INVESTMENT AGREEMENT
THIS INVESTMENT AGREEMENT (this "Investment Agreement"), dated August
5, 1997 is by and between ADVANCED AERODYNAMICS AND STRUCTURES, INC. ("the
Company"), and THE SUMITOMO BANK, LIMITED (the "Bank"), acting by and through
its Los Angeles Branch.
WITNESSETH:
WHEREAS, the California Economic Development Financing Authority (the
"Issuer") has issued its Variable Rate Demand Industrial Development Revenue
Bonds, Series, 1997 (Advanced Aerodynamics and Structures, Inc. Project) (the
"Bonds") in the aggregate principal amount of $8,500,000 pursuant to an
Indenture of Trust dated as of August 1, 1997 (the "Indenture") between the
Issuer and First Trust of California, National Association (the "Trustee"); and
WHEREAS, the Bank has agreed to issue its Irrevocable Letter of Credit
No. G/LA-400557 dated August 5, 1997 (the "Letter of Credit") to secure payment
of principal of, interest on and purchase price of, the Bonds pursuant to a
Reimbursement Agreement dated as of August 1, 1997 (the "Reimbursement
Agreement") between the Bank and the Company; and
WHEREAS, to induce the Bank to issue the Letter of Credit and secure
the obligations of the Company to the Bank under the Reimbursement Agreement,
the Company has agreed to deposit certain moneys with the Bank pursuant to this
Investment Agreement;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants hereinafter set forth, the parties intending to be legally bound
hereby agree as follows:
Section 1. Invested Funds. The Company hereby establishes this
Investment Agreement with the Bank and agrees that, pursuant to the terms of
this Investment Agreement, the Company shall invest with the Bank the aggregate
amount of $8,500,000 (the "Invested Funds"). The Company agrees to cause the
Invested Funds to be delivered to the Bank on August 5, 1997 for investment
pursuant to the terms of this Investment Agreement. The Company hereby
acknowledges that the Invested Funds and any interest accrued thereon under this
Investment Agreement are not insured by the Federal Deposit Insurance
Corporation.
Section 2. Investments with the Bank. Investments hereunder shall be
made by wire transfer in immediately available funds to Sumitomo Bank of
California, San Francisco, California, ABA #▇▇▇▇▇▇▇▇▇ for the account of the
Bank, account number ▇▇▇-▇▇▇▇▇▇-▇▇, reference: AASI.
Section 3. Term of Agreement. This Investment Agreement will terminate
with respect to the Invested Funds on the earlier of August 5, 2002 or the
Expiration Date of the Letter of Credit (the "Maturity Date") unless extended at
the request of the Company with the approval of the Bank. Prior to the Maturity
Date, the Bank shall have absolute and unconditional custody and control over
the invested Funds. Subject to the terms of the Reimbursement Agreement, the
Invested Funds shall
be due and payable by the Bank to the Company in immediately available funds to
the account specified by the Company to the Bank on the Maturity Date. Provided
no Event of Default has occurred and is continuing under the Reimbursement
Agreement, Invested Funds shall be due and payable by the Bank to the Company in
immediately available funds to the account specified by the Company to the Bank
within seven days following (i) an optional redemption of Bonds pursuant to
Article IV of the Indenture in the amount of the Bonds so redeemed or (ii)
receipt of a request by the Company, which request shall be accompanied by a
certificate of the Company delivered to the Trustee and the Bank, acknowledging
that the Bank shall not approve any Requisition pursuant to Section 3.03 of the
Indenture at any time that the aggregate amount held by the Bank pursuant to
this Investment Agreement is less than the aggregate principal amount of Bonds
Outstanding and that an amount of Bond proceeds at least equal to the amount of
Invested Funds paid to the Company has been invested with the Bank.
Section 4. Interest. Interest shall accrue on the daily outstanding
balance of the Invested Funds from and including August 5, 1997 to and including
August 13, 1997 at 5.475% per annum (calculated on the basis of a 360-day year
for actual number of days elapsed) and thereafter to and including the Maturity
Date at LIBOR (as hereinafter defined) less 0. 15 % per annum (calculated on the
basis of a 3 60-day year for actual number of days elapsed). As used herein,
"LIBOR" means with respect to any Reset Date (as hereinafter defined) the
arithmetic mean of the rates shown on the LIBOR display on the Reuters monitor
screen as the London Interbank offered rates for deposits in Dollars quoted by
Barclays Bank International Limited, Bank of Tokyo, Bankers Trust Company and
National Westminster Bank, PLC, at approximately I 1:00 a.m., London time, on
the day that is two Business Days preceding the Reset Date for a period of one
(1) week commencing on the Reset Date. "Reset Date" means the first business day
of each calendar week.
