EXHIBIT 10.88
PLEDGE AND ESCROW AGREEMENT II
THIS PLEDGE AND ESCROW AGREEMENT II (the "Agreement") is made and entered
into as of November 7, 2008 (the "Effective Date") by and among U.S. HELICOPTER
CORPORATION, a Delaware corporation (the "Company"), PHILADELPHIA FINANCIAL, LLC
(the "Pledgee"), the pledgors listed on Schedule A hereto (together, the
"Pledgors" and each individually, a "Pledgor"), XXXXXXXXX, XXXXXX & XXXXXX as
escrow agent (the "Escrow Agent").
RECITALS:
WHEREAS, in order to secure the full and prompt payment when due (whether
at the stated maturity, by acceleration or otherwise) of the Company's
obligations (the "Obligations") to the Pledgee or any successor to the Pledgee
to make payments under the Amended and Restated Convertible Promissory Note
issued by the Company to the Pledgee on the date hereof in the principal amount
of $650,000 (Six Hundred Fifty Thousand Dollars) (the "Note"), the Pledgors have
agreed to irrevocably pledge to the Pledgee, Six Hundred Thousand (600,000)
shares (the "Pledged Shares") of the common stock of the Company, in the
respective amounts set forth opposite their names on Schedule A hereto.
NOW, THEREFORE, in consideration of the mutual covenants, agreements,
warranties, and representations herein contained, and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. PLEDGE AND TRANSFER OF PLEDGED COLLATERAL.
1.1 The Pledgors hereby grant to Pledgee a security interest in the
Pledged Shares and any dividends, distributions, or proceeds thereof
(together with the Pledged Shares, the "Pledged Collateral") as security
for the Obligations. Simultaneously with purchase of the Note, the
Pledgors shall deliver to Escrow Agent (i) stock certificates representing
the Pledged Collateral and (ii) duly executed stock powers or other
appropriate transfer documents executed in blank by the Pledgors and the
Escrow Agent (the "Transfer Documents"), and such stock certificates and
Transfer Documents shall be held by the Escrow Agent until the full
payment of the Obligations, the termination or expiration of this
Agreement or the transfer of the Pledged Collateral to the Pledgee in
accordance with the terms hereof.
1.2 The Pledgee hereby appoints the Escrow Agent as its agent for
the sole purpose of accepting possession of the Pledged Collateral on its
behalf so as to create a perfected security interest therein in accordance
with the Uniform Commercial Code as in effect (the "UCC").
2. RIGHTS RELATING TO PLEDGED COLLATERAL. Absent the occurrence of an
Event of Default (as defined in the Note), the Pledgors shall be entitled to
vote the Pledged Collateral, and to enjoy all other rights and privileges
incident to the ownership of the Pledged Collateral. Upon the occurrence of an
Event of Default, the Pledgee shall be entitled to vote the Pledged Collateral
and to enjoy all other rights and privileges incident to the ownership of the
Pledged Collateral.
3. RELEASE OF PLEDGED COLLATERAL FROM PLEDGE.
3.1 Upon the satisfaction of all Obligations, the Company and
Pledgee shall notify the Escrow Agent to such effect in writing and shall
direct the Escrow Agent to release the Pledged Collateral ("Notice of
Satisfaction"). Upon receipt of a Notice of Satisfaction, the Escrow Agent
shall return to the Pledgors the Transfer Documents and the certificates
representing the Pledged Collateral (collectively, the "Pledged
Materials"), whereupon any and all rights of Pledgee in the Pledged
Materials shall terminate. Notwithstanding anything to the contrary
contained herein, upon full payment of all Obligations, Pledgee's security
interest and rights in and to the Pledged Collateral shall terminate.
3.2 In the event that the Pledgors purchase the Note, the Pledgors
and Pledgee shall notify the Escrow Agent to such effect in writing and
shall direct the Escrow Agent to release the Pledged Collateral ("Notice
of Note Purchase"). Upon receipt of a Notice of Note Purchase, the Escrow
Agent shall return to the Pledgors the Pledged Materials, whereupon any
and all rights of Pledgee therein shall terminate. Notwithstanding
anything to the contrary contained herein, upon purchase of the Note by
the Pledgors, Pledgee's security interest and rights in and to the Pledged
Collateral shall terminate.
