Exhibit
4.18


 


EXECUTION
COPY


 


 


	
  Date:

  	
   

  	
  March
  24, 2004

  
	
   

  	
   

  	
   

  
	
  To:

  	
   

  	
  Wilmington
  Trust Company

  
	
   

  	
   

  	
   

  
	
  From:

  	
   

  	
  Morgan
  Stanley Capital Services Inc.

  
	
   

  	
   

  	
   

  
	
  Subject:

  	
   

  	
  CLASS G – 1 ABOVE CAP LIQUIDITY FACILITY CONFIRMATION

  



 


 


Reference
Number: KQAUQ


 


 


Ladies
and Gentlemen:


 


The purpose of this
letter agreement (this “Confirmation”) is to confirm the terms and
conditions of the Interest Rate Cap Transaction entered into on the Trade Date
referred to in Paragraph 2 below (the “Transaction”) between Morgan
Stanley Capital Services Inc. (“Party A”) and Wilmington Trust Company
in its capacity as Subordination Agent on behalf of the Trustee under the Pass
Through Trust Agreement dated as of the date hereof between Wilmington Trust
Company and JetBlue Airways Corporation, with respect to the JetBlue Airways
Pass Through Trust, Series 2004–1G–1–O (“Party B”). This letter
agreement constitutes a “Confirmation” as referred to in the ISDA Master
Agreement specified below.


 


1.                                       The
definitions and provisions contained in the 2000 ISDA Definitions and Annex to
the 2000 ISDA Definitions (June 2000 Version) as published by the International
Swaps and Derivatives Association, Inc. (as so supplemented, the “Definitions”)
are incorporated into this Confirmation. 
In the event of any inconsistency between the Definitions and this
Confirmation, this Confirmation will govern. References herein to a
“Transaction” shall be deemed to be references to a “Swap Transaction” for the
purposes of the Definitions.


 


This
Confirmation supplements, forms a part of, and is subject to the 1992 ISDA
Master Agreement (Multicurrency – Cross Border) including the Schedule thereto,
dated as of March 24, 2004  as
amended and supplemented from time to time (collectively, the “Agreement”),
between us.  All provisions contained in
the Agreement govern this Confirmation except as modified below. In the event
of any inconsistency between the Agreement and this Confirmation, this
Confirmation will govern. Capitalized terms not otherwise defined in the
Agreement or this Confirmation shall have the meanings ascribed to them in the
Intercreditor Agreement dated as of March 24, 2004  among Wilmington Trust Company, as Trustee under
the JetBlue Airways Pass Through Trust 2004–1G–1, JetBlue Airways Pass Through
Trust 2004–1G 2 and JetBlue Airways Pass Through Trust 2004–1C, Landesbank
Hessen-Thüringen Girozentrale, as Class G–1
Primary Liquidity Provider, Class G–2 Primary Liquidity Provider and Class C
Primary Liquidity Provider,  Morgan
Stanley Capital Services Inc. as Class G–1 Above-Cap Liquidity Provider, Class
G–2 Above-Cap Liquidity Provider and Class C Above-Cap Liquidity Provider, MBIA
Insurance Corporation, as Policy Provider, and Wilmington Trust Company, as


 


1

















 


Subordination
Agent (the “Intercreditor Agreement”). The Agreement and each
Confirmation will be governed by and construed in accordance with the laws of
the State of New York.


 


Each
of Party A and Party B represents to the other that it has entered into this
Transaction in reliance upon such independent accounting, regulatory, legal,
tax and financial advice as it deems necessary and not upon any view expressed by the other.


 


2.                                       Party
A and Party B by this Confirmation are entering into a Transaction (the “Above
Cap Liquidity Facility”) that provides an irrevocable interest rate
cap.  The terms of the Above Cap
Liquidity Facility are as follows:


 


	
  General
  Terms:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Transaction
  Type:

  	
   

  	
  Interest
  Rate Cap Transaction

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Notional
  Amount:

  	
   

  	
  The
  Pool Balance for the Class G-1 Certificates from time to time.  The Notional Amount as of any Floating
  Rate Payer Payment Date shall be determined before giving effect to any
  distributions on such Class G-1 Certificates on such Floating Rate Payer
  Payment Date.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Trade
  Date:

  	
   

  	
  March 18, 2004

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Effective
  Date:

  	
   

  	
  March 24, 2004

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Termination
  Date:

  	
   

  	
  The
  first Business Day following the earlier of (i) June 15, 2015 and (ii) the
  date on which payment in full of Final Distributions with respect to the
  Class G-1 Certificates has been made.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Currency
  Unit:

  	
   

  	
  USD

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Business
  Day/Local Business Day:

  	
   

  	
  “Business Day” as
  defined in the Intercreditor Agreement for all purposes under the Agreement.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Business
  Day Convention:

  	
   

  	
  Following

  
	
   

  	
   

  	
   

  	
   

  
	
  Fixed
  Amounts:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Fixed
  Amount Payer:

  	
   

  	
  Party
  B

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Fixed
  Amount Payer Payment Date:

  	
   

  	
  Effective Date

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Fixed
  Amount:

  	
   

  	
  As
  set forth in a separate letter agreement between Party A and Party B.

