Document:

Exhibit 4.27

 

 

CONFIDENTIAL: 
SUBJECT TO RESTRICTIONS ON DISSEMINATION

SET FORTH IN SECTION 6 OF THIS AGREEMENT

 

 

PARTICIPATION AGREEMENT

[NXXXJB]

Dated as of [Date]

among

JETBLUE AIRWAYS CORPORATION,

Owner,

and

WILMINGTON TRUST COMPANY,

not in its individual capacity except as
expressly provided herein,

but solely as Mortgagee, Subordination Agent under the

Intercreditor Agreement and Pass Through Trustee under

each of the Pass Through Trust Agreements

One Airbus Model A320-232 Aircraft

Bearing Manufacturer’s Serial No. [MSN]

 

 

	
  Section 1.

  	
  Definitions and Construction

  	
   

  	
   

  
	
  Section 2.

  	
  Secured Loans; Closing

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2.1

  	
  Making
  of Loans and Issuance of Equipment Notes

  	
   

  	
   

  
	
  2.2

  	
  Closing

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 3.

  	
  Conditions Precedent

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  3.1

  	
  Conditions
  Precedent to Obligations of Pass Through Trustees

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.1.1

  	
  Equipment
  Notes

  	
   

  	
   

  
	
   

  	
  3.1.2

  	
  Delivery
  of Documents

  	
   

  	
   

  
	
   

  	
  3.1.3

  	
  Violation
  of Law

  	
   

  	
   

  
	
   

  	
  3.1.4

  	
  Representations,
  Warranties and Covenants

  	
   

  	
   

  
	
   

  	
  3.1.5

  	
  No
  Event of Default

  	
   

  	
   

  
	
   

  	
  3.1.6

  	
  No Event of Loss

  	
   

  	
   

  
	
   

  	
  3.1.7

  	
  Title

  	
   

  	
   

  
	
   

  	
  3.1.8

  	
  Certification

  	
   

  	
   

  
	
   

  	
  3.1.9

  	
  Section 1110

  	
   

  	
   

  
	
   

  	
  3.1.10

  	
  Filing

  	
   

  	
   

  
	
   

  	
  3.1.11

  	
  No Proceedings

  	
   

  	
   

  
	
   

  	
  3.1.12

  	
  Governmental
  Action

  	
   

  	
   

  
	
   

  	
  3.1.13

  	
  Note Purchase Agreement

  	
   

  	
   

  
	
   

  	
  3.1.14

  	
  Perfected
  Security Interest

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.2

  	
  Conditions
  Precedent to Obligations of Mortgagee

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.2.1

  	
  Documents

  	
   

  	
   

  
	
   

  	
  3.2.2

  	
  Other Conditions Precedent

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.3

  	
  Conditions
  Precedent to Obligations of Owner

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.3.1

  	
  Documents

  	
   

  	
   

  
	
   

  	
  3.3.2

  	
  Other
  Conditions Precedent

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.4

  	
  Post-Registration Matters

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 4.

  	
  Representations and Warranties

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.1

  	
  Owner’s
  Representations and Warranties

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.1.1

  	
  Organization;
  Qualification

  	
   

  	
   

  
	
   

  	
  4.1.2

  	
  Corporate
  Authorization

  	
   

  	
   

  
	
   

  	
  4.1.3

  	
  No Violation

  	
   

  	
   

  
	
   

  	
  4.1.4

  	
  Approvals

  	
   

  	
   

  
	
   

  	
  4.1.5

  	
  Valid
  and Binding Agreements

  	
   

  	
   

  
	
   

  	
  4.1.6

  	
  Litigation

  	
   

  	
   

  
	
   

  	
  4.1.7

  	
  Financial
  Condition

  	
   

  	
   

  
	
   

  	
  4.1.8

  	
  Registration and Recordation

  	
   

  	
   

  
	
   

  	
  4.1.9

  	
  Location

  	
   

  	
   

  

 

i

 

	
   

  	
  4.1.10

  	
  No
  Event of Loss

  	
   

  	
   

  
	
   

  	
  4.1.11

  	
  Compliance
  With Laws

  	
   

  	
   

  
	
   

  	
  4.1.12

  	
  Securities
  Laws

  	
   

  	
   

  
	
   

  	
  4.1.13

  	
  Broker’s Fees

  	
   

  	
   

  
	
   

  	
  4.1.14

  	
  Section 1110

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.2

  	
  WTC’s Representations and Warranties

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.2.1

  	
  Organization,
  Etc

  	
   

  	
   

  
	
   

  	
  4.2.2

  	
  Corporate Authorization

  	
   

  	
   

  
	
   

  	
  4.2.3

  	
  No Violation

  	
   

  	
   

  
	
   

  	
  4.2.4

  	
  Approvals

  	
   

  	
   

  
	
   

  	
  4.2.5

  	
  Valid
  and Binding Agreements

  	
   

  	
   

  
	
   

  	
  4.2.6

  	
  Citizenship

  	
   

  	
   

  
	
   

  	
  4.2.7

  	
  No Liens

  	
   

  	
   

  
	
   

  	
  4.2.8

  	
  Litigation

  	
   

  	
   

  
	
   

  	
  4.2.9

  	
  Securities Laws

  	
   

  	
   

  
	
   

  	
  4.2.10

  	
  Investment

  	
   

  	
   

  
	
   

  	
  4.2.11

  	
  Taxes

  	
   

  	
   

  
	
   

  	
  4.2.12

  	
  Broker’s
  Fees

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 5.

  	
  Covenants, Undertakings and Agreements

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.1

  	
  Covenants
  of Owner

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.1.1

  	
  Corporate
  Existence; U.S. Air Carrier

  	
   

  	
   

  
	
   

  	
  5.1.2

  	
  Notice
  of Change of Location

  	
   

  	
   

  
	
   

  	
  5.1.3

  	
  Certain
  Assurances

  	
   

  	
   

  
	
   

  	
  5.1.4

  	
  Securities Laws

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.2

  	
  Covenants of WTC

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.2.1

  	
  Liens

  	
   

  	
   

  
	
   

  	
  5.2.2

  	
  Securities
  Act

  	
   

  	
   

  
	
   

  	
  5.2.3

  	
  Performance of Agreements

  	
   

  	
   

  
	
   

  	
  5.2.4

  	
  Withholding
  Taxes

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.3

  	
  Covenants of Note Holders

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.3.1

  	
  Withholding
  Taxes

  	
   

  	
   

  
	
   

  	
  5.3.2

  	
  Transfer; Compliance

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.4

  	
  Agreements

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.4.1

  	
  Quiet Enjoyment

  	
   

  	
   

  
	
   

  	
  5.4.2

  	
  Consents

  	
   

  	
   

  
	
   

  	
  5.4.3

  	
  Insurance

  	
   

  	
   

  
	
   

  	
  5.4.4

  	
  Extent
  of Interest of Note Holders

  	
   

  	
   

  
	
   

  	
  5.4.5

  	
  Foreign
  Registration

  	
   

  	
   

  

 

ii

 

	
   

  	
  5.4.6

  	
  Interest
  in Certain Engines

  	
   

  	
   

  
	
   

  	
  5.4.7

  	
  Lease Assignment

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 6.

  	
  Confidentiality

  	
   

  	
   

  
	
  Section 7.

  	
  Indemnification and Expenses

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  7.1

  	
  General
  Indemnity

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.1.1

  	
  General

  	
   

  	
   

  
	
   

  	
  7.1.2

  	
  Exclusions

  	
   

  	
   

  
	
   

  	
  7.1.3

  	
  After
  Tax Basis; Etc

  	
   

  	
   

  
	
   

  	
  7.1.4

  	
  Notice
  and Contest

  	
   

  	
   

  
	
   

  	
  7.1.5

  	
  Subrogation;
  Reimbursement

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.2

  	
  Transaction Costs

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.2.1

  	
  Invoices
  and Payment

  	
   

  	
   

  
	
   

  	
  7.2.2

  	
  Payment
  of Other Expenses

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.

  	
  Assignment or Transfer of Interests

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  8.1

  	
  Note Holders

  	
   

  	
   

  
	
  8.2

  	
  Effect
  of Transfer

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 9.

  	
  Section 1110

  	
   

  	
   

  
	
  Section 10.

  	
  Change
  of Citizenship

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  10.1

  	
  Generally

  	
   

  	
   

  
	
  10.2

  	
  Mortgagee

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 11.

  	
  Miscellaneous

  	
   

  	
   

  
	
  11.1

  	
  Amendments

  	
   

  	
   

  
	
  11.2

  	
  Severability

  	
   

  	
   

  
	
  11.3

  	
  Survival

  	
   

  	
   

  
	
  11.4

  	
  Counterparts

  	
   

  	
   

  
	
  11.5

  	
  No Waiver

  	
   

  	
   

  
	
  11.6

  	
  Notices

  	
   

  	
   

  
	
  11.7

  	
  Governing
  Law; Submission to Jurisdiction; Venue

  	
   

  	
   

  
	
  11.8

  	
  Third
  Party Beneficiary

  	
   

  	
   

  
	
  11.9

  	
  Entire
  Agreement

  	
   

  	
   

  
	
  11.10

  	
  Further Assurances

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ANNEX,
  SCHEDULES AND EXHIBITS

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ANNEX A

  	
  -

  	
  Definitions

  	
   

  	
   

  
	
  SCHEDULE 1

  	
  -

  	
  Accounts; Addresses

  	
   

  	
   

  
	
  SCHEDULE 2

  	
  -

  	
  Loan Amounts

  	
   

  	
   

  
	
  SCHEDULE 3

  	
  -

  	
  Certain Terms

  	
   

  	
   

  
	
  SCHEDULE 4

  	
  -

  	
  Permitted
  Countries

  	
   

  	
   

  
							

 

iii

 

	
  EXHIBIT A

  	
  -

  	
  Opinion of
  special New York counsel to Owner

  	
   

  	
   

  
	
  EXHIBIT B

  	
  -

  	
  Opinion of
  in-house counsel to Owner

  	
   

  	
   

  
	
  EXHIBIT C

  	
  -

  	
  Opinion of
  special counsel in Oklahoma City, Oklahoma

  	
   

  	
   

  
	
  EXHIBIT D

  	
  -

  	
  Opinion of
  special counsel to Mortgagee

  	
   

  	
   

  
	
  EXHIBIT E

  	
  -

  	
  Opinion of special
  French counsel

  	
   

  	
   

  

 

iv

 

PARTICIPATION AGREEMENT

 

 

PARTICIPATION
AGREEMENT [NXXXJB], dated as of [Date] (this “Agreement”), among (a) JETBLUE AIRWAYS CORPORATION, a Delaware
corporation (“Owner”),
(b) WILMINGTON TRUST COMPANY, a Delaware
banking corporation, not in its individual capacity, except as expressly
provided herein, but solely as Mortgagee (in its capacity as Mortgagee, “Mortgagee” and in its individual capacity, “WTC”), (c) WILMINGTON
TRUST COMPANY, not in its individual capacity, except as expressly
provided herein, but solely as Pass Through Trustee under each of the Pass
Through Trust Agreements, (each, a “Pass Through Trustee”)
and (d) WILMINGTON TRUST COMPANY, not in
its individual capacity, except as expressly provided herein, but solely as
Subordination Agent under the Intercreditor Agreement (“Subordination Agent”).

 

RECITALS

 

A.            Owner and AVSA S.A.R.L. have entered
into the Purchase Agreement, pursuant to which, among other things, AVSA
S.A.R.L. has agreed to sell to Owner and Owner has agreed to purchase from AVSA
S.A.R.L., certain aircraft, including the Aircraft.

 

B.            Pursuant to each of the Pass Through
Trust Agreements, on the Issuance Date the Pass Through Trusts were created and
the Pass Through Certificates were issued and sold.

 

C.            Pursuant to the Note Purchase
Agreement, each Pass Through Trustee has agreed to use a portion of the
proceeds from the issuance and sale of the Pass Through Certificates issued by
each Pass Through Trust to purchase from the Owner, on behalf of the related
Pass Through Trust, the Equipment Note bearing the same interest rate as the
Pass Through Certificates issued by such Pass Through Trust.

 

D.            Owner and Mortgagee, concurrently
with the execution and delivery hereof, have entered into the Trust Indenture
for the benefit of the Note Holders, pursuant to which, among other things,
Owner agrees (1) to issue Equipment Notes, in the amounts and otherwise as
provided in the Trust Indenture, and (2) to mortgage, pledge and assign to
Mortgagee all of Owner’s right, title and interest in the Collateral to secure
the Secured Obligations and Related Secured Obligations, including, without
limitation, Owner’s obligations under the Equipment Notes.

 

E.             The parties hereto wish to set
forth in this Agreement the terms and conditions upon and subject to which the
aforesaid transactions shall be effected.

 

NOW,
THEREFORE, in consideration of the premises and the mutual
agreements contained herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:

 

Section 1.              Definitions
and Construction.  Capitalized terms
used but not defined herein shall have the respective meanings set forth or
incorporated by reference, and shall be

 

 

construed and interpreted
in the manner described, in Annex A. 
The “General Provisions” set forth in Annex A are hereby
incorporated as if set forth in full herein.

 

Section 2.              Secured
Loans; Closing.

 

2.1           Making of Loans
and Issuance of Equipment Notes. 
Subject to the terms and conditions of this Agreement, on the date
hereof or on such other date agreed to by the parties hereto (the “Closing Date”): 
each Pass Through Trustee shall make a secured loan to Owner in the
amount in Dollars opposite such Trustee’s 
name on Schedule 2, such loan to be evidenced by one or more
Equipment Notes, dated the Closing Date, issued to the Subordination Agent as
the registered holder on behalf of each such Pass Through Trustee for the
related Pass Through Trust by Owner in accordance with this Agreement and the
Trust Indenture of the Series set forth opposite such Trustee’s name on
Schedule 2, in an aggregate principal amount equal to the amount of the
secured loan made by each such Pass Through Trustee.

 

2.2           Closing.

 

(a)           The Closing shall occur at the
offices of Vedder, Price, Kaufman & Kammholz, P.C., 805 Third Avenue, New
York, New York  10022, or such other
place as the parties shall agree.

 

(b)           All payments pursuant to this
Section 2 shall be made in immediately available funds to [Owner’s] [AVSA
S.A.R.L.’s] account set forth in Schedule 1 hereto as directed by Owner.

 

Section 3.              Conditions
Precedent.

 

3.1           Conditions
Precedent to Obligations of Pass Through Trustees.  The obligation of each Pass Through Trustee
to make the secured loan described in Section 2.1 on the Closing Date is
subject to satisfaction or waiver by each such Trustee, on or prior to the
Closing Date, of the conditions precedent set forth below in this
Section 3.1:

 

3.1.1        Equipment Notes.  The Owner shall have tendered the Equipment
Notes to the Mortgagee for authentication and the Mortgagee shall have
authenticated such Equipment Notes and shall have tendered the Equipment Notes
to the Subordination Agent on behalf of each Pass Through Trustee, against
receipt of the loan proceeds, in accordance with Section 2.1.

 

3.1.2        Delivery of
Documents.  The
Subordination Agent on behalf of each Pass Through Trustee shall have received
executed counterparts or conformed copies of the following documents:

 

(i)            this Agreement;

 

(ii)           the Trust Indenture;

 

(iii)          the initial Trust Indenture Supplement;

 

2

 

(iv)          the Consent and Agreement, Engine
Consent and Agreement and the Airbus Consent;

 

(v)           the Equipment Notes dated the Closing
Date; provided, that only the Subordination Agent shall receive the
authenticated Equipment Notes;

 

(vi)          an excerpted copy of the Purchase
Agreement and Engine Agreement to the extent relating to Airframe Manufacturer’s
or Engine Manufacturer’s warranties or related obligations assigned pursuant to
the Trust Indenture; provided, that only Mortgagee shall receive copies of such
excerpted agreements (copies of which may be inspected by Pass Through Trustees
and their respective special counsel on the Closing Date, but after the Closing
Date such copies shall be retained by Mortgagee and may be inspected and
reviewed by Pass Through Trustees, the Policy Provider or their respective
counsel if and only if there shall have occurred and be continuing a Default or
an Event of Default);

 

(vii)         the Bills of Sale;

 

(viii)        the broker’s report and insurance
certificates required by Section 4.06 of the Trust Indenture;

 

(ix)           (A) a copy of the Certificate of
Incorporation and By-Laws of Owner and resolutions of the board of directors of
Owner and/or the executive committee thereof, in each case certified as of the
Closing Date, by the Secretary or an Assistant Secretary of Owner, duly
authorizing the execution, delivery and performance by Owner of the Operative
Agreements required to be executed and delivered by Owner on or prior to the
Closing Date in accordance with the provisions hereof and thereof; and
(B) an incumbency certificate of Owner as to the person or persons
authorized to execute and deliver the Operative Agreements on behalf of Owner;

 

(x)            an Officer’s Certificate of Owner,
dated as of the Closing Date, stating that its representations and warranties
set forth in this Agreement are true and correct as of the Closing Date (or, to
the extent that any such representation and warranty expressly relates to an
earlier date, true and correct as of such earlier date);

 

(xi)           a copy of a current, valid [Export
Certificate of Airworthiness for the Aircraft duly issued by the DGAC]
[Standard FAA Certificate of Airworthiness for the Aircraft];

 

(xii)          [an application for registration of
the Aircraft with the FAA in the name of Owner, provided, that only special
counsel in Oklahoma City, Oklahoma shall receive the sole executed copy thereof
for filing with the FAA] [a copy of the FAA certificate of registration for the
Aircraft];

 

(xiii)         the Financing Statement;

 

(xiv)        the following opinions of counsel, in
each case dated the Closing Date:

 

3

 

(A)          an opinion of Vedder Price
Kaufman & Kammholz, P.C., special New York counsel to Owner, substantially
in the form of Exhibit A;

 

(B)           an opinion of Owner’s General
Counsel, substantially in the form of Exhibit B;

 

(C)           an opinion of DeBee Gilchrist,
special counsel in Oklahoma City, Oklahoma, substantially in the form of
Exhibit C;

 

(D)          an opinion of Morris, James,
Hitchens & Williams LLP, special counsel to Mortgagee, substantially
in the form of Exhibit D; and

 

(E)           an opinion of special French counsel,
substantially in the form of Exhibit E; and

 

(xv)         the French Pledge Agreement.

 

3.1.3        Violation of
Law.  No change shall have occurred
after the date of this Agreement in any applicable Law that makes it a
violation of Law for (a) Owner, any Pass Through Trustee, Subordination
Agent or Mortgagee to execute, deliver and perform the Operative Agreements to
which any of them is a party or (b) any Pass Through Trustee to make the
loan contemplated by Section 2.1, to acquire an Equipment Note or to
realize the benefits of the security afforded by the Trust Indenture.

 

3.1.4        Representations,
Warranties and Covenants.  The
representations and warranties of each other party to this Agreement made, in
each case, in this Agreement and in any other Operative Agreement to which it
is a party, shall be true and accurate in all material respects as of the
Closing Date (unless any such representation and warranty shall have been made
with reference to a specified date, in which case such representation and
warranty shall be true and accurate as of such specified date) and each other
party to this Agreement shall have performed and observed, in all material
respects, all of its covenants, obligations and agreements in this Agreement
and in any other Operative Agreement to which it is a party to be observed or
performed by it as of the Closing Date.

 

3.1.5        No Event of Default.  On the Closing Date, no event shall have
occurred and be continuing, or would result from the mortgage of the Aircraft,
which constitutes a Default or an Event of Default.

 

3.1.6        No Event of
Loss.  No Event of Loss with respect
to the Airframe or any Engine shall have occurred and no circumstance,
condition, act or event 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 the
Airframe or any Engine shall have occurred.

 

3.1.7        Title.  Owner shall have good title [,subject to
filing and recordation of the FAA Bill of Sale with the FAA,] to the Aircraft,
free and clear of Liens, except (a) the Lien created by the Trust
Indenture and the initial Trust Indenture Supplement, (b) Liens permitted
by clause (d) (solely for Taxes not yet due) of the definition of “Permitted Liens” in Annex A to
the Trust Indenture and (c) Liens permitted by clauses (e) and (g) of
such definition.

 

4

 

3.1.8        Certification.  The Aircraft shall have been duly
certificated by the FAA as to type and airworthiness in accordance with the
terms of the Purchase Agreement.

 

3.1.9        Section 1110.  Mortgagee shall be entitled to the benefits
of Section 1110 (as currently in effect) with respect to the right to take
possession of the Airframe and Engines and to exercise any of its other rights
or remedies to sell, lease or dispose of the Aircraft as provided in the Trust
Indenture in the event of a case under Chapter 11 of the Bankruptcy Code
in which Owner is a debtor.

 

3.1.10      Filing.  On the Closing Date (a) the FAA Filed
Documents shall have been duly filed for recordation (or shall be in the
process of being so duly filed for recordation) with the FAA in accordance with
the Act and (b) the Financing Statement shall have been duly filed (or
shall be in the process of being so duly filed) in the appropriate
jurisdiction.

