<PAGE>


                             ENGINE LEASE AGREEMENT

                                     between

                          INVESTORS ASSET HOLDING CORP.
                                     Lessor

                                       and

                                TRANSNET LIMITED
                           [dba SOUTH AFRICAN AIRWAYS]
                                     Lessee

                          Dated as of DECEMBER 17, 1996

                covering one Pratt & Whitney model JT9D-7J engine

                                Serial No. 685952
<PAGE>

                                 LEASE AGREEMENT
                                TABLE OF CONTENTS

<TABLE>
<S>                                                                                   <C>
SECTION 1. Definitions ..............................................................  1

SECTION 2. Lease and Delivery of the Engine .........................................  3
         (a) Lease, Obligations, and Conditions Precedent ...........................  3
                  (i) Execution of Lease ............................................  3
                  (ii) Evidence of Legal Authority to Lease and Operate the Engine ..  3
                  (iii) Evidence of Corporate Authority .............................  3
                  (iv) Evidence of Insurance ........................................  3
                  (v) Payment of Rent ...............................................  3
         (b) Delivery ...............................................................  3

SECTION 3. Term and Rent ............................................................  4
         (a) Term ...................................................................  4
         (b) Rent ...................................................................  4
         (c) Method of Payment ......................................................  4
         (d) Supplemental Rent ......................................................  4

SECTION 4. Representations, Warranties and Miscellaneous Covenants ..................  4
         (a) The Lessee's Representations and Warranties ............................  4
                  (i) Organization and Qualification ................................  4
                  (ii) Corporate Authorization ......................................  5
                  (iii) Government Approval .........................................  5
                  (iv) Valid and Binding Agreements .................................  5
                  (v) Litigation ....................................................  5
                  (vi) Taxes ........................................................  5
                  (vii) Financial Condition .........................................  5
         (b) Representations and Warranties of the Lessor ...........................  6
                  (i) Due Organization ..............................................  6
                  (ii) Due Authorization; Enforceability ............................  6
                  (iii) No Violation ................................................  6
                  (iv) Ownership of Engine ..........................................  6
         (c) Disclaimer and Acknowledgment of Disclaimer;
                  Waiver of Consequential Damages ...................................  6
         (d) Lessor's Covenant of Quiet Enjoyment ...................................  7

SECTION 5. Title, Use, Operation, Maintenance, Possession ...........................  8
         (a) Title ..................................................................  8
         (b) General ................................................................  8
         (c) Use ....................................................................  8
         (d) Operation ..............................................................  8
         (e) Lessee to Pay All Costs ................................................  8
         (f) Reports ................................................................  8
         (g) Right to Inspect .......................................................  8
         (h) Engine Documents .......................................................  9
         (i) Possession .............................................................  9
         (j) Insignia ...............................................................  9
         (k) Repair and Maintenance Obligations .....................................  9
<PAGE>

SECTION 6. Return of the Engine ..................................................... 10
         (a) Return ................................................................. 10
         (b) Lease Continues ........................................................ 10
         (c) Condition of Engine .................................................... 10
         (d) Inspections ............................................................ 10
         (e) Acceptance ............................................................. 10
         (f) Engine Documents ....................................................... 11
         (g) Ownership .............................................................. 11
         (h) Disputes ............................................................... 11

SECTION 7. Liens .................................................................... 11

SECTION 8. Taxes .................................................................... 11
         (a) Tax Indemnity .......................................................... 11
         (b) Withholding ............................................................ 12
         (c) After-tax Payment ...................................................... 12

SECTION 9. Risk of Loss; Event of Loss; Requisition for Use ......................... 12
         (a) Risk of Loss ........................................................... 12
         (b) Event of Loss .......................................................... 13

SECTION 10. Insurance ............................................................... 13
         (a) All-Risk Insurance ..................................................... 13
         (b) War Risk Insurance ..................................................... 13
         (c) Liability Insurance .................................................... 14
         (d) Deductibles and Self Insurance ......................................... 14
         (e) Additional Requirements; Loss Payment .................................. 14
         (f) No Set-Off ............................................................. 15
         (g) Notice of Material Alteration of Cancellation .......................... 15
         (h) Renewal ................................................................ 15
         (i) Application of Hull Insurance Proceeds ................................. 15
         (j) Insurance for Own Account .............................................. 15
         (k) Reports Certificates ................................................... 16

SECTION 11. The Lessor's Right to Perform for the Lessee ............................ 16

SECTION 12. Further Assurances ...................................................... 16

SECTION 13. Events of Default ....................................................... 16
         (a) Failure to Pay Rent .................................................... 16
         (b) Failure to Pay Supplemental Rent ....................................... 16
         (c) Failure to Maintain Insurance .......................................... 16
         (d) Misrepresentation or Breach of Warranty ................................ 16
         (e) Bankruptcy, Etc. ....................................................... 17
         (f) General Default ........................................................ 17
         (g) Loss of Airline or Corporate Authority ................................. 17
         (h) Other Obligations ...................................................... 17
<PAGE>

SECTION 14. Remedies ................................................................ 17
         (a) Return and Repossession ................................................ 17
         (b) Sale, Use, Etc. ........................................................ 17
         (c) Liquidated Damages, Fair Market Rental ................................. 17
         (e) Cancellation, Termination, and Rescission .............................. 18
         (f) Other Remedies ......................................................... 18

SECTION 15. General Indemnity and Expenses .......................................... 18
         (a) General Indemnity ...................................................... 18
         (b) Legal Fees and Expenses ................................................ 19

SECTION 16. Assignment and Alienation ............................................... 19

SECTION 17. Notices ................................................................. 20

SECTION 18. No Set-Off, Counterclaim, Etc. .......................................... 20

SECTION 19. Governing Law ........................................................... 21
         (a) Consent to Jurisdiction ................................................ 21
         (b) Choice of Law .......................................................... 21

SECTION 20. Miscellaneous ........................................................... 21

EXHIBIT A: FORM OF LEASE SUPPLEMENT AND RECEIPT ..................................... 23

EXHIBIT B: FORM OF ENGINE RETURN RECEIPT AND LEASE TERMINATION ...................... 28
</TABLE>
<PAGE>

                             ENGINE LEASE AGREEMENT

            This ENGINE LEASE AGREEMENT dated as of December 17, 1996 between
INVESTORS ASSET HOLDING CORP., a Massachusetts corporation with its principal
place of business and registered office at 98 North Washington Street, Boston,
Massachusetts 02114 ("Lessor") and TRANSNET LIMITED, a public company
(registration number 90/00900/06) with limited liability and duly incorporated
under The Company Laws of the Republic of South Africa and trading as SOUTH
AFRICAN AIRWAYS (hereinafter referred to as "Lessee"), at Johannesburg
International Airport, 1627, Republic of South Africa,

            WHEREAS, the Lessee desires to lease from the Lessor and the Lessor
is willing to lease to the Lessee the engine described and referred to herein
upon and subject to the terms and conditions of this Lease;

            NOW, THEREFORE, in consideration of the mutual promises herein
contained, the Lessee and Lessor agree as follows:

            SECTION 1. Definitions. The following terms shall have the following
meanings for all purposes of this Lease:

      "Business Day" means a day of the year in which banks are not authorized
or required to close in Boston, Massachusetts, or __________________________.

      "Default" means an event which with the passage of time or the giving of
notice, or both, would constitute an Event of Default.

      "Delivery Date" has the meaning given such term in Section 2(b) hereof.

      "Delivery Location" has the meaning given such term in Section 2(b)
hereof.

      "Engine" means one Pratt & Whitney model JT9D-7J engine, serial number
685952, together with any and all parts so long as the same shall be either
incorporated or installed in or attached to the Engine. The Engine shall remain
leased hereunder whether or not from time to time attached to any airframe or on
the ground.

      "Engine Documents" has the meaning given such term in Section 5(h) hereof.

      "Event of Default" has the meaning given such term in Section 13 hereof.

      "Event of Loss" shall mean any of the following events with respect to any
property.

            (i) loss of such property or of the use thereof due to theft,
      disappearance, destruction, damage beyond economic repair or rendition of
      such property permanently unfit for normal use for any reason; or

            (ii) any damage to such property which results in an insurance
      settlement with respect to such property on the basis of an actual,
      constructive or compromised total loss; or

            (iii) the condemnation, confiscation or seizure of, or requisition
      of title to or use of, such property by private persons or by any
      governmental or purported governmental authority.
<PAGE>

      "Expiry" shall mean any of the following: (i) expiration of the Term
through the passage of time in accordance with the terms of this Lease, or (ii)
termination, cancellation, or rescission of the Lease in accordance with its
terms.

      "FAA" means the Federal Aviation Administration of the United States
Department of Transportation or any successor agency.

      "Indemnitee" means the Lessor, each partner comprising the Lessor,
Lessor's affiliates, and their respective successors, assigns, representatives,
employees, officers, directors and agents, and each of them.

      "Lease" shall mean this Engine Lease Agreement, as supplemented by the
Lease Supplement and Receipt, and as may be amended in accordance with Section
20 hereof.

      "Lease Supplement and Receipt" shall mean a Lease Supplement and Receipt,
substantially in the form of Exhibit A hereto.

      "Lessor Liens" means Liens which result from or constitute claims against
or affecting the Lessor not related to the transactions contemplated by this
Lease.

