Document:

<PAGE>

                                                                   EXHIBIT 10.17

                             EMPLOYMENT AGREEMENT
                             --------------------

          This Employment Agreement ("Agreement"), effective as of January 1,
2001, is entered into by and between St. John Knits, Inc., a California
corporation ("Company"), and Bruce Fetter ("Executive").  In consideration of
the mutual covenants and agreements set forth herein, the parties hereto agree
as follows.

                                   ARTICLE 1

                                  EMPLOYMENT
                                  ----------

          The Company hereby employs Executive and Executive accepts employment
with the Company upon the terms and conditions herein set forth.

          1.1  Employment.  The Company hereby employs Executive, and Executive
               ----------
agrees to serve as the Company's Executive Vice President and Chief Operating
Officer during the term of this Agreement, and shall serve at the discretion of
the Company.  Executive agrees to devote substantially his or her full business
time and attention and best efforts to the affairs of the Company during the
term of this Agreement.

          1.2  Term.  The employment of Executive under the terms and conditions
               ----
of this Agreement will commence as of January 1, 2001 and will continue for a
period of one (1) year unless renewed or terminated sooner in accordance with
the provisions hereof.

                                   ARTICLE 2

                                 COMPENSATION
                                 ------------

          2.1  Annual Salary.  During the employment of Executive, the Company
               -------------
shall pay to Executive a base salary at the annual rate of $425,000 (the "Base
Salary").  The Base Salary shall be payable in substantially equal semi-monthly
installments.

          2.2  Reimbursement of Expenses.  Executive shall be entitled to
               -------------------------
receive prompt reimbursement of all reasonable expenses incurred by Executive in
performing services hereunder provided that such expenses are incurred and
accounted for in sufficient detail in accordance with the policies and
procedures established by the Company.

          2.3  Automobile Allowance.  The Company shall pay directly, or
               --------------------
reimburse Executive for, all reasonable costs and expenses incurred by Executive
in connection with the operation and maintenance of an automobile (i.e. car
insurance, car license and general upkeep).

          2.4  Benefits.  Executive shall be entitled to participate in and be
               --------
covered by all

                                       1
<PAGE>

health, insurance, pension and other employee plans and benefits currently
established for the employees of the Company (collectively referred to as the
"Company Benefit Plans") on at least the same terms as other employees of the
Company, subject to meeting applicable eligibility requirements.

          2.5  Vacations and Holidays.  During Executive's employment with the
               ----------------------
Company, Executive shall be entitled to an annual vacation leave of three (3)
weeks at full pay, or such greater vacation benefits as may be provided for by
the Company's vacation policies applicable to senior executives.  Executive
shall be entitled to such holidays as are established by the Company for all
employees.

                                   ARTICLE 3

                       CONFIDENTIALITY AND NONDISCLOSURE
                       ---------------------------------

          3.1  Confidentiality.  Executive will not during Executive's
               ---------------
employment by the Company or thereafter at any time disclose, directly or
indirectly, to any person or entity or use for Executive's own benefit any trade
secrets or confidential information relating to the Company's business
operations, marketing data, business plans, strategies, employees, negotiations
and contracts with other companies, or any other subject matter pertaining to
the business of the Company or any of its clients, customers, consultants, or
licensees, known, learned, or acquired by Executive during the period of
Executive's employment by the Company (collectively "Confidential Information"),
except as may be required in the ordinary course of performing Executive's
particular duties as an employee of the Company.

          3.2  Return of Confidential Material.  Executive shall promptly
               -------------------------------
deliver to the Company on termination of Executive's employment with the
Company, whether or not for Cause and whatever the reason, or at any time the
Company may so request, all memoranda, notes, records, reports, manuals,
drawings, blueprints, Confidential Information and any other documents of a
confidential nature belonging to the Company, including all copies of such
materials which Executive may then possess or have under Executive's control.
Upon termination of Executive's employment by the Company, Executive shall not
take any document, data, or other material of any nature containing or
pertaining to the proprietary information of the Company.

