REMARKETING AGREEMENT



     THIS  REMARKETING  AGREEMENT  (this  "Remarketing  Agreement"),  dated  and
effective  as of  August 1,  1997,  by and  between  ADVANCED  AERODYNAMICS  AND
STRUCTURES,  INC., a Delaware  corporation  (the "Borrower") and RAUSCHER PIERCE
REFSNES, INC. (the "Remarketing Agent").

                              W I T N E S S E T H:

     WHEREAS,  the  California  Economic  Development  Financing  Authority (the
"Issuer") has issued its Variable  Rate Demand  Industrial  Development  Revenue
Bonds, Series 1997 (Advanced  Aerodynamics and Structures,  Inc. Project) in the
aggregate principal amount of $8,500,000 (the "Bonds"), pursuant to that certain
Indenture of Trust, dated as of August 1, 1997 (the "Indenture"), by and between
the Issuer and First Trust of California,  National Association, as trustee (the
"Trustee"); and

     WHEREAS,  to secure  the  payment  of the  principal  of,  interest  on and
purchase price of the Bonds, The Sumitomo Bank, Limited,  acting through its Los
Angeles  Branch (the "Bank"),  has issued its  irrevocable  direct pay letter of
credit (the "Letter of Credit") to the Trustee; and

     WHEREAS,  the Bonds are subject to purchase upon notice and delivery to the
Tender  Agent (as such term is  defined in the  Indenture)  as  provided  in the
Indenture; and

     WHEREAS,  the  Remarketing  Agent has been appointed  (and the  Remarketing
Agent by execution hereby accepts the appointment) as Remarketing Agent pursuant
to the Indenture; and

     WHEREAS,  the Borrower and the Remarketing  Agent desire to make additional
provisions  regarding the Remarketing  Agent's role as Remarketing Agent for the
Bonds.

     NOW, THEREFORE,  for and in consideration of the covenants herein made, the
Borrower and the Remarketing Agent hereby agree as follows:

     Section 1.  Definitions.  All  capitalized  terms used in this  Remarketing
Agreement  which  are not  otherwise  defined  herein  shall  have the  meanings
ascribed to them in the Indenture.

     Section 2. Duties. (a) In reliance upon the representations and agreements,
but subject to the terms and  conditions  contained in the Indenture and in this
Remarketing  Agreement,  the  Remarketing  Agent  has  been  appointed,  and the
Remarketing  Agent hereby  accepts such  appointment,  as exclusive  remarketing
agent in connection with the offering and sale of the Bonds from time to time in
the secondary market  subsequent to the initial  offering,  issuance and sale of
the Bonds.



<PAGE>




     (b)  It  is   understood   and   agreed   that  the   Remarketing   Agent's
responsibilities  hereunder and under the Indenture  will include (i) exercising
its best efforts in its sale of the Bonds (ii)  effecting  and  processing  such
purchases,  (iii) billing and receiving payment of Bond purchases,  (iv) causing
the  proceeds  from the  secondary  sale of the Bonds to be  transferred  to the
Tender Agent,  (v)  determining  the Fixed Interest Rate and the Weekly Interest
Rates,  and (vi) performing such other related  functions as may be provided for
in the  Indenture  of the  Remarketing  Agent  or  reasonably  requested  by the
Borrower and agreed to by the Remarketing Agent.

     (c) The  obligations  of the  Remarketing  Agent  hereunder  and  under the
Indenture,  with  respect  to the date on which the  Bonds are to be  remarketed
pursuant  to  this  Remarketing  Agreement,  are  also  subject  to the  further
condition that on and prior to such date there shall not have been any change in
the ownership of the Project  except as permitted  pursuant to the Agreement and
the Indenture, the Indenture, the Agreement and the Letter of Credit shall be in
full force and effect and shall not have been amended,  modified or supplemented
in any way  which  would  materially  and  adversely  affect  the  duties of the
Remarketing  Agent,  except  as  may  have  been  agreed  to in  writing  by the
Remarketing  Agent,  and there shall be in full force and effect such additional
resolutions,  agreements,  certificates  (including such  certificates as may be
required by regulations  for the Internal  Revenue Service in order to establish
or preserve the  tax-exempt  character  of interest on the Bonds) and  opinions,
which  resolutions,  agreements,  certificates  and opinions shall be reasonably
satisfactory  in form and substance to the Trustee,  to the Issuer,  to the Bank
and to counsel for the Remarketing Agent.

