UNITED STATESSECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

|                                                       |  | 
|------------------------------------------------------ |  | 
|FORM 10-Q                                             
|                                                       |  | 
|QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF   
|THE SECURITIES EXCHANGE ACT OF 1934                   
|                                                      
|For the Quarterly Period Ended May 31, 2005           
|                                                      
|Commission File Number: 333-109667-01                 
|                                                       |  | 
|                                                      
|TRUST CREATED FEBRUARY 25, 1986                       
|(Exact name of registrant as specified in its charter)
|                                                      
|                                                       |  | 

|Oregon                          | 51-6162910                       
|------------------------------- | ---------------------------------
|(State or other jurisdiction of | (IRS Employer Identification No.)
|incorporation or organization)  |                                  

|3850 Three Mile Lane, McMinnville, Oregon | 97128-9496
|----------------------------------------- | ----------
|(Address of principal executive offices)  | (Zip Code)

|Registrant's telephone number, including area code:  (503) 472-9361
|-------------------------------------------------------------------
|                                                                   
|                                                                   

Indicate by check mark whether
the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the 12 preceding months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days.   Yes  (X)   
No  (    )

Indicate by check mark whether
the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).        
Yes  (    )   No  (X)

As of July 15, 2005, there were two beneficial interests of the registrant outstanding.



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# TABLE OF CONTENTS

|PAGE
|----

|PART I. | FINANCIAL INFORMATION | 
|------- | --------------------- | 

| | Item 1. | Financial Statements                                                                 | 3 
| | ------- | ------------------------------------------------------------------------------------ | --
| | Item 2. | Management's Discussion and Analysis of Financial Condition
and Results of Operation | 6 
| | Item 3. | Quantitative and Qualitative Disclosures About Market Risk                           | 21
| | Item 4. | Controls and Procedures                                                              | 20

|PART II. | OTHER INFORMATION | 
|-------- | ----------------- | 

| | Item 1. | Legal Proceedings | 21
| | ------- | ----------------- | --
| | Item 6. | Exhibits          | 21

|SIGNATURES | 22
|---------- | --

|EXHIBIT INDEX | 23
|------------- | --

2



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Table of Contents

PART I.  FINANCIAL INFORMATION

|       
|-------
|ITEM 1.

BALANCE SHEETS
At May 31, 2005 and February 28, 2005(in thousands)

|                                        | May 31, 2005 |       
|--------------------------------------- | ------------ | ------
|                                        | (unaudited)  |       
|                                        |              |       
|ASSETS                                  |              |       
|                                       
|Aircraft and equipment, net             | $            | 11,639
|Capitalized loan acquisition costs      | 17           |       
|Due from affiliate                      | 639          |       
|                                        |              |       
|Total assets                            | $            | 12,295
|                                        |              |       
|                                       
|LIABILITIES AND TRUST EQUITY            |             
|                                       
|Current liabilities:                   
|Accrued liabilities                     | $            | 18    
|Current portion of long-term debt       | 2,035        |       
|                                        |              |       
|Total current liabilities               | 2,053        |       
|                                       
|Deferred rental income                  | 5,457        |       
|                                        |              |       
|Total liabilities                       | 7,510        |       
|                                        |              |       
|                                       
|Trust equity                            | 26,004       |       
|Less: Account receivable from affiliate | (21,219      | )     
|                                        |              |       
|Total trust equity                      | 4,785        |       
|                                        |              |       
|Total liabilities and trust equity      | $            | 12,295
|                                        |              |       

See notes to unaudited financial statements.

3



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STATEMENTS OF OPERATIONS AND TRUST EQUITY
For the Three Months EndedMay 31, 2005 and May 31, 2004(in thousands)

|                                     |                                    |        |      |        |        | 
|------------------------------------ | ---------------------------------- | ------ | ---- | ------ | ------ | 
|                                     | For the Three Months Ended May 31,
|                                     | 2005                               |        | 2004 |       
|                                     |                                    |        |      |       
|Operating revenue:                   |                                   
|Rental income from affiliate         | $                                  | 1,846  |      | $      | 1,880  | 
|                                    
|(Expense) other income               |                                   
|Depreciation                         | (93                                | )      |      | (93    | )     
|Loan acquisition costs               | (8                                 | )      |      | -      |       
|Interest expense                     | (68                                | )      |      | (197   | )     
|Interest income from affiliate       | -                                  |        |      | 6      |       
|                                     |                                    |        |     
|Net income                           | 1,677                              |        |      | 1,596  |       
|                                    
|Trust equity at beginning of period  | 24,327                             |        |      | 18,409 |       
|Less: Distributions to beneficiaries | -                                  |        |      | (302   | )     
|                                     |                                    |        |     
|Trust equity at end of period        | $                                  | 26,004 |      | $      | 19,703 | 
|                                     |                                    |        |     

See notes to unaudited financial statements.

4



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STATEMENTS OF CASH FLOWS
For the Three Months Ended May 31, 2005 and May 31, 2004(in thousands)

|                                           |                                    |       |      |        |       | 
|------------------------------------------ | ---------------------------------- | ----- | ---- | ------ | ----- | 
|                                           | For the Three Months Ended May 31,
|                                           | 2005                               |       | 2004 |       
|                                           |                                    |       |      |       
|Cash flows from operating activities:     
|Net income                                 | $                                  | 1,677 |      | $      | 1,596 | 
|Adjustments to reconcile net income to    
|net cash provided by operating activities:
|Depreciation and amortization              | 93                                 |       |      | 93     |      
|Account receivable from affiliate          | (686                               | )     |      | (711   | )    
|Accrued liabilities                        | (11                                | )     |      | -      |      
|Due from affiliate                         | -                                  |       |      | (3     | )    
|Deferred rental income                     | 279                                |       |      | 245    |      
|                                           |                                    |       |     
|Net cash provided by operating activities  | 1,352                              |       |      | 1,220  |      
|                                           |                                    |       |     
|                                          
|Cash flows from investing activities:     
|Note receivable from affiliate             | -                                  |       |      | 300    |      
|                                           |                                    |       |     
|Net cash provided by investing activities  | -                                  |       |      | 300    |      
|                                           |                                    |       |     
|                                          
|Cash flows from financing activities:     
|Payments on long-term debt                 | (1,335                             | )     |      | (1,218 | )    
|Capitalized loan acquisition costs         | (17                                | )     |      | -      |      
|Distributions to beneficiaries             | -                                  |       |      | (302   | )    
|                                           |                                    |       |     
|Net cash used in financing activities      | (1,352                             | )     |      | (1,520 | )    
|                                           |                                    |       |     
|Net decrease in cash                       | -                                  |       |      | -      |      
|                                          
|Cash, beginning of period                  | -                                  |       |      | -      |      
|                                           |                                    |       |     
|Cash, end of period                        | $                                  | -     |      | $      | -     | 
|                                           |                                    |       |     

