Document:

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                                                                Exhibit 10.16

                             CERTIFICATE OF OFFICER

      I, Jean Stein, president of CIT Leasing (Bermuda), Ltd., hereby certify
that attached herewith is a true and complete copy of the Aircraft Lease
Agreement, dated December 29. 1993, between CIT Leasing (Bermuda), Ltd., as
Lessor, Scandinavian Airlines System, Denmark-Norway-Sweden, as Lessee and SAS
Capital, B.V.

                                                CIT LEASING (BERMUDA), LTD.

                                                By: /s/ Jean B. Stein
                                                    --------------------------
                                                Name: Jean Stein
                                                Title: President
<PAGE>

Private & Confidential

                        DATED 29th day of December, 1993

                           CIT LEASING (BERMUDA), LTD.
                                   (as Lessor)                     (1)

                          SCANDINAVIAN AIRLINES SYSTEM
                              Denmark-Norway-Sweden
                                   (as Lessee)                     (2)

                                       and

                                 SAS CAPITAL BV                    (3)

                    -----------------------------------------

                            AIRCRAFT LEASE AGREEMENT
                                       for
                          One Boeing 767-300ER Aircraft
                         Manufacturer's Serial No. 24475
                       Norwegian Registration Mark LN-RCG

                    -----------------------------------------

                                   Norton Rose
                                     London
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                                    CONTENTS

Clause                             Heading                                  Page
------                             -------                                  ----

 1    Definitions ...........................................................  1

 2    Representations and Warranties ........................................ 10

 3    Term of Lease ......................................................... 14

 4    Conditions ............................................................ 15

 5    Delivery and Acceptance ............................................... 16

 6    Lessor's Warranties and Manufacturer's Warranties ..................... 17

 7    Rent .................................................................. 18

 8    Payments, Interest and Calculations ................................... 20

 9    Costs and Indemnities ................................................. 21

10    Taxation .............................................................. 24

11    General Undertakings .................................................. 30
      11.1 .................................................................. 30
          (a)    Notification of Relevant Event ............................. 30
          (b)    Consents and authorisations ................................ 31
          (c)    Preparation and Supply of Accounts ......................... 31
          (d)    Information concerning the Lessee and SAS BV ............... 31
      11.2 .................................................................. 31
          (a)    Status Report .............................................. 31
          (b)    Inspection ................................................. 31

12    Sub-Leasing ........................................................... 33

13    Operations and Maintenance ............................................ 37
          (a)    Certificates and Licences .................................. 37
          (b)    Operation and Use .......................................... 37
          (c)    Maintenance ................................................ 37
          (d)    Replacement and Installation of Engines and Parts .......... 38
          (e)    Removal of Engines and Parts ............................... 39
          (f)    Non-installed Engines ...................................... 39
          (g)    Nameplates ................................................. 39
          (h)    Alterations ................................................ 40
      13.2 Temporary Installation of engines and Parts ...................... 40
<PAGE>

      13.3 Pooling and Installation of Parts and Engines on other aircraft .. 40

14    Manuals and Technical Records ......................................... 42

15    Title and Registration ................................................ 43

16    Insurance ............................................................. 44

17    Loss and Damage ....................................................... 46

18    Requisition ........................................................... 48

19    Redelivery ............................................................ 49

20    Termination Events .................................................... 55

21    Lessor's Rights Following a Termination Event ......................... 57

22    Notices ............................................................... 58

23    Assignment ............................................................ 60

24    Miscellaneous ......................................................... 62

25    Confidentiality ....................................................... 62

26    Law and Jurisdiction .................................................. 64

Schedule

1     List of Documents and Evidence ........................................ 66

2     Acceptance Certificate ................................................ 71

3     Rent payable during the First Renewal Term and the Second Renewal
      Term .................................................................. 73

4     Agreed Value .......................................................... 74

5     Part 1 Permitted Air Carriers ......................................... 75

5     Part 2 Permitted Countries ............................................ 77

6     Form of Letter of Quiet Enjoyment ..................................... 78
<PAGE>

A LEASE AGREEMENT dated 29th of December, 1993, and made BETWEEN:

(1)   CIT LEASING (BERMUDA), LTD. a limited liability company organised and
      existing under the laws of Bermuda, whose registered office is at
      Clarendon House, 2 Church Street, Hamilton, Bermuda (the "Lessor"); and

(2)   SCANDINAVIAN AIRLINES SYSTEM Denmark-Norway-Sweden, a consortium organised
      and existing under the laws of Denmark, Norway and Sweden with its
      principal office at Frosundaviks Alle 1, Solna, 161 87 Stockholm, Sweden
      (the "Lessee"); and

(3)   SAS CAPITAL BV a company organised and existing under the laws of the
      Netherlands, acting for the purpose of this Agreement through its branch
      office in Brussels located at Regentlaan 45, 1000, Brussels, Belgium ("SAS
      BV").

BY WHICH IT IS AGREED as follows:

1     Definitions

1.1   In this Agreement, unless the context otherwise requires:

      "Acceptance Certificate" means a certificate in substantially the form set
      out in schedule 2 to be signed by the Lessee as required under clause 5
      (Delivery and Acceptance);

      "ABA" means Aktiebolaget Aerotransport, a Swedish corporation;

      "Affiliate" means, in relation to any person, any other person which,
      directly or indirectly, controls or is controlled by or is under common
      control with such person and for the purposes of this definition,
      "control" when used with respect to any specified person means the power
      to direct the management and policies of such person, directly or
      indirectly, whether through the ownership of voting securities, by
      contract or otherwise and the terms "controlling" and "controlled" have
      meanings correlative to the foregoing;

      "Agreed Value" means an amount calculated in accordance with schedule 4;

      "Aircraft" means the Airframe together with the Engines (whether or not
      any of the Engines may from time to time be installed on the Airframe);
      and, where the context so permits, shall include the Manuals and Technical
      Records and, unless otherwise provided herein, shall mean the Aircraft as
      a whole and any part thereof;

      "Aircraft Purchase Agreement" means the aircraft purchase agreement of
      even date herewith between the Lessee, as seller, and the Lessor, as
      buyer, relating to the sale by the Lessee to the Lessor of the Aircraft;

                                        1
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      "Airframe" means:

      (a)   the Boeing 767-300ER aircraft with manufacturer's serial number
            24475 (excluding the Engines or engines from time to time installed
            thereon) and all Parts installed at Delivery (other than galley
            inserts, cargo containers, and any audio visual and telephone
            equipment installed at Delivery which is leased by the Lessee from
            any third party);

      (b)   any and all Parts which are from time to time incorporated therein
            or installed thereon or attached thereto title to which is vested in
            the Lessor in accordance with the terms of this Agreement; and

      (c)   for so long as title thereto shall remain vested in the Lessor in
            accordance with the terms of this Agreement any and all Parts which
            have been removed from such aircraft and all replacements, renewals
            and additions made to the foregoing in accordance with this
            Agreement.;

      "Appraisal" shall mean an appraisal mutually agreed to by two
      internationally recognised independent aircraft appraisers, one of which
      shall be chosen by the Lessor, at the Lessor's expense, and one by the
      Lessee, at the Lessee's expense, or if such appraisers cannot agree on the
      amount of such appraisal, an amount equal to the average of such two
      appraisals and a third appraisal arrived at by a third internationally
      recognised independent aircraft appraiser chosen by the mutual consent of
      such two appraisers, and paid for by the Lessor and the Lessee in equal
      shares, provided that, if either party shall fail to appoint an appraiser
      within thirty (30) days after a written request to do so by the other
      party then the amount of the appraisal shall be determined by the
      appraiser selected by the other party; provided however, that in
      calculating such average any appraisal which has a greater then ten per
      cent. (10%) variance above or below the second highest of the three
      appraisals shall be disregarded;

      "Approved Maintenance Programme" means the Aviation Authority approved
      maintenance programme for aircraft of the same make and model as the
      Aircraft based upon the manufacturer's maintenance planning data document
      and encompassing scheduled maintenance (including block maintenance),
      condition monitored maintenance and on-condition maintenance of Airframe,
      Engines and Parts of the Aircraft including, but not limited to,
      servicing, testing, preventive maintenance, repairs, structural
      inspections, system checks, overhauls, approved modifications, service
      bulletins, engineering orders, airworthiness directives, corrosion
      control, inspections and treatments;

      "Assignment" means the assignment of the Lessor's rights, title and
      interest in and under this Agreement granted, or to be granted, by the
      Lessor in favour of the Lender as security for the Lessor's obligations to
      the Lender in respect of financing of the Aircraft;

      "Aviation Authority" means the Aviation Authority of the State of
      Registration or any other agency or office in the State of Registration
      who shall from time

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      to time be vested with the control and supervision of, or have
      jurisdiction over, the registration, airworthiness and operation of
      aircraft or other matters relating to civil aviation in the State of
      Registration;

      "Banking Day" means a day (other than a Saturday, Sunday or holiday
      scheduled by law) on which banks are open for business in Stockholm, Oslo,
      Brussels and New York City, and the relevant place of payment under clause
      8;

      "Compulsory Acquisition" means requisition of title or other compulsory
      acquisition, requisition, appropriation, expropriation, deprivation or
      confiscation for any reason of the Aircraft by a Government Entity or
      other competent authority, whether de jure or de facto, but shall exclude
      requisition for use or hire not involving requisition of title;

      "Consortium Agreement" means the Consortium Agreement dated 8th February
      1951, among DDL, DNL and ABA;

      "Cycle" shall mean one take-off and landing of the Aircraft or, in respect
      of any Engine or Part temporarily installed on another aircraft, that
      other aircraft;

      "DDL" means Det Danske Luftfarselskab A/S, a Danish corporation;

      "Delivery" means the time when the Lessor shall obtain title to the
      Aircraft under the Aircraft Purchase Agreement and shall be deemed to have
      delivered the Aircraft to the Lessee pursuant to clause 5, and the Lease
      Period shall have commenced, as evidenced by the execution and delivery of
      the Acceptance Certificate;

      "Delivery Date" means the date on which Delivery shall occur;

      "Delivery Location" means Arlanda Airport, Stockholm, Sweden or Copenhagen
      Airport, Copenhagen, Denmark, or Fornebu Airport, Oslo, Norway or such
      other location as may be mutually agreed by the Lessee and the Lessor;

      "Dispensation" means a dispensation issued by the Department of
      Transportation of the State of Registration permitting the Aircraft to be
      registered in the name of the Lessor;

      "DNL" means Det Norske Luftfartselskap A/S, a Norwegian corporation;

      "Dollars" and "$" mean the lawful currency of the United States of America
      and, in respect of all payments to be made under this Agreement in
      Dollars, mean funds which are for same day settlement in the New York
      Clearing House Interbank Payments System (or such other U.S. dollar funds
      as may at the relevant time be customary for the settlement of
      international banking transactions denominated in United States dollars);

                                        3
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      "Encumbrance" means any mortgage, charge, pledge, lien, hypothecation
      assignment, trust arrangement or security interest of any kind;

      "Engine" means:

      (a)   each of the Pratt & Whitney PW4060 engines specified in the
            Acceptance Certificate which are installed on the Airframe at
            Delivery and any other engine or engines which become the property
            of the Lessor pursuant to the terms of this Agreement whether or not
            any of the foregoing have been removed from the Airframe and
            installed on the Airframe or any other airframe or aircraft so long
            as title thereto shall remain vested in the Lessor in accordance
            with the terms of this Agreement;

      (b)   any Replacement Engine which may replace any of the engines referred
            to in paragraph (a) above pursuant to the terms hereof; and

      (c)   in each case, any and all Parts which are from time to time
            incorporated or installed on or in or attached to any such engine
            (or Replacement Engine) when delivered and leased hereunder or at
            any time thereafter title to which is vested in the Lessor in
            accordance with the terms of this Agreement, and any and all parts
            which have been removed therefrom provided that title thereto
            remains vested in the Lessor in accordance with the terms of this
            Agreement.

      "Engine Loss" means the occurrence of any of the events referred to in the
      definition of "Total Loss" but with reference therein to "Aircraft" being
      construed as references to any Engine;

      "Expected Delivery Date" means 30th December, 1993 or such other date as
      may be mutually agreed by the Lessee and the Lessor in writing;

      "Flight Hour" shall mean each hour or fraction thereof elapsing from the
      moment at which the wheels of the Aircraft (or other aircraft in the case
      of temporarily installed Parts or Engines) leave the ground on the
      take-off of such aircraft until the wheels of such aircraft touch the
      ground on the landing of such aircraft following such take-off;

      "First Renewal Term" shall have the meaning ascribed thereto in clause
      3.2;

      "Government Entity" means and includes (whether having a distinct legal
      personality or not) (a) any national government, political sub-division
      thereof, or local jurisdiction therein, (b) any board, commission,
      department, division, organ, instrumentality, court or agency of any
      entity referred to in (a) above, however constituted, and (c) any
      association, organisation or institution (international or otherwise) of
      which any entity mentioned in (a) or (b) above is a member or to whose
      jurisdiction any thereof is subject or in whose activities any thereof is
      a participant;

                                        4
<PAGE>

      "ICAO" means the International Civil Aviation Organisation;

      "Indebtedness" means any obligation for the payment or repayment of money,
      whether as principal or as surety, and whether present or future, actual
      or contingent;

      "Insurances" means any and all contracts or policies of insurance required
      to be effected and maintained under this Agreement;

      "Inter-Government Agreement" means the Inter-Government Agreement dated
      20th December, 1951 between Sweden, Denmark and Norway concerning
      cooperation with respect to air traffic;

      "Lease Period" means the period during which the Lessee shall be entitled
      to the possession and use of the Aircraft in accordance with this
      Agreement;

      "Lease Term" means the Primary Lease Term and any permitted extension
      thereof pursuant to clause 3.2;

      "Lender" means any bank or financial institution which provides to the
      Lessor finance in respect of the Aircraft;

      "Lessee" includes the successors, permitted assigns and permitted
      transferees of the Lessee;

      "Lessee Documents" means this Agreement, the Aircraft Purchase Agreement,
      the Warranties Assignment, any other agreement executed by the Lessee in
      connection with obligations owed to the Lessor under this Agreement and
      all notices, consents, certificates and other documents and agreements to
      which the Lessee is a party to be issued pursuant to the foregoing;

      "Lessor's Liens" means any Encumbrance arising as a result of (i) claims
      against the Lessor not related to the Lessee Documents or the transactions
      contemplated thereby, (ii) acts of the Lessor not contemplated hereunder
      or under the other Lessee Documents or which are in violation of the
      Lessee Documents, (iii) Taxes imposed against the Lessor which are not to
      be indemnified against by the Lessee pursuant to the Lessee Documents or
      other Taxes in respect of which the Lessee has made all indemnity payments
      to the Lessor required pursuant to the Lessee Documents, or (iv) claims
      against the Lessor arising out of the voluntary transfer by the Lessor
      (without the consent of the Lessee) of its interest, at any time, in the
      Aircraft, the Airframe or any Engine, other than a transfer or disposition
      by the Lessor permitted pursuant to clauses 21 or 23 hereof; provided
      however, that any Encumbrance which is attributable solely to the Lessor
      and would otherwise constitute Lessor's Liens hereunder shall not
      constitute Lessor's Liens hereunder so long as (1) the enforcement of such
      Lien would pose no likelihood of the sale, forfeiture or loss of the
      Aircraft, the Airframe or any Engine or any interest herein, (2) the
      enforcement of such Lien would not interfere in any way with the quiet

                                        5
<PAGE>

      enjoyment, use or operation of the Aircraft by the Lessee (or any
      permitted sub-lessee), and, if applicable, (3) the Lessor is diligently
      contesting such Lien by appropriate proceedings, or (4) such Lessor's Lien
      is a Permitted Lien hereunder or (5) the Lessor has procured a Letter of
      Quiet Enjoyment from the beneficiary of such Lessor's Lien;

      "Letter of Quiet Enjoyment" means a letter executed by the Lender or any
      other beneficiary of a Lessor's Lien, in each case in the form of schedule
      6, or such other form as the Lessee and the Lessor may agree;

      "Manuals and Technical Records" means all original records, logbooks,
      manuals, technical data and other materials and documents (whether kept or
      to be kept in compliance with any regulation of the Aviation Authority or
      otherwise) relating to the Aircraft all of which shall be maintained in
      the English language;

      "month" means a period beginning in one calendar month and ending in the
      next calendar month on the day numerically corresponding to the day of the
      calendar month on which it started; provided that (a) if the period
      started on the last Banking Day in a calendar month or if there is no such
      numerically corresponding day, it shall end on the last Banking Day in
      such next calendar month and (b) if such numerically corresponding day is
      not a Banking Day, the period shall end on the next following Banking Day
      in the same calendar month but if there is no such Banking Day it shall
      end on the preceding Banking Day and "months" and "monthly" shall be
      construed accordingly;

      "Mortgage" means the mortgage of the Aircraft granted or to be granted by
      the Lessor in favour of the Lender as security for the Lessor's
      obligations to the Lender in respect of financing of the Aircraft;

      "Parent" means The CIT Group/Equipment Financing Inc. of 1211 Avenue of
      the Americas, New York, N.Y. 10036;

      "Parent Guarantee" means a guarantee given or to be given by the Parent in
      favour of the Lessee in connection with the Lessor's obligations under the
      Lessee Documents, in form and substance reasonably satisfactory to the
      Lessee;

      "Part" means all appliances, parts, accessories, instruments, navigational
      and communications equipment, furnishings, modules, components and other
      items of equipment (other than complete Engines or engines), which may
      from time to time be incorporated or installed in or attached to the
      Airframe or any Engine;

      "Payment Date" means, subject to clause 8.2, the Delivery Date and each of
      the dates falling at successive one (1) monthly intervals thereafter
      throughout the Lease Period;

                                        6
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      "Permitted Air Carrier" means any air carrier which is licenced under
      applicable aviation laws and (a) which is not in bankruptcy or subject to
      insolvency proceedings and which is listed in part 1 of schedule 5, or (b)
      any Affiliate of the Lessee or (c) any other air carrier which the Lessor
      shall approve in writing (such approval not to be unreasonably withheld or
      delayed);

      "Permitted Country" means any of the countries listed in part 2 of
      schedule 5 or any other country which the Lessor shall approve;

      "Permitted Lien" means in respect of the Aircraft or any Engine:-

      (a)   the Assignment, the Mortgage and this Agreement;

      (b)   any Encumbrance for Taxes either not yet assessed or, if assessed,
            not yet due and payable or being contested in good faith by
            appropriate proceedings (and for the payment of which adequate
            reserves have been set aside) so long as any such proceedings or the
            continued existence of such Encumbrance do not involve the
            likelihood of the sale, forfeiture or loss of, or of any interest
            in, the Aircraft or any Engine;

      (c)   airports, air navigation authorities', airport hangar keepers',
            mechanics', material men's, carriers', employees' or other similar
            Encumbrances arising in each case, in the ordinary course of
            business by statute or by operation of law in respect of obligations
            which are not overdue or which are being contested in good faith by
            appropriate proceedings (and for the payment of which adequate
            reserves have been provided) so long as any such proceedings or the
            continued existence of such Encumbrance do not involve the
            likelihood of the sale, forfeiture or loss of, or of any interest
            in, the Aircraft or any Engine;

      (d)   Encumbrances (other than Encumbrances for Taxes) arising out of
            judgments or awards against the Lessee or any Permitted Air Carrier
            having possession of the Aircraft with respect to which at the time
            an appeal is being presented in good faith and with respect to which
            there shall have been secured a stay of execution pending that
            appeal so long as any such Encumbrance does not involve any
            likelihood that the Interests of the Lessor in the Airframe, any
            Engine or any Part will be adversely affected; and

      (e)   the rights of any other person under agreements or arrangements to
            the extent expressly permitted by the provisions of clause 13;

      "Primary Lease Term" means the period of five (5) years commencing from
      the time of Delivery;

      "Redelivery Location" means such of Arlanda Airport, Stockholm, Sweden or
      Copenhagen Airport, Copenhagen, Denmark or Fornebu Airport, Oslo, Norway

                                        7
<PAGE>

      as the Lessee may designate or any other location as may be mutually
      agreed by the Lessee and the Lessor;

      "Relevant Event" means any Termination Event or any event which with the
      giving of notice or lapse of time or the satisfaction of any other
      condition (or any combination thereof) would constitute a Termination
      Event;

      "Relevant Rate of Interest" means the rate of interest which is two per
      cent. (2%) per annum above the rate quoted by Chemical Bank as its prime
      per annum rate for the period in respect of which the Relevant Rate of
      Interest falls to be determined;

      "Rent" means the instalments of Rent payable pursuant to clause 3.2 and
      clause 7.1(a) and schedule 3;

      "Replacement Engine" means an engine of the same manufacturer of the same
      or an improved model and suitable for use on the Airframe and which is in
      at least as good operating condition and of at least equivalent value and
      utility as the Engine to be replaced or, as the case may be, in respect of
      which an Engine Loss has occurred assuming that such Engine was in the
      condition and repair, except for normal wear and tear, required by the
      terms hereof immediately prior to the replacement of or, as the case may
      be, the occurrence of such Engine Loss;

      "Requisition Compensation" means all moneys or other compensation from
      time to time payable in respect of the Compulsory Acquisition of the
      Aircraft;

      "SAS BV" includes the successors, permitted assigns and permitted
      transferees of SAS BV;

      "Scandinavian Countries" means Denmark, Norway and Sweden;

      "Second Renewal Term" shall have the meaning ascribed thereto in clause
      3.2;

      "State of Registration" means Norway or such other jurisdiction in which
      the Aircraft is from time to time registered in accordance with the terms
      of this Agreement;

      "Taxes" includes all present and future taxes, levies, imposts, duties,
      fees or charges of whatever nature, including, without limitation, any
      value added or similar tax, together with interest thereon and penalties
      in respect thereof and "Taxation" shall be construed accordingly;

      "Termination Date" means the date of termination of the leasing of the
      Aircraft hereunder pursuant to clause 21.1;

      "Termination Event" means any of the events or circumstances described in
      clause 20; and

                                        8
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      "Total Loss" means any of the following events:

      (a)   the actual or constructive total loss of the Aircraft (including any
            damage to the Aircraft which results in an insurance settlement on
            the basis of a total loss, or requisition for use or hire of the
            Aircraft which results in an insurance settlement on the basis of a
            total loss);

      (b)   the Aircraft being destroyed, damaged beyond repair, or otherwise
            ceasing to be useable by an airline in the normal course of its
            business for a period exceeding one hundred and twenty (120)
            consecutive days;

      (c)   the Compulsory Acquisition of the Aircraft; or

      (d)   the hijacking, theft, confiscation, capture, detention, seizure or
            requisition for use or hire of the Aircraft, other than where the
            same amounts to Compulsory Acquisition of the Aircraft, which
            deprives the operator of the use of the Aircraft for more than
            ninety (90) consecutive days, excluding requisition for use or hire
            by any Government Entity of any Scandinavian Country; or

      (e)   the requisition for use or hire of the Aircraft in the circumstances
            referred to in the second sentence of clause 18.5 hereof;

      "Warranties" means, at any time, all warranties and indemnities given by
      any manufacturer or supplier of any part of the Aircraft to the Lessee
      which are assignable either without consent or, if consent is required, in
      respect of which such consent has been obtained by the Lessee and held by
      the Lessee at such time;

      "Warranties Assignment" means the assignment executed or to be executed by
      the Lessor and the Lessee assigning in favour of the Lessor the
      Warranties.

1.2   Clause headings and the table of contents are inserted for convenience of
      reference only and shall be ignored in the interpretation of this
      Agreement.

1.3   In this Agreement, unless the context otherwise requires:

      (a)   references to clauses and schedules are to be construed as
            references to the clauses of, and schedules to, this Agreement and
            references to this Agreement include schedules;

      (b)   references to (or to any specified provision of) this Agreement or
            any other document shall be construed as references to this
            Agreement, that provision or that document as in force for the time
            being and as amended in accordance with the terms thereof or, as the
            case may be, with the agreement of the relevant parties and (where
            such consent is, by the terms of this Agreement or the relevant
            document required to be

                                        9
<PAGE>

            obtained as a condition to such amendment being permitted) the prior
            written consent of the Lessor and the Lessee;

      (c)   references to a "regulation" include any present or future
            regulation, rule, directive, requirement, request or guideline
            (whether or not having the force of law) of any agent, authority,
            central bank or governmental department or any self-regulatory or
            other supra-national authority;

      (d)   reference to a "consent" also includes an approval, authorisation,
            exemption, filing, licence, order, permission, recording or
            registration;

      (e)   words importing the plural shall include the singular and vice
            versa;

      (f)   references to a person shall be construed as including, references
            to an individual, firm, partnership, consortium, joint venture,
            association, company, corporation, joint-stock company,
            unincorporated body of persons and any Government Entity; and

      (g)   references to any enactment shall be deemed to include references to
            such enactment as re-enacted, amended or extended.

