Exhibit 4.9
MBIA INSURANCE CORPORATION
FINANCIAL GUARANTY INSURANCE POLICY
November 14, 2006
Policy No. 487110
Re:
JETBLUE AIRWAYS (SPARE PARTS) G-1 PASS THROUGH TRUST
$74,128,000 PASS THROUGH CERTIFICATES, CLASS G-1 (THE
"CLASS G-1 CERTIFICATES")
Insured
PAYMENT OF INTEREST AT THE STATED INTEREST RATE FOR THE
Obligation:
CLASS G-1 CERTIFICATES AND PRINCIPAL ON THE CLASS G-1
CERTIFICATES AND PAYMENT FOR REIMBURSEMENT TO THE
PRIMARY LIQUIDITY PROVIDER WITH RESPECT TO THE CLASS G-1
CERTIFICATES (THE "CLASS G-1 PRIMARY LIQUIDITY
PROVIDER") PURSUANT TO CLAUSE (VII) OF THE DEFINITION OF
DEFICIENCY AMOUNT SET FORTH HEREIN.
Beneficiary:
WILMINGTON TRUST COMPANY, AS SUBORDINATION AGENT FOR THE
BENEFIT OF THE CLASS G-1 TRUSTEE AND THE CLASS G-1
CERTIFICATEHOLDERS AND AS AGENT FOR THE CLASS G-1
PRIMARY LIQUIDITY PROVIDER (TOGETHER WITH ANY SUCCESSOR
SUBORDINATION AGENT DULY APPOINTED AND QUALIFIED UNDER
THE INTERCREDITOR AGREEMENT (AS DEFINED BELOW), THE
"SUBORDINATION AGENT")
MBIA INSURANCE CORPORATION ("MBIA"), for consideration received,
hereby unconditionally, absolutely and irrevocably and without the
assertion of
any defenses to payment, including fraud in the inducement or fact
or any other
circumstances (other than payment in full) that would have the
effect of
discharging a surety in law or in equity, guarantees to the
Subordination Agent,
subject only to the terms of this Policy (the "Policy"), payment of
the Insured
Obligation. MBIA agrees to pay to the Subordination Agent, in
respect of each
Distribution Date, an amount equal to (each, a "Deficiency
Amount"):
(i)
with respect to any Regular Distribution Date (which is not
also the Final Legal Distribution Date or a Special Distribution
Date
established pursuant to clause (ii), (iii), (iv) or (v) below), any
shortfall in amounts available to the Subordination Agent, after
giving
effect to the application of (a) available funds in accordance with
the
subordination provisions of Section 3.2 of the Intercreditor
Agreement,
(b) any drawing paid under the Primary Liquidity Facility with
respect to
Class G-1 Certificates (the "Class G-1 Primary Liquidity Facility")
in
respect of interest due on the Class G-1 Certificates on such
Distribution
Date and (c) any withdrawal from the Primary Cash Collateral
Account with
respect to Class G-1 Certificates (the "Class G-1 Primary Cash
Collateral
Account") or the Above-Cap Account with respect to Class G-1
Certificates
(the "Class G-1 Above-Cap Account") on such Distribution Date in
respect
of such interest due on the Class G-1 Certificates on such
Distribution
Date in accordance with the Intercreditor Agreement, for the
payment of
all payments due and owing in respect of accrued and unpaid
interest on
the Class G-1 Certificates at the Stated Interest Rate for the
Class G-1
Certificates (calculated assuming that JetBlue will not cure any
Payment
Default);
(ii)
with respect to any Special Distribution Date (which is not
also an Election Distribution Date or a Special Distribution Date
established pursuant to the succeeding clause (iii) or clause (iv)
below)
established by the Subordination Agent by reason of its receipt of
a
Special Payment constituting the proceeds from the sale and final
disposition of all Equipment Notes (as to which there has been a
payment
default or which has been accelerated) or of all of the Pledged
Spare
Parts and Pledged Spare Engines subject to the Lien of the
Indenture at
the time of such sale, as the case may be (each, a "Final
Disposition"),
any shortfall in the amounts available to the Subordination Agent,
after
giving effect to the application of available funds in accordance
with the
subordination provisions of Section 3.2 of the Intercreditor
Agreement
(but without regard to any funds available under the Class G-1
Primary
Liquidity Facility, Class G-1 Primary Cash Collateral Account or
the Class
G-1 Above-Cap Account), for (x) the payment in full of the then
outstanding Pool Balance of the Class G-1 Certificates and (y) the
payment
of accrued and unpaid interest thereon at the Stated Interest Rate
for the
Class G-1 Certificates for the period from the immediately
preceding
Regular Distribution Date to such Special Distribution Date
(calculated
assuming that JetBlue will not cure any Payment Default);
(iii)
with respect to the Special Distribution Date (a) that is
the 25th day (or if such 25th day is not a Business Day, the next
Business
Day) following the Regular Distribution Date on which a Payment
Default
with respect to the Series G-1 Equipment Note (without giving
