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HomeMy WebLinkAboutResolution No. 93-P5RESOLUTION NO. 93-P5 A RESOLUTION OF THE AZUSA PUBLIC FINANCING AUTHORITY APPROVING AND AUTHORIZING THE MERGER OF AZUSA PUBLIC FINANCING AUTHORITY INTO AZUSA VALLEY WATER COMPANY AND FORM OF REORGANIZATION AGREEMENT AND MERGER AGREEMENT WHEREAS, the City of Azusa (the "City") and the Redevelopment Agency of the City have entered into a Joint Exercise of Powers Agreement dated January 2, 1990, establishing the Azusa Public Financing Authority (the "Authority"); WHEREAS the City and the Authority have taken steps to enable the City to acquire (the "Acquisition") the right to operate the water system of Azusa Valley Water Company, a business corporation ("AVWC"); WHEREAS, to further the Acquisition, the Authority has formed Azusa Public Improvement Corporation, a nonprofit public benefit corporation ("Newco I"), which in turn has formed Azusa Public Financing Corporation, a business corporation ("Newco II"); WHEREAS, the Authority is the sole member of Newco I, Newco I is the sole shareholder of Newco II, and Newco I will become the majority shareholder of AVWC; WHEREAS, to effectuate the Acquisition, Newco I, the Authority, the City and AVWC, have entered into the Agreement Re Tender Offer dated as of April 15, 1993, pursuant to which Newco I has made a tender offer for all of the shares of common stock of AVWC; WHEREAS, Section 7.4(q) of the Agreement Re Tender Offer requires the City to cause the merger of Newco II into AVWC; WHEREAS, the Board of Directors of the Authority deem it to be in the best interest of the Authority and necessary to further the Acquisition that Newco II merge with and into AVWC, with AVWC to be the surviving corporation; and WHEREAS, there has been presented to the Board of Directors of the Authority draft copies of a proposed Reorganization Agreement ("Reorganization Agreement") and of an Agreement of Merger ("Merger Agreement"), each among AVWC, Newco I and Newco II; NOW, THEREFORE, the Board of Directors of the Authority does hereby resolve, determine and order: Section 1. Merger of Newco II with and into AVWC. RESOLVED, that the merger (the "Merger") of Newco II with F:\WP51\AZWATER\MISC\AZUSA.954 0 and into AVWC be and hereby is approved and authorized. RESOLVED, that the form, terms and conditions of the Reorganization Agreement and the Merger Agreement, respectively, in the forms attached hereto as Exhibits A and B, and the mode of carrying them into effect as set forth therein, as well as the transactions contemplated thereby, including the manner and basis of converting the shares of the constituent corporations into shares of AVWC as set forth therein, be and hereby are authorized and approved, with such changes thereto as the directors of Newco I may authorize and approve. RESOLVED, FURTHER, that the proper officers of the Authority and the directors of Newco I, and each of them, be and hereby are authorized, empowered and directed to execute any and all documents, instruments or papers and to the take any or all steps or actions which may be necessary or appropriate to carry out the interest of the foregoing resolutions and the transactions contemplated thereby. Section 2. Effective Date. This Resolution shall take effect from and after the date of its passage and adoption. * * * * * * * * * * * * * * PASSED AND ADOPTED at a regular meeting of the Azusa Public Financing Authority, held this 19th day of July, 1993, on the following vote: U��t0leZ4 Qi;i /"/ a-�o Eugefie F. Moses, CHAIRMAN I HEREBY CERTIFY the foregoing Resolution was duly adopted by the Board of Directors of Azusa Public Financing Authority, at a regular meeting thereof held on the 19th day of July, 1993. AYES: DIRECTORS: MADRID, NARANJO, ALEXANDER, MOSES NOES: DIRECTORS: NONE ABSENT: DIRECTORS: DANGLEIS Adolph A. Solis, SECRETARY F:\NP51\AZYATER\MISC\AZUSA.954 EXHIBIT "A" REORGANIZATION AGREEMENT This Reorganization Agreement ("Agreement") is made and entered into as of July 27, 1993, by and among Azusa Public Improvement Corporation, a California nonprofit public benefit corporation (" Corporation"), Azusa Public Financing Corporation, a California corporation, which is a wholly owned subsidiary of Corporation ("Financing Corporation"), and Azusa Valley Water Company, a California corporation, which is a majority owned subsidiary of Corporation (11AVWC11), with reference to the following facts: A. The parties desire to effect a business combination by which Financing Corporation shall be merged with and into AVWC, AVWC shall be the surviving corporation, all