Document:

EX-10.1

Exhibit 10.1

THIRD AMENDMENT TO CREDIT AGREEMENT

     THIRD AMENDMENT TO CREDIT AGREEMENT dated as of August 14, 2008 (this “Amendment”),
among CALGON CARBON CORPORATION, a corporation organized under the laws of the State of Delaware
(the “Company”), CALGON CARBON INVESTMENTS INC., a corporation organized under the laws of
the State of Delaware (“Calgon Investments”), CHEMVIRON CARBON LIMITED, a private company
limited by shares organized under the laws of England and Wales with company number 02208285
(“Chemviron”), WATERLINK (UK) HOLDINGS LIMITED, a private company limited by shares
organized under the laws of England and Wales with company number 03181974 (“Waterlink”),
SUTCLIFFE SPEAKMAN LIMITED, a private company limited by shares organized under the laws of England
and Wales with company number 029081113 (“Sutcliffe”), LAKELAND PROCESSING LIMITED, a
private company limited by shares organized under the laws of England and Wales with company number
02926645 (“Lakeland”), CHARCOAL CLOTH (INTERNATIONAL) LIMITED, a private company limited by
shares organized under the laws of England and Wales with company number 02743909 (“Charcoal
International”), BSC COLUMBUS, LLC, a limited liability company organized under the laws of the
State of Delaware (“BSC”), and CCC COLUMBUS LLC, a limited liability company organized
under the laws of the State of Delaware (“Columbus”), the Lenders party hereto, J.P. MORGAN
EUROPE LIMITED, as the European Administrative Agent, JPMORGAN CHASE BANK, N.A., as the US
Administrative Agent, and J.P. MORGAN SECURITIES, INC., as Sole Bookrunner and Sole Lead Arranger.

     WHEREAS, the Loan Parties are party to a Credit Agreement dated as of August 18, 2006, as
amended (the “Existing Credit Agreement”), with the Lenders party thereto (the
“Lenders”) and the Administrative Agents party thereto (as further amended and modified by
this Amendment and as the same may be further amended, modified, supplemented or restated from time
to time, the “Credit Agreement”); and

     WHEREAS the Loan Parties have requested that the Administrative Agents and the Lenders amend
the Existing Credit Agreement to (i) increase the Total Revolving Commitment to an amount not
exceeding $60,000,000 and (ii) amend the Existing Credit Agreement in certain other respects, and
the Administrative Agents and the Lenders have agreed to do so, subject to the terms and conditions
set forth herein,

     NOW, THEREFORE, in consideration of the foregoing and the agreements contained herein, the
parties hereby agree as follows:

1. Capitalized Terms.

     Capitalized terms used herein which are defined in the Existing Credit Agreement have the same
meanings herein as therein, except to the extent that such meanings are amended hereby.

 

 

2. Amendments to Credit Agreement.

     Subject to the terms and conditions set forth in Section 4 hereof and in reliance on the
representations set forth in Section 3 hereof, the Loan Parties, the Lenders and the Administrative
Agents agree that the Existing Credit Agreement be, and it hereby is, amended, as follows:

     (a) The chart in the definition of “Applicable Margin” in Section 1.01 is hereby deleted and
replaced with the following:

	 	 	 	 	 	 	 
	Average Monthly US Borrowing	 	Alternate US	 	Eurocurrency	 	Alternate
	Base Availability	 	Base Rate Spread	 	Spread	 	Eurocurrency
	 	 	 	 	 	 	Base Rate
	 	 	 	 	 	 	Spread
	Category 1

	 	0.75% 
	 	2.50% 
	 	2.50% 
	 
	 	 	 	 	 	 
	Less than $15,000,000
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Category 2

	 	0.25% 
	 	2.00% 
	 	2.00% 
	 
	 	 	 	 	 	 
	$15,000,000 or more but 

less than $25,000,000
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Category 3

	 	0.00% 
	 	1.75% 
	 	1.75% 
	 
	 	 	 	 	 	 
	$25,000,000 or more but 

less than $35,000,000
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Category 4

	 	0.00% 
	 	1.50% 
	 	1.50% 
	 
	 	 	 	 	 	 
	$35,000,000 or more
	 	 	 	 	 	 

     For avoidance of doubt, the changes set forth above shall take effect upon the effectiveness
of this Amendment.

