EXHIBIT 10.78
NOTE PURCHASE AGREEMENT
THIS NOTE PURCHASE AGREEMENT ("Agreement") is made as of this 12th day of
September, 2008, between U.S. HELICOPTER CORPORATION (the "Company"), a Delaware
corporation, and PORTFOLIO LENDERS II, LLC, a New Jersey limited liability
company (the "Purchaser").
RECITALS
WHEREAS, the Company has authorized the issuance and sale of the Company's
unsecured Promissory Note to Purchaser in the aggregate principal amount of
$125,000.00, having the terms set forth in Exhibit A attached hereto (the
"Note") and certain warrants as described herein; and
WHEREAS, the Purchaser desires to purchase, and the Company desires to
issue, the Note and warrants on the terms set forth in this Agreement;
NOW, THEREFORE, in consideration of the foregoing and of the terms and
conditions contained in this Agreement, the Company and the Purchaser agree as
follows:
1. PURCHASE AND SALE OF THE NOTE.
1.1 Subject to the terms and conditions contained in this Agreement,
at the Closing (as hereinafter defined) the Purchaser shall purchase from
the Company and the Company shall sell to the Purchaser the Note for
$125,000.00 (ONE HUNDRED TWENTY FIVE THOUSAND DOLLARS AND 00/100) (the
"Loan Amount") which shall be payable via wire transfer to the Company's
designated account (not later than the Closing Date).
1.2 The Note shall be repaid, along with all accrued and unpaid
interest, 30 (thirty) days after the Closing Date.
1.3 The Note shall bear interest at the rate of 15% per annum based
on a 365-day year. Any prepaid interest paid shall be non-refundable in
the event of early repayment.
1.4 As additional consideration, the Purchaser shall receive from
the Company an origination fee equal to five percent (5%) of the Loan
Amount, equal to the sum of $6,250, which shall be payable on the Closing
Date.
1.5 Any and all principal and accrued but unpaid interest under the
Note shall be convertible at the sole option of the Purchaser into shares
of the Company's common stock, par value $0.001 per share, at a price
equal to $0.20 per share. The shares of common stock issuable under the
Note (the "Conversion Shares") shall contain piggyback registration
rights.
2. CLOSING. The closing of the purchase and sale of the Note (the
"Closing") shall take place on September 12, 2008, or such other day as agreed
to by the parties (the "Closing Date").
3. INDUCEMENT WARRANT. As an inducement to purchase the Note, the
Purchaser shall be entitled to receive a warrant to purchase up to 250,000
shares of the Company's common stock (the "Warrant"). The Warrant shall contain
an exercise price of $0.20 per share and be exercisable for a period of five
years from the Closing Date. The shares issuable upon exercise of the Warrant
(the "Warrant Shares") shall contain piggyback registration rights.
4. REPRESENTATIONS AND WARRANTIES.
4.1 Representations and Warranties of the Company. The Company
represents and warrants that as of the date of this Agreement:
(a) Existence. The Company is a corporation duly organized and
in good standing under the laws of the State of Delaware and is duly
qualified to do business and is in good standing in all states where
such qualification is necessary, except for those jurisdictions in
which the failure to qualify would not, in the aggregate, have a
material adverse effect on the Company's financial condition,
results of operations or business.
(b) Authority. The execution and delivery by the Company of
this Agreement, the Note, the Warrants and the Registrable
Securities (together, the "Securities") (i) are within the Company's
corporate powers; (ii) are duly authorized by the Company's board of
directors; (iii) are not in contravention of the terms of the
Company's certificate of incorporation or bylaws; (iv) are not in
contravention of any law or laws; (v) except for the filing of a
Form D Notice with the Securities and Exchange Commission and any
exemption filing related thereto which may be required pursuant to
applicable state securities or "blue sky" laws, do not require any
governmental consent, registration or approval; (vi) do not
contravene any contractual or governmental restriction binding upon
the Company; and (vii) will not result in the imposition of any
lien, charge, security interest or encumbrance upon any property of
the Company under any existing indenture, mortgage, deed of trust,
loan or credit agreement or other material agreement or instrument
to which the Company is a party or by which the Company or any of
the Company's property may be bound or affected.
(c) Binding Effect. This Agreement, the Note and the Warrants
have been duly authorized, executed and delivered by the Company and
constitute the valid and legally binding obligation of the Company,
enforceable in accordance with their respective terms, subject to
bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and to
general equity principles. Upon issuance, the Registrable Securities
shall be duly authorized, validly issued, fully paid and
nonassessable shares of the Company's common stock.
