by the First Supplemental Indenture and the Agreement, as amended by the First
Amendment to Loan Agreement may be amended and references to them include any amendments.

     Reference is made to the Indenture as supplemented by the First Supplemental Indenture for a
more complete description of the Series 2007 Project, the provisions, among others, with respect to
the nature and extent of the security for the Bonds, the rights, duties and obligations of the
Issuer, the Trustee and the Holders of the Bonds, and the terms and conditions upon which the Bonds
are issued and secured, to the Agreement, as amended by the First Amendment to Loan Agreement for a
more complete description of obligations of the Company thereunder with respect to the Series 2007
Bonds thereunder.

     Pursuant to the Loan Agreement, as amended by the First Amendment to Loan Agreement, the
Company has executed and delivered to the Trustee the Company’s promissory note dated as of
November 28, 2007 (the “Series 2007 Project Note”), in the principal amount of $54,135,000. The
Company is required by the Loan Agreement, as amended by the First Amendment to Loan Agreement and
the Series 2007 Project Note to make payments to the Trustee in the amounts and at the times
necessary to pay the principal of and interest and any premium (the “Bond Service Charges”) on the
Series 2007 Bonds. In the Indenture, as supplemented by the First Supplemental Indenture, the
Issuer has assigned to the Trustee, to provide for the payment of the Bond Service Charges on the
Bonds, the Issuer’s right, title and interest in and to the Loan Agreement, as amended by the First
Amendment to Loan Agreement, except for Unassigned Issuer’s Rights as defined in the Loan
Agreement.

     The Bond Service Charges on the Bonds are payable solely from the Revenues, as defined and as
provided in the Indenture (being, generally, the amounts payable under the Loan Agreement in
repayment of the Loan and any unexpended proceeds of the Bonds), and are an obligation of the
Issuer only to the extent of the Revenues. The Bonds are not secured by an obligation or pledge of
any moneys raised by taxation and do not represent or constitute a debt or pledge of the faith and
credit of the Issuer.

     Copies of the Indenture, the First Supplemental Indenture, the Loan Agreement, the First
Amendment to Loan Agreement and the Series 2007 Project Note are on file in the principal corporate
trust office of the Trustee. Each Holder assents, by its acceptance hereof, to all of the
provisions of the Indenture, the First Supplemental Indenture, the Loan Agreement and the First
Amendment to Loan Agreement.

     The Series 2007 Bonds are issuable only as fully registered bonds in the denominations of
$100,000 and any integral multiple of $1,000 in excess thereof and are exchangeable for Series 2007
Bonds of other authorized denominations in equal aggregate principal amounts at the office of the
Registrar specified on the face hereof, but only in the manner and subject to the limitations
provided in the Indenture, as supplemented by the First Supplemental Indenture. This Bond is
transferable at the office of the Registrar, by the Holder in person or by his attorney, duly
authorized in writing, upon presentation and surrender hereof to the Registrar.

A-4

 

     The Registrar is not required to transfer or exchange (i) any Series 2007 Bond during a period
beginning at the opening of business 15 days before the day of the mailing of a notice of
redemption of Bonds and ending at the close of business on the day of such mailing, or (ii) any
Series 2007 Bonds so selected for redemption in whole or in part, within 90 days following such
mailing.

     This Series 2007 Bond is subject to redemption as follows:

     1. The Series 2007 Bonds are subject to mandatory sinking fund redemption at a redemption
price of 100 percent of the principal amount redeemed plus interest accrued to the redemption date,
in each of the years and in the principal amount set forth in the Indenture, as supplemented.

     The Indenture, as supplemented by the First Supplemental Indenture provides that there shall
be credited against the applicable principal amount to be redeemed by mandatory sinking redemption
(“Sinking Fund Amount”) an amount bearing the same ratio to such Sinking Fund Amount as the total
principal amount of Series 2007 Bonds of such maturity redeemed bears to the total principal amount
of Series 2007 Bonds outstanding of such maturity.

     2. The Series 2007 Bonds are subject to extraordinary optional redemption by the Issuer, at
the Company’s option, if events described in Section 6.2 of the Agreement occur (relating,
generally, to damage or taking of the Project, changes in law or circumstances affecting the
Project or acquisition of the stock or assets of the Company) (a) at any time in whole, or (b) on
any Interest Payment Date in part in inverse order of maturity upon condemnation of part of the
Project as provided in Section 6.2 of the Agreement, in each case, at a redemption price of 100
percent of the principal amount to be redeemed plus interest accrued to the redemption date.

     3. The Series 2007 Bonds are subject to mandatory redemption upon a Determination of
Taxability (as defined in the Indenture), at a redemption price equal to 103 percent (103%) of the
principal amount thereof plus interest accrued to the redemption date, at the earliest practicable
date selected by the Trustee, after consultation with the Company, but in no event later than 180
days following the Trustee’s notification of the Determination of Taxability.

     4. The Series 2007 Bonds maturing on December 1, 2013 are nor subject to optional redemption
prior to their stated maturity. Unless previously redeemed, the Series 2007 maturing December 1,
2037 Bonds are subject to redemption at the option of the Issuer, at the direction of the Company
in whole at any time or in part on any Interest Payment Date on or after December 1, 2017 (from
funds other than those deposited in accordance with the mandatory sinking fund requirements of the
Indenture, as supplemented by the First Supplemental Indenture), at the redemption price equal to
the principal amount redeemed, plus interest accrued to the redemption date.

     If Series 2007 Bonds or portions thereof are called for redemption and if on the redemption
date moneys for the redemption thereof are held by the Trustee as provided in the Indenture,
thereafter those Series 2007 Bonds or portions thereof to be redeemed shall cease to

A-5

 

bear interest, and shall cease to be secured by, and shall not be deemed to be outstanding
under, the Indenture.

     The Indenture permits certain amendments or supplements to the Loan Agreement, the Indenture
and the Series 2007 Project Note not prejudicial to the Holders to be made without the consent of
or notice to the Holders, and other amendments or supplements thereto to be made with the consent
of the Holders of not less than a majority in aggregate principal amount of the Bonds then
outstanding. NOTWITHSTANDING ANY OTHER PROVISION OF THIS BOND TO THE CONTRARY, BUT EXCEPT AS
OTHERWISE PROVIDED IN SECTION 2.01(e) OF THE FIRST SUPPLEMENTAL INDENTURE, THIS BOND IS
NONTRANSFERABLE UNLESS TRANSFERRED TO A QUALIFIED INVESTOR AS SET FORTH IN THE FIRST SUPPLEMENTAL
INDENTURE.

     The Holder of each Bond has only those remedies provided in the Indenture.

     The Issuer, Trustee, Registrar, Authenticating Agent and any agent thereof may treat the
Registered Holder of this Bond as the absolute owner for the purpose of receiving payment as herein
provided and for all other purposes hereunder and under the Indenture and none of them shall be
affected by any notice to the contrary.

     The Bonds shall not constitute the personal obligation, either jointly or severally, of the
members of the Board of Directors or of any other officer of the Issuer.

     This Bond shall not be entitled to any security or benefit under the Indenture or be valid or
become obligatory for any purpose until the certificate of authentication hereon shall have been
signed.

     It is certified and recited that there have been performed and have happened in regular and
due form, as required by law, all acts and conditions necessary to be done or performed by the
Issuer or to have happened (i) precedent to and in the issuing of the Series 2007 Bonds in order to
make them legal, valid and binding special limited obligations of the Issuer, and (ii) precedent to
and in the execution and delivery of the First Supplemental Indenture and the First Amendment to
Loan Agreement; that payment in full for the Series 2007 Bonds has been received; and that the
Series 2007 Bonds do not exceed or violate any constitutional or statutory limitation.

A-6

 

     IN WITNESS OF THE ABOVE, The Industrial Development Authority of the County of Pima has caused
this Bond to be executed in the name of the Issuer in their official capacities by the manual or
facsimile signatures of the President and Secretary, as of the date shown above.

	 	 	 	 	 
	 	THE INDUSTRIAL DEVELOPMENT AUTHORITY OF THE
COUNTY OF PIMA

 	 
	 	By:  	 	 
	 	 	Name:  	Stanley Lehman 	 
	 	 	Title:  	Vice President 	 
	 

ATTEST

                                                            

Secretary

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(FORM OF CERTIFICATE OF AUTHENTICATION)

Date of
Registration and Authentication
                                                              
                  :

This Bond is one of the Bonds described in the within-mentioned Indenture.

	 	 	 	 	 
	 	U.S. BANK NATIONAL ASSOCIATION, as Trustee

 	 
	 	By:  	 	 
	 	 	Authorized Signer 	 
	 	 	 	 
	 

Registrable at and payable by: U.S. Bank National Association, as Trustee

A-8

 

(FORM OF ASSIGNMENT)

ASSIGNMENT

     The following abbreviations when used in the inscription on the face of the within Bond, shall
be construed as though they were written out in full according to applicable laws or regulations:

TEN COM — as tenants in common

TEN ENT — as tenants by the entireties

JT TEN —  as joint tenants with right of

     survivorship and not as tenants in common

UNIF GIFT/TRANS MIN ACT                                          Custodian for                          
                under

(Cust.) (Minor)

Uniform Gifts/Transfers to Minors Act of                                                             .

(State)

Additional abbreviations may also be used though not in list above.

A-9

 

ASSIGNMENT

     FOR VALUE RECEIVED, the undersigned                                          (the “Transferor”), hereby sells, assigns
and transfers unto                      (the “Transferee”), whose address is
                                         and whose social security number (or other federal tax identification
number) is

PLEASE INSERT SOCIAL SECURITY OR OTHER

IDENTIFYING NUMBER OF TRANSFEREE

 

 

the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints
                                         as attorney to register the transfer of the within Bond on the books
kept for registration and registration of transfer thereof, with full power of substitution in the
premises.

     Date:                                         

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SIGNATURE(S) GUARANTEED BY:

	 	 	 
	 

	 	 
	Firm or Bank

	 	NOTICE:   No transfer will be registered
and no new Bond will be issued in the
name of the Transferee, unless that
signature(s) to this assignment
correspond(s) with the name as it
appears upon the fact of the within
Bond in every particular, without
alteration or enlargement or any change
whatever and name, address and the
Social Security Number or federal
employee identification number of the
Transferee is supplied.

