Document:

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                                                                   Exhibit 10.42

               WARRANTY ASSIGNMENT AGREEMENT AND CONSENT [N288SK]

     THIS WARRANTY ASSIGNMENT AGREEMENT AND CONSENT [N288SK] (this "Assignment")
is dated as of the 29th day of June, 2001, and is among Solitair Corp., a
Delaware corporation ("Seller"), as assignor, Wells Fargo Bank Northwest,
National Association, a United States national banking association ("WFB"), not
in its individual capacity but solely as Owner Trustee under a Trust Agreement
dated as of June 5, 2001 (the "Trust Agreement") between WFB and Mitsui & Co.
(U.S.A.), Inc. (the "Beneficiary") (in such capacity hereinafter referred to as
"Buyer"), as assignee, Chautauqua Airlines, Inc., a New York corporation, as
operator under the Lease Agreement as defined below ("Operator"), and
Rolls-Royce Corporation, a Delaware corporation ("Rolls-Royce"), as consenting
party.

                              W I T N E S S E T H:

     WHEREAS, Seller, Operator, and Rolls-Royce have entered into that certain
Rolls-Royce AE3007A Series Engine Warranty Agreement ("Warranty Agreement")
dated as of April 30, 1999 pursuant to which Rolls-Royce granted to Seller and
Operator certain Warranties as defined therein for the Engines and Supplies; and

     WHEREAS, Seller owns an Embraer model EMB-145LR aircraft, Embraer's serial
number 145443, United States Registration Number N288SK (the "Aircraft") with
two (2) installed Allison AE3007A1P engines bearing manufacturer's serial
numbers CAE311866 and CAE311867), manufactured by Allison Engine Company, Inc.,
a subsidiary of Rolls-Royce, including Supplies as defined in the Warranty
Agreement (the "Engines"); and

     WHEREAS, pursuant to that certain Aircraft Purchase Agreement [N288SK] (the
"Purchase Agreement") dated as of June 5, 2001 among Seller, Beneficiary, Buyer
and Lessee, Seller has agreed to sell, and Buyer has agreed to buy, the Aircraft
with the installed Engines; and

     WHEREAS, the sale of the Aircraft to Buyer pursuant to the Purchase
Agreement is conditioned upon Seller assigning to Buyer (as consented to by
Rolls-Royce) all of the assignable warranties granted by Rolls-Royce to Seller
pursuant to the Warranty Agreement with respect to the Engines; and

     WHEREAS, in accordance with the Warranty Agreement, Rolls-Royce must
consent to any assignment of the Warranties; and

     WHEREAS, pursuant to that certain Aircraft Lease Agreement [N288K] dated as
of June 5, 2001 ("Lease Agreement", capitalized terms not defined herein being
assigned the meanings given therein) between Buyer and Operator, Buyer shall
lease the Aircraft and assign the Assigned Warranties (as that term is defined
herein) to Operator subject to conditions; and

     WHEREAS, Seller and Buyer wish to accomplish such assignments pursuant to
the terms and conditions of this Assignment, and Rolls-Royce wishes to consent
to such assignments.

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     NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth herein and in the Purchase Agreement and for other valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, Seller and Buyer
hereby agree (and Rolls-Royce hereby consents) as follows:

     1. Seller hereby assigns and transfers to Buyer and Buyer hereby accepts
such assignments and transfer of, the Warranties and indemnitees under the
Warranty Agreement to the extent that they relate to the Engines described
above.

     2. Rolls-Royce hereby consents to the assignment of the Warranties by
Seller to Buyer under and pursuant to the terms and conditions of this Agreement
and further consents to the assignment of the Warranties by Buyer to Operator.
Notwithstanding anything in this Assignment to the contrary, so long as no Event
of Default shall have occurred and the Lease Agreement shall not have been
terminated under Section 17.02 thereof, Operator may, to the exclusion of Buyer,
exercise in Operator's name the right to obtain any recovery or benefit
resulting from the enforcement of any of the Warranties under the Warranty
Agreement in respect of the Engines and may exercise all other rights and powers
of the Buyer with respect to the Warranties, and may without the consent of
Buyer, enter into amendments or modifications thereof or terminate some or all
of the Warranties and replace them with power by the hour agreements (which
agreements will not be assigned to the Buyer), provided that Rolls-Royce hereby
confirms to the Buyer that in the event that an Event of Default shall have
occurred and the Lease Agreement shall have been terminated under Section 17.02
thereof, Buyer shall be entitled to exercise all rights and powers of the Buyer
with respect to the Warranties notwithstanding that the Operator has entered
into such power by the hour agreements, to the same extent as if none of such
Warranties had been terminated or replaced by such power by the hour agreements.
Rolls-Royce shall not be deemed to have knowledge of, and need not recognize the
occurrence or discontinuance of, any Event of Default under, or termination of,
the Lease Agreement, unless and until Rolls-Royce has received written notice
thereof from Buyer (including by telex or telecopy) addressed to Rolls-Royce
Corporation at 2001 South Tibbs Avenue S30, Indianapolis, Indiana 46241,
Attention: Vice President Commercial, and, in acting in accordance with the
terms and conditions of the Warranty Agreement and this Assignment, Rolls-Royce
may act with acquittance and conclusively rely upon any such notice. If
Rolls-Royce so receives notice from Buyer that an Event of Default shall have
occurred and the Lease Agreement shall have been terminated under Section 17.02
thereof, Rolls-Royce will have no further contractual obligation under the
Warranty Agreement or power by the hour agreements to the Operator, if
applicable, and will, to the extent not already provided to the Operator,
perform all the duties and obligations under the Warranty Agreement with respect
to the Warranties for the benefit of Buyer and, to the extent not already paid
to the Operator, will make any and all payments that it thereafter is required
to make in respect of the Warranties directly to Buyer at the account or
location as Buyer from time to time notifies Rolls-Royce in writing.

3.   Anything herein contained to the contrary notwithstanding:

     (a) Except with respect to the Engines specifically assigned hereunder,
Buyer and Beneficiary shall have no obligation or liability under the Warranty
Agreement by reason of, or arising out of, this Assignment, or be obligated to
perform any of Seller's duties or obligations

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under the Warranty Agreement, to make any payment, to present or file any
claim, or to take any other action to collect or enforce any claim for any
payment assigned hereunder;

     (b) Buyer confirms, for Rolls-Royce's benefit, that in exercising any
rights under the Warranty Agreement or in making any claim with respect to the
Engines or other goods and services delivered or to be delivered pursuant to the
Warranty Agreement, the terms and conditions of the Warranty Agreement shall
apply to and bind Buyer (and any assignee of Buyer) to the same extent as
Seller; and

     (c) Except as expressly stated herein, nothing contained herein shall
subject Rolls-Royce or Seller to any liability to which it, as the case may be,
would not otherwise be subject under the Warranty Agreement or modify in any
respect the rights of Rolls-Royce or Seller thereunder.

     (d) Rolls-Royce shall have no obligation or liability to Seller with
respect to the Engines specifically assigned hereunder after the date of closing
and the transfer of title.

5.   This Assignment (and the acknowledgement and consent to be signed by
Rolls-Royce) may be executed in separate counterparts, each of which when so
executed and delivered shall be an original and all such counterparts shall
together constitute one and the same instrument.

6.    This Assignment shall be governed by and construed in accordance with the
laws of the State of New York without reference to any choice of law rules
thereof that would result in a choice of law other than that of New York.

7.       WFB is entering into this Assignment solely as Owner Trustee under the
Trust Agreement and not in its individual capacity and neither WFB nor any
entity acting as successor Owner Trustee or additional Owner Trustee under the
Trust Agreement shall be personally liable for, or for any loss in respect of,
any of the statements, representations, warranties, agreements or obligations
stated to be those of the Buyer hereunder, as to which all interested parties
shall look solely to the Trust Estate, except to the extent expressly provided
otherwise in the other Operative Documents, PROVIDED HOWEVER, that nothing in
this paragraph 7 shall be construed to limit in scope or substance the liability
of WFB or any entity acting as successor Owner Trustee or additional Owner
Trustee under the Trust Agreement in its individual capacity for the
consequences of its own willful misconduct or gross negligence or (in receiving,
handling or remitting funds) its simple negligence, or the inaccuracy or breach
of its representations, warranties or covenants made in such capacity in any
other Operative Documents.