     (b) Clause (c) of the definition of “Prepayment Event” is hereby deleted and replaced by the
following:

     (c) the issuance by any Borrower of any Equity Interests, or the receipt by any
Borrower of any capital contribution, other than (i) any issuance by a Borrower of common
Equity Interests upon the exercise of employee, director or consultant stock rights pursuant
to the Calgon Stock Option Plan (or any comparable stock incentive plan intended to replace
such plan) and the Calgon 1993 Non-Employee Directors’ Stock Option Plan (or any comparable
stock incentive plan intended to replace such plan) or (ii) any issuance by the Company of
its common Equity Interests as all or a portion of the consideration for any exercise of the
right of conversion of, or any redemption,

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repurchase or other acquisition of, the Convertible Notes having an aggregate principal
amount not in excess of $75,000,000; or

     (c) Section 2.05(b)(iii) is amended by deleting the reference to “$6,000,000” and replacing it
with “$7,000,000”.

     (d) Section 2.08 is amended by adding the following subsections (i), (j) and (k):

     (i) The Borrowers shall have the right to increase the Total Revolving Commitment (and,
in connection therewith, the Belgian Revolving Sublimit and the UK Revolving Sublimit) by
obtaining additional Total Revolving Commitments, either from one or more of the Lenders or
another lending institution provided that (i) any such request for an increase shall be in a
minimum amount of $5,000,000 and integral multiples of $1,000,000, (ii) the US Borrower
Representative, on behalf of the Borrowers, may make a maximum of two(2) such requests,
(iii) the Administrative Agent has approved the identity of any such new Lender, such
approval not to be unreasonably withheld, (iv) any such new Lender assumes all of the rights
and obligations of a “Lender” hereunder, and (v) the procedure described in Section 2.08(j)
have been satisfied. To request such an increase, the Borrowers shall deliver a written
request for such increase to the US Administrative Agent and the Lenders at least seven (7)
days prior to the date of the proposed increase.

     (j) Any amendment hereto for such an increase or addition shall be in form and
substance satisfactory to the Administrative Agent and shall only require the written
signatures of the Administrative Agent, the Borrowers and the Lender(s) being added or
increasing their Commitments, subject only to the approval of all Lenders if any such
increase would cause the Total Revolving Commitments to exceed $70,000,000. As a condition
precedent to such an increase, the Company shall deliver to the Administrative Agent a
certificate of each Loan Party (in sufficient copies for each Lender) signed by an
authorized officer of such Loan Party (i) certifying and attaching the resolutions adopted
by such Loan Party approving or consenting to such increase, and (ii) in the case of the
Borrowers, certifying that, before and after giving effect to such increase, (A) the
representations and warranties contained in Article III and the other Loan Documents are
true and correct, except to the extent that such representations and warranties specifically
refer to an earlier date, in which case they are true and correct as of such earlier date,
and (B) no Default exists.

     (k) Within a reasonable time after the effective date of any increase, the
Administrative Agent shall, and is hereby authorized and directed to, revise the Commitment
Schedule to reflect such increase and shall distribute such revised Commitment Schedule to
each of the Lenders and the Borrowers, whereupon such revised Commitment Schedule shall
replace the old Commitment Schedule and become part of this Agreement. On the Business Day
following any such increase, all outstanding Alternate US Base Rate Advances and Alternate
Eurocurrency Base Rate Advances shall be reallocated among the Lenders (including any newly
added Lenders) in accordance with the Lenders’ respective revised Applicable Percentages.
Eurocurrency Advances shall not be reallocated among the Lenders prior to the expiration of
the applicable Interest Period in effect at the time of any such increase.

-3-

 

     (e) Section 2.11(a) is amended by deleting the first sentence thereof and replacing it with
the following:

     The Borrowers agree, jointly and severally, to pay to the US Administrative Agent for
the account of each Lender, a commitment fee, which shall accrue at the rate of
three-eighths of one percent (0.375%) on the average daily amount of the Available Revolving
Commitment of such Lender during the period from and including the Effective Date to but
excluding the date on which such Commitments terminate; provided that at any time when the
Average Monthly US Borrowing Base Availability is less than $15,000,000 (determined by the
US Administrative Agent as of the end of each fiscal month of the Company on a Consolidated
Basis based upon Average Monthly US Borrowing Base Availability during the month then
ended), such commitment fee will accrue at the rate of one-half of one percent (0.500%).

