Exhibit 4.7
EXECUTION COPY
MBIA INSURANCE CORPORATION
as Policy Provider,
JETBLUE AIRWAYS CORPORATION
WILMINGTON TRUST COMPANY,
not in its individual capacity but solely as Subordination Agent
and
WILMINGTON TRUST COMPANY,
as Trustee under the
JETBLUE AIRWAYS PASS THROUGH TRUST, CLASS G-1
INSURANCE AND INDEMNITY AGREEMENT
JETBLUE AIRWAYS PASS THROUGH TRUST CERTIFICATES, CLASS G-1
Dated as of November 14, 2006
(This Table of Contents is for convenience of reference only and
shall not be deemed to be part of this Insurance Agreement. All
capitalized
terms used in this Insurance Agreement and not otherwise defined
shall have the
meanings set forth in Article I of this Insurance Agreement.)
TABLE OF CONTENTS
Page
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ARTICLE I.
DEFINITIONS.......................................................................................2
Section 1.01
Defined
Terms.............................................................................2
Section 1.02
Other Definitional
Provisions.............................................................6
ARTICLE II. REPRESENTATIONS, WARRANTIES AND
COVENANTS........................................................6
Section 2.01
Representations and Warranties of
JetBlue.................................................6
Section 2.02
Covenants of
JetBlue.....................................................................10
Section 2.03
Covenants of the Class G-1 Trustee and Subordination
Agent...............................10
Section 2.04
Representations, Warranties and Covenants of the Policy
Provider.........................10
ARTICLE III. THE POLICY; REIMBURSEMENT;
INDEMNIFICATION.....................................................12
Section 3.01
Issuance of the
Policy...................................................................12
Section 3.02
Payment of Fees and
Premium..............................................................14
Section 3.03
Reimbursement
Obligation.................................................................15
Section 3.04
Indemnification..........................................................................16
Section 3.05
Procedure for Payment of Fees and
Premium................................................16
Section 3.06
Payment by Subordination
Agent...........................................................17
ARTICLE IV. FURTHER
AGREEMENTS..............................................................................17
Section 4.01
Effective Date; Term of the Insurance
Agreement..........................................17
Section 4.02
Further Assurances and Corrective
Instruments............................................17
Section 4.03
Obligations
Absolute.....................................................................18
Section 4.04
Assignments; Reinsurance; Third-Party
Rights.............................................19
Section 4.05
Liability of the Policy
Provider.........................................................19
ARTICLE V.
MISCELLANEOUS....................................................................................20
Section 5.01
Amendments,
Etc..........................................................................20
Section 5.02
Notices..................................................................................20
Section 5.03
Severability.............................................................................21
Section 5.04
Governing
Law............................................................................21
Section 5.05
Consent to
Jurisdiction..................................................................21
Section 5.06
Consent of the Policy
Provider...........................................................22
Section 5.07
Counterparts.............................................................................22
Section 5.08
Headings.................................................................................22
-i-
Section 5.09
Trial by Jury
Waived.....................................................................23
Section 5.10
Limited
Liability........................................................................23
Section 5.11
Entire
Agreement.........................................................................23
Section 5.12
Independent
Agreements...................................................................23
Section 5.13
Successors and
Assigns...................................................................23
-ii-
INSURANCE AND INDEMNITY AGREEMENT (as may be amended, modified or
supplemented from time to time, this "Insurance Agreement"), dated
as of
November 14, 2006, by and among MBIA INSURANCE CORPORATION, as
Policy Provider
("MBIA" or the "Policy Provider"), JETBLUE AIRWAYS CORPORATION
("JetBlue"),
WILMINGTON TRUST COMPANY, not in its individual capacity but solely
as
Subordination Agent (the "Subordination Agent"), and WILMINGTON
TRUST COMPANY,
as Class G-1 Trustee (the "Class G-1 Trustee").