	 	 	 
	Authorized Signature	 	 
	 
	 	 
	Signature guarantee should be
made by a guarantor institution
participating in the Securities,
Transfer Agents Medallion Program
or in such other program
acceptable to the Bond Registrar.exv10w5w1

EXHIBIT
10.5.1

AMENDED AND RESTATED CREDIT AGREEMENT

     THIS AMENDED AND RESTATED CREDIT AGREEMENT is entered into as of December 9, 2005, by and
among GLOBAL WATER RESOURCES, LLC, a Delaware limited liability company (“Global Resources”),
GLOBAL WATER MANAGEMENT, LLC, a Delaware limited liability company (“Global Management”), GLOBAL
WATER RESOURCES, INC., a Delaware corporation (“Global, Inc.”) (Global Resources, Global Management
and Global, Inc. are individually and collectively, the “Borrower”), and WELLS FARGO BANK, NATIONAL
ASSOCIATION (“Bank”).

RECITALS

RECITALS

          A. Bank extended to Borrower a revolving line of credit (“Revolving Loan”) in the
maximum principal amount of Ten Million and No/100 Dollars ($10,000,000.00) pursuant to that
certain Credit Agreement, dated July 7, 2005 (the “Original Credit Agreement”), and
evidenced by that certain $10,000,000.00 Revolving Line of Credit Note, dated July 7, 2005 (the
“Original Line of Credit Note”). The outstanding principal balance of the Revolving Loan as
of the date hereof is $9,000,000.00.

          B. Bank extended to Borrower credit on a term basis (“Term Loan”) in the principal
amount of Five Million and No/100 Dollars ($5,000,000.00) pursuant to the Original Credit
Agreement, and evidenced by that certain $5,000,000.00 Term Note, dated July 7, 2005 (the “Term
Note”). The outstanding principal balance of the Term Loan as of the date hereof is
$5,000,000.00.

          C. The Revolving Loan and the Term Loan are secured by the collateral as more particularly
referenced in Section 1.4 of the Original Credit Agreement.

          D. Borrower has requested, inter alia, that Bank (i) increase the maximum amount of the
Revolving Loan to Thirty-Five Million and No/100 Dollars ($35,000,000.00), a portion of which shall
be used to repay the Term Loan in full and (ii) otherwise modify the Loan pursuant to this
Agreement.

          E. Lender is willing to so modify the Loan and the Loan Documents, and amend and restate the
Original Loan Agreement subject to the terms and conditions herein.

     NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Bank and Borrower hereby agree as follows:

ARTICLE I

CREDIT TERMS

     SECTION 1.1. LINE OF CREDIT.

     (a) Line of Credit. Subject to the terms and conditions of this Agreement, Bank hereby
agrees to make advances to Borrower from time to time up to and including December 9, 2007 (the
“Maturity Date”), not to exceed at any time the aggregate principal amount of

 

 

Thirty-Five Million Dollars ($35,000,000.00) (“Line of Credit”), the proceeds of which shall be
used to refinance existing debt (including, but not limited to, the Term Loan), working capital
purposes and for the acquisition of utility companies. Borrower’s obligation to repay advances
under the Line of Credit shall be evidenced by an amended and restated promissory note dated as of
December 9, 2005 (“Line of Credit Note”), all terms of which are incorporated herein by this
reference, which Line of Credit Note shall amend and restate the Original Line of Credit Note.

     (b) Limitation on Borrowings Prior to December 31, 2006. Prior to December 31, 2006,
outstanding borrowings under the Line of Credit, to a maximum of the principal amount set forth
above, shall not at any time exceed an aggregate of five (5) times Annualized Recurring EBITDA (as
defined in Section 4.9(b)) (the “Maximum Amount”) as determined accordance with the Borrowing Base
Certificate attached hereto as Exhibit A, the terms of which are herein incorporated by this
reference. If at any time the aggregate outstanding principal balance of the Line of Credit exceeds
the Maximum Amount (the “Excess Borrowings”), Borrower shall pay to Bank the amount of any Excess
Borrowings within 10 days of Borrower’s receipt of notice thereof.

     (c) Limitation on Borrowings On and After December 31, 2006. On and after December
31, 2006, outstanding borrowings under the Line of Credit, to a maximum of the principal amount set
forth above, shall not at any time exceed an aggregate of four (4) times Annualized Recurring
EBITDA (as defined in Section 4.9(b)) (the “Maximum Amount”) as determined in accordance with the
Borrowing Base Certificate attached hereto as Exhibit A, the terms of which are herein incorporated
by this reference. If at any time the aggregate outstanding principal balance of the Line of
Credit exceed the Maximum Amount (the “Excess Borrowings”), Borrower shall pay to Bank the amount
of any Excess Borrowings within 10 days of Borrower’s receipt of notice thereof.

     (d) Letter of Credit Subfeature. As a subfeature under the Line of Credit, Bank agrees
from time to time during the term thereof to issue or cause an affiliate to issue standby letters
of credit for the account of Borrower (each, a “Letter of Credit” and collectively, “Letters of
Credit”); provided however, that the aggregate undrawn amount of all outstanding Letters of Credit
shall not at any time exceed Five Million Dollars ($5,000,000.00). The form and substance of each
Letter of Credit shall be subject to approval by Bank, in its sole discretion. No Letter of Credit
shall have an expiration date subsequent to the Maturity Date of the Line of Credit. The undrawn
amount of all Letters of Credit shall be reserved under the Line of Credit and shall not be
available for borrowings thereunder. Each Letter of Credit shall be subject to the additional terms
and conditions of the Letter of Credit agreements, applications and any related documents required
by Bank in connection with the issuance thereof. Each drawing paid under a Letter of Credit shall
be deemed an advance under the Line of Credit and shall be repaid by Borrower in accordance with
the terms and conditions of this Agreement applicable to such advances; provided however, that if
advances under the Line of Credit are not available, for any reason, at the time any drawing is
paid, then Borrower shall immediately pay to Bank the full amount drawn, together with interest
thereon from the date such drawing is paid to the date such amount is fully repaid by Borrower, at
the rate of interest applicable to advances under the Line of Credit. In such event Borrower agrees
that Bank, in its sole discretion, may debit any account maintained by Borrower with Bank for the
amount of any such drawing.

     (e) Borrowing and Repayment. Borrower may from time to time during the term of the
Line of Credit borrow, partially or wholly repay its outstanding borrowings, and reborrow, subject
to all of the limitations, terms and conditions contained herein or in the Line of Credit

-2-

 

Note; provided however, that the total outstanding borrowings under the Line of Credit shall not at
any time exceed the maximum principal amount available thereunder, as set forth above.

     SECTION 1.2. INTEREST/FEES.

     (a) Interest. The outstanding principal balance of each credit subject hereto shall
bear interest, and the amount of each drawing paid under any Letter of Credit shall bear interest
from the date such drawing is paid to the date such amount is fully repaid by Borrower, at the rate
of interest set forth in each promissory note or other instrument or document executed in
connection therewith.

     (b) Unused Commitment Fee. Borrower shall pay to Bank a fee equal to .125% per annum
(computed on the basis of a 360-day year, actual days elapsed) on the average daily unused amount
of the Line of Credit, which fee shall be calculated on a quarterly basis by Bank and shall be due
and payable by Borrower in arrears within 5 days after each billing is sent by Bank.

     (c) Letter of Credit Fees. Borrower shall pay to Bank (i) fees upon the issuance of
each Letter of Credit equal to one percent (1.00%) per annum (computed on the basis of a 360-day
year, actual days elapsed) of the face amount thereof, and (ii) fees upon the payment or
negotiation of each drawing under any Letter of Credit and fees upon the occurrence of any other
activity with respect to any Letter of Credit (including without limitation, the transfer,
amendment or cancellation of any Letter of Credit) determined in accordance with Bank’s standard
fees and charges then in effect for such activity.

     SECTION 1.3. COLLATERAL.

     As security for all indebtedness of Borrower to Bank subject hereto, Global Resources hereby
grants to Bank a security interests of first priority in the membership interests of Santa Cruz
Water Company, LLC (“Santa. Cruz”) and Palo Verde Utility Company, LLC (“Palo Verde”), the common
stock of Global Inc., and all of Global Resources’ accounts, other rights to payment, general
intangibles, inventory and equipment.

     As security for all indebtedness of Borrower to Bank subject hereto, Global Resources shall
cause Levine Investments Limited Partnership, Trevor Hill, Leo Commandeur, Dan Cracchiolo, Graham
Symmonds, Cindy Liles and Andrew Cohn to grant to Bank a security interest of first priority in all
of the membership interest of Global Resources.

     As security for all indebtedness of Borrower to Bank subject hereto, Global Management hereby
grants to Bank a security interest of first priority in all of the accounts, other rights to
payment, general intangibles, inventory and equipment of Global Management.

     As security for all indebtedness of Borrower to Bank subject hereto, Global Management shall
cause Levine Investments Limited Partnership, Trevor Hill, Leo Commandeur, Dan Cracchiolo, Graham
Symmonds, Cindy Liles and Andrew Cohn to grant to Bank a security interest of first priority in all
of the membership interest of Global Management.

     As security for all indebtedness of Borrower to Bank subject hereto, Global, Inc. hereby
grants to Bank a security interest of first priority in all of the accounts, other rights to
payment, general intangibles, inventory and equipment of Global, Inc., and a first priority
security interest

-3-

 

in all of the common stock of Cave Creek Water Co. (“Cave Creek”), Pacer Equities Co. (“Pacer”) and
Hassayampa Utility Company, Inc. (“Hassayampa”).

     All of the foregoing shall be evidenced by and subject to the terms of such security
agreements, financing statements, deeds of trust and other documents as Bank shall reasonably
require, all in form and substance satisfactory to Bank. Borrower shall reimburse Bank immediately
upon demand for all costs and expenses incurred by Bank in connection with any of the foregoing
security, including without limitation, filing and recording fees and costs of appraisals and
collateral audits.

     In addition to the above, at such time as Borrower or any affiliate of Borrower acquires,
forms or otherwise comes into ownership of a controlling interest in public utility companies not
otherwise referenced in this Agreement (each, a “New Company”), Borrower shall promptly execute
such assignment documents (in form substantially similar to those executed in connection with this
Agreement) pledging the member interest, shareholder interest or partner interest, as applicable,
in such New Company to Bank as additional collateral for the Loan and to perform such other and
further acts and execute and deliver any and all such other and further instruments as may be
required or reasonably requested by Bank to establish, maintain and protect the respective rights
and remedies of Bank with respect to such New Company.

     SECTION 1.4. GUARANTIES.

     (a) Guarantees. All indebtedness of Borrower to Bank hereunder shall be guaranteed
jointly and severally by (i) William S. Levine (the “Levine Guaranty”) and (ii) Levine Investments
Limited Partnership (“Levine Investments”), as evidenced by and subject to the terms of guaranties
in form and substance satisfactory to Bank.

