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Published: 2008-03-26

Modification Services Agreement - Federal Express Corp. and The Boeing Co.



01-07-00
                                                          Letter Agreement No. 8
                                                                     DAC 96-29-M

Federal Express Corporation
2005 Corporate Avenue
Memphis, Tennessee  38132

Federal Express Corporation (Federal Express) and McDonnell Douglas Corporation,
a wholly-owned subsidiary of The Boeing Company (MDC), have entered into
Modification Services Agreement Document No. DAC 96-29-M (the "Agreement") dated
September 16, 1996, which Agreement covers Federal Express' desire to
incorporate certain modifications in its DC-10 aircraft (the "Aircraft", as
defined in the Agreement) and MDC desires to perform such modifications. As a
further consideration of the parties hereto, this Letter Agreement No. 8 shall
constitute a part of said Agreement.

In anticipation of potential FAA future requirements, MDC agrees to install
certified smoke detection systems in the Aircraft subject to the following terms
and conditions:

1.     UPPER CARGO COMPARTMENT

      a)   MDC shall install a certified one-minute smoke detection system in
           the upper main cargo compartment of MD-10 (ACF configured) Aircraft.
           The certification basis and detailed design shall include use of the
           Whittaker model 602 one-minute smoke detector (the "One-Minute
           Detectors").

      b)   For all Aircraft that are to receive the ACF Modification and that
           are Delivered in a passenger configuration, the One-Minute Detectors
           for the upper cargo compartment shall be provided by MDC as Seller
           Furnished Equipment (SFE)

      c)   For all Aircraft that are to receive the ACF Modification and that
           are Delivered in a freighter configuration, the One-Minute Detectors
           for the upper cargo compartment shall be provided by FedEx as Buyer
           Furnished Equipment (BFE)


2.    LOWER CARGO COMPARTMENTS


      a)   MDC shall continue to install a certified five-minute smoke detection
           system in the lower forward cargo compartment in accordance with
           Exhibit B. - Passenger to Freighter Modification (ER 95-051).


      b)   For all Aircraft that are to receive the ACF Modification and the
           Passenger to Freighter Modification as noted in Exhibit O - Schedule,
           MDC shall install a certified five-minute smoke detection and fire
           suppression system in the lower center and aft cargo compartments
           concurrently with the accomplishment of the P to F and ACF
           Modifications at an additional charge to FedEx of [ * ].


      c)   For all Aircraft that are to receive the ACF Modification only as
           noted in Exhibit O - Schedule, FedEx shall be responsible for
           installing the smoke 



                                                                          Page 2

           detection and fire suppression systems in the center and aft cargo
           compartments either by contracting directly with a FedEx
           subcontractor prior to Delivery or directly with MDC, or its
           subcontractor, via the ASR process during the Aircraft Visit.

      d)   MDC shall be responsible to provide the One-Minute Detectors for the
           lower forward cargo compartment for those Aircraft in which the lower
           galley is removed during the Passenger to Freighter modification.
           FedEx shall be responsible to provide the One-Minute Detectors for
           the lower forward, center and aft cargo compartments as BFE for all
           other Aircraft.


3.    Aircraft that are configured for CRAF and/or animal charter operation
      ("Charter Aircraft") shall be certified with a five-minute smoke detection
      system for the upper and lower cargo compartments.


4.    In all cases where the five-minute smoke detector system is installed, MDC
      shall (i) obtain FAA approval for the One-Minute Detector to be an
      equivalent part to the existing five minute detectors without change to
      the five-minute system certification, which approval will preclude the
      intermix of one-minute and five-minute detectors, and (ii) install the BFE
      or SFE, as applicable, One Minute Detectors in the lower forward, center
      and aft cargo compartments during the ACF Modification at no additional
      charge to FedEx.


5.    MDC shall install the one-minute smoke detection system on all flight test
      Aircraft prior to Redelivery to Federal Express. Federal Express shall be
      responsible for providing a complete shipset (all upper and lower
      compartments) of One-Minute Detectors as BFE for fuselage 444.


6.    All of the terms of the Agreement shall remain in full force and effect,
      except as herein expressly changed, modified or supplemented, or except
      insofar as the terms thereof have been completed, performed or complied
      with prior to the date hereof.


If the foregoing correctly sets forth our understanding, please execute this
Letter Agreement in the space provided below.


FEDERAL EXPRESS CORPORATION                        MCDONNELL DOUGLAS CORPORATION


/s/ JAMES R. PARKER                                /s/ CHARLES STREITZ
---------------------------                        -----------------------------
      Signature                                              Signature

JAMES R. PARKER                                    CHARLES STREITZ
---------------------------                        -----------------------------
      Printed Name                                           Printed Name

VICE PRESIDENT                                     CONTRACTS MANAGER
---------------------------                        -----------------------------
      Title                                                  Title


                                                   1-14-00
                                                   -----------------------------
                                                             Date

*  Blank space contained confidential information which has been filed
   separately with the Securities and Exchange Commission pursuant to Rule 24b-2
   under the Securities Exchange Act of 1934.