W I T N E S S E T H :
WHEREAS, JetBlue is the owner of certain Pledged Spare Parts (and
Pledged Spare Engines, if any);
WHEREAS, pursuant to the Trust Indenture, JetBlue will issue, on a
recourse basis, two series of Equipment Notes which are to be
secured by a
security interest in all right, title and interest of JetBlue in
and to certain
Pledged Spare Parts, Pledged Spare Engines, if any, and certain
other property
described in the Trust Indenture;
WHEREAS, the Trustee under each of the Trust Agreements, will
create
the Trusts, which will acquire the Equipment Notes;
WHEREAS, pursuant to each Trust Agreement, a separate Trust has
been
created to facilitate the sale of the Certificates;
WHEREAS, (i) the Class G-1 Primary Liquidity Provider and the
Subordination Agent, as agent for the Class G-1 Trustee, have
entered into the
Class G-1 Primary Liquidity Facility for the benefit of the Class
G-1
Certificateholders, (ii) the Class G-1 Above-Cap Liquidity Provider
and the
Subordination Agent, as agent for the Class G-1 Trustee, have
entered into the
Class G-1 Above-Cap Liquidity Facility for the benefit of the Class
G-1
Certificateholders, (iii) the Class G-1 Trustee on behalf of the
Class G-1
Trust, the Class G-1 Primary Liquidity Provider, the Class G-1
Above-Cap
Liquidity Provider, the Policy Provider and the Subordination Agent
have entered
into the Intercreditor Agreement and (iv) JetBlue, the Mortgagee
and the Policy
Provider have entered into the Collateral Maintenance Agreement;
WHEREAS, the Policy Provider has issued a Policy in respect of the
Class G-1 Certificates, pursuant to which it has agreed to
guarantee the payment
of interest to the Subordination Agent for the benefit of the Class
G-1 Trustee
and the Class G-1 Certificateholders and the payment of principal
of the Class
G-1 Certificates on the Final Distribution Date for the Class G-1
Certificates
and as otherwise provided therein; and
WHEREAS, each of JetBlue, the Class G-1 Trustee and the
Subordination Agent has agreed to undertake certain obligations in
consideration
for the Policy Provider's issuance of the Policy;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained, the parties hereto agree as follows:
ARTICLE I.
DEFINITIONS
Section 1.01
Defined Terms.
Unless the context clearly requires
otherwise, all capitalized terms used but not defined herein shall
have the
respective meanings assigned to them in the Intercreditor Agreement
or, if not
defined therein, in the Policy described below. For purposes of
this Insurance
Agreement, the following terms shall have the following meanings:
"Act" means Part A of subtitle VII of title 49, United States Code,
as amended from time to time, or any similar legislation of the
United States
enacted in substitution or replacement thereof.
"Applicable Time" means 4:50 p.m., Eastern Time on the Offer Date.
"Bankruptcy Code" means the United States Bankruptcy Code, 11
U.S.C.
Section 101 et seq.
"Base Prospectus" means the base prospectus of JetBlue, dated as of
June 30, 2006, covering pass through certificates.
"Citizen of the United States" is defined in Section 40102(a)(15)
of
the Act and in the FAA Regulations.
"Class G-1 Certificate" has the meaning given such term in the
related Policy.
"Class G-1 Certificateholder" has the meaning given such term in
the
related Policy.
"Class G-1 Above-Cap Liquidity Provider" has the meaning given such
term in the related Policy.
"Class G-1 Primary Liquidity Facility" has the meaning given such
term in the related Policy.
"Class G-1 Primary Liquidity Provider" has the meaning given such
term in the related Policy.
"Class G-1 Trust" has the meaning given such term in the related
Policy.
"Class G-1 Trustee" has the meaning given such term in the preamble
hereto.
"Closing Date" means November 14, 2006.
"Collateral" has the meaning given such term in the Trust
Indenture.
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"Collateral Maintenance Agreement" means the Collateral Maintenance
Agreement, dated November 14, 2006 and among JetBlue, the Mortgagee
and the
Policy Provider.
"Event of Loss" has the meaning given such term in the Trust
Indenture.
"Expenses" means any and all liabilities, obligations, losses
(other
than losses from non-reimbursement of amounts paid by MBIA under
the Policy),
damages, settlements, penalties, claims, actions, suits, costs,
out-of-pocket
expenses and disbursements (including, without limitation,
reasonable fees and
disbursements of legal counsel, accountants, appraisers, inspectors
or other
professionals, and costs of investigation).
