**Exhibit 10.3****CONVERTIBLE NOTE PURCHASE AGREEMENT**     **THIS AGREEMENT**(“Agreement”) is made as of this 26th day of October, 2005, between**U.S. HELICOPTER CORPORATION**(the “Company”), a Delaware corporation, and **PORTFOLIO LENDERS II, LLC**,a New Jersey limited liability company (the “Purchaser”).**RECITAL**     **WHEREAS,**the Company has authorized the issuance and sale of the Company’s Promissory Note toPurchaser in the aggregate principal amount of **$250,000.00**, having the terms set forth in Exhibit Aattached hereto (the “Note”); and     **WHEREAS,**the Purchaser desires to purchase, and the Company desires to issue, the Note on theterms set forth in this Agreement;     **NOW, THEREFORE,**in consideration of the foregoing and of the terms and conditions contained inthis 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 (ashereinafter defined) the Purchaser shall purchase from the Company and the Company shall sell tothe Purchaser the Note for **$250,000.00 (TWO HUNDRED FIFTY THOUSAND DOLLARS AND 00/100)**(the “LoanAmount”) which shall be payable via wire transfer to the Company’s designated account (not laterthan the Closing Date).     1.2 The Note shall be repaid, along with all accrued and unpaid interest, as follows:          1.2.1 $150,000 shall be repaid by the Company within two business days after theclosing date of an investment of at least $2 million in the Company by a potential investorcurrently in negotiations with the Company; and          1.2.2 All remaining sums due and payable shall be repaid by the Company on the earliestof (1) two business days after the closing date of a second investment of at least $2million by a second potential investor currently in negotiations with the Company; (2) thedate which the Company draws down its first advance under an Amended & Restated StandbyEquity Distribution Agreement with Cornell Capital Partners, LP; and (3) 120 days from theClosing Date (the “Maturity Date”).     1.3 The Note shall bear interest at the rate of 15% per annum based on a 360-day year,which shall be paid by the Company in advance on the Closing Date. The interest paid shall benon-refundable in the event of early repayment. Upon the occurrenceof an Event of Default as defined in
 

 
the Note, the Note shall bear interest at the rate of 20% per annum based on a360-day year, from the date of such Event of Default.     1.4 As additional consideration, the Purchaser shall receive the sum of $12,500 by theCompany, which shall be payable on the Closing Date, representing five (5) points of the totalamount of the Note.     1.5 The Purchaser shall have the right to convert the Loan Amount plus any accrued but unpaidinterest 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 beentitled to receive a warrant to purchase up to 100,000 shares of Common Stock (the “Warrant”).The Warrant shall contain an exercise price of $0.50 per share and be exercisable for a period offive years from the Closing Date. The shares issuable upon exercise of the Warrant (the “WarrantShares”) shall contain registration rights identical to those of the Conversion Shares as describedbelow.     3. CLOSING. The closing of the purchase and sale of the Note (the “Closing”) shalltake place on October 26, 2005, 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 andwarrants that as of the date of this Agreement:          (a) Existence. The Company is a corporation duly organized and in goodstanding under the laws of the State of Delaware and is duly qualified to do business and isin good standing in all states where such qualification is necessary, except for thosejurisdictions in which the failure to qualify would not, in the aggregate, have a materialadverse effect on the Company’s financial condition, results of operations or business.          (b) Authority. The execution and delivery by the Company of this Agreement andthe Note (i) are within the Company’s corporate powers; (ii) are duly authorized by theCompany’s board of directors; (iii) are not in contravention of the terms of the Company’scertificate 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 andany exemption filing related thereto which may be required pursuant to applicable statesecurities or “blue sky” laws, do not require any governmental consent, registration orapproval; (vi) do not contravene any contractual or governmental restriction binding uponthe Company; and (vii) will not result in the imposition of any lien, charge, securityinterest or encumbrance upon any property of the Company under any existing indenture,mortgage, deed of trust, loan or credit agreement or other materialagreement or instrument to which the