 

3.1.11      No Proceedings.  No action or proceeding shall have been
instituted, nor shall any action be threatened in writing, before any
Government Entity, nor shall any order, judgment or decree have been issued or
proposed to be issued by any Government Entity, to set aside, restrain, enjoin
or prevent the completion and consummation of this Agreement or any other Operative
Agreement or the transactions contemplated hereby or thereby.

 

3.1.12      Governmental
Action.  All appropriate action
required to have been taken prior to the Closing Date by the FAA, or any
governmental or political agency, subdivision or instrumentality of the United
States, in connection with the transactions contemplated by this Agreement
shall have been taken, and all orders, permits, waivers, authorizations,
exemptions and approvals of such entities required to be in effect on the
Closing Date in connection with the transactions contemplated by this Agreement
shall have been issued and be in full force and effect on the Closing Date.

 

3.1.13      Note Purchase
Agreement.  The conditions precedent
to the obligations of the Pass Through Trustees and the other requirements
relating to the Aircraft and the Equipment Notes set forth in the Note Purchase
Agreement shall have been satisfied.

 

3.1.14      Perfected Security
Interest.  On the Closing Date, after
giving effect to the filing of the FAA Filed Documents and the Financing
Statement, Mortgagee shall have a duly perfected first priority security
interest in all of Owner’s right, title and interest in the Aircraft, subject
only to Permitted Liens.

 

3.2           Conditions
Precedent to Obligations of Mortgagee.  The obligation of Mortgagee to authenticate
the Equipment Notes on the Closing Date is subject to the satisfaction or
waiver by Mortgagee, on or prior to the Closing Date, of the conditions
precedent set forth below in this Section 3.2.

 

3.2.1        Documents.  Executed originals of the agreements,
instruments, certificates or documents described in Section 3.1.2 shall
have been received by Mortgagee, except as specifically provided therein,
unless the failure to receive any such agreement, instrument, certificate or
document is the result of any action or inaction by Mortgagee.

 

5

 

3.2.2        Other Conditions
Precedent.  Each of the conditions
set forth in Sections 3.1.3, 3.1.4, 3.1.5 and 3.1.9 shall have been
satisfied unless the failure of any such condition to be satisfied is the
result of any action or inaction by Mortgagee.

 

3.3           Conditions
Precedent to Obligations of Owner.  The obligation of Owner to participate in the
transaction contemplated hereby on the Closing Date is subject to the
satisfaction or waiver by Owner, on or prior to the Closing Date, of the
conditions precedent set forth below in this Section 3.3.

 

3.3.1        Documents.  Executed originals of the agreements,
instruments, certificates or documents described in Section 3.1.2 shall
have been received by Owner, except as specifically provided therein, and shall
be satisfactory to Owner, unless the failure to receive any such agreement,
instrument, certificate or document is the result of any action or inaction by
Owner.  In addition, the Owner shall have
received the following:

 

(i)            (A) an incumbency certificate
of WTC as to the person or persons authorized to execute and deliver the
Operative Agreements on behalf of WTC and (B) a copy of the Certificate of
Incorporation and By-Laws and general authorizing resolution of the board of
directors (or executive committee) or other satisfactory evidence of
authorization of WTC, certified as of the Closing Date by the Secretary or
Assistant or Attesting Secretary of WTC, which authorize the execution,
delivery and performance by WTC of the Operative Agreements to which it is a
party; and

 

(ii)           an Officer’s Certificate of WTC,
dated as of the Closing Date, stating that its representations and warranties
in its individual capacity or as Mortgagee, as Pass Through Trustee or
Subordination Agent, as the case may be, set forth in this Agreement are true
and correct as of the Closing Date (or, to the extent that any such
representation and warranty expressly relates to an earlier date, true and
correct as of such earlier date);

 

3.3.2        Other Conditions
Precedent.  Each of the conditions
set forth in Sections 3.1.3, 3.1.4, 3.1.6, 3.1.7, 3.1.8, 3.1.10, 3.1.11,
3.1.12 and 3.1.13 shall have been satisfied or waived by Owner, unless the
failure of any such condition to be satisfied is the result of any action or
inaction by Owner.

 

3.4           Post-Registration
Matters.  Promptly following the
registration of the Aircraft and the recordation of the FAA Filed Documents
pursuant to the Act, Owner will cause DeBee Gilchrist, special counsel in
Oklahoma City, Oklahoma, to deliver to Owner, each  Pass Through Trustee and Mortgagee a
favorable opinion or opinions addressed to each of them with respect to such registration
and recordation.

 

Section 4.              Representations
and Warranties.

 

4.1           Owner’s
Representations and Warranties. 
Owner represents and warrants to each Pass Through Trustee,
Subordination Agent and Mortgagee that as of the date hereof:

 

4.1.1        Organization; Qualification.  Owner is a corporation duly incorporated,
validly existing and in good standing under the Laws of the State of Delaware
having an organizational

 

6

 

identification number
2936994 and its true and complete name as indicated on the public record of the
State of Delaware is “JetBlue Airways Corporation”.  Owner 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.  Owner 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 Owner.

 

4.1.2        Corporate Authorization.  Owner 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 authorize the execution and delivery of each of
the Operative Agreements to which it is a party, and the performance of its
obligations thereunder.

 

4.1.3        No Violation.  The execution and delivery by Owner of the
Operative Agreements to which it is a party, the performance by Owner of its
obligations thereunder and the consummation by Owner on the Closing Date of the
transactions contemplated thereby, do not and will not (a) violate any
provision of the Certificate of Incorporation or By-Laws of Owner,
(b) violate any Law applicable to or binding on Owner or (c) violate
or constitute any default under (other than any violation or default that would
not result in a Material Adverse Change to Owner), or result in the creation of
any Lien (other than Permitted Liens) upon the Aircraft under, any indenture,
mortgage, chattel mortgage, deed of trust, conditional sales contract, lease,
loan or other material agreement, instrument or document to which Owner is a
party or by which Owner or any of its properties is bound.

 

4.1.4        Approvals.  The execution and delivery by Owner of the
Operative Agreements to which it is a party, the performance by Owner of its
obligations thereunder and the consummation by Owner on the Closing Date 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 holder of any debt of Owner and
(b) any Government Entity, other than the filing of (w) the FAA Filed
Documents and the Financing Statement (and continuation statements
periodically), (x) filings, recordings, notices or other ministerial
actions pursuant to any routine recording, contractual or regulatory
requirements applicable to it, (y) filings, recordings, notices or other
actions contemplated by the Operative Agreements in connection with the leasing
or reregistration of the Aircraft and (z) filings, recordings, notices or
other actions all of which have either been, or will be, completed on or prior
to the Closing Date and will be in full force and effect on the Closing Date.

 

4.1.5        Valid and Binding
Agreements.  The Operative Agreements
to which it is a party have been duly authorized, executed and delivered by
Owner and, assuming the due authorization, execution and delivery thereof by
the other party or parties thereto, constitute the legal, valid and binding
obligations of Owner and are enforceable against Owner 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

 

7

 

of creditors generally
and general principles of equity, whether considered in a proceeding at law or
in equity.

 

4.1.6        Litigation.  Except as set forth in Owner’s most recent
Annual Report on Form 10-K, as amended, filed by Owner 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 Owner with the SEC subsequent to such
Form 10-K and on or prior to the Closing Date, no action, claim or
proceeding is now pending or, to the Actual Knowledge of Owner, threatened,
against Owner, before any court, governmental body, arbitration board, tribunal
or administrative agency, which is reasonably likely to be determined adversely
to Owner and if determined adversely to Owner would result in a Material
Adverse Change.

 

4.1.7        Financial Condition.  The audited consolidated balance sheet of
Owner with respect to Owner’s most recent fiscal year included in Owner’s most
recent Annual Report on Form 10-K, as amended, filed by Owner with the
SEC, and the related consolidated statements of operations and cash flows for
the period then ended have been prepared in conformity with GAAP and present
fairly in all material respects the financial condition of Owner and its
consolidated subsidiaries as of such date and the results of its 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 operations of
Owner, except for matters disclosed in (a) the financial statements
referred to above or (b) any subsequent Quarterly Report on Form 10-Q
or Current Report on Form 8-K filed by Owner with the SEC on or prior to
the date hereof or (c) any press releases issued by Owner and posted on
Owner’s website or in any other public filing with the SEC.

 

4.1.8        Registration
and Recordation.  Except
for (a) the registration of the Aircraft with the FAA pursuant to the Act
in the name of Owner, (b) the filing for recordation (and recordation) of
the FAA Filed Documents, (c) the filing of the Financing Statement (and
continuation statements relating thereto at periodic intervals) and (d) the
affixation of the nameplates referred to in Section 4.02(e) of the Trust
Indenture, 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
security interest in the Aircraft, as against Owner and any other Person, in
each case, in any applicable jurisdictions in the United States.

 

4.1.9        Location.  The “location” (as such term is used in 9-307
of Article 9 of the UCC) of Owner is the State of Delaware.

 

4.1.10      No Event of Loss.  No Event of Loss has occurred with respect to
the Airframe or any Engine, and, to the Actual Knowledge of Owner, no
circumstance, condition, act or event has occurred that, with the giving of
notice or lapse of time or both gives rise to or constitutes an Event of Loss
with respect to the Airframe or any Engine.

 

4.1.11      Compliance With
Laws.

 

(a)           Owner is a U.S. Air Carrier.

 

8

 

(b)           Owner holds all licenses, permits and
franchises from the appropriate Government Entities necessary to authorize
Owner 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 Owner.

 

(c)           Owner is not an “investment company”
or a company controlled by an “investment company” within the meaning of the
Investment Company Act of 1940, as amended.

 

4.1.12      Securities Laws.  Neither Owner 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 Aircraft 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.

 

4.1.13      Broker’s Fees.  No Person acting on behalf of Owner is or
will be entitled to any broker’s fee, commission or finder’s fee in connection
with the Transactions.

 

4.1.14      Section 1110.  Mortgagee is entitled to the benefits of
Section 1110 (as currently in effect) with respect to the right to take
possession of the Airframe and Engines and to exercise any of its other rights
or remedies to sell, lease or dispose of the Aircraft as provided in the Trust
Indenture in the event of a case under Chapter 11 of the Bankruptcy Code in
which Owner is a debtor.

 

4.2           WTC’s
Representations and Warranties. 
WTC  represents and warrants (with
respect to Section 4.2.10 solely in its capacity as Subordination Agent)
to Owner that:

 

4.2.1        Organization,
Etc.  WTC is a Delaware banking
corporation duly organized, validly existing and in good standing under the
Laws of the State of Delaware, authorized to do business as a Delaware banking
corporation with banking authority to execute and deliver, and perform its
obligations under, the Mortgagee Agreements, the Pass Through Trustee
Agreements and the Subordination Agent Agreements.

 

4.2.2        Corporate
Authorization.  WTC 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 Law or by its Certificate of Incorporation or By-Laws) to authorize
the execution and delivery by WTC, in its individual capacity or as Mortgagee,
as Pass Through Trustee or as Subordination Agent, as the case may be, of the
Mortgagee Agreements, the Pass Through Trustee Agreements, and the
Subordination Agent Agreements and the performance of its obligations
thereunder.

 

4.2.3        No Violation.  The execution and delivery by WTC, in its
individual capacity or as Mortgagee, as Pass Through Trustee or as
Subordination Agent, as the case may be, of the Mortgagee Agreements, the Pass
Through Trustee Agreements and the Subordination Agent Agreements, the
performance by WTC, in its individual capacity or as Mortgagee, as Pass Through
Trustee or as Subordination Agent, as the case may be, of its obligations
thereunder and the consummation on the Closing Date of the transactions
contemplated thereby, do not and will

 

9

 

not (a) violate any provision
of the Certificate of Incorporation or By-Laws of WTC, (b) violate any Law
applicable to or binding on WTC, in its individual capacity or (except in the
case of any Law relating to any Plan) as Mortgagee, a Pass Through Trustee or
Subordination Agent, or (c) violate or constitute any default under (other
than any violation or default that would not result in a Material Adverse
Change to WTC, in its individual capacity or as Mortgagee, as Pass Through
Trustee or Subordination Agent), or result in the creation of any Lien (other
than the lien of the Trust Indenture) upon any property of WTC, in its
individual capacity or as Mortgagee, as Pass Through Trustee or Subordination
Agent, or any of WTC’s subsidiaries under, any indenture, mortgage, chattel mortgage,
deed of trust, conditional sales contract, lease, loan or other agreement,
instrument or document to which WTC, in its individual capacity or as
Mortgagee, as Pass Through Trustee or Subordination Agent, is a party or by
which WTC, in its individual capacity or as Mortgagee, as Pass Through Trustee
or Subordination Agent, or any of their respective properties is bound.

 

4.2.4        Approvals.  The execution and delivery by WTC, in its
individual capacity or as Mortgagee, as Pass Through Trustee or Subordination
Agent, as the case may be, of the Mortgagee Agreements, the Pass Through
Trustee Agreements and the Subordination Agent Agreements, the performance by
WTC, in its individual capacity or as Mortgagee, as Pass Through Trustee or
Subordination Agent, as the case may be, of its obligations thereunder and the
consummation on the Closing Date by WTC, in its individual capacity or as
Mortgagee, as Pass Through Trustee or Subordination Agent, as the case may be,
of the transactions contemplated thereby do not and will not require the
consent, approval or authorization 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 holder
of any debt of WTC or (b) any Government Entity, other than the filing of
the FAA Filed Documents and the Financing Statement.

 

4.2.5        Valid and Binding
Agreements.  The Mortgagee
Agreements, the Pass Through Trustee Agreements and the Subordination Agent
Agreements have been duly authorized, executed and delivered by WTC and,
assuming the due authorization, execution and delivery by the other party or
parties thereto, constitute the legal, valid and binding obligations of WTC, in
its individual capacity or as Mortgagee, as Pass Through Trustee or
Subordination Agent, as the case may be, and are enforceable against WTC, in
its individual capacity or as Mortgagee, as Pass Through Trustee or
Subordination Agent, as the case may be, in accordance with the respective
terms thereof, except as such enforceability may be limited by bankruptcy,
insolvency, reorganization, receivership, moratorium or other similar Laws
affecting the rights of creditors generally and general principles of equity,
whether considered in a proceeding at law or in equity.

 

4.2.6        Citizenship.  WTC is a Citizen of the United States.

 

4.2.7        No Liens.  On the Closing Date, there are no Liens
attributable to WTC in respect of all or any part of the Collateral.

 

4.2.8        Litigation.  There are no pending or, to the Actual
Knowledge of WTC, threatened actions or proceedings against WTC, in its
individual capacity or as Mortgagee, as Pass Through Trustee or Subordination
Agent, before any court, administrative agency or

 

10

 

tribunal which, if
determined adversely to WTC, in its individual capacity or as Mortgagee, as
Pass Through Trustee or Subordination Agent, as the case may be, would
materially adversely affect the ability of WTC, in its individual capacity or
as Mortgagee, as Pass Through Trustee or Subordination Agent, as the case may
be, to perform its obligations under any of the Mortgagee Agreements, the Pass
Through Trustee Agreements or the Subordination Agent Agreements.

 

4.2.9        Securities
Laws.  Neither WTC 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 Aircraft or
any interest in the Collateral or any of the Equipment Notes or any other
interest in or security under the Collateral 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 other than the Subordination Agent and the
Pass Through Trustees, except for the offering and sale of the Pass Through
Certificates.

 

4.2.10      Investment.  The Equipment Notes to be acquired by the
Subordination Agent are being acquired by it for the account of the Pass
Through Trustees, for investment and not with a view to any resale or
distribution thereof, except that, subject to the restrictions on transfer set
forth in Section 8, the disposition by it of its Equipment Notes shall at
all times be within its control.

 

4.2.11      Taxes.  There are no Taxes payable by any Pass
Through Trustee or WTC, as the case may be, imposed by the State of Delaware or
any political subdivision or taxing authority thereof in connection with the
execution, delivery and performance by such Pass Through Trustee or WTC, as the
case may be, of this Agreement or any of the Pass Through Trustee Agreements
(other than franchise or other taxes based on or measured by any fees or
compensation received by any such Pass Through Trustee or WTC, as the case may
be, for services rendered in connection with the transactions contemplated by
any of the Pass Through Trust Agreements), and there are no Taxes payable by
any Pass Through Trustee or WTC, as the case may be, imposed by the State of
Delaware or any political subdivision thereof in connection with the
acquisition, possession or ownership by any such Pass Through Trustee of any of
the Equipment Notes (other than franchise or other taxes based on or measured
by any fees or compensation received by any such Pass Through Trustee or WTC,
as the case may be, for services rendered in connection with the transactions
contemplated by any of the Pass Through Trust Agreements), and, assuming that
the trusts created by the Pass Through Trust Agreements will not be taxable as
corporations, but, rather, each will be characterized as a grantor trust under
subpart E, Part I of Subchapter J of the Code or as a
partnership under Subchapter K of the Code, such trusts will not be
subject to any Taxes imposed by the State of Delaware or any political
subdivision thereof.

 

4.2.12      Broker’s Fees.  No Person acting on behalf of WTC, in its
individual capacity or as Mortgagee, any Pass Through Trustee or Subordination
Agent, is or will be entitled to any broker’s fee, commission or finder’s fee
in connection with the Transactions.

 

Section 5.              Covenants, Undertakings and Agreements.

 

5.1           Covenants of
Owner.  Owner covenants
and agrees, at its own cost and expense, with Note Holder and Mortgagee as
follows:

 

11

 

5.1.1        Corporate Existence;
U.S. Air Carrier.  Owner shall at all
times maintain its corporate existence, except as permitted by
Section 4.07 of the Trust Indenture, and shall at all times remain a
U.S. Air Carrier.

 

5.1.2        Notice of Change
of Location.  Owner will give
Mortgagee timely written notice (but in any event within 30 days prior to
the expiration of the period of time specified under applicable Law to prevent
lapse of perfection) of any change in its “location” (as such term is used in
Section 9-307 of Article 9 of the UCC) and will promptly take any
action required by Section 5.1.3(c) as a result of such change in
location.

 

5.1.3        Certain Assurances.

 

(a)           Owner shall duly execute, acknowledge
and deliver, or shall cause to be executed, acknowledged and delivered, all
such further agreements, instruments, certificates or documents, and shall do
and cause to be done such further acts and things, in any case, as Mortgagee
shall reasonably request for accomplishing the purposes of this Agreement and
the other Operative Agreements, provided that any instrument or other document
so executed by Owner will not expand any obligations or limit any rights of
Owner in respect of the transactions contemplated by any Operative Agreement.

 

(b)           Owner shall promptly take such action
with respect to the recording, filing, re-recording and refiling of the Trust
Indenture and any supplements thereto, including, without limitation, the
initial Trust Indenture Supplement, as shall be necessary to establish and
protect the perfection and priority of the Lien created by the Trust Indenture.

 

(c)           Owner, at its sole cost and expense,
will cause the FAA Filed Documents, the Financing Statement (and any amendments
thereto necessitated by any combination, consolidation or merger of the Owner
pursuant to Section 4.07 of the Trust Indenture, or any change in location
described in Section 5.1.2) and, upon the written direction of Mortgagee,
together with copies thereof suitable for filing, any continuation statements
in respect of the Financing Statement as shall be necessary, subject only to
the execution and delivery thereof by Mortgagee, as applicable, to be duly and
timely filed and recorded, or filed for recordation, to the extent permitted
under the Act (with respect to the FAA Filed Documents) or the UCC or similar law
of any other applicable jurisdiction.

 

5.1.4        Securities
Laws.  Neither Owner nor any person
authorized to act on its behalf will directly or indirectly offer any
beneficial interest or Security relating to the ownership of the Aircraft or
any interest in any of the Equipment Notes or any other interest in or security
under the Trust Indenture, for sale to, or solicit any offer to acquire any
such interest or security from, or sell any such interest or security to, any
person in violation of the Securities Act or applicable state or foreign
securities Laws.

 

5.2           Covenants
of WTC.  WTC in its individual
capacity or as Mortgagee, as each Pass Through Trustee or Subordination Agent,
as the case may be, covenants and agrees with Owner as follows:

 

5.2.1        Liens.  WTC (a) will not directly or indirectly
create, incur, assume or suffer to exist any Lien attributable to it on or with
respect to all or any part of the Collateral or the

 

12

 

Aircraft, (b) will,
at its own cost and expense, promptly take such action as may be necessary to
discharge any Lien attributable to WTC on all or any part of the Collateral or
the Aircraft and (c) will personally hold harmless and indemnify Owner,
each Note Holder and each of their respective Affiliates, successors and
permitted assigns and the Collateral from and against (i) any and all
Expenses, (ii) any reduction in the amount payable out of the Collateral
and (iii) any interference with the possession, operation or other use of
all or any part of the Aircraft, imposed on, incurred by or asserted against
any of the foregoing as a consequence of any such Lien.

 

5.2.2        Securities Act.  WTC in its individual capacity or as
Mortgagee, as Pass Through Trustee or Subordination Agent, will not offer any
beneficial interest or Security relating to the ownership of the Aircraft or
any interest in the Collateral, or any of the Equipment Notes or any other
interest in or security under the Trust Indenture for sale to, or solicit any
offer to acquire any such interest or security from, or sell any such interest
or security to, any Person in violation of the Securities Act or applicable
state or foreign securities Laws, provided that the foregoing shall not be
deemed to impose on WTC any responsibility with respect to any such offer, sale
or solicitation by any other party hereto.