     (b) Bank agrees to provide each of the guarantors hereunder with notice of any event of
default of Borrower hereunder, with such notice to be sent to the address provided for William S.
Levine as set forth in Section 7.2 hereof.

ARTICLE II 

REPRESENTATIONS AND WARRANTIES

     Borrower makes the following representations and warranties to Bank, which representations and
warranties shall survive the execution of this Agreement and shall continue in full force and
effect until the full and final payment, and satisfaction and discharge, of all obligations of
Borrower to Bank subject to this Agreement.

     SECTION 2.1. LEGAL STATUS GLOBAL RESOURCES. Global Resources is a limited liability company,
duly organized and existing and in good standing under the laws of the State of Delaware, and is
qualified or licensed to do business (and is in good standing as a foreign corporation, if
applicable) in all jurisdictions in which such qualification or licensing is required or in which
the failure to so qualify or to be so licensed could have a material adverse effect on Global
Resources.

     SECTION 2.2. LEGAL STATUS GLOBAL MANAGEMENT. Global Management is a limited liability company,
duly organized and existing and in good standing under the laws of the State of Delaware, and is
qualified or licensed to do business (and is in good standing as a foreign corporation, if
applicable) in all jurisdictions in which such qualification or licensing is

-4-

 

required or in which the failure to so qualify or to be so licensed could have a material adverse
effect on Global Management.

     SECTION 2.3. LEGAL STATUS GLOBAL, INC. Global, Inc. is a corporation, duly organized and
existing and in good standing under the laws of the State of Delaware, and is qualified or licensed
to do business (and is in good standing as a foreign corporation, if applicable) in all
jurisdictions in which such qualification or licensing is required or in which the failure to so
qualify or to be so licensed could have a material adverse effect on Global, Inc.

     SECTION 2.4. AUTHORIZATION AND VALIDITY. This Agreement and each promissory note, contract,
instrument and other document required hereby or at any time hereafter delivered to Bank in
connection herewith (collectively, the “Loan Documents”) have been duly authorized, and upon their
execution and delivery in accordance with the provisions hereof will constitute legal, valid and
binding agreements and obligations of Borrower or the party which executes the same, enforceable in
accordance with their respective terms.

     SECTION 2.5. NO VIOLATION. The execution, delivery and performance by Borrower of each of the
Loan Documents do not violate any provision of any law or regulation, or contravene any provision
of any Articles of Organization, Operating Agreement, Articles of Incorporation or By-Laws of
Borrower, as applicable, or result in any breach of or default under any contract, obligation,
indenture or other instrument to which Borrower is a party or by which Borrower may be bound, which
could have a material adverse effect.

     SECTION 2.6. LITIGATION. There are no pending, or to the best of Borrower’s knowledge
threatened, actions, claims, investigations, suits or proceedings by or before any governmental
authority, arbitrator, court or administrative agency which could have a material adverse effect on
the financial condition or operation of Borrower or any subsidiary or affiliate of Borrower, other
than that certain pending condemnation case between the Town of Cave Creek, Arizona and Cave Creek
Water Company and Pacer Equities Company, case no. CV2005-005882.

     SECTION 2.7. CORRECTNESS OF FINANCIAL STATEMENT. The financial statements of Borrower dated
August 31, 2005, true copies of which have been delivered by Borrower to Bank prior to the date
hereof, (a) are complete and correct in all material respects and present fairly the financial
condition of Borrower, (b) disclose all liabilities of Borrower, that are required to be reflected
or reserved against under generally accepted accounting principles, whether liquidated or
unliquidated, fixed or contingent, and (c) have been prepared in accordance with generally accepted
accounting principles consistently applied. Since the date of such financial statements there has
been no material adverse change in the financial condition of Borrower, nor has Borrower mortgaged,
pledged, granted a security interest in or otherwise encumbered any of their respective assets or
properties except in favor of Bank or as otherwise permitted by Bank in writing.

     SECTION 2.8. INCOME TAX RETURNS. Borrower has no knowledge of any pending assessments or
adjustments of income tax payable by Borrower with respect to any year, other than current year’s
taxes not yet due and payable.

     SECTION 2.9. NO SUBORDINATION. There is no agreement, indenture, contract or instrument to
which Borrower is a party or by which Borrower may be bound that requires the subordination in
right of payment of any of Borrower’s obligations subject to this Agreement to any other obligation
of Borrower.

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     SECTION 2.10. PERMITS, FRANCHISES. Each of Borrower possesses, and will hereafter possess, all
material permits, consents, approvals, franchises and licenses required and rights to all
trademarks, trade names, patents, and fictitious names, if any, necessary to enable it, to conduct
the business in which it is now engaged in compliance with applicable law.

     SECTION 2.11. ERISA. Borrower is in compliance in all material respects with all applicable
provisions of the Employee Retirement Income Security Act of 1974, as amended or recodified from
time to time (“ERISA”); none has violated any provision of any defined employee pension benefit
plan (as defined in ERISA) maintained or contributed to by it (each, a “Plan”); no Reportable Event
as defined in ERISA has occurred and is continuing with respect to any Plan initiated by such
entity, each has met its minimum funding requirements under ERISA with respect to each Plan; and
each Plan will be able to fulfill its benefit obligations as they come due in accordance with the
Plan documents and under generally accepted accounting principles.

     SECTION 2.12. OTHER OBLIGATIONS. Borrower is not in default on any material obligation for
borrowed money, any material purchase money obligation or any other material lease, commitment,
contract, instrument or obligation.

     SECTION 2.13. ENVIRONMENTAL MATTERS. Except as disclosed by Borrower to Bank in writing prior
to the date hereof, Borrower is in compliance in all material respects with all applicable federal
or state environmental, hazardous waste, health and safety statutes, and any rules or regulations
adopted pursuant thereto, which govern or affect any of such entity’s operations and/or properties,
including without limitation, the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, the Superfund Amendments and Reauthorization Act of 1986, the Federal Resource
Conservation and Recovery Act of 1976, and the Federal Toxic Substances Control Act, as any of the
same may be amended, modified or supplemented from time to time. To Borrower’s knowledge, none of
the operations of Borrower is the subject of any federal or state investigation evaluating whether
any remedial action involving a material expenditure is needed to respond to a release of any toxic
or hazardous waste or substance into the environment. Borrower does not have a material contingent
liability in connection with any release of any toxic or hazardous waste or substance into the
environment.

ARTICLE III 

CONDITIONS

     SECTION 3.1. CONDITIONS OF INITIAL EXTENSION OF CREDIT. The obligation of Bank to extend any
credit contemplated by this Agreement is subject to the fulfillment to Bank’s satisfaction of all
of the following conditions:

     (a) Documentation. Bank shall have received, in form and substance satisfactory to
Bank, each of the following, duly executed.

	 	(i)	 	This Agreement;
	 
	 	(ii)	 	Amended and Restated Revolving Line of Credit Note;
	 
	 	(iii)	 	UCC Financing Statements (Borrower);
	 
	 	(iv)	 	UCC Financing Statement (William S. Levine, Leo Commandeur,
Trevor Hill, Daniel Crachhiolo, Levine Investments, Graham Symmonds, Cindy
Liles and Andrew Cohn);

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	 	(v)	 	Limited Liability Certificate: Borrowing (Global Water Resources, LLC);
	 
	 	(vi)	 	Limited Liability Certificate: Borrowing (Global Water Management, LLC)
	 
	 	(vii)	 	Corporate Resolution: Borrowing (Global Resources, Inc.);
	 
	 	(viii)	 	Amended and Restated Security Agreement (Borrower);
	 
	 	(ix)	 	Collateral Assignment of Membership Interest with respect to Global Water Resources, LLC;
	 
	 	(x)	 	Collateral Assignment of Membership Interest with respect to Global Water Management, LLC;
	 
	 	(xi)	 	Stock Pledge Agreement (with stock power) with respect to Global Water Resources, Inc.;
	 
	 	(xii)	 	Stock Pledge Agreement (with stock power) with respect to Cave Creek Water Co.;
	 
	 	(xiii)	 	Stock Pledge Agreement (with stock power) with respect to Pacer Equities Co.;
	 
	 	(xiv)	 	Stock Pledge Agreement (with stock power) with respect to Hassayampa Utility Company, Inc.;
	 
	 	(xv)	 	Collateral Assignment of Membership Interest with respect to Santa Cruz Water Company, LLC
and Palo Verde Utility Company, LLC;
	 
	 	(xvi)	 	Guaranty: William S. Levine;
	 
	 	(xvii)	 	Guaranty: Levine Investments Limited Partnership;
	 
	 	(xviii)	 	Partnership Certificate: Levine Investments Limited Partnership: Guaranty Pledge Collateral;
	 
	 	(xix)	 	Such other documents as Bank may reasonably require under any other Section of this Agreement.

     (b) Financial Condition. There shall have been no material adverse change, as
determined by Bank, in the financial condition or business of Borrower, nor any material decline,
as determined by Bank, in the market value of any collateral required hereunder or a substantial or
material portion of the assets of Borrower.

ARTICLE IV

AFFIRMATIVE COVENANTS

     Borrower covenants that so long as Bank remains committed to extend credit to Borrower
pursuant hereto, or any liabilities (whether direct or contingent, liquidated or unliquidated) of
Borrower to Bank under any of the Loan Documents remain outstanding, and until payment in full of
all obligations of Borrower subject hereto, Borrower shall, unless Bank otherwise consents in
writing:

     SECTION 4.1. PUNCTUAL PAYMENTS. Punctually pay all principal, interest, fees or other
liabilities due under any of the Loan Documents at the times and place and in the manner specified
therein.

     SECTION 4.2. ACCOUNTING RECORDS. Maintain adequate books and records in accordance with
generally accepted accounting principles consistently applied, and permit any representative of
Bank, at any reasonable time, to inspect, audit and examine such books and records, to make copies
of the same, and to inspect the properties of Borrower, with such inspection to be at Bank’s sole
cost and expense unless such inspection is requested by Bank

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following an Event of Default hereunder, upon reasonable prior notice and with Borrower’s
supervision.