     The  Remarketing  Agent will perform the duties  specified  as  Remarketing
Agent  under  the  Indenture  and  this  Remarketing  Agreement.  In  acting  as
Remarketing  Agent, the Remarketing Agent will act as agent and not as principal
except as expressly provided in this Section.

     The  Remarketing  Agent  may,  if  it  determines  to do  so  in  its  sole
discretion,  buy as  principal  any such  Bonds  but it will not in any event be
obligated to do so.

     Section 3. Disclosure  Statement.  (a) If the Remarketing  Agent reasonably
determines that it is necessary or desirable to amend or supplement the Official
Statement (as defined below) in connection  with its offering of the Bonds,  the
Remarketing  Agent will notify the Borrower and the Borrower  will  provide,  or
cause to be provided to, the Remarketing Agent an amendment or supplement to the
Official  Statement  satisfactory to the Remarketing  Agent and its counsel with
respect to the Bonds. The Borrower will supply,  or cause to be supplied to, the
Remarketing  Agent with such number of copies of the  amendment or supplement to
the Official  Statement and documents  related thereto as the Remarketing  Agent
reasonably  requests from time to time and will amend or supplement the Official
Statement (and/or the documents  incorporated by reference in it) so that at all
times the Official  Statement and any documents related thereto will not contain
any  untrue  statement  of a  material  fact or omit to  state a  material  fact
necessary  to  make  the  statements  in such  documents,  in the  light  of the
circumstances  under which they were made,  not  misleading.  In  addition,  the
Borrower will take all steps reasonably


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<PAGE>



requested by the Remarketing  Agent which the  Remarketing  Agent or its counsel
may  consider  necessary  or  desirable to register the sale of the Bonds by the
Remarketing  Agent under any Federal or state  securities  law or to qualify the
Indenture  under the Trust  Indenture  Act of 1939,  as  amended  and as then in
effect (the "Trust  Indenture  Act") to the extent required under any federal or
state  securities  law or the  Trust  Indenture  Act for  municipal  obligations
similar in character to the Bonds,  and will provide the Remarketing  Agent such
officers'  certificates,   counsel  opinions,  accountants'  letters  and  other
documents as may be customary in similar transactions.  If the Borrower does not
perform  its  obligations   under  this  Section,   the  Remarketing  Agent  may
immediately  cease to remarket  the Bonds and, in such  event,  shall  resign as
Remarketing Agent as provided herein.

     (b) The Issuer has  previously  prepared and  delivered to the  Remarketing
Agent a copy of the  Official  Statement,  dated  August 4, 1997 (the  "Official
Statement"), including financial and other information in respect of the Issuer,
the Borrower and the Bank. The Issuer has authorized the use by the  Remarketing
Agent of the Official Statement in connection with the remarketing of Bonds. For
purposes of this  Remarketing  Agreement,  the Official  Statement and any other
documents  provided to the  Remarketing  Agent pursuant to paragraph (a) of this
Section  shall be  considered  to be the  Disclosure  Statement  (as  defined in
Section 7 hereof).

     Section 4.  Representations,  Warranties,  Covenants and  Agreements of the
Remarketing Agent. The Remarketing Agent, by its acceptance hereof,  represents,
warrants, covenants and agrees with the Borrower as follows:

     (a) It is a member  of the  National  Association  of  Securities  Dealers,
having  a  capitalization   of  at  least   $15,000,000,   otherwise  meets  the
requirements for the Remarketing Agent set forth in the Indenture, is authorized
by  law to  perform  all  duties  imposed  upon  it by the  Indenture  and  this
Remarketing  Agreement  and has full  power and  authority  to take all  actions
required or permitted to be taken by the  Remarketing  Agent hereunder and under
the Indenture.