     (f) Section 6.01 is amended by (i) deleting the “and” at the end of subsection (j), (ii)
deleting the “.” at the end of subsection (k) and replacing it with “; and ” and adding a new
subsection (l) as follows:

     (l) Indebtedness in respect of a term loan in an aggregate original principal amount
not in excess of $25,000,000; provided that (i) such term loan shall be advanced by the
Lenders or other lenders acceptable to the US Administrative Agent, shall be agented and
arranged by the US Administrative Agent (the US Administrative Agent in such capacity, the
“Term Loan Agent”) and shall be incurred no later than September 18, 2008 and shall contain
such terms, covenants and conditions as shall be acceptable to the US Administrative Agent,
the lenders thereto and the Company, (ii) such term loan (including any refinancing
thereof), if secured by any of the Collateral as permitted by Section 6.02(j), shall be
subject to the terms of an intercreditor agreement between the Term Loan Agent and the
Administrative Agents and in form and substance satisfactory to the Administrative Agents
providing for the subordination of any Liens securing such term loan to the Liens created
under the Loan Documents and such other terms as required by the Administrative Agents and
(iii) the proceeds of such term loan shall be used only with respect to the transactions
described in Section 6.08(a)(iii)(C)(II) including such transactions that are consummated
after August 14, 2008 but prior to the closing of such term loan.

     (g) Section 6.02 is amended by (i) deleting the “and” at the end of subsection (h), (ii)
deleting the “.” at the end of subsection (i) and replacing it with “; and ” and adding a new
subsection (j) as follows:

     (j) Liens securing indebtedness permitted by Section 6.01(l).

     (h) Section 6.04 is amended by deleting “and” at the end of clause (j), adding “and” to the
end of clause (k) and a new clause (l) after clause (k) as follows:

     (l) investments permitted under Section 6.08(a)(iii)(C).

     (i) Section 6.08(a)(i) is amended by deleting it in its entirety and replacing it with the
following new clause (i):

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     (i) the Company may declare and pay dividends with respect to its common stock
payable solely in additional shares of its common stock, and, with respect to its
preferred stock, payable solely in additional shares of such preferred stock or in
            shares of its common stock or may convert, redeem, repurchase or otherwise acquire
the Convertible Notes for consideration consisting of its common stock or a
combination of its common stock and, to the extent permitted to be paid by Section
6.08(a)(iii)(C), cash,

     (j) Section 6.08(a)(iii) is amended by deleting clause (C) in its entirety and replacing such
clause with the following new clause (C):

     (C) in connection with (I) the repurchase, redemption, retirement or other
acquisition of outstanding shares of its common stock; provided that the aggregate
amount of cash paid after the Effective Date in the case of this subclause (I) shall
not exceed $10,000,000 or (II) the conversion, redemption, repurchase, retirement or
other acquisition of the Convertible Note, provided that the aggregate amount of cash
paid after the Effective Date in the case of subclauses (I) and (II) of this clause
(C) shall not exceed $75,000,000;

     (k) Each of the Lenders hereby agrees to the increase in its Total Revolving Commitment and
its Belgian Revolving Sublimit as set forth on the Commitment Schedule and each further agrees that
the Commitment Schedule that is Schedule 1(a) to the Existing Credit Agreement shall be
amended in its entirety as set forth on Schedule 1(a) attached hereto.

3. No Default; Representations and Warranties, etc.

     Each of the Loan Parties represents and warrants to the Lenders and the Administrative Agents
that as of the date hereof and after giving effect to the amendments set forth herein (a) the
representations of the Loan Parties contained in Article III of the Credit Agreement are true and
correct in all material respects as of the date hereof as if made on such date (except to extent
that such representations and warranties expressly relate to an earlier date, in which case they
shall be true and correct in all material respects as of such date); (b) the Loan Parties are in
compliance in all material respects with all of the terms and provisions set forth in the Credit
Agreement and the other Loan Documents to be observed or performed by them thereunder; (c) no
Default shall have occurred and be continuing; and (d) the execution, delivery and performance by
the Loan Parties of this Amendment (i) have been duly authorized by all necessary corporate and, if
required, shareholder action on the part of the Loan Parties, (ii) will not violate any applicable
material law or regulation or the organizational documents of any Loan Party, (iii) will not
violate or result in a default under any material indenture, agreement or other instrument binding
on any Loan Party or any of its assets and (iv) do not require any consent, waiver or approval of
or by any Person (other than the Administrative Agents and the Lenders) which has not been
obtained.

