Document:

Exhibit 10.1

 

AIRCRAFT DRY LEASE

 

THIS AIRCRAFT DRY LEASE (this “Lease”) is made and entered into as of September 23, 2014, by and among Moelis & Company Manager LLC (“Lessor”), a Delaware limited liability company, on the one hand, and Kenneth D. Moelis (“Mr. Moelis”), a citizen of the United States and a resident of the State of California, Moelis & Company Group LP (“Group LP”), a Delaware limited partnership, and Moelis Asset Management LP (“Management LP”), a Delaware limited partnership, on the other.  Mr. Moelis, Group LP, and Management LP are hereinafter also individually referred to as “Lessee” and collectively as “Lessees”.

 

W I T N E S S E T H:

 

WHEREAS, pursuant to an Aircraft Purchase Agreement, dated as of June 26, 2014 (the “Purchase Agreement”), Lessor purchased the aircraft set forth on Schedule 1 ( the “Aircraft”); and

 

WHEREAS, Lessor desires to lease the Aircraft to Lessees and Lessees desire to lease the Aircraft from Lessor commencing on the date of the actual delivery of the Aircraft outfitted and completed in accordance with the Specification (as such term is defined in the Purchase Agreement) by the Manufacturer (as defined in Schedule 1) to Lessor (currently scheduled for September 30, 2014) and the concurrent acceptance of the Aircraft by Lessees for lease hereunder as evidenced by the execution and delivery of the Aircraft Delivery and Acceptance Receipt pursuant to Section 5 (the “Delivery Date”), subject to the terms and conditions of this Lease.

 

NOW THEREFORE, for and in consideration of the foregoing recitals, the mutual promises, covenants, agreements, representations and warranties contained in this Lease, the parties agree as follows:

 

1.                                      Lease of the Aircraft.  Subject to the terms and conditions contained herein, Lessor agrees to lease the Aircraft to Lessees and Lessees agree to lease the Aircraft from Lessor, for the Lease Term (as defined in Section 2).

 

2.                                      Term.  The term of this Lease (the “Lease Term”) shall commence on the Delivery Date and end on December 31, 2019, unless otherwise extended by exercise of each Renewal Option (as defined under Section 22) by Lessees or cancelled or terminated pursuant to Section 24.

 

3.                                      Operating Base.  Lessor and Lessees acknowledge and accept that the operating base of the Aircraft shall be Van Nuys Airport (KVNY), Van Nuys, California (“Operating Base”).

 

4.                                      Delivery to Lessees.  Lessor or its designated representative shall deliver to Lessees or to their designated representative(s), on the Delivery Date, the Aircraft at Bradley International Airport (KBDL), Windsor Locks, Connecticut or such other location within the continental United States as Lessor and Lessees may agree to in writing.

 

 

5.                                      Lessees’ Inspection and Acknowledgement of Delivery.  On the Delivery Date, Lessees, through their designated representative(s), shall inspect the Aircraft, and shall note their acceptance of the Aircraft and any discrepancies or exceptions on the Aircraft Delivery and Acceptance Receipt substantially in the form of Exhibit “A” attached hereto.

 

6.                                      Redelivery to Lessor.  On the Termination Date, Lessees, at their own expense, shall make the Aircraft available for inspection by Lessor or its designated agent and shall redeliver to Lessor the Aircraft and all applicable records, including but not limited to log books, manuals, maintenance and inspection reports, programs, computer printouts and data, and all inspection, modification and overhaul records required to be maintained with respect to the Aircraft, at Bradley International Airport (KBDL), Windsor Locks, Connecticut on or such other location in the continental United States as Lessor and Lessees may agree to in writing.  Lessees shall return the Aircraft to Lessor in a flight ready status, in compliance with all the requirements set forth under Section 11(a) through (e) and in the same condition as received, normal wear and tear excepted.  Upon redelivery, each fuel tank shall contain approximately the same quantity of fuel as was contained in the fuel tanks when the Aircraft was delivered to Lessees (or, in the case of differences in such quantity, an appropriate adjustment will be made by payment at the then current fair market price of fuel).

 

7.                                      Lessor’s Inspection and Acknowledgment of Redelivery.  Lessor or its designated representative shall inspect the Aircraft and shall acknowledge redelivery of the Aircraft in the condition required under this Lease by executing the Aircraft Redelivery and Acceptance Receipt, substantially in the form of Exhibit “B” attached hereto, subject to any discrepancies or exceptions noted therein.

 

8.                                      Rent.  Lessees shall pay to Lessor for the use of the Aircraft, a fixed monthly rental (individually “Fixed Rental,” collectively “Fixed Rentals”) in the amount set forth in Exhibit “C” attached hereto, payable in advance on the first day of each and every month (“Rental Payment Date”), except that if the Delivery Date does not take place on September 30, 2014, solely for the period from and including the Delivery Date through the end of the month of the Delivery Date (the “Interim Period”), Lessor agrees that Lessees shall pay to Lessor as rent an amount equal to the Fixed Rental, divided by thirty (30), multiplied by the number of days in the Interim Period (the “Interim Rent”).  Lessees shall pay the Interim Rent on the Delivery Date.  All payments by Lessees shall be made by bank wire transfer in immediately available funds, free of any transmission charges or other charges of any sort, to the bank account designated by Lessor and in accordance with the instructions Lessor shall provide from time to time to Lessees.

 

In the event Lessees fail to pay any Fixed Rental within ten (10) days after their due date, Lessees shall pay, as a late payment charge, in addition to the amount of such Fixed Rental, interest thereon at the maximum lawful rate or one half of one percent (.5%) per month, whichever is less, from the date the Fixed Rental was originally due, until paid.

 

Lessees acknowledge that this is a net lease and agree that Lessees are obligated to pay all Fixed Rentals hereunder, and that said obligations and the rights of Lessor in and to such Fixed Rentals, shall be absolute and unconditional and shall not be subject to any

 

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abatement, reduction, set-off, defense, counter-claim or recoupment, except as otherwise expressly provided in this Lease.

 

9.                                      Log Books and Records.  Lessees shall, at all times during the Lease Term, maintain or cause to be maintained and be responsible for all logs, books, manuals and records (including any computerized maintenance records and programs) pertaining to the Aircraft, engines, auxiliary power unit, and other major components and their maintenance during the Lease Term in accordance with the rules and regulations of the United States Federal Aviation Administration (“FAA”) and Lessees shall, at the end of the Lease Term, deliver such records in legible form to Lessor.

 

10.                               Use of Aircraft and Operational Control.  Lessees acknowledge and agree that the Aircraft shall be operated exclusively under Part 91 of the Federal Aviation Regulations (“FARs”).  Each Lessee, when in possession of and using the Aircraft, shall have and retain operational control of the Aircraft as defined in the applicable FARs (FARs § 1.1 General Definitions: Operational control, with respect to a flight, means the exercise of authority over initiating, conducting or terminating a flight) during the period of such possession and use by such Lessee.  Likewise, for federal tax purposes, including applicable provisions of the United States Internal Revenue Code, as amended, and the Regulations and rulings promulgated thereunder, each Lessee, when in possession of and using the Aircraft, shall have and retain “possession, command and control” of the Aircraft during the period of such possession and use by such Lessee.  Each Lessee acknowledges and agrees that it shall supply duly-qualified, current and properly rated pilots, whose licenses are in good standing and who meet the requirements established and specified by the insurance policies required hereunder and by the FAA, and who have attended and successfully completed the Manufacturer’s approved training course for the Aircraft.  The pilots shall be under the exclusive command, control and direction of each Lessee in all phases of each such Lessee’s flights.