          3.3  Prohibition on Solicitation of Customers.  During the term of
               ----------------------------------------
Executive's employment with the Company and for a period of one (1) year
thereafter Executive shall not, directly or indirectly, either for Executive or
for any other person or entity, solicit any person or entity to terminate such
person's or entity's contractual and/or business relationship with the Company,
nor shall Executive interfere with or disrupt or attempt to interfere with or
disrupt any such relationship.  None of the foregoing shall be deemed a waiver
of any and all rights and remedies the Company may have under applicable law.

                                       2
<PAGE>

          3.4  Prohibition on Solicitation of Employees, Agents or Independent
               ---------------------------------------------------------------
Contractors After Termination.  During the term of Executive's employment with
-----------------------------
the Company and for a period of one (l) year following the termination of
Executive's employment with the Company, Executive will not, directly or
indirectly, solicit any of the employees, agents, or independent contractors of
the Company to leave the employ of the Company for a competitive company or
business.  However, Executive may solicit any employee, agent or independent
contractor who voluntarily terminates his or her employment with the Company
(without having been solicited by Executive) after a period of 120 days has
elapsed since the termination date of such employee, agent or independent
contractor.  None of the foregoing shall be deemed a waiver of any and all
rights and remedies the Company may have under applicable law.

          3.5  Right to Injunctive and Equitable Relief.  Executive's
               ----------------------------------------
obligations not to disclose or use Confidential Information and to refrain from
the solicitations described in this Article 3 are of a special and unique
character which gives them a peculiar value.  The Company cannot be reasonably
or adequately compensated for damages in an action at law in the event Executive
breaches such obligations.  Therefore, Executive expressly agrees that the
Company shall be entitled to injunctive and other equitable relief without bond
or other security in the event of such breach in addition to any other rights or
remedies which the Company may possess or be entitled to pursue.  Furthermore,
the obligations of Executive and the rights and remedies of the Company under
this Article 3 are cumulative and in addition to, and not in lieu of, any
obligations, rights, or remedies created by applicable law relating to
misappropriation or theft of trade secrets or Confidential Information.

          3.6  Survival of Obligations.  Executive agrees that the terms of this
               -----------------------
Article 3 shall survive the term of this Agreement and the termination of
Executive's employment by the Company.

                                   ARTICLE 4

                                  TERMINATION
                                  -----------

          4.1  For purposes of this Article 4, the following definitions shall
apply to the terms set forth below:

               (a)  Cause.  "Cause" shall include the following:
                    -----

                    (i)   personal dishonesty or willful misconduct by
          Executive;

                    (ii)  a breach of Executive's fiduciary duties to the
          Company which involves personal profit or benefit to Executive;

                    (iii) willful violation and conviction of any law, rule or
          regulation (other than traffic violations or similar offenses) or of
          any final cease and desist order issued by any financial institution
          regulatory authority against the

                                       3
<PAGE>

          Company; or

                    (iv)  a material breach of this Agreement by Executive.

               (b)  Good Reason.  "Good Reason" shall mean voluntary termination
                    -----------
     as a result of:

                    (i)   the assignment to Executive of duties materially
          inconsistent with the position of Executive as of the date of this
          Agreement without Executive's prior written consent;

                    (ii)  a material alteration in the nature of Executive's
          responsibilities or a material change in Executive's title or
          reporting level from those that exist as of the date of this
          Agreement;

                    (iii) the relocation of the Company's executive offices or
          principal business location to a point more than fifty (50) miles from
          the location of such offices or businesses as of the date of this
          Agreement;

                    (iv)  a material reduction by the Company of Executive's
          Base Salary; or

                    (v)   a failure by the Company to obtain from any successor,
          before the succession takes place, an agreement to assume and perform
          this Agreement.

               (c)  Disability.  "Disability" shall mean a physical or mental
                    ----------
     incapacity as a result of which Executive becomes unable to continue the
     proper performance of his or her duties hereunder (reasonable absences
     because of sickness for up to two (2) consecutive months excepted;
     provided, however, that any new period of incapacity or absence shall be
     deemed to be part of a prior period of incapacity or absence if the prior
     period terminated within ninety (90) days of the beginning of the new
     period of incapacity or absence and the incapacity or absence is determined
     by the Company's Board of Directors, in good faith, to be related to the
     prior incapacity or absence).  A determination of Disability shall be
     subject to the certification of a qualified medical doctor agreed to by the
     Company and Executive or in the event of Executive's incapacity to
     designate a doctor, Executive's legal representative.  In the absence of
     agreement between the Company and Executive, each party shall nominate a
     qualified medical doctor and the two (2) doctors so nominated shall select
     a third doctor, who shall make the determination as to Disability.

