PURCHASE CONTRACT

                                   $8,500,000
               California Economic Development Financing Authority
                              Variable Rate Demand
                Industrial Development Revenue Bonds, Series 1997
              (Advanced Aerodynamics and Structures, Inc. Project)

                                 August 4, 1997

California Economic Development Financing Authority
801 K Street, Suite 1700
Sacramento, California 91584

The Honorable Matt Fong
Treasurer of the State of California
915 Capitol Mall, Room 110
Sacramento, California 95814

Ladies and Gentlemen:

         1. Rauscher Pierce Refsnes,  Inc. (the  "Underwriter")  offers to enter
into this purchase  contract  (this  "Purchase  Contract")  with the  California
Economic Development  Financing Authority (the "Authority") and the Treasurer of
the  State  of  California,  solely  in his  capacity  as  agent of sale for the
Authority (the  "Treasurer"),  which upon the  Authority's  and the  Treasurer's
acceptance  hereof will be binding upon the  Authority,  the  Treasurer  and the
Underwriter.  This offer is made  subject  to the  Authority's  and  Treasurer's
acceptance  by  execution  of this  Purchase  Contract  and approval by Advanced
Aerodynamics and Structures,  Inc., a Delaware  corporation (the "Borrower") and
their delivery of same to the Underwriter at or before 9:00 p.m., New York time,
today.  Delivered to you herewith as Exhibit A, is the Letter of Representation,
dated the date hereof (the "Letter of Representation"), under which the Borrower
makes certain representations and undertakes certain obligations with respect to
this Purchase Contract.

         2.  Upon  the  terms  and   conditions   and  upon  the  basis  of  the
representations, warranties and covenants hereinafter set forth, the Underwriter
hereby  agrees to purchase  from the Authority and the Treasurer for offering to
the public,  and the  Authority  and the  Treasurer  hereby agree to sell to the
Underwriter for such purpose, at an interest rate to be determined in accordance
with the terms of the Indenture  (hereinafter  defined),  all (but not less than
all) of $8,500,000  aggregate principal amount of the Authority's  Variable Rate
Demand Industrial  Development Revenue Bonds, Series 1997 (Advanced Aerodynamics
and Structures,  Inc.  Project),  dated as of the date of delivery  thereof (the
"Bonds").  The purchase price of the Bonds shall be 100% of the principal amount
of the Bonds.

         3. The Bonds shall be otherwise  as  described  in, and shall be issued
and secured under the provisions of, the Indenture of Trust,  dated as of August
1, 1997 (the "Indenture"), by and



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between the Authority and First Trust of California,  National  Association,  as
trustee (the "Trustee"). The proceeds of sale of the Bonds will be loaned to the
Borrower  pursuant to the Loan  Agreement (as  hereinafter  defined) and will be
applied  by the  Borrower  to defray  the  Borrower's  cost of the  acquisition,
construction,   improving  and  equipping  of  a  manufacturing   facility  (the
"Project").  The Project is further described in the Loan Agreement, dated as of
August 1, 1997 (the "Loan  Agreement"),  between the Authority and the Borrower.
The Bonds  will be secured by an  irrevocable  direct pay letter of credit  (the
"Letter of Credit") issued by The Sumitomo Bank, Limited, acting through its Los
Angeles Branch, (the "Bank"), pursuant to the Reimbursement Agreement,  dated as
of  August 1, 1997 (the  "Reimbursement  Agreement"),  between  the Bank and the
Borrower.

         The Bonds are more fully described in the Official  Statement  relating
to the Bonds, dated August 4, 1997 (the "Official Statement").

         4. The  Underwriter  agrees to make a bona fide public  offering of all
the  Bonds  at par,  plus  interest  accrued  thereon,  if any,  to the  date of
delivery.  The Bonds may be offered and sold to certain  dealers  (including the
Underwriter and other dealers depositing such Bonds into investment trusts) at a
price or at prices lower than such public offering price.

         5. As soon as practicable after the execution of this Purchase Contract
by the Authority,  but no later than the Closing, the Authority shall deliver or
use its best  efforts  to  cause to be  delivered  to the  Underwriter  manually
executed originals of the documents listed below in subparagraphs (a), (b), (d),
(e) and  (g),  a copy of the  document  listed  below  in  subparagraph  (c) and
certified copies of the documents listed below in subparagraph (f):

                  (a)      the Indenture;

                  (b)      the Reimbursement Agreement;

                  (c) the Letter of  Credit,  issued by the Bank in favor of the
         Trustee  in an  amount  equal to at least the  principal  amount of the
         Bonds and 45 days'  interest  thereon  calculated at the rate of 12% on
         the basis of a 365/366 day year;

                  (d)      the Loan Agreement;

                  (e) the Tax Regulatory  Agreement,  dated as of August 1, 1997
         (the "Tax Regulatory Agreement"), among the Authority, the Borrower and
         the Trustee;

                  (f) (i) the resolution of the Authority,  adopted on April 30,
         1997,  expressing the  Authority's  intention to issue the Bonds and to
         reimburse certain  expenditures  incurred by the Borrower from proceeds
         of the Bonds,  certified by the  Secretary of the  Authority,  (ii) the
         resolution of the Authority,  adopted on June 20, 1997, authorizing the
         issuance, sale and delivery of the Bonds and the execution and delivery
         of the Indenture,  the Loan Agreement, the Tax Regulatory Agreement and
         this Purchase  Contract,  certified by the Secretary of the  Authority,
         and (iii) the resolution of the California  Infrastructure and Economic
         Development Bank (the "Infrastructure Bank"), adopted June 20, 1997,


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          approving the issuance of the Bonds by the Authority, certified by the
          Secretary of the Infrastructure Bank; and

                  (g) the Official Statement.

         By execution of this Purchase  Contract,  the Authority consents to the
use  by the  Underwriter  of all of the  above  documents  and  the  information
contained therein in connection with the public offering of the Bonds.