 

11.                               Operation and Maintenance Responsibilities of Lessees.  Lessees shall each bear their share (based upon their respective utilization of the Aircraft) of all the operating costs, direct/variable and fixed, including, but not limited to, fuel, insurance premiums, hangar and storage charges, all the maintenance costs, scheduled and unscheduled, of the Aircraft and customary and routine refurbishing and modernization costs, if any.  Without limiting the foregoing, Lessees shall arrange and pay for all maintenance, work, repairs and inspections, as are required by the Manufacturer, by Rolls-Royce Deutschland Ltd. & Co. KG (the engine manufacturer) and by the FAA, and in connection with the intended use and operations of the Aircraft; and Lessees shall supply or cause to be supplied to Lessor evidence of their compliance with the maintenance, overhaul and inspection requirements as submitted to the FAA, pursuant to its regulations, together with copies of reports of all inspections and periodic summaries of the total airframe hours, number of landings, total engine hours and cycles.  Lessees, at their sole cost and expense, further agree to keep the Aircraft: (a) fully operational, duly certified and in airworthy condition at all times, and maintained in accordance with the Manufacturer’s recommended inspection program [FARs § 91.409(e) and (f)]; (b) in compliance with all the required inspections pursuant to the manufacturers’ maintenance manuals and programs for the Aircraft and its engines and components, including compliance with the Computerized Maintenance Management

 

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System (“CMMS”) maintenance tracking system for the Aircraft; (c) in compliance with all FAA Airworthiness Directives and manufacturers’ Mandatory Service Bulletins; (d) in mechanical condition adequate to comply with all regulations of the FAA and any other Federal, state or local governing body, domestic or foreign, having jurisdiction over the maintenance, use or operation of the Aircraft; and (e) current and fully paid up under the CorporateCare program (“CorporateCare”) with respects to the engines, the Honeywell Maintenance Service Plan (“MSP”) with respect to the auxiliary power unit, the Manufacturer’s Smart Parts Plus Plan program (“Smart Parts”) with respect to the airframe and its components and systems, and the CMMS.

 

12.                               Additions and Alterations.  Lessor consents and agrees that Lessees shall have the right to make, or cause to be made, customary and routine upgrades, improvements and similar modifications to the Aircraft and/or its engines or avionics, provided such upgrades, improvements and similar modifications, as well as any additional accessories, devices or equipment as may be available from time to time, shall be at Lessees’ sole cost and expense and in conformity with the specifications and inspections required or recommended by the manufacturers and the applicable FAA regulations and directives.  Except for the foregoing, Lessees shall not in any way alter or modify, or cause to be made alterations or modifications to the Aircraft, including its engines and avionics, without the prior written consent of Lessor.

 

13.                               Inspection and Reports.  Lessor shall have the right, but not the duty, to inspect the Aircraft at any reasonable time, wherever located.  Lessees shall, at any reasonable time, make the Aircraft and Lessees’ records pertaining to the Aircraft available to Lessor for inspection.  All such inspections made by Lessor shall be at its sole cost and expense; provided, however, that, upon the occurrence and continuation of an Event of Default (as defined in Section 23), Lessees shall be responsible for the cost and expense of Lessor of any inspection and Lessees shall pay Lessor such amount promptly upon demand.

 

14.                               Liens.  Lessees will not directly or indirectly create, incur, assume or suffer to exist any liens on or with respect to (a) the Aircraft or any part thereof; (b)  Lessor’s title thereto; or (c) any interest of Lessor (and Lessees will promptly, at their own expense, take such action as may be necessary to discharge any such lien), except (i) the respective rights Lessor and Lessees as herein provided, and (ii) liens created by or caused to be created by Lessor.

 

15.                               Taxes and Tax Indemnities.  Lessees shall pay to and indemnify Lessor and its members, managers, officers, employees and agents (collectively, “Indemnitees”) for, and hold each Indemnitee harmless from and against, any sales, use, excise or aircraft property taxes (except for the annual property tax assessed by the Los Angeles County Tax Collector with respect to the Aircraft as a result of the Operating Base of the Aircraft, the payment of which shall be the sole and exclusive responsibility of Lessor), any ad valorem, value added, leasing, stamp, landing, airport use or other taxes, levies, imposts, duties, customs, charges, fees or withholdings of any nature, together with any penalties, fines, or interest thereon (“Impositions”) arising out of the transactions contemplated by this Lease or the use of the Aircraft by Lessees and imposed against any Indemnitee, Lessees or the Aircraft or any part thereof by any Federal or foreign government, any state, municipal or

 

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local subdivision, any agency or instrumentality thereof or other taxing authority upon or with respect to the Aircraft or any part thereof or upon the ownership, delivery, leasing, possession, use, operation, maintenance, storage, return, transfer or release thereof, or upon the rentals, receipts or earnings arising therefrom, or upon or with respect to this Lease.  Lessees specifically acknowledge and accept that should any taxing jurisdiction or authority assess or levy any sales, use, excise, property or similar taxes as a result of the lease of the Aircraft to Lessees, the payments of the Fixed Rentals under this Lease or Lessees’ use of the Aircraft, Lessees shall remit to Lessor all such taxes together with each Fixed Rental; provided, however, that if such taxes shall be due and payable at an earlier time as a matter of applicable laws, rules, regulations, orders, directives, licenses or permits of any governmental body, instrumentality, agency or authority, Lessees shall remit such taxes to Lessor at the required time.  Except for the foregoing, in all other cases Lessees shall have the right to contest any Impositions, provided that (a) Lessees shall have given to Lessor written notice of any such Impositions, which notice shall state that such Impositions are being contested by Lessees in good faith with due diligence and by appropriate proceedings and that Lessees have agreed to indemnify each Indemnitee against any cost, expense, liability or loss (including, without limitation, reasonable attorneys’ fees) arising from or in connection with such contest; (b) in Lessor’s sole judgment, Lessor has received adequate assurances of payment of such contested Impositions; and (c) counsel for Lessor shall have determined that the nonpayment of any such Impositions or the contest of any such payment in such proceedings does not, in the sole opinion of such counsel, adversely affect the title, property or rights of Lessor.  In case any report or return is required to be made with respect to any Impositions, Lessees will either (after notice to Lessor) make such report or return in such manner as will show the ownership of the Aircraft in Lessor, and send a copy of such report or return to Lessor or will notify Lessor of such requirement and make such report or return in such manner as shall be satisfactory to Lessor.  Lessor agrees to cooperate fully with Lessees in the preparation of any such report or return.

