EXHIBIT 10.68
CONVERTIBLE NOTE PURCHASE AGREEMENT
THIS AGREEMENT ("Agreement") is made as of the date set forth on
the
signature page hereto, between U.S. HELICOPTER CORPORATION (the
"Company"), a
Delaware corporation, and the individual whose name appears on the
signature
page hereto (the "Purchaser").
RECITALS
WHEREAS, the Company has authorized the issuance and sale of
the
Company's Promissory Note to Purchaser in the aggregate principal
amount set
forth on the signature page to this Agreement, having the terms set
forth in
Exhibit A attached hereto (the "Note"); and
WHEREAS, the Purchaser desires to purchase, and the Company desires
to
issue, the Note 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 the
amount set forth on the signature page to this Agreement (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, on the date which is 60 days after the Closing
Date (the
"Maturity Date").
1.3 The Note shall bear interest at the rate of 18% per annum
based on a 365-day year. Any prepaid interest 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 $0.50 per share (such shares, the "Conversion
Shares").
2. INDUCEMENT WARRANT. As an inducement to purchase the Note,
the
Purchaser shall be entitled to receive a warrant to purchase three
(3) shares of
Common Stock for every $5.00 invested (the "Warrant"). The Warrant
shall contain
an exercise price of $0.50 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 registration rights identical
to those of
the Conversion Shares as described below.
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3. CLOSING. The closing of the purchase and sale of the Note
(the
"Closing") shall take place on the second business day after the
date of this
Agreement, or such other day as agreed to by the parties (the
"Closing Date").
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 and the Note (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 Warrant
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.
(d) CAPITALIZATION. The authorized capital stock of the
Company consists of 95,000,000 shares of Common Stock, par value
$0.001
per share, 36,641,779 shares of which were issued and outstanding
as of
August 10, 2007, and 5,000,000 shares of authorized Preferred
Stock,
par value $0.001 per share, of which none were issued and
outstanding
as of August 10, 2007. The shares of Common Stock issuable pursuant
to
this Agreement and the Warrant (together, the "Shares") have been
duly
and validly authorized and reserved for issuance and, when issued
and
delivered in accordance with the terms of this Agreement and
the
Warrant, will be duly and validly issued, fully paid and
non-assessable.
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(e) DISCLOSURE DOCUMENTS. The Company has furnished the
Purchaser or made available at the website of the Securities
and
Exchange Commission (the "SEC") (HTTP://WWW.SEC.GOV) a copy of
the
Company's Quarterly Report on Form 10-QSB/A for the period ended
March
31, 2007 as filed with the SEC on June 1, 2007, and the
Company's
Annual Report on Form 10-KSB for the period ended December 31, 2006
as
filed with the SEC on April 17, 2007, and Reports on Form 8-K as
filed
on May 11, 2007, May 16, 2007 and June 21, 2007 (together, the
"SEC
Documents").
(f) SECURITIES MATTERS. Subject to the accuracy of the
representations of the Purchaser set forth in Section 4.2 hereof,
the
offer, sale and issuance of the Note and the Shares 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
Note, the Warrant and the Shares 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 Note, the Warrant and the Shares; 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
Note, the Warrant and the Shares will not cause such overall
commitment to become excessive; and, that the Purchaser is
able to
bear the economic risk of the Note, the Warrant and
the Shares, 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 Note, the Warrant and the Shares.
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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 Note, the Warrant and
the Shares 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 Note, the Warrant and the Shares.
(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 Note, the
Warrant and the Shares for investment purposes only without
intent to distribute the same, and acknowledges that the Note,
the Warrant and the Shares have not been registered under the
Securities Act and applicable state securities laws, and
accordingly, constitute "restricted securities" for purposes
of the Securities Act and such state securities laws until
such time as a registration statement covering the Shares is
declared effective by the SEC and the states in which the
registration statement is filed.
(viii) The Purchaser acknowledges that it will not be
able to transfer the Note, the Warrant and the Shares 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 Note, the Warrant and the Shares will contain a legend to
the foregoing effect until such time as a registration
statement covering the Shares is declared effective by the
SEC.
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 of 1933, as amended (the
"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 held by the Purchaser
requested to
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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".
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:
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;
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;
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;
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
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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
