Document:

exv10w14

 

Exhibit 10.14

BUSINESS LOAN AGREEMENT

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Principal	 	Loan Date	 	Maturity	 	Loan No	 	 	 	Account	 	Officer	 	 
	$16,500,000.00	 	06-16-2005	 	8-31-2007	 	9329000055-1	 	Call / Coll	 	9329000055-1	 	22163	 	Initials
	References in the
shaded area are for Lender’s use only and do not limit the applicability of this document to any particular loan or item.
Any item above containing “***” has been omitted due to text length limitations

	 	 	 	 	 	 	 
	Borrower:

	 	Aerovironment, Inc.
	 	Lender:
	 	California Bank & Trust
	 

	 	825 South Myrtle Avenue
	 	 	 	Los Angeles Commercial Banking
	 

	 	Monrovia, CA 91016
	 	 	 	550 South Hope Street, Suite 300
	 

	 	 	 	 	 	Los Angeles, CA 90071

THIS BUSINESS LOAN AGREEMENT dated June 16, 2005, is made and executed between Aerovironment,
Inc. (“Borrower”) and California Bank & Trust (“Lender”) on the following terms and conditions.
Borrower has received prior commercial loans from Lender or has applied to Lender for a commercial
loan or loans or other financial accommodations, including those which may be described on any
exhibit or schedule attached to this Agreement (“Loan”). Borrower understands and agrees that:
(A) in granting, renewing or extending any Loan, Lender is relying upon Borrower’s representations,
warranties, and agreements as set forth in this Agreement; (B) the granting, renewing or extending
of any Loan by Lender at all times shall be subject to Lender’s sole judgment and discretion; and
(C) all such Loans shall be and remain subject to the terms and conditions of this Agreement.

TERM. This Agreement shall be effective as of June 16, 2005, and shall continue in full force and
effect until such time as all of Borrower’s Loans in favor of Lender have been paid in full,
including principal, interest, costs, expenses, attorneys’ fees, and other fees and charges, or
until such time as the parties may agree in writing to terminate this Agreement.

CONDITIONS PRECEDENT TO EACH ADVANCE. Lender’s obligation to make the initial Advance and each
subsequent Advance under this Agreement shall be subject to the fulfillment to Lender’s
satisfaction of all of the conditions set forth in this Agreement and in the Related Documents.

Loan Documents. Borrower shall provide to Lender the following documents for the Loan: (1) the
Note; (2) together with all such Related Documents as Lender may require for the Loan; all in form
and substance satisfactory to Lender and Lender’s counsel.

Borrower’s Authorization. Borrower shall have provided in form and substance satisfactory to
Lender properly certified resolutions, duly authorizing the execution and delivery of this
Agreement, the Note and the Related Documents. In addition, Borrower shall have provided such
other resolutions, authorizations, documents and instruments as Lender or its counsel, may require.

Payment of Fees and Expenses. Borrower shall have paid to Lender all fees, charges, and other
expenses which are then due and payable as specified in this Agreement or any Related Document.

Representations and Warranties. The representations and warranties set forth in this Agreement, in
the Related Documents, and in any document or certificate delivered to Lender under this Agreement
are true and correct.

No Event of Default. There shall not exist at the time of any Advance a condition which would
constitute an Event of Default under this Agreement or under any Related Document.

REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants to Lender as of the date of
this Agreement, as of the date of each disbursement of loan proceeds, as of the date of any
renewal, extension or modification of any Loan, and at all times any indebtedness exists:

Organization. Borrower is a corporation for profit which is, and at all times shall be, duly
organized, validly existing, and in good standing under and by virtue of the laws of the state of
California. Borrower is duly authorized to transact business in all other states in which Borrower
is doing business, having obtained all necessary filings, governmental licenses and approvals for
each state in which Borrower is doing business. Specifically, Borrower is, and at all times shall
be, duly qualified as a foreign corporation in all states in which the failure to so qualify would
have a material adverse effect on its business or financial condition. Borrower has the full power
and authority to own its properties and to transact the business in which it is presently engaged
or presently proposes to engage. Borrower maintains an office at 825 South Myrtle Avenue,
Monrovia, CA 91016. Unless Borrower has designated otherwise in writing, the principal office is
the office at which Borrower keeps its books and records including its records concerning the
Collateral. Borrower will notify Lender prior to any change in the location of Borrower’s state of
organization of any change in Borrower’s name. Borrower shall do

 

 

					
	 
	 	BUSINESS LOAN AGREEMENT	 	 
	 
	 	(Continued)	 	 
	Loan No.: 9329000055-1
	 	 	 	Page 2

all things necessary to preserve and to keep in full force and effect its existence, rights and
privileges, and shall comply with all regulations, rules, ordinances, statutes, orders and decrees
of any governmental or quasi-governmental authority or court applicable to Borrower and Borrower’s
business activities.

Assumed Business Names. Borrower has filed or recorded all documents or filings required by law
relating to all assumed business names used by Borrower. Excluding the name of Borrower, the
following is a complete list of all assumed business names under which Borrower does business:
None.

Authorization. Borrower’s execution, delivery, and performance of this Agreement and all the
Related Documents have been duly authorized by all necessary action by Borrower and do not conflict
with, result in a violation of, or constitute a default under (1) any provision of (a) Borrower’s
articles of incorporation or organization, or bylaws, or (b) any agreement or other instrument
binding upon Borrower or (2) any law, governmental regulation, court decree, or order applicable to
Borrower or Borrower’s properties.

Financial Information. Each of Borrower’s financial statements supplied to Lender truly and
completely disclosed Borrower’s financial condition as of the date of the statement, and there has
been no material adverse change in Borrower’s financial condition subsequent to the date of the
most recent financial statement supplied to Lender. Borrower has no material contingent
obligations except as disclosed in such financial statements.

Legal Effect. This Agreement constitutes, and any instrument or agreement Borrower is required to
give under this Agreement when delivered will constitute legal, valid, and binding obligations of
Borrower enforceable against Borrower in accordance with their respective terms.

Properties. Except as contemplated by this Agreement or as previously disclosed in Borrower’s
financial statements or in writing to Lender and as accepted by Lender, and except for property tax
liens for taxes not presently due and payable, Borrower owns and has good title to all of
Borrower’s properties free and clear of all Security interests, and has not executed any security
document or financing statements relating to such properties. All of Borrower’s properties are
titled in Borrower’s legal name, and Borrower has not used or filed a financing statement under any
other name for at least the last five (5) years.

Hazardous Substances. Except as disclosed and acknowledged by Lender in writing, Borrower
represents and warrants that: (1) During the period of Borrower’s ownership of the Collateral,
there has been no use, generation, manufacture, storage, treatment, disposal, release or threatened
release of any Hazardous Substance by any person on, under, about or from any of the Collateral;
(2) Borrower has no knowledge of, or reason to believe that there has been (a) any breach or
violation of any Environmental Laws; (b) any use, generation, manufacture, storage, treatment,
disposal, release or threatened release of any Hazardous Substance on, under about or from the
Collateral by any prior owners or occupants of any of the Collateral; or (c) any actual or
threatened litigation or claims of any kind by any person relating to such matters; (3) Neither
Borrower nor any tenant, contractor, agent or other authorized user of any of the Collateral shall
use, generate, manufacture, store, treat, dispose of or release any Hazardous Substance on, under,
about or from any of the Collateral; and any such activity shall be conducted in compliance with
all applicable federal, state, and local laws, regulations, and ordinances, including without
limitation all Environmental Laws. Borrower authorizes Lender and its agents to enter upon the
Collateral to make such inspections and tests as Lender may deem appropriate to determine
compliance of the Collateral with this section of the Agreement. Any inspections or tests made by
Lender shall be at Borrower’s expense and for Lender’s purposes only and shall not be construed to
create any responsibility or liability on the part of Lender to Borrower or to any other person.
The representations and warranties contained herein are based on Borrower’s due diligence in
investigating the Collateral for hazardous waste and Hazardous Substances. Borrower hereby (1)
releases and waives any future claims against Lender for indemnity or contribution in the event
Borrower becomes liable for cleanup or other costs under any such laws, and (2) agrees to indemnify
and hold harmless Lender against any and all claims, losses, liabilities, damages, penalties, and
expenses which Lender may directly or indirectly sustain or suffer resulting from a breach of this
section of the Agreement or as a consequence of any use, generation, manufacture, storage,
disposal, release or threatened release of a hazardous waste or substance on the Collateral. The
provisions of this section of the Agreement, including the obligation to indemnify, shall survive
the payment of the indebtedness and the termination, expiration, or satisfaction of this Agreement
and shall not be affected by Lender’s acquisition of any interest in any of the Collateral, whether
by foreclosure or otherwise.

Litigation and Claims. No litigation, claim, investigation, administrative proceeding or similar
action (including those for unpaid taxes) against Borrower is pending or threatened, and no other
event has occurred which may materially adversely affect Borrower’s financial condition or
properties, other than litigation, claims, or other events, if any, that have been disclosed to and
acknowledged by Lender in writing.

 

 

					
	 
	 	BUSINESS LOAN AGREEMENT	 	 
	 
	 	(Continued)	 	 
	Loan No.: 9329000055-1
	 	 	 	Page 3

Taxes. To the best of Borrower’s knowledge, all of Borrower’s tax returns and reports that are or
were required to be filed, have been filed, and all taxes, assessments and other governmental
charges have been paid in full, except those presently being or to be contested by Borrower in good
faith in the ordinary course of business and for which adequate reserves have been provided.

Lien Priority. Unless otherwise previously disclosed to Lender in writing, Borrower has not
entered into or granted any Security Agreements, or permitted the filing or attachment of any
Security Interests on or affecting any of the Collateral directly or indirectly securing repayment
of Borrower’s Loan and Note, that would be prior or that may in any way be superior to Lender’s
Security Interests and rights in and to such Collateral.

Binding Effect. This Agreement, the Note, all Security Agreements (if any), and all Related
Documents are binding upon the signers thereof, as well as upon their successors, representatives
and assigns, and are legally enforceable in accordance with their respective terms.

AFFIRMATIVE COVENANTS. Borrower covenants and agrees with Lender that, so long as this Agreement
remains in effect, Borrower will:

Notices of Claims and Litigation. Promptly inform Lender in writing of (1) all material adverse
changes in Borrower’s financial condition, and (2) all existing and all threatened litigation,
claims, investigations, administrative proceedings or similar actions affecting Borrower or any
Guarantor which could materially affect the financial condition of Borrower or the financial
condition of any Guarantor.

Financial Records. Maintain its books and records in accordance with GAAP, applied on a consistent
basis, and permit Lender to examine and audit Borrower’s books and records at all reasonable times.

Financial Statements. Furnish Lender with the following:

Annual Statements. As soon as available, but in no event later than one-hundred-twenty
(120) days after the end of each fiscal year, Borrower’s balance sheet and income statement
for the year ended, audited by a certified public accountant satisfactory to Lender.

Interim Statements. As soon as available, but in no event later than thirty (30) days after
the end of each month, Borrower’s balance sheet and profit and loss statement for the period
ended, prepared by Borrower.

Tax Returns. As soon as available, but in no event later than thirty (30) days after the
applicable filing date for the tax reporting period ended, Federal and other governmental
tax returns, prepared by Borrower.

