Exhibit 4.7


 


EXECUTION VERSION


 


 


PARTICIPATION AGREEMENT

(N126FE)


 


Dated as of August 13, 2020


 


among


 


FEDERAL EXPRESS CORPORATION,


 


WILMINGTON TRUST COMPANY,

as Pass Through Trustee under the

Pass Through Trust Agreement,


 


WILMINGTON TRUST COMPANY,

as Subordination Agent,


 


WILMINGTON TRUST COMPANY,

as Loan Trustee,


 


and


 


WILMINGTON TRUST COMPANY,

in its individual capacity as set forth herein


 


One Boeing 767-3S2F


 


(Generic Manufacturer and Model Boeing
767-300F) Aircraft

U.S. Registration No. N126FE


 


 






    


     


    

 


TABLE OF CONTENTS


 


Page


 


	ARTICLE 1	 	DEFINITIONS	 	2
	 	 	 	 	 
	Section 1.01.	 	Definitions	 	2
	Section 1.02.	 	Other Definitional Provisions	 	2
	 	 	 	 	 
	ARTICLE 2	 	THE LOANS	 	2
	 	 	 	 	 
	Section 2.01.	 	The Loans	 	2
	Section 2.02.	 	Issuance of Equipment Notes	 	3
	Section 2.03.	 	The Closing	 	4
	 	 	 	 	 
	ARTICLE 3	 	CONDITIONS PRECEDENT	 	4
	 	 	 	 	 
	Section 3.01.	 	Conditions Precedent to Obligations
    of Pass Through Trustees	 	4
	Section 3.02.	 	Conditions Precedent to Obligations
    of Company	 	8
	 	 	 	 	 
	ARTICLE 4	 	REPRESENTATIONS, WARRANTIES AND
    INDEMNITIES OF COMPANY	 	10
	 	 	 	 	 
	Section 4.01.	 	Representations and Warranties
    of Company	 	10
	Section 4.02.	 	General Indemnity	 	13
	 	 	 	 	 
	ARTICLE 5	 	REPRESENTATIONS, WARRANTIES AND
    COVENANTS OF WTC	 	19
	 	 	 	 	 
	Section 5.01.	 	Representations, Warranties and
    Covenants of WTC	 	19
	 	 	 	 	 
	ARTICLE 6	 	OTHER COVENANTS AND AGREEMENTS	 	22
	 	 	 	 	 
	Section 6.01.	 	Other Agreements	 	22
	Section 6.02.	 	Certain Covenants of Company	 	24
	 	 	 	 	 
	ARTICLE 7	 	MISCELLANEOUS	 	27
	 	 	 	 	 
	Section 7.01.	 	Notices	 	27
	Section 7.02.	 	Survival of Representations, Warranties, Indemnities,
    Covenants and Agreements	 	28
	Section 7.03.	 	Governing Law	 	28
	Section 7.04.	 	Severability	 	28
	Section 7.05.	 	No Oral Modifications or Continuing
    Waivers; Consents	 	28
	Section 7.06.	 	Effect of Headings and Table of
    Contents	 	28
	Section 7.07.	 	Successors and Assigns	 	28
	Section 7.08.	 	Benefits of Agreement	 	29
	Section 7.09.	 	Counterparts	 	29
	Section 7.10.	 	Submission to Jurisdiction	 	29



 






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	Section 7.11.	 	Further Assurances	 	29
	Section 7.12.	 	Section 1110	 	29
	 	 	 	 	 
	Schedule I	-	Equipment Notes, Purchasers and Original
    Principal Amounts	 	 
	Schedule II	-	Trust Supplement
	 	 	 
	Exhibit A-1	-	Form of Opinion
    of Counsel for FedEx Corporation
	Exhibit A-2	-	Form of Opinion
    of Davis Polk & Wardwell LLP, special counsel for Company
	Exhibit B	-	Form of Opinion
    of Special Counsel for Loan Trustee, Pass Through Trustee, Subordination Agent and WTC
	Exhibit C	-	Form of Opinion
    of Special FAA Counsel
	Exhibit D	-	Form of Manufacturer’s
    Consent
	Exhibit E	-	Form of Opinion
    of Special Delaware UCC Counsel for Company
	 	 	 
	Annex A	-	Definitions




 






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PARTICIPATION AGREEMENT

(N126FE)


 


This
PARTICIPATION AGREEMENT (N126FE), dated as of August 13, 2020, is made by and among FEDERAL EXPRESS CORPORATION, a Delaware
corporation (together with its successors and permitted assigns, “Company”), WILMINGTON TRUST COMPANY, a Delaware
trust company (in its individual capacity, together with its successors and permitted assigns, “WTC”), not
in its individual capacity except as otherwise expressly provided in any of the Operative Documents or the Pass Through Documents,
but solely as Pass Through Trustee under the Pass Through Trust Agreement (such terms and other capitalized terms used herein
without definition being defined as provided in ‎Section 1.01), WILMINGTON TRUST
COMPANY, a Delaware trust company, as subordination agent and trustee (in such capacity, together with any successor trustee in
such capacity, “Subordination Agent”) under the Intercreditor Agreement, and WILMINGTON TRUST COMPANY, a Delaware
trust company, as loan trustee (in such capacity, together with any successor trustee in such capacity, “Loan Trustee”)
under the Indenture.


 


WITNESSETH:


 


WHEREAS, Company is
the owner of that certain Boeing Model 767-3S2F aircraft more particularly described in the Indenture Supplement originally executed
and delivered under the Indenture;


 


WHEREAS, concurrently
with the execution and delivery of this Agreement, Company and Loan Trustee are entering into the Indenture, pursuant to which,
among other things, Company will issue one series of Equipment Notes, which Equipment Notes are to be secured by a security interest
in all right, title and interest of Company in and to the Aircraft and certain other property described in the Indenture;


 


WHEREAS, pursuant
to the Basic Pass Through Trust Agreement and the Trust Supplement set forth in Schedule II, the Pass Through Trust was created
and the Pass Through Certificates issued and sold;


 


WHEREAS, pursuant
to the Intercreditor Agreement, Subordination Agent will hold the Equipment Notes on behalf of the Pass Through Trust;


 


NOW, THEREFORE, in
consideration of the foregoing premises and the mutual agreements herein contained, and of other good and valuable consideration
the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:


 






    


     


    

 


ARTICLE 1


 


DEFINITIONS


 


Section 1.01.     Definitions.
For the purposes of this Agreement, unless the context otherwise requires, capitalized terms used but not defined herein shall
have the respective meanings set forth or incorporated by reference in Annex A.


 


Section 1.02.     Other
Definitional Provisions. (a)  The definitions stated herein and in Annex A apply equally to both the singular and
the plural forms of the terms defined.


 


(a)          All
references in this Agreement to designated “Articles”, “Sections”, “Subsections”, “Schedules”,
“Exhibits”, “Annexes” and other subdivisions are to the designated Article, Section, Subsection, Schedule,
Exhibit, Annex or other subdivision of this Agreement, unless otherwise specifically stated.


 


(b)          The
words “herein”, “hereof” and “hereunder” and other words of similar import refer to this Agreement
as a whole and not to any particular Article, Section, Subsection, Schedule, Exhibit, Annex or other subdivision.


 


(c)          All
references in this Agreement to a “government” are to such government and any instrumentality or agency thereof.


 


(d)          Unless
the context otherwise requires, whenever the words “including”, “include” or “includes” are
used herein, they shall be deemed to be followed by the phrase “without limitation”.


 


(e)          All
references in this Agreement to a Person shall include successors and permitted assigns of such Person.


 


ARTICLE 2


 


THE LOANS


 


Section 2.01.     The
Loans. Subject to the terms and conditions of this Agreement and the Indenture, on the Closing Date, Pass Through Trustee
for each Pass Through Trust shall make a loan to Company by paying to Company the aggregate original principal amounts of the
Equipment Notes being issued to such Pass Through Trust as set forth on Schedule I opposite the name of such Pass Through Trust.
Pass Through Trustees, on behalf of the Pass Through Trusts, shall make such loans to Company no later than 11:00 a.m. (New
York City time) on the Closing Date by transferring such amount in immediately available funds to Company at its account at [     ]
Account Name: FedEx Express, with the request that the bank advise Company by telephone at [     ] upon
transfer of the funds.


 






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Section 2.02.     Issuance
of Equipment Notes. Upon the occurrence of the above payments by Pass Through Trustee for each Pass Through Trust to Company,
Company shall issue, pursuant to and in accordance with Article II of the Indenture, to Subordination Agent as agent and
trustee for Pass Through Trustee for each Pass Through Trust, one or more Equipment Notes of the maturity and aggregate original
principal amount and bearing the interest rate set forth in Schedule I opposite the name of such Pass Through Trust. Each such
Equipment Note shall be duly authenticated by Loan Trustee pursuant to the Indenture, registered in the name of Subordination
Agent and dated the Closing Date and shall be delivered by Loan Trustee to Subordination Agent. In addition, subject to Section 8.01(c) or
8.01(d) of the Intercreditor Agreement, as applicable, Company shall have the option after the Closing Date, at any time
and from time to time, (i) to issue one or more Series of Additional Series Equipment Notes under the Indenture
(including, for the avoidance of doubt, multiple issuances at the same or different times resulting in more than one Series of
Additional Series Equipment Notes being outstanding at any time) and (ii) at any time following the payment in
full at maturity or otherwise of all but not less than all of any Series of Additional Series Equipment Notes, to issue,
to a grantor trust newly formed for such purpose, under the Indenture new Equipment Notes with the same Series designation
as, but with terms that may be the same as or different from those of, such Equipment Notes that have been paid in full. If Additional
Series Equipment Notes or new Additional Series Equipment Notes are so issued after the Closing Date, each Noteholder
of such Equipment Notes shall be deemed to be a party hereto without further act, and shall be entitled to execute, and at the
request of Company shall execute, a counterpart to this Agreement. Subject to Section 8.01(c) or 8.01(d) of the
Intercreditor Agreement, as applicable, each of the parties hereto agrees, at the Company’s request, to enter into any amendments
to (or any amendment and restatement of) this Agreement, any of the other Operative Documents and the Pass Through Documents as
may be necessary or desirable (A) to give effect to (x) any redemption and issuance, any issuance or any
payment and issuance of any such Additional Series Equipment Notes or new Additional Series Equipment Notes, as applicable,
and the issuance of pass through certificates by any pass through trust that acquires any such Additional Series Equipment
Notes or new Additional Series Equipment Notes, as applicable, or (y) any redemption and issuance, any issuance
or any payment and issuance of any new or “Additional Series Equipment Notes” of any Series or new “Additional
Series Equipment Notes” of any Series, in each case under any Related Indenture, and the issuance of pass through certificates
by any pass through trust that acquires any such Additional Series Equipment Notes” or new “Additional Series Equipment
Notes”, as applicable, and (B) to make changes relating to any of the foregoing (including, without limitation,
to provide for any prefunding mechanism in connection therewith) and to provide for any credit support for any pass through certificates
relating to any such Additional Series Equipment Notes or new Additional Series Equipment Notes or “Additional
Series Equipment Notes” of any Series or new “Additional Series Equipment Notes” of any Series in
each case under any Related Indenture (including, without limitation, to provide for payment of fees, interest, expenses, reimbursement
of advances and other obligations arising from such credit support (including, without limitation, to specify such credit support
as a “Liquidity Facility” and the provider of any such credit support as a “Liquidity Provider” and, if
such Liquidity Facility is to be comprised of more than one instrument, to incorporate appropriate mechanics for multiple Liquidity
Facilities for a single Pass Through Trust)). For the avoidance of doubt, if Company shall issue “Additional Series Equipment
Notes” of any Series or new “Additional Series Equipment Notes” of any Series, in each case under
any Related Indenture, Company may, but shall not be required to, issue, as the case may be, Additional Series Equipment
Notes of the same Series or new Additional Series Equipment Notes of the same Series, in each case under the Indenture.


 






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Section 2.03.     The
Closing. The closing (the “Closing”) of the transactions contemplated hereby shall take place via teleconference
at [10:00] a.m. (New York City time) on August 13, 2020, or at such other time or place as the parties shall agree.


 


ARTICLE 3


 


CONDITIONS PRECEDENT


 


Section 3.01.     Conditions
Precedent to Obligations of Pass Through Trustees. The obligation of each Pass Through Trustee to make the loan contemplated
by Article ‎2 is subject to the fulfillment (or the waiver by such Pass Through
Trustee) prior to or on the Closing Date of the following conditions precedent:


 


(a)          Authentication.
Company shall have tendered the Equipment Notes being issued on the Closing Date to Loan Trustee for authentication, and Loan
Trustee shall have authenticated such Equipment Notes and shall have tendered such Equipment Notes to Subordination Agent on behalf
of the Pass Through Trustee, against receipt of the loan proceeds, in accordance with ‎Section 2.02.