2     Representations and Warranties

2.1   The Lessee represents and warrants to the Lessor that:

      (a)   the Lessee is a consortium established by the Consortium Agreement
            and is regarded as a legal entity under the laws of the Scandinavian
            Countries with full power and authority (corporate and other) to
            conduct its operations as presently conducted, to own its properties
            and to execute and deliver, and to perform all of its obligations
            under, this Agreement and any other Lessee Document;

      (b)   DDL, DNL and ABA are jointly and severally liable as against third
            parties for the obligations and liabilities of the Lessee (including
            the Lessee's obligations to the Lessor under this Agreement and the
            other Lessee Documents) except as the same may be limited by
            operation of law and applicable bankruptcy, insolvency,
            reorganisation, moratorium or other similar laws affecting the
            rights of creditors generally;

      (c)   this Agreement and each other Lessee Document has been duly
            authorised by the Lessee and the Lessee Documents constitute or will
            when executed and delivered constitute valid and legally binding
            obligations of the Lessee, enforceable in accordance with their
            terms except as such enforceability may be limited by bankruptcy,
            insolvency, reorganisation, moratorium, liquidation or similar laws
            affecting the rights of creditors generally and except as
            enforceability may be subject to general principles of equity,
            whether asserted in proceedings in equity or at law;

                                       10
<PAGE>

      (d)   the execution and delivery of, the performance of its obligations
            under, and compliance by the Lessee with the provisions of, the
            Lessee Documents will not (i) contravene any existing applicable
            law, statute, rule or regulation or any judgment, decree or permit
            to which the Lessee is subject, (ii) conflict with, or result in any
            breach of any of the terms of, or constitute a default under, any
            agreement or other instrument to which the Lessee is a party or is
            subject or by which it or any of its property is bound, or (iii)
            contravene or conflict with any provision of the Lessee's
            constitutional documents;

      (e)   except for registration of the Aircraft with the Aviation Authority,
            no further action, including any filing or recording of any
            document, is necessary in order to establish and perfect the
            Lessor's title to and interest in the Aircraft, in any applicable
            jurisdiction in the Scandinavian Countries;

      (f)   no litigation, arbitration or administrative proceeding is taking
            place, pending or to its knowledge threatened against the Lessee
            which could have a material adverse effect on the Lessee's ability
            to perform its obligations under the Lessee Documents;

      (g)   the audited financial statements of the Lessee for the financial
            year ended on 31st December, 1992 certified by independent auditors
            of recognised standing in the Scandinavian Countries as delivered to
            the Lessor have been prepared in accordance with International
            Accounting Standards which have been consistently applied, and, as
            at such date, the Lessee did not have any significant liabilities
            (contingent or otherwise) or any unrealised or anticipated losses
            which are not disclosed by, or reserved against in, such financial
            statements;

      (h)   save for the registration of the Aircraft with the Aviation
            Authority on a permanent basis in the name of the Lessor and the
            issue of a permanent certificate of airworthiness by the Aviation
            Authority, it is not necessary to ensure the legality, validity,
            enforceability or admissibility in evidence of each of the Lessee
            Documents that any of them or any other instrument be notarised,
            filed, recorded, registered or enrolled in any court, public office
            or elsewhere in the Scandinavian Countries or that any stamp,
            registration or similar tax or charge be paid in the Scandinavian
            Countries on or in relation to any of the Lessee Documents and the
            Lessee Documents are in proper form for their enforcement in the
            courts of the Scandinavian Countries;

      (i)   the choice by the Lessee of English law to govern this Agreement and
            the submission by the Lessee to the non-exclusive jurisdiction of
            the English courts is valid and binding;

      (j)   the Lessee has received every consent, approval or authorisation of,
            and has given every notice to, each Government Entity having
            jurisdiction

                                       11
<PAGE>

            with respect to the execution, delivery or performance of this Lease
            (including all monetary and other obligations hereunder) that is
            required for the Lessee to execute and deliver this Lease and each
            other Lessee Document to which it is a party, and to perform the
            transactions contemplated hereby and thereby and each such consent,
            approval or authorisation is valid and effective and has not been
            revoked;

      (k)   the Lessee is subject to civil and commercial law with respect to
            its obligations under the Lessee Documents and the transactions
            contemplated thereby constitute private and commercial acts done for
            private and commercial purposes and neither the Lessee nor any of
            its assets is entitled to any immunity on the grounds of sovereignty
            or otherwise from any legal action or proceeding (which shall
            include, without limitation, suit, attachment prior to judgment,
            execution or other enforcement).

2.2   SAS BV represents and warrants to the Lessor that:

      (a)   it is duly organised and existing under the laws of the Netherlands
            as a limited liability company and has full power and authority
            (corporate and other) to conduct its operations as presently
            conducted, to own its properties and to execute and deliver, and to
            perform all of its obligations under, this Agreement;

      (b)   this Agreement has been duly authorised by SAS BV and this Agreement
            constitutes valid and legally binding obligations of SAS BV
            enforceable in accordance with their terms, except as such
            enforceability may be limited by bankruptcy, insolvency,
            reorganisation, moratorium, liquidation or similar laws affecting
            the rights of creditors generally and except as enforceability may
            be subject to general principles of equity, whether asserted in
            proceedings in equity or at law;

      (c)   the execution and delivery of, the performance of its obligations
            under, and compliance by SAS BV with the provisions of, this
            Agreement will not (i) contravene any existing applicable law,
            statute, rule or regulation or any judgement, decree, permit or
            consent to which SAS BV is subject or which is in force in relation
            to SAS By, (ii) conflict with, or result in any breach of any of the
            terms of, or constitute a default under, any agreement to which SAS
            BV is a party or is subject or by which it or any of its property is
            bound, or (iii) contravene or conflict with any provision of SAS
            BV's constitutional documents;

      (d)   no litigation, arbitration or administration proceeding is taking
            place, pending or, to its knowledge, threatened against SAS BV which
            could have a material adverse effect on SAS BV's ability to perform
            its obligations under this Agreement;

                                       12
<PAGE>

      (e)   the choice by SAS BV of English law to govern this Agreement and the
            submission by SAS BV to the non-exclusive jurisdiction of the
            English courts is valid and binding;

      (f)   SAS BV has received every consent, approval or authorisation of, and
            has given every notice to, each Government Entity having
            jurisdiction with respect to the execution, delivery or performance
            of this Lease (including all monetary and other obligations
            hereunder) that is required for SAS BV to execute and deliver this
            Lease, and to perform the transactions contemplated hereby and each
            such consent, approval or authorisation is valid and effective and
            has not been revoked;

      (g)   SAS BV is subject to civil and commercial law with respect to its
            obligations under this Lease and the transactions contemplated
            hereby constitute private and commercial acts done for private and
            commercial purposes and neither SAS BV nor any of its assets is
            entitled to any immunity on the grounds of sovereignty or otherwise
            from any legal action or proceeding (which shall include, without
            limitation, suit, attachment prior to judgment, execution or other
            enforcement).

2.3   The Lessor hereby represents and warrants to the Lessee that:

      (a)   it is duly organised and existing under the laws of Bermuda as a
            limited liability company and has all requisite corporate power and
            authority to enter into and perform its obligations under this
            Agreement and the other Lessee Documents to which it is or will be a
            party;

      (b)   the execution, delivery and performance of this Agreement and the
            other Lessee Documents to which it is or will be a party, have been
            duly authorised by all necessary corporate action on its part and
            each of this Agreement and such other Lessee Documents to which it
            is or will be a party constitutes or, when so executed and
            delivered, will constitute its legal, valid and binding obligation;

      (c)   the execution and delivery of, the performance of its obligations
            under, and compliance by the Lessor with the provisions of the
            Lessee Documents to which it is or will be a party will not (i)
            contravene any existing applicable law, statute, rule or regulation
            or any judgment, decree or permit to which the Lessor is subject,
            (ii) conflict with, or result in any breach of any of the terms of,
            or constitute a default under, any agreement or other instrument to
            which the Lessor is a party or is subject or by which it or any of
            its property is bound, or (iii) contravene or conflict with any
            provision of the Lessor's constitutional documents;

      (d)   no litigation, arbitration or administrative proceeding is taking
            place, pending or to its knowledge threatened against the Lessor
            which would have a material adverse effect on its liability to
            perform its obligations

                                       13
<PAGE>

            under this Agreement or any other Lessee Document to which it is or
            will be a party;

      (e)   no consent of, giving of notice to, or registration with, or taking
            of any other action in respect of, any governmental or other
            competent authority or agency of Bermuda or the United States of
            America is required to be obtained, given, made or taken by it in
            connection with the execution, delivery, performance, validity or
            enforceability of this Agreement or any other Lessee Document to
            which the Lessor is or will be a party or the carrying out by it of
            any of the transactions contemplated hereby or thereby; and

      (f)   the choice by the Lessor of English law to govern this Agreement and
            the submission to jurisdiction of the Lessor to the non-exclusive
            jurisdiction of the English courts is valid and binding.

2.4   The Lessor hereby represents, warrants, covenants and undertakes to the
      Lessee that at all times throughout the Lease Term:

      (a)   without prejudice to any rights the Lessor may have under clause
            23.2, and except as otherwise may be required by applicable law, it
            shall maintain and preserve its status as a Bermuda tax exempt
            company; and

      (b)   without prejudice to any rights the Lessor may have under clause
            23.2 and save for as a result of any transfer of stock or shares in
            the Lessor expressly permitted pursuant to the terms of the Parent
            Guarantee, the issued share capital of, and the voting rights in,
            the Lessor will be majority owned, directly or indirectly, by the
            Parent.

3     Term of Lease

3.1   The Lessor shall lease and the Lessee shall take on lease the Aircraft,
      subject to the terms and conditions of this Agreement, for the Lease Term.

3.2   The Lessee shall be entitled, provided that no Termination Event has
      occurred and is continuing, on giving to the Lessor notice (which notice,
      when given shall be irrevocable) not less than one hundred and eighty
      (180) days prior to the end of the Primary Lease Term to extend the Lease
      Term for one (1) further year (the "First Renewal Term"). During the First
      Renewal Term the Lessee shall be entitled, provided that no Termination
      Event has occurred and is continuing, on giving to the Lessor notice
      (which notice, when given shall be irrevocable) not less than one hundred
      and eighty (180) days prior to the end of the First Renewal Term to extend
      the Lease Term for a second period of one (1) further year (the "Second
      Renewal Term"). During each of the First and Second Renewal Terms the
      provisions of this Agreement shall remain in full force and effect, save
      that rent payable by the Lessee shall be determined in accordance with the
      provisions of clause 7. 1(b).

                                       14
<PAGE>

4     Conditions

4.1   The obligation of the Lessor to lease the Aircraft to the Lessee under
      this Agreement is subject to the condition that, on or prior to Delivery,
      the Lessor shall have received the documents and evidence specified in
      Parts 1 and 2 of schedule 1 in form and substance satisfactory to the
      Lessor.

4.2   The obligation of the Lessor to lease the Aircraft to the Lessee under
      this Agreement is subject to the further conditions that:-

      (a)   the Aircraft shall have been delivered to the Lessor and the Lessor
            shall have received a bill of sale from the Lessee dated the
            Delivery Date;

      (b)   all necessary governmental and other third party consents or
            approvals required to permit the Lessor to lease the Aircraft to the
            Lessee shall have been received by the Lessor;

      (c)   the representations and warranties of (i) the Lessee set out in
            clause 2.1 and in the Aircraft Purchase Agreement and (ii) SAS BV
            set out in clause 2.2, are true and correct as if each were made
            with respect to the facts and circumstances existing immediately
            prior to the time when Delivery is to take place;

      (d)   the Lessor shall have received an appraisal of the fair market value
            of the Aircraft performed by Aircraft Information Services, Inc.
            which the Lessor, notwithstanding the terms of this clause 4.2,
            acknowledges and confirms it has received and that such appraisal is
            acceptable to it in form and substance;

      (e)   no Relevant Event shall have occurred and be continuing or would
            arise by reason of Delivery taking place; and

      (f)   the Lessor shall have received written notice from the Lessee at
            least one (1) Banking Day prior to Delivery specifying the Delivery
            Date, the serial numbers of the Engines being delivered pursuant to
            the Aircraft Purchase Agreement and confirming the amount of the
            instalments of Rent to be paid pursuant to clause 7.1(a).

4.3   The obligation of the Lessee to take the Aircraft on lease under this
      Agreement is subject to the condition that, prior to Delivery, the Lessee
      shall have received the documents and evidence specified in Part 3 of
      schedule 1 in form and substance satisfactory to the Lessee.

4.4   The obligation of the Lessee to take the Aircraft on lease under this
      Agreement is subject to the further conditions that:

      (a)   the representations and warranties of the Lessor in clauses 2.3,
            2.4, 6.1 and 6.2 shall be true and correct as if each was made with
            respect to the

                                       15
<PAGE>

            facts and circumstances existing immediately prior to the time when
            Delivery is to take place;

      (b)   no Total Loss or Engine Loss shall have occurred on or prior to
            Delivery;

      (c)   Delivery shall have occurred.

5     Delivery and Acceptance

5.1   Subject to clause 4, immediately following the transfer of title to the
      Aircraft by the Lessee to the Lessor under the Aircraft Purchase
      Agreement, the Aircraft shall be deemed to have been delivered to the
      Lessee by the Lessor and accepted by the Lessee for the purposes of this
      Agreement and the Lessee shall execute and deliver the Acceptance
      Certificate to the Lessor and the Lease Period shall commence.

5.2   The Lessor and the Lessee acknowledge that the condition, quality,
      suitability and fitness for purpose of the Aircraft at Delivery shall be
      the sole responsibility of the Lessee, and the Lessor shall not, subject
      to clause 4.1 and clause 4.2, be entitled for any reason whatsoever to
      refuse to deliver, and the Lessee shall not, subject to clause 4.3 and
      clause 4.4, be entitled for any reason whatsoever to refuse to accept
      delivery of the Aircraft or to refuse to execute and deliver the
      Acceptance Certificate for the Aircraft to the Lessor once the Aircraft is
      deemed to have been delivered to and accepted by the Lessor under the
      Aircraft Purchase Agreement. The Lessor shall not be liable for any loss
      or damage of any kind whatsoever, or any loss of profit, resulting
      directly or indirectly from any physical defect or alleged physical defect
      in the Aircraft.

5.3   The Lessor shall not be responsible to the Lessee for any loss or expense,
      or any loss of profit, arising from any delay in the delivery of, or
      failure to deliver, the Aircraft to the Lessee under this Agreement unless
      such delay or failure arises as a direct consequence of the wilful default
      or gross negligence of the Lessor.

5.4   The Lessee shall not be responsible to the Lessor for any loss or expense,
      or any loss of profit arising from any delay in the delivery of, or
      failure to deliver, the Aircraft to the Lessor under the Aircraft Purchase
      Agreement or to the Lessee under this Agreement where such delay or
      failure is not caused by a breach by the Lessee of its obligations under
      the Aircraft Purchase Agreement or this Agreement.

5.5   If for any reason, other than a breach by the Lessor of any of its
      obligations under the Lessee Documents to which it is a party, the
      Aircraft shall not have been delivered to and accepted by the Lessee in
      accordance with clause 5.1 within sixty (60) days following the Expected
      Delivery Date, or such later date as the Lessor and the Lessee may agree
      in writing, then the Lessor may, without prejudice to any other rights or
      remedies which the Lessor may have at law, in

                                       16
<PAGE>

      equity or otherwise, cancel the obligation contained in this Agreement to
      lease the Aircraft to the Lessee by the Lessor giving notice to the Lessee
      to that effect whereupon the Lessee's obligation to pay Rent and to lease
      the Aircraft under this Agreement shall immediately terminate.

5.6   If, for any reason, other than a breach by the Lessee of any of its
      obligations under the Lessee Documents, the Aircraft shall not have been
      delivered to and accepted by the Lessee in accordance with clause 5.1
      within sixty (60) days following the Expected Delivery Date or such later
      date as the Lessor and the Lessee may agree in writing, then the Lessee
      may, without prejudice to any other rights or remedies which the Lessee
      may have at law, in equity or otherwise, cancel the obligation contained
      in this Agreement to lease the Aircraft from the Lessor by giving notice
      to the Lessor to that effect whereupon the Lessee's obligation to pay Rent
      and to lease the Aircraft under this Agreement shall immediately
      terminate.

5.7   As soon as practicable after Delivery, but in any event within five (5)
      Banking Days, the Lessee shall provide the Lessor with details of the
      status of each Engine delivered to the Lessor pursuant to the Aircraft
      Purchase Agreement.

6     Lessor's Warranties and Manufacturer's Warranties

6.1   The Lessor warrants and undertakes that, subject to clause 17.1 and clause
      21, the Lessor shall not through its own acts interfere during the Lease
      Period with the use, possession and quiet enjoyment of the Aircraft by the
      Lessee or any Permitted Air Carrier. For avoidance of doubt, the Lessee
      acknowledges and agrees that, notwithstanding the foregoing, if the Lessor
      is entitled in accordance with the provisions of this Agreement to
      interfere with the use, possession and quiet enjoyment of the Aircraft by
      the Lessee, the Lessor shall also be entitled to interfere with the use,
      possession and quiet enjoyment of the Aircraft by any Permitted Air
      Carrier.

6.2   The Lessor warrants that on the Delivery Date the Lessor shall have
      received such title to the Aircraft as is conveyed to it on such date by,
      or on behalf of, the Lessee and the Aircraft shall be free from Lessor's
      Liens.

6.3   THE LESSEE EXPRESSLY AGREES AND ACKNOWLEDGES THAT, SAVE ONLY AS EXPRESSLY
      PROVIDED IN CLAUSES 6.1 AND 6.2, NO CONDITION, WARRANTY OR REPRESENTATION
      OF ANY KIND IS OR HAS BEEN GIVEN BY OR ON BEHALF OF THE LESSOR IN RESPECT
      OF THE AIRCRAFT OR ANY PART THEREOF, AND ACCORDINGLY THE LESSEE CONFIRMS
      THAT IT HAS NOT, IN ENTERING INTO THIS AGREEMENT, RELIED ON ANY CONDITION,
      WARRANTY OR REPRESENTATION BY THE LESSOR OR ANY PERSON ON THE LESSOR'S
      BEHALF, EXPRESS OR IMPLIED, WHETHER ARISING BY LAW OR OTHERWISE IN
      RELATION TO THE AIRCRAFT OR ANY PART THEREOF, INCLUDING, WITHOUT
      LIMITATION, (A) ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A
      PARTICULAR

                                       17
<PAGE>

      PURPOSE, VALUE, CONDITION, DESIGN, USE OR OPERATION OF THE AIRCRAFT; (B)
      ANY IMPLIED WARRANTY ARISING FROM COURSE OF PERFORMANCE, COURSE OF DEALING
      OR USAGE FOR TRADE; (C) ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY
      IN TORT, WHETHER OR NOT ARISING FROM THE ACTUAL OR IMPUTED NEGLIGENCE OR
      BREACH OF STATUTORY DUTY ON THE PART OF THE LESSOR, ITS DIRECTORS,
      SERVANTS OR AGENTS; AND (D) ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR
      REMEDY OR LOSS OF OR DAMAGE TO ANY TANGIBLE OR INTANGIBLE THING, FOR LOSS
      OF USE, REVENUE OR PROFIT OR FOR ANY LIABILITY OF THE LESSOR TO ANY THIRD
      PARTY, OR FOR ANY OTHER DIRECT OR INDIRECT, INCIDENTAL OR CONSEQUENTIAL
      DAMAGES.

6.4   During the Lease Period the Lessor will use all reasonable endeavours to
      extend to the Lessee the benefit of all Warranties and all warranties and
      indemnities given by any manufacturer or supplier of any part of the
      Aircraft to the Lessor (as owner of the Aircraft), if any. Provided no
      Termination Event has occurred and is continuing, the Lessee shall be
      entitled during the Lease Period to take such action upon any Warranty or
      any such warranty or indemnity in the name of the Lessor against any such
      manufacturer or supplier as the Lessee shall see fit, but subject to the
      Lessee first ensuring that the Lessor is indemnified and secured to its
      reasonable satisfaction against all costs and expenses thereby incurred or
      to be incurred.

6.5   The Lessee agrees to assign, promptly after the Lessee becomes aware it
      has received the same, to the Lessor or its nominee, the benefit of all
      Warranties that are given to the Lessee during the Lease Period by any
      manufacturer or supplier of any part of the Aircraft.

7     Rent

7.1   (a)   During the Primary Lease Term SAS BV shall pay to the Lessor
            instalments of Rent for the Aircraft monthly in advance, each such
            instalment, subject to the remainder of this clause 7.1(a), being of
            the amount of Six hundred and seventy five thousand Dollars
            ($675,000). The instalments of Rent payable during the Primary Lease
            Term will be subject to amendment, either upward or downward, to
            reflect the four (4) year Treasury Rate of the United States of
            America (the "US Treasury Rate") in effect one (1) Banking Day
            before the Delivery Date. The amount of the instalments of Rent
            specified above is calculated by reference to the US Treasury Rate
            as of 9th November, 1993 which had a yield to maturity of 4.63%. The
            actual instalments of Rent payable during the Primary Lease Term
            will be adjusted by reference to the yield to maturity of the US
            Treasury Rate having a remaining term to maturity closest to four
            (4) years as at 11.00am (New York time) on the date being one (1)
            Banking Day before the Delivery Date as reported on pages 5 and 217
            ("US Treasury and Money Markets") of the information ordinarily
            provided by Telerate Systems

                                       18
<PAGE>

            Incorporated, it being agreed that, for every basis point movement
            in such yield, the instalments of Rent will be increased or, as the
            case may be, decreased by the amount of $391.50; provided however,
            that in the event the exact maturity of four (4) years is not so
            quoted, the yield will be derived by interpolating on a straight
            line basis the yield for the nearest quoted maturity shorter and
            longer than four (4) years.

      (b)   The instalments of Rent to be paid during the First Renewal Term and
            the Second Renewal Term shall be calculated by reference to the
            formula set out in schedule 3. If the Lessee requests that such
            calculation be made, the Lessor, the Lessee and SAS BV agree that
            such calculation shall be made not less than one hundred and eighty
            (180) days and not more than two hundred and seventy (270) days
            prior to the end of the Primary Lease Term or, as the case may be,
            the First Renewal Term.

7.2   SAS BV's obligation to pay Rent and the other amounts referred to in
      clause 7.3 and the Lessee's obligation to make other payments in
      accordance with this Agreement shall be absolute and unconditional
      irrespective of any contingency whatsoever including (but not limited to):

      (a)   any unavailability of the Aircraft for any reason, including, but
            not limited to, any lack or invalidity of title or any other defect
            in the title, airworthiness, merchantability, fitness for any
            purpose, condition, design or operation of any kind or nature of the
            Aircraft; or

      (b)   the ineligibility of the Aircraft for any particular use or trade,
            or for registration or documentation under the laws of any relevant
            jurisdiction; or

      (c)   subject to clause 17.4, the Total Loss of, or any damage to, the
            Aircraft; or

      (d)   any failure or delay on the part of any party hereto, whether with
            or without fault on its part, in performing or complying with any of
            the terms or conditions of this Agreement; or

      (e)   any insolvency, bankruptcy, administration, reorganisation,
            arrangement, readjustment of debt, dissolution, liquidation or
            similar proceedings by or against the Lessor, the Lessee, SAS BV or
            any Permitted Air Carrier; or

      (f)   any lack of due authorisation of, or other defect in, this
            Agreement.

      Nothing in this clause 7.2 shall prejudice the rights of the Lessee and/or
      SAS BV to pursue a separate action against the Lessor under applicable law
      with respect to any breach by the Lessor of any of its covenants,
      obligations, agreements or undertakings under this Agreement.

                                       19
<PAGE>

7.3   The Lessor and the Lessee each acknowledges and agrees that,
      notwithstanding anything to the contrary contained in this Agreement, the
      obligations of SAS BV under this Agreement shall be limited to, and
      neither the Lessor nor the Lessee shall have any recourse against SAS BV
      except in respect of, the obligation of SAS BV to pay Rent pursuant to
      this clause 7 in accordance with clauses 8.1, 8.2 and 8.5 and payment
      obligations pursuant to clauses 8.3, 8.6, 10, 17.4, 18.5 and 21.1 but only
      to the extent that such payment obligations directly relate to, or arise
      as a direct result of, payment or non-payment of Rent by or on behalf of
      SAS BV.

8     Payments, Interest and Calculations

8.1   All payments to be made by the Lessee or SAS BV to the Lessor under any
      Lessee Document shall be made (unless specifically otherwise provided in
      such Lessee Document) without prior demand in such currency as is
      designated for such payment for value on the day on which payment is due
      to the account of the Lessor at Chemical Bank, 640 Madison Avenue, New
      York, New York 10022, account number 323-252-907, ABA number 021-000-128
      quoting the reference "SAS-767-24475" and marked for the attention of
      CEF/IMG or at such other bank in such other place as the Lessor may have
      notified to SAS BV and the Lessee.

8.2   When any payment under any Lessee Document would otherwise be due to the
      Lessor on a day which is not a Banking Day, the due date for payment shall
      be extended to the next following Banking Day.

8.3   If the Lessee or SAS BV fails to pay to the Lessor any sum (including
      without limitation, any sum payable pursuant to this clause 8.3) on its
      due date for payment under this Agreement, the Lessee or, as the case may
      be, SAS BV shall pay to the Lessor on demand interest on such sum from the
      due date up to the date of actual payment (as well after as before any
      relevant judgment) at the Relevant Rate of Interest.

8.4   All interest and other payments of an annual nature under this Agreement
      shall accrue from day to day and be calculated on the basis of actual days
      elapsed and a 360 day year.

8.5   Any certificate or determination of the Lessor as to any rate of interest
      or any other amount pursuant to and for the purposes of this Agreement
      shall be prima facie evidence as to the rate or amount so certified or
      determined.