          4.2  Termination by Company.  The Company may terminate Executive's
               ----------------------
employment hereunder immediately for Cause.  Subject to the other provisions
contained in this Agreement, the Company may terminate this Agreement for any
reason other than Cause upon thirty (30) days' written notice to Executive.  The
effective date of termination ("Effective Date")

                                       4
<PAGE>

shall be considered to be thirty (30) days subsequent to written notice of
termination; however, the Company may elect to have Executive leave the Company
immediately.

          4.3  Termination by Executive.  Executive may terminate his or her
               ------------------------
employment hereunder upon thirty (30) days' written notice to the Company.  The
effective date of termination ("Effective Date") shall be considered to be
thirty (30) days subsequent to written notice of termination; however, the
Company may elect to have Executive leave the Company immediately.

          4.4  Death or Disability of Executive.  Executive's employment
               --------------------------------
hereunder shall terminate immediately upon the death or Disability of Executive.

          4.5  Severance Benefits Received Upon Termination.
               --------------------------------------------

               (a)  If Executive's employment is terminated by the Company for
     Cause, or Executive terminates this Agreement pursuant to Section 4.3 other
     than for Good Reason, then the Company shall pay Executive his or her Base
     Salary through the Effective Date of such termination plus credit for any
     vacation earned but not taken, and the Company shall thereafter have no
     further obligations to Executive under this Agreement.

               (b)  Except as set forth below, if Executive's employment is
     terminated by the Company without Cause, or Executive terminates this
     Agreement for Good Reason, or this Agreement expires after its 1-year term
     without the Company renewing or extending the term for another year, then
     the Company shall provide Executive:

                    (i)  salary continuation in an amount equal to Executive's
          Base Salary for a period equal to the longer of the remainder of the
          term of this Agreement or six (6) months, said sum to be paid semi-
          monthly in equal installments at the times salary payments are usually
          made; and

                    (ii) health insurance coverage as then in effect for
          Executive, his or her spouse and dependent children for a period equal
          to the longer of the remainder of the term of this Agreement or six
          (6) months, subject to any employee contribution provisions as defined
          in the Company Benefit Plans.  Subsequent health insurance benefits
          will be in accordance with COBRA.

     The above periods of salary and health insurance coverage continuation
     shall be extended up to a total of twelve (12) months (i.e. in the event
     Executive is provided six (6) months salary and health benefits
     continuation per the Sections 4.5(b)(i) and (ii), then such period shall be
     extended another six (6) months for a total of twelve (12) months), but
     only in the event Executive is terminated by the Company without Cause or
     Executive terminates this Agreement for Good Reason within twelve (12)
     months of a Change in Control or if after a Change in Control this
     Agreement expires after its term without the Company renewing or extending
     the term for another year. For purposes of this Agreement,

                                       5
<PAGE>

     "Change in Control" shall mean the point in time when Vestar Capital
     Partners III, L. P. ceases to beneficially own, directly or indirectly, a
     majority of the total voting power of the Company.

               (c)  If Executive's employment is terminated by the Company as a
     result of Disability, then the Company shall provide Executive:

                    (i)  salary continuation in an amount equal to Executive's
          then Base Salary for a period equal to one month for each full year
          Executive has been employed by the Company, up to a maximum of
          eighteen (18) months, said sum to be paid monthly in equal
          installments at the times salary payments are usually made; and

                    (ii) health insurance coverage as then in effect for
          Executive, his or her spouse and dependent children for a period of
          one month for each full year Executive has been employed by the
          Company, up to a maximum of eighteen (18) months, subject to any
          employee contribution provisions as defined in the Company Benefit
          Plans.  Subsequent health insurance benefits will be in accordance
          with COBRA.

