EXHIBIT 10.75
SUBORDINATION AGREEMENT
THIS SUBORDINATION AGREEMENT (this "Agreement") is made as of the 24th
day of August 2007, by and BETWEEN YA GLOBAL INVESTMENTS, L.P. (hereafter "YA")
and PORTFOLIO LENDERS (hereafter "Portfolio Lenders"), XX. XXXXXXXX XXXXXXX
(hereafter "Xxxxxxx"), and XXXXX X. XXXXXXX (hereafter "Xxxxxxx") (collectively,
the "Subordinated Lenders").
WITNESSETH
WHEREAS, Portfolio Lenders and U.S. Helicopter Corporation (the
"Borrower") are parties to that certain Convertible Note Purchase Agreement
dated as of June 15, 2007 whereby the Borrower borrowed a total of $150,000 in
principal (the "Portfolio Lenders Loan"); and
WHEREAS, Xxxxxxx and the Borrower are parties to that certain
Convertible Note Purchase Agreement dated as of July 11, 2007 whereby the
Borrower borrowed a total of $250,000 in principal (the "Xxxxxxx Loan"); and
WHEREAS, Xxxxxxx and U.S. Helicopter Corporation (the "Borrower") are
parties to that certain Convertible Note Purchase Agreement dated as of June 20,
2007 whereby the Borrower borrowed a total of $100,000 in principal (the
"Xxxxxxx Loan") (the Portfolio Lenders Loan, the Xxxxxxx Loan and the Xxxxxxx
Loan shall collectively be referred to herein as the "Subordinated Loan"); and
WHEREAS, pursuant to those certain securities purchase agreements
(collectively, the "Securities Purchase Agreements") dated March 30, 2007, May
14, 2007, and August __, 2007 between YA and the Borrower, YA has made, or has
agreed to make loans to the Borrower in the aggregate principal amount of Two
Million Four Hundred Thousand and No/00 Dollars ($2,400,000.00) to the Borrower
(all monetary obligations of the Borrower to YA under the Securities Purchase
Agreements 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 $8,650,000
(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 are hereinafter referred to as
the "YA Loan");
WHEREAS, as a condition of increasing the YA Bridge Loan amount, YA has
required the Subordinated Lenders to subordinate repayment of the Subordinated
Loan and the lien/ security interest created in favor of the Subordinated
Lenders (the "Subordinated Lien") to the YA Loan and the lien/ security interest
created in favor of YA (the "YA Lien"), which shall confirm YA's first priority
lien on the assets of the Borrower and its priority of payment.
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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 Loan and any and all documents entered into in connection
therewith shall be and hereby are subordinated and the payment thereof is
deferred until the full and final payment in cash of the YA Loan. The YA Lien
shall be senior to the Subordinated Lien irrespective of the time of the
execution, delivery or issuance of any thereof or the filing or recording for
perfection of any thereof or the filing of any financing statement or
continuation statement relating to any thereof. 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 Loan unless or until the YA Bridge
Loan has been paid in full.
2. After the YA Bridge Loan has been paid in full, 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
Loan 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. In further consideration of
this subordination agreement, 93,750 of the warrants issued to Portfolio Lenders
in connection with the Portfolio Lenders Loan shall be re-priced to an exercise
price of $0.01 per share, 156,250 of the warrants issued to Xxxxxxx in
connection with the Xxxxxxx Loan shall be re-priced to an exercise price of
$0.01 per share, and 62,500 of the warrants issued to Xxxxxxx in connection with
the Xxxxxxx Loan shall be re-priced to an exercise price of $0.01 per share.
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 Loan, and no adjustment or
modification to the Subordinated Loan or any documents entered into connection
therewith shall be made without YA's prior written consent.
5. The maturity date of the Subordinated Loan shall be extended to October 31,
2007.
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: PORTFOLIO LENDERS II, LLC
____________________________ /S/ XXXXXX X. XXXXXXXXX
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WITNESS: XX. XXXXXXXX XXXXXXX
____________________________ /S/ XX. XXXXXXXX XXXXXXX
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WITNESS: XXXXX X. XXXXXXX
____________________________ /S/ XXXXX X. XXXXXXX
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WITNESS: YA GLOBAL INVESTMENTS, L.P.
BY: YORKVILLE ADVISORS,
ITS INVESTMENT MANAGER
____________________________ /S/ XXXX XXXXX
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WITNESS: U.S. HELICOPTER CORPORATION
____________________________ /S/ XXXXXX X. XXXX, XX.
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