See notes to unaudited financial statements.

5



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NOTES TO UNAUDITED FINANCIAL STATEMENTS

NOTE 1  BASIS FOR PRESENTATION

Organization 
The Trust Created February 25, 1986 ("Trust", "we", "us", or "our") is a subsidiary of Evergreen International Aviation, Inc.
("Evergreen Aviation"), which is a wholly-owned subsidiary of Evergreen Holdings, Inc. ("Holdings"). The Trust was created pursuant
to the Trust Agreement, dated as of February 25, 1986, as amended and restated pursuant to the Amended and Restated Trust
Agreement, dated as of August 31, 1987, as amended on August 31, 1988, and as amended and restated pursuant to the Second Amended and
Restated Trust Agreement, dated as of September 29, 1995, as amended by the First Amendment thereto as of May 8, 2003, as amended by
the Second Amendment thereto as of January 14, 2004, and as amended by the Third Amendment thereto as of May 10, 2004, among
Evergreen International Aviation, Inc. (an assignee of Evergreen Holdings, Inc., as successor to 747, Inc. and King Christian,
Inc.) and Mr. Delford M. Smith, as Beneficiaries, and Wilmington Trust Company, not in its individual capacity, but solely as Owner
Trustee.

The Trust provides aircraft
leasing services to its sole customer, Evergreen International Airlines, Inc. ("Evergreen Airlines"), a wholly-owned subsidiary of
Evergreen Aviation.

The interim financial
statements included in this quarterly report have been prepared by the Trust, without audit,
pursuant to the rules and regulations of the United States Securities and Exchange Commission ("SEC").  Certain information and note
disclosures normally included in the annual financial statements prepared in accordance with accounting principles generally accepted
in the United States of America have been condensed or omitted pursuant to the rules and regulations of the SEC.

In the opinion of management,
the interim financial statements included in this quarterly report contain all adjustments necessary to present fairly
the financial position, results of operations, and cash flows of the Trust for the periods indicated.  Such adjustments, other
than adjustments that have been separately disclosed, are of a normal recurring nature. The interim financial statements included
in this report should be read in conjunction with our consolidated
financial statements and the accompanying notes that were included in our Annual Report on Form 10-K for the fiscal year ended
February 28, 2005, which was filed with the SEC on June 14, 2005.

RECENT ACCOUNTING PRONOUNCEMENT

In January 2003, the FASB issued
FASB Interpretation No. 46 ("FIN 46"), Consolidation of Variable Interest Entities - An Interpretation of ARB No.51
Consolidated Financial Statements, and subsequently revised in December 2003, with the issuance of FIN 46-R. The interpretation
addresses how variable interest entities are to be identified and how an enterprise assesses its interests in a variable interest
entity to decide whether to consolidate that entity. The Interpretation also requires existing unconsolidated variable interest
entities to be consolidated by their primary beneficiaries if the entities do not effectively disperse risks among the parties
involved. The Trust's parent company, Evergreen Aviation, adopted FIN 46-R as of the period ended May 31, 2005.
Based upon their assessment of the impact of FIN 46-R on Evergreen Aviation and the Trust, management concluded that the Trust is
not the primary beneficiary of any variable interest entities. The adoption of FIN 46-R by Evergreen Aviation did not have an impact
on the Trust's financial statements.

6



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NOTE 2  LONG-TERM DEBT OBLIGATIONS

The Trust's long-term
debt as of May 31, 2005 and February 28, 2005 consisted of the following:

|                                           |                    |       |                   |        |       |   | 
|------------------------------------------ | ------------------ | ----- | ----------------- | ------ | ----- | - | 
|(in thousands)                             | May 31, 2005       |       | February 28, 2005
|                                           |                    |       |                  
|Note payable to FINOVA Capital Corporation | $                  | 2,035 |                   | $      | 3,370 |  
|Less:  current portion                     | (2,035             | )     |                   | (3,370 | )    
|                                           |                    |       |                  
|                                           | Net long-term debt | $     | -                 |        | $     | - | 
|                                           |                    |       |                  

In May 1997, we entered into
a $30.0 million Secured Loan Agreement with FINOVA Capital Corporation (the "FINOVA Note"). The FINOVA Note bears interest at the
annual rate of 10.44%. Monthly installments of principal and interest were payable through April 2005, at which time the FINOVA Note
was scheduled to mature with a final payment of approximately $2.5 million due and payable upon maturity.

Effective April 29, 2005,
the Trust and FINOVA executed a Third Amendment Agreement to amend and extend the FINOVA Note (the "Third Amendment").  The Third
Amendment extends the maturity date of the FINOVA
Note to September 29, 2005, with the annual rate of interest remaining at 10.44%. Monthly installments of principal
and interest in the amount of $471,650 are scheduled through the extended maturity date, resulting in a full amortization of the
remaining outstanding principal balance. All outstanding principal and accrued, but unpaid interest, will be due upon maturity.

The FINOVA Note
is secured by means of a first priority security interest granted to FINOVA in one Boeing 747 aircraft and three McDonnell Douglas
DC-9 ("DC-9") aircraft owned by the Trust.