01-07-00
                                                        Letter Agreement No. 11
                                                                    DAC 96-29-M

Federal Express Corporation
2005 Corporate Avenue
Memphis, Tennessee  38132


Federal Express Corporation (FedEx) and McDonnell Douglas Corporation, a
wholly-owned subsidiary of The Boeing Company (MDC), have entered into
Modification Services Agreement Document No. DAC 96-29-M (the "Agreement") dated
September 16, 1996, which Agreement covers Federal Express' desire to
incorporate certain modifications in its DC-10 aircraft (the "Aircraft", as
defined in the Agreement) and MDC desires to perform such modifications. As a
further consideration of the parties hereto, this Letter Agreement No. 11 shall
constitute a part of said Agreement.

FedEx and MDC have previously come to an agreement on certain wiring changes
which are to be accomplished on all Aircraft during completion of the Services.
These wiring changes consist of the Sundstrand enhanced electrical system (the
"EPC Wiring") and replacement of a substantial portion of the wiring in the
non-pressurized sections of the airframe (the "External Wiring), and have been
documented in Amendment No. 1 to the Agreement dated January 27, 1999.

In addition to the EPC Wiring and External Wiring changes noted above, FedEx and
MDC agree to substantially replace the wiring in the pressurized sections of the
airframe as defined by the list included herein as Attachment A (the "Internal
Wiring"). As a result of accomplishing the replacement of the Internal Wiring,
effectively the only wiring remaining on the Aircraft that will not have been
replaced, by virtue of one or all of the EPC Wiring, External Wiring or Internal
Wiring changes, will be the power feeder cables connecting from the Electrical
Power Center (EPC) to the engines, Auxiliary Power Unit (APU) and Air Driven
Generator (ADG). Any wiring not listed in Attachment A which is part and parcel
to Line Replaceable Units (LRUs) will also remain unchanged.

MDC hereby agrees to replace the Internal Wiring on the Aircraft during the
accomplishment of the Services on each Aircraft, excluding Flight Test Aircraft
fuselages 138 and 444, subject to the following terms and conditions:


1.    In consideration of MDC accomplishing the replacement of the Internal
      Wiring on the Aircraft, the Price to be paid to MDC by FedEx upon
      Redelivery of the Aircraft shall be increased by an amount equal to [ * ],
      subject to escalation in accordance with Exhibit N to the Agreement.


2.    MDC shall develop a standardized wire harness by incorporating the changes
      associated with the replacement of the EPC Wiring, External Wiring and
      Internal Wiring such that substantially the same wire harness assemblies
      are installed on each Aircraft (the "Standard Wire Harness"). FedEx and
      MDC have jointly developed a mutually agreed to list of FedEx EOs,
      included herein as Attachment B, that are to be included for potential
      interface on any given Aircraft as part of the Standard Wire Harness
      design configuration (the "Standard ACF Configuration"). [ * ] FedEx shall
      be responsible for the adaptive engineering to revise the FedEx EOs in
      Attachment B to coincide with the MDC design at a 




                                                                          Page 2

      mutually agreed interface point. If an Aircraft is Delivered with a given
      EO in Attachment B incorporated, then MDC shall retain and re-connect such
      installations at no additional charge to FedEx. If an Aircraft is
      Delivered without a given EO in Attachment B incorporated, and FedEx
      elects to install such EO on that Aircraft, then MDC shall accomplish such
      EO and charge FedEx via the ASR process.


3.    FedEx acknowledges that as a result of the changes associated the EPC
      Wiring, External Wiring, Internal Wiring, Standard ACF Configuration and
      the Standard Wire Harness, MDC will essentially remove indiscriminately
      all wiring from the Aircraft, except for the wiring noted above, prior to
      installing new wiring in the Aircraft during the accomplishment of the
      Services. As a result, it is possible for wiring to be removed from any
      given Aircraft that is associated with installations that were installed
      by MDC, FedEx or the prior owner(s) of the Aircraft after such Aircraft
      was delivered by MDC to the original owner and that are not part of the
      Standard ACF Configuration or the Standard Wire Harness ("Unique
      Installation"). If a Unique Installation is encountered in the process of
      accomplishing the Services, FedEx can request for MDC to include such
      Unique Installation into that Aircraft's configuration at additional
      charge to FedEx via the ASR process. Notwithstanding the terms of this
      Paragraph, at no additional charge to FedEx MDC shall install all wiring
      that is in excess of that listed in Attachment A which is otherwise
      required for MDC's accomplishment of the Services in accordance with the
      Agreement.


4.    All of the terms of the Agreement shall remain in full force and effect,
      except as herein expressly changed, modified or supplemented, or except
      insofar as the terms thereof have been completed, performed or complied
      with prior to the date hereof.



If the foregoing correctly sets forth our understanding, please execute this
Letter Agreement in the space provided below.