All financial reports required to be provided under this Agreement shall be prepared in accordance
with GAAP, applied on a consistent basis, and certified by Borrower as being true and correct.

Additional Information. Furnish such additional information and statements, as Lender may request
from time to time.

Financial Covenants and Ratios. Comply with the following covenants and ratios:

Working Capital Requirements. Maintain Working Capital according to the following:

Quick Ratio. Maintain a Quick Ratio in excess of 0.650 to 1.000. The term Quick Ratio
means cash, cash equivalent, marketable securities, trade account receivables and unbilled
receivables divided by total current liabilities. This liquidity ratio will be evaluated as
of quarter end.

Tangible Net Worth Requirements. Borrower shall comply with the following net worth ratio
requirements:

Debt / Worth Ratio. Maintain a ratio of Debt / Worth not in excess of 2.250 to
1.000. The ratio “Debt / Worth” means Borrower’s Total Liabilities divided by
Borrower’s Tangible Net Worth. This leverage ratio will be evaluated as of
quarter-end.

 

 

					
	 
	 	BUSINESS LOAN AGREEMENT	 	 
	 
	 	(Continued)	 	 
	Loan No.: 9329000055-1
	 	 	 	Page 4

Other Requirements.

Debt Service Coverage Ratio. Maintain a minimum Debt Service Coverage ratio of 2.50 to
1.00, to be measured quarterly on a rolling 4-quarter basis. Debt Service Coverage Ratio is
defined as “Earning before Interest Expenses, Taxes, Depreciation and Amortization Expenses
divided by Current Portion of Long-Term Debt plus Interest Expense.”

Except as provided above, all computations made to determine compliance with the
requirements contained in this paragraph shall be made in accordance with generally accepted
accounting principles, applied on a consistent basis, and certified by Borrower as being
true and correct.

Insurance. Maintain fire and other risk insurance, public liability insurance, and such other
insurance as Lender may require with respect to Borrower’s properties and operations, in form,
amounts, coverages and with insurance companies acceptable to Lender. Borrower, upon request of
Lender, will deliver to Lender from time to time the policies or certificates of insurance in form
satisfactory to Lender, including stipulations that coverages will not be cancelled or diminished
without at least ten (10) days prior written notice to Lender. Each insurance policy also shall
include an endorsement providing that coverage in favor of Lender will not be impaired in any way
by any act, omission or default of Borrower or any other person. In connection with all policies
covering assets in which Lender holds or is offered a security interest for the Loans, Borrower
will provide Lender with such lender’s loss payable or other endorsements as Lender may require.

Insurance Reports. Furnish to Lender, upon request of Lender, reports on each existing insurance
policy showing such information as Lender may reasonably request, including without limitation the
following: (1) the name of the insurer, (2) the risks insured; (3) the amount of the policy; (4)
the properties insured; (5) the then current property values on the basis of which insurance has
been obtained, and the manner of determining those values; and (6) the expiration date of the
policy. In addition, upon request of Lender (however not more often than annually), Borrower will
have an independent appraiser satisfactory to Lender determine, as applicable, the actual cash
value or replacement cost of any Collateral. The cost of such appraisal shall be paid by Borrower.

Other Agreements. Comply with all terms and conditions of all other agreements, whether now or
hereafter existing, between Borrower and any other party and notify Lender immediately in writing
of any default in connection with any other such agreements.

Loan Proceeds. Use all Loan proceeds solely for Borrower’s business operations, unless
specifically consented to the contrary by Lender in writing.

Taxes, Charges and Liens. Pay and discharge when due all of its indebtedness and obligations,
including without limitation all assessments, taxes, governmental charges, levies and liens, of
every kind and nature, imposed upon Borrower or its properties, income, or profits, prior to the
date on which penalties would attach, and all lawful claims that, if unpaid, might become a lien or
charge upon any of Borrower’s properties, income, or profits.

Performance. Perform and comply, in a timely manner, with all terms, conditions, and provisions
set forth in this Agreement, in the Related Documents, and in all other instruments and agreements
between Borrower and Lender. Borrower shall notify Lender immediately in writing of any default in
connection with any agreement.

Operations. Maintain executive and management personnel with substantially the same qualifications
and experience as the present executive and management personnel; provide written notice to Lender
of any change in executive and management personnel; conduct its business affairs in a reasonable
and prudent manner.

Environmental Studies. Promptly conduct and complete, at Borrower’s expense, all such
investigations, studies, samplings and testings as may be requested by Lender or any governmental
authority relative to any substance, or any waste or by-product of any substance defined as toxic
or a hazardous substance under applicable federal, state, or local law, rule, regulation, order or
directive, at or affecting any property or any facility owned, leased or used by Borrower.

Compliance with Governmental Requirements. Comply with all laws, ordinances, and regulations, now
or hereafter in effect, of all governmental authorities applicable to the conduct of Borrower’s
properties, businesses and operations, and to the use or occupancy of the Collateral, including
without limitation, the Americans With Disabilities Act. Borrower may contest in good faith any
such law, ordinance, or regulation and withhold compliance during any proceeding, including
appropriate appeals, so long as Borrower has notified Lender in writing prior to doing so and so
long as, in Lender’s sole

 

 

					
	 
	 	BUSINESS LOAN AGREEMENT	 	 
	 
	 	(Continued)	 	 
	Loan No.: 9329000055-1
	 	 	 	Page 5

opinion, Lender’s interests in the Collateral are not jeopardized.
Lender may require Borrower to post adequate security or a surety bond, reasonably satisfactory to
Lender, to protect Lender’s interest.

Inspection. Permit employees or agents of Lender at any reasonable time to inspect any and all
Collateral for the Loan or Loans and Borrower’s other properties and to examine or audit Borrower’s
books, accounts, and records and to make copies and memoranda of Borrower’s books, accounts, and
records. If Borrower now or at any time hereafter maintains any records (including without
limitation computer generated records and computer software programs for the generation of such
records) in the possession of a third party, Borrower, upon request of Lender, shall notify such
party to permit Lender free access to such records at all reasonable times and to provide Lender with copies of any
records it may request, all at Borrower’s expense.

Environmental Compliance and Reports. Borrower shall comply in all respects with any and all
Environmental Laws; not cause or permit to exist, as a result of an intentional or unintentional
action or omission on Borrower’s part or on the part of any third party, on property owned and/or
occupied by Borrower, any environmental activity where damage may result to the environment, unless
such environmental activity is pursuant to and in compliance with the conditions of a permit issued
by the appropriate federal, state or local governmental authorities; shall furnish to Lender
promptly and in any event within thirty (30) days after receipt thereof a copy of any notice,
summons, lien, citation, directive, letter or other communication from any governmental agency or
instrumentality concerning any intentional or unintentional action or omission on Borrower’s part
in connection with any environmental activity whether or not there is damage to the environment
and/or other natural resources.

Additional Assurances. Make, execute and deliver to Lender such promissory notes, mortgages, deeds
of trust, security agreements, assignments, financing statements, instruments, documents and other
agreements as Lender or its attorneys may reasonably request to evidence and secure the Loans and
to perfect all Security Interests.

LENDER’S EXPENDITURES. If any action or proceeding is commenced that would materially affect
Lender’s interest in the Collateral or if Borrower fails to comply with any provision of this
Agreement or any Related Documents, including but not limited to Borrower’s failure to discharge or
pay when due any amounts Borrower is required to discharge or pay under this Agreement or any
Related Documents, Lender on Borrower’s behalf may (but shall not be obligated to) take any action
that Lender deems appropriate, including but not limited to discharging or paying all taxes, liens,
security interests, encumbrances and other claims, at any time levied or placed on any Collateral
and paying all costs for insuring, maintaining and preserving any Collateral. All such
expenditures incurred or paid by Lender for such purposes will then bear interest at the rate
charged under the Note from the date incurred or paid by Lender to the date of repayment by
Borrower. All such expenses will become a part of the indebtedness and, at Lender’s option, will
(A) be payable on demand; (B) be added to the balance of the Note and be apportioned among and be
payable with any installment payments to become due during either (1) the term of any applicable
insurance policy; or (2) the remaining term of the Note; or (C) be treated as a balloon payment
which will be due and payable at the Note’s maturity.

NEGATIVE COVENANTS. Borrower covenants and agrees with Lender that while this Agreement is in
effect, Borrower shall not, without the prior written consent of Lender:

Indebtedness and Liens. (1) Except for trade debt incurred in the normal course of business and
indebtedness to Lender contemplated by this Agreement, create, incur or assume indebtedness for
borrowed money, including capital leases, (2) sell, transfer, mortgage, assign, pledge, lease,
grant a security interest in, or encumber any of Borrower’s assets (except as allowed as Permitted
Liens), or (3) sell with recourse any of Borrower’s accounts, except to Lender.

Continuity of Operations. (1) Engage in any business activities substantially different than those
in which Borrower is presently engaged, (2) cease operations, liquidate, merge, transfer, acquire
or consolidate with any other entity, change its name, dissolve or transfer or sell Collateral out
of the ordinary course of business, or (3) pay any dividends on Borrower’s stock (other than
dividends payable in its stock); provided, however, that notwithstanding the foregoing, but only so
long as no Event of Default has occurred and is continuing or would result from the payment of
dividends, if Borrower is a “Subchapter S Corporation” (as defined in the Internal Revenue Code of
1986, as amended), Borrower may pay cash dividends on its stock to its shareholders from time to
time in amounts necessary to enable the shareholders to pay income taxes and make estimated income
tax payments to satisfy their liabilities under federal and state law which arise solely from their
status as Shareholders of a Subchapter S Corporation because of their ownership of shares of
Borrower’s stock, or purchase or retire any of Borrower’s outstanding shares or alter or amend
Borrower’s capital structure.

 

 

					
	 
	 	BUSINESS LOAN AGREEMENT	 	 
	 
	 	(Continued)	 	 
	Loan No.: 9329000055-1
	 	 	 	Page 6

Loans, Acquisitions and Guaranties. (1) Loan, invest in or advance money or assets to any other
person, enterprise or entity, (2) purchase, create or acquire any interest in any other enterprise
or entity, or (3) incur any obligation as surety or guarantor other than in the ordinary course of
business.

Agreements. Borrower will not enter into any agreement containing any provisions which would be
violated or breached by the performance of Borrower’s obligations under this Agreement or in
connection herewith.

CESSATION OF ADVANCES. If Lender has made any commitment to make any Loan to Borrower, whether
under this Agreement or under any other agreement, Lender shall have no obligation to make Loan
Advances or to disburse Loan proceeds if: (A) Borrower or any Guarantor is in default under the
terms of this Agreement or any of the Related Documents or any other agreement that Borrower or any
Guarantor has with Lender; (B) Borrower or any Guarantor dies, become incompetent or
becomes insolvent, files a petition in bankruptcy or similar proceedings, or is adjudged a
bankrupt; (C) there occurs a material adverse change in Borrower’s financial condition, in the
financial condition of any Guarantor, or in the value of any Collateral securing any Loan; or (D)
any Guarantor seeks, claims or otherwise attempts to limit, modify or revoke such Guarantor’s
guaranty of the Loan or any other loan with Lender; or (E) Lender in good faith deems itself
insecure, even though no Event of Default shall have occurred.