      "Lien" means any mortgage, security interest, lease or other charge or
encumbrance or claim or right of others, including, without limitation, rights
of others under any airframe or engine interchange or pooling agreement.

      "Overdue Payment Rate" means one and one-half percent per month.

      "Return Date" has the meaning given to such term in Section 6(a) hereof.

      "Return Location" has the meaning given to such term in Section 6(a)
hereof.

      "Stipulated Loss Value" has the meaning given to such term in Section
10(a) hereof.

      "Supplemental Rent" means all amounts, liabilities, indemnifications and
obligations of any kind whatsoever which the Lessee is obligated to pay in
accordance with the terms of this Lease.

      "Tax" has the meaning given to such word in Section 8(a) hereof.

      "Term" has the meaning given to such word in Section 3(a) hereof.


                                       2
<PAGE>

            SECTION 2. Lease and Delivery of the Engine

      (a) Lease, Obligations, and Conditions Precedent.

      The Lessor agrees to lease to the Lessee, and the Lessee agrees to lease
from the Lessor, the Engine, on the terms and conditions of this Lease. The
Lessor's obligation to lease the Engine shall be conditioned upon the absence of
any Default hereunder, the absence of any materially adverse change in the
Lessee's financial or operating condition or prospects from the date of this
Lease to the Delivery Date, and the performance by Lessee of each of the
following obligations on or before the Delivery Date (unless a sooner date is
specified), all in form and substance satisfactory to Lessor and its counsel:

            (i) Execution of Lease. The Lessee shall have executed and delivered
      this Lease, and the Lease Supplement and Receipt (dated the Delivery
      Date);

            (ii) Evidence of Legal Authority to Lease and Operate the Engine.
      The Lessee shall have obtained all licenses, permits and approvals
      required with respect to the Engine by the FAA for the lease of the Engine
      and for the commercial operation thereof by the Lessee, and Lessee shall
      provide Lessor with certified copies of such;

            (iii) Evidence of Corporate Authority. The Lessee shall have
      delivered to the Lessor certified resolutions of the Board of Directors of
      the Lessee duly authorizing the execution, delivery and performance of
      this Lease, and other satisfactory evidence as may be requested by Lessor
      that the Lessee has taken all corporate action necessary to authorize this
      Lease and the transactions contemplated hereby, together with an
      incumbency certificate as to the person or persons authorized to execute
      and deliver the same;

            (iv) Evidence of Insurance. The Lessee shall have delivered to the
      Lessor reports and certificates of insurance in compliance with the
      requirements of the FAA and Section 10 hereof;

            (v) Payment of Rent. Lessee shall have received payment of monthly
      rent for the first 30 days of the Term, covering the 30 day period
      commencing on the Delivery Date.

      (b) Delivery. The Engine shall be delivered to the Lessee "AS IS," "WHERE
IS," AND SUBJECT TO EACH AND EVERY DISCLAIMER OF WARRANTY AND REPRESENTATION AS
SET FORTH IN SECTIONS 4(c) HEREOF. The Engine shall delivered and accepted at
JFK International Airport, Jamaica, New York, or such other place as may be
mutually agreed upon in writing by the Lessor and Lessee (the "Delivery
Location") and on December , 1996, or such other date as may be mutually agreed
upon in writing by the Lessor and Lessee (the "Delivery Date", which date shall
be the date of the Lease Supplement and Receipt). Upon tender of delivery
hereunder by the Lessor, Lessee shall immediately inspect the Engine accept
delivery of the Engine. Upon acceptance of the Engine, the Lessee shall execute
and deliver the Lease Supplement and Receipt to the Lessor, which shall
constitute, without further act, unconditional and irrevocable acceptance by the
Lessee of the Engine under, and for all purposes of, this Lease and as being
serviceable, in accordance with specifications, in good working order and repair
and without defect or inherent vice in title condition, design, operation or
fitness for use, whether or not discoverable by the Lessee on the Delivery Date.


                                        3
<PAGE>

            SECTION 3. Term and Rent.

      (a) Term. The term for which the Engine is leased hereunder (the "Term")
shall be not less than thirty days, commencing on the Delivery Date, and
continuing thereafter until terminated by either party by providing the other
party with ten days' prior written notice, unless Expiry occurs sooner pursuant
to the express provisions of this Lease.

      (b) Rent. The Lessee shall pay to the Lessor Monthly rental for the Engine
in the amount equal to the daily equivalent of Nineteen Hundred United States
Dollars (US$1,900.00) plus hourly rental for the Engine in the amount of two
hundred United States Dollars (US$200.00) per flight hour. Monthly rental shall
by payable monthly in advance of the Delivery Date and the day of each calendar
month following the Delivery Date which corresponds to the Delivery Date (or, if
any such month does not have such a corresponding day then the last day of such
month) during the Term. Hourly rental shall by payable monthly in arrears on the
tenth day of each calendar month and on the Return Date.

      (c) Method of Payment. All rent hereunder shall be paid by the Lessee not
later than 12:00 noon, New York time, on the date due thereof by wire transfer
in U.S. Dollars and in immediately available funds to the Lessor by deposit to:

                  National Westminster Bank
                  80 Pine Street
                  New York, New York 10005
                  ABA # 021 200 339
                  Acct. # 2181 01 7572

or to such other account as the Lessor shall specify to the Lessee in writing.
Any rent due on a day which is not a Business Day shall be due on the next
Business Day.

      (d) Supplemental Rent. The Lessee also agrees to pay to the Lessor any and
all Supplemental Rent promptly as the same shall become due and owing. In the
event of any failure on the part of the Lessee to pay any Supplemental Rent, the
Lessor shall have all rights, powers and remedies provided for herein or by law
or equity or otherwise in the case of nonpayment of rent. The Lessee will also
pay, on demand, as Supplemental Rent, an amount equal to interest at the Overdue
Payment Rate on any part of any payment of rent not paid on the date it becomes
due for any period for which the same shall be overdue.

            SECTION 4. Representations, Warranties and Miscellaneous Covenants.

      (a) The Lessee's Representations and Warranties. The Lessee represents and
warrants as follows:

            (i) Organization and Qualification. The Lessee is a corporation duly
      incorporated in and validly existing under the laws of South Africa,
      possessing perpetual corporate existence, having the capacity to sue and
      be sued in its own name, has full power, legal right and authority
      (corporate and otherwise) to carry on its business as currently conducted,
      to own and hold under lease its properties and to execute, deliver and
      perform and observe the provisions of this Lease, and is duly qualified to
      do business in good standing wherever the nature of its business makes
      such qualification necessary.


                                        4
<PAGE>

            (ii) Corporate Authorization. The execution, delivery, and
      performance by the Lessee of this Lease (A) have been duly authorized by
      all necessary corporate action on behalf of the Lessee, (B) do not require
      the consent or approval of the Lessee's stockholders or of any trustee or
      the holders of any indebtedness or obligations of the Lessee (except such
      as have been obtained, and certified copies of which have been furnished
      to the Lessor), (C) do not contravene any existing law to which the Lessee
      is subject, (D) do not conflict with or result in any breach of any of the
      terms or constitute a default under any document, instrument, or agreement
      to which the Lessee is a party or is subject or by which it or any of its
      assets are bound, (E) do not contravene the Lessee's charter or By-Laws,
      or any other provisions of Lessee's constitutive documents, and (F) do not
      and will not result in the creation or imposition of or oblige Lessee to
      create any Lien on or over the Engine.

            (iii) Government Approval. Every consent, authorization, and
      approval required by the Lessee to enable it to carry on its business or
      required by it to authorize or in connection with the execution, delivery,
      legality, validity, priority, enforceability, admissibility in evidence,
      or effectiveness of this Lease or the performance by it of any of its
      obligations under this Lease has been duly obtained or made and is in full
      force and effect and there has been no default in observance or
      performance of any of the conditions, restrictions (if any), imposed on or
      in connection with any such consent or approval or sanction. At Delivery,
      the Lessee will have and will thereafter maintain valid all necessary
      certificates and licenses for the operation of (a) its business as an
      airline operating scheduled and charter flights for the carriage of
      passengers and cargo and (b) the Engine on such flights; the Lessee is not
      exempt from the obtaining of any such certificates or licenses usually
      required by commercial airline operators.

            (iv) Valid and Binding Agreements. This Lease constitutes the legal,
      valid and binding obligations of the Lessee enforceable against the Lessee
      in accordance with their respective terms.

            (v) Litigation. There are no unsatisfied judgments against Lessee,
      and there is no pending or, to the best of the Lessee's knowledge,
      threatened action or proceeding affecting the Lessee before any court,
      tribunal, governmental agency or arbitrator which may materially adversely
      affect the financial condition or operations of the Lessee or the ability
      of the Lessee to perform its obligations under the Lease.

            (vi) Taxes. The Lessee has filed all material tax returns which are
      required to be filed by it, and has paid all Taxes shown to be due or
      payable on said returns or any assessment received by the Lessee unless
      protected by appropriate proceedings.