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(d) Capitalization. The authorized capital stock of the
Company consists of 500,000,000 shares of Common Stock, par value
$0.001 per share, 45,712,669 shares of which were issued and
outstanding as of September 1, 2008, and 25,000,000 shares of
authorized Preferred Stock, par value $0.001 per share, of which
none are issued and outstanding.
(e) Disclosure Documents. The Company has furnished the
Purchaser or made available at the website of the Securities and
Exchange Commission (the "SEC") (xxxx://xxx.xxx.xxx) copies of the
Company's (i) Annual Report on Form 10-KSB for the fiscal year ended
December 31, 2007 as filed with the SEC on April 15, 2008; (ii) the
Company's Quarterly Reports on Form 10-QSB for the fiscal quarters
ended March 31, 2008 and June 30, 2008 as filed with the SEC on May
20, 2008 and August 18, 2008, respectively, and (iii) the Company's
report on Form 8-K as filed on September 4, 2008 (together, the "SEC
Documents").
(f) Securities Matters. Subject to the accuracy of the
representations of the Purchaser set forth in Section 3.2 hereof,
the offer, sale and issuance of the Securities as contemplated by
this Agreement are exempt from the registration requirements of the
Securities Act of 1933 as amended (the "Securities Act"). The
Company has complied and will comply with all applicable state "blue
sky" or securities laws in connection with the offer, sale and
issuance of the Securities as contemplated by this Agreement.
4.2 Representations and Warranties of the Purchaser. The Purchaser
represents and warrants that as of the date of the execution of this
Agreement:
(a) Authorization. This Agreement constitutes a valid and
legally binding obligation of the Purchaser.
(b) Investment Representations. (i) The Purchaser has received
and reviewed the SEC Documents and the Purchaser or the Purchaser's
designated representatives have concluded a satisfactory due
diligence investigation of the Company and have had an opportunity
to review the documents provided by the Company and to have all of
their questions related thereto satisfactorily answered.
(ii) The Purchaser understands the fundamental risks of
the Securities; has determined that he/she/it can reasonably
benefit from the investment based upon net worth, income,
overall investment objectives and portfolio structure; that
the Purchaser's overall commitment to investments which are
not readily marketable is not disproportionate to the
Purchaser's net worth, and that the Securities will not cause
such overall commitment to become excessive; and, that the
Purchaser is able to bear the economic risk of the Securities,
including the loss of the entire value of its investment.
Additionally, the Purchaser understands that that there are
restrictions on the Purchaser's right to liquidate the
Securities.
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(iii) The Purchaser has reviewed the Risk Factors
sections included in the SEC Documents, and understands the
Risk Factors describing the fact that the Company (a) has
substantial liabilities, (b) may not be able to obtain
sufficient funds to grow its business and the subsequent
financing may be on terms adverse to the Securities and (c) is
currently not profitable.
(iv) The Purchaser (or its members and/or officers) has
previously invested in unregistered securities and has
sufficient financial and investing expertise to evaluate and
understand the risks of the Securities.
(v) The Purchaser has received from the Company, and is
relying on, no representations or projections (except as set
forth in this Agreement or the SEC Documents) with respect to
the Company's business and prospects.
(vi) The Purchaser is an "accredited investor" within
the meaning of Regulation D under the Securities Act.
(vii) The Purchaser is acquiring the Securities for
investment purposes only without intent to distribute the
same, and acknowledges that the Securities have not been
registered under the Securities Act and applicable state
securities laws, and accordingly, constitutes "restricted
securities" for purposes of the Securities Act and such state
securities laws.
(viii) The Purchaser acknowledges that it will not be
able to transfer the Securities except upon compliance with
the registration requirements of the Securities Act and
applicable state securities laws or exemptions therefrom.
(ix) The certificates and/or instruments evidencing the
Securities will contain a legend to the foregoing effect.