8.6   If any sum due from the Lessee or SAS BV under any Lessee Document or
      under any order or judgment given or made in relation thereto has to be
      converted from the currency ("the first currency") in which the same is
      payable under such Lessee Document or under such order or judgment into
      another currency ("the second currency") for the purpose of (a) making or
      filing a claim or proof against the Lessee or SAS BV, (b) obtaining an
      order or judgment in any court or other tribunal or (c) enforcing any
      order or judgment

                                       20
<PAGE>

      given or made in relation to such Lessee Document, the Lessee or, as the
      case may be, SAS BV shall indemnify and hold harmless the Lessor from and
      against any loss suffered as a result of any difference between (i) the
      rate of exchange used for such purpose to convert the sum in question from
      the first currency into the second currency and (ii) the rate or rates of
      exchange at which the Lessor may in the ordinary course of business
      purchase the first currency with the second currency upon receipt of a sum
      paid to it in satisfaction, in whole or in part, of any such order,
      judgment, claim or proof. Any amount due from the Lessee or SAS BV under
      this clause 8.6 shall be due as a separate debt and shall not be affected
      by judgment being obtained for any other sums due under or in respect of
      such Lessee Document and the term "rate of exchange" includes any premium
      and costs of exchange payable in connection with the purchase of the first
      currency with the second currency.

9     Costs and Indemnities

9.1   Subject to the exclusions stated in clause 9.2, the Lessee agrees to
      indemnify and hold harmless the Lessor and its shareholders, affiliates,
      directors, officers, servants, agents and employees (each such person in
      this clause 9 being referred to as an "Indemnitee") from and against all
      costs, expenses, payments, charges, losses, demands, liabilities, claims,
      actions, proceedings, penalties, fines, damages, judgments, orders or
      other sanctions (in this clause 9 together referred to as "Losses"):

      (a)   relating to, or arising directly or indirectly in any manner or for
            any cause or reason whatsoever out of, the design, manufacture,
            testing, delivery, purchase, import, export, registration,
            possession, control, use, operation, leasing, sub-leasing,
            insurance, maintenance, repair, refurbishment, condition, service,
            overhaul, modification, change, alteration, loss, damage, removal,
            storage, re-delivery or replacement of, in or to the Aircraft, or
            otherwise in connection with the Aircraft, or relating to loss or
            destruction of or damage to any property, or death or injury of, or
            other loss of whatsoever nature suffered by, any person caused by,
            relating to, or arising from or out of (in each case whether
            directly or indirectly) any of the foregoing matters;

      (b)   which may at any time be made or brought on the ground that any
            design, article or material in the Aircraft or the operation or use
            thereof constitutes an infringement of any patent, intellectual
            property right or any other right whatsoever;

      (c)   which may at any time be incurred by the Lessor in preventing or
            attempting to prevent the arrest, confiscation, seizure, taking in
            execution, impounding, forfeiture or detention of the Aircraft, or
            in securing the release of the Aircraft;

      (d)   which the Lessor shall certify as sustained or incurred by it as a
            consequence of any default in payment by SAS BV or the Lessee or the

                                       21
<PAGE>

            due and punctual performance of any of the Lessee's other
            obligations under any of the Lessee Documents or as a consequence of
            the breach by the Lessee or SAS BV of any representation, warranty
            or covenant made by the Lessee or SAS BV under any Lessee Document;
            or

      (e)   without prejudice to clause 9.2, which the Lessor or any Indemnitee
            shall certify as sustained or incurred by it as a consequence of the
            Lessor entering into, or performing its obligations under, the
            Lessee Documents, but excluding Losses which represent or relate to
            obligations expressly agreed to be performed by the Lessor
            thereunder and further excluding, but without prejudice to paragraph
            (d) above, any Losses which represent or relate to obligations or
            liabilities of the Lessor or any Indemnitee under any contract or
            agreement with any third party.

      Provided always that the Lessee shall be entitled, at its sole cost and
      expense, acting through counsel reasonably acceptable to the respective
      Indemnitee, (a) in any judicial or administrative proceeding that involves
      solely a claim for one or more Losses, to assume responsibility for and
      control thereof, (b) in any judicial or administrative proceeding
      involving a claim for one or more Losses and other claims related or
      unrelated to the transactions contemplated by this Lease, to assume
      responsibility for and control of such claim for Losses to the extent that
      the same may be and is severed from such other claims (and such Indemnitee
      shall use its best efforts to obtain such severance), and (c) in any other
      case, to be consulted by such Indemnitee with respect to judicial
      proceedings subject to the control of such Indemnitee. Notwithstanding any
      of the foregoing to the contrary, the Lessee shall not be entitled to
      assume responsibility for and control of any such judicial or
      administrative proceedings (i) while a Relevant Event under the Lease
      shall have occurred and be continuing, (ii) if such proceedings would
      involve the likelihood of the sale, forfeiture or loss of, or the creation
      of any Encumbrance (other than a Permitted Lien) on the Aircraft (except
      an Encumbrance which the Lessee shall have bonded in an amount and manner
      satisfactory to the Lessor), this Lease or any part thereof, (iii) if such
      claim relates in any way to the business of such Indemnitee other than the
      transactions contemplated by the Lessee Documents, (iv) if such claim, in
      the opinion of independent counsel for such Indemnitee reasonably
      satisfactory to the Lessee, has a reasonable possibility of compromising
      or jeopardising any substantial interests of such Indemnitee, or (v) the
      Lessee shall not have furnished such Indemnitee with an opinion of
      independent counsel reasonably satisfactory to such Indemnitee to the
      effect that there exists a meritorious basis for contesting such claim.
      The Indemnitee may at its own cost participate with its own counsel in any
      judicial proceeding controlled by the Lessee pursuant to the preceding
      provisions. The Indemnitee shall supply the Lessee with such information
      reasonably requested by the Lessee as is necessary or advisable for the
      Lessee to control or participate in any proceeding to the extent permitted
      by this clause 9.1. Such Indemnitee shall not enter into a settlement or
      other compromise with respect to any Losses without the prior written
      consent of the Lessee, which consent shall not be

                                       22
<PAGE>

      unreasonably withheld or delayed, unless such Indemnitee waives its right
      to be indemnified with respect to such Losses under this clause 9.1.

9.2   Notwithstanding the provisions of clause 9.1, the Lessee shall not be
      responsible pursuant to clause 9.1 to any Indemnitee for:

      (a)   Losses arising or imposed to the extent the same result from the
            breach by such Indemnitee of any express provisions of, or the
            default of such Indemnitee in its performance of any of its
            obligations under, this Agreement or any other Lessee Document to
            which the Indemnitee is a party or result from any representation or
            warranty given or made by such Indemnitee in this Agreement or any
            other Lessee Document to which the Indemnitee is a party being
            incorrect at the date when given or made, or any wilful default,
            fraud or gross negligence of such Indemnitee;

      (b)   Losses arising or imposed to the extent the same result from the
            sale, transfer or other disposition of the Aircraft, the Airframe,
            any Engine or any Part or any interest in the Aircraft, the
            Airframe, any Engine or any Part, other than (i) as contemplated by
            this Agreement or any other Lessee Document, or (ii) pursuant to the
            exercise by the Lessor of any of its rights pursuant to clause 21.1;

      (c)   Losses to the extent the same arise out of any claim of title to or
            against the Aircraft, the Airframe, any Engine or any Part by any
            creditor of such Indemnitee claiming in its capacity as such, other
            than a claim arising as a result of any breach by the Lessee or SAS
            BV of any provision of, or the default by the Lessee or SAS BV in
            its performance of any of its obligations under, this Agreement or,
            in the case of the Lessee, the Aircraft Purchase Agreement;

      (d)   Losses arising from or attributable to acts or events occurring
            after the latest to occur of (i) the termination or expiry of the
            Lease Term, (ii) if the Lessee is required to return the Aircraft to
            the Lessor, the date on which the Aircraft is returned to the Lessor
            in accordance with the provisions hereof, and (iii) if the leasing
            of the Aircraft under this Agreement shall have been terminated
            pursuant to clause 21.1, the sale, transfer or other disposition of
            the Aircraft, the Airframe, any Engine or any Part or any interest
            in the Aircraft, the Airframe, any Engine or any Part; or

      (e)   except to the extent necessary to make payments on an after-tax
            basis, Losses resulting from or arising out of any Taxes or a loss
            of Tax benefits or increase in Tax liability whether or not the
            Lessee or SAS BV is required to indemnify any person therefor
            pursuant to clause 10 (it being understood that clause 10 provides
            for the Lessee's and SAS BV's liability with respect to Taxes) and
            any other Losses against which the

                                       23
<PAGE>

            Lessee shall have indemnified such Indemnitee pursuant to any other
            provision of this Agreement or any other Lessee Document; or

      (f)   Losses caused by any Lessor's Lien; or

      (g)   except as otherwise expressly provided herein, Losses which relate
            to legal, accounting or other expenses incurred by any Indemnitee or
            the Parent in connection with the negotiation, preparation and
            execution of any Lessee Document; or

      (h)   without prejudice to clause 9. 1(d), Losses which are operating or
            overhead expenses of any Indemnitee.

9.3   The Lessee shall pay all stamp, documentary, registration or other like
      Taxes (including any such Taxes payable by the Lessor) imposed on or in
      connection with the Lessee Documents by any country or jurisdiction other
      than in Bermuda, the United States of America and any other jurisdiction
      in which the Lessor has a place of business (excluding however any
      jurisdiction in which the Lessor would not have been deemed to have a
      place of business had it not entered into and/or performed its obligations
      under the Lessee Documents).

9.4   The Lessee shall pay to the Lessor on demand all expenses (including
      legal, survey and other costs) incurred by the Lessor in connection with
      the enforcement of, or preservation of any rights under, any of the Lessee
      Documents, or otherwise in respect of moneys owing under any of the Lessee
      Documents, or in respect of breach of any representation, warranty,
      covenant, agreement, condition or stipulation therein contained, together
      with interest at the Relevant Rate of Interest from the date on which such
      expenses were incurred to the date of payment (as well after as before
      judgment).

      All expenses payable pursuant to this clause 9.4 shall be paid together
      with any value added tax or similar tax thereon (if any), and in the
      currency in which the same are incurred by the Lessor.

9.5   Subject always to clause 9.2, the indemnities by the Lessee in favour of
      the Lessor contained in this clause 9 shall continue in full force and
      effect notwithstanding the termination of the leasing of the Aircraft to
      the Lessee under this Agreement.

10    Taxation

10.1  Subject to clauses 10.3, 10.4 and 10.5, the Lessee or, in the case of the
      subject matter of paragraph (b) below (but only in so far as the same
      relate to payments made by SAS BV under this Agreement) SAS BV, shall pay
      promptly and shall indemnify and hold harmless each Indemnitee on an
      after-tax basis for and against all Taxes (a) levied or assessed on or in
      respect of the Aircraft, or (b) levied or assessed in respect of any
      payments made under any of the Lessee Documents or any of the transactions
      contemplated by any of the Lessee

                                       24
<PAGE>

      Documents or (c) relating to or arising out of the ownership, possession,
      leasing, sub-leasing, use, delivery, operation or return of the Aircraft.

10.2  Subject to clauses 10.3, 10.4 and 10.5, if at any time the Lessee or SAS
      BV is required to make any deduction or withholding in respect of Taxes
      from any payment due under the Lessee Documents for the account of the
      Lessor:

      (a)   the sum due from the Lessee or, as the case may be, SAS BV in
            respect of such payment shall be increased to the extent necessary
            to ensure that, after the making of such deduction or withholding,
            the Lessor receives on the due date for such payment (and retains,
            free from any liability in respect of such deduction or withholding)
            a net sum equal to the sum which it would have received had no such
            deduction or withholding been required to be made;

      (b)   the Lessee or, as the case may be, SAS BV shall pay to the relevant
            authority within the period for payment permitted by applicable law
            the full amount of the deduction or withholding (including, but
            without prejudice to the generality of the foregoing, the full
            amount of any deduction or withholding from any increased amount
            paid pursuant to this clause 10.2);

      (c)   the Lessee or, as the case may be, SAS BV shall indemnify the Lessor
            against any losses or costs incurred by the Lessor by reason of any
            failure of the Lessee or SAS BV (as applicable) to make any such
            deduction or withholding or by reason of any increased payment not
            being made on the due date for such payment; and

      (d)   the Lessee or, as the case may be, SAS BV shall promptly deliver to
            the Lessor any receipt, certificates or other proof evidencing the
            amounts (if any) paid or payable in respect of any deduction or
            withholding as aforesaid.

10.3  If, following any such deduction or withholding as is referred to in
      clause 10.2 from any payment by the Lessee or SAS BV, any Indemnitee shall
      receive or be granted a credit against or remission for any Taxes payable
      by it (other than Taxes the subject of an indemnity from the Lessee or SAS
      BV pursuant to this clause 10), the Lessor shall procure that such
      Indemnitee shall, subject to the Lessee or, as the case may be, SAS BV
      having made any increased payment in accordance with clause 10.2 and to
      the extent that such Indemnitee can do so without prejudicing the
      retention of the amount of such credit or remission and without prejudice
      to the right of such Indemnitee to obtain any other relief or allowance
      which may be available to it, reimburse the Lessee or SAS BV (as
      applicable) with such amount as such Indemnitee shall certify to be the
      proportion of such credit or remission as will leave such Indemnitee
      (after such reimbursement) in no worse position than it would have been in
      had there been no such deduction or withholding from the payment by the
      Lessee or SAS BV as aforesaid. Such reimbursement shall be made forthwith
      upon such

                                       25
<PAGE>

      Indemnitee certifying that the amount of such credit or remission or
      economic benefit has been received by it.

      If any Indemnitee shall, for reasons outside its control, lose all or any
      portion of any credit in respect of which such Indemnitee shall have
      reimbursed the Lessee or SAS BV pursuant to this clause 10.3, the Lessee
      or, as the case may be, SAS BV shall refund to such Indemnitee all (or the
      appropriate portion of) such reimbursement.

10.4  The Lessor agrees that for so long as in the good faith opinion of the
      affected Indemnitee the rights and interests of such Indemnitee would not
      be adversely affected thereby:

      (a)   the Lessor shall procure that such Indemnitee shall notify the
            Lessee and SAS BV prior to making payment of any Taxes in respect of
            which the Lessee or SAS BV is required to indemnify such Indemnitee
            pursuant to this clause 10 provided however that, without prejudice
            to the Lessee's or SAS BV's other rights in respect of such failure,
            the Lessor's failure to procure that such Indemnitee so notifies the
            Lessee and SAS BV shall not affect such Indemnitee's right to
            indemnification in respect of such Taxes hereunder;

      (b)   the Lessor shall procure that such Indemnitee shall consult with the
            Lessee and SAS BV for a reasonable period not extending beyond the
            due date for payment of the relevant Taxes prior to making payment
            of any Taxes in respect of which the Lessee or SAS BV is required to
            indemnify such Indemnitee pursuant to this clause 10 provided that,
            without prejudice to the Lessee's or SAS BV's other rights in
            respect of such failure, the Lessor's failure to procure that such
            Indemnitee so consults shall not affect such Indemnitee's right to
            indemnification in respect of such Taxes hereunder;

      (c)   if a claim is made against such Indemnitee for any Tax that is
            subject to indemnification under this clause 10, the Lessor shall
            procure that such Indemnitee will give the Lessee and SAS BV written
            notice of such claim provided that, without prejudice to the
            Lessee's or SAS BV's other rights in respect of such failure, the
            Lessor's failure to procure that such Indemnitee so notifies the
            Lessee shall not affect such Indemnitee's right to indemnification
            in respect of Taxes under this clause 10. If the Lessee or SAS BV
            (as applicable) so requests in writing within thirty (30) days after
            receipt of such notice, the Lessor shall procure that such
            Indemnitee shall permit the Lessee or SAS BV (as applicable) to
            contest the claim in the name of such Indemnitee or in the name of
            the Lessee or SAS BV (as applicable), to the extent permitted by
            law. However, if (i) such claim together with other claims which
            could be made with respect to other transactions to which such
            Indemnitee is then a party could (if sustained) have an adverse
            effect on such Indemnitee's business or financial affairs (a
            "Special Claim"), or (ii) the Lessee or SAS BV

                                       26
<PAGE>

            (as applicable) shall not be permitted by law to contest a claim
            (other than a Special Claim) on behalf of such Indemnitee, or (iii)
            the contest of such claim includes the contest of claims unrelated
            to the transactions contemplated by this Lease, then the Lessor
            shall procure that such Indemnitee shall contest such claim in good
            faith. Notwithstanding the foregoing, no claim shall be contested by
            any of the Lessee, SAS BV or such Indemnitee unless and until (a)
            such Indemnitee shall have received (i) an indemnity for all
            reasonable expenses paid in contesting the claim (including
            reasonable attorneys' and accountants' fees and disbursements), and
            (ii) written acknowledgement by the Lessee or SAS BV (as applicable)
            of its liability hereunder (if such contest is decided adversely) in
            respect of such Taxes; (b) the action to be taken will not involve
            the likelihood of the sale, forfeiture or loss of, or the creation
            of any Encumbrance (except a Permitted Lien or an Encumbrance which
            the Lessee or SAS BV (as applicable) shall have bonded in an amount
            and manner reasonably satisfactory to the Lessor) on, the Aircraft
            or any part thereof or any interest therein; (c) if such contest
            shall be conducted in a manner requiring the payment of the claim,
            the Lessee or SAS BV (as applicable) shall have advanced the amount
            required on an after-tax basis; (d) no Termination Event shall have
            occurred and be continuing; and (e) if such claim is a Special
            Claim, such Indemnitee shall have received a legal opinion (at the
            expense of the Lessee or SAS BV (as applicable)) from counsel
            satisfactory to such Indemnitee indicating that a reasonable basis
            for such contest exists. The Lessor shall procure that any affected
            Indemnitee, the Lessee and SAS BV shall in good faith consider the
            other partys' views regarding the conduct of the contest.
            Notwithstanding the foregoing provisions of this clause 10, if at
            any time any Indemnitee waives its right of indemnification under
            this clause 10 in respect of a claim, or if, after having received
            payment of indemnification from the Lessee or SAS BV hereunder in
            respect of such claim, such Indemnitee tenders such payment to the
            Lessee or SAS BV (as applicable), then the Lessee or SAS BV (as
            applicable) shall not be entitled to contest, or to continue to
            contest, any such claim;

      (d)   the Lessee or SAS BV (as applicable) will provide such information
            as may be reasonably requested by the Lessor and reasonably
            available to or obtainable by the Lessee or SAS BV (as applicable)
            to enable the Lessor to fulfil its tax filing requirements with
            respect to the transactions contemplated hereby. In the event that
            any return, statement or report is required to be made or filed with
            respect to any Tax required to be indemnified against by the Lessee
            or SAS BV under this clause 10, the Lessee or SAS BV (as applicable)
            shall notify the Lessor of such requirement and (a) to the extent
            permitted by law and, unless otherwise requested by the Lessor or
            required by law, make and file in its own name such return,
            statement or report in such manner as will show the ownership of the
            Aircraft in the Lessor and furnish the Lessor with a copy of such
            return, statement or report, or (b) where such return, statement or
            report is required to be in the name of or filed by the

                                       27
<PAGE>

            Lessor, prepare and furnish such return, statement or report for
            filing by the Lessor in such manner as shall be satisfactory to the
            Lessor and send the same to the Lessor for filing no later than
            thirty (30) days prior to the due date. Where the Lessor is required
            to make or file a return, statement or report reflecting items other
            than or in addition to Taxes indemnified against by the Lessee or
            SAS BV under this clause 10, the Lessee or SAS BV (as applicable)
            shall, upon the Lessor's request, provide the Lessor with
            information, within a reasonable time, sufficient to permit such
            return, statement or report to be properly made and timely filed;

      (e)   without prejudice to the provisions of clause 10.4(c), the Lessor
            agrees, at the cost, expense and liability of the Lessee, to provide
            such documents and instruments as are within its possession and as
            are reasonably available to it and to make such filings as the
            Lessee or SAS BV may reasonably request for the purpose of reducing
            or avoiding any claim, demand or assessment for Taxes in respect of
            which the Lessee or SAS BV is required to indemnify pursuant to this
            clause 10 or to recover the same from any third party properly
            liable for the same.

      In furtherance of the foregoing, the Lessor agrees, in each case at the
      cost, expense and liability of the Lessee or, as the case may be, SAS BV,
      and subject to the Lessee or SAS BV first ensuring that the Lessor is
      indemnified and secured to the Lessor's reasonable satisfaction against
      all costs, expenses and liabilities thereby incurred or which may be
      incurred in connection therewith, to co-operate in good faith with the
      Lessee or SAS BV (as applicable) in taking such steps as the Lessor, in
      its sole discretion, determines will not be prejudicial to the Lessor and
      to be appropriate for the purpose of reducing or avoiding any claim,
      demand or assessment for Taxes in respect of which the Lessee or SAS BV is
      required to indemnify pursuant to this clause 10 and which are imposed by
      any Government Entity or any political subdivision or taxing authority
      thereof or therein. The Lessor, the Lessee and SAS BV further agree to
      consider in good faith (but without any obligation to agree thereto) any
      reasonable modifications of the transaction described in this Lease that
      would reduce or eliminate any Taxes imposed on either party as a result of
      such transaction.

10.5  Notwithstanding the provisions of clause 10, neither the Lessee nor SAS BV
      shall be responsible pursuant to clause 10 for:

      (a)   Taxes levied on, based on, measured by or with respect to net or
            gross income, capital income, asset, capital, capital gains,
            receipts, franchises, profits or the conduct of the business of the
            Lessor to the extent any Indemnitee would have been subject to such
            Taxes in the same amount in the absence of the transactions
            contemplated by the Lease or any other Lessee Document;

                                       28
<PAGE>

      (b)   Taxes paid, arising or imposed to the extent the same result from
            the failure by any Indemnitee to account for Tax on time (provided
            always that such Indemnitee has before the due date for payment
            either received a written demand therefor or otherwise been made
            aware in writing of the imposition of such Taxes and the due date
            for payment thereof) other than where any such failure arises as a
            result of any breach by the Lessee or SAS BV of any provision of, or
            the default by the Lessee or SAS BV in the performance of its
            obligations under, the Lessee Documents;

      (c)   Taxes arising or imposed to the extent the same result from the
            breach by any Indemnitee of any express provision of, or the default
            by any Indemnitee in its performance of any of its obligations
            under, this Agreement or any other Lessee Document or result from
            any representation or warranty given or made by any Indemnitee in
            this Agreement or any other Lessee Document being incorrect at the
            date when given or made, or any fraud or wilful default or gross
            negligence of any Indemnitee.

      (d)   Taxes (save for interest or penalties on Taxes arising earlier and
            which are indemnifiable by the Lessee or SAS BV in accordance with
            the other provisions of this clause 10) arising or attributable to
            acts or events occurring after the latest to occur of (i) the
            termination or expiry of the Lease Term, (ii) if the Lessee is
            required to return the Aircraft to the Lessor hereunder, the date on
            which the Aircraft is returned to the Lessor in accordance with the
            provisions hereof, and (iii) if the leasing of the Aircraft under
            this Agreement shall have been terminated pursuant to clause 21.1,
            the sale, transfer or other disposition of the Aircraft, the
            Airframe, any Engine or any Part or any interest in the Aircraft,
            the Airframe, any Engine or any Part;

      (e)   Taxes to the extent any Indemnitee would have been subject to such
            Taxes in the same amount as a result of (i) activities or business
            of such Indemnitee unrelated to the transactions contemplated by the
            Lessee Documents, or (ii) any financing obtained by such Indemnitee;

      (f)   Taxes arising or imposed to the extent the same are imposed with
            respect to the purchase by the Lessor of the Aircraft pursuant to
            the Aircraft Purchase Agreement (indemnification for which is
            provided in such Agreement) or from the sale, transfer or other
            disposition of the Aircraft, the Airframe, any Engine or any Part or
            any interest in the Aircraft, the Airframe, any Engine or Part
            unless such sale, transfer or other disposition occurs (i) in
            connection with the exercise of remedies after the leasing of the
            Aircraft under this Agreement shall have been terminated pursuant to
            clause 21.1, or (ii) pursuant to clause 17.5, 17.7, 18.5 or 23.1;

                                       29
<PAGE>

      (g)   Taxes levied or imposed upon any assignee or transferee (permitted
            or otherwise) of any of the Lessor's right, title or interest in or
            to any Lessee Document, the Aircraft, the Airframe, any Engine or
            Part to the extent such Taxes, at the time of such assignment or
            transfer, are, or could reasonably be foreseen will be as a result
            of any change in law not then in effect, in excess of the Taxes
            which would have been imposed had no such assignment or transfer
            taken place;

      (h)   Taxes in respect of which the Lessee shall have indemnified the
            relevant Indemnitee pursuant to any other provision of this
            Agreement or any other Lessee Document; and

      (i)   Taxes imposed on any Indemnitee under any applicable law of any
            jurisdiction which would not have been imposed had the transactions
            contemplated in the Lessee Documents been the sole connection
            between such Indemnitee and such jurisdiction; and

      (j)   Taxes arising or imposed as a result of the loss of any anticipated
            Tax benefits except where such loss is as a result of any breach by
            the Lessee of any provisions of, or the default by the Lessee in the
            performance of its obligations under, the Lessee Documents.

      Provided however, that the preceding paragraphs (e) and (i) shall not
      apply to any Taxes imposed on any Indemnitee by a taxing jurisdiction in
      Sweden, Belgium or the Netherlands to the extent such tax would not have
      been imposed but for the transactions relating to SAS BV's agreement to
      pay Rent under this Lease, unless such Taxes would not have been imposed
      by such taxing jurisdiction if such Indemnitee had not operated an actual
      permanent place of business in such jurisdiction.