            (vii) Financial Condition. The Lessee is not in default in the
      performance of any of its obligations (A) for the payment of indebtedness
      for borrowed money or any interest or premium thereon or (B) for the
      payment of rent under any lease or agreement to lease real, personal or
      mixed property. The Lessee has not taken nor proposes to take any
      corporate action nor have any other steps or administrative or legal
      proceedings been taken or started or threatened against it for the
      winding-up, dissolution, reorganization or amalgamation of the Lessee or
      for the appointment of a liquidator, administrator, receiver,
      administrative receiver, trustee or similar officer of the Lessee or all
      or any of its revenues or assets nor has the Lessee sought any other
      relief under any applicable insolvency or bankruptcy law.


                                        5
<PAGE>

      (b) Representations and Warranties of the Lessor. The Lessor makes the
following representations and warranties:

            (i) Due Organization. The Lessor is a corporation duly organized and
      validly existing in good standing under the laws of Massachusetts and has
      the power and authority to enter into and perform its obligations under
      this Lease and the Lease Supplement and Receipt.

            (ii) Due Authorization; Enforceability. This Lease has been, and the
      Lease Supplement and Receipt to which the Lessor is a party will be, duly
      authorized, executed and delivered by the Lessor and, assuming due
      authorization, execution and delivery thereof by the other parties hereto
      and thereto, are, or in the case of the Lease Supplement and Receipt will
      be, legal, valid and binding obligations of the Lessor, enforceable in
      accordance with their respective terms.

            (iii) No Violation. The execution and delivery by the Lessor of this
      Lease are not, and the execution and delivery by the Lessor of the Lease
      Supplement and Receipt will not be, and the performance by the Lessor of
      its obligations under each of the foregoing documents will not be,
      inconsistent with its articles or By-Laws, do not and will not contravene
      any law, governmental rule or regulation, judgment or order applicable to
      it, and do not and will not contravene any provision of, or constitute a
      default under, any indenture, mortgage, contract or other instrument to
      which the Lessor is a party or by which it is bound or require the consent
      or approval of, the giving of notice to, the registration with or the
      taking of any action in respect of or by, any Federal, state or local
      governmental authority or agency, except such as have been obtained, given
      or accomplished.

            (iv) Ownership of Engine. On the Delivery Date, the Lessor shall
      have full legal and beneficial title to the Engine, free and clear of all
      Liens except any Lien which Lessor caused to be placed on the Engine as
      permitted herein.

      (c) Disclaimer and Acknowledgment of Disclaimer; Waiver of Consequential
Damages. The Engine is being leased by the Lessor to the Lessee hereunder ON A
COMPLETELY "AS IS," "WHERE IS," BASIS, WHICH IS ACKNOWLEDGED AND AGREED TO BY
THE LESSEE. THE WARRANTIES AND REPRESENTATIONS SET FORTH IN (b) ABOVE ARE
EXCLUSIVE AND IN LIEU OF ALL OTHER REPRESENTATIONS OR WARRANTIES WHATSOEVER,
EXPRESS OR IMPLIED, AND LESSOR HAS NOT MADE AND SHALL NOT BE CONSIDERED OR
DEEMED TO HAVE MADE (WHETHER BY VIRTUE OF HAVING LEASED THE ENGINE UNDER THIS
LEASE, OR HAVING ACQUIRED THE ENGINE, OR HAVING DONE OR FAILED TO DO ANY ACT, OR
HAVING ACQUIRED OR FAILED TO ACQUIRE ANY STATUS UNDER OR IN RELATION TO THIS
LEASE OR OTHERWISE) ANY OTHER REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS OR
IMPLIED, WITH RESPECT TO THE ENGINE OR TO ANY PART THEREOF, AND SPECIFICALLY,
WITHOUT LIMITATION, IN THIS RESPECT DISCLAIMS AS TO THE TITLE, AIRWORTHINESS,
VALUE, CONDITION, DESIGN, MERCHANTABILITY, COMPLIANCE WITH SPECIFICATIONS,
CONSTRUCTION AND CONDITION OF THE ENGINE OPERATION, OR FITNESS FOR A PARTICULAR
USE OF THE ENGINE AND AS TO THE ABSENCE OF LATENT AND OTHER DEFECTS, WHETHER OR
NOT DISCOVERABLE, AS TO THE ABSENCE OF ANY INFRINGEMENT OR THE LIKE, HEREUNDER
OF ANY PATENT, TRADEMARK OR COPYRIGHT, AS TO THE ABSENCE OF OBLIGATIONS BASED ON
STRICT LIABILITY IN TORT, OR AS TO THE QUALITY OF THE MATERIAL OR WORKMANSHIP OF
THE ENGINE OR ANY PART THEREOF OR ANY


                                        6
<PAGE>

OTHER REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS OR IMPLIED (INCLUDING ANY
IMPLIED WARRANTY ARISING FROM A COURSE OF PERFORMANCE OR DEALING OR USAGE OF
TRADE), WITH RESPECT TO THE ENGINE OR ANY PART THEREOF.

      THE LESSEE HEREBY WAIVES, RELEASES, DISCLAIMS AND RENOUNCES ALL
EXPECTATION OF OR RELIANCE UPON ANY SUCH AND OTHER WARRANTIES, OBLIGATIONS AND
LIABILITIES OF LESSOR AND RIGHTS, CLAIMS AND REMEDIES OF THE LESSEE AGAINST
LESSOR, EXPRESS OR IMPLIED, ARISING BY LAW OR OTHERWISE, INCLUDING BUT NOT
LIMITED TO (i) ANY IMPLIED WARRANTY OF MERCHANTABILITY OF FITNESS FOR ANY
PARTICULAR USE, (ii) ANY IMPLIED WARRANTY ARISING FROM COURSE OF PERFORMANCE,
COURSE OF DEALING OR USAGE OF TRADE, (iii) ANY OBLIGATION, LIABILITY, RIGHT,
CLAIM OR REMEDY IN TORT, WHETHER OR NOT ARISING FROM THE NEGLIGENCE OF LESSOR,
ACTUAL OR IMPUTED, AND (iv) ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY
FOR LOSS OF OR DAMAGE TO THE ENGINE, FOR LOSS OF USE, REVENUE OR PROFIT WITH
RESPECT TO THE ENGINE, OR FOR ANY OTHER DIRECT, INCIDENTAL OR CONSEQUENTIAL
DAMAGES.

      THE LESSOR SHALL NOT HAVE ANY RESPONSIBILITY OR LIABILITY TO THE LESSEE OR
ANY OTHER PERSON WHETHER ARISING IN CONTRACT OR TORT OUT OF ANY NEGLIGENCE OR
STRICT LIABILITY OF LESSOR OR OTHERWISE, AND LESSEE HEREBY DISCLAIMS AND WAIVES
ANY RIGHT IT WOULD OTHERWISE HAVE TO RECOVER FOR

      (i) ANY LIABILITY, LOSS OR DAMAGE CAUSED OR ALLEGED TO BE CAUSED DIRECTLY
      OR INDIRECTLY BY THE ENGINE OR ANY ENGINE OR BY ANY INADEQUACY THEREOF OR
      DEFICIENCY OR DEFECT THEREIN OR BY ANY OTHER CIRCUMSTANCE IN CONNECTION
      THEREWITH AND THIS LEASE,

      (ii) THE USE, OPERATION OR PERFORMANCE OF THE ENGINE OR ANY RISKS RELATING
      THERETO,

      (iii) ANY CONSEQUENTIAL DAMAGES, INCLUDING THOSE FOR INTERRUPTION OF
      SERVICE, LOSS OF BUSINESS OR ANTICIPATED PROFITS, HEREUNDER FOR
      CONSEQUENTIAL DAMAGES AS A RESULT OF ANY BREACH OR ALLEGED BREACH BY THE
      LESSOR OF ANY OF THE AGREEMENTS, REPRESENTATION, OR WARRANTIES OF THE
      LESSOR CONTAINED IN THIS LEASE, OR

      (iv) THE DELIVERY, OPERATION, SERVICING, MAINTENANCE, REPAIR, IMPROVEMENT
      OR REPLACEMENT OF THE ENGINE.

      (d) Lessor's Covenant of Quiet Enjoyment. The Lessor agrees that, so long
as no Event of Default shall have occurred and be continuing, the Lessor will
not take or knowingly fail to take any action, which causes interference with
the Lessee's peaceful and quiet use, operation and possession of the Engine
under this Lease.


                                        7
<PAGE>

            SECTION 5. Title, Use, Operation, Maintenance, Possession

      (a) Title. Lessee acknowledges that title to the Engine shall remain
vested in Lessor, and the Lessee undertakes to do all such further acts, deeds,
assurances or things as may, in the opinion of the Lessor, be necessary or
desirable in order to protect or preserve Lessor's title to the Engine.

      (b) General. Lessee, at its own cost and expense, shall (i) maintain the
Engine Documents in the English language in accordance with FAA regulations; and
(ii) at a minimum, give the Engine the same level of attention and maintenance
as the Lessee affords to the other engines in its fleet.

      (c) Use. Lessee agrees not to operate or locate the Engine, or suffer the
Engine to be operated or located, in any area (i) excluded from coverage by any
insurance policy in effect or required to be maintained hereunder with respect
to the Engine or (ii) in any war zone or in any recognized or, in Lessor's
reasonable judgment, threatened area of hostilities unless fully covered by war
risk insurance meeting the terms of Section 10 hereof. Lessee agrees not to
operate the Engine, or suffer the Engine to be operated during the Term (1)
unless the Engine is covered by insurance as required by the provisions of
Section 10 hereof or (2) contrary to the terms of such insurance.