 


(b)          No
Changes in Law. No change shall have occurred after the date of this Agreement in applicable law or regulations thereunder
or interpretations thereof by appropriate regulatory authorities or any court that would make it a violation of law or governmental
regulations for Pass Through Trustees to make the loans contemplated by ‎Section 2.01
or to acquire the Equipment Notes.


 


(c)          Documentation.
This Agreement and the following documents shall have been duly authorized, executed and delivered by the respective party or
parties thereto (other than Pass Through Trustees or Loan Trustee), shall be in full force and effect and executed counterparts
(or copies thereof where indicated) thereof shall have been delivered to each Pass Through Trustee:


 






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(i)            the
Intercreditor Agreement;


 


(ii)           the
Liquidity Facility;


 


(iii)          the
Pass Through Trust Agreements;


 


(iv)          the
Indenture and the Indenture Supplement covering the Aircraft and dated the Closing Date;


 


(v)           the
Guarantee


 


(vi)          the
Manufacturer’s Consent;


 


(vii)         a
copy of the FAA Bill of Sale; and


 


(viii)        a
copy of the Warranty Bill of Sale.


 


(d)           Financing
Statement. A Uniform Commercial Code financing statement or statements covering the security interest created by the Indenture
naming Company, as debtor, and Loan Trustee, as secured party, shall have been (or shall be in the process of being) duly filed
in all places necessary or desirable within the State of Delaware.


 


(e)           Certain
Closing Certificates. Each Pass Through Trustee shall have received the following:


 


(i)            (x) a
certificate dated the Closing Date of the Secretary or an Assistant Secretary of Company, certifying as to (A) a copy
of the resolutions of the Board of Directors of Company or the executive or any other applicable committee thereof duly authorizing
the transactions contemplated hereby and the execution, delivery and performance by Company of this Agreement and the Indenture
and each other document required to be executed and delivered by Company in accordance with the provisions hereof or thereof and
(B) a copy of the certificate of incorporation and by-laws of Company, as in effect on the Closing Date and (y) a
certificate dated the Closing Date of the Secretary or an Assistant Secretary of Guarantor, certifying as to (A) a
copy of the resolutions of the Board of Directors of Guarantor or the executive or any other applicable committee thereof duly
authorizing the transactions contemplated hereby and the execution, delivery and performance by Guarantor of the Guarantee and
each other document required to be executed and delivered by Guarantor in accordance with the provisions hereof or thereof and
(B) a copy of the certificate of incorporation and by-laws of Guarantor, as in effect on the Closing Date;


 






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(ii)           a
certificate or other evidence from the Secretary of State of the State of Delaware, dated as of a date reasonably near the Closing
Date, as to the due incorporation and good standing of Company and the Guarantor in such state;


 


(iii)          an
incumbency certificate of (x) Company as to the person or persons authorized to execute and deliver this Agreement,
the Indenture and each other document to be executed by Company in connection with the transactions contemplated hereby and thereby,
and the specimen signatures of such person or persons and (y) Guarantor as to the person or persons authorized to
execute and deliver the Guarantee and each other document to be executed by Guarantor in connection with the transactions contemplated
hereby and thereby, and the specimen signatures of such person or persons; and


 


(iv)          one
or more certificates of Loan Trustee and Subordination Agent certifying to the reasonable satisfaction of Pass Through Trustees
as to the due authorization, execution, delivery and performance by Loan Trustee and Subordination Agent of each of the Operative
Documents to which Loan Trustee or Subordination Agent is or will be a party and any other documents to be executed by or on behalf
of Loan Trustee or Subordination Agent in connection with the transactions contemplated hereby or thereby.


 


(f)            Representations;
No Event of Default or Event of Loss. On the Closing Date, the following statements shall be correct: (i) the
representations and warranties of (x) Company herein are correct in all material respects as though made on and as
of such date, except to the extent that such representations and warranties relate solely to an earlier date (in which case such
representations and warranties are correct on and as of such earlier date) and (y) made by Guarantor in the Guarantee
are correct in all material respects as though made on and as of such date, except to the extent that such representations and
warranties relate solely to an earlier date (in which case such representations and warranties are correct on and as of such earlier
date) and (ii) no event has occurred and is continuing that constitutes an Event of Default or an Event of Loss with
respect to the Aircraft or would constitute an Event of Default or such an Event of Loss but for the requirement that notice be
given or time elapse or both.


 


(g)           Opinion
of Counsel to Company. Each Pass Through Trustee and Loan Trustee shall have received (i) an opinion addressed
to it from the General Counsel, an Associate General Counsel or an Assistant General Counsel of FedEx Corporation (or from such
other internal counsel to FedEx Corporation as shall be reasonably satisfactory to Pass Through Trustees) substantially in the
form set forth in Exhibit A-1 and (ii) an opinion addressed to it from Davis Polk & Wardwell
LLP substantially in the form set forth in Exhibit A-2.


 






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(h)           Opinion
of Counsel to WTC, Loan Trustee, Pass Through Trustee and Subordination Agent. Each Pass Through Trustee and Loan Trustee
shall have received an opinion addressed to it from Morris James LLP, special counsel for WTC, Loan Trustee, Pass Through Trustees
and Subordination Agent, substantially in the form set forth in Exhibit B.


 


(i)            Opinion
of FAA Counsel. Each Pass Through Trustee and Loan Trustee shall have received an opinion addressed to it from Crowe &
Dunlevy, a Professional Corporation, special FAA counsel in Oklahoma City, Oklahoma, substantially in the form set forth in Exhibit C.


 


(j)            Certification
from Company. Each Pass Through Trustee and Loan Trustee shall have received a certificate or certificates signed by the chief
financial or accounting officer, any Senior Vice President, the Treasurer, any Vice President or any Assistant Treasurer (or any
other Responsible Officer) of Company or Guarantor, dated the Closing Date, certifying as to the correctness of the matters stated
in ‎Section 3.01(f).


 


(k)           Certification
from WTC, Loan Trustee and Subordination Agent. Each Pass Through Trustee shall have received a certificate from WTC in its
individual capacity and as Loan Trustee and Subordination Agent, as applicable, dated the Closing Date, signed by an authorized
officer of WTC in its individual capacity and as Loan Trustee and Subordination Agent, as applicable, certifying for each such
entity that no Loan Trustee Liens or Other Party Liens attributable to it, as applicable, exist, and further certifying as to
the correctness of each of the matters stated in ‎Section 5.01.


 


(l)            [Reserved.]


 


(m)          Insurance
Matters. Loan Trustee shall have received an insurance report of an independent insurance broker and the related certificates
of insurance, each in form and substance reasonably satisfactory to Loan Trustee, as to the compliance with the terms of Section 7.06
of the Indenture relating to insurance with respect to the Aircraft.


 


(n)           No
Proceedings. No action or proceeding shall have been instituted nor shall governmental action be threatened before any court
or governmental agency, nor shall any order, judgment or decree have been issued or proposed to be issued by any court or governmental
agency at the time of the Closing to set aside, restrain, enjoin or prevent the completion and consummation of this Agreement
or the transactions contemplated hereby.


 






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(o)           Funding
of Pass Through Trusts. Each Pass Through Trustee shall have received in immediately available funds an amount at least equal
to the aggregate purchase price of the Equipment Notes to be purchased from Company by such Pass Through Trustee.


 


(p)           Manufacturer’s
Consent. Loan Trustee shall have received an executed copy of the Manufacturer’s Consent substantially in the form set
forth in Exhibit D.


 


(q)           Governmental
Approvals. All appropriate action required to have been taken prior to the Closing Date by the FAA or any governmental or
political agency, subdivision or instrumentality of the United States in connection with the transactions contemplated by this
Agreement has been taken, and all orders, permits, waivers, authorizations, exemptions and approvals of such entities required
to be in effect on the Closing Date in connection with the transactions contemplated by this Agreement have been issued.


 


Promptly upon the
recording of the Indenture (with the Indenture Supplement covering the Aircraft attached) pursuant to the Transportation Code
and the receipt of appropriate and correct recording information from the FAA, Company will cause Crowe & Dunlevy, a
Professional Corporation, special FAA counsel in Oklahoma City, Oklahoma to deliver to Subordination Agent, to Pass Through Trustees,
to Loan Trustee and to Company an opinion as to the due recording of such instrument and the lack of filing of any intervening
documents with respect to the Aircraft.


 


Section 3.02.     Conditions
Precedent to Obligations of Company. The obligation of Company to issue and sell the Equipment Notes is subject to the fulfillment
(or waiver by Company) prior to or on the Closing Date of the following conditions precedent:


 


(a)          No
Changes in Law. No change shall have occurred after the date of this Agreement in applicable law or regulations thereunder
or interpretations thereof by appropriate regulatory authorities or any court that would make it a violation of law or governmental
regulations for Company to enter into any transaction contemplated by the Operative Documents or the Pass Through Documents.


 


(b)          Documentation.
The documents referred to in ‎Section 3.01(c) shall have been duly authorized,
executed and delivered by the respective party or parties thereto (other than Company and Guarantor), shall be in full force and
effect and executed counterparts (or copies thereof where indicated) thereof shall have been delivered to Company, and Company
shall have received such documents and evidence with respect to WTC, the Liquidity Provider, Loan Trustee, Subordination Agent
and each Pass Through Trustee as Company reasonably requests in order to establish the consummation of the transactions contemplated
by this Agreement, the taking of all corporate and other proceedings in connection therewith and compliance with the conditions
herein set forth.


 






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(c)           FAA
Filing. The Indenture (with the Indenture Supplement covering the Aircraft attached) shall have been duly filed for recordation
(or shall be in the process of being so duly filed for recordation) with the FAA pursuant to the Transportation Code. The registration
of the International Interests (or Prospective International Interests) created under the Indenture (as supplemented by the Indenture
Supplement with respect to the Aircraft) shall have been effected (or shall be in the process of being so effected) on the International
Registry in accordance with the Cape Town Treaty.


 


(d)           Representations
and Warranties. On the Closing Date, the representations and warranties herein of WTC, Loan Trustee, Subordination Agent and
Pass Through Trustees shall be correct as though made on and as of such date, except to the extent that such representations and
warranties relate solely to an earlier date (in which case such representations and warranties shall have been correct on and
as of such earlier date), and, insofar as such representations and warranties concern WTC, Loan Trustee, Subordination Agent or
any Pass Through Trustee, such party shall have so certified to Company.


 


(e)           Certain
Opinions and Certificates. Company shall have received each opinion referred to in Sections ‎3.01(h) and
‎3.01(i), each such opinion addressed to Company or accompanied by a letter from the
counsel rendering such opinion authorizing Company to rely on such opinion as if it were addressed to Company, and the certificates
referred to in Sections ‎3.01(e)(iv) and ‎3.01(k).


 


(f)            Certain
Opinion of Special Delaware Counsel. Company shall have received an opinion addressed to it from Richards, Layton &
Finger, P.A., special Delaware counsel for Company as to UCC matters, substantially in the form set forth in Exhibit E.


 


(g)           No
Proceedings. No action or proceeding shall have been instituted nor shall governmental action be threatened before any court
or governmental agency, nor shall any order, judgment or decree have been issued or proposed to be issued by any court or governmental
agency at the time of the Closing to set aside, restrain, enjoin or prevent the completion and consummation of this Agreement
or the transactions contemplated hereby.


 


(h)           No
Other Party Liens, etc. Company shall have received a certificate from WTC dated the Closing Date, signed by an authorized
officer of WTC, certifying for each Pass Through Trustee that no Other Party Liens attributable to it exist and further certifying
as to the correctness of each of the matters stated in ‎Section 5.01.


 






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(i)           Payment
for Equipment Notes. Company shall have been paid by each Pass Through Trustee the aggregate original principal amount of
the Equipment Notes being issued to such Pass Through Trustee as set forth on Schedule I opposite the name of such Pass Through
Trust.


 


(j)           Tax
Forms. Each of the Pass Through Trustee and the Subordination Agent shall have provided a completed and executed copy of IRS
Form W-9 to each of the Company, the Subordination Agent and the Liquidity Provider.


 


ARTICLE 4


 


REPRESENTATIONS, WARRANTIES AND INDEMNITIES
OF COMPANY


 


Section 4.01.     Representations
and Warranties of Company. Company represents and warrants that:


 


(a)          Organization;
Authority; Qualification. Company is a corporation duly incorporated and validly existing in good standing under the laws
of the State of Delaware, is a Certificated Air Carrier, is a Citizen of the United States, has the corporate power and authority
to own its properties or hold them under lease and to enter into and perform its obligations under the Operative Documents to
which it is a party and is duly qualified to do business as a foreign corporation in good standing in each other jurisdiction
in which the failure to so qualify would have a material adverse effect on the consolidated financial condition of Company and
its subsidiaries, considered as a whole, and its jurisdiction of organization (as such term is used in Article 9 of the Uniform
Commercial Code as in effect in the State of Delaware) is Delaware.