 

16.                               Insurance.  Lessees shall secure and maintain in full force and effect, at their sole cost and expense, throughout the Lease Term insurance policies containing such provisions and with insurance companies of recognized responsibility, as shall be reasonably satisfactory to Lessor.  Without limitation to the generality of the foregoing, Lessees shall procure and maintain (a) aviation liability insurance covering public liability, property damage and including passenger legal liability, in an amount not less than the amount set forth on Schedule 1 hereto for any single occurrence; (b) all-risk aircraft hull and engine insurance (including, without limitation, foreign object damage insurance) in an amount not less than the amount set forth on Schedule 1 hereto; (c) breach of warranty insurance; and (d) war risk and allied perils insurance (including confiscation, appropriation, expropriation, terrorism and hijacking insurance) in the amounts set forth hereinabove.  The coverage territory for all the foregoing polices shall be worldwide.  All insurance policies shall name Lessor, and each Lessee as the named insureds, with Lessor (as the owner of the Aircraft) as loss payee, and shall provide that any cancellation or substantial change in coverage shall not be effective as to Lessor, for thirty (30) days after receipt by Lessor of written notice from such insurer(s) of such cancellation or change.  All insurance shall insure Lessor’s interest, regardless of any breach or violation by Lessees of any warranties, declarations or conditions in such policies, shall include a severability of interest clause providing that such policy shall operate in the same manner if there were a separate policy covering each

 

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insured, shall waive any right of set-off against Lessees or Lessor, and shall waive any rights of subrogation against Lessor.  Such insurance shall be primary and not be subject to any offset by any other insurance carried by Lessor or any of Lessees.  Each Lessee hereby appoints Lessor as each Lessee’s attorney-in-fact to make proof of loss and claim for and to receive payment of and to execute or endorse all documents, checks or drafts in connection with all policies of insurance in respect of the Aircraft.  Any expense of adjusting or collecting insurance proceeds shall be borne by Lessees.  Lessor may, at its option, apply proceeds of insurance, in whole or in part, to (i) repair or replace the Aircraft or any part thereof, or (ii) satisfy any obligation of Lessees to Lessor hereunder.  Any balance remaining shall be retained by Lessor.

 

Annually on the anniversary of the Delivery Date, Lessees shall furnish to Lessor, a report describing in reasonable detail the insurance then carried and maintained on the Aircraft and certifying that such insurance complies with the terms hereof and a certificate of the insurer as to such insurance.  Lessees shall advise Lessor in writing promptly of any default in the payment of any premium and of any other act or omission on the part of Lessees which might invalidate or render unenforceable, in whole or in part, any insurance on the Aircraft.  In the event Lessees shall fail to maintain insurance as herein provided, Lessor may, at its option, provide such insurance, and Lessees shall, upon demand, reimburse forthwith Lessor for the cost thereof.

 

17.                               Loss or Damage.  Lessees shall bear all risk of loss, theft, confiscation, damage to or destruction of the Aircraft from any cause whatsoever.  Lessees shall promptly report any of the foregoing occurrences to the appropriate insurance company or companies, to Lessor, and to all concerned Federal, state, local or other governmental agencies, and shall furnish such information and execute such documents as may be necessary or required for Lessor, and under applicable laws.  Lessees shall cooperate fully in any investigation of any claim or loss processed by Lessor under the Aircraft insurance policies.

 

Except as otherwise specifically provided hereinbelow, this Lease shall not terminate and the obligations of Lessees shall not be affected by reason of any damage to the Aircraft.  Lessees shall be responsible for any expense of adjusting or collecting insurance proceeds and for the deductible, if any, associated with the damage, loss and destruction of the Aircraft, including but not limited to expenses resulting from foreign object damage.

 

In the event of total loss or destruction of all or substantially all of the Aircraft, or damage to the Aircraft which causes it to be irreparable in the opinion of the insurance carrier providing hull coverage pursuant to Section 16, or in the event of confiscation or seizure of the Aircraft, upon payment of such claims by the insurance company or companies to Lessor, as the case may be, no further payments of Fixes Rentals shall be due by Lessees and this Lease shall automatically terminate.

 

18.                               Indemnification.  Lessees shall indemnify and save harmless Lessor, its successors and assigns, from and against any and all loss (including Lessees’ own loss of use), claims (including, without limitation, claims involving strict or absolute liability in tort, damage, injury, death, liability and third party claims), demands, costs and expenses of every nature, including reasonable attorneys’ fees, arising directly or indirectly from or in

 

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connection with the possession, use, operation, maintenance or storage of the Aircraft, except when arising from the material default, willful misconduct or gross negligence of Lessor. Claims attributable to acts or events occurring before or after the Lease Term or after the Aircraft has been redelivered to Lessor in accordance with Section 6, shall be excluded from Lessees’ agreement to indemnify under this Section 18.  Lessees’ obligations under this Section 18 shall survive termination of this Lease and shall remain in effect until all required indemnity payments have been made by Lessees to Lessor.

 

19.                               Representations, Warranties and Agreements of Lessor.  Lessor represents, warrants and agrees as follows:

 

(a)                                 Aircraft in Good Order and Repair.  On the Delivery Date, the Aircraft shall be in an undamaged and airworthy condition with all systems and avionics functioning properly.  The Aircraft shall be in full compliance with all FAA Airworthiness Directives and Mandatory Service Bulletins applicable to the Aircraft and shall have properly kept and updated maintenance and inspection records, reflecting the current maintenance and inspection status of the Aircraft, in accordance with all applicable FAA rules and regulations and the manufacturer’s recommendations.

 

(b)                                 Manufacturers Warranties and Programs.  In connection with Lessees’ operation and maintenance of the Aircraft during the Lease Term, Lessor shall allow Lessees to use and benefit from (i) all of the Manufacturer’s warranties (including the engine manufacturer’s warranties and other manufacturers’ warranties applicable thereunder), as provided to Lessor in accordance with Section 15 of the Aircraft Description & Customer Support Services Manual dated January 1, 2012 (“Product Description”) included in the Specification and incorporated in the Purchase Agreement and to assist and process any claims under such warranties, (ii) the initial training programs for pilots, mechanics and flight attendants as provided under Section 14.3 of the Product Description, and (iii) the enrollments on CorporateCare, MSP, Smart Parts and CMMS (all of which shall be the responsibility of Lessees to keep current and paid up).

 

(c)                                  No Adverse Proceedings.  No action, suit, or proceeding is currently pending or threatened against Lessor which shall in any material way affect Lessor’s financial status as of the date hereof, or impair the execution, delivery, or performance by Lessor of this Lease.

 

(d)                                 Quiet Enjoyment.  During the Lease Term, Lessor covenants that it shall not, through its own actions or inactions, interfere in Lessees’ quiet enjoyment of the Aircraft so long as no Event of Default on the part of Lessees shall have occurred and be continuing.

 

(e)                                  Company Authorization.  Lessor is a limited liability company, duly organized, validly existing and in good standing under the laws of Delaware, has all necessary powers to enter into the transaction contemplated in this Lease and has authorized and approved the lease of the Aircraft to Lessees.

 

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20.                               Representations, Warranties and Agreements of Lessees.

 

Each Lessee represents, warrants and agrees as follows:

 

(a)                                 Government Approvals.  No consent or approval of, giving notice to, registration with, or taking of any other action in respect of or by, any Federal, state or local governmental authority or agency (including without limitation, the FAA), or other person is required with respect to the execution, delivery and performance by each Lessee of this Lease or the consummation of any of the transactions by each Lessee contemplated hereby or thereby, or if any such approval, notice, registration or action is required, it has been duly given or obtained.

