EXHIBIT 10.75
NOTE PURCHASE AGREEMENT
THIS NOTE PURCHASE AGREEMENT ("Agreement") is made as of this 28th day of
August, 2008, between U.S. HELICOPTER CORPORATION (the "Company"), a Delaware
corporation, and PHILADELPHIA FINANCIAL, LLC (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
$400,000.00, 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
$400,000.00 (FOUR HUNDRED 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 days after the Closing Date.
1.3 The Note shall bear interest at the rate of 15% per annum based
on a 360-day year, of which 30 days' worth of interest shall be prepaid on
the Closing Date. The interest paid shall be non-refundable in the event
of early repayment.
1.4 The Purchaser shall have the right to convert the Loan Amount
plus any accrued but unpaid interest in whole or in part into shares of
the Company's common stock, par value $0.001 per share ("Common Stock") at
a conversion rate of $0.20 per share (such shares, the "Conversion
Shares").
1.5 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 $20,000, which shall be payable on the Closing
Date.
2. CLOSING. The closing of the purchase and sale of the Note (the
"Closing") shall take place on August 28, 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 600,000
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 Conversion Shares, the Warrants and
the Warrant Shares (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 Warrant Shares 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 the date hereof, 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; and (ii)
the Company's Quarterly Reports on Form 10-Q for the fiscal quarters
ended March 31, 2008 and June 30, 2008 as filed with the SEC on May
20, 2008 and August 19, 2008, respectively (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.
(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.
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(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.
5.1 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 shares of common stock
issued or issuable under the Note or the Warrants (together, the "Shares")
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 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 Shares 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 5.1 is referred to herein as the "Piggyback Registration".
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5.2 Obligations of Purchaser. It shall be a condition precedent to
the obligation of the Company to register any Shares pursuant to this
Section 5 that the Purchaser shall furnish to the Company such information
regarding the Shares 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
Shares until the Company advises the Purchaser that such registration
statement has been amended or supplemented.
5.3 If and whenever the Company is required by the provisions of
this Section 5 to effect the registration of the Shares under the
Securities Act, the Company will:
(a) Furnish to the Purchaser such reasonable number of copies
of the registration statement, preliminary prospectus, final
prospectus and such other documents as the Purchaser may reasonably
request in order to facilitate the sale of such shares;
(b) 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;
(c) Notify the Purchaser promptly of any request by the
Commission for the amending or supplementing of such registration
statement or prospectus or for additional information;
(d) Prepare and promptly file with the Commission 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 the light of the circumstances in which they were made,
not misleading; and
(e) Advise the Purchaser, promptly after it shall receive
notice or obtain knowledge thereof, of the issuance of any stop
order by the Commission suspending the effectiveness of such
registration statement or the initiation or threatening of any
proceeding for that purpose and promptly use its best efforts to
prevent the issuance of any stop order or to obtain its withdrawal
if such stop order should be issued.
5.4 With respect to a registration required pursuant to this Section
5, all fees, costs and expenses of and incidental to such registration,
shall be borne by the Company, including all registration, filing,
printing expenses, fees and disbursements of counsel and accountants for
the Company, and all legal fees and disbursements and other expenses of
complying with state securities or blue sky laws of any jurisdictions in
which the Shares to be offered are to be registered and qualified. Fees
and disbursements of counsel and accountants for the participating
Purchaser and any other expenses incurred by the Purchaser shall be borne
by the Company; provided that the fees and disbursements of counsel to the
Purchaser shall not exceed $5,000 in connection with a registration
required under this Section 5.
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5.5 The Company will indemnify and hold harmless the Purchaser and
any underwriter for such Purchaser from and against, and will reimburse
such Purchaser and each such underwriter with respect to, any and all
loss, damage, liability, cost and expense to which such Purchaser or any
such underwriter may become subject under the Securities Act or otherwise,
insofar as such losses, damages, liabilities, costs or expenses are caused
by any untrue statement or alleged untrue statement of any material fact
contained in such registration statement, any prospectus contained therein
or any amendment or supplement thereto, or arise out of or are based upon
the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein, in light
of the circumstances in which they were made, not misleading; provided,
however, that the Company will not be liable in any such case to the
extent that any such loss, damage, liability, cost or expenses arises out
of or is based upon an untrue statement or alleged untrue statement or
omission or alleged omission so made in conformity with information
furnished by such Purchaser or such underwriter in writing for use in the
preparation thereof.
5.6 The Purchaser will indemnify and hold harmless the Company, any
successor entity of the Company, its directors and officers, any
controlling person and any underwriter from and against, and will
reimburse the Company, its directors and officers, any controlling person
and any underwriter with respect to, any and all loss, damage, liability,
cost or expense to which the Company or any controlling person and/or any
underwriter may become subject under the Securities Act or otherwise,
insofar as such losses, damages, liabilities, costs or expenses are caused
by any untrue statement or alleged untrue statement of any material fact
contained in such registration statement, any prospectus contained therein
or any amendment or supplement thereto, or arise out of or are based upon
the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein, in light
of the circumstances in which they were made, not misleading, in each case
to the extent that such untrue statement or alleged untrue statement or
omission or alleged omission was so made in reliance upon and in
conformity with written information furnished by or on behalf of such
Purchaser for use in the preparation thereof. The maximum aggregate
liability of each Purchaser pursuant to its indemnification obligations
under this Section 5 shall not exceed the portion of the Purchase Price
paid by such Purchaser hereunder.
Promptly after receipt by an indemnified party pursuant to the
provisions of Sections 5.5 or 5.6 above of notice of the commencement of
any action involving the subject matter of the foregoing indemnity
provisions such indemnified party will, if a claim thereof is to be made
against the indemnifying party pursuant to the provisions of said Sections
5.5 or 5.6, promptly notify the indemnifying party of the commencement
thereof; but the omission to so notify the indemnifying party will not
relieve it from any liability which it may have to any indemnified party
otherwise than hereunder. In case such action is brought against any
indemnified party and it notifies the indemnifying party of the
commencement thereof, the indemnifying party shall have the right to
assume the defense thereof, with counsel reasonably satisfactory to such
indemnified party.
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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)
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.
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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."
(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% of the Loan Amount, or $60,000 for a total
investment of $400,000. The Company agrees that such fee may be
deducted from the gross amount of the Loan Amount at Closing.
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(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.
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.
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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
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: Philadelphia Financial, LLC
___________________________
___________________________
Telephone:_________________
Fax:_______________________
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.
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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:
--------------------------------
Xxxxxx X. Xxxx, Xx.
Chief Financial Officer
PHILADELPHIA FINANCIAL, LLC
By:
--------------------------------
Name:
Title:
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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
August 28, 2008
FOUR HUNDRED THOUSAND DOLLARS
15% NOTE
FOR VALUE RECEIVED, U.S. HELICOPTER CORPORATION, a Delaware corporation
(the "Company") hereby promises to pay to the order of PHILADELPHIA FINANCIAL,
LLC (the "Holder"), or its registered assigns, the principal sum of FOUR HUNDRED
THOUSAND DOLLARS AND 00/100 ($400,000.00), 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 Company agrees to prepay 30 days' worth of interest on the Closing Date,
which shall be non-refundable in the event of early repayment. 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. REGISTRATION RIGHTS. The Holder of this Note shall have the
registration rights pertaining to the shares issuable upon conversion of this
Note as described in the Note Purchase Agreement.
5. 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.
6. 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.
7. 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
Company results in the Company's having paid any interest in excess of that
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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.
8. 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.
9. 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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