         6. The Authority represents and warrants to the Underwriter that:

                  (a) The Authority is a body public and corporate, and a public
         instrumentality of the State of California (the "State"), organized and
         existing  under the laws of the State,  specifically  Section  15710 et
         seq. of the California  Government Code, as amended, with all necessary
         power and  authority  to issue  the  Bonds  and to enter  into the Loan
         Agreement  for the purpose of promoting  and  encouraging  commerce and
         industry, and generally to foster economic development in the State; to
         enter  into  the  Indenture,  the Tax  Regulatory  Agreement  and  this
         Purchase  Contract;  to  issue,  sell  and  deliver  the  Bonds  to the
         Underwriter  as provided  herein;  and to carry out and  consummate all
         other transactions contemplated by each of the aforesaid documents.

                  (b) The  Authority  has duly  authorized,  by all  appropriate
         action,  and complied  with all  provisions of law with respect to, the
         execution and delivery of the Indenture,  the Loan  Agreement,  the Tax
         Regulatory Agreement and this Purchase Contract and the issuance, sale,
         execution and delivery of the Bonds.

                  (c)  When  delivered  to and paid  for by the  Underwriter  in
         accordance with the terms of this Purchase  Contract and the Indenture,
         the  Bonds  will  have  been  duly and  validly  authorized,  executed,
         authenticated,   issued  and   delivered  by  the  Authority  and  will
         constitute  legal,  valid  and  binding  limited   obligations  of  the
         Authority  enforceable  in  accordance  with  their  terms,  subject to
         applicable  bankruptcy,  insolvency or other laws affecting  creditors'
         rights  and  remedies,  and will be  entitled  to the  benefits  of the
         Indenture.

                  (d) The  execution and delivery of the Bonds,  the  Indenture,
         the Loan  Agreement,  the Tax  Regulatory  Agreement  and this Purchase
         Contract,  and compliance with the provisions  thereof, do not and will
         not  conflict  with,  or  constitute  on the  part of the  Authority  a
         violation of, breach of or default under any indenture,  mortgage, deed
         of trust,  resolution,  note agreement or other agreement or instrument
         to which the  Authority is a party or by which the  Authority is bound,
         or, to its knowledge,  any  constitutional  provision or statute of the
         State or of the United States of America, any order, rule or regulation
         of any court or governmental  agency or body having  jurisdiction  over
         the Authority or any of its activities or properties;  and all consents
         of any  governmental  authority of the State or of the United States of
         America  required in connection  with the issuance or sale of the Bonds
         by the Authority have been obtained;


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         provided, however, that no representation is made concerning compliance
         with the federal  securities  laws or the securities or "Blue Sky" laws
         of the various states.

                  (e)  There  is  no  action,  suit,   proceeding,   inquiry  or
         investigation,  at law or in  equity,  or  before  or by any  court  or
         governmental  agency or body pending or, to the best of its  knowledge,
         threatened  against or affecting the Authority,  nor to the best of its
         knowledge is there any basis therefor, wherein an unfavorable decision,
         ruling or finding would  materially  adversely  affect the transactions
         contemplated  by  this  Purchase  Contract,  the  Indenture,  the  Loan
         Agreement or the Tax Regulatory Agreement,  or which, in any way, would
         adversely  affect the  validity  or  enforceability  of the Bonds,  the
         Indenture,  the Loan  Agreement,  the Tax Regulatory  Agreement or this
         Purchase  Contract or any other  agreement or  instrument  to which the
         Authority is a party,  used or contemplated for use in the consummation
         of  the  transactions  contemplated  by  this  Purchase  Contract,  the
         Indenture, the Loan Agreement or the Tax Regulatory Agreement.

                  (f) The  Authority  will not  take or omit to take any  action
         which action or omission  will in any way cause the  proceeds  from the
         sale of the Bonds to be applied in a manner  contrary to that  provided
         for in the Indenture.

                  (g) The Authority has reviewed the statements contained in the
         Official  Statement  relating to the  Authority  under the caption "THE
         AUTHORITY"  and  such  statements,  insofar  as  they  are  within  the
         knowledge of the Authority,  are true and correct and fairly  summarize
         the  matters  encompassed  thereby  to  the  extent  such  matters  are
         described  therein.  If between the date of this Purchase  Contract and
         the date of the Closing (as hereinafter  defined) any event shall occur
         which,  in the  opinion  of the  Authority,  might or would  cause  the
         Official  Statement as then  supplemented  or amended to contain,  with
         respect to statements  contained in the Official  Statement relating to
         the Authority under the caption "THE  AUTHORITY",  any untrue statement
         of a material fact or omit to state any material fact necessary to make
         the statements  therein,  in the light of the circumstances under which
         they  were  made,  not  misleading,  the  Authority  shall  notify  the
         Underwriter,  and if in the opinion of the Authority or the Underwriter
         such event requires the  preparation and publication of a supplement or
         amendment to the Official Statement,  the Authority,  at the expense of
         the Borrower, will supplement or amend the Official Statement in a form
         and in a manner approved by the Underwriter.

         7. At 11:00 A.M.,  New York time,  on August 5, 1997,  or at such other
time or on such earlier or later business day as shall have been mutually agreed
upon by the  Authority,  the Borrower and the  Underwriter,  the Authority  will
deliver or cause to be delivered to the  Underwriter  the Bonds,  in  definitive
fully registered form, duly executed and authenticated,  at a place in New York,
New York, to be mutually agreed upon by the Authority and the  Underwriter.  The
Authority  will  deliver  or cause to be  delivered  to the  Underwriter  in Los
Angeles, California, at such time and on such date and at a place to be mutually
agreed upon by the  Authority,  the  Borrower and the  Underwriter,  the closing
documents  mentioned  paragraph 7(b) hereof.  The  Underwriter  will accept such
delivery  and pay the  purchase  price of the Bonds as set forth in  Paragraph 2
hereof,  by a Federal  Funds check or wire transfer to the order of "First Trust
of California, National Association, as Trustee" unless the Authority


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shall  otherwise  direct.  This  payment  and  delivery  is  herein  called  the
"Closing." The Bonds will be delivered in authorized  denominations as set forth
in the  Indenture  and  registered  in the name of CEDE & Co., as nominee of The
Depository  Trust Company or in such other names as the  Underwriter  shall have
requested.  The Bonds will be made available to the Underwriter for checking and
packaging by the  Underwriter  at least one business day before the Closing at a
place to be mutually agreed upon by the Authority and the Underwriter.