 

(b)                                 Lawful Use.  The Aircraft will not be used, operated, maintained or stored in violation of any law or any rule, regulation or order of any government authority having jurisdiction (domestic or foreign), or in violation of any airworthiness certificate, license or registration relating to the Aircraft or its use, or in violation or breach of any representation or warranty made with respect to obtaining insurance on the Aircraft or any term or condition of such insurance policy.  During the Lease Term, each Lessee shall operate the Aircraft solely under FARs Part 91.

 

(c)                                  Aircraft Location.  The Aircraft will not be operated or located in any area excluded from coverage by the terms of insurance or in any recognized or threatened area of hostilities, unless fully covered to Lessor’s satisfaction by war risk insurance.

 

(d)                                 FAA Filings.  Each Lessee shall take all steps necessary to preserve and protect Lessor’s U.S. Registration of the Aircraft.  Lessees shall file or caused to be filed a copy of this Lease with the appropriate FAA office, in compliance with all applicable laws and regulations.

 

(e)                                  Identification.  A legible copy of the Lease shall be kept in the Aircraft at all times.

 

(f)                                   No Adverse Proceedings.  No action, suit, or proceeding is currently pending or threatened against Lessees, which shall in any material way affect the financial status of Lessees as of the date hereof, or impair the execution, delivery, or performance by Lessees of this Lease.

 

(g)                                  Authorizations.  Each Lessee has all the necessary powers to enter into the transaction contemplated in this Lease and each has authorized and approved the lease of the Aircraft from Lessor.

 

21.                               Disclaimer of Warranties.  EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED HEREIN, THE AIRCRAFT IS BEING LEASED BY LESSOR TO LESSEES HEREUNDER ON AN “AS IS” AND “WHERE IS” BASIS AND WITHOUT ANY REPRESENTATION, GUARANTEE OR WARRANTY, EXPRESSED OR IMPLIED, OF ANY KIND BEING MADE OR GIVEN BY LESSOR, ARISING BY LAW OR OTHERWISE, INCLUDING BUT NOT LIMITED TO ANY WARRANTIES OF

 

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MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.  EACH LESSEE HEREBY WAIVES ANY CLAIMS, RIGHTS AND REMEDIES (INCLUDING, WITHOUT LIMITATION, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGE) CAUSED BY THE AIRCRAFT OR BY THE LOSS OF USE THEREOF BY EACH SUCH LESSEE.

 

22.                               Options to Extend.  Provided Lessees are not in breach of the terms and conditions of this Lease, each Lessee shall have the option to extend the term at the end of the initial period for an additional period of one (1) year, and thereafter for a subsequent additional period of one (1) year, subject to such Lessee giving written notice to Lessor of the exercise of each such extension no more than six (6) months and no less than three (3) months prior to the expiration date of each such period (each a “Renewal Option”).  All of the terms and conditions of this Lease shall apply to each of the foregoing extensions.  In the event that a Renewal Option is not exercised, Lessees expressly acknowledges, consents and agrees that Lessor shall have the right to market the Aircraft for sale during the last three (3) months of the relevant period and Lessees shall cooperate with Lessor to schedule showings, inspections and/or demonstration flights of the Aircraft, provided that the intended use of the Aircraft by each Lessee shall always have priority over said rights of Lessor, the intention being that such rights shall be exercised solely at times and places that will not interfere with use or scheduled use of the Aircraft by each Lessee.

 

23.                               Events of Default.  The term “Event of Default”, wherever used herein shall mean any of the following:

 

(a)                           Lessees shall have failed to make payment of a Fixed Rental within ten (10) days after the same shall become due;

 

(b)                               Lessees shall have failed to maintain at all times insurance coverage as required by Section 16;

 

(c)                                Lessees shall have breached any of their representations and warranties and shall have failed to cure same or commence curing same in good faith following the expiration of thirty (30) days written notice thereof from Lessor to Lessees;

 

(d)                               Lessees shall have failed to perform or observe (or cause to be performed and observed) any other obligation, covenant or agreement required to be performed under this Lease and such failure shall continue for thirty (30) days after written notice thereof from Lessor to Lessee; or

 

(e)                                Any of the Lessees becomes insolvent or fails to pay their debts when due or makes any assignment for the benefit of creditors, or seeks relief under any bankruptcy law or similar law for the protection of debtors, or suffers a petition of bankruptcy to be filed against it or a receiver or trustee appointed for substantially all of their assets, and such is not removed within sixty (60) days.

 

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24.                               Lessor’s Remedies.

 

(a)                                 Upon the occurrence of any Event of Default, Lessor may, at its option, exercise any or all remedies available at law or in equity, including, without limitation, any or all of the following remedies, as Lessor in its sole discretion shall elect:

 

(i)                                     By notice in writing cancel or terminate this Lease, whereupon all rights of Lessees to the use of the Aircraft or any part thereof shall absolutely cease and terminate but Lessees shall remain liable as hereinafter provided; and thereupon Lessees, if so requested by Lessor, shall at Lessees’ expense promptly return the Aircraft to Lessor as required by Section 6, or Lessor, at its option, may enter upon the premises where the Aircraft is located and take immediate possession of and remove the Aircraft by summary proceedings or otherwise.  Lessees specifically authorize Lessor’s entry upon any premises where the Aircraft may be located for the purpose of a peaceful retaking of the Aircraft, and Lessees shall waive any cause of action Lessees may have arising therefrom and shall forthwith pay to Lessor an amount equal to the total accrued and unpaid Fixed Rentals and all other accrued and unpaid amounts due hereunder, plus any and all losses and damages incurred or sustained by Lessor by reason of any default by Lessees under this Lease.

 

(ii)                                  Perform or cause to be performed any obligation, covenant or agreement of Lessees hereunder.  Lessees agree to pay all costs and expenses incurred by Lessor for such performance as additional Fixed Rental hereunder and acknowledge that such performance by Lessor shall not be deemed to cure said Event of Default.

 

(b)                                 Lessees shall be liable for all costs, charges and expenses, including reasonable attorneys’ fees and disbursements, incurred by Lessor by reason of the occurrence of any Event of Default or the exercise of Lessor’s remedies with respect thereto.

 

(c)                                  No remedy referred to herein is intended to be exclusive, but each shall be cumulative and in addition to any other remedy referred to above or otherwise available to Lessor at law or in equity.  No express or implied waiver by Lessor of any default or Event of Default hereunder shall in any way be, or be construed to be, a waiver of any future or subsequent default or Event of Default.  The failure or delay of Lessor in exercising any rights granted to it hereunder upon any occurrence of any of the contingencies set forth herein shall not constitute a waiver of any such right upon the continuation or recurrence of any such contingencies or similar contingencies and any single or partial exercise of any particular right by Lessor shall not exhaust the same or constitute a waiver of any other right provided herein.

 

25.                               General Provisions.

 

(a)                                 Broker/Finder Fees.  Each party represents that it has dealt with no broker or finder in connection with the transaction contemplated by this Lease and that no broker or other person is entitled to any commission or finder’s fee in connection therewith.  Lessor and Lessees each agree to indemnify and hold harmless one another against any loss, liability, damage, cost, claim or expense incurred by reason of any brokerage commission or finder’s fee alleged to be payable because of any act, omission or statement of the indemnifying party.