 


(b)          Corporate
Action and Authorization; No Violations. The execution, delivery and performance by Company of this Agreement and the other
Operative Documents to which Company is a party have been duly authorized by all necessary corporate action on the part of Company,
do not require any stockholder approval or approval or consent of any trustee or holder of any indebtedness or obligations of
Company, except such as have been duly obtained and are in full force and effect, and do not contravene any law, governmental
rule, regulation, judgment or order binding on Company or the certificate of incorporation or by-laws of Company or contravene
or result in a breach of, or constitute a default under, or result in the creation of any Lien (other than as permitted under
the Indenture) upon the property of Company under, any material indenture, mortgage, contract or other agreement to which Company
is a party or by which it or any of its properties may be bound or affected.


 






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(c)            Governmental
Approvals. Neither the execution and delivery by Company of this Agreement and the other Operative Documents to which it is
a party, nor the consummation by Company of any of the transactions contemplated hereby or thereby, requires the authorization,
consent or approval of, the giving of notice to, the filing or registration with or the taking of any other action in respect
of, the Department of Transportation, the FAA or any other federal or state governmental authority or agency, or the International
Registry, except for (i) the registration of the issuance and sale of the Pass Through Certificates under the Securities
Act and under the securities laws of any state or other jurisdiction in which the Pass Through Certificates may be offered for
sale if the laws of such state or other jurisdiction require such action, (ii) the qualification of the Pass Through
Trust Agreements under the Trust Indenture Act, (iii) the orders, permits, waivers, exemptions, authorizations and
approvals of the regulatory authorities having jurisdiction over Company’s ownership or operation of the Aircraft required
to be obtained on or prior to the Closing Date, which orders, permits, waivers, exemptions, authorizations and approvals have
been duly obtained and are, or on the Closing Date will be, in full force and effect, (iv) the filings and registrations
referred to in ‎Section 4.01(e), (v) authorizations, consents, approvals,
notices and filings required to be obtained, taken, given or made under securities or Blue Sky or similar laws of the various
states and foreign jurisdictions and (vi) consents, approvals, notices, registrations and other actions required to
be obtained, given, made or taken only after the date hereof.


 


(d)           Valid
and Binding Agreements. This Agreement and each other Operative Document to which Company is a party have been duly executed
and delivered by Company and constitute the legal, valid and binding obligations of Company enforceable against Company in accordance
with their terms, except as the same may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the rights of creditors generally and by general principles of equity and except, in the case of the Indenture, as limited
by applicable laws that may affect the remedies provided in the Indenture, which laws, however, do not make the remedies provided
in the Indenture inadequate for the practical realization of the rights and benefits intended to be provided thereby.


 


(e)           Filings
and Recordation. Except for (i) the filing for recordation pursuant to the Transportation Code of the Indenture
(with the Indenture Supplement covering the Aircraft attached), (ii) with respect to the security interests created
by such documents, the filing of financing statements (and continuation statements at periodic intervals) under the Uniform Commercial
Code of Delaware, and (iii) the registration on the International Registry of the International Interests (or Prospective
International Interests) created under the Indenture (as supplemented by the Indenture Supplement covering the Aircraft), no further
filing or recording of any document is necessary under the laws of the United States or any state thereof as of the Closing Date
in order to establish and perfect the security interest in the Aircraft created under the Indenture in favor of Loan Trustee as
against Company and any third parties in any applicable jurisdiction in the United States.


 






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(f)            Investment
Company Act. Company is not required to be registered as an “investment company” within the meaning of the Investment
Company Act of 1940, as amended.


 


(g)           Title.
As of the Closing Date, (i) Company has good title to the Aircraft, free and clear of Liens other than Permitted Liens,
(ii) the Aircraft has been duly certificated by the FAA as to type and airworthiness in accordance with the terms
of the Indenture, (iii) the Indenture (with the Indenture Supplement covering the Aircraft attached) has been duly
filed for recordation (or shall be in the process of being so duly filed for recordation) with the FAA pursuant to the Transportation
Code, (iv) the Aircraft is duly registered with the FAA in the name of Company, and (v) the registration
of the International Interests (or Prospective International Interests) created under the Indenture (as supplemented by the Indenture
Supplement with respect to the Aircraft) shall have been effected (or shall be in the process of being so effected) on the International
Registry in accordance with the Cape Town Treaty.


 


(h)           Section 1110.
Loan Trustee is entitled to the benefits of Section 1110 with respect to the Aircraft being subjected to the Lien of the
Indenture on the Closing Date.


 


(i)            Security
Interest. The Indenture creates in favor of Loan Trustee, for the benefit of Noteholders, Indenture Indemnitees and Related
Indenture Indemnitees, a valid and (subject to the filings and registrations referred to in ‎Section 4.01(e))
perfected Lien on the Aircraft purported to be subjected to the Lien of the Indenture on the Closing Date, subject to no equal
or prior Lien, except Permitted Liens.


 


(j)            Licenses,
Permits and Franchises. Company holds all licenses, permits and franchises from the appropriate government entities necessary
to authorize Company lawfully to engage in air transportation as currently conducted, except where the failure to so hold any
such license, permit or franchise would not have a material adverse effect on the financial condition or operations of Company
and its consolidated subsidiaries, taken as a whole.


 






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Section 4.02.     General
Indemnity. (a) Claims Defined. For the purposes of this ‎Section 4.02,
“Claims” means any and all liabilities, obligations, losses, damages, penalties, claims, actions, suits, costs
or expenses of whatsoever kind and nature (whether or not on the basis of negligence, strict or absolute liability or liability
in tort) that may be imposed on, incurred by, suffered by or asserted against an Indemnitee, as defined below, and, except as
otherwise expressly provided in this ‎Section 4.02, includes all reasonable out-of-pocket
costs, disbursements and expenses (including reasonable out-of-pocket legal fees and expenses) actually incurred by an Indemnitee
in connection therewith or related thereto.


 


(a)          Indemnitee
Defined. For the purposes of this ‎Section 4.02, “Indemnitee”
means (i) WTC and Loan Trustee, (ii) each separate or additional trustee appointed pursuant to Section 8.02
of the Indenture, (iii) so long as it holds any Equipment Notes as agent and trustee of any Pass Through Trustee,
Subordination Agent (iv) so long as it is the holder of any Equipment Notes, each Pass Through Trustee, (v) the
Liquidity Provider, (vi) any Related Noteholder, and (vii) each of their respective successors and permitted
assigns in such capacities, agents, servants, officers, employees and directors (the respective agents, servants, officers, employees
and directors of each of the foregoing Indemnitees, as applicable, together with such Indemnitee, collectively the “Related
Indemnitee Group” of such Indemnitee); provided that such Persons, to the extent they are not signatories to
this Agreement, have expressly agreed in writing to be bound by the terms of this ‎Section 4.02
prior to, or concurrently with, the making of a Claim. If any Indemnitee fails to comply with any duty or obligation under this
‎Section 4.02 with respect to any Claim, such Indemnitee shall not be entitled to
any indemnity with respect to such Claim under this ‎Section 4.02 to the extent
such failure was prejudicial to Company. No holder of a Pass Through Certificate in its capacity as such holder shall be an Indemnitee.


 


(b)          Claims
Indemnified. Subject to the exclusions stated in ‎Section 4.02(d), Company agrees
to indemnify, protect, defend and hold harmless on an After-Tax Basis each Indemnitee against Claims resulting from or arising
out of the sale, purchase, acceptance, non-acceptance or rejection of the Aircraft under the Purchase Agreement or the ownership,
possession, use, non-use, substitution, airworthiness, control, maintenance, repair, operation, registration, re-registration,
condition, sale, lease, sublease, storage, modification, alteration, return, transfer or other disposition of the Aircraft, the
Airframe, any Engine or any Part (including, without limitation, latent or other defects, whether or not discoverable, and
any claim for patent, trademark or copyright infringement) by Company, any Permitted Lessee or any other Person. Without limiting
the foregoing and subject to, and without duplication of, the provisions of ‎Section 6.01(a),
Company agrees to pay the reasonable ongoing fees, and the reasonable out-of-pocket costs and expenses actually incurred (including,
without limitation, reasonable attorney’s fees and disbursements actually incurred and, to the extent payable as provided
in the Indenture, reasonable compensation and expenses of Loan Trustee’s agents actually incurred), of Loan Trustee in connection
with the transactions contemplated hereby.


 






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(c)           Claims
Excluded. The following are excluded from Company’s agreement to indemnify an Indemnitee under this ‎Section 4.02:


 


(i)            any
Claim to the extent such Claim is attributable to acts or events occurring after (A) the Lien of the Indenture has
been discharged, or (B) the transfer of possession of the Aircraft pursuant to Article IV of the Indenture except
to the extent that such Claim is attributable to acts occurring in connection with the exercise of remedies pursuant to ‎Section 4.02
of the Indenture following the occurrence and continuance of an Event of Default;


 


(ii)           any
Claim to the extent such Claim is, or is attributable to, a Tax (or loss of any Tax benefit), except with respect to paying indemnity
amounts on an After-Tax Basis;


 


(iii)          any
Claim to the extent such Claim is attributable to the negligence or willful misconduct of such Indemnitee or such Indemnitee’s
Related Indemnitee Group;


 


(iv)          any
Claim to the extent such Claim is attributable to the noncompliance by such Indemnitee or such Indemnitee’s Related Indemnitee
Group with any of the terms of, or any misrepresentation by an Indemnitee or its Related Indemnitee Group contained in, this Agreement,
any other Operative Document or any Pass Through Document to which such Indemnitee or any of such Related Indemnitee Group is
a party or any agreement relating hereto or thereto;


 


(v)           any
Claim to the extent such Claim constitutes a Lien attributable to such Indemnitee;


 


(vi)          any
Claim to the extent such Claim is attributable to the offer, sale, assignment, transfer, participation or other disposition (whether
voluntary or involuntary) by or on behalf of such Indemnitee or its Related Indemnitee Group (other than during the occurrence
and continuance of an Event of Default; provided that any such offer, sale, assignment, transfer, participation or other
disposition during the occurrence and continuation of an Event of Default shall not be subject to indemnification unless it is
made in accordance with the Indenture and applicable law) of any Equipment Note or interest therein or Pass Through Certificate,
all or any part of such Indemnitee’s interest in the Operative Documents or the Pass Through Documents, or any interest
in the Collateral or any similar security;


 


(vii)         any
Claim to the extent such Claim is attributable to (A) a failure on the part of Loan Trustee to distribute in accordance
with this Agreement or any other Operative Document any amounts received and distributable by it hereunder or thereunder, (B) a
failure on the part of Subordination Agent to distribute in accordance with the Intercreditor Agreement any amounts received and
distributable by it thereunder or (C) a failure on the part of any Pass Through Trustee to distribute in accordance
with the Pass Through Trust Agreement to which it is a party any amounts received and distributable by it thereunder;


 






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(viii)        any
Claim to the extent such Claim is attributable to the authorization or giving or withholding of any future amendments, supplements,
waivers or consents with respect to any Operative Document or any Pass Through Document, other than such as have been requested
by Company or that occur as the result of an Event of Default, or such as are expressly required or contemplated by the provisions
of the Operative Documents or the Pass Through Documents;


 


(ix)          any
Claim to the extent such Claim is payable or borne by (A) Company pursuant to any indemnification, compensation or
reimbursement provision of any other Operative Document or any Pass Through Document or (B) a Person other than Company
pursuant to any provision of any Operative Document or any Pass Through Document;


 


(x)           any
Claim to the extent such Claim is an ordinary and usual operating or overhead expense or not an out-of-pocket expense actually
incurred;


 


(xi)          any
Claim to the extent such Claim is incurred on account of or asserted as a result of (A) any “prohibited transaction”
within the meaning of Section 406 of ERISA or Section 4975 of the Code or any foreign, federal, state or local law which
is substantially similar to the prohibited transaction provisions of Section 406 of ERISA or Section 4975 of the Code
(“Similar Law”) or (B) any breach of fiduciary duty under ERISA;


 


(xii)         any
Claim to the extent such Claim is attributable to one or more of the other aircraft financed through the offering of Pass Through
Certificates (in the event of doubt, any Claim shall be allocated between the Aircraft and such other aircraft in the same proportion
that the then outstanding Equipment Notes bear to the then outstanding equipment notes issued with respect to the other aircraft
and held by Pass Through Trustees);


 


(xiii)        any
Claim to the extent such Claim is attributable to any amount which any Indemnitee expressly agrees shall not be paid by, borne
by, or reimbursed by Company;


 






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(xiv)           any
Claim by an Indemnitee related to the status of such Indemnitee as a shipper on any of Company’s aircraft or as a party
to a marketing or promotional or other commercial agreement with Company unrelated to the transactions contemplated by the Operative
Documents; and


 


(xv)            any
Claim to the extent such Claim is attributable to the offer or sale by an Indemnitee (or any member of such Indemnitee’s
Related Indemnitee Group) of any interest in the Aircraft, the Equipment Notes, the Pass Through Certificates, or any similar
interest, in violation of the Securities Act or other applicable federal, state or foreign securities laws (other than any thereof
caused by acts or omissions of Company or any of its affiliates).