         8. The Underwriter's  obligations hereunder to purchase and pay for the
Bonds shall be subject to the performance by the Authority of the obligations to
be performed by it hereunder at or prior to the Closing,  to the  performance by
the Borrower of the  obligations  and agreements to be performed by the Borrower
at or prior  to the  Closing  under  the  Letter  of  Representation  and to the
accuracy in all material respects of the  representations  and warranties of the
Authority  contained  herein  and of the  Borrower  contained  in the  Letter of
Representation,  as of the date hereof and as of the Closing,  and shall also be
subject to the following conditions:

                  (a) At the time of the Closing (i) the  Indenture,  the Letter
         of Credit,  the Loan Agreement,  the Reimbursement  Agreement,  the Tax
         Regulatory  Agreement and the Letter of Representation shall be in full
         force  and  effect,  and  shall  not have  been  amended,  modified  or
         supplemented  except  as may have  been  agreed  to in  writing  by the
         Underwriter; and (ii) the Authority shall perform or have performed all
         of its  obligations  required  under  or  specified  in  this  Purchase
         Contract to be performed at or prior to the Closing.

                  (b) The Bonds shall have been duly  authorized,  executed  and
         authenticated in accordance with the provisions of the Indenture.

                  (c) The  Underwriter  may terminate this Purchase  Contract by
         notification  to the  Authority if at any time  subsequent  to the date
         hereof and at or prior to the Closing (i)  legislation  shall have been
         enacted  by the  United  States  or shall  have  been  reported  out of
         committee or being  considered  by any committee of the Congress of the
         United States, or a decision shall have been rendered by a court of the
         United States or the Tax Court of the United States,  or a ruling shall
         have been made or a  regulation  or a temporary  regulation  shall have
         been proposed or made or any other release or  announcement  shall have
         been  made by the  Treasury  Department  of the  United  States  or the
         Internal  Revenue  Service,  with  respect  to  federal  taxation  upon
         revenues or other  income or payments  of the general  character  to be
         derived by the State or upon interest  received on  obligations  of the
         general character of the Bonds,  which in the reasonable opinion of the
         Underwriter materially adversely affects the market for the Bonds; (ii)
         there  shall have  occurred  any new  outbreak  of  hostilities  or any
         national  or  international  calamity  or  crisis,  the  effect of such
         outbreak,  calamity  or  crisis  being  such  as  could  cause  a major
         disruption  in the debt markets and as, in the  reasonable  judgment of
         the Underwriter, would make it impracticable for it to market the Bonds
         or to enforce contracts for the sale of the Bonds; (iii) there shall be
         in  force  a  general  suspension  of  trading  on The New  York  Stock
         Exchange,  Inc.,  or minimum or maximum  prices for trading  shall have
         been fixed and be in force, or maximum ranges for prices for securities
         shall  have  been  required  and be in  force  on The  New  York  Stock
         Exchange,


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         Inc., whether by virtue of a determination by that exchange or by order
         of the  Securities  and Exchange  Commission or any other  governmental
         authority having jurisdiction;  (iv) a general banking moratorium shall
         have been  declared by federal,  New York,  or  California  authorities
         having  jurisdiction  and be in  force;  or (v) any  event  shall  have
         occurred or shall exist which  makes  untrue or  incorrect,  as of such
         time, in any material  respect,  any material  statement or information
         contained  in the Official  Statement or which is not  reflected in the
         Official  Statement,  but should be reflected  therein in order to make
         such  material   statements  and  information   contained  therein  not
         misleading as of such time.

                  (d) At or prior to the Closing,  the Underwriter shall receive
         the following documents:

                           (1)  The  approving  opinion  of  Kutak  Rock  ("Bond
                  Counsel"),  relating  to the  Bonds,  dated  the  date  of the
                  Closing,  in the form set forth as Appendix A to the  Official
                  Statement,  together with a letter of Bond Counsel,  dated the
                  date of the Closing and addressed to the  Underwriter  stating
                  that the Underwriter may rely on such opinion.

                           (2) The  supplemental  opinion of Bond Counsel  dated
                  the date of the Closing and addressed to the  Underwriter,  to
                  the effect that:

                                    (i) this  Purchase  Contract  has been  duly
                           authorized,  executed and  delivered by the Authority
                           and,  assuming  due   authorization,   execution  and
                           delivery  by  the  Underwriter  and  approval  by the
                           Borrower,  is a valid and  binding  agreement  of the
                           Authority,  subject to laws  relating to  bankruptcy,
                           insolvency,   reorganization   or  creditors'  rights
                           generally  and  to  the   application   of  equitable
                           principles;

                                    (ii)  the   statements   contained   in  the
                           Official  Statement in the sections thereof entitled:
                           "DESCRIPTION OF THE BONDS," "SECURITY FOR THE BONDS,"
                           "THE  LOAN   AGREEMENT,"  "THE  INDENTURE"  and  "TAX
                           MATTERS"  insofar  as  such  statements   purport  to
                           summarize  certain  provisions of the Bonds, the Loan
                           Agreement  or  the  Indenture,   and  Bond  Counsel's
                           opinion  concerning  certain tax matters  relating to
                           the Bonds are accurate in all material respects; and

                                    (iii)  the  Bonds  are  not  subject  to the
                           registration  requirements  of the  Securities Act of
                           1933,  as amended,  and the  Indenture is exempt from
                           qualification  as an indenture  pursuant to the Trust
                           Indenture Act of 1939, as amended.

                           (3) The opinion of counsel to the Borrower, which may
                  be rendered by one or more firms  acceptable  to the Authority
                  and the Underwriter, dated the date of the closing and in form
                  and substance acceptable to the Authority and the Underwriter.