4. Conditions Precedent. The effectiveness of this Amendment shall be conditioned upon the
satisfaction of the following conditions precedent:

     (a) Counterparts of Amendment. The Administrative Agents shall have received from
each party hereto either (i) a counterpart of this Amendment signed on behalf of such

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party or (ii) written evidence reasonably satisfactory to the Administrative Agents (which may
include telecopy transmission of a signed signature page of this Amendment) that such party has
signed a counterpart of this Amendment.

     (b) Corporate Documents. Such documents and certificates as the Administrative Agents
or its counsel may reasonably request relating to borrowings under the Credit Agreement and any
other legal matters relating to the Loan Parties (including board of director resolutions and
evidence of the incumbency of officers) and the Existing Credit Agreement, as amended by this
Amendment.

     (c) Financial Officer Certificate. The US Administrative Agent shall have received a
certificate of the chief financial officer of the US Borrowing Representative on behalf of the Loan
Parties dated the date hereof, stating that the representations and warranties in Article III are
true and correct in all material respects on such date as though made on and as of such date and
that no event has occurred and is continuing which constitutes a Default.

     (d) Solvency Assurances. The US Administrative Agent shall have received a
certificate of a duly authorized officer of the Loan Parties on behalf of the Loan Parties dated as
of the date hereof in form and substance satisfactory to the US Administrative Agent.

     (e) Opinion. The US Administrative Agent shall have such opinions from counsel to the
Loan Parties as requested by the US Administrative Agent and such opinions shall be in form and
substance satisfactory to the US Administrative Agent.

     (f) Amendment Fee. The US Administrative Agent shall have received, for the benefit
of the Lenders on a pro rata basis, an amendment fee in the amount of $162,500 which shall be
deemed earned up the execution of this Amendment.

     (g) Other Documents. Such other documents as the US Administrative Agent or counsel
to the US Administrative Agent may reasonably request.

5. Confirmation of Guarantee and Collateral Documents. Each Loan Guarantor hereby confirms
that all Obligations of the Borrowers under the Credit Agreement are and shall continue to be
entitled to the benefits of the guarantee set forth in Article X of the Credit Agreement, and each
Loan Party hereby confirms that the Obligations under the Credit Agreement, and in respect of its
guarantee under Article X of the Credit Agreement (in the case of the Loan Guarantors), are and
shall continue to be entitled to the benefits of the collateral security provided by the Collateral
Documents. Each Affiliate or Subsidiary of any Loan Party that is a party to any Other Collateral
Documents hereby confirms that the Obligations under the Credit Agreement are and shall continue to
be entitled to the benefits of the collateral security provided by the Other Collateral Documents.

6. Miscellaneous.

     (a) The Loan Parties, the Lenders and the Administrative Agents hereby ratify and confirm the
terms and provisions of the Credit Agreement and the other Loan Documents and agree that, except to
the extent specifically amended hereby, the Credit Agreement, the other Loan Documents and all
related documents shall remain in full force and effect. Nothing

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contained herein shall constitute an amendment or waiver of any provision of the Loan
Documents, except such amendments as are expressly set forth herein.

     (b) The Loan Parties jointly and severally agree to pay all reasonable out-of-pocket costs and
expenses incurred by JPMorgan Chase Bank, N.A. and its respective Affiliates (including the
reasonable fees, charges and disbursements of counsel for the Agent), in connection with the
preparation of this Amendment.

     (c) This Amendment may be executed in any number of counterparts (including by way of
facsimile transmission), each of which, when executed and delivered, shall be an original, but all
counterparts shall together constitute one instrument.

     (d) This Amendment shall be governed by the laws of the State of New York and shall be binding
upon and inure to the benefit of the parties hereto and their respective successors and assigns.

[Signature Pages Follow]

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     IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed by their
respective authorized officers as of the day and year first above written.