of the outstanding shares of common stock of AVWC shall be canceled in consideration of payment of $264.00 per share, each outstanding shares of common stock of Financing Corporation shall be converted into one share of common stock of AVWC, and as a consequence AVWC shall become a wholly owned subsidiary of Corporation (the "Merger"). B. The Merger shall be accomplished by an.Agreement of Merger (the "Merger Agreement") which contains such provisions as are required by applicable law, consistent with the terms of this Agreement. ARTICLE I THE MERGER AND RELATED MATTERS 1.1 Filing of the Merger Agreement and Closing. Subject to satisfaction (by fulfillment or waiver by the party or parties entitled to the benefit thereof) of the conditions of Article II of this Agreement, the Merger Agreement will be completed, executed and filed as provided therein and herein and the transactions contemplated by this Agreement will be consummated at 10:00 A.M. on the second business day after the last of the conditions set forth in Section 2.2 and 2.3 have been satisfied or on such other day as to which both Corporation and AVWC agree. The Merger will become effective upon the time and date of such filing. As used herein, the term "Effective Time" shall mean and refer to the time and date such filing is accomplished. The closing of the transactions contemplated hereby will be held at the offices of Barbosa, Garcia & Barnes, 500 Citadel Drive, Suite 390, Los Angeles, California 90040, or at such other place as to which both Corporation and AVWC agree. 1.2 The Merger. At the Effective Time the following transactions will be deemed to have occurred simultaneously: azusa-2.526 7/19/93 1-1 9 0 EXHIBIT "A" (a) The separate existence of Financing Corporation will cease, and Financing Corporation will be merged with and into AVWC which will be the surviving corporation. (b) Each share of the common stock, no par value, of AVWC outstanding immediately prior to the Effective Time shall be canceled and the holder of record thereof shall be paid $264.00 per share for each such share of common stock held immediately prior to the Effective Time. Such payment shall be made as provided in Section 1.3 below. Shares of such common stock held by Corporation need not be made in cash but shall be made by offset, and appropriate accounting entries, against the cash to be provided by Corporation pursuant to Section 1.3 below. (c) Each share of the common stock, no par value, of Financing Corporation outstanding immediately prior to the Effective Time shall be converted into and exchanged for one share of the common stock, no par value, of AVWC. 1.3 Delivery of Cash. Prior to the Effective Time, Corporation shall engage First Interstate Bank of California as Payment Agent (the "Payment Agent") for the Merger, and shall deliver to the Payment Agent prior to the Effective Time cash in an amount equal to at least $264.00 multiplied by the number of shares of common stock, no par value, of AVWC outstandingimmediately prior to the Effective Time and held by persons other than Corporation, and such additional cash as the Payment Agent may require to make payment in full in accordance with Section 1.2(b) hereof. Delivery to the holders of AVWC common stock outstanding immediately prior to the Effective Time of the cash to which they are entitled will subsequently be made by the Payment Agent against delivery of share certificates formerly evidencing AVWC common stock (duly executed and in proper form for transfer) to the Payment Agent: (a) As soon as possible after the Effective Time, the Payment Agent will send a notice and transmittal form to each record holder (except Corporation) of a certificate theretofore evidencing share of AVWC common stock outstanding immediately prior to the Effective Time, advising such holders of the procedure for surrendering to the Payment Agent such certificate in exchange for payment of cash of $264.00 per share. Each holder of such certificate, upon surrender of the same to the Payment Agent in accordance with such transmittal form, shall be entitled to receive the consideration provided for in Section 1.2(b) above. If such consideration is to be delivered to any person other than the registered holder of the shares of AVWC common stock surrendered for payment, the amount of any stock transfer or similar taxes (whether imposed on the registered holder or such person) payable on account of the transfer to such person shall be paid to the azusa-2.526 7/19/93 1-2 EXHIBIT "A" Payment Agent by such person, or the Payment Agent may withhold such payment unless satisfactory evidence of the payment of such taxes or exemption therefrom is submitted. (b) After the Effective Time, each outstanding certificate which theretofore represented shares of AVWC common stock shall, until surrendered for payment in accordance with this Section 1.3, be deemed for all purposes to have been canceled and to represent only the right to receive payment in accordance with Section 1.2(b) above but without interest. From and after the Effective Time holders of AVWC common stock shall not be entitled to receive dividends or other distributions, except payment in accordance with Section 1.2(b) above. 