EXHIBIT 10.99
SUBORDINATION AGREEMENT
THIS SUBORDINATION AGREEMENT (this "Agreement") is made as of the 31st day
of March, 2008, by and BETWEEN YA GLOBAL INVESTMENTS, L.P. (hereafter "YA") and
the persons set forth on the signature page to this Agreement (collectively, the
"Subordinated Lenders").
WITNESSETH
WHEREAS, the Subordinated Lenders and U.S. Helicopter Corporation (the
"Borrower") are parties to certain Note Purchase Agreements whereby the Borrower
borrowed a total of $350,000 in principal (the "Subordinated Loans"); and
WHEREAS, YA has agreed to make loans to the Borrower in the aggregate
principal amount of $1,250,000 pursuant to that certain Securities Purchase
Agreement dated March 31, 2008 and related documentation (all monetary
obligations of the Borrower to YA under such Securities Purchase Agreement and
related documents and debentures, including without limitation all principal,
interest, redemption fees, costs, and expenses, whether now owed or hereafter
arising are hereinafter referred to as the "YA Bridge Loan"); and
WHEREAS, in addition to the YA Bridge Loan, the Borrower is indebted to YA
under prior financing arrangements (the "Prior Financing Agreements") between YA
and the Borrower in the aggregate principal amount in excess of $10,100,000 (the
YA Bridge Loan and all monetary obligations of the Borrower to YA under the
Prior Financing Agreements and related documents and debentures, including
without limitation all principal, interest, redemption fees, costs, and
expenses, whether now owed or hereafter arising, and together with the YA Bridge
Loan, are hereinafter referred to as the "YA Loan");
WHEREAS, as a condition of making the YA Bridge Loan, YA has required the
Subordinated Lenders to subordinate repayment of the Subordinated Loans to the a
total of $6,250,000 of the YA Loan as described herein.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:
1. The Subordinated Loans and any and all documents entered into in connection
therewith shall be and hereby are subordinated and the payment thereof is
deferred until the payment in cash of a total of $6,250,000 of the YA Loan with
proceeds to be received from an institutional private placement conducted by the
Borrower (the "YA Repayment"). The YA Repayment shall not include any repayments
made with proceeds of any future financing transaction with YA. The Borrower
shall not be permitted to pay, and the Subordinated Lenders shall not be
permitted to receive, any payments (whether regularly scheduled payment of
interest, principal, or otherwise) on the Subordinated Loans unless or until the
YA Repayment has been made.
2. After the YA Repayment has been made, the Borrower shall be permitted to pay,
and the Subordinated Lenders shall be permitted to receive, any regularly
scheduled payment of interest or principal on the Subordinated Loans so long as
(i) at the time of such payment, or after giving effect thereto, no default has
occurred and is continuing under any of the YA Loans, and (ii) such payment is
made solely from funds received in a financing or capital raising transaction
and not out of any cash receipts, funds generated from the Borrower's
operations, or through any strategic partnerships (including, without
limitation, any cash receipts or funds from Delta Airlines or any other
airline).
3. The subordination described in paragraph 1 above shall apply to all existing
and future advances of funds to the Borrower by YA.
4. The terms of the Subordinated Loans (including, without limitation, the
conversion price of any convertible debentures and the exercise price of any
warrants issued in connection with the Subordinated Loan) shall not be adjusted
based on any terms granted to YA under the YA Bridge Loan, and no adjustment or
modification to the Subordinated Loans or any documents entered into connection
therewith shall be made without YA's prior written consent.
5. The Subordinated Lenders represent and warrant that they have not been
granted any liens by the Company.
6. This Agreement shall be binding upon and shall inure to the benefit of the
Subordinated Lenders and YA and their respective successors and assigns.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their respective duly authorized representatives as of the day and year first
above written.
WITNESS: XXXX XXXXXX
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WITNESS: XXXXXXX & XXXXX XXXXXX JTWROS
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WITNESS: PAINT MASTERS
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WITNESS: YA GLOBAL INVESTMENTS, L.P.
BY: YORKVILLE ADVISORS, ITS INVESTMENT MANAGER
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WITNESS: U.S. HELICOPTER CORPORATION
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