               (d)  If Executive's employment is terminated by the Company as a
     result of death, then the Company shall provide Executive's spouse or
     estate health insurance coverage as then in effect for Executive, his or
     her spouse and dependent children for a period of six (6) months, subject
     to any employee contribution provisions as defined in the Company Benefit
     Plans.  Health insurance benefits subsequent to the salary continuation
     period will be in accordance with COBRA.

                                   ARTICLE 5

                              GENERAL PROVISIONS
                              ------------------

          5.1  Notice.  Notices and all other communications provided for in
               ------
this Agreement shall be in writing and shall be deemed sufficient if given by
(i) registered or certified mail, postage prepaid, return receipt requested,
(ii) overnight courier (i.e. UPS or FedEx), or (iii) facsimile (with a copy
mailed by regular U.S. mail), addressed to the respective addresses of the
parties as set forth below or at such other addresses as the respective parties
may designate by like notice from time to time.  Each such notice shall be
effective (x) if given by registered or certified mail, three days after deposit
in the mails, or (y) if given by overnight courier, one day after dispatch, or
(z) if given by facsimile, when transmitted to the applicable number specified
below and an appropriate answer is received confirming transmission was
completed.

                                       6
<PAGE>

     If to the Company:   St. John Knits, Inc.
                          17622 Armstrong Avenue
                          Irvine, CA 92614
                          Attn: Chief Executive Officer
                          Facsimile: (949) 399-8205

     With a copy to:      David A. Krinsky, Esq.
                          O'Melveny & Myers LLP
                          610 Newport Center Drive
                          Suite 1700
                          Newport Beach, CA 92660
                          Facsimile: (949) 823-6994

     If to Executive:     Bruce Fetter
                          c/o St. John Knits, Inc.
                          2722 Michelson Drive
                          Irvine, California 92612
                          Facsimile: (949) 223-3396

          5.2  No Waivers.  No provision of this Agreement may be modified,
               ----------
waived or discharged unless such waiver, modification or discharge is agreed to
in writing signed by Executive and the Company.  No waiver by either party
hereto at any time of any breach by the other party hereto of, or compliance
with, any condition or provision of this Agreement to be performed by such other
party shall be deemed a waiver of similar or dissimilar provisions or conditions
at the same or at any prior or subsequent time.

          5.3  Beneficial Interests.  This Agreement shall inure to the benefit
               --------------------
of and be enforceable by Executive's personal and legal representatives,
executors, administrators, successors, heirs, distributees, devisees and
legatees.  If Executive should die while any amounts are still payable to him
hereunder, all such amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to Executive's devisee, legatee, or
other designee or, if there be no such designee, to Executive's estate.

          5.4  Governing Law.  This Agreement shall be governed by and construed
               -------------
in accordance with the laws of the State of California.  The parties agree that
any and all suits relating to this Agreement shall be brought in the proper
state or federal court located in Orange County, California.

          5.5  Severability or Partial Invalidity.  The invalidity or
               ----------------------------------
unenforceability of any provisions of this Agreement shall not affect the
validity or enforceability of any other provision of this Agreement, which shall
remain in full force and effect.

          5.6  Counterparts.  This Agreement may be executed in one or more
               ------------
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.

                                       7
<PAGE>

          5.7  Legal Fees and Expenses.  Should any party institute any action
               -----------------------
or proceeding to enforce this Agreement or any provision hereof, or for damages
by reason of any alleged breach of this Agreement or of any provision hereof, or
for a declaration of rights hereunder, the prevailing party in any such action
or proceeding shall be entitled to receive from the other party all costs and
expenses, including reasonable attorneys' fees, incurred by the prevailing party
in connection with such action or proceeding.

          5.8  Entire Agreement.  This Agreement constitutes the entire
               ----------------
agreement of the parties and supersedes all prior written or oral and all
contemporaneous oral agreements, understandings, and negotiations between the
parties with respect to the subject matter hereof.  This Agreement is intended
by the parties as the final expression of their agreement with respect to such
terms as are included in this Agreement and may not be contradicted by evidence
of any prior or contemporaneous agreement.  The parties further intend that this
Agreement constitutes the complete and exclusive statement of its terms and that
no extrinsic evidence may be introduced in any judicial proceeding involving
this Agreement.