 

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(b)                                 Costs.  Each party shall pay all of its own costs and expenses incurred or to be incurred by it in negotiating and preparing this Lease.

 

(c)                                  Headings.  Sections and other headings and captions of this Lease are included for convenience only and shall not affect the construction or interpretation of any of its provisions.

 

(d)                                 Entire Agreement.  This Lease constitutes the entire agreement among the parties pertaining to the subject matter contained in it and supersedes all prior and contemporaneous agreements, representations and understandings of the parties.  No supplement, modification or amendment of this Lease shall be binding unless executed in writing by all the parties.  No waiver of any of the provisions of this Lease shall be deemed, or shall constitute, a waiver of any other provision, whether or not similar, nor shall any waiver constitute a continuing waiver.  No waiver shall be binding unless executed in writing by the party making the waiver.

 

(e)                                  Counterparts.  This Lease may be executed simultaneously in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.  The parties may exchange executed copies transmitted by telecopier or PDF e-mail, provided the executed originals are forwarded by mail or courier.

 

(f)                                   Successors and Assigns.  Lessees shall not sell, transfer, assign, encumber or, except with Lessor’s prior written consent, sublet or part with possession of the Aircraft or any of Lessees’ rights under this Lease.  This Lease shall be binding on, and shall inure to the benefit of, the parties to it and their respective heirs, legal representatives, successors and assigns; provided, however, that Lessees may not assign any of their rights under this Lease.

 

(g)                                  No Third Party Rights.  Nothing in this Lease whether express or implied, is intended to confer any rights or remedies under or by reason of this Lease on any persons other than the parties to it and their respective successors and assigns, nor is anything in this Lease intended to relieve or discharge the obligation or liability of any third persons to any party to this Lease, nor shall any provision give any third persons any right of subrogation or action over against any party to this Lease.

 

(h)                                 Survival.  All representations, warranties, covenants and agreements of the parties contained in this Lease, or in any instrument, certificate, exhibit, schedule, or other writing provided for in it, shall survive the Lease Term.

 

(i)                                     Notices.  All notices or other communications, which shall or may be given pursuant to this Lease, shall be in writing and shall be delivered by certified mail or registered mail with postage prepaid, return receipt requested, by facsimile transmission or by e-mail or by hand.  Such communication shall be deemed given and received upon dispatch, if sent by facsimile (provided confirmation of successful transmission is received by the sending facsimile machine at the time of transmission) or e-mail (provided a transmission error message is not received by sender), or upon delivery if hand delivered, or within three (3) days of mailing, if sent by certified or registered mail, at the addresses of

 

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the parties as set forth in Exhibit “D” attached hereto.  Any address for notice to a party may be changed at any time by written notice to the other parties.

 

(j)                                    Agreement Negotiated.  The parties to this Lease are sophisticated and have been represented or had the opportunity to be represented in connection with the negotiation and performance of this Lease.  The parties agree that no presumptions relating to the interpretation of contracts against the drafter of any particular clause should or may be applied in this case and, therefore, waive their effects.

 

(k)                                 Governing Law.  The validity of this Lease and the interpretation and performance of all its terms shall be construed and enforced in accordance with the laws of the State of California, as apply to contracts that are executed and performed entirely in California.

 

(l)                                     Arbitration.  Any dispute, claim or controversy of whatever nature arising out of or relating to this Lease or the breach, termination, enforcement, interpretation or validity thereof, including the determination of the scope or applicability of this agreement to arbitrate, shall be determined by arbitration in Los Angeles, California before one neutral arbitrator.  Such arbitrator shall be an attorney licensed to practice law in the United States, actively engaged in the practice of law for at least ten years and having at least five years of experience with and knowledge of business aviation.  The arbitration shall be administered by JAMS pursuant to its Comprehensive Arbitration Rule & Procedures.  Judgment on the Award may be entered in any court having jurisdiction.  This clause shall not preclude parties from seeking provisional remedies in aid or arbitration from a court of appropriate jurisdiction, or injunctive relief.

 

(m)                             Partial Invalidity.  If any provision of this Lease is held invalid or unenforceable by any court of final jurisdiction, it is the intent of the parties that all other provisions of this Lease be construed to remain fully valid, enforceable and binding on the parties.

 

26.                                                                               TRUTH-IN-LEASING.

 

(a)                                 THE AIRCRAFT HAS BEEN MAINTAINED AND INSPECTED UNDER PART 91 OF THE FEDERAL AVIATION REGULATIONS DURING THE TWELVE MONTHS PERIOD (OR PORTION THEREOF DURING WHICH THE AIRCRAFT HAS BEEN SUBJECT TO U.S. REGISTRATION) PRECEDING THE DATE OF EXECUTION OF THIS LEASE AND PRESENTLY COMPLIES WITH APPLICABLE FAA MAINTENANCE AND INSPECTION REQUIREMENTS FOR OPERATION TO BE CONDUCTED UNDER THIS LEASE.

 

(b)                                 EACH LESSEE CERTIFIES THAT EACH LESSEE, AND NOT LESSOR, IS RESPONSIBLE FOR OPERATIONAL CONTROL OF THE AIRCRAFT WHEN SUCH LESSEE UTILIZES THE AIRCRAFT UNDER THIS LEASE DURING THE LEASE TERM.  EACH LESSEE FURTHER CERTIFIES THAT EACH LESSEE UNDERSTANDS HIS OR ITS RESPONSIBILITY FOR COMPLIANCE WITH APPLICABLE FEDERAL AVIATION REGULATIONS.

 

12

 

(c)                                  EACH LESSEE CERTIFIES THAT THE AIRCRAFT WILL CONTINUE TO BE MAINTAINED AND INSPECTED UNDER PART 91 OF THE FEDERAL AVIATION REGULATIONS FOR OPERATIONS TO BE CONDUCTED UNDER THIS LEASE.  EACH LESSEE UNDERSTANDS THAT AN EXPLANATION OF FACTORS BEARING ON OPERATIONAL CONTROL AND THE PERTINENT FEDERAL AVIATION REGULATIONS CAN BE OBTAINED FROM THE NEAREST FAA FLIGHT STANDARDS DISTRICT OFFICE.

 

[SIGNATURES APPEAR ON FOLLOWING PAGE]

 

13

 

IN WITNESS WHEREOF, the parties hereto have each caused this Aircraft Dry Lease to be duly executed as of the day and year first written above.

 

	
LESSOR:
    	
LESSEE:
    
	
 
    	
 
    
	
MOELIS &   COMPANY MANAGER LLC
    	
KENNETH   D. MOELIS
    
	
 
    	
 
    
	
By:
    	
/s/   Ken Moelis
    	
.
    	
 
    	
/s/   Ken Moelis
    	
.
    
	
Name:
    	
Ken   Moelis
    	
.
    	
 
    	
 
    
	
Title:
    	
Managing   Member
    	
.
    	
 
    	
 
    
	
 
    	
 
    
	
 
    	
LESSEE:
    
	
 
    	
 
    
	
 
    	
MOELIS &   COMPANY GROUP LP
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Elizabeth Crain
    	
.
    	
 
    
	
 
    	
Name:
    	
Elizabeth   Crain
    	
.
    	