FEDERAL EXPRESS CORPORATION                        MCDONNELL DOUGLAS CORPORATION


/s/ JAMES R. PARKER                                /s/ CHARLES STREITZ
----------------------------                       -----------------------------
        Signature                                              Signature

JAMES R. PARKER                                    CHARLES STREITZ
----------------------------                       -----------------------------
        Printed Name                                           Printed Name

VICE PRESIDENT                                     CONTRACTS MANAGER
----------------------------                       -----------------------------
        Title                                                  Title


                                                   1-14-00
                                                   -----------------------------
                                                               Date

*  Blank spaces contained confidential information which has been filed
   separately with the Securities and Exchange Commission pursuant to Rule 24b-2
   under the Securities Exchange Act of 1934.




11-18-99
                                                         Letter Agreement No. 13
                                                                     DAC 96-29-M

Federal Express Corporation
2005 Corporate Avenue
Memphis, Tennessee 38132


Federal Express Corporation (FedEx) and McDonnell Douglas Corporation, a
wholly-owned subsidiary of The Boeing Company (MDC), have entered into
Modification Services Agreement Document No. DAC 96-29-M (the "Agreement") dated
September 16, 1996, which Agreement covers Federal Express' desire to
incorporate certain modifications in its DC-10 aircraft (the "Aircraft", as
defined in the Agreement) and MDC desires to perform such modifications. As a
further consideration of the parties hereto, this Letter Agreement No. 13 shall
constitute a part of said Agreement.

This Letter Agreement No. 13 provides notice to FedEx that fuselage 4, Factory
Serial Number 46600 (the "MAE Aircraft"), shall receive the ACF Modification at
ST Mobile Aerospace, Inc. (MAE) located in Mobile, AL. MDC acknowledges that
FedEx desires to contract directly with MAE to accomplish any non-routines that
arise during the accomplishment of the ACF Modification, or for maintenance
actions that were deferred during the accomplishment of the P to F modification
while the Aircraft was at Aeronavali in Venice, Italy (collectively the
"Specified Services"). MDC also acknowledges that FedEx intends to contract
directly with MAE to accomplish the Specified Services concurrently with the
accomplishment of the ACF Modification by MAE under separate contract with MDC.

MDC hereby agrees to the reduction in work scope resulting from FedEx or its
subcontractor accomplishing the Specified Services subject to the following
terms and conditions:


1.    MDC agrees to waive the requirement that FedEx contract through MDC for
      the accomplishment of the Specified Services [ * ].


2.    The induction of the MAE Aircraft into Mobile, AL at the MAE facility for
      commencement of the ACF Modification shall be August 25, 1999. The
      Redelivery Date of the MAE Aircraft shall be May 21, 2000. FedEx shall be
      responsible for ensuring that the Federal Express Supplied Parts required
      to support the accomplishment of the Specified Services are delivered to
      MAE in accordance with the requirements stipulated in the Agreement.


3.    FedEx hereby irrevocably and unconditionally waives any of MDC's
      warranties which are exclusively related to workmanship and only for the
      portion of the Specified Services on the MAE Aircraft exclusively
      performed by FedEx or its subcontractor, provided, however, nothing in
      this Section 3. shall extend to or otherwise affect warranties which may
      be applicable to Parts.


4.    The performance of the Specified Services by FedEx or its subcontractor
      shall in no manner change, modify, terminate or otherwise affect MDC's
      warranties regarding the MAE Aircraft or in any manner whatsoever modify
      the terms and conditions of the Agreement except as expressly set forth
      herein.



                                                                          Page 2

5.    FedEx and MDC mutually acknowledge that a potential resource conflict
      exists as a result of MAE entering into two separate contracts to
      accomplish work concurrently on one aircraft. FedEx and MDC agree to
      mutually develop a priority of tasks, and mutually resolve any resource
      conflicts that arise to prevent any materially adverse impact to the MAE
      Aircraft Redelivery Date. If a resource conflict arises, then the party
      identifying the conflict shall immediately notify the other party. If the
      resource conflict cannot be resolved within two days of notification of
      the conflict by MDC or FedEx, and such conflict results in a delay of
      MDC's or FedEx's ability to accomplish the services in accordance with the
      scheduled planning in MDC's or FedEx's respective contract with MAE, then
      any resultant delay in the Redelivery Date will constitute an Excusable
      Delay as defined in the Agreement.


6.    Should there be a delay to the flight test activity on the MAE Aircraft
      that is directly attributable to a delay caused by the accomplishment of
      the Specified Services by FedEx or its subcontractor, and (i) FedEx has
      not initiated appropriate action, and (ii) the parties agree that such
      delay can be cured more expeditiously by MDC providing resources or parts
      on behalf of FedEx or its subcontractor; then MDC shall have the right to
      provide such resources or parts provided that the costs associated
      therewith are mutually agreed upon by the parties via the ASR process
      prior to such services being performed by MDC. MDC shall provide FedEx
      with timely notice of such potential delay in order for FedEx or its
      subcontractor to initiate any appropriate action.


7.    All of the terms of the Agreement shall remain in full force and effect,
      except as herein expressly changed, modified or supplemented, or except
      insofar as the terms thereof have been completed, performed or complied
      with prior to the date hereof.