     (b) The  execution  and  delivery  of this  Remarketing  Agreement  and the
consummation of the transactions  contemplated  herein and in the Indenture will
not conflict with or constitute on the part of the Remarketing Agent a breach of
or default under its charter documents, its by-laws, or any statute,  indenture,
mortgage,  deed of trust, lease, note agreement or other agreement or instrument
to which the  Remarketing  Agent is a party or by which it or its properties are
bound, or any order,  rule or regulation of any court or governmental  agency or
body having  jurisdiction over the Remarketing Agent or any of its activities or
properties.

     (c) This  Remarketing  Agreement  has been duly  authorized,  executed  and
delivered by the Remarketing Agent and this Remarketing Agreement is a valid and
binding  obligation of the Remarketing  Agent enforceable in accordance with its
terms.



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<PAGE>



     (d) The  Remarketing  Agent will use its best efforts to remarket the Bonds
pursuant to this Remarketing Agreement and the Indenture.

     Section 5.  Representation,  Warranties,  Covenants  and  Agreements of the
Borrower.  The  representations,  warranties  and agreements of the Borrower set
forth in the Letter of  Representation,  dated August 4, 1997, from the Borrower
to Rauscher  Pierce Refsnes,  Inc., as the underwriter of the Bonds,  the Issuer
and the Treasurer of the State of California  attached to the Purchase  Contract
are hereby  incorporated herein as being made to the Remarketing Agent as of the
date hereof.

     Section 6. Conditions to Remarketing Agent's  Obligations.  The obligations
of the Remarketing  Agent under this Remarketing  Agreement have been undertaken
in reliance on, and shall be subject to, the due  performance by the Borrower of
its obligations and agreements to be performed  hereunder and to the accuracy of
and compliance with the representations, warranties, covenants and agreements of
the  Borrower  contained  herein,  on and as of the  date  of  delivery  of this
Remarketing  Agreement.  The obligations of the  Remarketing  Agent on and as of
each date on which Bonds are to be offered and sold pursuant to this Remarketing
Agreement are also subject to the following further conditions:

     (a) Each of the  Indenture,  the  Agreement,  the  Letter  of  Credit,  the
Reimbursement Agreement and all other documents and agreements referenced in the
Indenture  or  relating to the Bonds shall be in full force and effect and shall
not  have  been  amended,  modified  or  supplemented  in any  way  which  would
materially and adversely affect the Bonds,  except as may have been agreed to in
writing by the  Remarketing  Agent,  and there shall be in full force and effect
such  additional  resolutions,  agreements,  certificates  and  opinions,  which
resolutions, agreements, certificates and opinions shall be satisfactory in form
and substance to the Remarketing Agent; and

     (b) No Event of Default shall have occurred and be continuing  and no event
shall have  occurred and be  continuing  which,  with the passage of time or the
giving of notice or both, would constitute such an Event of Default.

     Section 7. Indemnification and Contribution. (a) To the extent permitted by
law, the Borrower will indemnify and hold harmless the Remarketing  Agent,  each
of its  directors,  officers  and  employees  and each person who  controls  the
Remarketing  Agent  within the  meaning of Section 15 of the  Securities  Act of
1933, as amended (herein called the  "Securities  Act" and any such person being
herein  sometimes  called an "Indemnified  Party"),  against any and all losses,
claims,  damages or  liabilities,  joint or several,  to which such  Indemnified
Party may become  subject under any statute or at law or in equity or otherwise,
and shall reimburse any such  Indemnified  Party for any legal or other expenses
incurred  by it in  connection  with  investigating  any  claims  against it and
defending any actions, but only to the extent that such losses, claims, damages,
liabilities  or  actions  arise out of or are based  upon (i) an  allegation  or
determination  that the Bonds or the obligations of the Bank under the Letter of
Credit should have been  registered  under the  Securities  Act or the Indenture
should have been  qualified  under the Trust  Indenture  Act, or (ii) any untrue
statement or alleged untrue statement of a material fact