 
    
	
 
    	
Title:
    	
Chief   Operating Officer
    	
.
    	
 
    
	
 
    	
 
    
	
 
    	
LESSEE:
    
	
 
    	
 
    
	
 
    	
MOELIS   ASSET MANAGEMENT LP
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Osamu Watanabe
    	
.
    	
 
    
	
 
    	
Name:
    	
Osamu   Watanabe
    	
.
    	
 
    
	
 
    	
Title:
    	
General   Counsel
    	
.
    	
 
    

 

14Exhibit 10.2

 

COST SHARING AND OPERATING AGREEMENT

 

THIS COST SHARING AND OPERATING AGREEMENT (this “Agreement”) is made and entered into as of September 23, 2014 by and among Kenneth D. Moelis (“Mr. Moelis”), a citizen of the United States and a resident of the State of California, Moelis & Company Group LP (“Group LP”), a Delaware limited partnership, and Moelis Asset Management LP (“Management LP”), a Delaware limited partnership.  Mr. Moelis, Group LP, and Management LP are hereinafter also individually referred to as “Party” and collectively as “Parties”.

 

W I T N E S S E T H:

 

WHEREAS, pursuant to that certain Aircraft Dry Lease of even date hereof (the “Lease”) by and among Lessor, on the one hand, and the Parties, on the other, the Parties have leased a certain aircraft (as defined in the Lease, the “Aircraft”) from Moelis & Company Manager LLC (“Lessor”), a Delaware limited liability company;

 

WHEREAS, there is substantial variation among the Parties in their respective contemplated use of the Aircraft; and

 

WHEREAS, the Parties wish to memorialize their agreement regarding their utilization of the Aircraft and their sharing and allocation of the lease and operating costs of the Aircraft.

 

NOW, THEREFORE, in consideration of the foregoing recitals and the mutual covenants and agreements contained herein, the Parties agree as follow:

 

1.                                      Use and Operation of the Aircraft.

 

The Parties agree that each Party shall, from time to time, on a noncontinuous basis, have exclusive use of the Aircraft pursuant to the Lease.  The Parties shall coordinate their respective utilization of the Aircraft by giving advance notice to the Service Provider (as defined in Section 4), by telephone, e-mail and/or facsimile, of any proposed use of the Aircraft, including commencing and ending dates of flights and projected destinations.  The Party who first gives notice to the Service Provider of a proposed flight shall have the right to use the Aircraft for such noticed flight (i.e., on a first-come, first-serve basis).  In the event a scheduling conflict should arise, which the Parties cannot mutually resolve after consulting with each other, the Party who first reserved the use of the Aircraft for the particular flight shall have priority.  The Parties shall estimate their respective flight hours utilization of the Aircraft during the first twelve (12) consecutive calendar months of this Agreement and shall prepare with the Service Provider an Aircraft budget of the estimated operational expenses for such period.  For the purpose of this Agreement, flight hours, or any fraction thereof to the nearest 1/10 hour, shall be measured as recorded by the Flight Management System of the Aircraft.

 

 

2.                                      Operational Control of the Aircraft.

 

Each Party acknowledges and agrees that the Aircraft shall be operated exclusively under Part 91 of the Federal Aviation Regulations (“FARs”).  Either Mr. Moelis, Group LP or Management LP, as the case may be, when in possession of and using the Aircraft, shall have and retain operational control of the Aircraft as defined in the applicable FARs (FARs § 1.1 General Definitions: Operational control, with respect to a flight, means the exercise of authority over initiating, conducting or terminating a flight) during the period of such possession and use by such Party.  Likewise, for federal tax purposes, including applicable provisions of the United States Internal Revenue Code, as amended, and the Regulations and rulings promulgated thereunder, either Mr. Moelis, Group LP or Management LP, when in possession of and using the Aircraft, shall have and retain “possession, command and control” of the Aircraft during the period of such possession and use by such Party.

 

Mr. Moelis, Group LP or Management LP acknowledge and agree that each Party, when operating the Aircraft, shall obtain and utilize duly-qualified, current and type-rated pilots, whose licenses are in good standing, who meet the requirements established and specified by the insurance policies required under the Lease and by the FAA, and who have attended and successfully completed Bombardier’s approved training course for the Aircraft.  Mr. Moelis, Group LP or Management LP further expressly acknowledge that, with respect to each Party’s utilization of the Aircraft, solely that Party utilizing the Aircraft (i) shall have the sole discretion and power to designate which pilots fly the Aircraft; (ii) shall have exclusive control and direction over said pilots; and (iii) shall have the power to substitute or otherwise terminate the pilots proposed or supplied by the Service Provider, for and on behalf and at the request of each such Party, and cause other competent duly qualified, current and type rated pilots, who conform to the requirements set forth hereinabove, to be hired for that Party’s respective flights of the Aircraft.

 

Mr. Moelis, Group LP or Management LP acknowledge and agree that, in accordance with the applicable FARs, the flight crew provided by the Service Provider, for and on behalf and at the request of each Party, and accepted by each such Party or otherwise hired or assigned by each of the Parties in connection with their respective flights, shall have full and exclusive authority to exercise all of its duties and responsibilities in regard to the safety of each flight conducted hereunder.  Each Party specifically agrees that the flight crew, in its sole discretion, may terminate any flight, refuse to commence any flight, or take any other such action which, in the considered judgment of the assigned pilot in command, is necessitated by safety considerations.  No such action by the pilot in command will create or support any liability for loss, injury, damage or delay to any Party or any other person.  The Parties further agree that no Party will be liable for delay or failure to timely furnish or return the Aircraft pursuant to this Agreement when such failure is caused by government regulation or authority, mechanical difficulty, war, civil commotion, strikes or labor disputes, weather conditions or acts of God.

 

2

 

3.                                      Compliance with Lease.

 

Each Party represents to the other that they shall take no action or omit to take any action which shall result in such Party not being in compliance with the terms and conditions of the Lease.

 

4.                                      Selection of Service Provider.

 

The Parties agree and consent to select an independent service provider (the “Service Provider”), mutually acceptable to the Parties, having substantial expertise and specialization in business aviation and specifically regarding the operations of executive business jet aircraft, for the purpose of providing specialized services with respect to the scheduling, operations and the maintenance of the Aircraft by the Parties during the Lease in accordance with the terms of this Agreement.  The Parties shall cause the Service Provider to prepare an annual budget of the estimated costs and expenses associated with the operation of the Aircraft and related activities.  Notwithstanding anything to the contrary set forth herein, each Party reserves the right to retain a separate independent service provider by giving written notice to the other Parties, whereupon such Party shall be solely responsible for the fees and expenses charged by such separate service provider.