	 	 	 	 	 	 	 
	 	 	BORROWERS:
	 

	 	 	 	 	 	 
	 	 	CALGON CARBON CORPORATION
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	   /s/ Leroy M. Ball	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	CALGON CARBON INVESTMENTS, INC.
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	   /s/ Leroy M. Ball	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	BSC COLUMBUS, LLC
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	   /s/ Leroy M. Ball	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	CCC COLUMBUS, LLC
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	   /s/ Leroy M. Ball	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 

[Signature Page to Third Amendment]

 

 

	 	 	 	 	 	 	 	 	 
	 	 	EXECUTED AND DELIVERED as a Deed by
	 	 	CHEMVIRON CARBON LIMITED acting by:
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Director:	 	      /s/ C.H.S. Majoor	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Director/secretary:	 	   /s/ Reinier Keijzer	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	EXECUTED AND DELIVERED as a Deed by
	 	 	WATERLINK (UK) HOLDINGS LIMITED acting by:
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Director:	 	   /s/ C.H.S. Majoor	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Director/secretary:	 	   /s/ Reinier Keijzer	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	EXECUTED AND DELIVERED as a Deed by
	 	 	SUTCLIFFE SPEAKMAN LIMITED acting by:
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Director:	 	   /s/ C.H.S. Majoor	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Director/secretary:	 	   /s/ Reinier Keijzer	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	EXECUTED AND DELIVERED as a Deed by
	 	 	LAKELAND PROCESSING LIMITED acting by:
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Director:	 	   /s/ C.H.S. Majoor	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Director/secretary:	 	   /s/ Reinier Keijzer	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	EXECUTED AND DELIVERED as a Deed by
	 	 	CHARCOAL CLOTH (INTERNATIONAL)
	 
	 	 	 	 	 	 	 	 
	 	 	LIMITED acting by:
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Director:	 	   /s/ C.H.S. Majoor	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Director/secretary:	 	   /s/ Reinier Keijzer	 	 
	 

	 	 	 	 	 	 	 	 

[Signature Page to Third Amendment]

 

 

	 	 	 	 	 
	 	ADMINISTRATIVE AGENTS AND
LENDERS:

JPMORGAN CHASE BANK, N.A., as

US Administrative Agent and as a Lender

 	 
	 	By:  	/s/ Donna DiFiorio
 	 
	 	 	Name:  	Donna DiForio 	 
	 	 	Title:  	Vice President 	 
	 

	 	 	 	 	 
	 	J.P. MORGAN EUROPE LIMITED,

as European Administrative Agent

 	 
	 	By:  	/s/ Helen Mathie
 	 
	 	 	Name:  	Helen Mathie 	 
	 	 	Title:  	Assistant Vice President 	 
	 

	 	 	 	 	 
	 	CITIZENS BANK OF PENNSYLVANIA,

as a Lender

 	 
	 	By:  	/s/ Paul Rebholz
 	 
	 	 	Name:  	Paul Rebholz 	 
	 	 	Title:  	Vice President 	 
	 

[Schedules have been omitted and will be furnished upon request.]exv10w5w2

Exhibit 10.5.2

FIRST MODIFICATION AGREEMENT

	 	 	 	 	 
	DATE:

	 	 	 	July 1, 2006
	 
	 	 	 	 
	PARTIES:
	 	 	 	 
	 
	 	 	 	 
	 

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

	 	Borrower
	 	21410 N. 19th Avenue, Suite 201
	 

	 	Address:
	 	Phoenix, AZ 85027

Attn: Trevor Hill
	 
	 	 	 	 
	 

	 	Bank:
	 	WELLS FARGO BANK, NATIONAL ASSOCIATION, a

national banking association
	 
	 	 	 	 
	 

	 	Bank
	 	100 W. Washington Street
	 

	 	Address:
	 	MAC S4101-251

Phoenix, AZ 85003

Attn: Keri Tignini, Vice President
	 
	 	 	 	 
	RECITALS:
	 	 	 	 

          A. Bank has extended to Borrower a revolving line of credit (the “Line of
Credit”) in the maximum principal amount of Thirty-Five Million and No/100
Dollars ($35,000,000.00). pursuant to that certain Amended and Restated Credit Agreement, dated
December 9, 2005 (the “Credit Agreement”), and evidenced by that certain
$35,000,000 Amended and Restated Revolving Line of Credit Note dated December 9, 2005 (the
“Note”). The unpaid principal outstanding under the Note as of the date hereof is $30,331,405.20.
Capitalized terms not otherwise defined herein shall have the same
meaning as set forth
in the Credit Agreement.

