Document:

exv10w5w3

Exhibit 10.5.3

SECOND MODIFICATION AGREEMENT

	 	 	 
	DATE:

	 	December 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 Fifty-Six Million and No/100 Dollars
($56,000,000.00), pursuant to that certain Amended and Restated Credit Agreement, dated
December 9, 2005, as modified by that certain First Modification Agreement, dated July 1, 2006
(collectively, the “Credit Agreement”), and evidenced by that certain Second Amended
and
Restated Revolving Line of Credit Note in the maximum principal amount of FIFTY-SIX
MILLION AND NO/100 Dollars ($56,000,000.00) (the “Note”). 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. A portion of the collateral and security pledged and assigned to secure the
Line of Credit pursuant to the Loan Documents constitutes certain payment rights of Borrower
to
the net operating revenues of (i) Global Water-Palo Verde Utility Company, an Arizona
corporation (expected to be approved by the Arizona Corporation Commission as successor in

 

 

interest to Palo Verde Utilities Company, LLC, an Arizona limited liability company, with such
corporation and such limited liability company referred to herein together as “Palo
Verde”) and (ii) Global Water-Santa Cruz Water Company, an Arizona corporation (expected to be
approved by the Arizona Corporation Commission as successor in interest to Santa Cruz Water
Company, LLC. an Arizona limited liability company, with such corporation and such limited
liability company referred to herein together as “Santa
Cruz”).

          D. Borrower has requested the assistance of The Industrial Development
Authority of the County of Pima (“Issuer”) through the issuance of its Water and
Wastewater
Revenue Bonds (Global Water Resources, LLC Projects) Series 2006 (“Bonds”) initially
in an
aggregate principal amount of $36,495,000 pursuant to the terms of a Trust Indenture, dated
as of
December 1, 2006 (as amended, “Trust Indenture”) between the Issuer and U.S. Bank
National
Association, a national banking association, as trustee (in a corporate trust capacity,
together
with its successors, for the benefit of the holders of the Bonds, the “Trustee”) who
serves in such
capacity for the benefit of the holders from time to time of the Bonds.

          E. Issuer has agreed to loan the proceeds from the sale of the Bonds (“Trust
Indenture Loan”) to Borrower for certain prior and anticipated capital expenditures
pursuant to
the terms of a Loan Agreement, dated as of December 1, 2006 (as amended, “Trust
Indenture Loan Agreement”) among the Issuer, the Trustee and the Borrower.

          F. It is proposed that the payment and performance by Borrower of its
obligations under the Trust Indenture Loan Agreement will be secured by a pledge of the
collateral described in the Security Agreement, dated as of December 1, 2006 (“Bond
Security Agreement” which together with the Trust Indenture, the Trust Indenture Loan Agreement
and
the other documents relating from time to time to the Bonds as the same may be amended from
time to time, the “Bond Documents”) between the Borrower and the Trustee consisting of
Borrower’s exclusive right to receive the Palo Verde Receipts (as defined in the Trust
Indenture
Loan Agreement) and the Santa Cruz Receipts (as defined in the Trust Indenture Loan
Agreement) which payment rights to such collateral receipts are subject to the Loan Documents.

          G. Borrower has requested Bank’s consent to the pledge of the collateral and
security granted in the Bond Security Agreement which comprises a portion of the “trust
estate”
granted to secure the Bonds pursuant to the Trust Indenture and has further requested that
Bank
modify the Line of Credit and the Loan Documents as provided herein to, inter alia, add
certain
additional negative covenants and events of default consistent with the terms of that certain
Intercreditor Agreement, dated December 1, 2006 (the “Intercreditor Agreement”),
between
Bank, Trustee and Borrower.

          H. Bank has agreed to consent to such pledge of Borrower’s exclusive right to receive the
Palo Verde Receipts and the Santa Cruz Receipts subject to the execution and delivery and
continuing effectiveness of the Intercreditor Agreement and this Agreement.

AGREEMENT:

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

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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 following Sections are hereby added to Article V of the Credit
Agreement as follows:

          SECTION 5.7. HEDGE OR DERIVATIVE TRANSACTIONS. Directly
or indirectly, engage in or benefit from any hedge or derivative transactions relating,
directly or indirectly, to the $36,495,000 Water and Wastewater Revenue Bonds (Global Water
Resources, LLC Project), Series 2006 (the “Bonds”), of the Industrial Development
Authority of the County of Pima, a nonprofit corporation designated a political subdivision
of the State of Arizona (the “Issuer’’), dated December 1, 2006, issued by the
Issuer pursuant to the Trust Indenture, dated December 1, 2006 (the “Indenture”),
between the Issuer and U.S. Bank National Association, a national banking association (the
“Trustee”), as amended or supplemented from time to time, and any Additional Bonds
(as defined in the Indenture).