7



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NOTE 3  RELATED PARTY TRANSACTIONS

The Trust has extensive
transactions and relationships with subsidiaries and affiliates of Holdings and Evergreen Aviation.  Because of
these relationships, it is possible that the terms of these transactions are not the same as those that would result from
transactions with unaffiliated third parties.

Rental
Income from Affiliate The Trust leases its owned aircraft to Evergreen Airlines, an affiliate of the Trust.
During the three months ended May 31, 2005, the Trust recognized rental revenue from affiliate in the
amount of $1.8 million, as compared to $1.9 million of rental revenue recognized during the three months ended May 31, 2004.

Deferred
Rental Income The monthly rent obligation of Evergreen Airlines incrementally increases throughout the term of the
aircraft lease.  However, the Trust recognizes rental revenue on a straight-line basis. Therefore,
each month the Trust recognizes rental revenue in an amount equal to the total amount of rent payable under the lease divided by the
total number of months in the lease term.  The accumulated differences between the lessee's monthly rent obligation and the amount
of rental revenue recognized by the Trust has been recorded as deferred rental income. As of May 31, 2005 and February 28, 2005,
the balances of deferred rental income were $5.4 million and $5.2 million, respectively.

Account
Receivable from Affiliate  In partial satisfaction of its obligations under the aircraft lease, Evergreen Airlines
pays to FINOVA the monthly installments due under the FINOVA Note. See "Note 2 - Long-Term Debt Obligations" above.  However, the
amounts of the monthly debt installments paid by Evergreen Airlines are less than the amounts of the monthly rent that Evergreen
Airlines would have otherwise paid under the aircraft lease.  The Trust has recorded the accumulated differences as a receivable
from affiliate. As of May 31, 2005 and February 28, 2005, the amounts of receivable from affiliate were $21.2 million and $20.5
million, respectively. However, because the timing of future collection is uncertain, we have reported the receivable on our
financial statements as a reduction to trust equity.

Note
Receivable from Affiliate  Until August 31, 2004, the Trust held a note receivable from one of
its beneficiaries. During the three months ended May 31, 2004, the note receivable was reduced by $0.3 million of in-kind distributions
from that beneficiary's share of the Trust's net income. As of August 31, 2004, the note receivable was repaid in full.

Due from
Affiliate  The line item "Due from affiliate" on the Trust's balance sheets represents certain accounts receivable from
Evergreen Aviation and its subsidiaries that have accrued over time.  As of May 31, 2005 and February 28, 2005, the balances of "Due
from affiliate" were $0.6 million.

8



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NOTE 4  TRUST AS CO-GUARANTOR OF EVERGREEN AVIATION DEBT
OBLIGATIONS

The Trust, along with substantially
all of the subsidiaries of Evergreen Aviation, is a joint and several co-guarantor of the Indenture Notes (see "Indenture Notes" below)
and the Secured Credit Facility (see "Secured Credit Facility" below). Substantially all of the Trust's assets are pledged as collateral
to secure payment of these debt obligations.

Indenture Notes

In May 2003, Evergreen Aviation
issued $215.0 million of 12% Senior Second Secured Notes (the Indenture Notes)
pursuant to an Indenture, dated as of May 16, 2003, executed by and among i) Evergreen Aviation, as
issuer, ii) Holdings and substantially all of the subsidiaries of Evergreen Aviation,
including the Trust, as guarantors, and iii) J.P. Morgan Trust Company, N.A., as successor trustee to Bank One, N.A., as trustee.

The
Indenture Notes bear interest at an annual fixed rate of 12.0%. Payments of interest are due
semi-annually on May 15th and November 15th of each year. The most recent semi-annual payment of interest in the amount of $12.9
million was paid by Evergreen Aviation on May 15, 2005. The next payment of accrued interest
in the amount of $12.9 million will be due and payable on November 15, 2005.

The
Indenture Notes are secured by a second priority lien, subject to certain permitted liens,
on substantially all of the assets of Evergreen Aviation and its domestic subsidiaries,
including the assets of the Trust. The Indenture Notes are fully and unconditionally
guaranteed, both jointly and severally, by Holdings, substantially all of the subsidiaries of Evergreen
Aviation, and the Trust.

The
Indenture Notes impose certain restrictions on Evergreen Aviation and its restricted
subsidiaries, including the Trust. Such restrictions include, but are not limited to,
restrictions on the ability to:

| |  | incur additional debt or create liens;                       
|- |  | -------------------------------------------------------------
| |  | pay dividends or acquire shares of capital stock;            
| |  | make payments on subordinated debt or make investments;      
| |  | make distributions from restricted subsidiaries;             
| |  | issue or sell capital stock of restricted subsidiaries;      
| |  | issue guarantees;                                            
| |  | sell or exchange assets, or make capital expenditures;       
| |  | enter into transactions with shareholders and affiliates; and
| |  | effect mergers and other changes of control.                 

Secured Credit Facility

On May 13, 2004, Evergreen
Aviation and certain of its subsidiaries, including the Trust, entered into a three-year senior secured credit
facility (the Secured Credit Facility) with Wells Fargo
Foothill, Inc. and Ableco Finance LLC (collectively, the Wells Fargo Lenders).
The Secured Credit Facility consists of two loans  a $50.0 million term loan and a
$50.0 million revolving loan. The Secured Credit Facility is secured by substantially all
of the assets of Evergreen Aviation and its domestic subsidiaries, including the assets of
the Trust.

As
of May 31, 2005, the outstanding balance of the Secured Credit Facility was $74.0
million. Taking into consideration the Minimum Availability Requirement (as defined below), as of May 31, 2005, Evergreen
Aviations availability to obtain additional advances under the Secured Credit Facility was $0.8 million.