                            [SIGNATURE PAGE FOLLOWS]

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IN WITNESS WHEREOF, the parties hereto have caused this Warranty Assignment
Agreement and Consent [N288SK] to be duly executed as of the date and year first
above written.

                                  SOLITAIR CORP.

                                  BY: /s/ Douglas J. Lambert
                                      ------------------------------------------
                                  NAME: Douglas J. Lambert
                                        ----------------------------------------
                                  TITLE: Vice President
                                         ---------------------------------------

                                  WELLS FARGO BANK NORTHWEST,
                                  NATIONAL ASSOCIATION, not in its individual
                                  capacity but solely as Owner Trustee under the
                                  Trust Agreement

                                  By: /s/ Brett R. King
                                      ------------------------------------------
                                  Name: Brett R. King
                                        ----------------------------------------
                                  Title: Vice President
                                         ---------------------------------------

                                  CHAUTAUQUA AIRLINES, INC.

                                  By: /s/ Robert H. Cooper
                                      ------------------------------------------
                                  Name: Robert H. Cooper
                                        ----------------------------------------
                                  Title: Vice President
                                         ---------------------------------------

                                  Consented to by ROLLS-ROYCE CORPORATION

                                  By:
                                      ------------------------------------------
                                  Name: Peter Turner
                                        ----------------------------------------
                                  Title: Authorized Officer
                                         ---------------------------------------

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NOTE TO EXHIBIT 10.42

The two additional Warranty Assignment Agreements are substantially identical
in all material respects to the filed Warranty Assignment Agreement except as
follows:

<Table>
<Caption>

------------------------------------- ----------------------------------- -----------------------------------
            TAIL NUMBER                          CLOSING DATE                     OWNER-PARTICIPANT

------------------------------------- ----------------------------------- -----------------------------------
<S>                                   <C>                                 <C>
              N286SK                             June, 2001                        Mitsui & Co.
------------------------------------- ----------------------------------- -----------------------------------
              N287SK                             June, 2001                        Mitsui & Co.
------------------------------------- ----------------------------------- -----------------------------------

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</Table><Page>

                                                               EXECUTION VERSION

                             TAX INDEMNITY AGREEMENT

     TAX INDEMNITY AGREEMENT dated as of June 5, 2001 (this "TAX INDEMNITY
AGREEMENT" or this "AGREEMENT"), between CHAUTAUQUA AIRLINES, INC. (the
"LESSEE") and MITSUI & CO. (U.S.A.), INC. (the "BENEFICIARY").

                                    RECITALS

     A. Concurrently with the execution and delivery of this Agreement, the
Beneficiary and the Owner Trustee are executing and delivering a Trust Agreement
[N288SK], dated as of June 5, 2001 (the "TRUST AGREEMENT"), pursuant to which
the Beneficiary has agreed to cause the Owner Trustee to acquire and to lease to
the Lessee the Aircraft; and

     B. It is a condition precedent to the obligation of the Beneficiary to
cause the Owner Trustee to purchase the Aircraft and to lease the Aircraft to
the Lessee pursuant to the Trust Agreement and Aircraft Lease Agreement [N288SK]
dated as of the date hereof (the "LEASE") that the Lessee execute and deliver to
the Beneficiary this Agreement, which provides, among other things, for certain
income tax indemnities from the Lessee to the Beneficiary and certain
reimbursements by the Beneficiary to he Lessee, based upon the Tax Assumptions;
and

     NOW, THEREFORE, as an inducement to the Beneficiary to enter into the Lease
and the Purchase Agreement and in consideration of the mutual covenants
contained herein and therein, Lessee and the Beneficiary hereby agree as
follows:

     Section 1. DEFINITIONS. (a) The term "BENEFICIARY" shall mean the
Beneficiary and, for any taxable year in which the Beneficiary joins in the
filing of a consolidated federal income tax return, shall include each member of
the affiliated group (within the meaning of Section 1504 of the Code (or any
successor provision thereto)) of which the Beneficiary is a member.

          (b) "BENEFICIARY'S COST" shall mean [*]

          (c) "GROSS--UP" shall mean the portion of any indemnity payment due
from the Lessee to the Beneficiary pursuant to Section 6 hereof that is
calculated to indemnify the Beneficiary for the taxation of the indemnity
payment or the portion of any reverse payment due from the Beneficiary to the
Lessee that is calculated to take into account the reduction in income taxes of
the Beneficiary resulting from such reverse payment.

          (d) "LESSEE PERSON" shall mean the Lessee, any Person controlled by
it, in control of it, or under common control with it, directly or indirectly,
any Person claiming by, through or under the Lessee, any sublessee or other user
or person in possession of the Aircraft (or any part thereof) during the Term,
any Affiliate of any of the foregoing (but excluding the Beneficiary or the
Owner Trustee or any Person claiming by, through or under the Beneficiary or the
Owner Trustee (but not so excluding any Person claiming directly or indirectly
through or under the Lease), unless any such Person is in possession of the
Aircraft or any part thereof pursuant to an exercise of remedies in connection
with an Event of Default under the Lease).

          (e) "TAX ATTRIBUTE PERIOD" shall mean the period beginning on the
Delivery Date and ending on March 31, 2009, PROVIDED that in the event the
depreciation period for the Aircraft is other than the period specified in Tax
Assumption 2(c)(i) as a direct result of a Lessee Act (as hereinafter defined),

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* Confidential

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which caused an indemnity to become payable hereunder by the Lessee to the
Beneficiary, such period shall end on the last day of the taxable year in which
a depreciation deduction for the Aircraft is allowed or allowable to Mitsui &
Co. (U.S.A.), Inc.

          (f) "PERMITTED PERCENTAGE" shall mean [*]

          (g) "REASONABLE BASIS" means the support required by American Bar
Association Formal Opinion 85-352 for a position which a lawyer may properly
advise a client to take on a tax return in accordance with that Opinion.

          (h) Capitalized terms used herein without definition shall have
meanings ascribed thereto in the Lease.

     In this Agreement, except as otherwise expressly provided or unless the
context otherwise requires:

          (i) references within any documents to appendices, schedules,
paragraphs, sections, exhibits or annexes are references to appendices,
schedules, paragraphs, sections, exhibits or annexes in or to such document;

          (ii) headings, subheadings, and paragraph number descriptions and the
table of contents are solely for the convenience of reference and shall not
affect the meaning, construction or effect of any provision of this Agreement or
any other document;

          (iii) reference to any agreement means such agreement as amended,
modified or supplemented from time to time in accordance with the provisions
thereof;

          (iv) references to "including" shall mean including without limiting
the generality of any description preceding such term and the rule of EJUSDEM
GENERIS shall not be applicable to limit a general statement, followed by or
referable to an enumeration of specific matters, to matters similar to those
specifically mentioned;

          (v) where any matter requires the approval or consent of either party,
such approval or consent shall be deemed not to have been given unless given in
writing and where any matter is required to be acceptable to either party, the
same shall be deemed not to have been accepted unless such acceptance is
communicated in writing; and

          (vi) each of the parties hereto and its counsel have reviewed and
revised, or requested revisions to, this Agreement, and the usual rule of
construction that any ambiguities are to be resolved against the drafting party
shall be inapplicable in the construction and interpretation of this Agreement.