          5.9  Assignment.  This Agreement and the rights, duties, and
               ----------
obligations hereunder may not be assigned or delegated by any party without the
prior written consent of the other party and any attempted assignment or
delegation without such prior written consent shall be void and be of no effect.
Notwithstanding the foregoing provisions of this Section 5.9, the Company may
assign or delegate its rights, duties, and obligations hereunder to any
affiliate or to any person or entity which succeeds to all or substantially all
of the business of the Company through merger, consolidation, reorganization, or
other business combination or by acquisition of all or substantially all of the
assets of the Company.

                                       8
<PAGE>

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

                                   "Company"

                                   St. John Knits, Inc.,
                                   a California corporation

                                   By: /s/ Bob Gray
                                       -------------------------------------
                                       Bob Gray
                                       Chief Executive Officer

                                   "Executive"

                                   /s/ Bruce Fetter
                                   -----------------------------------------
                                   Bruce Fetter

                                       9<PAGE>

                                AIRCRAFT LEASE                     EXHIBIT 10.20
                                --------------

THIS LEASE is made as of April 1, 1999, between Ocean Air Charters, Inc., as
Trustee of the SJA 1&2, Ltd.  Trust (the "Lessor"), and St. John Knits, Inc.,.
(the "Lessee").

     1.  LEASE.    Lessor leases to the Lessee the following described aircraft:

                   One Dassault-Brequet Falcon 50 Aircraft, Serial No. 080 and
                   Garrett Engines Serial No. P76381, P76376 & P76212
                   ("Aircraft")

     2.  TERM.     The term of this lease shall be two (2) years, commencing on
April 1, 1999 and ending on March 31, 2001.

     3.  RENTAL.   The Aircraft rental shall be at the rate of $93,000 per
month, plus any applicable state tax, payable to the Lessor on or before the
first day of each monthly period of the lease. All rental payments shall be paid
at the place where designated by the Lessor.

     4.  LESSEE COVENANTS AND AGREEMENTS.

     (a) Conforming Use.  Lessee covenants and agrees to use the Aircraft only
         --------------
for the purposes and in the manner set forth in any application for insurance
executed in connection with the leased Aircraft, to abide by and conform to, and
cause others to abide by and to, all present and future federal, state,
municipal, and other laws, ordinances, orders, rules, and regulations,
controlling or in any way affecting the operation, use, or occupancy of the
Aircraft or the use of any airport premises by the Aircraft.

     (b) No Lien or Assignment.  Lessee agrees to keep safely, and use
         ---------------------
carefully, the Aircraft, and not to sell, or attempt to sell, or assign or
dispose of the Aircraft, or of any interest therein, or of any part thereof, or
equipment necessary thereto, or suffer or permit any charge, lien, or
encumbrance of any nature upon the Aircraft, or any part thereof, or lend or
rent the same, or remove or permit the Aircraft to be removed from its
designated home airport for periods in excess of 30 days, and not to remove
permanently the Aircraft from its designated home airport without the Lessor's
prior written consent.

     (c) Sublease.  Upon approval of the Lessor, the Lessee may sublease the
         --------
Aircraft, provided, however, the Aircraft is maintained in conformance with all
applicable rules and regulations pertaining to the use to which the Aircraft
shall be subjected.

     (d) Taxes.  Lessee shall pay all taxes, assessments, and charges imposed by
         -----
any national, state, municipal, or other public or airport authority on the
Aircraft or on its use during the term of this lease and until redelivery of the
Aircraft to the Lessor; and to save the Lessor free and harmless therefrom, and
reimburse the Lessor on a pro rata basis for any such taxes or charges payable
subsequent to the term of this lease.