     SECTION 4.3. FINANCIAL STATEMENTS. Provide to Bank all of the following, in form and detail
satisfactory to Bank:

     (a) not later than 120 days after and as of the end of each fiscal year, audited and
consolidated and consolidating financial statements of Borrower and its subsidiaries;

     (b) not later than 45 days after and as of the end of each calendar quarter a financial
statement of Borrower, prepared by Borrower, to include quarterly consolidated and consolidating
financial statements of Borrower and its subsidiaries;

     (c) not later than 120 days after and as of the end of each fiscal year, a financial statement
of Levine Investments, prepared by Levine Investments, with such financial statement to include
balance sheet and income statement;

     (d) not later than 30 days after filing but in no event later than November 15, of each year,
a copy of William S. Levine’s federal income tax return with all schedules, including K-1s
attached;

     (e) not later than 120 days after and as of the end of each fiscal year, the personal
financial statement of William S. Levine, with such financial statement to include balance sheet
and income statement;

     (f) not later than 45 days after and as of the end of each fiscal quarter or at any time there
is a material change in Borrower’s cash flow, a borrowing base certificate in the form attached
hereto as Exhibit A the terms of which are incorporated herein by this reference;

     (g) contemporaneously with each annual and quarterly financial statement of Borrower required
hereby, a certificate of the president or chief financial officer or member of Borrower in the form
of Exhibit B attached hereto and incorporated herein by this reference, that said financial
statements are accurate and that there exists no Event of Default nor any condition, act or event
which with the giving of notice or the passage of time or both would constitute an Event of
Default; and

     (h) from time to time such other information as Bank may reasonably request

     SECTION 4.4. COMPLIANCE. Preserve and maintain all licenses, permits, governmental approvals,
rights, privileges and franchises necessary for the conduct of its and their business; and comply
with the provisions of all documents pursuant to which Borrower is organized and/or which govern
Borrower’s continued existence and with the requirements of all laws, rules, regulations and orders
of any governmental authority applicable to Borrower and/or its Borrower’s business.

     SECTION 4.5. INSURANCE. Maintain and keep in force insurance of the types and in amounts
customarily carried in lines of business similar to that of Borrower, Santa Cruz, Palo Verde, Cave
Creek, Pacer and Hassayampa including but not limited to fire, extended coverage, public liability,
flood, property damage and workers’ compensation, with all such insurance carried with companies
and in amounts satisfactory to Bank, and deliver to Bank from

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time to time at Bank’s request schedules setting forth all insurance then in effect. Bank
acknowledges that Borrower’s current insurance is satisfactory to Bank.

     SECTION 4.6. FACILITIES. Keep all properties useful or necessary to Borrower’s business in
good repair and condition, and from time to time make necessary repairs, renewals and replacements
thereto so that such properties shall be fully and efficiently preserved and maintained.

     SECTION 4.7. TAXES AND OTHER LIABILITIES. Pay and discharge when due any and all indebtedness,
obligations, assessments and taxes, both real or personal, including without limitation federal and
state income taxes and state and local property taxes and assessments, except such (a) as Borrower
may in good faith contest or as to which a bona fide dispute may arise, and (b) for which Borrower
has made provision, to Bank’s reasonable satisfaction, for eventual payment thereof in the event
Borrower is obligated to make such payment.

     SECTION 4.8. LITIGATION. Promptly give notice in writing to Bank of any litigation pending or
threatened against Borrower with a claim in excess of $200,000.00.

     SECTION 4.9. FINANCIAL CONDITION. Maintain Borrower’s financial condition, on a consolidated
basis (such consolidation, for purposes of these covenants, to include Borrower and its
subsidiaries and its subsidiaries, if any), as follows using generally accepted accounting
principles consistently applied and used consistently with prior practices (except to the extent
modified by the definitions herein), with compliance determined quarterly, commencing with
Borrower’s and Guarantor’s financial statements for the period ending September 30, 2005:

     (a) Net Worth. Net Worth not at any time less than $20,000,000.00, with “Net Worth” defined as
total equity.

     (b) Annualized Recurring EBITDA Coverage. Annualized Recurring EBITDA Coverage Ratio as of
each fiscal quarter end not less than 1.50 to 1.0, with “Annualized Recurring EBITDA” defined as
net profit before tax plus interest expense (net of capitalized interest expense), depreciation
expense and amortization expense; provided, however, Bank shall exclude from the foregoing
calculation the amount of any “impact fees” and any expenses related thereto, and any cash flows
pledged to any entity other than Bank for the fiscal quarter then ended multiplied by four (4).
“Annualized Recurring EBITDA Coverage Ratio” defined as Annualized Recurring EBITDA divided by the
aggregate of annualized interest expense based on the most recent fiscal quarter plus current
maturities of long-term debt. If Borrower acquires a utility company during the term of any credit
hereunder, Borrower’s Annualized Recurring EBITDA shall be adjusted to include the Annualized
Recurring EBITDA of the acquired entity which shall be subject to adjustment and qualification by
Bank.

     (c) Total Senior Funded Debt to Annualized Recurring EBITDA. Total Senior Funded Debt to
Annualized Recurring EBITDA not greater than 5.00 to 1.0 at any time prior to December 31, 2006 and
4.0 to 1.0 at any time thereafter. As used herein “Total Senior Funded Debt” defined as the sum of
all obligations for borrowed money plus all capital lease obligations of Borrower less subordinated
debt, and with Annualized Recurring EBITDA defined in Section 4.9(b).

     SECTION 4.10. NOTICE TO BANK. Promptly (but in no event more than five (5) days after the
occurrence of each such event or matter) give written notice to Bank in reasonable

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detail of: (a) the occurrence of any Event of Default (as defined in Section 6.1 hereof), or any
condition, event or act which with the giving of notice or the passage of time or both would
constitute an Event of Default; (b) any change in the name or the organizational structure of
Borrower; (c) the occurrence and nature of any Reportable Event or Prohibited Transaction, each as
defined in ERISA, or any funding deficiency with respect to any Plan; (d) any termination or
cancellation of any insurance policy which Borrower is required to maintain, or any uninsured or
partially uninsured loss through liability or property damage, or through fire, theft or any other
cause affecting Borrower’s property in excess of an aggregate of $200,000.00; or (e) the need for
any capital improvements for any subsidiary of Borrower that become reasonably necessary in order
to properly serve existing or future customers within the areas described within the respective
certificates of convenience and necessity (the “Necessary Capital Improvements”).

ARTICLE V

NEGATIVE COVENANTS

     Borrower further covenants that so long as Bank remains committed to extend credit to Borrower
pursuant hereto, or any liabilities (whether direct or contingent, liquidated or unliquidated) of
Borrower to Bank under any of the Loan Documents remain outstanding, and until payment in full of
all obligations of Borrower subject hereto, Borrower will not, and Borrower, will not without
Bank’s prior written consent:

     SECTION 5.1. USE OF FUNDS. Use any of the proceeds of any credit extended hereunder except for
the purposes stated in Article I hereof.

     SECTION 5.2. OTHER INDEBTEDNESS. Create, incur, assume or permit to exist any indebtedness or
liabilities resulting from borrowings, loans or advances, whether secured or unsecured, matured or
unmatured, liquidated or unliquidated, joint or several, except (a) the liabilities of Borrower to
Bank, (b) any other liabilities of Borrower existing as of, and disclosed to Bank prior to, the
date hereof, or (c) indebtedness to Levine Investments Limited Partnership that is subordinated to
Bank, with such subordination evidenced by and subject to the terms of a subordination agreement in
form and substance satisfactory to Bank.

     SECTION 5.3. MERGER, CONSOLIDATION, TRANSFER OF ASSETS. Merge into or consolidate with any
other entity; make any substantial change in the nature of Borrower’s business as conducted as of
the date hereof; acquire all or substantially all of the assets of any other entity (except for
acquisitions within the water or wastewater utility industry); nor sell, lease, transfer or
otherwise dispose of all or a substantial or material portion of Borrower’s assets except in the
ordinary course of its business.

     SECTION 5.4 GUARANTIES. Guarantee or become liable in any way as surety, endorser (other than
as endorser of negotiable instruments for deposit or collection in the ordinary course of
business), accommodation endorser or otherwise for, nor pledge or hypothecate any assets of
Borrower as security for, any liabilities or obligations of any other person or entity, except any
of the foregoing in favor of Bank.

     SECTION 5.5. LOANS, ADVANCES, INVESTMENTS. Make any loans or advances to or investments in
excess of $200,000.00 in any person or entity, except (a) any of the foregoing existing as of, and
disclosed to Bank prior to, the date hereof, and (b) for acquisitions within the water and
wastewater utility industry.

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     SECTION 5.6. PLEDGE OF ASSETS. Mortgage, pledge, grant or permit to exist a security interest
in, or lien upon, all or any portion of Borrower’s assets now owned or hereafter acquired, except
any of the foregoing in favor of Bank or which is existing as of, and disclosed to Bank in writing
prior to, the date hereof, or assets obtained in future acquisitions within the water or wastewater
industry utility industry that have not been previously pledged to Bank as collateral for any
indebtedness created hereunder.

ARTICLE VI 

EVENTS OF DEFAULT

     SECTION 6.1. The occurrence of any of the following shall constitute an “Event of Default”
under this Agreement:

     (a) Borrower shall fail to pay when due any principal, interest, fees or other amounts payable
under any of the Loan Documents. Notwithstanding anything to the contrary in this Agreement, any
failure by Borrower to pay any principal, interest, fees or other amounts when due shall not
constitute an Event of Default until the expiration of a period of (i) 10 days from the occurrence
of any such default arising from the failure to make such required payment.

     (b) Any financial statement or certificate furnished to Bank in connection with, or any
representation or warranty made by Borrower or any other party under this Agreement or any other
Loan Document shall prove to be incorrect, false or misleading in any material respect when
furnished or made.

     (c) Any default in the performance of or compliance with any obligation, agreement or other
provision contained herein or in any other Loan Document (other than those referred to in
subsections (a) and (b) above), and with respect to any such default which by its nature can be
cured, such default shall continue for a period of thirty (30) days after written notice from Bank
of its occurrence, provided that if the default is of such a nature that it cannot be cured within
such thirty (30) day period, such period shall be extended to a period not exceeding ninety (90)
days so long as Borrower diligently pursues such cure during such period as extended.

     (d) Any default in the payment or performance of any material obligation beyond any applicable
cure period, or any defined event of default, under the terms of any material contract or
instrument (other than any of the Loan Documents) pursuant to which Borrower any guarantor
hereunder or any general partner or joint venturer in any Borrower which is a partnership or joint
venture (with each such guarantor, general partner and/or joint venturer referred to herein as a
“Third Party Obligor”) has incurred any debt or other liability to any person or entity other than
Bank.

     (e) Any default in the payment or performance of any obligation beyond any applicable cure
period, or any defined event of default, under the terms of any contract or instrument (other than
any of the Loan Documents) pursuant to which Borrower, any guarantor hereunder or any general
partner or joint venturer in any Borrower which is a partnership or joint venture (with each such
guarantor, general partner and/or joint venturer referred to herein as a “Third Party Obligor”) has
incurred any debt or other liability to Bank.