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<PAGE>



contained in any amendment or supplement to the Official  Statement  referred to
in  Section 3 hereof (a  "Disclosure  Statement")  or any  amendment  thereof or
supplement  thereto,  or the  omission or alleged  omission  to state  therein a
material fact necessary to make the statements  therein not misleading,  but the
Borrower  shall not be liable in any such case to the extent that any such loss,
claim,  damage,  liability or action  arises out of, or is based upon,  any such
untrue  statement or alleged  untrue  statement or omission or alleged  omission
made  therein  in  reliance  upon and in  conformity  with  written  information
furnished to the Borrower or the Issuer by the  Remarketing  Agent  specifically
for use in connection with the preparation  thereof,  or if the person asserting
any such loss, claim,  damage or liability  purchased Bonds from the Remarketing
Agent,  if delivery to such person of the Disclosure  Statement or any amendment
or  supplement  to it would have been a valid  defense to the action  from which
such loss, claim, damage or liability arose and if the same was not delivered to
such person by or on behalf of the Remarketing  Agent. This indemnity  agreement
shall not be construed as a limitation on any other liability which the Borrower
may otherwise have to any Indemnified  Party. The Remarketing  Agent may, in its
sole discretion,  pursue any rights it may have against any party other than the
Borrower to recover any losses,  damages or liabilities  covered by this Section
7(a); provided,  however,  that the Borrower's liability under this Section 7(a)
shall not be  limited  by the  availability  of such  rights or the  Remarketing
Agent's actions with respect to such rights.

     (b) An Indemnified Party shall, promptly after the receipt of notice of the
commencement  of any action against such  Indemnified  Party in respect of which
indemnification  may be sought against the Borrower (the "Indemnifying  Party"),
notify the Indemnifying  Party in writing of the commencement  thereof.  In case
any  such  action  shall  be  brought  against  an  Indemnified  Party  and such
Indemnified  Party shall notify the Indemnifying  Party, the Indemnifying  Party
may, or if so requested by such Indemnified Party shall,  participate therein or
assume  the  defense  thereof,  with  counsel  reasonably  satisfactory  to such
Indemnified  Party,  and  after  notice  from  the  Indemnifying  Party  to such
Indemnified  Party of an  election  so as to assume the  defense  thereof,  such
Indemnified Party shall reasonably  cooperate in the defense thereof,  including
without  limitation,  the settlement of outstanding claims, and the Indemnifying
Party will not be liable to such Indemnified  Party under this Section 7 for any
legal or other  expenses  subsequently  incurred  by such  Indemnified  Party in
connection with the defense thereof other than reasonable costs of investigation
incurred with the consent of the Indemnifying  Party, which consent shall not be
unreasonably withheld; provided, however, that unless and until the Indemnifying
Party assumes the defense of any such action at the request of such  Indemnified
Party,  the  Indemnifying  Party shall have the right to  participate at its own
expense in the defense of any such action.  If the Indemnifying  Party shall not
have employed counsel to have charge of the defense of any such action or if any
Indemnified  Party shall have  reasonably  concluded  that there may be defenses
available  to it or them  which  are  different  from  or  additional  to  those
available to the Indemnifying  Party (in which case the Indemnifying Party shall
not have the  right to  direct  the  defense  of such  action  on behalf of such
Indemnified Party),  legal and other expenses incurred by such Indemnified Party
shall be borne by the  Indemnifying  Party. Any obligation under this Section of
an Indemnifying Party to reimburse an Indemnified Party for


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<PAGE>



expenses  includes the obligation to make advances to the  Indemnified  Party to
cover such expenses in reasonable  amounts and at reasonable  periodic intervals
not  more  often  than   monthly  as  requested   by  the   Indemnified   Party.
Notwithstanding  the foregoing,  the Indemnifying  Party shall not be liable for
any  settlement  of any action or claim  effected  without  its  consent,  which
consent shall not be unreasonably withheld.