      (d) Operation. Lessee agrees not to (i) operate the Engine or permit the
Engine to be operated during the Term except in commercial or other operations
for which Lessee is duly authorized by the FAA; or (ii) use or permit the Engine
to be used for a purpose for which the Engine is not designed or reasonably
suitable. Lessee will not permit the Engine to be maintained, used or operated
during the Term in violation of any law, or contrary to any manufacturer's
operating manuals or instructions.

      (e) Lessee to Pay All Costs. Lessee shall pay all costs incurred in the
operation of the Engine, including but not limited to fuel, oil, lubricants,
line maintenance, insurance, landing and navigation fees, airport charges, and
any and all expenses of any kind or nature, arising directly or indirectly in
connection with or related to the use, movement and operation of the Engine by
Lessee during the Term. The obligations of Lessee under this provision shall
survive the end of the Term.

      (f) Reports. Lessee shall furnish to Lessor the following reports on a
monthly basis (i) the hours and cycles operated by the Engine; (ii) monthly
Engine maintenance planning sheet; (iii) monthly deferred items carried forward;
(iv) damage reports; (v) a list of those service bulletins, airworthiness
directives and engineering modifications issued during such month and applicable
to the Engine, whether or not incorporated in the Engine; (vi) monitoring
reports containing performance data for the prior month; and (vii) any flight
crew or maintenance crew log-book entries relating to condition or performance
of the Engine. In addition, Lessee shall notify Lessor of all accidents, cases
of significant theft or vandalism, extended periods of Engine grounding for
cause, and insured occurrences as promptly as practicable.

      (g) Right to Inspect. Lessor and its agents shall have the right to
inspect the Engine or the Engine Documents at any reasonable time, upon giving
Lessee reasonable notice, to ascertain the condition of the Engine and to
satisfy Lessor that the Engine is being properly repaired and maintained in
accordance with the requirements of this Lease.


                                        8
<PAGE>

      (h) Engine Documents. Lessee, at its expense, will at all times maintain
and preserve, in the English language, all flight records, manuals, and logbooks
required or recommended by the Engine manufacturer, or required from time to
time by the FAA with respect to the Engine, including without limitation shop
records detailing service checks, inspections, tests, repairs, or overhauls. All
documentation of any type referred to in the preceding sentence is herein
individually and collectively referred to as the "Engine Documents." Records
produced by electronic data processing or other automated means are not
acceptable, except as summary documents accompanied by original, or manual,
records, unless specifically approved by the Lessor in writing. Engine Documents
pertaining to maintenance shall contain verification of accomplishment and
quality assurance by actual identifiable signature. Engine Documents for Life
Limited Components shall establish total service, origin, and authenticity
"back-to-birth." All Engine Documents shall be the property of the Lessor. All
Engine Documents shall be stored by Lessee during the Term at a secure facility,
and Lessee shall notify Lessor in writing of the location of such facility. All
Engine Documents will be at all times kept current and up to date in order to
facilitate Lessor's ability to inspect periodically the Engine, monitor the
maintenance of the Engine during the Term and to facilitate Lessor's ability to
inspect periodically the Engine, monitor the maintenance of the Engine during
the Term and to facilitate the sale or re-lease of the Engine to a third party
at the end of the Term.

      (i) Possession. The Lessee will not, without the prior written consent of
the Lessor, which may be withheld in the sole and absolute discretion of the
Lessor, assign any of its rights or obligations under this Lease or sublease or
otherwise in any manner deliver, transfer or relinquish possession or control
of, or transfer any right, title or interest in, the Engine (whether through
pooling or interchange agreements or otherwise) or install the Engine, or permit
any Engine to be installed, provided that the Lessee may, without the prior
written consent of the Lessor:

            (i) install the Engine on an airframe owned by the Lessee free and
      clear of all Liens; and

            (ii) install the Engine on an airframe leased to the Lessee or owned
      by the Lessee and subject to a security agreement under which the Lessee
      is the debtor, provided that (A) such airframe is free and clear of all
      Liens except the rights of the parties to such lease or security
      agreement, and (B) such lessor or secured party agrees in writing that it
      shall not acquire any right, title or interest in such Engine.

      (j) Insignia. The Lessee agrees to maintain on the Engine a metal
nameplate bearing the manufacturer serial number, stating that such Engine is
leased from "INVESTORS ASSET HOLDING CORP., LESSOR" and bearing such other
information as from time to time may be required by law or otherwise necessary
in order to protect the title of the Lessor to such Engine and the rights of the
Lessor under this Lease. The Lessee will replace promptly any such nameplate
which may be removed, defaced or destroyed.

      (k) Repair and Maintenance Obligations. Lessee shall be responsible for
all expenses for line maintenance and for maintenance and repairs arising from
foreign object damage, insured occurrences, Lessee's negligence, or operational
mishandling, including but not limited to incorrect or unauthorized setting or
overspeed. Lessor shall be responsible for all expenses for all other
maintenance and repairs. Lessee shall not remove parts from the Engine or
perform any maintenance other than line maintenance without the prior consent of
the Lessor.


                                        9
<PAGE>

            SECTION 6. Return of the Engine.

      (a) Return. On the last Business Day of the Term or earlier Expiry (the
"Return Date"), all of the terms of this Section 6 shall apply and the Lessee
shall return the Engine to the Lessor by delivering the same, at the Lessee's
own risk and expense, to Kennedy Airport, New York, or such other place as may
be mutually agreed upon in writing by the Lessor and Lessee (the "Return
Location"), fully equipped. The Engine at the time of its return shall be in the
condition set forth in this Section 6 and shall be free and clear of all Liens
other than Lessor Liens. At the time of acceptance of return of the Engine to
Lessor, Lessor and Lessee shall execute an Engine Return Receipt and Lease
Termination in the form attached hereto as Exhibit B.

      (b) Lease Continues. In the event Lessee does not return the Engine or any
part thereof to Lessor on the last Business Day of the Term or earlier Expiry in
condition required hereunder, for any cause, then all of the obligations of
Lessee under this Lease shall continue and such continued use shall not be
considered a renewal of the Term of this Lease or a waiver of any right of
Lessee hereunder. During such continued use, rent shall continue to be paid by
Lessee to Lessor and the other performance and obligations of Lessee to Lessor
shall continue hereunder for each day until the engine is actually delivered to
Lessor, and all other terms and conditions of this Lease shall remain in full
force and effect. Payment shall be made upon presentation of Lessor's invoice
and any failure to pay shall constitute an Event of Default of Lessee. Any
discrepancies found during the inspections hereinafter described that were not
corrected by Lessee prior to return of the Engine to Lessor may be corrected by
Lessor or its designee after return of the Engine and Lessee shall reimburse
Lessor for expenses incurred by Lessor or its designee for accomplishing such
discrepancy corrections. Lessee shall pay Lessor for such expenses incurred upon
presentation of Lessor's invoice therefor. Any late payments shall be subject to
interest at the Overdue Payment Rate.

      (c) Condition of Engine. The Engine at the time of its return to Lessor
shall be in as good operating condition as on the Delivery Date, ordinary wear
and tear from normal airline operations excepted, with all of the Engine
equipment, components and systems functioning in accordance with their intended
use. The Engine shall be returned with all parts installed therein as on the
Delivery Date, excepting only modifications, additions, replacements and
substitution of parts as may have been properly made by Lessee pursuant to
Section 5 and as specifically otherwise set forth in this Section 6. The Engine
shall be on the same stand as when delivered, covered, sealed with plastic and
otherwise "preserved" for long-term out-of-service storage as provided in the
manufacturer's maintenance manual. Lessee shall provide Lessor with all
reliability reports for the Engine provided to the FAA.

      (d) Inspections. A full, videotaped borescope inspection of all Engine
sections, a full test cell run, and an oil spectrum analysis shall be performed
under the surveillance of Lessor at Lessee's expense at the time of the Engine's
return to Lessor. One purpose of such inspections shall be to determine whether
during the Term there was unusual degradation to Engine condition, performance,
or exhaust gas temperature margin for which Lessee is responsible for the cost
of any maintenance or repairs in accordance with Section 5(k), above, and
Section 6(h), below.

      (e) Acceptance. Upon completion of the foregoing inspections and after
Lessee has corrected the discrepancies as required to comply with this Section
6, the return of the Engine shall be accepted by Lessor's representatives at the
Return Location.


                                       10
<PAGE>

      (f) Engine Documents. Lessee shall return to Lessor, at the time the
Engine is returned to Lessor, all of the Engine Documents, updated and
maintained by Lessee through the date of return of the Engine.

      (g) Ownership. Any documents, equipment and any other items returned to
Lessor pursuant to this Section 6 which are not already owned by Lessor shall
thereupon become the property of Lessor.

      (h) Disputes. Any dispute between Lessee and Lessor regarding the
condition of the Engine arising under this Lease shall be referred to and be
determined by the Engine manufacturer, and such determination shall be final and
binding upon the parties.

            SECTION 7. Liens. The Lessee will not create or suffer to exist any
Lien upon or with respect to the Engine, except for the rights of the Lessor and
the Lessee hereunder.

            SECTION 8. Taxes.