5. REGISTRATION RIGHTS. The initial holder of the Note and Warrants (and
certain assignees thereof) shall have registration rights as follows:
(a) Participation in Registered Offerings. If the Company proposes
or is required to register any of its shares or other equity securities
for public sale for cash under the Securities Act (other than on Forms S-4
or S-8 or similar registration forms), it will at each such time or times
give written notice to the Purchaser of its intention to do so. Upon the
written request of the Purchaser given within twenty (20) days after
receipt of any such notice, the Company shall use its best efforts to
cause to be included in such registration any Conversion Shares or
Registrable Securities (together, "Registrable Securities") held by the
Purchaser requested to be registered; provided, that if the managing
underwriter advises that less than all of the shares requested to be
registered should be offered for sale so as not materially and adversely
to affect the price or salability of such offering being registered by the
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Company, the Purchaser (but not the Company to the extent it desires to
include shares for its own account) shall reduce the number of its
Registrable Securities to be included in the registration statement as
required by the underwriter to the extent requisite of all prospective
sellers of the securities proposed to be registered (other than the
Company) on a pro rata basis according to the amounts of securities
proposed to be registered by all prospective sellers to permit the sale or
other disposition (in accordance with the intended method of disposition
thereof as aforesaid) by the prospective seller or sellers of the
securities so registered. The registration requested pursuant to this
Section 5(a) is referred to herein as the "Piggyback Registration".
(b) Obligations of Purchaser. It shall be a condition precedent to
the obligation of the Company to register any Registrable Securities
pursuant to this Section 5 that the Purchaser shall furnish to the Company
such information regarding the Registrable Securities held and the
intended method of disposition thereof and other information concerning
the Purchaser as the Company shall reasonably request and as shall be
required in connection with the registration statement to be filed by the
Company. If after a registration statement becomes effective the Company
advises the Purchaser that the Company considers it appropriate to amend
or supplement the applicable registration statement, the Purchaser shall
suspend further sales of the Registrable Securities until the Company
advises the Purchaser that such registration statement has been amended or
supplemented.
(c) Registration Proceedings. Whenever the Company is required by
the provisions of this Section 5 to effect the registration of the
Registrable Securities under the Securities Act, the Company shall:
(i) Prepare and promptly file with the SEC a registration
statement with respect to such securities and use its best efforts
to cause such registration statement to become effective within 90
days of filing and remain effective;
(ii) Prepare and file with the SEC such amendments to such
registration statement and supplements to the prospectus contained
therein as may be necessary to keep such registration statement
effective;
(iii) Furnish to the Purchaser and to the underwriters of the
securities being registered such reasonable number of copies of the
registration statement, preliminary prospectus, final prospectus and
such other documents as such underwriters may reasonably request in
order to facilitate the public offering of such securities;
(iv) Use its best efforts to register or qualify the
securities covered by such registration statement under such state
securities or Blue Sky Laws of such jurisdictions as the Purchaser
may reasonably request within twenty (20) days following the
original filing of such registration statement, except that the
Company shall not for any purpose be required to execute a general
consent to service of process or to qualify to do business as a
foreign corporation in any jurisdiction wherein it is not so
qualified;
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(v) Notify the Purchaser, promptly after it shall receive
notice thereof, of the time when such registration statement has
become effective or a supplement to any prospectus forming a part of
such registration statement has been filed;
(vi) Notify the Purchaser promptly of any request by the SEC
for the amending or supplementing of such registration statement or
prospectus or for additional information; and
(vii) Prepare and promptly file with the SEC and promptly
notify the Purchaser of the filing of such amendment or supplement
to such registration statement or prospectus as may be necessary to
correct any statements or omissions if, at the time when a
prospectus relating to such securities is required to be delivered
under the Securities Act, any event shall have occurred as the
result of which any such prospectus or any other prospectus as then
in effect would include an untrue statement of a material fact or
omit to state any material fact necessary to make the statements
therein, in light of the circumstances in which they were made, not
misleading. Notwithstanding any provision herein to the contrary,
the Company shall not be required to amend, supplement, or update a
prospectus contained in any registration statement if to do so would
result in an unduly burdensome expense to the Company.
(d) Expenses. With respect to the inclusion of the Registrable
Securities in a registration statement pursuant to this Section 5, all
registration expenses, fees, costs and expenses of and incidental to such
registration, shall be borne by the Company; provided, however, that
Purchaser shall bear its own professional fees and pro rata share of the
underwriting discounts and commissions. The fees, costs and expenses of
registration to be borne by the Company shall include, without limitation,
all registration, filing, and printing expenses, fees and disbursements of
counsel and accountants for the Company, fees and disbursements of counsel
for the underwriter or underwriters of such securities (if the Company
and/or selling security holders are required to bear such fees and
disbursements), and all legal fees and disbursements and other expenses of
complying with state securities or Blue Sky laws of any jurisdiction in
which the securities to be offered are to be registered or qualified.