     (f) The filing of a notice of judgment lien against Borrower or any Third Party Obligor; or
the recording of any abstract of judgment against Borrower or any Third Party Obligor in any county
in which Borrower or such Third Party Obligor has an interest in real

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property; or the service of a notice of levy and/or of a writ of attachment or execution, or other
like process, against the assets of Borrower or any Third Party Obligor; or the entry of a judgment
against Borrower or any Third Party Obligor. Any such lien, judgment, levy, or other matter set
forth in this Section 6.1(e) shall not be deemed a default hereunder unless (i) such matter is in
excess of $200,000.00, and (ii) such matter is not paid, discharged, satisfied, bonded over, or
otherwise disposed of to Bank’s reasonable satisfaction within 20 days of such event.

     (g) Borrower or any Third Party Obligor shall become insolvent, or shall suffer or consent to
or apply for the appointment of a receiver, trustee, custodian or liquidator of itself or any of
its property, or shall generally fail to pay its debts as they become due, or shall make a general
assignment for the benefit of creditors; Borrower or any Third Party Obligor shall file a voluntary
petition in bankruptcy, or seeking reorganization, in order to effect a plan or other arrangement
with creditors or any other relief under the Bankruptcy Reform Act, Title 11 of the United States
Code, as amended or recodified from time to time (“Bankruptcy Code”), or under any state or federal
law granting relief to debtors, whether now or hereafter in effect; or any involuntary petition or
proceeding pursuant to the Bankruptcy Code or any other applicable state or federal law relating to
bankruptcy, reorganization or other relief for debtors is filed or commenced against Borrower or
any Third Party Obligor, or Borrower or any Third Party Obligor shall file an answer admitting the
jurisdiction of the court and the material allegations of any involuntary petition; or Borrower or
any Third Party Obligor shall be adjudicated a bankrupt, or an order for relief shall be entered
against Borrower or any Third Party Obligor by any court of competent jurisdiction under the
Bankruptcy Code or any other applicable state or federal law relating to bankruptcy, reorganization
or other relief for debtors.

     (h) There shall exist or occur any event or condition which Bank in good faith believes
impairs, or is substantially likely to impair, the prospect of payment or performance by Borrower
of its obligations under any of the Loan Documents.

     (i) Borrower or Borrower’s members shall not have funded any Necessary Capital Improvements,
in a manner and in an amount reasonably satisfactory to Bank in Bank’s reasonable discretion within
twenty (20) days following Borrower’s notice to Bank pursuant to Section 4.10.

     SECTION 6.2. REMEDIES. Upon the occurrence of any Event of Default: (a) all indebtedness of
Borrower under each of the Loan Documents, any term thereof to the contrary notwithstanding, shall
at Bank’s option and without notice become immediately due and payable without presentment, demand,
protest or notice of dishonor, all of which are hereby expressly waived by Borrower; (b) the
obligation, if any, of Bank to extend any further credit under any of the Loan Documents shall
immediately cease and terminate; and (c) Bank shall have all rights, powers and remedies available
under each of the Loan Documents, or accorded by law, including without limitation the right to
resort to any or all security for any credit subject hereto and to exercise any or all of the
rights of a beneficiary or secured party pursuant to applicable law. All rights, powers and
remedies of Bank may be exercised at any time by Bank and from time to time after the occurrence of
an Event of Default, are cumulative and not exclusive, and shall be in addition to any other
rights, powers or remedies provided by law or equity.

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ARTICLE VII

MISCELLANEOUS

     SECTION 7.1. NO WAIVER. No delay, failure or discontinuance of Bank in exercising any right,
power or remedy under any of the Loan Documents shall affect or operate as a waiver of such right,
power or remedy; nor shall any single or partial exercise of any such right, power or remedy
preclude, waive or otherwise affect any other or further exercise thereof or the exercise of any
other right, power or remedy. Any waiver, permit, consent or approval of any kind by Bank of any
breach of or default under any of the Loan Documents must be in writing and shall be effective only
to the extent set forth in such writing.

     SECTION 7.2. NOTICES. All notices, requests and demands which any party is required or may
desire to give to any other party under any provision of this Agreement must be in writing
delivered to each party at the following address:

	 	 	 
	BORROWER:

	 	Deer Valley Financial Centre
	 

	 	22601 N. 19th Avenue, Suite 210
	 

	 	Phoenix, AZ 85027
	 

	 	Telecopy: 623-580-9659
	 

	 	Attn: Trevor Hill
	 
	 	 
	And

	 	William S. Levine
	 

	 	1702 East Highland, Suite 310
	 

	 	Phoenix, AZ 85016
	 

	 	Telecopy: 602-248-0884
	 
	 	 
	With copy to:

	 	Powell, Goldstein, Frazer & Murphy, LLP
	 

	 	191 Peachtree Street, N. E.
	 

	 	Sixteenth Floor
	 

	 	Atlanta, GA 30303
	 

	 	Telecopy: 404-572-6999
	 

	 	Attn: William B. Shearer, Jr., Esq.
	 
	 	 
	BANK:

	 	Wells Fargo Bank, National Association
	 

	 	100 W. Washington Street
	 

	 	MAC S4101-251
	 

	 	Phoenix, AZ 85003
	 

	 	Telecopy: 602-378-2350
	 

	 	Attn: Curtiss C. Smith, Vice President

or to such other address as any party may designate by written notice to all other parties. Each
such notice, request and demand shall be deemed given or made as follows: (a) if sent by hand
delivery, upon delivery; (b) if sent by mail, upon the earlier of the date of receipt or three (3)
postal business days after deposit in the U.S. mail, first class and postage prepaid; (c) if sent
by telecopy, upon receipt; and (d) if sent by overnight delivery, upon the earlier of the date of
receipt or 1 postal business day.

     SECTION 7.3. COSTS, EXPENSES AND ATTORNEYS’ FEES. Borrower shall pay to Bank immediately upon
demand the full amount of all reasonable payments, advances, charges, costs and expenses, including
reasonable attorneys’ fees (to include outside counsel fees and all allocated costs of Bank’s
in-house counsel), expended or incurred by Bank in

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connection with (a) the negotiation and preparation of this Agreement and the other Loan Documents,
Bank’s continued administration hereof and thereof, and the preparation of any amendments and
waivers hereto and thereto, (b) the enforcement of Bank’s rights and/or the collection of any
amounts which become due to Bank under any of the Loan Documents, and (c) the prosecution or
defense of any action in any way related to any of the Loan Documents, 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. No such payment shall be due if Bank is at fault with respect to such matter, Bank has
breached this Agreement, the Credit Agreement, or any of the documents entered into as contemplated
or required by the Credit Agreement, or in the event of Bank’s gross negligence or willful
misconduct. There shall likewise be no payment due if it is determined that Bank wrongfully
asserted a claim for enforcement or collection pursuant to subsection (b) above.

     SECTION 7.4. SUCCESSORS, ASSIGNMENT. This Agreement shall be binding upon and inure to the
benefit of the heirs, executors, administrators, legal representatives, successors and assigns of
the parties; provided however, that Borrower may not assign or transfer its interest hereunder
without Bank’s prior written consent. Bank reserves the right to sell, assign, transfer, negotiate
or grant participations in all or any part of, or any interest in, Bank’s rights and benefits under
each of the Loan Documents. In connection therewith, Bank may disclose all documents and
information which Bank now has or may hereafter acquire relating to any credit subject hereto,
Borrower or its business, any guarantor hereunder or the business of such guarantor, or any
collateral required hereunder.

     SECTION 7.5. ENTIRE AGREEMENT; AMENDMENT. This Agreement and the other Loan Documents
constitute the entire agreement between Borrower and Bank with respect to each credit subject
hereto and supersede all prior negotiations, communications, discussions and correspondence
concerning the subject matter hereof. This Agreement may be amended or modified only in writing
signed by each party hereto.

     SECTION 7.6. NO THIRD PARTY BENEFICIARIES. This Agreement is made and entered into for the
sole protection and benefit of the parties hereto and their respective permitted successors and
assigns, and no other person or entity shall be a third party beneficiary of, or have any direct or
indirect cause of action or claim in connection with, this Agreement or any other of the Loan
Documents to which it is not a party.

     SECTION 7.7. TIME. Time is of the essence of each and every provision of this Agreement and
each other of the Loan Documents.

     SECTION 7.8. SEVERABILITY OF PROVISIONS. If any provision of this Agreement shall be
prohibited by or invalid under applicable law, such provision shall be ineffective only to the
extent of such prohibition or invalidity without invalidating the remainder of such provision or
any remaining provisions of this Agreement.

     SECTION 7.9. COUNTERPARTS. This Agreement may be executed in any number of counterparts, each
of which when executed and delivered shall be deemed to be an original, and all of which when taken
together shall constitute one and the same Agreement.

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     SECTION 7.10. GOVERNING LAW. This Agreement shall be governed by and construed in accordance
with the laws of the State of Arizona.

     SECTION 7.11. JOINT AND SEVERAL LIABILITY. As used in this Section 7.11, the term “Joint
Credit” shall mean the Line of Credit subject to this Agreement.

     (a) Each Borrower has determined and represents to Bank that it is in its best interests and
in pursuance of its legitimate business purposes to induce Bank to extend credit pursuant to this
Agreement. Each Borrower acknowledges and represents that its business is related to the business
of the other Borrowers, the availability of the commitments provided for herein benefits each
Borrower, and advances and other credit extensions made hereunder will inure to the benefit of
Borrowers, individually and as a group.

     (b) Each Borrower has determined and represents to Bank that it has, and after giving effect
to the transactions contemplated by this Agreement will have, assets having a fair saleable value
in excess of its debts, after giving effect to any rights of contribution or subrogation which may
be available to such Borrower, and each Borrower has, and will have, access to adequate capital for
the conduct of its business and the ability to pay its debts as such debts mature.

     (c) Each Borrower agrees that it is jointly and severally liable to Bank for, and each
Borrower agrees to pay to Bank when due the full amount of, all indebtedness now existing or
hereafter arising to Bank under or in connection with the Joint Credit and all modifications,
extensions and renewals thereof, including without limitation all advances disbursed to any
Borrower under the Joint Credit, all interest which accrues thereon and all fees, costs and
expenses chargeable to any Borrower in connection therewith.

     (d) The liability of each Borrower for the Joint Credit shall be reinstated and revived and
the rights of Bank shall continue if and to the extent that for any reason any amount at any time
paid on account of any of the Joint Credit is rescinded or must otherwise be restored by Bank,
whether as a result of any proceedings in bankruptcy or reorganization or otherwise, all as though
such amount had not been paid.

