On October 26, 2023, Global Water Resources, Inc. (the Company) entered into a note purchase agreement (the ?Note Purchase Agreement?) with Jackson National Life Insurance Company pursuant to which the Company will, subject to customary closing conditions, issue an aggregate principal amount of $20,000,000 of 6.91% Senior Secured Notes due on January 3, 2034 (the ?Notes?). The Company plans to use the proceeds from the Notes offering to refinance existing indebtedness, to support capital investments associated with growth and for general corporate purposes. The Company anticipates closing the Notes offering on January 3, 2024.

The Notes will accrue interest at 6.91% per annum from the date of issuance, payable semi-annually on January 3 and July 3 of each year, beginning on July 3, 2024, with a balloon payment due on January 3, 2034. The obligations evidenced by the Notes will be guaranteed by the following subsidiaries of the Company: Global Water, LLC, Global Water Holdings, Inc., and West Maricopa Combine, LLC. The obligations evidenced by the Notes will be secured by a pledge of the equity interests in all direct and indirect subsidiaries of the Company and certain related rights and property.

The Note Purchase Agreement contains a debt service coverage ratio financial maintenance covenant and contains certain restrictive covenants that limit, among other things, the Company?s ability to: create liens and other encumbrances; incur additional indebtedness; merge, liquidate or consolidate with another entity; dispose of or transfer assets; make distributions or other restricted payments; engage in certain affiliate transactions; and change the nature of the business. Additionally, the Note Purchase Agreement contains a provision limiting the payment of dividends if the Company falls below a debt service coverage ratio of 1.20:1.00 for any fiscal quarter ended on or before June 15, 2024 and 1.25:1.00 for any fiscal quarter ended during the period from and after June 16, 2024. The foregoing covenants are subject to various qualifications and limitations as set out in the Note Purchase Agreement.

As set out in the Note Purchase Agreement, the Notes will be subject to certain customary events of default after which the Notes may be declared due and payable if not cured within the grace period or, in certain circumstances, may be declared due and payable immediately. On October 26, 2023, the Company entered into Amendment No. 2 to Security Agreements with Global Water, LLC, West Maricopa Combine, LLC, Global Water Holdings, Inc., and U.S. Bank Trust Company, National Association, in its capacity as collateral agent (the ?Security Agreements Amendment?).

The Security Agreements Amendment further amends the terms and conditions of the separate Pledge and Security Agreements entered into by the parties, each dated June 24, 2016, to, among other things, make certain changes to reflect the issuance of the Notes and related matters.