 


(d)          Insured
Claims. In the case of any Claim indemnified by Company hereunder that is covered by a policy of insurance maintained by Company,
each Indemnitee agrees to cooperate, at Company’s expense, with the insurers in the exercise of their rights to investigate,
defend and compromise such Claim.


 


(e)          Claims
Procedure. An Indemnitee shall promptly notify Company of any Claim as to which indemnification is sought. The failure to
provide such prompt notice shall not release Company from any of its obligations to indemnify hereunder except to the extent that
Company is prejudiced by such failure or Company’s indemnification obligations are increased as a result of such failure
(in which event Company shall not be responsible for such additional indemnification obligations). Such Indemnitee shall promptly
submit to Company all additional information in such Indemnitee’s possession to substantiate such Claim as Company reasonably
requests. Subject to the rights of Company’s insurers, Company may, at its sole cost and expense, investigate any Claim,
and may in its sole discretion defend or compromise any Claim. At Company’s expense, any Indemnitee shall cooperate with
all reasonable requests of Company in connection therewith. Such Indemnitee shall not enter into a settlement or other compromise
with respect to any Claim without the prior written consent of Company, which consent shall not be unreasonably withheld or delayed,
unless such Indemnitee waives its right to be indemnified with respect to such Claim. Where Company or its insurers undertake
the defense of an Indemnitee with respect to a Claim, no additional legal fees or expenses of such Indemnitee in connection with
the defense of such Claim shall be indemnified hereunder unless such fees or expenses were incurred at the written request of
Company or such insurers. Subject to the requirements of any policy of insurance, an Indemnitee may participate at its own expense
in any judicial proceeding controlled by Company pursuant to the preceding provisions; provided that such party’s
participation does not, in the opinion of outside counsel appointed by Company or its insurers to conduct such proceedings, interfere
with such control. Such participation shall not constitute a waiver of the indemnification provided in this ‎Section 4.02.
Notwithstanding anything to the contrary contained herein, Company shall not under any circumstances be liable for the fees and
expenses of more than one counsel for all Indemnitees with respect to any one Claim. Notwithstanding anything to the contrary
contained herein, an Indemnitee shall not under any circumstances be required or deemed to be required to contest any Claim or
to assume responsibility for or control of any judicial proceeding with respect thereto. Company will provide the relevant Indemnitee
with such information not within the control of such Indemnitee, as is in Company’s control or is reasonably available to
Company, which such Indemnitee may reasonably request and will otherwise cooperate with such Indemnitee so as to enable such Indemnitee
to fulfill its obligations under this Section. If an Indemnitee is not a party to this Agreement, Company may require such Indemnitee
to agree in writing to the terms of this ‎Section 4.02 and ‎Section 7.10
of this Agreement prior to making any payment to such Indemnitee under this ‎Section 4.02.


 






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(f)           Subrogation.
To the extent that a Claim is in fact paid in full by Company or its insurer, Company or such insurer (as the case may be) shall,
without any further action, be subrogated to the rights and remedies of the Indemnitee on whose behalf such Claim was paid with
respect to the transaction or event giving rise to such Claim. Such Indemnitee shall give such further assurances or agreements
and shall cooperate with Company or such insurer, as the case may be, to permit Company or such insurer to pursue such rights
and remedies, if any, to the extent reasonably requested by Company. So long as no Event of Default has occurred and is continuing,
if an Indemnitee receives any payment, in whole or in part, from any party other than Company or its insurers with respect to
any Claim paid by Company or its insurers, it shall promptly pay over to Company the amount received (but not an amount in excess
of the amount Company or any of its insurers has paid in respect of such Claim). Any amount referred to in the preceding sentence
that is payable to Company shall not be paid to Company, or, if it has been previously paid directly to Company, shall not be
retained by Company, if at the time of such payment an Event of Default has occurred and is continuing, but shall be paid to and
held by Loan Trustee as security for the obligations of Company under the Operative Documents. If Company agrees, such amount
payable shall be applied against Company’s obligations thereunder when and as they become due and payable. At such time
as such Event of Default is no longer continuing, such amount, to the extent not previously so applied against Company’s
obligations, shall be paid to Company.


 


(g)          No
Guaranty. Nothing set forth in this ‎Section 4.02 constitutes a guarantee by
Company that the Aircraft at any time will have any particular value, useful life or residual value.


 






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(h)          Payments;
Interest. Any amount payable to any Indemnitee on account of a Claim shall be paid within 30 days after receipt by Company
of a written demand therefor from such Indemnitee accompanied by a written statement describing in reasonable detail the Claims
that are the subject of and basis for such indemnity and the computation of the amount payable. Any payments made pursuant to
this ‎Section 4.02 directly to an Indemnitee or to Company, as the case may be,
shall be made in immediately available funds at such bank or to such account as is specified by the payee in written directions
to the payor or, if no such directions are given, by check of the payor payable to the order of the payee and mailed to the payee
by certified mail, return receipt requested, postage prepaid to its address referred to in ‎Section 7.01.
To the extent permitted by applicable law, interest at the Past Due Rate shall be paid, on demand, on any amount or indemnity
not paid when due pursuant to this ‎Section 4.02 until the same is paid. Such interest
shall be paid in the same manner as the unpaid amount in respect of which such interest is due.


 


(i)            Tax
Deduction or Credit. If, by reason of any payment made to or for the account of any Indemnitee by Company, or by reason of
any Claim of any Indemnitee paid or indemnified against by Company, in each case pursuant to ‎Section 4.02,
such Indemnitee realizes a Tax deduction or credit not previously taken into account in computing such payment, such Indemnitee
shall promptly pay to Company an amount equal to the sum of (i) the actual reduction in Taxes realized by such Indemnitee
which is attributable to such deduction or credit, and (ii) the actual reduction in Taxes realized by such Indemnitee
as a result of any payment made by such Indemnitee pursuant to this sentence; provided that the amount payable by such
Indemnitee pursuant to this sentence shall not exceed the sum of all amounts previously paid by Company to such Indemnitee pursuant
to this ‎Section 4.02; provided, further, that any such excess shall
be carried forward and applied to reduce pro tanto any subsequent obligations of Company to make payments to such Indemnitee
pursuant to ‎Section 4.02. If such Tax deduction or credit is subsequently disallowed
or lost, upon written notice from the Indemnitee Company shall promptly repay all amounts paid to it pursuant to this ‎Section 4.02(j) in
respect of such disallowed or lost deduction or credit. If, at the time an amount would otherwise be payable to Company under
this ‎Section 4.02(j), any Event of Default shall have occurred and be continuing,
such amount shall be held by the relevant Indemnitee as security for the obligations of Company under the Operative Documents.
At such time as no Event of Default is continuing, such amount or portion thereof shall be applied to offset Company’s outstanding
obligations under the Operative Documents and any remaining amount after such application shall be paid to Company.


 






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ARTICLE 5


 


REPRESENTATIONS, WARRANTIES AND COVENANTS
OF WTC


 


Section 5.01.        Representations,
Warranties and Covenants of WTC. WTC, generally, and as each of Loan Trustee, Subordination Agent and Pass Through Trustee
as it relates to it, represents, warrants and covenants that:


 


(a)          Organization;
Authority. WTC is a Delaware trust company duly organized and validly existing in good standing under the laws of the State
of Delaware, holds a valid certificate to do business as a Delaware trust company, is eligible to be Loan Trustee under Section 8.01(a) of
the Indenture, will promptly comply with Section 8.01(a) of the Indenture and has full power, authority and legal right
to enter into and perform its obligations under each of the Operative Documents and the Pass Through Documents to which WTC, Loan
Trustee, Subordination Agent or any Pass Through Trustee is a party and, in its capacity as Loan Trustee and Pass Through Trustee,
respectively, to authenticate the Equipment Notes and the Pass Through Certificates, respectively. WTC is qualified to act as
Loan Trustee under Section 8.01(c) of the Indenture. WTC is a Citizen of the United States (without the use of a voting
trust agreement), and will resign as Loan Trustee under the Indenture promptly after it obtains actual knowledge that it has ceased
to be such a Citizen of the United States.


 


(b)          Due
Authorization; No Violations. The execution, delivery and performance by WTC, individually or in its capacity as Loan Trustee,
Subordination Agent or Pass Through Trustee, as the case may be, of this Agreement, each of the other Operative Documents and
each of the Pass Through Documents to which WTC, Loan Trustee, Subordination Agent or any Pass Through Trustee is a party, the
performance by WTC, individually or in its capacity as Loan Trustee, Subordination Agent or Pass Through Trustee, as the case
may be, of its obligations thereunder and the consummation on the Closing Date or the Issuance Date, as the case may be, of the
transactions contemplated thereby, and the authentication of the Equipment Notes and the Pass Through Certificates, respectively,
to be delivered on the Closing Date or the Issuance Date, as the case may be: (i) have been duly authorized by all
necessary action on the part of WTC, Loan Trustee, Subordination Agent and each Pass Through Trustee, as the case may be, (ii) do
not violate any law or regulation of the United States or of the state of the United States in which WTC is located and which
governs the trust powers of WTC or any order, writ, judgment or decree of any court, arbitrator or governmental authority applicable
to WTC, Loan Trustee, Subordination Agent or any Pass Through Trustee or any of their assets, (iii) will not violate
any provision of the charter or by-laws of WTC and (iv) will not violate any provision of, or constitute a default
under, any mortgage, indenture, contract, agreement or undertaking to which any of WTC, Loan Trustee, Subordination Agent or any
Pass Through Trustee is a party or by which any of them or their respective properties may be bound or affected.


 






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(c)          Approvals.
Neither the execution and delivery by WTC, individually or in its capacity as Loan Trustee, Subordination Agent or Pass Through
Trustee, as the case may be, of this Agreement, any other Operative Document or any Pass Through Document to which WTC, Loan Trustee,
Subordination Agent or any Pass Through Trustee is a party, nor the consummation by WTC, Loan Trustee, Subordination Agent or
any Pass Through Trustee of any of the transactions contemplated hereby or thereby, requires the authorization, consent or approval
of, the giving of notice to, the filing or registration with, or the taking of any other action in respect of, (i) any
governmental authority or agency of the United States or the state of the United States where WTC is located and regulating the
trust powers of WTC or (ii) any trustee or other holder of any debt of WTC.


 


(d)          Valid
and Binding Agreements. This Agreement, each other Operative Document and each Pass Through Document to which WTC, Loan Trustee,
Subordination Agent or any Pass Through Trustee is a party have been duly executed and delivered by WTC, individually and in its
capacity as Loan Trustee, Subordination Agent or Pass Through Trustee, as the case may be, and constitute the legal, valid and
binding obligations of WTC, Loan Trustee, Subordination Agent and such Pass Through Trustee, as the case may be, enforceable against
it in accordance with its terms, except as the same may be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the rights of creditors generally and by general principles of equity.


 


(e)          No
Loan Trustee Liens or Other Party Liens. It unconditionally agrees with and for the benefit of the parties to this Agreement
that it will not directly or indirectly create, incur, assume or suffer to exist any Loan Trustee Lien or Other Party Lien attributable
to it, and it agrees that it will, at its own cost and expense, promptly take such action as may be necessary to discharge and
satisfy in full any such Lien.


 


(f)           Intercreditor
Agreement. The Equipment Notes to be issued to Subordination Agent pursuant hereto are being acquired by it to be held under
the Intercreditor Agreement.


 


(g)          Funds
Transfer Fees. Each of WTC, Loan Trustee, Subordination Agent and each Pass Through Trustee agrees that it will not impose
any lifting charge, cable charge, remittance charge or any other charge or fee on any transfer by Company of funds to, through
or by WTC, Loan Trustee, Subordination Agent or such Pass Through Trustee pursuant to this Agreement, any other Operative Document
or any Pass Through Document, except as may be otherwise agreed to in writing by Company.


 






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(h)          Confidentiality.
Each of WTC, Loan Trustee, Subordination Agent and each Pass Through Trustee agrees to be bound by the terms of Section 10.16
of the Indenture.


 


(i)           Certain
Tax Matters. There are no Taxes payable by (i) WTC, Loan Trustee, Subordination Agent or any Pass Through Trustee
imposed by the State of Delaware or any political subdivision or taxing authority thereof, in connection with the execution, delivery
or performance by WTC, Loan Trustee or Subordination Agent on the one hand, or WTC or any Pass Through Trustee, on the other,
of any Operative Document or any Pass Through Document (other than franchise or other Taxes based on or measured by any fees or
compensation received by any such Person for services rendered in connection with the transactions contemplated by the Operative
Documents or the Pass Through Documents), and there are no Taxes payable by any Pass Through Trustee imposed by the State of Delaware
or any political subdivision thereof in connection with the acquisition, possession or ownership by such Pass Through Trustee
of any of the Equipment Notes (other than franchise or other Taxes based on or measured by any fees or compensation received by
such Pass Through Trustee for services rendered in connection with the transactions contemplated by the Operative Documents or
the Pass Through Documents) and, assuming that the Pass Through Trusts will not be taxable for federal income tax purposes as
corporations, but, rather, will be characterized for such purposes as grantor trusts or partnerships, the Pass Through Trusts
will not be subject to any Taxes imposed by the State of Delaware or any political subdivision thereof.