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                           (4) A  certificate  dated the date of the  Closing of
                  the Chair of the Authority,  or the Chair's  designee,  to the
                  effect that as of such date,  (a) no litigation is pending or,
                  to his knowledge,  threatened in any court (i) challenging the
                  creation,  organization  or existence of the  Authority,  (ii)
                  seeking to restrain or enjoin the  issuance or delivery of any
                  of the Bonds,  or the  collection  of revenues or other moneys
                  pledged or to be pledged to pay the  principal of and interest
                  on the  Bonds,  or in any  way  contesting  or  affecting  the
                  validity of the Bonds or the  Indenture or the  collection  of
                  revenues or other moneys or the pledge thereof,  or contesting
                  the  powers  of the  Authority  to issue the Bonds or to enter
                  into the  Indenture,  (iii) in any way contesting or affecting
                  the  validity  of  the  Loan  Agreement,  the  Tax  Regulatory
                  Agreement or this Purchase Contract,  or contesting the powers
                  of the  Authority  to enter into or to execute and deliver the
                  Loan Agreement,  the Tax Regulatory Agreement or this Purchase
                  Contract,  (b)  the  representations  and  warranties  of  the
                  Authority  contained  herein  are  true  and  correct  in  all
                  material  respects  on and as of the date of the Closing as if
                  made on the  date of the  Closing;  and (c) to the best of his
                  knowledge, no event affecting the Authority has occurred since
                  the  date  of  the  Official  Statement  which  has  not  been
                  disclosed  therein or by supplement  or amendment  thereto and
                  which should be disclosed  in the Official  Statement  for the
                  purpose for which it is to be used or which it is necessary to
                  disclose   therein  in  order  to  make  the   statements  and
                  information therein not misleading in any material respect.

                           (5) An  opinion,  dated the date of the  Closing  and
                  addressed to the Underwriter,  the Authority, Bond Counsel and
                  Standard & Poor's  Ratings  Services  ("Standard & Poor's") of
                  United  States  and  Japanese  counsel to the Bank in form and
                  substance acceptable to the Underwriter,  the Authority,  Bond
                  Counsel and Standard & Poor's.

                           (6) A  certificate  of an  authorized  officer of the
                  Bank,  dated the date of the  Closing,  to the effect that the
                  information  under the captions  "THE BANK" and "THE LETTER OF
                  CREDIT  AND  THE  REIMBURSEMENT  AGREEMENT"  in  the  Official
                  Statement does not contain any untrue  statement of a material
                  fact or omit to state a material  fact  necessary  to make the
                  statements   made  under  such   caption,   in  light  of  the
                  circumstances under which they were made, not misleading.

                           (7) A  preference  opinion,  dated  the  date  of the
                  Closing, of Bond Counsel, addressed to Standard & Poor's.

                           (8) A certificate of the Borrower,  dated the date of
                  the  Closing  and  signed  by an  authorized  officer  of  the
                  Borrower,  acting  solely  in his  official  capacity,  to the
                  effect that (i) since the date hereof no material  and adverse
                  change has  occurred in the  financial  position or results of
                  operations of the Borrower;  (ii) the Borrower has not,  since
                  the date hereof,  incurred any material liabilities other than
                  in the  ordinary  course  of  business  or as set  forth in or
                  contemplated  by  the  Official  Statement;   (iii)  no  event
                  affecting the Borrower has


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                  occurred since the date of the Official Statement which should
                  be  disclosed in the  Official  Statement  for the purpose for
                  which it is to be used or which is  necessary  to be disclosed
                  therein  in  order  to make  the  statements  and  information
                  therein  in light of the  circumstances  under  which they are
                  made not  misleading  as of the date of Closing;  and (iv) the
                  representations  and  warranties  included  in the  Letter  of
                  Representation  are true and correct in all material  respects
                  as of the  date  of the  Closing,  and all  obligations  to be
                  performed by the Borrower  under the Letter of  Representation
                  on or prior to the date of the Closing have been performed.

                           (9) The Official Statement signed on behalf of the
                  Authority.

                           (10) Executed counterparts of the Indenture, the Loan
                  Agreement,   the  Remarketing  Agreement,   the  Reimbursement
                  Agreement  and the Tax  Regulatory  Agreement and specimens of
                  the Letter of Credit and the Bonds.

                           (11) Copies of the  resolutions or other documents of
                  the Borrower  authorizing  the  execution  and delivery of the
                  Loan Agreement,  the Reimbursement  Agreement, the Remarketing
                  Agreement,   the  Letter  of   Representations   and  the  Tax
                  Regulatory  Agreement,   certified  by  the  Secretary  or  an
                  Assistant  Secretary  of the  Borrower  as  having  been  duly
                  adopted and being in full force and effect.

                           (12)  Copies  of the  resolutions  of  the  Authority
                  authorizing the issuance of the Bonds, the use of the Official
                  Statement  and  authorizing  or approving  the  execution  and
                  delivery of the  documents to which the  Authority is a party,
                  certified by the  Secretary of the  Authority,  as having been
                  duly adopted and being in full force and effect.

                           (13) A certificate  of a duly  authorized  officer of
                  the Authority satisfactory to the Underwriter,  dated the date
                  of Closing, stating that such officer is charged, either alone
                  or with others, with the responsibility for issuing the Bonds;
                  setting  forth,  in  the  manner  permitted  by  the  Treasury
                  Regulations  and  the  Internal  Revenue  Code  of  1986  (the
                  "Code"),  the reasonable  expectations  of the Authority as of
                  such  date as to the use of  proceeds  of the Bonds and of any
                  other funds of the Authority pledged or expected to be used to
                  pay  principal  or  purchase  price of,  premium,  if any,  or
                  interest  on the Bonds and the  facts and  estimates  on which
                  such  expectations are based; and stating that, to the best of
                  the  knowledge  and  belief  of the  certifying  officer,  the
                  Authority's  expectations are reasonable,  which certification
                  may be made in reliance  upon a similar  certification,  dated
                  the date of the  Closing,  furnished  to such  person for such
                  purpose by a duly authorized officer or  attorneys-in-fact  of
                  the Borrower satisfactory to the Underwriter.

                           (14) An opinion of  counsel to the  Authority,  dated
                  the date of the  Closing,  addressed to the  Underwriter,  the
                  Trustee and Bond Counsel, in form and substance  acceptable to
                  the Underwriter, the Trustee and Bond Counsel.


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<PAGE>




                           (15) The letter from Standard & Poor's indicating the
                  rating for the Bonds which is not lower than "A/A-1."

