AASI Signs Letter of Intent for Sale/Leaseback of 200,000-Square-Foot Manufacturing Building; Proceeds Targeted for Full-Scale Production of JETCRUZER 500 Aircraft.

LONG BEACH, Calif.--(BUSINESS WIRE)--Feb. 22, 1999--Advanced Aerodynamics & Structures Inc. (Nasdaq:AASI) Monday announced that it has signed a letter of intent with LaserLine Lease Financial Corp. for the sale and leaseback of its 200,000-square-foot manufacturing facility in Long Beach for $11.25 million.

Terms call for AASI to lease the facility for a 20-year period, with the option to extend the lease for an additional 10 years. The agreement also includes a building repurchase option.

AASI will receive an initial payment of $8.5 million and an additional $2.75 million at a later date. The company will use the proceeds to complete the final phase in the development of the JETCRUZER 500 aircraft and enter full-scale manufacturing in late 1999.

The transaction is subject to the approval of the city of Long Beach and the completion of due diligence by LaserLine.

Dr. Carl Chen, chairman and chief executive officer of AASI, said: "The sale of our interest in this state-of-the-art manufacturing facility is an important part of our corporate strategy to develop the JETCRUZER 500 and ramp up to full-scale production in the third quarter of this year. Proceeds from the transaction will fully satisfy our capital requirements needed to enter production in anticipation of making initial deliveries in late 1999."

AASI said this is the largest general aviation aircraft factory in the western United States, containing more than 200,000 square feet of office and manufacturing space on 10 acres at the Long Beach airport. Construction of the facility began in May 1998, with AASI occupying its new facility on Nov. 16, 1998.

"We are gratified by the efficient efforts of Kajima Construction and the support of the city of Long Beach to see the rapid completion of this project," added Chen.

The JETCRUZER 500 is a high-speed single engine, corporate propjet aircraft that can accommodate first-class seating for six people, including the pilot. Powered by a Pratt & Whitney propjet engine, the JETCRUZER 500 will fly at 360 miles per hour from Los Angeles to New York at altitudes up to 30,000 feet, with only one stop.

To date, AASI has orders for 172 of the corporate aviation industry's newest executive propjet aircraft, representing a backlog that exceeds $200 million.

Advanced Aerodynamics & Structures is a development-stage company organized to design, develop, have certified by the Federal Aviation Administration (FAA), manufacture and market propjet and jet aircraft for the world business, commercial and government markets.

Certain statements contained in this news release, including statements concerning the company's future cash and financing requirements, the company's ability to continue to obtain market acceptance of the JETCRUZER 500 aircraft, the company's ability to obtain regulatory approval of the JETCRUZER 500, and the competitive market for sales of small-business aircraft and other statements contained herein regarding matters that are not historical facts, are forward-looking statements; actual results may differ materially from those set forth in the forward-looking statements, which statements involve risks and uncertainties, including, without limitation, those risks and uncertainties set forth in the company's Registration Statement on Form SB-2 under the heading "Risk Factors," and the company's Form 10-KSB and Form 10-QSB on file with the SEC.