     (c)  In  order  to  provide  for  just  and   equitable   contribution   in
circumstances in which the indemnification provided for in paragraph (a) of this
Section 7 is due in  accordance  with its terms but is for any reason  held by a
court to be  unavailable  from the  Borrower  on  grounds  of  public  policy or
otherwise,  the  Borrower  and the  Remarketing  Agent shall  contribute  to the
aggregate  losses,  claims,  damages and liabilities  (including  legal or other
expenses reasonably incurred in connection with investigating or defending same)
to which the  Borrower  and the  Remarketing  Agent may be  subject  (i) in such
proportion as is  appropriate to reflect the relative  benefits  received by the
Borrower  on the one  hand  and the  Remarketing  Agent  on the  other  from the
remarketing of the Bonds or (ii) if the allocation  provided by clause (i) above
is not permitted by applicable  law, in such  proportion  as is  appropriate  to
reflect not only the relative  benefits referred to in clause (i) above but also
the relative fault of the Borrower and the Remarketing  Agent in connection with
the failure to register or qualify  certain  instruments as described in Section
7(a)(i) or in connection with the statements or omissions which resulted in such
losses,  claims,  damages  or  liabilities,   as  well  as  any  other  relevant
considerations.  The relative  benefits received by the Borrower on the one hand
and the  Remarketing  Agent  on the  other  shall  be  deemed  to be in the same
proportion as the aggregate principal amount of the Bonds remarketed pursuant to
this  Remarketing  Agreement bear to the total  remarketing fees received by the
Remarketing Agent. The relative fault of the Borrower on the one hand and of the
Remarketing  Agent on the other shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged  omission to state a material  fact  relates to  information
supplied by the Borrower or by the Remarketing  Agent and the parties'  relative
intent,  knowledge,  access to information and opportunity to correct or prevent
such statement or omission;  provided,  however, in the case of an allegation or
determination  that the Bonds or the obligations of the Bank under the Letter of
Credit should have been  registered  under the  Securities  Act or the Indenture
should have been  qualified  under the Trust  Indenture  Act, the fault shall be
deemed to be  entirely  that of the  Borrower.  The amount  paid or payable by a
party as a result of the losses,  claims,  damages and  liabilities  referred to
above shall be deemed to include any legal or other fees or expenses  reasonably
incurred by such party in connection with  investigating or defending any action
or claim.

     (d) The Borrower and the Remarketing  Agent agree that it would not be just
and equitable if contribution  pursuant to this Section 7 were determined by pro
rata allocation or by any other method of allocation which does not take account
of  the  equitable  considerations  referred  to in  the  immediately  preceding
paragraph.  Notwithstanding  the  provisions of this Section 7, the  Remarketing
Agent  shall  not  be  required  to  contribute  any  amount  in  excess  of the
remarketing fee applicable to the Bonds remarketed  pursuant to this Remarketing
Agreement. No person guilty of


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<PAGE>



fraudulent  misrepresentation  (within  the  meaning  of  Section  11(f)  of the
Securities  Act) shall be  entitled to  contribution  from any person who is not
guilty of such fraudulent misrepresentation.


     (e)  For  purposes  of  this  Section  7,  each  person  who  controls  the
Remarketing  Agent within the meaning of Section 15 of the  Securities Act shall
have  the  same  rights  as  the  Remarketing   Agent.  Any  party  entitled  to
contribution  shall,  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 paragraph (d),
notify  such  party or parties  from whom  contribution  may be sought,  but the
omission  so to notify  such party or  parties  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 paragraph (d).

     Section 8. Fees and Expenses.  In consideration of the Remarketing  Agent's
services under this Remarketing Agreement, the Borrower will pay the Remarketing
Agent an annual  amount equal to an  aggregate  of 1/8 of 1.0% of the  aggregate
principal amount of Bonds outstanding under the Indenture,  payable quarterly in
arrears on February 1, May 1, August 1 and November 1, commencing on November 1,
1997 and computed on the basis of the actual number of days elapsed  during such
calculation  period and the aggregate  principal amount of the Bonds outstanding
during such  calculation  period.  The  Borrower  also will pay all  expenses in
connection with the preparation of any Disclosure Statement, the registration of
the Bonds and any other documents  relating to the Bonds required to comply with
any applicable  securities  laws or required to comply with the Trust  Indenture
Act and will reimburse the  Remarketing  Agent for all of its reasonable  direct
out-of-pocket   expenses   incurred  by  it  as  Remarketing  Agent  under  this
Remarketing   Agreement   and  the   Indenture,   including   counsel  fees  and
disbursements.