 

5.2.3        Performance
of Agreements.  WTC, in
its individual capacity and as Mortgagee, as Pass Through Trustee or
Subordination Agent, as the case may be, shall perform its obligations under
the Indenture Agreements, the Pass Through Trustee Agreements and the
Subordination Agent Agreements in accordance with the terms thereof.

 

5.2.4        Withholding Taxes.  WTC shall indemnify (on an after-tax basis)
and hold harmless Owner against any United States withholding taxes (and
related interest, penalties and additions to tax) as a result of the failure by
WTC to withhold on payments to any Note Holder if such Note Holder failed to
provide to Mortgagee necessary certificates or forms to substantiate the right
to exemption from such withholding tax. 
Any amount payable hereunder shall be paid within 30 days after
receipt by WTC of a written demand therefor.

 

5.3           Covenants
of Note Holders.  Each
Note Holder (including Subordination Agent) as to itself only covenants and
agrees with Owner and Mortgagee as follows:

 

5.3.1        Withholding
Taxes.  Such Note Holder (if it is a
Non-U.S. Person) agrees to indemnify (on an after-tax basis) and hold harmless
Owner and Mortgagee against any United States withholding taxes (and related
interest, penalties and additions to tax) as a result of the failure to provide
Mortgagee necessary certificates or forms to substantiate the right to
exemption from, or reduction of, such withholding taxes or as a result of the
inaccuracy or invalidity of any certificate or form provided by such Note
Holder to Mortgagee in connection with such withholding taxes.  Any amount payable hereunder shall be paid
within 30 days after receipt by a Note Holder of a written demand therefor.

 

5.3.2        Transfer;
Compliance.

 

(a)           Such Note Holder will (i) not
transfer any Equipment Note or interest therein in violation of the Securities
Act or applicable state or foreign securities Law; provided, that the foregoing
provisions of this section shall not be deemed to impose on such Note Holder
any responsibility with respect to any such offer, sale or solicitation by any
other party hereto,

 

13

 

and (ii) perform and
comply with the obligations specified to be imposed on it (as a Note Holder)
under each of the Trust Indenture and the form of Equipment Note set forth in
the Trust Indenture.

 

(b)           Except for the transfer of the
interests of each Pass Through Trustee in the Equipment Notes to the trustee of
the Related Trust (as defined in each Pass Through Trust Agreement) in
accordance with the Pass Through Trust Agreement, each Note Holder will not
sell, assign, convey, exchange or otherwise transfer any Equipment Note or any
interest in, or represented by, any Equipment Note (it being understood that
this provision is not applicable to the Pass Through Certificates) unless the
proposed transferee thereof first provides Owner with both of the following:

 

(i)            a written representation and
covenant that either (a) no portion of the funds it uses to purchase,
acquire and hold such Equipment Note or interest directly or indirectly
constitutes, or may be deemed under the Code or ERISA or any rulings,
regulations or court decisions thereunder to constitute, the assets of any Plan
or (b) the transfer, and subsequent holding, of such Equipment Note or
interest shall not involve or give rise to a transaction that constitutes a
prohibited transaction within the meaning of Section 406 of ERISA or
Section 4975(c)(1) of the Code involving Owner, a Pass Through Trustee,
the Subordination Agent or the proposed transferee (other than a transaction
that is exempted from the prohibitions of such sections by applicable
provisions of ERISA or the Code or administrative exemptions or regulations
issued thereunder); and

 

(ii)           a written covenant that it will not
transfer any Equipment Note or any interest in, or represented by, any
Equipment Note unless the subsequent transferee also makes the representation
described in clause (i) above and agrees to comply with
Section 5.3.2(a) and this clause (ii).

 

5.4           Agreements.

 

5.4.1        Quiet Enjoyment.  Each Pass Through Trustee, Subordination
Agent, each Note Holder and Mortgagee agrees as to itself with Owner that, so
long as no Event of Default shall have occurred and be continuing, such Person
shall not (and shall not permit any Affiliate or other Person claiming by,
through or under it to) interfere with Owner’s (or any Permitted Lessee’s)
rights in accordance with the Trust Indenture to the quiet enjoyment,
possession and use of the Aircraft.

 

5.4.2        Consents.  Each Pass Through Trustee, Subordination
Agent and Mortgagee covenants and agrees, for the benefit of Owner, that it
shall not unreasonably withhold its consent to any consent or approval
requested of it or of Mortgagee under the terms of any of the Operative
Agreements which by its terms is not to be unreasonably withheld.

 

5.4.3        Insurance.  (a) Each Note Holder, Pass Through Trustee,
the Subordination Agent and Mortgagee agrees not to obtain or maintain
insurance for its own account as permitted by Section 4.06 of the Trust
Indenture if such insurance would limit or otherwise adversely affect

 

14

 

the coverage of any
insurance required to be obtained or maintained by Owner pursuant to
Section 4.06 and Annex B of the Trust Indenture.

 

(b)           Each Note Holder, the Owner, the Pass
Through Trustee, the Subordination Agent, Mortgagee and each other Additional
Insured agrees that upon receipt of any proceeds of insurance in connection
with the loss or damage to the Aircraft, other than as contemplated by the
Indenture, such Person will pay such amounts to the Mortgagee for application
in accordance with the terms of the Indenture.

 

5.4.4        Extent of
Interest of Note Holders. 
A Note Holder shall not, as such, have any further interest in, or other
right with respect to, the Collateral when and if the principal and Break
Amount, if any, of and interest on the Equipment Note held by such Holder, and
all other sums, then due and payable to such Holder hereunder and under any
other Operative Agreement, shall have been paid in full.

 

5.4.5        Foreign
Registration.  Each Note
Holder and Mortgagee hereby agrees, for the benefit of Owner but subject to the
provisions of Section 4.02(b) and 4.02(d) of the Trust Indenture:

 

(a)           that Owner shall be entitled to
register the Aircraft or cause the Aircraft to be registered in a country other
than the United States subject to compliance with the following:

 

(i)            each of the following requirements
is satisfied:

 

(A)          no Special Default or Event of Default
shall have occurred and be continuing at the time of such registration; and

 

(B)           such proposed change of registration
is made in connection with a Permitted Lease to a Permitted Air Carrier;

 

(ii)           the Mortgagee shall have received an
opinion of counsel (subject to customary exceptions) reasonably satisfactory to
the Mortgagee addressed to the Mortgagee to the effect that:

 

(A)          such country would recognize the Owner’s
ownership interest in the Aircraft;

 

(B)           the obligations of Owner, and the
rights and remedies of Mortgagee, under the Trust Indenture are valid, binding
and enforceable under the laws of such jurisdiction (or the laws of the
jurisdiction to which the laws of such jurisdiction would refer as the
applicable governing law);

 

(C)           after giving effect to such change in
registration, the Lien of the Trust Indenture on the Owner’s right, title and
interest in and to the Aircraft shall either (x) continue as a valid and
duly perfected first priority security interest and all filing, recording or
other action necessary to protect the same shall have been accomplished (or, if
such opinion cannot be given at the time of such proposed change in
registration because such change in registration is not yet

 

15

 

effective, (1) the opinion shall detail what
filing, recording or other action is necessary and (2) the Mortgagee shall
have received a certificate from Owner that all possible preparations to
accomplish such filing, recording and other action shall have been done, and
such filing, recording and other action shall be accomplished and a
supplemental opinion to that effect shall be delivered to the Mortgagee on or
prior to the effective date of such change in registration) or
(y) continue as provided in the preceding clause (x) (subject to the
provisions of the parenthetical in such clause) except for any filing,
recording or other action required as of a date after the effective date of
such change in registration, and specifying the nature thereof;

 

(D)          it is not necessary, solely as a
consequence of such change in registration and without giving effect to any
other activity of the Mortgagee (or any Affiliate of the Mortgagee), for the
Mortgagee to qualify to do business in such jurisdiction as a result of such
reregistration in order to exercise any rights or remedies with respect to the
Aircraft; and

 

(E)           unless Owner shall have agreed to
provide insurance covering the risk of requisition of use of the Aircraft by
the government of such country (so long as the Aircraft is registered under the
laws of such country), the laws of such country require fair compensation by
the government of such country payable in currency freely convertible into
Dollars and freely removable from such country (without license or permit,
unless Owner prior to such proposed reregistration has obtained such license or
permit) for the taking or requisition by such government of such use;

 

(b)           In addition, as a condition precedent
to any change in registration Owner shall have given Mortgagee assurances
reasonably satisfactory to the Mortgagee:

 

(i)            to the effect that the provisions of
Section 4.06 of the Trust Indenture have been complied with after giving
effect to such change of registration;

 

(ii)           of the payment by Owner of all
reasonable out-of-pocket expenses of each Note Holder and Mortgagee in
connection with such change of registry, including, without limitation
(1) the reasonable fees and disbursements of counsel to Mortgagee,
(2) any filing or recording fees, Taxes or similar payments incurred in
connection with the change of registration of the Aircraft and the creation and
perfection of the security interest therein in favor of Mortgagee for the
benefit of Note Holders, and (3) all costs and expenses incurred in
connection with any filings necessary to continue in the United States the
perfection of the security interest in the Aircraft in favor of Mortgagee for
the benefit of Note Holders; and

 

(iii)          to the effect that the tax and other
indemnities in favor of each person named as an indemnitee under any other
Operative Agreement afford each such person substantially the same protection
as provided prior to such change of registration (or Owner shall have agreed
upon additional indemnities that, together with such original indemnities, in
the reasonable judgment of Mortgagee, afford such protection);

 

16

 

(c)           Mortgagee agrees that if Owner
requests a change of registration pursuant to this Section 5.4.5, it will
take all such action reasonably requested by Owner in order to effect such a
change in registration, including the execution and delivery of such documents
and instruments as may be necessary or advisable in connection therewith; and

 

(d)           Anything to the contrary in the
Operative Agreements notwithstanding, each of the parties hereto agrees that so
long as the conditions in paragraphs (a) and (b) of this
Section 5.4.5 have been satisfied (including the legal opinion required
under Section 5.4.5(a)(ii)), (A) reregistration of the Aircraft may
be effected in a jurisdiction in which (i) the Aircraft is not registered
in the name of the Owner and/or (ii) the Trust Indenture is not recorded
of record in such jurisdiction and/or no filing is made in such jurisdiction in
respect of the Lien of the Trust Indenture and (B) perfection of the
Mortgagee’s Lien on the Collateral may be effected through a pledge or other
unconventional (from a United States perspective) structure.  The provisions of this Section 5.4.5(d)
are not intended to, and shall not, permit the Owner to effect any financing of
the Aircraft in connection with any such reregistration.

 

5.4.6        Interest in
Certain Engines.  Each
Note Holder and Mortgagee agree, for the benefit of each of the lessor,
conditional seller, mortgagee or secured party of any airframe or engine leased
to, or purchased by, Owner or any Permitted Lessee subject to a lease,
conditional sale, trust indenture or other security agreement that it will not
acquire or claim, as against such lessor, conditional seller, mortgagee or
secured party, any right, title or interest in any engine as the result of such
engine being installed on the Airframe at any time while such engine is subject
to such lease, conditional sale, trust indenture or other security agreement
and owned by such lessor or conditional seller or subject to a trust indenture
or security interest in favor of such mortgagee or secured party.

 

5.4.7        Lease Assignment.  Owner shall collaterally assign any lease
effected in accordance with Section 4.02(b)(viii) of the Trust Indenture
with a base term in excess of two years to Mortgagee as security for Owner’s
obligations under the Operative Agreements pursuant to an instrument of
assignment reasonably satisfactory to Mortgagee; provided, however,
that unless an Event of Default shall be continuing, the Owner shall be
entitled to exercise all of the rights of the “lessor” under such lease to the
exclusion of Mortgagee.  In addition, any
such lease entered into by Owner and so collaterally assigned shall provide
that any payments due under such lease shall be paid by the lessee directly to
Owner unless an Event of Default shall have occurred and be continuing and the
lessee has been notified by Mortgagee thereof in writing, in which case such
payments shall, so long as such Event of Default shall be continuing, be paid
by the lessee directly to Mortgagee for application as provided in
Section 6.06 of the Trust Indenture.

 

Section 6.              Confidentiality.  Owner, Note Holders and Mortgagee shall keep
the Participation Agreement and Annex B to the Trust Indenture
confidential and shall not disclose, or cause to be disclosed, the same to any
Person, except (A) to prospective and permitted transferees of Owner’s, a
Note Holder’s, a Liquidity Provider’s, a Pass Through Trustee’s, the Policy
Provider’s, Mortgagee’s or other Indenture Indemnitee’s interest or their
respective counsel or special counsel, independent insurance brokers, auditors,
or other agents who agree to hold such information confidential, (B) Owner’s,
a Note Holder’s, a Liquidity Provider’s, a Pass Through Trustee’s, the Policy
Provider’s, Mortgagee’s or other Indenture Indemnitee’s counsel

 

17

 

or special counsel,
independent insurance brokers, auditors, or other agents, Affiliates or
investors who agree to hold such information confidential, (C) as may be
required by any statute, court or administrative order or decree, legal process
or governmental ruling or regulation, including those of any applicable
insurance regulatory bodies (including, without limitation, the National
Association of Insurance Commissioners), federal or state banking examiners,
Internal Revenue Service auditors or any stock exchange, (D) with respect
to a Note Holder, the Policy Provider or any Pass Through Trustee, to a
nationally recognized rating agency for the purpose of obtaining a rating on
the Equipment Notes or the Pass Through Trust Certificates or to support an
NAIC rating for the Equipment Notes or (E) such other Persons as are
reasonably deemed necessary by the disclosing party in order to protect the
interests of such party or for the purposes of enforcing such documents by such
party; provided, that any and all disclosures permitted by clauses (C),
(D) or (E) above shall be made only to the extent necessary to meet the
specific requirements or needs of the Persons making such disclosures.

 

Section 7.              Indemnification and Expenses.

 

7.1           General Indemnity.

 

7.1.1        General.  Subject to Section 7.1.4, Owner hereby
agrees to indemnify each Indemnitee against, and agrees to protect, save and
keep harmless each of them from any and all Expenses imposed on, incurred by or
asserted against any Indemnitee arising out of or resulting from any one or
more of the following:  (i) the
Aircraft, the Airframe, any Engine or any Part, including without limitation
(A) the operation, possession, use, maintenance, overhaul, testing,
registration, reregistration, delivery, non-delivery, sublease, nonuse,
modification, alteration, repair, storage, airworthiness, replacement,
substitution, abandonment or return of the Aircraft, the Airframe, any Engine
or any Part by the Owner, any lessee or any other Person whatsoever (each, an “Indemnified Act”), whether or not such Indemnified
Act is in compliance with the terms of the Trust Indenture, including, without
limitation, tort liability, claims for death, personal injury or property
damage or other loss or harm to any person whatsoever and claims relating to
any laws, rules or regulations pertaining to such Indemnified Act including
environmental control, noise and pollution laws, rules or regulations and
(B) the manufacture, design, acceptance, rejection, delivery, or condition
of the Aircraft, the Airframe, any Engine or any Part, including, without
limitation, latent and other defects, whether or not discoverable, or trademark
or copyright infringement; (ii) the Operative Agreements or the
enforcement of any of the terms of the Operative Agreements; and (iii) the
offer, sale and delivery of any Equipment Notes, any pass through certificates
issued in respect thereof or successor debt obligations issued in connection
with the refunding or refinancing thereof or any interest therein or
represented thereby or in any way relating to or arising out of the offer or
sale of any interest in the Collateral or any similar interest arising out of
the Trust Indenture and the Collateral (including, without limitation, any
claim arising out of the Securities Act of 1933, as amended, the Securities
Exchange Act of 1934, as amended, or any other Federal or state statute, law or
regulation, or at common law or otherwise relating to securities (collectively “Securities Liabilities”)) (the indemnity provided in this
clause (iii) to extend also to any Person who controls an Indemnitee, its
successors, assigns, employees, directors, officers, servants and agents within
the meaning of Section 15 of the Securities Act of 1933, as amended).

 

18

 

7.1.2        Exclusions.  The foregoing indemnity in Section 7.1.1
shall not extend to any Expense of any Indemnitee to the extent attributable to
one or more of the following: 
(1) any representation or warranty by such Indemnitee or any
Related Indemnitee (as defined below) thereof in the Operative Agreements or
any Pass Through Agreements being incorrect in any material respect;
(2) the failure by such Indemnitee or Related Indemnitee thereof to
perform or observe any agreement, covenant or condition in any of the Operative
Agreements or any Pass Through Agreements; (3) acts or omissions involving
the willful misconduct or gross negligence of such Indemnitee or Related
Indemnitee thereof (other than gross negligence imputed to such Indemnitee or
Related Indemnitee thereof solely by reason of its interest in the Aircraft);
(4) in the case of any Note Holder, a disposition (voluntary or
involuntary) by such Note Holder of all or any part of its interest in an Equipment
Note or, in the case of any other Indemnitee, a disposition by such Indemnitee
of all or any part of such Indemnitee’s interest in the Airframe, any Engine,
Operative Agreements or any Pass Through Agreements; (5) losses arising
out of inspection rights under the Trust Indenture; (6) other than during
the continuation of an Event of Default, the authorization or giving or
withholding of any future amendments, supplements, waivers or consents with
respect to any of the Operative Agreements or any Pass Through Agreements,
which amendments, supplements, waivers or consents are not required pursuant to
the terms of the Operative Agreements or any Pass Through Agreements and not
requested by Owner; (7) any loss of tax benefits, any Tax, or increase in
tax liability under any tax law whether or not Owner is required to indemnify
thereof or pursuant to this Agreement; (8) any fine or expense incurred by
any Indemnitee as a result of such Indemnitee’s having engaged in a “prohibited
transaction” within the meaning of Section 406 of ERISA or
Section 4975 of the Code; (9) any amount which constitutes an expense
that is to be borne by any Indemnitee pursuant to the Operative Agreements or
any Pass Through Agreements; (10) any costs associated with overhead or
normal administration of the Collateral; (11) any amount which constitutes
a loss of future profits; (12) acts or omissions involving the negligence
of such Indemnitee in the operation of an aircraft which is involved in an
accident with the Aircraft or an aircraft on which an Engine is installed;
(13) any amount to the extent attributable to the failure of the
Mortgagee, Subordination Agent or Pass Through Trustee to distribute funds
received and distributable by it in accordance with the terms of the Trust Indenture,
the Intercreditor Agreement or the Pass Through Trust Agreement, respectively;
(14) except to the extent attributable to acts or event occurring on or prior
thereto, acts or events which occur after the termination of the Trust
Indenture in accordance with its terms; (15) 
any amount resulting from any Lien on the Collateral which such
Indemnitee or any of its Related Indemnitees is required to discharge under the
Operative Agreements or any Pass Through Agreement; (16) amounts to the extent
attributable to the offer or sale by such Indemnitee or any Related Indemnitee
of any interest in the Aircraft, any Equipment Note, any Pass Through
Certificate or any similar interest in violation of the Securities Act, other
applicable federal, state or foreign securities laws or any other law on or
prior to the applicable Issuance Date; or (17) amounts related to activities or
transactions of such Indemnitee (or any Related Indemnitee) not arising out of
or resulting from, or attributable to the transactions contemplated by the
Operative Agreements or the Pass Through Agreements.

 

For purposes of this Section 7.1.2, “Related
Indemnitee” means, with respect to any Indemnitee, any director, officer,
employee, agent, servant or Affiliate of any thereof.

 

19

 

7.1.3        After Tax Basis;
Etc.  Owner further agrees that any
payment or indemnity pursuant to this Section 7.1 in respect of any “Expense”
shall be in an amount which, after deduction of all Taxes required to be paid
by such recipient with respect to such payment or indemnity under the laws of
any federal, state or local government or taxing authority in the United
States, or under the laws of any taxing authority or governmental subdivision
of a foreign country, or any territory or possession of the United States or
any international authority, shall be equal to the excess, if any, of
(A) the amount of such Expense over (B) the net reduction in Taxes
required to be paid by such recipient resulting from the accrual or payment of
such Expense.

 

The agreement of Owner in this Section 7.1
constitutes a separate agreement with respect to each Indemnitee and is
enforceable directly by each such Indemnitee.