(e) Indemnification of the Purchaser. Subject to the conditions set
forth below, in connection with any registration of the Registrable
Securities pursuant to this Section 5, the Company agrees to indemnify and
hold harmless the Purchaser, any underwriter for the offering and each of
their officers and directors and agents and each other person, if any, who
controls Purchaser or their underwriter (each, a "Purchaser Indemnified
Party"), within the meaning of Section 15 of the Securities Act, as
follows:
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(i) Against any and all loss, claim, damage and expense
whatsoever arising out of or based upon (including, but not limited
to, any and all expense whatsoever reasonably incurred in
investigating, preparing or defending any litigation, commenced or
threatened, or any claim whatsoever based upon) any untrue or
alleged untrue statement of a material fact contained in any
preliminary prospectus (if used prior to the effective date of the
registration statement), the registration statement or the
prospectus (as from time to time amended and supplemented), or in
any application or other document executed by the Company or based
upon written information furnished by the Company filed in any
jurisdiction in order to qualify the Company's securities under the
securities laws thereof, or the omission or alleged omission
therefrom of a material fact required to be stated therein or
necessary to make the statements therein not misleading, or any
other violation of applicable federal or state statutory or
regulatory requirements or limitations relating to action or
inaction by the Company in the course of preparing, filing, or
implementing such registered offering; provided, however, that the
indemnity agreement contained in this section shall not apply to any
loss, claim, damage, liability or action arising out of or based
upon any untrue or alleged untrue statement or omission made in
reliance upon and in conformity with any information furnished in
writing to the Company by or on behalf of the Purchaser expressly
for use in connection therewith or arising out of any action or
inaction of the Purchaser;
(ii) Subject to the proviso contained in Subsection (i) above,
against any and all loss, liability, claim, damage and expense
whatsoever to the extent of the aggregate amount paid in settlement
of any litigation, commenced or threatened, or of any claim
whatsoever based upon any untrue statement or omission (including,
but not limited to, any and all expense whatsoever reasonably
incurred in investigating, preparing or defending against any such
litigation or claim) if such settlement is effected with the written
consent of the Company; and
(iii) In no case shall the Company be liable under this
indemnity agreement with respect to any claim made against any
Purchaser Indemnified Party unless the Company shall be notified, by
letter or by facsimile confirmed by letter, of any action commenced
against such Purchaser Indemnified Party, promptly after such person
shall have been served with the summons or other legal process
giving information as to the nature and basis of the claim. The
failure to so notify the Company, if prejudicial in any material
respect to the Company's ability to defend such claim, shall relieve
the Company from its liability to the indemnified person under this
Section 5(e), but only to the extent that the Company was
prejudiced. The failure to so notify the Company shall not relieve
the Company from any liability which it may have otherwise than on
account of this indemnity agreement. The Company shall be entitled
to participate at its own expense in the defense of any suit brought
to enforce any such claim, but if the Company elects to assume the
defense, such defense shall be conducted by counsel chosen by it,
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provided such counsel is reasonably satisfactory to the Purchaser
Indemnified Party in any suit so brought. In the event the Company
elects to assume the defense of any such suit and retain such
counsel, the Purchaser Indemnified Party in the suit shall, after
the date they are notified of such election, bear the fees and
expenses of any counsel thereafter retained by them, as well as any
other expenses thereafter incurred by them in connection with the
defense thereof; provided, however, that if the Purchaser
Indemnified Party reasonably believes that there may be available to
it any defense or counterclaim different than those available to the
Company or that representation of the Purchaser Indemnified Party by
counsel for the Company presents a conflict of interest for such
counsel, then the Purchaser Indemnified Party shall be entitled to
defend such suit with counsel of its own choosing and the Company
shall bear the fees, expenses and other costs of such separate
counsel.