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Company is a party or by which the Company or anyof the Company’s property may be bound or affected.          (c) Binding Effect. This Agreement, the Note and the Warrant have been dulyauthorized, executed and delivered by the Company and constitute the valid and legallybinding obligation of the Company, enforceable in accordance with their respective terms,subject to bankruptcy, insolvency, reorganization and other laws of general applicabilityrelating to or affecting creditors’ rights and to general equity principles.          (d) Capitalization. The authorized capital stock of the Company consists of95,000,000 shares of Common Stock, par value $0.001 per share, 24,545,723 shares of whichwere issued and outstanding as of October 21, 2005, and 5,000,000 shares of authorizedPreferred Stock, par value $0.001 per share, of which 316,000 are issued and outstanding asof October 21, 2005. The shares of Common Stock issuable pursuant to this Agreement and theWarrant (together, the “Shares”) have been duly and validly authorized and reserved forissuance and, when issued and delivered in accordance with the terms of this Agreement andthe Warrant, will be duly and validly issued, fully paid and non-assessable.          (e) Disclosure Documents. The Company has furnished the Purchaser or madeavailable at the website of the Securities and Exchange Commission (the “SEC”)(http://www.sec.gov) a copy of the Company’s prospectus filed on September 20, 2005 (the“Prospectus”), and a registration statement on Form SB-2 as filed with the SEC on April 22,2005, as amended on June 27, 2005, July 21, 2005, August 17, 2005, August 31, 2005 and onSeptember 2, 2005 (together, the “SEC Documents”).          (f) Securities Matters. Subject to the accuracy of the representations of thePurchaser set forth in Section 4.2 hereof, the offer, sale and issuance of the Note and theShares as contemplated by this Agreement are exempt from the registration requirements ofthe Securities Act of 1933 as amended (the “Securities Act”). The Company has complied andwill comply with all applicable state “blue sky” or securities laws in connection with theoffer, sale and issuance of the Note and the Shares as contemplated by this Agreement.     4.2 Representations and Warranties of the Purchaser. The Purchaser represents andwarrants that as of the date of the execution of this Agreement:          (a) Authorization. This Agreement constitutes a valid and legally bindingobligation of the Purchaser.          (b) Investment Representations. (i) The Purchaser has received and reviewedthe SEC Documents and the Purchaser or the Purchaser’s designated representatives haveconcluded a satisfactory due diligence investigation of the Company and have had anopportunity to review the documents provided by the Company and to have all of theirquestions related thereto satisfactorily answered.
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          (ii) The Purchaser understands the fundamental risks of the Note and theShares; has determined that he/she/it can reasonably benefit from the investmentbased upon net worth, income, overall investment objectives and portfolio structure;that the Purchaser’s overall commitment to investments which are not readilymarketable is not disproportionate to the Purchaser’s net worth, and that the Noteand the shares of Common Stock will not cause such overall commitment to becomeexcessive; and, that the Purchaser is able to bear the economic risk of the Noteand the shares of Common Stock, including the loss of the entire value of itsinvestment. Additionally, the Purchaser understands that the Note and the Company’sCommon Stock are not listed on any Stock Exchange in the United States, Canada orelsewhere; that there is currently no market through which the Note or the shares ofCommon Stock may be traded; and, that there are restrictions on the Purchaser’sright to liquidate the Note and the Shares.          (iii) The Purchaser has reviewed the Risk Factors section included in theProspectus, and understands the Risk Factors describing the fact that the Company(a) has substantial liabilities, (b) may not be able to obtain sufficient funds togrow its business and the subsequent financing may be on terms adverse to the Noteand the Shares and (c) is currently not profitable.          (iv) The Purchaser (or its members and/or officers) has previously invested inunregistered securities and has sufficient financial and investing expertise toevaluate and understand the risks of the Note and the Shares.          (v) The Purchaser has received from the Company, and is relying on, norepresentations or projections (except as set forth in this Agreement or the SECDocuments) with respect to the Company’s business and prospects.          (vi) The Purchaser is an “accredited investor” within the meaning of RegulationD under the Securities Act.          (vii) The Purchaser is acquiring the Note and the Shares for investmentpurposes only without intent to distribute the same, and acknowledges that the Noteand the Shares have not been registered under the Securities Act and applicablestate securities laws, and accordingly, constitute “restricted securities” forpurposes of the Securities Act and such state securities laws until such time as aregistration statement covering the Shares is declared effective by the SEC and thestates in which the registration statement is filed.          (viii) The Purchaser acknowledges that it will not be able to transfer the Noteand the Shares except upon compliance with the registration requirements of theSecurities Act and applicable state securities laws or exemptions therefrom.