1.4 Payment of Dissenters. In the event that holders of AVWC common stock shall have made demands for payment of the fair market value thereof in accordance with Section 1300(b) of the California General Corporation Law, Corporation shall pay to the holders of AVWC common stock which constitute "dissenting shares" (as defined in such Section) any amounts to which they may be entitled as dissenting shareholders under California law. (a) Reference is made to an Agreement Re Tender Offer dated as of April 15, 1993, among Corporation, AVWC and others (the "Tender Offer Agreement"). The Tender Offer Agreement, among other things, provides, generally (and as provided therein), that if during a specified period of five years Corporation or any affiliate sells certain water rights owned by AVWC then the holders of AVWC common stock outstanding immediately prior to the closing of the tender offer provided for in the Tender Offer Agreement shall be entitled to receive 30% of the net proceeds from such sale, all as more particularly provided in the Tender Offer Agreement (the "Water Rights"). If Corporation is required to make payment for any dissenting shares pursuant to this Section 1.4, then Corporation reserves the right to contest the right of such dissenting shares to receive payment with respect to the Water Rights on the basis that payment for dissenting shares would represent payment in full of fair market value as a matter of California law. 1.5 Articles, Bylaws and Directors of Surviving Corporation. The articles of incorporation and bylaws of AVWC, as in effect immediately prior to the Effective Time, shall continue to be the articles of incorporation and bylaws of AVWC as the surviving corporation in the Merger. The board of directors of AVWC, as constituted immediately prior to the Effective Time, shall be the board of directors of the surviving corporation. 1.6 Cooperation; Best Efforts. Each of the parties, consistent with the fiduciary duties of the directors of each azusa-2.526 7/19/93 1-3 • EXHIBIT "A" Ll party, will use its respective best efforts to consummate the transactions contemplated by this Agreement and the Merger Agreement and cooperate in any action necessary or advisable to facilitate such consummation including, without limitation, making all filings required in order to obtain any necessary consents or comply with law and providing any information necessary in connection therewith. ARTICLE II CONDITIONS TO THE TRANSACTIONS; TERMINATION OF THE AGREEMENT 2.1 General Conditions. The obligations of all of the parties hereto to effect the Merger shall be subject to the following conditions: (a) Corporate Approvals. This Agreement and the Merger Agreement shall have been approved by the respective Board of Directors of each of Corporation, Financing Corporation, and AVWC, and the principal terms of the Merger shall have been approved by a majority of the outstanding shares of common stock of AVWC. (b) No Proceedings. No legal, administrative or other proceeding by any governmental authority or by any shareholders of AVWC shall have been instituted or, in the reasonable opinion of Corporation, be imminent, and, at what would otherwise have been the Effective Time, remain imminent or pending by or before a court or any governmental authority to restrain or prohibit the transactions contemplated hereby, unless, in the reasonable opinion of Barbosa, Garcia & Barnes there is no substantial likelihood that such proceedings will result in a restraint or prohibition of the transactions contemplated hereby. (c) Tender Offer Closing. The Tender Offer described and referred to in the Tender Offer Agreement shall have been consummated and closed, and shall not have been terminated or canceled. (d) Wells Fargo Bank Loans. All loans obtained by AVWC from Wells Fargo Bank shall have been re -paid in full, and wells Fargo Bank shall have fully released all liens and security interests held by Wells Fargo Bank in assets of AVWC. The Authority shall provide the monies required to pay-off the Wells Fargo Bank loans by means of wire transfer or cashier's check delivered to Wells Fargo Bank on July 27, 1993. AVWC shall in turn deliver to the Authority a fully executed, unsecured promissory note in the sum equivalent to the aggregate pay-off the Well Fargo Bank loans. 