Document:

Exhibit 10.2

 

March 22, 2004

 

 

Richard J. Shields

32 New Haven

Laguna Niguel, CA 92677

 

Dear Rich:

 

The purpose of this letter is to document our
agreement concerning a mutually agreeable severance package in the event that
either you or the Company chose to end our current employment relationship
during the remainder of 2004.    This
severance is offered in exchange for your commitment to focus on completing the
pending secondary offering, for assisting in obtaining the NiAmerica funding,
for continuing to function as the company’s chief financial officer, and for
certain promises and releases on your part. 
In addition, you agree that whether the company or you initiate the
severance, you will continue to function as chief financial officer, in the
same manner as you currently do, for at least a one-month period, unless
released earlier by the company.

 

The severance amount consists of a gross
amount of $175,000, less applicable taxes and other legally required
deductions.  You may choose to take the
severance as a lump sum or as salary and benefit continuation.  If you choose the salary and benefit
continuation, you will remain on the payroll and will continue to be eligible
for benefits.  You will receive payments
on your payroll cycle at your current salary rate until the $175,000 amount is
exhausted.  Your termination date will be
the day the final payment is made.  At
any time, you may choose to convert the remaining amount to a lump sum
payment.  Your termination date will
coincide with the date of the payment of the lump sum.  On your termination date, you will be paid
for any earned, but unused vacation, and your options will be terminated in
accordance with our employee stock option plan.

 

The severance amount is payable if you:

•                  Are involuntarily terminated, unless as a
result of gross misconduct of your duties as CFO (“for cause” termination), or

•                  Voluntarily resign.

 

Attached is a Release and Agreement that is part
of this letter.  You have 21 days in
which to consider the Release and Agreement. 
After you indicate your acceptance of the Release and Agreement, Human
Resources holds it for 7 days before we can finalize this Agreement.  You have
until April 12, 2004, to inform me of your decision to accept or reject the
Release and Agreement.

 

Sincerely,

 

	
  /s/ Peter J.
  Moerbeek

  	
   

  

 

Peter J. Moerbeek

Southwest Water Company

President and Chief Operating Officer

 

 

RELEASE LETTER

 

In exchange for the Severance Payment and
other consideration you agree that the Severance Payment is provided to you in
full and complete satisfaction and discharge of any and all obligations that
Southwest Water Company has or may have to you. 
Except as to rights and obligations arising out of this Release Letter,
you release and discharge Southwest Water Company, and its shareholders,
partners, directors, officers, employees, insurance carriers, attorneys,
parents, subsidiaries, affiliated entities, successors, and assigns, and each
of them (collectively referred to as “Released Parties”), from all claims,
liability, obligations, grievances, demands, allegations, damages, promises,
losses, expenses, fees, wages, bonuses, commissions, back pay, loss of
earnings, debts, mental anguish, loss of consortium, pain, embarrassment,
humiliation, emotional distress, exemplary and/or punitive damages, attorneys’
fees or costs and other legal responsibilities which arise from anything
occurring before you sign this Release Letter, including but not limited to
claims arising out of or related to your employment by Southwest Water Company,
the termination of that employment, any wages or benefits due with respect to
such employment and any rights you may have arising from such employment.

 

This release extends to any action, including
but not limited to, any action based on contract, tort or statute, and under
any federal, state or local discrimination laws, including but not limited to
the Title VII of the Civil Rights Act of 1964, the Americans with Disabilities
Act, the California Fair Employment and Housing Act, the Unruh Civil Rights
Act, the Age Discrimination in Employment Act, the Retirement Income Security
Act, the Occupational Health and Safety Act, the Older Workers Benefit
Protection Act of 1990, the Family and Medical Leave Act, the California Family
Leave Act, the Fair Labor Standards Act and the California Labor Code, each as
they may have been amended from time to time. This release extends to any
relief, no matter how denominated, including but not limited to back pay, front
pay, compensatory damages, punitive damages, damages for pain and suffering, or
physical or mental suffering.