Provided no Event of Default has occurred and is continuing under the
Reimbursement Agreement, interest shall be credited to the account specified by
the Company on the first Business Day of each month, on the Maturity Date or on
any earlier date on which Invested Funds are paid to the Company hereunder.
Interest in an amount equal to one-quarter of the total interest accruing
hereunder through August 5, 1999 shall be added to and become part of the
Invested Funds on such date. The balance shall be paid to or for the account of
the Company on such date to the account specified in or pursuant to Section 3
hereof or as otherwise directed by the Company.
Section 5. Representations and Warranties. (a) The Company represents
and warrants to the Bank that: (i) this Investment Agreement constitutes a valid
and binding obligation of the Company; and (ii) the execution, delivery and
performance of this Investment Agreement by the Company will not result in a
breach or violation of or cause a default under any provision of any law,
regulation, order, license, decree, judgment, indenture, contract or agreement
binding upon the Company.
(b) The Bank represents and warrants to the Company that: (i) this
Investment Agreement constitutes a valid and binding obligation of the Bank; and
(ii) the execution, delivery and performance of this Investment Agreement by the
Bank will not result in a breach or violation of or cause a default under any
provision of any law, regulation, order, ]license, decree, judgment, indenture,
contract or agreement binding upon the Bank.
Section 6. Role of the Bank. It is expressly understood and agreed that
in performing its obligations hereunder, the Bank is not acting as a fiduciary,
agent or other representative for the registered owners of the Bonds or anyone
else, and that neither the Bank nor any of its directors, officers, employees,
or agents shall be liable or responsible for: (i) the payment to the registered
owners of any amounts owing on or with respect to the Bonds; or (ii) any acts or
omissions of the Issuer or the Trustee under or with respect to the validity or
enforceability of the Bonds or the Indenture.
Section 7. No Implied Rights. Nothing expressed or implied herein is
intended or shall be construed to confer upon any person, firm or corporation
other than the parties hereto any right, remedy or claim by reason of this
Investment Agreement or any term hereof, and all terms contained herein shall be
for the sole and exclusive benefit of the parties hereto and their successors.
Section 8. Notices. All notices given pursuant to this Investment
Agreement shall be given telephonically, with verification sent by first-class
mail, postage prepaid, or by telex or telecopier, or overnight commercial
courier sent that Business Day to the addresses listed below, or to such other
addresses or to the attention of such other person as such party shall have
designated for such purpose in a written notice to the other:
To the Company as follows:
Advanced Aerodynamics and Structures, Inc.
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▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇, Ph.D.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
To Sumitomo as follows:
The Sumitomo Bank, Limited
Los Angeles Branch
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▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Manager - Structured Finance
and Financial Institutions Group
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
To the Trustee as follows:
First Trust of California, National Association
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▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Department
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
However, the failure by either party to provide written confirmation on the same
Business Day of any telephonic notice given hereunder will not result in a
breach of this Investment Agreement.
Section 9. Successors and Assigns. This Investment Agreement and all
obligations and rights arising hereunder shall be binding upon and inure to the
benefit of the parties hereto and their respective successors, transferees and
assigns. This Investment Agreement may not be assigned by any party without the
prior written consent of the other party.
Section 10. Amendments and Waivers. This Investment Agreement may not
be modified, amended or supplemented, and no term or provision hereof may be
waived, except in writing signed by the parties hereto.
Section 11. Governing Law. The obligations of the Company and the Bank
under this Investment Agreement shall be governed by and construed in accordance
with the laws of the State of California.
Section 12. Counterparts. This Investment Agreement may be executed in
counterparts, each of which shall be deemed to be an original and all of which
taken together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Investment
Agreement to be executed as of the date written above.
THE SUMITOMO BANK, LIMITED
By:_____________________________________
, Los Angeles Branch
ADVANCED AERODYNAMICS AND STRUCTURES,
INC.
By:_____________________________________
President
ATTEST:
By:____________________________
Secretary
(SEAL)