     (e) Each Borrower authorizes Bank, without notice to or demand on such Borrower, and without
affecting such Borrower’s liability for the Joint Credit, from time to time to: (a) alter,
compromise, extend, accelerate or otherwise change the time for payment of, or otherwise change the
terms of, the liabilities and obligations of any other Borrower to Bank on account of any of the
Joint Credit; (b) take and hold security from any other Borrower for the payment of any of the
Joint Credit, and exchange, enforce, waive, subordinate or release any such security; (c) apply
such security and direct the order or manner of sale thereof, including without limitation, a
non-judicial sale permitted by the terms of the controlling security agreement or deed of trust, as
Bank in its discretion may determine; (d) release or substitute any one or more of the endorsers or
any guarantors of any of the Joint Credit, or any other party obligated thereon; and (e) apply
payments received by Bank from the any other Borrower to indebtedness of such other Borrower to
Bank other than the Joint Credit.

     (f) Each Borrower represents and warrants to Bank that it has established adequate means of
obtaining from any other Borrower on a continuing basis financial and other information pertaining
to such other Borrower’s financial condition, and each Borrower agrees to keep adequately informed
from such means of any facts, events or circumstances which might in any way affect its risks
hereunder Each Borrower further agrees that Bank shall have no

-15-

 

obligation to disclose to it any information or material about any other Borrower which is acquired
by Bank in any manner.

     (g) Each Borrower waives any right to require Bank to: (i) proceed against any other Borrower
or any other person; (ii) proceed against or exhaust any security held from any other Borrower or
any other person; (iii) pursue any other remedy in Bank’s power; (iv) apply payments received by
Bank from any other Borrower to any of the Joint Credit; or (v) mate any presentments or demands
for performance, or give any notices of nonperformance, protests, notices of protest or notices of
dishonor in connection with any of the Joint Credit.

     (h) Each Borrower waives any defense to its liability for the Joint Credit based upon or
arising by reason of: (i) any disability or other defense of any other Borrower or any other
person; (ii) the cessation or limitation from any cause whatsoever, other than payment in full, of
the liability of any other Borrower for the Joint Credit; (iii) any lack of authority of any
officer, director, partner, agent or other person acting or purporting to act on behalf of any
other Borrower or any defect in the formation of any other Borrower; (iv) the application by any
other Borrower of the proceeds of any of the Joint Credit for purposes other than the purposes
intended or understood by Bank or any Borrower; (v) any act or omission by Bank which directly or
indirectly results in or aids the discharge of any other Borrower by operation of law or otherwise,
or which in any way impairs or suspends any rights or remedies of Bank against any other Borrower;
(vi) any impairment of the value of any interest in any security for any of the Joint Credit,
including without limitation, the failure to obtain or maintain perfection or recordation of any
interest in any such security, the release of any such security without substitution, and/or the
failure to preserve the value of, or to comply with applicable law in disposing of, any such
security; or (vii) any modification of the obligations or liabilities of any other Borrower for any
of the Joint Credit, including without limitation the renewal, extension, acceleration or other
change in time for payment of, or other change in the terms of, the indebtedness of any other
Borrower for any of the Joint Credit, including increase or decrease of the rate of interest
thereon. Until the Joint Credit and all indebtedness of each Borrower to Bank arising under or in
connection with this Agreement shall have been paid in full, no Borrower shall have any right of
subrogation. Each Borrower waives all rights and defenses it may have arising out of (A) any
election of remedies by Bank, even though that election of remedies, such as a non-judicial
foreclosure with respect to any security for any of the Joint Credit, destroys its rights of
subrogation or its rights to proceed against any other Borrower for reimbursement, or (B) any loss
of rights it may suffer by reason of any rights, powers or remedies of any other Borrower in
connection with any anti-deficiency laws or any other laws limiting, qualifying or discharging any
Borrower’s indebtedness for any of the Joint Credit. Until the Joint Credit and all indebtedness of
each Borrower to Bank arising under or in connection with this Agreement shall have been paid in
full, each Borrower waives any right to enforce any remedy which Bank now has or may hereafter have
against any other Borrower or any other person, and waives any benefit of, or any right to
participate in, any security now or hereafter held by Bank.

     (i) If any of the waivers herein is determined to be contrary to any applicable law or public
policy, such waiver shall be effective only to the extent permitted by law.

     (j) It is the position of the Borrowers that each Borrower benefits from the Joint Credit that
have been made available by Bank under this Agreement and from each extension of credit thereunder,
regardless of whether such credit is disbursed to a joint account of Borrowers or to or for the
account of any Borrower.

-16-

 

     SECTION 7.12. AMENDMENT AND RESTATEMENT. This Agreement amends and restates the Original Loan
Agreement. This Agreement supersedes the Original Loan Agreement and any credit outstanding
thereunder shall be deemed to be outstanding under this Agreement.

     SECTION 7.13. ARBITRATION.

     (a) Arbitration. The parties hereto agree, upon demand by any party, to submit to
binding arbitration all claims, disputes and controversies between or among them (and their
respective employees, officers, directors, attorneys, and other agents), whether in tort, contract
or otherwise arising out of or relating to in any way (i) the loan and related Loan Documents which
are the subject of this Agreement and its negotiation, execution, collateralization,
administration, repayment, modification, extension, substitution, formation, inducement,
enforcement, default or termination; or (ii) requests for additional credit.

     (b) Governing Rules. Any arbitration proceeding will (i) proceed in a location in
Arizona selected by the American Arbitration Association (“AAA”); (ii) be governed by the Federal
Arbitration Act (Title 9 of the United States Code), notwithstanding any conflicting choice of law
provision in any of the documents between the parties; and (iii) be conducted by the AAA, or such
other administrator as the parties shall mutually agree upon, in accordance with the AAA’s
commercial dispute resolution procedures, unless the claim or counterclaim is at least
$1,000,000.00 exclusive of claimed interest, arbitration fees and costs in which case the
arbitration shall be conducted in accordance with the AAA’s optional procedures for large, complex
commercial disputes (the commercial dispute resolution procedures or the optional procedures for
large, complex commercial disputes to be referred to, as applicable, as the “Rules”). If there is
any inconsistency between the terms hereof and the Rules, the terms and procedures set forth herein
shall control. Any party who fails or refuses to submit to arbitration following a demand by any
other party shall bear all costs and expenses incurred by such other party in compelling
arbitration of any dispute. Nothing contained herein shall be deemed to be a waiver by any party
that is a bank of the protections afforded to it under 12 U.S.C. §91 or any similar applicable
state law.

     (c) No Waiver of Provisional Remedies, Self-Help and Foreclosure. The arbitration
requirement does not limit the right of any party to (i) foreclose against real or personal
property collateral; (ii) exercise self-help remedies relating to collateral or proceeds of
collateral such as setoff or repossession; or (iii) obtain provisional or ancillary remedies such
as replevin, injunctive relief, attachment or the appointment of a receiver, before during or after
the pendency of any arbitration proceeding. This exclusion does not constitute a waiver of the
right or obligation of any party to submit any dispute to arbitration or reference hereunder,
including those arising from the exercise of the actions detailed in sections (i), (ii) and (iii)
of this paragraph.

     (d) Arbitrator Qualifications and Powers. Any arbitration proceeding in which the
amount in controversy is $5,000,000.00 or less will be decided by a single arbitrator selected
according to the Rules, and who shall not render an award of greater than $5,000,000.00. Any
dispute in which the amount in controversy exceeds $5,000,000.00 shall be decided by majority vote
of a panel of three arbitrators; provided however, that all three arbitrators must actively
participate in all hearings and deliberations. The arbitrator will be a neutral attorney licensed
in the State of Arizona or a neutral retired judge of the state or federal judiciary of Arizona, in
either case with a minimum of ten years experience in the substantive law applicable to the subject

-17-

 

matter of the dispute to be arbitrated. The arbitrator will determine whether or not an issue is
arbitratable and will give effect to the statutes of limitation in determining any claim. In any
arbitration proceeding the arbitrator will decide (by documents only or with a hearing at the
arbitrator’s discretion) any pre-hearing motions which are similar to motions to dismiss for
failure to state a claim or motions for summary adjudication. The arbitrator shall resolve all
disputes in accordance with the substantive law of Arizona and may grant any remedy or relief that
a court of such state could order or grant within the scope hereof and such ancillary relief as is
necessary to make effective any award. The arbitrator shall also have the power to award recovery
of all costs and fees, to impose sanctions and to take such other action as the arbitrator deems
necessary to the same extent a judge could pursuant to the Federal Rules of Civil Procedure, the
Arizona Rules of Civil Procedure or other applicable law. Judgment upon the award rendered by the
arbitrator may be entered in any court having jurisdiction. The institution and maintenance of an
action for judicial relief or pursuit of a provisional or ancillary remedy shall not constitute a
waiver of the right of any party, including the plaintiff, to submit the controversy or claim to
arbitration if any other party contests such action for judicial relief.

     (e) Discovery. In any arbitration proceeding discovery will be permitted in accordance
with the Rules. All discovery shall be expressly limited to matters directly relevant to the
dispute being arbitrated and must be completed no later than 20 days before the hearing date and
within 180 days of the filing of the dispute with the AAA. Any requests for an extension of the
discovery periods, or any discovery disputes, will be subject to final determination by the
arbitrator upon a showing that the request for discovery is essential for the party’s presentation
and that no alternative means for obtaining information is available.

     (f) Class Proceedings and Consolidations. The resolution of any dispute arising
pursuant to the terms of this Agreement shall be determined by a separate arbitration proceeding
and such dispute shall not be consolidated with other disputes or included in any class proceeding.

     (g) Payment Of Arbitration Costs And Fees. The arbitrator shall award all costs and
expenses of the arbitration proceeding.

     (h) Miscellaneous. To the maximum extent practicable, the AAA, the arbitrators and the
parties shall take all action required to conclude any arbitration proceeding within 180 days of
the filing of the dispute with the AAA. No arbitrator or other party to an arbitration proceeding
may disclose the existence, content or results thereof, except for disclosures of information by a
party required in the ordinary course of its business or by applicable law or regulation. If more
than one agreement for arbitration by or between the parties potentially applies to a dispute, the
arbitration provision most directly related to the Loan Documents or the subject matter of the
dispute shall control. This arbitration provision shall survive termination, amendment or
expiration of any of the Loan Documents or any relationship between the parties.

-18-

 

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the day
and year first written above.