                           (16) Evidence  satisfactory to the  Underwriter  that
                  the Bonds have been  approved by the  Governor of the State or
                  other  appropriate  official or governing body, after a public
                  hearing  thereon  held  after  reasonable   public  notice  in
                  accordance with Section 147(f) of the Code.

                           (17)  Evidence of the filing,  as required by Section
                  149(e) of the Code, of Form 8038.

                           (18)  A  certified  copy  of  the  resolution  of the
                  California  Debt  Limit  Allocation   Committee  granting  the
                  Authority  a portion of the  State's  volume cap for the Bonds
                  equal to at least the amount of the Bonds purchased pursuant
                  to this Purchase Contract.

                           (19) Such  additional  certificates,  instruments and
                  other  documents  as  the  Underwriter   reasonably  may  deem
                  necessary to evidence the truth and accuracy as of the time of
                  the  Closing  of the  representations  of the  Authority,  the
                  Borrower and the Bank and the due  performance or satisfaction
                  by the  Authority,  the  Borrower  and the Bank at or prior to
                  such  time  of all  agreements  then to be  performed  and all
                  conditions then to be satisfied by the Authority, the Borrower
                  and the Bank.

         If the Authority shall be unable to satisfy the conditions contained in
this  Purchase  Contract,  or if the  obligations  of the  Underwriter  shall be
terminated  for any reason  permitted by this Purchase  Contract,  this Purchase
Contract shall  terminate and neither the Underwriter nor the Authority shall be
under further obligation hereunder, except as set forth in Paragraph 10.

         9. The Authority  covenants  with the  Underwriter to cooperate with it
and the Borrower in qualifying the Bonds for offer and sale under the securities
or "Blue Sky" laws of such States as the Underwriter may request;  provided that
in no event shall the  Authority  be  obligated  to take any action  which would
subject  it to general  service  of process in any State  where it is not now so
subject.  It is understood  that the Authority is not responsible for compliance
with or the consequences of failure to comply with applicable "Blue Sky" laws.

         10.  (a) The  Underwriter  shall  be  under  no  obligation  to pay any
expenses incident to the performance of the Authority's  obligations  hereunder,
including  but not  limited  to (i) the  cost of  printing  and  delivering  and
preparation for printing or other  reproduction of the Indenture,  the Letter of
Credit, the Loan Agreement, the Reimbursement Agreement, this Purchase Contract,
the  Letter  of  Representation,  the  Remarketing  Agreement  and the  Official
Statement;  (ii) the fees and  disbursements  of Bond  Counsel,  counsel  to the
Authority  and any  experts or  consultants  retained  by the  Authority  or the
Borrower;  (iii) the fees and disbursements of the Bank and its counsel and (iv)
the  fees of  Standard  &  Poor's.  The  costs  and  expenses  set  forth in the
immediately  preceding  sentence shall be paid out of the proceeds of the Bonds,
or other


                                        9

<PAGE>



available funds of the Borrower in accordance with the Indenture or if the Bonds
are not delivered to the  Underwriter by the Authority  (unless such delivery be
prevented by the Underwriter's default hereunder, in which event the Underwriter
shall pay such costs and  expenses  as and for  liquidated  damages  hereunder),
shall be paid by the Borrower pursuant to the Letter of Representation.

         (b)  The  Underwriter  shall  pay  (i)  all  advertising   expenses  in
connection  with the public  offering  of the Bonds and (ii) all other  expenses
incurred by it in connection  with the public  offering and  distribution of the
Bonds.

         11.  Any  notice or other  communication  to be given to the  Authority
under this Purchase  Contract may be given by delivering  the same in writing at
its address set forth above, addressed Attention:  Chair, and any such notice or
other  communication  to be given to the  Underwriter may be given by delivering
the same to Rauscher Pierce Refsnes,  Inc., 117 East Colorado  Boulevard,  Suite
210, Pasadena,  California 91105. All notices or communications hereunder by any
party shall be given and served upon each other party.

         12.  This  Purchase  Contract  shall  constitute  the entire  agreement
between the Authority,  the Treasurer and the Underwriter and is made solely for
the benefit of the Authority,  the Borrower and the  Underwriter  (including the
successors or assigns of the Underwriter). No other person shall acquire or have
any rights hereunder or by virtue hereof.  All  representations,  warranties and
agreements of the Authority in this Purchase Contract shall remain operative and
in full force and  effect,  regardless  of (a) any  investigation  made by or on
behalf  of the  Underwriter,  (b) the  delivery  of any  payment  for the  Bonds
hereunder and (c) any termination of this Purchase Contract.  The parties hereto
agree to cooperate  prior and  subsequent to the Closing to take such actions as
shall be necessary or desirable in  connection  with  securing the rating of the
Bonds by Standard & Poor's.

         13.  This  Purchase  Contract  may not be amended  without  the written
consent of the Authority, the Treasurer and the Borrower.


                                       10

<PAGE>



         14. The  validity,  interpretation  and  performance  of this  Purchase
Contract shall be governed by the laws of the State of California.


                                     RAUSCHER PIERCE REFSNES, INC.


                                     By:______________________________________
                                           Managing Director




                                     CALIFORNIA ECONOMIC DEVELOPMENT
                                     FINANCING AUTHORITY


                                     By:______________________________________
                                            Chair


Attest:


By:_________________________________
           Secretary


                                      OFFICE OF THE STATE TREASURER


                                      By:_____________________________________
                                            Deputy Treasurer

Agreed to and Approved by:

ADVANCED AERODYNAMICS AND
STRUCTURES, INC.


By:_______________________________
      Authorized Signatory


<PAGE>



                                    EXHIBIT A

                            Letter of Representation

                                 August 4, 1997

California Economic Development Financing Authority
801 K Street, Suite 1700
Sacramento, California 91584

The Honorable Matt Fong
Treasurer of the State of California
915 Capitol Mall, Room 110
Sacramento, California 95814

Rauscher Pierce Refsnes, Inc.
117 East Colorado Boulevard, Suite 210
Pasadena, California  91105

Ladies and Gentlemen:

         Pursuant to a purchase  contract  dated the date hereof (the  "Purchase
Contract"),  with Rauscher Pierce Refsnes,  Inc. (the "Underwriter"),  which the
undersigned (the "Borrower") has approved,  the California Economic  Development
Financing  Authority  (the  "Authority")  and  the  Treasurer  of the  State  of
California  propose  to  sell  $8,500,000  aggregate  principal  amount  of  the
Authority's  Variable Rate Demand Industrial  Development  Revenue Bonds, Series
1997 (Advanced  Aerodynamics and Structures,  Inc.  Project) (the "Bonds").  The
offering of the Bonds is  described  in an official  statement,  dated August 4,
1997 (the "Official Statement").