     Section  9.  Dealing  in Bonds by  Paying  Agent,  Tender  Agent,  Bank and
Remarketing Agent. The Trustee,  the Paying Agent, the Tender Agent, the Bank or
the Remarketing Agent, in their respective  individual  capacities,  may in good
faith buy,  sell,  own,  hold and deal in any of the Bonds,  and may join in any
action  which Bond  owners may be entitled to take with like effect as if it did
not act in any capacity  hereunder.  The Trustee,  the Paying Agent,  the Tender
Agent,  the  Bank or the  Remarketing  Agent,  in  their  respective  individual
capacities, either as principal or agent, may also engage in or be interested in
any financial or other  transaction with the Issuer,  and may act as depositary,
trustee or agent for other  obligations of the Issuer as freely as if it did not
act in any capacity hereunder.

     Section 10. Intention of Parties. It is the intention of the parties hereto
that no purchase,  sale or transfer of any Bonds, as herein and in the Indenture
provided,  shall constitute or be construed to be extinguishment of any Bonds or
the indebtedness represented thereby or the reissuance of any Bonds.

     Section 11. Fails. The Remarketing  Agent will not be liable to the Issuer,
the  Borrower,  the  Trustee,  the  Tender  Agent or the Bank on  account of the
failure of any person to whom the  Remarketing  Agent has sold a Bond to pay for
such Bond or to deliver any


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<PAGE>



document  in  respect  of  the  sale.  It is  understood  and  agreed  that  the
Remarketing  Agent shall not be  obligated to advance its own funds to purchase,
or to effect the purchase of, any Bonds.

     Section 12. Remarketing Agent's Performance. (a) The duties and obligations
of the Remarketing  Agent as Remarketing Agent shall be determined solely by the
express  provisions of this  Remarketing  Agreement and the  Indenture,  and the
Remarketing Agent shall not be responsible for the performance of any duties and
obligations  other  than as are  specifically  set  forth  in  this  Remarketing
Agreement and the Indenture,  and no implied  covenants or obligations  shall be
read into this  Remarketing  Agreement or the Indenture  against the Remarketing
Agent.

     (b) The Remarketing Agent may conclusively rely upon any notice or document
given or furnished to the Remarketing  Agent and conforming to the  requirements
of this Remarketing  Agreement or the Indenture and shall be protected in acting
upon any such notice or document  reasonably believed by it to be genuine and to
have been given, signed or presented by the proper party or parties.

     (c) The  Remarketing  Agent  shall not be liable for any  actions  taken or
omitted to be taken pursuant to this Remarketing  Agreement,  except for its own
negligence or willful misconduct.

     Section 13.  Termination.  (a) This  Remarketing  Agreement  will terminate
automatically  at such  time as all of the Bonds  have been paid or deemed  paid
under  the  Indenture  and upon the  effective  resignation  or  removal  of the
Remarketing  Agent as Remarketing  Agent in accordance  with the Indenture.  The
Remarketing  Agent  will  resign as  Remarketing  Agent  under  the  Remarketing
Agreement  if  requested  to do so by the Borrower and the Issuer in writing and
may resign at any time upon forty-five (45) days written notice delivered to the
Issuer, the Borrower, the Tender Agent, the Bank, the Trustee, Standard & Poor's
Ratings Services and Moody's Investors  Service,  to the extent each such rating
agency is then rating the Bonds.

     (b) In addition to the  provisions of paragraph  (a) of this  section,  the
Remarketing Agent may terminate its obligations under this Remarketing Agreement
at any time by notifying the Borrower in writing or by telegram,  telex or other
electronic communications of its election so to do, if:

          (i) Legislation shall be favorably reported,  recommended by committee
or enacted by the Congress or adopted by either House thereof or a decision by a
Court of the United  States of America or the United  States Tax Court  shall be
rendered,  or a ruling,  regulation or official statement by or on behalf of the
Treasury  Department  of the United  States of  America,  the  Internal  Revenue
Service or other  governmental  agency  shall be made,  with  respect to federal
taxation of receipts, revenues or other income of the general character expected
to be derived  by the Issuer or of  interest  received  on bonds of the  general
character  of the Bonds or which would have the effect of  changing  directly or
indirectly  the  federal  income tax  consequences  of  interest on bonds of the
general