effect to
any Acceleration or any payments by any Liquidity Provider or the
Policy
Provider) exists and has been continuing for eight consecutive
Interest
Periods ending on such Regular Distribution Date (the "Default
Period")
and (b) on which such Payment Default continues to exist, if the
Subordination Agent has not received a Special Payment constituting
proceeds from a Final Disposition during such Default Period, the
then
outstanding principal amount of the Series G-1 Equipment Note (less
the
amount of any Policy Drawings previously paid by MBIA in respect of
principal) plus accrued and unpaid interest thereon at the Stated
Interest
Rate for the Class G-1 Certificates (calculated assuming that
JetBlue will
not cure any Payment Default) for the period from the immediately
preceding Regular Distribution Date to such Special Distribution
Date;
provided, however, if a Policy Provider Election (as defined below)
has
been made or deemed to have been made at least ten (10) days prior
to the
end of any such 24-month period, the Deficiency Amount shall be an
amount
equal to (A) with respect to such Special Distribution Date, any
shortfall
in the scheduled interest payable but not paid (whether by JetBlue
or by
the application of proceeds from the sale of any Collateral in
connection
with the exercise of remedies under the Indenture) on the Series
G-1
Equipment Note (calculated assuming that JetBlue will not cure any
Payment
Default) during such 24-month period (reduced by the amount of
funds
received from the Class G-1 Primary Liquidity Facility, the Class
G-1
Primary Cash Collateral Account or the Class G-1 Above-Cap Account
or from
MBIA to the extent of any Policy Drawings paid by MBIA in respect
of any
"Deficiency Amount" defined in clause (i) above as a result of a
failure
of the Class G-1 Primary Liquidity Provider to honor Interest
Drawings
under the Class G-1 Primary Liquidity Facility or a failure of the
Class
G-1 Above-Cap Liquidity Provider and the applicable Liquidity
Guarantor to
make an Above-Cap Payment under the Class G-1 Above-Cap Liquidity
Facility) and (B) thereafter, on each Regular Distribution Date
prior to
the establishment of an Election Distribution Date or a
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Special Distribution Date pursuant to the immediately succeeding
clause
(iv), an amount equal to any shortfall in available funds required
to pay
scheduled principal (without regard to any Acceleration thereof or
any
Redemption Notice that JetBlue has failed to honor but taking into
account
any adjustments previously made for redemptions) and interest
payments
(without duplication of any "Deficiency Amount" defined in clause
(i)
above and without regard to any funds available under the Class G-1
Primary Liquidity Facility or in the Class G-1 Primary Cash
Collateral
Account or the Class G-1 Above-Cap Account and calculated assuming
that
JetBlue will not cure any Payment Default) at the Stated Interest
Rate for
the Class G-1 Certificates scheduled to be paid on the Series G-1
Equipment Note on the related payment date; except that,
notwithstanding
the foregoing, MBIA shall not be required to pay (x) any amount in
respect
of principal under this clause (iii)(B) on any Regular Distribution
Date
if it has theretofore honored Policy Drawings in respect of
"Deficiency
Amounts" defined in clause (ii) above or this clause (iii) in
respect of
principal of the Series G-1 Equipment Note or if in connection with
the
exercise of remedies under the Indenture there has previously been
a
reduction in the outstanding principal balance of the Series G-1
Equipment
Note as a result of the application of proceeds from the sale of
Collateral, to the extent that after giving effect to the
distribution of
any such amount or such proceeds or both in accordance with the
provisions
of the Intercreditor Agreement the Pool Balance of the Class G-1
Certificates as of such Regular Distribution Date would be less
than the
Pool Balance of the Class G-1 Certificates as of such Regular
Distribution
Date were all payments on the Series G-1 Equipment Note to have
been made
by JetBlue when due (without regard to any Acceleration thereof or
any
Redemption Notice that JetBlue has failed to honor but taking into
account
any adjustments previously made for redemptions) in accordance with
Schedule 1 to such Series G-1 Equipment Note nor (y) for the
avoidance of
doubt, any amount in respect of interest under this clause (B) on
such
