Monocle Acquisition Corporation (NasdaqCM:MNCL) entered into a definitive agreement to acquire AerSale Inc. from Leonard Green & Partners, L.P., Florida Growth Fund by Hamilton Lane Incorporated (NasdaqGS:HLNE) and AerSale's founders for approximately $430 million on December 8, 2019. As of September 8, 2020, amended agreement was signed for the acquisition. AerSale Inc. entered into a definitive agreement to acquire Monocle Acquisition Corporation (NasdaqCM:MNCL) in a reverse merger transaction. Under the terms of the agreement, existing AerSale shareholders and in the money Stock Appreciation Rights (SARs), including Leonard Green & Partners, will receive $400 million in cash and stock. Cash amount will be $250 million and $150 million will be in newly issued common equity at closing, subject to adjustment to the mix of consideration under certain circumstances. Existing AerSale shareholders and it's in the money SARs will also have the right to receive $33 million as earn out consideration which will involve issuance of 2.5 million in additional shares of NewCo Common Stock based on the post-closing share price performance. Under the terms of the earn out consideration, half of shares i.e. 1.25 million will be issued at such time as the NewCo Common Stock price is greater than $12.5 per share for any period of twenty trading days out of thirty consecutive trading days on or prior to the fifth anniversary of the date of the closing and the other half of which will be issued at such time as the NewCo Common Stock price is greater than $14 per share for any period of twenty trading days out of thirty consecutive trading days on or prior to the fifth anniversary of the closing date. Following the transaction, Leonard Green & Partners, Florida Growth Fund LLC and members of AerSale's management team will continue to own approximately 42% of the outstanding shares of the combined company, subject to certain transaction closing assumptions. The remaining outstanding shares of the combined company will be held by public stockholders, including the founders of Monocle. Following completion of the transaction, the current owners of AerSale will receive approximately $76 million in cash and $241 million in newly issued common equity, representing 56.4% of the outstanding shares of the combined company, assuming no redemptions by Monocle's existing public shareholders. The current owners will also have the right to receive 3 million shares of contingent consideration depending upon the achievement of certain stock price performance targets. AerSale's current owners can elect to receive all of their transaction consideration in the form of common equity in the surviving company, in which case the cash consideration will be divided pro rata by the non-electing owners, if any, or if all of AerSale's current owners make such election, the cash consideration will be paid to the surviving company. Those who elect to receive their transaction consideration in the form of common equity will receive additional shares of common equity at closing, and will also have the right to receive additional shares of contingent consideration depending on the achievement of certain stock price performance targets. The remaining outstanding shares of the combined company will be held by public stockholders and the founders of Monocle. The transaction will financed from $175 million cash held in Monocle Trust account, cash on balance sheet of $33 million. Monocle has secured a commitment of $150 million (ABL debt facility) from Wells Fargo Bank, N.A. and PNC Bank, National Association, and may seek to raise additional capital through junior debt or other sources of debt financing. As of January 26, 2020, Veritas has committed to provide Monocle a senior secured asset-based first-in/last-out term loan with an aggregate commitment of up to $75 million. Monocle intends to use the net proceeds of the FILO Facility to finance a portion of the cash consideration payable in the transaction. The funding of the FILO Facility is contingent upon the satisfaction of customary conditions. The FILO Facility will mature on the fourth anniversary of the closing date of Monocle's pending business combination with AerSale Corp, or if the scheduled maturity date of the asset-based revolving credit facility provided pursuant to that certain $150 million Senior Secured Credit Facility is extended to after the fourth anniversary of the Closing Date, the earlier of the scheduled maturity date of the ABL Facility and the fifth anniversary of the Closing Date. Post completion, the combined company, named AerSale Corporation, will be publicly traded on the Nasdaq.

Following completion, AerSale will be led by highly experienced management team, including Co-Founder, Chairman and Chief Executive Officer Nicolas Finazzo; Co-Founder and Executive Vice Chairman Robert Nichols; Division President of MRO Services Basil Barimo; Division President of Airframe & Engine Materials Gary Jones; Chief Technology Officer and Division President of Engineered Solutions Iso Nezaj; Division President of Aircraft & Engine Management Craig Wright; and Chief Financial Officer Martin Garmendia. It is anticipated that the Board of Directors of the combined company will be comprised of eight members: two co-founders, Nicolas Finazzo and Robert B. Nichols; two members of the Monocle management team; one member from Leonard Green & Partners; and three additional independent directors. As of September 15, 2020, it is expected that combined company will have nine members in its Board, consisting of Nicolas Finazzo, Robert B. Nichols, Jonathan Seiffer, Peter Nolan, Michael Kirton, Eric J. Zahler, Sai S. Devabhaktuni, Richard J. Townsend and C. Robert Kehler.

The transaction is subject to Monocle shareholder approval and other customary closing conditions, all applicable waiting periods (and any extensions thereof) under the HSR Act shall have expired or been terminated, Monocle shall have at least $5 million of net tangible assets remaining after the closing of the Monocle Share Redemption, Lock-Up Agreement and the available closing cash amount shall be equal to or greater than $75 million. The transaction has been unanimously approved by the Boards of Directors of both Monocle and AerSale. As of December 23, 2019, Federal Trade Commission has approved the transaction. As of December 31, 2019, Monocle Acquisition Corporation issued notice to its shareholders for special meeting. On December 21, 2020, Monocle Acquisition Corporation stockholders approved the business combination. Completion of the transaction is expected in the first half of 2020. As per revised agreement, the transaction is expected to close in early fourth quarter of 2020.

PJT Partners and Cowen and Company acted as financial advisors to Monocle and Gregory P. Patti & Braden K. McCurrach, Stephen Fraidin, Linda Swartz and David Teigman of Cadwalader and Wickersham & Taft LLP & Alan Annex and Jason Simon of Greenberg Traurig, LLP acted as legal advisors while Alton Aviation Consultancy acted as consultant. RBC Capital Markets and Harris Williams LLC acted as financial advisors to AerSale and Howard A. Sobel & Paul F. Kukish of Latham & Watkins LLP acted as legal advisors. Morrow & Co acted as information agent for Monocle Acquisition Corporation. Mark Zimkind of Continental Stock Transfer & Trust Company, Inc. acted as transfer agent for Monocle Acquisition in the transaction. Morrow & Co., LLC will receive $17,500 as a fee for its services. As of October 16, 2020, Morrow & Co. will receive a fees of $22,500. Cowen Inc. will receive a fee of $6.04 million for its services. In the event Monocle does not consummate a business combination and is forced to liquidate, Cowen will not receive this fee.