2.2 Conditions For The Benefit of the AVWC Shareholders. The azusa-2.526 7/19/93 1-4 EXHIBIT "A" obligations of AVWC to effect the Merger shall be subject to the condition that prior to the Effective Time Corporation shall have deposited with the Payment Agent, in accordance with Section 1.3 above, cash in an amount sufficient to pay the consideration referred to in Section 1.2(b) above. 2.3 Termination of Agreement and Abandonment of Merger. Anything contained herein to the contrary notwithstanding, this Agreement and the Merger Agreement may be terminated at any time before the Effective Time, whether before or after approval by shareholders, as follows and in no other manner: (a) By mutual consent of all parties. (b) By any party if any of the conditions specified in Section 2.1 above has not been satisfied prior to December 1, 1993. (c) By AVWC or by any shareholders (except Corporation) of AVWC collectively holding of record at least 10% of the outstanding shares of common stock of AVWC if the condition specified in Section 2.2 above has not been satisfied by October 15, 1993. ARTICLE III OF OBLIGATIONS; PAYMENT OF EXPENSES 3.1 Termination; Non -Survival of Representations and Warranties. In the event that this Agreement is terminated pursuant to Section 2.3 above, all further obligations of the parties under this Agreement and the Merger Agreement shall terminate without further liability of any party to another, provided that the obligations of the parties contained in Section 3.3 below shall survive any such termination. A termination under Section 2.3 above shall not relieve any party of any liability for a breach of this Agreement or the Merger Agreement or for any intentional misrepresentation hereunder or be deemed to constitute a waiver of any available remedy for any such breach or intentional misrepresentation. In such event the prevailing party shall. be entitled to reasonable attorneys, fees and expenses. 3.2 Relationship To Tender Offer Agreement. This Agreement and the Merger Agreement do not supersede or modify the Tender Offer Agreement but are intended to carry out the intent of the Tender Offer Agreement. Any termination of this Agreement or of the Merger Agreement shall not effect a termination of the Tender Offer Agreement, and the Tender Offer Agreement may be terminated only as provided in the Tender Offer Agreement. 3.3 Payment of Expenses. The parties agree that fees and azusa-2.526 7/19/93 1-5 0 EXHIBIT "A" 0 out-of-pocket expenses shall be paid as follows: (a) Fees and disbursements of counsel, consultants and accountants shall be paid by the party employing such person; (b) Expenses incurred in connection with obtaining approval of the principal terms of this Agreement and of the Merger Agreement, including Notification Statement costs, shall be paid by the party incurring such expense; (c) Except as provided in connection with printing this and the Notification Statement to and any Securities and Exchange agency filing fees and expenses except that legal expenses shall such expense; and in Subsection (b) above, expenses Agreement, the Merger Agreement be sent to shareholders of AVWC, Commission and other regulatory shall be paid by Corporation, be paid by the party incurring (d) All other fees and out-of-pocket expenses incurred in connection with the transactions contemplated hereby shall be paid by the party incurring such expense. ARTICLE IV GENERAL 4.1 Amendments. Subject to applicable law, this Agreement and the Merger Agreement may be amended, whether before of after the relevant approval of AVWC shareholders. 4.2 Governing Law. This Agreement and the Merger Agreement, and the legal relations between the parties, shall be governed by and construed in accordance with the internal laws of the State of California without taking into account principles of choice of law, except to the extent certain matters may be governed as a matter of law by Federal law. 4.3 Notices. Any notice or other communication required or permitted pursuant to this Agreement shall be in writing and shall be deemed to have been given two days after placing it in the United States mail, first class and registered or certified, postage prepaid, or twenty-four hours after dispatch of a telegram, or upon personal delivery, addressed as follows: (a) If to AVWC, to: Azusa Valley Water Company 617 North Azusa Avenue P. O. Box 548 Azusa, California 91702 azusa-2.526 7/19/93 1— 6 EXHIBIT "A" Attention: President (b) If to Corporation or Financing Corporation, to: The City of Azusa Light and Water Department 777 No. Alameda Avenue P. O. Box 9500 Azusa, California 91702 Attention: Mr. Joseph F. Hsu, Director of Utilities 4.4 No Assignment. Neither this Agreement nor the Merger Agreement may be assigned by any of the parties hereto, by operation of law or otherwise. 