Regular Distribution Date other than accrued and unpaid interest
(at the
Stated Interest Rate for the Class G-1 Certificates calculated
assuming
that JetBlue will not cure any Payment Default) on the Pool Balance
of the
Class G-1 Certificates as of such Regular Distribution Date
(calculated
without giving effect to any Policy Drawing in respect of principal
under
this clause (iii)(B) on such Regular Distribution Date);
(iv)
following the giving or deemed giving of any Policy Provider
Election, with respect to any Business Day (other than a Regular
Distribution Date) elected by MBIA upon twenty (20) days prior
written
notice (which shall be a Special Distribution Date) and upon
request by
MBIA to the Subordination Agent to make a drawing under this
Policy, an
amount (as determined after giving effect to the application of
available
funds in accordance with the subordination provisions of Section
3.2 of
the Intercreditor Agreement) equal to the then outstanding Pool
Balance of
the Class G-1 Certificates and accrued and unpaid interest on such
amount
at the Stated Interest Rate for the Class G-1 Certificates
(calculated
assuming that JetBlue will not cure any Payment Default) from the
immediately preceding Regular Distribution Date to such Special
Distribution Date;
(v)
with respect to any Special Distribution Date which is an
Election Distribution Date, an amount (as determined after giving
effect
to the application of available funds in accordance with the
subordination
provisions of Section 3.2 of the Intercreditor Agreement) equal to
the
then outstanding Pool Balance of the Class G-1
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Certificates and accrued and unpaid interest on such amount at the
Stated
Interest Rate for the Class G-1 Certificates (calculated assuming
that
JetBlue will not cure any Payment Default) from the immediately
preceding
Regular Distribution Date to such Election Distribution Date;
(vi)
with respect to the Final Legal Distribution Date of the
Class G-1 Certificates, any shortfall in amounts available to the
Subordination Agent, after giving effect to the application of (a)
available funds in accordance with the subordination provisions of
Section
3.2 of the Intercreditor Agreement, (b) any drawing paid under the
Class
G-1 Primary Liquidity Facility in respect of interest due on the
Class G-1
Certificates on such Distribution Date and (c) any withdrawal from
the
Class G-1 Primary Cash Collateral Account or the Class G-1
Above-Cap
Account on such Distribution Date in respect of such interest due
on the
Class G-1 Certificates on such Distribution Date in accordance with
the
Intercreditor Agreement, for the payment in full of the Final
Distributions (calculated as of such date but excluding any accrued
and
unpaid Premium and calculated assuming that JetBlue will not cure
any
Payment Default) on the Class G-1 Certificates; and
(vii)
with respect to any Distribution Date elected by the
Subordination Agent on behalf of the Class G-1 Primary Liquidity
Provider
upon at least twenty (20) days' prior notice (which notice can be
given in
advance of the expiry of the 24-month period referred to below but
cannot
become effective until the Liquidity Provider Reimbursement Date
(as
defined below)) to MBIA, which Distribution Date is a Business Day
no
earlier than the earliest to occur of (1) the date on which an
Interest
Drawing was made under the Class G-1 Primary Liquidity Facility and
remains unreimbursed for twenty-four (24) months, (2) the date on
which
any Downgrade Drawing, Non-Extension Drawing or Final Drawing that
was
deposited into the Class G-1 Primary Cash Collateral Account has
been
applied to pay any scheduled payment of interest on the Class G-1
Certificates and remains unreplenished to such Class G-1 Primary
Cash
Collateral Account or unreimbursed to the Class G-1 Primary
Liquidity
Provider, as the case may be, for twenty-four (24) months and (3)
the date
on which all of the Equipment Notes have been Accelerated and
continue to
be Non-Performing Equipment Notes for twenty-four (24) months (in
each
case, disregarding any reimbursements from payments by the Policy
Provider
and from any Special Payment constituting proceeds from the sale of
Equipment Notes or Collateral during such 24-month period) (such
Business
Day, the "Liquidity Provider Reimbursement Date"), the amount of
all
outstanding Drawings under the Class G-1 Primary Liquidity Facility
plus
accrued interest thereon (as determined pursuant to such Class G-1
Primary
Liquidity Facility).
