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TERMS OF AGREEMENT

                     In consideration of the mutual promises and covenants herein contained, the Members agree as
              follows:

                                                        ARTICLE 1.
                                                       DEFINITIONS


                     The following terms have the following meanings for purposes of this Agreement:
                     1.1    “Act” means The Joint Exercise of Powers Act, set forth in Chapter 5 of division 7 of
              Title 1 of the Government Code, sections 6500, et seq., including all laws supplemental thereto.

                     1.2    “Agreement” has the meaning assigned thereto in the Preamble.

                     1.3    “Auditor” means the auditor of the financial affairs of the SCV-GSA appointed by the
              Board of Directors pursuant to Section 13.3 of this Agreement.

                     1.4    “Basin” means the Santa Clara River Valley East Groundwater Subbasin, groundwater
              basin number 4-4.07 per Bulletin 118, as further depicted in Exhibit A to this MOU.

                     1.5    “Board  of  Directors”  or  “Board”  means  the  governing  body  of  the  SCV-GSA  as
              established by Article 6 of this Agreement.

                     1.6     “Director”  and  “Alternate  Director”  shall  mean  a  director  and  alternate  director
              appointed pursuant to Article 6 of this Agreement.

                     1.7    “DWR” means the California Department of Water Resources.

                     1.8    “Effective Date” has the meaning assigned thereto in the Preamble.

                     1.9    “GSA”  means  Groundwater  Sustainability  Agency,  as  defined  by  SGMA,  that
              implements the provisions of SGMA.

                     1.10  “GSP”  means  Groundwater  Sustainability  Plan,  as  defined  by  SGMA,  proposed  or
              adopted by a GSA pursuant to SGMA.

                     1.11  “Member”  has  the  meaning  in  the  Preamble  and  further  means  each  party  to  this
              Agreement that satisfies the requirements of Section 5.1 of this Agreement, including any new members
              as may be approved by the parties, pursuant to Section 5.2 of this Agreement.

                     1.12  “Officer(s)” means the Chair, Vice Chair, and Secretary to be appointed by the Board of
              Directors pursuant to Section 7.1 of this Agreement.

                     1.13  “SCV-GSA” means the Santa Clarita Groundwater Sustainability Agency and consists of
              the  following  members:  Santa  Clarita  Valley  Water  Agency,  the  City  of  Santa  Clarita,  Los  Angeles
              County Waterworks District No. 36 Val Verde, and the County of Los Angeles.





              55396.00001\31178779. 1                     5



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