 


(j)           Limitation
on Situs of Activities. Except with the consent of Company, which shall not be unreasonably withheld, WTC will act as Pass
Through Trustee , Subordination Agent and Loan Trustee solely through its offices within the State of Delaware, except for such
services as may be performed for it by independent agents in the ordinary course of business, but not directly by it, in other
states.


 


(k)          No
Proceedings. There are no pending or, to its knowledge, threatened actions or proceedings against WTC, Loan Trustee, Subordination
Agent or any Pass Through Trustee before any court or administrative agency which individually or in the aggregate, if determined
adversely to it, would materially adversely affect the ability of WTC, Loan Trustee, Subordination Agent or any Pass Through Trustee
to perform its obligations under any Operative Document or any Pass Through Document.


 






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(l)           Other
Representations. The representations and warranties contained in Section 7.15 of the Basic Pass Through Trust Agreement
and Section 7.04 of the Trust Supplement are true, complete and correct as of the Closing Date.


 


ARTICLE 6


 


OTHER COVENANTS AND AGREEMENTS


 


Section 6.01.         Other
Agreements. (a) Fees and Expenses. Company agrees promptly to pay (without duplication of any other obligation
Company may have to pay such amounts) (1) the initial and annual fees and (to the extent Loan Trustee is entitled
to be reimbursed for its reasonable expenses) the reasonable expenses of Loan Trustee in connection with the transactions contemplated
hereby and (2) the following expenses incurred by Loan Trustee, Subordination Agent and Pass Through Trustees in connection
with the negotiation, preparation, execution and delivery of this Agreement, the other Operative Documents and the other documents
or instruments referred to herein or therein:


 


(i)               the
reasonable fees, expenses and disbursements of (A) Morris James LLP, special counsel for Loan Trustee, Subordination
Agent and Pass Through Trustees, (B) Richards, Layton & Finger, P.A., special Delaware counsel for the Company,
and (C) Crowe & Dunlevy, a Professional Corporation, special FAA counsel in Oklahoma City, Oklahoma, in each
case to the extent actually incurred; and


 


(ii)              all
reasonable expenses actually incurred in connection with printing and document production or reproduction expenses, and in connection
with the filing of Uniform Commercial Code financing statements.


 


(b)          Continuing
Registration and Re-Registration. Loan Trustee, Noteholders, Subordination Agent and each Pass Through Trustee agree to execute
and deliver, at Company’s expense, all such documents and consents as Company reasonably requests for the purpose of continuing
the registration of the Aircraft at the FAA in Company’s name or for the purpose of registering or maintaining any registration
on the International Registry in respect of the Aircraft. In addition, each of Loan Trustee, Subordination Agent, each Pass Through
Trustee and any other Noteholder agrees, for the benefit of Company, to cooperate with Company in effecting any foreign registration
of the Aircraft pursuant to Section 7.02(e) of the Indenture; provided that prior to any such change in the country
of registry of the Aircraft the conditions set forth in Section 7.02(e) of the Indenture are met to the reasonable satisfaction
of, or waived by, Loan Trustee.


 






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(c)          Quiet
Enjoyment. Each of WTC, Loan Trustee, Subordination Agent, each Pass Through Trustee, any other Noteholder, Class AA
Liquidity Provider (by having entered into the Class AA Liquidity Facility) agrees that, unless an Event of Default shall
have occurred and be continuing, it shall not (and shall not permit any Affiliate or other Person claiming by, through or under
it to) take any action contrary to, or otherwise in any way interfere with or disturb (and then only in accordance with the Indenture),
the quiet enjoyment of the use and possession of the Aircraft, the Airframe, any Engine or any Part by Company or any transferee
of any interest in any thereof permitted under the Indenture.


 


(d)          No
Noteholder Liens. Each Noteholder, including, without limitation, Subordination Agent and each Pass Through Trustee, unconditionally
agrees with and for the benefit of the parties to this Agreement that it will not directly or indirectly create, incur, assume
or suffer to exist any Noteholder Liens, and such Noteholder agrees that it will, at its own cost and expense, promptly take such
action as may be necessary to discharge and satisfy in full any such Noteholder Lien; and each Noteholder hereby agrees to indemnify,
protect, defend and hold harmless each Indemnitee and Company against claims in any way resulting from or arising out of a breach
by it of its obligations under this ‎Section 6.01(d).


 


(e)           Agreement
to be Bound; Transfer. By its acceptance of its Equipment Notes, each Noteholder unconditionally agrees for the benefit of
Company and Loan Trustee: (i) to be bound by and to perform and comply with all of the terms of such Equipment Notes,
the Indenture and this Agreement applicable to such Noteholder and (ii) that it will not transfer any Equipment Note
(or any part thereof) to any entity unless such transfer complies with and does not violate the Transportation Code, the Securities
Act (or require registration under such Act) or any other law (including, without limitation, ERISA, the Code and Similar Law),
and does not create a relationship that would be in violation thereof, or result in a “prohibited transaction” under
Section 406 of ERISA, Section 4975 of the Code or Similar Law or require qualification of an indenture under the Trust
Indenture Act.


 


(f)           Tax
Returns. Each Pass Through Trustee shall file any Tax returns required to be filed by the related Pass Through Trust and the
Company shall pay the Applicable Portion of any expenses relating to the preparation thereof. For purposes of this ‎Section 6.01(f),
the “Applicable Portion” of any amount shall equal such amount multiplied by a fraction, the numerator of which
shall be the sum of the then outstanding aggregate principal amount of the Equipment Notes held by the relevant Pass Through Trustee,
and the denominator of which shall be the sum of the outstanding aggregate principal amount of all “Equipment Notes”
issued under each of the “Indentures” (in each case as defined in the Intercreditor Agreement) held by such Pass Through
Trustee.


 






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(g)          No
Petition. Each of Company, Loan Trustee, each Pass Through Trustee, Subordination Agent and any other Noteholder covenants
that until one year and one day after the Series AA Equipment Notes have been paid in full, it shall not acquiesce, petition
or otherwise invoke or cause or join in invoking or causing the Class AA Pass Through Trust or any other Person to invoke
the process of any governmental authority for the purpose of commencing or sustaining a case (whether voluntary or not) against
the Class AA Pass Through Trust under any bankruptcy, insolvency or similar law or appointing a receiver, liquidator, assignee,
trustee, custodian, sequestrator or other similar official of the Class AA Pass Through Trust or any substantial part of
its property or ordering the winding-up or liquidation of the affairs of the Class AA Pass Through Trust, and (ii) if
any Additional Series Equipment Notes of any Series shall have been issued, until one year and one day after such Additional
Series Equipment Notes have been paid in full, it shall not acquiesce, petition or otherwise invoke or cause or join in invoking
or causing the related Additional Series Pass Through Trust or any other Person to invoke the process of any governmental
authority for the purpose of commencing or sustaining a case (whether voluntary or not) against such Additional Series Pass
Through Trust under any bankruptcy, insolvency or similar law or appointing a receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar official of such Additional Series Pass Through Trust or any substantial part of its property
or ordering the winding-up or liquidation of the affairs of such Additional Series Pass Through Trust.


 


Section 6.02.         Certain
Covenants of Company. Company covenants and agrees with Loan Trustee as follows:


 


(a)          Further
Assurances. On and after the Closing, Company will cause to be done, executed, acknowledged and delivered such further acts,
conveyances and assurances as Loan Trustee reasonably requests for accomplishing the purposes of this Agreement and the other
Operative Documents; provided that any instrument or other document so executed by Company will not expand any obligations
or limit any rights of Company in respect of the transactions contemplated by the Operative Documents.


 


(b)          Filing
and Recordation of the Indenture; Registration of International Interests. Company, at its expense, will cause the Indenture
(with the Indenture Supplement covering the Aircraft attached) to be promptly filed and recorded, or filed for recording, with
the FAA to the extent permitted under the Transportation Code and the rules and regulations of the FAA thereunder. In addition,
on or prior to the Closing Date, Company will cause the registration of the International Interests (or Prospective International
Interests) created under the Indenture (as supplemented by the Indenture Supplement with respect to the Aircraft) to be effected
(or shall be in the process of being so effected) on the International Registry in accordance with the Cape Town Treaty, and shall,
as and to the extent applicable, consent to such registration upon the issuance of a request for such consent by the International
Registry.


 






    24


     


    

 


(c)          Maintenance
of Filings. The Company, at its expense, will take, or cause to be taken, such action with respect to the recording, filing,
re-recording and refiling of the Indenture and any financing statements or other instruments as are necessary to maintain, so
long as the Indenture is in effect, the perfection of the security interests created by the Indenture or will furnish Loan Trustee
timely notice of the necessity of such action, together with such instruments, in execution form, and such other information as
may be required to enable Loan Trustee to take such action. In addition, Company will pay any and all recording, stamp and other
similar Taxes payable in the United States, and in any other jurisdiction where the Aircraft is registered, in connection with
the execution, delivery, recording, filing, re-recording and refiling of the Indenture or any such financing statements or other
instruments. Company will notify Loan Trustee of any change in its jurisdiction of organization (as such term is used in Article 9
of the Uniform Commercial Code as in effect in the State of Delaware) promptly after making such change or in any event within
the period of time necessary under applicable law to prevent the lapse of perfection (absent refiling) of financing statements
filed under the Operative Documents.


 


(d)          Maintenance
of Corporate Existence. Company shall at all times maintain its corporate existence except as permitted by ‎Section 6.02(e).


 


(e)          Merger;
Consolidation; Transfer of Substantially All Assets. Company shall not consolidate with or merge into any other Person or
convey, transfer or lease substantially all of its assets as an entirety to any Person, unless:


 


(i)               the
successor or transferee entity shall, if and to the extent required under Section 1110 in order that Loan Trustee continues
to be entitled to any benefits of Section 1110 with respect to the Aircraft, be a Citizen of the United States and a Certificated
Air Carrier and shall execute and deliver to Loan Trustee an agreement containing the express assumption by such successor or
transferee entity of the due and punctual performance and observance of each covenant and condition of the Operative Documents
to which Company is a party to be performed or observed by Company;


 


(ii)              if
the Aircraft is, at the time, registered with the FAA or such Person is located in a “Contracting State” (as such
term is used in the Cape Town Treaty), such Person makes such filings and recordings with the FAA pursuant to the Transportation
Code and registration under the Cape Town Treaty, or if the Aircraft is, at the time, not registered with the FAA, such Person
makes such filings and recordings with the applicable aviation authority, as are necessary to evidence such consolidation, merger,
conveyance, transfer or lease;


 






    25


     


    

 


(iii)            immediately
after giving effect to such transaction, no Event of Default shall have occurred and be continuing; and


 


(iv)            Company
shall deliver to Loan Trustee and the Liquidity Provider a certificate signed by a Responsible Officer of Company stating that
such consolidation, merger, conveyance, transfer or lease and the assumption agreement mentioned in clause ‎(i) above
comply with this ‎Section 6.02(e) and that all conditions precedent herein
relating to such transaction have been complied with.


 


Upon
any consolidation or merger, or any conveyance, transfer or lease of substantially all of the assets of Company as an entirety
in accordance with this ‎Section 6.02(e), the successor Person formed by such consolidation
or into which Company is merged or to which such conveyance, transfer or lease is made shall succeed to, and be substituted for,
and may exercise every right and power of, Company under this Agreement and the other Operative Documents with the same effect
as if such successor Person had been named as Company herein.


 


(f)           Section 1110.
Company shall remain a Certificated Air Carrier for as long as and to the extent required under Section 1110 in order that
Loan Trustee shall be entitled to any of the benefits of Section 1110 with respect to the Aircraft.


 


(g)          Additional
Information. Promptly after the occurrence of a Triggering Event or an Indenture Event of Default resulting from the failure
of Company to make payments on any Equipment Note and on every Regular Distribution Date while the Triggering Event or such Indenture
Event of Default shall be continuing, Company will, at the Subordination Agent’s request from time to time but in any event
no more frequently than once every three months, provide to the Subordination Agent a statement setting forth the following information
with respect to the Aircraft if then subject to the lien of the Indenture: (A) whether the Aircraft is currently in
service or parked in storage, (B) the maintenance status of the Aircraft, and (C) the location of the
Engines. As used in this ‎Section 6.02(g), the terms “Triggering Event”,
“Indenture Event of Default” and “Regular Distribution Date” shall have the respective meanings set forth
in the Intercreditor Agreement.