For the avoidance of doubt, no Deficiency Amount described in
clauses (i)-(vii) above or payment to be made in respect of an
Avoided
Payment described below shall constitute an accelerated or
acceleration
payment.
If any amount paid or required to be paid in respect of the Insured
Obligation is voided (a "Preference Event") pursuant to a final
(non-appealable)
order of a court exercising proper jurisdiction under any
applicable bankruptcy,
insolvency, receivership or similar law in an Insolvency
Proceeding, and, as a
result of such a Preference Event, the Subordination Agent, the
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Class G-1 Primary Liquidity Provider, the Class G-1 Trustee or any
Class G-1
Certificateholder is required to return such voided payment, or any
portion of
such voided payment made or to be made in respect of the Class G-1
Certificates
(including any disgorgement from the Class G-1 Certificateholders,
the Class G-1
Trustee or the Class G-1 Primary Liquidity Provider resulting from
any such
Insolvency Proceeding, whether such disgorgement is determined on a
theory of
preferential conveyance or otherwise) (an "Avoided Payment"), MBIA
will pay an
amount equal to each such Avoided Payment, irrevocably, absolutely
and
unconditionally and without the assertion of any defenses to
payment, including
fraud in the inducement or fact or any other circumstances that
would have the
effect of discharging a surety in law or in equity, upon receipt by
MBIA from
the Subordination Agent, the Class G-1 Primary Liquidity Provider,
the Class G-1
Trustee or such Class G-1 Certificateholder of (x) a certified copy
of a final
(non-appealable) order of a court exercising proper jurisdiction in
such
Insolvency Proceeding to the effect that the Subordination Agent,
the Class G-1
Primary Liquidity Provider, the Class G-1 Trustee or such Class G-1
Certificateholder is required to return any such payment or portion
thereof
because such payment was voided under applicable law, with respect
to which
order the appeal period has expired without an appeal having been
filed (the
"Final Order"), (y) an assignment, in the form of Exhibit D hereto,
irrevocably
assigning to MBIA all rights and claims of the Subordination Agent,
the Class
G-1 Primary Liquidity Provider, the Class G-1 Trustee or such Class
G-1
Certificateholder relating to or arising under such Avoided Payment
and
appointing MBIA as the agent of the Subordination Agent, the Class
G-1 Primary
Liquidity Provider, the Class G-1 Trustee or such Class G-1
Certificateholder in
respect of such Avoided Payment (including, without limitation, for
purposes of
any legal proceedings related to such Avoided Payment) and (z) a
Notice of
Avoided Payment in the form of Exhibit B hereto appropriately
completed and
executed by the Subordination Agent, the Class G-1 Primary
Liquidity Provider,
the Class G-1 Trustee or such Class G-1 Certificateholder. Such
payment shall be
disbursed to the receiver, conservator, debtor-in-possession or
trustee in
bankruptcy named in the Final Order and not to the Subordination
Agent, the
Class G-1 Primary Liquidity Provider, the Class G-1 Trustee or such
Class G-1
Certificateholder directly unless the Subordination Agent, the
Class G-1 Primary
Liquidity Provider, the Class G-1 Trustee or such Class G-1
Certificateholder
has returned such payment to such receiver, conservator,
debtor-in-possession or
trustee in bankruptcy, in which case such payment shall be
disbursed to the
Subordination Agent, the Class G-1 Primary Liquidity Provider, the
Class G-1
Trustee or such Class G-1 Certificateholder, as the case may be,
upon proof of
such payment reasonably satisfactory to MBIA.