 

As a condition of receiving the Severance
Payment, you promise that you have not initiated, and will not initiate any
claim, charge, lawsuit, or other action against any of the Released Parties
(and that you have not assigned that right to any other person or entity), and
that if you file any such action or any action to invalidate this Release
Letter, you will first return any and all benefits received pursuant to
this Release Letter, except those to which you are entitled by law, including
without limitation, the Severance Payment. 
You further agree that in the event that you pursue an action against
the Released Parties you will indemnify and hold the Released Parties harmless
for any loss or liability, including attorneys’ fees and costs, caused by such
a claim.

 

 

You acknowledge and agree that you will
not be able to make any claim for any damage, loss or injury which may exist as
of the date of this Release Letter, but which you may not know or realize to
exist, regardless of whether that lack of knowledge is the result of ignorance,
oversight, error, negligence or any other cause.

 

We also ask that you agree not to disclose
privately or publicly any of the terms of this Release Letter to anyone other
than members of your immediate family, attorneys or accountants, who each shall
likewise maintain such information in confidence.  In addition, you acknowledge that you will
not use or disclose confidential information regarding Southwest Water
Company’s business, nor will you disparage Southwest Water Company, any of its
affiliated companies, or any of its employees, officers or directors.  You also agree that in addition to any other
remedy that Southwest Water Company may have for breach of confidentiality,
Southwest Water Company is entitled to equitable relief to enjoin disclosure of
confidential information.

 

The Severance Payment and the other
consideration for this Release Letter are not and should not be viewed as an
admission of any obligation or liability by the Released Parties. If any
provision of this Release Letter is held to be unenforceable for any reason, it
shall be interpreted to achieve the intent of the parties to the extent
possible.  All other provisions of this
Release Letter shall be deemed valid and enforceable to the extent possible.  If any action or proceeding in any forum is
brought arising out of or related to this Release Letter, the prevailing party
in such action or proceeding shall recover reasonable attorney’s fees and all
costs and expenses.

 

                You agree that any dispute regarding any aspect of this Release Letter
or any act that allegedly has or would violate any provision of this Release
Letter (“arbitrable dispute”) will be exclusively submitted to arbitration
before a neutral arbitrator.  Arbitration
proceedings shall be held in Los Angeles, California or any other location mutually
agreed upon by you and Southwest Water Company. The arbitrator shall be bound
by the qualifications and the procedures set forth in the most recent version
of the Model Arbitration Procedures of the American Arbitration Association.  The arbitrator shall have the authority to
order such discovery as is appropriate to the nature of the claim and shall be
permitted to award only those remedies in law or equity that are requested by
the parties, appropriate for the claims and supported by credible, relevant
evidence.  You agree that this
arbitration shall be the exclusive means of resolving any arbitrable dispute
and that no other action will be brought in any court or other forum. If any
action or proceeding in any forum is brought arising out of or related to this
Release Letter, the prevailing party in such action or proceeding shall recover
reasonable attorney’s fees and all costs and expenses.

 

2

 

Please take time to consider this offer and
to review it with legal and financial counselors.  The offer of the Severance Payment is open
for 21 days from the date you first receive this Release Letter.  If you accept the terms of this Release
Letter, sign it and return it to Shelley Farnham, Human Resources by April 12, 2004.  Upon receiving the Release Letter Shelley
will wait for 7 days before
initiating any action. This 7-day period is referred to as a revocation
period.  During the revocation period, if
you want to revoke the Release Letter, you must deliver a written notice to
Shelley to arrive no later than 5 p.m. on the 7th day after you
sign this Release Letter.  No Severance Payment payments will be made to you
until the revocation period has expired.  If you have any questions about this Release
Letter, please speak to Shelley directly or call her on (213) 929-1822.