"FAA" means the Federal Aviation Administration of the United
States
of America or any Government Entity succeeding to the functions of
such Federal
Aviation Administration.
"Final Dissolution Date" means following the occurrence of a
Triggering Event, the Distribution Date next succeeding the date of
receipt by
the Subordination Agent of the proceeds of the sale of the Series
G-1 Equipment
Note or the Pledged Spare Parts comprising all of the Pledged Spare
Parts then
subject to the Lien of the Trust Indenture.
"Final Distribution Date" means the date which is the earlier of
the
(i) Final Legal Distribution Date or (ii) Final Dissolution Date.
"Final Prospectus" means the Base Prospectus as supplemented by the
Final Prospectus Supplement.
"Final Prospectus Supplement" means the final prospectus
supplement,
dated as of November 7, 2006, with respect to the Certificates.
"Financing Statements" means collectively, UCC-1 (and, where
appropriate, UCC-3) financing statements covering the related
Collateral, naming
JetBlue as debtor, showing Mortgagee as secured party, for filing
in Delaware
and each other jurisdiction in which such filing is made.
"GAAP" means generally accepted accounting principles as set forth
in the statements of financial accounting standards issued by the
Financial
Accounting Standards Board of the American Institute of Certified
Public
Accountants, as such principles may at any time or from time to
time be varied
by any applicable financial accounting rules or regulations issued
by the SEC
and, with respect to any Person, shall mean such principles applied
on a basis
consistent with prior periods except as may be disclosed in such
Person's
financial statements.
"Government Entity" means (a) any federal, state, provincial or
similar government, and any body, board, department, commission,
court,
tribunal, authority, agency or other instrumentality of any such
government or
otherwise exercising any executive, legislative, judicial,
administrative or
regulatory functions of such government or (b) any other government
entity
having jurisdiction over any matter contemplated by the Operative
Agreements or
relating
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to the observance or performance of the obligations of any of the
parties to the
Operative Agreements.
"Indemnification Agreement" means the Indemnification Agreement,
dated as of November 7, 2006, among MBIA, JetBlue and the
Underwriter, as
amended, supplemented or otherwise modified from time to time in
accordance with
its terms.
"Insurance Agreement" has the meaning given such term in the
initial
paragraph hereof.
"Intercreditor Agreement" means the Intercreditor Agreement, dated
as of November 14, 2006, 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) named therein.
"JetBlue" has the meaning given such term in the preamble hereto.
"Investment Company Act" means the United States Investment Company
Act of 1940, including, unless the context otherwise requires, the
rules and
regulations thereunder, as amended from time to time.
"Lien" means any mortgage, pledge, lien, charge, encumbrance or
security interest affecting the title to or any interest in
property.
"Material Adverse Change" means, in respect of any Person as at any
date, a material adverse change in the ability of such Person to
perform its
obligations under any of the Operative Agreements to which it is a
party as of
such date, including any material adverse change in the business,
financial
condition, results of operations or properties of such Person on a
consolidated
basis with its subsidiaries which is reasonably likely to have such
effect.
"MBIA" has the meaning given such term in the preamble hereto.
"Mortgagee" means Wilmington Trust Company in its capacity as
Mortgagee under the Trust Indenture.
"Offer Date" means November 7, 2006.
"Operative Agreements" means this Insurance Agreement, the Policy,
the Indemnification Agreement, the Intercreditor Agreement, the
Trust Indenture,
the Note Purchase Agreement, the Series G-1 Equipment Note, the
Class G-1
Certificates, the Class G-1 Primary Liquidity Facility, the Class
G-1 Above-Cap
Liquidity Facility, the Class G-1 Trust Agreement, the Collateral
Maintenance
Agreement and the Policy Fee Letter, together with all exhibits and
schedules
included with any of the foregoing.
"Permitted Liens" has the meaning given to such term in the Trust
Indenture.
4
"Person" means an individual, joint stock company, trust,
unincorporated association, joint venture, corporation, business or
owner trust,
partnership or other organization or entity (whether governmental
or private).
"Policy" means the Financial Guaranty Insurance Policy No. 487110,
together with all endorsements thereto, issued by the Policy
Provider in favor
of the Subordination Agent, for the benefit of the Class G-1
Certificateholders,
as each of the same may be amended from time to time in accordance
with the
terms of the Intercreditor Agreement.