 

7.1.4        Notice and Contest.  If a claim is made against an Indemnitee
involving one or more Expenses and such Indemnitee has notice thereof, such
Indemnitee shall promptly after receiving such notice give notice of such claim
to Owner; provided that the failure to provide such notice shall not release
Owner from any of its obligations to indemnify hereunder except to the extent
that such failure results in an additional Expense to Owner (in which case
Owner shall not be responsible for such additional Expense) or Owner is
prejudiced as a result of the failure to give such notice in a timely fashion,
and no payment by Owner to an Indemnitee pursuant to this Section 7.1
shall be deemed to constitute a waiver or release of any right or remedy which
Owner may have against such Indemnitee for any actual damages as a result of
the failure by such Indemnitee to give Owner such notice.  Owner shall be entitled, at its sole cost and
expense, acting through counsel reasonably acceptable to the respective
Indemnitee, so long as Owner has acknowledged in writing its responsibility for
such Expense hereunder (provided that such acknowledgment does not apply if
such Expense is covered by Section 7.1.2 or if the decision of a court or
arbitrator provides that Owner is not liable hereunder), (A) in any
judicial or administrative proceeding that involves solely a claim for one or
more Expenses, to assume responsibility for and control thereof, (B) in
any judicial or administrative proceeding involving a claim for one or more
Expenses and other claims related or unrelated to the transactions contemplated
by the Operative Agreements, to assume responsibility for and control of such
claim for Expenses to the extent that the same may be and is severed from such
other claims (and such Indemnitee shall use its reasonable efforts to obtain
such severance), and (C) in any other case, to be consulted by such
Indemnitee with respect to judicial proceedings subject to the control of such
Indemnitee and to be allowed, at Owner’s sole expense, to participate
therein.  An Indemnitee may participate
at its own expense and with its own counsel in any judicial proceeding
controlled by Owner pursuant to the preceding provisions.  Notwithstanding any of the foregoing, Owner
shall not be entitled to assume responsibility for and control of any such
judicial or administrative proceedings if any Event of Default shall have
occurred and be continuing, if such proceedings will involve a material risk of
the sale, forfeiture or loss of, or the creation of any Lien (other than a
Permitted Lien) on the Aircraft or the Collateral, unless Owner shall have
posted a bond or other security reasonably satisfactory to the relevant
Indemnitee with respect to such risk or if such proceedings could entail any
risk of criminal liability being imposed on such Indemnitee.

 

Each affected Indemnitee shall supply Owner with such
information reasonably requested by Owner as is necessary or advisable for
Owner to control or participate in any proceeding to

 

20

 

the extent permitted by this Section 7.1.  Such Indemnitee shall not enter into a
settlement or other compromise with respect to any Expense without the prior
written consent of Owner, which consent shall not be unreasonably withheld or
delayed, unless such Indemnitee waives its right to be indemnified with respect
to such Expense under this Section 7.1.

 

Owner shall supply each affected Indemnitee with such
information reasonably requested by such Indemnitee as is necessary or
advisable for such Indemnitee to control or participate in any proceeding to
the extent permitted by this Section 7.1.

 

7.1.5        Subrogation; Reimbursement.  To the extent of any payment of any Expense
pursuant to this Section 7.1, Owner, without any further action, shall be
subrogated to any claims the affected Indemnitee may have relating thereto
(other than with respect to any of such Indemnitee’s insurance policies).  Such Indemnitee agrees to give such further
assurances or agreements and to cooperate with Owner to permit Owner to pursue
such claims, if any, to the extent reasonably requested by Owner.

 

In the event that Owner shall have paid an Expense to
an Indemnitee pursuant to this Section 7.1, and such Indemnitee
subsequently shall be reimbursed in respect of such indemnified amount from any
other Person, such Indemnitee shall promptly pay Owner the amount of such
reimbursement, including interest received attributable thereto, provided that
no Event of Default has occurred and is continuing, in which case such amounts
shall be paid over to Mortgagee to hold as security for Owner’s obligations as
provided in Section 6.06 of the Trust Indenture.

 

Any indemnity payable under this Section 7.1
shall be payable by Owner within 30 days of the demand therefor
(accompanied by supporting documentation) by the Indemnitee entitled thereto.

 

7.2           Transaction
Costs.

 

7.2.1        Invoices and
Payment.  Each of the Mortgagee, the
Pass Through Trustees, and the Subordination Agent shall promptly submit to
Owner for its prompt approval (which shall not be unreasonably withheld) copies
of invoices in reasonable detail of the Transaction Expenses for which it is
responsible for providing information as they are received (but in no event
later than the 120th day after the Closing Date).  If so submitted and approved, the Owner
agrees promptly, but in any event no later than the 135th day after the
Closing Date, to pay Transaction Expenses.

 

7.2.2        Payment of Other
Expenses.  Owner shall pay
(i) the ongoing fees and expenses of Mortgagee as set out in separate
letter agreement, and (ii) all reasonable out-of-pocket costs and expenses
(including the reasonable fees and disbursements of counsel) incurred by
Mortgagee or any Note Holder in connection with any waiver, amendment or
modification of any Operative Agreement to the extent requested by Owner.

 

Section 8.              Assignment
or Transfer of Interests.

 

8.1           Note Holders.  Subject to Section 5.3.2 hereof and
Section 2.07 of the Trust Indenture, any Note Holder may, at any time and
from time to time, Transfer or grant

 

21

 

participations in all or
any portion of the Equipment Notes and/or all or any portion of its beneficial
interest in its Equipment Notes and the Collateral to any person (it being
understood that the sale or issuance of Pass Through Certificates by a Pass
Through Trustee shall not be considered a Transfer or participation); provided,
that any participant in any such participations shall not have any direct
rights under the Operative Agreements or any Lien on all or any part of the
Aircraft or Collateral and Owner shall not have any increased liability or
obligations as a result of any such participation.  In the case of any such Transfer, the
Transferee, by acceptance of Equipment Notes in connection with such Transfer,
shall be deemed to be bound by all of the covenants of Note Holders contained
in the Operative Agreements.

 

8.2           Effect of Transfer.  Upon any Transfer in accordance with
Section 8.1 (other than any Transfer by any Note Holder, to the extent it
only grants participations in Equipment Notes or in its beneficial interest
therein), Transferee shall be deemed a “Note Holder,” for all purposes of this
Agreement and the other Operative Agreements and, and each reference herein to
Note Holder, shall thereafter be deemed a reference to such Transferee for all
purposes, and the transferring Note Holder shall be released from all of its
liabilities and obligations under this Agreement and any other Operative
Agreements to the extent such liabilities and obligations arise after such
Transfer and, in each case, to the extent such liabilities and obligations are
assumed by the Transferee; provided, that such transferring Note Holder (and
its respective Affiliates, successors, assigns, agents, servants,
representatives, directors and officers) will continue to have the benefit of
any rights or indemnities under any Operative Agreement vested or relating to
circumstances, conditions, acts or events prior to such Transfer.

 

Section 9.              Section 1110. 
It is the intention of each of Owner, the Note Holders (such intention
being evidenced by each of their acceptance of an Equipment Note) and Mortgagee
that Mortgagee shall be entitled to the benefits of Section 1110 in the
event of a case under Chapter 11 of the Bankruptcy Code in which Owner is
a debtor.

 

Section 10.            Change of Citizenship.

 

10.1         Generally.  Without prejudice to the representations,
warranties or covenants regarding the status of any party hereto as a Citizen
of the United States, each of Owner, WTC and Mortgagee agrees that it will,
immediately upon obtaining knowledge of any facts that would cast doubt upon
its continuing status as a Citizen of the United States and promptly upon
public disclosure of negotiations in respect of any transaction which would or
might adversely affect such status, notify in writing all parties hereto of all
relevant matters in connection therewith.

 

10.2         Mortgagee.  Upon WTC giving any notice in accordance with
Section 10.1, Mortgagee shall (if and so long as such citizenship is
necessary under the Act as in effect at such time or, if it is not necessary,
if and so long as Mortgagee’s citizenship could have any adverse effect on
Owner or any Note Holder), subject to Section 9.02 of the Trust Indenture,
resign (subject to the appointment of a replacement) as Mortgagee promptly upon
its ceasing to be such a citizen.

 

22

 

Section 11.            Miscellaneous.

 

11.1         Amendments.  No provision of this Agreement may be
amended, supplemented, waived, modified, discharged, terminated or otherwise
varied orally, but only by an instrument in writing that specifically
identifies the provision of this Agreement that it purports to amend,
supplement, waive, modify, discharge, terminate or otherwise vary and is signed
by the party against which the enforcement of the amendment, supplement,
waiver, modification, discharge, termination or variance is sought.  Each such amendment, supplement, waiver,
modification, discharge, termination or variance shall be effective only in the
specific instance and for the specific purpose for which it is given.  No provision of this Agreement shall be
varied or contradicted by oral communication, course of dealing or performance
or other manner not set forth in an agreement, document or instrument in
writing and signed by the party against which enforcement of the same is
sought.

 

11.2         Severability.  If any provision hereof shall be held
invalid, illegal or unenforceable in any respect in any jurisdiction, then, to
the extent permitted by Law, (a) all other provisions hereof shall remain
in full force and effect in such jurisdiction and (b) such invalidity,
illegality or unenforceability shall not affect the validity, legality or
enforceability of such provision in any other jurisdiction.  If, however, any Law pursuant to which such
provisions are held invalid, illegal or unenforceable may be waived, such Law
is hereby waived by the parties hereto to the full extent permitted, to the end
that this Agreement shall be deemed to be a valid and binding agreement in all
respects, enforceable in accordance with its terms.

 

11.3         Survival.  Except as expressly provided herein, the
indemnities set forth herein shall survive the delivery or return of the
Aircraft, the Transfer of any interest by any Note Holder of its Equipment Note
and the expiration or other termination of this Agreement or any other
Operative Agreement.

 

11.4         Counterparts.  This Agreement and any amendments, waivers,
consents or supplements hereto may be executed in any number of counterparts
(or upon separate signature pages bound together into one or more
counterparts), each of which when so executed shall be deemed to be an
original, and all of which counterparts, taken together, shall constitute one
and the same instrument.

 

11.5         No Waiver.  No failure on the part of any party hereto to
exercise, and no delay by any party hereto in exercising, any of its respective
rights, powers, remedies or privileges under this Agreement or provided at Law,
in equity or otherwise shall impair, prejudice or constitute a waiver of any
such right, power, remedy or privilege or be construed as a waiver of any
breach hereof or default hereunder or as an acquiescence therein nor shall any
single or partial exercise of any such right, power, remedy or privilege
preclude any other or further exercise thereof by it or the exercise of any
other right, power, remedy or privilege by it. 
No notice to or demand on any party hereto in any case shall, unless
otherwise required under this Agreement, entitle such party to any other or
further notice or demand in similar or other circumstances or constitute a
waiver of the rights of any party hereto to any other or further action in any
circumstances without notice or demand.

 

11.6         Notices.  Unless otherwise expressly permitted by the
terms hereof, all notices, requests, demands, authorizations, directions,
consents, waivers and other communications required or permitted to be made,
given, furnished or filed hereunder shall be in writing (it being

 

23

 

understood that the
specification of a writing in certain instances and not in others does not
imply an intention that a writing is not required as to the latter), shall
refer specifically to this Agreement or other applicable Operative Agreement,
and shall be personally delivered, sent by facsimile or telecommunication
transmission (which in either case provides written confirmation to the sender
of its delivery), sent by registered mail or certified mail, return receipt
requested, postage prepaid, or sent by overnight courier service, in each case
to the respective address or facsimile number set forth for such party in
Schedule 1, or to such other address, facsimile or other number as each
party hereto may hereafter specify by notice to the other parties hereto. Each
such notice, request, demand, authorization, direction, consent, waiver or
other communication shall be effective when received or, if made, given,
furnished or filed by facsimile or telecommunication transmission, when
received unless received outside of business hours, in which case on the next
open of business on a Business Day.

 

11.7         Governing Law;
Submission to Jurisdiction; Venue.

 

(a)           THIS AGREEMENT SHALL IN ALL RESPECTS
BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE. 
THIS AGREEMENT IS BEING DELIVERED IN THE STATE OF NEW YORK.

 

(b)           EACH PARTY HERETO HEREBY IRREVOCABLY
AGREES, ACCEPTS AND SUBMITS ITSELF TO THE NON-EXCLUSIVE JURISDICTION OF THE
COURTS OF THE STATE OF NEW YORK IN THE CITY AND COUNTY OF NEW YORK AND OF THE
UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, IN CONNECTION WITH ANY
LEGAL ACTION, SUIT OR PROCEEDING WITH RESPECT TO ANY MATTER RELATING TO OR
ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT.

 

(c)           EACH PARTY HERETO HEREBY IRREVOCABLY
CONSENTS AND AGREES TO THE SERVICE OF ANY AND ALL LEGAL PROCESS, SUMMONS,
NOTICES AND DOCUMENTS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH SUIT,
ACTION OR PROCEEDING MAY BE MADE BY MAILING COPIES THEREOF BY REGISTERED
OR CERTIFIED MAIL, POSTAGE PREPAID, AT THE ADDRESS SET FORTH PURSUANT TO
SECTION 11.6.  EACH PARTY HERETO
HEREBY AGREES THAT SERVICE UPON IT, OR ANY OF ITS AGENTS, IN EACH CASE IN
ACCORDANCE WITH THIS SECTION 11.7(c), SHALL CONSTITUTE VALID AND EFFECTIVE
PERSONAL SERVICE UPON SUCH PARTY, AND EACH PARTY HERETO HEREBY AGREES THAT THE
FAILURE OF ANY OF ITS AGENTS TO GIVE ANY NOTICE OF SUCH SERVICE TO ANY SUCH
PARTY SHALL NOT IMPAIR OR AFFECT IN ANY WAY THE VALIDITY OF SUCH SERVICE ON
SUCH PARTY OR ANY JUDGMENT RENDERED IN ANY ACTION OR PROCEEDING BASED THEREON.

 

(d)           EACH PARTY HERETO HEREBY IRREVOCABLY
WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, AND AGREES NOT TO ASSERT, BY
WAY OF MOTION, AS A DEFENSE, OR OTHERWISE, IN ANY LEGAL ACTION OR PROCEEDING
BROUGHT HEREUNDER IN ANY OF THE ABOVE-NAMED COURTS, THAT SUCH ACTION OR
PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM,

 

24

 

THAT VENUE FOR THE ACTION
OR PROCEEDING IS IMPROPER OR THAT THIS AGREEMENT OR ANY OTHER OPERATIVE
AGREEMENT MAY NOT BE ENFORCED IN OR BY SUCH COURTS.

 

(e)           EACH PARTY HERETO HEREBY WAIVES ITS
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION IN ANY COURT
IN ANY JURISDICTION BASED UPON OR ARISING OUT OF OR RELATING TO THIS AGREEMENT.

 

11.8         Third Party Beneficiary.  This Agreement is not intended to, and shall
not, provide any person not a party hereto (other than the Liquidity Providers,
the Policy Provider, the Escrow Agent and the Paying Agent, each of which is an
intended third party beneficiary with respect to the provisions of
Section 7.1) with any rights of any nature whatsoever against any of the
parties hereto and no person not a party hereto (other than the Liquidity
Providers, the Escrow Agent and the Paying Agent, with respect to the
provisions of Section 7.1) shall have any right, power or privilege in
respect of any party hereto, or have any benefit or interest, arising out of
this Agreement.

 

11.9         Entire Agreement.  This Agreement, together with the other Operative
Agreements, on and as of the date hereof, constitutes the entire agreement of
the parties hereto with respect to the subject matter hereof, and all prior or
contemporaneous understandings or agreements, whether written or oral, among
any of the parties hereto with respect to such subject matter are hereby
superseded in their entireties.

 

11.10       Further Assurances.  Each party hereto shall execute, acknowledge
and deliver or shall cause to be executed, acknowledged and delivered, all such
further agreements, instruments, certificates or documents, and shall do and
cause to be done such further acts and things, in any case, as any other party
hereto shall reasonably request in connection with the administration of, or to
carry out more effectively the purposes of, or to better assure and confirm
into such other party the rights and benefits to be provided under this
Agreement and the other Operative Agreements.

 

[This space intentionally left blank]

 

25

 

IN WITNESS
WHEREOF, each of the parties has caused this Participation
Agreement to be duly executed and delivered as of the day and year first above
written.

 

	
   

  	
  JETBLUE AIRWAYS CORPORATION,

  
	
   

  	
  Owner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WILMINGTON TRUST COMPANY,

  
	
   

  	
  not in its
  individual capacity, except as expressly provided herein, but solely as
  Mortgagee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WILMINGTON TRUST COMPANY,

  
	
   

  	
  not in its
  individual capacity, except as expressly provided herein, but solely as Pass
  Through Trustee under the Pass Through Trust Agreement for the JetBlue
  Airways Pass Through Trust, 2004-2G-1

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WILMINGTON TRUST COMPANY,

  
	
   

  	
  not in its
  individual capacity, except as expressly provided herein, but solely as Pass
  Through Trustee under the Pass Through Trust Agreement for the JetBlue
  Airways Pass Through Trust, 2004-2G-2

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

26

 

	
   

  	
  WILMINGTON TRUST COMPANY,

  
	
   

  	
  not in its
  individual capacity, except as expressly provided herein, but solely as Pass
  Through Trustee under the Pass Through Trust Agreement for the JetBlue
  Airways Pass Through Trust, 2004-2C

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WILMINGTON TRUST COMPANY,

  
	
   

  	
  not in its
  individual capacity, except as expressly provided herein, but solely as
  Subordination Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

27

 

SCHEDULE 1

TO

PARTICIPATION AGREEMENT

ACCOUNTS; ADDRESSES

Address For Notices

 

	
  JETBLUE AIRWAYS CORPORATION

  	
  JetBlue Airways Corporation 

  118-29 Queens Blvd. 

  Forest Hills, NY 11375 

  Attention: Vice President – Corporate Finance 

  Facsimile: (718) 709-3639

  
	
   

  	
   

  
	
  AVSA S.A.R.L.

  	
  AVSA S.A.R.L. 

  2, rond-point Maurice Bellonte 

  31700 Blagnac, France 

  

  Account Details: 

  Calyon, New York Branch 

  for the account of AVSA S.A.R.L. 

  ABA No. 026008073 

  Account No. 0118 363 000 100 

  Attention: William McIllvain 

  Ref: JetBlue/MSN [MSN]

  
	
   

  	
   

  
	
  WILMINGTON TRUST COMPANY, AS MORTGAGEE

  	
  Wilmington Trust Company 

  One Rodney Square 

  1100 North Market Street 

  Wilmington, Delaware 19890-0001 

  Attention: Corporate Trust Administration 

  Facsimile: (302) 636-4140 Telephone: (302) 636-6000

  
	
   

  	
   

  
	
   

  	
  Account Details:

  
	
   

  	
   

  
	
  WILMINGTON TRUST COMPANY, 

  AS SUBORDINATION AGENT

  	
  Wilmington Trust Company 

  ABA No. 031100092 

  Account No. [       ] 

  Ref. N[XXX]JB

  

 

1

 

	
   

  	
   

  
	
  WILMINGTON TRUST COMPANY, 

  AS PASS THROUGH TRUSTEE FOR THE 

  2004-2G-1 PASS THROUGH TRUST

  	
  Wilmington Trust Company 

  One Rodney Square 

  1100 North Market Street 

  Wilmington, Delaware 19890-0001 

  Attention: Corporate Trust Administration 

  Facsimile: (302) 636-4140 

  Telephone: (302) 636-6000

  
	
   

  	
   

  
	
  WILMINGTON TRUST COMPANY, 

  AS PASS THROUGH TRUSTEE FOR THE 

  2004-2G-2 PASS THROUGH TRUST

  	
  Wilmington Trust Company 

  One Rodney Square 

  1100 North Market Street

  Wilmington, Delaware 19890-0001 

  Attention: Corporate Trust Administration 

  Facsimile: (302) 636-4140 

  Telephone: (302) 636-6000

  
	
   

  	
   

  
	
  WILMINGTON TRUST COMPANY, 

  AS PASS THROUGH TRUSTEE FOR THE

  2004-2C PASS THROUGH TRUST

  	
  Wilmington Trust Company 

  One Rodney Square 

  1100 North Market Street 

  Wilmington, Delaware 19890-0001 

  Attention: Corporate Trust Administration 

  Facsimile: (302) 636-4140 

  Telephone: (302) 636-6000

  

 

2

 

SCHEDULE 2

TO

PARTICIPATION AGREEMENT

 

LOANS

 

	
  Pass
  Through 

  Trustee

  	
   

  	
  Series of 

  Equipment Notes

  	
   

  	
  Dollar Amount 

  of Loan

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

1

SCHEDULE 3

TO

PARTICIPATION AGREEMENT

 

CERTAIN TERMS

 

	
  Minimum Liability Insurance Amount:

  	
  $300,000,000

  

 

1

 

SCHEDULE 4

TO

PARTICIPATION AGREEMENT

 

PERMITTED COUNTRIES

 

Argentina

Australia

Austria

Bahamas

Belgium

Brazil

Canada

Chile

Cyprus

Czech Republic

Denmark

Egypt

Ecuador

France

Germany

Greece

Hungary

Iceland

India

Indonesia

Ireland

Italy

Jamaica

Japan

Jordan

Kuwait

Luxembourg

Malaysia

Malta

Mexico

Morocco

Netherlands

New Zealand

Norway

Oman

Paraguay

People’s Republic of China

Philippines

Poland

Portugal

Qatar

Republic of China (Taiwan)

Singapore

Slovakia

South Africa

South Korea

Spain

Sri Lanka

Sweden

Switzerland

Thailand

Tobago

Trinidad

Tunisia

Turkey

United Kingdom

Uruguay

Venezuela

 

1

 

 

EXHIBIT A

 

[FORM OF OPINION OF OWNER’S
SPECIAL NEW YORK COUNSEL]

 

To the
Persons Listed on Schedule I

Attached Hereto

 

Re:          Mortgage
of Airbus Model A320-232 Aircraft with Manufacturer’s

Serial Number [MSN] and U.S. Registration Number NXXXJB

 

Gentlemen:

 

We
have been requested by JetBlue Airways
Corporation, a Delaware corporation (the “Company”), to act as special New York counsel with respect to, and to
render this opinion letter in connection with, the transactions contemplated by
the Participation Agreement [NXXXJB], dated as of [Date] (the “Participation Agreement”), among Wilmington
Trust Company, a Delaware banking corporation (“WTC”), as Mortgagee (the “Mortgagee”), the Company, as Owner, and WTC, in
its capacity as Subordination Agent under the Intercreditor Agreement (as
defined in the Participation Agreement) and as Pass Through Trustee under the
Pass Through Trust Agreements (as defined in the Participation Agreement).  Capitalized terms used herein and not otherwise
defined herein have the respective meanings given those terms in the
Participation Agreement.