     Section 2. ASSUMPTIONS. The transactions described in the Lease have been
entered into on the assumptions (the "TAX ASSUMPTIONS") that for Federal income
tax purposes:

          (a) at all times during the Term, for federal income tax purposes the
Lease will constitute a "true lease", the Beneficiary will be treated as the
owner and lessor of the Aircraft and the Lessee will be treated as the lessee of
the Aircraft;

          (b) the Beneficiary's taxable year is the year ending March 31, and
the Beneficiary will include all items of income, gain, loss, deduction, or
credit with respect to the transactions contemplated by the Lease using an
accrual method of accounting;

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* Confidential

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          (c) the Beneficiary, as the owner of the Aircraft for Federal income
tax purposes, will be entitled to the following Federal income tax benefits:

               (i) cost recovery deductions for 100% of the Beneficiary's Cost
     of the Aircraft pursuant to Section 168(b) of the Code, commencing in the
     Beneficiary's taxable year in which the Delivery Date occurs, computed (i)
     on the basis that the Aircraft is "7-year property" (within the meaning of
     Section 168(e) of the Code), (ii) by using the 200% declining balance
     method over a 7 year recovery period, switching to the straight-line method
     for the first taxable year of the Beneficiary during the term for which
     such method yields a larger allowance, (iii) assuming salvage value is zero
     and (iv) using a half-year convention, equal to the following percentages
     of the Beneficiary's Cost for each of the following years (the "MACRS
     DEDUCTIONS"):

<Table>
<Caption>
         TAXABLE YEAR ENDING MARCH 31                        PERCENT
       <S>                                          <C>
                 2002                                         14.29%
                 2003                                         24.49%
                 2004                                         17.49%
                 2005                                         12.49%
                 2006                                          8.93%
                 2007                                          8.92%
                 2008                                          8.93%
                 2009                                          4.46%;
</Table>

               (ii) for each taxable year of the Beneficiary during the Tax
     Attribute Period, not more than the Permitted Percentage of any item of
     income, deduction or loss with respect to the transactions contemplated by
     the Lease will be treated for Federal income tax purposes as derived from,
     or allocable to, sources outside the United States; and

               (iii) the Beneficiary will be a domestic corporation subject to a
     Federal and state income tax rate of (after giving effect to the
     deductibility of such state income taxes for Federal income tax purposes)
     40.00% (the "ASSUMED TAX RATE") in 2001 and in each year thereafter, and
     the Beneficiary will have sufficient taxable income to be taxed at the
     Assumed Tax Rate after full utilization of the MACRS Deductions;

          (d) the Beneficiary will not be subject to the minimum tax or the
     alternative minimum tax under Section 55 of the Code;

          (e) during the Tax Attribute Period, neither the Aircraft nor any part
     thereof will be treated as "used predominantly outside the United States"
     within the meaning of Section 168(g) of the Code; and

          (f) the Beneficiary will not be required to include in its gross
income for Federal, State or local income tax purposes any amount with respect
to the transactions contemplated by the Operative Documents other than (i) Basic
Rent when and as such Basic Rent is stated to accrue in accordance with

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the terms of the Lease, (ii) any payment of Stipulated Loss Value to the extent
that such amount exceeds the Beneficiary's adjusted basis in the Airframe to
which such payment relates, at the time such payment is required to be made
under the Operative Documents, (iii) any amount payable to the Beneficiary or
Lessor on overdue payments and specifically identified as interest at the time
payable pursuant to the Operative Documents, (iv) any payment made to the
Beneficiary or the Lessor if and to the extent that the amount of the payment is
determined on an "after-tax" basis and (v) any other amounts offset by
deductions of the same character and in the same taxable year (other than the
MACRS Deductions) that would not have been available but for the event or
circumstance giving rise to the inclusion in income (the failure of any of the
assumptions in this subsection (f) to be correct being referred to herein as an
"INCOME INCLUSION").

     Section 3. RECORDS AND STATEMENTS. The Lessee shall, at its expense,
maintain such information or records relating to the Aircraft as are regularly
maintained by the Lessee or as may be required by law to be maintained
(including, but not limited to, flight logs). The Lessee shall, at the Lessee's
expense, provide or cause to be provided any such records or information, and
such other information customarily maintained by comparable airlines, as the
Beneficiary may reasonably request from the Lessee to enable the Beneficiary to
fulfill its tax filing, tax audit, and tax litigation obligations, including,
but not limited to, its Federal income tax filing obligations.

     Section 4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF LESSEE. The Lessee
represents, warrants and covenants that:

          (a) if at the time of transfer of title to the Owner Trustee on the
Delivery Date the Aircraft were instead acquired by the Lessee, the Aircraft
would qualify on the Deliver Date as "7-year property" within the meaning of
Section 168(e)(1) of the Code in the hands of the Lessee;

          (b) neither Lessee nor any other Lessee Person thereof has claimed or
will claim the MACRS Deductions, or claim to be the owner of the Aircraft in
respect of any period after the Delivery Date and during the Term, or has taken
or will take any action or position (not required by the Lease or other
Operative Documents) inconsistent with the status of the Beneficiary during the
Term as the sole owner of the Aircraft for Federal, state, local and foreign tax
purposes, in each case, with respect to any period after the Delivery Date and
during the Term;

          (c) assuming that neither Beneficiary, Owner Trustee nor any Affiliate
of Beneficiary or Owner Trustee is a "tax-exempt entity" within the meaning of
Section 168(h)(2) of the Code during the Tax Attribute Period, neither the
Aircraft nor any part thereof will be "tax-exempt use property" within the
meaning of Section 168(h) of the Code; and

          (d) during the Tax Attribute Period, neither the Lessee nor any Lessee
Person will take any action which would cause (x) the Aircraft to be used
"predominantly outside the United States" within the meaning of Section 168(g)
of the Code or (y) the registration of the Aircraft in any jurisdiction outside
the United States.

     Section 5. FEDERAL INCOME TAX INDEMNITY. (a) If for any taxable year, as a
direct result of

               (i) any act on the part of the Lessee or any Lessee Person (other
     than the execution and delivery of the Lease or an act required under the
     Lease or other Operative Documents or expressly permitted under the Lease
     or other Operative Documents or requested by the Beneficiary in writing);
     (ii) Lessee failing to take any action required to be taken under the
     Operative Documents other than a failure requested in writing by the
     Beneficiary; (iii) the inaccuracy or breach of any representation,
     agreement, covenant or warranty of the Lessee

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     contained herein; (iv) the Lessee failing to take such other reasonable
     action as is requested in writing from time to time by the Beneficiary
     (unless such failure is due to reasonable cause); or (v) any replacement of
     Aircraft or any Engine or any improvements, alterations, modifications or
     additions to the Aircraft (or any part thereof) or the temporary or
     permanent removal from service of the Aircraft (each such act, failure,
     omission, inaccuracy, breach or event, a "LESSEE ACT"),

the Beneficiary for federal income tax purposes shall suffer a loss,
disallowance or deferral of, shall suffer a delay in claiming, shall not have
the right to claim (based on a written opinion of independent tax counsel
selected by the Beneficiary and reasonably acceptable to the Lessee that there
is not a Reasonable Basis for claiming the item in question), shall be required
to recapture (a "RECAPTURE"), all or any portion of the MACRS Deductions (a
"MACRS LOSS") or Beneficiary shall be required to include in its gross income
for Federal income tax purposes any amount which constitutes an Income Inclusion
and which is attributable to (x) any improvements, additions, modifications or
alterations to the Aircraft, (y) any replacement of the Aircraft, Airframe or
Engines (except to the extent such replacement constitutes a Recapture) or (z)
any prepayments of Basic Rent or other scheduled payments by the Lessee (an
"INCOME INCLUSION LOSS") (either a MACRS Loss or an Income Inclusion Loss being
hereinafter referred to as a "TAX LOSS"), then unless (x) the Lessee elects with
respect to such Tax Loss to make the payment or payments provided for in
paragraph (c) of this Section 5 or (y) the Tax Loss results from a Sublease
during the Tax Attribute Period with a Permitted Sublessee domiciled in a
country other than the United States (in which case the provisions of paragraph
(c) of this Section 5 shall apply), the Lessee, after written notice from the
Beneficiary of such Tax Loss, shall pay to the Beneficiary as an indemnity, from
time to time as required, an amount which, after deduction of the amount of all
additional Federal, state, local, and foreign taxes actually required to be paid
by the Beneficiary in respect of the receipt or accrual of such amount, shall be
equal to the increase in Federal and state income taxes payable by (or not
refundable to) the Beneficiary as a result of such Tax Loss, plus the amount of
any actual interest, penalties and additions to tax payable by the Beneficiary
with respect to such Tax Loss (taking into account the deductibility of interest
or other additional amounts for Federal income tax purposes to the extent such
amounts are deductible on a concurrent basis). Further, for purposes of
determining the amounts of the increase in income taxes as a result of a MACRS
Loss, the applicable tax rate shall be the Assumed Tax Rate and shall be
calculated on a hypothetical basis (I.E., assuming that the Beneficiary pays
taxes and can fully utilize the MACRS Deductions), and, for purposes of
determining the Tax Loss from an Income Inclusion Loss or the amount of any
"Gross-up," the applicable tax rate shall be the highest marginal income tax
rate of the Beneficiary for the taxable year in which such Income Inclusion Loss
or Gross-up is accrued by the Beneficiary. Each payment by the Lessee pursuant
to this Section 5(a) shall be made within 30 days after receipt of a written
demand certifying that there has been a Tax Loss, describing in reasonable
detail the Tax Loss in question, the amount of additional income tax, interest,
penalties and additions to tax and the calculation of the payment due in respect
thereof and describing the event or condition that Beneficiary claims gives rise
to an obligation by the Lessee to indemnify hereunder (but in no event earlier
than one (1) Business Day prior to the date the indemnified tax liability is, or
would be, due); PROVIDED THAT, if a contest of the Tax Loss is being conducted
pursuant to Section 7 hereof, payment (other than payments required under
Section 7), shall not be required from the Lessee until 30 days after the Final
Determination (as hereinafter defined) of such contest.