      (a) Tax Indemnity. The Lessee agrees to pay, and to indemnify each
Indemnitee for all taxes, fees, levies, imposts, duties, charges and
withholdings of any nature (together with any and all fines, penalties,
additions to tax and/or interest thereon or computed by reference thereto)
(individually, a "Tax" and collectively, "Taxes") which are imposed by any
government, governmental subdivision or other taxing authority of or in any
jurisdiction, or by any international organization, and which are imposed with
respect to or in connection with any transaction or activity described in or
resulting from this Lease, including (without limitation) Taxes imposed on or
with respect to, or measured by, any of the following:

            (i) The Engine or any part thereof or any interest therein;

            (ii) The acceptance, possession, ownership, delivery, use,
      operation, location, leasing, subleasing, condition, maintenance, repair,
      modification, overhaul, testing, storage, abandonment, repossession, or
      return of the Engine or any part thereof or any interest therein;

            (iii) The rentals, receipts or earnings arising from the Engine or
      any part thereof or any interest therein;

            (iv) This Lease; any agreement or instrument executed in connection
      with or pursuant to any of the foregoing; any future amendment,
      supplement, waiver or consent requested by Lessee with respect to any
      thereof, or the execution, delivery, recording or performance of any
      thereof; or

            (v) Any payment made pursuant to this Lease;

provided, however, that the Lessee shall not be required by this paragraph (a)
to indemnify an Indemnitee for any of the following Taxes:

            (x) Taxes which are imposed by any government, governmental
      subdivision or other taxing authority of or in the United States and which
      are based on or measured by the net income, capital or net worth of an
      Indemnitee; provided, however, that the exclusion set forth in this
      subdivision (x) shall not apply to any of the following Taxes:


                                       11
<PAGE>

                  (1) Taxes in the nature of sales, use, rental or value-added
            Taxes,

                  (2) Taxes which would not have been imposed but for, or are
            increased as a result of any of the following:

                        (A) the use or location of the Engine in the
                  jurisdiction imposing the Tax,

                        (B) any place of business or the activities of the
                  Lessee in the jurisdiction imposing the Tax;

      provided, however, that this subdivision (x) shall not be interpreted to
      limit the Lessee's obligations under paragraph (c) of this Section 8; or

            (y) Sales, value-added or other transfer Taxes which are imposed on
      or with respect to a transfer by the Indemnitee of (1) any interest in the
      Engine or (2) any interest in another Indemnitee other than a transfer
      that occurs pursuant to an Event of Loss while an Event of Default is
      continuing.

Lessee will pay all Taxes imposed upon it, or upon its income or profits, or
upon any property belonging to it, prior to the date on which penalties attach
thereto and prior to the date on which any lawful claim, if not paid, would
become a Lien upon any of the material property of Lessee. The Expiry of this
Lease shall not limit or modify the obligations of the Lessee with respect to
any indemnities contained in this Lease.

      (b) Withholding. If the Lessee is required by law to make any withholding
from any amount payable by the Lessee to or for the benefit of an Indemnitee
pursuant to this Lease or any related agreement, the Lessee shall (i) pay such
additional amount as may be necessary to make the net amount actually received
by the person entitled to receive the payment, after all withholdings, equal to
the amount such person would have received if no withholding had been required,
and (ii) as soon as practicable thereafter, deliver to the Indemnitee a receipt
or other document reasonably satisfactory to the Indemnitee evidencing the
withholding and the payment of the amount withheld to the relevant governmental
authority.

      (c) After-tax Payment. Each indemnity pursuant to Section 15 or this
Section 8 shall be in an amount which, after taking into account all Taxes
required to be paid by the Indemnitee entitled to the indemnity as a result of
the receipt or accrual of the indemnity (determined by assuming that each
indemnity received or accrued by an Indemnitee will be subject to Tax at the
highest marginal rates of Tax applicable to the Indemnitee when such indemnity
is received or accrued), shall be equal to the total amount of the indemnity
that the Lessee would be required to pay if the Indemnitee were not subject to
Taxes as a result of the receipt or accrual of the indemnity.

           SECTION 9. Risk of Loss; Event of Loss.

      (a) Risk of Loss. The Lessee will bear the entire risk of destruction,
loss, theft, requisition of title, or use, confiscation, taking or damage of or
to the Engine from any cause during the period commencing when the Lease
Supplement and Receipt is executed and delivered by Lessee and ending when the
Engine Return Receipt and Lease Termination is executed and delivered by Lessor.


                                       12
<PAGE>

      (b) Event of Loss. If an Event of Loss shall occur with respect to the
Engine, the Lessee will forthwith notify the Lessor thereof in writing and will
pay to the Lessor, in U.S. Dollars and in immediately available funds (i) 60
days after the date of the occurrence of such Event of Loss, or (ii) the date of
receipt of insurance proceeds, whichever is earlier, an amount equal to the
Stipulated Loss Value of the Engine; provided, however, that if the date such
payment is made by the Lessee is not a rent payment date, there shall be
deducted from the amount payable by the Lessee an amount equal to a pro rata
portion of the rent for the Engine computed on a daily basis from and including
the date such payment is made by the Lessee to but not including the rent
payment date immediately following the date such payment is made by the Lessee.
In addition, the Lessee will pay in full when due, but without duplication, the
rent for the Engine payable on each rent payment date occurring prior to the
date payment is made by the Lessee pursuant to the immediately preceding
sentence hereof. Upon payment in full by the Lessee of all amounts referred to
above in this Section 9(b), (i) the Lessee shall have no further obligation to
pay rent for such Engine due thereafter, (ii) upon payment in full of any
Supplemental Rent then owing this Lease shall terminate with respect to the
Engine and (iii) upon request of the insurers of the Engine, the Lessor will
transfer to such insurers title to the Engine, without any recourse,
representation or warranty on the part of the Lessor except that the Engine is
free and clear of Lessor Liens.

            SECTION 10. Insurance. The Lessee represents, warrants and agrees to
allow the Engine to be operated only in areas and only in a manner for which
each policy of insurance required by the provisions of this Section 10 shall be
in full force and effect. On or before the Delivery Date and throughout the
Term, Lessee shall without cost or expense to Lessor obtain, maintain and keep
in full force and effect the following insurance with respect to the Engine,
carried with insurers satisfactory to Lessor:

      (a) All-Risk Insurance. All-risk hull insurance on the Engine (with
flight, taxiing and ingestion coverages) in an amount not less than Two Million
Five Hundred Thousand Dollars (US$2,500,000) (the "Stipulated Loss Value"), or
such greater amounts as Lessee may carry from time to time on other similar
engines in its fleet. Such hull insurance shall cover the Engine in an amount
not less than its replacement cost. Such insurance shall provide that while the
Engine is installed on an aircraft, the agreed value payable for and Event of
Loss for such aircraft shall be not less than the aggregate of all amounts
payable to the loss payees of such aircraft and the Stipulated Loss Value of the
Engine; and, shall include a loss payable clause that provides that all
insurance proceeds in respect of the Engine up to the Stipulated Loss Value
shall be paid to Lessor.

      (b) War Risk Insurance. War risk and allied perils insurance on the Engine
to the broadest extent available in the market in an amount not less than the
Stipulated Loss Value or such greater amounts as Lessee may carry from time to
time on other similar aircraft in its fleet and covering the perils of:

            (i) war, invasion, acts of foreign enemies, hostilities (whether war
      be declared or not), civil war, rebellion, revolution, insurrection,
      martial law, military or usurped power, or attempts at usurpation of
      power;

            (ii) strikes, riots, civil commotions or labor disturbances;

            (iii) any act of one or more persons, whether or not agents of a
      sovereign power, for political or terrorist purposes and whether the loss
      or damage therefrom is accidental or intentional;

            (iv) any malicious act or act of sabotage;


                                       13
<PAGE>

            (v) confiscation, nationalization, seizure, restraint, detention,
      appropriation, requisition for time or use by or under the order of any
      government (whether civil, military or de facto) or public or local
      authority expressly including without limitation the government or any
      public or local authority of the country of registration; and

            (vi) hijacking or any unlawful seizure or wrongful seizure or
      wrongful exercise of control of the Engine or crew in flight (including
      any attempt at such seizure or control) made by any person or persons
      acting without the consent of Lessee.

      (c) Liability Insurance. Throughout the Term, Lessee shall also, without
cost or expense to the Lessor, obtain, maintain and keep in full force and
effect liability insurance with respect to the Engine carried with insurers
satisfactory to Lessor for a combined single limit of not less than Five Hundred
Million Dollars (US$500,000,000) per occurrence or such greater amounts as
Lessee may carry from time to time on its fleet, which shall:

            (i) include public liability insurance, passenger liability
      insurance and property damage liability; and

            (ii) provide that all the provisions thereof, except the limits of
      liability, shall operate in the same manner as if there were a separate
      policy covering each such insured.

      (d) Deductibles and Self Insurance. Lessee may from time to time
self-insure, by way of deductible or premium adjustment provisions in insurance
policies, the risks required to be insured against pursuant to Section 10(a),
but in no case shall such self-insurance exceed US$500,000. No deductible shall
apply in the event of an Event of Loss.