 

In
connection with this opinion letter we have examined, among other things,
originals or copies certified or otherwise identified to our satisfaction of the
following documents:

 

(i)            Participation
Agreement;

 

(ii)           Trust
Indenture;

 

(iii)          Trust
Indenture Supplement No. 1;

 

(iv)          Consent
and Agreement;

 

(v)           Engine
Consent and Agreement;

 

(vi)          Forms
of the Equipment Notes; and

 

(vii)         Bills
of Sale.

 

We
have also examined and relied upon such other documents and such other
corporate records, certificates and other statements of governmental officials
and corporate officers and other representatives of the Company as we have
deemed necessary or appropriate for the purposes of this opinion.  As to certain facts material to the opinions
expressed herein, we have relied upon representations and warranties contained
in the Operative Agreements.  The
opinions expressed herein are subject to the following exceptions, assumptions,
qualifications and limitations:

 

1

 

A.            The
opinions set forth below are limited to the laws of the State of New York, the
federal laws of the United States of America and the General Corporation Law of
the State of Delaware, except that we express no opinion with respect to
(i) the laws, regulations or ordinances of any county, town or
municipality or governmental subdivision or agency thereof, (ii) state
securities or blue sky laws or federal securities laws, including the
Securities Act and the Investment Company Act of 1940, (iii) any federal
or state tax, antitrust or fraudulent transfer of conveyance laws,
(iv) the Employee Retirement Income Security Act of 1974, as amended, or
(v) the Act (except as expressly provided in paragraph 3 below), or
any other laws, rules or regulations governing, regulating or relating to the
acquisition, ownership, registration, use or sale of an aircraft, airframe or
aircraft engine or to the particular nature of the equipment to be acquired by
the Owner.  In addition, our opinions are
based upon a review of those laws, statutes, rules and regulations which, in
our experience, are normally applicable to transactions of the type
contemplated by the Participation Agreement.

 

B.            The
opinion set forth in paragraph 1 below is subject to (i) limitations
on enforceability arising from applicable bankruptcy, insolvency,
reorganization, moratorium, receivership, fraudulent conveyance, fraudulent
transfer, preferential transfer and similar laws relating to or affecting the
rights and remedies of the creditors or lessors generally and the effect of
general principles of equity, including, without limitation, laches and
estoppel as equitable defenses and concepts of materiality, reasonableness,
good faith and fair dealing (regardless of whether such enforceability is
considered or applied in a proceeding in equity or at law) and considerations
of impracticability or impossibility of performance, and defenses based upon
unconscionability of otherwise enforceable obligations in the context of the
factual circumstances under which enforcement thereof is sought and
(ii) the qualification that the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding
therefor may be brought.  In addition,
certain remedial and procedural provisions of the Operative Agreements to which
the Company is a party (the “Company Documents”)
and the Trust Indenture are or may be unenforceable in whole or in part, but
the inclusion of such provisions does not affect the validity of those
agreements and does not, in our opinion, make the remedies provided in those
agreements, or otherwise available under applicable law, inadequate for the
practical realization of the substantive benefits purported to be provided
thereby, except for the economic consequences resulting from any delay imposed
by, or any procedure required by, applicable laws, rules, regulations and by
constitutional requirements.  We express
no opinion as to (i) any provision contained in any Operative Agreement
(a) providing for indemnification or exculpation of any Person for such
Person’s gross negligence, willful misconduct, recklessness or unlawful conduct
or in respect of liabilities under the Securities Act, (b) providing for
late payment charges or an increase in interest rate upon delinquency in
payment or the occurrence of a default or other specified event but only to the
extent such provision is deemed to constitute a penalty or liquidated damages
provision, (c) as such provision relates to the subject matter
jurisdiction of federal courts or the waiver of inconvenient forum with respect
to proceedings in federal courts, (d) that purports to establish (or may
be construed to establish) evidentiary standards or (e) providing for the
waiver of any statutory right or any broadly or vaguely stated rights or
unknown future rights, or any waiver which is against public policy
considerations or (ii) Section 11.2 or 11.7(c) of the Participation
Agreement or any comparable provision of any other Operative Agreement.  Under certain circumstances the requirement
that the provisions of an Operative Agreement may be modified or waived only in
writing or only in a specific instance

 

2

 

and provisions to the effect that failure or delay in
exercising any right, remedy, power and/or privilege will not impair or waive
such right, remedy, power and/or privilege may be unenforceable to the extent
that an oral agreement has been effected or a course of dealing has occurred
modifying such provisions.  A court may
modify or limit contractual agreements regarding attorneys’ fees.

 

C.            To
the extent that our opinions expressed herein involve conclusions as to the
matters set forth in the opinions dated the date hereof of Morris, James,
Hitchens & Williams LLP or DeBee Gilchrist being delivered to you on
the date hereof, we have assumed, without independent investigation, the
correctness of the matters set forth in such opinions.

 

D.            We
have assumed the due authorization, execution and delivery of the Operative
Agreements by each of the parties thereto, that each of such parties has the
power and authority to execute, deliver and perform each such Operative
Agreement and has obtained or made all necessary consents, approvals, filings
and registrations in connection therewith (except any required under New York
law by the Company), that such execution, delivery and performance does not
violate its charter, by-laws or similar instrument, that each Operative
Agreement constitutes the legal, valid and binding obligation of each party
thereto (other than the Company) enforceable against such Person in accordance
with its terms, that value has been given by each Pass Through Trustee to the
Company under the Trust Indenture, that the Company has rights in the
Collateral, that each of the Company and WTC is duly organized, validly
existing and in good standing in its jurisdiction of organization and qualified
to transact business in each other jurisdiction where such qualification is
required.

 

E.             We
have assumed the due authorization, execution and issuance of the Equipment
Notes by the Company and the due authentication of the Equipment Notes by the
Mortgagee and the delivery thereof against payment therefor, all in accordance
with the Participation Agreement and the Trust Indenture, and that the
Equipment Notes conform to the forms thereof examined by us.

 

F.             We
have assumed that all signatures on documents examined by us are genuine, that
all persons signing such documents have legal capacity, that all documents
submitted to us as originals are authentic and that all documents submitted to
us as copies or specimens conform with the originals, which facts we have not
independently verified.

 

G.            We
express no opinion as to any provision in any Operative Agreement that is
contrary to Section 9-401, or Part VI of Article 9, of the UCC.

 

H.            We
have not made any examination of, and express no opinion with respect to (and
to the extent relevant have assumed the accuracy and sufficiency of),
(i) descriptions of, the legal or beneficial ownership of, or the title or
condition of title to, the Collateral or any other property covered by any of
the Operative Agreements, (ii) except as expressly set forth in
paragraphs 3 and 5 below, the existence, creation, validity or attachment
of any Lien thereof, (iii) except as expressly set forth in
paragraph 3 below, the perfection of any Lien thereon and (iv) the
priority of any Lien thereon.

 

3

 

I.              The
opinions expressed herein are given as of the date hereof.  We assume no obligation to advise you of any
facts or circumstance that may come to our attention, or any changes in law
that may occur after the date hereof, which may affect the opinion expressed
herein.

 

J.             To
the extent the opinions rendered refer to security interests in proceeds, we
note that Section 9-315 of the UCC provides that proceeds of a security
interest to which the UCC is applicable is continuously perfected, but becomes
unperfected unless one of the measures required to be taken by Section 9-315(d)
thereof is taken within 21 days after receipt of the proceeds by the “debtor.”

 

Based
on and subject to the foregoing, we are of the opinion that:

 

1.             Each
Company Document constitutes the valid and binding obligation of the Company
and is enforceable against the Company in accordance with its terms.

 

2.             Except
for the matters referred to in clauses (i), (ii) and (iii) of
paragraph 3 below, no approval, authorization or other action by or filing
with any governmental authority is required for the execution and delivery by
the Company of the Company Documents or the consummation of the transactions
contemplated thereby to occur at the Closing.

 

3.             Except
for (i) the registration of the Aircraft with the FAA pursuant to the Act,
(ii) the filing and recordation in accordance with the Act of the FAA
Filed Documents, and assuming that at the time of such filing no other
unrecorded document relating to the Aircraft has been filed pursuant to the Act
and (iii) the filing of the Financing Statement referred to in
Section 3.1.14 of the Participation Agreement, and the filing of periodic
continuation statements with respect thereto, (a) no further filing or
recording of any document is necessary (x) to establish the Company’s
title to the Airframe and Engines, and (y) to create a valid security
interest in the Company’s interest as owner of the Airframe and Engines, and
(b) no further filing or recording of any document in the State of New
York, under the Act or under the UCC as currently in effect in New York is
required to perfect a security interest in the Company’s right, title and interest
in the Collateral, to the extent it is subject to Article 9 of the UCC, in
favor of the Mortgagee pursuant to the Trust Indenture.

 

4.             So
long as the Company, on the date hereof, holds an air carrier operating
certificate issued by the Secretary of Transportation pursuant to
Chapter 447 of Title 49 of the United States Code for aircraft
capable of carrying 10 or more individuals or 6,000 pounds or more of cargo,
the Mortgagee will be entitled to the benefits of Section 1110 of Title 11
of the United States Code with respect to the Airframe and Engines delivered on
the date hereof in connection with any case commenced by or against the Company
under Chapter 11 of Title 11 of the United States Code.

 

5.             Upon
issuance, execution, authentication and delivery of the Equipment Notes at the
Closing, the Trust Indenture creates the security interest in favor of the
Mortgagee, as trustee for the benefit of the holders of the Equipment Notes, in
the Collateral it purports to create to the extent that the UCC applies to a
security interest in such property.

 

4

 

This
opinion is being delivered pursuant to Section 3.1.2(xiv)(A) of the
Participation Agreement.  This opinion
may be relied upon by you (and any permitted Transferee under Section 8.1
of the Participation Agreement) in connection with the matters set forth herein
and, without our prior written consent, may not be relied upon for any other
purpose and may not be furnished to any other Person for any purpose.

 

Very truly yours,

 

5

 

SCHEDULE I

 

Wilmington Trust Company, individually, as
Mortgagee, as Subordination Agent and as each Pass Through Trustee

 

Landesbank Baden-Württemberg, as Primary
Liquidity Provider

 

Citibank, N.A., as Above-Cap Liquidity
Provider

 

MBIA Insurance Corporation, as Policy
Provider

 

Moody’s Investors Service, Inc.

 

Morgan Stanley & Co. Incorporated,
individually and as representative for Citigroup Global Markets Inc., J.P.
Morgan Securities Inc. and HSBC Securities (USA) Inc.

 

Standard & Poor’s Ratings Services

 

JetBlue Airways Corporation

 

6

 

EXHIBIT B

 

[FORM OF OPINION OF OWNER’S IN-HOUSE
COUNSEL]

 

To the
Persons Listed on

Schedule I Hereto

 

Re:          Mortgage
of Airbus Model A320-232 Aircraft with Manufacturer’s Serial Number [MSN]
and U.S. Registration Number NXXXJB

 

Ladies and
Gentlemen:

 

I am
Vice President and General Counsel of JetBlue
Airways Corporation, a Delaware corporation (the “Company”), and have acted in such capacity in
connection with the transactions contemplated by the Participation Agreement
[NXXXJB] dated as of [Date], among Wilmington Trust Company,
a Delaware banking corporation, as Mortgagee, Subordination Agent under the
Intercreditor Agreement (as defined in the Participation Agreement) and as Pass
Through Trustee under the Pass Through Trust Agreements (as defined in the
Participation Agreement) and the Company, as Owner (the “Participation Agreement”). 
All capitalized terms used herein and not otherwise defined herein shall
have the respective meanings given those terms in the Participation
Agreement.  This opinion letter is being
furnished to you pursuant to Section 3.1.2(xiv)(B) of the Participation
Agreement.

 

In
rendering the opinions set forth herein, I have examined:

 

(i)            an
execution copy of the Participation Agreement;

 

(ii)           an
execution copy of the Trust Indenture;

 

(iii)          an
execution copy of the Trust Indenture Supplement No. 1;

 

(iv)          an
execution copy of the Consent and Agreement;

 

(v)           an
execution copy of the Engine Consent and Agreement;

 

(vi)          an
execution copy of the Equipment Notes delivered today;

 

(vii)         an
execution copy of the Bills of Sale; and

 

(viii)        the
opinion of DeBee Gilchrist, special FAA counsel, dated the date hereof.

 

I have
also examined such other documents, instruments and materials as I have
considered relevant in connection with the opinions set forth herein.

 

Subject
to the comments and qualifications set forth below, I am of the opinion that:

 

(a)           The
Company is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware; and has the corporate power and
authority to

 

1

 

enter into and perform its obligations under the
Participation Agreement, the Trust Indenture, the Trust Indenture Supplement
No. 1 and the Equipment Notes (collectively, the “Company Documents”).

 

(b)           The
Company is a “citizen of the United States” and holds an air carrier operating
certificate issued by the Secretary of Transportation pursuant to Chapter 447
of Title 49 of the United States Code for aircraft capable of carrying 10 or
more individuals or 6,000 pounds or more of cargo, and such certificate is in
full force and effect.

 

(c)           Each
of the Company Documents has been duly executed and delivered on behalf of the
Company.  The execution, delivery and
performance by the Company of the Company Documents, and the consummation of
the transactions contemplated thereby, have been duly authorized by all
necessary corporate action on the part of the Company, and do not (i)
contravene any law, judgment, government rule, regulation, order, writ,
injunction or decree of any court or governmental authority applicable to the
Company or binding on the Company or the certificate of incorporation or bylaws
of the Company or (ii) require stockholder approval.

 

(d)           The
execution, delivery and performance by Company of the Company Documents, and
the consummation of the transactions contemplated thereby, do not violate or
constitute a default under (other than any violation or default that would not
result in a Material Adverse Change to Owner), or result in the creation of any
Lien (other than Permitted Liens) upon the Aircraft under, (i) the Company’s
corporate charter or by-laws or (ii) any indenture, mortgage, contract, or
other agreement known to me to which the Company is a party or by which it or
its properties may be bound.

 

(e)           There
are no pending or, to the best of my knowledge and information, threatened
actions or proceedings before any court or administrative agency or arbitrator
that question the validity of any of the Company Documents or the Company’s
ability to perform its obligations under the Company Documents or that would
have been required to be disclosed in the Company’s Annual Report on Form 10-K
filed for the year ended                             ,
on any subsequent Quarterly Report on Form10-Q or Current Report on Form 8-K,
except such as are therein disclosed.

 

Whenever
a statement herein is qualified by “to the best of my knowledge and information”
or similar phrase, it is intended to indicate that neither I nor any lawyer
employed by the Company has current actual knowledge of the inaccuracy of such
statement.  However, except as otherwise
expressly indicted, I have not undertaken any independent investigation to
determine the accuracy of any such statement, and no inference that I have any
knowledge of any matters pertaining to such statement should be drawn.

 

The
opinions set forth herein are subject to, and are limited by, the following
assumptions, qualifications, limitations and exceptions in addition to those
set forth elsewhere herein:

 

A.            I
have not examined the title to the Aircraft or the Engines and I do not express
any opinion as to such title or as to the due filing or recording of any
instrument affecting title.  (Such
matters are covered by the above-referenced opinion of DeBee Gilchrist).

 

2

 

B.            This
letter is given as of the date hereof.  I
have no obligation to advise the recipients of this letter (or any third party)
of changes of law or fact that may occur after the date hereof.

 

C.            I
am a member of the bar of the State of New York and I do not express any opinion
as to matters governed by any laws other than the State of New York, the
Federal laws of the United States of America and the general corporate laws of
the State of Delaware.

 

	
   

  	
  Very truly
  yours,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  James G.
  Hnat

  
	
   

  	
  Vice
  President and General Counsel

  
	
   

  	
  JetBlue
  Airways Corporation

  

 

3

 

SCHEDULE I

 

Wilmington Trust Company, individually and as
Mortgagee, as Subordination Agent and as each Applicable Pass Through Trustee

 

Landesbank Baden-Württemberg, as Primary
Liquidity Provider

 

Citibank, N.A., as Above-Cap Liquidity
Provider

 

MBIA Insurance Corporation, as Policy
Provider

 

Moody’s Investors Service, Inc.

 

Morgan Stanley & Co. Incorporated,
individually and as representative for Citigroup Global Markets Inc., J.P.
Morgan Securities Inc. and HSBC Securities (USA) Inc.

 

Standard & Poor’s Ratings Services

 

4

 

EXHIBIT C

 

[FORM OF FAA COUNSEL OPINION]

 

                             ,
[2005]

 

To the
Addressees on 

Schedule I Attached Hereto:

 

Re:          JetBlue
Airways Corporation;

Our File Number:  

 

Ladies &
Gentlemen:

 

This
opinion is rendered in connection with Section 3.1.2(xiv)(C) of the
Participation Agreement [N         JB],
dated as of November              ,
2004 (the “Participation Agreement”),
among JETBLUE AIRWAYS CORPORATION,
a Delaware Corporation, as owner (the “Owner”),
and WILMINGTON TRUST COMPANY, a
Delaware Banking Corporation, not in its individual capacity, except as
expressly provided therein, but solely as Mortgagee (in its capacity as
mortgagee, “Mortgagee”), WILMINGTON TRUST COMPANY, not in its
individual capacity, except as expressly provided therein, but solely as Pass
Through Trustee under each of the Pass Through Trust Agreements (as such terms
are defined in the Participation Agreement), and WILMINGTON TRUST COMPANY, not in its individual capacity,
except as expressly provided therein, but solely as Subordination Agent under
the Intercreditor Agreement (as such terms are defined in the Participation
Agreement), as such Participation Agreement relates to the following-described
aircraft and engines:

 

AIRCRAFT

 

	
  Manufacturer

  	
   

  	
  Model

  	
   

  	
  Serial 

  Number

  	
   

  	
  U.S. Registration 

  Number

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Airbus

  	
   

  	
  A320-232

  	
   

  	
  [MSN]

  	
   

  	
  [N        JB]

  	
   

  

 

hereafter referred to as the “Aircraft”; and

 

ENGINES

 

	
  Manufacturer

  	
   

  	
  Model

  	
   

  	
  Serial Number

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  International Aero Engines

  	
   

  	
  [           ]

  	
   

  	
  [MSN]

  	
   

  
	
  International Aero Engines

  	
   

  	
  [           ]

  	
   

  	
  [MSN]

  	
   

  

 

hereafter referred to as the “Engines”; this opinion is rendered with
respect to matters arising under that portion of Section 40102 and Section
44101 through Section 44112 of Title 49, United

 

1

 

States Code, “Transportation” (the “Act”),
relating to the recordation of instruments and the registration of the Aircraft
pursuant to the Act.

 

Except
as otherwise defined herein, terms are used in this opinion as they are defined
in the Act.

 

This
letter confirms that the following described instruments (the “Instruments”) were filed with the Federal
Aviation Administration (the “FAA”)
on                                ,
            , at
the Central Standard Times noted below:

 

(1)           Aircraft
Bill of Sale (FAA AC Form 8050-2), dated                                  ,
              
(the “Bill of Sale”), between
AVSA, S.A.R.L., as seller, and The Owner, as purchaser, filed at              :        .m.;

 

(2)           Aircraft
Registration Application (FAA AC Form 8050-1), dated                                ,
          (the “Application”), in the name of The Owner,
filed at      :           .m.;
and

 

(3)           Trust
Indenture and Mortgage [N         JB],
dated as of                       ,
            ,
between The Owner, as mortgagor, and the Mortgagee, with Trust Indenture and
Mortgage [N____JB] Supplement No. 1, dated                      ,
              ,
executed by The Owner, as mortgagor, attached (herein collectively the “Mortgage”), filed with the FAA as one
instrument at         :           .m.

 

PLEASE
NOTE:  The Mortgage was filed with the FAA
with certain proprietary information in attachments thereto intentionally
omitted from the FAA filing counterpart thereof as containing confidential
financial information.