9



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Evergreen
Aviation and its restricted subsidiaries, including the Trust, are subject to various
restrictive covenants under the Secured Credit Facility. In addition to other requirements that are set forth in the covenants,
Evergreen Aviation and its restricted subsidiaries, including the Trust, are required to maintain: i) an
undrawn availability of not less than $5.0 million on the revolving loan (the "Minimum Availability Requirement"), ii) minimum
thresholds with respect to certain consolidated and non-consolidated earnings before
interest, taxes, depreciation and amortization (EBITDA), and iii) a minimum
ratio with respect to fixed charge coverages. In addition, Evergreen Aviation and its
restricted subsidiaries, including the Trust, have agreed to limit the amount of capital
expenditures that may be made in any fiscal year to $75.0 million, of which at least $10.0
million must be financed from sources other than the Secured Credit Facility. As of May 31, 2005, Evergreen Aviation and its
subsidiaries were in compliance with such covenants.

# Notice and Waiver of Specified Events of Default under Secured
Credit Facility

On June 1, 2005, the Wells
Fargo Lenders notified Evergreen Aviation that the Wells Fargo Lenders believed that Evergreen Aviation was
in default of certain covenants of the Secured Credit Facility (the "Specified Events of Default"), as follows:

| | i)   |  | occurrence of a default at the final maturity, on April 29, 2005,
of the obligations under the FINOVA Note;      
| | ---- |  | -----------------------------------------------------------------------------------------------------------------
|
| | ii)  |  | failure to maintain insurance on the Collateral (as defined in the Secured
Credit Facility);                     
|
| | iii) |  | making an unpermitted investment toward the purchase of two Boeing 747
airplanes (the "Designated 747s"); and    
|
| | iv)  |  | unauthorized use of the proceeds from advances under the Secured Credit
Facility to renovate the Designated 747s.

The Wells Fargo Lenders further notified Evergreen Aviation that, as a result of the Specified Events of Default, the Wells
Fargo Lenders had elected to charge the default rate of interest, which, as set forth in the Secured Credit Facility, is a per annum
rate equal to 2 percentage points above the per annum rate otherwise applicable. The default rate of interest was charged
from April 29, 2005, the date on which the Wells Fargo Lenders asserted that a default had occurred under the FINOVA Note, until
June 14, 2005, the date on which the Wells Fargo Lenders, by execution of the Amendment Number Two (as defined below) waived the
Specified Events of Default. At April 29, 2005, the per annum rates of interest on the Secured Credit Facility ranged from 6.09% to 8.75%.

On June 14, 2005,
Evergreen Aviation, its subsidiaries that are co-borrowers under the Secured Credit Facility, and the Trust, as co-guarantor, entered
into an Amendment Number Two and Waiver to Loan and Security Agreement (the "Amendment Number Two") with the Wells Fargo
Lenders whereby the Wells Fargo Lenders agreed to waive the Specified Events of Default, and the Wells Fargo Lenders and
Evergreen Aviation agreed to amend the Secured Credit Facility to allow Evergreen Aviation and its subsidiaries to maintain only
all-risk ground insurance coverage for aircraft that have been grounded and taken out of service.

10



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Table of Contents

Amendment Number Three to Secured Credit Facility. On July 11, 2005, Evergreen Aviation, its subsidiaries that are
co-borrowers under the Secured Credit Facility, and the Trust, as co-guarantor, entered into an Amendment Number Three and Consent
(the "Amendment Number Three") with the Wells Fargo Lenders. Amendment Number Three amends the Secured Credit Facility to allow
Evergreen Airlines to i) lease the Designated 747s from Ventures Acquisition Company LLC ("Ventures Acquisition Company"), an
affiliated entity that is wholly-owned by one of our beneficiaries, Mr. Smith, and ii) reimburse
Ventures Acquisition Company for certain out-of-pocket transaction costs incurred by Ventures Acquisition Company
in connection with the purchase of the Designated 747s. In exchange, Mr. Smith pledged to Wells Fargo Foothill, Inc., as
administrative agent and for the benefit of the Wells Fargo Lenders, all of his rights, title, and interest in
Ventures Acquisition Company.

Risk of Default on Debt Obligations

Substantially all of the
assets of Evergreen Aviation and its subsidiaries, including the Trust, are pledged as collateral under
Evergreen Aviations various debt agreements. Furthermore, the Indenture Notes and
the Secured Credit Facility both contain cross-default provisions whereby certain events
of default under one or more of the debt obligations of Evergreen Aviation or its
subsidiaries, including the Trust, will result in an event of default under either, or
both, the Indenture Notes and the Secured Credit Facility. In the event that such defaults
are not cured or waived, the Trust is at risk that the Trusts obligations
under either, or both, the Indenture Notes and the Secured Credit Facility will be
accelerated.

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|       
|-------
|ITEM 2.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form
10-Q contains statements, which to the extent they are not recitations of historical fact, constitute "forward-looking statements"
as defined in Section 21E of the Securities Exchange Act of 1934, as amended.  Statements and assumptions with regard to future
revenues, income and cash flows, program performance, the outcome of litigation, and planned dispositions of assets are examples of
forward-looking statements.  Wherever possible, we have identified these forward-looking statements by words such as "anticipates",
"believes", "could", "may", "intends", "estimates", "expects", "projects", and similar phrases.

Forward-looking statements involve
risks and uncertainties that could cause actual results to differ materially from historical experience or our present expectations.
The risks and uncertainties to which our business is subject include, but are not limited to, the risks and  uncertainties included
under the heading "Risk Factors Relating to the Trust" in our Annual Report on Form 10-K for the fiscal year ended February 28, 2005.
Such risks and uncertainties include:

| |  | our reliance upon one customer, Evergreen Airlines, for 100% of our
revenue (see "Our Sole Customer" below);                      
| | - | ----------------------------------------------------------------------------------------------------------------------------------
| |  | the financing agreements of Evergreen Aviation which include financial covenants
that impose substantial restrictions upon us; and
| |  | the age of our aircraft.                                                                                                          

For further information regarding the
risks and uncertainties associated with our business, please see the Trust's other reports and filings with the SEC, including, but
not limited to, our Annual Report on Form 10-K for the fiscal year ended February 28, 2005.