(f) Indemnification of the Company. The Purchaser agrees to
indemnify and hold harmless the Company, each underwriter for the
offering, and each of their officers and directors and agents and each
other person, if any, who controls the Company and the underwriter within
the meaning of Section 15 of the Securities Act and any other stockholder
selling securities against any and all such losses, liabilities, claims,
damages and expenses as are indemnified against by the Company under
Section 5(f) (i), (ii) and (iii) above; provided, however, that such
indemnification by Purchaser hereunder shall be limited to any losses,
liabilities, claims, damages, or expenses to the extent caused by any
untrue statement of a material fact or omission of a material fact
(required to be stated therein or necessary to make statements therein not
misleading), if any made (or in settlement of any litigation effected with
the written consent of such Purchasers, alleged to have been made) in any
preliminary prospectus, the registration statement or prospectus or any
amendment or supplement thereof or in any application or other document in
reliance upon, and in conformity with, written information furnished in
respect of such Purchaser by or on behalf of such Purchaser expressly for
use in any preliminary prospectus, the registration statement or
prospectus or any amendment or supplement thereof or in any such
application or other document or arising out of any action or inaction of
such Purchaser in implementing such registered offering. In case any
action shall be brought against the Company, or any other person so
indemnified, in respect of which indemnity may be sought against any
Purchaser, such Purchaser shall have the rights and duties given to the
Company, and each other person so indemnified shall have the rights and
duties given to Purchaser, by the provisions of Section 5(f). The person
indemnified agrees to notify the Purchaser promptly after the assertion of
any claim against the person indemnified in connection with the sale of
securities.
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(g) Contribution. If the indemnification provided for in Sections
5(e) and 5(f) above are unavailable or insufficient to hold harmless an
indemnified party in respect of any losses, claims, damages or liabilities
(or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion as is
appropriate to reflect the relative fault of the indemnified party, on one
hand, and such indemnifying party, on the other hand, in connection with
the statements or omissions which resulted in such losses, claims,
damages, or liabilities (or actions in respect thereof). The relative
fault shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied
by the indemnified party, on one hand, or such indemnifying party, on the
other hand, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission. No person who has committed fraudulent misrepresentation (within
the meaning of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to
above in this Section shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim.
(h) Assignment of Registration Rights. The right to have the Company
register Registrable Securities pursuant to this Warrant shall be
automatically assignable to any transferee of all or any portion of the
Registrable Securities if: (a) the Purchaser agrees in writing with the
transferee or assignee to assign such rights, and a copy of such agreement
is furnished to the Company within a reasonable time after such
assignment, (b) the Company is, within a reasonable time after such
transfer or assignment, furnished with written notice of (i) the name and
address of such transferee or assignee, and (ii) the securities with
respect to which such registration rights are being transferred or
assigned, (c) following such transfer or assignment, the further
disposition of such securities by the transferee or assignee is restricted
under the 1933 Act and applicable state securities laws and, (d) at or
before the time the Company receives the written notice contemplated by
clause (b) of this sentence, the transferee or assignee agrees in writing
with the Company to be bound by all of the provisions contained herein
(the foregoing a "Permitted Transferee").
6. MISCELLANEOUS.
6.1 Confidentiality.
(a) The Purchaser agrees to keep confidential any and all
non-public information delivered or made available to the Purchaser
by the Company except for disclosures, as necessary, made by the
Purchaser to the Purchaser's officers, directors, employees, agents,
counsel and accountants each of whom shall be notified by the
Purchaser of this confidentiality covenant and for whom the
Purchaser shall be liable in the event of any breach of this
covenant by any such individual or individuals; provided, however,
that nothing herein shall prevent the Purchaser from disclosing such
information (a) upon the order of any court or administrative
agency, (b) upon the request or demand of any regulatory agency or
authority having jurisdiction over the Purchaser, (c) which has been
publicly disclosed or (d) to any of its members provided that any
such members agree in writing (with a copy provided to the Company)
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to be bound by confidentiality provisions in form and substance
substantially as are contained herein. In the event of a mandatory
disclosure as described in clause (a) and/or (b) of the preceding
sentence, the Purchaser shall promptly notify the Company in writing
of any applicable order, request or demand for such information,
cooperate with the Company if and to the extent that the Company
elects to seek an appropriate protective order or other relief from
such order, request, or demand, and disclose only the minimal amount
of information ultimately required to be disclosed. The Purchaser
shall not use for its own benefit, nor permit any other person to
use for such person's benefit, any of the Company's non-public
information including, without limitation, in connection with the
purchase and/or sale of the Company's securities.
(b) The Company shall in no event disclose non-public
information to the Purchaser, advisors to or representatives of the
Purchaser unless prior to disclosure of such information the Company
marks such information as "Non-Public Information - Confidential"
and provides the Purchaser, such advisors and representatives with
the opportunity to accept or refuse to accept such non-public
information for review. The Company may, as a condition to
disclosing any non-public information hereunder, require the
Purchaser's advisors and representatives to enter into a
confidentiality agreement in form reasonably satisfactory to the
Company and the Purchaser.
