Bridge Agreement dated September 11, 2023 between Jet.AI Inc. and the Investors named therein
Exhibit 10.1
September 11, 2023
(the “Effective Date”)
This Binding Term Sheet (the “Term Sheet”) constitutes a commitment by the parties hereto to negotiate in good faith and to enter into one or more senior secured promissory notes (each a “Note”) in the amounts and upon the terms set forth herein. The terms and conditions of the Notes described below are not limited to those set forth herein. Matters that are not covered by the provisions hereof are subject to the approval and mutual agreement of the parties.
Senior Secured Promissory Note
| Company | Jet.AI Inc. (Nasdaq: JTAI) |
| Investors | As set forth in the signatures pages hereto. |
| Securities | Senior Secured Promissory Notes |
| Aggregate Principal Amount | $625,000 (20% OID); |
| Aggregate Purchase Price | $500,000 funded upon the execution of this Term Sheet (“Closing”), with each Investor funding the amount set forth on the signature pages hereto by wire transfer of same day funds to the account specified in Exhibit A. |
| Interest Rate | 5.0% per annum |
| Maturity Date | 6 months from Closing, at which time the then outstanding Aggregate Principal Amount under the Notes shall be paid in full. |
| Redemption | 100% of the proceeds from any equity or debt financing shall be used to repay the outstanding Principal Amount of the Notes, on a pro rata basis, so long as any Notes are outstanding. The Company shall pay a redemption premium equal to 110.0% (the “Redemption Premium”) of the Principal Amount being redeemed. |
| Event of Default | Upon an Event of Default as further outlined in the legal Documentation, the outstanding Principal Amount of the Notes shall increase by 120% and each Investor may convert the Notes into common stock of the Company at the lower of (a) the Minimum Price to be determined by the parties and set forth in the Documentation (the “Fixed Conversion Price”) or (b) the lowest daily volume weighted average price reported by Bloomberg (“VWAP”) of the Common Stock during the ten (10) business days prior to the conversion date (collectively, the “Conversion Price”). For avoidance of doubt, an Event of Default shall include, without limitation, the failure to comply with the Redemption and Covenants provisions of this Term Sheet, which failure has not been cured in 30 days, as well as typical bankruptcy events of the Company.
If the daily VWAP of the common stock is below $1.00 for 10 consecutive trading days, the Conversion Price shall be 95% of the lowest daily VWAP ten (10) days before conversion date. |
| Ownership Limitation | No Investor shall be able to convert the Note into an amount that would result in such Investor (or its affiliates) beneficially owning more than 4.99% of the outstanding shares of the Company unless such investor beneficially owned greater than 4.99% of the outstanding shares of the Company on the Effective Date. |
| Covenants | The Company agrees so long as any amounts are outstanding under the Notes, the Company will not enter any variable rate financings with another party unless such financing will be used to redeem the Notes under the terms hereof. |
| Documentation | Promissory Notes. Securities Purchase Agreement. |
| Registration | Upon an Event of Default, the Company shall include on any Registration Statement the shares underlying the Event of Default conversion. |
| Legal Doc Prep Fee | To be paid by the Company. |
Binding Agreement: The parties hereto acknowledge the binding nature of this Term Sheet and agree to be bound by the obligations set forth herein from the Effective Date. The parties hereto agree to negotiate in good faith, using all reasonable best efforts, to finalize and enter into the Documentation as promptly as practicable, unless the Company has repaid the Notes in full in accordance with the Redemption provisions set forth above prior thereto (a “Full Pay-off”). Upon a Full Pay-off, this Term Sheet and any obligations arising hereunder shall terminate and the parties shall each be released of their obligations set forth herein.
IN WITNESS, WHEREOF, Company has caused this Term Sheet to be signed in its name by its duly authorized officer this 11th day of September 2023 (the “Effective Date”).
| Jet.AI Inc. | ||
| 10845 Griffith Peak Dr. Suite 200 | ||
| Las Vegas, NV 89135 | ||
| By: | /s/ Mike Winston | |
| Michael D. Winston | ||
| Executive Chairman and | ||
| Interim Chief Executive Officer | ||
| Accepted and Agreed: | ||
| Investor: Michael Winston | ||
| By: | /s/ Mike Winston | |
| Investor Funding Amount: $50,000 | ||
| Investor Principal Amount: $62,500 | ||
| Investor: Wrendon Timothy | ||
| By: | /s/ Wrendon Timothy | |
| Name: | Wrendon Timothy | |
| Title: | self | |
| Investor Funding Amount: $50,000 | ||
| Investor Principal Amount: $62,500 | ||
| Investor: Bill Yankus | ||
| By: | /s/ Bill Yankus | |
| Name: | William Yankus | |
| Title: | Principal | |
| Investor Funding Amount: $25,000 | ||
| Investor Principal Amount: $31,250 | ||
| Investor: Oxbridge Re Holdings Limited | ||
| By: | /s/ Wrendon Timothy | |
| Name: | Wrendon Timothy | |
| Title: | Chief Financial Officer | |
Investor Funding Amount: $100,000 Investor Principal Amount: $125,000 | ||
| Investor: Jay Madhu | ||
| By: | /s/ Jay Madhu | |
| Name: | Jay Madhu | |
| Title: | Sanjay Madhu | |
| Investor Funding Amount: $75,000 | ||
| Investor Principal Amount: $93,750 | ||
| Investor: Allan Martin | ||
| By: | /s/ Allan Martin | |
| Name: | Allan Martin | |
| Title: | Director | |
| Investor Funding Amount: $50,000 | ||
| Investor Principal Amount: $62,500 | ||
| Investor: Thomas Schreiber | ||
| By: | /s/ Thomas Schreiber | |
| Name: | Thomas Schreiber | |
| Title: | ||
| Investor Funding Amount: $50,000 | ||
| Investor Principal Amount: $62,500 | ||
| Investor: Arvind Reddy | ||
| By: | /s/ Arvind Reddy | |
| Name: | Arvind Reddy | |
| Title: | Manager | |
| Investor Funding Amount: $100,000 | ||
| Investor Principal Amount: $125,000 | ||