DEFAULT. Each of the following shall constitute an Event of Default under this Agreement:

Payment Default. Borrower fails to make any payment when due under the Loan.

Other Defaults. Borrower fails to comply with or to perform any other term, obligation, covenant
or condition contained in this Agreement or in any of the Related Documents or to comply with or to
perform any term, obligation, covenant or condition contained in any other agreement between Lender
and Borrower.

Default in Favor of Third Parties. Borrower or any Grantor defaults under any loan, extension of
credit, security agreement, purchase or sales agreement, or any other agreement, in favor of any
other creditor or person that may materially affect any of Borrower’s or any Grantor’s property or
Borrower’s or any Grantor’s ability to repay the Loans or perform their respective obligations
under this Agreement or any of the Related Documents.

False Statements. Any warranty, representation or statement made or furnished to Lender by
Borrower or on Borrower’s behalf under this Agreement or the Related Documents is false or
misleading in any material respect, either now or at the time made or furnished or becomes false or
misleading at any time thereafter.

Insolvency. The dissolution or termination of Borrower’s existence as a going business, the
insolvency of Borrower, the appointment of a receiver for any part of Borrower’s property, any
assignment for the benefit of creditors, any type of creditor workout, or the commencement of any
proceeding under any bankruptcy or insolvency laws by or against Borrower.

Defective Collateralization. This Agreement or any of the Related Documents ceases to be in full
force and effect (including failure of any collateral document to create a valid and perfected
security interest or lien) at any time and for any reason.

Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether
by judicial proceeding, self help, repossession or any other method, by any creditor of Borrower or
by any governmental agency against any collateral securing the Loan. This includes a garnishment
of any of Borrower’s accounts, including deposit accounts, with Lender. However, this Event of
Default shall not apply if there is a good faith dispute by Borrower as to the validity or
reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and if
Borrower gives Lender written notice of the creditor or forfeiture proceeding and deposits with
Lender monies or a surety bond for the creditor or forfeiture proceeding, in an amount determined
by Lender, in its sole discretion, as being an adequate reserve or bond for the dispute.

Events Affecting Guarantor. Any of the preceding events occurs with respect to any Guarantor of
any of the Indebtedness or any Guarantor dies or becomes incompetent, or revokes or disputes the
validity of, or liability under, any Guaranty of the Indebtedness. In the event of a death,
Lender, at its option, may, but shall not be required to, permit the Guarantor’s estate to assume
unconditionally the obligations arising under the guaranty in a manner satisfactory to Lender, and,
in doing so, cure any Event of Default.

 

 

					
	 
	 	BUSINESS LOAN AGREEMENT	 	 
	 
	 	(Continued)	 	 
	Loan No.: 9329000055-1
	 	 	 	Page 7

Change in Ownership. Any change in ownership of twenty-five percent (25%) or more of the common
stock of Borrower.

Adverse Change. A material adverse change occurs in Borrower’s financial condition, or Lender
believes the prospect of payment or performance of the Loan is impaired.

Insecurity. Lender in good faith believes itself insecure.

Right to Cure. If any default, other than a default on Indebtedness, is curable and if Borrower or
Grantor, as the case may be, has not been given a notice of a similar default within the preceding
twelve (12) months, it may be cured if Borrower or Grantor, as the case may be, after receiving
written notice from Lender demanding cure of such default: (1) cure the default within fifteen
(15) days; or (2) if the cure requires more than fifteen (15) days, immediately initiate steps
which Lender deems in Lender’s sole discretion to be sufficient to cure the default and thereafter
continue and complete all reasonable and necessary steps sufficient to produce compliance as soon
as reasonably practical.

EFFECT OF AN EVENT OF DEFAULT. If any Event of Default shall occur, except where otherwise
provided in this Agreement or the Related Documents, all commitments and obligations of Lender
under this Agreement or the Related Documents or any other agreement immediately will terminate
(including any obligation to make further Loan Advances or disbursements), and, at Lender’s option,
all Indebtedness immediately will become due and payable, all without notice of any kind to
Borrower, except that in the case of an Event of Default of the type described in the “Insolvency”
subsection above, such acceleration shall be automatic and not optional. In addition, Lender shall
have all the rights and remedies provided in the Related Documents or available at law, in equity,
or otherwise. Except as may be prohibited by applicable law, all of Lender’s rights and remedies
shall be cumulative and may be exercised singularly or concurrently. Election by Lender to pursue
any remedy shall not exclude pursuit of any other remedy, and an election to make expenditures or
to take action to perform an obligation of Borrower or of any Grantor shall not affect Lender’s
right to declare a default and to exercise its rights and remedies.

DEPOSIT AGREEMENT SECURITY. Borrower hereby grants a security interest to Lender in any and all
deposit accounts (checking, savings, money market or time) of Borrower at Lender, now existing or
hereinafter opened, to secure the Indebtedness. This includes all deposit accounts Borrower holds
jointly with someone else.

PRE-TAX PROFITS. Borrower shall achieve a minimum net profit before tax of at least $6,000,000.00
for Fiscal Year End April 30, 2006 and Fiscal Year End April 30, 2007, to be measured on an annual
basis.

PROFITABILITY. No two consecutive quarterly losses in any fiscal year.

ADDITIONAL INFORMATION. Borrower covenants and agrees with Lender that, while this Agreement is in
effect, Borrower will furnish such additional information and statements, list of assets and
liabilities, agings of receivables and payables, inventory schedules, budgets, forecasts, tax
returns, and other reports with respect to Borrower’s financial condition and business operations
as Lender may reasonably request from time to time, including without limitation: (a) detailed
Accounts Receivable and Payable agings, as soon as available, but in no event later than twenty
(20) days of each month end and; (b) detailed Inventory Report, as soon as available, but in no
event later than twenty (20) days of each month end.

COLLATERAL EXAM. Borrower covenants and agrees with Lender that, while this Agreement is in
effect, Borrower will permit employees or agents of Lender at any reasonable time, but at least
annually, to inspect any and all collateral for the Loan or Loans, as well as Borrower’s other
properties and to examine or audit Borrower’s books, accounts, and records and to make copies and
memoranda of Borrower’s books, accounts, and records as may be deemed necessary. Any such
inspection or examination shall be at Borrower’s expense.

PROJECTIONS. Borrower covenants and agrees that, while this Agreement is in effect Borrower will
provide Lender with annual balance sheet and profit and loss statement due with fiscal year end
audited financial statements, on an annual basis.

USAGE FEE. Borrower covenants and agrees with Lender that, while this Agreement is in effect, on
an annual basis, beginning April 30, 2006, Borrower shall be assessed a 15% fee when the annual
average usage is less than $3,750,000.00

MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Agreement:

Amendments. This Agreement, together with any Related Documents, constitutes the entire
understanding and agreement of the parties as to the matters set forth in this Agreement. No
alteration of or amendment to this Agreement

 

 

					
	 
	 	BUSINESS LOAN AGREEMENT	 	 
	 
	 	(Continued)	 	 
	Loan No.: 9329000055-1
	 	 	 	Page 8

shall be effective unless given in writing and signed
by the party or parties sought to be charged or bound by the alteration or amendment.

Attorneys’ Fees; Expenses. Borrower agrees to pay upon demand all of Lender’s costs and expenses,
including Lender’s attorneys’ fees and Lender’s legal expenses, incurred in connection with the
enforcement of this Agreement. Lender may hire or pay someone else to help enforce this Agreement,
and Borrower shall pay the costs and expenses of such enforcement. Costs and expenses include
Lender’s attorneys’ fees and legal expenses whether or not there is a lawsuit, including attorneys’
fees and legal expenses for bankruptcy proceedings (including efforts to modify or vacate any
automatic stay or injunction), appeals, and any anticipated post-judgment collection services.
Borrower also shall pay all court costs and such additional fees as may be directed by the court.

Caption Headings. Caption headings in this Agreement are for convenience purposes only and are not
to be used to interpret or define the provisions of this Agreement.

Consent to Loan Participation. Borrower agrees and consents to Lender’s sale or transfer, whether
now or later, of one or more participation interests in the Loan to one or more purchasers, whether
related or unrelated to Lender. Lender may provide, without any limitation whatsoever, to any one
or more purchasers, or potential purchasers, any information or knowledge Lender may have about
Borrower or about any other matter relating to the Loan, and Borrower hereby waives any rights to
privacy Borrower may have with respect to such matters. Borrower additionally waives any and all
notices of sale of participation interests, as well as all notices of any repurchase of such
participation interests. Borrower also agrees that the purchasers of any such participation
interests will be considered as the absolute owners of such interests in the Loan and will have all
the rights granted under the participation agreement or agreements governing the sale of such
participation interests. Borrower further waives all rights of offset or counterclaim that it may
have now or later against Lender or against any purchaser of such a participation interest and
unconditionally agrees that either Lender or such purchaser may enforce Borrower’s obligation under
the Loan irrespective of the failure or insolvency of any holder of any interest in the Loan.
Borrower further agrees that the purchaser of any such participation interests may enforce its
interests irrespective of any personal claims or defenses that Borrower may have against Lender.

Governing Law. This Agreement will be governed by federal laws applicable to Lender and, to the
extent not preempted by federal law, the laws of the State of California without regard to its
conflicts of law provisions. This Agreement has been accepted by Lender in the State of
California.

Choice of Venue. If there is a lawsuit, Borrower agrees upon Lender’s request to submit to the
jurisdiction of the courts of Los Angeles County, State of California.

No Waiver by Lender. Lender shall not be deemed to have waived any rights under this Agreement
unless such waiver is given in writing and signed by Lender. No delay or omission on the part of
Lender in exercising any right shall operate as a waiver of such right or any other right. A
waiver by Lender of a provision of this Agreement shall not prejudice or constitute a waiver of
Lender’s right otherwise to demand strict compliance with that provision or any other provision of
this Agreement. No prior waiver by Lender, nor any course of dealing between Lender and Borrower,
or between Lender and any Grantor, shall constitute a waiver of any of Lender’s rights or of any of
Borrower’s or any Grantor’s obligations as to any future transactions. Whenever the consent of
Lender is required under this Agreement, the granting of such consent by Lender in any instance
shall not constitute continuing consent to subsequent instances where such consent is required and
in all cases such consent may be granted or withheld in the sole discretion of Lender.

Notices. Any notice required to be given under this Agreement shall be given in writing, and shall
be effective when actually delivered, when actually received by telefacsimile (unless otherwise
required by law), when deposited with a nationally recognized overnight courier, or, if mailed,
when deposited in the United States mail, as first class, certified or registered mail postage
prepaid, directed to the addresses shown near the beginning of this Agreement. Any party may
change its address for notices under this Agreement by giving formal written notice to the other
parties, specifying that the purpose of the notice is to change the party’s address. For notice
purposes, Borrower agrees to keep Lender informed at all times of Borrower’s current address.
Unless otherwise provided or required by law, if there is more than one Borrower, any notice given
by Lender to any Borrower is deemed to be notice given to all Borrowers.