          (b) If, as the result of a Tax Loss for which an indemnity has been
paid pursuant to Section (a), the amount of Federal income taxes payable by the
Beneficiary for any taxable year shall be less than the amount of such taxes
which would have been payable by the Beneficiary had such Tax Loss not occurred
(or as the result thereof the Beneficiary shall receive a refund or credit of
Federal income taxes, which shall be greater than the amount of such refund or
credit, if any, which the Beneficiary would have received had such Tax Loss not
occurred), then the Beneficiary shall pay to the Lessee the amount of such
increased reduction in taxes (or refund or credit, including any actual interest
(net of any taxes payable with respect to such interest) received or credited
thereon), plus any net additional Federal,

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<Page>

state, local or foreign tax benefits actually realized by the Beneficiary as the
result of any payment made pursuant to this sentence (such reduction in or
increased refund or credit of income taxes to be determined on a hypothetical
basis, I.E., assuming the Beneficiary can utilize any additional tax benefits
resulting from the Tax Loss at the Assumed Tax Rate and a hypothetical basis);
PROVIDED, HOWEVER, that the "Gross-up" or the tax benefit resulting from an
Income Inclusion Loss shall be determined on the basis of the highest marginal
income tax rate of the Beneficiary Each payment made by the Beneficiary to the
Lessee pursuant to this Section 5(b) shall be made within 30 days after the
Beneficiary files a tax return (including estimated returns) or received or was
credited with a refund or adjustment from the Internal Revenue Service which
reflects such reduction in federal income tax. The Beneficiary shall act in good
faith in claiming and pursuing refunds and Tax savings which would result in
payments to the Lessee pursuant to this Section 5.

          (c) (i) If (x) the Beneficiary suffers a Tax Loss and the Lessee
elects to make the payment or payments provided for in this paragraph (c), after
written notice to the Lessee by the Beneficiary that a Tax Loss has occurred and
at the election of the Lessee, or (y) a Tax Loss is reasonably expected to
result from a Sublease entered into during the Tax Attribute Period with a
Permitted Sublessee domiciled in a country other than the United States (a
"Foreign Sublease"), the Lessee shall pay either (A) a lump sum amount which,
after deducting income taxes required to be paid by the Beneficiary as a result
of the Beneficiary's receipt or accrual of such amount, will cause the yield
portion of the Beneficiary's Net Economic Return to be maintained (after taking
into account any present or future tax benefits reasonably expected to be
available to the Beneficiary as a result of such Tax Loss or Foreign Sublease)
or (B) except in the case of a Foreign Sublease, if no Event of Default has
occurred and is continuing, a series of equal payments which, when added to
Basic Rent payable under the Lease, and which after deducting income taxes
required to be paid by the Beneficiary as a result of the receipt or accrual
thereof (computed in accordance with Section 7 hereof), will cause the yield
portion of the Beneficiary's Net Economic Return to be maintained, in either
case together with any interest, penalties and additions to tax payable in
respect of such Tax Loss. The computation of the indemnity amount or payment
amounts under this paragraph (c) shall be made by the Beneficiary utilizing the
methodology and assumptions, including the Tax Assumptions, utilized by the
Beneficiary in determining its Net Economic Return, except as such assumptions
shall be varied to take into account such Tax Loss or Foreign Sublease or any
previous Tax Loss or Foreign Sublease for which an indemnity was paid under this
Agreement. Further, for purposes of determining the amounts of the increase and
reduction in income taxes as a result of a Tax Loss or Foreign Sublease, the
applicable tax rate shall be the Assumed Tax Rate provided, that for purposes of
computing the amount of any Income Inclusion Loss or the amount of any
"Gross-up", the Beneficiary shall be assumed to be subject to the highest
marginal income tax rate applicable to the Beneficiary for the relevant period
or periods affected by such computation (and, to the extent such computation
relates to a future period, the highest marginal income tax rate applicable to
the Beneficiary in effect or scheduled to be in effect as of the date such
indemnity becomes payable hereunder). Except in the case of a Foreign Sublease,
indemnity payments under this paragraph shall commence (or if the Lessee shall
have elected to pay the indemnity in a lump sum, such sum shall be payable) on
the later of (x) in the case of a contest pursuant to Section 7, 30 days after
the Final Determination of such contest, or (y) the Rent Payment Date next
succeeding the date on which the Beneficiary pays to the Internal Revenue
Service an amount of any tax increase resulting from a Tax Loss (or suffers a
reduction in the amount of any refund or credit which the Beneficiary would have
been entitled to receive but for such Tax Loss), provided, however, that, for
purposes of this clause (y), if an indemnity obligation arises after the last
payment of Basic Rent under the Lease shall have been made, then the total
amount of such indemnity shall be payable in a lump sum within 30 days of the
Beneficiary's request therefor; PROVIDED, FURTHER, that any amount payable to
the Beneficiary shall not be due prior to 30 days after receipt by the Lessee of
a written demand therefor accompanied by a written statement describing in
reasonable detail such Tax Loss and the computation of the amount so payable. If
a Specified Default shall occur and be continuing, or if the Lease shall
terminate for any other reason, and

                                        6
<Page>

such Specified Default occurs after the Lessee shall have commenced the payment
of an indemnity pursuant to clause (B) of Section 5(c) hereof, then the Lessee
shall pay to the Beneficiary a lump sum amount equal to all such payments then
remaining unpaid, discounted to the date of the Specified Default so as to
maintain the yield portion of the Beneficiary's Net Economic Return. In the case
of a Foreign Sublease, the indemnity shall be calculated only as a lump sum
amount in accordance with clause (A) of this Section 5(c)(i), and such amount
shall be payable as a lump sum immediately prior to the commencement of such
Foreign Sublease. If the Lessee notifies the Beneficiary in writing that
commencement of the contemplated Foreign Sublease will not occur, the
Beneficiary shall promptly return to the Lessee any indemnity payment made
pursuant to the immediately preceding sentence with respect to such contemplated
Foreign Sublease.