          SECTION 5.8. OFF-BALANCE SHEET TRANSACTIONS. Directly or
indirectly, engage in or benefit from any off balance sheet transactions, irrespective of
the treatment of such transactions under generally accepted accounting principles
consistently applied.

          SECTION 5.9. DEFEASANCE OF BONDS. Terminate the Bonds under
the Indenture with a direct assignment or application of the Palo Verde Receipts and the
Santa Cruz Receipts without reasonable prior notice to and consultation with Bank.

          SECTION 5.10. OPTIONAL REDEMPTION OF BONDS. Optionally
redeem the Bonds under the Indenture with a direct assignment or application of the Shared
Collateral (as defined in the Intercreditor Agreement, dated December 1, 2006 (the
“Intercreditor Agreement”), between Bank, Trustee and Borrower) without reasonable
prior notice to and consultation with Bank.

          SECTION 5.11. PURCHASE OF BONDS. Purchase Bonds in lieu of
redemption under the Indenture or in the open markets with a direct assignment or
application of the Shared Collateral without reasonable prior notice to and consultation
with Bank.

          SECTION 5.12. AMENDMENT TO BONDS. Amend, restate, supplement
or otherwise modify (i) the Bonds (whether or not resulting in a reissuance for federal
income tax purposes), (ii) any credit enhancement or liquidity support for the Bonds, or
(iii) (a) the Indenture, (b) the Intercreditor Agreement, (c) the Bond Loan Agreement,
dated as of December 1, 2006, between Issuer, Trustee and Borrower, (d) the Security
Agreement, dated as of December 1, 2006, by Borrower in favor of Trustee, and (e) the

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other documents relating from time to time to the Bonds as the same may be amended from
time to time (the “Bond Documents”), UNLESS such amendment, restatement, supplement
or modification does not materially increase the Borrower’s obligations under the Bonds or
the Bond Documents.

          SECTION 5.13. ADDITIONAL DEPOSIT ACCOUNTS. Create, open, or
deposit any funds into a Deposit Account (as such term is defined in Arizona Revised
Statutes Section 47-9102) other than a Deposit Account maintained by Bank unless (i) Bank
shall have consented in writing in advance to the addition of such Deposit Account with the
relevant bank, and (ii) prior to the time of the opening of any such Deposit Account. Bank,
Borrower and such bank shall have executed and delivered to Bank a deposit account control
agreement in form and substance satisfactory to Bank.

               2.1.2 The following paragraph is hereby added to Section 6.1 of the Credit
Agreement as follows:

          (j) Any default or event of default under the Bond Documents or any of
them.

          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 except as modified by the Intercreditor Agreement.

4. BORROWER REPRESENTATIONS AND WARRANTIES.

     Borrower represents and warrants to Bank:

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

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

-4-

 

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

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

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

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

5. BORROWER COVENANTS.

     Borrower covenants with Bank:

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

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

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

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

6. EXECUTION AND DELIVERY OF AGREEMENT BY BANK.

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

-5-

 

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

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

8. BINDING EFFECT.

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

9. CHOICE OF LAW.

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

10. COUNTERPART EXECUTION.

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

-6-

 

	 	 	 	 	 	 	 	 	 	 	 
	DATED as of the date first above stated.	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	GLOBAL WATER RESOURCES, L.L.C.

a Delaware limited liability company	 	 	 	WELLS FARGO BANK,

NATIONAL ASSOCIATION	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

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

	 	 
	 	 	 	 	 	 	 	 
	 

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

a Delaware limited liability company	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ William S. Levine	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

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

a Delaware corporation	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Trevor Hill	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	Trevor Hill, President	 	 	 	 	 	 	 	 

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SECOND MODIFICATION AGREEMENT

	 	 	 	 	 
	DATE:

	 	 	 	December 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 Fifty-Six Million and No/100 Dollars
($56,000,000.00), pursuant to that certain Amended and Restated Credit Agreement, dated
December 9, 2005, as modified by that certain First Modification Agreement, dated July 1,
2006 (collectively, the “Credit Agreement”), and evidenced by that certain Second Amended
and Restated Revolving Line of Credit Note in the maximum principal amount of FIFTY-SIX
MILLION AND NO/100 Dollars ($56,000,000.00) (the “Note”). 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. A portion of the collateral and security pledged and assigned to secure the
Line of Credit pursuant to the Loan Documents constitutes certain payment rights of Borrower
to the net operating revenues of (i) Global Water-Palo Verde Utility Company, an Arizona
corporation (expected to be approved by the Arizona Corporation Commission as successor in

 

interest to Palo Verde Utilities Company, LLC, an Arizona limited liability company, with such
corporation and such limited liability company referred to herein together as “Palo
Verde”) and (ii) Global Water-Santa Cruz Water Company, an Arizona corporation (expected to
be approved by the Arizona Corporation Commission as successor in interest to Santa Cruz Water
Company, LLC, an Arizona limited liability company, with such corporation and such limited
liability company referred to herein together as “Santa Cruz”).