4.5 Headings. The descriptive headings of the several Articles and Sections of this Agreement are inserted for convenience only and do not constitute a part of this Agreement. 4.6 Counterparts. This Agreement and the Merger Agreement may be executed in any number of counterparts, all of which shall be considered one and the same instrument; this Agreement shall become effective when one or more counterparts of this Agreement have been signed by each of the parties and delivered to each of the other parties hereto. IN WITNESS WHEREOF, each of the parties has caused this Agreement to be executed on its behalf by one or more duly authorized officers, all as of the date set forth above. AZUSA PUBLIC CORPORATION, a California nonprofit public benefit corporation By:*4yu�ge /L/T. ,, ne F. Moses Its: President AZUSA PUBLIC FINANCING CORPORATION a California corporation By: Eugene F. Moses Its: President azusa-2.526 7/19/93 I— 7 0 0 EXHIBIT "A" AZUSA VALLEY WATER COMPANY a California corporation By: 6f Eugene F. Moses Its: President azusa-2.526 7/19/93 - 1-8 0 0 EXHIBIT "B" OF MERGER This Agreement of Merger, dated as of , 1993, is entered into by and among Azusa Public Financing Corporation, a California corporation ("Financing" or "Merging Corporation"), Azusa Valley Water Company, a California corporation ("AVWC" or "Surviving Corporation"), and Azusa Public Improvement Corporation, a California nonprofit public benefit corporation ("Improvement Corporation"). Financing and AVWC sometimes are called herein the "Constituent Corporations." RECITALS A. As described below in these Recitals, Improvement Corporation is the sole shareholder of Financing, and is the majority shareholder of AVWC. The parties desire to effect a business combination by which Financing will be merged with and into AVWC and AVWC will be the surviving corporation, all as provided in this Agreement of Merger and in accordance with the laws of the State of California. B. AVWC has authorized capital stock consisting of 50,000 shares of Common Stock, no par value ("Common Stock"), 3,000 shares of Class A Preferred Stock, $100.00 par value ("Class A Preferred Stock"), and 10,000 shares of Class B Preferred Stock, $100.00 par value ("Class B Preferred Stock"), of which as of the date hereof there are issued and outstanding 37,285 shares of Common Stock, no shares of Class A Preferred Stock and no shares of Class B Preferred Stock. Improvement Corporation owns beneficially and of record shares of the issued and outstanding shares of Common Stock. of AVWC representing _% of the total number of issued and outstanding shares of Common Stock of AVWC. C. Financing has authorized capital stock consisting of shares of Common Stock, no par value (the "Financing Common Stock"), of which shares are issued and outstanding. Improvement Corporation owns beneficially and of record 1000 of the issued and outstanding shares of Financing Common Stock and is the sole shareholder of Financing. D. The Directors of each of Improvement Corporation and the Constituent Corporations, respectively, unanimously deem it advisable and in the best interests of Improvement Corporation and the Constituent Corporations and their respective shareholders that the merger of Financing with and into AVWC on the terms provided in this Agreement of Merger (the "Merger") be consummated. The Merger has been approved by the vote of of the issued and outstanding shares of Common Stock of AVWC representing _% of the total number of issued and outstanding shares of Common Stock of AVWC. RMT\58.D • EXHIBIT "B" NOW, THEREFORE, Financing, AVWC and Improvement Corporation, in consideration of the premises and the mutual covenants and agreements in this Agreement of Merger, hereby agree that Financing shall be merged with and into AVWC, that AVWC shall be the surviving corporation, and hereby agree, prescribe and set forth the terms and conditions of the Merger, the manner of carrying the same into effect and the manner and basis of converting the shares of each of the Constituent Corporations, as follows: ARTICLE