10.6  All payments by the Lessee or SAS BV under clause 8.6, clause 9 and this
      clause 10 shall include any amount necessary to hold the recipient thereof
      harmless on an after-tax basis from all Taxes required to be paid by such
      recipient with respect to such payment or indemnity. Calculations made on
      an after-tax basis shall be made assuming the actual rate applicable to
      the recipient for the relevant year.

10.7  The provisions of this clause 10 shall survive the expiration or
      termination of this Lease Agreement.

11    General Undertakings

11.1  The Lessee undertakes with the Lessor that it will:

      (a)   Notification of Relevant Event

            promptly inform the Lessor in writing of any Relevant Event
            forthwith upon becoming aware thereof;

                                       30
<PAGE>

      (b)   Consents and authorisations

            without prejudice to paragraph 4 of Part 1 of schedule 1, obtain or
            cause to be obtained, maintain in full force and effect and comply
            in all material respects with the conditions and restrictions (if
            any) imposed in, or in connection with, every consent,
            authorisation, licence or approval of governmental or public bodies
            or authorities or courts and do, or cause to be done, all other acts
            and things, which may from time to time be necessary under any
            applicable laws in the State of Registration for the continued due
            performance of all its obligations under each of the Lessee
            Documents;

      (c)   Preparation and Supply of Accounts

            furnish to the Lessor, within one hundred and eighty (180) days
            after the end of each of its financial years, the annual report of
            the Lessee in English including the balance sheet and profit and
            loss accounts in respect of such financial year and, within sixty
            (60) days after the end of each quarter, the quarterly report (if
            any) of the Lessee in English which the Lessee makes available to
            the public or its creditors generally;

      (d)   Information concerning the Lessee and SAS BV

            provide the Lessor with such additional information as the Lessor
            may from time to time in writing reasonably require and is relevant
            in the context of the Lessee's or SAS BV's obligations under any of
            the Lessee Documents or in respect of the Aircraft.

11.2  The Lessee further undertakes with the Lessor that it will:

      (a)   Status Report

            provide to the Lessor within fifteen (15) days of the written
            request of the Lessor (which request the Lessor shall be entitled to
            make at any time a Termination Event has occurred and is continuing,
            and at any reasonable time during the last two hundred and seventy
            (270) days of the Lease Term, but otherwise in respect of the
            Airframe, not more than once in any twelve (12) month period and, in
            the case of the Engines, not more than once in any six (6) month
            period) status reports on the Airframe and/or, as the case may be,
            the Engines containing or indicating such information as the Lessor
            may reasonably request;

      (b)   Inspection

            throughout the Lease Period permit the Lessor and/or its agents or
            representatives to inspect the Aircraft at any reasonable time upon
            giving the Lessee not less than ten (10) days prior written notice.
            The Lessor shall only be entitled to perform such inspections during
            normal business

                                       31
<PAGE>

            hours in the jurisdiction in which the Aircraft is located at the
            time of the inspection (or at any other time acceptable to each of
            the Lessor and the Lessee) and provided no unreasonable interference
            or delay is caused to the Lessee's or any Permitted Air Carrier's
            operation, maintenance and use of the Aircraft. The cost of such
            inspections and surveys shall be paid by the Lessor.

11.3  Lessor's Undertakings

      The Lessor hereby undertakes to the Lessee and SAS BV that throughout the
      Lease Term and for so long as any obligations of the Lessor under this
      Agreement remain to be performed:

      (a)   it will not sell or otherwise transfer its title to the Aircraft or
            any part thereof or its interest therein, unless otherwise provided
            for in this Agreement or any of the other Lessee Documents to which
            the Lessee is a party or after having obtained the prior written
            consent of the Lessee;

      (b)   it shall not create or permit to exist any Lessor's Lien (other than
            Permitted Liens) on or with respect to the Aircraft, title thereto
            or any interest therein and that it will promptly, at its own
            expense, take such action as may be necessary duly to discharge any
            such Lessor's Lien;

      (c)   without prejudice to the Lessee's obligations under this Agreement
            or pursuant to applicable law, it shall obtain, make and maintain in
            full force and effect, promptly renew from time to time and comply
            with the terms of all consents, permissions, licences,
            authorisations, approvals, registrations and filings in Bermuda, the
            United States of America and in any other jurisdiction in which the
            Lessor has actual knowledge that any of the foregoing are so
            necessary, which may from time to time be necessary in order to
            enable it to perform its obligations under this Agreement or any
            other Lessee Document to which it is a party or for the legality,
            validity, enforceability or admissibility in evidence hereof or
            thereof;

      (d)   it shall notify the Lessee and SAS BV within ten (10) Banking Days
            of obtaining or receiving actual knowledge of any change in law
            which would require payment by the Lessee, SAS BV or the Lessor of
            any additional amount in respect of withholding Taxes pursuant to
            this Agreement but any failure of the Lessor so to do shall not
            affect or derogate from the obligations of the Lessee or SAS BV (as
            applicable) hereunder or under any other Lessee Document or result
            in any liability (or increased liability) of the Lessor under this
            Agreement or any other Lessee Document;

                                       32
<PAGE>

      (e)   it shall promptly forward to the Lessee a copy of any notices
            relating to the Lessee's obligations hereunder with respect to the
            Aircraft received by it from any appropriate authority;

      (f)   it shall promptly discharge all or any Taxes which are payable by it
            from time to time against which it is not entitled to be indemnified
            under any Lessee Document and which if not discharged would
            materially and adversely affect the rights or interests of the
            Lessee or SAS BV under this Agreement save where, and for so long
            as, payment of such Taxes is being contested in good faith and by
            appropriate proceedings which will not materially and adversely
            affect the rights or interests of the Lessee or SAS BV under this
            Agreement.

12    Sub-Leasing

12.1  The Lessee will not at any time, without the prior written consent of the
      Lessor (which consent shall not be unreasonably withheld or delayed),
      sub-lease, charter, hire or otherwise part with the possession or
      operational control of the Aircraft or any Engine or install any Engine,
      or permit any Engine to be installed, on any airframe other than the
      Airframe.

      Notwithstanding the foregoing, so long as no Termination Event shall have
      occurred and be continuing, the Lessee may, without the prior written
      consent of the Lessor:

      (a)   subject to the provisions of clause 12.2, sub-lease or deliver
            possession of the Aircraft, the Airframe or any Engine to any
            Permitted Air Carrier whose base of operations is in a Permitted
            Country for a term (including, without limitation, any option of the
            sub-lessee to renew or extend the sub-lease) not to extend beyond
            the end of the Lease Term.

      (b)   deliver, or permit such Permitted Air Carrier as has possession of
            the Aircraft to deliver, possession of the Airframe or any Engine to
            the manufacturer thereof or any qualified person for the purpose of
            testing, maintenance, service, repair or overhaul work or any
            modifications, changes or alterations permitted under this Agreement
            being carried out on the Airframe, such Engine or any Part thereof;

      (c)   subject, or permit such Permitted Air Carrier as has possession of
            the Aircraft to subject, any Engine or Part to normal interchange or
            pooling agreements or arrangements in each case customary in the
            airline industry and entered into by the Lessee in the ordinary
            course of its business with Permitted Air Carriers, provided that if
            any interest of the Lessee or the Lessor in or to any such Engine or
            Part shall be divested under any such agreement or arrangement, such
            divestiture shall be deemed to be a Total Loss with respect to such
            Engine or Part and the Lessee shall comply with clause 17.5, in the
            case of an Engine, and clause 13.1(d), in the case of a Part; and

                                       33
<PAGE>

      (d)   lease, chatter or hire out, or permit such Permitted Air Carrier as
            has possession of the Aircraft to lease, charter or hire out, the
            Aircraft in circumstances where the Aircraft shall remain registered
            in the State of Registration and the Lessee or the Permitted Air
            Carrier (as the case may be) shall be obligated under the terms of
            the relevant lease, charter or hire agreement to provide the flight
            crew and to operate and maintain (other than line maintenance) the
            Aircraft and to effect the insurances required to be maintained with
            respect to the Aircraft pursuant to clause 16.

12.2  (a)   The Lessee shall remain primarily liable hereunder for the
            performance of all of the terms of this Agreement to the same extent
            as if any sub-lease or transfer of possession contemplated by
            clause 12.1 had not occurred and any such sub-lease shall include
            provisions (i) for the maintenance and insurance of the Aircraft
            substantially the same as those contained in this Agreement, (ii)
            that the Aircraft, Airframe or Engines shall not be operated or used
            in a manner contrary to the terms of this Agreement, (iii) that the
            sub-lessee will not transfer possession or control of the Aircraft,
            Airframe or any Engine to anyone other than the Lessee or, following
            the occurrence of a Termination Event, the Lessor, provided however
            that such provisions shall permit the sub-lessee to transfer
            possession or control of the Aircraft, Airframe or any Engine on the
            same terms as clauses 12.1(b) to (d), 13.2 or 13.3, (iv) that the
            sub-lessee will not assign the sub-lease or further sub-lease the
            Aircraft other than as contemplated in clause 12.1(d), and (v) that
            the term of such sub-lease will not extend beyond the end of the
            Lease Term. The Lessee shall procure that no pooling agreement,
            sub-lease or other relinquishment of possession of the Aircraft or
            any Engine shall in any way discharge or diminish any of the
            Lessee's obligations to the Lessor hereunder nor shall the Lessee
            permit any such agreement, sub-lease or arrangement to prejudice the
            right, title and interest of the Lessor in and to the Aircraft or
            under this Agreement.

      (b)   Prior to the effective date of any sub-lease referred to in clause
            12.1(a), the Lessee shall give the Lessor written notice of its
            intent to sub-lease the Aircraft (which notice shall specify the
            identity of the proposed sub-lessee and the material terms of the
            sub-lease), and as soon as practicable (and in any event not later
            than ten (10) days after receipt by the Lessor of such notice) the
            Lessor shall elect, by written notice to the Lessee, either (i) that
            such sub-lease shall be subject and subordinate to the terms of this
            Agreement, or (ii) that such sub-lease shall be assigned in favour
            of the Lessor as security for the Lessee's and SAS BV's obligations
            under this Agreement provided however that it is understood and
            agreed by the Lessee that, in respect of any sub-lease with a term
            of six (6) months or less, the Lessor, unless it otherwise agrees in
            writing, shall be deemed to have elected the alternative specified
            in paragraph (i) above, without the need for any notice or other act
            on the part of the Lessor. If the Lessor elects the alternative
            specified in paragraph (i)

                                       34
<PAGE>

            above, the Lessee shall procure that the rights of any person who
            receives possession of the Aircraft pursuant to such sub-lease shall
            be made expressly subject and subordinate to, all the terms of this
            Agreement and the Lessor's rights hereunder (including, without
            limitation, the right of the Lessor to take possession of the
            Aircraft in accordance with clause 21) and will procure that any
            such sub-lease includes a provision that such sub-lease will
            terminate upon termination of this Agreement for any reason. If the
            Lessor elects the alternative specified in paragraph (ii) above,
            prior to the effective date of such sub-lease, the Lessee shall
            execute an assignment in favour of the Lessor reasonably
            satisfactory to the Lessor of all its rights under such sub-lease as
            security for all the obligations of the Lessee and SAS BV under the
            Lessee Documents (such assignment being enforceable only if a
            Termination Event has occurred and is continuing) and the Lessee
            shall procure that the sub-lessee under such sub-lease acknowledges
            a notice of such assignment. The Lessor agrees to issue to such
            sub-lessee, in consideration of such acknowledgement, a letter of
            quiet enjoyment addressed to such sub-lessee, in the form of the
            Letter of Quiet Enjoyment or in such other form as the Lessor, the
            Lessee and such sub-lessee may agree. Any failure by the Lessor to
            make an election as contemplated by, and in accordance with, this
            clause 12.2(b) shall be deemed to be an election by the Lessor of
            the alternative specified in paragraph (ii) above, unless the Lessee
            notifies the Lessor to the contrary in writing, and the Lessor shall
            be bound by, and perform its obligations under, this clause 12.2(b)
            as if the Lessor had elected the alternative specified in paragraph
            (ii) above or, as the case may be, paragraph (i) above. All costs
            and expenses incurred by the Lessor in connection with the granting
            of any assignment referred to in paragraph (ii) shall be for the
            account of the Lessee. At least five (5) days prior to the effective
            date of any sub-lease contemplated in either paragraph (i) or (ii)
            above, the Lessee shall deliver to the Lessor a copy of such
            sub-lease provided however that all financial provisions of any such
            sub-lease which is subject and subordinate to the terms of this
            Agreement may be deleted prior to delivery to the Lessor. For the
            avoidance of doubt, the Lessor shall not have the right to require
            any assignment of any sub-lease which is subject to and subordinate
            to the terms of this Agreement.

      (c)   The Lessee shall not permit or allow any filing with the Aviation
            Authority or any other Government Entity evidencing any such
            sub-lease which is prejudicial to any of the Lessor's rights, title
            or interest in or to the Aircraft or this Agreement without the
            prior written consent of the Lessor.

      (d)   Notwithstanding the foregoing provisions of this clause 12, the
            Lessee shall not enter into any sub-lease which requires any change
            in the State of Registration without the prior written consent of
            the Lessor (such consent not to be unreasonably withheld or delayed)
            provided however that the Lessor may not withhold its consent if the
            proposed new State

                                       35
<PAGE>

            of Registration is a Permitted Country and the Lessee delivers to
            the Lessor, at the Lessee's cost, prior to the registration of the
            Aircraft in the proposed new State of Registration:

            (i)   a certificate of insurance signed by an independent insurance
                  broker to the effect that the Aircraft is, and after such
                  re-registration will continue to be, insured in accordance
                  with the requirements of clause 16 hereof;

            (ii)  a certificate signed by a duly authorised officer of the
                  Lessee stating that no Relevant Event exists as of the date of
                  such certificate and no such event will occur or exist upon or
                  resulting from such re-registration; and

            (iii) a favourable opinion of English counsel (which counsel and
                  opinion shall be reasonably satisfactory to the Lessor) that
                  the applicable Lessee Documents, including (if governed by
                  English law) any sub-lease in effect at the time of or entered
                  into in connection with such re-registration are and upon such
                  re-registration will continue to be legal, valid and binding
                  and enforceable according to their terms, except as such
                  enforceability may be limited by bankruptcy, insolvency,
                  reorganisation, moratorium, liquidation or similar laws
                  affecting the rights of creditors generally and except as
                  enforceability may be subject to general principles of equity,
                  whether asserted in proceedings in equity or at law; and

            (iv)  a favourable opinion of counsel (which counsel and opinion
                  shall be reasonably satisfactory to the Lessor) in the
                  proposed new State of Registration as to such matters relating
                  to such re-registration as may be reasonably requested by the
                  Lessor; and

            (v)   if such sub-lease shall be to an airline which is not a
                  recognised flag-carrying airline and if the Lessee itself
                  obtains the same, a power of attorney which will be
                  irrevocable and valid and enforceable in the proposed new
                  State of Registration (but only at a time when a Termination
                  Event has occurred and is continuing) which would permit the
                  Lessee and/or the Lessor to de-register the Aircraft from the
                  Aviation Authority and export the Aircraft from such State of
                  Registration and the Lessee agrees to use its reasonable
                  endeavours (having regard to all the commercial circumstances)
                  to obtain such a power of attorney provided however that,
                  subject to having made such reasonable endeavours, the Lessee
                  shall be under no liability or obligation should such a power
                  of attorney not be obtained.

                                       36
<PAGE>

13    Operations and Maintenance

13.1  The Lessee further undertakes with the Lessor that throughout the Lease
      Period it will have the technical and operational responsibility for the
      Aircraft and will at its own cost and expense:

      (a)   Certificates and Licences

            obtain and maintain in full force and effect all necessary
            certificates, licences, permits and authorisations required for the
            use and operation of the Aircraft, including, without limitation, an
            air operators certificate, an unrestricted certificate of
            airworthiness with respect to the Aircraft in the public transport
            category (passenger) issued by the Aviation Authority, and such
            certificates of maintenance, review and release to service as are
            required for the Aircraft to be used for the public transport of
            passengers;

      (b)   Operation and Use

            (i)   use or procure that the Aircraft is used, operated and
                  controlled in accordance with all applicable laws, ordinances,
                  rules, regulations, orders or requirements of the State of
                  Registration and in accordance with all certificates,
                  licences, permits, authorisations and registrations relating
                  to the Aircraft imposed by the Aviation Authority and so as
                  not to invalidate any manufacturer's warranties;

            (ii)  not use or procure that the Aircraft will not be used for any
                  purpose for which it is not designed or reasonably suited, or
                  outside the tolerances and limitations for which the Aircraft
                  was designed and will be operated in accordance with the
                  Manuals and Technical Records and in a manner permitted by the
                  Aviation Authority;

            (iii) not use or procure that the Aircraft will not be knowingly
                  used for any illegal purpose or in an illegal manner or for
                  any purpose or in any manner not fully covered by the
                  Insurances, or outside any geographical limit imposed by the
                  Insurances without first procuring the consent to such use
                  from the appropriate insurers and complying with such
                  requirements as to extra premium or otherwise as the insurers
                  may require or procuring alternative indemnities acceptable to
                  the Lessor;

      (c)   Maintenance

            ensure that the Aircraft is maintained, serviced, repaired and
            overhauled in accordance with the Approved Maintenance Programme so
            as to:

                                       37
<PAGE>

            (i)   keep the Aircraft in good repair, condition and appearance and
                  airworthy in all respects and generally in as good operating
                  condition as when delivered to the Lessee on the Delivery
                  Date, fair wear and tear excepted;

            (ii)  comply with all mandatory modifications and Alert Service
                  Bulletins which are due and applicable to the Aircraft and all
                  other Service Bulletins which are selected, without
                  discrimination, by the Lessee for incorporation in the
                  Lessee's fleet of Boeing 767-300ER aircraft; and

            (iii) comply with all applicable laws, ordinances, rules,
                  regulations, orders and requirements of the State of
                  Registration and ICAO;

      (d)   Replacement and Installation of Engines and Parts

            the Lessee, at its own cost and expense, shall promptly replace or
            cause to be replaced any Engine, or any Part, which may from time to
            time be incorporated in, installed on or attached to the Airframe or
            any Engine, and which may from time to time become worn out, lost,
            stolen, destroyed, seized, confiscated, damaged beyond repair or
            permanently rendered unfit for use for any reason whatsoever. In
            addition, the Lessee may, at its own cost and expense, remove or
            permit to be removed in the ordinary course of maintenance, service,
            repair, overhaul or testing, any Engine or any Part, whether or not
            worn out, lost, stolen, destroyed, seized, confiscated, damaged
            beyond repair or permanently rendered unfit for use, provided that
            the Lessee shall, at its own cost and expense replace or cause to be
            replaced such Engine or Parts as promptly as possible. Each
            Replacement Engine or Part shall be free and clear of all
            Encumbrances other than Permitted Liens and shall be (i) serviceable
            in accordance with the Approved Maintenance Programme and the
            regulations of the Aviation Authority, (ii) be an approved part for
            use on the Aircraft, and (iii) in as good operating condition as,
            and shall have a value and utility substantially equal to, the
            Engine or Part replaced assuming such replaced Engine or Part was
            then of the value and in the condition and repair required to be
            maintained by the terms hereof. Each Engine and Part at any time
            removed from the Airframe or (in the case of any Part) any Engine
            shall remain the property of the Lessor, no matter where located,
            until such time as such Engine or Part shall be replaced by an
            Engine or Part which has been incorporated in, installed on or
            attached to the Airframe or such Engine (as the case may be) and
            which meet the requirements for replacement Engines and Parts
            specified above. Immediately upon any replacement Engine and Part
            being incorporated in, installed on or attached to the Airframe or
            any Engine (as the case may be) as above the Lessee shall procure
            that, in accordance with the laws of the lex situs, (i) title to
            such replacement or substitute Engine or Part shall vest in the
            Lessor free and clear of all Encumbrances other than Permitted Liens
            and (ii) such replacement or

                                       38
<PAGE>

            substitute Engine or Part shall become subject to this Agreement and
            be deemed part of the Airframe or such Engine (as the case may be)
            for all purposes hereof to the same extent as the Engine or Part
            originally incorporated in, installed on or attached to the Airframe
            or such Engine (as the case may be). The Lessee shall, at the cost
            and expense of the Lessee, do such acts and things as the Lessor may
            reasonably require to ensure that title so vests in the Lessor. Upon
            such installation, title to the replaced or removed Engine or Part
            shall vest in the Lessee, free and clear of all Lessor's Liens and
            rights or claims of the Lessor. The Lessor shall, at the cost and
            expense of the Lessee, do such acts and things as the Lessee may
            reasonably require to ensure that title so vests in the Lessee;

      (e)   Removal of Engines and Parts

            subject to clause 13.2 and clause 13.3, ensure that no Engine on the
            Airframe or any Part installed in the Airframe or any Engine is at
            any time removed therefrom otherwise than during the course of
            maintaining, servicing, repairing, overhauling or testing the
            Airframe or such Engine, or making such modifications, changes or
            alterations to the Airframe or such Engine as are permitted under
            this Agreement, and then only if it is promptly reinstalled, or
            promptly replaced or substituted by an item complying with the
            provisions of clause 13.1(d) Provided that any Engine or Part (as
            the case may be) which is installed on the Airframe or any Engine by
            way of addition and not by way of replacement, substitution, renewal
            or mandatory improvement may be removed without the Lessee being
            obliged to comply with the foregoing provisions of this clause
            13.1(e), and upon such removal of such Part in such circumstances,
            title to such Part shall vest in the Lessee and provided further
            that after any such removal the Lessee shall restore the Aircraft to
            the condition the Aircraft would have been in had such removed
            Engine or Part (as the case may be) not been installed on the
            Aircraft;

      (f)   Non-installed Engines

            ensure that, save in accordance with clause 13.3, no Engine is
            installed on any other aircraft, and that any Engine not installed
            on the Airframe is properly and safely stored in accordance with the
            manufacturer's recommendations, and kept free from Encumbrances
            other than Permitted Liens and that appropriate insurance cover is
            effected in respect of any Engine or Parts belonging to the Lessor
            which are not installed on the Airframe or any Engine;

      (g)   Nameplates

            within fourteen (14) days of the Delivery Date affix and maintain a
            fireproof nameplate in a reasonably prominent position on the
            flightdeck

                                       39
<PAGE>

            or cockpit of the Aircraft stating that the Aircraft is the property
            of the Lessor and will ensure that the same is not covered or
            painted over; and

      (h)   Alterations

            subject to the provisions of clause 13.4, procure that no
            modification to or change or alteration in the Aircraft is made
            which will have the effect of reducing the value or airworthiness of
            the Aircraft except as (i) necessary for compliance with the
            provisions of this Agreement or (ii) required by the manufacturer of
            the Aircraft or (iii) required by the Aviation Authority or ICAO.

13.2  Temporary Installation of engines and Parts

      The Lessee and any Permitted Air Carrier shall be entitled to install any
      engine on the Airframe or any Part on the Airframe or any Engine by way of
      substitution or replacement or renewal or mandatory modification
      notwithstanding that such installation is not in accordance with clause
      13.1(d) if (a) there shall not have been available to the Lessee or, as
      the case may be, the Permitted Air Carrier at the time and in the place
      that such engine or Part was required to be installed on the Airframe or
      any Engine a substitute or replacement engine or Part complying with the
      requirements of clause 13.1(d), and (b) it would have resulted in an
      unreasonable disruption of the operation of the Aircraft and/or the
      business of the Lessee or, as the case may be, the Permitted Air Carrier
      to have grounded the Aircraft until such time as an engine or Part
      complying with the requirements of clause 13.1(d) became available for
      installation in the Airframe or any Engine, and (c) as soon as may be
      operationally and economically practicable after installation of the same
      on the Airframe or any Engine, and in any event on or prior to the date
      falling ninety (90) days after the date of installation of the same or, if
      earlier, prior to the date on which the Lessee re-delivers the Aircraft
      pursuant to clause 19 the Lessee or, as the case may be, the Permitted Air
      Carrier shall ensure that any such engine or Part not complying with the
      requirements of clause 13.1(d) is removed and replaced or substituted by
      an engine or Part complying with the requirements of clause 13.1(d).

13.3  Pooling and Installation of Parts and Engines on other aircraft

      (a)   Notwithstanding anything in this Agreement to the contrary, the
            Lessee may and may allow any Permitted Air Carrier (for such period
            as may be permitted pursuant to the relevant agreement or
            arrangement) to lease, let on hire or charter or otherwise part with
            possession of an Engine or any Part (on terms conferring no more
            than a contractual right in personam against the Lessee, or the
            relevant Permitted Air Carrier but not rights against such Engine or
            relevant Part) pursuant to pooling agreements or arrangements to
            which the Lessee or the relevant Permitted Air Carrier is a party
            provided that such pooling agreements or arrangements conform to
            normal interchange or pooling arrangements

                                       40
<PAGE>

            customary in the airline industry involving solvent and responsible
            scheduled commercial air carriers, or the manufacturer's or
            suppliers of the Engines or Parts, and which do not contemplate
            transfer of title to the pooled Engine or relevant Part.