4. REMEDIES.
4.1 Upon and any time after the occurrence of an Event of Default,
the Pledgee shall have the right to provide written notice of such Event
of Default (the "Default Notice") to the Company, the Pledgors and the
Escrow Agent. As soon as is practicable after receipt of the Default
Notice and confirmation reasonably satisfactory to the Escrow Agent that
such Default Notice was delivered to the Company and the Pledgors, the
Escrow Agent shall deliver to Pledgee the Pledged Materials held by the
Escrow Agent hereunder. Upon receipt of the Pledged Materials, the Pledgee
shall have the right to (i) sell the Pledged Collateral and to apply the
proceeds of such sales, net of any selling commissions, to the
Obligations, including, without limitation, outstanding principal and
interest, and (ii) exercise all other rights and remedies of a secured
party with respect to such property as may be available under the UCC. The
Pledgee shall have the right to sell or dispose of the Pledged Collateral
in any manner and shall have no liability to the Pledgors or any other
party for selling or disposing of such Pledged Collateral even if other
methods of sales or dispositions would or allegedly would result in
greater proceeds than the method actually used. The Pledgee shall return
to the Escrow Agent any Pledged Collateral released to it and remaining
after the Pledgee has applied the net proceeds to satisfy the Obligations.
In the event that Pledgee resorts to the Pledged Collateral to satisfy the
Obligations, then the Pledgors shall have the full right to be subrogated
with regard to the Company's Obligations with respect to the Note, and in
order to effect such subrogation, Pledgee shall execute and deliver all
such documents as may be reasonably requested by Pledgors, including an
assignment of all of Pledgee's right, title and interest in the Note to
the Pledgors, without representation, warranty or recourse and deliver to
the Pledgors the originally executed Note.
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4.2 Each right, power and remedy of the Pledgee provided for in this
Agreement, the Note or any other document related to the Note purchase and
sale transaction (collectively, the "Transaction Documents") shall be
cumulative and concurrent and shall be in addition to every other such
right, power or remedy. The exercise or beginning of the exercise by the
Pledgee of any one or more of the rights, powers or remedies provided for
in this Agreement or any other Transaction Document or now or hereafter
existing at law or in equity or by statute or otherwise shall not preclude
the simultaneous or later exercise by the Pledgee of all such other
rights, powers or remedies, and no failure or delay on the part of the
Pledgee to exercise any such right, power or remedy shall operate as a
waiver thereof. No notice to or demand on the Pledgors in any case shall
entitle them to any other or further notice or demand in similar or other
circumstances or constitute a waiver of any of the rights of the Pledgee
to any other further action in any circumstances without demand or notice.
5. REPRESENTATIONS AND WARRANTIES. Each of the Pledgors represent and
warrant as follows:
5.1 This Agreement has been duly executed and delivered by such
Pledgor and is a legal, valid and binding obligation of such Pledgor,
enforceable in accordance with its terms.
5.2 The Pledgor is the legal and beneficial owner of the Pledged
Collateral free and clear of any lien, security interest, option or other
charge or encumbrance except for the security interest created by this
Agreement.
5.3 This Agreement, when the procedures contemplated hereby shall
have been performed in accordance with their terms, creates a valid and
perfected security interest in the Pledged Collateral, securing the
payment of the Obligations.
5.4 No consent of any other person or entity and no authorization,
approval, or other action by, and no notice to or filing with, any
governmental authority or regulatory body is required (i) for the pledge
by such Pledgor of the Pledged Collateral pursuant to this Agreement or
for the execution, delivery or performance of this Agreement by the
Pledgor, (ii) for the perfection or maintenance of the security interest
created hereby, or (iii) for the exercise by the Pledgee of the voting or
other rights provided for in this Agreement or the remedies contained
herein in respect of the Pledged Collateral pursuant to this Agreement
(except as may be required in connection with any disposition of any
portion of the Pledged Collateral by laws affecting the offering and sale
of securities generally).
5.5 The execution, delivery and performance by such Pledgor of this
Agreement are within the Pledgor's powers and do not contravene any law,
regulation, order or contractual restriction binding on or affecting such
Pledgor.
6. FURTHER ASSURANCES. The Pledgors agree that at any time and from time
to time the Pledgors will promptly execute and deliver all further instruments
and documents, and take all further action, that may be necessary or desirable,
or that the Pledgee may reasonably request, in order to perfect and protect any
security interest granted or purported to be granted hereby or to enable the
Pledgee to exercise and enforce Pledgee's rights and remedies hereunder with
respect to the Pledged Collateral.
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7. CONCERNING THE ESCROW AGENT.
7.1 The Escrow Agent undertakes to perform only such duties as are
expressly set forth herein and no implied duties or obligations shall be
read into this Agreement against the Escrow Agent.
7.2 The Escrow Agent may act in reliance upon any writing or
instrument or signature which it, in good faith, believes to be genuine,
may assume the validity and accuracy of any statement or assertion
contained in such a writing or instrument, and may assume that any person
purporting to give any writing, notice, advice or instructions in
connection with the provisions hereof has been duly authorized to do so.