  
	
   

  	
   

  	
   

  	
   

  
	
  Floating
  Amounts:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Floating
  Rate Payer:

  	
   

  	
  Party
  A

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Floating
  Amount:

  	
   

  	
  On
  each Floating Rate Payer Payment Date on which (i) the Floating Rate Option
  exceeds the Cap Rate and (ii) a Drawing 

  



 


2

















 


	
   

  	
   

  	
   

  	
  Event
  (as defined below) has occurred, the Floating Amount shall be calculated as
  follows:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  In
  the event that either (a) the Available Amount under the Primary Liquidity
  Facility (before giving effect to any Interest Drawing to be made on such
  Payment Date) is greater than zero or (b) the amount on deposit in the Primary
  Cash Collateral Account (before giving effect to any withdrawals to be made
  from such account on such Payment Date) is greater than zero, the Floating
  Amount shall equal the Above-Cap Payment for such date.  In the
  event that both statements in clauses (a) and (b) above are not true, then
  the Floating Amount shall equal zero.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Period
  End Dates:

  	
   

  	
  Each
  March 15, June 15, September 15 and December 15, commencing on June 15, 2004
  and ending on the Termination Date, subject to adjustment in accordance with
  the Following Business Day Convention.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Floating
  Rate Payer Payment Dates:

  	
   

  	
  Each
  day that is a Period End Date and any Special Distribution Date not
  coinciding with a Period End Date on which a distribution of interest is, by
  the terms of the Intercreditor Agreement, to be made on the Class G-1
  Certificates.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Floating
  Rate Option:

  	
   

  	
  USD-LIBOR-BBA;
  provided that, if the relevant
  rate does not appear on the Telerate Page 3750, the rate shall be
  “Three-Month LIBOR” as determined by the Loan Trustee in accordance with the
  definition of “Three-Month LIBOR” in Annex A to the Indentures; and provided further that the Floating Rate
  Option shall be deemed to equal the Cap Rate during such period as the Stated
  Interest Rate applicable to the Class G-1 Certificates is subject to the
  Capped Interest Rate pursuant to the proviso in the definition of “Stated
  Interest Rate” in the Intercreditor Agreement.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Cap
  Rate:

  	
   

  	
  8%

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Designated
  Maturity:

  	
   

  	
  3-Month

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Spread:

  	
   

  	
  None

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Floating
  Rate Day Count Fraction:

  	
   

  	
  Actual/360

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Reset
  Dates:

  	
   

  	
  The
  first day of the relevant Calculation Period.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Compounding:

  	
   

  	
  Inapplicable

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Notice:

  	
   

  	
  Party
  B shall, on or before 1:00 p.m. (New York time) on each Floating Rate Payer
  Payment Date, provide Party A with notice

  



 


3

















 


	
   

  	
   

  	
   

  	
  of
  the then-current Pool Balance of the Class G-1 Certificates and the Floating
  Amount payable, if any, together with, if such Floating Amount is payable,
  the certification referred to in the final sentence of Section 3.6(a)  of the Intercreditor Agreement.

  



 


3.                                       Role
of Party A; Role of Calculation Agent


 


(i)                                     Party
B acknowledges that: (a) in connection with this Transaction and this
Agreement, Party A has acted in the capacity of an arm’s-length contractual
counterparty and not as its financial advisor or fiduciary; and (b) in
exercising its rights or performing any of its duties under this Agreement,
Party A will act as principal and not as a fiduciary of Party B.


 


(ii)                                  Whenever
the Calculation Agent is required to act or exercise judgment in any way, it
will do so in good faith and in a commercially reasonable manner. The
calculations and determinations of the Calculation Agent shall be made in
accordance with terms of this Confirmation having regard in each case to the
criteria stipulated herein.


 


4.                                       Additional
Termination Event/Replacement of Above-Cap Liquidity Provider


 


It will be an Additional
Termination Event with respect to Party A if the relevant credit rating of
Morgan Stanley or any assignee issued by any Rating Agency at any time is lower
than the applicable Threshold Rating (“Credit Downgrade”).  Party A shall be the sole Affected Party
with respect to such Additional Termination Event.