      (b)   Notwithstanding anything in this Agreement to the contrary, the
            Lessee may and may allow any Permitted Air Carrier to:

            (i)   install any of the Engines on an aircraft owned by the Lessee
                  or the relevant Permitted Air Carrier (as the case may be) or
                  leased or hired to the Lessee or the relevant Permitted Air
                  Carrier, as the case may be, whereby the Lessee or the
                  relevant Permitted Air Carrier (as the case may be) has full
                  operational control of such aircraft or an aircraft purchased
                  by the Lessee or the relevant Permitted Air Carrier (as the
                  case may be) subject to a conditional sale agreement or
                  subject to a charge or charges covering such aircraft,
                  provided that the terms of any lease, conditional sale
                  agreement or charge or charges provide that such Engines will
                  remain subject to this Agreement free and clear of any rights
                  of any other lessors, mortgagees or persons other than
                  Permitted Liens; or

            (ii)  install any Part belonging to the Lessor on an aircraft owned
                  by the Lessee or the relevant Permitted Air Carrier (as the
                  case may be) leased or hired to the Lessee or any relevant
                  Permitted Air Carrier (as the case may be) on terms whereby
                  the Lessee or any relevant Permitted Air Carrier (as the case
                  may be) has full operational control of such aircraft or an
                  aircraft purchased by the Lessee or the relevant Permitted Air
                  Carrier (as the case may be) subject to a conditional sale
                  agreement or subject to a charge or charges covering such
                  aircraft, provided that the terms of any lease, conditional
                  sale agreement or charge or charges provide that such Parts
                  will remain subject to this Agreement free and clear of any
                  rights of any other lessors, mortgagees or persons other than
                  Permitted Liens.

13.4  Installation of Other Equipment

      Notwithstanding the provisions of clause 13.1(d), the Lessee may, or may
      permit any Permitted Air Carrier to, install audio visual entertainment,
      telephonic and other equipment in the Aircraft which does not comply with
      the requirements as to title thereto specified in clause 13.1(d) and
      remove such equipment so installed and the Lessee undertakes that upon
      installation of any such equipment it shall make, or procure that there is
      made, an entry in the Manuals and Technical Records to the effect that
      such equipment is then installed in the Aircraft and that upon termination
      of the Lease Period the Lessee shall if it wishes to do so or if it asked
      to do so by the Lessor at its own cost and expense, remove any part of or
      all of (as the Lessee shall in its absolute

                                       41
<PAGE>

      discretion determine) such equipment from the Aircraft and the Lessee
      shall after such removal restore the Aircraft to the same condition it was
      in immediately prior to any modification carried out in order to install
      such equipment. The Lessor shall not claim or acquire title to any such
      equipment other than equipment the Lessee chooses not to remove upon
      termination of the Lease Period and equipment purchased by the Lessor as
      contemplated by the remainder of this clause 13.4, and the rights of the
      owners therein shall not constitute a default under this Agreement. Upon
      the expiry of the Lease Period, the Lessor may offer to purchase any
      equipment referred to above at a price equal to the Lessee's actual cost
      (inclusive of evidenced design, labour and material costs) of such
      equipment, and the Lessee may accept or reject any such offer at its sole
      discretion. Any equipment referred to in the first sentence of this clause
      13.4 which is not removed by the Lessee or is purchased by the Lessor as
      contemplated above, prior to the return of the Aircraft to the Lessor at
      the end of the Lease Period, shall become the property of the Lessor,
      except for any such equipment which is leased by the Lessee and the owner
      of such equipment and the Lessor have agreed directly with each other that
      such equipment shall remain on the Aircraft.

14    Manuals and Technical Records

14.1  Throughout the Lease Period the Lessee shall ensure that there are kept
      accurate, complete and current records of all flights made by the
      Aircraft, and of all maintenance and repairs carried out to the Airframe
      and each Engine and Parts, and shall maintain all other records, logs and
      documents which are required to be maintained in respect of the Aircraft
      by the Aviation Authority, and shall allow the Lessor and/or its agents or
      representatives to examine such records at any reasonable time during
      normal business hours in the jurisdiction where such records are kept (or
      at any other time acceptable to both the Lessor and the Lessee) upon
      giving not less than ten (10) days written notice to the Lessee and
      provided no unreasonable interference or delay is caused to the Lessee's
      or any Permitted Air Carrier's operation, maintenance and use of the
      Aircraft. The costs of such examinations shall be paid by the Lessor.

14.2  The records, logs and documents so kept or maintained shall be kept and
      maintained in the English language and conform with the regulations from
      time to time in force of the Aviation Authority, and with the normal
      practices of the Lessee and shall disclose the whereabouts of all Engines
      and Parts not installed on the Airframe.

14.3  The records, logs and documents so kept or maintained shall be part of the
      Manuals and Technical Records and shall be the property of the Lessor and,
      at the end of the Lease Period, if the Aircraft is redelivered to the
      Lessor, the Lessee shall deliver the original Manuals and Technical
      Records to the Lessor, provided that the Lessee shall be entitled to take
      and retain copies thereof.

14.4  The Lessee shall (save as hereinafter provided) procure that all the
      Manuals and Technical Records are kept on the Aircraft or in its
      possession or in the

                                       42
<PAGE>

      possession of the relevant Permitted Air Carrier (save for any purpose
      specified in clause 12) and shall procure that no other person (other than
      a person entitled to have possession or control of the Aircraft under the
      terms of this Agreement) shall have possession of or control over the
      Manuals and Technical Records or any of them, except with the prior
      written consent of the Lessor (such consent not to be unreasonably
      withheld or delayed).

15    Title and Registration

15.1  The Lessee, at its sole cost and expense, shall use its reasonable
      endeavours to cause the Aircraft to be certified as to airworthiness by
      the Aviation Authority on a permanent basis in accordance with the laws of
      Norway or any Permitted Country (as the case may be) at all times during
      the Lease Period.

15.2  The Lessee, at its sole cost and expense, shall as soon as reasonably
      practicable after the Delivery Date and in any event no later than five
      (5) Banking Days following the Delivery Date cause the title of the Lessor
      to the Aircraft to be duly registered on a permanent basis and, to the
      extent permitted under the laws of Norway, at all times thereafter to
      remain duly registered in the Register of Aircraft in accordance with the
      laws of Norway, and, to the extent permitted under the laws of Norway,
      shall not register or allow the Aircraft to be registered in any other way
      or manner under the laws of Norway or any other country (provided that
      registration in accordance with the laws of Norway other than by way of
      registration of the title of the Lessor to the Aircraft shall not
      prejudice the Lessor's position as holder of title to the Aircraft),
      except in the event the Lessee either wishes to register the Aircraft in a
      different Permitted Country or sub-leases the Aircraft in any Permitted
      Country, in which event (provided that such registration will not
      prejudice the Lessor's position as holder of title to the Aircraft) the
      Lessee shall at its cost, to the extent permitted under the laws of such
      other Permitted Country, cause the title of the Lessor to the Aircraft to
      be duly registered or recorded in a way or manner similar to those
      described in this clause 15.2 under the laws of such Permitted Country,
      which registration or recordation, for the avoidance of doubt, shall
      extend only to the registration of the Lessor's interests as Owner of the
      Aircraft.

15.3  In the event that the Aircraft is returned to the Lessor pursuant to the
      terms of this Agreement, the Lessee shall if so requested by the Lessor,
      at the Lessee's own cost and expense, take all necessary steps to:

      (a)   remove the registration of the Aircraft from any jurisdiction in
            which the Aircraft may be registered at such time;

      (b)   obtain an export certificate of airworthiness for the Aircraft (if
            applicable) from the Aviation Authority; and

      (c)   assist the Lessor or its designee(s), at the Lessor's cost, in
            securing such new registration of the Aircraft as may be determined
            by the Lessor, which assistance shall include, without limitation,
            preparation or

                                       43
<PAGE>

            provision of documents necessary to be obtained from the Lessee in
            connection with such new registration.

16    Insurance

16.1  On or before Delivery and until the Aircraft has been returned to the
      Lessor pursuant to clause 19 or title has been transferred to the Lessee,
      the Lessee shall obtain, maintain and keep in full force and effect with
      Polygon Insurance Company Limited insurance with respect to the Aircraft
      complying with the requirements of this clause 16.

16.2  Until the Aircraft has been returned to the Lessor pursuant to clause 19
      or title has been transferred to the Lessee, the Lessee shall comply with
      all legal requirements as to the insurance of the Aircraft which may from
      time be imposed by the laws of the State of Registration.

16.3  The Lessee shall pay or shall procure the payment of the premiums (or
      instalments thereof) as required by the terms of the policies relating to
      the Insurances.

16.4  The Lessee shall not create or permit to exist any Encumbrance other than
      Permitted Liens over the Insurances, or its interest therein, save as
      expressly permitted by this Agreement.

16.5  (a)   The Lessee shall obtain and maintain:

            (i)   "All-Risks" hull insurance on the Aircraft including all
                  flights, taxiing and ground risks in such amount in Dollars as
                  is equal to the Agreed Value of the Aircraft as at the time
                  the insurance is placed or renewed. The deductible in respect
                  of such insurance shall not exceed $2,000,000.

            (ii)  "All-Risks" (including War and Allied Risks except when on the
                  ground or in transit other than by air) property insurance on
                  Engines, Parts, components or spares when not installed on the
                  Aircraft on an "Agreed Value" basis for their full replacement
                  value and including engine test and running risks. The
                  deductible in respect of such insurance shall not exceed
                  $1,000,000 each and every loss.

            (iii) "War Risks" hull insurance to the extent available as detailed
                  in the War, Hijacking and Other Perils Exclusion Article
                  AVN48B or any modification or substitution thereof for the
                  time being in force but excluding confiscation by the
                  governments of the Scandinavian Countries, in such amount in
                  Dollars as is equal to the Agreed Value of the Aircraft as at
                  the time the insurance is placed or renewed.

                                       44
<PAGE>

      (b)   The insurances required under clause 16.5(a) shall be provided on an
            agreed value basis, and the policies shall be endorsed to include
            paragraph 1 of AVN67A, with the Lessor, inter alia, named as a
            Contract Party in AVN67A.

      (c)   The original certificate of insurance issued by the relevant brokers
            shall confirm, in the event of separate insurances being arranged to
            cover the "All-Risks" hull insurance and the "War Risks" and related
            insurance, that the underwriters subscribing to such insurance have
            agreed in the terms of AVS 103 (or equivalent) that in the event of
            any dispute as to whether a claim is covered by the "All Risks" or
            "War Risks" policy, such claim be settled on a 50/50 claim funding
            basis.

16.6  (a)   The Lessee shall obtain and maintain, in a form which complies with
            the current market standard, aircraft third party, passenger,
            baggage, cargo, mail and airline general third party liability and
            products liability insurance coverage (including AV52) for a
            combined single limit (bodily injury or property damage) of
            $500,000,000 for any one accident.

      (b)   The policies evidencing the insurances required under clause 16.6(a)
            shall be endorsed to include paragraph 2 of AVN67A, with the Lessor,
            inter alia, named as a Contract Party in AVN67A.

16.7  (a)   The policies evidencing the insurances required under clause 16.5
            and clause 16.6 shall:

            (i)   specifically reference this Agreement;

            (ii)  provide for worldwide coverage (subject only to such
                  exceptions as may be customary and generally applicable in the
                  aviation insurance industry with respect to the geographical
                  scope of the hull, war and allied risks insurances for
                  aircraft of the same type as the Aircraft); and

            (iii) be endorsed to include paragraph 3 of AVN67A with the Lessor
                  (inter alia) named as a Contract Party in AVN67A.

16.8  The Lessor shall be entitled, after the expiry or termination of the Lease
      Period, to require the Lessee at the Lessee's expense to effect and to
      maintain insurance, if available, with respect to its liability under the
      indemnities set forth in clause 9.1(a) for such period (which shall not
      exceed two (2) years from the date of such expiry or termination) as the
      Lessor may reasonably require such insurance to provide for the Lessor to
      be named as additional insured thereunder to the extent of its interests
      under the said indemnities, and the obligation of the Lessee to effect the
      same to continue notwithstanding the Lessee ceasing to be the user or
      operator of the Aircraft and the Lessor ceasing to be the owner of the
      Aircraft.

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<PAGE>

16.9  The Lessor shall be entitled to take out and maintain, at the Lessor's
      cost, additional insurance relating to the Aircraft, provided that such
      insurance does not or may not prejudice any insurances required to be
      maintained under this Agreement or recovery thereunder.

16.10 Any reference in this clause 16 to clauses from AVN67A shall be deemed to
      have such clauses incorporated herein by reference and become a part of
      this Agreement. Such clause shall be effective notwithstanding any changes
      made to AVN67A or in the event AVN67A becomes obsolete or superseded by
      any successor endorsement provisions, unless the Lessor and the Lessee
      shall have entered into a written agreement amending this clause 16 to
      provide for appropriate revisions regarding such successor endorsement
      provisions.

17    Loss and Damage

17.1  Throughout the Lease Period the Lessee shall bear the full risk of any
      loss, destruction, hi-jacking, theft, condemnation, confiscation, seizure
      or requisition of or damage to the Aircraft and of any other occurrence of
      whatever kind which shall deprive the Lessee or the operator of the
      Aircraft for the time being of the use, possession or enjoyment thereof.

17.2  (a)   The Lessee shall give the Lessor immediate (and, in any event,
            within seven (7) days after such occurrence) notice in writing of
            any such occurrence as is referred to in clause 17.1 (other than
            repairable damage the likely cost of rectification of which will not
            exceed in aggregate Two million Dollars ($2,000,000), or in relation
            to any Engine One million Dollars ($1,000,000)) or any other
            occurrence of whatever kind which shall deprive the Lessee or the
            operator of the Aircraft for the time being of the use, possession
            or enjoyment thereof.

      (b)   The Lessee shall supply to the Lessor all necessary information,
            documentation and assistance which may reasonably be required by the
            Lessor in connection with making any claim under the Insurances.

17.3  (a)   If the Aircraft shall become a Total Loss during the Lease Period,
            the Lessee shall pay, or procure that the insurers pay, to the
            Lessor being loss payee under the Insurances on the date insurance
            proceeds are paid in full but in any case within ninety (90) days
            (or such longer period as may be agreed) of the date on which the
            Total Loss occurred, the Agreed Value as at the date of payment
            thereof together with all amounts of Rent and any other amounts then
            due and payable under the Lessee Documents. If the Lessor receives
            any monies paid pursuant to the Insurances in excess of the Agreed
            Value it shall immediately pay such excess to the Lessee.

      (b)   For the purposes of this Agreement a Total Loss shall be deemed to
            have occurred:

                                       46
<PAGE>

            (i)   in the case of an actual total loss, at noon (London time) on
                  the actual date the Aircraft was lost or, if such date is not
                  known, noon (London time) on the day on which the Aircraft was
                  last heard of;

            (ii)  in the case of any of the events described in sub-paragraph
                  (a) of the definition of Total Loss (other than an actual
                  total loss), upon the date that notice claiming the loss of
                  the Aircraft is given to the relevant insurers, unless the
                  insurers do not forthwith admit such claim, when such Total
                  Loss shall be deemed to have occurred at the date and time at
                  which either a total loss is subsequently admitted by the
                  insurers or a competent court or arbitration tribunal issues a
                  judgment to the effect that a total loss has occurred;

            (iii) in the case of any of the events described in sub-paragraph
                  (b) of the definition of Total Loss, upon the date of
                  occurrence of such destruction, damage or cessation;

            (iv)  in the case of Compulsory Acquisition, upon the date upon
                  which the relevant requisition of title or other compulsory
                  acquisition, requisition, appropriation, expropriation,
                  deprivation or confiscation occurs; and

            (v)   in the case of any of the events described in sub-paragraph
                  (d) of the definition of Total Loss, upon the expiry of the
                  period of ninety (90) days referred to in such sub-paragraph
                  (d) after the date upon which the relevant hijacking, theft,
                  condemnation, confiscation, capture, detention, seizure or
                  requisition for use or hire occurred.

17.4  SAS BV shall continue to pay Rent on the days and in the amounts required
      under this Agreement notwithstanding any Total Loss Provided Always that
      no further instalments of Rent shall become due after the date on which
      all sums due under clause 17.3(a) shall have been paid in full, and on
      such date the Lease Period shall terminate and the Lessor shall assign to
      the Lessee or its nominee all claims against third parties relating to the
      Aircraft arising from the Total Loss.

17.5  In the event of repairable damage to the Aircraft or any of the Engines,
      or an Engine Loss all insurance moneys which may be payable by the
      insurers of the Aircraft shall be paid to the Lessee who shall be obliged
      to ensure that such damage shall (if it has not already) be made good or
      repaired or put in hand for repair or, in the case of an Engine Loss, the
      Lessee shall utilise the relevant insurance moneys in payment of the
      purchase price of a replacement Engine Provided always that if a Relevant
      Event has occurred and is continuing, the Lessor shall be entitled, as
      loss payee under the Insurances, to receive any insurance moneys and such
      insurance moneys may be applied in or towards

                                       47
<PAGE>

      settlement of any amounts owing by the Lessee or SAS BV to the Lessor
      under any Lessee Document.

17.6  In the event of repairable damage to the Aircraft or any of the Engines,
      or an Engine Loss, and if the insurance moneys paid in respect thereof are
      insufficient to pay the cost or estimated cost of making good or repairing
      such damage or the cost of purchasing a replacement Engine, the Lessee
      will pay the deficiency.

17.7  Replacement Engine(s)

      Upon the occurrence of an Engine Loss under circumstances in which there
      has not also occurred a Total Loss, the Lessee shall give the Lessor
      written notice promptly after becoming aware thereof and shall, within
      sixty (60) days after the occurrence of such Engine Loss, convey or cause
      to be conveyed to the Lessor, as replacement for such Engine, title, free
      and clear of all Encumbrances other than Permitted Liens, to a Replacement
      Engine. Prior to or at the time of any such conveyance, the Lessee will
      (a) furnish the Lessor with a bill of sale with respect to such
      Replacement Engine and (b) take such other actions and furnish such other
      certificates and documents as the Lessor may reasonably require in order
      to ensure that the Replacement Engine is duly and properly conveyed to the
      Lessor and leased to the Lessee to the same extent as the Engine replaced
      thereby and leased hereunder. For all purposes hereof such engine shall,
      after such transfer, be deemed part of the property leased hereunder and
      shall be deemed an "Engine" as defined herein. Upon full compliance by the
      Lessee with the terms of this clause 17.7, the lease hereunder of the
      replaced Engine with respect to which such Engine Loss occurred shall
      cease and title to such Engine shall thereupon vest in the Lessee or the
      Lessee's nominee free and clear of all rights of the Lessor and any
      Lessor's Liens. No Engine Loss with respect to any Engine which is
      replaced in accordance with the provisions of this clause 17.7 shall
      result in any increase or decrease of Rent or the Agreed Value.

18    Requisition

18.1  If the Aircraft is requisitioned for hire by any governmental or other
      competent authority during the Lease Period then, unless and until the
      Aircraft becomes a Total Loss following such requisition and the Lessee
      shall have made payment of all sums due pursuant to clause 17.3(a), the
      lease of the Aircraft to the Lessee under this Agreement shall continue in
      full force and effect (subject always to the provisions of clause 21) for
      the remainder of the Lease Term and the Lessee and, subject to clause 7.3,
      SAS BV shall remain fully responsible for the due compliance with all
      their respective obligations under this Agreement other than such
      obligations which the Lessee is unable to comply with solely by virtue of
      such requisition.

18.2  If the Lessee and SAS BV shall duly comply with all their respective
      obligations under this Agreement, save as mentioned in clause 18.1, the
      Lessee shall, during the Lease Period, be entitled to all requisition hire
      paid to the Lessor or to the Lessee on account of such requisition.

                                       48
<PAGE>

18.3  The Lessee shall, as soon as practicable after the end of any requisition
      for hire, cause the Aircraft to be put into the condition required by this
      Agreement, and where that requisition shall end after the expiry or
      termination of the Lease Term, the Lessee shall, as soon as practicable,
      cause the Aircraft to be put into the redelivery condition required by
      clause 19, allowance being made for fair wear and tear in respect of the
      period from the expiry or termination of the Lease Term.

18.4  The Lessee shall be entitled to all compensation payable in respect of any
      change in the structure, state or condition of the Aircraft arising during
      the period of requisition for hire. The Lessee shall apply such
      compensation in or towards the cost of complying with its obligation under
      clause 18.3, provided always that if a Relevant Event has occurred and is
      continuing, the Lessor shall be entitled to receive and apply such
      compensation in or towards settlement of any amounts owing by the Lessee
      under any Lessee Document.

18.5  Should the Aircraft be under requisition for hire at the end of the Lease
      Term the lease of the Aircraft under this Agreement shall be extended to
      the earlier of the date (the "Extended Date") falling ninety (90) days
      after the date of expiration of the Lease Term and the date the Aircraft
      is released from such requisition for hire, and all the provisions of this
      Agreement shall remain in full force and effect, save that the rate of
      Rent payable by SAS BV during such extension shall be equal to the rate of
      Rent payable by SAS BV under this Agreement immediately prior to the
      expiration of the Lease Term. If the Aircraft remains under requisition
      for hire at the Extended Date the Aircraft shall be deemed to be a Total
      Loss, and the provisions of this Agreement relating to a Total Loss shall
      apply. Upon receipt by the Lessor of the Agreed Value and all other
      amounts due and payable to the Lessor under the Lessee Documents in the
      circumstances contemplated in this clause 18.5, the Lessor shall transfer
      to the Lessee such title to the Aircraft as the Lessor received pursuant
      to the Aircraft Purchase Agreement, free of all Lessor's Liens, and the
      Lessor shall, at the Lessee's cost, do such acts and things as the Lessee
      may reasonably require to ensure that title so vests in the Lessee.

19    Redelivery

19.1  At the end of the Lease Period (other than following a Total Loss) the
      Lessee at its own expense shall redeliver the Aircraft to the Lessor at
      the Redelivery Location, and the Lessee shall, at the Lessee's cost,
      de-register the Aircraft from the Aviation Authority and procure the issue
      of an export certificate of airworthiness in respect of the Aircraft. All
      other costs in connection with the export of the Aircraft from the State
      of Registration and any re-registration of the Aircraft shall be borne by
      the Lessor, provided that the Lessee shall, at the Lessor's cost, provide
      such assistance as the Lessor may reasonable require.

19.2  On redelivery:

                                       49
<PAGE>

      (a)   the condition of the Aircraft and the Manuals and Technical Records
            shall be such as to demonstrate that the Lessee has in all respects
            complied with the obligations on its part contained in clause 13;

      (b)   the Aircraft shall be in as good operating condition as when
            delivered under this Agreement to the Lessee, ordinary wear and tear
            excepted, and free of corrosion unless such corrosion is within
            permitted limits as defined in the manufacturer's structural repair
            manual;

      (c)   the Aircraft (i) shall have completed, immediately prior to
            redelivery, the next scheduled "C" check (or its equivalent)
            including all tasks required for a full "C" check, and which should
            include the next scheduled "SC" check (or its equivalent), provided
            however that such "SC" check (or its equivalent) is not an "S4C"
            check, and shall be at least equivalent in workscope to the systems,
            zonal and structures tasks for the respective "C" and "SC" checks in
            the Boeing Maintenance Planning Data Document ("MPD") under the
            Lessee's Approved Maintenance Programme and (ii) at redelivery shall
            have at least half time remaining until its next most comprehensive
            basic overhaul ("S4C" check) under the Approved Maintenance
            Programme; provided, however, that the Lessee may comply with clause
            (ii) above if (A) the Airframe has less than half time but more than
            quarter time, remaining until such next basic overhaul and (B) the
            Lessee pays to the Lessor the amount equal to (i) the average of the
            quotations of the cost of performing an "S4C" check on a Boeing
            767-300ER aircraft of similar age as the Aircraft obtained from
            three third party providers of "S4C" checks of Boeing 767-300ER
            aircraft, one such third party provider being chosen by the Lessor,
            one being chosen by the Lessee and the third being acceptable to
            each of the Lessor and the Lessee (each acting reasonably), divided
            by (ii) the number of Flight Hours which a Boeing 767-300ER aircraft
            is scheduled under the Lessee's Approved Maintenance Programme to
            operate between one "S4C" check and the immediately following "S4C"
            check, for each Flight Hour less than half time remaining to such
            next basic overhaul;

      (d)   with respect to the Aircraft, the nose and the main landing gears
            (the "landing gear") shall be half time (currently 9,000 Cycles)
            from overhaul. In no circumstance will landing gears be returned
            with less than quarter time remaining provided, however, that the
            Lessee may comply with this clause 19.1(d) if the landing gear has
            less than half time (currently 9,000 Cycles) remaining from the
            previous overhaul until the next overhaul the Lessee by paying to
            the Lessor $6.25 for each Cycle less than half time (currently 9,000
            Cycles) remaining to such next overhaul;

      (e)   the APU shall be fresh from overhaul;

                                       50
<PAGE>

      (f)   each Engine will be returned "half time" (which, for the purpose of
            this clause 19.2(f) shall mean the mean time of the Lessee's
            operated PW4060 engines between scheduled shop level repairs under
            the Lessee's Approved Maintenance Programme). In no circumstance
            will any Engine be returned with less than quarter time remaining
            (for the purpose of this clause 19.2(f) "quarter time" shall mean
            one half of half time). Each Engine will be within the
            manufacturer's EGT margins and all other parameters in accordance
            with the performance test in the manufacturer's manual or other
            comparable test as agreed to by the Lessor using temperature
            corrected charts, provided however that such tests shall be made
            on-wing using on-wing limitations. Each Engine's trend analysis will
            not have exhibited any negative deterioration. If an Engine has less
            than half time but more than quarter time, remaining until the next
            scheduled removal the Lessee shall pay to the Lessor One hundred and
            twenty five Dollars ($125) (adjusted for inflation between the date
            of this Agreement and the time of any such payment in accordance
            with the producer price index maintained by Denmark) for each Flight
            Hour less than half time remaining to the next scheduled removal in
            respect of such Engine;

      (g)   there shall be a current Certificate of Airworthiness and, if
            required by the Lessor, an Export Certificate of Airworthiness
            issued in respect of the Aircraft by the Aviation Authority in the
            public transport category (passenger) and such current certificates
            of maintenance, review and release to service issued as shall allow
            the Aircraft to be used for the public transport of passengers or
            cargo under the regulations of the Aviation Authority;

      (h)   all airworthiness directives and mandatory orders affecting the
            Aircraft issued by the Aviation Authority which require compliance
            prior to the date falling six (6) months (or the equivalent number
            of Flight Hours and Cycles based on the previous twelve (12) months
            of operation) after the last day of the Lease Period shall have been
            complied with, provided that (i) appropriate modification kits are
            available from the manufacturer concerned on or prior to the last
            day of the Lease Period, and (ii) such airworthiness directive or
            mandatory order is issued by the Aviation Authority not later than
            thirty (30) days prior to the re-delivery, provided that, for the
            purpose of this paragraph (h), any waiver, deviation or time
            extension obtained by the Lessee (or any Permitted Air Carrier) from
            the Aviation Authority and/or any other Government Entity shall be
            disregarded;

      (i)   the Aircraft shall be free and clear of all Encumbrances other than
            Lessor's Liens;

      (j)   the livery, insignia and markings of the Lessee (or any Permitted
            Air Carrier) shall have been removed from the Aircraft which shall
            be repainted, using the same quality of paint as the Lessee uses on
            other

                                       51
<PAGE>

            Boeing 767-300ER aircraft in its fleet, at the Lessee's cost in the
            same colour as the surrounding area and in a workmanlike manner to
            produce a uniform appearance and the Lessee shall prepare the
            Aircraft for such repainting by restoring aerodynamic sealer to any
            area of stripped paint and wing, and horizontal stabilizer surfaces
            that are painted shall be touched-up as required wherever paint has
            peeled away or is otherwise worn out or missing, including control
            surfaces not requiring balancing due to painting;

      (k)   the Aircraft exterior shall be washed, the interior shall be clean
            by international commercial airline standards, the cockpit
            instrument panels shall be repainted as required if worn beyond
            normal wear and tear and placards shall be replaced as required;

      (l)   all equipment, parts, components, accessories and loose equipment
            shall be functioning in accordance with its intended use;

      (m)   the Lessee shall have strictly adhered to the Boeing Corrosion
            Prevention and Control Programme ("CPCP"), or in the event that
            Boeing has not established a CPCP for the Boeing 767 aircraft, then
            the Lessee shall have strictly adhered to corrosion prevention and
            treatment programme in accordance with the Approved Maintenance
            Programme;

      (n)   the Aircraft, except as otherwise provided in this Agreement or as
            consented to by the Lessor, shall be in the same configuration
            (including, but not limited to, interior seating configuration, the
            location of galleys and lavatories) as when the Aircraft was
            originally delivered to the Lessee hereunder;

      (o)   neither the Aircraft nor any Engine shall have any open, deferred or
            placarded maintenance items or watch items, nor shall they have any
            time extensions, and the Aircraft and Engines shall comply with the
            operation specifications of the Lessee without waiver or exceptions;
            and

      (p)   all repairs accomplished during the Lease Term of a temporary or
            interim nature, including repairs using blind fasteners and those
            requiring repetitive inspections or future upgrading, shall be
            upgraded to a permanent repair and all external doublers (scab
            patches) shall, if more than one doubler is located on adjacent skin
            panels, be replaced with flush repairs (unless such doubler is due
            to a service bulletin accomplishment), all in accordance with the
            applicable manufacturer's maintenance manual, structural repair
            manual, or other Aviation Authority approved data.