          D. Borrower has requested the assistance of The Industrial Development
Authority of the County of Pima (“Issuer”) through the issuance of its Water and
Wastewater Revenue Bonds (Global Water Resources, LLC Projects) Series 2006 (“Bonds”) initially
in an aggregate principal amount of $36,495,000 pursuant to the terms of a Trust Indenture, dated as
of December 1, 2006 (as amended, “Trust Indenture”) between the Issuer and U.S. Bank
National Association, a national banking association, as trustee (in a corporate trust capacity,
together with its successors, for the benefit of the holders of the Bonds, the “Trustee”) who
serves in such capacity for the benefit of the holders from time to time of the Bonds.

          E. Issuer has agreed to loan the proceeds from the sale of the Bonds (“Trust
Indenture Loan”) to Borrower for certain prior and anticipated capital expenditures
pursuant to the terms of a Loan Agreement, dated as of December 1, 2006 (as amended, “Trust
Indenture Loan Agreement”) among the Issuer, the Trustee and the Borrower.

          F. It is proposed that the payment and performance by Borrower of its
obligations under the Trust Indenture Loan Agreement will be secured by a pledge of the
collateral described in the Security Agreement, dated as of December 1, 2006 (“Bond
Security Agreement” which together with the Trust Indenture, the Trust Indenture Loan Agreement
and the other documents relating from time to time to the Bonds as the same may be amended from
time to time, the “Bond Documents”) between the Borrower and the Trustee consisting of
Borrower’s exclusive right to receive the Palo Verde Receipts (as defined in the Trust
Indenture Loan Agreement) and the Santa Cruz Receipts (as defined in the Trust Indenture Loan
Agreement) which payment rights to such collateral receipts are subject to the Loan Documents.

          G. Borrower has requested Bank’s consent to the pledge of the collateral and
security granted in the Bond Security Agreement which comprises a portion of the “trust
estate” granted to secure the Bonds pursuant to the Trust Indenture and has further requested that
Bank modify the Line of Credit and the Loan Documents as provided herein to, inter alia, add
certain additional negative covenants and events of default consistent with the terms of that certain
Intercreditor Agreement, dated December 1, 2006 (the “Intercreditor Agreement”),
between Bank, Trustee and Borrower.

          H. Bank has agreed to consent to such pledge of Borrower’s exclusive right to receive the
Palo Verde Receipts and the Santa Cruz Receipts subject to the execution and delivery and
continuing effectiveness of the Intercreditor Agreement and this Agreement.

AGREEMENT:

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

-2-

 

	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 following Sections are hereby added to Article V of the Credit
Agreement as follows:

     SECTION 5.7. HEDGE OR DERIVATIVE TRANSACTIONS. Directly
or indirectly, engage in or benefit from any hedge or derivative transactions relating,
directly or indirectly, to the $36,495,000 Water and Wastewater Revenue Bonds (Global Water
Resources, LLC Project), Series 2006 (the “Bonds”), of the Industrial Development
Authority of the County of Pima, a nonprofit corporation designated a political subdivision
of the State of Arizona (the “Issuer”), dated December 1, 2006, issued by the
Issuer pursuant to the Trust Indenture, dated December 1, 2006 (the “Indenture”),
between the Issuer and U.S. Bank National Association, a national banking association (the
“Trustee”), as amended or supplemented from time to time, and any Additional Bonds
(as defined in the Indenture).

     SECTION 5.8. OFF-BALANCE SHEET TRANSACTIONS. Directly or
indirectly, engage in or benefit from any off balance sheet transactions, irrespective of
the treatment of such transactions under generally accepted accounting principles
consistently applied.

     SECTION 5.9. DEFEASANCE OF BONDS. Terminate the Bonds under
the Indenture with a direct assignment or application of the Palo Verde Receipts and the
Santa Cruz Receipts without reasonable prior notice to and consultation with Bank.