"Policy Fee Letter" means the fee letter, dated as of November 14,
2006 from the Policy Provider to JetBlue and the Subordination
Agent setting
forth the Premium and certain other amounts payable in respect of
the Policy.
"Policy Provider" means MBIA Insurance Corporation, or any
successor
thereto, as issuer of the Policy.
"Policy Provider Information" means the information set forth (or
incorporated by reference) under the caption "Description of the
Policy
Provider" in the Preliminary Prospectus Supplement and the Final
Prospectus
Supplement and in Appendix III of the Preliminary Prospectus
Supplement and the
Final Prospectus Supplement.
"Preliminary Prospectus Supplement" means the preliminary
prospectus
supplement, dated as of November 7, 2006, with respect to the
Certificates.
"Premium" has the meaning given such term in the Policy Fee Letter.
"SEC" means the Securities and Exchange Commission of the United
States of America, or any successor thereto.
"Section 1110" means 11 U.S.C. ss. 1110 of the Bankruptcy Code or
any successor or analogous section of the federal bankruptcy law in
effect from
time to time.
"Securities Act" means the Securities Act of 1933, including,
unless
the context otherwise requires, the rules and regulations
thereunder, as amended
from time to time.
"Security" means a "security" as defined in Section 2(a)(1) of the
Securities Act.
"Subordination Agent" has the meaning given such term in the
preamble hereto.
"Time of Sale Prospectus" has the meaning given to such term in the
Underwriting Agreement.
"Transactions" means the transactions contemplated by the Operative
Agreements.
"Trust Indenture" means the Trust Indenture and Mortgage, dated as
of November 14, 2006, between JetBlue and the Mortgagee, as
amended,
supplemented or otherwise modified from time to time in accordance
with its
terms.
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"UCC" means the Uniform Commercial Code as in effect in any
applicable jurisdiction.
"Underwriter Information" has the meaning given such term in the
Indemnification Agreement.
"Underwriting Agreement" means the Underwriting Agreement, dated as
of November 7, 2006, by and between the Underwriter and JetBlue,
relating to the
purchase of the Class G-1 Certificates and the Class B Certificates
by the
Underwriter, as the same may be amended, supplemented or otherwise
modified from
time to time in accordance with its terms.
"U.S. Air Carrier" means any United States air carrier that is a
Citizen of the United States holding an air carrier operating
certificate issued
by the Secretary of Transportation pursuant to the Act for aircraft
capable of
carrying 10 or more individuals or 6000 pounds or more of cargo,
and as to which
there is in force an air carrier operating certificate issued
pursuant to Part
121 of the FAA Regulations, or which may operate as an air carrier
by
certification or otherwise under any successor or substitute
provisions therefor
or in the absence thereof.
Section 1.02 Other Definitional Provisions.
The words "hereof,"
"herein" and "hereunder" and words of similar import when used in
this Insurance
Agreement shall refer to this Insurance Agreement as a whole and
not to any
particular provision of this Insurance Agreement, and Section,
subsection,
Schedule and Exhibit references are to this Insurance Agreement
unless otherwise
specified. The meanings given to terms defined herein shall be
equally
applicable to both the singular and plural forms of such terms. The
words
"include" and "including" shall be deemed to be followed by the
phrase "without
limitation."
ARTICLE II.
REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 2.01
Representations and Warranties of JetBlue.
JetBlue
represents and warrants as of the Closing Date as follows:
(a) Organization; Qualification.
JetBlue is a corporation duly
incorporated, validly existing and in good standing under the laws
of the
State of Delaware and has the corporate power and authority to
conduct the
business in which it is currently engaged and to own or hold under
lease
its properties and to enter into and perform its obligations under
the
Operative Agreements to which it is a party as of such date.
JetBlue is
duly qualified to do business as a foreign corporation in good
standing in
each jurisdiction in which the nature and extent of the business
conducted
by it, or the ownership of its properties, requires such
qualification,
except where the failure to be so qualified would not give rise to
a
Material Adverse Change to JetBlue.
(b) Corporate Authorization.