 


ARTICLE 7


 


MISCELLANEOUS


 


Section 7.01.         Notices.
Unless otherwise expressly specified or permitted by the terms hereof, all notices required or permitted under the terms and provisions
of this Agreement shall be in English and in writing, and any such notice may be given by United States mail, courier service
or facsimile, and any such notice shall be effective when delivered (or, if mailed, three Business Days after deposit, postage
prepaid, in the first class United States mail, and if delivered by facsimile, upon completion of transmission and confirmation
by the sender (by a telephone call to a representative of the recipient or by machine confirmation) that such transmission was
received) addressed as follows:


 






    26


     


    

 


if to Company, addressed to:


 


Federal Express Corporation


3610 Hacks Cross Road


Memphis, TN 38125


Attn: General Counsel


 


with a copy to:


 


FedEx Corporation


942 S. Shady Grove Road


Memphis, TN 38120


Attn: Treasurer


 


with a separate FedEx Corporation
copy to: Corporate Vice President, Securities & Corporate Law


 


if to WTC, Pass Through Trustee, Loan Trustee, Subordination
Agent or Pass Through Agent, addressed to:


 


Wilmington Trust Company


 


1100 North Market Square

Wilmington, DE 19890-1605

Attention:         Global Capital Market Services

Ref:                   FedEx
2020-1AA EETC

Telephone:       [     ]

Telecopy:         [     ]


 


or if to any subsequent Noteholder, addressed
to such Noteholder at its address set forth in the Equipment Note Register maintained pursuant to Section 2.07 of the Indenture.


 


Any
party, by notice to the other parties hereto, may designate different addresses for subsequent notices or communications. Whenever
the words “notice” or “notify” or similar words are used herein, they mean the provision of formal notice
as set forth in this ‎Section 7.01.


 






    27


     


    

 


Section 7.02.         Survival
of Representations, Warranties, Indemnities, Covenants and Agreements. The indemnities set forth in ‎Section 4.02
of this Agreement and the confidentiality obligations set forth in ‎Section 5.01(h) of
this Agreement shall survive the making of the loans, the transfer of any interest by any Noteholder of its Equipment Note and
the expiration or termination of any Operative Documents (in the case of the indemnities, to the extent arising out of acts or
events occurring prior to such expiration or termination).


 


Section 7.03.         Governing
Law. THIS AGREEMENT HAS BEEN DELIVERED IN THE STATE OF NEW YORK AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAW OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.


 


Section 7.04.         Severability.
To the extent permitted by applicable law, any provision of this Agreement which is prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable
such provision in any other jurisdiction.


 


Section 7.05.         No
Oral Modifications or Continuing Waivers; Consents. Subject to Section 9.03 of the Indenture, no terms or provisions
of this Agreement may be changed, waived, discharged or terminated orally, but only by an instrument in writing signed by the
party against which the enforcement of the change, waiver, discharge or termination is sought. No such change, waiver, discharge
or termination shall be effective unless a signed copy thereof is delivered to Loan Trustee.


 


Section 7.06.         Effect
of Headings and Table of Contents. The headings of the various Articles and Sections herein and in the Table of Contents are
for convenience of reference only and do not define or limit any of the terms or provisions hereof.


 


Section 7.07.         Successors
and Assigns. All covenants, agreements, representations and warranties in this Agreement by Company, by WTC, individually
or as Loan Trustee, Subordination Agent or Pass Through Trustee, or by any Noteholder, shall bind and inure to the benefit of
and be enforceable by Company, and subject to the terms of ‎Section 6.02(e), its
successors and permitted assigns, each Pass Through Trustee and any successor or other trustee under the Pass Through Trust Agreement
to which it is a party, Subordination Agent and its successor under the Intercreditor Agreement and Loan Trustee and its successor
under the Indenture, whether so expressed or not.


 






    28


     


    

 


Section 7.08.         Benefits
of Agreement. Subject to the next sentence, nothing in this Agreement, express or implied, gives to any Person, other than
the parties hereto and their successors hereunder, any benefit or any legal or equitable right, remedy or claim under this Agreement,
except as expressly provided herein. Company agrees and acknowledges that the Liquidity Provider, and each separate or additional
trustee appointed pursuant to Section 8.02 of the Indenture shall be third party beneficiaries of the covenants and agreements
of Company with respect to the indemnities contained in ‎Section 4.02 and may rely
on the covenants and agreements of Company with respect to such indemnities to the same extent as if the covenants and agreements
of Company with respect to such indemnities were made to the Liquidity Provider or such trustee, as the case may be, directly.
WTC generally, and each of the Loan Trustee, the Subordination Agent and each Pass Through Trustee, insofar as relating to each
such Person, agrees and acknowledges that the Liquidity Provider is a third party beneficiary of the representations and warranties
set forth in ‎Section 5.01, and that the Liquidity Provider may rely on such representations
and warranties to the same extent as if such representations and warranties were made to the Liquidity Provider directly.


 


Section 7.09.         Counterparts.
This Agreement may be executed in any number of counterparts. Each of the parties hereto shall not be required to execute the
same counterpart. Each counterpart of this Agreement including a signature page or pages executed by each of the parties
hereto shall be an original counterpart of this Agreement, but all of such counterparts shall together constitute one instrument.


 


Section 7.10.         Submission
to Jurisdiction. Each of the parties hereto, to the extent it may do so under applicable law, for purposes hereof and of all
other Operative Documents hereby (a) irrevocably submits itself to the non-exclusive jurisdiction of the courts of
the State of New York sitting in the City of New York and to the non-exclusive jurisdiction of the United States District Court
for the Southern District of New York, for the purposes of any suit, action or other proceeding arising out of this Agreement,
the subject matter hereof or any of the transactions contemplated hereby brought by any party or parties hereto or thereto, or
their successors or permitted assigns and (b) waives, and agrees not to assert, by way of motion, as a defense, or
otherwise, in any such suit, action or proceeding, that the suit, action or proceeding is brought in an inconvenient forum, that
the venue of the suit, action or proceeding is improper or that this Agreement or the subject matter hereof or any of the transactions
contemplated hereby may not be enforced in or by such courts.


 


Section 7.11.         Further
Assurances. Each party hereto shall execute, acknowledge and deliver or shall cause to be executed, acknowledged and delivered,
all such further agreements, instruments, certificates or documents, and shall do and cause to be done such further acts and things,
including, without limitation, making or consenting to registrations (or discharges thereof, as appropriate) with respect to the
Indenture on the International Registry and appointing Crowe & Dunlevy, a Professional Corporation (or another qualified
FAA counsel), as its “professional user entity” (as defined in the Cape Town Treaty) to make or consent to any registrations
(or discharges thereof, as appropriate) on the International Registry with respect to the Airframe or any Engine, in any case,
as any other party hereto shall reasonably request in connection with the administration of, or to carry out more effectively
the purposes of, or to better assure and confirm into such other party the rights and benefits to be provided under this Agreement,
the other Operative Documents and the Pass Through Documents.


 


Section 7.12.         Section 1110.
It is the intention of each of Company, Noteholders (such intention being evidenced by each of their acceptance of an Equipment
Note), Loan Trustee and other parties hereto that the security interest created by the Indenture, to the fullest extent available
under applicable law, entitles the Loan Trustee, on behalf of the Noteholders, to all of the benefits of Section 1110 with
respect to the Aircraft, Airframe, Engines and Parts.





 








    29


     


    

 


IN WITNESS WHEREOF,
the parties hereto have caused this Participation Agreement to be duly executed by their respective officers thereunto duly authorized
as of the date first above written.


 


	 	FEDERAL EXPRESS CORPORATION
	 	 	 
	 	By:	/s/ Herbert C. Nappier
	 	 	Name: Herbert C. Nappier
	 	 	Title: Treasurer
	 	 	 
	 	WILMINGTON TRUST COMPANY, as Pass Through Trustee under
    the Pass Through Trust Agreement
	 	 	 
	 	By:	/s/ Chad May
	 	 	Name: Chad May
	 	 	Title: Vice President
	 	 	                       
                                               
	 	WILMINGTON TRUST COMPANY, as Subordination Agent
	 	 	 
	 	By:	/s/ Chad May
	 	 	Name: Chad May
	 	 	Title: Vice President



 






    


     


    

 


	 	WILMINGTON TRUST COMPANY, as Loan Trustee
	 	 	 
	 	By:	/s/ Chad May
	 	 	Name: Chad May
	 	 	Title: Vice President
	 	 	 
	 	WILMINGTON TRUST COMPANY, in its individual capacity
    as set forth herein
	 	 	                                                             
	 	By:	/s/ Chad May
	 	 	Name: Chad May
	 	 	Title: Vice President



 









    


     


    

 


SCHEDULE I to

PARTICIPATION AGREEMENT


 


EQUIPMENT NOTES,

PURCHASERS AND ORIGINAL PRINCIPAL AMOUNTS


 


	Purchaser	 	Description of 
 Equipment 
 Notes	 	Maturity	 	Interest
 Rate	 	 	Original
 Principal 
 Amount	 
	FedEx Pass Through Trust 2020-1AA	 	Series 2020-1AA-N126FE Equipment Note	 	February 20, 2034	 	 	1.875	%	 	$	32,875,000.00	 







 






    


     


    

 


SCHEDULE II to

PARTICIPATION AGREEMENT


 


TRUST SUPPLEMENT


 


Trust Supplement No. 2020-1AA,
dated as of the Issuance Date, between Company and Pass Through Trustee in respect of Federal Express Corporation Pass Through
Trust 2020-1AA.


 









    


     


    

 


EXHIBIT A-1
to

PARTICIPATION AGREEMENT


 


FORM OF OPINION OF

COUNSEL FOR FEDEX CORPORATION


 


[Attached.]


 






    


     


    

 





EXHIBIT A-2 to

PARTICIPATION AGREEMENT


 


FORM OF OPINION OF

SPECIAL COUNSEL FOR COMPANY


 


[Attached.]


 









    


     


    

 



 


EXHIBIT B to

PARTICIPATION AGREEMENT


 


 


FORM OF OPINION OF

SPECIAL COUNSEL FOR LOAN TRUSTEE, PASS THROUGH TRUSTEES,

SUBORDINATION AGENT AND WTC


 


[Attached.]


 






    


     


    

 


EXHIBIT C to

PARTICIPATION AGREEMENT


 


 


FORM OF OPINION OF

SPECIAL FAA COUNSEL


 


[Attached.]


 






    


     


    

 


EXHIBIT D to

PARTICIPATION AGREEMENT


 


 


FORM OF MANUFACTURER’S CONSENT


 


[Attached.]


 






    


     


    

 


EXHIBIT E to

PARTICIPATION AGREEMENT


 


 


FORM OF OPINION OF SPECIAL DELAWARE
UCC COUNSEL FOR COMPANY


 


[Attached.]


 






    


     


    

 


Annex A to

Participation Agreement and

Indenture and Security Agreement

(N126FE)


 


DEFINITIONS

(N126FE)


 


“Additional
Series” or “Additional Series Equipment Notes” means Equipment Notes issued under the Indenture
and designated as a Series (other than “Series AA”) thereunder in the principal amounts and maturities and
bearing interest as specified in Schedule I to the Indenture amended at the time of original issuance of such Additional Series under
the heading for such Series.


 


“Additional
Series Pass Through Trust” means a grantor trust created to facilitate the issuance and sale of pass through certificates
in connection with the issuance of any Additional Series Equipment Notes.


 


“Affiliate”
means with respect to any Person, any other Person directly or indirectly controlling, controlled by or under common control with
such Person. For the purposes of this definition, “control” (including “controlled by” and “under
common control with”) shall mean the power, directly or indirectly, to direct or cause the direction of the management and
policies of such Person whether through the ownership of voting securities or by contract or otherwise. In no event shall WTC
be deemed to be an Affiliate of Loan Trustee or vice versa.


 


“After-Tax
Basis” means that indemnity and compensation payments required to be made on such basis will be supplemented by the
Person paying the base amount by that amount which, when added to such base amount, and after deduction of all federal, state,
local and foreign Taxes required to be paid by or on behalf of the payee with respect of the receipt or realization of the base
amount and any such supplemental amounts, and after consideration of any current tax savings of such payee resulting by way of
any deduction, credit or other tax benefit actually and currently realized that is attributable to such base amount or Tax, shall
net such payee the full amount of such base amount.


 


“Agreement”
and “Participation Agreement” mean that certain Participation Agreement (N126FE), dated on or before the Closing
Date, among Company, WTC, Pass Through Trustee under the Pass Through Trust Agreement, Subordination Agent and Loan Trustee, as
the same may be amended, supplemented or otherwise modified from time to time in accordance with its terms.