     SECTION 5.10. OPTIONAL REDEMPTION OF BONDS. Optionally
redeem the Bonds under the Indenture with a direct assignment or application of the Shared
Collateral (as defined in the Intercreditor Agreement, dated December 1, 2006 (the
“Intercreditor Agreement”), between Bank, Trustee and Borrower) without reasonable
prior notice to and consultation with Bank.

     SECTION 5.11. PURCHASE OF BONDS. Purchase Bonds in lieu of
redemption under the Indenture or in the open markets with a direct assignment or
application of the Shared Collateral without reasonable prior notice to and consultation
with Bank.

     SECTION 5.12. AMENDMENT TO BONDS. Amend, restate, supplement
or otherwise modify (i) the Bonds (whether or not resulting in a reissuance for federal
income tax purposes), (ii) any credit enhancement or liquidity support for the Bonds, or
(iii) (a) the Indenture, (b) the Intercreditor Agreement, (c) the Bond Loan Agreement,
dated as of December 1, 2006, between Issuer, Trustee and Borrower, (d) the Security
Agreement, dated as of December 1, 2006, by Borrower in favor of Trustee, and (e) the

-3-

 

other documents relating from time to time to the Bonds as the same may be amended from
time to time (the “Bond Documents”). UNLESS such amendment, restatement, supplement
or modification does not materially increase the Borrower’s obligations under the Bonds or
the Bond Documents.

     SECTION 5.13. ADDITIONAL DEPOSIT ACCOUNTS. Create, open, or
deposit any funds into a Deposit Account (as such term is defined in Arizona Revised
Statutes Section 47-9102) other than a Deposit Account maintained by Bank unless (i) Bank
shall have consented in writing in advance to the addition of such Deposit Account with the
relevant bank, and (ii) prior to the time of the opening of any such Deposit Account, Bank,
Borrower and such bank shall have executed and delivered to Bank a deposit account control
agreement in form and substance satisfactory to Bank.

          2.1.2 The following paragraph is hereby added to Section 6.1 of the Credit
Agreement as follows:

          (j) Any default or event of default under the Bond Documents or any of
them.

     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 except as modified by the Intercreditor Agreement.

4. BORROWER REPRESENTATIONS AND WARRANTIES.

     Borrower represents and warrants to Bank:

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

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

-4-

 

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

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

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

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

5. BORROWER COVENANTS.

     Borrower covenants with Bank:

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

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

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

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

6. EXECUTION AND DELIVERY OF AGREEMENT BY BANK.

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

-5-

 

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

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

8. BINDING EFFECT.

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

9. CHOICE OF LAW.

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

10. COUNTERPART EXECUTION.

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

-6-

 

	 	 	 	 	 	 	 	 	 	 	 
	DATED as of the date first above stated.	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	GLOBAL WATER RESOURCES, L.L.C.

a Delaware limited liability company	 	 	 	WELLS FARGO BANK,

NATIONAL ASSOCIATION	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	By:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 

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

a Delaware limited liability company	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

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

a Delaware corporation	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Trevor Hill	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	Trevor Hill, President	 	 	 	 	 	 	 	 

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CONSENT AND AGREEMENT OF GUARANTORS AND PLEDGORS

     With respect to the Second Modification Agreement, dated December 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.

     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:

 	 
	 	 	 
	 	WILLIAM S. LEVINE 	 
	 	

LEVINE INVESTMENTS LIMITED 

PARTNERSHIP, an Arizona limited partnership

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

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

-3-exv10w5w4

Exhibit 10.5.4

THIRD MODIFICATION AGREEMENT

	 	 	 	 	 
	DATE:

	 	 	 	April 20, 2007
	 
	 	 	 	 
	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

Address:
	 	21410 N. 19th Avenue, Suite 201

Phoenix, AZ 85027
 Attn: Trevor Hill
	 
	 	 	 	 
	 

	 	Bank:
	 	WELLS FARGO BANK, NATIONAL ASSOCIATION, a

national banking association
	 
	 	 	 	 
	 

	 	Bank

Address:
	 	100 W. Washington Street

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 Fifty-Six Million and No/100 Dollars
($56,000,000.00), pursuant to that certain Amended and Restated Credit Agreement, dated
December 9, 2005, as modified by that certain First Modification Agreement, dated July 1,
2006
and that certain Second Modification Agreement, dated December 1, 2006 (as modified, the
“Credit Agreement”), and evidenced by that certain $56,000,000 Second Amended and
Restated
Revolving Line of Credit Note dated July 1, 2006 (the “Second Amended Note”). The
unpaid
principal outstanding under the Note as of the date hereof is $31,367,192.03. 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 Eighty Million and No/100 Dollars ($80,000,000.00) in order to fund Borrower’s

 

 

increased working capital and other financing needs, (ii) delete the borrowing base component of
the Line of Credit, (iii) extend the Maturity Date to March 31, 2008 and (iv) modify certain of the
covenants in the Credit Agreement. 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
FIFTY-SIX MILLION AND NO/100 Dollars ($56,000,000.00) to EIGHTY MILLION
AND NO/100 Dollars ($80,000,000.00). 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 EIGHTY MILLION AND NO/100 Dollars
($80,000,000.00).