The Escrow Agent shall not be liable in any manner for the sufficiency or
correctness as to form, manner, and execution, or validity of any
instrument deposited in this escrow, nor as to the identity, authority, or
right of any person executing the same; and its duties hereunder shall be
limited to the safekeeping of such certificates, monies, instruments, or
other documents received by it as such escrow holder, and for the
disposition of the same in accordance with the written instruments
accepted by it in the escrow.
7.3 The Company, the Pledgee and the Pledgors hereby agree, to
defend and indemnify the Escrow Agent and hold it harmless from any and
all claims, liabilities, losses, actions, suits, or proceedings at law or
in equity, or any other expenses, fees, or charges of any character or
nature which it may incur or with which it may be threatened by reason of
its acting as Escrow Agent under this Agreement; and in connection
therewith, to indemnify the Escrow Agent against any and all expenses,
including attorneys' fees and costs of defending any action, suit, or
proceeding or resisting any claim (and any costs incurred by the Escrow
Agent pursuant to Sections 7.3 or 7.4 hereof). The Escrow Agent shall be
vested with a lien on all property deposited hereunder, for
indemnification of attorneys' fees and court costs regarding any suit,
proceeding or otherwise, or any other expenses, fees, or charges of any
character or nature, which may be incurred by the Escrow Agent by reason
of disputes arising between the makers of this escrow as to the correct
interpretation of this Agreement and instructions given to the Escrow
Agent hereunder, or otherwise, with the right of the Escrow Agent,
regardless of the instructions aforesaid, to hold said property until and
unless said additional expenses, fees, and charges shall be fully paid.
Any fees and costs charged by the Escrow Agent for serving hereunder shall
be paid by the Company.
7.4 If any of the parties shall be in disagreement about the
interpretation of this Agreement, or about the rights and obligations, or
the propriety of any action contemplated by the Escrow Agent hereunder,
the Escrow Agent may, at its sole discretion deposit the Pledged Materials
with the Clerk of the United States District Court of New York, sitting in
New York, and, upon notifying all parties concerned of such action, all
liability on the part of the Escrow Agent shall fully cease and terminate.
The Escrow Agent shall be indemnified by the Pledgors, the Company and
Pledgee for all costs, including reasonable attorneys' fees in connection
with the aforesaid proceeding, and shall be fully protected in suspending
all or a part of its activities under this Agreement until a final
decision or other settlement in the proceeding is received.
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7.5 The Escrow Agent may consult with counsel of its own choice (and
the costs of such counsel shall be paid by the Company, Pledgors and
Pledgee) and shall have full and complete authorization and protection for
any action taken or suffered by it hereunder in good faith and in
accordance with the opinion of such counsel. The Escrow Agent shall not be
liable for any mistakes of fact or error of judgment, or for any actions
or omissions of any kind, unless caused by its willful misconduct or gross
negligence.
7.6 The Escrow Agent may resign upon ten (10) days' written notice
to the parties in this Agreement. If a successor Escrow Agent is not
appointed within this ten (10) day period, the Escrow Agent may petition a
court of competent jurisdiction to name a successor.
7.7 The Escrow Agent shall be discharged from any and all duties,
obligations or liabilities that it may have as Escrow Agent under this
Agreement at and from any such time as it may transfer the Pledged
Materials in accordance with the terms and conditions of this Agreement.
7.8 Conflict Waiver. The Company, the Pledgors and the Pledgee
hereby acknowledge that Escrow Agent is general counsel to the Company and
the Company and counsel to the Company and the Company in connection with
the transactions contemplated by and referred to herein. The Pledgee and
the Pledgors agree that in the event of any dispute arising in connection
with this Agreement or otherwise in connection with any transaction or
agreement contemplated by or referred to herein, the Escrow Agent shall be
permitted to continue to represent the Company and the Company and neither
the Pledgee nor the Pledgors will seek to disqualify such counsel and they
further waive any objection they might have with respect to Escrow Agent
acting as the Escrow Agent pursuant to this Agreement.
8. NOTICES. Unless otherwise provided herein, all demands, notices,
consents, service of process, requests and other communications hereunder shall
be in writing and shall be delivered in person or by overnight courier service,
or mailed by certified mail, return receipt requested, addressed:
If to the Pledgors: U.S. Helicopter Corporation
0 Xxxx Xxxxx Xxxxx, Xxxxx 000
Xxxxxxxx Xxxxxxxxx Heliport
Xxx Xxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Escrow Agent, to: Xxxxxxxxx, Xxxxxx & Xxxxxx
Attention: Xxxxxx X. Xxxxxxxxx, Esq.