 

Based
upon examination of the Instruments and the records maintained by the FAA under
the Act (the “Records”) as deemed
necessary to render this opinion and as were made available, the undersigned is
of the opinion that as of the time of filing noted above:

 

(a)           The
Bill of Sale and the Mortgage are in due form for recording pursuant to the Act
and have been duly filed for recordation with the FAA pursuant to the Act;

 

(b)           The
Application is in due form for filing and has been duly filed with the FAA
pursuant to and in accordance with the provisions of the Act;

 

(c)           The
Aircraft is presently eligible for registration with the FAA under the Act in
the name of the Owner, and the filing with the FAA of the Bill of Sale and the
Application will cause the FAA to register the Aircraft, in due course, in the
name of the Owner and to issue to the Owner a Certificate of Aircraft
Registration (AC Form 8050-3) for the Aircraft pursuant to and in accordance
with the provisions of the Act;

 

2

 

(d)           The
Owner has valid legal title to the Aircraft, and the Aircraft and the Engines
are free of all liens and encumbrances except those created by the Mortgage;

 

(e)           The
filing of the Mortgage for recordation will, upon recordation, result in a duly
perfected first priority mortgage on and a security interest in the Aircraft
and the Engines, in favor of the Mortgagee, under the terms of the Mortgage;

 

(f)            Except
for the recording of the Mortgage with the FAA as described herein, no further
filing or recording, including any filing or recording of the Mortgage or any
other document in any other place within the United States, is necessary in
order to create and perfect the Mortgagee’s first priority mortgage on and a
security interest in the Aircraft and the Engines, under the terms of the
Mortgage, as against any third parties under the applicable laws of any
jurisdiction within the United States; and

 

(g)           Neither
the execution, delivery and performance of the Instruments by the parties
thereto, nor the consummation of any of the transactions contemplated thereby, require
the consent or approval of, or the giving of notice to, or the registration of,
or the taking of any other action in respect of the FAA under the Act and the
regulations adopted thereunder, except the filings specified elsewhere in this
opinion.

 

The
opinions expressed herein are as to federal laws of the United States
only.  Pursuant to Section 44108 of the
Act, the validity of any instrument, the recording of which is provided for by
Section 44107 of the Act, is subject to the laws of the State, the District of
Columbia, or the territory or possession of the United States at which the
conveyance, lease or instrument is delivered (the “Governing Laws”).  The
undersigned expresses no opinions as to such Governing Laws and assumes the
Instruments and the documents in the Records are legally sufficient under such
Governing Laws to create valid and enforceable interests of the type they
purport to create and to release or terminate those interests which they
purport to release or terminate.  No
opinion is expressed as to times when the Aircraft and the Engines are outside
the United States.

 

Since
the examination was limited to the Records, the opinion does not cover liens
which are perfected without the filing of notice thereof with the FAA, such as
and including, but not limited to, federal tax liens, liens arising under Title
29, United States Code, Section 1368(a), possessory artisans’ liens, or matters
of which the parties have actual notice. 
The opinion is subject to the accuracy of FAA personnel and contractors
in the filing, indexing and recording of the Records and in searching for
cross-reference index cards for the Engines. 
The opinion does not cover documents, if any, which may have been filed
for recordation but not listed upon the indices of Records available for
examination immediately prior to our examination for the purpose of this
opinion.

 

3

 

The
opinions as to title of the Aircraft and liens upon the Aircraft and the
Engines relate only to the time beginning with United States registration, and
not to times when the Aircraft may have been upon a foreign aircraft registry.

 

The
opinion relating to registration of the Aircraft is only as to its current
eligibility for registration and not with respect to events which may occur in
the future which may affect continued eligibility for registration.  As to matters of citizenship, the undersigned
has relied upon representations made by the Owner in the Application.  It is assumed the Aircraft is not registered
under the laws of any other country.

 

In
rendering this opinion with respect to the eligibility of the Mortgage for
recordation with certain proprietary information intentionally omitted
therefrom, we have relied upon the opinion of John A. Cassady, Deputy
Chief Counsel of the FAA issued September 16, 1994 (Federal
Register/Volume 59, Number 182/September 21, 1994).

 

The
undersigned has assumed that all documents are authentic and all signatures are
genuine and properly authorized.

 

This
opinion is supplied to and may be relied upon by the entities to whom it is
addressed, solely for the purposes described herein.

Very truly yours,

 

DEBEE GILCHRIST

 

 

Jack P. Gilchrist

 

4

 

SCHEDULE I

to Opinion of                            ,
    

 

Re:          JetBlue
Airways Corporation;

One (1) Airbus A320-232 Aircraft, Serial

Number [MSN], U.S. Registration Number

[N        JB]; and Two (2)
International Aero

Engines [            ]
Engines, Serial Numbers

[MSN] and [MSN];

Our File Number:                   

 

ADDRESSEES

 

Wilmington Trust Company, as mortgagee, as
subordination agent and as pass through trustee

 

JetBlue Airways Corporation

 

Landesbank Baden-Württemberg, as Primary
Liquidity Provider

 

Citibank, N.A., as above-cap liquidity
provider

 

MBIA Insurance Corporation, as Policy
Provider

 

Moody’s Investors Service, Inc.

 

Morgan Stanley & Co. Incorporated,
individually and as representative for Citigroup Global Markets Inc., J.P.
Morgan Securities Inc. and HSBC Securities (USA) Inc.

 

Standard & Poor’s Ratings Services

 

5

 

EXHIBIT D

 

[FORM OF WTC COUNSEL’S OPINION]

 

[date]

 

To
Each of the Persons

Listed on Schedule A

Attached Hereto

 

Re:          JetBlue
Airways Financing of One Airbus A320-232

Aircraft Bearing Manufacturer’s Serial Number [MSN]

 

Ladies and
Gentlemen:

 

We
have acted as special counsel to Wilmington
Trust Company, a Delaware banking corporation (in its individual
capacity, “Wilmington
Trust”), in
connection with the Trust Indenture and Mortgage [NXXXJB], dated as of [Date]
(the “Trust
Indenture”), between
Wilmington Trust, not in its individual capacity, except as expressly stated
therein, but solely as Mortgagee (the “Mortgagee”),
and JetBlue Airways Corporation (the “Owner”).  Pursuant to the
Participation Agreement [NXXXJB], dated as of [Date] (the “Participation Agreement”), among JetBlue
Airways Corporation, as
Owner, and Wilmington Trust, not in its individual capacity except as expressly
provided therein, but solely as Mortgagee, Subordination Agent under the
Intercreditor Agreement, and Pass Through Trustee under each of the Pass
Through Agreements, financing is being provided for the acquisition of one
Airbus A320-232 Aircraft bearing Manufacturer’s Serial No. [MSN].  This opinion is furnished pursuant to
Section 3.1.2(xiv)(D) of the Participation Agreement.  Capitalized terms used herein and not
otherwise defined are used as defined in the Participation Agreement or, if not
defined therein, as defined in the Trust Indenture, except that reference
herein to any instrument shall mean such instrument as in effect on the date
hereof.

 

We
have examined executed counterparts, forms or copies otherwise identified to
our satisfaction of the following documents:

 

(a)           the
Participation Agreement;

 

(b)           the
Trust Indenture and the Trust Indenture Supplement (the documents in
paragraphs (a) and (b) above being collectively referred to as the “Mortgagee Documents”);

 

(c)           the
Equipment Notes being issued today and authenticated by the Mortgagee (the “Equipment Notes”);

 

(d)           a
Certificate of Good Standing for Wilmington Trust, obtained as of a recent date
from the Secretary of State of the State of Delaware;

 

(e)           one
or more certificates of an officer of Wilmington Trust, dated the Delivery Date
(the “Officer’s Certificate”),
certifying as to the truth of its representations and warranties set forth in
the Participation Agreement; and

 

1

 

(f)            one
or more certificates and/or affidavits of an officer of Wilmington Trust, dated
the Delivery Date (collectively, the “Secretary’s Certificate”), certifying as to, among other things, the amended charter of
Wilmington Trust attached thereto (the “Charter”),
the amended bylaws of Wilmington Trust attached thereto (the “Bylaws”), and the citizenship of Wilmington
Trust.

 

For
purposes of this letter, we have not reviewed any documents other than the
documents referenced in paragraphs (a) through (f) above.  In particular, we have not reviewed and
express no opinion as to any other document that is referred to in,
incorporated by reference into, or attached to any of the documents reviewed by
us.  The opinions in this letter relate
only to the documents specified in such opinions, and not to any exhibit,
schedule, or other attachment to, or any other document referred to in or
incorporated by reference into, any of such documents.  We have assumed that there exists no
provision in any document that we have not reviewed that bears upon or is
inconsistent with or contrary to the opinions in this letter.  We have conducted no factual investigation of
our own, and have relied solely upon the documents reviewed by us, the
statements and information set forth in such documents, certain statements of
governmental authorities and others (as applicable), and the additional matters
recited or assumed in this letter, all of which we assume to be true, complete,
and accurate in all respects and none of which we have independently
investigated or verified.

 

Based
upon and subject to the foregoing and subject to the assumptions, exceptions,
qualifications, and limitations in this letter, it is our opinion that:

 

1.             Wilmington
Trust has been duly incorporated and is validly existing as a Delaware banking
corporation in good standing under the laws of the State of Delaware, and has
the corporate power and authority to execute, deliver and perform, in its
individual capacity, or as Mortgagee, Pass Through Trustee, or Subordination
Agent, as the case may be, the Mortgagee Documents, and to authenticate the
Equipment Notes.  Wilmington Trust is a “citizen
of the United States” as defined in Section 40103(a)(15) of Title 49,
U.S.C., as amended.

 

2.             Each
of the Mortgagee Documents has been duly authorized, executed and delivered by
Wilmington Trust in its individual capacity, or as Mortgagee, the Pass Through
Trustee, or Subordination Agent, as the case may be, and constitutes the legal,
valid and binding obligation of Wilmington Trust in its individual capacity, or
as the Mortgagee, the Pass Through Trustee or 
Subordination Agent, as the case may be, enforceable against Wilmington
Trust, the Mortgagee, the Pass Through Trustee or the Subordination Agent, as
the case may be, in accordance with its terms.

 

3.             The
execution, delivery and performance by Wilmington Trust, the Mortgagee, the
Pass Through Trustee or the Subordination Agent, as the case may be, of the
Mortgagee Documents to which each is a party, the authentication by the
Mortgagee of the Equipment Notes and the consummation by Wilmington Trust, the
Mortgagee, the Pass Through Trustee or the Subordination Agent, as the case may
be, of any of the transactions contemplated thereby are not in violation of the
Charter or Bylaws of Wilmington Trust or of any law, governmental rule, or
regulation of the State of Delaware or of any law, governmental rule, or
regulation of the United States of America governing the banking and trust
powers of Wilmington Trust or, to our knowledge, of any indenture, mortgage,
bank credit agreement, note or bond purchase

 

2

 

agreement, long-term lease, license or other agreement
or instrument to which it is a party or by which it is bound or, to our
knowledge, of any judgment or order of the State of Delaware or the United
States of America relating to the banking and trust powers of Wilmington Trust.

 

4.             Neither
the execution and delivery by Wilmington Trust, the Mortgagee, the Pass Through
Trustee or the Subordination Agent, as the case may be, of the Mortgagee
Documents to which each is a party, the authentication of the Equipment Notes,
nor the consummation of any of the transactions by Wilmington Trust, the
Mortgagee, the Pass Through Trustee or the Subordination Agent, as the case may
be, contemplated thereby requires the consent or approval of, the giving of
notice to, the registration with, or the taking of any other action in respect
of, any governmental authority or agency of the State of Delaware or the United
States of America governing the banking or trust powers of Wilmington Trust or
under any Delaware law.

 

5.             There
are no taxes, fees or other charges (other than taxes payable by Wilmington
Trust on or measured by any compensation received by Wilmington Trust for its
services as Mortgagee, Subordination Agent or Pass Through Trustee) payable
under the laws of the State of Delaware or any political subdivision thereof in
respect of the execution, delivery and performance by Wilmington Trust (in its
individual capacity, as Mortgagee, Pass Through Trustee or Subordination Agent,
as the case may be) of the Mortgagee Documents and the Equipment Notes, which
taxes, fees or other charges would not have been imposed if Wilmington Trust
were not a Delaware banking corporation and did not perform its obligations as
Mortgagee under the Trust Indenture in the State of Delaware.

 

6.             The
Equipment Notes have been duly and validly authenticated by the Mortgagee in
accordance with the Trust Indenture.

 

7.             To
our knowledge, there are no proceedings pending or threatened against or
affecting Wilmington Trust, the Mortgagee in any court or before any
governmental authority, agency, arbitration board or tribunal which, if
adversely determined, individually or in the aggregate, would materially and
adversely affect the Mortgaged Property or the right, power and authority of
Wilmington Trust in its individual capacity, or as Mortgagee, Pass Through
Trustee, or  Subordination Agent, as the
case may be, to enter into or perform its obligations under the Mortgagee Documents
or which would call into question or challenge the validity of any of the
Mortgage Documents or the enforceability thereof.

 

The
foregoing opinions are subject to the following assumptions, exceptions and
qualifications:

 

A.            The
opinions in this letter are limited to the laws of the State of Delaware as
enacted and currently in effect and the federal laws of the United States of
America governing the banking and trust powers of Wilmington Trust as enacted
and currently in effect (other than (i) federal securities laws,
including, without limitation, the Securities Act of 1933, as amended, the
Securities Exchange Act of 1934, as amended, the Trust Indenture Act of 1939,
as amended, the Investment Company Act of 1940, as amended, and rules, regulations,
orders, and decisions relating thereto, (ii) Part A of
Subtitle VII of Title 49 of the United States Code, as amended, and
rules, regulations, orders, and decisions relating thereto (except as stated in
the second sentence in numbered paragraph 1 above, which opinion is based
solely on the Officer’s Certificate),

 

3

 

(iii) the Federal Communications Act of 1934, as
amended, and rules, regulations, orders, and decisions relating thereto,
(iv) the Employee Retirement Income Security Act of 1974, as amended, and
rules, regulations, orders, and decisions relating thereto, (v) securities
laws of the State of Delaware, and rules, regulations, orders, and decisions
relating thereto, (vi) laws, rules, regulations, orders, ordinances, and
decisions of any county, town, municipality, or special political subdivision
of the State of Delaware, and (vii) laws, rules, regulations, orders, and
decisions applicable to the particular nature of the property or activities of
the Trusts) and we have considered and express no opinion on the effect of,
concerning matters involving, or otherwise with respect to any other laws of
any jurisdiction, or rules, regulations, orders, or decisions relating thereto.  Insofar as the foregoing opinions relate to
the validity and enforceability of the Transaction Documents expressed to be
governed by the laws of the State of New York, we have assumed that each such
document is legal, valid, binding and enforceable in accordance with its terms under
such laws (as to which we express no opinion).

 

B.            The
foregoing opinions relating to enforceability are subject to
(i) bankruptcy, insolvency, moratorium, reorganization, receivership,
fraudulent conveyance, preferential transfer, liquidation, and similar laws
relating to or affecting rights and remedies of creditors generally,
(ii) principles of equity, including, without limitation, applicable law
relating to fiduciary duties (regardless of whether considered and applied in a
proceeding in equity or at law), (iii) standards of good faith, fair
dealing, course of dealing, course of performance, materiality, and
reasonableness that may be applied by a court, considerations of public policy,
and the exercise of judicial discretion, and (iv) federal or state
securities law and public policy considerations relating to indemnification or
contribution.

 

C.            We
have assumed: (i) except as stated in numbered paragraph 1 above, the
due incorporation or due formation, as the case may be, due organization, and
valid existence in good standing of each of the parties (other than natural
persons) to the documents reviewed by us under the laws of all relevant
jurisdictions; (ii) the legal capacity of all relevant natural persons,
(iii) except as stated in numbered paragraph 2 above, the due
authorization, execution, and delivery of each of the documents reviewed by us
by each of the parties thereto; and (iv) except as stated in numbered
paragraph 1 above, that each of such parties had and has the power and
authority to execute, deliver, and perform such documents.

 

D.            We
have assumed that (i) all signatures (other than signatures by officers of
Wilmington Trust, in its individual capacity, or as Mortgagee, the Pass Through
Trustee, or Subordination Agent, as the case may be, on the Mortgage Documents,
as the case may be, on the Transaction Documents and the Certificates) on all
documents reviewed by us are genuine, (ii) all documents furnished to us
as originals are authentic, (iii) all documents furnished to us as copies or
specimens conform to the originals thereof, (iv) all documents furnished
to us in final draft or final or execution form conform to the final, executed
originals of such documents, (v) each document reviewed by us constitutes
the entire agreement among the parties thereto with respect to the subject
matter thereof, and (vi) except as stated in numbered paragraph 2
above, each document reviewed by us constitutes a legal, valid and binding
obligation of each of the parties thereto, enforceable against each of such
parties in accordance with its terms.

 

E.             We
express no opinion concerning (i) ownership of, title to, or any similar
interest in any property, (ii) creation or attachment of any lien, pledge,
mortgage, or security interest,

 

4

 

(iii) perfection of any lien, pledge, mortgage,
or security interest, or (iv) priority of any lien, pledge, mortgage, or
security interest.

 

F.             For
purposes of this letter, an opinion that is limited “to our knowledge” means that,
in the course of our representation of Wilmington Trust as described above,
attorneys in this firm who have worked substantively on this letter and the
transactions contemplated by the Mortgagee Documents have not, without
undertaking any investigation or verification of the subject matter of such
opinion, obtained actual knowledge that such opinion is incorrect.

 

G.            The
opinion set forth in paragraph 1 above concerning the citizenship of
Wilmington Trust is based upon an affidavit of Wilmington Trust, made by an
authorized representative, the facts set forth in which we have not
independently verified.

 

This
letter speaks only as of the date hereof, and we assume no obligation to advise
anyone of any changes in the foregoing subsequent to the delivery of this
letter.  We consent to your relying on
this letter on the date hereof in connection with the matters set forth
herein.  Without our prior written
consent, this letter may not be furnished or quoted to, or relied upon by, any
other person or entity, or any governmental authority, or relied upon for any
other purpose.

 

In
addition, the opinions in this letter are limited to the opinions expressly
stated in numbered paragraphs 1 through 7 of this letter, and no
other opinions may be inferred beyond such matters expressly stated.

 

Very truly yours,

 

5

 

SCHEDULE A

 

Wilmington Trust Company, individually, as
Mortgagee, as Subordination Agent and as each Pass Through Trustee

 

Landesbank Baden-Württemberg, as Primary
Liquidity Provider

 

Citibank, N.A., as Above-Cap Liquidity
Provider

 

MBIA Insurance Corporation, as Policy
Provider

 

Moody’s Investors Service, Inc.

 

Morgan Stanley & Co. Incorporated,
individually and as representative for Citigroup Global Markets Inc., J.P.
Morgan Securities Inc. and HSBC Securities (USA) Inc.

 

Standard & Poor’s Ratings Services

 

JetBlue Airways Corporation

 

6

 

EXHIBIT E

 

[FORM OF OPINION OF SPECIAL
FRENCH COUNSEL]

 

To:          The
Opinion Addressees referred to in Schedule hereof

 

Re:          Airbus
Model A320-232 Aircraft

Manufacturer’s Serial No.
          

US Registration Number NXXXJB (the “Aircraft”)

 

Dear Sirs,

 

1.             We
have been requested by JetBlue Airways
Corporation, a Delaware corporation (the “Company”), to act as special French counsel with respect to,
and to render this opinion letter in connection with, certain transactions
contemplated by the Participation Agreement [NXXXJB], dated as of
November            ,
2004 (the “Participation Agreement”),
among the Company as Owner, Wilmington Trust
Company, a Delaware banking corporation (“WTC”), as Mortgagee (the “Mortgagee”),
and WTC (in its capacity as Subordination Agent under the Intercreditor
Agreement) (as defined in the Participation Agreement) and Pass Through Trustee
under the Pass Through Trust Agreements (as defined in the Participation
Agreement).

 

2.             This
opinion is being delivered pursuant to Section 3.1.2(xiv)(E) of the
Participation Agreement.

 

3.             We
have examined:

 

(a)           a
copy of the granting clause of a Trust Indenture and Mortgage [NXXXJB], dated
as of [                 ]
(the “Trust Indenture”) made
between the Company and the Mortgagee;

 

(b)           a
copy of a consent and agreement to (i) the granting clause of the Trust
Indenture and (ii) the Pledge Agreement dated [                       ]
(the “AVSA Consent and Agreement”) made between AVSA S.A.R.L. (“AVSA”), the
Company, and Mortgagee;

 

(c)           a
copy of a consent and agreement of Airbus S.A.S. (legal successor of Airbus
S.N.C., formerly known as Airbus G.I.E. and Airbus Industrie E.I.E. (“Airbus”)
to (i) the granting clause of the Trust Indenture and (ii) the Pledge Agreement
dated [                         ]
(the “Airbus Consent and Agreement”);
and

 

(d)           a
copy of a pledge agreement entitled “Convention
de Nantissement de Créances” dated as of the date hereof in the
French language and its English translation (the “Pledge Agreement”) made between the Company (as pledgor) and
the Mortgagee (as pledgee);

 

(e)           a
Bill of Sale dated [                       ]
executed by AVSA in favour of the Company; and

 

(f)            an
FAA Bill of Sale dated [                      ]
executed by AVSA in favour of the Company.

 

1

 

The
documents referred to in paragraphs (a) to (f) above are referred to herein as
the “Documents”.