         Certain revenues and other moneys received by the Authority pursuant or
with  respect  to the Loan  Agreement,  dated as of August  1,  1997 (the  "Loan
Agreement"),  between the  Authority  and the Borrower will be pledged to secure
the  payment  of the  Bonds,  including  the  interest  thereon  pursuant  to an
Indenture  of Trust,  dated as of August 1, 1997 (the  Indenture"),  between the
Authority and First Trust of California,  National Association,  as trustee (the
"Trustee"),  relating to the Bonds. In addition, the Bonds shall be payable from
funds drawn  under an  irrevocable  direct pay letter of credit (the  "Letter of
Credit")  issued by The  Sumitomo  Bank,  Ltd.,  acting  through its Los Angeles
Branch, (the "Bank"), pursuant to a Reimbursement Agreement,  dated as of August
1, 1997 (the "Reimbursement Agreement"), between the Borrower and the Bank.

         In order to induce you to enter into the Purchase  Contract and to make
the sale and purchase and  reoffering  of the Bonds  therein  contemplated,  the
Borrower hereby represents, warrants and agrees with each of you as follows:

                  (1) The  Borrower  is a  corporation,  organized  and  validly
         existing under the laws of the State of Delaware, has full legal right,
         power and authority to enter into this


                                       A-1

<PAGE>



         Letter  of  Representation,   the  Loan  Agreement,  the  Reimbursement
         Agreement  and the  Remarketing  Agreement,  to  approve  the  Purchase
         Contract and to carry out and consummate all transactions  contemplated
         by this Letter of Representation, the Loan Agreement, the Reimbursement
         Agreement,  the Remarketing Agreement, the Tax Regulatory Agreement and
         the Purchase  Contract  and by proper  action has duly  authorized  the
         execution  and  delivery  of this  Letter of  Representation,  the Loan
         Agreement,  the Reimbursement  Agreement,  the Tax Regulatory Agreement
         and  the  Remarketing  Agreement  and  the  approval  of  the  Purchase
         Contract.

                  (2) The  officer  of the  Borrower  executing  this  Letter of
         Representation, the Loan Agreement, the Reimbursement Agreement and the
         Remarketing  Agreement and approving the Purchase  Contract is duly and
         properly authorized to execute the same.

                  (3) The Purchase  Contract has been duly approved by, and this
         Letter  of  Representation,   the  Loan  Agreement,  the  Reimbursement
         Agreement,  the Tax Regulatory Agreement and the Remarketing  Agreement
         have been duly authorized,  executed and delivered by the Borrower. The
         Loan Agreement, when assigned to the Trustee pursuant to the Indenture,
         will constitute the legal, valid and binding obligation of the Borrower
         to the Trustee  enforceable against the Borrower in accordance with its
         terms for the benefit of the owners of the Bonds; except as enforcement
         of  the  Loan  Agreement  may be  limited  by  bankruptcy,  insolvency,
         moratorium, reorganization,  fraudulent conveyance laws, laws affecting
         the  enforcement  of creditors  rights,  the  application  of equitable
         principles and judicial  discretion,  and by the covenant of good faith
         and fair  dealing  which may be  implied  by law into  contracts.  This
         Letter of Representation,  the Reimbursement Agreement, the Remarketing
         Agreement  and the Tax  Regulatory  Agreement  and  any  rights  of the
         Authority and  obligations of the Borrower under the Loan Agreement not
         so assigned to the Trustee will constitute the legal, valid and binding
         agreements  of  the  Borrower   enforceable  against  the  Borrower  in
         accordance with their respective  terms;  except as enforcement of each
         of the above-named documents may be limited by bankruptcy,  insolvency,
         moratorium, reorganization,  fraudulent conveyance laws, laws affecting
         the  enforcement  of creditors  rights,  the  application  of equitable
         principles and judicial  discretion,  and by the covenant of good faith
         and fair dealing which may be implied by law into contracts.

                  (4) The  Borrower is not in any  material  way in breach of or
         default under (i) any  applicable law or  administrative  regulation of
         the State of California or the United States or any applicable judgment
         or decree or (ii) any material loan agreement,  indenture,  bond, note,
         resolution,  agreement or other instrument to which it is a party or is
         otherwise  subject,  and no event has occurred and is continuing which,
         with the  passage  of time or the  giving  of  notice  or  both,  would
         constitute an event of default under any such instrument.

                  (5) The  approval of the  Purchase  Contract  and the Official
         Statement;  the  execution  and  delivery  of the Loan  Agreement,  the
         Reimbursement  Agreement, the Tax Regulatory Agreement, the Remarketing
         Agreement and this Letter of  Representation;  the  consummation of the
         transactions herein and therein contemplated; and the fulfillment


                                       A-2

<PAGE>



         of or compliance with the terms and conditions  hereof and thereof will
         not  conflict  with or  constitute  a violation or breach of or default
         (with due notice or the passage of time or both)  under the  Borrower's
         Organization Documents (as defined in the Indenture), or any applicable
         law or  administrative  rule or regulation,  or any applicable court or
         administrative  decree or order,  or, to the knowledge of the Borrower,
         any indenture, mortgage, deed of trust, loan agreement, lease, contract
         or other  agreement or instrument to which it is a party or by which it
         or its  properties  are  otherwise  subject or bound,  or result in the
         creation or imposition of any prohibited lien, charge or encumbrance of
         any  nature  whatsoever  upon  any  of  the  Borrower's  assets,  which
         conflict, violation, breach, default, lien, charge or encumbrance might
         have  consequences  that  would  materially  and  adversely  affect the
         consummation of the transactions contemplated by the Purchase Contract,
         the Indenture,  the Loan Agreement,  the Reimbursement  Agreement,  the
         Remarketing  Agreement,  the Tax Regulatory  Agreement,  this Letter of
         Representation  or the Official  Statement or the financial  condition,
         assets, properties or operations of the Borrower.