 

5.                                      Operating Costs and Allocation.

 

The Parties agree and accept that, for the purpose of this Agreement and the billing, allocation and payment of the costs associated with the operation of the Aircraft, such costs shall be divided into four categories and paid by the Parties as set forth hereinbelow:

 

5.1                               Fixed Operating Costs.

 

5.1.1                     Definition of Fixed Operating Costs.  The Fixed Operating Costs shall be the cost of the following: fixed monthly rentals under the Lease (“Fixed Rentals”); insurance; hangar and storage rentals; flight crew personnel as employed and charged by the Service Provider and training of said flight crew personnel (initial and recurrent); a qualified mechanic as employed and charged by the Service Provider and training (initial and recurrent) of said mechanic; cabin attendant(s) as employed and charged by the Service Provider and any specialized training course of said cabin attendant(s); other professional personnel expressly required by the Parties for specialized services in connection with their flight and travel activities and related logistical arrangements; training flights; Service Provider’s management or administrative fees; those scheduled maintenance costs of airframe, engines, thrust reversers and avionics that are not covered by the specific plans and programs set forth under Section 5.2.1 (i.e., CorporateCare, MSP and Smart Parts as such terms are defined therein); the fees of the Computerized Maintenance Management System (“CMMS”) maintenance tracking system for the Aircraft; maintenance and flight manual subscriptions; software updates; database for Flight Management System; navigation chart services; publications; aeronautical registration fees; property taxes that are the responsibility of the Parties under the Lease, if any; and any other costs and expenses relating directly or indirectly, to the operation of the Aircraft, which are not expressly included under Sections 5.2.1, 5.3.1, and 5.4.1 hereof.

 

3

 

5.1.2                     Payment of Fixed Operating Costs.  The Parties agree that the Fixed Operating Costs shall be allocated to and paid by the Parties pro rata according to each Party’s utilization of the Aircraft.  The Parties shall cause the Service Provider to deliver to each Party, no later than the twentieth (20th) day of each month, a statement of the actual Fixed Operating Costs incurred during the previous month, together with the amount of such costs allocated to each Party based on the estimated annual utilization of the Aircraft, which amount shall be payable by such Party in accordance with Section 6.  For the purpose of the preceding sentence, the estimated utilization of the Aircraft by each Party shall be the contemplated utilization of such Party during the first twelve (12) consecutive calendar months of this Agreement for statements delivered prior to October 1, 2015 and such Party’s actual utilization of the Aircraft during the twelve months ended on the immediately preceding September 30th for statements delivered on or after October 1, 2015 (by way of clarification, the foregoing shall not modify in any manner that the Fixed Operating Costs shall be allocated to and paid by the Parties pro rata according to each Party’s actual utilization of the Aircraft as set forth herein below).

 

No later than October 20th of each year during the term of this Agreement (or at such time as this Agreement is terminated), the Parties shall cause the Service Provider to deliver to each Party a statement of the aggregate amount of actual Fixed Operating Costs allocated to such Party based on the estimated utilization of the Aircraft for the twelve-month period ended on the preceding September 30th (or on the termination date of this Agreement) and the aggregate amount of actual Fixed Operating Costs allocable to such Party based on the actual utilization of the Aircraft by the Parties for the twelve-month period ended on the preceding September 30th (or on the termination date of this Agreement).  Any excess of the amount of Fixed Operating Costs allocated over the amount of Fixed Operating Costs allocable shall be credited to such Party and any excess of Fixed Operating Costs allocable over the amount of Fixed Operating Costs allocated shall be payable by such Party in accordance with Section 6.

 

5.2                               Direct Operating Costs.

 

5.2.1                     Definition of Direct Operating Costs.  The Direct Operating Costs, for the purposes of this Agreement, shall be the cost of the following: fuel, oil and other lubricants; the service rate per engine flying hour of the Rolls Royce CorporateCare program (“CorporateCare”) with respect to the engines; the hourly charges of the Honeywell Maintenance Service Plan (“MSP”) with respect to the auxiliary power unit; the hourly usage rate charges of the Bombardier Smart Parts Plus Plan (“Smart Parts”) with respect to the airframe and its components and systems; the crew expenses for airline travel, ground transportation, lodging, meals and other similar expenses related to the crew’s activities in connection with the operation of the Aircraft; compensation paid to qualified contract pilot(s) hired for specific flight(s) at the express request of the Party operating the Aircraft for such flight(s); compensation paid to contract cabin attendant(s) hired for specific flight(s) at the express request of the Party operating the Aircraft for such flight(s); compensation paid to other contract professional personnel hired to render specialized services in connection with specific flight and travel arrangements at the express request of the Party operating the Aircraft for such flight(s); weather services; flight service fees; flight planning fees; over flight fees; landing, ramp, parking, tie-down and ground handling fees; de-icing charges; storage and hangar use charges at temporary locations during Aircraft

 

4

 

flights; airport civilian aviation charges; customs and immigration charges; supplies; catering; communication charges, in-flight telephone calls, telecopier and data transmissions; and miscellaneous flight expenses.

 

5.2.2                     Payment of Direct Operating Costs.  The Direct Operating Costs incurred with respect to an Aircraft flight shall be paid by the Party utilizing and having operational control of the Aircraft for such flight within the meaning of the FARs Part 91.  The Service Provider will issue, no later than the twentieth (20th) day of each month, separate statements directly to each Party for the Direct Operating Costs attributable to that Party’s utilization of the Aircraft.

 

5.3                               Unscheduled Maintenance Costs.

 

5.3.1                     Definition of Unscheduled Maintenance Costs.  The Unscheduled Maintenance Costs, for purposes of this Agreement, shall be the cost of the following: compliance with applicable FAA Airworthiness Directives and manufacturers’ Mandatory Service Bulletins, and all those items of unscheduled maintenance which are not included in CMMS and the recommended inspection program of the Aircraft.

 

5.3.2                     Payment of Unscheduled Maintenance Costs.  Any cost of Unscheduled Maintenance Costs shall be allocated to and paid by the Parties pro rata according to each Party’s utilization of the Aircraft since the commencement date of this Agreement to the date such cost is incurred.

 

5.4                               Nonrecurring Costs.

 

5.4.1                     Definition of Nonrecurring Costs.  The Nonrecurring Costs, for the purposes of this Agreement, shall be the cost of the following: customary and routine refurbishments, improvements, upgrades and similar modifications, additions and alterations to the Aircraft, its engines and avionics, as permitted in accordance with the terms and conditions of the Lease.

 

5.4.2                     Payment of Nonrecurring Costs.  Prior to incurring any Nonrecurring Costs, the Parties shall consult with each other and approve the anticipated expenditure.  The cost of such Nonrecurrent Costs shall be allocated to and paid by the Parties pro rata according to each Party’s utilization of the Aircraft since the commencement date of this Agreement to the date such cost is incurred.

 

6.                                      Bank Account and Payments.

 

The Parties agree to pay all amounts shown as due in accordance with this Agreement on statements from the Service Provider within seven (7) days from receipt of such statements, by depositing such sums directly into a trust account established by the Service Provider at a bank approved by the Parties (the “Trust Account”).

 

7.                                      Operating Costs Deposit.

 

As a deposit toward the monthly payments of the costs and expenses associated with the operation of the Aircraft, the Parties shall deposit or cause to be

 

5

 

deposited into the Trust Account on or around the date of the delivery of the Aircraft to the Parties, an amount determined and mutually agreed with the Service Provider (the “Operating Costs Deposit”), which shall be credited among the Parties pro rata based upon their respective utilization of the Aircraft during the first twelve (12) consecutive calendar months of this Agreement.  The Service Provider, within twenty days after the end of each month, shall furnish each Party with a statement detailing all credits and debits to the Trust Account for the preceding month, without consideration of the amount of the Fixed Operating Costs Deposit.  Within seven days of receipt of such statement, each Party shall reimburse the Trust Account by the amount that the debits exceed the credits for such Party.