 


“Aircraft”
means the Airframe (or any Substitute Airframe or Replacement Airframe substituted therefor pursuant to Section 7.04 or Section 7.05,
respectively, of the Indenture) together with the two Engines described in the Indenture Supplement originally executed and delivered
under the Indenture (or any Replacement Engine that may from time to time be substituted for any of such Engines pursuant to Section 7.04
or Section 7.05 of the Indenture), whether or not any of such initial or substituted Engines is from time to time installed
on such Airframe or installed on any other airframe or on any other aircraft. The term “Aircraft” includes any Replacement
Aircraft.


 






    


     


    

 


“Airframe”
means (a) the Boeing 767-3S2F (generic manufacturer and model Boeing 767-300F) aircraft (except (i) the Engines
or engines from time to time installed thereon and any and all Parts related to such Engine or engines and (ii) Excluded
Equipment) specified on Annex A to the Indenture Supplement originally executed and delivered under the Indenture and (b) any
and all related Parts. The term “Airframe” includes any Substitute Airframe or Replacement Airframe that is substituted
for the Airframe pursuant to Section 7.04 or Section 7.05, respectively, of the Indenture. At such time as any Substitute
Airframe or Replacement Airframe is so substituted and the Airframe for which such substitution is made is released from the Lien
of the Indenture, such replaced Airframe shall cease to be an Airframe under the Indenture.


 


“Bankruptcy
Code” means the United States Bankruptcy Code, 11 United States Code §§101 et seq., as amended from time to
time, or any successor statutes thereto.


 


“Basic Pass
Through Trust Agreement” means that certain Pass Through Trust Agreement, dated as of August 13, 2020, between
Company and WTC, as the same may be amended, supplemented or otherwise modified from time to time in accordance with its terms
(but does not include any Trust Supplement).


 


“Business
Day” means any day other than a Saturday, a Sunday or a day on which commercial banks are required or authorized to
close in New York, New York, Memphis, Tennessee or, if different from the foregoing, the city and state in which Loan Trustee,
any Pass Through Trustee or Subordination Agent maintains its Corporate Trust Office or receives and disburses funds.


 


“Cape Town
Treaty” means, collectively, the official English language text of (a) the Convention on International Interests
in Mobile Equipment, and (b) the Protocol to the Convention on International Interests in Mobile Equipment on Matters
Specific to Aircraft Equipment, in each case adopted on November 16, 2001, at a diplomatic conference in Cape Town, South
Africa, and from and after the effective date of the Cape Town Treaty in the relevant country, means when referring to the Cape
Town Treaty with respect to that country, the Cape Town Treaty as in effect in such country, unless otherwise indicated, and (c) all
rules and regulations adopted pursuant thereto and, in the case of each of the foregoing described in clauses (a) through
(c), all amendments, supplements, and revisions thereto.


 


“Certificated
Air Carrier” means a Citizen of the United States holding an air carrier operating certificate issued by the Secretary
of Transportation pursuant to Chapter 447 of Title 49 of the United States Code for aircraft capable of carrying ten or more individuals
or 6,000 pounds or more of cargo or that otherwise is certified or registered to the extent required to fall within the purview
of Section 1110.


 






    2


     


    

 


“Citizen
of the United States” has the meaning specified for such term in Section 40102(a)(15) of Title 49 of the United
States Code or any similar legislation of the United States enacted in substitution or replacement therefor.


 


“Claim”
has the meaning specified in ‎Section 4.02(a) of the Participation Agreement.


 


“Class AA
Liquidity Facility” has the meaning set forth in the Intercreditor Agreement.


 


“Class AA
Liquidity Provider” has the meaning set forth in the Intercreditor Agreement.


 


“Class AA
Pass Through Trust” means the FedEx Pass Through Trust 2020-1AA created pursuant to the Basic Pass Through Trust Agreement,
as supplemented by Trust Supplement No. 2020-1AA, dated as of the Issuance Date, between Company and Wilmington Trust Company,
as Class AA Trustee.


 


“Class AA
Trustee” means the trustee for the Class AA Pass Through Trust.


 


“Closing”
has the meaning specified in ‎Section 2.03 of the Participation Agreement.


 


“Closing
Date” means the Issuance Date.


 


“Code”
means the Internal Revenue Code of 1986, as amended from time to time.


 


“Collateral”
has the meaning specified in the granting clause of the Indenture.


 


“Company”
means Federal Express Corporation, and its successors and permitted assigns.


 


“Compulsory
Acquisition” means requisition of title or other compulsory acquisition, capture, seizure, deprivation, confiscation
or detention for any reason of the Aircraft, the Airframe or any Engine by any government that results in the loss of title or
use of the Aircraft, the Airframe or any Engine by Company (or any Permitted Lessee) for a period in excess of 180 consecutive
days, but shall exclude requisition for use or hire not involving requisition of title.


 


“Corporate
Trust Office” has the meaning specified in Section 1.01 of the Intercreditor Agreement.


 


“Debt Rate”
means (i) with respect to any Series of Equipment Notes, the rate per annum specified for the applicable Series as
such in Schedule I to the Indenture (as amended, in the case of any Series of Additional Series Equipment Notes, or
new Additional Series Equipment Notes of any Series issued pursuant to Section 2.02 of the Indenture, at the time
of issuance of such Series), and (ii) for any other purpose, with respect to any period, the weighted average interest
rate per annum during such period borne by the outstanding Equipment Notes, excluding in each case any interest payable at the
Past Due Rate.


 






    3


     


    

 


“Department
of Transportation” means the United States Department of Transportation and any agency or instrumentality of the United
States government succeeding to its functions.


 


“Direction”
has the meaning specified in Section 2.16 of the Indenture.


 


“Dollars”
and “$” mean the lawful currency of the United States.


 


“Engine”
means (a) each of the two CF6-80C2B6F engines (generic manufacturer and model CF6-80C2) listed by manufacturer’s
serial number and further described on Annex A to the Indenture Supplement originally executed and delivered under the Indenture,
whether or not from time to time installed on the Airframe or installed on any other airframe or on any other aircraft and (b) any
Replacement Engine substituted for an Engine pursuant to Section 7.04 or 7.05 of the Indenture; together in each case with
any and all related Parts but excluding Excluded Equipment. At such time as a Replacement Engine is so substituted and the Engine
for which substitution is made is released from the Lien of the Indenture, such replaced Engine shall cease to be an Engine under
the Indenture.


 


“Equipment
Note” means and includes any equipment notes issued under the Indenture in the form specified in Section 2.01 thereof
(as such form may be varied pursuant to the terms of the Indenture) and any Equipment Note issued in exchange therefor or replacement
thereof pursuant to Section 2.07 or 2.08 of the Indenture.


 


“Equipment
Note Register” has the meaning specified in Section 2.07 of the Indenture.


 


“Equipment
Note Registrar” has the meaning specified in Section 2.07 of the Indenture.


 


“ERISA”
means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated and rulings
issued thereunder. Section references to ERISA are to ERISA as in effect at the date of the Participation Agreement and any
subsequent provisions of ERISA amendatory thereof, supplemental thereto or substituted therefor.


 


“Event of
Default” has the meaning specified in Section 4.01 of the Indenture.


 






    4


     


    

 


“Event of
Loss” means, with respect to the Aircraft, Airframe or any Engine, any of the following events with respect to such
property:


 


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


 


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


 


(c)            the
theft, hijacking or disappearance of such property for a period in excess of 180 consecutive days;


 


(d)            the
requisition for use or hire of such property by any government (other than a requisition for use or hire by a Government or the
government of the country of registry of the Aircraft) that results in the loss of possession of such property by Company (or
any Permitted Lessee) for a period in excess of 12 consecutive months;


 


(e)            the
operation or location of the Aircraft, while under requisition for use by any government, in any area excluded from coverage by
any insurance policy in effect with respect to the Aircraft required by the terms of Section 7.06 of the Indenture, unless
Company shall have obtained indemnity or insurance in lieu thereof from such government;


 


(f)            any
Compulsory Acquisition;


 


(g)            as
a result of any law, rule, regulation, order or other action by the FAA or other government of the country of registry, the use
of the Aircraft or Airframe in the normal business of air transportation is prohibited by virtue of a condition affecting all
aircraft of the same type for a period of 18 consecutive months, unless Company is diligently carrying forward all steps that
are necessary or desirable to permit the normal use of the Aircraft or Airframe or, in any event, if such use is prohibited for
a period of three consecutive years; and


 


(h)            with
respect to an Engine only, any divestiture of title to or interest in an Engine or any event with respect to an Engine that is
deemed to be an Event of Loss with respect to such Engine pursuant to Section 7.02(a)(vii) of the Indenture.


 


An Event of Loss with
respect to the Aircraft shall be deemed to have occurred if an Event of Loss occurs with respect to the Airframe unless Company
elects to substitute a Replacement Airframe pursuant to Section 7.05(a)(i) of the Indenture.


 






    5


     


    

 


“Excluded
Equipment” means (i) defibrillators, enhanced emergency medical kits and other medical equipment, (ii) any
items, equipment or systems leased by Company or any Permitted Lessee (other than items, equipment, or systems that are leased
from Company pursuant to the applicable Lease) or owned by Company or any Permitted Lessee subject to a conditional sales agreement
or a security interest (other than the security interest granted under the Indenture) and (iii) cargo containers.


 


“FAA”
means the United States Federal Aviation Administration and any agency or instrumentality of the United States government succeeding
to its functions.


 


“FAA Bill
of Sale” means the bill of sale for the Aircraft on AC Form 8050-2 (or such other form as may be approved by the
FAA) executed by Manufacturer or an affiliate of Manufacturer in favor of Company and recorded with the FAA.


 


“Government”
means the government of any of Canada, France, Germany, Japan, The Netherlands, Sweden, Switzerland, the United Kingdom or the
United States and any instrumentality or agency thereof.


 


“Guarantee”
means the guarantee dated as of the date hereof, provided by FedEx Corporation, a Delaware corporation, and its successors and
assigns, as the same may be amended, supplemented or otherwise modified from time to time.


 


“Guarantor”
means the Guarantor (as defined in the Guarantee).


 


“Indemnitee”
has the meaning specified in ‎Section 4.02(b) of the Participation Agreement.


 


“Indenture”
means that certain Indenture and Security Agreement (N126FE), dated as of the Closing Date, between Company and Loan Trustee,
as the same may be amended, supplemented or otherwise modified from time to time in accordance with its terms, including supplementation
by an Indenture Supplement pursuant to the Indenture.


 


“Indenture
Indemnitee” means (i) Loan Trustee, (ii) WTC, (iii) each separate or successor or additional
trustee appointed pursuant to Section 8.02 of the Indenture, (iv) so long as it holds any Equipment Notes as
agent and trustee of any Pass Through Trustee, Subordination Agent, (v) the Liquidity Provider, (vi) so
long as it is the holder of any Equipment Notes, each Pass Through Trustee, and (vii) any of their respective successors
and permitted assigns in such capacities, directors, officers, employees, agents and servants. No holder of a Pass Through Certificate
in its capacity as such shall be an Indenture Indemnitee.


 


“Indenture
Supplement” means a supplement to the Indenture, substantially in the form of Exhibit A to the Indenture, which
particularly describes the Aircraft, and any Substitute Airframe, Replacement Airframe and/or Replacement Engine, included in
the property subject to the Lien of the Indenture.


 






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“Intercreditor
Agreement” means that certain Intercreditor Agreement, dated as of the Issuance Date, among the Class AA Pass Through
Trustee, the Liquidity Provider and Subordination Agent, as the same may be amended, supplemented or otherwise modified from time
to time in accordance with its terms; provided that, for purposes of any obligations of Company, no amendment, modification
or supplement to, or substitution or replacement of, such Intercreditor Agreement shall be effective unless consented to by Company.


 


“Interests”
has the meaning specified in Section 7.06(a) of the Indenture.


 


“International
Interest” has the meaning ascribed to the defined term “international interest” under the Cape Town Treaty.


 


“International
Registry” means the international registry established pursuant to the Cape Town Treaty.


 


“Issuance
Date” means August 13, 2020.


 


“Lease”
means any lease permitted by the terms of Section 7.02(a) of the Indenture.


 


“Lien”
means any mortgage, pledge, lien, encumbrance, lease, sublease, sub-sublease or security interest.


 


“Liquidity
Facility” means, collectively, the Class AA Liquidity Facility.


 


“Liquidity
Provider” means, collectively, Class AA Liquidity Provider.


 


“Loan Trustee”
has the meaning specified in the introductory paragraph of the Indenture.


 


“Loan
Trustee Liens” means any Lien attributable to WTC or Loan Trustee with respect to the Aircraft, any interest therein
or any other portion of the Collateral arising as a result of (i) claims against WTC or Loan Trustee not related to its interest
in the Aircraft or the administration of the Collateral pursuant to the Indenture, (ii) acts of WTC or Loan Trustee
not permitted by, or the failure of WTC or Loan Trustee to take any action required by, the Operative Documents or the Pass Through
Documents, (iii) claims against WTC or Loan Trustee relating to Taxes or Claims that are excluded from the indemnification
provided by ‎Section 4.02 of the Participation Agreement pursuant to said ‎Section 4.02
or (iv) claims against WTC or Loan Trustee arising out of the transfer by any such party of all or any portion of
its interest in the Aircraft, the Collateral, the Operative Documents or the Pass Through Documents, except while an Event of
Default is continuing and prior to the time that Loan Trustee has received all amounts due to it pursuant to the Indenture.