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<PAGE>



character  of the  Bonds in the  hands of the  holders  thereof,  which,  in the
opinion of the Remarketing Agent,  materially adversely affects the market price
of the Bonds;

          (ii)  Legislation  shall be introduced  by committee,  by amendment or
otherwise,  in, or be enacted by, the House of  Representatives or the Senate of
the Congress of the United States, or a decision by a court of the United States
shall be rendered, or a stop order, ruling, regulation or official statement by,
or on behalf of, the United States  Securities and Exchange  Commission or other
governmental  agency having  jurisdiction of the subject matter shall be made or
proposed,  to the effect that the offering or sale of obligations of the general
character of the Bonds, as contemplated  hereby,  is or would be in violation of
any provision of the Securities Act, or the Securities  Exchange Act of 1934, as
amended and as then in effect,  or the Trust  Indenture Act, or with the purpose
or effect of otherwise  prohibiting  the offering or sale of  obligations of the
general character of the Bonds, or the Bonds, as contemplated hereby;

          (iii)  Any  information  shall  have  become  known,   which,  in  the
Remarketing Agent's reasonable opinion, makes untrue, incorrect or misleading in
any material  respect any statement or  information  contained in the Disclosure
Statement, as the information contained therein has been supplemented or amended
by  other  information,  as  of  the  date  furnished  or  supplemented  to  the
Remarketing  Agent in accordance with Section 3 hereof, or causes the Disclosure
Statement,  as so  supplemented or amended,  to contain an untrue,  incorrect or
misleading  statement  of a material  fact or to omit to state a  material  fact
required to be stated therein or necessary to make the statements  made therein,
in light of the circumstances under which they were made, not misleading;

          (iv)  Except  as  provided  in clause  (i)  hereof,  any  legislation,
resolution,  ordinance, rule or regulation shall be introduced in, or be enacted
by, any  governmental  body,  department  or agency of the United  States or the
State  of  California  shall  be  rendered  which,  in the  Remarketing  Agent's
reasonable opinion, materially adversely affects the marketability of the Bonds;

          (v)  Additional  material  restrictions  not in  force  as of the date
hereof  shall have been  imposed  upon  trading in  securities  generally by any
governmental authority or by any national securities exchange;

          (vi) Any  governmental  authority  shall impose,  as to the Bonds,  or
obligations of the general character of the Bonds, any material restrictions not
now in force, or increase materially those now in force;

          (vii) A general  banking  moratorium  shall have been  established  by
federal, New York or California authorities;



                                        9

<PAGE>



          (viii) Any rating of the Bonds shall have been downgraded or withdrawn
by a national rating  service,  which,  in the  Remarketing  Agent's  reasonable
opinion, materially adversely affects the marketability of the Bonds;

          (ix) A war involving the United  States shall have been  declared,  or
any existing conflict involving the armed forces of the United States shall have
escalated,  or any other national emergency relating to the effective  operation
of government or the financial  community  shall have  occurred,  which,  in the
Remarketing  Agent's  reasonable  opinion,   materially  adversely  affects  the
marketability of the Bonds;

          (x) An event, including, without limitation, the bankruptcy or default
of any other issuer of or obligor on obligations of the general character of the
Bonds or on similar  commercial paper, shall have occurred which, in the opinion
of the Remarketing  Agent, makes the marketability of obligations of the general
character of the Bonds impossible over an extended period of time.

The provisions of Section 7 shall survive the  termination  of this  Remarketing
Agreement and the payment or defeasance of the Bonds.

     Section 14. Miscellaneous.  (a) Except as otherwise provided, any notice or
other  communication  herein  required  or  permitted  to be  given  shall be in
writing,  by facsimile  transmission  or by telephone  with  subsequent  written
confirmation  and may be personally  served or sent by United States mail, first
class mail postage prepaid,  and shall be deemed to have been given upon receipt
by the party  notified.  For the  purposes  hereof,  the  address of the parties
(until notice of a change thereof is delivered as provided in this Section 14(a)
shall be as follows:


     Remarketing Agent:       Rauscher Pierce Refsnes, Inc.
                              2711 North Haskell Avenue, Suite 2400
                              Dallas, Texas  75204
                              Attention:  Fixed Income Banking
                              (214) 989-1834   Fax: (214) 989-1842