If the foregoing correctly sets forth our understanding, please execute this
Letter Agreement in the space provided below.





FEDERAL EXPRESS CORPORATION                        MCDONNELL DOUGLAS CORPORATION


/s/ JAMES R. PARKER                                /s/ CHARLES STREITZ
----------------------------                       -----------------------------
         Signature                                              Signature

JAMES R. PARKER                                    CHARLES STREITZ
----------------------------                       -----------------------------
         Printed Name                                           Printed Name

VICE PRESIDENT                                     CONTRACTS MANAGER
----------------------------                       -----------------------------
         Title                                                  Title


                                                   12-1-99
                                                   -----------------------------
                                                                Date



11-03-99
                                                         Letter Agreement No. 14
                                                                     DAC 96-29-M

Federal Express Corporation
2005 Corporate Avenue
Memphis, Tennessee 38132


Federal Express Corporation (FedEx) and McDonnell Douglas Corporation, a
wholly-owned subsidiary of The Boeing Company (MDC), have entered into
Modification Services Agreement Document No. DAC 96-29-M (the "Agreement") dated
September 16, 1996, which Agreement covers Federal Express' desire to
incorporate certain modifications in its DC-10 aircraft (the "Aircraft", as
defined in the Agreement) and MDC desires to perform such modifications. As a
further consideration of the parties hereto, this Letter Agreement No. 14 shall
constitute a part of said Agreement.

This Letter Agreement No. 14 incorporates a revised Exhibit O - Schedule dated
11-08-99 to the Agreement, enclosed herein as Attachment A, which reflects
mutually agreed revisions to the Delivery and Redelivery Dates, fuselage number
sequencing and modification site allocations.

MDC and FedEx agree to the accomplishment of the Services in accordance with the
above noted revised Exhibit O subject to the following terms and conditions:


1.    MDC assumes that one Module 5 and one Module 1 kit will both be utilized
      on an Aircraft of Option Block 3 which is to be Delivered to Mobile
      Aerospace in Mobile, AL (MAE) by no later than May 2003 for commencement
      of the Services. [ * ]


2.    If FedEx elects not to exercise another block of Option Aircraft, or does
      not include an Aircraft that needs the above noted parts in their next
      option block [ * ].


3.    The price to FedEx for the Passenger to Freighter Modification for each of
      fuselage numbers 207, 271, 353 and 321 (the "Advanced Aircraft") shall be
      [ * ]. When FedEx exercises the block of Option Aircraft that includes
      Aircraft fuselage numbers 3, 5, 12 and 13 (the "Required Option Block"),
      then [ * ] of the Premium Amount per Aircraft shall be refundable (the
      "Refundable Amount"). Within 30 days of FedEx's exercise of the Required
      Option Block, MDC shall issue a refund check to FedEx for the Refundable
      Amount for each of the four Advanced Aircraft. If FedEx does not exercise
      the Required Option Block prior to the termination of the Agreement, the
      entire Premium Amount shall be non-refundable.


4.    The Delivery Dates and corresponding Redelivery Dates for Aircraft
      fuselage number 298 and fuselage number 351 have been extended to the new
      dates shown in Attachment A. FedEx shall be charged the price for the
      Passenger to 



                                                                          Page 2

      Freighter and ACF Modifications for the two noted Aircraft in accordance
      with Exhibit K to the Agreement, subject to escalation in accordance with
      Exhibit N of the Agreement.


5.    For Aircraft Delivered to OAN subsequent to the two Aircraft noted in
      Paragraph 4 above, which are specified by Exhibit O to receive the P to F
      as well as the ACF Modifications (the "Subsequent Aircraft"), FedEx shall
      provide [ * ] written notice to MDC prior to the Delivery of any
      given Subsequent Aircraft that (i) FedEx intends to accept Redelivery of
      the Aircraft, ferry that Aircraft to a FedEx designated location, have the
      ACF line replaceable units itemized in the list included herein as
      Attachment B ( the "ACF LRUs") removed by MDC, and place that Aircraft
      into storage (the "Storage Aircraft"), or (ii) FedEx intends to accept
      Redelivery of the Aircraft with a new shipset of ACF LRUs for entry of
      that Aircraft into the FedEx revenue fleet (the "Revenue Aircraft").