 






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“Make-Whole
Amount” means, with respect to any Equipment Note, the amount (as determined by an independent investment banker selected
by Company (and, following the occurrence and during the continuance of an Event of Default, reasonably acceptable to Loan Trustee)),
if any, by which (i) the present value of the remaining scheduled payments of principal and interest from the redemption date
to maturity of such Equipment Note computed by discounting each such payment on a semiannual basis from its respective Payment
Date (assuming a 360-day year of twelve 30 day months) using a discount rate equal to the Treasury Yield plus the Make-Whole Spread
exceeds (ii) the outstanding principal amount of such Equipment Note plus accrued but unpaid interest thereon to the
date of redemption. For purposes of determining the Make-Whole Amount, “Treasury Yield” means, at the date
of determination, the interest rate (expressed as a semiannual equivalent and as a decimal rounded to the number of decimal places
as appears in the Debt Rate of such Equipment Note and, in the case of United States Treasury bills, converted to a bond equivalent
yield) determined to be the per annum rate equal to the semiannual yield to maturity for United States Treasury securities maturing
on the Average Life Date and trading in the public securities market either as determined by interpolation between the most recent
weekly average constant maturity, non- inflation-indexed series yield to maturity for two series of United States Treasury securities,
trading in the public securities markets, (A) one maturing as close as possible to, but earlier than, the Average
Life Date and (B) the other maturing as close as possible to, but later than, the Average Life Date, in each case
as reported in the most recent H.15 Page or, if a weekly average constant maturity, non-inflation indexed series yield to
maturity for United States Treasury securities maturing on the Average Life Date is reported in the most recent H.15 Page, such
weekly average yield to maturity as reported in such H.15 Page. “H.15 Page” means the H.15 Page published
by the Board of Governors of the Federal Reserve System on its website (or successor publication of such information by such Board
of Governors). The date of determination of a Make-Whole Amount shall be the third Business Day prior to the applicable redemption
date and the “most recent H.15 Page” means the H.15 Page published prior to the close of business on the
third Business Day prior to the applicable redemption date. “Average Life Date” means, for each Equipment Note
to be redeemed, the date which follows the redemption date by a period equal to the Remaining Weighted Average Life at the redemption
date of such Equipment Note. “Remaining Weighted Average Life” of an Equipment Note, at the redemption date
of such Equipment Note, means the number of days equal to the quotient obtained by dividing: (i) the sum of the products
obtained by multiplying (A) the amount of each then remaining installment of principal, including the payment due
on the maturity date of such Equipment Note, by (B) the number of days from and including the redemption date to but
excluding the scheduled Payment Date of such principal installment by (ii) the then unpaid principal amount of such
Equipment Note. Loan Trustee shall have no obligation to calculate, or verify the calculation of, the Make-Whole Amount.


 


“Make-Whole
Spread” means, with respect to any Series of Equipment Notes, the percentage specified for the applicable Series as
such in Schedule I to the Indenture (as amended, in the case of any Additional Series or new Additional Series issued
pursuant to Section 2.02 of the Indenture, at the time of issuance of such Series).


 






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“Manufacturer”
means The Boeing Company, a Delaware corporation, and its successors and assigns.


 


“Manufacturer’s
Consent” means the Manufacturer’s Consent and Agreement to Assignment of Warranties, dated as of the Closing Date,
substantially in the form of Exhibit D to the Participation Agreement.


 


“Noteholder”
means any Person in whose name an Equipment Note is registered on the Equipment Note Register (including, for so long as it is
the registered holder of any Equipment Notes, Subordination Agent on behalf of Pass Through Trustees pursuant to the provisions
of the Intercreditor Agreement).


 


“Noteholder
Liens” means any Lien attributable to any Noteholder on or against the Aircraft, any interest therein or any other portion
of the Collateral, arising out of any claim against such Noteholder that is not related to the Operative Documents or Pass Through
Documents, or out of any act or omission of such Noteholder that is not related to the transactions contemplated by, or that constitutes
a breach by such Noteholder of its obligations under, the Operative Documents or the Pass Through Documents.


 


“Operative
Documents” means, collectively, the Participation Agreement, the Indenture, each Indenture Supplement, the Manufacturer’s
Consent and the Equipment Notes.


 


“Operative
Indentures” means, as of any date, each “Indenture” (as such term is defined in the Intercreditor Agreement),
dated as of the date of the Indenture, including the Indenture, but only if as of such date all “Equipment Notes”
(as defined in each such “Indenture”) are held by “Subordination Agent” under the “Intercreditor
Agreement”, as such terms are defined in each such “Indenture”.


 


“Other Party
Liens” means any Lien attributable to any Pass Through Trustee (other than in its capacity as Noteholder), Subordination
Agent (other than in its capacity as Noteholder) or the Liquidity Provider on or against the Aircraft, any interest therein, or
any other portion of the Collateral arising out of any claim against such party that is not related to the Operative Documents
or Pass Through Documents, or out of any act or omission of such party that is not related to the transactions contemplated by,
or that constitutes a breach by such party of its obligations under, the Operative Documents or the Pass Through Documents.


 


“Participation
Agreement” has the meaning set forth under the definition of “Agreement”.


 






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“Parts”
means any and all appliances, parts, instruments, appurtenances, accessories, furnishings and other equipment of whatever nature
(other than (a) complete Engines or engines and (b) Excluded Equipment), so long as the same are incorporated
or installed in or attached to the Airframe or any Engine or so long as the same are subject to the Lien of the Indenture in accordance
with the terms of Section 7.04 thereof after removal from the Airframe or any Engine.


 


“Pass Through
Certificates” means the pass through certificates issued by any Pass Through Trust (and any other pass through certificates
for which such pass through certificates may be exchanged).


 


“Pass Through
Documents” means the Class AA Pass Through Trust Agreement, the Intercreditor Agreement and the Liquidity Facility.


 


“Pass Through
Trust” means the grantor trust that has been created pursuant to the Class AA Pass Through Trust Agreement to facilitate
certain of the transactions contemplated by the Operative Documents.


 


“Pass Through
Trust Agreement” means the Trust Supplement relating to the Class AA Pass Through Trust, together with the Basic
Pass Through Trust Agreement, as the same may be amended, supplemented or otherwise modified from time to time in accordance with
its terms.


 


“Pass Through
Trustee” means the trustee under the Class AA Pass Through Trust Agreement, together with any successor in interest
and any successor or other trustee appointed as provided in such Pass Through Trust Agreement.


 


“Past Due
Rate” means the lesser of (a) with respect to (i) any payment made to a Noteholder under any Series of
Equipment Notes, the Debt Rate then applicable to such Series plus 1% and (ii) any other payment made under any
Operative Document to any other Person, the Debt Rate plus 1% (computed on the basis of a year of 360 days comprised of twelve
30-day months) and (b) the maximum rate permitted by applicable law.


 


“Payment
Date” means, for any Equipment Note, each February 20 and August 20, commencing with February 20, 2021.


 


“Permitted
Lessee” means any Person to whom Company is permitted to lease the Airframe or any Engine pursuant to Section 7.02(a) of
the Indenture and is a party to a Lease.


 


“Permitted
Lien” has the meaning specified in Section 7.01 of the Indenture. “Person” means any person,
including any individual, corporation, limited liability company, partnership, joint venture, association, joint-stock company,
trust, trustee, unincorporated organization or government or any agency or political subdivision thereof.


 






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“Prospective
International Interest” has the meaning ascribed to the defined term “prospective international interest”
under the Cape Town Treaty.


 


“Purchase
Agreement” means Purchase Agreement No. 3712, dated as of December 14, 2011, which incorporates by reference
the Aircraft General Terms Agreement AGTA-FED, dated as of November 7, 2006, between Manufacturer and Company, as the same
may be amended, supplemented or otherwise modified from time to time in accordance with its terms.


 


“Related
Equipment Note” means, as of any date, an “Equipment Note” as defined in each Related Indenture, but only
if as of such date it is held by “Subordination Agent” under the “Intercreditor Agreement”, as such terms
are defined in such Related Indenture.


 


“Related
Indemnitee Group” has the meaning specified in ‎Section 4.02(b) of
the Participation Agreement.


 


“Related
Indenture” means each Operative Indenture (other than the Indenture).


 


“Related
Indenture Indemnitee” means each Related Noteholder.


 


“Related
Noteholder” means a registered holder of a Related Equipment Note.


 


“Replacement
Aircraft” means the Aircraft of which a Replacement Airframe is part. “Replacement Airframe” means
a Boeing 767-3S2F aircraft or a comparable or improved model of Manufacturer (except (a) Engines or engines from time
to time installed thereon and any and all Parts related to such Engine or engines and (b) Excluded Equipment), that
shall have been made subject to the Lien of the Indenture pursuant to Section 7.05 thereof, together with all Parts relating
to such aircraft.


 


“Replacement
Engine” means a CF6-80C2B6F engine (or an engine of the same or another manufacturer of a comparable or an improved
model and suitable for installation and use on the Airframe with the other Engine (or any other Replacement Engine being substituted
simultaneously therewith)) that is made subject to the Lien of the Indenture pursuant to Section 7.04 or Section 7.05
thereof, together with all Parts relating to such engine.


 


“Responsible
Officer” means, with respect to Company, its Chief Executive Officer, Chairman of the Board, its President, its Chief
Operating Officer, any Executive Vice President, any Senior Vice President, the Chief Financial Officer, any Vice President, the
Treasurer, the Assistant Treasurer, the Controller, the Assistant Secretary or the Secretary.


 






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“Section 1110”
means Section 1110 of the Bankruptcy Code.


 


“Securities
Act” means the Securities Act of 1933, as amended from time to time.


 


“Series”
means any series of Equipment Notes, including the Series AA Equipment Notes, or, if issued, any Additional Series Equipment
Notes.


 


“Series AA”
or “Series AA Equipment Notes” means Equipment Notes issued and designated as “Series AA Equipment
Notes” under the Indenture, in the original principal amount and maturities as specified in Schedule I to the Indenture
under the heading “Series AA Equipment Notes” and bearing interest at the Debt Rate for Series AA Equipment
Notes specified in Schedule I to the Indenture.


 


“Similar
Law” has the meaning specified in ‎Section 4.02(d)(xi) of the Participation
Agreement.


 


“Subordination
Agent” has the meaning specified in the introductory paragraph of the Participation Agreement.


 


“Substitute
Airframe” means a Boeing 767-3S2F aircraft or a comparable or improved model of Manufacturer (except (a) Engines
or engines from time to time installed thereon and any and all Parts related to such Engine or engines and (b) Excluded
Equipment), that shall have been made subject to the Lien of the Indenture pursuant to Section 7.04 thereof, together with
all Parts relating to such aircraft.


 


“Tax”
and “Taxes” mean all governmental fees (including, without limitation, license, filing and registration fees)
and all taxes (including, without limitation, franchise, excise, stamp, value added, income, gross receipts, sales, use and property
taxes), withholdings, assessments, levies, imposts, duties or charges, of any nature whatsoever, together with any related penalties,
fines, additions to tax or interest thereon imposed, withheld, levied or assessed by any country, taxing authority or governmental
subdivision thereof or therein or by any international authority, including any taxes imposed on any Person as a result of such
Person being required to collect and pay over withholding taxes.


 


“Transportation
Code” means that portion of Title 49 of the United States Code comprising those provisions formerly referred to as the
Federal Aviation Act of 1958, as amended, or any subsequent legislation that amends, supplements or supersedes such provisions.


 


“Trust Indenture
Act” means the Trust Indenture Act of 1939, as amended from time to time.


 


“Trust Officer”
means any officer within the Corporate Trust Office of Loan Trustee, including any vice president, assistant vice president, assistant
secretary, assistant treasurer or any other officer of Loan Trustee who shall have direct responsibility for the administration
of the Indenture, or any other officer of Loan Trustee to whom such matter is referred because of his or her knowledge of and
familiarity with the particular subject.


 






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“Trust Supplement”
means that agreement supplemental to the Basic Pass Through Trust Agreement referred to in Schedule II to the Participation Agreement.


 


“UCC”
means the Uniform Commercial Code as in effect in any applicable jurisdiction.


 


“United States”
means the United States of America.


 


“WTC”
has the meaning specified in the introductory paragraph of the Participation Agreement.


 


“Warranty
Bill of Sale” means the warranty (as to title) bill of sale covering the Aircraft executed by Manufacturer or an affiliate
of Manufacturer in favor of Company and specifically referring to each Engine, as well as the Airframe, constituting a part of
the Aircraft.


 






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