I MERGER Section 1.1 Financing will be merged in AVWC in accordance with the applicable provisions of the laws of the State of California upon the filing of this Agreement of Merger with the California Secretary of State as provided in the California General Corporation Law. The Merger will become effective at the time a copy of this Agreement of Merger is filed with the California Secretary of State. The date and time on which the Merger becomes effective is herein referred to as the "Effective Time." Upon the Effective Time, the separate existence of Financing shall cease, except to the extent provided by law in the case of a corporation after its merger into another corporation, and AVWC shall continue under the laws of the State of California as the surviving corporation (the "Surviving Corporation"). ARTICLE II CHARTER AND BYLAWS OF SURVIVING CORPORATION Section 2.1 As of the Effective Time, the Articles of Incorporation of AVWC as in effect immediately prior to the Effective Time shall remain the Articles of Incorporation of the Surviving Corporation. Section 2.2 As of the Effective Time, the Bylaws of AVWC as in effect immediately prior to the Effective Time shall remain the Bylaws of the Surviving Corporation and shall continue in full force and effect as the Bylaws of the Surviving Corporation until thereafter duly amended. ARTICLE III MANNER OF CONVERTING SHARES OF STOCK OF CONSTITUENT CORPORATIONS Section 3.1 As of the Effective Time: RMT\SS.D (a) Each share of AVWC Common Stock outstanding immediately prior to the Effective Time and held by persons other than Improvement Corporation will be canceled and exchanged for payment of cash in the amount of $264.00 per each share of such AVWC Common Stock. Such payment for such shares shall be effected as provided in Section 3.2 below. (b) Each share of AVWC Common Stock outstanding immediately prior to the Effective Time and held by Improvement Corporation will be canceled and exchanged for payment of cash in the amount of $264.00 per each share of such AVWC Common Stock so held by Improvement Corporation except that, in lieu of Improvement Corporation providing such cash to pay to itself, such payment may be effected by offset and accounting entry against the cash Improvement Corporation otherwise would provide pursuant to Section 3.2 below with respect to such shares of AVWC Common Stock held by Improvement Corporation. (c) The provisions of subsection 3.1(a) above shall not apply with respect to any shares of AVWC Common Stock which are "dissenting shares" within the meaning of Section 1300(b) of the California General Corporation Law. (d) Each share of Financing Common Stock outstanding immediately prior to the Effective Time will be converted into and exchanged for one share of AVWC Common Stock. Such conversion and exchange shall be effected by delivery to AVWC of the share certificate(s) evidencing such shares of Financing Common Stock and thereupon AVWC will issue to the holder of such Financing Common Stock a share certificate(s) evidencing the shares of AVWC Common Stock into which the Financing Common Stock is so converted. Until such exchange has been effected, the share certificate(s) evidencing such shares of Financing Common Stock shall represent and evidence the shares of AVWC Common Stock into which such shares of Financing Common Stock are to be converted and exchanged. Section 3.2 Certificates evidencing shares of AVWC Common Stock shall be exchanged for cash in the amount of $264.00 per share of AVWC Common Stock as follows: (a) Improvement Corporation shall engage First Interstate Bank of California as Payment Agent ("Payment Agent"). Improvement Corporation will make available to the Payment Agent at the Effective Time the cash to which holders of AVWC Common Stock will be entitled pursuant to Section 3.1(b) hereof. (b) As soon as possible after the Effective Time, the Payment Agent will send a notice and transmittal form to each record holder of a certificate theretofore evidencing shares of RMT\58.D 3 0 r EXHIBIT "B" AVWC Common Stock, advising such holders of the applicable terms of the conversion effected by the Merger and the procedure for surrendering to the Payment Agent such certificate for exchange for cash in the amount of $264.00 per share of AVWC Common Stock. Each holder of such certificate, upon surrender of the same to the Payment Agent in accordance with such transmittal form, shall be entitled to receive the consideration of $264.00 per share of AVWC Common Stock referred to in Section 3.1(b). If the consideration for shares of AVWC Common Stock provided