 

8.                                      Indemnification.

 

8.1                               Scope of Indemnification.  Each Party shall indemnify the other Party (the “Indemnitee”) from and against any all claims, demands, liabilities, costs (including without limitation, attorneys’ fees and costs), expenses, damages, losses, suits, proceedings and actions, whether judicial, administrative, investigative or otherwise, of any nature whatsoever, known or unknown, liquidated or unliquidated, that may be incurred by the Indemnitee or in which the Indemnitee may become involved, arising out of such Party’s breach of this Agreement or operation of the Aircraft in any manner or for any purpose excepted from coverage under the insurance maintained by the Parties pursuant to the terms of the Lease.

 

8.2                               Cumulative Rights.  The right of any Indemnitee to the indemnification provided in this Section 8 shall be in addition to any rights such Indemnitee may otherwise be entitled by contract or as a matter of law or equity and shall extend to such Indemnitee’s successors, assigns and legal representatives.

 

9.                                      Relationship of the Parties.

 

The Parties intend this Agreement to provide solely for the sharing of the costs of the lease and operation of the Aircraft.  The Parties do not intend to form a partnership under any laws, including the laws of the State of California or the United States of America, any of its states, or the laws of any other jurisdiction.  Nothing contained in this Agreement shall in any way create any association, partnership, joint venture, or principal and agent relationship between or among the Parties hereto or be construed to evidence the intention of the Parties to constitute such.

 

10.                               Termination.

 

This Agreement shall terminate and all rights and obligations of the Parties under this Agreement shall cease upon the termination of the Lease or upon the written consent of the parties, subject, however, to each of the Parties promptly settling any outstanding amounts due or receiving reimbursement of any amounts to be credited pursuant to the provisions of Section 5.

 

6

 

11.                               Miscellaneous.

 

11.1                        Section Headings.  Section and other headings and captions contained in this Agreement are for reference purposes only and are in no way intended to interpret, define, or limit the scope, extent, or intent of this Agreement or any provision hereof.

 

11.2                        Counterpart Originals.  This Agreement and any amendment hereto may be executed in any number of counterparts with the same effect as if the Parties hereto had signed the same document; provided, however, that the counterparts in the aggregate shall have been executed by all of the Parties hereto.  All counterparts shall be construed together and shall constitute one and the same instrument.  The Parties may exchange executed copies transmitted by telecopier or PDF e-mail, provided the executed originals are forwarded by mail or courier.

 

11.3                        Agreement Negotiated. The Parties to this Agreement are sophisticated and have been represented or had the opportunity to be represented in connection with the negotiation and performance of this Agreement.  The Parties agree that no presumptions relating to the interpretation of contracts against the drafter of any particular clause should or may be applied in this case and, therefore, waive their effects.

 

11.4                        Governing Law.  The Parties agree that the provisions of this Agreement shall be construed and enforced according to the laws of California regardless of the choice of laws provisions of California or any other jurisdiction.

 

11.5                        Arbitration.  Any dispute, claim or controversy of whatever nature arising out of or relating to this Agreement or the breach, termination, enforcement, interpretation or validity thereof, including the determination of the scope or applicability of this agreement to arbitrate, shall be determined by arbitration in Los Angeles, California before one neutral arbitrator.  Such arbitrator shall be an attorney licensed to practice law in the United States, actively engaged in the practice of law for at least ten years and having at least five years of experience with and knowledge of business aviation.  The arbitration shall be administered by JAMS pursuant to its Comprehensive Arbitration Rule & Procedures.  Judgment on the Award may be entered in any court having jurisdiction.  This clause shall not preclude parties from seeking provisional remedies in aid or arbitration from a court of appropriate jurisdiction, or injunctive relief.

 

11.6                        Severability.  If any provision in this Agreement is found by a court of competent jurisdiction to be illegal, invalid, unlawful, void, or unenforceable, then such provision shall be enforced to the extent that it is not illegal, invalid, unlawful, void or unenforceable, and the remainder of this Agreement shall continue in full force and effect.

 

11.7                        Prior Agreements.  This Agreement contains all of the agreements of the Parties hereto with respect to any matter covered or mentioned in this Agreement, and no prior agreement or understanding, oral or written, express or implied, pertaining to any such matter shall be effective for any purpose.  The Parties acknowledge that all such prior agreements, representations and negotiations are deemed superseded by the execution of this Agreement to the extent they are not incorporated herein.

 

7

 

11.8                        Modifications. This Agreement may only be modified if the modification is in writing and is signed by the Party against whom enforcement is sought.

 

11.9                        Remedies Cumulative.  Each right, power and remedy provided for in this Agreement or now or hereafter existing at law, in equity, by statute or otherwise shall be cumulative and concurrent and shall be in addition to every other right, power or remedy provided for in this Agreement or now or hereafter existing at law, in equity, by statute or otherwise, and the exercise or beginning of the exercise of the forbearance of exercise by any Party of any one or more of such rights, powers or remedies shall not preclude the simultaneous or later exercise by such Party of any or all of such other rights, powers or remedies.

 

11.10                 Waiver.  No consent or waiver, express or implied, by any Party to or of any breach or default by any other Party in the performance of obligations under this Agreement shall be deemed or construed to be a consent or waiver to or of any other breach or default in the performance by such party.  Failure on the part of any Party to complain of any act or failure to act by any other Party or to declare any other Party in default, irrespective of how long such failure continues, shall not constitute a waiver by any Party of its rights under this Agreement.

 

11.11                 Notices.  All notices or other communications, which shall or may be given pursuant to this Agreement, shall be in writing and shall be delivered by certified mail or registered mail with postage prepaid, return receipt requested, by facsimile transmission or by e-mail or by hand.  Such communication shall be deemed given and received upon dispatch, if sent by facsimile (provided confirmation of successful transmission is received by the sending facsimile machine at the time of transmission) or e-mail (provided a transmission error message is not received by sender), or upon delivery if hand delivered, or within three (3) days of mailing, if sent by certified or registered mail, at the addresses of the parties as set forth in Exhibit “A” attached hereto.  Any address for notice to a party may be changed at any time by written notice to the other parties.

 

[SIGNATURES APPEAR ON FOLLOWING PAGE]

 

8

 

IN WITNESS WHEREOF, the Parties have executed this Cost Sharing and Operating Agreement as of the day and year first above written.

 

 

	
KENNETH   D. MOELIS
    	
 
    
	
 
    	
 
    
	
/s/   Ken Moelis
    	
.
    	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
MOELIS &   COMPANY GROUP LP
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/   Elizabeth Crain
    	
.
    	
 
    	
 
    
	
Name:
    	
Elizabeth   Crain
    	
.
    	
 
    	
 
    
	
Title:
    	
Chief   Operating Officer
    	
.
    	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
MOELIS   ASSET MANAGEMENT LP
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/   Osamu Watanabe
    	
.
    	
 
    	
 
    
	
Name:
    	
Osamu   Watanabe
    	
.
    	
 
    	
 
    
	
Title:
    	
General   Counsel
    	
.
    	
 
    	
 
    

 

9

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