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

          C. Borrower has requested that Lender modify the Line of Credit and the
Loan Documents as provided herein to, inter alia, increase the maximum amount of the
Line of Credit to Fifty-Six Million and No/100 Dollars ($56,000,000.00) in order to fund
Borrower’s

 

 

increased working capital and other financing needs. Bank is willing to so modify the Line of
Credit and the Loan Documents, subject to the terms and conditions herein.

AGREEMENT:

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

1. ACCURACY OF RECITALS.

     Borrower acknowledges the accuracy of the Recitals.

2. MODIFICATION OF LOAN DOCUMENTS.

     2.1 The Loan Documents are modified as follows:

     2.1.1 The maximum amount of the Line of Credit is hereby increased from
THIRTY-FIVE MILLION AND NO/100 Dollars ($35,000,000.00) to FIFTY-SIX
MILLION AND NO/100 Dollars ($56,000,000.00). Borrower may obtain, and Bank
shall be obligated to make. Advances, subject to the terms and conditions of the
Loan Documents applicable to Advances up to the increased amount. Any and all references
to the maximum amount of the Line of Credit Amount in the Loan Documents are
hereby revised to reflect the amount of FIFTY-SIX MILLION AND NO/100 Dollars
($56,000,000.00).

          2.1.2 Section 1.1 of the Credit Agreement is hereby deleted in its entirely and
the following is inserted in plate thereof:

                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 Fifty-Six Million Dollars ($56,000,000.00)
(“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 including ownership interests therein. Borrower’s
obligation to repay advances under the Line of Credit shall be
evidenced by that certain Second Amended and Restated Revolving
Line of Credit Note, dated as of July 1, 2006 (“Line of Credit
Note”), all terms of which are incorporated herein by this
reference, which Line of Credit Note shall amend and restate that
certain Amended and Restated Revolving Line of Credit Note dated
December 9, 2005.

-2-

 

     (b) Limitation on Borrowings. The sum of (i) outstanding borrowings under the Line of
Credit, (ii) amounts due under the Revenue Bonds and (iii) the face amount of letters of credit
issued under this Agreement (collectively, “Aggregate Borrowings”) shall not at any time exceed an
aggregate of six (6) 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 Borrowings 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.
As used in this Agreement. “Revenue Bonds” shall be defined as the Industrial Development
Authority of the County of Pima Revenue Bonds (Global Water
Resources). Series 2006, to be issued
subsequent to Borrower and Bank entering into this Agreement and shall be approved and authorized
by Bank as “Other Indebtedness” pursuant to Section 5.2 of the Loan Agreement.

     (c) 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 Fifteen Million Dollars ($15,000,000.00). The form and substance of
each Letter of Credit shall be subject to approval by Bank, in its sole discretion. Letters of
Credit may be issued for a period which extends beyond the Maturity Date but no Letter of Credit
shall be issued for a period exceeding one (1) year. 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

-3-

 

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.

     (d) 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 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.

          2.1.3 Section 4.9 of the Credit Agreement is hereby deleted in its entirely and
the following is inserted in place thereof:

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:

     (a) Net Worth. Net Worth not at any time less than
$10,000,000.00. 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 (except for cash flows pledged in connection with
the Revenue Bonds) 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

-4-

 

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 6.00 to 1.0. As used herein “Total Senior Funded
Debt” defined as the sum of all obligations for borrowed money
(including the outstanding principal balance of the Line of Credit
and the Revenue Bonds), plus the aggregate face amount of letters
of credit issued under this Agreement, plus all capital lease
obligations of Borrower; less subordinated debt, and with
Annualized Recurring EBITDA defined in Section 4.9(b).