(c) Nothing herein shall require the Company to disclose
non-public information to the Purchaser or its advisors or
representatives, and the Company represents that it does not
disseminate non-public information to any Purchasers who purchase
stock in the Company in a public offering, to money managers or to
securities analysts.
6.2 Legends. To the extent applicable, each note, certificate or
other document evidencing the Securities to be purchased and sold pursuant
to this Agreement shall be endorsed with the legends set forth below, and
the Purchaser on behalf of itself and each holder of the Securities
covenants that, except to the extent such restrictions are waived by the
Company, it shall not transfer the Securities without complying with the
restrictions on transfer described in the legends endorsed on such
Securities:
(a) The following legend under the Securities Act:
"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED,
AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED, OR
HYPOTHECATED ABSENT AN EFFECTIVE REGISTRATION THEREOF UNDER
SUCH ACT OR COMPLIANCE WITH RULE 144 PROMULGATED UNDER SUCH
ACT, OR UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL,
IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE COMPANY
AND ITS COUNSEL AND FROM ATTORNEYS REASONABLY ACCEPTABLE TO
THE COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT
REQUIRED."
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(b) If required by the authorities of any state in connection
with the issuance or sale of the Securities, the legend required by
such state authority.
(c) The legend set forth above shall be removed from the
Securities and the Company shall within two (2) business days issue
a certificate without such legend to the holder of the Securities
upon which it is stamped, if, unless otherwise required by state
securities laws, (i) in connection with a sale transaction, provided
the Securities are registered under the Securities Act or (ii) in
connection with a sale transaction, after such holder provides the
Company with an opinion of counsel, which opinion shall be in form,
substance and scope customary for opinions of counsel in comparable
transactions, to the effect that a public sale, assignment or
transfer of the Securities may be made without registration under
the Securities Act. The legend set forth above shall be removed from
the Securities and the Company shall issue replacement Securities
without such legend to the holder of the Securities immediately upon
the registration of the Securities under the Securities Act.
6.3 Fees and Expenses.
(a) The Company shall pay a structuring/finder's fee in an
amount equal to 15 points, or $18,750 for a total investment of
$125,000. The Company agrees that such fee may be deducted from the
gross amount of the Loan Amount at Closing.
(b) The Company shall reimburse Purchaser for its reasonable
legal fees and expenses in connection with the purchase of the
Securities. The Company shall be responsible for all of its fees and
expenses in connection with this transaction.
6.4 Assignability; Successors. The provisions of this Agreement
shall inure to the benefit of and be binding upon the permitted successors
and assigns of the parties hereto.
6.5 Survival. All agreements, covenants, representations and
warranties made by the Company or by the Purchaser herein shall survive
the execution and delivery of this Agreement.
6.6 GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED ACCORDING TO
THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE PRINCIPLES
THEREOF RELATING TO CONFLICTS OF LAWS.
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6.7 Counterparts: Headings. This Agreement may be executed in
several counterparts, each of which shall be deemed an original, but such
counterparts shall together constitute but one and the same agreement. The
descriptive headings in this Agreement are inserted for convenience of
reference only and shall not affect the construction of this Agreement.
6.8 Legal Representation.
(a) Each party hereto represents and warrants that it has
carefully read this Agreement and knows the contents hereof and that
it has signed this Agreement freely and voluntarily and that each
party has obtained independent counsel in reviewing this document
and further acknowledges that the law firm of Xxxxxxxxx, Xxxxxx &
Xxxxxx has memorialized the within Agreement and has provided legal
advice solely to the Company with respect to this Agreement.
(b) The Purchaser was provided the opportunity to retain
individual counsel, and has retained or waived the right to retain
individual counsel to review this Agreement.
6.9 Entire Agreement, Amendments. This Agreement and the Exhibits
contain the entire understanding of the parties with respect to the
subject matter hereof, and supersede all other representations and
understandings, oral or written, with respect to the subject matter
hereof. No amendment, modification, alteration, or waiver of the terms of
this Agreement or consent required under the terms of this Agreement shall
be effective unless made in a writing, which makes specific reference to
this Agreement and which has been signed by the Company and the Purchaser.
Any such amendment, modification, alteration, waiver or consent shall be
effective only in the specific instance and for the specific purpose for
which given.