Severability. If a court of competent jurisdiction finds any provision of this Agreement to be
illegal, invalid, or unenforceable as to any circumstance, that finding shall not make the
offending provision illegal, invalid or unenforceable as to any other circumstance. If feasible,
the offending provision shall be considered modified so that it becomes legal, valid and
enforceable. If the offending provision cannot be so modified, it shall be considered deleted from
this Agreement.

 

 

					
	 
	 	BUSINESS LOAN AGREEMENT	 	 
	 
	 	(Continued)	 	 
	Loan No.: 9329000055-1
	 	 	 	Page 9

Unless otherwise required by law, the illegality, invalidity, or unenforceability
of any provision of this Agreement shall not affect the legality, validity or enforceability of any
other provision of this Agreement.

Subsidiaries and Affiliates of Borrower. To the extent the context of any provisions of this
Agreement makes it appropriate, including without limitation any representation, warranty or
covenant, the word “Borrower” as used in this Agreement shall include all of Borrower’s
subsidiaries and affiliates. Notwithstanding the foregoing however, under no circumstances shall
this Agreement be construed to require Lender to make any Loan or other financial recommendation to
any of Borrower’s subsidiaries or affiliates.

Successors and Assigns. All covenants and agreements by or on behalf of Borrower contained in this
Agreement or any Related Documents shall bind Borrower’s successors and assigns and shall inure to
the benefit of Lender and its successors and assigns. Borrower shall not, however, have the right
to assign Borrower’s rights under this Agreement or any interest therein, without the prior written
consent of Lender.

Survival of Representations and Warranties. Borrower understands and agrees that in extending Loan
Advances, Lender is relying on all representations, warranties, and covenants made by Borrower in
this Agreement or in any certificate
or other instrument delivered by Borrower to Lender under this Agreement or the Related Documents.
Borrower further agrees that regardless of any investigation made by Lender, all such
representations, warranties and covenants will survive the extension of Loan Advances and delivery
to Lender of the Related Documents, shall be continuing in nature, shall be deemed made and redated
by Borrower at the time each Loan Advance is made, and shall remain in full force and effect until
such time as Borrower’s Indebtedness shall be paid in full, or until this Agreement shall be
terminated in the manner provided above, whichever is the last to occur.

Time is of the Essence. Time is of the essence in the performance of this Agreement.

Waive Jury. All parties to this Agreement hereby waive the right to any jury trial in any action,
proceeding, or counterclaim brought by any party against any other party.

DEFINITIONS. The following capitalized words and terms shall have the following meanings when used
in this Agreement. Unless specifically stated to the contrary, all references to dollar amounts
shall mean amounts in lawful money of the United States of America. Words and terms used in the
singular shall include the plural, and the plural shall include the singular, as the context may
require. Words and terms not otherwise defined in this Agreement shall have the meanings
attributed to such terms in the Uniform Commercial Code. Accounting words and terms not otherwise
defined in this Agreement shall have the meanings assigned to them in accordance with generally
accepted accounting principles as in effect on the date of this Agreement.

Advance. The word “Advance” means a disbursement of Loan funds made, or to be made, to Borrower or
on Borrower’s behalf on a line of credit or multiple advance basis under the terms and conditions
of this Agreement.

Agreement. The word “Agreement” means this Business Loan Agreement, as this Business Loan
Agreement may be amended or modified from time to time, together with all exhibits and schedules
attached to this Business Loan Agreement from time to time.

Borrower. The word “Borrower” means Aerovironment, Inc. and includes all co-signers and co-makers
signing the Note.

Collateral. The word “Collateral” means all property and assets granted as collateral security for
a Loan, whether real or personal property, whether granted directly or indirectly, whether granted
now or in the future, and whether granted in the form of a security interest, mortgage, collateral
mortgage, deed of trust, assignment, pledge, crop pledge, chattel mortgage, collateral chattel
mortgage, chattel trust, factor’s lien, equipment trust, conditional sale, trust receipt, lien,
charge, lien or title retention contract, lease or consignment intended as a security device, or
any other security or lien interest whatsoever, whether created by law, contract, or otherwise.

Environmental Laws. The words “Environmental Laws” means any and all state, federal or local
statutes, regulations and ordinances relating to the protection of human health or the environment,
including without limitation the Comprehensive Environmental Responses, Compensation, and Liability
Act of 1980, as amended, 42 U.S.C. Section 9601, et seq. (“CERCLA”), the Superfund Amendments and
Reauthorization Act of 1986, Pub. L. No. 99-499 (“SARA”), the Hazardous Materials Transportation
Act, 49 U.S.C. Section 1801, et seq., the Resource Conservation and Recovery Act, 42 U.S.C. Section
6901, et seq., Chapters 6.5 through 7.7 of Division 20 of the California Health and Safety Code,
Section 25100, et seq., or other applicable state or federal laws, rules, or regulations adopted
pursuant thereto.

 

 

					
	 
	 	BUSINESS LOAN AGREEMENT	 	 
	 
	 	(Continued)	 	 
	Loan No.: 9329000055-1
	 	 	 	Page 10

Event of Default. The words “Event of Default” mean any of the events of default set forth in this
Agreement in the default section of this Agreement.

GAAP. The word “GAAP” means generally accepted accounting principles.

Grantor. The word “Grantor” means each and all of the persons or entities granting a Security
Interest in any Collateral for the Loan, including without limitation all Borrowers granting such a
Security Interest.

Guarantor. The word “Guarantor” means any guarantor, surety, or accommodation party of any or all
of the Loan.

Guaranty. The word “Guaranty” means the guaranty from Guarantor to Lender, including without
limitation a guaranty of all or part of the Note.

Hazardous Substances. The words “Hazardous Substances” means materials that, because of their
quantity, concentration or physical, chemical or infectious characteristics, may cause or pose a
present or potential hazard to human health or the environment when improperly used, treated,
stored, disposed of, generated, manufactured, transported or
otherwise handled. The words “Hazardous Substances” are used in their very broadest sense and
include without limitation any and all hazardous or toxic substances, materials or waste as defined
by or listed under the Environmental Laws. The term “Hazardous Substances” also includes, without
limitation, petroleum and petroleum by-products or any faction thereof and asbestos.

Indebtedness. The word “Indebtedness” means the indebtedness evidenced by the Note or Related
Documents, including all principal and interest together with all other indebtedness and costs and
expenses for which Borrower is responsible under this Agreement or under any of the Related
Documents.

Lender. The word “Lender” means California Bank & Trust, its successors and assigns.

Loan. The word “Loan” means any and all loans and financial accommodations from Lender to
Borrower, whether now or hereafter existing, and however evidenced, including without limitation
those loans and financial accommodations described herein or described on any exhibit or schedule
attached to this Agreement from time to time.

Note. The word “Note” means the Note executed by Aerovironment, Inc. in the principal amount of
$10,000,000.00 dated March 31, 2004, together with all renewals of, extensions of, modifications
of, refinancings of, consolidations of, and substitutions for the note or credit agreement.

Permitted Liens. The words “Permitted Liens” mean (1) liens and security interests securing
Indebtedness owed by Borrower to Lender; (2) liens for taxes, assessments, or similar charges
either not yet due or being contested in good faith; (3) liens of materialmen, mechanics,
warehousemen, or carriers, or other like liens arising in the ordinary course of business and
securing obligations which are not yet delinquent; (4) purchase money liens or purchase money
security interests upon or in any property acquired or held by Borrower in the ordinary course of
business to secure indebtedness outstanding on the date of this Agreement or permitted to be
incurred under the paragraph of this Agreement titled “Indebtedness and Liens”; (5) liens and
security interests which, as of the date of this Agreement, have been disclosed to and approved by
the Lender in writing; and (6) those liens and security interests which in the aggregate constitute
an immaterial and insignificant monetary amount with respect to the net value of Borrower’s assets.

Related Documents. The words “Related Documents” mean all promissory notes, credit agreements,
loan agreements, environmental agreements, guaranties, security agreements, mortgages, deeds of
trust, security deeds, collateral mortgages, and all other instruments, agreements and documents,
whether now or hereafter existing, executed in connection with the Loan.

Security Agreement. The words “Security Agreement” mean and include without limitation any
agreements, promises, covenants, arrangements, understandings or other agreements, whether created
by law, contract, or otherwise, evidencing, governing, representing, or creating a Security
Interest.

Security Interest. The words “Security Interest” mean, without limitation, any and all types of
collateral security, present and future, whether in the form of a lien, charge, encumbrance,
mortgage, deed of trust, security deed, assignment, pledge, crop pledge, chattel mortgage,
collateral chattel mortgage, chattel trust, factor’s lien, equipment trust, conditional sale, trust

 

 

					
	 
	 	BUSINESS LOAN AGREEMENT	 	 
	 
	 	(Continued)	 	 
	Loan No.: 9329000055-1
	 	 	 	Page 11

receipt, lien or title retention contract, lease or consignment intended as a security device, or
any other security or lien interest whatsoever whether created by law, contract, or otherwise.

Tangible Net Worth. The words “Tangible Net Worth” mean Borrower’s total assets excluding all
intangible assets (i.e., goodwill, trademarks, patents, copyrights, organizational expenses, and
similar intangible items, but including leaseholds and leasehold improvements) less total debt.

BORROWER ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS BUSINESS LOAN AGREEMENT AND BORROWER
AGREES TO ITS TERMS. THIS BUSINESS LOAN AGREEMENT IS DATED JUNE 16, 2005.

	 	 	 	 	 	 	 	 	 	 	 
	BORROWER:	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	AEROVIRONMENT, INC.	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Timothy Conver
 

Timothy Conver, President/CEO of Aerovironment, Inc.
	 	 
	 	By:
	 	/s/ Stephen C. Wright
 

Stephen C. Wright, CFO/VP of Finance/Sec. of
Aerovironment, Inc.
	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	LENDER:	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	CALIFORNIA BANK & TRUST	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Joe Lim
 

	 	 	 	 	 	 	 	 
	 

	 	Joe Lim, Vice President	 	 	 	 	 	 	 	 

 

 

CHANGE IN TERMS AGREEMENT

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Principal	 	Loan Date	 	Maturity	 	Loan No	 	 	 	Account	 	Officer	 	 
	$16,500,000.00	 	06-16-2005	 	8-31-2007	 	9329000055-1	 	Call / Coll	 	9329000055-1	 	22163	 	Initials
	References in the shaded area are for Lender’s use only and do not limit the applicability of this document to any particular loan or item.
	Any item above
containing “***” has been omitted due to text length limitations

	 	 	 	 	 	 	 
	Borrower:

	 	Aerovironment, Inc.
	 	Lender:
	 	California Bank & Trust
	 

	 	825 South Myrtle Avenue
	 	 	 	Los Angeles Commercial Banking
	 

	 	Monrovia, CA 91016
	 	 	 	550 South Hope Street, Suite 300
	 

	 	 	 	 	 	Los Angeles, CA 90071

Principal Amount:           $16,500,000.00           Initial Rate: 6.000%           Date of Agreement: June 16, 2005

DESCRIPTION OF EXISTING INDEBTEDNESS.

The Business Loan Agreement (Asset Based) and Promissory Note each dated March 31, 2004, in the
original amount of $10,000,000.00, as amended by that certain Change in Terms Agreement dated May
11, 2004, from Aerovironment, Inc. to Lender.