6.    The first Subsequent Aircraft designated by FedEx as a Storage Aircraft
      shall be the First Rotable Aircraft, and the next Aircraft after the First
      Rotable Aircraft Delivered to OAN shall be automatically designated the
      Second Rotable Aircraft. These two noted Aircraft shall be Redelivered to
      FedEx with the full shipset of ACF LRUs installed. After FedEx ferry of
      each of these noted Aircraft to a FedEx designated storage location, MDC
      shall remove, inventory, and ship the ACF LRUs to OAN for use as a rotable
      Redelivery shipset (the "Rotable ACF LRU Set") for use on subsequent
      Storage Aircraft. FedEx shall be charged [ * ] associated with the return
      of the ACF LRUs to Aeronavali in Venice, Italy (OAN) via the ASR process.
      [ * ]. The price for the First Rotable Aircraft and Second Rotable 
      Aircraft shall be as noted in Exhibit K, [ * ] (the "ACF LRU Price") for 
      the price of the ACF LRUs, with the remaining balance subject to 
      escalation in accordance with Exhibit N of the Agreement. With respect
      to the two Rotable ACF LRU Sets referred to herein, at the Redelivery of a
      Storage Aircraft, the applicable Rotable ACF LRU Set shall be considered
      not Redelivered until it is Redelivered to FedEx installed in either the
      Next-to-Last Subsequent Aircraft or the Last Subsequent Aircraft in
      accordance with Paragraph 9. of this Letter Agreement. As such, issues
      regarding risk of loss, risk of damage or warranty associated with
      component(s) of the Rotable ACF LRU Sets:


      a)   Prior to Redelivery to FedEx, shall be resolved in accordance with
           Article 8 - Warranty and Article 22-Insurance as if the component(s)
           in question from the applicable Rotable ACF LRU Set was not yet
           Redelivered to FedEx.


      b)   After Redelivery to FedEx installed in either the Next-to-Last
           Subsequent Aircraft or the Last Subsequent Aircraft, shall be
           resolved in accordance with Article 8 - Warranty and Article 22 -
           Insurance as if the component(s) in question from the applicable
           Rotable ACF LRU Set was Redelivered to FedEx.



                                                                          Page 3

7.    Subsequent Aircraft to the First Rotable Aircraft and Second Rotable
      Aircraft, which have been designated by FedEx as Storage Aircraft in
      accordance with Paragraph 5. above, shall be Redelivered to FedEx
      utilizing one of the two Rotable ACF LRU Sets noted above, subject to the
      following:


      a)   The price for Storage Aircraft shall be as noted in Exhibit K, less
           the amount of the ACF LRU Price, with the remaining balance subject
           to escalation in accordance with Exhibit N of the Agreement.


      b)   If MDC can successfully defer, [ * ]. FedEx agrees to purchase the 
           ACF LRUs for each applicable Storage Aircraft from MDC at the ACF 
           LRU Price by no later than [ * ] after Redelivery of each such 
           Storage Aircraft to FedEx. The ACF LRU Price shall be subject to 
           escalation in accordance with Exhibit N of the Agreement.


           i)   FedEx shall provide MDC written notice by [ * ] of its intent 
                to designate the first or more Subsequent Aircraft as Storage 
                Aircraft. MDC shall negotiate in good faith with its ACF LRU 
                suppliers to defer the ACF LRUs for those designated Storage
                Aircraft in such a manner to mitigate FedEx's liability as noted
                in Paragraph 7.c) below.


      c)   If MDC is unable to defer shipment of a given set of ACF LRUs for any
           Subsequent Aircraft, then MDC shall retain in storage each such set
           of ACF LRUs, and FedEx shall be charged MDC's inventory holding costs
           at a rate not to exceed [ * ] per month (which shall be verified by
           MDC outside auditors upon request) for the storage of each such set
           of ACF LRUs, which amount shall not be subject to escalation. If
           requested by FedEx, MDC shall provide documentation to the
           satisfaction of FedEx to verify MDC's receipt of each set of ACF LRUs
           for which FedEx is being charged. The noted charges shall accrue from
           the time the applicable Storage Aircraft is Redelivered to FedEx
           until FedEx purchases the applicable ACF LRUs from MDC. [ * ]


      d)   After ferry of the Aircraft by FedEx to a FedEx designated storage
           location, MDC shall remove, inventory, and ship the Rotable ACF LRU
           Set to OAN for use on a subsequent Storage Aircraft. FedEx shall be
           charged the direct pass through removal labor hours, packaging and
           freight costs associated with the return of the Rotable ACF LRU Set
           to OAN via the ASR process. [ * ]


      e)   FedEx shall provide to MDC either (i) [ * ] written notice if MDC 
           has no ACF LRUs sets in storage, or (ii) [ * ] written notice if 
           MDC has ACF LRUs sets in storage, of its intent to purchase a set 
           of ACF 



                                                                          Page 4

           LRUs for use on a Storage Aircraft, including the First Rotable
           Aircraft and the Second Rotable Aircraft, for FedEx's return of the
           Storage Aircraft to revenue service.


8.    Subsequent Aircraft which have been designated as Revenue Aircraft by
      FedEx in accordance with Paragraph 5. above shall be Redelivered to FedEx
      with a new set of ACF LRUs installed. [ * ]


9.    The Next-to-last Subsequent Aircraft , as designated by FedEx at the
      Delivery of any given Subsequent Aircraft, shall be Redelivered to FedEx
      utilizing one of the two Rotable ACF LRU Sets, which shall remain
      installed on the Aircraft and be retained by FedEx. Once the Next-to-last
      Subsequent Aircraft has been designated, the following Subsequent Aircraft
      shall be the Last Subsequent Aircraft, and shall be Redelivered to FedEx
      utilizing the remaining Rotable ACF LRU Set, which shall remain installed
      on the Aircraft and be retained by FedEx. FedEx shall be charged the price
      for the Passenger to Freighter and ACF Modifications for these two noted
      Aircraft in accordance with Exhibit K to the Agreement, subject to
      escalation in accordance with Exhibit N to the Agreement.