Notwithstanding the foregoing, in no event shall MBIA be obligated
to make any payment in respect of any Avoided Payment, which
payment represents
a payment of the principal amount of the Class G-1 Certificates,
prior to the
time MBIA would have been required to make a payment in respect of
such
principal pursuant to sub-paragraphs (ii)-(vi) of the definition of
Deficiency
Amount in this Policy; provided, further, that no payment of
principal under
this Policy (not including any payment of outstanding drawings
under the Primary
Liquidity Facility pursuant to sub-paragraph (vii) of the
definition of
Deficiency Amount under this Policy) on any Distribution Date,
other than with
respect to an Avoided Payment, shall exceed the Net Principal
Policy Amount (as
defined below) for such Distribution Date; provided, further, that,
other than
with respect to an Avoided Payment, no payment of a Deficiency
Amount (not
including any payment of outstanding drawings under the Primary
Liquidity
Facility and accrued interest thereon pursuant to sub-paragraph
(vii) of the
definition of
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Deficiency Amount under this Policy), shall be in excess of the
then outstanding
Pool Balance of the Class G-1 Certificates and accrued and unpaid
interest
thereon at the Stated Interest Rate for the Class G-1 Certificates.
This Policy
does not cover (i) any premium (including, without limitation, any
Premium),
break amount (including, without limitation, any Break Amount),
interest on
interest (for the avoidance of doubt, without limiting
sub-paragraph (vii) of
the definition of Deficiency Amount under this Policy), default
interest,
prepayment penalty or other accelerated payment, which at any time
may become
due on or with respect to any Class G-1 Certificate, (ii)
shortfalls, if any,
attributable to the liability of the Class G-1 Trust, the Class G-1
Trustee or
the Subordination Agent, for withholding taxes, if any (including
interest and
penalties in respect of any such liability or taxes) or (iii) any
failure of the
Subordination Agent to make any payment due to the Class G-1
Trustee.
Capitalized terms used herein and not otherwise defined herein
shall
have the meanings assigned to them in that certain Intercreditor
Agreement,
dated as of November 14, 2006 (the "Intercreditor Agreement"),
among MBIA, as
Policy Provider, Landesbank Hessen Thueringen Girozentrale, as the
Initial
Primary Liquidity Provider, Morgan Stanley Capital Services, Inc.,
as the
Initial Above-Cap Liquidity Provider, Wilmington Trust Company, as
trustee, the
Subordination Agent and the Additional Primary Liquidity
Provider(s), Additional
Above-Cap Liquidity Provider(s) and Additional Policy Provider(s)
to become
parties thereto from time to time, without regard to any amendment
or supplement
thereto unless such amendment or supplement has been executed, or
otherwise
approved in writing, by MBIA.
"Business Day" shall mean any day (i) other than a Saturday, a
Sunday or other day on which insurance companies in New York, New
York or
commercial banking institutions in the cities in which the
corporate trust
office of the Class G-1 Trustee, the Fiscal Agent (as defined
herein), the
Subordination Agent or the Mortgagee, or, solely with respect to
draws under
this Policy, the office of MBIA, are located are authorized or
obligated by law
or executive order to close and (ii) that is a day for trading by
and between
banks in the London interbank Eurodollar market.
"Class G-1 Above-Cap Liquidity Facility" means the Above-Cap
Liquidity Facility with respect to the Class G-1 Certificates.
"Class G-1 Above-Cap Liquidity Provider" means the Above-Cap
Liquidity Provider with respect to the Class G-1 Above-Cap
Liquidity Facility.
"Class G-1 Certificateholder" shall mean any person who is the
registered owner or beneficial owner of any of the Class G-1
Certificates and
who, on the applicable Distribution Date, is entitled under the
terms of the
Class G-1 Certificates to payment thereunder.
"Class G-1 Liquidity Guarantor" means the Liquidity Guarantor with
respect to the Class G-1 Above-Cap Liquidity Facility.
"Class G-1 Trust" means the JetBlue Airways (Spare Parts) G-1 Pass
Through Trust, created and administered pursuant to the Class G-1
Trust
Agreement.
"Class G-1 Trust Agreement" means the JetBlue Airways (Spare Parts)
G-1 Pass Through Trust Agreement, dated as of November 14, 2006,
governing the
creation and
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administration of the Class G-1 Trust and the issuance of the Class
G-1
Certificates, as the same may be amended, supplemented or otherwise
modified
from time to time in accordance with its terms.
"Class G-1 Trustee" means Wilmington Trust Company, not in its
individual capacity except as expressly set forth in the Class G-1
Trust
Agreement, but solely as trustee under the Class G-1 Trust
Agreement, together
with any successor trustee appointed pursuant thereto.
"Election Distribution Date" shall mean any Specia