 

We
have also examined :

 

(a)           a
copy of the constitutive documents (statuts)
of Airbus dated [                ];

 

(b)           an
extract (extrait K-bis) dated [                  ]
and issued by the commercial and companies registry (registre du commerce et des sociétés) of Toulouse, France,
relating to Airbus;

 

(c)           a
certificate issued by Airbus dated [                    ]
relating to the extract (extrait K-bis)
and constitutive documents (statuts)
mentioned in (a) and (b) above;

 

(d)           a
copy of the constitutive documents (statuts)
of AVSA dated [                   ];

 

(e)           an
extract (extrait K-bis) dated [                   ]
and issued by the commercial and companies registry (registre du commerce et des sociétés) of Toulouse, France,
relating to AVSA;

 

(f)            a
certificate issued by AVSA dated [               ]
relating to the extract (extrait K-bis)
and constitutive documents (statuts)
mentioned in (d) and (e) above.

 

4.             For
the purpose of giving this opinion we have assumed:

 

(i)            that
the Documents have been duly executed by the parties thereto;

 

(ii)           the
genuineness of all signatures;

 

(iii)          the
completeness and conformity to the originals of all documents supplied to us as
copies or as facsimiles;

 

(iv)          the
accuracy, at the date hereof, of the factual matters set forth in the documents
listed in items (a) to (f) of paragraph 3 above;

 

(v)           the
Documents expressed to be governed by New York law constitute the legal, valid
and binding obligations of the parties thereto under New York law;  and

 

(vi)          the
merger of Airbus S.N.C. into Airbus S.A.S. was duly completed in accordance
with and is valid under French law.

 

5.             Having
considered the Documents we are of the opinion, subject to the qualifications
set out in paragraph 6 below, that:

 

(i)            Airbus is a company duly
incorporated and validly existing in France as a société par
actions simplifiée and has the power and authority to carry on its
business as now conducted;

 

2

 

(ii)           AVSA
is a société à responsabilité limitée
duly established and existing under the laws of the French Republic and has the
power and authority to carry on its business as now conducted;

 

(iii)          Each
of Airbus and AVSA has full power and authority to enter into and to execute,
deliver and perform its obligations under those of the Documents to which it is
a party; such obligations are legal, valid and binding upon them, respectively,
are enforceable in accordance with their respective terms and rank pari passu
with the other unsecured obligations of Airbus or AVSA, as the case may be;

 

(iv)          Assuming
that under New York law, the Mortgagee would be entitled to take proceedings in
its own name and on its own account to recover from the Company the full amount
of all amounts secured by the Pledge Agreement and subject to the registration
and process server (huissier)
requirements set out in paragraph 6(c) hereof and the observation set out in
paragraph 6 (e) hereof, the Pledge Agreement:

 

(a)           duly
creates for the benefit of the Mortgagee the security interests which the
Pledge Agreement purports to create and the Mortgagee is entitled to the
benefits and security afforded thereby; and

 

(b)           would
be effective as against Airbus, AVSA and third parties to perfect the pledge of
the obligations of Airbus (if any) and AVSA that are the subject of the Pledge
Agreement;

 

(v)           The
choice of the laws of the State of New York to govern the Documents (which are
expressed to be so governed) is valid under the laws of the French Republic and
a French court would uphold such choice of law in any suit on the Documents
brought in a French court;

 

(vi)          All
actions, authorizations, approvals, consents, conditions and things required at
law to be taken, fulfilled and done to authorize the execution, delivery and
performance by Airbus and AVSA of those of the Documents to which they
respectively are party have been taken, obtained, fulfilled and done; and no
consents under any exchange control laws, rules or regulations of the French
Republic are necessary in connection therewith;

 

(vii)         Neither
the execution and delivery and performance of the Documents to which Airbus and
AVSA respectively are a party, nor the consummation of the transactions
contemplated thereby, contravenes or violates any law, judgment, governmental
rule, regulation or order applicable to or binding on Airbus or AVSA;

 

(viii)        The
transfer of title from AVSA to the Company is exempt from French VAT provided
that the conditions set out in Article 74 of the Appendix III to the French Code général des impôts are satisfied and
in particular provided that (i) the Aircraft is to be exported outside the
European Union and (ii) AVSA files the export declaration (Document Administratif Unique) showing
that the Aircraft has been exported; and

 

(ix)           Under
the laws of the French Republic, Airbus and AVSA are subject to private
commercial law and to suit, and neither Airbus nor AVSA, nor their respective
properties

 

3

 

have any
immunity from the jurisdiction of any court or any legal process (whether
through service of notice, attachment prior to notice, attachment prior to
judgment, attachment in aid of execution, execution or otherwise), except that,
with respect to Airbus:

 

(a)           to
the extent that Airbus occupies or possesses any property by virtue of any
license or grant from the French State, such property and the title of Airbus
thereto may be immune from suit or execution on the grounds of sovereignty; and

 

(b)           suit
and execution against Airbus or its property may be affected by action taken by
the French public authorities in the interests of national defense or on the
occurrence of exceptional circumstances of paramount importance to the national
interest of France, as such concept is understood under the constitution, laws
and regulations of France.

 

6.             This
opinion must be read subject to the following qualifications and observations
as to French law:

 

(a)           the
remedy of specific performance may not be available in a French court;

 

(b)           in
respect of payment obligations, a French court has power under Article 1244-1
of the French Code civil to grant
time to a debtor (not in excess of two years), taking into account the position
of the debtor and the needs of the creditor;

 

(c)           in
order to ensure the validity as against third parties of the pledge (“nantissement”) created by the Pledge
Agreement in accordance with the provisions of Article 2075 of the French Code civil, it is necessary for the signed
French version of the Pledge Agreement to be registered with the French tax
administration, involving payment of a stamp duty of a nominal amount. In
addition the nantissement created
by the Pledge Agreement will need to be served on each of the obligors by
process server (“huissier”), in
accordance with the provisions of Article 2075 of the French Code civil.  We have been instructed to assist in carrying
out such formalities which we intend to do upon receipt of duly executed
originals of the Pledge Agreement and we anticipate that there will be no
difficulty in accomplishing these formalities;

 

(d)           in
the event of any proceedings being brought in a French court in respect of a
monetary obligation expressed to be payable in a currency other than euros, a
French court would probably give judgment expressed as an order to pay, not
such currency, but its euro equivalent at the time of payment or enforcement of
judgment. With respect to a bankruptcy, insolvency, liquidation, moratorium,
reorganization, reconstruction or similar proceedings, French law may require
that all claims or debts be converted into euros at an exchange rate determined
by the court at a date related thereto, such as the date of commencement of a
winding-up;

 

(e)           pledges
over non-monetary claims are unusual under French law. In principle, pledges
over claims of this type should be effective against Airbus, AVSA and third

 

4

 

parties but in
the absence of case law, there is a lack of certainty about the pledge being
effective;

 

(f)            a
determination or certificate as to any matter provided for in the Documents
might be held by a French court not to be final, conclusive or binding, if such
determination or certificate could be shown to have an unreasonable, incorrect
or arbitrary basis or not to have been given or made in good faith;

 

(g)           claims
may become barred by effluxion of time or may be or become subject to defense
of set-off or counterclaim;

 

(h)           a
French court may stay proceedings if concurrent proceedings are being brought
elsewhere;

 

(i)            we
express no opinion as to whether any provision in the documents conferring a
right of set-off or similar right would be effective against a liquidator or a
creditor;

 

(j)            the enforcement against Airbus of any of the Documents to which
it is a party may be limited by applicable bankruptcy, insolvency, arrangement,
moratorium or similar laws relating to or affecting the enforcement of
creditors’ rights generally, as such laws are applied to Airbus.  The enforcement against AVSA of any of the
Documents to which it is a party may be limited to such laws, as applied to
AVSA;

 

(k)           our
opinion as to the enforceability of the Documents relates only to their
enforceability in France in circumstances where the competent French court has
and accepts jurisdiction.  The term “enforceability”
refers to the legal character of the obligations assumed by the parties under
the documents, i.e. that they are of a character which French law enforces or
recognizes.  It does not mean that the
Documents will be enforced in all circumstances or in foreign jurisdictions or
by or against third parties or that any particular remedy will be available;

 

(l)            Article
899 of the French Code Général des Impôts
provides that agreements evidencing an undertaking to pay a sum of money are
subject to stamp duties (droits de timbre)
of a nominal amount if made in the French Republic; agreements made in a
foreign country are subject to stamp duty of a nominal amount before certain
use thereof can be made in the French Republic (Article 897 of the Code  Général
des Impôts).  Payment of such
stamp duty will not be a condition to the validity of any written undertaking,
although such payment will be necessary before any such written undertaking can
be used in any way in France, either in a public act or a declaration of any
kind or before any public or administrative body; and

 

We are
qualified as French Avocats.

 

No
opinion is expressed herein as to laws other than the laws of the French
Republic as of the date hereof.  This
opinion is for your use and that of no one else, and is limited to (i) the
matters specifically mentioned herein, and (ii) the purpose set out above.

 

Yours faithfully,

 

Clifford
Chance

 

5

 

Schedule

 

Opinion
Addressees

 

Wilmington Trust Company, individually, as
Mortgagee, as Subordination Agent and as each Pass Through Trustee

 

Landesbank Baden-Württemberg, as Primary
Liquidity Provider

 

Citibank, N.A., as Above-Cap Liquidity
Provider

 

MBIA Insurance Corporation, as Policy
Provider

 

Moody’s Investors Service, Inc.

 

Morgan Stanley & Co. Incorporated,
individually and as representative for Citigroup Global Markets Inc., J.P.
Morgan Securities Inc. and HSBC Securities (USA) Inc.

 

Standard & Poor’s Ratings Services

 

JetBlue Airways Corporation

 

6Exhibit
10.1

 

TRANSITION AGREEMENT

 

THIS TRANSITION
AGREEMENT (the “Agreement”) is made effective as of October 2, 2004 (the “Effective
Date”), between CURATIVE HEALTH SERVICES, INC., a Minnesota corporation (the “Company”),
and JOSEPH L. FESHBACH (“Executive”), an individual resident of the State of
California.

 

WHEREAS, the
Executive has served as an officer and director of the Company;

 

WHEREAS, the
Company and Executive have agreed to change certain aspects of Executive’s
relationship with the Company;

 

WHEREAS, Executive
will continue as an employee but will transition from his role as Chief
Executive Officer to a role as Special Advisor;

 

WHEREAS, the
parties entered into an Employment Agreement dated July 24, 2002 (the “Employment Agreement”), which was
amended in part by the Acknowledgment of Assignment of Employment Agreement
dated June 3, 2003 (“Assignment I”) and the Amendment to and Second
Acknowledgment of Assignment of Employment Agreement dated August 19, 2003 (“Assignment
II”);

 

NOW, THEREFORE, in
consideration of the promises and the mutual covenants and agreements herein
contained, the Company and Executive hereby agree as follows:

 

1.             Employment

 

1.1           Role
as Special Advisor. Commencing on the date that Paul McConnell replaces
Executive as Chief Executive Officer (the “Transition Date”), which will occur
on November 15, 2004, Executive shall continue employment as Special Advisor to
the Company, reporting directly to the Board of Directors during the Special
Advisor Term (as defined in Section 2, below). 
Executive will expend the effort necessary and appropriate to perform
such duties as may be reasonably requested of him as Special Advisor, including
but not limited to, advising the Company, its subsidiaries and affiliates on
long-term strategy and capital formation, proactively seeking out potential
transactions for detailed review at the discretion of management, advising
management, as requested, upon a number of topics including, but not limited
to, investor relations, public relations and legislative affairs, evaluating,
negotiating, and executing mergers and acquisitions, transitioning his duties
as Chief Executive Officer and such other duties as the Board may assign.  The Board shall conduct an annual review of
Executive’s performance as Special Advisor beginning on the first anniversary
of the Transition Date.  In the event
that Executive wishes to alter his role and/or lessen his commitment at any
time during the Special Advisor Term, the Board agrees to consider such
proposal with a corresponding modification in his then current base salary.

 

1.2           Location. The Company has set
up an office in the San Francisco Bay area. 
The Company shall pay the rent for such office through February 28, 2005
and Executive shall be able to utilize such office during such time.

 

 

1.3           Resignation and Board of Directors
During Special Advisor Term.  While
Special Advisor, Executive agrees to accept election and to serve as a director
and Chairman of the Board of Directors of the Company, without any compensation
therefor other than that specified herein, subject to shareholder approval and
Board appointment or approval.  Executive
will perform such duties that are customary for such a position, including
calling and running meetings of the Board of Directors.  Effective on the Transition Date, Executive
shall resign from his position as Chief Executive Officer of the Company and
from all other positions as an officer or director of any of the Company’s
subsidiaries or affiliates.  Upon the
termination of this Agreement or Executive’s employment hereunder for any
reason, Executive shall resign from any and all other positions as an officer
or director of any of the Company’s subsidiaries or affiliates, if
applicable.  On the date on which he
signs this Agreement, Executive agrees to submit his resignation letter with
respect to his role as Chief Executive Officer in the form attached as Exhibit
A.

 

2.             Employment Term.  The term of Executive’s employment as Special
Advisor shall be deemed to commence on the Transition Date and shall end on
October 1, 2007 (the “Special Advisor Term”), or earlier in accordance with the
provisions of Section 4.

 

2.1           General Release.  In consideration for entering into this
Agreement, no earlier than the Transition Date and no later than the
twenty-first day after receipt, Executive agrees to execute and deliver to the
Company a general release in form and substance reasonably satisfactory to the
Company releasing the Company, its subsidiaries and affiliates, and their
officers, directors, employees and agents from all liabilities, claims and
obligations of any nature whatsoever, including but not limited to any and all
obligations under the Employment Agreement, excepting only the Company’s
prospective obligations under this Agreement, under any Stock Option Award
Agreements, any Restricted Stock Agreement and under any other employee benefit
plans or programs in which Executive participates under Section 3.2, if
applicable, subject to all terms and conditions of such plans or programs and
this Agreement.  The General Release is
attached as Exhibit B.

 

3.             Compensation and Benefits

 

3.1           Cash Compensation.

 

(a)                                  Base
Salary. Beginning on October 2, 2004 and continuing through October 1,
2005, the Company will pay Executive an annual base salary of $1.00 payable on
October 2, 2004.  For the period October
2, 2005 through October 1, 2006, and for the period October 2, 2006 through
October 1, 2007, Executive shall be paid an annualized salary of at least
$50,000, payable in equal monthly installments of at least $4,166.50 on regular
Company payroll dates; however, no later than October 1, 2005 and October 1,
2006, if applicable, Executive and the Compensation Committee of the Board
shall review Executive’s responsibilities and mutually agree on the appropriate
amount of monthly compensation for Executive’s role as Special Advisor for the
subsequent twelve month period.  Except
as set forth in this Section 3.1(a) and in Sections 4.5(a) and (c), Executive
is not eligible for any cash compensation under this Agreement.

 

2

 

(b)                                 Base
Compensation Stock Grant:  In lieu of
any severance payments to which Executive may otherwise be entitled under his
Employment Agreement, and as consideration for his serving as Special Advisor,
reducing his salary from the Effective Date until the Transition Date and
waiving his eligibility for a cash bonus for performance in calendar year 2004,
the Company agrees to grant Executive 100,000 restricted shares of the Company’s
common stock, which shall vest in twelve equal monthly installments over a
twelve-month period with the first installment to vest on the date of grant and
thereafter on the first day of each month commencing with December 2004 and
ending on October 1, 2005 (the “Base Compensation Stock Grant”), provided,
however, that during the Special Advisor Term all shares under the Base
Compensation Stock Grant will vest immediately in the event of a Change in
Control or a Termination Without Cause by the Company. The parties agree that
for all purposes hereunder the value of the shares covered by the Base
Compensation Stock Grant shall be determined based on the closing price of the
Common Stock as reported on the Nasdaq National Market on November 9, 2004. The
specific terms and conditions of the Base Compensation Stock Grant shall be set
forth in a Restricted Stock Award Agreement which is attached as Exhibit C
to this Agreement.

 

(c)                                  Annual
Stock Grant Eligibility:  Beginning
with the annual stockholders meeting during the second calendar quarter of
2006, Executive will be eligible to receive, if still employed on the date of
the meeting, the same number of stock options (on substantially the same terms
and conditions to the extent feasible under the provisions of the related
Company stock option plan) as are granted to non-employee directors re-elected
to the board at the 2006 meeting. 
Executive is not eligible for any additional stock grants or restricted
stock awards through October 1, 2007.

 

(d)                                 Vacation
Payment:  On the Transition Date, the
Company shall pay Executive an amount equal to his accrued but unused vacation
at the rate of pay earned by Executive as of September 30, 2004.

 

3.2           Participation in Benefit Plans.  Executive shall be entitled to participate in
all employee benefit plans or programs of the Company to the extent that his
position, title, tenure, salary, age, health and other qualifications make him
eligible to participate.  The Company
does not guarantee the continuance of any particular employee benefit plan or
program during the Special Advisor Term and Executive’s participation in any
such plan or program shall be subject to all terms, provisions, rules and
regulations applicable thereto.  During
the Special Advisor Term, Executive agrees that he will not be entitled to
accrue any personal time and/or vacation days. 
In the event that Executive is not eligible to participate in any
medical or dental plan of the Company during the Special Advisor Term, and
Executive elects COBRA coverage, the Company shall reimburse Executive for
COBRA premiums for the shorter of (1) six (6) months or (2) until he becomes
eligible for medical and dental benefits through another employer.

 

3.3           Expenses. The Company will pay
or reimburse Executive for all reasonable and necessary out-of-pocket expenses
incurred by him in the performance of his duties under this Agreement,
including the cost of first class air travel. Executive shall keep detailed and
accurate 

 

3

 

records of expenses incurred in connection with the performance of his
duties hereunder and reimbursement therefor shall be in accordance with
policies and procedures to be established from time to time by the Board.

 

3.4           Automobile Expenses. During
the Executive’s employment hereunder, Executive shall be entitled to the use of
an automobile leased in the name of the Company through September 30, 2005. The
automobile shall be selected by Executive subject to the reasonable approval of
the Company. Executive shall be repaid by the Company for all automobile
expenses, including automobile insurance reasonably acceptable to Executive and
the Company, incurred by Executive in the performance of his duties under this
Agreement.

 

3.5           Legal Expenses. The Company agrees
to reimburse Executive in an amount not to exceed $15,000 for attorneys’ fees
incurred by Executive in negotiating and preparing this Agreement.

 

3.6           Secretary.  The Company shall continue to employ a
secretary exclusively devoted to working for Executive at the office identified
in Section 1.2 above on at least substantially the same compensation and
benefit terms as of the Effective Date through February 28, 2005.  In the event that such secretary should leave
employment prior to February 28, 2005, the Company shall not be required to
hire a new secretary.

 

4.             Termination of Employment

 

4.1           Definitions.

 

(a)                                  “Cause”
shall mean any of the following:

 

(i)                                     the
Executive’s willful act of fraud, embezzlement, dishonesty or other misconduct
that materially damages the Company, its subsidiaries and affiliates;

 

(ii)                                  any
intentional act or omission by Executive, other than that made in good faith,
that is detrimental in any material respect to the interests of the Company,
its subsidiaries and affiliates;

 

(iii)                               the
commission by Executive of a felony; or

 

(iv)                              the
material breach by Executive of his agreements or obligations under this
Agreement.

 

No
termination for Cause pursuant to the preceding clause (iv) shall occur unless
the Company has provided Executive with written notice of the existence of such
Cause, and Executive is given at least fifteen (15) days to cure, except that
no such notice shall be required if the act or omission constituting Cause is
not susceptible of cure.  Executive
represents and warrants that to the best of his knowledge he has not engaged in
any activities during his employment which would constitute wrongful conduct
including, but not limited to, fraud, misrepresentation, violation of any
federal, state or local law, or any conduct 

 

4

 

contrary
to company policy nor has he engaged in any conduct which would constitute “Cause”
under this Agreement.  The Company is not
aware of any events which would constitute “Cause” up through the Effective
Date.

 

(b)                                 A
“Change of Control” shall mean any of the following:

 

(i)                                     a
sale of all or substantially all of the assets of the Company;

 

(ii)                                  the
acquisition of more than fifty percent (50%) of the Common Stock of the Company
(with all classes or series thereof treated as a single class) by any person or
group of persons, except a Permitted Shareholder (as hereinafter defined),
acting in concert. A “Permitted Shareholder” means a holder, as of the
Effective Date, of Common Stock;

 

(iii)                               a
reorganization of the Company wherein the holders of Common Stock of the
Company receive stock in another company (other than a subsidiary of the
Company), a merger of the Company with another company wherein there is an
fifty percent (50%) or greater change in the ownership of the Common Stock of
the Company as a result of such merger, or any other transaction in which the
Company (other than as the parent corporation) is consolidated for federal
income tax purposes or is eligible to be consolidated for federal income tax
purposes with another corporation;

 

(iv)                              in
the event that the Common Stock is traded on an established securities market,
a public announcement that any person has acquired or has the right to acquire
beneficial ownership of more than fifty percent (50%) of the then-outstanding
Common Stock and for this purpose the terms “person” and “beneficial ownership”
shall have the meanings provided in Section 13(d) of the Securities and
Exchange Act of 1934 or related rules promulgated by the Securities and
Exchange Commission, or the commencement of or public announcement of an
intention to make a tender offer or exchange offer for more than fifty percent
(50%) of the then outstanding Common Stock;

 

(v)                                 a
majority of the Board of Directors is not comprised of Continuing Directors. A “Continuing
Director” means a director recommended by the Board of Directors of the Company
for election as a director of the Company by the stockholders; or

 

(vi)                              the
Board of Directors of the Company, in its sole and absolute discretion,
determines that there has been a sufficient change in the share ownership of
the Company to constitute a change of effective ownership or control of the
Company.