Readers of this Quarterly Report
on Form 10-Q are cautioned not to place undue reliance on the forward-looking statements contained herein, which speak only as of
the date hereof. We assume no obligation to publicly update or revise our forward-looking statements included in this report,
whether as a result of new information, future events, or otherwise, except as required by law.

12



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BUSINESS OVERVIEW

The
Trust Created February 25, 1986 ("Trust", "we", "us", or "our") is a subsidiary of Evergreen International Aviation, Inc. ("Evergreen
Aviation"), which is a wholly-owned subsidiary of Evergreen Holdings, Inc. ("Holdings"). The Trust was created pursuant
to the Trust Agreement, dated as of February 25, 1986, as amended and restated pursuant to the Amended and Restated Trust
Agreement, dated as of August 31, 1987, as amended on August 31, 1988, and as amended and restated pursuant to the Second Amended and
Restated Trust Agreement, dated as of September 29, 1995, as amended by the First Amendment thereto as of May 8, 2003, as amended by
the Second Amendment thereto as of January 14, 2004, and as amended by the Third Amendment thereto as of May 10, 2004, among
Evergreen International Aviation, Inc. (an assignee of Evergreen Holdings, Inc., as successor to 747, Inc. and King Christian,
Inc.) and Mr. Delford M. Smith, as Beneficiaries, and Wilmington Trust Company, not in its individual capacity, but solely as Owner
Trustee.  The Trust assets consist primarily of one Boeing 747 aircraft and three McDonnell Douglas DC-9 ("DC-9") aircraft.

Our only source of revenue comes
from the rental of one Boeing 747 aircraft and three DC-9 aircraft to Evergreen Airlines, a wholly-owned subsidiary of our direct parent
company, Evergreen Aviation. During the last three fiscal years, rental revenue from Evergreen Airlines accounted for 100%
of our operating revenue. Because all of our aircraft are under lease to Evergreen Airlines, we do not have excess capacity. In
addition, because we share the same direct parent company, the aircraft leasing
activity between the Trust and Evergreen Airlines generates not only intercompany transactions, but also receivables from affiliate
and payables to affiliate.

In partial satisfaction of its
obligations under the aircraft lease, Evergreen Airlines pays to FINOVA Capital Corporation ("FINOVA")
the monthly installments due from the Trust under the FINOVA Note (as defined in "Capital Resources and Liquidity - FINOVA Note" below).
However, because the amounts of the
monthly debt installments paid by Evergreen Airlines are less than the amounts of the monthly rent that Evergreen Airlines would
have otherwise paid under the lease, we have recorded the accumulated differences as a receivable from affiliate. See "Note 3 -
Related Party Transactions" in Item 1 of the quarterly report.

All intercompany transactions,
affiliate receivables, and affiliate payables between us and Evergreen Airlines are eliminated in consolidation at the parent
company level.

Our Sole Customer

Evergreen Airlines, our sole customer,
is a leading provider of worldwide air freight transportation.  Evergreen Airlines provides air freight services to a broad base of
customers, including the United States Air Force Air Mobility Command, freight forwarders, domestic and foreign airlines, industrial
manufacturers, and other government agencies. Evergreen Airlines' diverse customer base and its ability to deploy aircraft to match
market conditions gives it the agility to respond to changes in demand for air freight services.

Because Evergreen Airlines is
our only customer, our ability to generate revenue is dependent upon Evergreen Airlines' continued demand to lease our aircraft.
Such demand for leased aircraft is affected by various trends and fluctuations in the markets served by Evergreen Airlines. Changes
in government regulations and policies, shifts in global economic and political environments, and the emergence of new competition
are all factors that influence decisions by Evergreen Airlines to increase or decrease the number of aircraft that it leases.  A
decision by Evergreen Airlines to terminate our aircraft lease would have a materially adverse effect upon us.

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Trust Beneficiaries

The
Trust has two beneficiaries, as follows:

| |  | Mr. Delford M. Smith, the controlling shareholder of Holdings,
holds a one-third beneficial ownership interest in that portion of the Trust that owns the Boeing 747 aircraft.                                                                                                        
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Evergreen Aviation, our direct parent company, holds the remaining two-thirds beneficial ownership interest in the portion of the Trust that
owns the Boeing 747 aircraft and the entire beneficial ownership interest in that portion of
the Trust that owns the three DC-9 aircraft.

Available Information

General information about us,
our direct parent company, and the other subsidiaries of our direct parent company can be found at www.evergreenaviation.com/invr.html. Our
Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports are available free
of charge on our direct parent company's website at www.evergreenaviation.com/invr.html, as soon as reasonably practicable after
such reports are filed with, or furnished to, the SEC. Information on our direct parent
company's website is not incorporated into, or a part of, this Form 10-Q or our other securities filings.

RECENT ACCOUNTING PRONOUNCEMENT

The accounting
pronouncement enacted during the three months ended May 31, 2005 did not have an effect on our financial
position or results of operations. For a further discussion of recent accounting pronouncements, see "Note 1 - Significant Accounting
Policies" in Item 1 of this Quarterly Report.