19.3  Immediately prior to re-delivery of the Aircraft, the Lessee shall, if the
      Lessor so requests in writing, make the Aircraft and the Manuals and
      Technical Records available to the Lessor for inspection during normal
      business hours in the jurisdiction in which the Manuals and Technical
      Records are located in order

                                       52
<PAGE>

      to verify that the condition of the Aircraft complies with the provisions
      hereof. The period allowed for such inspection shall have such duration as
      to permit the conduct by the Lessor of the following:

      (a)   inspection of the Manuals and Technical Records;

      (b)   inspection of the Aircraft, Engines and Parts and the performance of
            a full cold and hot section borescope and isotope inspection of the
            Engines (the borescope inspections shall be performed by a
            representative of the Lessor and at the expense of the Lessor in the
            presence of a representative of the Lessee as observer). Any
            additional Engine checks and tests including, without limitation,
            engine power checks shall be performed at the cost of the Lessee;

      (c)   the opening or removal of panels as reasonably required by the
            Lessor, including access to all compartments and bays that are
            accessible through access doors and all other compartments and bays
            that are opened during the "C" Check (or its equivalent), provided
            however that the Lessor agrees that the inspections referred to in
            this paragraph (c) shall be conducted during the "C" Check (or its
            equivalent) which is to be performed by the Lessee pursuant to
            clause 19.2(c) if (i) the Lessee shall have given the Lessor not
            less than ten (10) days advance notice of the time and location for
            the performance of such "C" Check (or its equivalent), as the case
            may be, and (ii) the Lessor shall be given the opportunity during
            such "C" Check (or its equivalent) to conduct all activities
            necessary to verify that the Aircraft complies with the requirements
            of this clause 19.2; and

      (d)   if requested by the Lessor, and at the Lessee's expense, a two (2)
            hour test flight by the Lessee with a maximum of two (2)
            representatives of the Lessor as observer on board, who will
            determine, in co-operation with the flight crew of the Aircraft,
            which systems will be operated. The Lessee shall be responsible for
            all expenses associated with such flight test and the Lessee shall
            arrange the necessary crews and fuel. All discrepancies found during
            the flight test which are determined not to have been in compliance
            with the limits set out in the Lessee's Aviation Authority approved
            maintenance manual shall be corrected at the Lessee's expense.

19.4  If on redelivery the Aircraft (including the Manuals and Technical
      Records) shall not be in the condition required by clause 19.2 as shall be
      determined during the inspections and the test flight described in clause
      19.3, the Lessor shall be entitled to require the Lessee at the Lessee's
      expense to rectify any defects or deficiencies in the Aircraft when it is
      redelivered, and the Lessee shall promptly (in any event, no later than
      thirty (30) days after being requested to do so) comply with any such
      requirement. To the extent that such rectification extends beyond the
      Lease Term, the Lessor may after consultation and with the agreement of
      the Lessee (a) remedy such defects and deficiencies

                                       53
<PAGE>

      and recover on demand from the Lessee the costs so incurred, together with
      interest at the Relevant Rate of Interest from the date of expenditure by
      the Lessor of the relevant cost until the date of recovery thereof from
      the Lessee (both before and after any relevant judgment), or (b) continue
      the Lease Period on a day-to-day basis until such non-compliance is
      rectified by the Lessee with Rent being payable by SAS BV on a day-to-day
      basis at the rate at which Rent was payable at the date on which
      redelivery would otherwise have occurred.

19.5  Upon redelivery of the Aircraft, if requested by the Lessor by not less
      than thirty (30) days prior written notice, the Lessee agrees to provide
      at the Lessee's cost storage, storage maintenance and storage facilities
      for the Aircraft at a storage location selected by the Lessee for a period
      of up to ninety (90) days or such longer period as may be agreed between
      the Lessor and the Lessee. During any such period of storage the Aircraft
      shall be at the risk of the Lessor and the Lessor shall be responsible for
      the insurance of the Aircraft although the Lessee will, if requested to do
      so, co-operate with the Lessor in procuring insurance for the Aircraft
      during such period satisfactory to the Lessor. The Lessor shall be
      responsible for the cost of correcting any discrepancies discovered during
      such storage and the cost of complying with any airworthiness directive
      issued during the period of such storage and the cost of any other work
      requested by the Lessor which the Lessee agrees to perform.

19.6  Any other matters relating to the re-delivery of the Aircraft shall be
      resolved between the Lessee and the Lessor following discussions between
      them provided that any additional requirements (including, without
      limitation, any redelivery/ferry flight required by the Lessor once the
      Aircraft has been redelivered at the Delivery Location (excluding any
      flight to a storage location)) shall be for the cost of the Lessor.

19.7  In the event of any dispute between the Lessor and the Lessee regarding
      any matter contained within this clause 19 the dispute shall be resolved
      by three experienced and internationally recognised independent aircraft
      technical consultants, one of which shall be chosen by the Lessor, one by
      the Lessee and one by the mutual consent of the former two technical
      consultants (provided that, if either party shall fail to appoint
      technical consultants within thirty (30) days after a written request to
      do so by the other party then the second technical consultant shall be
      chosen by the technical consultant chosen by the other party) who shall
      inspect the Aircraft at the Redelivery Location (or such other location at
      which the Aircraft may be situated at the relevant time) with a view to
      preparing a report to be delivered to each of the Lessee and the Lessor at
      the same time within five (5) Banking days following the completion of
      such inspection and setting out the findings and conclusions of the said
      aircraft technical consultants regarding the matter in dispute and
      containing an opinion as to which party is liable and in what amount such
      party is liable to the other party. Each party to this Agreement agrees to
      be bound by the findings in such report. The costs of obtaining such
      report and the related inspection shall be borne by the Lessee if the
      aircraft technical consultants determine that the Aircraft is not in the
      redelivery condition required by this clause 19 but if the

                                       54
<PAGE>

      Aircraft is in the condition required the Lessor shall be responsible for
      such costs.

19.8  For the purpose of determining whether or not the Aircraft is being
      tendered for re-delivery in a condition which complies or fails to comply
      with the requirements of this clause 19 the parties agree that the
      Lessee's Approved Maintenance Programme shall be used to establish any
      benchmark tests by reference to which the state and condition of the
      Aircraft should be ascertained by the independent aircraft technical
      consultants pursuant to clause 19.7.

19.9  At or upon the return of the Aircraft pursuant to clause 19.1, the Lessee
      shall deliver to the Lessor, at no cost to the Lessor, all service
      bulletin kits furnished without charge by a manufacturer for installation
      on the Aircraft which have not been installed together with appropriate
      instructions for installation provided with such kits. In the event such
      service bulletin or modifications kits were purchased or manufactured by
      the Lessee and have not yet been installed by the Lessee, then the Lessee
      shall provide, and the Lessor shall have the option to purchase, such kits
      at the Lessor's actual cost for a period of one hundred and eighty (180)
      days after re-delivery of the Aircraft, subject to availability.

19.10 The Lessee agrees to sell to the Lessor, within ninety (90) days following
      receipt by the Lessee of written notice from the Lessor given on or prior
      to the last day of the Lease Period, up to three ship-sets of galley
      inserts and/or cargo containers suitable for use on the Aircraft, and the
      Lessor agrees that the price of such galley inserts and/or cargo
      containers payable by the Lessor shall be the actual cost of the same to
      the Lessee, plus all Taxes levied or imposed on or in connection with such
      sale.

20    Termination Events

20.1  Each of the following events or circumstances shall constitute a
      Termination Event:

      (a)   SAS BV fails to make any payment of Rent or other payment referred
            to in clause 7.3 payable by it under this Agreement within two (2)
            Banking Days or the Lessee shall fail to make payment of any other
            amount due and payable by the Lessee under this Agreement or any
            other Lessee Document, within seven (7) Banking Days, in either case
            (unless the Lessor is prohibited from giving any notice by
            applicable law) after written notice of non-payment has been
            received by the Lessee; or

      (b)   the Insurances are not obtained and maintained in full force and
            effect in accordance with the provisions of clause 16 provided that,
            at any time the Aircraft is under requisition for hire, any
            invalidation of the Insurances resulting from such requisition shall
            not constitute a Termination Event if, for so long as, a Government
            Entity has issued indemnities in respect of the Aircraft
            satisfactory to the Lessor; or

                                       55
<PAGE>

      (c)   the Lessee commits any breach of or omits to observe any of the
            obligations or undertakings expressed to be assumed by it under any
            Lessee Document (other than those referred to in clauses 20.1(a)
            and (b) above) which failure could in the reasonable opinion of the
            Lessor materially and adversely affect the rights or interests of
            the Lessor hereunder or in any other Lessee Document or in the
            Aircraft and, in respect of any such breach or omission which in the
            reasonable opinion of the Lessor is capable of remedy, such action
            as the Lessor may reasonably require shall not have been taken
            within thirty (30) days of the Lessor notifying the Lessee in
            writing of such default and of such required action unless the
            failure has been waived or excused by the Lessor, provided, however,
            that if the Lessee shall have undertaken to cure any such failure
            relating to maintenance, service, repair or overhaul and,
            notwithstanding the reasonable diligence of the Lessee in attempting
            to cure such failure, such failure is not cured within the said
            thirty (30) day period but is curable with further due diligence
            within the next sixty (60) days, there shall exist no Termination
            Event so long as the Lessee is proceeding with due diligence to cure
            such failure and provided that such failure is cured within such
            additional sixty (60) day period and provided further that there
            exists no likelihood of the sale, forfeiture or loss of the Aircraft
            or any Engine or Part thereof; or

      (d)   any representation or warranty made or deemed to be made or repeated
            by the Lessee or SAS BV in or pursuant to this Agreement is or
            proves to have been incorrect and such incorrectness is likely to
            have a material adverse effect on the ability of the Lessee or SAS
            BV to perform its obligations under this Agreement or could
            materially and adversely affect the rights, interest and position of
            the Lessor in the Aircraft and the Lessee or SAS BV (as applicable)
            is unable to remedy the incorrect representation or warranty within
            thirty (30) days of the Lessor notifying the Lessee and SAS BV in
            writing of such incorrectness and specifying the action to be taken
            by the Lessee or SAS BV (as applicable) to remedy such
            incorrectness; or

      (e)   the Lessee or SAS BV suspends payment of its debts as they fall due
            or becomes insolvent or unable to pay its debts or admits inability
            to pay its debts as they fall due or proposes or enters into any
            composition or other arrangement for the benefit of its creditors
            generally or any class of creditors or proceedings are commenced in
            relation to the Lessee or SAS BV under any law, regulation or
            procedure relating to reconstruction or readjustment of debts under
            any jurisdiction or with any Government Entity; or

      (f)   the Lessee or SAS BV takes any action or any legal proceedings are
            started in any jurisdiction or with any Government Entity for (i)
            the Lessee or SAS BV to be adjudicated or found bankrupt or
            insolvent, (ii) the winding-up or dissolution of the Lessee or SAS
            BV (other than in respect of any amalgamation or reorganisation not
            arising out of

                                       56
<PAGE>

            insolvency), (iii) the appointment of a liquidator, trustee,
            receiver, or similar officer of the Lessee or SAS BV of the whole or
            any part of its undertaking, assets, rights or revenues, or (iv) the
            judicial protection of the Lessee or SAS BV from its creditors (not,
            in any such case, being action or legal proceedings that the Lessee
            or, as the case may be, SAS BV can demonstrate are frivolous,
            vexatious or an abuse of the process of the court or which the
            Lessee or, as the case may be, SAS BV discharges within thirty (30)
            days of the Lessor becoming aware of the same or which the Lessee
            or, as the case may be, SAS BV is contesting in good faith and by
            appropriate proceedings); or

      (g)   save where the relevant circumstance constitutes a Total Loss, the
            Aircraft is arrested, confiscated, seized, taken in execution,
            impounded, forfeited or detained in exercise or purported exercise
            of any possessory lien or other claim and the Lessee fails to
            procure the release of the Aircraft within thirty (30) days (except
            as a consequence of any of (i) the existence of a Lessor's Lien, or
            (ii) a breach by the Lessor of the provisions of clause 6.1 or
            clause 6.2); or

      (h)   the registration of the Aircraft in accordance with the provisions
            of clause 15.2 is cancelled otherwise than (i) in connection with
            the re-registration of the Aircraft upon the commencement or
            termination of a sub-lease of the Aircraft permitted under the
            provisions of clause 12.2(c), or (ii) as a result of the occurrence
            of a Total Loss or (iii) as a result of any act or omission of the
            Lessor not arising out of a breach by the Lessee of its obligations
            under this Agreement or any other Lessee Document or at the request
            of the Lessee; or

      (i)   the validity or enforceability of any of the Lessee Documents shall
            at any time and for any reason be contested by any party thereto
            (other than the Lessor), or if any such party shall deny that it has
            any, or any further, liability thereunder or shall otherwise
            repudiate any of the Lessee Documents.

21    Lessor's Rights Following a Termination Event

21.1  At any time after the occurrence of any Termination Event (and provided
      that the same is continuing) the Lessor may, by notice (except in the case
      where any such notice is prohibited by law) to the Lessee:

      (a)   proceed by appropriate court action to enforce performance by the
            Lessee and/or SAS BV of the applicable covenants and provisions of
            this Agreement or to recover damages for the breach thereof; and/or

      (b)   terminate the Lease Period with respect to the Aircraft (including,
            without limitation, the termination of any sub-lease) on the
            termination date specified in such notice and retake possession of
            the Aircraft, and the Lessee agrees that the Lessor may for this
            purpose enter upon any

                                       57
<PAGE>

            premises where the Aircraft or any part thereof may be located, and
            the Lessee or (in the case of amounts for which SAS BV is liable in
            accordance with clause 7.3) SAS BV shall pay to the Lessor forthwith
            upon such termination such sum as shall equal the aggregate of:

            (i)   all amounts (including Rent) due under the Lessee Documents as
                  of the date of termination of the Lease Period as shall be
                  payable and remain outstanding; and

            (ii)  all losses incurred by the Lessor in connection with such
                  termination including, without prejudice to the generality of
                  the foregoing, all costs and expenses so incurred in
                  recovering possession of the Aircraft, in moving the Aircraft
                  to the Redelivery Location and in carrying out any works or
                  modifications required to bring the Aircraft up to the
                  condition specified in clause 19.2.

21.2  If the Lessee fails to comply with any of its obligations under any Lessee
      Document the Lessor may upon giving the Lessee written notice of its
      intention to do so, without being in any way obliged so to do, or
      responsible for so doing, and without prejudice to the ability of the
      Lessor to treat that non-compliance as a Termination Event, effect
      compliance on the Lessee's behalf, and if the Lessor incurs any
      expenditure in effecting such compliance the Lessor shall be entitled
      (without prejudice to clause 21.1) to recover such expenditure from the
      Lessee together with interest thereon at the Relevant Rate of Interest
      from the date on which such expenditure is incurred by the Lessor until
      the date of reimbursement thereof by the Lessee (both before and after any
      relevant judgment).

21.3  The rights and remedies of the Lessor provided in this Agreement are
      cumulative and are not exclusive of any rights and remedies provided by
      law.

22    Notices

22.1  Every notice, request, demand or other communication under this Agreement
      shall be in writing delivered personally or by first class prepaid letter
      (airmail if available) or facsimile transmission addressed as follows:

      (a)   be sent:

            (i)   to the Lessor to:-

                  CIT Leasing (Bermuda), Ltd.
                  Clarendon House
                  2 Church Street
                  Hamilton
                  Bermuda

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<PAGE>

                  Fax:        (1) 809-292-4720
                  (Attention: The Secretary)

                  with a copy to:-

                  The CIT Group/Equipment Financing, Inc.
                  1211 Avenue of the Americas
                  New York
                  N.Y. 10036

                  Phone:      (1) 212-536-9490
                  Fax:        (1) 212-536-1388
                  Attention:  General Counsel

            (ii)  to the Lessee to:-

                  Scandinavian Airlines System,
                  SAS Finance (Dept. STOUY),
                  Frosundaviks Alle 1,
                  S-161 87 Stockholm,
                  Sweden

                  Fax:        46 8 85 58 76
                  Attention:  SAS Finance

            (iii) to SAS BV to:-

                  Regentlaan 45
                  1000 Brussels
                  Belgium

                  Fax:        322 514 5714
                  Attention   Managing Director

                  with a copy to the Lessee

      or to such other address or facsimile number as is notified by one party
      to the other under this Agreement. Save as otherwise expressly provided in
      this Agreement, a notice, request, demand or other communication shall be
      deemed to have been received, in the case of a letter, when personally
      delivered or five (5) days after it has been put in the post or, in the
      case of a telefax, on electronic confirmation by the recipient of actual
      receipt or, if earlier, on actual or deemed receipt by the recipient of a
      confirmatory letter.

22.2  All documents, notices, communications, evidence, reports, opinions and
      other documents given or to be given under this Agreement, unless made in
      the English language, shall (unless expressly provided to the contrary) be
      accompanied by an English translation and the English version of all such

                                       59
<PAGE>

      documents, notices, communications, evidence, reports, opinions and other
      documents shall, to the extent permitted by applicable law, govern in the
      event of any conflict with the non-English version thereof.

23    Assignment

23.1  Neither the Lessee nor SAS BV may assign or otherwise transfer any of its
      rights or obligations under this Agreement without the prior written
      consent of the Lessor (such consent not to be unreasonably withheld or
      delayed).

23.2  (a)   Save for, and pursuant to, the Assignment and the Mortgage, the
            Lessor may not assign or otherwise transfer any or all of its
            rights, benefits or obligations under or pursuant to any Lessee
            Document without the prior written consent of the Lessee (such
            consent not to be unreasonably withheld or delayed), other than to:-

            (i)   in the case of an assignment or transfer of all the Lessor's
                  rights and obligations under the Lessee Documents, an
                  Affiliate of the Lessor, provided that (if such Affiliate has,
                  or has at any time in the twelve (12) month period immediately
                  preceding the proposed date of such assignment or transfer
                  had, a tangible net worth of less than $50,000,000) such
                  assignment or transfer shall be conditional upon the receipt
                  by the Lessee of a guarantee issued by the Parent of all such
                  Affiliate's obligations to the Lessee in the same form
                  (mutatis mutandis) as the Guarantee (unless such Affiliate's
                  obligations are covered by the Guarantee), and (if a new
                  guarantee is to be provided) a legal opinion obtained at the
                  cost of the Lessor in form and substance reasonably
                  satisfactory to the Lessee in respect of such guarantee and
                  assignment and transfer; or

            (ii)  in the case of an assignment or transfer of all the Lessor's
                  rights and obligations under the Lessee Documents, a person:-

                  (1)   who has and had at all times during the twelve (12)
                        month period immediately preceding such proposed
                        assignment or transfer, a net worth of not less than
                        $50,000,000; and

                  (2)   who is not a commercial airline in competition with the
                        Lessee; and

                  (3)   who is constituted by no more than four persons provided
                        however that one person shall have full power and
                        authority, as agent, to take any and all actions of the
                        Lessor contemplated or permitted by any of the Lessee
                        Documents, including, without limitation, the grant of
                        consents or waivers thereunder; and

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<PAGE>

                  (4)   who, in the case of any transfer or assignment of rights
                        which is not accompanied by the assignment or transfer
                        of all obligations pursuant to the Lessee Documents,
                        prior to such assignment or transfer, issues (and
                        procures that any mortgagee of such person issues) to
                        the Lessee a letter of quiet enjoyment in the same form
                        (mutatis mutandis) as the Letter of Quiet Enjoyment; and

                  (5)   who, prior to any such assignment or transfer which
                        involves a transfer of obligations of the Lessor
                        pursuant to the Lessee Documents, represents and
                        warrants to the Lessee substantially in the terms of the
                        Lessor's representations and warranties set out in the
                        Lessee Document, but as if references to "Bermuda" were
                        references to the country or state of incorporation of
                        such person,

            and provided that, notwithstanding any other provision of this
            clause 23. the Lessee shall have no liability or obligation under or
            pursuant to any Lessee Document after any assignment or transfer by
            the Lessor of any or all of its rights, benefits or obligations
            under or pursuant to any Lessee Document in respect of any cost,
            expense or liability which, at the time of such assignment or
            transfer, is, or could reasonably be foreseen (as a result of a
            change in law not then in effect) will be, in excess of what would
            have been incurred had such assignment or transfer not taken place
            and provided further that the Lessor may not make any such
            assignment or transfer, unless the Lessee is first indemnified to
            its reasonable satisfaction from and against any cost, expense or
            liability which may be incurred by the Lessee in connection with
            such assignment or transfer which would not have been incurred by
            the Lessee if such assignment or transfer had not taken place and
            further provided that the restrictions set out in paragraphs (a)(i)
            and (ii) above shall not apply at any time a Termination Event has
            occurred and remains outstanding.

      (b)   The Lessor undertakes and agrees that it will not execute the
            Assignment or the Mortgage unless and until each beneficiary thereof
            has agreed with the Lessee to issue a Letter of Quiet Enjoyment to
            the Lessee and the Lessee agrees, upon receipt of such Letter of
            Quiet Enjoyment, to cooperate in good faith with the Lessor, at the
            request and cost of the Lessor in relation to any acts or things as
            may be required to protect the rights of any beneficiary of the
            Assignment and/or the Mortgage.

23.3  The agreements, covenants, obligations and liabilities contained in this
      Agreement on the part of the Lessee and the obligations contained in this
      Agreement on the part of SAS BV, including, but not limited to all
      obligations to pay Rent and indemnify the Lessor, are made for the benefit
      of the Lessor, any assignee or transferee of the Lessor and their
      respective successors and assigns.

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<PAGE>

23.4  The agreements, covenants, obligations and liabilities contained in this
      Agreement on the part of the Lessor, are made for the benefit of the
      Lessee and SAS BV, any assignee or transferee of the Lessee or SAS BV (as
      applicable) and their respective successors and assigns.

24    Miscellaneous

24.1  The Lessee Documents contain the entire agreement between the Lessor, the
      Lessee and SAS BV relating to the leasing of the Aircraft, and the terms
      and conditions of any Lessee Document shall not be varied otherwise than
      by an instrument in writing of even date herewith or subsequent hereto
      executed by or on behalf of the parties thereto.