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          (ix) The certificates and/or instruments evidencing the Note and the Shareswill contain a legend to the foregoing effect until such time as a registrationstatement covering the Shares is declared effective by the SEC.     5. REGISTRATION RIGHTS.          5.1 Subject to the terms and conditions of this Agreement, the Company shall prepare and file,no later than forty five (45) days from the Closing Date (the “Scheduled Filing Deadline”), withthe SEC a registration statement on Form S-1 or SB-2 (or, if the Company is then eligible, on FormS-3) under the 1933 Act (the “Initial Registration Statement”) for the registration for the resaleby the Purchaser of the Shares (together, the “Registrable Securities”). The Company shall causethe Registration Statement to remain effective until the earlier of (i) the Registrable Securitieshave been sold, or (ii) the date the Registrable Securities become eligible for sale withoutrestriction under Rule 144(k) promulgated under the Securities Act of 1933.          5.2 Effectiveness of the Initial Registration Statement. The Company shall use itsbest efforts (i) to have the Initial Registration Statement declared effective by the SEC no laterthan one hundred eighty (180) days after the filing thereof (the “Scheduled Effective Deadline”)and (ii) to ensure that the Initial Registration Statement and any subsequent RegistrationStatement remains in effect until all of the Registrable Securities have been sold, subject to theterms and conditions of this Agreement, but not later than the point in time that Section 144(k)becomes available for resale of the Registrable Securities.          5.3 If and whenever the Company is required by the provisions of this Section 5 to effect theregistration 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 reasonablyrequest in order to facilitate the sale of such shares;               Notify the Purchaser, promptly after it shall receive notice thereof, of the time when suchregistration statement has become effective or a supplement to any prospectus forming a part ofsuch registration statement has been filed;               Notify the Purchaser promptly of any request by the Commission for the amending orsupplementing of such registration statement or prospectus or for additional information;               Prepare and promptly file with the Commission and promptly notify the Purchaser of the filingof such amendment or supplement to such registration statement or prospectus as may be necessary tocorrect any statements or omissions if, at the time when aprospectus 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 asthen in effect would include an
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untrue statement of a material fact or omit to state any materialfact necessary to make the statements therein, in the light of the circumstances in which they weremade, not misleading; and               Advise the Purchaser, promptly after it shall receive notice or obtain knowledge thereof, ofthe issuance of any stop order by the Commission suspending the effectiveness of such registrationstatement or the initiation or threatening of any proceeding for that purpose and promptly use itsbest efforts to prevent the issuance of any stop order or to obtain its withdrawal if such stoporder should be issued.          5.4 With respect to a registration required pursuant to this Section 5, all fees, costs andexpenses of and incidental to such registration, shall be borne by the Company, including allregistration, filing, printing expenses, fees and disbursements of counsel and accountants for theCompany, and all legal fees and disbursements and other expenses of complying with state securitiesor blue sky laws of any jurisdictions in which the Shares to be offered are to be registered andqualified. Fees and disbursements of counsel and accountants for the participating Purchaser andany other expenses incurred by the Purchaser shall be borne by the Company; provided thatthe fees and disbursements of counsel to the Purchaser shall not exceed $5,000 in connection with aregistration required under this Section 5.          5.5 The Company will indemnify and hold harmless the Purchaser and any underwriter for suchPurchaser from and against, and will reimburse such Purchaser and each such underwriter withrespect to, any and all loss, damage, liability, cost and expense to which such Purchaser or anysuch 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 untruestatement of any material fact contained in such registration statement, any prospectus containedtherein or any amendment or supplement thereto, or arise out of or are based upon the omission oralleged omission to state therein a material fact required to be stated therein or necessary tomake 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 theextent that any such loss, damage, liability, cost or expenses arises out of or is based upon anuntrue statement or alleged untrue statement or omission or alleged omission so made in conformitywith information furnished by such Purchaser or such underwriter in writing for use in thepreparation thereof.          5.6 The Purchaser will indemnify and hold harmless the Company, any successor entity of theCompany, 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 anyunderwriter with respect to, any and all loss, damage, liability, cost or expense to which theCompany or any controlling person and/or any underwriter may become subject under the SecuritiesAct or otherwise, insofar as such losses, damages, liabilities, costs or expenses are caused by anyuntrue statement or alleged untrue statement of any material fact contained in such registrationstatement, any prospectus contained therein or any amendment orsupplement thereto, or arise out of or are based upon the omission or alleged omission to statetherein a material fact required to be