      (e) Additional Requirements; Loss Payment. The insurance shall be provided
on an agreed value basis, and the policies shall:

            (i) name the Indemnitees as additional insureds as their respective
      interests may appear;

            (ii) provide that the insurance shall not be invalidated by any
      action or inaction by Lessee and insure the interest of the Indemnitees
      regardless of any breach or violation by Lessee or any other named insured
      of any warranty, declaration or condition contained in such policies;

            (iii) provide that the insurers shall waive any right of subrogation
      to any right of any Indemnitee or against any Indemnitee;

            (iv) provide that in the event of separate insurance being arranged
      to cover the all-risk hull insurance and the war risk and allied perils
      insurance, the underwriters subscribing to such insurance agree to a 50/50
      claim funding arrangement in the event of any dispute as to which
      insurance is applicable;

            (v) provide that the liability of the insurers shall not be affected
      by any other insurance which may be available to any Indemnitee so as to
      reduce the amount payable to any Indemnitee;


                                       14
<PAGE>

            (vi) extend to, and the underwriters thereof have agreed to, insure
      the indemnification provided in Section 15 hereof;

            (vii) be of the type usually carried by corporations engaged in the
      same or a similar business, similarly situated with Lessee and owning and
      operating similar aircraft and engines, and covering risks of the kind
      customarily insured against by such corporations;

            (viii) be primary without right of contribution from other insurance
      which may be available to any Indemnitee;

            (ix) provide that the Indemnitees shall have no liability for
      premiums, commissions, calls or assessments with respect to such
      policies;

            (x) provide in the case of the insurance required by Sections 10(a)
      and 10(b) hereof that any proceeds, regardless of the amount, shall be
      payable to Lessor.

      (f) No Set-Off. Each insurance policy shall contain a waiver of any right
of the insurers to any set-off or counter-claim or any other deduction against
any Indemnitee.

      (g) Notice of Material Alteration of Cancellation. Each insurance policy
shall provide that no cancellation or lapse of coverage for nonpayment of
premium or otherwise, and no substantial change of coverage which adversely
affects the Indemnitees shall be effective as to the Indemnitees until not less
than 30 days (7 days in the case of war risk policies, subject to exceptions
uniformly applied in war risk policies then available in commercially reasonable
terms) after receipt by Lessor of written notice from the insurers of such
cancellation, lapse or change.

      (h) Renewal. Each insurance policy shall provide that the insurers or
Lessee's insurance broker shall promptly notify Lessor if any insurance is not
renewed.

      (i) Application of Hull Insurance Proceeds. As between Lessor and Lessee,
any payments received under policies of insurance shall be applied as follows:

            (i) If such payments are received with respect to loss or damage not
      constituting an Event of Loss with respect to the Engine, such payments
      shall be paid over to or retained by Lessee upon Lessee's performance of
      its repair or replacement obligations under this Lease pursuant to Section
      5 hereof, and

            (ii) if such payments are received with respect to an Event of Loss
      with respect to the Engine, so much of such payments as shall not exceed
      the amount required to be paid by Lessee pursuant to Section 9 hereof
      shall be applied in reduction of Lessee's obligation to pay such amount if
      not already paid by Lessee, and to reimburse Lessee if it shall have paid
      all or part of such amount, and the balance, if any, of such payments
      shall be paid over to or retained by Lessee.

      (j) Insurance for Own Account. Nothing in this Section 10 shall prohibit
any Indemnitee or Lessee from obtaining insurance for its own account and any
proceeds payable thereunder shall be payable as provided in the insurance policy
relating thereto, provided that no such insurance may be obtained which would
limited or otherwise adversely affect the coverage or payment of any insurance.


                                       15
<PAGE>


      (k) Reports Certificates. Lessee shall furnish to Lessor not later than
five (5) Business Days prior to the Delivery Date a report signed by a firm of
independent insurance brokers satisfactory to Lessor stating the opinion of such
firm that the insurance then carried and maintained on the Engine complies with
the terms hereof. Lessee will during the Term furnish to Lessor evidence of
renewal of the insurance policies required pursuant to this Section 10 prior to
the cancellation, lapse or expiration of such insurance policies and, on the
renewal dates thereof, a report signed by a firm of independent aircraft
insurance brokers, satisfactory to Lessor stating the opinion of such firm that
the insurance then carried and maintained on the Engine complies with the terms
hereof. Lessee will cause such firm to advise Lessor in writing promptly of any
default in the payment of any premium and of any other act of omission on the
part of Lessee of which they have knowledge and which would in such firm's
opinion invalidate or render unenforceable, in whole or in any material part,
any insurance on the Engine. Lessee will also cause such firm to advise Lessor
in writing at least 30 days prior to the termination or cancellation of, or
material adverse change in such insurance carried and maintained on the Engine.

            SECTION 11. The Lessor's Right to Perform for the Lessee. If the
Lessee fails to make any payment required hereunder or fails to perform or
comply with any of its other agreements contained herein, the Lessor may make
such payment or perform or comply with such agreement, including, but not
limited to, the placement of insurance required by this Lease, and the amount of
such payment and the amount of its out-of-pocket costs and expenses incurred in
connection with the performance of or compliance with such agreement (together
with interest thereon at the Overdue Payment Rate) shall be payable by the
Lessee on demand as Supplemental Rent.

            SECTION 12. Further Assurances. The Lessee at its expense will
promptly and duly execute and deliver such documents and assurances and take
such action as may be necessary or desirable, or as the Lessor may from time to
time reasonably request, in order to more effectively carry out the intent and
purpose of this Lease and to establish and protect the Lessor's title to the
Engine and its rights and remedies created or intended to be created under this
Lease.

            SECTION 13. Events of Default. The following events shall constitute
Events of Default (whether any such event shall be voluntary or involuntary or
arise by operation of law or pursuant to or in compliance with any judgment,
decree, order, rule or regulation of any court or any administrative or
governmental body):

      (a) Failure to Pay Rent. The Lessee shall fail to make any payment of rent
or Stipulated Loss Value within three days after such payment shall become due;
or

      (b) Failure to Pay Supplemental Rent. The Lessee shall fail to make any
other payment of Supplemental Rent of any kind and such failure shall continue
unremedied for a period of ten days after written demand therefor by the Lessor
to the Lessee; or

      (c) Failure to Maintain Insurance. The Lessee shall fail to maintain
insurance in accordance with Section 10 hereof;

      (d) Misrepresentation or Breach of Warranty. Any representation or
warranty made by the Lessee in this Lease or in any document or certificate
furnished by the Lessee in connection herewith or therewith shall have been
incorrect in any material respect at the time made; or


                                       16
<PAGE>

      (e) Bankruptcy, Etc. The Lessee shall generally not pay its debts as such
debts become due, or shall admit in writing its inability to pay its debts
generally, or shall make a general assignment for the benefit of creditors; or
any proceeding shall be instituted by or against the Lessee under the laws of
any country seeking to adjudicate it a bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement, adjustment, protection,
relief or composition of it or its debts under any law of any country relating
to bankruptcy, insolvency or reorganization or relief of debtors, or seeking the
entry of an order for relief or the appointment of a receiver, trustee, or other
similar official for it or for any substantial part of its property and either
such proceeding shall remain undismissed or unstayed for a period of 45 days or
any of the actions sought in such proceeding (including, without limitation, the
entry of an order for relief against it or the appointment of a receiver,
trustee, custodian or other similar official for it or for any substantial part
of its property) shall occur; or the Lessee shall take any corporate action to
authorize any of the actions set forth above in this subsection (e); or

      (f) General Default. The Lessee fails to duly observe or perform any of
its other obligations under this Lease and such failure shall not have been
remedied within a period of ten (10) calendar days after delivery of written
notice specifying the same from Lessor, including without limitation failure to
maintain the Engine as required by this Lease or the FAA or failure to protect
or preserve Lessor's title to the Engine; or

      (g) Loss of Airline or Corporate Authority. Lessee shall cease to be a
commercial airline, or the franchises, concessions, permits, rights or
privileges required for the conduct of the business and operations of Lessee
shall be revoked, canceled or otherwise terminated or the free and continued use
and exercise thereof curtailed or prevented, and as a result thereof the
preponderant business activity of Lessee shall cease to be that of a commercial
airline; or

            SECTION 14. Remedies. Upon the occurrence of any Event of Default
and at any time thereafter so long as the same shall be continuing, the Lessor
may, at its option, declare in writing to the Lessee that this Lease is in
default; and at any time thereafter, so long as the Lessee shall not have
remedied all outstanding Events of Default, the Lessor may do one or more of the
following with respect to the Engine, as the Lessor in its sole discretion shall
elect, to the extent permitted by law then in effect:

      (a) Return and Repossession. Lessor may in writing demand the prompt
return, and the Lessee hereby agrees that it shall return promptly, the Engine
to the Lessor in the manner and condition required by, and otherwise in
accordance with all the provisions of, Section 6 as if the Engine were being
returned at the end of the Term, or the Lessor or the Lessor's agent, at its
option, may, but shall be under no obligation to, enter upon the premises where
all or any part of the Engine is located and take immediate possession of and
remove the same by summary proceedings or otherwise;

      (b) Sale, Use, Etc. Lessor may sell the Engine at public or private sale,
as the Lessor may determine, or otherwise dispose of, hold, use, operate, lease
to others or keep idle the Engine as the Lessor may determine, all free and
clear of any rights or claims of the Lessee and without any duty to account to
the Lessee with respect to such action or inaction or for any proceeds with
respect thereto;

      (c) Liquidated Damages; Fair Market Rental. The Lessor may cause the
Lessee to pay to the Lessor, and the Lessee shall pay to the Lessor, on the
payment date specified in such notice, as liquidated.