          2.1.2 Section 1.1 of the Credit Agreement is hereby deleted in its entirety and
the following is inserted in place 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 March 31, 2008
(the “Maturity Date”), not to exceed at any time the aggregate
principal amount of Eighty Million Dollars ($80,000,000.00)
(“Line of Credit”), the proceeds of which shall be used for
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 Third Amended and Restated Revolving
Line of Credit Note, dated as of April 20, 2007 (“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 Second Amended and Restated Revolving Line of Credit Note
dated July 1, 2006.

-2-

 

     (b) Maximum Principal Amount Reduction. Upon the 2007 Revenue Bond Closing, the
maximum principal amount of the Line of Credit shall be automatically decreased to Sixty Million
and No/100 Dollars ($60,000,000.00) without any further required action by Bank. Borrower shall
immediately pay to Bank any amount in excess of Sixty Million and No/100 Dollars ($60,000,000.00).
As used in this Section 1.1(b), “2007 Revenue Bond Closing” shall be defined as the
issuance of Industrial Development Authority of the County of Pima Revenue Bonds (Global Water
Resources), Series 2007, 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, provided, the maximum aggregate of all Revenue Bonds (as hereinafter
defined) does not excess One Hundred Twenty Million and No/100 Dollars ($120,000,000.00).

     (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 Borrower, at
the rate of interest applicable to advances under the Line of Credit. In such event Borrower
agrees that Bank, in its

-3-

 

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 entirety 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) Rolling Four Quarter EBITDA Coverage.
Rolling Four Quarter EBITDA Coverage Ratio as of each fiscal
quarter end not less than 1.50 to 1.0, with “Rolling Four Quarter
EBITDA” defined as net profit before tax plus interest expense
(net of capitalized interest expense), depreciation expense and
amortization expense for the most recent four (4) quarters;
provided, however, Bank shall exclude from the foregoing
calculation the amount of any “impact fees” and any expenses
related thereto, any cash flows pledged to any entity other than
Bank (except for cash flows pledged in connection with the Revenue
Bonds) and any non-recurring income (including, but not limited
to, interest income and gains (or losses) on the sale of any
utility company). “Rolling Four Quarter EBITDA Coverage Ratio”
defined as Rolling Four Quarter EBITDA divided by the aggregate of
interest expense based on the most recent four (4) quarters plus
current maturities of long-term debt. “Revenue Bonds” defined as
the “Bonds” as such term is defined in Section 5.7 of the
Credit Agreement and the revenue bonds issued pursuant to the 2007
Revenue Bond Closing. If Borrower either (i) acquires a utility
company during the term

-4-

 

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

          2.1.4 Exhibit B attached to the Credit Agreement is hereby deleted in its
entirety and Exhibit B attached hereto is inserted in place thereof.

     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 be a default or
an event of default under the Loan Documents as modified herein has occurred and is continuing.

     4.2 There has been no material adverse change in the financial condition of Borrower or any
other person whose financial statement has been delivered to 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.

     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.

-5-

 

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

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

     5.4 Contemporaneously with the execution and delivery of this Agreement, Borrower
shall have delivered an executed Third Amended and Restated Revolving Line of Credit Note in
the maximum principal amount of EIGHTY MILLION AND NO/100 Dollars ($80,000,000.00)
(the “Third Amended Note”).

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 Pledgor(s).

-6-

 

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.

	 	 	 	 	 	 	 	 	 	 	 
	DATED as of the date first above stated.	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	GLOBAL WATER RESOURCES,
L.L.C.

a Delaware limited liability company	 	 	 	WELLS FARGO BANK,

NATIONAL ASSOCIATION	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ William S. Levine
 

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

Keri Tignini, Vice President
	 	 

	 	 	 	 	 	 	 	 	 
	GLOBAL WATER MANAGEMENT, LLC,
 a
Delaware limited liability company	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ William S. Levine
 

William S. Levine, Manager
	 	 	 	 	 	 

-7-

 

	 	 	 	 	 	 	 	 	 
	GLOBAL WATER, INC., 

a Delaware corporation	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Trevor Hill
 

Trevor Hill, President
	 	 	 	 	 	 

-8-

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