10.   Notwithstanding the terms of Letter Agreement No. 9, for all Subsequent
      Aircraft designated by FedEx as Storage Aircraft, including the First
      Rotable Aircraft and the Second Rotable Aircraft:


      a)   The Services specified on the initial issue of the MJCS for each
           applicable Aircraft are to be performed concurrently with the P to F
           and ACF Modifications and, except as may be mutually agreed to as
           noted in Paragraph b) below, shall be limited to those items
           specified in the MJCS Standard Tasks List, included herein as
           Attachment C. FedEx may elect to contract the MJCS work tasks either
           directly with MDC or directly with OAN. If FedEx elects to contract
           the noted MJCS items directly with MDC, then the prices noted in
           Attachments A and C to Exhibit K of the Agreement, or the ASR process
           as applicable, shall be used to determine the pricing for each such
           MJCS item.


      b)   Any MJCS Addendums issued after the initial issue of the MJCS for
           each applicable Aircraft shall be subject to mutual agreement between
           FedEx and MDC and MDC shall not unreasonably withhold concurrence of
           such additional work items. FedEx shall limit such MJCS Addendums to
           AD/FAR driven tasks which cannot be deferred or other tasks in which
           deferral would add significantly to FedEx's total Aircraft costs to
           return the Aircraft to revenue service.


      c)   It is acknowledged by MDC and FedEx that any ASRs requested by FedEx,
           or any non-routines written by OAN in the course of accomplishing the
           Services on the Aircraft, shall be deferred if possible to future
           maintenance action, unless such ASR or non-routine is (i) considered
           by FedEx to be a safety of flight item, (ii) is the result of an
           AD/FAR action or other such mandatory item, (iii) or such non-routine
           interferes with the accomplishment of the Services by MDC or its
           subcontractor, or (iv) FedEx and MDC 




                                                                          Page 5

           mutually determine that it is economically more efficient to
           accomplish the item during the Services rather than during
           maintenance action at a future date.


11.   It is the intent of this Letter Agreement that only Aircraft that are to
      receive the P to F and ACF Modifications at OAN are affected by the terms
      described in Paragraphs 4 through 10 above inclusively. None of the
      Aircraft that are to be modified at other facilities or are to receive
      only the ACF Modification during their respective Aircraft Visit are
      affected by the terms described in Paragraphs 4 through 10 above
      inclusively, other than their respective Aircraft Positions and Aircraft
      Visit time periods as noted in Attachment A herein.


12.   [ * ]. Written notice to MDC for an Aircraft substitution as noted in 
      this Paragraph, executed by an officer of FedEx and submitted to MDC 
      in accordance with Article 11 - Notice of the Agreement, shall be deemed 
      to amend the Agreement accordingly with regard to the substitution of 
      such Aircraft.


      a)   Where specific fuselage numbers are cited in this Letter Agreement,
           except Paragraph 3, it is the intent of this Letter Agreement that
           the cited fuselage numbers are for reference to that Aircraft
           Position's Aircraft Visit time period at OAN. If FedEx substitutes
           one of the cited Aircraft by exercising its rights under the terms of
           the Agreement, it is understood that the new Aircraft fuselage number
           shall replace the old fuselage number in all instances as cited in
           this Letter Agreement.


13.   Notwithstanding the terms of Paragraph 12 above, FedEx acknowledges that
      for fuselage numbers 298 and 351, FedEx has exercised its right to modify
      the schedule as noted in Paragraph 2.C. of the Agreement. Any further
      modifications to the schedule with respect to these two noted Aircraft
      shall require approval from MDC.


14.   If MDC or its subcontractors are able to demonstrate improvement to the
      Aircraft Visit time period and Redelivery Dates for various Aircraft, such
      that a given conversion facility could accept Delivery of an Aircraft on
      an earlier date than the scheduled Delivery Date, then FedEx agrees to
      Deliver the affected Aircraft at the earlier date.


      a)   Notwithstanding the foregoing, FedEx shall not be obligated to accept
           early Redelivery of an Aircraft in cases where such early Redelivery
           would cause the Redelivery Date to occur in an earlier FedEx fiscal
           year (fiscal year ends May 31) than was budgeted by FedEx. FedEx
           shall remain obligated to 




                                                                          Page 6

           accept Redelivery of the Aircraft on the scheduled Redelivery Date in
           accordance with Exhibit "O". attached hereto.

      b)   Notwithstanding any other provision, any payments required for early
           Delivery and/or Redelivery which occur in a FedEx fiscal year in
           which it was not originally scheduled per Exhibit "O" shall be made
           in accordance with Exhibit "O" attached hereto.