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RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MAY 31, 2005
AS COMPARED TO THE THREE MONTHS ENDED MAY 31, 2004

The
following table sets forth the Trust's results of operations for the three months ended May 31, 2005 and May 31, 2004.

|                                               |                                      |        |        |  |        |        |  | 
|---------------------------------------------- | ------------------------------------ | ------ | ------ |  | ------ | ------ |  | 
|Results of Operations(in thousands of dollars)
|                                               | For the Three Months                 |       
|                                               | Ended May 31,                        |       
|                                               |                                      |       
|                                               | 2005                                 |        | 2004   | 
|                                               |                                      |        |        | 
|                                               | Operating revenue:                   |        |       
|                                               | Rental income from affiliate         | $      | 1,846  |  | $      | 1,880  |  | 
|                                               |                                      |       
|                                               | (Expense) other income               |       
|                                               | Depreciation                         | (93    | )      |  | (93    | )      | 
|                                               | Loan acquisition costs               | (8     | )      |  | -      |        | 
|                                               | Interest expense                     | (68    | )      |  | (197   | )      | 
|                                               | Interest income                      | -      |        |  | 6      |        | 
|                                               |                                      |        |        | 
|                                               | Net income                           | 1,677  |        |  | 1,596  |        | 
|                                              
|                                               | Trust equity at beginning of period  | 24,327 |        |  | 18,409 |        | 
|                                               | Less: Distributions to beneficiaries | -      |        |  | (302   | )      | 
|                                               |                                      |        |        | 
|                                               | Trust equity at end of period        | $      | 26,004 |  | $      | 19,703 |  | 
|                                               |                                      |        |        | 

Rental income from
affiliate  We derive 100% of our operating
revenue from the aircraft lease with our affiliate, Evergreen Airlines.  During the three months ended May 31, 2005, we recognized
rental income from affiliate of $1.8 million, as compared to $1.9 million of rental revenue recognized during the three months
ended May 31, 2004.

Depreciation  During each of the three-month periods ended May 31, 2005 and May 31, 2004, depreciation expense on our
aircraft was $0.1 million per period.

Interest expense  Interest expense during the three months ended May 31, 2005 was $0.1 million, as compared to $0.2 million
of interest expense during the three months ended May 31, 2004, resulting in a $0.1 million decrease in expense. The decrease in
interest expense was primarily attributable to reductions in the outstanding principal balance of our note payable to FINOVA. See
"Note 2 - Long-Term Debt Obligations" in Item 1 above.

Interest income  Interest
income during the three months ended May 31, 2005 was $0, as compared to $6,000 of interest income recognized during
the three months ended May 31, 2004. The $6,000 decrease in interest income was primarily attributable to reductions in notes
receivable from affiliates. See "Note 3 - Related Party Transactions" in Item 1 above.

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CAPITAL RESOURCES AND LIQUIDITY

FINOVA Note

In May 1997, we entered into
a $30.0 million Secured Loan Agreement with FINOVA Capital Corporation (the "FINOVA Note"). The FINOVA Note bears interest at the
annual rate of 10.44%. Monthly installments of principal and interest were payable through April 2005, at which time the FINOVA Note
was scheduled to mature with a final payment of approximately $2.5 million due and payable upon maturity.

On June 9, 2005, we executed a Third
Amendment Agreement to amend
and extend the FINOVA Note (the "Third Amendment").  The Third Amendment extends the maturity date of the FINOVA
Note to September 29, 2005, with the annual rate of interest remaining at 10.44%. Monthly installments of principal
and interest in the amount of $471,650 are scheduled through the extended maturity date, resulting in a full amortization of the
remaining outstanding principal balance. All outstanding principal and accrued, but unpaid interest, will be due upon maturity.

The FINOVA Note
is secured by means of a first priority security interest granted to FINOVA in the one Boeing 747 aircraft and three DC-9 aircraft
owned by the Trust.

Repayment of the FINOVA Note has been
through monthly installments of principal and interest that have incrementally increased throughout the term of the note. The monthly
installments have been paid by Evergreen Airlines, in satisfaction of its obligation to make lease payments under the terms of its
aircraft lease. We anticipate that future rentals from the aircraft lease will be sufficient to satisfy our debt obligations to FINOVA.

The amount of the monthly
loan installments paid by Evergreen Airlines have been slightly lower than Evergreen Airlines' monthly rental obligation
under the aircraft lease. The difference between the amounts has been recorded by us as a receivable from affiliate. However, because
future collection is uncertain, we have reported the receivable on our financial statements as a reduction to trust equity.

We do not generate or
hold any liquid assets. Our contractual obligations are paid by Evergreen Airlines, in satisfaction of its lease obligations under
the terms of our aircraft lease. Based upon current known and expected future commitments, we do not anticipate that our liquidity
will materially increase or decrease.

Trust as Co-Guarantor of Evergreen Aviation Debt Obligations

The Trust, along with substantially
all of the subsidiaries of Evergreen Aviation, is a joint and several co-guarantor of the Indenture Notes (defined in "Indenture
Notes" below) and the Secured Credit Facility (defined in "Secured Credit Facility" below). Substantially all of the Trust's assets are pledged as collateral
to secure payment of these debt obligations.

Indenture
Notes In May 2003, Evergreen Aviation issued $215.0 million of 12%
Senior Second Secured Notes (the Indenture Notes)
pursuant to an Indenture, dated as of May 16, 2003, executed by and among i) Evergreen Aviation, as
issuer, ii) Holdings and substantially all of the subsidiaries of Evergreen Aviation,
including the Trust, as guarantors, and iii) J.P. Morgan Trust Company, N.A., as successor trustee to Bank One, N.A., as trustee.

The
Indenture Notes bear interest at an annual fixed rate of 12.0%. Payments of interest are due
semi-annually on May 15th and November 15th of each year. The most recent semi-annual payment of interest in the amount of $12.9
million was paid by Evergreen Aviation on May 15, 2005. The next payment of accrued interest
in the amount of $12.9 million will be due and payable on November 15, 2005.

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The
Indenture Notes are secured by a second priority lien, subject to certain permitted liens,
on substantially all of the assets of Evergreen Aviation and its domestic subsidiaries,
including the assets of the Trust. The Indenture Notes are fully and unconditionally
guaranteed, both jointly and severally, by Holdings, substantially all of Evergreen
Aviations subsidiaries, and the Trust.