DESCRIPTION OF COLLATERAL.

1. All inventory, equipment, accounts (including but not limited to all health-care-insurance
receivables), chattel paper, instruments (including but not limited to all promissory notes),
letter-of-credit rights, letters of credit, documents, deposit accounts, investment property,
money, other rights to payment and performance, and general intangibles (including but not limited
to all software and all payment intangibles); all fixtures; all attachments, accessions,
accessories, fittings, increases, tools, parts, repairs, supplies, and commingled goods relating to
the foregoing property, and all additions, replacements of and substitutions for all or any part of
the foregoing property; all insurance refunds relating to the foregoing property; all good will
relating to the foregoing property; all records and data and embedded software relating to the
foregoing property, and all equipment, inventory and software to utilize, create, maintain and
process any such records and data on electronic media; and all supporting obligations relating to
the foregoing property; all whether now existing or hereafter arising, whether now owned or
hereafter acquired or whether now or hereafter subject to any rights in the foregoing property; and
all products and proceeds (including but not limited to all insurance payments) of or relating to
the foregoing property.

Government Contract Number W58RGZ-04-0025 for US Army Raven

Government Contract Number DAAH01-03-C0134 for US Army Raven

Government Contract Number DAAD16-03-C-0074 for SOCOM/NATICK Repair

Government Contract Number W911QY-04-C-0046

Government Contract Number FA8620-04-C-3404 for AFOSOC Pointer

Government Contract Number M67854-04-D-1011-0001 for Dragon Eye BOA

Government Contract Number N41756-04-D-4726 for Swift IDQ

Government Contract Number NCA4-3 for Pathfinder/Systems Analysis/Refurbish/Flight Testing.

DESCRIPTION OF CHANGE IN TERMS.

1. The loan amount is hereby increased from $10,000,000.00 to $16,500,000.00.

2. The Asset Based Structure of this Loan is hereby deleted and converted to a Non-ABL structured
Revolving Line of Credit.

3. The One Month, Two Months, Three Months or Four Months, LIBOR plus 2.750 percent optional rate
is hereby amended to One Month, Two Months, Three Months or Four Months, LIBOR plus 2.500 percent.

4. This Change in Terms Agreement is subject to the terms and conditions of that Loan Agreement
executed by Borrower in favor of Lender on June 16, 2005.

5. The Standby Letter of Credit Sublimit in the amount of $750,000.00 is hereby increased to
$2,000,000.00, see attached exhibit.

6. A Letter of Credit Subline in the amount of $1,000,000.00 is hereby added to the Revolving Line
of Credit. An Exhibit titled “Letter of Credit Subline Exhibit” is hereby attached to this
agreement and made part of this agreement.

PAYMENT. Borrower will pay this loan in one payment of all outstanding principal plus all accrued
unpaid interest on August 31, 2007. In addition, Borrower will pay regular monthly payments of all
accrued unpaid interest due as of each

 

 

					
	 
	 	CHANGE IN TERMS AGREEMENT	 	 
	 
	 	(Continued)	 	 
	Loan No.: 9329000055-1
	 	 	 	Page 2

payment date, beginning July 31, 2005, with all subsequent interest payments to be due on the
last day of each month after that. Unless otherwise agreed or required by applicable law, payments
will be applied first to any accrued unpaid interest; then to principal; then to any unpaid
collection costs; and then to any late charges. Interest on this Agreement is computed on a
365/360 simple interest basis; that is, by applying the ratio of the annual interest rate over a
year of 360 days, multiplied by the outstanding principal balance, multiplied by the actual number
of days the principal balance is outstanding. Borrower will pay Lender at Lender’s address shown
above or at such other place as Lender may designate in writing.

VARIABLE INTEREST RATE. Subject to designation of a different interest rate index by Borrower as
provided below, the interest rate on this Agreement is subject to change from time to time based on
changes in an index which is the rate of interest set from time to time by Bank as its Prime Rate.
California Bank & Trust Prime Rate is determined by Bank as a means of pricing credit extensions to
some customers and is neither tied to any external rate of interest or index nor is it necessarily
the lowest rate of interest charged by Bank at any given time for any particular class of customers
or credit extensions (the “Index”). The Index is not necessarily the lowest rate charged by Lender
on its loans and is set by Lender in its sole discretion. If the Index becomes unavailable during
the term of this loan, Lender may designate a substitute index after notifying Borrower. Lender
will tell Borrower the current Index rate upon Borrower’s request. The interest rate change will
not occur more often than each Day. Borrower understands that Lender may make loans based on other
rates as well. The Index currently is 6.000% per annum. The interest rate to be applied to the
unpaid principal balance of the Note will be at a rate equal to the Index, resulting in an initial
rate of 6.000% per annum. NOTICE: Under no circumstances will the interest rate on the Note be
more than the maximum rate allowed by applicable law.

INTEREST RATE OPTIONS. On the terms and subject to the conditions set forth herein, Borrower will
be able to select, from one of the following Rate Options, an interest rate which will be
applicable to a particular dollar increment of amounts outstanding, or to be disbursed, under this
Agreement. Principal shall be payable as specified herein in the “Payment” section, and interest
shall be payable as specified for each Rate Option. The following Rate Options are available to
Borrower:

(A) Default Option. The interest rate margin and index described in the “VARIABLE INTEREST RATE”
paragraph herein (the “Default Option”).

(B) LIBOR. A margin of 2.500 percentage points over LIBOR. For purposes of this Agreement, LIBOR
shall mean Lender’s LIBOR rate for the relevant Interest Period determined as of the start of each
Interest Period. The length of the Interest Period selected shall be designated One Month, Two
Months, Three Months or Four Months, though the actual length of such periods shall be calculated
as set forth below. The initial Interest Period, unless commenced on the first business day of a
month, shall, notwithstanding the length of the Interest Period selected by Borrower, (i) for
Interest Periods beginning before the 25th of each calendar month, end on the first business day of
the month following commencement of the initial Interest Period, and (ii) for Interest Periods
beginning on or after the 25th of each calendar month, end of the first business day of the second
month following commencement of the Initial Interest Period. All subsequent Interest Periods shall
commence on the first business day of the relevant month and end on the first business day of the
month determined by the length of the Interest Period selected by Borrower. The Bank’s calculation
pursuant to the provision of the length of the Interest Periods shall be in its sole and absolute
discretion and shall conclusively bind the Borrower absent manifest error. Lender’s LIBOR rate
shall mean the rate per annum quoted by Lender as Lender’s LIBOR rate based upon quotes from the
London Interbank Offered Rate from the British Bankers Association Interest Settlement Rates, as
quoted for U.S. Dollars by Bloomberg, or other comparable services selected by the Lender. This
definition of Lender’s LIBOR rate is to be strictly interpreted and is not intended to serve any
purpose other than providing an index to determine the interest rate used herein. Lender’s LIBOR
rate may not necessarily be the same as the quoted offered side in the Eurodollar time deposit
market by any particular institution or service applicable to any interest period. Interest based
on this Rate Option is a floating rate and will change on and as of the date of a change in LIBOR
(the “Interest Period”). Adjustments in the interest rate due to changes in the maximum
nonusurious interest rate allowed (the “Highest Lawful Rate”) shall be made on the effective day of
any change in the payment of all accrued and unpaid interest on the last day of such Interest
Period and, in the case of an Interest Period greater than three (3) months, at three month (3
month) intervals after the first day of such Interest Period.

The following provisions concerning Rate Options are a part of this Agreement:

Selection of Rate Options. Provided Borrower is not in default under this Agreement, Borrower may
request (a “Rate Request”) that a $100,000.00 increment or any amount in excess thereof (an
“Increment”) of the outstanding principal of, or amounts to be disbursed under, this Agreement bear
interest at the selected rate. Borrower may make this Rate Request by telephonic notice, however
no later than 10:00 AM PDT three (3) business days prior to the effective date of the Rate Request
to permit Lender to quote the rate requested.

 

 

					
	 
	 	CHANGE IN TERMS AGREEMENT	 	 
	 
	 	(Continued)	 	 
	Loan No.: 9329000055-1
	 	 	 	Page 3

Applicable Interest Rate. Borrower’s Rate Request will become effective, and interest on the
increment designated will be calculated at the rate (the “Effective Rate”), which Borrower
requested, for the applicable Interest Period, subject to the following:

(1) Notwithstanding any Rate Request, interest shall be calculated on the basis of the
Default Option if (a) Lender, in good faith, is unable to ascertain the requested Rate
Option by reason of circumstances then affecting the applicable money market or otherwise,
(b) it become unlawful or impracticable for Lender to maintain loans based upon the
requested Rate Option, or (c) Lender, in good faith, determines that it is impracticable to
maintain loans based on the requested Rate Option because of increased taxes, regulatory
costs, reserve requirements, expenses or any other costs or charges that affect such Rate
Options. Upon the occurrence of any of the events described in this “Interest Rate Options”
section, any increment to which a requested Rate Option applies shall be immediately (or at
the option of Lender, at the end of the current Interest Period), without further action of
Lender or Borrower, converted to an increment to which the Default Option applies.

(2) Borrower may have no more than a total of 2 Effective Rates applicable to amounts
outstanding under this Agreement at any given time.

(3) A Rate Request shall be effective as to amounts to be disbursed under this Agreement
only if, on the effective date of the Rate Requests, such amounts are in fact disbursed to
or for Borrower’s account in accordance with the provisions of this Agreement and any
related loan documents.

(4) Any amounts of outstanding principal for which a Rate Request has not been made, or is
otherwise not effective, shall bear interest until paid in full at the Default Option.

(5) Any amounts of outstanding principal bearing interest based upon a Rate Option shall
bear interest at such rate until the end of the Interest Period therefor, and thereafter
shall bear interest based upon the Default Option unless a new Rate Request for a Rate
Option complying with the terms hereof has been made and has become effective.

(6) If Borrower is in default under this Agreement (“Default”), the Lender shall no longer
be obligated to honor any Rate Requests.

(7) No Interest Period shall extend beyond the maturity date of this Agreement.

Notices: Authority to Act. Borrower acknowledges and agrees that the agreement of Lender herein
to receive certain notices by telephone is solely for Borrower’s convenience. Lender shall be
entitled to rely on the authority of the person purporting to be a person authorized by Borrower to
give such notice, and Lender shall have no liability to Borrower on account of any action taken by
Lender in reliance upon such telephonic notice. Borrower’s obligation to repay all sums owing
under the Note shall not be affected in any way or to any extent by any failure by Lender to
receive written confirmation of any telephonic notice or the receipt by Lender of a confirmation
which is at variance with the terms understood by Lender to be contained in the telephonic notice.