 

 

3

 

AGREEMENT

 

I have read, understand, and agree to all of
the terms of this Release Letter.  I have
been advised and have had an opportunity to consult with an attorney about this
Release Letter and its contents.  I
understand also that from the date I sign this Agreement to the Release Letter,
I have 7 days to revoke it and that it will not become effective until that
7-day period has expired.  This Release
Letter fully and accurately reflects the content of all understandings and
agreements between me and Southwest Water Company concerning the matters in
this Release Letter, and I am not relying on any other representations as an
inducement to sign this Release Letter. 
I am signing this Release Letter voluntarily, with full knowledge that
it is intended to the maximum extent permitted by law as a complete release and
waiver of any and all claims.

 

 

	
  /s/ Rich
  Shields

  	
   

  	
  April 9, 2004

  
	
   

  	
   

  	
  DATE

  

 

4

 

May 13, 2004

 

 

 

Mr. Richard J. Shields

Chief Financial Officer

Southwest Water Company

624 S. Grand Ave., Suite 2900

Los Angeles, CA 90017

 

Dear Rich:

 

To follow up on our discussion this morning,
you indicated to me that you were willing to turn your $175,000 exit package
into a retention package (cash, options, restricted stock, etc.) paid on
specific deliverables.  You also agreed
that the process to develop a retention package could take anywhere from 30 -
60 days to complete.  During that time
you are willing to waive your rights to your termination package and go full
speed ahead with improvements to the financial departments, lead the completion
of the SOX 404 and perform the rest of your CFO duties.

 

If I have stated this correctly, please sign
your concurrence at the bottom of this letter.

 

Rich, I am glad to have you on the Southwest
Water executive team.

 

Sincerely,

 

	
  /s/ Anton C. Garnier

  	
   

  

 

Anton C. Garnier

Chairman & CEO

 

 

 

Agreed:

 

	
  /s/ Rich Shields

  	
   

  
	
  Richard J. ShieldsEXHIBIT 10.41

 

FIRST AMENDMENT TO AMENDED

AND RESTATED CREDIT AGREEMENT

 

Dated as of September 24,
2004

 

among

 

WILLIS
LEASE FINANCE CORPORATION,

as
Borrower,

 

NATIONAL
CITY BANK,

as
Administrative Agent and Bank,

 

FORTIS
BANK (NEDERLAND) N.V.,

as
Structuring Agent, Security Agent and Bank,

 

and

 

CDC
FINANCE - CDC IXIS

 

 

Vedder, Price,
Kaufman & Kammholz

Chicago, Illinois

 

 

 

FIRST
AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT

 

THIS FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT,
dated as of September 24, 2004 (this “Amendment”),
is entered into by and among WILLIS LEASE
FINANCE CORPORATION, a Delaware corporation (the “Borrower”), NATIONAL CITY BANK, as Administrative Agent and as Bank, FORTIS BANK (NEDERLAND) N.V., as Security
Agent, Structuring Agent and as Bank, and CDC
FINANCE – CDC IXIS, a corporation organized and existing under the
laws of the Republic of France (“CDC”).

 

RECITALS

 

WHEREAS, the Borrower, the Administrative
Agent, the Structuring Agent, and the Security Agent (in their respective
capacities as Agents and Banks) and the Banks have entered into that certain
Amended and Restated Credit Agreement dated as of June 29, 2004 (the “Agreement”) pursuant to which the Banks
have agreed to make available to the Borrower a revolving credit facility used
for the purchase or refinance of Engines and Equipment;

 

WHEREAS, pursuant to Section 2.1(a) of the
Agreement, the Aggregate Revolving Loan Commitment may be increased to not more
than One Hundred Seventy Five Million Dollars ($175,000,000) prior to September
27, 2004; and

 

WHEREAS, CDC has agreed to commit the
amount of Ten Million Dollars ($10,000,000) toward the Aggregate Revolving Loan
Commitment, and National City Bank has agreed to increase its Revolving Loan
Commitment by Two Million Five Hundred Thousand Dollars ($2,500,000), as set
forth herein.

 

NOW, THEREFORE, in consideration of the
premises and promises hereinafter set forth and intending to be legally bound
hereby, the parties hereto agree as follows:

 

AGREEMENT

 

Section 1.               Definitions.  Terms not defined herein shall have the
meanings ascribed thereto in the Agreement.