BORROWER:

	 	 	 	 	 	 	 	 	 	 	 
	GLOBAL WATER RESOURCES, L.L.C.

a Delaware limited liability company	 	 	 	WELLS FARGO BANK,

NATIONAL ASSOCIATION	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ William S. Levine
	 	 
	 	By:
	 	/s/ Curtiss C Smith
	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 

	 	William S. Levine, Manager
	 	 	 	 	 	Curtiss C Smith, Vice President	 	 

	 	 	 	 	 	 	 	 	 
	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	 	 	 	 	 	 

 

 

EXHIBIT A

BORROWING BASE CERTIFICATE

 

 

EXHIBIT A (1 of 2)

Borrowing Base Certificate

Global Water Resources LLC, a Delaware limited liability company, Global Water Management, LLC, an
Arizona limited liability company, and Global Water Resources, Inc., a Delaware corporation,
individually and collectively the “Borrower” to that certain Credit Agreement dated November 1,
2005, (herein together with all amendments and modifications, if any, called the “Agreement”), by
and between the Borrower and Guarantor named therein and Wells Fargo Bank, National Association,
hereby certifies that Borrower has prepared the Borrowing Base Certificate in accordance with the
terms of the Agreement for the reporting period ending: 9-30-05

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Annualized	 
	 	 	Quarterly 	 	 	Less:	 	 	Eligible	 	 	Eligible	 
	 	 	EBITDA	 	 	Ineligible	 	 	EBITDA	 	 	EBITDA	 
	Calculation of Eligible EBITDA (Section 4.9 (b))
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Santa Cruz Water Company, LLC
	 	$	1,587,420	 	 	$	—	 	 	$	1,587,420	 	 	$	6,349,680	 
	Palo Verde Utility Company, LLC
	 	$	511,821	 	 	$	—	 	 	$	511,821	 	 	$	2,047,284	 
	Cave Creek Water Company, Inc.
	 	$	193,447	 	 	$	—	 	 	$	193,447	 	 	$	773,788	 
	Global Water Management, LLC
	 	$	120,406	 	 	$	—	 	 	$	120,406	 	 	$	481,624	 
	Global Water Resources, LLC
	 	$	836,810	 	 	$	836,810	 	 	$	—	 	 	$	—	 
	 
	 	 	 	 	 	$	—	 	 	$	—	 	 	$	—	 
	Acquisitions:
	 	 	 	 	 	$	—	 	 	$	—	 	 	$	—	 
	 
	 	 	 	 	 	$	—	 	 	$	—	 	 	$	—	 
	 
	 	 	 	 	 	$	—	 	 	$	—	 	 	$	—	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Totals
	 	$	3,249,904	 	 	$	836.810	 	 	$	2,413,094	 	 	$	9,652,376	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Worksheet Variance
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	604	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Calculation of Borrowing Base (Sections 1.1 (b)
and Sections 1.1©
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Maximum Multiple of 5.0:1 prior to 12-31-06
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	5.0	 
	Maximum Multiple of 4.0:1, on and after
12-31-06.
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Gross Margined EBITDA(A)
	 	 	 	 	 	 	 	 	 	 	 	 	 	$	48,261,880	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	RLC Borrowing Base (the lesser of
$35,000,000 or A).
	 	 	 	 	 	 	 	 	 	 	 	 	 	$	35,000,000	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Less: Term Loan Balance (Wells 04-04)
	 	 	 	 	 	 	 	 	 	 	 	 	 	$	5,000,000	 
	Less. RLC Balance (Wells 07-05)
	 	 	 	 	 	 	 	 	 	 	 	 	 	$	6,519,498	 
	Less: Issued Letters of Credit (Sonoran)
	 	 	 	 	 	 	 	 	 	 	 	 	 	$	1,000,000	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Remaining RLC Availability
	 	 	 	 	 	 	 	 	 	 	 	 	 	$	22,480,502	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Negative Availability requires repayment of
principal
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

Borrowing Base Certificate

Borrower by its undersigned officer, hereby certifies that the foregoing represents a true and
accurate calculation of the Borrowing Base, calculated in accordance with the Agreement and that
Borrower remains in compliance with all the terms of the Agreement. Borrower will provide an
updated Borrowing Base Certificate in the event that there is any material change with regard to
Total or Eligible EBITDA. Annualized Recurring EBITDA from newly acquired companies may be included
in the Borrowing Base, subject to Banks’ adjustment and qualification.

Dated this 19th day of DECEMBER, 2005.

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Global Water Resources, LLC	 	 	 	Global Water Resources, Inc.	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	by:	 	/s/ Trevor Hill
 	 	 	 	by: 	 	/s/ Trevor Hill
 	 	 
	 

	 	its:
	 	PRESIDENT
	 	 	 	 	 	its:
	 	PRESIDENT	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Global Water Management, LLC	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	by:	 	/s/ Trevor Hill
 	 	 	 	 	 	 	 	 	 	 
	 

	 	its:
	 	PRESIDENT	 	 	 	 	 	 	 	 	 	 

 

 

EXHIBIT A (2 of 2)

COMPLIANCE CERTIFICATE WORKSHEET

	 	 	 	 	 	 	 	 	 	 	 	 	 
	Net Worth
	 	 	 	 	 	 	 	 	 	 	 	 
	GWR, LLC
	 	$	30,590,199	 	 	 	 	 	 	 	 	 
	GWM, LLC
	 	$	61,279	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 
	Total
	 	$	30,651,478	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 
	 
	 
	 	GWR, LLC	 	GWM, LLC	 	Total
	 
	 	 	 	 	 	 	 	 	 	 
	Senior Funded Debt
	 	 	 	 	 	 	 	 	 	 	 	 
	Total Liabilities
	 	$	72,722,907	 	 	$	712,506	 	 	$	73,435,413	 
	Less A/P
	 	$	3,448,756	 	 	$	42,962	 	 	$	3,491,718	 
	Less: Other Non-contractual debt
	 	$	57,754,653	 	 	$	669,544	 	 	$	58,424,197	 
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	$	11,519,498	 	 	$	—	 	 	$	11,519,498	 
	Less: Subordinated Debt (LILP)
	 	$	—	 	 	$	—	 	 	$	—	 
	 
	 	 	 	 	 	 	 	 	 	 
	Senior Debt (Wells)
	 	$	11,519,498	 	 	$	—	 	 	$	11,519,498	 
	 
	 	 	 	 	 	 	 	 	 	 

Quarterly EBITDA

Combined recurring utility company EBITDA

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Profit Before	 	Subordinated	 	All other	 	Depreciation	 	 
	Quarterly EBITDA	 	Taxes	 	Debt Interest	 	Interest	 	& Amortization	 	EBITDA
	GWR, LLC Consolidated
	 	$	2,019,513	 	 	$	—	 	 	$	211,043	 	 	$	898,943	 	 	$	3,129,499	 
	GWM, LLC
	 	$	120,301	 	 	 	 	 	 	$	—	 	 	$	255	 	 	$	120,558	 
	Less: Infrastructure Revenue
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	$	1,325,876	 
	Plus: Infrastructure Expenses
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	$	489,066	 
	Quarterly Subtotal
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	$	2,413,245	 
	Annualized Eligible EBITDA
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	$	9,652,980	 

Cash paid Subordinated Debt Interest and All other Interest paid equals Total Cash Interest Paid

 

 

EXHIBIT B

Compliance Certificate

Global Water Resources LLC, a Delaware limited liability company, Global Water Management LLC, an
Arizona limited liability company, and Global Water Resources, Inc., a Delaware Corporation,
individually and collectively the “Borrower” to that certain Credit Agreement dated November 1,
2005, (herein together with all amendments and modifications, if any, called the “Agreement”), by
and between the Borrower and Guarantor named therein and Wells Fargo Bank, National Association,
hereby certifies that Borrower has prepared the Compliance Certificate in accordance with the terms
of the Agreement for the reporting period ending: 9/30/2005

Minimum Net Worth not less than $20,000,000 (Section 4.9 (a))

Net Worth not at any time less than $20,000,000, with “Net Worth” defined as total members’ equity.

	 	 	 	 	 	 	 	 	 
	At or above $20,000,000	 	 	 	 	 	 	 	Compliance
	Measured at each fiscal quarter end beginning 9/30/05	 	 	 	Actual	 	Yes/No
	Net Worth

	 	 	 	$	30,651,478	 	 	Yes

Annualized Recurring EBITDA Coverage Required (Section 4.9 (b))

Measured on a annualized basis (last fiscal quarter) with Annualized Recurring EBITDA Coverage of
not less than  1.50:1

	 	 	 	 	 	 	 	 	 	 	 	 	 
	At or above 1.50:1	 	 	 	 	 	 	 	 	 	Compliance
	Measured at each fiscal quarter end beginning 9/30/05	 	 	 	 	 	Actual	 	Yes/No
	Annualized Recurring EBITDA
	 	$	9,652,980	 	 	 	5.017	 	 	Yes
	Prior Period Current Portion of Long Term Debt
	 	$	1,080,000	 	 	 	 	 	 	 	 	 
	Annualized Total Cash Interest Paid
	 	$	844,172	 	 	 	 	 	 	 	 	 

Senior Funded Debt to Annualized Recurring EBITDA Required (Section 4.9 (c))

Measured on an annualized basis (last fiscal quarter), with “Senior Funded Debt divided by
“Annualized Recurring EBITDA” not to exceed 5.0:1 at any time prior to December 31, 2006, then
reducing to no greater than 4.0:1 at anytime on or after December 31, 2006.

	 	 	 	 	 	 	 	 	 	 	 	 	 
	Less than 5.0:1	 	 	 	 	 	 	 	 	 	Compliance
	Measured at each fiscal quarter beginning 9/30/05	 	 	 	 	 	Actual	 	Yes/No
	Senior Funded Debt
	 	$	11,519,498	 	 	 	1.193	 	 	Yes
	Annualized Recurring EBITDA
	 	$	9,652,980	 	 	 	 	 	 	 	 	 

Financial Statements and Covenant Compliance Certificate

Borrower by its undersigned officer, hereby certifies that the foregoing represents a true and
accurate calculation of the financial covenants, calculated in accordance with the Agreement. The
undersigned further certifies that the financial statements of Borrower for the reporting period
has been prepared in accordance to generally accepted accounting practices consistently applied and
fairly sets forth the financial condition of Borrower as the date hereto and the results of
operations for the period then ending.

Dated this 19th day of DECEMBER, 2005.