                                       17
<PAGE>

damages for loss of a bargain and not as a penalty any unpaid rent for the
Engine due (or which would have been due in the absence of the Expiry) prior to
the payment date specified in such notice, plus an amount equal to the present
value (computed as of the payment date specified in such notice and using 6% of
the total rents due for what would have been the remainder of the Term in the
absence of the Expiry ("Liquidated Rental") (together with interest on all
amounts payable by the Lessee under this subsection (c) at the Overdue Payment
Rate from such specified payment date until the date of actual payment), and
upon such payment of Liquidated Rental and the payment of all other rent then
due hereunder, Lessor shall proceed to exercise its best efforts to lease the
Engine for what would have been the remainder of the Term in the absence of
Expiry and shall pay over to Lessee an amount equal to the present value of the
rents due for the remainder of the term under the new lease agreement (after
deducting from such rents, all costs and expenses whatsoever incurred by Lessor
in connection therewith and all other amounts which may become payable to
Lessor) up to the amount of Liquidated Rental actually paid;

      (d) Cancellation, Termination, and Rescission. The Lessor may cancel,
terminate, or rescind the Lease, or may exercise any other right or remedy which
may be available to it under law or proceed by court action to enforce the terms
hereof or to recover damage for the breach hereof, including without limitation
Lessee's agreement to lease the Engine for the Term and to pay rent.

      (e) Other Remedies. In addition, the Lessee shall be liable, except as
otherwise provided above, for any and all unpaid rent due hereunder before,
after or during the exercise of any of the foregoing remedies and for all legal
fees and other costs and expenses incurred by reason of the occurrence of any
Event of Default or the exercise of remedies with respect thereto, including all
reasonable costs and expenses incurred in connection with any retaking of the
Engine or in placing the Engine in the condition required by Sections 5 and 6.
At any sale of the Engine pursuant to this Section 14 the Lessee may bid for and
purchase such property. No remedy referred to in this Section 14 is intended to
be exclusive, but each shall be cumulative and in addition to any other remedy
referred to above or otherwise available to the Lessor at law or in equity,
including without limitation the applicable Uniform Commercial Code, and the
exercise or beginning of exercise by the Lessor of any one or more of such
remedies shall not preclude the simultaneous or later exercise by the Lessor of
any or all of such other remedies. No express or implied waiver by the Lessor of
any Event of Default or Default shall in any way be, or be construed to be, a
waiver of any future or subsequent Event of Default or Default. To the extent
permitted by law, the Lessee hereby waives any rights now or hereafter conferred
by statute or otherwise which may require the Lessor to sell, lease or otherwise
use the Engine in mitigation of the Lessor's damages except as set forth in this
Section 14 or which may otherwise limit or modify any of the Lessor's rights or
remedies under this Section 14.

            SECTION 15. General Indemnity and Expenses

      (a) General Indemnity. The Lessee agrees to indemnify, reimburse, and hold
harmless each Indemnitee, on an after-tax basis, from and against all claims,
damages, losses, liabilities, demands, suits, judgments, causes of action, civil
and criminal legal proceedings, penalties, fines, and other sanctions, and any
reasonably attorney fees and other reasonable costs and expenses, arising or
imposed with or without the Lessor's fault or negligence or under the doctrine
of strict liability (collectively, "Claims"), relating to or arising in any
manner out of


                                       18
<PAGE>

            (i) This Lease or the breach of any representation, warranty, or
            covenant made by the Lessee under this Lease;

            (ii) Manufacture, purchase, lease, delivery, non-delivery,
            acceptance, rejection, ownership, possession, use, operation,
            return, or disposition of the Engine;

            (iii) The Engine's condition or any discoverable or nondiscoverable
            defect in it arising from its design, testing, or construction; any
            article used in the Engine; or any maintenance, service or repair,
            whether or not the Engine is in the Lessee's possession and
            regardless of where the Engine is located; or

            (iv) Any transaction, approval, or document contemplated by this
            Lease.

      The Lessee waives and releases each Indemnitee from any existing or future
Claims in any way connected with injury to or death of the Lessee's personnel,
loss or damage of the Lessee's property, or loss of use of any property, which
may;

            (v) Result from or arise in any manner out of the ownership,
            leasing, condition, use or operation of the Engine; or

            (vi) Be caused by any defect in the Engine; its design, testing, or
            construction; any article used in the Engine; or any maintenance,
            service, or repair, whether or not the Engine is in the Lessee's
            possession and regardless of where the Engine is located.

      The indemnities described in this Section will continue in full force and
effect notwithstanding the expiration or other termination of this Lease and are
expressly made for the benefit of and will be enforceable by each Indemnitee.

      (b) Legal Fees and Expenses. The Lessee agrees to pay all reasonable costs
and expenses, if any (including, without limitation, reasonable counsel fees and
expenses), in connection with the enforcement of this Lease, and the other
documents to be delivered hereunder or thereunder.

            SECTION 16. Assignment and Alienation. Lessor shall have the right
to assign, sell or encumber any interest of Lessor in the Engine or this Lease
and/or the proceeds hereof subject to the rights of Lessee under the provisions
of this Lease. To effect or facilitate any such assignment, sale or encumbrance,
Lessee agrees to provide such agreements, consents, conveyances or documents as
may be reasonably requested by Lessor, which shall include, without limitation,
a commercially standard estoppel certificate. The agreements, covenants,
obligations and liabilities contained herein including, but not limited to, all
obligations to pay rent and indemnify each Indemnitee are made for the benefit
of each Indemnitee and their respective successors and assigns; provided,
however, that no assignment, sale or encumbrance shall increase the aggregate
financial exposure under the indemnity obligations of Lessee under this Lease as
compared to what such obligations would have been had such assignment, sale or
encumbrance occurred. In the event this Lease is assigned, sold or encumbered by
Lessor, any assignee, transferee or mortgagee shall agree as a condition
precedent thereto not to disturb or otherwise interfere with the quiet enjoyment
of Lessee of the Engine so long as not Event or Default shall have occurred and
be continuing.


                                       19
<PAGE>

            SECTION 17. Notices. All notices required under the terms and
provisions hereof shall be in writing in the English language, and any such
notice shall become effective when received by the other party, by hand, by
registered mail with proper postage for airmail prepaid, or, if in the form of a
telegram, telex or telecopy, upon confirmation of receipt thereof, in each case
addressed (i) if to the Lessee:

            South African Airways
            Johannesburg International Airport
            1627
            Republic of South Africa
                     Attention: Andre Dippenaar

                     Telephone: 27 11 978-3500
                     Telecopier: 27 11 978-6057

   with a copy to:

            Manager (contract Legal Services)
            R212 Administration Building
            SAA Technical Area JIA

            Tel: 27 11 978-3042
            Fax: 27 11 978-5404

or to such other address as the Lessee shall from time to time designate in
writing to the Lessor, or (ii) if to the Lessor, in care of:

            Investors Asset Holding Corp.
            c/o American Finance Group, Inc.
            98 North Washington Street
            Boston, Massachusetts 02114
                     Attention: Aircraft Management

            Telephone:  617 854 5800
            Telecopier: 617 523 1410

or to such other address as the Lessor shall from time to time designate in
writing to Lessee.

            SECTION 18. No Set-Off, Counterclaim, Etc. The Lessee's obligation
to pay all rent and Supplemental Rent payable hereunder shall be absolute and
unconditional and shall not be affected by any circumstance, including, without
limitation, (i) any set-off, counterclaim, recoupment, defense or other right
which the Lessee may have against the Lessor, any partner comprising the Lessor,
the manufacturer of the Engine or anyone else for any reason whatsoever (whether
in connection with the transactions contemplated hereby or in connection with
any unrelated transaction), (ii) any defect in the title, airworthiness,
condition, design, operation, or fitness for use of, or any damage to or loss or
destruction of, or any Lien upon, the Engine, or any interruption or cessation
in the use or possession thereof by the Lessee for any reason whatsoever,
whether arising out of or related to an act or omission of the Lessee, (iii) any
insolvency, bankruptcy, reorganization or similar proceedings by or against the
Lessee or the Lessor, (iv) the invalidity or unenforceability of this Lease or
any absence of right, power, or authority of the Lessor or Lessee to enter into
this Lease, or (v) any other circumstance, happening or event whatsoever,
whether or not similar to any of the foregoing. If for any reason whatsoever
this Lease shall be terminated as to the Engine in whole or in part by operation
of law, or otherwise, the Lessee nonetheless agrees to pay to the Lessor an
amount equal to each rent payment for the Engine at the time such payment would
have become due and payable in accordance with the terms hereof had this Lease
not been so terminated in whole or in part. The Lessee hereby waives, to the
extent permitted by law, any and all rights which it may now have or which at
any time hereafter may be conferred upon it, by law or otherwise, to terminate,
cancel, quit or surrender


                                       20
<PAGE>

this Lease, or any obligation imposed on the Lessee by this Lease. Nothing in
this Section 18 shall be construed to preclude the Lessee from bringing any suit
at law or in equity against any person which it would otherwise be entitled for
breach of any representation, warranty, covenant or duty hereunder.

            SECTION 19. Governing Law.