PREPAYMENT; MINIMUM INTEREST CHARGE. In any event, even upon full prepayment of this Agreement,
Borrower understands that Lender is entitled to a minimum interest charge of $200.00. Other than
Borrower’s obligation to pay any minimum interest charge, Borrower may pay without penalty all or a
portion of the amount owed earlier than it is due. Early payments will not, unless agreed to by
Lender in writing, relieve Borrower of Borrower’s obligation to continue to make payments of
accrued unpaid interest. Rather, early payments will reduce the principal balance due. Borrower
agrees not to send Lender payments marked “paid in full,” “without recourse,” or similar language.
If Borrower sends such a payment, Lender may accept it without losing any of Lender’s rights under
this Agreement, and Borrower will remain obligated to pay any further amount owed to Lender. All
written communications concerning disputed amounts, including any check or other payment instrument
that indicates that the payment constitutes “payment in full” of the amount owed or that is
tendered with other conditions or limitations or as full satisfaction of a disputed amount must be
mailed or delivered to: California Bank & Trust, Los Angeles Commercial Banking, 550 South Hope
Street, Suite 300, Los Angeles, CA 90071.

LATE CHARGE. If a payment is 15 days or more late, Borrower will be charged 6.000% of the
regularly scheduled payment or $500.00, whichever is less.

 

 

					
	 
	 	CHANGE IN TERMS AGREEMENT	 	 
	 
	 	(Continued)	 	 
	Loan No.: 9329000055-1
	 	 	 	Page 4

INTEREST AFTER DEFAULT. Upon default, the variable interest rate on this Agreement shall
immediately increase to 5.000 percentage points over the index, if permitted under applicable law.

DEFAULT. Each of the following shall constitute an Event of Default under this Agreement:

Payment Default. Borrower fails to make any payment when due under this Agreement.

Other Defaults. Borrower fails to comply with or to perform any other term, obligation, covenant
or condition contained in this Agreement or in any of the Related Documents or to comply with or to
perform any term, obligation, covenant or condition contained in any other agreement between Lender
and Borrower.

Default in Favor of Third Parties. Borrower defaults under any loan, extension of credit, security
agreement, purchase or sales agreement or any other agreement, in favor of any other creditor or
person that may materially affect any of Borrower’s property or Borrower’s ability to perform
Borrower’s obligations under this Agreement or any of the Related Documents.

False Statements. Any warranty, representation or statement made or furnished to Lender by
Borrower or on Borrower’s behalf under this Agreement or the Related Documents is false or
misleading in any material respect, either now or at the time made or furnished or becomes false or
misleading at any time thereafter.

Insolvency. The dissolution or termination of Borrower’s existence as a going business, the
insolvency of Borrower, the appointment of a receiver for any part of Borrower’s property, any
assignment for the benefit of creditors, any type of creditor workout, or the commencement of any
proceeding under any bankruptcy or insolvency laws by or against Borrower.

Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether
by judicial proceeding, self-help, repossession or any other method by any creditor of Borrower or
by any governmental agency against any collateral securing the Indebtedness. This includes a
garnishment of any of Borrower’s accounts, including deposit accounts, with Lender. However, this
Event of Default shall not apply if there is a good faith dispute by Borrower as to the validity or
reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and if
Borrower gives Lender written notice of the creditor or forfeiture proceeding and deposits with
Lender monies or a surety bond for the creditor or forfeiture proceeding, in an amount determined
by Lender, in its sole discretion, as being an adequate reserve or bond for the dispute.

Events Affecting Guarantor. Any of the preceding events occurs with respect to any guarantor,
endorser, surety, or accommodation party of any of the Indebtedness or any guarantor, endorser,
surety, or accommodation party dies or becomes incompetent, or revokes or disputes the validity of,
or liability under, any Guaranty of the Indebtedness evidenced by this Note. In the event of a
death, Lender, at its option, may, but shall not be required to, permit the guarantor’s estate to
assume unconditionally the obligations arising under the guaranty in a manner satisfactory to
Lender, and, in doing so, cure any Event of Default.

Change in Ownership. Any change in ownership of twenty-five percent (25%) or more of the common
stock of Borrower.

Adverse Change. A material adverse change occurs in Borrower’s financial condition, or Lender
believes the prospect of payment or performance of the Indebtedness is impaired.

Insecurity. Lender in good faith believes itself insecure.

Cure Provisions. If any default, other than a default in payment is curable and if Borrower has
not been given a notice of a breach of the same provision of this Agreement within the preceding
twelve (12) months, it may be cured if Borrower, after receiving written notice from Lender
demanding cure of such default: (1) cures the default within fifteen (15) days; or (2) if the cure
requires more than fifteen (15) days, immediately initiates steps which Lender deems in Lender’s
sole discretion to be sufficient to cure the default and thereafter continues and completes all
reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical.

LENDER’S RIGHTS. Upon default, Lender may declare the entire unpaid principal balance of this
Agreement and all accrued unpaid interest immediately due, and then Borrower will pay that amount.

 

 

					
	 
	 	CHANGE IN TERMS AGREEMENT	 	 
	 
	 	(Continued)	 	 
	Loan No.: 9329000055-1
	 	 	 	Page 5

ATTORNEY’S FEES; EXPENSES. Lender may hire or pay someone else to help collect this Agreement if
Borrower does not pay. Borrower will pay Lender that amount. This includes, subject to any limits
under applicable law, Lender’s attorneys’ fees and Lender’s legal expenses, whether or not there is
a lawsuit, including attorneys’ fees, expenses for bankruptcy proceedings (including efforts to
modify or vacate any automatic stay or injunction), and appeals. Borrower also will pay any court
costs, in addition to all other sums provided by law.

JURY WAIVER. Lender and Borrower hereby waive the right to any jury trial in any action,
proceeding, or counterclaim brought by either Lender or Borrower against the other.

GOVERNING LAW. This Agreement will be governed by federal law applicable to Lender and, to the
extent not preempted by federal law, the laws of the State of California without regard to its
conflicts of law provisions. This Agreement has been accepted by Lender in the State of
California.

CHOICE OF VENUE. If there is a lawsuit, Borrower agrees upon Lender’s request to submit to the
jurisdiction of the courts of Los Angeles County, State of California.

COLLATERAL. Borrower acknowledges this Agreement is secured by the following collateral described
in the security instrument listed herein: inventory, chattel paper, accounts, equipment, general
intangibles and government contracts described in a Commercial Security Agreement dated March 31,
2004.

LINE OF CREDIT. This Agreement evidences a revolving line of credit. Advances under this
Agreement may be requested either orally or in writing by Borrower or as provided in this
paragraph. Lender may, but need not, require that all oral requests be confirmed in writing. All
communications, instructions, or directions by telephone or otherwise to Lender are to be directed
to Lender’s office shown above. Borrower agrees to be liable for all sums either: (A) advanced in
accordance with the instructions of an authorized person or (B) credited to any of Borrower’s
accounts with Lender. The unpaid principal balance owing on this Agreement at any time may be
evidenced by endorsements on this Agreement or by Lender’s internal records, including daily
computer print-outs. Lender will have no obligation to advance funds under this Agreement if: (A)
Borrower or any guarantor is in default under the terms of this Agreement or any agreement that
Borrower or any guarantor has with Lender, including any agreement made in connection with the
signing of this Agreement; (B) Borrower or any guarantor ceases doing business or is insolvent; (C)
any guarantor seeks, claims or otherwise attempts to limit, modify or revoke such guarantor’s
guarantee of this Agreement or any other loan with Lender; (D) Borrower has applied funds provided
pursuant to this Agreement for purposes other than those authorized by Lender; or (E) Lender in
good faith believes itself insecure.

CONTINUING VALIDITY. Except as expressly changed by this Agreement, the terms of the original
obligation or obligations, including all agreements evidenced or securing the obligation(s), remain
unchanged and in full force and effect. Consent by Lender to this Agreement does not waive
Lender’s right to strict performance of the obligation(s) as changed, nor obligate Lender to make
any future change in terms. Nothing in this Agreement will constitute a satisfaction of the
obligation(s). It is the intention of Lender to retain as liable parties all makers and endorsers
of the original obligation(s), including accommodation parties, unless a party is expressly
released by Lender in writing. Any maker or endorser, including accommodation makers, will not be
released by virtue of this Agreement. If any person who signed the original obligation does not
sign this Agreement below, then all persons signing below acknowledge that this Agreement is given
conditionally, based on the representation to Lender that the non-signing party consents to the
changes and provisions of this Agreement or otherwise will not be released by it. This waiver
applies not only to any initial extension, modification or release, but also to all such subsequent
actions.

FINANCIAL STATEMENT CERTIFICATIONS. The undersigned hereby certifies to California Bank & Trust
(“Bank”) that all financial information (“Information”) submitted to Bank now and at all times
during the terms of this loan does, and will, fairly and accurately represent the financial
condition of the undersigned, all Borrowers and Guarantors. Financial Information includes, but is
not limited to all Business Financial Statements (including Interim and Year End financial
statements that are company prepared and/or CPA prepared). Business Income Tax Returns, Borrowing
Base Certificates, Accounts Receivable and Accounts Payable Agings, Personal Financial Statements
and Personal Income Tax Returns. The undersigned understands that the Bank will rely on all
financial information, whenever provided, and that such information is a material inducement to
Bank to make, to continue to make, or otherwise extend credit accommodations to the undersigned.
The undersigned covenants and agrees to notify Bank of any adverse material changes in her/his/its
financial condition in the future. The undersigned further understands and acknowledges that there
are criminal penalties for giving false financial information to federally insured financial
institutions.

DEPOSIT AGREEMENT SECURITY. Borrower hereby grants a security interest to Lender in any and all
deposit accounts (checking, savings, money market or time) of Borrower at Lender, now existing or
hereinafter opened, to secure its indebtedness hereunder. This includes all deposit accounts
Borrower holds jointly with someone else.

 

 

					
	 
	 	CHANGE IN TERMS AGREEMENT	 	 
	 
	 	(Continued)	 	 
	Loan No.: 9329000055-1
	 	 	 	Page 6

STAND-BY LETTER OF CREDIT SUBLINE. An exhibit, titled “Stand-By Letter of Credit Subline,” is
attached to this Agreement and by this reference is made a part of this Agreement just as if all
the provisions, terms and conditions of the Exhibit had been fully set forth in this Agreement.

LETTER OF CREDIT SUBLINE EXHIBIT. An exhibit, titled “Letter of Credit Subline Exhibit,” is
attached to this Agreement and by this reference is made a part of this Agreement just as if all
the provisions, terms and conditions of the Exhibit had been fully set forth in this Agreement.

SUCCESSORS AND ASSIGNS. Subject to any limitations stated in this Agreement on transfer of
Borrower’s interest, this Agreement shall be binding upon and inure to the benefit of the parties,
their successors and assigns. If ownership of the Collateral becomes vested in a person other than
Borrower, Lender, without notice to Borrower, may deal with Borrower’s successors with reference to
this Agreement and the Indebtedness by way of forbearance of extension without releasing Borrower
from the obligations of this Agreement or liability under the Indebtedness.

MISCELLANEOUS PROVISIONS. Lender may delay or forgo enforcing any of its rights or remedies under
this Agreement without losing them. Borrower and any other person who signs, guarantees or
endorses this Agreement, to the extent allowed by law, waive any applicable statute of limitations,
presentment, demand for payment, and notice of dishonor. Upon any change in the terms of this
Agreement, and unless otherwise expressly stated in writing, no party who signs this Agreement,
whether as maker, guarantor, accommodation maker or endorser, shall be released from liability.
All such parties agree that Lender may renew or extend (repeatedly and for any length of time) this
loan or release any party or guarantor or collateral; or impair, fail to realize upon or perfect
Lender’s security interest in the collateral; and take any other action deemed necessary by Lender
without the consent of or notice to anyone. All such parties also agree that Lender may modify
this loan without the consent of or notice to anyone other than the party with whom the
modification is made. The obligations under this Agreement are joint and several.