15.   MDC agrees to pay to FedEx a lump sum payment of [ * ] within five days of
      execution of this Letter Agreement, which amount FedEx agrees shall be
      payment in full for all FedEx's incremental costs at additional facilities
      through December 31, 1999 and satisfies all of MDC's responsibilities in
      accordance with item (ii) of the first sentence of Paragraph 5.A.3. and
      Paragraph 5.A.3)b) of the Agreement, excluding MDC's responsibilities as
      stipulated in Letter Agreement No. 9. Without affecting the terms and
      conditions of Letter Agreement No. 9, which shall remain in full force and
      effect, item (ii) of the first sentence of Paragraph 5.A.3. and Paragraph
      5.A.3)b) shall no longer be applicable effective January 1, 2000 for the
      conversion facilities located in Venice, Italy; Mobile, Alabama; Zurich,
      Switzerland and Goodyear, Arizona. If MDC is contemplating the use of a
      new facility other than those noted herein for accomplishment of the
      Services, MDC shall coordinate such intent in a timely manner with FedEx
      and FedEx shall identify and submit to MDC in a timely manner FedEx's
      incremental costs (or cost basis) for support of such a new facility. MDC
      shall not enter into an agreement for the accomplishment of the Services
      with the operators of a new facility without the prior consent of FedEx as
      stipulated in Paragraph 5.A.3) of the Agreement. Subject to FedEx's
      consent as stipulated herein, MDC shall be obligated to provide to FedEx
      the reimbursement of FedEx's incremental costs associated with the new
      facility in accordance with Paragraph 5.A.3) of the Agreement, however
      such reimbursement shall be limited to only those costs (or cost basis)
      identified and submitted by FedEx to MDC prior to FedEx issuing such
      consent as described herein.


16.   This Letter Agreement is subject to MDC and OAN coming to an agreement
      with respect to extending the Delivery Dates for fuselage numbers 298 and
      351 as contemplated in Paragraph 4. above.


17.   FedEx agrees to pay in full by wire transfer of funds the balance due
      amounts noted in invoice numbers 506427-00 and 506428-00 within five days
      of execution of this Letter Agreement.


18.   MDC shall provide invoices for all charges for each Redelivered Aircraft
      by no later than thirty (30) business days after the Redelivery of an
      Aircraft commencing with all Aircraft Redelivered after the execution of
      this Letter Agreement. FedEx shall not be responsible for charges against
      the above noted Redelivered Aircraft discovered by MDC after the thirty
      day deadline, except at FedEx's sole discretion.


19.   MDC agrees that if FedEx needs to store an Aircraft prior to Delivery at
      the applicable modification site noted in Exhibit O - Schedule, and the
      applicable 




                                                                          Page 7

      modification site cannot accommodate the storage of such Aircraft, then
      FedEx shall store such Aircraft at the AMS, Inc. facility located in
      Goodyear, AZ. MDC's and FedEx's responsibilities associated with the
      subsequent ferry of such a stored Aircraft from Goodyear, AZ to the
      specified modification site shall be in accordance with Letter Agreement
      No. 9 as then currently stored Aircraft. The terms in this Paragraph 19.
      assumes that storage of an incremental Aircraft at Goodyear, AZ by FedEx
      does not exceed the maximum allowed number of stored Aircraft as
      stipulated in the Agreement.


20.   All of the terms of the Agreement, including any prior Letter Agreements
      entered into by and between the parties, shall remain in full force and
      effect, except as herein expressly changed, modified or supplemented, or
      except insofar as the terms thereof have been completed, performed or
      complied with prior to the date hereof.





If the foregoing correctly sets forth our understanding, please execute this
Letter Agreement in the space provided below.








FEDERAL EXPRESS CORPORATION                        MCDONNELL DOUGLAS CORPORATION


/s/ JAMES R. PARKER                                /s/ CHARLES STREITZ
---------------------------                        -----------------------------
         Signature                                              Signature

JAMES R. PARKER                                    CHARLES STREITZ
---------------------------                        -----------------------------
         Printed Name                                           Printed Name

VICE PRESIDENT                                     CONTRACTS MANAGER
---------------------------                        -----------------------------
         Title                                                  Title


                                                   11-8-99
                                                   -----------------------------
                                                                Date





*  Blank spaces contained confidential information which has been filed
   separately with the Securities and Exchange Commission pursuant to Rule 24b-2
   under the Securities Exchange Act of 1934.




10-29-99

                                                         Letter Agreement No. 15
                                                                     DAC 96-29-M


Federal Express Corporation
2005 Corporate Avenue
Memphis, Tennessee 38132


Federal Express Corporation (FedEx) and McDonnell Douglas Corporation, a
wholly-owned subsidiary of The Boeing Company (MDC), have entered into
Modification Services Agreement Document No. DAC 96-29-M (the "Agreement") dated
September 16, 1996, which Agreement covers Federal Express' desire to
incorporate certain modifications in its DC-10 aircraft (the "Aircraft", as
defined in the Agreement) and MDC desires to perform such modifications. As a
further consideration of the parties hereto, this Letter Agreement No. 15 shall
constitute a part of said Agreement.