 

Section 2.               Acknowledgment
of Waiver of Assignment Fee of Section 11.4.  The $5,000 assignment fee as required
pursuant to Section 11.4 of the Agreement for Participations and Assignments is
hereby waived for CDC for purposes of its pending November 1, 2004 merger into
CDC IXIS Capital Markets.

 

Section 3.               Exhibits.  Exhibit A to the Agreement is hereby deleted
in its entirety and replaced with Exhibit A attached hereto, and CDC shall be
deemed a “Bank” for all purposes of the Agreement.

 

Section 4.               Ratification.  Except as amended hereby, the Agreement, as
heretofore supplemented, amended, assigned and modified shall continue and
shall remain in full force and effect and is hereby ratified in all
respects.  From and after the date
hereof, any and all references to the “Agreement” shall be deemed to refer to
the Agreement as amended hereby.

 

 

Section 5.               Governing
Law; Severability; Construction of Amendment.  THIS AMENDMENT SHALL BE GOVERNED BY AND BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA,
WITHOUT REGARD TO CALIFORNIA OR FEDERAL PRINCIPLES OF CONFLICTS OF LAWS.  To the extent permitted by applicable law,
the parties hereby waive any provision of law which renders any provision
hereof prohibited or unenforceable in any respect.  Otherwise, any provision of this Amendment
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability, without invalidating any of the remaining provisions hereof,
and any such prohibition or unenforceability in any one or more jurisdictions
shall not invalidate or render unenforceable such provisions in other
jurisdictions.

 

Section 6.               Counterparts;
Effectiveness.  This Amendment may be
signed in any number of counterparts, each of which shall be an original, with
the same effect as if the signatures thereto and hereto were upon the same
instrument.  This Amendment shall become
effective when the Administrative Agent shall have received signed counterparts
or notice by fax of the signature page that the counterpart has been signed and
is being delivered to it or facsimile that such counterparts have been signed
by all the parties hereto or thereto.

 

Section 7.               Headings.  All section headings contained herein are for
convenience of reference only and are not intended to define or limit the scope
of any provision of this Amendment.

 

Section 8.               Representations
and Warranties.  The Borrower hereby
represents and warrants to each of the other parties hereto that (i) this
Amendment has been duly authorized, executed and delivered by it and
(ii) this Amendment constitutes its legal, valid and binding obligation,
enforceable against it in accordance with its terms.

 

*    *    *

 

2

 

IN
WITNESS WHEREOF, the parties hereto have each caused this Amendment to be duly
executed by their duly authorized representatives as of the date first above
written.

 

	
   

  	
  WILLIS LEASE FINANCE

  
	
   

  	
  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
					

 

Notices
to:

 

2320
Marinship Way

Suite
300

Sausalito,
CA  94965

Fax
No. (415) 331-5167

Attention:  General Counsel

Email:
tnord@willislease.com

 

3

 

	
   

  	
  NATIONAL CITY BANK,

  
	
   

  	
  as Administrative Agent

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
					

 

Notices
To:

 

Christos
Kytzidis

Vice
President

National
City Bank

One
South Broad

14th
Floor, Locator 01-5997

Philadelphia,
PA  19107

Telephone:  267-256-4092

Facsimile:  267-256-4001

Email:  chris.kytzidis@nationalcity.com

 

with
a copy to:

 

Scott
Lankford

Sr.
Loan Administrator

National
City Bank

1900
E. Ninth Street

Cleveland,
Ohio  44114

 

4

 

	
   

  	
  NATIONAL CITY BANK

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
					

 

Notices
To:

 

Christos
Kytzidis

Vice
President

National
City Bank

One
South Broad

14th
Floor, Locator 01-5997

Philadelphia,
PA  19107

Telephone:  267-256-4092

Facsimile:  267-256-4001

Email:  chris.kytzidis@nationalcity.com

 

with
a copy to:

 

Scott
Lankford

Sr.
Loan Administrator

National
City Bank

1900
E. Ninth Street

Cleveland,
Ohio  44114

 

5

 

	
   

  	
  FORTIS BANK (NEDERLAND) N.V.,

  
	
   

  	
  as Structuring Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
					

 

Notices
To:

 

Fortis
Bank (Nederland) N.V.