     (e) Maintenance.  Lessee shall maintain and keep the Aircraft and all its
         -----------
components in good order and repair, in accordance with the requirements of the
manufacturer and the Federal Aviation Agency or any other governmental authority
having jurisdiction, and within a reasonable time replace in or on the Aircraft
any and all parts, equipment, appliances, instruments, or accessories which may
be worn out, lost, destroyed, confiscated, or otherwise rendered unsatisfactory
or unavailable for use in or on the Aircraft.  Such replacement shall be (1) in
good
<PAGE>

operating condition and have a value, utility, and quality at least equal to
that which the property replaced originally had, and (2) at the time affixed to
the Aircraft and made subject to this lease, owned by the Lessee free and clear
of all liens and encumbrances, it being understood that the Lessee shall have
the same protection as the Lessor under the standard warranty clause of the
manufacturer of the Aircraft, the terms and provisions of said warranty being
incorporated herein; perform all major overhaul on the Aircraft, whenever deemed
necessary and as may be required by the manufacturer and/or the Federal Aviation
Agency or any other governmental authority during the term of this lease, and
all engine overhaul and inspection and maintenance service.

     (f) Indemnification.  Lessee shall be responsible and liable to the Lessor
         ---------------
for, and indemnify the Lessor against, any and all damage to the Aircraft which
occurs in any manner from any cause or causes during the term of this lease or
until redelivery of the Aircraft to the Lessor, and to indemnify and hold Lessor
harmless from and against all claims, cost, expenses, damages, and liabilities,
including personal injury, death, or property damage claims arising or in any
manner occasioned by the operation or use of the Aircraft, during the term of
this lease or until redelivery of the Aircraft to the Lessor.

     (g) Insurance.  Lessee shall, at its own expense, keep the Aircraft covered
         ---------
by insurance in accordance with the following:

          (1)  Risk of Loss or Damage: With respect to the Aircraft and its
     equipment, the insurance policy obtained in connection herewith shall be in
     the joint names of Lessor and Lessee and shall insure the Aircraft and its
     equipment against all risk of loss or damage or not less than the full
     market value thereof, and the premiums therefor shall be paid by Lessee
     unless otherwise provided herein.  With respect to all other equipment,
     Lessee shall keep the equipment insured against all risk of loss or damage
     from every cause whatever for not less than the full replacement value
     thereof, except that in the case of oil or gas equipment, the insurance, at
     the election of Lessor, need not include fire and extended coverage on
     equipment situated beneath the ground.  Any such insurance shall be in form
     and amount with companies approved by Lessor and shall, at the election of
     Lessor, either  be in the joint names of Lessor and Lessee or be for the
     beneficial interest of Lessor, and Lessee shall pay the premiums therefor
     and at the request of Lessor deliver said policies or duplicates thereof to
     Lessor.  The proceeds of any such insurance at the option of Lessor, shall
     be applied (i) toward the replacement, restoration, or repair of the
     Aircraft and its equipment or (ii) toward payment of the obligations of
     Lessee hereunder.

          (2) With respect to the Aircraft and its equipment, public liability
     and property damage insurance shall be carried in the joint names of Lessor
     and Lessee against any and all damages and liabilities arising out of,
     connected with, or resulting from the possession, use, and operation of
     such equipment, shall be in form and amount with companies approved by
     Lessor and the premiums therefor shall be paid by Lessee unless otherwise
     provided herein.  With respect to all equipment other than the Aircraft,
     Lessee at the election of Lessor shall carry public liability and property
     damage insurance against any and all damages and liabilities arising out
     of, connected with, or resulting from the possession, use, and operation of
     such equipment.  Any such insurance shall be in form and amount with
     companies approved by Lessor and shall be in the joint names of Lessor and
     Lessee, and Lessee shall pay the premiums therefor and at the request of
     Lessor deliver said policies or duplicates thereof to Lessor.
<PAGE>

With respect to all policies of insurance hereinabove required to be obtained by
Lessee that are not issued in the joint names of Lessor and Lessee, such
policies, at Lessor's election, shall effectively provide that the insurer in
such policies shall give Lessor 30 days' written notice before the policy in
question shall be altered or canceled.  If within ten days following notice by
Lessor to Lessee, the Lessor has not received the insurance policies herein
required to be obtained by Lessee or has not received evidence of the payment by
Lessee of the premiums due on any of the policies of insurance required herein,
the Lessor may procure such insurance or pay such premiums and any sums so
expended by Lessor shall thereafter be reimbursed by Lessee to Lessor and shall
become additional rent under this lease and shall be payable in its entirety on
the next rental payment date or within 60 days, whichever event is sooner.