                  (6) No consent  or  approval  of any  trustee or holder of any
         indebtedness   of   the   Borrower,   and   no   consent,   permission,
         authorization, order or license of, or filing or registration with, any
         governmental authority (except in connection with Blue Sky proceedings)
         is  necessary in  connection  with the  execution  and delivery of this
         Letter  of  Representation,   the  Loan  Agreement,  the  Reimbursement
         Agreement,  the Tax Regulatory Agreement or the Remarketing  Agreement;
         the  approval of the  Purchase  Contract;  or the  consummation  of any
         transaction therein or herein contemplated on the part of the Borrower,
         except  as have  been  obtained  or made and as are in full  force  and
         effect  or, as  appropriate,  will be in full  force and  effect at the
         Closing.  The Borrower makes no  representation  as to any approvals or
         actions  as may  be  required  under  any  state  Blue  Sky or  federal
         securities laws.

                  (7)  There  is  no  action,  suit,   proceeding,   inquiry  or
         investigation  before or by any court or federal,  state,  municipal or
         other  government  authority  pending  or,  to  the  knowledge  of  the
         Borrower,  threatened  against or affecting the Borrower or its assets,
         properties or operations which, if determined adversely to the Borrower
         or the interests thereof, would have a material and adverse effect upon
         the consummation of the transactions contemplated by or the validity of
         the Purchase Contract, the Loan Agreement, the Reimbursement Agreement,
         the Remarketing Agreement, the Tax Regulatory Agreement, this Letter of
         Representation  or  the  Official   Statement  or  upon  the  financial
         condition,  assets,  properties or operations of the Borrower,  and the
         Borrower is not in default  with  respect to any order or decree of any
         court  or any  order,  regulation  or  demand  of any  federal,  state,
         municipal  or  other  governmental   authority,   which  default  would
         materially and adversely  affect the  consummation of the  transactions
         contemplated  by  the  Purchase  Contract,  the  Loan  Agreement,   the
         Reimbursement  Agreement, the Remarketing Agreement, the Tax Regulatory
         Agreement, this Letter of Representation, the Official Statement or the
         financial condition, assets, properties or operations of the Borrower.



                                       A-3

<PAGE>



                  (8) The  Borrower  has  obtained or will obtain all  variances
         from  applicable  zoning  ordinances and has obtained or will obtain in
         due course all  building  permits and  easements  or  licenses  for the
         acquisition, construction and equipping of the Project (as said term is
         defined  in the  Indenture),  to the  extent  and as  such  Project  is
         described  in the  Official  Statement,  and such  variances,  permits,
         easements  and  licenses  constitute  all  approvals  required  for the
         Project;  and the  Project  should  not be  subject  to  change  by any
         administrative  or  judicial  body  so as  to  materially  affect  such
         acquisition  and  construction.  The  Project  has  complied  with  the
         requirements of the California Environmental Quality Act.

                  (9) The Borrower  hereby agrees to pay the expenses  described
         in Paragraph  10(a) of the Purchase  Contract,  and to pay any expenses
         incurred in amending or supplementing the Official  Statement  pursuant
         to the Purchase Contract.

                  (10) As of the date hereof, the Official Statement, as amended
         or  supplemented  pursuant to the  Purchase  Contract or this Letter of
         Representation,  if applicable, does not and will not contain as of the
         Closing  any untrue  statement  of a  material  fact or omit to state a
         material  fact  required to be stated  therein or necessary to make the
         statements  therein, in the light of the circumstances under which they
         were made, not misleading.

                  (11) If between  the date  hereof and the date of the  Closing
         any  event  shall  occur  which  might  or  would  cause  the  Official
         Statement,  as then  supplemented  or  amended,  to  contain  an untrue
         statement  of a  material  fact  or to omit to  state a  material  fact
         required  to be stated  therein  or  necessary  to make the  statements
         therein,  in the light of the circumstances under which they were made,
         not  misleading,  the  Borrower  shall  notify  the  Authority  and the
         Underwriter and if in the opinion of the Borrower, the Authority or the
         Underwriter  such event requires the  preparation  and publication of a
         supplement or amendment to the Official  Statement,  the Authority will
         request the Borrower to cause the  Official  Statement to be amended or
         supplemented in a form and in a manner approved by the Underwriter.

                  (12) After the Closing,  the Borrower (a) will not participate
         in the  issuance of any  amendment  of or  supplement  to the  Official
         Statement to which,  after being furnished with a copy, the Underwriter
         or the Authority shall  reasonably  object in writing or which shall be
         disapproved by counsel for the  Underwriter or the Authority and (b) if
         any event relating to or affecting the Authority or the Borrower or its
         present or proposed  facilities  shall occur as a result of which it is
         necessary,  in the  opinion  of  counsel  for  the  Underwriter  or the
         Authority,  to amend or supplement  the Official  Statement in order to
         make  the  Official  Statement  not  misleading  in  the  light  of the
         circumstances  existing  at the time it is  delivered  to a  purchaser,
         forthwith  prepare and furnish to the Underwriter and the Authority (at
         the  expense  of the  Borrower)  a  reasonable  number  of copies of an
         amendment  of or  supplement  to the  Official  Statement  (in form and
         substance  satisfactory  to counsel for the  Underwriter and counsel to
         the Authority) which will amend or supplement the Official Statement so
         that it will not contain an untrue statement of a material fact or omit
         to state a  material  fact  necessary  in order to make the  statements
         therein,  in the light of the  circumstances  existing  at the time the
         Official Statement is


                                       A-4

<PAGE>



         delivered  to  purchaser,  not  misleading.  For the  purposes  of this
         subsection,   the   Authority   and  the  Borrower  will  furnish  such
         information  as the  Underwriter  may  from  time  to  time  reasonably
         request.