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

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

3. RATIFICATION OF LOAN DOCUMENTS AND COLLATERAL

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

4. BORROWER REPRESENTATIONS AND WARRANTIES.

     Borrower represents and warrants to Lender:

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

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

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

-5-

 

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

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

          4.6 Borrower is validly existing under the laws of the State of its formation or organization
and has the requisite power and authority to execute and deliver this Agreement and to perform the
Loan Documents as modified herein. The execution and delivery of this Agreement and the performance
of the Loan Documents as modified herein have been duly authorized by all requisite action by or on
behalf of Borrower. This Agreement has been duly executed and delivered on behalf of Borrower. The
certifications, representations and warranties made to Bank in those certain Corporate Resolutions
and Limited Liability Certificates of Borrower, dated December 9, 2005 remain true and correct as
of the date of this Agreement.

5. BORROWER COVENANTS.

     Borrower covenants with Lender:

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

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

          5.3 Pursuant to Section 4.2 of the Loan Agreement. Borrower’s execution of this Agreement
shall serve as notice to Bank of the name change of GLOBAL WATER RESOURCES, INC. to GLOBAL WATER,
INC. Borrower hereby authorized Bank to file any UCC financing statement amendments in connection
with such name change and Borrower further agrees to execute any agreements, documents or
instruments reasonably requested by Bank in connection with such name change.

          5.4 Contemporaneously with the execution and delivery of this Agreement. Borrower has paid to
Lender:

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

          5.5 Contemporaneously with the execution and delivery of this Agreement. Borrower
shall have delivered an executed Second Amended and Restated Revolving Line of Credit Note
in the maximum principal amount of FIFTY-SIX MILLION AND NO/100 Dollars
(S56,000,000.00) (the “Second Amended Note”).

-6-

 

6. EXECUTION AND DELIVERY OF AGREEMENT BY LENDER.

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

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

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

8. BINDING EFFECT.

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

9.
CHOICE OF LAW.

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

10. COUNTERPART EXECUTION.

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

-7-

 

DATED as
of the date first above stated.

	 	 	 	 	 	 	 	 	 	 	 
	GLOBAL WATER RESOURCES, LLC.

a Delaware limited liability company	 	 	 	WELLS FARGO BANK.

NATIONAL ASSOCIATION	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

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

	 	 
	 	 	 	 	 	 	 	 
	 

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

a Delaware limited liability company	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:
	 	/s/ William S. Levine	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	William S. Levine, Manager	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	GLOBAL WATER, INC.

a Delaware corporation	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:
	 	Trevor Hill	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	Trevor Hill, President	 	 	 	 	 	 	 	 

-8-

 

CONSENT AND AGREEMENT OF GUARANTORS AND PLEDGORS

     With
respect to the First Modification Agreement, dated July 1, 2006 (“Agreement”),
among GLOBAL WATER RESOURCES, LLC, a Delaware limited liability
company. GLOBAL WATER MANAGEMENT,
LLC, a Delaware limited liability company, and GLOBAL WATER. INC., (f/k/a GLOBAL WATER RESOURCES,
INC.), a Delaware corporation (collectively.
“Borrower”), and WELLS FARGO BANK. NATIONAL
ASSOCIATION, a national banking association (“Bank”). WILLIAM S. LEVINE and LEVINE INVESTMENTS
LIMITED PARTNERSHIP, an Arizona limited partnership (collectively. “Guarantors”) and
TREVOR HILL, LEO COMMANDEUR, DANIEL CRACCHIOLO, ANDREW COHN, GRAHAM SYMMONDS and CINDY LILES
(collectively. “Pledgors”) agree for the benefit
of Bank as follows:

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

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

     3. Guarantors and Pledgors consent to the modification of the Loan Documents and all other
matters in the Agreement. Accordingly, the Guarantor Documents and the Pledgor Documents are
modified to increase the principal amount of indebtedness of Borrower to Lender from
$35,000,000.00 to $56,000,000.00.

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

 

 

     5. Guarantors
and Pledgors agree that all references, if any, to the Note, the Credit
Agreement, and the other Loan Documents in the Guarantor Documents and the Pledgor Documents shall
be deemed to refer to such agreements, documents, and instruments as modified by the Agreement.

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

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

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

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

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

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

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

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

-2-

 

	 	 	 	 	 
	 	GUARANTORS:

 	 
	 	/s/ WILLIAM S.  LEVINE
 	 
	 	WILLIAM S.  LEVINE
 	 
	 	 	 
	 
	 	LEVINE INVESTMENTS LIMITED

PARTNERSHIP, an Arizona limited

partnership

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

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

-3-

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