The Lessee hereby appoints Lessor as the Lessee's attorney-in-fact to make proof
of loss, and claim for, receive payment of, and execute or endorse all
documents, checks, or drafts for hull damage or return premium under the
insurance policies.

     (h) Licensed pilotage.  Lessee shall permit the Aircraft to be operated
         -----------------
only by a currently certificated pilot having at least the minimum total pilot
hours required by the applicable insurance and regulations.

     (i) Right of inspection.  Lessee shall permit the Lessor, or Lessor's duly
         -------------------
authorized agent or representative, to inspect the Aircraft at any reasonable
time, either on the land or aloft, and to furnish any information in respect to
the Aircraft and its use that the Lessor may reasonable request.

     (j) Delivery upon termination.  Lessee shall return, upon demand, at the
         -------------------------
expiration of the lease term, the Aircraft to the Lessor, at such place as may
be designated by the Lessor, in the same operating order, repair, condition, and
appearance as when received, excepting only for reasonable wear and tear, and
damage by any cause covered by collectible insurance.

     (k) Further assurances.  Lessee shall execute and deliver to the Lessor all
         ------------------
additional or supplemental instruments or documents as the Lessor may request in
connection with the Aircraft or this lease.

     5.  ASSIGNMENT OF WARRANTY.  The Lessor hereby assigns to the Lessee, for
and during the lease term, any warranty of the manufacturer, express or implied,
issued on or relating to the Aircraft, and hereby authorizes the Lessee to
obtain the customary service furnished by the manufacturer in connection with
any warranty, at Lessee's expenses.  The Lessee acknowledges and agrees that the
Aircraft is of a size, design, capacity, and a manufacturer selected by the
Lessee and suitable for its purposes.

     6.  NO IMPLIED REPRESENTATIONS OR WARRANTIES.  The parties acknowledge that
the Lessor is not a manufacturer or engaged in the sale or distribution of the
Aircraft.  Lessor makes no representations, promises, statements, or warranties,
expressed or implied, with respect to the merchantability, suitability, or
fitness for purpose of the Aircraft or otherwise.  Lessor shall not be liable to
the Lessee for any loss, claim, demand, liability, cost, damage, or expense of
any kind, caused, or alleged to be caused, directly, or indirectly, by the
Aircraft, or by any inadequacy thereof for any purpose, or by any defect
therein; or in the use of maintenance thereof, or any repairs, servicing, or
adjustments thereto, or any delay in providing, or failure to provide the same,
or any interruption or loss of service or use thereof, or any loss of business,
or any damage whatsoever and howsoever caused.
<PAGE>

     7.   RISK OF LOSS. All risks of loss or damage of the Aircraft leased, from
whatever cause, are hereby assumed by the Lessee during the entire lease term of
the Aircraft, and if the Aircraft is damaged, and is capable of being repaired,
the Lessee shall have the option of either repairing same or replacing same, at
the Lessee's cost.

     8.   IRREVOCABILITY. This lease is irrevocable for its full term and until
the aggregate rentals have been paid by the Lessee. Rent shall not abate during
the lease term because the Lessee's right to possession of the Aircraft has
terminated, or for any other reason whatsoever.

     9.   LESSOR'S ASSUMPTION OF LESSEE'S OBLIGATIONS. If Lessee shall fail to
use, preserve, and maintain the Aircraft, discharge all taxes, liens, or
charges, pay all costs and expenses, or procure and maintain insurance, in the
manner above provided, the Lessor, at its option, may do so, and all such
advances by the Lessor shall be added to the unpaid balance of the rentals due
under this lease and shall be repayable by the Lessee to Lessor on demand,
together with interest thereon at the rate of 10 percent per annum, until the
unpaid balance shall have been repaid in full. The Lessor may enter upon any
premises where the Aircraft is located, for the purpose of inspection, and may
remove the Aircraft forthwith, without notice to Lessee, if, in the opinion of
the Lessor, the Aircraft is being improperly used or maintained.