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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 extentthat such untrue statement or alleged untrue statement or omission or alleged omission was so madein reliance upon and in conformity with written information furnished by or on behalf of suchPurchaser for use in the preparation thereof. The maximum aggregate liability of each Purchaserpursuant to its indemnification obligations under this Section 5 shall not exceed the portion ofthe Purchase Price paid by such Purchaser hereunder.          Promptly after receipt by an indemnified party pursuant to the provisions of Sections 5.5 or5.6 above of notice of the commencement of any action involving the subject matter of the foregoingindemnity provisions such indemnified party will, if a claim thereof is to be made against theindemnifying party pursuant to the provisions of said Sections 5.5 or 5.6, promptly notify theindemnifying party of the commencement thereof; but the omission to so notify the indemnifyingparty will not relieve it from any liability which it may have to any indemnified party otherwisethan hereunder. In case such action is brought against any indemnified party and it notifies theindemnifying party of the commencement thereof, the indemnifying party shall have the right toassume the defense thereof, with counsel reasonably satisfactory to such indemnified party.     6. MISCELLANEOUS.     6.1 Confidentiality. (a) The Purchaser agrees to keep confidential any andall non-public information delivered or made available to the Purchaser by the Companyexcept 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 thePurchaser of this confidentiality covenant and for whom the Purchaser shall be liable in theevent 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 ofany regulatory agency or authority having jurisdiction over the Purchaser, (c) which hasbeen publicly disclosed or (d) to any of its members provided that any such members agree inwriting (with a copy provided to the Company) to be bound by confidentiality provisions inform and substance substantially as are contained herein. In the event of a mandatorydisclosure as described in clause (a) and/or (b) of the preceding sentence, the Purchasershall promptly notify the Company in writing of any applicable order, request or demand forsuch information, cooperate with the Company if and to the extent that the Company elects toseek 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 suchperson’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 suchinformation the Company marks such information as “Non-Public Information — Confidential”and provides the Purchaser, such advisors and representatives with the
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opportunity to acceptor refuse to accept such non-public information for review. The Company may, as a conditionto disclosing any non-public information hereunder, require the Purchaser’s advisors andrepresentatives to enter into a confidentiality agreement in form reasonably satisfactory tothe Company and the Purchaser.     (c) Nothing herein shall require the Company to disclose non-public information to thePurchaser or its advisors or representatives, and the Company represents that it does notdisseminate non-public information to any Purchasers who purchase stock in the Company in apublic offering, to money managers or to securities analysts.     6.2 Legends**.**To the extent applicable, each note, certificate or other documentevidencing the Note to be purchased and sold pursuant to this Agreement and any Shares issued shallbe endorsed with the legends set forth below, and the Purchaser on behalf of itself and each holderof the Note covenants that, except to the extent such restrictions are waived by the Company, itshall not transfer the Note or Shares without complying with the restrictions on transfer describedin the legends endorsed on such Note or certificate:     (a) The following legend under the Securities Act:“THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATESSECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED,PLEDGED, OR HYPOTHECATED ABSENT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT ORCOMPLIANCE WITH RULE 144 PROMULGATED UNDER SUCH ACT, OR UNLESS THE COMPANY HASRECEIVED AN OPINION OF COUNSEL, IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THECOMPANY AND ITS COUNSEL AND FROM ATTORNEYS REASONABLY ACCEPTABLE TO THE COMPANY ANDITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED.”     (b) If required by the authorities of any state in connection with the issuance or saleof the Note or the Shares, the legend required by such state authority.     (c) The legend set forth above shall be removed from the Shares and the Company shallwithin two (2) business days issue a certificate without such legend to the holder of theShares upon which it is stamped, if, unless otherwise required by state securities laws, (i)in connection with a sale transaction, provided the Shares are registered under theSecurities Act or (ii) in connection with a sale transaction, after such holder provides theCompany with an opinion of counsel, which opinion shall be in form,substance and scope customary for opinions of counsel in comparable transactions, tothe effect that a public sale, assignment or transfer of the Shares may be made withoutregistration under the Securities Act. The legend set forth above shall be removed from theShares and the Company shall