24.2  No failure or delay on the part of the Lessor in exercising any right,
      power or remedy under this Agreement or any other Lessee Document shall
      operate as a waiver thereof, nor shall any single or partial exercise by
      the Lessor of any such right, power or remedy preclude any other or
      further exercise thereof or the exercise of any other right, power or
      remedy. The remedies provided in this Agreement and the other Lessee
      Documents are cumulative and are in addition to any remedies provided by
      law.

24.3  Subject to the periods of grace referred to in clause 20, time shall be of
      the essence as regards the performance by the Lessee and SAS BV of their
      respective obligations under this Agreement.

24.4  The Lessee shall from time to time do and perform such other and further
      acts and execute and deliver any and all such further instruments as may
      be required by law or reasonably requested in writing by the Lessor to
      establish, maintain and protect the rights and remedies of the Lessor and
      to carry out and effect the intent and purposes of this Agreement.

24.5  This Agreement may be executed in any number of counterparts and by each
      of the parties hereto in separate counterparts, each of which when so
      executed shall be deemed to be an original, and all of which, taken
      together, shall constitute one and the same instrument.

24.6  If any provision of this Agreement shall become invalid, illegal or
      unenforceable in any respect under any law, the validity, legality and
      enforceability of the remaining provisions of this Agreement shall not in
      any way be affected or impaired.

24.7  Time and strict and punctual performance are of the essence with respect
      to the payment obligations of the Lessee under this Agreement.

25    Confidentiality

25.1  At all times during the continuance of this Agreement and for a period of
      seven (7) years after the end of the Lease Term, each of the parties
      hereto shall keep

                                       62
<PAGE>

      confidential and shall not, without the prior written consent, in the case
      of the Lessee or SAS BV, of the Lessor and, in the case of the Lessor, of
      the Lessee, disclose to any other person the subject matter of this
      Agreement or any other Lessee Document and the transactions contemplated
      hereby or any other agreement entered into after the date hereof by the
      Lessor, the Lessee and SAS BV or any of them in connection with this
      Agreement or any other Lessee Document provided that the parties hereto
      shall be entitled, without any such consent, to disclose the same:

      (a)   in connection with any proceedings arising out of or in connection
            with this Agreement or any of the other Lessee Documents; or

      (b)   if required to do so by an order of a court of competent
            jurisdiction whether in pursuance of any procedure for discovery of
            documents or otherwise; or

      (c)   pursuant to any law or regulation having the force of law; or

      (d)   to any fiscal, monetary, tax, governmental or other competent
            authority; or

      (e)   to the auditors, legal or other professional advisors of the Lessee,
            SAS BV or the Lessor or the Lessor's, the Lessee's or SAS BV's
            parent, subsidiary or affiliate (direct or indirect) companies; or

      (f)   if any of the same is or shall become publicly known otherwise than
            as a result of a breach by such party of this clause 25; or

      (g)   in any manner contemplated by any of the Lessee Documents; or

      (h)   to directors, officers and employees of the Lessor, the Lessee or
            SAS BV, or their respective parent companies (direct or indirect),
            any of its subsidiaries or affiliates (direct or indirect), or any
            of such subsidiary's or affiliate's parent companies, and to legal
            counsel of any of the foregoing.

      In the event of any disclosure to any person or party pursuant to
      sub-paragraphs (e) or (h) above, each of the Lessor, the Lessee and SAS BV
      agrees to use its best efforts to inform such person or party of the
      confidential nature of the information and use its best efforts to secure
      from such persons an agreement not to disclose the Information. In the
      event of any request for disclosure of Information pursuant to
      sub-paragraphs (a)-(d) above, each of the Lessor, the Lessee and SAS BV
      agrees (if and to the extent permitted by law) to use its best efforts to
      provide the others with advance notice of any such request for disclosure
      as promptly as feasible in order that the affected party may seek a
      protective order or such other appropriate remedy as the affected party
      deems necessary; provided that none of the Lessor, the Lessee or SAS BV
      shall have an obligation to undertake any action in order to maintain the
      confidentiality of

                                       63
<PAGE>

      the Information where the request for the disclosure is made pursuant to
      sub-paragraphs (a)-(d) above other than the obligation to use its best
      efforts to give notice as provided by this Agreement.

      The term "Information" includes all written financial and other
      information furnished by one party to one or more of the other parties to
      this Agreement in connection with this Agreement and which is identified
      to the recipient(s) as confidential by being marked "Confidential".

26    Law and Jurisdiction

26.1  This Agreement is governed by and shall be construed in accordance with
      English law.

26.2  For the benefit of the other party, each party to this Agreement
      irrevocably agrees that any legal action or proceedings in connection with
      this Agreement or any other Lessee Document which is expressed to be
      governed by English law, against either party or any of its assets may be
      brought in the English Courts, which shall have jurisdiction to settle any
      disputes arising out of or in connection with this Agreement or any other
      Lessee Document and each party hereby irrevocably and unconditionally
      submits to the jurisdiction of the English Courts.

26.3  The submission to jurisdiction referred to in clause 26.2 shall not (and
      shall not be construed so as to) limit the rights of either party to this
      Agreement to take proceedings against the other party in the courts of any
      other competent jurisdiction, nor shall the taking of proceedings in any
      one or more jurisdictions preclude the taking of proceedings in any other
      jurisdiction, whether concurrently or not.

26.4  Each party to this Agreement irrevocably waives any objection it may now
      or hereafter have to the laying of venue of any action or proceeding in
      any court and any claim it may now or hereafter have that any action or
      proceeding has been brought in an inconvenient forum.

26.5  Each of the Lessee and SAS BV hereby irrevocably designates, appoints and
      empowers Scandinavian Airlines System at present of 52-53 Conduit Street,
      London W1R 0AY to receive for it and on its behalf service of process
      issued out of the English courts in any legal action or proceeding arising
      out of or in connection with this Agreement and/or any other Lessee
      Document. The Lessee confirms its acceptance of its appointment by SAS BV
      referred to above.

26.6  The Lessor hereby irrevocably designates, appoints and empowers London Law
      Agency Limited at present of Temple Chambers, 84 Temple Avenue, London
      EC4Y 0HP to receive for it and on its behalf service of process issued
      out of the English courts in any legal action or proceeding arising out of
      or in connection with this Agreement and/or any other Lessee Document to
      which it is a party.

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<PAGE>

26.7  Each party to this Agreement agrees that in any legal action or
      proceedings against it or its assets in connection with this Agreement
      and/or any other Lessee Document no immunity from such legal action or
      proceedings (which shall include, without limitation, suit, attachment
      prior to judgment, other attachment, the obtaining of judgment, execution
      or other enforcement) shall be claimed by or on behalf of its or with
      respect to its assets, irrevocably waives any such right of immunity which
      it or its assets now have or may hereafter acquire or which may be
      attributed to it or its assets and consents generally in respect of any
      such legal action or proceedings to the giving of any relief or the issue
      of any process in connection with such action or proceedings including,
      without limitation, the making, enforcement or execution against any
      property whatsoever (irrespective of its use or intended use) of any order
      of judgment which may be made or given in such action or proceedings.

IN WITNESS whereof the parties hereto have caused this Agreement to be duly
executed the day and year first above written.

                                       65
<PAGE>

                                   Schedule 1

                         List of Documents and Evidence
                                     Part 1

1     (a)   A copy, certified by a duly authorised representative of the Lessee
            to be a true. complete and up-to-date copy, of the Consortium
            Agreement and the Inter-Government Agreement; and

      (b)   A copy, certified by a duly authorised representative of SAS BV to
            be a true, complete and up to date copy, of the constituent
            documents of SAS BV.

2     A certificate, executed by a duly authorised representative of the Lessee
      certifying that the board of directors of the Lessee has:-

      (a)   approved the transactions contemplated by such of the Lessee
            Documents to which the Lessee is a party; and

      (b)   authorised a person or persons to execute and deliver on behalf of
            the Lessee such of the Lessee Documents to which it is a party and
            any notices or other documents to be given pursuant thereto.

3     A power of attorney, duly executed by SAS BV, authorising a person or
      persons to execute and deliver on behalf of SAS BV this Agreement.

4     Specimen signatures, authenticated by a duly authorised representative of
      the relevant person of each of the authorised signatories referred to in
      clauses 2(b) and 3 of this schedule 1.

5     Evidence that all governmental and other licences, approvals, consents,
      registrations and filings necessary for any matter or thing contemplated
      by the Lessee Documents and for the legality, validity, enforceability,
      admissibility in evidence and effectiveness thereof (including, but
      without prejudice to the generality of the foregoing, any exchange control
      approvals that may be required) which the Lessee or SAS BV is required to
      obtain pursuant to the Lessee Documents, have been obtained or effected on
      an unconditional basis and remain in full force and effect (or, in the
      case of effecting of any registrations and filings, that arrangements
      reasonably satisfactory to the Lessor have been made for the effecting of
      the same within any applicable time limit).

6     Evidence reasonably satisfactory to the Lessor that all steps which it is
      reasonably practicable to take on or prior to the Delivery Date have been
      taken by the Lessee to obtain or facilitate the registration of the
      Aircraft with the Aviation Authority in Norway on a permanent basis in the
      name of the Lessor and for the issuance by the Aviation Authority of a
      certificate of airworthiness.

                                       66
<PAGE>

                                     Part 2

1     (a)   Originals or certified copies of certificates evidencing the
            insurance required to be maintained pursuant to clause 16; and

      (b)   a letter addressed to the Lessor by a recognised firm of aviation
            insurance brokers reasonably satisfactory to the Lessor confirming
            that the insurance required to be maintained pursuant to clause 16
            adequately protects the interests of the Lessor; and

      (c)   a letter of undertaking addressed to the Lessor from the Lessee's
            insurance brokers in form and substance reasonably satisfactory to
            the Lessor.

2     A certified copy of each of:-

      (a)   the Certificate of Airworthiness in the public transport category
            (passenger) issued by the Aviation Authority with respect to the
            Aircraft,

      (b)   the current Air Operator's Certificate issued by the Aviation
            Authority to the Lessee with respect to aircraft of the type of the
            Aircraft,

      (c)   a certified copy of the Dispensation.

3     Two original copies of the Aircraft Purchase Agreement and the Warranties
      Assignments (as defined in the Aircraft Purchase Agreement) executed by
      each of the parties thereto. For the avoidance of doubt, the foregoing
      reference to Warranties Assignments as a condition precedent shall not
      include a reference to any consent of any third party contemplated by any
      such Warranty Assignment.

4     A certificate signed by a duly authorised officer of the Lessee, dated the
      Delivery Date, to the effect that:-

      (a)   the representations and warranties made by each of the Lessee and
            SAS BV contained in the Lessee Documents are true and correct on and
            as of such date as though made on and as of such date and all
            authorisations and approvals of, giving of notice to, and filings
            and recordings with, all regulatory bodies and authorities which may
            be conditions to the validity or enforceability of the Lessee
            Documents or the Lessee's or SAS BV's performance of the terms
            thereof have been duly accomplished; and

      (b)   no Relevant Event or Termination Event has occurred and is
            continuing or would result from the lease of the Aircraft.

5     Legal opinions of Dutch, Swedish, Danish and Norwegian counsel to the
      Lessee on matters relating to the Lessee Documents or the registration of
      the Aircraft (as the case may be) and on matters of Dutch, Swedish, Danish
      or Norwegian

                                       67
<PAGE>

      law (as the case may be) in form and substance reasonably satisfactory to
      the Lessor.

6     Legal opinion of English counsel to the Lessee on matters relating to the
      Lessee Documents and on matters of English law, in form and substance
      reasonably satisfactory to the Lessor.

7     Executed copies of each of the Lessee Documents.

8     An executed copy of the letter from the Lessee (as Seller) to the Lessor
      (as Buyer) as to payment of the purchase price of the Aircraft pursuant to
      the Aircraft Purchase Agreement).

                                       68
<PAGE>

                                     Part 3

1     A copy certified by the Secretary of the Lessor to be a true, complete and
      up-to-date copy, of the constitutional documents of the Lessor.

2     A copy, certified by the Secretary of the Lessor to be a true copy, and as
      being in full force and effect and not amended or rescinded, of
      resolutions of the board of directors of the Lessor:-

      (a)   approving the transactions contemplated by the Lessee Documents; and

      (b)   authorising a person or persons to execute and deliver on behalf of
            the Lessor, the Lessee Documents to which it is a party and any
            notices or other documents to be given pursuant thereto.

3     Specimen signatures, verified by an Incumbency Certificate of the Lessor
      of each of the authorised signatories referred to in clause 2(b) of this
      schedule 1.

4     Evidence that all governmental and other licences, approvals, consents,
      registrations and filings necessary for any matter or thing contemplated
      by the Lessee Documents and for the legality, validity, enforceability,
      admissibility in evidence and effectiveness thereof (including, but
      without prejudice to the generality of the foregoing, any exchange control
      approvals that may be required) which the Lessor is required to obtain
      pursuant to the Lessee Documents, have been obtained or effected on an
      unconditional basis and remain in full force and effect.

5     Legal opinions from (a) Conyers, Dill & Pearman on matters of Bermudan
      law, (b) Schulte, Roth and Zabel on matters of New York law relating to
      the Guarantee, and (c) in-house counsel of the Guarantor on matters
      relating to the Guarantee, in each case in form and substance reasonably
      satisfactory to the Lessee.

6     Two original copies of the Aircraft Purchase Agreement duly executed by
      each of the parties thereto.

7     The Parent Guarantee duly executed by the Parent.

8     Copies of the Certificate of Incorporation and By-Laws of the Parent
      certified as true, complete and up-to-date as of the Delivery Date by a
      duly authorised officer of the Parent.

9     An application for the registration of the Lessor with the Aviation
      Authority as the owner of the aircraft prepared by the Lessee and duly
      executed by the Lessor.

                                       69
<PAGE>

10    A certified copy of the confirmation of London Law Agency Limited of its
      acceptance of its appointment of the Lessors process agent.

                                       70
<PAGE>

                                   Schedule 2

                             Acceptance Certificate

This Acceptance Certificate is delivered, on and as of the date set forth below
by SCANDINAVIAN AIRLINES SYSTEM Denmark-Norway-Sweden (the "Lessee"), to CIT
LEASING (BERMUDA), LTD., (the "Lessor"), pursuant to an Aircraft Lease Agreement
dated ____ December, 1993, and made between the Lessor and the Lessee (the
"Agreement").

Details of Acceptance

The Lessee hereby indicates and confirms to the Lessor its successors and
assigns, that the Lessee has at ____ hours (London time) on this day of ____
December, 1993, at _________ accepted the following in accordance with the
provisions of the Agreement:

(a)   Model: Boeing 767-300ER jet airframe,
      Norwegian Registration Mark LN-RCG and Manufacturer's Serial No. 24475

(b)   Two (2) Pratt & Whitney PW4060 Engines with Manufacturer's Serial Numbers
      724137 and 724170.

Confirmation of Undertakings

The terms used in this Certificate shall have the meaning given to such terms in
the Agreement.

The Lessee confirms that as at ____ hours (London time) today, being the
Delivery Date as defined in the Agreement:

(i)   the Aircraft was duly accepted by the Lessee in accordance with and
      subject to all of the terms and conditions contained in the Agreement and
      the execution and delivery of this Certificate further confirms the
      acceptance of the Aircraft by the Lessee for all purposes of the
      Agreement;

(ii)  the Lease Period commenced and the Lessee became obliged to pay to the
      Lessor the amounts provided for in the Agreement with respect to the
      Aircraft;

(iii) the Aircraft is insured in accordance with the Agreement;

(iv)  the representations and warranties made by the Lessee under clause 2 of
      the Agreement remain, and if made at the date hereof, would be, true and
      correct in all respects;

(v)   the Aircraft conforms to the Lessee's requirements;

                                       71
<PAGE>

(vi)   the Aircraft is satisfactory to the Lessee in all respects;

(vii)  fuel on board is ____ kgs;

(viii) no Relevant Event has occurred or will result from Delivery taking place;

(ix)   loose equipment on the Aircraft are as set out in Appendix "A" hereto and
       the Manuals and Technical Records are as set out in Appendix "B".

The Lessee confirms that each instalment of Rent payable under clause 7.1(a) of
the Agreement shall be the sum of $680,481.

IN WITNESS WHEREOF the Lessee has caused this Acceptance Certificate to be
executed in its name, but its duly authorised officer(s) or representative(s),
pursuant to due corporate authority, this ____ day of December, 1993.

SIGNED by                             )

for and on behalf of                  )  ------------------------------
SCANDINAVIAN AIRLINES                 )
SYSTEM Denmark-Norway-Sweden          )

                                       72
<PAGE>

  [LOGO]           TECHNICAL EQUIPMENT CHECK LIST 767-300ER    AC Reg
                                  APPENDIX "A"
                                                                1993-99-1

--------------------------------------------------------------------------------
Chk   Qty   No.         Description
--------------------------------------------------------------------------------

All items checked by maintenance at A-check.

o - Items checked by AUP at originating station or crew change.
x - Items checked by cabin crew at originating station or crew change.
m - Items checked by maintenance personnel at MSC.
--------------------------------------------------------------------------------

                        FLIGHT DECK
      1                 Pinto Board
o    4 pr  D243426      Emergency Evacuation Gloves
o     4     465970      Smoke Goggles, EROS, P/N MXP 210-00
      3     475092      Hand Microphone, TELEX 38T
      2     475093      Boomset, Airman 750
      3                 Headset, Sennhereer P/N 681647
      2                 Normal Check List
o     2                 Emergency/Malfunction Check List
      1                 Tool Kit, sealed (M 648-033 cockpit)
      6                 Sun Visor, small (4), large (2)
o     4      F81XS      SAS Flashlight
o     4     467532      Life Vest, red
      3                 Aircraft Log, FLIGHT DECK (brown cover)
o     1                 Chart Folder -300ER
m     1                 EICAS Log
o     1                 Flight Manual
o     1                 Ship's Library, AOM Vol 1 & 2, FRM, AHM, SHH
      1                 Flight Document Folder, FDF
      1                 Map Folder (National Geographic)
o     1     688181      Smoke Hood
o     1        915      Dynalite flashlight
o     1    42D8331      Fire Axe
o    1 pr    85027      Fire Protection Gloves
o     1                 Handcuff kit
o     1     467502      Fire Extinguisher, Halon, sealed
o     1                 Fueling Order Pad
      5                 Gear Pins
      4                 [illegible] Tube Cover
o     1    452-205      VHF Emergency Transceiver
      1                 Technical Equipment Check List
      1                 Certificate Folder, sealed
      1                 Route Manual Box, sealed
o     1     476932      Handset interphone & PA, P/N 285N 0412-3

                        FORWARD COATROOM
      1                 Extension cushion for 1st observer's seat
o     1                 Cold weather suit, DA400614
x     1                 Key to Flight Deck door
x     1                 Wheel Chair
o     4                 Polar suits and Down boots for F/D, in two bags

                        CABIN, GENERAL
m           685674      Life Vest, yellow, one under each pass. seat
                        incl. crew rest seat
m                       Polar suit, one under each pass. seat, incl.
                        crew rest seat
                        Slide/Raft, one at each cabin door

                        FWD LEFT CABIN DOOR (C/A 1 and 7)
x    1 + 1  467532      Life Vest, red
x    1 + 1              Flashlight, emergency, P2-07-0003-001
x    1 + 1              Cabin Emergency Check Lists
x    1 + 1              C/A Pre-Flight Check List
x     1                 Technical Equipment Check List  (C/A 1)
x     1                 Safety on Board folder (C/A 7)
x     1     476932      Handset, interphone (C/A 1)
x     1     490179      Megaphone (check for function)

                        VIDEO CONTROL CENTER (VCC)
x     1      F81XS      Flashlight, SAS
x     1     476932      Handset, interphone
x     1                 Cabin Log
x     1                 CAM, COP and Video Folder
x     1                 Cabin Failure Guide (CFG)
x     1      5207F      Eurosleeper Kit
x     3                 Polar suits and Down boots for C/A 1, 7 and 4
x     1                 Key to C/A Slow

                        FWD RIGHT CABIN DOOR (C/A 4)
x     1     467532      Life Vest, red
x     1                 Flashlight, emergency, P2-07-0003-001
x     1     F81XS       Flashlight, SAS
x     1                 Safety on Board folder
x     1                 C/A Pre-Flight Check List C/A 4
x     1                 Cabin Emergency Check Lists
x     1     476932      Handset, interphone

                        G4 STOWAGE LH
x     1     467502      Fire Extinguisher, Halon, sealed
x     1    452-101      ELT (Radio Beacon), sealed
x     1    451-105      Oxygen Bottle 310 l, min press 1500 psi
x     2     742850      Oxygen mask
x     1                 Dangerous Goods kit, DA 400494
x     1     467536      Life Vest, Demo
x     1                 Oxygen Demo kit, DA 400628
x     2     688181      Smoke Hood
x     1    453-000      First Aid kit, sealed
x     4     685674      Life Vest, yellow, reserve
x     2     820003      Artificial Respiration Mask
x     2    451-103      Oxygen Bottle 120 l, min press 1500 psi
x     4     742880      Oxygen mask
x     1    453-004      Doctor's Kit, sealed

                        G4 STOWAGE RH
x     1     467502      Fire Extinguisher, Halon, sealed
x     1    451-103      Oxygen Bottle 310 l, min press 1500 psi
x     2     742880      Oxygen mask
x     1     467536      Life Vest, Demo
x     1     688181      Smoke Hood
x     1                 Oxygen Demo-kit, DA 400628
x     2     685674      Life Vest, yellow, reserve
x     1    453-000      First Aid kit, sealed

                        DOGHOUSE, D6
x     1    451-105      Oxygen Bottle 310 l, min press 1500 psi
x     2     742880      Oxygen Mask
x     1    451-103      Oxygen Bottle 120 l, min press 1500 psi
x     2     742880      Oxygen mask
x     1     820003      Artificial Respiration Mask
x     2     467536      Life Vest, Demo
x     2                 Oxygen Demo-kit, DA 400628
x     1                 Polar suit and Down boots (C/A 6)

                        DOG HOUSE D4, RH
x     1     467502      Fire Extinguisher, Halon, sealed
x     1     688181      Smoke Hood

                        DOG HOUSE D3, LH
x     1     467502      Fire Extinguisher, Halon, sealed

                        OVER WING AREA (C/A 3 and C/A 6)
x    1 + 1              Cabin Emergency Check Lists
x    1 + 1              C/A Pre-Flight Check List
x    1 + 1              Safety on Board folder
x    1 + 1              Flashlight, emergency P2-07-0003-001
x     1      F81XS      Flashlight, SAS (C/A 3)
x    1 + 1  467532      Life Vest, red
x     1     476932      Handset, interphone (C/A 3)

                        LAVATORY E STOWAGE S9 AND S10
x     2     467502      Fire Extinguisher, Halon, sealed
x     1    256-002      Fire Extinguisher, H2O, sealed
x     1                 Fire Axe
x     1     688181      Smoke Hood
x    1 pr    85027      Fire Protection Gloves, 650104
x     15    467538      Life Vest, infant
x     15                Infant/Extension belt P/N 501695-405 (or DA-400510-1)

                                                            Effective: 17SEP83
                                                            Issue No: 13
<PAGE>

--------------------------------------------------------------------------------
                        DOG HOUSE D6
      2    451-105      Oxygen Bottle 310 l, min. press. 1500 psi
x     4     742880      Oxygen Mask
x     1    461-103      Oxygen Bottle 120 l, min. press. 1500 psi
x     2     742880      Oxygen Mask
x     1     620003      Artificial Respiration Mask
x     2     467536      Life Vest, Demo
x     2                 Oxygen Demo-kit, DA 400628
x     1                 Polar suit and Down boots (C/A 3)

                        AFT LEFT CABIN DOOR (C/A 5 and 8)

x    1+1                Cabin Emergency Check Lists
x    1+1                C/A Pre-Flight Check List
x    1+1                Safety on Board folder
x    1+1                Flashlight, emergency, P2-07-0003-001
x    1+1    467532      Life vest, red

                        C/A 8

x     1     476932      Handset, interphone
x     1     490179      Megaphone (in G5, check for function)

                        DOG HOUSE D9

x     2    451-105      Oxygen Bottle 310 l, min. press. 1500 psi
x     4     742880      Oxygen Mask
x     2    451-103      Oxygen Bottle 120 l, min. press. 1500 psi
x     4     742880      Oxygen Mask
x     1     820003      Artificial Respiration Mask
x     2                 Polar suit and Down boots for C/A 5 and 8

                        AFT CENTER DOGHOUSE D 11

x     2    463-000      First Aid Kit ____ sealed
x     1     467502      Fire extinguisher, Halon, ____ sealed
x     1     688181      Smoke Hood

                        AFT RIGHT CABIN DOOR (C/A 2)

x     1                 Cabin Emergency Check Lists
x     1                 C/A Pre-Flight Check List C/A 2
x     1                 Safety on Board folder
x     1                 Flashlight, emergency, P2-07-0003-001
x     1      F81XS      Flashlight, SAS
x     1     467532      Life Vest, red
x     1     476932      Handset, interphone

                        DOG HOUSE D10

x     2    451-105      Oxygen Bottle 310 l, min. press. 1500 psi
x     4     742880      Oxygen Mask
x     2    461-103      Oxygen Bottle 120 l, min. press. 1500 psi
x     4     742880      Oxygen Mask
x     1     820003      Artificial Respiration Mask
x     1                 Polar suit and Down boots for C/A 2

                        AFT CENTER DOGHOUSE D12

x     1    452-101      ELT (Radio Beacon ____ sealed
x     1     467502      Fire Extinguisher, Halon, ____ sealed
x    1+1    688181      Smoke Hood
x     6     685674      Life Vest, yellow, reserve

--------------------------------------------------------------------------------
Comfort/Service items to be carried on flight deck:
- 6 x Sanitary napkin,SANI-COM, 420-016-01
- 3 x Instrument Screen Cleaner, VISIAL, 361-107-01
- 12 x Ear Covers, 6 ea DE 1204, 6 ea D125083
- 2 x Waste Bag.
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
Arctic survival equipment:
Polar suits P/N 1443R SAS
Down boots P/N SAS 838644
Bag, cont. 2 ea polar suits and 2 ea down boots DA 300258
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
    loading and checks                                 Notify P-I-C of any
C/A signature pertains only to                         technical remarks for
items marked x                                         entering in A/C Log.
-----------------------------------------------------
Station  Date  Sign.  Time  Station  Date  Sign. Time  Notes about discrepancies
--------------------------------------------------------------------------------

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<PAGE>

                                  Appendix "B"

                          Manuals and Technical Records

0     Maintenance Program: Complete description and copy of             1 set
      present maintenance program to include time controls,
      maintenance intervals and program planning schedule.