      (a) Consent to Jurisdiction. Each of the Lessor and the Lessee irrevocably
agrees that any legal suit, action or proceeding arising out of or relating
solely to this Lease or any of the transactions contemplated hereby or thereby
or any document referred to herein or therein, may be instituted in the State or
Federal courts in the Commonwealth of Massachusetts and it hereby irrevocably
waives, to the fullest extent permitted by law, any objection which it may have
now or hereafter to the laying of the venue or the jurisdiction or the
convenience of the forum of any such legal suit, action or proceeding and
irrevocably submits generally and unconditionally to the jurisdiction of any
such court but only in any such suit, action or proceeding. Final judgment
against the Lessee or the Lessor in any suit shall be conclusive, and may be
enforced in other jurisdictions by suit on the judgment, a certified or true
copy of which shall be conclusive evidence of the fact and of the amount of any
indebtedness or liability of the Lessee or the Lessor, as the case may be,
therein described; provided always that the plaintiff may at its option bring
suit, or institute other judicial proceedings, against the Lessee or the Lessor,
as the case may be, or any of its assets in the courts of any country or place
where the Lessee or the Lessor, as the case may be, or such assets may be found.

      (b) Choice of Law. THIS LEASE HAS BEEN NEGOTIATED AND DELIVERED IN THE
COMMONWEALTH OF MASSACHUSETTS AND SHALL IN ALL RESPECTS BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, INCLUDING ALL
MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE

            SECTION 20. Miscellaneous. This Lease constitutes the entire
agreement of the parties. Any provision of this Lease which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibitions or unenforceability in
any jurisdiction shall not invalidate or render unenforceable such provision in
any other jurisdiction. To the extent permitted by law, each of Lessor and the
Lessee hereby waives any provision of law which renders any provision hereof
prohibited or unenforceable in any respect.

      This Lease shall constitute an agreement of lease, and nothing herein
shall be construed as conveying to the Lessee any right, title or interest in
the Engine except as a lessee only.

            This Lease, including all agreements, covenants, representations and
warranties, shall be binding upon and inure to the benefit of, and may be
enforced by, (1) Lessor and its agents, servants and personal representatives
and, to the extent permitted hereby, assigns and (2) Lessee and its successors
and, to the extent permitted hereby, assigns. The section and subsection
headings in this Lease and for convenience of reference only and shall not
modify, define, expand or limit any of the terms or provisions hereof. This
Lease may be executed by the parties hereto in separate counterparts, each of
which when so executed and delivered shall be an original, but all such
counterparts shall together constitute but one and the same instrument.


                                       21
<PAGE>

      No term or provision of this Lease may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by the party
against which the enforcement of the change, waiver, discharge or termination is
sought.

            IN WITNESS WHEREOF, the Lessor and the Lessee have each caused this
Lease to be duly executed as of the date and year first above written.

INVESTORS ASSET HOLDING CORP.,
         the Lessor


By:  /s/ James F. Livesey
     -------------------------
Name: James F. Livesey
     -------------------------
Title: Vice President
     -------------------------

SOUTH AFRICAN AIRWAYS,
         the Lessee


By:  /s/ A N Dippenaar
     -------------------------
Name: A N Dippenaar
     -------------------------
Title: Senior Manager
     -------------------------


                                       22
<PAGE>

      No term or provision of this Lease may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by the party
against which the enforcement of the change, waiver, discharge or termination is
sought.

            IN WITNESS WHEREOF, the Lessor and the Lessee have each caused this
Lease to be duly executed as of the date and year first above written.

INVESTORS ASSET HOLDING CORP.,
         the Lessor


By:  /s/ James F. Livesey
     -------------------------
Name: James F. Livesey
     -------------------------
Title: Vice President
     -------------------------

SOUTH AFRICAN AIRWAYS,
         the Lessee


By:  /s/ A N Dippenaar
     -------------------------
Name: A N Dippenaar
     -------------------------
Title: Senior Manager
     -------------------------


                                       22
<PAGE>

                 EXHIBIT A: FORM OF LEASE SUPPLEMENT AND RECEIPT

            LEASE SUPPLEMENT AND RECEIPT dated December 16, 1996 INVESTORS ASSET
HOLDING CORP. (the "Lessor"), and TRANSNET LIMITED, d/b/a SOUTH AFRICAN AIRWAYS
(the "Lessee").

            The Lessor and the Lessee have heretofore entered into that certain
Engine Lease Agreement, dated as of December 17, 1996 (herein called the "Lease"
and the defined terms therein being hereinafter used with the same meanings),
relating to one Pratt & Whitney model JT9D-7J engine, manufacturer serial number
685952. The Lease provides for the execution and delivery of a Lease Supplement
and Receipt.

            NOW, THEREFORE, in consideration of the premises and other good and
sufficient consideration, the Lessor and the Lessee hereby agree as follows:

            A. THE LEASE. The Lease has been duly authorized, executed and
delivered by Lessee and constitute valid, legal and binding agreements,
enforceable in accordance with their terms. All of the terms and provisions of
the Lease are hereby incorporated by reference in this Lease Supplement and
Receipt to the same extent as if fully set forth herein. The parties confirm
that the Delivery Date is the date of this Lease Supplement and Receipt.

            B. THE ENGINE. The Lessee hereby certifies that the Engine described
Schedule 1 hereto, consisting of one page (including attachments) and made a
part hereof, and the Engine Documents described in Schedule 2 hereto, consisting
of one page (including attachments) and made a part hereof, have been delivered
to the Lessee, inspected by the Lessee, found to be in good order and accepted
under, and for all purposes of, the Lease, all on the date hereof. Any
qualifications to the return conditions set forth in Lease Section 6 are
attached hereto in Schedule 3. Lessee accepts delivery of the Engine "AS IS,"
"WHERE IS," AND SUBJECT TO EACH AND EVERY DISCLAIMER OF WARRANTY AND
REPRESENTATION AS SET FORTH IN SECTIONS 4(c) OF THE LEASE.

            C. REPRESENTATIONS BY THE LESSEE. The Lessee hereby represents and
warrants to the Lessor that on the date hereof:

            1. The representations and warranties of the Lessee set forth in the
      Lease are true and correct in all material respects as though made on and
      as of the date thereof.

            2. The Lessee has satisfied or complied with all requirements set
      forth in the Lease to be satisfied or complied with on or prior to the
      date thereof.

            3. No default or Event of Default under the Lease has occurred and
      is continuing on the date hereof.

            4. The Lessee has obtained, and there are in full force and effect,
      such insurance policies with respect to the Engine as are required to be
      obtained under the terms of this Lease.


                                       23
<PAGE>


            This Lease Supplement and Receipt may be executed by the parties
hereto in separate counterparts, each of which when so executed and delivered
shall be an original, but all such counterparts shall together constitute but
one and the same instrument.

            IN WITNESS WHEREOF, the Lessor and the Lessee have caused this
Lease Supplement and Receipt to be duly executed as of the date and year first
above written.

INVESTORS ASSET HOLDING CORP.,
         the Lessor


By:  /s/ James F. Livesey
     -------------------------
Name: James F. Livesey
     -------------------------
Title: Vice President
     -------------------------

SOUTH AFRICAN AIRWAYS,
         the Lessee


By:  /s/ [Illegible]
     -------------------------
Name: [Illegible]
     -------------------------
Title: For Senior Manager
     -------------------------


                                       24
<PAGE>

         SCHEDULE 1 TO LEASE SUPPLEMENT AND RECEIPT: ENGINE DESCRIPTION

Engine: Pratt & Whitney model JT9D-7J engine, manufacturer serial number 685952.

Total hours: 39,369:49 Total cycles: 6,759

Time remaining on limiter: #2 air seal (hours) 6,809 (cycles)

Time since last shop visit: 1869 (hours) 342 (cycles)

Time since last hot section inspection 1869 (hours) 342 (cycles)

Life Limited Components:

                       [LIST BY PART NUMBER, SERIAL NUMBER,
                    REPLACEMENT INTERVAL, AND LIFE REMAINING]

SEE ATTACHED -- NOTE, SUBTRACT 1,068 HRS AND 173 CYCLES TO BRING DATA TO CURRENT
TOTALS.

Quick Engine Change Components:     SEE ATTACHED

                    [LIST BY AIRFRAME OR ENGINE PART NUMBER]

Stand:


                                       31
<PAGE>

                   SCHEDULE 3 TO LEASE SUPPLEMENT AND RECEIPT:
                       QUALIFICATIONS TO RETURN CONDITIONS

Lessor and Lessee hereby agree that the following particulars of the condition
of the Engine shall be qualifications to the return conditions set forth in
Section 6 of the Lease.

Condition as per video borescope by Lufthansa Technik.  No significant
defect on 5, 8&9th HPC, Combustion Chamber, 1&2nd HPT.

      IN WITNESS WHEREOF, the Lessor and the Lessee have caused this Schedule 3
to the Lease Supplement and Receipt to be duly executed as of December 16, 1996.

INVESTORS ASSET HOLDING CORP.,
         the Lessor


By:  /s/ James F. Livesey
     -------------------------
Name: James F. Livesey
     -------------------------
Title: Vice President
     -------------------------

SOUTH AFRICAN AIRWAYS
         the Lessee


By:  /s/ [Illegible]
     -------------------------
Name: [Illegible]
     -------------------------
Title: Manager
     -------------------------

         MANAGER
         TECH OPS CENTRE


                                     27