for in Section 3.1(b) is to be delivered to any person other than the record holder of the shares of AVWC Common Stock surrendered for cancellation and payment, the amount of any stock transfer or similar taxes (whether imposed on the record holder or such other person) payable on account of the transfer to such person shall be paid to the Payment Agent by such other person, or the Payment Agent may refuse to make payment of the consideration for such canceled shares unless satisfactory evidence of the payment of such taxes, or exemption, therefrom, is submitted. (c) After the Effective Time, each outstanding certificate which prior to the Effective Time represented shares of AVWC Common Stock shall, until surrendered for payment pursuant to this Section 3.2, be deemed for all purposes to be canceled and to represent only the right to receive payment of the cash to which such shares are entitled pursuant to Section 3.1(b) above (or payment for "dissenting shares" pursuant to Section 3.1(c) above). No dividends or distributions, except as provided in Sections 3.1(b) and 3.1(c) above, will be paid upon or with respect such shares of AVWC Common Stock after the Effective Time. Interest will not be paid upon the sums payable pursuant to Section 3.1(b) above. ARTICLE IV SUBMISSION TO SHAREHOLDERS; EFFECTIVENESS Section 4.1 This Agreement has been approved by the respective Board of Directors of each of the Constituent Corporations and Improvement Corporation, and has been submitted for consideration and vote by the shareholders of each of the Constituent Corporations as required by the laws of the State of California and adopted by the requisite vote of the shareholders of each of the Constituent Corporations. This Agreement of Merger as executed by any officer of each of the Constituent Corporations and of Improvement Corporation with an appropriate officers' certificate of each of the Constituent Corporations and of Improvement Corporation shall be delivered to the California Secretary of State for filing, all in accordance with the applicable provisions of the California General Corporation Law, RMT\58.D EXHIBIT "B" and the officers of each of the Constituent Corporations shall execute all such other documents and shall take all such other action as may be necessary to effect the Merger in accordance with this Agreement of Merger. ARTICLE V TRANSFER OF ASSETS AND LIABILITIES Section 5.1 Upon and after the Effective Time: (a) The separate existence of Financing shall cease, and the corporation existence and identity of AVWC shall continue as the Surviving Corporation. (b) The Surviving Corporation shall thereupon and thereafter possess all the rights, privileges, immunities and franchises, of a public as well as of a private nature, of Financing; and all of the property, real, personal and mixed, all choses in action, and all and every other interest of and belonging to or due to Financing, shall be deemed transferred to and vested in the Surviving Corporation without further act or deed. (c) The Surviving Corporation shall thenceforth be responsible and liable for all liabilities and obligations of Financing; and any claim existing or action or proceeding pending by or against Financing may be prosecuted as if the Merger had not taken place or the Surviving Corporation may be substituted in its place. Neither the rights of creditors nor liens upon the property of Financing shall be impaired by the Merger. Section 5.2 Merging Corporation shall from time to time, as and when requested by Surviving Corporation, execute and deliver all such documents and instruments and take all such action necessary or desirable to evidence or carry out this Merger. law. Section 5.3 The Effect of the Merger is as prescribed by ARTICLE VI MISCELLANEOUS Section 6.1 This Agreement of Merger may be executed in one or more counterparts, each of which shall be deemed an original but all of which counterparts collectively shall constitute one instrument representing this Agreement of Merger. RMT\58.D 5 0 EXHIBIT "B" 0 Section 6.2 This Agreement of Merger and the legal relations between the parties hereto shall be governed by and construed in accordance with the laws of the State of California. IN WITNESS WHEREOF, Financing, AVWC and Improvement Corporation have executed this Agreement of Merger as of the date first above written. AZUSA PUBLIC FINANCING CORPORATION a California corporation By: I AZUSA VALLEY WATER COMPANY a California corporation By: Its: AZUSA PUBLIC IMPROVEMENT CORPORATION a California nonprofit public benefit corporation By: EU ENE MOSES It : President RMT\58.D 6