1     MM: Maintenance Manual for APU, Engines and Airframe              1 set

2     IPC for APU, Engines and Airframe                                 1 set

3     Wiring Diagram Manual                                             1 set

4     System Schematics                                                 1 set

5     Ramp Maintenance Manual                                           1 set

6     B.I.T.E. Manual                                                   1 set

7     Fault Isolation Manual                                            1 set

8     Fault Reporting Manual                                            1 set

9     Weight and Balance Manual                                         1 set/AC

10    Fuel Measuring Sticks Tables for Off Altitude Conditions          1 set
      Boeing Document No D345T030 (Fuelling Procedures)

11    Interior Finish Specification                                     1 set

12a   Boeings Flight Operations Manual (FOM)                            1 set

12b   SAS Aircraft Operations Manual (AOM)                              1 set/AC

13    FAA Approved Flight Manual (AFM)                                  1 set/AC

14    SAS Emergency Malfunctioning Checklist                            1 set/AC

15    Aircraft Readiness Log                                            1 set/AC

16    Aircraft Log Books                                                1 set/AC

17    Engine Log Books                                                  1 set/AC

18    APU Log Books                                                     1 set/AC

19    AD Status: Records of AD status for APU, engines and              1 set/AC
      airframe

20    SB Status: Records of SB status for APU, engines and              1 set/AC
      airframe
<PAGE>

                                   Schedule 3

                   Rent payable during the First Renewal Term
                           and the Second Renewal Term

Rent payable during any First Renewal Term and during any Second Renewal Term
shall continue to be paid monthly in advance and shall be calculated as the
lesser of (a) the fair market rent per month for the Aircraft as it may be
determined pursuant to and in accordance with the following paragraph and (b)
ninety per cent. (90%) of the monthly Rent paid by the Lessee during the Primary
Lease Term.

In this schedule 3 the expression "fair market rent" shall be determined not
less than one hundred and eighty (180) days and not more than two hundred and
seventy (270) days before the first day of the First Renewal Term or the Second
Renewal Term (as the case may be) on the basis of, and shall mean the amount
which would be obtainable in an arm's-length transaction between an informed and
willing lessee (other than a lessee currently in possession of the Aircraft)
under no compulsion to lease and an informed and willing lessor under no
compulsion to lease, and neither of which is Lessor or Lessee or a permitted
sub-lessee or a subsidiary or Affiliate of or a person related to the Lessor or
the Lessee or a permitted sub-lessee, for the lease of the Aircraft, assuming
that the Aircraft is unencumbered by this Lease or any renewal or purchase
option and that the Aircraft is in the condition and repair required to be
maintained by the terms of this Lease upon return of the Aircraft pursuant to
clause 19 hereof, and such amount shall be net of leasing and transportation
charges.

                                       73
<PAGE>

                                   Schedule 4

                                  Agreed Value

               Date                               Agreed Value % *
               ----                               ----------------

               30-Dec-93                              101.148%
               30-Jan-94                              101.091%
               23-Feb-94                              101.030%
               30-Mar-94                              100.964%
               30-Apr-94                              100.897%
               30-May-94                              100.826%
               30-Jun-94                              100.755%
               30-Jul-94                              100.679%
               30-Aug-94                              100.598%
               30-Sep-94                              100.517%
               30-Oct-94                              100.431%
               30-Nov-94                              100.340%
               30-Dec-94                              100.249%
               30-Jan-95                              100.153%
               28-Feb-95                              100.053%
               30-Mar-95                               99.947%
               30-Apr-95                               99.841%
               30-May-95                               99.730%
               30-Jun-95                               99.618%
               30-Jul-95                               99.502%
               30-Aug-95                               99.380%
               30-Sep-95                               99.258%
               30-Oct-95                               99.131%
               30-Nov-95                               98.999%
               30-Dec-95                               98.866%
               30-Jan-96                               98.729%
               29-Feb-96                               98.586%
               30-Mar-96                               98.438%
               30-Apr-96                               98.289%
               30-May-96                               98.135%
               30-Jun-96                               97.980%
               30-Jul-96                               97.820%
               30-Aug-96                               97.655%
               30-Sep-96                               97.489%
               30-Oct-96                               97.318%
               30-Nov-96                               97.141%
               30-Dec-96                               96.964%
               30-Jan-97                               96.781%
               21-Feb-97                               96.593%

            *     The Agreed Value for each date set forth In this Schedule 4
                  shall equal the product of the Agreed Value % set forth
                  opposite such date multiplied by $65,000,000.

                                       74
<PAGE>

               Date                               Agreed Value % *
               ----                               ----------------

               30-Mar-97                               96.399%
               30-Apr-97                               96.204%
               30-May-97                               96.004%
               30-Jun-97                               95.803%
               30-Jul-97                               95.596%
               30-Aug-97                               95.384%
               30-Sep-97                               95.171%
               30-Oct-97                               94.952%
               30-Nov-97                               94.728%
               30-Dec-97                               94.502%
               30-Jan-98                               94.271%
               28-Feb-98                               94.034%
               30-Mar-98                               93.792%
               30-Apr-98                               93.580%
               30-May-98                               93.363%
               30-Jun-98                               93.177%
               30-Jul-98                               92.986%
               30-Aug-98                               92.789%
               30-Sep-98                               92.624%
               30-Oct-98                               92.453%
               30-Nov-98                               92.278%
               30-Dec-98                               91.231%

            *     The Agreed Value for each date set forth in this Schedule 4
                  shall equal the product of the Agreed Value % set forth
                  opposite such date multiplied by $65,000,000.

                                       75
<PAGE>

                                   Schedule 5
                                     Part 1
                             Permitted Air Carriers

                          Aer Lingus
                          Aero Mexico
                          Air Aruba
                          Air Canada
                          Air Europe Italy S.P.A.
                          Air France
                          Air Malta
                          Air New Zealand
                          Air 2000
                          Alitalia
                          All Nippon Airways
                          American Airlines
                          Ansett Australia
                          Asiana Airlines
                          Australia-Asia Airlines
                          Britannia Airways
                          British Airways
                          British Midland
                          Canadian
                          Cathay Pacific
                          Condor Flugdienst
                          Continental
                          Delta Air Lines
                          Dragonair
                          El Al
                          Finnair
                          Garuda
                          Iberia
                          Icelandair
                          Japan Airlines
                          Japan Air System
                          KLM
                          Korean Airlines
                          LAN Chile
                          Lauda Air
                          LOT
                          LTU Sud International Airways
                          Martinair Holland
                          Malaysian Airlines
                          Monarch
                          Northwest
                          Olympic
                          Premiair
                          Qantas

                                       76
<PAGE>

                          Region Air
                          Royal Brunei Airlines
                          SABENA
                          SAS
                          Singapore Airlines
                          Silk Air (affiliate of Singapore Airlines)
                          Spanair
                          Sun Country
                          Swissair
                          TAP
                          Thai
                          Transbrazil
                          Translift
                          TWA
                          United Airlines
                          USAir
                          Varig

                                       77
<PAGE>

                                   Schedule 5

                                     Part 2

                               Permitted Countries

                          Aruba
                          Australia
                          Austria
                          Belgium
                          Brazil
                          Brunei
                          Canada
                          Chile
                          Finland
                          France
                          Germany
                          Greece
                          Hong Kong
                          Ireland
                          Iceland
                          Israel
                          Italy
                          Japan
                          Malta
                          Malaysia
                          Mexico
                          Netherlands
                          New Zealand
                          Portugal
                          Seychelles
                          Singapore
                          South Korea
                          Spain
                          Switzerland
                          Thailand
                          United Kingdom
                          United States

                                       78
<PAGE>

                                   Schedule 6

                        Form of Letter of Quiet Enjoyment

From: [Lender] (the "Lender")

To:   Scandinavian Airlines System (the "Lessee")

                                                  [         ], 199[ ].

Dear Sirs,

      Lease of Boeing 767-300ER Aircraft, Manufacturer's Serial Number 24475
      (the "Aircraft") dated ____ December, 1993, between CIT Leasing (Bermuda),
      Ltd. (the "Lessor"), the Lessee and SAS Capital BV (the "Lease")

1 For good and valuable consideration (the receipt and sufficiency of which the
Lender acknowledges and confirms), the Lender confirms to you that the Lender
will not interfere with the quiet possession and use of the Aircraft by the
Lessee throughout the term of the Lease, so long as no Termination Event (as
defined in the Lease), which has not been waived by the Lessor, has occurred and
is continuing.

2 The foregoing undertaking is not to be construed as restricting the rights of
the Lender (if any) to dispose of the Aircraft to such persons and on such terms
as it considers appropriate. However, if the Lender exercises such rights during
the term of the Lease, and provided that no Termination Event (as defined in the
Lease), which has not been waived by the Lessor, has occurred and is continuing,
the Lender will (subject to any requirements or restrictions imposed by
applicable law) dispose of the Aircraft expressly subject to the Lease and on
terms that the purchaser issues an undertaking to the Lessee that it will not
interfere with the quiet possession and use of the Aircraft by the Lessee
throughout the remaining term of the lease, so long as no Termination Event (as
defined in the Lease), which has not been waived by the Lessor, has occurred and
is continuing.

3 This letter shall be governed by, and construed in accordance with, English
law.

      Please countersign this letter in order to confirm your agreement to its
terms.

                        --------------------------------
                                    [Lender]

                                       79
<PAGE>

Agreed and accepted

--------------------------------
Scandinavian Airline Systems

                                       80
<PAGE>

SIGNED on behalf of                )
CIT LEASING (BERMUDA), LTD.        ) /s/ [Illegible]        /s/ Miriam D. Starc
by:                                ) [Illegible]            Miriam D. Starc
in the presence of:-               ) ATTORNEY-IN-FACT       ATTORNEY-IN-FACT

SIGNED on behalf of                )
SCANDINAVIAN AIRLINES SYSTEM       ) /s/ [Illegible]        /s/ John Forngre
Denmark-Norway-Sweden              ) [Illegible]            John Forngre
by:                                ) POWER OF ATTORNEY      POWER OF ATTORNEY
in the presence of:-               )

SIGNED on behalf of                )
SAS CAPITAL BV                     ) /s/ [Illegible]        /s/ John Forngre
by:                                ) [Illegible]            John Forngre
in the presence of:-               ) POWER OF ATTORNEY      POWER OF ATTORNEY

                                       81<PAGE>

                                                                   Exhibit 10.17

                                PROMISSORY NOTE

                                                           Boston, Massachusetts
$10,450,000                                                August 31, 1998

      FOR VALUE RECEIVED, Semele Group Inc., a Delaware corporation with offices
located at One Canterbury Green, Stamford, Connecticut 06901 (the "Maker"),
promises to pay to the order of Equis Financial Group Limited Partnership, a
Massachusetts limited partnership (the "Payee"), at 88 Broad Street, Boston,
Massachusetts 02110, or at such other place as the Payee may from time to time
designate in writing at least ten days before a payment hereunder is due, the
principal sum of Ten Million Four Hundred Fifty Thousand Dollars ($10,450,000),
together with interest on the unpaid principal balance hereof from time to time
at the rate of seven percent (7%) per annum. Interest shall be payable hereunder
quarterly in arrears, with all accrued interest payable on the last day of each
calendar quarter commencing on September 30, 1998, provided, however, that if
and to the extent that the Available Interest Amount shall be less than the
interest due and payable hereunder (the "Interest Amount"), then the balance
shall be added to the outstanding principal of this Note. As used herein,
"Available Interest Amount" shall mean an amount, not to exceed the Interest
Amount, determined as of each quarterly interest payment date, equal to the sum
of the Interest Reserve Amount and any cash generated by the assets owned by
Ariston Corporation ("Ariston") on the date hereof during the previous quarterly
period. Prior to the maturity date of this Note, principal hereunder shall be
payable only out of and to the extent of (i) the net proceeds to the Maker from
the conversion, if any, by Ariston of leased assets to cash, less (ii) such
amount as it may be necessary to retain from such net proceeds in order to
permit the Maker to maintain a reserve equal to the amount of interest that is
estimated to be payable hereunder in the ensuing 12-month period (the amount, if
any, in such reserve account at any time is herein referred to as the "Interest
Reserve Amount"). Any such mandatory payments of principal shall be made within
15 days of receipt by the Maker of such net proceeds.

      The entire unpaid principal balance and all accrued and unpaid interest
hereunder shall be absolutely due and payable in full on the date that is 5
years from the date hereof.

      All payments hereunder shall be applied first to any costs and expenses of
the holder due hereunder, then to interest due hereunder, and any balance shall
be applied to the outstanding principal balance of this Note.

      This Note may be prepaid in whole or in part at any time without penalty,
provided that all accrued interest is paid with any such prepayment.

      This Note evidences amounts owned to the Payee by the Maker under an
Agreement for Purchase and Sale of Stock dated the date hereof between the Maker
and the Payee. This Note is secured by the collateral referred to in the
Security Agreement between the Maker and the Payee dated the date hereof and is
recourse to the Maker only to the extent of such collateral.

      All amounts payable under this Note shall immediately become due and
payable in full at the option of the holder without notice or demand in the
event of (1) the failure of the Maker to make any payment hereunder when and as
the same shall become due and payable, and such failure shall not be cured
within 30 days after the Maker shall have received written notice from the
holder of such failure, (2) the Maker ceasing to do business, being liquidated
or winding down its affairs or being a party to a merger or consolidation, (3)
the filing of bankruptcy proceedings involving the Maker as a debtor, (4) the
application for appointment of a receiver for the Maker or any of its property;
(5) the making of a general assignment for the benefit of the Maker's creditors,
(6) the insolvency of the Maker, or (7) the declaration or payment of dividends
by Ariston Corporation, a Delaware corporation, in excess of $2,020,000 in the
aggregate without the prior written consent of the Payee (each, an "Event of
Default").

      The Maker shall pay, upon demand, all costs and expenses, including legal
expenses and reasonable attorneys' fees, paid or incurred by the holder in
enforcing any obligations of the Maker under this Note.
<PAGE>

      Except as specifically provided herein, the Maker waives presentment,
demand, notice, protest and all other demands or notices in connection with the
delivery, acceptance, performance, default or enforcement of the obligations of
the Maker under this Note.

      The holder of this Note shall not by any act, delay, omission or otherwise
be deemed to have waived any of such holder's rights or remedies under this Note
unless such waiver shall be in writing and signed by the holder. A waiver on any
one occasion shall not be construed as a bar to or waiver of any such right or
remedy on any future occasion.

      All notices hereunder shall be in writing and shall be deemed to have been
duly given if delivered by hand, or mailed, certified or registered mail with
first class postage prepaid, (i) to the holder at the address of the Payee set
forth above or to such other address as the holder shall direct in writing; and
(ii) to the Maker at the address of the Maker set forth above or to such other
address as the Maker shall direct in writing.

      This Note shall be construed in accordance with and governed by the laws
of the Commonwealth of Massachusetts.

      EXECUTED under seal as of the date first above written.

                                            SEMELE GROUP INC.

Witness: /s/ Illegible                      By: /s/ James A. Coyne
        --------------------------          -----------------------------
                                            Name: James A. Coyne
                                            Title: PRESIDENT

                                       -2-
<PAGE>

                               SECURITY AGREEMENT

      THIS SECURITY AGREEMENT made as of the 31st day of August, 1998, by and
between Semele Group Inc., a Delaware corporation (the "Pledgor"), and Equis
Financial Group Limited Partnership, a Massachusetts limited partnership (the
"Secured Party"),

                                   WITNESSETH:

      WHEREAS, pursuant to an Agreement for Purchase and Sale of Stock dated as
of the date hereof (the "Purchase Agreement"), the Pledgor has purchased from
the Secured Party 100 shares of the Common Stock, $.0l par value (the "Stock"),
of Ariston Corporation, a Delaware corporation (the "Company"), which are all
the shares of capital stock of the Company issued and outstanding;

      WHEREAS, the Pledgor has paid for such shares by a $2,000,000 cash payment
to the Secured Party and delivery of the Pledgor's promissory note payable to
the Secured Party in the principal amount of $10,450,000 (the "Note"); and

      WHEREAS, the Pledgor has agreed to secure his commitments under the Note
by a pledge of the Stock now owned by the Pledgor;

      NOW, THEREFORE, in consideration of the mutual covenants contained in this
Agreement, and other good and valuable consideration, receipt of which is hereby
acknowledged, the parties hereto hereby agree as follows:

      1.    Pledge.

      In consideration of the acceptance by the Secured Party of the Note and
the undertakings of the Pledgor in this Agreement, the Pledgor hereby grants a
security interest to the Secured Party in the Stock (together with any other
securities or other property at any time pledged hereunder pursuant to the terms
hereof, the "Pledged
<PAGE>

Stock"). The Pledged Stock is represented by Certificate No. 1, which
certificate, accompanied by a separate stock power duly endorsed in blank by the
Pledgor is herewith delivered to the Secured Party, to be held on the terms and
conditions contained herein. The Pledgor hereby appoints the Secured Party as
its attorney in fact to cause the transfer of the Pledged Stock on the books of
the Company to the Secured Party or his designee upon the occurrence of an
"Event of Default," as such term is defined in the Note. The Secured Party shall
hold the Pledged Stock as security for the purposes described herein and shall
not encumber or dispose of such property except in accordance with the
provisions of this Agreement.

      2.    Stock Dividend or Stock Split; Liquidation, Recapitalization,
            Merger, etc.

      Any additional shares of capital stock paid upon or distributed with
respect to any of the Pledged Stock in the event of any stock dividend or stock
split declared by the Company or any issuer thereof and any sums paid upon or
with respect to any of the Pledged Stock upon the merger, consolidation,
liquidation, recapitalization, dissolution or reorganization of the Company or
any other issuer thereof shall be paid over to the Secured Party to be held by
him as security for the Note; and in case any distribution of capital shall be
made upon or with respect to any of the Pledged Stock or any property shall be
distributed upon or with respect to any of the Pledged Stock pursuant to the
recapitalization or reclassification of the capital of the issuer thereof or
pursuant to the reorganization, merger or consolidation thereof, the property so
distributed shall be delivered to the Secured Party to be held by him as
security for the Note. All securities, sums of money and other property paid or
distributed in respect of the Pledged Stock upon any such stock dividend, stock
split, merger, consolidation, liquidation, dissolution, reorganization,
recapitalization or reclassification which are received by the Pledgor shall,

                                      -2-
<PAGE>

until paid or delivered to the Secured Party, be held in trust for the Secured
Party as security for the Note.

      3.    Warranty of Title.

      The Pledgor warrants that he has good and marketable title to the Pledged
Stock pledged hereunder on the date hereof, subject to no pledge, lien, security
interest, charge, option, restriction or other encumbrance, and that it has
power, authority and legal right to pledge such Pledged Stock pursuant to this
Agreement. The Pledgor covenants that it will defend the Secured Party's rights
and security interest in such Pledged Stock against the claims and demands of
all persons whomsoever; and the Pledgor covenants that it will have the like
title to and right to pledge all other property hereafter pledged with the
Secured Party hereunder and will likewise defend the Secured Party's rights and
security interest therein.

      4.    Dividends and Voting Rights.

      Unless and until an Event of Default shall have occurred and be
continuing, the Pledgor shall be entitled to receive all cash dividends paid in
respect of the Pledged Stock and to vote the Pledged Stock and to give consents,
waivers and ratifications in respect of the Pledged Stock; provided, however,
that no vote shall be cast, or consent, waiver or ratification given or action
taken which would be inconsistent with or violate any provisions of this
Agreement or the Note. All such rights of the Pledgor to receive any cash
dividends shall cease in case an Event of Default shall have occurred and be
continuing, and in that case cash dividends shall be paid over by the Pledgor to
the Secured Party to be applied by it to the satisfaction of the Note, and all
cash dividends received by the Pledgor shall, until so paid to the Secured
Party, be held in trust for the Secured Party as security for the Note. All such
rights of the Pledgor to vote and give consents, waivers and

                                      -3-
<PAGE>

ratifications with respect to the Pledged Stock shall, at the Secured Party's
option as evidenced by the Secured Party's notifying the Pledgor of such
election, cease in case an Event of Default shall have occurred and be
continuing, and in that case the Secured Party shall have all such rights.

      5.    Discharge of Obligations.

      Upon payment and performance in full of all obligations to be performed by
the Pledgor under the Note, the Secured Party shall transfer to the Pledgor all
of the Pledged Stock and all rights received by the Secured Party as a result of
the pledge contained herein.

      6.    Default.

      Upon the occurrence of an Event of Default, the Secured Party shall have
the rights and remedies provided in the Uniform Commercial Code of
Massachusetts, and in that connection the Secured Party may, upon 5 days' notice
to the Pledgor sent by registered mail and without liability for any diminution
in price which may have occurred, sell all of the Pledged Stock in such manner
and for such price as the Secured Party may determine. It is agreed by the
Pledgor that such notice is reasonable. At any public sale, the Secured Party
shall be free to purchase all or any part of the Pledged Stock. Out of the
proceeds of any sale, the Secured Party may retain an amount equal to the
principal and interest then due under the Note, plus the amount of the expenses
of sale, including legal costs and reasonable attorneys' fees, and shall pay any
balance of such proceeds to the Pledgor.

                                      -4-
<PAGE>

      7.    Binding Effect.

      This Agreement shall be binding upon and inure to the benefit of the
Pledgor and the Secured Party and their successors and assigns; provided,
however, that neither party may assign this Agreement without the consent of the
other.

      8.    Other Provisions.

      (a) Waivers; Rights and Remedies. No delay or omission on the part of the
Secured Party in exercising any right or remedy shall operate as a waiver
thereof or of any other right or remedy. No waiver by the Secured Party shall be
effective unless made in writing, and a waiver on any one occasion shall not be
construed as a bar to or waiver of any right or remedy on any future occasion.
All the Secured Party's rights and remedies shall be cumulative and may be
exercised singularly or concurrently, and nothing herein shall be deemed to
limit in any way any rights the Secured Party might otherwise have under any
other instrument or by law, including, without limiting the generality thereof,
the right to negotiate any note or other instrument together with any collateral
specifically described herein.

      (b) Entire Agreement; Amendment. This Agreement constitutes the entire
agreement of the parties with respect to the subject matter hereof and may be
amended only by an instrument in writing referring to this Agreement executed by
the Pledgor and the Secured Party.

      (c) Governing Law. This Agreement shall be governed by and construed and
interpreted according to the laws of the Commonwealth of Massachusetts.

      (d) Notices. All notices required or permitted hereunder shall be in
writing and shall be deemed to have been duly given if delivered in hand or
deposited in

                                      -5-
<PAGE>

the United States mail, postage prepaid, or with Federal Express or comparable
overnight delivery service, addressed as follows:

                             (i) if to the Pledgor:

                             Semele Group Inc.
                             One Canterbury Green
                             Stamford, CT 06901

                             (ii) if to the Secured Party:

                             Equis Financial Group Limited Partnership
                             88 Broad Street
                             Boston, MA 02110

or to such other address as a party shall designate by notice to the other.

      IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.

                                    SEMELE GROUP INC.

                                    By: /s/ James A. Coyne
                                        ----------------------------------------
                                        James A. Coyne
                                    Title: President

                                    EQUIS FINANCIAL GROUP LIMITED
                                     PARTNERSHIP

                                    By: Equis Corporation, its general partner

                                    By:
                                        ----------------------------------------
                                        Gary D. Engle
                                    Title:

                                      -6-
<PAGE>

the United States mail, postage prepaid, or with Federal Express or comparable
overnight delivery service, addressed as follows:

                             (i) if to the Pledgor:

                             Semele Group Inc.
                             One Canterbury Green
                             Stamford, CT 06901

                             (ii) if to the Secured Party:

                             Equis Financial Group Limited Partnership
                             88 Broad Street
                             Boston, MA 02110

or to such other address as a party shall designate by notice to the other.

      IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.

                                    SEMELE GROUP INC.

                                    By:
                                        ----------------------------------------
                                        James A. Coyne
                                    Title:

                                    EQUIS FINANCIAL GROUP LIMITED
                                     PARTNERSHIP

                                    By: Equis Corporation, its general partner

                                    By: /s/ Gary D. Engle
                                        ----------------------------------------
                                        Gary D. Engle
                                    Title: President

                                      -6-

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