          (ii) If, as the result of a Tax Loss or a Foreign Sublease or a change
of facts that gave rise to a Tax Loss or a Foreign Sublease for which an
indemnity was paid pursuant to Section 5(c)(i), the amount of federal income
taxes payable by the Beneficiary for any taxable year shall be less than the
amount of such taxes which would have been payable by the Beneficiary had such
Tax Loss or Foreign Sublease or such change not occurred (or as the result
thereof the Beneficiary shall receive a refund of such income taxes, which shall
be greater than the amount of such refund, if any, which the Beneficiary would
have received had such Tax Loss, Foreign Sublease or change not occurred (other
than savings already taken into account in determining the indemnity pursuant to
Section 5(c)(i)), then provided that no Specified Default has occurred and is
continuing (if a Specified Default shall have occurred and be continuing the
Beneficiary shall hold such amounts described in this Section 5(c)(ii) as
provided in Section 4.09 of the Lease until any such Specified Default shall no
longer be continuing at which time the Beneficiary shall pay such amounts to the
Lessee) the Beneficiary shall pay to the Lessee the amount of any actual
resulting reduction in taxes (or increased refund, including any actual interest
(net of any taxes payable with respect to such refund or interest) received or
credited thereon), plus any net additional federal, state, local or foreign tax
benefits or savings actually realized by the Beneficiary as the result of any
payment made pursuant to this sentence (such actual reduction in or increased
refund of income taxes to be determined, with respect to a Tax Loss, Foreign
Sublease or change, on a hypothetical basis, i.e., assuming the Beneficiary can
utilize any additional tax benefits resulting from the Tax Loss, Foreign
Sublease or change at the Assumed Tax Rate, provided, however, that the amount
payable by the Beneficiary pursuant to this sentence shall not exceed the sum of
the amounts previously paid by the Lessee to the Beneficiary pursuant to
Section 5(c)(i), less the aggregate amount of all prior payments by the
Beneficiary to the Lessee under this sentence, with any excess amount otherwise
payable being carried forward and available to reduce pro tanto any subsequent
obligation of Lessee to Beneficiary pursuant to this Section 5. Subject to the
provisions above, each payment made by the Beneficiary to the Lessee pursuant to
this Section 5(c)(ii) shall be made within 30 days after the Beneficiary files a
tax return or receives a refund or adjustment from the Internal Revenue Service
which reflects such reduction in federal income tax, and the Beneficiary shall
act in good faith to properly and timely claim on each such tax return or
returns any tax benefit that Beneficiary determines in its sole discretion is
reasonably available that results in such reduction if a Reasonable Basis exists
to claim such benefit. The Beneficiary shall act in good faith in claiming and
pursuing refunds and Tax savings which would result in payments to the Lessee
pursuant to this Section 5.

          (d) Any taxes that are imposed on the Beneficiary as a result of the
subsequent disallowance of all or any portion of a reduction (or refund or
credit) of the Beneficiary's tax liability, which reduction (or refund or
credit) was taken into account under Section 5(b), shall be treated as a Tax
Loss subject to indemnification under this Agreement without regard to Section 6
hereof (except Section 6(e)). For purposes of calculating indemnity obligations
pursuant to Sections 5(a) or 5(c), and amounts due to Lessee pursuant to
Section 5(b) or 5(c), it shall be assumed that the Beneficiary suffers a Tax
Loss or is entitled to a benefits for state and local income tax purposes if and
only if the Beneficiary suffers a corresponding Tax Loss or realizes a
corresponding benefit for federal income tax purposes.

                                        7
<Page>

          (e) (i) If, as a result of the use or operation or location of the
Aircraft outside the United States by any Lessee Person, the Tax Assumption set
forth in Section 2(c)(ii) hereof shall be inaccurate during any taxable year of
the Beneficiary included in whole or in part within the Tax Attribute Period (an
"EXCESS FOREIGN ALLOCATION"), and if as a result thereof the amount of the
foreign tax credits available for utilization by the Beneficiary for any taxable
year shall be less than the amount of the foreign tax credits that would have
been available for utilization by the Beneficiary if such Tax Assumption had
been accurate (such event being referred to herein as a "FOREIGN TAX CREDIT
LOSS"), then the Lessee shall pay to the Beneficiary as an indemnity an amount
which, after deduction of the amount of all additional federal, state, local and
foreign taxes actually required to be paid by the Beneficiary in respect of the
receipt or accrual of such amount, is equal to the actual increase in the
Federal income taxes payable by (or not refundable or creditable to) the
Beneficiary for such taxable year as a result of such Foreign Tax Credit Loss,
plus the amount of any interest, penalties and additions to tax payable by the
Beneficiary as a result of such Foreign Tax Credit Loss. The amounts of any
increase in Federal income taxes payable by (or not refundable or creditable to)
the Beneficiary as a result of a Foreign Tax Credit Loss shall be computed on
the assumption that any reduced amount of foreign tax credits of the Beneficiary
is attributable to an Excess Foreign Allocation and foreign source losses
arising from other equipment leasing transactions that provided the Beneficiary
with indemnification for the loss of foreign tax credits, on a pro rata basis,
prior to being attributable to any other foreign source deductions or losses of
the Beneficiary;

          (ii) If, as a result of (A) an Excess Foreign Allocation or (B) the
usage or location of the Aircraft outside the United States so that any item of
income or gain with respect to the transactions contemplated by the Lease during
any taxable year is treated as derived from sources outside the United States,
the amount of the foreign tax credits that the Beneficiary utilizes against its
tax liability for a taxable year exceeds the amount of such foreign tax credits
to which the Beneficiary would have otherwise been entitled, and provided that
no Specified Default under the Lease shall have occurred and be continuing (in
which event such amounts shall become payable upon the Lessee's curing such
Specified Default, then the Beneficiary shall pay to the Lessee the amount of
any actual reduction in its Federal income tax liability (or actual increase in
a refund or credit of Federal income taxes owning to the Beneficiary)), plus any
net additional Federal, state, local and foreign income tax benefits actually
realized by the Beneficiary as the result of such payment; PROVIDED, HOWEVER,
that the sum of the amounts payable by the Beneficiary pursuant to this sentence
before taking into account the "Gross-up" shall not exceed before taking into
account the "Gross-up" the sum of the amounts previously paid by the Lessee to
the Beneficiary pursuant to this Section 5(d) to the extent not previously taken
into account under this provision, and PROVIDED, FURTHER, HOWEVER, that no
payment shall be required with respect to clause (B) above unless and until the
usage or location outside the United States has resulted in an aggregate amount
of increased foreign tax credits being available to the Beneficiary (calculated
for this purpose without regard to the otherwise applicable requirement that
foreign source gain or income exceed the "Permitted Percentage" of 10%) equal to
the aggregate amount of unindemnified tax increases (reduced by any utilization
of foreign tax credit carryovers or carryforwards that would, under principles
applicable to clause (A) above, have resulted in an obligation to make a payment
to the Lessee if the Permitted Percentage during the year in which the
unindemnifed tax increase occurred were zero) suffered by the Beneficiary
resulting from the application of the Permitted Percentages during the Tax
Attribute Period. In addition, for purposes of determining the utilization of
foreign tax credits as a carryforward or carryback pursuant to clause (A) above,
such carryforward or carryback utilization shall be attributable to the Lessee
after utilization of all other carryforwards and carrybacks except that such
carryforward and carryback utilization shall be attributed to the Lessee on a
pro rata basis with the utilization of carryforwards and carrybacks relating to
other leasing transactions in which the Beneficiary was entitled to
indemnification with respect to a loss or deferral of foreign tax credits.

                                        8
<Page>

          Once a foreign tax, the loss of the credit in respect of which
     Beneficiary was indemnified and paid by Lessee in accordance with
     Section 5(e) hereof, is deemed to be utilized pursuant to the ordering
     rules set forth above, it shall not subsequently be recharacterized as not
     having been utilized as a result of a foreign tax liability arising in a
     subsequent year;

               (iii) Each payment by the Lessee pursuant to this Section 5(e)
     shall be made within 30 days after receipt of a written demand therefor
     accompanied by a written statement describing in reasonable detail the
     Foreign Tax Credit Loss in question, the amount of additional Federal
     income tax, interest, penalties and additions to tax and the calculation of
     the payment due in request thereof (but in no event earlier than one (1)
     Business Day prior to the date such additional Federal income taxes are
     due); PROVIDED THAT, if a contest of the Foreign Tax Credit Loss is being
     conducted pursuant to Section 7 hereof, payment (other than payments
     required under Section 7) shall not be required from the Lessee until 30
     days after the Final Determination of such contest. Each payment by the
     Beneficiary to the Lessee pursuant to this Section 5(e) in respect of an
     actual increase in available foreign tax credits shall be made within 30
     days after the Beneficiary files a tax return (including estimated returns)
     (or receives a refund, credit or adjustment) which reflects the utilization
     of such increased foreign tax credit.