6.10 Notices. All communications or notices required or permitted by
this Agreement shall be in writing and shall be deemed to have been given
or made when delivered in hand, deposited in the mail, or sent by
facsimile, with confirmation (if sent by facsimile on a non-business day,
receipt shall be deemed to have occurred on the next succeeding business
day). Communications or notices shall be delivered personally or by
certified or registered mail, postage, or by facsimile and addressed as
follows, unless and until either of such parties notifies the other in
accordance with this Section of a change of address:
IF TO THE COMPANY: U.S. Helicopter Corporation
0 Xxxx Xxxxx Xxxxx, Xxxxx 000
Xxxxxxxx Xxxxxxxxx Heliport
Xxx Xxxx, XX 00000
Attn.: Xxxx X. Xxxxxx, CEO and President
Telephone: 000-000-0000
Fax: 000-000-0000
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WITH A COPY TO: Xxxxxxxxx, Xxxxxx & Xxxxxx
000 Xxxxxxx Xxxxxxxxx
0xx Xxxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Attn: Xxxxxx X. Xxxxxxxxx, Esq.
Telephone: 000-000-0000
Fax: 000-000-0000
IF TO THE PURCHASER: Portfolio Lenders II, LLC
c/o Gallagher, Xxxxxx & Xxxxxx
000 Xxxxxxx Xxxxxxxxx
0xx Xxxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Attn: Xxxxxx X. Xxxxxxxxx, Esq.
Telephone: 000-000-0000
Fax: 000-000-0000
6.11 Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement shall be
prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions
of this Agreement.
6.12 Maximum Interest. It is expressly stipulated and agreed to be
the intent of the Company and the Purchaser at all times to comply with
the applicable law governing the maximum rate of interest payable on or in
connection with all indebtedness and transactions hereunder (or applicable
United States federal law to the extent that it permits Purchaser to
contract for, charge, take, reserve or receive a greater amount of
interest). If the applicable law is ever judicially interpreted so as to
render usurious any amount of money or other consideration called for
hereunder, or contracted for, charged, taken, reserved or received with
respect to any loan or advance hereunder, or if acceleration of the
maturity of the Note results in the Company's having paid any interest in
excess of that permitted by law, then it is the Company's and the
Purchaser's express intent that all excess cash amounts theretofore
collected by Purchaser be credited on the principal balance of the Note
(or if the Note has been or would thereby be paid in full, refunded to the
Company), and the provisions of this Agreement immediately be deemed
reformed and the amounts thereafter collectible hereunder reduced, without
the necessity of the execution of any new document, so as to comply with
the applicable law, but so as to permit the recovery of the fullest amount
otherwise called for hereunder. The right to accelerate maturity of the
Note does not include the right to accelerate any interest which has not
otherwise accrued on the date of such acceleration, and the Purchaser does
not intend to collect any unearned interest in the event of acceleration.
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IN WITNESS WHEREOF, this Agreement has been duly executed as of the day
and year first above written.
U. S. HELICOPTER CORPORATION
By:
-------------------------------------
Xxxx X. Xxxxxx
Chief Executive Officer and President
PORTFOLIO LENDERS II, LLC
By:
-------------------------------------
Xxxxxx X. Xxxxxxxxx
Authorized Officer
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EXHIBIT A
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED,
ASSIGNED, PLEDGED, OR HYPOTHECATED ABSENT AN EFFECTIVE REGISTRATION THEREOF
UNDER SUCH ACT OR COMPLIANCE WITH RULE 144 PROMULGATED UNDER SUCH ACT, OR UNLESS
THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL, IN FORM AND SUBSTANCE REASONABLY
SATISFACTORY TO THE COMPANY AND ITS COUNSEL AND FROM ATTORNEYS REASONABLY
ACCEPTABLE TO THE COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT
REQUIRED.
PROMISSORY NOTE
September 12, 2008
ONE HUNDRED TWENTY FIVE THOUSAND DOLLARS
15% NOTE
FOR VALUE RECEIVED, U.S. HELICOPTER CORPORATION, a Delaware corporation
(the "Company") hereby promises to pay to the order of PORTFOLIO LENDERS II, LLC
(the "Holder"), or its registered assigns, the principal sum of ONE HUNDRED
TWENTY FIVE THOUSAND DOLLARS AND 00/100 ($125,000.00), and to pay interest from
the date hereof on the outstanding principal sum at the rate of 15% per annum
based on a 365-day year, such interest to accrue from the date hereof (the
"Closing Date"). The principal and accrued but unpaid interest shall be paid in
full 30 days after the date hereof (the "Maturity Date").