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issue a certificate without such legend to the holder of theShares immediately upon the registration of the Shares under the Securities Act inaccordance with this Agreement.     6.3 Costs and Expenses. The Company shall reimburse Purchaser for its reasonablelegal fees and expenses in connection with the purchase of the Note. The Company shall beresponsible for all of its fees and expenses in connection with this transaction.     6.4 Assignability; Successors. The provisions of this Agreement shall inure to thebenefit 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 theCompany 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 THESTATE 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 oneand the same agreement. The descriptive headings in this Agreement are inserted for convenience ofreference 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 Agreementand knows the contents hereof and that it has signed this Agreement freely and voluntarilyand that each party has obtained independent counsel in reviewing this document and furtheracknowledges that the law firm of Gallagher, Briody & Butler has memorialized the withinAgreement and has provided legal advice solely to the Company with respect to thisAgreement.     (b) The Purchaser was provided the opportunity to retain individual counsel, and hasretained or waived the right to retain individual counsel to review this Agreement.     6.9 Entire Agreement, Amendments. This Agreement and the Exhibits contain the entireunderstanding of the parties with respect to the subject matter hereof, and supersede all otherrepresentations and understandings, oral or written, with respect to the subject matter hereof. Noamendment, modification, alteration, or waiver of the terms of this Agreement or consent requiredunder 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 andthe Purchaser. Any such amendment, modification, alteration, waiver or consent shall be effectiveonly 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 Agreementshall 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 anon-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 notifiesthe other in accordance with this Section of a change of address:         **If to the Company:** U.S. Helicopter Corporation      6 East River Piers, Suite 216      Downtown Manhattan Heliport      New York, NY 10004      Attn.: John G. Murphy, President      Telephone: 212-248-2002      Fax: 212-248-0940           **With a copy to:** Gallagher, Briody & Butler      155 Village Boulevard      2nd Floor      Princeton, New Jersey 08540      Attn: Thomas P. Gallagher, Esq.      Telephone: 609-452-6000      Fax: 609-452-0090           **If to the Purchaser:** Portfolio Lenders II, LLC      c/o Gallagher, Briody & Butler      155 Village Boulevard      2nd Floor      Princeton, New Jersey 08540      Attn: Thomas P. Gallagher, Esq.      Telephone: 609-452-6000      Fax: 609-452-0090       6.11 Severability. Whenever possible, each provision of this Agreement shall beinterpreted in such manner as to be effective and valid under applicable law, but if any provisionof this Agreement shall be prohibited by or invalid under applicable law, such provision shall beineffective to the extent of such prohibition or invalidity, without invalidating the remainder ofsuch provision or the remaining provisions of this Agreement.     6.12 Maximum Interest. It is expressly stipulated and agreed to be the intent of theCompany and the Purchaser at all times to comply with the applicable law governing themaximum rate of interest payable on or in connection with all indebtedness and transactionshereunder (or applicable United States federal law to the extent that it permits Purchaser tocontract for, charge, take, reserve or receive a greater amount of interest). If the applicablelaw is ever judicially
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interpreted so as to render usurious any amount of money or otherconsideration called for hereunder, or contracted for, charged, taken, reserved or received withrespect to any loan or advance hereunder, or if acceleration of the maturity of the Note results inthe Company’s having paid any interest in excess of that permitted by law, then it is the Company’sand the Purchaser’s express intent that all excess cash amounts theretofore collected by Purchaserbe credited on the principal balance of the Note (or if the Note has been or would thereby be paidin full, refunded to the Company), and the provisions of this Agreement immediately be deemedreformed and the amounts thereafter collectible hereunder reduced, without the necessity of theexecution of any new document, so as to comply with the applicable law, but so as to permit therecovery of the fullest amount otherwise called for hereunder. The right to accelerate maturity ofthe Note does not include the right to accelerate any interest which has not otherwise accrued onthe date of such acceleration, and the Purchaser does not intend to collect any unearned interestin the event of acceleration.[The remainder of this page is intentionally left blank.]
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     **IN WITNESS WHEREOF,**this Agreement has been duly executed as of the day and year first abovewritten.      **U. S. HELICOPTER CORPORATION**