     10.  REPOSSESSION UPON DEFAULT.  If the Lessee shall fail to pay any rental
or any other amounts payable pursuant to this lease, when the same is due and
payable, or if the Lessee shall breach any other provision of this lease, or if
the Lessee becomes insolvent, or files a voluntary, or has filed against him an
involuntary, proceeding in bankruptcy for either discharge of indebtedness or
other protection from creditors or if a receiver is appointed for the Lessees's
property or an arrangement is made with or committee is formed for the Lessee's
creditors, then the Lessor, at its option, and in addition to and without
prejudice to any other remedies, may take possession of and remove, the
Aircraft, and all equipment, instruments, accessories, and repairs thereon,
which shall be considered a component part of the Aircraft, and in removing the
Aircraft, the Lessor may, if permitted by law, use any of the Lessee's licenses
in respect to the Aircraft, and/or the Lessor may terminate this lease.  The
retaking of such possession, however, shall not constitute a termination of this
lease unless the Lessor, so notifies Lessee in writing.  The Lessor, at its
option, may (a) lease the repossessed Aircraft, or any part thereof to any third
party upon such terms and conditions as Lessor may determine, or (b) sell the
Aircraft, or any part thereof, at public or private sale.  The total proceeds,
less the Lessor's expenses incurred in connection therewith, including
attorneys' fees, of such sale or sales, shall be applied to the total unpaid
rental.  Any deficiency thereafter shall be paid by the Lessee.

     11.  TIME OF ESSENCE.  Time is of the essence of this lease.

     12.  NO PASSAGE OF TITLE.  This agreement is a lease, and the Lessee does
not acquire hereby any right, title, or interest whatsoever, legal or equitable,
in the Aircraft or to the proceeds of the sale of the Aircraft except its
interests as the Lessee under this lease.

     13.  MISCELLANEOUS.

     (a)   The Lessor warrants that, if Lessee performs its obligations under
this lease, the Lessee shall peaceable and quietly hold, possess and use the
Aircraft during the entire lease term, free of any interference or hindrance.

     (b)   The relationship between the Lessor and Lessee is only that of Lessor
and Lessee.  The Lessee shall never at any time during the term of this lease
for any purpose whatsoever be
<PAGE>

or become the agent of the Lessor, and the Lessor shall not be responsible for
the acts or omissions of the Lessee or its agents.

     (c)   The Lessor's rights and remedies with respect to any of the terms and
conditions of this lease shall be cumulative and not exclusive, and shall be in
addition to all other rights and remedies available to Lessor.

     (d)  The Lessor's failure to strictly enforce any provisions of this lease
shall not be construed as a waiver thereof or as excusing the Lessee from future
performance.

     14.  SEVERABILITY.  The invalidity of any portion of this lease shall not
affect the remaining valid portions thereof.

     15.  ENTIRE AGREEMENT.  This lease constitutes the entire agreement between
the parties hereto, and any change or modification to this lease must be in
writing and signed by the parties hereto.

     16.  NOTICES.  All notices or other documents under this lease shall be in
writing and delivered personally or mailed by certified mail, postage prepaid,
addressed to the parties at their last known addresses.

     17.  NON-WAIVER.  No delay or failure by either party to exercise any right
under this lease, and no partial or single exercise of that right, shall
constitute a waiver of that or any other right, unless otherwise expressly
provided herein.

     18.  HEADINGS.  Headings in this lease are for convenience only and shall
not be used to interpret or construe its provisions.

     19.  GOVERNING LAW.  This lease shall be construed in accordance with and
governed by the laws of the State of California.

     20.  COUNTERPARTS.  This lease may be executed in two or more counterparts,
each of which shall be deemed an original but all of which together shall
constitute one and the same instrument.

     21.  BINDING EFFECT.  The provisions of this lease shall be binding upon
and inure to the benefit of both parties and their respective legal
representatives, successors, and assigns.

     IN WITNESS WHEREOF the Lessee and Lessor have duly executed this lease on

LESSOR:                                         LESSEE:

The SJA 1&2, Ltd. Trust                         St. John Knits, Inc.

By: Ocean Air Charters, Trustee   By /s/ Roger G. Ruppert
                                     -------------------------------------------
                                         Roger G. Ruppert, Senior Vice President
                                         /CFO
    By: /s/ Bob Gray
        -------------------------
            Bob Gray, President

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00019-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00019-of-00352.parquet"}]]