JetBlue has taken, or caused to be
taken, all necessary corporate action (including, without
limitation, the
obtaining of any consent or approval of stockholders required by
its
certificate of incorporation or by-laws) to
6
authorize the execution and delivery of each of the Operative
Agreements
to which it is a party as of such date, and the performance of its
obligations thereunder.
(c) No Violation.
The execution and delivery by JetBlue of the
Operative Agreements to which it is a party as of such date, the
performance by JetBlue of its obligations thereunder and the
consummation
by JetBlue of the Transactions contemplated thereby, do not and
will not
(a) violate any provision of the certificate of incorporation or
by-laws
of JetBlue, (b) violate any law, regulation, rule or order
applicable to
or binding on JetBlue or (c) violate or constitute any default
under
(other than any violation or default that would not result in a
Material
Adverse Change to JetBlue), or result in the creation of any Lien
(other
than Permitted Liens) upon the Collateral under, any indenture,
mortgage,
chattel mortgage, deed of trust, conditional sales contract, lease,
loan
or other material agreement, instrument or document to which
JetBlue is a
party or by which it or any of its properties is bound.
(d) Approvals.
The execution and delivery by JetBlue of the
Operative Agreements to which it is a party as of such date, the
performance by JetBlue of its obligations thereunder and the
consummation
by JetBlue of the Transactions contemplated thereby do not and will
not
require the consent or approval of, or the giving of notice to, or
the
registration with, or the recording or filing of any documents
with, or
the taking of any other action in respect of, (a) any trustee or
other
creditor of JetBlue and (b) any Government Entity, other than (i)
such as
are required under the Securities Act, the Trust Indenture Act of
1939, as
amended, the securities and Blue Sky laws of the various states and
of
foreign jurisdictions or rules and regulations of the National
Association
of Securities Dealers, Inc., (ii) filings or recordings with the
FAA and
under the UCC or other laws in effect in any applicable
jurisdiction
governing the perfection of security interests in the Collateral,
which
filings or recordings shall have been made, or duly presented for
filing
or recordation, or shall be in the process of being duly filed or
filed
for recordation, on or before such date (and continuation
statements
periodically), (iii) filings, recordings, notices or other
ministerial
actions pursuant to any routine recording, contractual or
regulatory
requirements applicable to it and (iv) filings, recordings, notices
or
other actions contemplated by the Operative Agreements in
connection with
the lease or sale of the Pledged Spare Parts (and Pledged Spare
Engines,
as the case may be).
(e) Valid and Binding Agreements.
The Operative Agreements executed
and delivered by JetBlue on or prior to such date have been duly
executed
and delivered by JetBlue and, assuming the due authorization,
execution
and delivery thereof by the other party or parties thereto (and, in
the
case of the Class G-1 Equipment Notes, when issued and
authenticated in
the manner provided for in the Trust Indenture and delivered
against
payment of the consideration therefor specified in the Note
Purchase
Agreement), constitute the legal, valid and binding obligations of
JetBlue
and are enforceable against JetBlue in accordance with the
respective
terms thereof, except as such enforceability may be limited by
bankruptcy,
insolvency, reorganization, receivership, moratorium and other
similar
laws affecting the rights of creditors generally and general
principles of
equity, whether considered in a proceeding at law or in equity, and
subject to principles of public policy limiting the right to
enforce the
indemnification and contribution
7
provisions contained therein, insofar as such provisions relate to
indemnification and contribution for liabilities arising under
federal
securities laws.
(f) Litigation.
Except as set forth in the Time of Sale Prospectus,
JetBlue's most recent Annual Report on Form 10-K, as amended, filed
by
JetBlue with the SEC on or prior to the Closing Date or in any
Quarterly
Report on Form 10-Q or Current Report on Form 8-K filed by JetBlue
with
the SEC subsequent to such Form 10-K, no action, claim or
proceeding is
now pending or, to the actual knowledge of JetBlue, threatened
against
JetBlue before any court, governmental body, arbitration board,
tribunal
or administrative agency, which is reasonably likely to be
determined
adversely to JetBlue and if determined adversely to JetBlue is
reasonably
likely to result in a Material Adverse Change to JetBlue.
(g) Financial Condition.