PRIOR TO SIGNING THIS AGREEMENT, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS AGREEMENT,
INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. BORROWER AGREES TO THE TERMS OF THE AGREEMENT.

	 	 	 	 	 	 	 	 	 	 	 
	BORROWER:	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	AEROVIRONMENT, INC.	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Timothy Conver
 

Timothy Conver, President/CEO of Aerovironment, Inc.
	 	  
	 	By:
	 	/s/ Stephen C. Wright
 

Stephen C. Wright, CFO/VP of Finance/Sec. of
Aerovironment, Inc.exv10w15

 

Exhibit 10.15

CERTAIN MATERIAL (INDICATED BY AN ASTERISK) HAS BEEN OMITTED FROM THIS DOCUMENT PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION

AV Direct Project Request

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Program Manager:

	 	Calvin Au
	 	Department:
	 	 	1750	 	 	 	 	 	 	Date:
	 	7/7/2005
	 	 	 	 	 	 	 	 	 	 	 
	Project Title:

	 	Dragon Eye D.O. 0019
	 	Customer No:
	 	 	C1391	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	Customer Name:	 	MARCORSYSCOM	 	Available Credit:	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 

											
	Address:

	 	Commander, MARCORSYSCOM
	 	Ship to:
	 	Ship In Place
	 	Billing:
	 	DFAS-Columbus Center
	 

	 	 
	 	 	 	 
	 	 	 	 
	 

	 	Attn: JWS/R&R — Jeff Campbell
	 	 	 	 	 	 	 	DFAS-CO/West Entitlement
	 

	 	 
	 	 	 	 
	 	 	 	 
	 

	 	2200 Lester Street
	 	 	 	 	 	 	 	Operations; P.O. Box 182381;
	 

	 	 
	 	 	 	 
	 	 	 	 
	 

	 	Quantico, VA 22134
	 	 	 	 	 	 	 	Columbus, OH 43218-2381
	 

	 	 
	 	 	 	 
	 	 	 	 
	Contact:

	 	Jeff Campbell
	 	Contact:
	 	 	 	Contact:	 	 
	 

	 	 
	 	 	 	 
	 	 	 	 
	Phone #:

	 	(703) 432-6017
	 	Phone #:
	 	 	 	Phone #:	 	 
	 

	 	 
	 	 	 	 
	 	 	 	 

Credit Card Orders

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Cardholder Name:	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Visa No:

	 	 	4	 	 	 	 	 	 	MasterCard No:
	 	 	5	 
	 	 	 	 	 	 	 	 	 	 	 
	Expiration Date:	 	 	 	 	 	 	 	Expiration Date:	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
	Zip Code:

	 	 	 	 	 	 	 	 	 	Zip Code:	 	 	 	 
	 	 	 	 	 	 	 

	 	 	 	 	 	 	 	 	 
	Contract Value:

	 	$[***]
	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	Mod #1:

	 	 	 	 	 	Mod #3:	 	 
	 

	 	 
	 	 	 	 	 	 
	Mod #2:

	 	 	 	 	 	Mod #3:	 	 
	 

	 	 
	 	 	 	 	 	 
	Contract No:	 	M67854-04-D-1011	 	Date of Contract:	 	6/8/2005
	 

	 	 
	 	 	 	 	 	 
	Start Date:	 	7/8/2005	 	Completion Date:	 	1/3/2006
	 

	 	 
	 	 	 	 	 	 

Contract Deliverables:

	 	 	 	 	 	 	 	 	 
	Contract Line Item	 	Description	 	Qty	 	Price	 	Delivery Date:
	0001

	 	IIP Provisioning Spares
	 	Lot
	 	$[***]
	 	1/3/2006
	 

	 	 
	 	 
	 	 
	 	 
	0002

	 	Depot Spares
	 	Lot
	 	$[***]
	 	1/3/2006
	 

	 	 
	 	 
	 	 
	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 
	 	 
	 	 
	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 
	 	 
	 	 
	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 
	 	 
	 	 
	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 
	 	 
	 	 
	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 
	 	 
	 	 
	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 
	 	 
	 	 
	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 
	 	 
	 	 
	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 
	 	 
	 	 
	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 
	 	 
	 	 
	 	 

	 	 	 	 	 
	Billing Method:

	 	Contract Type:
	 	Retention ___%
	N-Non Billable

	 	01-Gov’t ___	 	 
	T-T&M

	 	02-Gov’t Sub	 	 
	F-FP or Milestone

	 	03-Industry	 	 
	 

	 	04-Institutions
	 	137.0%/43.3%/15.50%
	Sales Tax:

	 	05-Other Gov’t	 	 
	Yes

	 	06-Foreign	 	 
	No

	 	09-Internal	 	 

MAS 90 Information (Assigned by Finance)

	 	 	 	 	 	 	 	 	 
	Job Type:

	 	SUAV
	 	Job Number:
	 	51067.19	 	 
	 

	 	 	 	 	 	 	 	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	Cost Codes:
	 	Descriptions:
	 	 	 	 
	 	 	 	Cost Types:
	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 51067.19	 	Delivery Order 0019	 	 	 	 	 	SE	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 51067.19.1	 	SUAV System	 	 	 	 	 	SE	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 51067.19.1.2	 	Production	 	 	 	 	 	SE	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 51067.19.1.2.01	 	DO #19 CLIN 0001 IIP Spares	 	 	 	 	 	CA	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 51067.19.1.2.02	 	DO #19 CLIN 0001 Depot Spares	 	 	 	 	 	CA	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Approvals:
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 	Project Mgr	 	Finance/Contracts	 	Operations	 	 	 	 	 	Screening Committee

 

			
	***	 	Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions.

1

 

	 	 	 	 	 	 	 
	ORDER FOR SUPPLIES OR SERVICES

(Contractor must submit four copies of invoice)

	 	 	Form Approved

OMB No 0704-0187

Expires Jun 30, 1997
	 	 	PAGE 1 OF 3
	 

Public reporting burden for this collection of information is estimated to average 1 hour per response,
including the time for reviewing instructions, searching existing data sources, gathering and maintaining the
data needed and completing and reviewing the collection of information. Send comments regarding this burden
estimate or any other aspect of the collection of information, including suggestions for reducing this burden, to
Washington Headquarters Services, Directorate for Information Operations and Reports, 1215 Jefferson Davis Hwy,
Suite 1204, Arlington VA 22202-4302, and to the Office of Management and Budget, Paperwork Reduction Project
(0704-0187), Washington DC 20503

PLEASE DO NOT RETURN YOUR FORM TO EITHER OF THESE ADDRESSES.

SEND YOUR COMPLETED FORM TO THE PROCUREMENT OFFICIAL IDENTIFIED IN ITEM 6.

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	1. CONTRACT/PURCHASE ORDER No.

M67854-04-D-1011

	 	 	2. DELIVERY ORDER

No. 0019
	 	 	3. DATE OF ORDER

8 June 05
	 	 	4. REQUISITION/PURCH
REQUEST No.
See Schedule
	 	 	5. PRIORITY

    C9E
	 	 	 	 	 	 	 	 	 	 	 	 	 
	6. ISSUED BY:             
                 CODE [ M67854 ]

	 	 	7. ADMINISTERED BY
	 	 	CODE [S0512A]	 	 	8. DELIVERY FOB:
	COMMANDER

MARCORSYSCOM

ATTN 1WS/R&R-Jeff Campbell

2200 Lester Street

BUYER: JEFF CAMPBELL (703) 432-3720

	 	 	 	 	 	DCMA Los Angeles

16111 Plummer Street

Bldg. 10, 2nd Floor

Sepulveda, CA 91343
	 	 	
	 	 	
o DEST

þ OTHER

(See Schedule if other)
	 	 	 	 	 	 	 	 	 	 	 	 	 
	9. CONTRACTOR

AEROVIRONMENT INC.

825 MYRTLE AVE

MONROVIA, CA 91016        TIN: 95-2705790

PHONE (805) 581-2187          DUNS: 058024456

FAX: (805) 581-4512              Cage: 60107

	 	 	 	 	 	 	 	 	10: DELIVER TO FOB POINT BY DATE

      See Block 14.
	 	 	11. MARK IF

BUSINESS IS

	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	12. DISCOUNT TERMS

NET 30
	 	 	þ SMALL
o SMALLDSAD

o WOMENOWN
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	13. MAIL INVOICES TO

      SEE BLOCK 15	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	14. SHIP TO                
                    
  CODE [           ]

See Schedule

	 	 	 	 	 	15. PAYMENT WILL BE MADE BY            CODE [HQ0339]

DFAS-Columbux Center

DFAS-CO/West Entitlement Operations

PO BOX 182381

Columbus, OH 43218-2381
	 	 	MARK ALL

PACKAGES AND

PAPERS WITH

CONTRACT OR

ORDER NUMBER
	 	 	 	 	 	 	 	 	 	 	 	 	 

	 	 	 	 	 	 	 	 	 	 	 	 
	16.

TYPE OF
 ORDER

	 	 	DELIVERY
	 	 	X
	 	 	This delivery order is issued on another Government agency or in accordance with and subject to terms and conditions of above numbered contract.	 	 
	 	 	 	 	 	 	 	 	 
	 	 	PURCHASE
	 	 	 	 	 	Reference your                                           furnish the following on terms specified herein.	 	 
	 	 	 	 	 	 	 	 	 	 

ACCEPTANCE. THE CONTRACTOR HEREBY ACCEPTS THE OFFER REPRESENTED BY THE NUMBERED PURCHASE ORDER AS IT MAY PREVIOUSLY HAVE BEEN OR IS NOW MODIFIED. SUBJECT TO ALL OF THE TERMS AND CONDITIONS SET
FORTH AND AGREES TO PERFORM THE SAME.

	 	 	 	 	 	 	 
	John F. Grabowsky

	 	/s/ John F. Grabowsky
	 	General Manager
	 	6/8/05
	 

	 	 
	 	 
	 	 
	NAME OF CONTRACTOR

	 	SIGNATURE
	 	TYPED NAME AND TITLE
	 	DATE SIGNED

	 	 	 	 	 	 	 
	þ If this box is marked, supplier must sign Acceptance and return the following number of copies: 1
	 
	17. ACCOUNTING AND APPROPRIATION DATA/LOCAL USE
	    SEE SCHEDULE

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	18.

ITEM NO.

	 	 	19.	 	 	 	 	20. QUANTITY 
 ORDERED
 ACCEPTED
	 	 	 	21.	 	 	 	 	22.	 	 	 	 	23.	 
	 

	 	 	SCHEDULE OF SUPPLIES/SERVICE
	 	 	 	 	UNIT
	 	 	UNIT PRICE
	 	 	AMOUNT

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	*

	 	 	* SEE SCHEDULE
	 	 	*
	 	 	 	*	 	 	 	 	*	 	 	 	 	*	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

	 	 	 	 	 	 	 	 	 
	If quantity accepted by the
Government is same as
quantity ordered, indicate by
X. If different, enter actual
quantity accepted below
quantity ordered and encircle.

