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VALENCIA WATER COMPANY
a California corporation
PLAN OF DISSOLUTION
This Plan of Dissolution ("Plan") is for the purpose of effecting the complete dissolution of Valencia
Water Company, a California corporation, ("Corporation"), in accordance with the applicable laws of the State
of California.
RECITALS
(a) The shares of the Corporation are wholly owned by Santa Clarita Valley Water Agency
(“Agency”);
(b) California Senate Bill 634 (“SB634”), the implementing legislation for the formation of the
Agency, provides that the Corporation be dissolved and that all of its assets, property, liabilities
and indebtedness be transitioned to the Agency, which will thereafter provide water service to
the customers of the Corporation; and
(c) The purpose of this Plan is (i) to carry out the dissolution of the Corporation as required by
SB634 in an orderly and efficient manner; and (ii) to provide a smooth and seamless transition
of the operations of the Corporation to the Agency with minimal disruption to the service,
customers and employees of the Corporation.
OPERATIVE PROVISIONS
1. Approval of Shareholders. This Plan has been approved by the Board of Directors of the
Corporation and shall be submitted to the Agency for adoption at a meeting to be duly held for that purpose.
The Plan shall become effective upon its adoption by the Agency.
2. Distribution of Assets and Liabilities. Following approval by the Agency, Corporation will take
the following actions to transition the assets, property, liabilities and encumbrances of the Corporation to the
Agency as soon as reasonably practicable and in any event prior to January 29, 2018:
(a) The Corporation will terminate all employees and pay to each employee their
outstanding wages and accrued benefits in accordance with the requirements of California law. The effective
date of such termination will be coordinated with Agency to allow for the immediate rehire of employees by the
Agency on such employment terms and conditions as the Agency may offer and the employees may accept. The
Corporation will further terminate all retirement and benefit plans that are currently in effect as of the
termination date, it being understood that the Agency, as a public agency, will offer a retirement plan and
benefits that are appropriate for public employees.
(b) The Corporation will give notice to all creditors and obligees of the Corporation that the
Corporation will be dissolved and that the Agency will assume all of the liabilities and obligations of the
Corporation as of the actual date of dissolution. The Corporation will enter into an assignment and assumption
agreement with the Agency, pursuant to which the Corporation will assign and the Agency will assume all
existing debts, liabilities and contractual obligations of the Corporation.
(c) Notwithstanding Section 2(b), it is the understanding of the Corporation that the
Agency will provide for the repayment in full of the debt of the Corporation which is currently held by Modern
Woodmen and that Corporation and Agency will work with Modern Woodmen to provide for the mechanics of
such repayment upon the closing of a bond offering by the Agency for such purpose.
55396.00048\30275344.4
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