The audited consolidated balance sheet of
JetBlue with respect to JetBlue's most recent fiscal year included
in
JetBlue's most recent Annual Report on Form 10-K, as amended, filed
by
JetBlue with the SEC, and the related consolidated statements of
operations and cash flows for the fiscal year then ended have been
prepared in conformity with GAAP and present fairly in all material
respects the consolidated financial condition of JetBlue and its
consolidated subsidiaries as of such date and their consolidated
results
of operations and cash flows for such period, and since the date of
such
balance sheet, there has been no Material Adverse Change in such
financial
condition or results of operations of JetBlue, except for matters
disclosed in (a) the Time of Sale Prospectus, (b) the financial
statements
referred to above or (c) any subsequent Quarterly Report on Form
10-Q or
Current Report on Form 8-K or any press release filed by JetBlue
with the
SEC on or prior to the Closing Date.
(h) Registration and Recordation.
Except for (a) the filing for
recordation (and recordation) of the Trust Indenture with the FAA
pursuant
to the Act, (b) the filing of the Financing Statements (and
continuation
statements relating thereto at periodic intervals) and (c) in the
case of
Pledged Spare Engines, if any, registration with the International
Registry, no further action, including any filing or recording of
any
document (including any financing statement in respect thereof
under
Article 9 of the UCC) is necessary in order to establish and
perfect the
Mortgagee's first priority perfected security interest in the
Collateral,
including the Pledged Spare Parts and the Spare Parts Documents (as
defined in the Trust Indenture) and Pledged Spare Engines and Spare
Engine
Documents, if any, (subject only to Permitted Liens), as against
JetBlue
and any other Person claiming by or through JetBlue in any
applicable
jurisdiction in the United States.
(i) Location.
JetBlue's location (as such term is used in Section
9-307 of Article 9 of the UCC) is the State of Delaware.
(j) No Default.
On the Closing Date, no event which would
constitute an Event of Default (as defined in the Trust Indenture)
and no
event or condition that with the giving of notice or the lapse of
time or
both would become such an Event of Default has occurred and is
continuing.
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(k) No Event of Loss.
As of the Closing Date, no Event of Loss has
occurred with respect to Pledged Spare Parts having an Appraised
Value of
more than $2,000,000, and to the actual knowledge of JetBlue, no
circumstance, condition, act or event has occurred that, with the
giving
of notice or lapse of time or both would give rise to or constitute
an
Event of Loss with respect to Pledged Spare Parts having an
Appraised
Value of more than $2,000,000.
(l) Compliance with Laws.
(a)
JetBlue is a Citizen of the United States and a
U.S. Air Carrier.
(b)
JetBlue holds all licenses, permits and franchises
from the appropriate Government Entities necessary to
authorize JetBlue to lawfully engage in air transportation and
to carry on scheduled commercial passenger service as
currently conducted, except where the failure to so hold any
such license, permit or franchise would not give rise to a
Material Adverse Change to JetBlue.
(c)
Neither JetBlue nor the Class G-1 Trust is an
"investment company" or a company controlled by an "investment
company" within the meaning of the Investment Company Act.
(m) Securities Laws.
Neither JetBlue nor any person authorized to
act on its behalf has directly or indirectly offered any beneficial
interest or Security relating to the ownership of the Collateral,
or any
of the Equipment Notes or any other interest in or security under
the
Trust Indenture, for sale, to, or solicited any offer to acquire
any such
interest or security from, or has sold any such interest or
security to,
any Person in violation of the Securities Act.
(n) Section 1110.
The Mortgagee is entitled to the benefits of
Section 1110 (as in effect on such date) with respect to the right
to take
possession of the Pledged Spare Parts and Pledged Spare Engines, if
any,
and to enforce any of its other rights or remedies as provided in
the
Trust Indenture in the event of a case under Chapter 11 of the
Bankruptcy
Code in which JetBlue is a debtor.
(o) Accuracy of Information.
Neither the Operative Agreements to
which it is a party as of such date nor other material information
relating to the Pledged Spare Parts and Pledged Spare Engines, if
any, or
the operations or financial condition of JetBlue furnished to the
Policy
Provider contain any statement of a material fact which was untrue
or
misleading in any material respect when made or omit to state a
material
fact necessary to make the statement