	 	 24. UNITED STATES OF AMERICA

/s/ JEFF T. CAMPBELL

	25. TOTAL

	 	
BY: JEFF T. CAMPBELL CONTRACTING/ORDERING OFFICER
	
29. DIFFERENCE

	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	26. QUANTITY IN COLUMN 20 HAS BEEN

o INSPECTED o RECEIVED o ACCEPTED, AND
CONFORMS TO 
                             
                    THE CONTRACT EXCEPT AS NOTED	 	 	27. SHIP TO	 	28. D.O. VOUCHER NO.	 	30. INITIALS	 	 	 
	 	 	 	 	 	o PARTIAL

    o FINAL	 	 	32. PAID BY,	 	 	33. AMOUNT VERIFIED CORRECT FOR  
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	DATE	 	SIGNATURE OF AUTHORIZED GOVERNMENT REP.	 	 	31. PAYMENT	 	 	 	 	 	34. CHECK NUMBER
	 

	 	 	 	 	o COMPLETE	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	    o PARTIAL	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	o FINAL	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	36. I certify this account is correct and proper for payment	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	35. BILL OF LADING NO.
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	DATE	SIGNATURE AND TITLE OF CERTIFYING OFFICER	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	37. RECEIVED BY

	 	 	38. RECEIVED
BY (PRINT)
	 	 	39. DATE
RECEIVED 
 YYMMDD
	 	 	40. TOTAL
 CONTAINERS
	 	 	41. S/R ACCOUNT

NUMBER
	 	 	42. S/R VOUCHER NO.
	 	 

					
	DD FORM 1155, JUN 94
	 	PREVIOUS EDITION MAY BE USED
	 	 

 

			
	 	 	 
	AEROVIRONMENT, INC

Page 2 of 3
	 	M67854-04-D-1011

D.O. 0019

	1.	 	Block 4 – Requisition Numbers:

	 	a.	 	M9545005RC03356-ACRN AA
	 
	 	b.	 	M9545005RC03332-ACRN AB
	 
	 	c.	 	M6785405RC03279-ACRN AC
	 
	 	d.	 	M6789905RC00005-ACRN AD

	2.	 	Block 17 – Accounting and Appropriation Data. The following funds are hereby obligated to
Delivery Order 0019:

APPROPRIATION DATA/SPECIAL INSTRUCTIONS: The Government Payment Office shall make all
payments against this contract in accordance with the CLIN/ACRN association specified below.
All contractor requests for payment made against this contract that fail to specify a
CLIN/ACRN association shall be promptly rejected by the Government Payment Office.

	 	 	 	 	 	 	 	 	 
	CLIN	 	ACRN	 	UNTING/APPROPRIATION DATA	 	AMOUNT
	0001	 	AA	 	1751109 7000 310 67854 067443 2D 7000F4 45005RC03356
	 	$	[***]	 
	0001	 	AB	 	1751109 7000 310 67854 067443 2D 700019 45005RC03332
	 	$	[***]	 
	0002	 	AC	 	1751106 27A0 310 67854 067443 2D M67854 DHSB5RC03279
	 	$	[***]	 
	0002	 	AD	 	1751106 27A0 250 67898 067443 2D M67899 CE015R000005
	 	$	[***]	 
	 	 	 	 	TOTAL DELIVERY ORDER 0019
	 	$	[***]	 

 

			
	*	 	NOTE: Requests for payment under Delivery Order 0019 shall be in order of the ACRNs as listed above.

	3.	 	Blocks 18 through 23 — Schedule of Supplies/Services.

The following Delivery Order is issued in accordance with the year one requirements as follows:

	 	 	 	 	 	 	 	 	 
	 	 	 	 	QTY/Unit	 	 	 	 
	CLIN	 	Description	 	of Issue	 	Unit Price	 	Total Amount
	0001

	 	Pursuant to the
catalog spares
under the basic
contract, Initial
Issue Provisioning
Spares (IIP) in
accordance with
Attachment 1 to
this order. The
deliverables under
this CLIN shall
undergo and pass
quality control
checks using the
Acceptance Test
Procedures (ATP) as
outlined in the
basic contract as a
guide. This shall
include Flight
Tests for all
center fuselage
sections of the
Dragon Eye Air
Vehicle. ATP
Flight Tests for
all center fuselage
sections of the
Dragon Eye Air
Vehicle and Ground
Control Station
components do not
need to be
witnessed by a
Government
representative.	 	 	 	 	 	 
	0002

	 	Pursuant to the
catalog spares
under the basic
contract, Depot
Level Spares in
accordance with
Attachment 1 to
this order. The
deliverables under
this CLIN shall
undergo and pass
quality control
checks using the
ATP as outlined in
the basic contract
as a guide. This
shall include
Flight Tests for
all center fuselage
sections of the
Dragon Eye Air
Vehicle. ATP
Flight Tests for
all center fuselage
sections of the
Dragon Eye Air
Vehicle and Ground
Control Station
components do not
need to be
witnessed by a
Government
representative.	 	 	 	 	 	 
	 	 	TOTAL AMOUNT FOR DELIVERY ORDER 0019	 	NTE
$[***]

 3 

 

			
	***	 	Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions.

 

 

			
	 	 	 
	AEROVIRONMENT, INC

PAGE 3 OF 3
	 	M67854-04-D-1011

D.O. 0019

The equitable adjustment in the price of the contract resulting from the changes outlined in
modification P00015 to the basic contract shall be negotiated pursuant to the procedures of the
“Changes” clause as outlined in modification P00015 to the basic contract. The equitable
adjustment for this order shall not exceed a total amount of $ [***]. If in the
event of contract termination, the maximum Government liability shall not exceed the following
amount $ [***].

NOTE: The contractor shall not deliver any units under this order until CLIN’s 0001 & 0002
have been definitized.

	4.	 	Stock 14 — Ship To:
	 
	 	 	Block 14 — Ship To:

CLIN’s 0001 and 0002 shall be delivered FOB Origin at the contractor’s facility NLT 210 days after
receipt of order. CLIN’s 0001 and 0002 shall be shipped / inspected and accepted in place at the
contractor’s facility. Inspection & acceptance shall be at Origin. Upon inspection and
acceptance, the deliverables shall become Government Furnished Equipment (GFE). The contractor
shall be responsible for placing the GFE in bonded storage. The consumables and spares and
subassemblies shall be delivered as necessary to conduct depot maintenance or in response to
requisitions from Marine Operating Forces per paragraph 3.7.3 of the Statement of Work. When
directed, by the program office, shipment of spares shall be via the Defense Transportation System
on a GBL, “prepaid” CBL, or Small Package Express Airbill moving via the World Wide Express (WWX)
contract rates.

 

			
	***	 	Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions.

4

 

CLIN 0001 IIP SPARES

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Unit of	 	 	 	 
	CLIN	 	P/N	 	Item Description	 	Qty	 	Issue	 	Unit Price	 	Total Amount
	0001AA

	 	[***]
	 	Assy, Nose, Color, BLK 0.5, DE-Swift
	 	 	50	 	 	EA
	 	$[***]
	 	$[***]
	0001AB

	 	[***]
	 	Asst, Center Section w/o Avionics, DE
	 	 	19	 	 	EA
	 	$[***]
	 	$[***]
	0001AC

	 	[***]
	 	Assy, Propeller Hub/Spinner, Left, BLK 0.5, DE
	 	 	50	 	 	EA
	 	$[***]
	 	$[***]
	0001AD

	 	[***]
	 	Hub/Propeller, Left, BLK 0.5, DE
	 	 	50	 	 	EA
	 	$[***]
	 	$[***]
	0001AE

	 	[***]
	 	Assy, Propeller Hub/Spinner, Right, BLK 0.5, DE
	 	 	50	 	 	EA
	 	$[***]
	 	$[***]
	0001AF

	 	[***]
	 	Hub, Propeller, Right, BLK 0.5, DE
	 	 	50	 	 	EA
	 	$[***]
	 	$[***]
	00D1AG

	 	[***]
	 	Assy, Tool Kit, BLK 0.5, DE
	 	 	75	 	 	EA
	 	$[***]
	 	$[***]
	0001AH

	 	[***]
	 	Screwdriver, #1 Phillips, 6.7 InOAL
	 	 	35	 	 	EA
	 	$[***]
	 	$[***]
	0001AJ

	 	[***]
	 	Card, FSK, Parts List, BLK 0.5, Laminated, DE
	 	 	30	 	 	EA
	 	$[***]
	 	$[***]

0019-Attachment 1

All Pricing herein are not to exceed (NTE) amounts which shall be definitized in accordance with P00015

 

			
	***	 	Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions.

5

 

CLIN 0002 Depot SPARES

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Unit of	 	 	 	 
	CLIN	 	P/N	 	Item Description	 	Qty	 	Issue	 	Unit Price	 	Total Amount
	0002AA

	 	[***]
	 	Screw, MACH, STD, 6-32x 0.625 in
	 	 	1000	 	 	EA
	 	$[***]
	 	$[***]
	0002AB

	 	[***]
	 	Mount, Camera, Foam, Color, Swift
	 	 	50	 	 	EA
	 	$[***]
	 	$[***]
	0002AC

	 	[***]
	 	Mount, B-W, Camera, Nose BLK 0.5, DE
	 	 	20	 	 	EA
	 	$[***]
	 	$[***]
	0002AD

	 	[***]
	 	Bracket, Connector, Nose, BLK 0.5
	 	 	600	 	 	EA
	 	$[***]
	 	$[***]
	0002AE

	 	[***]
	 	Screw, Pan Head, Phillips 4-24x5
	 	 	5000	 	 	EA
	 	$[***]
	 	$[***]
	0002AF

	 	[***]
	 	Washer 0.125 ID, 0.312 OD, Stainless
	 	 	5000	 	 	EA
	 	$[***]
	 	$[***]
	0002AG

	 	[***]
	 	Asst, Center Section w/o Avionics, DE
	 	 	20	 	 	EA
	 	$[***]
	 	$[***]
	0002AH

	 	[***]
	 	Bulkhead, Fuselage, Front, CE
	 	 	60	 	 	EA
	 	$[***]
	 	$[***]
	0002AJ

	 	[***]
	 	Collet, Propeller, BLK 0.5, DE
	 	 	20	 	 	EA
	 	$[***]
	 	$[***]
	0002AK

	 	[***]
	 	Assy, Elevon Actuator, BLK 0.5, DE
	 	 	35	 	 	EA
	 	$[***]
	 	$[***]
	0002AL

	 	[***]
	 	Bushing, Elevon Actuator, BLK 0.5, DE
	 	 	35	 	 	EA
	 	$[***]
	 	$[***]
	0002AM

	 	[***]
	 	Brush, Epoxy
	 	 	30	 	 	EA
	 	$[***]
	 	$[***]
	0002AN

	 	[***]
	 	Eraser, Retractable Pen Type, 0.15in dia Stick
	 	 	30	 	 	EA
	 	$[***]
	 	$[***]

0019-Attachment 1

All Pricing herein are not to exceed (NTE) amounts which shall be definitized in accordance with P00015

 

			
	***	 	Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions.

6

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