          (f) Upon request of the Lessee, the accuracy of the Beneficiary's
calculation of the amount or amounts payable to either the Beneficiary or the
Lessee pursuant to this Section 6 shall be promptly verified by the independent
accounting firm selected by the Beneficiary (other than the Beneficiary's
regular auditors unless such auditors comprise one of the "Big 5" accounting
firms which will be deemed acceptable to Lessee) and reasonably acceptable to
Lessee and, in order to enable such accountants to verify such adjustments, the
Beneficiary shall provide to such accountants (for their own confidential use
and not be disclosed to the Lessee or any other person) all information
reasonably necessary for such verification, including any computer analyses used
by the Beneficiary to calculate such amount or amounts. The cost of such
verification shall be borne by the Lessee unless it is the determination of such
verification that the actual amount payable deviates, in a manner favorable to
the Lessee, by more than [*] from the amount originally determined by the
Beneficiary in which case such cost shall be borne by the Beneficiary.

     Section 6.  EXCLUDED EVENTS. The Beneficiary shall not be entitled to any
payment from the Lessee under Section 5 hereof in respect of any Tax Loss or
Foreign Tax Credit Loss to the extent such Tax Loss or Foreign Tax Credit Loss
occurs as a direct result of one or more of the following events:

          (a) any sale, assignment, transfer or other disposition (including any
deemed disposition under Section 338 of the Code or any similar provision) by
the Beneficiary or the Owner Trustee of the Aircraft, any Engine, any Part or
any interest in any thereof (including any deemed disposition under Section 338
of the Code or any similar provision) or the Lease, any other Operative
Documents, the Trust Estate or the Beneficiary or the Owner Trustee unless such
sale, assignment, transfer or other disposition occurs in connection with the
exercise of remedies in connection with an Event of Default under the Lease that
has occurred and is continuing, or any involuntary sale, assignment, transfer or
disposition (including any deemed disposition under Section 338 of the Code or
any similar provision) of any such interest resulting from the bankruptcy or
insolvency of, or proceedings for the relief of debtors, or foreclosure
proceedings, against the Beneficiary or Lessor unless, in each case, such
involuntary sale, assignment, transfer, disposition (including any deemed
disposition under Section 338 of the Code or any similar provision) bankruptcy
or insolvency or foreclosure results from such Event of Default;

          (b) the failure of the Beneficiary properly and in a timely manner to
claim the MACRS Deductions or the inclusion by the Beneficiary of any Recapture
in the Beneficiary's gross income as reported on its Federal income tax return
(including any amended return) or other tax filing or document,

                                        9

-------
* Confidential

<Page>

or the taking of a position by the Beneficiary on a Federal income tax return
(or amended return) that would result in a Foreign Tax Credit Loss or an Income
Inclusion Loss, unless, in such case, the Beneficiary shall have received a
written opinion of independent tax counsel selected by the Beneficiary and
reasonably satisfactory to Lessee that no Reasonable Basis exists for making
such claim or failing to so include in gross income;

          (c) except in the case of a Tax Loss resulting from the replacement of
an Aircraft, Airframe or Engine, any amendment or addition to, or change in, the
Code or Income Tax Regulations (or any interpretation of either thereof), which
is enacted or adopted after the Delivery Date, PROVIDED that a change in Federal
income tax rates shall be taken into account in determining the indemnity
amounts payable to the extent specified in Section 5 above;

          (d) any failure of the Beneficiary to take in a timely manner all
actions in contesting a claim if the Beneficiary was required to take such
actions pursuant to Section 7 hereof and such failure has a material adverse
impact upon the Lessee's contest rights under Section 7 hereof;

          (e) the willful misconduct or gross negligence of the Beneficiary,
Owner Trustee or any Affiliate of either thereof;

          (f) the status for Federal income tax purposes of the Beneficiary, the
Owner Trustee or any Affiliate of either thereof as a "tax-exempt entity" within
the meaning of Section 168(h) of the Code or as a Person that is not a "United
States person" within the meaning of Section 7701(a)(30) of the Code;

          (g) the failure of the Beneficiary to have sufficient taxable income
or tax liability for Federal income tax purposes to benefit from the Federal
income tax benefits described in Section 2(c);

          (h) any Loss to the extent incurred or imposed in respect of or
relating to any period after the later of (i) the expiration or earlier
termination of the Lease in accordance with the terms thereof or (ii) delivery
of possession of the Aircraft to the Beneficiary (or any designee of the
Beneficiary);

          (i) the failure of the Trust created by the Trust Agreement to be
treated as a grantor trust under Section 671 ET SEQ. of the Code;

          (j) the application of Section 168(d)(3) of the Code or Regulations
thereunder;

          (k) the failure of the Lease to be treated as a "true lease" for
Federal income tax purposes or the failure of the Beneficiary to be treated as
the owner of the Aircraft for Federal income tax purposes, unless in either
case, as a result of a breach of the representations in Section 4(b);

          (l) the treatment of the Permitted Percentage (or less than the
Permitted Percentage) of any item of income, deduction, loss or credit as having
been derived from, or allocable to income derived from, sources outside the
United States;

          (m) the Beneficiary having a tax year of less than 12 months;

          (n) the application of any of Sections 55, 168(b)(2)(C), 168(b)(3)(D),
168(f)(1), 168(g)(7), 465, 467, 469 of the Code or Regulations thereunder;

          (o) the failure of the Aircraft to be registered with the FAA as a
result of the failure of the Beneficiary or Owner Trustee to be a Citizen of the
United States;

                                       10
<Page>

          (p) the Beneficiary having a basis in the Aircraft on the Delivery
Date of less than the Beneficiary's Cost;

          (q) an event with respect to which Lessee is required to pay
Stipulated Loss Value (or an amount calculated with reference to Stipulated Loss
Value);

          (r) any amendment or modification to any Operative Document without
the written consent of Lessee;

          (s) the exercise of a Purchase Option by the Lessee or the sale of the
Aircraft to the Lessee pursuant to the exercise of a Purchase Option;

          (t) a change in the Beneficiary's tax year;

          (u) any penalties, additions to tax or interest assessed against
Beneficiary as a result of any return not being filed on a timely basis unless
such failure is directly a result of a Lessee Act; or

          (v) the inclusion in income by the Beneficiary upon or following
termination of Lease of amounts attributable to improvements or additions to the
Aircraft.