	 	 	 	 	 	 	 	 	 	 	 
	Global Water Resources, LLC	 	 	 	Global Water Resources, Inc.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	by:

	 	/s/ Trevor Hill
	 	 	 	by:
	 	/s/ Trevor Hill	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 

	 	its: President
	 	 	 	 	 	its: President	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Global Water Management, LLC	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	by:

	 	/s/ Trevor Hill	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	its: President	 	 	 	 	 	 	 	 

 

 

EXHIBIT A (1 of 2)

Borrowing Base Certificate

Global Water Resources LLC, a Delaware limited liability company, Global Water Management, LLC, an
Arizona limited liability company, and Global Water Resources, Inc., a Delaware Corporation,
individually and collectively the “Borrower” to that certain Credit Agreement dated November 1,
2005, (herein together with all amendments and modifications, if any, called the “Agreement”), by
and between the Borrower and Guarantor named therein and Wells Fargo Bank, National Association,
hereby certifies that Borrower has prepared the Borrowing Base Certificate in accordance with the
terms of the Agreement for the reporting period ending: 9-30-05

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Annualized	 
	 	 	Quarterly	 	 	Less:	 	 	Eligible	 	 	Eligible	 
	 	 	EBITDA	 	 	Ineligible	 	 	EBITDA	 	 	EBITDA	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Calculation of Eligible EBITDA
(Section 4.9 (b))
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Santa Cruz Water Company, LLC
	 	$	1,587,420	 	 	$	—	 	 	$	1,587,420	 	 	$	6,349,680	 
	Palo Verde Utility Company, LLC
	 	$	511,821	 	 	$	—	 	 	$	511,821	 	 	$	2,047,284	 
	Cave Creek Water Company, Inc.
	 	$	193,447	 	 	$	—	 	 	$	193,447	 	 	$	773,788	 
	Global Water Management, LLC
	 	$	120,406	 	 	$	—	 	 	$	120,406	 	 	$	481,624	 
	Global Water Resources, LLC
	 	$	836,810	 	 	$	836,810	 	 	$	—	 	 	$	—	 
	 
	 	 	 	 	 	$	—	 	 	$	—	 	 	$	—	 
	Acquisitions:
	 	 	 	 	 	$	—	 	 	$	—	 	 	$	—	 
	 
	 	 	 	 	 	$	—	 	 	$	—	 	 	$	—	 
	 
	 	 	 	 	 	$	—	 	 	$	—	 	 	$	—	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Totals
	 	$	3,249,904	 	 	$	836,810	 	 	$	2,413,094	 	 	$	9,652,376	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Worksheet Variance
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	604	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Calculation of Borrowing Base
(Sections 1.1 (b)
and Sections 1.1 ©
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Maximum Multiple of 5.0:1
prior to 12-31-06
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	5.0	 
	Maximum Multiple of 4.0:1,
on and after 12-31-06.
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Gross Margined EBITDA (A)
	 	 	 	 	 	 	 	 	 	 	 	 	 	$	48,261,880	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	RLC Borrowing Base (the
lesser of $35,000,000 or A).
	 	 	 	 	 	 	 	 	 	 	 	 	 	$	35,000,000	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Less: Term Loan Balance
(Wells 04-04)
	 	 	 	 	 	 	 	 	 	 	 	 	 	$	5,000,000	 
	Less: RLC Balance (Wells 07-05)
	 	 	 	 	 	 	 	 	 	 	 	 	 	$	6,519,498	 
	Less: Issued Letters
of Credit (Sonoran)
	 	 	 	 	 	 	 	 	 	 	 	 	 	$	1,000,000	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Remaining RLC Availability
	 	 	 	 	 	 	 	 	 	 	 	 	 	$	22,480,502	 
	Negative Availability
requires repayment of principal
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

Borrowing Base Certificate

Borrower by its undersigned officer, hereby certifies that the foregoing represents a true and
accurate calculation of the Borrowing Base, calculated in accordance with the Agreement and that
Borrower remains in compliance with all the terms of the Agreement. Borrower will provide an
updated Borrowing Base Certificate in the event that there is any material change with regard to
Total or Eligible EBITDA.

Annualized Recurring EBITDA from newly acquired companies may be included in the Borrowing Base,
subject to Banks’ adjustment and qualification.

Dated this 19th day of DECEMBER, 2005.

	 	 	 	 	 	 	 	 	 	 	 
	Global Water Resources, LLC	 	 	 	Global Water Resources, Inc.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	by:

	 	/s/ Trevor Hill
	 	 	 	by:
	 	/s/ Trevor Hill	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 

	 	its: PRESIDENT
	 	 	 	 	 	its: PRESIDENT	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Global Water Management, LLC	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	by:

	 	/s/ Trevor Hill	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	its: President	 	 	 	 	 	 	 	 

 

 

EXHIBIT A (2 of 2)

COMPLIANCE CERTIFICATE WORKSHEET

	 	 	 	 	 
	Net Worth
	 	 	 	 
	GWR, LLC
	 	$	30,590,199	 
	GWM, LLC
	 	$	61,279	 
	 
	 	 	 
	Total
	 	$	30,651,478	 
	 
	 	 	 

	 	 	 	 	 	 	 	 	 	 	 	 	 
	Senior Funded Debt
	 	GWR, LLC	 	 	GWM, LLC	 	 	Total	 
	Total Liabilities
	 	$	72,722,907	 	 	$	712,506	 	 	$	73,435,413	 
	Less A/P
	 	$	3,448,756	 	 	$	42,962	 	 	$	3,491,718	 
	Less: Other Non-contractual debt
	 	$	57,754,653	 	 	$	669,544	 	 	$	58,424,197	 
	 
	 	 	 	 	 	 	 	 	 
	 
	 	$	11,519,498	 	 	$	—	 	 	$	11,519,498	 
	 
	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 
	Less: Subordinated Debt (Illegible)
	 	$	—	 	 	$	—	 	 	$	—	 
	 
	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 
	Senior Debt (Wells)
	 	$	11,519,498	 	 	$	—	 	 	$	11,519,498	 
	 
	 	 	 	 	 	 	 	 	 

Quarterly EBITDA

Combined recurring utility company EBITDA

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Profit Before	 	Subordinated	 	All other	 	Depreciation	 	 
	Quarterly EBITDA	 	Taxes	 	Debt Interest	 	Interest	 	& Amortization	 	EBITDA
	GWR, LLC Consolidated
	 	$	2,019,513	 	 	$	  —	 	 	$	211,043	 	 	$	898,943	 	 	$	3,129,499	 
	GWM, LLC
	 	$	120,301	 	 	 	 	 	 	$	—	 	 	$	255	 	 	$	120,556	 
	Less: Infrastructure Revenue
	 	 	Illegible 	 	 	 	Illegible 	 	 	 	Illegible 	 	 	 	Illegible 	 	 	$	1,325,876	 
	Plus: Infrastructure Expenses
	 	 	Illegible 	 	 	 	Illegible 	 	 	 	Illegible 	 	 	 	Illegible 	 	 	$	489,066	 
	Quarterly Subtotal
	 	 	Illegible 	 	 	 	Illegible 	 	 	 	Illegible 	 	 	 	Illegible 	 	 	$	2,413,245	 
	Annualized Eligible EBITDA
	 	 	Illegible 	 	 	 	Illegible 	 	 	 	Illegible 	 	 	 	Illegible 	 	 	$	9,652,980	 

Cash paid Subordinated Debt Interest and All other Interest paid equals Total Cash Interest Paid

 

 

EXHIBIT B

COMPLIANCE CERTIFICATE

 

 

EXHIBIT B

Compliance Certificate

Global Water Resources LLC, a Delaware limited liability company, Global Water Management LLC, an
Arizona limited liability company, and Global Water Resources, Inc., a Delaware Corporation,
individually and collectively the “Borrower” to that certain Credit Agreement dated November 1,
2005, (herein together with all amendments and modifications, if any, called the “Agreement”), by
and between the Borrower and Guarantor named therein and Wells Fargo Bank, National Association,
hereby certifies that Borrower has prepared the Compliance Certificate in accordance with the terms
of the Agreement for the reporting period ending: 9/30/2005

Minimum Net Worth not less than $20,000,000 (Section 4.9 (a))

Net Worth not at any time less than $20,000,000, with “Net Worth” defined as total members’ equity.

	 	 	 	 	 	 	 	 	 
	At or above $20,000,000	 	 	 	 	 	 	 	Compliance
	Measured at each fiscal quarter end beginning 9/30/05	 	 	 	Actual	 	Yes/No
	Net Worth

	 	 	 	$	30,651,478	 	 	Yes

Annualized Recurring EBITDA Coverage Required (Section 4.9 (b))

Measured on a annualized basis (last fiscal quarter) with Annualized Recurring EBITDA Coverage of
not less than 1.50:1

	 	 	 	 	 	 	 	 	 	 	 	 	 
	At or above 1.50:1	 	 	 	 	 	 	 	 	 	Compliance
	Measured at each fiscal quarter end beginning 9/30/05	 	 	 	 	 	Actual	 	Yes/No
	Annualized Recurring EBITDA
	 	$	9,652,980	 	 	 	5.017	 	 	Yes
	Prior Period Current Portion of Long Term Debt
	 	$	1,080,000	 	 	 	 	 	 	 	 	 
	Annualized Total Cash Interest Paid
	 	$	844,172	 	 	 	 	 	 	 	 	 

Senior Funded Debt to Annualized Recurring EBITDA Required (Section 4.9 (c))

Measured on an annualized basis (last fiscal quarter), with “Senior Funded Debt divided by
“Annualized Recurring EBITDA” not to exceed 5.0:1 at any time prior to December 31, 2006, then
reducing to no greater than 4.0:1 at anytime on or after December 31, 2006.

	 	 	 	 	 	 	 	 	 	 	 	 	 
	Less than 5.0:1	 	 	 	 	 	 	 	 	 	Compliance
	Measured at each fiscal quarter beginning 9/30/05	 	 	 	 	 	Actual	 	Yes/No
	Senior Funded Debt
	 	$	11,519,498	 	 	 	1.193	 	 	Yes
	Annualized Recurring EBITDA
	 	$	9,652,980	 	 	 	 	 	 	 	 	 

Financial Statements and Covenant Compliance Certificate

Borrower by its undersigned officer, hereby certifies that the foregoing represents a true and
accurate calculation of the financial covenants, calculated in accordance with the Agreement. The
undersigned further certifies that the financial statements of Borrower for the reporting period
has been prepared in accordance to generally accepted accounting practices consistently applied and
fairly sets forth the financial condition of Borrower as the date hereto and the results of
operations for the period then ending.

Dated this 19th day of DECEMBER, 2005.

	 	 	 	 	 	 	 	 	 	 	 
	Global Water Resources, LLC	 	 	 	Global Water Resources, Inc.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	by:

	 	/s/ Trevor Hill
	 	 	 	by:
	 	/s/ Trevor Hill	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 

	 	its: PRESIDENT
	 	 	 	 	 	its: PRESIDENT	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Global Water Management, LLC	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	by:

	 	/s/ Trevor Hill	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	its: PRESIDENT

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00142-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00142-of-00352.parquet"}]]