This Note is an authorized issue of a 15% Note of the Company (the "Note")
issued pursuant to a Note Purchase Agreement dated as of the date hereof between
the Company and the Holder (the "Note Purchase Agreement"). The Holder of this
Note is entitled to the benefits of the Note Purchase Agreement and to enforce
the agreements of the Company contained therein. Capitalized terms used herein
and not otherwise defined shall have the meaning ascribed thereto in the Note
Purchase Agreement. All payments shall be paid in lawful money of the United
States of America at the principal office of the Holder or at such other place
as the Holder may designate from time to time in writing to the Company.
1. CONVERSION RIGHTS. The principal and any and all interest payable on
this Note shall be convertible, at the option of either the Holder, at any time
into shares of Company Common Stock at $0.20 per share.
2. DEFAULT. The Company shall be in default under this Note upon the
occurrence of any of the following events ("Event of Default"):
(a) Failure to make any principal or interest payment required under
this Note within three days of the date such payment is due;
(b) Any material default, breach or misrepresentation under the
terms and provisions of the Note Purchase Agreement that is not cured
after 30 days written notice by Holder to the Company; or
(c) An assignment for the benefit of creditors by or the filing of a
petition under bankruptcy, insolvency or debtor's relief law, or for any
readjustment of indebtedness, composition or extension by the Company, or
commenced against the Company which is not discharged within sixty (60)
days.
3. REMEDIES UPON EVENT OF DEFAULT. Upon the occurrence of an Event of
Default:
(a) specified in clause (c) of Section 2, then the Note shall be
automatically accelerated and immediately due and payable at the option of
Holder, without notice or demand;
(b) specified in clauses (a) or (b) of Section 2, then the Holder
may declare the Note immediately accelerated due and payable; and
(c) the Holder shall have all of the rights and remedies, at law and
in equity, by statute or otherwise, and no remedy herein conferred upon
the Holder is intended to be exclusive of any other remedy and each 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.
4. CHANGES; PARTIES. This Note can only be changed by an agreement in
writing signed by the Company and the Holder. This Note shall inure to the
benefit of and be binding upon the Company and the Holder and their respective
successors and assigns.
5. WAIVER OF PRESENTMENT. The Company hereby waives presentment, demand,
notice, protest and all other demands and notices in connection with the
delivery, acceptance, performance, default or enforcement of this Note.
6. MAXIMUM RATE OF INTEREST. It is expressly stipulated and agreed to be
the intent of the Company and Holder at all times to comply with the applicable
law governing the maximum rate of interest payable on or in connection with all
indebtedness and transactions hereunder (or applicable United States federal law
to the extent that it permits Holder to contract for, charge, take, reserve or
receive a greater amount of interest). If the applicable law is ever judicially
interpreted so as to render usurious any amount of money or other consideration
called for hereunder, or contracted for, charged, taken, reserved or received
with respect to any loan or advance hereunder, or if acceleration of the
maturity of this Note or the indebtedness hereunder or if any prepayment by the
2
Company results in the Company's having paid any interest in excess of that
permitted by law, then it is the Company's and Holder's express intent that all
excess cash amounts theretofore collected by Holder be credited on the principal
balance of this Note (or if this Note has been or would thereby be paid in full,
refunded to the Company), and the provisions of this Note immediately be deemed
reformed and the amounts thereafter collectible hereunder reduced, without the
necessity of the execution of any new document, so as to comply with the
applicable law, but so as to permit the recovery of the fullest amount otherwise
called for hereunder. The right to accelerate maturity of this Note does not
include the right to accelerate any interest which has not otherwise accrued on
the date of such acceleration, and Holder does not intend to collect any
unearned interest in the event of acceleration.
7. NO IMPLIED WAIVER. No failure or delay on the part of Holder in
exercising any right, power or privilege under this Note and no course of
dealing between the Company and Holder shall operate as a waiver thereof. No
single or partial exercise of any right, power or privilege hereunder shall
preclude any other or further exercise of any right, power or privilege Holder
would otherwise have. No notice to, or demand on, the Company in any case shall
entitle the Company to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the right of Holder to any other or
further action in any circumstances without notice or demand.
8. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED ACCORDING TO THE LAWS
OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE PRINCIPLES THEREOF
RELATING TO CONFLICTS OF LAWS.
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IN WITNESS WHEREOF, the Company has executed this Note as of the day and
year set forth above.
U.S. HELICOPTER CORPORATION
By:
------------------------
Xxxxxx X. Xxxx, Xx.
Chief Financial Officer
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