     Section 7.  CONTEST PROVISIONS AND PROCEEDINGS. (a) The Beneficiary shall
promptly (but in no event less than 20 days prior to the last day for submitting
a protest to the Internal Revenue Service) notify the Lessee in writing of
receipt from the Internal Revenue Service of a written proposed or final revenue
agent's report, a 30-day letter or a notice of deficiency (as described in
Section 6212 of the Code), in which an adjustment is proposed to the Federal
income taxes of the Beneficiary for which the Lessee would be required to
indemnify the Beneficiary pursuant to this agreement if such adjustment were
sustained. Such notice shall specify the name of Beneficiary's counsel (if the
existence of a Beneficiary's counsel is at that point necessary under this
Agreement), the terms of the proposed adjustment, and any action taken or
proposed to be taken by the Internal Revenue Service with respect to the
proposed adjustment. After the giving of such notice, the Beneficiary shall for
at least 20 days after the giving of such notice forbear (if such forbearance is
permitted by law) payment of any tax (including interest, penalties and
additions to tax thereon) asserted to be payable as a result of such proposed
adjustment. If the Lessee within 20 days of receipt of notice from the
Beneficiary) requests, in writing, the Beneficiary to do so, the Beneficiary
shall contest the proposed adjustment, shall consider in good faith any
suggestion made by the Lessee and its counsel as to the method of pursuing such
contest, and, provided the Lessee is complying with its obligations under this
Section 7, shall not, without the consent of the Lessee, except as provided in
the last sentence of this Section 7(a), settle such proposed adjustment;
PROVIDED, HOWEVER, that the Beneficiary shall not be obligated to contest such
adjustment unless (i) independent tax counsel selected by the Beneficiary and
reasonably acceptable to Lessee ("TAX COUNSEL") delivers an opinion that there
is a Reasonable Basis for contesting the matter in question, (ii) the amount of
the proposed adjustment is in excess of $50,000, (iii) no Event of Default
described in clauses (a), (b), (g), (h), (i), or (j) of Section 17.01 of the
Lease shall have occurred and be continuing, and (iv) the Beneficiary has
determined, in good faith, that the contest shall not result in a material risk
of the loss or forfeiture of the Aircraft (unless the Lessee has provided to the
Beneficiary a bond or other sufficient protection against such risk of loss or
forfeiture reasonably satisfactory to the Beneficiary) or the imposition of
criminal penalties. Any clear and unambiguous conclusions or findings of fact or
law contained in the Final Determination (as defined in Section 7(c)) of a
judicial proceeding conducted pursuant to this Section 7 shall be binding on the
Lessee and the Beneficiary for purposes of determining the existence or extent
of the Lessee's indemnity obligation pursuant to this Agreement. The Beneficiary
shall afford Lessee and its counsel reasonable opportunities to consult the
Beneficiary and shall keep

                                       11
<Page>

Lessee reasonably informed of the nature of all actions taken to contest such
proposed adjustment, including (x) whether any action to contest such proposed
adjustment will initially be by way of judicial or administrative proceedings,
or both, (y) whether any such proposed adjustment will be contested by resisting
payment thereof or by paying the same and seeking a refund thereof and (z) if
the Beneficiary shall undertake judicial action with respect to such proposed
adjustment, the court or other judicial body before which such action will be
commenced; but in all cases the Beneficiary shall have ultimate discretion to
determine the nature (and forum) of, and shall control the prosecution of, all
such action. The Beneficiary shall upon the conclusion of any administrative
proceedings, promptly notify the Lessee of the outcome of such proceedings, and
shall notify the Lessee at least 60 days in advance of the last date for filing
a petition in the Tax Court. In the event of an unfavorable resolution of
administrative proceedings, the Beneficiary shall, if requested by the Lessee in
a timely manner, (x) contest any proposed adjustment beyond the level of
administrative proceedings, (y) consider in good faith any advice offered by the
Lessee's counsel concerning the court of competent jurisdiction in which the
adjustment is most likely to be favorably resolved, and (z) keep the Lessee
reasonably informed as to the progress of any litigation and, if requested by
the Lessee, shall consult with the Lessee's counsel and consider in good faith
any recommendations by the Lessee's counsel concerning the conduct of such
proceedings, and shall permit Lessee's counsel to review and comment in advance
on all submissions to the extent relating to the Loss PROVIDED that the final
form and substance of such submissions shall be determined by Tax Counsel. The
Beneficiary shall take such reasonable action during the course of such
proceedings as the Tax Counsel deems advisable after consultation with the
Lessee's counsel to preserve as a basis for appeal any legal issue that the
Lessee or the Lessee's counsel has identified in writing. The Beneficiary shall
be required to appeal any adverse judicial determination only if (A) an appeal
is timely requested in writing by the Lessee, and (B) the Beneficiary is
furnished with an opinion of Tax Counsel selected by the Beneficiary and
reasonably acceptable to the Lessee that there is a substantial basis that
Beneficiary will prevail on such appeal; PROVIDED, HOWEVER, that in no event
shall the Beneficiary be required to appeal any adverse decision in the U.S.
Supreme Court. At any time, whether before or after commencing to take the
actions set forth in this Section 7, the Beneficiary may decline to contest or
appeal all or any portion of a proposed adjustment, or may compromise or settle
any such proposed adjustment, by notifying the Lessee in writing that the Lessee
is relieved of its obligation to indemnify the Beneficiary with respect to such
adjustment or such portion, as the case may be; PROVIDED, HOWEVER, that (x) the
Beneficiary shall promptly notify the Lessee of the Beneficiary's intent to
decline to contest or appeal all or any portion of proposed adjustment, or to
compromise or settle all or any portion of a proposed adjustment and (y) the
Lessee shall not be obligated to indemnify the Beneficiary hereunder with
respect to any other Tax Loss or Foreign Tax Credit Loss for which a successful
contest or appeal is foreclosed as a result of the failure to take action with
respect to such contest or appeal (or the settlement or compromise of such
contest or appeal without the consent of the Lessee), and the Beneficiary shall
repay to the Lessee within 30 days of the notice referred to in the previous
clause(x) hereof such amounts theretofore advanced or paid by the Lessee related
to such adjustment, contest or appeal (other than reimbursement of costs and
expenses of the Beneficiary previously incurred), plus interest at the rate that
would have been payable if such contest had been successfully concluded at such
time PROVIDED, FURTHER, if the Beneficiary proposes to enter into a settlement
or compromise with resect to such adjustment, such settlement would materially
and substantially reduce the Beneficiary's or the Lessee's liability with
respect to an issue involving such adjustment (without regard to any reduction
achieved by "trading" such issue for unrelated issues), and the Beneficiary
notifies the lessee in writing regarding the proposed settlement (including
reasonable detail with respect to the basis and amount of such proposed
settlement), then the Beneficiary may enter into such settlement or compromise
without waiving its rights to indemnification relating to such adjustment unless
within 30 days after the receipt of such notice the Lessee shall have provided
the Beneficiary with written acknowledgement of its obligation to indemnify the
Beneficiary with respect to such adjustment to the extent the contest is not
successful. If the Lessee requests that the Beneficiary accept a settlement of a
proposed adjustment offered by the Internal Revenue Service (other than an offer
conditioned upon the Beneficiary's agreement with respect to any unrelated
issue) and acknowledges its

                                       12
<Page>

liability under this agreement with respect to such adjustment, the Beneficiary
shall either accept such settlement offer or agree with the Lessee that Lessee's
liability with respect to such adjustment shall be limited to an amount
calculated on the basis of such settlement offer.

          (b) The Beneficiary shall not be required to take any action pursuant
to this Section 7 unless and until the Lessee shall have agreed in writing to
reimburse the Beneficiary (on demand and on an actual, net after-tax basis
grossed-up for all applicable Federal, state, local and foreign taxes for all
reasonable fees and expenses, any statutory or regulatory penalties, interest,
additions to tax, or other liabilities, costs or losses which the Beneficiary
may incur as a result of contesting the validity of any proposed adjustment
(including, without limitation, any reasonable fees and disbursements of counsel
incurred in connection with taking any action or rendering any opinion described
in Section 7(a)). If the Beneficiary determined to contest any adjustment by
paying the additional tax and suing for a refund, the Lessee shall timely lend
to the Beneficiary on an interest-free basis an amount equal to the sum of any
tax, interest, penalties and additions to tax required to be paid and shall
indemnify the Beneficiary in a manner reasonably satisfactory to the Beneficiary
against any adverse tax consequences resulting from such advance. Upon receipt
by the Beneficiary of a refund (or upon application of amounts otherwise
refundable against other tax liability of the Beneficiary) of any amount paid by
it, in respect of which amount the Beneficiary shall have been paid or advanced
an equivalent amount by the Lessee, the Beneficiary shall pay to the Lessee the
amount of such refund (plus any amounts otherwise refundable but applied against
other tax liability of the Beneficiary) (which, in the case of any contest in
which a loan has been advanced pursuant to this paragraph, shall be deemed to be
in repayment of the loan advanced by the Lessee to the extent fairly
attributable thereto), together with any interest received by or credited to the
Beneficiary on such refund (or application) that is fairly attributable to the
amount and the period of such payment or advance by the Lessee (net of any taxes
actually payable by the Beneficiary with respect to the receipt or accrual of
such interest), plus any net additional Federal, state local and foreign tax
benefits actually realized by the Beneficiary as the result of such payment;
and, upon disallowance of any such refund, the Lessee shall forgive the amount
of the loan fairly attributable thereto and shall pay to the Beneficiary the
balance of the amount of its indemnity obligation hereunder (including such
amount as shall be equal to the sum, on an actual after-tax basis, of any tax,
interest, penalties or additions to tax payable with respect to the forgiveness
of such loan) (or if such advance exceeds the amount of such disallowance, the
 Beneficiary shall pay such excess to the Lessee). Any subsequent loss of such
refund (or of such application of amounts otherwise refundable) to the extent
having resulted in a payment to Lessee, shall be treated as a Tax Loss subject
to indemnification pursuant to Section 5 hereof without regard to Section 6
hereof (other than Section 6(b) or 6(e) hereof). If the Beneficiary receives an
award of attorneys' fees or related expenses in a contest for which the Lessee
has paid or reimbursed all or any portion of such fees and expenses, the
Beneficiary shall pay to the Lessee the portion of such award attributable to
such fees and expenses paid or reimbursed by the Lessee.