The
Indenture Notes impose certain restrictions on Evergreen Aviation and its restricted
subsidiaries, including the Trust. Such restrictions include, but are not limited to,
restrictions on the ability to:

| |  | incur additional debt or create liens;                       
|- |  | -------------------------------------------------------------
| |  | pay dividends or acquire shares of capital stock;            
| |  | make payments on subordinated debt or make investments;      
| |  | make distributions from restricted subsidiaries;             
| |  | issue or sell capital stock of restricted subsidiaries;      
| |  | issue guarantees;                                            
| |  | sell or exchange assets, or make capital expenditures;       
| |  | enter into transactions with shareholders and affiliates; and
| |  | effect mergers and other changes of control.                 

Secured
Credit Facility  On May 13, 2004, Evergreen Aviation and certain of
its subsidiaries, including the Trust, entered into a three-year senior secured credit
facility (the Secured Credit Facility) with Wells Fargo
Foothill, Inc. and Ableco Finance LLC (collectively, the Wells Fargo Lenders).
The Secured Credit Facility consists of two loans  a $50.0 million term loan and a
$50.0 million revolving loan. The Secured Credit Facility is secured by substantially all
of the assets of Evergreen Aviation and its domestic subsidiaries, including the assets of
the Trust.

As
of May 31, 2005, the outstanding balance of the Secured Credit Facility was $74.0
million. Taking into consideration the Minimum Availability Requirement (as defined below), as of May 31, 2005, Evergreen
Aviations availability to obtain additional advances under the Secured Credit Facility was $0.8 million.

Evergreen
Aviation and its restricted subsidiaries, including the Trust, are subject to various
restrictive covenants under the Secured Credit Facility. In addition to other requirements that are set forth in the covenants, Evergreen Aviation
and its restricted subsidiaries, including the Trust, are required to maintain: i) an
undrawn availability of not less than $5.0 million on the revolving loan (the "Minimum Availability Requirement"), ii) minimum
thresholds with respect to certain consolidated and non-consolidated earnings before
interest, taxes, depreciation and amortization (EBITDA), and iii) a minimum
ratio with respect to fixed charge coverages. In addition, Evergreen Aviation and its
restricted subsidiaries, including the Trust, have agreed to limit the amount of capital
expenditures that may be made in any fiscal year to $75.0 million, of which at least $10.0
million must be financed from sources other than the Secured Credit Facility. As of May 31, 2005, Evergreen Aviation and its
subsidiaries were in compliance with such covenants.

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Notice and Waiver of
Specified Events of Default  On June 1, 2005, the Wells
Fargo Lenders notified Evergreen Aviation that the Wells Fargo Lenders believed that Evergreen Aviation was
in violation of certain covenants of the Secured Credit Facility (the "Specified Events of Default"), as follows:

| | i)   |  | occurrence of a default at the final maturity, on April 29, 2005,
of the obligations under the FINOVA Note;      
| | ---- |  | -----------------------------------------------------------------------------------------------------------------
|
| | ii)  |  | failure to maintain insurance on the Collateral (as defined in the Secured
Credit Facility);                     
|
| | iii) |  | making an unpermitted investment toward the purchase of two Boeing 747
airplanes (the "Designated 747s"); and    
|
| | iv)  |  | unauthorized use of the proceeds from advances under the Secured Credit
Facility to renovate the Designated 747s.

The Wells Fargo Lenders further notified Evergreen Aviation that, as a result of the Specified Events of Default, the Wells
Fargo Lenders had elected to charge the default rate of interest, which, as set forth in the Secured Credit Facility, is a per annum
rate equal to 2 percentage points above the per annum rate otherwise applicable. The default rate of interest was charged
from April 29, 2005, the date on which the Wells Fargo Lenders asserted that a default had occurred under the FINOVA Note, until June 14, 2005,
the date on which the Wells Fargo Lenders, by execution of the Amendment Number Two (as defined below) waived the Specified Events of
Default. At April 29, 2005, the per annum rates of interest on the Secured Credit Facility ranged from 6.09% to 8.75%.

On June 14, 2005,
Evergreen Aviation, its subsidiaries that are co-borrowers under the Secured Credit Facility, and the Trust, as co-guarantor, entered
into an Amendment Number Two and Waiver to Loan and Security Agreement (the "Amendment Number Two") with the Wells Fargo
Lenders whereby the Wells Fargo Lenders agreed to waive the Specified Events of Default, and the Wells Fargo Lenders and
Evergreen Aviation agreed to amend the Secured Credit Facility to allow Evergreen Aviation and its subsidiaries to maintain only
all-risk ground insurance coverage for aircraft that have been grounded and taken out of service.

Amendment Number Three to Secured Credit Facility. On July 11, 2005, Evergreen Aviation, its subsidiaries that are
co-borrowers under the Secured Credit Facility, and the Trust, as co-guarantor, entered into an Amendment Number Three and Consent
(the "Amendment Number Three") with the Wells Fargo Lenders. Amendment Number Three amends the Secured Credit Facility to allow
Evergreen Airlines to i) lease the Designated 747s from Ventures Acquisition Company LLC ("Ventures Acquisition Company"), an
affiliated entity that is wholly-owned by one of our beneficiaries, Mr. Smith, and ii) reimburse
Ventures Acquisition Company for certain out-of-pocket transaction costs incurred by Ventures Acquisition Company
in connection with the purchase of the Designated 747s. In exchange, Mr. Smith pledged to Wells Fargo Foothill, Inc., as
administrative agent and for the benefit of the Wells Fargo Lenders, all of his rights, title, and interest in
Ventures Acquisition Company.

Risk
of Default on Debt Obligations  Substantially all of the assets of Evergreen
Aviation and its subsidiaries, including the Trust, are pledged as collateral under
Evergreen Aviations various debt agreements. Furthermore, the Indenture Notes and
the Secured Credit Facility both contain cross-default provisions whereby certain events
of default under one or more of the debt obligations of Evergreen Aviation or its
subsidiaries, including the Trust, will result in an event of default under either, or
both, the Indenture Notes and the Secured Credit Facility. In the event that such defaults
are not cured or waived, the Trust is at risk that the Trusts obligations
under either, or both, the Indenture Notes and the Secured Credit Facility will be
accelerated.