FedEx desires to utilize Flight Test Aircraft Fuselage 138 ("T1") for flight
testing of the Local Area Augmentation System (LAAS) as developed by the Federal
Aviation Administration (FAA). The flight tests for the LAAS shall be
accomplished on a non-interference basis concurrently with the flight test
program accomplished by MDC in support of the certification of the ACF
Modification.

MDC hereby agrees to allow the use of T1 for the noted FAA/FedEx flight test of
the LAAS subject to the following terms and conditions:


1.    MDC acknowledges that the LAAS flight test procedure "Wide-Band Airport
      Pseudolite (APL) Test Plan" dated October 1999, included herein for
      reference only as Attachment A (the "LAAS Procedure"), shall be
      accomplished by FedEx in conjunction with the FAA.


2.    The LAAS Procedure shall be accomplished at Memphis International Airport
      and shall consist of static tests as well as in-flight tests as noted in
      the LAAS Procedure.


3.    This Letter Agreement shall remain in effect until the completion of the
      LAAS Procedure. The LAAS Procedure shall commence on 10-29-99 and proceed
      in accordance with the LAAS Procedure, for approximately seven consecutive
      days.


4.    FedEx shall be responsible for the following:


      a)   Providing the LAAS Test Prototype (LTP) in the form of an FAA owned
           LAAS testbed (the "LAAS Testbed"), as well as any other equipment or
           instrumentation required for accomplishment of the LAAS Procedure.

      b)   Installation of the LAAS Testbed and other required equipment noted
           in Paragraph 4.a) above shall utilize FedEx provided technical
           personnel.





                                                                       Page 2

      c)   Providing the ground maintenance crew for all required servicing and
           routine maintenance of T1 during the LAAS Procedure.

      d)   Providing the necessary flight crew, other than pilot-in-command, for
           the accomplishment of the LAAS Procedure, including the required
           technical personnel for the operation of the LAAS Testbed equipment.

      e)   Providing all required aircraft fuel in support of the LAAS
           Procedure.

      f)   All landing and parking fees incurred during the accomplishment of
           the LAAS Procedure.

      g)   At the conclusion of the LAAS Procedure, removal of the LAAS Testbed
           and all associated equipment from T1 utilizing FedEx provided
           personnel.


5.    MDC shall be responsible for the following:


      a)   Providing the pilot in command during the LAAS Procedure.

      b)   Providing flight test technical personnel for on board data
           management during the LAAS Procedure.

      c)   Installation of necessary wiring and other accommodations as required
           for the installation of the LAAS Testbed. (i.e. wiring for power
           source and source for general aircraft data needed for the LAAS
           Testbed and LAAS Procedure)

      d)   Providing project safety oversight for the LAAS Procedure.

      e)   All costs associated with the ferry of T1 in its flight from Mesa, AZ
           to Memphis, TN for the LAAS Procedure, and the ferry of T1 in its
           return flight from Memphis, TN to Mesa, AZ.


6.    FedEx shall pay to MDC the amount of [ * ] in the aggregate for the total
      per diem cost of MDC's personnel in Memphis in support of the LAAS
      Procedure for a seven day period, which amount shall not be subject to
      escalation. If the LAAS Procedure requires more than seven days, then
      FedEx agrees to pay an additional [ * ] per day in per diem charges for
      each day beyond the seventh day. In addition to the per diem charges
      noted, FedEx shall be charged the actual touch labor hours required for
      MDC to accomplish its responsibilities as outlined in Paragraph 5 above,
      not to exceed [ * ]. The indicated amounts shall represent payment in full
      for MDC's efforts in support of the LAAS Procedure. MDC shall submit an
      invoice to FedEx itemizing the final charges, based on the calculations
      stated in this Paragraph, after the conclusion of the LAAS Procedure.


7.    All of the terms of the Agreement shall remain in full force and effect,
      except as herein expressly changed, modified or supplemented, or except
      insofar as the terms thereof have been completed, performed or complied
      with prior to the date hereof.




                                                                          Page 3


If the foregoing correctly sets forth our understanding, please execute this
Letter Agreement in the space provided below.








FEDERAL EXPRESS CORPORATION                        MCDONNELL DOUGLAS CORPORATION


/s/ RONALD D. WICKENS                              /s/ CHARLES STREITZ
---------------------------                        -----------------------------
           Signature                                              Signature

RONALD D. WICKENS                                  CHARLES STREITZ
---------------------------                        -----------------------------
           Printed Name                                           Printed Name

VP, ADD STRATEGIC PROJECTS                         CONTRACTS MANAGER
---------------------------                        -----------------------------
           Title                                                  Title


                                                   10-30-99
                                                   -----------------------------
                                                                  Date





*  Blank spaces contained confidential information which has been filed
   separately with the Securities and Exchange Commission pursuant to Rule 24b-2
   under the Securities Exchange Act of 1934.