          (c) If any adjustment referred to in this Section 7 shall be proposed
and the Lessee shall have requested the Beneficiary to contest such adjustment
as above provided and the Lessee shall have duly complied with the terms of this
Section 7, then notwithstanding any provision to the contrary in Section 5, the
Lessee's liability with respect to such adjustment shall become fixed upon a
Final Determination of such adjustment. A "FINAL DETERMINATION" with respect to
a Tax Loss shall mean (i) a decision, judgment, decree or other order by any
court of competent jurisdiction, which decision, judgment, decree or other order
has become final after all allowable appeals (in the case of the Beneficiary as
required under this Section 7) by either party to the action have been exhausted
or the time for filing such appeal has expired, (ii) a closing agreement entered
into under Section 7121 of the Code, or any other settlement agreement entered
into in connection with an administrative or judicial proceeding and with the
consent of the Lessee where required, (iii) the expiration of the time for
instituting suit with

                                       13
<Page>

respect to the claimed deficiency, or (iv) the expiration of the time for
instituting a claim for refund, or if such a claim was filed, the expiration of
the time for instituting suit with respect thereto.

     Section 8.  SURVIVAL OF AGREEMENT. The obligations and liabilities of the
Lessee and the Beneficiary arising under this Agreement shall continue in full
force and effect, notwithstanding the expiration or other termination of the
Lease, until all such obligations under this Agreement have been met and all
such liabilities under this Agreement have been paid in full. This Agreement
shall inure to the benefit of any successor or assign to the Beneficiary or the
Lessee permitted pursuant to the Lease; PROVIDED, HOWEVER, that (a) such
successor or assign shall have specifically agreed in writing to be bound by the
terms and conditions of this Agreement to perform the obligations imposed
hereunder on the Beneficiary or the Lessee, as the case may be, in accordance
with the interest of such successor or assign in the Aircraft and the Lease, (b)
the successor or assign shall not be entitled to indemnity payment or other
rights or benefits greater than the payments, rights or benefits to which the
Beneficiary or the Lessee, as the case may be, would have been entitled if no
transfer or assignment had occurred, and (c) in applying the terms hereof to
such successor or assign, the terms "Beneficiary" and "Lessee" as used herein
shall mean such respective successor or assign.

     Section 9.  NOTICES. Any notice, request, or other communication provided
for in this Agreement shall be given in the manner provided in the Lease.

     Section 10. PAYMENTS. Payments made by the Lessee or the Beneficiary
pursuant to this Agreement shall be made by wire transfer of immediately
available funds to such bank and/or account in the continental United States as
specified by the other party in written directions to the paying party at least
one (1) Business Day prior to the due date thereof, and if no such direction
shall have been given, by check payable in immediately available funds to the
order of such payee and mailed to such payee by certified mail, postage prepaid,
at its address provided for purposes of the Lease.

     Section 11.  NO SETOFF. No payment required to be made by the Lessee
pursuant to this Agreement shall be subject to any right of setoff,
counterclaim, defense, abatement, suspension, deferment or reduction other than
as expressly provided herein; and, except in accordance with the express terms
hereof, neither the Beneficiary nor the Lessee shall have the right to terminate
this Agreement or to be released, relieved or discharged from any obligation or
liability under this Agreement for any reason whatsoever other than as expressly
provided herein.

     Section 12.  LATE PAYMENTS, INTEREST. Any late payment by any party hereto
of any of its obligations under this Agreement shall bear interest at the
Interest Rate set forth in the Lease

     Section 13.  EXCLUSIVE REMEDY. The indemnities provided to the Beneficiary
in this Agreement shall be the sole remedy of the Beneficiary for a breach or
inaccuracy of any representation, warranty or covenant contained herein or for
loss of income tax benefits.

     Section 14.  GOVERNING LAW. THIS AGREEMENT IS BEING DELIVERED IN THE STATE
OF NEW YORK AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL,
PURSUANT TO NEW YORK GENERAL OBLIGATIONS LAW SECTION 5-1401, BE GOVERNED BY THE
LAWS OF THE STATE OF NEW YORK.

     Section 15.  COUNTERPARTS. This Agreement may be simultaneously executed in
any number of counterparts, each of which so executed shall be deemed to be an
original, and such counterparts together shall constitute and be one and the
same instrument.

     Section 16.  ASSIGNMENT. This Agreement shall not be assignable by either
party without the consent of the other; PROVIDED, HOWEVER, that the Beneficiary
may assign this Agreement (subject to the

                                       14
<Page>

limitations contained in Section 8) without the consent of the Lessee in
connection with the sale of all of the Beneficiary's interests in the Aircraft
and the Lease in accordance with the terms of the Lease and other Operative
Documents.

     Section 17.  CERTAIN ADJUSTMENTS. In the event of a Tax Loss (or Foreign
Sublease) subject to payment of indemnification by the Lessee hereunder, the
Stipulated Loss Values set forth in the Lease shall be adjusted as provided in
accordance with the Lease (utilizing the same methods and assumptions originally
used to calculate said Values, other than assumptions changed as a result of
such Tax Loss or as a result of a previous adjustment of such Values), and the
Tax Assumptions shall be deemed to have been appropriately modified. If an event
giving rise to the payment of an amount determined by reference to a schedule of
Stipulated Loss Values shall occur and the date as of which the Beneficiary
shall be affected for tax purposes shall be earlier or later than the date taken
into account in computing such schedule, such values shall be appropriately
adjusted based otherwise on the same assumptions previously used by the
Beneficiary in calculating such schedule.

                      [Signature page immediately follows]

                                       15
<Page>

     IN WITNESS WHEREOF, the Lessee and the Beneficiary have caused this
instrument to be duly executed as of the day and year first above written.

                                          MITSUI & CO. (U.S.A.), INC.

                                          By /s/ Kazuki Okamura
                                             -----------------------------------
                                             Name: Kazuki Okamura
                                             Title: General Manager

                                          CHAUTAUQUA AIRLINES, INC.

                                          By: /s/ Robert H. Cooper
                                              ----------------------------------
                                             Name: Robert H. Cooper
                                             Title: Vice President

                                       16
<Page>

NOTE TO EXHIBIT 10.43

The two additional Tax Indemnity Agreements are substantially identical in all
material respects to the filed Tax Indemnity Agreement except as follows:

<Table>
<Caption>

------------------------------------- ----------------------------------- -----------------------------------
            TAIL NUMBER                          CLOSING DATE                     OWNER-PARTICIPANT

------------------------------------- ----------------------------------- -----------------------------------
<S>                                   <C>                                 <C>
              N286SK                             June, 2001                        Mitsui & Co.
------------------------------------- ----------------------------------- -----------------------------------
              N287SK                             June, 2001                        Mitsui & Co.
------------------------------------- ----------------------------------- -----------------------------------

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

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

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

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

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

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

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

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

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

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

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

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

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

------------------------------------- ----------------------------------- -----------------------------------
</Table>

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00034-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00034-of-00352.parquet"}]]