Coolsingel
93

30122
AE Rotterdam

The
Netherlands

Attention:  Maarten H. Schipper

Telephone:  31 10 401 9522

Facsimile:  31 10 401 9529

Email:
maarten.schipper@nl.fortisbank.com

 

with
a copy to:

 

Vedder,
Price, Kaufman & Kammholz

Attention:  Lynne Gochanour, Esq.

222
North LaSalle Street

Chicago,
Illinois  60601

Telephone:  312-609-7500

Facsimile:  312-609-5005

 

6

 

	
   

  	
  FORTIS BANK (NEDERLAND) N.V.,

  
	
   

  	
  as Security Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
					

 

Notices
To:

 

Fortis
Bank (Nederland) N.V.

Coolsingel
93

30122
AE Rotterdam

The
Netherlands

Attention:  Maarten H. Schipper

Telephone:  31 10 401 9522

Facsimile:  31 10 401 9529

Email:
maarten.schipper@nl.fortisbank.com

 

with
a copy to:

 

Vedder,
Price, Kaufman & Kammholz

Attention:  Lynne Gochanour, Esq.

222
North LaSalle Street

Chicago,
Illinois  60601

Telephone:  312-609-7500

Facsimile:  312-609-5005

 

7

 

	
   

  	
  CDC Finance – CDC IXIS

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   Henri Malick

  
	
   

  	
   

  	
  Title:

  	
   Managing Director For

  
	
   

  	
   

  	
   

  	
   Financing Activities

  
						

 

Notices
To:

 

Jean-Michel
Chatel

Back
Offices Loans and Structured Finance Manager

CDC
Finance – CDC IXIS

26-28
Rue Neuve Tolbiac

75658
Paris Cedex 13

France

Telephone:  + 33 1 58 55 60 71

Facsimile:  + 33 1 58 55 60 82

Email:  jm.chatel@cdcixis.com

 

 

EXHIBIT A

 

BANKS’ REVOLVING LOAN COMMITMENTS AND PERCENTAGES

 

	
   

  	
   

  	
  Revolving

  Loan Commitment

  	
   

  	
  Revolving

  Loan Commitment 

  Percentage

  	
   

  	
  Closing

  Fee

  	
   

  	
   

  	
   

  
	
  Fortis Bank

  	
   

  	
  30,000,000

  	
   

  	
  22

  	
  %

  	
  0.004

  	
   

  	
  120,000

  	
   

  
	
  National City Bank

  	
   

  	
  30,000,000

  	
   

  	
  22

  	
  %

  	
  0.004

  	
   

  	
  110,000

  	
   

  
	
  California Bank & Trust

  	
   

  	
  20,000,000

  	
   

  	
  14

  	
  %

  	
  0.004

  	
   

  	
  80,000

  	
   

  
	
  Wells Fargo Bank

  	
   

  	
  15,500,000

  	
   

  	
  11

  	
  %

  	
  0.004

  	
   

  	
  62,000

  	
   

  
	
  HSH Nordbank

  	
   

  	
  15,000,000

  	
   

  	
  11

  	
  %

  	
  0.0025

  	
   

  	
  37,500

  	
   

  
	
  City National Bank

  	
   

  	
  10,000,000

  	
   

  	
  7

  	
  %

  	
  0.0025

  	
   

  	
  25,000

  	
   

  
	
  CDC Finance – CDC IXIS

  	
   

  	
  10,000,000

  	
   

  	
  7

  	
  %

  	
  0.0025

  	
   

  	
  25,000

  	
   

  
	
  State Bank of India

  	
   

  	
  8,000,000

  	
   

  	
  6

  	
  %

  	
  0.0025

  	
   

  	
  20,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TOTAL

  	
   

  	
  $

  	
  138,500,000

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  $

  	
  479,500

  	
   

  
												

 

1

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