 


In the event of a Credit
Downgrade or an Event of Default specified in Section 5(a)(iii)(2) of the
Agreement, Party A may, within ten days, at its own expense, arrange for one or
more Replacement Above-Cap Liquidity Providers to enter into and deliver to
Party B a Replacement Above-Cap Liquidity Facility for the Above-Cap Liquidity
Facility.  If Party A does not
arrange for such replacement and if this Above-Cap Liquidity Facility has not
otherwise been replaced by JetBlue Airways Corporation (at the expense of
JetBlue Airways Corporation) in accordance with the terms of Section 3.6(c)(ii)
of the Intercreditor Agreement, such 10th day (or if such 10th
day is not a Business Day, the next succeeding Business Day) shall be deemed to
be an “Early Termination Date” and Party A shall make a termination payment to
Party B in accordance with Part 1(j) of the Schedule to the Agreement.


 


5.                                       Additional
Definitions


 


“Drawing Event”
shall mean an event on any Distribution Date where Party B, after giving effect
to the subordination provisions of the Intercreditor Agreement and any Election
Interest Payments made by the Policy Provider (but without regard to drawings
under a Primary Liquidity Facility or withdrawals from the Cash Collateral
Account or Above-Cap Account), shall not have sufficient funds for the payment
of accrued interest due and owing on the Class G–1 Certificates other than any
amount of interest due and payable on the Class G–1 Certificates on such
Distribution Date that remains unpaid due to the failure of the Depositary to
pay any amount of accrued interest on the Deposits on such Distribution Date.


 


“Threshold Rating”
shall mean, for purposes of this Agreement, the short-term unsecured debt
rating of P-1 by Moody’s and short-term issuer credit rating of A-1 by Standard
& Poor’s.


 


4

















 


6.                                       Payments


 


Party A hereby
irrevocably instructs Party B to make any payment due to Party A directly to
the account specified below in the name of Party A. Party B hereby irrevocably
instructs Party A to make any payments of Floating Amounts and any Termination
Amount due to Party B directly to the account(s) specified below in the name of
Party B. All payments by Party A of Floating Amounts and any Termination Amount
due to Party B shall be made prior to 4:00 p.m. (New York City time) on the
date such payment is due without setoff, deduction, withholding, netting, or
any other reduction.


 


7.                                       Account
Details


 


	
  Payments
  to Party A:

  	
   

  	
  Citibank,
  New York

  
	
   

  	
   

  	
  ABA#:
  021 000 089

  
	
   

  	
   

  	
  Account#:
  4072 4601

  
	
   

  	
   

  	
  Reference:
  Morgan Stanley Capital Services Inc.

  
	
   

  	
   

  	
   

  
	
  Payments
  to Party B:

  	
   

  	
  Wilmington
  Trust Company

  
	
   

  	
   

  	
  ABA#:
  031 1000 92

  
	
   

  	
   

  	
  Account#:
  65540-2

  
	
   

  	
   

  	
  Reference:
  JetBlue 2004-1 G-1

  



 


8.                                       Offices


 


The Office of Party A for the Transaction is its
office at the address specified for notices to it in the Schedule to the
Agreement. The Office of Party B for the Transaction is its office at the
address specified for notices to it in the Schedule to the Agreement.


 


9.                                       Counterparts


 


This Confirmation may be executed in any number of
counterparts and by each party hereto on separate counterparts, each of which
counterparts, when so executed and delivered, shall be deemed to be an original
and all of which counterparts, taken together, shall constitute but one and the
same Confirmation.


 


[Signatures follow on separate page]


 


5

















 


Please confirm that the
foregoing correctly sets forth the terms of our agreement by executing the copy
of this Confirmation enclosed for that purpose and returning it to us.


 


	
   

  	
  Yours sincerely,

  
	
   

  	
   

  
	
   

  	
  MORGAN
  STANLEY CAPITAL SERVICES INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Nina C. Simmons

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Nina C. Simmons

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Vice President

  	
   

  



 


 


Confirmed
as of the date first written above:


 


WILMINGTON TRUST COMPANY


in
its capacity as Subordination Agent on behalf

of the Trustee under the Class G-1 Trust Agreement


 


	
  By:

  	
  /s/ Kathleen A.
  Pedelini

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
  Kathleen A. Pedelini

  	
   

  
	
   

  	
   

  	
   

  
	
  Title

  	
  Financial Services
  Officer

  	
   

  



 


6