Princeton Xxxxxxxxx Village
000 Xxxxxxx Xxxx - Xxxxx 000
Xxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
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If to the Pledgee: Philadelphia Financial, LLC
___________________________
___________________________
Telephone: ________________
Facsimile: ________________
If to the Company: U.S. Helicopter Corporation
Attention: Xxxx X. Xxxxxx, CEO and President
0 Xxxx Xxxxx Xxxxx, Xxxxx 000
Xxxxxxxx Xxxxxxxxx Heliport
Xxx Xxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a mandatory copy to: Xxxxxxxxx, Xxxxxx & Xxxxxx
Attention: Xxxxxx X. Xxxxxxxxx, Esq.
Princeton Xxxxxxxxx Village
000 Xxxxxxx Xxxx - Xxxxx 000
Xxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Any such notice shall be effective (a) when delivered, if delivered by hand
delivery or overnight courier service, or upon facsimile transmission with
confirmation thereof, or (b) five (5) days after deposit in the United States
mail, as applicable. Notice of a change of address of a party shall be furnished
in writing by such party to each other party listed above in this Section 8 in
accordance with the notice provisions of this Section 8.
9. BINDING EFFECT. All of the covenants and obligations contained herein
shall be binding upon and shall inure to the benefit of the respective parties,
their successors and assigns.
10. GOVERNING LAW; VENUE; SERVICE OF PROCESS. The validity, interpretation
and performance of this Agreement shall be determined in accordance with the
laws of the State of New York applicable to contracts made and to be performed
wholly within that state. The parties hereto agree that any disputes, claims,
disagreements, lawsuits, actions or controversies of any type or nature
whatsoever that, directly or indirectly, arise from or relate to this Agreement,
including, without limitation, claims relating to the inducement, construction,
performance or termination of this Agreement, shall be brought only in the
Federal district courts located in the Eastern District of New York, New York,
and the parties hereto agree not to challenge the selection of that venue in any
such proceeding for any reason, including, without limitation, on the grounds
that such venue is an inconvenient forum. The parties hereto specifically agree
that service of process may be made, and such service of process shall be
effective if made, pursuant to Section 8 hereto.
11. ENFORCEMENT COSTS. If any legal action or other proceeding is brought
for the enforcement of this Agreement, or because of an alleged dispute, breach,
default or misrepresentation in connection with any provisions of this
Agreement, the successful or prevailing party or parties shall be entitled to
recover reasonable attorneys' fees, court costs and expenses even if not taxable
as court costs (including, without limitation, all such fees, costs and expenses
incident to appeals), incurred in that action or proceeding, in addition to any
other relief to which such party or parties may be entitled.
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12. REMEDIES CUMULATIVE. No remedy herein conferred upon any party is
intended to be exclusive of any other remedy, and each and every such remedy
shall be cumulative and shall be in addition to every other remedy given
hereunder or now or hereafter existing at law, in equity, by statute, or
otherwise. No single or partial exercise by any party of any right, power or
remedy hereunder shall preclude any other or further exercise thereof.
13. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute the same instrument.
14. NO PENALTIES. No provision of this Agreement is to be interpreted as a
penalty upon any party to this Agreement.
15. JURY TRIAL. EACH OF THE COMPANY, THE PLEDGEE AND THE PLEDGORS HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES THE RIGHT WHICH IT MAY HAVE TO A
TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION BASED HEREON, OR
ARISING OUT OF, UNDER OR IN ANY WAY CONNECTED WITH THE DEALINGS BETWEEN THE
COMPANY, PLEDGEE AND PLEDGORS, THIS PLEDGE AND ESCROW AGREEMENT OR ANY DOCUMENT
EXECUTED IN CONNECTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF ANY PARTY HERETO OR THERETO
IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN CONTRACT,
TORT, EQUITY OR OTHERWISE.
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IN WITNESS WHEREOF, the parties hereto have duly executed this Pledge and
Escrow Agreement as of the date first above written.
U.S. HELICOPTER CORPORATION
By:
--------------------------
Xxxxxx X. Xxxx, Xx.
Chief Financial Officer
PLEDGEE:
By:
--------------------------
Name:
Title:
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ESCROW AGENT:
XXXXXXXXX, XXXXXX & XXXXXX
By:
--------------------------
Xxxxxx X. Xxxxxxxxx, Esq.
Partner
PLEDGORS:
-----------------------------
Name:
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SCHEDULE A
PLEDGORS
TOTAL:..................................................................600,000
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