                  (13) The Borrower  agrees to indemnify  and hold  harmless the
         Authority and the Underwriter and each person, if any, who controls (as
         such term is defined in Section 15 of the  Securities  Act of 1933,  as
         amended) the Authority and the Underwriter and their officers,  agents,
         employees,  advisors  and  attorneys  against  any and  all  judgments,
         losses,  claims,  damages,  liabilities and expenses (i) arising out of
         any statement or information in the Official Statement, relating to the
         Borrower  and  the  Project,  that is or is  alleged  to be  untrue  or
         incorrect in any material  respect or the omission or alleged  omission
         therefrom of any statement or information that should be stated therein
         or that is necessary  to make the  statements  therein  relating to the
         Borrower and the Project not  misleading in any material  respect,  and
         (ii) to the extent of the  aggregate  amount paid in  settlement of any
         litigation  commenced or threatened arising from a claim based upon any
         such untrue  statement or omission if such  settlement is effected with
         the written consent of the Borrower. In case any claim shall be made or
         action  brought  against  the  Authority  or  the  Underwriter  or  any
         controlling   person  based  upon  the  Official  Statement  for  which
         indemnity may be sought against the Borrower,  as provided above,  such
         party shall promptly  notify the Borrower in writing  setting forth the
         particulars  of such claim or action and the Borrower  shall assume the
         defense thereof,  including the retaining of counsel acceptable to such
         party  and  the  payment  of  all  expenses.   The  Authority  and  the
         Underwriter  or any such  controlling  person  shall  have the right to
         retain  separate  counsel in any such action and to  participate in the
         defense  thereof but shall bear the fees and  expenses of such  counsel
         unless  (i)  the  Borrower  shall  have  specifically   authorized  the
         retaining of such counsel or (ii) the parties to such suit include such
         Underwriter or controlling person or persons, and the Borrower and such
         Underwriter or controlling  person or persons have been advised by such
         counsel that one or more legal  defenses may be available to it or them
         which may not be available to the Borrower,  in which case the Borrower
         shall  not  be   entitled   to  assume   the   defense   of  such  suit
         notwithstanding  its  obligation  to bear the fees and expenses of such
         counsel.

                  (14) In order to provide for just and  equitable  contribution
         in circumstances in which the indemnification provided for in Paragraph
         (13) hereof is applicable  but for any reason is held to be unavailable
         from the Borrower, the Borrower and the Underwriter shall contribute to
         the aggregate losses,  claims,  damages and liabilities  (including any
         investigation,  legal and other expenses  incurred in connection  with,
         and any amount paid in settlement of, any action, suit or proceeding or
         any claims asserted,  but after deducting any contribution  received by
         the Borrower  from persons who control the Borrower  within the meaning
         of Section 20 of the Securities  Exchange Act of 1934 and Section 15 of
         the Securities Act of 1933, as amended  (collectively,  the "Securities
         Acts"),  to which the  Borrower and the  Underwriter  may be subject in
         such  proportions that the Underwriter are responsible for that portion
         represented by the  percentage  that the  underwriting  discount or fee
         received by the  Underwriter  bears to the offering  price of the Bonds
         and the Borrower is  responsible  for the balance;  provided,  however,
         that (i) in no case shall the Underwriter be responsible for any amount
         in excess of the


                                       A-5

<PAGE>



         underwriting fee or discount  applicable to the Bonds purchased by such
         Underwriter pursuant to the Purchase Contract and (ii) no person guilty
         of fraudulent misrepresentation (within the meaning of Section 11(f) of
         the   Securities  Act  of  1933,  as  amended)  shall  be  entitled  to
         contribution  from any  person  who was not  guilty of such  fraudulent
         misrepresentation. For purposes of this Paragraph (14), each person, if
         any, who controls the Underwriter  within the meaning of the Securities
         Acts,  shall have the same rights to contribution  as the  Underwriter,
         and each person,  if any, who controls the Borrower  within the meaning
         of the Securities  Acts shall have the same rights to  contribution  as
         the  Borrower,  subject  in each case to  clauses  (i) and (ii) of this
         Paragraph (14). Any party entitled to contribution will, promptly after
         receipt of notice of  commencement  of any action,  suit or  proceeding
         against such party in respect of which a claim for  contribution may be
         made against another party or parties under this Paragraph (14), notify
         such party or parties  from whom  contribution  may be sought,  but the
         omission to so notify such party from whom  contribution  may be sought
         shall not relieve the party or parties  from whom  contribution  may be
         sought  from any  other  obligation  it or they may have  hereunder  or
         otherwise than under this Paragraph  (14). No party shall be liable for
         contribution  with respect to any action or claims settled  without its
         consent.

         The  representations,  warranties,  agreements and  indemnities  herein
shall survive the Closing under the Purchase Contract and any investigation made
by or on behalf of the Authority and the  Underwriter or any person who controls
the Authority or the  Underwriter of any matters  described in or related to the
transactions  contemplated  hereby and by the  Purchase  Contract,  the Official
Statement, the Loan Agreement, the Remarketing Agreement and the Indenture.




                                       A-6

<PAGE>



         This Letter of  Representation  shall be binding  upon the Borrower and
shall inure solely to the benefit of the Authority,  the Underwriter and, to the
extent set forth herein,  persons controlling the Authority and the Underwriter,
and their  respective  officers,  employees,  agents,  advisors,  attorneys  and
personal  representatives,  successors and assigns,  and no other person or firm
shall  acquire  or  have  any  right  under  or by  virtue  of  this  Letter  of
Representation.

                                Very truly yours,

                                ADVANCED AERODYNAMICS AND
                                STRUCTURES, INC.


                                By:________________________________
                                     Authorized Signatory



                                       A-7

<PAGE>










                                PURCHASE CONTRACT


                                      among


                         CALIFORNIA ECONOMIC DEVELOPMENT
                               FINANCING AUTHORITY


                      TREASURER OF THE STATE OF CALIFORNIA


                                       and


                          RAUSCHER PIERCE REFSNES, INC.




                              Dated August 4, 1997



                                   Relating to


                                   $8,500,000
               California Economic Development Financing Authority
                              Variable Rate Demand
                Industrial Development Revenue Bonds, Series 1997
              (Advanced Aerodynamics and Structures, Inc. Project)