     Issuer:                  California Economic Development
                              Financing Authority
                              801 K Street, Suite 1700
                              Sacramento, California  91584
                              Attention:  Chair
                              (916) 323-8022   Fax:  (916) 322-7214




                                       10

<PAGE>



     Bank:                    The Sumitomo Bank, Limited
                              777 South Figueroa Street, Suite 2600
                              Los Angeles, California  90017
                              Attention: Structured Finance & Financial
                              Institutions Group
                              (213) 955-0800  Fax:  (213) 623-6832

     Borrower:                Advanced Aerodynamics and Structures, Inc.
                              3501 Lakewood Boulevard
                              Long Beach, California 90808
                              Attention: President
                              (562) 938-8618  Fax: (562) 938-8620

     Trustee:                 First Trust of California, National Association
                              One California Street, 4th Floor
                              San Francisco, California  94111
                              Attention: Municipal Trusts and Agency
                              (415) 273-4500     Fax: (415) 273-4590

     Tender Agent:            First Trust of California, National Association
                              One California Street, 4th Floor
                              San Francisco, California  94111
                              Attention: Municipal Trusts and Agency
                              (415) 273-4590     Fax: (415) 273-4590

     The Remarketing Agent, the Issuer, the Borrower,  the Trustee, the Bank and
the  Tender  Agent  may,  by notice  given  under  this  Remarketing  Agreement,
designate  other  addresses to which  notices or other  communications  shall be
directed.

     (b) This Remarketing  Agreement will inure to the benefit of and be binding
upon the parties hereto and their respective  successors and assigns.  The terms
"successors"  and "assigns"  shall not include any purchaser of any of the Bonds
merely because of such purchase.

     (c)  All of the  representations,  warranties  and  covenants  made in this
Remarketing  Agreement  shall  remain  operative  and in full force and  effect,
regardless  of (i) any  investigation  made by or on behalf of any party hereto,
(ii) delivery of and any payment for any Bonds hereunder,  or (iii)  termination
or cancellation of this Remarketing Agreement.

     (d) Section headings have been inserted in this Remarketing  Agreement as a
matter of  convenience  of  reference  only,  and it is agreed that such section
headings are not a part of this  Remarketing  Agreement  and will not be used in
the interpretation of any provisions of this Remarketing Agreement.



                                       11

<PAGE>



     (e) If any provision of this Remarketing  Agreement shall be held or deemed
to be or shall, in fact, be invalid,  inoperative or unenforceable as applied in
any  particular  case  in  any   jurisdiction  or   jurisdictions,   or  in  all
jurisdictions  because it conflicts  with any  provisions  of any  constitution,
statute,  rule or public policy, or any other reason,  such circumstances  shall
not have the effect of rendering the provisions in question invalid, inoperative
or unenforceable  in any other case or  circumstance,  or of rendering any other
provisions of this Remarketing  Agreement invalid,  inoperative or unenforceable
to any extent whatsoever.

     (f) This  Remarketing  Agreement  may be executed in several  counterparts,
each of which shall be regarded as an original and all of which shall constitute
one and the same document.

     (g) The terms of this Remarketing  Agreement shall not be waived,  altered,
modified,  amended or  supplemented in any manner  whatsoever  except by written
instrument signed by all of the parties hereto.

     (h) This  Remarketing  Agreement  shall be  governed  by and  construed  in
accordance with the laws of the State of California.





                                       12

<PAGE>



     IN WITNESS WHEREOF, the Remarketing Agent and the Borrower have caused this
Remarketing  Agreement to be signed in their names by the undersigned  officers,
thereunto duly authorized, all as of the day and year first above written.



                                            RAUSCHER PIERCE REFSNES, INC.


                                            By ________________________________
                                                Managing Director



                                            ADVANCED AERODYNAMICS AND
                                            STRUCTURES, INC.


                                            By ________________________________
                                                Authorized Signatory




<PAGE>










                              REMARKETING AGREEMENT


                                 by and between



                          RAUSCHER PIERCE REFSNES, INC.


                                       and


                   ADVANCED AERODYNAMICS AND STRUCTURES, INC.



                           Dated as of August 1, 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)