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Distributions to Beneficiaries

We previously held a note
receivable from one of our beneficiaries. In lieu of cash distributions to the beneficiary, the note receivable was reduced by
in-kind distributions of the beneficiary's share of the Trust's net income. During the three months ended May 31, 2004, the note
receivable was reduced by $0.3 million of in-kind distributions
from the beneficiary's share of the Trust's net income. As of August 31, 2004, the note receivable was repaid in
full.

We have not made any other
distributions to the trust beneficiaries and, until the trust is terminated, we do not anticipate
making any such distributions.

Table of Contractual Obligations

The following table summarizes
our contractual obligations as of May 31, 2005, excluding any obligations which may arise as a result of our guarantees of
indebtedness of Evergreen Aviation:

|                                       |                                    |     |           |           |            |  |       |   |  |   |   |  |   |     | 
|-------------------------------------- | ---------------------------------- | --- | --------- | --------- | ---------- |  | ----- | - |  | - | - |  | - | --- | 
|Contractual Obligations               
|                                      
|                                       | Payments due by End of Fiscal Year
|                                       |                                   
|(in millions)                          | 2006                               |     | 2007-2008 | 2009-2010 | After 2010 |  | Total |  
|                                       |                                   
|Current maturities of debt obligations | $                                  | 2.0 |           | $         | -          |  | $     | - |  | $ | - |  | $ | 2.0 | 

|       
|-------
|ITEM 3.

Interest Rate Risk

With
respect to interest rate risks at May 31, 2005, we had debt of $2.0 million at a fixed annual interest rate of 10.44%. A 1%
increase in interest rates would decrease the fair market value of our fixed rate debt by approximately $4,000. We have not
entered into any obligations for trading purposes. We are not exposed to foreign currency exchange rate risks or commodity
price risks. We have not entered into any futures or swap contracts at this time.

Concentration of Credit
Risks  Financial instruments that potentially subject the Trust to credit risk are
primarily accounts receivable. Accounts receivable derived from operations are
the same as collateral for debt to FINOVA Capital Corporation. See "Note 3 - Long-Term Debt Obligations" in Item 8 below. The
Trust operates for, and grants credit to its customer Evergreen Airlines.

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|       
|-------
|ITEM 4.

Disclosure Controls and Procedures

The Trust's management, with
the participation of the Trust's principal executive officer and principal financial officer, has evaluated the effectiveness of
the Trust's disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities
Exchange Act of 1934, as amended (the "Exchange Act")) as of the end of the period covered by this report.  Based on such evaluation,
the Trust's principal executive officer and principal financial officer have concluded that, as of the end of such period, the
Trust's disclosure controls and procedures are effective in recording, processing, summarizing and reporting, on a timely basis,
information required to be disclosed by the Trust in the reports that it files or submits under the Exchange Act, and are
effective in ensuring that information required to be disclosed by the Trust in the reports that it files or submits under the
Exchange Act is accumulated and communicated to the Company's management, including the Trust's principal executive officer and
principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

During fiscal year 2005, the
Trust retained a certified public accounting firm (the "Internal Audit Consultants") to provide certain internal audit
services to the Trust. The Internal Audit Consultants interfaced with the registered independent public
accounting firm during both the audit of the Trust's financial statements for the fiscal year ended February 28, 2005, and the
period covered by this report, and have performed analyses
of major accounts included in the Trust's financial statements. Although the Trust was not able to file its
Annual Report on Form 10-K for the fiscal year ended February 28, 2005 on the original due date, the Trust
believes that initiating the internal audit function improved the Trust's effectiveness in recording, processing, summarizing and
reporting financial information. In addition, the Trust believes that the internal audit function, and the account analyses
performed at, and for, the fiscal year ended February 28, 2005 and the period covered by this report, will positively affect
the Trust's internal control over financial reporting, and enhance the Trust's ability to meet its future reporting
requirements in a timely manner.

Changes in Internal Control Over Financial Reporting

There have not been any changes in the Trust's internal control
over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange
Act) during the fiscal quarter ended May 31, 2005 that have materially affected, or are
reasonably likely to materially affect, the Trust's internal control over financial reporting.

20



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# PART II.   OTHER INFORMATION

|ITEM 1. | LEGAL PROCEEDINGS
|------- | -----------------

We
are not currently involved in any legal proceedings.

|ITEM 6. | EXHIBITS
|------- | --------

|           
|-----------
|Exhibit No.
|           

| | 10.1 | *               | Amendment Number Three and Consent, dated July 11, 2005, by and between the
lenders identified on the signature pages thereof (the "Lenders"),
Wells Fargo Foothill, Inc., as the arranger and administrative agent for the Lenders, and
Evergreen International Aviation, Inc. and each of its Subsidiaries that are signatories thereto, as Borrowers.
| | ---- | --------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | 31.1 | *               | Certification of Principal Executive Officer pursuant to Rule
13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                      
|
| | 31.2 | *               | Certification of Principal Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                      
|
| | 32.1 | *               | Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                  
|
| | *    | Filed herewith.

22



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# SIGNATURES

Pursuant to the requirements
of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

| | TRUST
CREATED FEBRUARY 25, 1986
(Registrant)
| | --------------------------------------------

|                    
|--------------------
|Date:  July 15, 2005
|                    
|                    
|Date:  July 15, 2005

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# EXHIBIT INDEX

|           
|-----------
|Exhibit No.
|           

| | 10.1 | *               | Amendment Number Three and Consent, dated July 11, 2005, by and between the
lenders identified on the signature pages thereof (the "Lenders"),
Wells Fargo Foothill, Inc., as the arranger and administrative agent for the Lenders, and
Evergreen International Aviation, Inc. and each of its Subsidiaries that are signatories thereto, as Borrowers.
| | ---- | --------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | 31.1 | *               | Certification of Principal Executive Officer pursuant to Rule
13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                      
|
| | 31.2 | *               | Certification of Principal Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                      
|
| | 32.1 | *               | Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                  
|
| | *    | Filed herewith.

23