 

Executive agrees that no
Change In Control has occurred as of the Effective Date.

 

(c)                                  “Date
of Termination” shall mean the date specified in the Notice of Termination (as
hereinafter defined) (except in the case of Executive’s death, in which case
the 

 

5

 

Date of
Termination shall be the date of death); provided, however, that if Executive’s
employment is terminated by the Company other than for Cause, the date
specified in the Notice of Termination shall be at least thirty (30) days from
the date the Notice of Termination is given to Executive and if Executive’s
employment is terminated by Executive, the date specified in the Notice of
Termination shall not be more than thirty (30) days from the date the Notice of
Termination is given to the Company.

 

(d)                                 “Notice
of Termination” shall mean a written notice either from the Company to
Executive, or Executive to the Company, that indicates Section 2 or the
specific provision of Section 4 of this Agreement relied upon as the reason for
such termination, the Date of Termination, and, in reasonable detail, the facts
and circumstances claimed to provide a basis for termination pursuant to
Section 2 or this Section 4 of this Agreement, as applicable.

 

4.2           Termination Upon Death or
Disability. This Agreement, and Executive’s employment hereunder, shall
terminate automatically and without the necessity of any action on the part of
the Company upon the death of Executive. In addition, if at any time during the
Special Advisor Term Executive has become so physically or mentally disabled as
to be incapable of satisfactorily performing his duties and services hereunder
with or without a reasonable accommodation, for (i) a period of six (6)
consecutive months, or (ii) for shorter periods aggregating six (6) months
during any twelve (12) month period, the Company may at any time after the last
day of the sixth consecutive month of disability or the day on which the
shorter periods of disability shall have equaled an aggregate of six (6)
months, by written notice to Executive (but before Executive has recovered from
such disability), terminate this Agreement and Executive’s employment
hereunder.  The determination of whether
or not Executive is disabled shall be made by an independent physician selected
by mutual consent of the Board of Directors and Executive or, if appropriate,
Executive’s representative.

 

4.3           Company’s and Executive’s Right to
Terminate—Prior to Change of Control. 
Prior to a Change of Control, this Agreement and Executive’s employment
hereunder may be terminated at any time (i) by the Company, with or without
Cause, upon thirty (30) days prior written notice to Executive, and (ii) by
Executive, upon thirty (30) days prior written notice to the Company.  Any termination of Executive’s employment by
the Company without Cause prior to a Change of Control that occurs (i) at the
request or insistence of any person (other than the Company) relating to such
Change of Control or (ii) in anticipation of a Change of Control shall be
deemed to have occurred after the Change of Control for the purposes of this
Agreement. For purposes of this Agreement, it will be presumed that any
termination of Executive’s employment by the Company without Cause ninety (90)
days prior to a Change of Control, is a termination that occurred pursuant to
(i) or (ii) above.

 

4.4           Company’s and Executive’s Right to
Terminate—Following a Change of Control. Following a Change of Control,
this Agreement and Executive’s employment hereunder may be terminated at any
time (i) by the Company, with or without Cause, upon thirty (30) days prior
written notice to Executive, and (ii) by Executive upon thirty (30) days prior
written notice to the Company. Executive’s right to terminate his employment
pursuant to this Section 4.4 shall not be affected by incapacity due to
physical or mental illness.

 

6

 

4.5           Compensation Upon Termination or
Change In Control During the Special Advisor Term.

 

(a)                                  Termination
During The Special Advisor Term By The Company Without Cause.  If this Agreement is terminated by the
Company without Cause, Executive shall be entitled to receive his then current
base salary through the Date of Termination and, provided that he delivers to
the Company a general release on the terms outlined in 4.5(e), Executive shall
continue to be paid his then current base salary for the period beginning on
the day after the Date of Termination and continuing through October 1,
2007.  In addition, as set forth in
Section 3.1(b), in the event that the Company terminates Executive’s employment
pursuant to this Section 4.5(a), any unvested stock option awards or restricted
stock grants theretofore awarded to Executive shall vest and/or become
immediately exercisable in full.

 

(b)                                 Termination
During The Special Advisor Term By The Company With Cause or by Executive.  If this Agreement is terminated during the
Special Advisor Term by the Company for Cause or by Executive for any reason,
Executive shall not be entitled to any payments following the Date of
Termination, other than his then current base salary earned through the Date of
Termination.

 

(c)                                  Termination
Upon Expiration of Special Advisor Term. 
If this Agreement is not terminated prior to September 1, 2007,
Executive shall not be required to perform any services following that date;
however, the Company shall pay his then current base salary for the period
September 2, 2007 – October 1, 2007 provided that he delivers to the Company a
general release on the terms outlined in 4.5(d).

 

(d)                                 Change
in Control During The Special Advisor Term. 
In the event of a Change in Control during the Special Advisor Term, to
the extent not otherwise required under the Company’s Stock Option Plan or any
award agreement with Executive, any unvested stock option awards or restricted
stock grants theretofore awarded to Executive shall vest and/or become
immediately exercisable in full.

 

(e)                                  Anything
to the contrary contained herein notwithstanding, as a condition to Executive
receiving severance benefits to be paid pursuant to Sections 4.5(a) and (c),
Executive shall execute and deliver to the Company a general release in form
and substance reasonably satisfactory to the Company releasing the Company, its
subsidiaries and affiliates, and their officers, directors, employees and
agents from all liabilities, claims and obligations of any nature whatsoever,
excepting only the Company’s prospective obligations under this Agreement,
under any Stock Option Award Agreements, any Restricted Stock Agreement and
under any other employee benefit plans or programs in which Executive
participates under 

 

7

 

Section 3.2, if applicable, subject to all terms and
conditions of such plans or programs and this Agreement.  The General Release is attached as Exhibit
B.

 

5.             Employment Covenants

 

5.1                                 Trade
Secrets and Confidential Information. Executive agrees that he shall,
during the course of his employment and thereafter, hold inviolate and keep
secret all documents, materials, knowledge or other confidential business or
technical information of any nature whatsoever disclosed to or developed by him
or to which he had access as a result of his employment (hereinafter referred
to as “Confidential Information”). Such Confidential Information shall include
technical and business information, including, but not limited to, inventions,
research and development, engineering, products, designs, manufacture, methods,
systems, improvements, trade secrets, formulas, processes, marketing,
merchandising, selling, licensing, servicing, customer lists, records or
financial information, manuals or Company strategy concerning its business,
strategy or policies. Executive agrees that all Confidential Information shall
remain the sole and absolute property of the Company. During the course of his
employment, Executive shall not use, disclose, disseminate, publish, reproduce
or otherwise make available such Confidential Information to any person, firm,
corporation or other entity, except for the purpose of conducting business on
behalf of the Company. Following the termination of his employment (for
whatever reason), Executive shall not use, disclose, disseminate, publish,
reproduce or otherwise make available such Confidential Information to any
person, firm, corporation or other entity. Upon termination of his employment
with the Company, Executive will leave with or deliver to the Company all
records and any compositions, articles, devices, equipment and other items
which disclose or embody Confidential Information including all copies or
specimens thereof, whether prepared by him or by others. The foregoing
restrictions on disclosure of Confidential Information shall apply so long as
the information has not properly come into the public domain through no action
of Executive.

 

5.2                                 Transfer
of Inventions. Executive, for himself and his heirs and representatives,
will promptly communicate and disclose to the Company, and upon request will,
without additional compensation, execute all papers reasonably necessary to
assign to the Company or the Company’s nominees, free of encumbrance or
restrictions, all inventions, discoveries, improvements, whether patentable or
not, conceived or originated by Executive solely or jointly with others, at the
Company’s expense or at the Company’s facilities, or at the Company’s request,
or in the course of his employment, or based on knowledge or information
obtained during his employment. All such assignments shall include the patent
rights in this and all foreign countries. Notwithstanding the foregoing, this
Section 5.2 shall not apply to any invention for which no equipment, supplies,
facilities or trade secret information of the Company, its subsidiaries or
affiliates was used and which was developed entirely on Executive’s own time
and (a) that does not relate (1) directly to the business of the Company, its
subsidiaries or affiliates or 

 

8

 

(2) to
the Company’s, or a subsidiary or affiliate of the Company’s, actual or
demonstrably anticipated research or development, or (b) that does not result
from any work performed by Executive for the Company, its subsidiaries or
affiliates.

 

5.3                                 Exclusivity
of Employment. Subject to Sections 1.1 and 5.4, during his employment,
Executive may own, as a passive investor, securities of any corporation.  Executive shall be entitled to devote working
time to manage and operate a business unaffiliated with the Company and that
does not compete with the Company, provided that he performs the duties
reasonably assigned to him by the Company from time to time as set forth above
in Section 1.1.

 

5.4                                 Restrictive
Covenant.  Due to his employment with
the Company and its subsidiaries and affiliates, Executive will have access to
the foregoing Confidential Information, which the Company is entitled to
protect.  Accordingly, Executive agrees,
in consideration for receiving access to such information and for the
opportunity to be employed by the Company, its subsidiaries and
affiliates,  the sufficiency of which
consideration is hereby expressly acknowledged, Executive agrees to not use
that information to the disadvantage of the Company and its subsidiaries and
affiliates and, accordingly, agrees to be bound and abide by the following
post-employment restrictive covenant:

 

(a)                                  Term
and Scope. During his employment with the Company and for a period of two
(2) years after his employment ends for whatever reason (whether occasioned by
Executive or the Company), Executive shall not render to any Conflicting
Organization (as hereinafter defined), services, directly or indirectly,
anywhere in the world in connection with any Conflicting Product, except that
Executive may accept employment with a large Conflicting Organization whose
business is diversified (and which has separate and distinct divisions) if
Executive first certifies to the Board of Directors in writing that he has
provided a copy of Section 5 of this Agreement to such prospective employer,
that such prospective employer is a separate and distinct division of the
Conflicting Organization and that Executive will not render services directly
or indirectly in respect of any Conflicting Product (as hereinafter defined).
Such two-year time period shall be tolled during any period that Executive is
engaged in activity in violation of this covenant.

 

(b)                                 Agreement
Not to Solicit Clients or Vendors. 
During his employment with the Company, and for a period of two years
after his employment ends for whatever reason (whether occasioned by Executive
or the Company), Executive shall not, directly or indirectly, divert, solicit,
or accept business from any client or prospective client of the Company, its
subsidiaries or affiliates that were solicited or serviced directly by
Executive, or that Executive supervised, directly or indirectly, in whole or in
part, the solicitation or services activities related to such clients or
prospects, where Executive received access to Confidential Information
pertaining to that client or prospect. 
Executive further agrees to not, directly or indirectly, in any way
interfere, or attempt to interfere, with the Company’s 

 

9

 

relationships
with any of its actual or potential vendors or suppliers or those of its
subsidiaries or affiliates.

 

(c)                                  Judicial
Action. Executive and the Company agree that, if the period of time or the
scope of the restrictive covenant not to compete contained in this Section 5.4
shall be adjudged unreasonable in any court proceeding, then the period of time
and/or scope shall be reduced accordingly, so that this covenant may be
enforced in such scope and during such period of time as is judged by the court
to be reasonable. In the event of a breach or violation of this Section 5.4 by
Executive, the parties agree than in addition to all other remedies, the
Company shall be entitled to equitable relief for specific performance, and
Executive hereby agrees and acknowledges that the Company has no adequate
remedy at law for the breach of the covenants contained herein.

 

(d)                                 Definitions.
For purposes of this Agreement, the following terms shall have the following
meanings:

 

“Conflicting Product” means any product, method or
process, system or service of any person or organization other than the Company
which is related to the areas of disease management, wound care, specialty
infusion services, or specialty pharmaceutical services, or the provision or
sale of data in respect thereof, that is the same as or similar to or competes
with a product, method or process, system or service of or provided by the
Company or any of its subsidiaries or affiliates in existence or under
development at the time Executive’s employment with the Company terminates or
about which Executive acquires Confidential Information.

 

“Conflicting Organization” means any person or
organization which is engaged in disease management, wound care, specialty
infusion services, or specialty pharmaceutical services, or the provision or
sale of data in respect thereof, and which is, or about to become, engaged in
research on or development, production, marketing, licensing, selling or
servicing of a Conflicting Product.

 

5.5                                 Disclosure
to Prospective Employers. Executive will disclose to any prospective
employer, prior to accepting employment, the existence of Section 5 of this
Agreement. The obligation imposed by this Section 5.5 shall terminate two (2)
years after termination of Executive’s employment with the Company; provided,
however, the running of such two-year period shall be tolled to the extent the
covenant not to compete contained in Section 5.4(a) hereof is tolled.

 

5.6                                 Non-Solicitation.
For one (1) year after termination of employment with the Company for any
reason, Executive shall not directly or indirectly solicit or hire, or assist
any other person in soliciting or hiring, any employee of the Company, its subsidiaries
or affiliates (as of the Date of Termination) or any person who, as of the Date
of Termination, was in the process of being recruited by the Company, its
subsidiaries or affiliates or induce any such employee to terminate his or her
employment with the Company, its subsidiaries or affiliates.

 

10

 

6.             Agreement
to Cooperate.  Executive agrees that he will reasonably
cooperate with the Company with respect to any claims, charges or lawsuits
brought, or threatened to be brought, against the Company and its agents.
Following the end of his employment, Executive agrees to make himself available
upon reasonable notice to discuss with the Company and its counsel issues
related to claims, charges or lawsuits against the Company.  Executive agrees to appear without subpoena
for deposition or testimony at the request of the Company. In the event that
Executive is requested by the Company to travel out of town in connection with
his agreement to cooperate as provided herein, the Company agrees to reimburse
Executive for his costs.

 

7.             Miscellaneous

 

7.1                                 Notices.
Any notice required or permitted to be delivered hereunder shall be in writing
and shall be deemed to be delivered on the earlier of (i) the date received, or
(ii) the date of delivery, refusal or non-delivery indicated on the return
receipt, if deposited in a United States Postal Service depository, postage
prepaid, sent registered or certified mail, return receipt requested, addressed
to the party to receive the same at the address of such party set forth below,
or at such other address as may be designated in a notice delivered or mailed
as herein provided.

 

	
  To Company:

  	
  Curative Health
  Services, Inc. 

  150 Motor Parkway 

  Hauppauge, New York 11788 

  Attention: Nancy F. Lanis, Esq.

  Executive Vice President, General Counsel and Corporate Secretary

  
	
   

  	
   

  
	
  Executive:

  	
  Joseph L. Feshbach 

  110 Atherton Avenue 

  Atherton, CA 94027

  

 

7.2                                 Headings.
The headings of the articles and sections of this Agreement are inserted for
convenience only and shall not be deemed a part of or affect the construction
or interpretation of any provision hereof.

 

7.3                                 Modifications;
Waiver. No modification of any provision of this Agreement or waiver of any
right or remedy herein provided shall be effective for any purpose unless
specifically set forth in a writing signed by the party to be bound thereby. No
waiver of any right or remedy in respect of any occurrence or event on one
occasion shall be deemed a waiver of such right or remedy in respect of such
occurrence or event on any other occasion.

 

7.4                                 Entire
Agreement. This Agreement contains the entire agreement of the parties with
respect to the subject matter hereof and supersedes and replaces any and all
other agreements, oral or written, including, but not limited to, the
Employment Agreement,  Assignment I and
Assignment II and/or any other assignments, heretofore made with respect
thereto.

 

11

 

7.5                                 Severability.
Any provision of this Agreement prohibited by or unlawful or unenforceable
under any applicable law of any jurisdiction shall as to such jurisdiction be
ineffective without affecting any other provision hereof. To the full extent,
however, that the provisions of such applicable law may be waived, they are
hereby waived, to the end that this Amended and Restated Employment Agreement
be deemed to be a valid and binding agreement enforceable in accordance with
its terms.

 

7.6                                 Governing
Law. The Executive and the Company agree that New York law shall govern the
construction and interpretation of this Agreement which has been negotiated by
the parties who have been represented by counsel.  Nothing in this Agreement or the General
Release shall be interpreted to mean that New York law shall not govern and
control the interpretation of this Agreement.

 

7.7                                 Assignments.
The Company shall have the right to assign this Agreement and to delegate all
rights, duties and obligations hereunder to any entity that controls the
Company, that the Company controls or that may be the result of the merger,
consolidation, acquisition or reorganization of the Company and another entity.
Executive agrees that this Agreement is personal to him and his rights and
interest hereunder may not be assigned, nor may his obligations and duties
hereunder be delegated (except as to delegation in the normal course of
operation of the Company), and any attempted assignment or delegation in
violation of this provision shall be void.

 

7.8                                 Attorney
Fees. In the event of litigation between the parties, to enforce their
respective rights under this Agreement, the prevailing party shall be entitled
to receive from the non-prevailing party reimbursement of the prevailing party’s
reasonable attorney’s fees and costs at all levels of trial and appeal.

 

IN WITNESS WHEREOF, the parties have executed this
Agreement as of the Effective Date.

 

	
   

  	
  CURATIVE HEALTH SERVICES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Thomas
  Axmacher

  
	
   

  	
  Its:

  	
  Executive Vice President and

  
	
   

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  Dated:

  	
  11/10/04

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ Joseph L. Feshbach

  
	
   

  	
  Joseph L. Feshbach

  
	
   

  	
  Dated:

  	
  11/10/04

  
				

 

12

 

Exhibit A

 

 

November      ,
2004

 

 

Board of Directors

Curative Health Services, Inc.

150 Motor Parkway

Hauppauge, New York  11788

 

Re:  Resignation as Director and Officer

 

Dear Sir or Madam:

 

Effective as of November 15, 2004 I hereby
resign in my capacity as Director and Officer of the following entities:

 

	
  Entity

  	
   

  	
  Title

  	
   

  
	
  Curative Health Services,
  Inc.

  	
   

  	
  Chief Executive Officer

  	
   

  
	
  Critical Care Systems,
  Inc.

  	
   

  	
  Director

  	
   

  
	
  Curative Health Services
  Co.

  	
   

  	
  Director

  	
   

  
	
  Curative Pharmacy
  Services, Inc.

  	
   

  	
  Director

  	
   

  
	
  Curative Health Services
  of New York, Inc.

  	
   

  	
  Director

  	
   

  
	
  Apex Therapeutic Care,
  Inc.

  	
   

  	
  Director

  	
   

  
	
  Optimal Care Plus, Inc.

  	
   

  	
  Director

  	
   

  
	
  MedCare, Inc.

  	
   

  	
  Director

  	
   

  
	
  eBioCare.com, Inc.

  	
   

  	
  Director

  	
   

  
	
  Hemophilia Access, Inc.

  	
   

  	
  Director

  	
   

  
	
  Curative Health Services
  III Co.

  	
   

  	
  Director

  	
   

  
	
  Infinity Infusion Care,
  Ltd.

  	
   

  	
  Director and Manager

  	
   

  
	
  Infinity Infusion II, LLC

  	
   

  	
  Chair and Manager

  	
   

  
	
  Infinity Infusion, LLC

  	
   

  	
  Chair and Manager

  	
   

  

 

 

Sincerely,

 

 

JOSEPH L. FESHBACH

 

 

Exhibit
B

 

MUTUAL GENERAL RELEASE

 

This Mutual
General Release (“General Release”) is made and entered into by Joe Feshbach (“Executive”)
and Curative Health Services, Inc. (the “Company”).

 

WHEREAS,
the Company and Executive are parties to a Transition Agreement with an
effective date of October 2, 2004 (“Transition Agreement”);

 

WHEREAS,
under the terms of the Transition Agreement, which Executive agrees are fair
and reasonable, Executive and the Company have agreed to enter into this
General Release;

 

NOW,
THEREFORE, in consideration of the provisions and the
mutual covenants herein contained, the parties agree as follows:

 

1.             Release by Executive.  For the consideration expressed in the Transition
Agreement and except as otherwise set forth herein, Executive does hereby fully
and completely release, discharge, covenant not to sue and waive any and all
claims, complaints, causes of action, demands, suits, and damages, of any kind
or character, which he has or may have against the Releasees, as hereinafter
defined, arising out of any acts, omissions, conduct, decisions, behavior, or
events occurring up through the date of his signature on this General
Release.  For purposes of this General
Release, the “Releasees” means collectively the Company, its predecessors,
successors, assigns, parents, affiliates, subsidiaries, related companies,
officers, directors, shareholders, agents, servants, counsel, executives,
insurers, and each and all thereof.

 

Executive
understands and accepts that his release of claims includes any and all
possible statutory claims, including but not limited to claims based upon:  Title VII of the Federal Civil Rights Act of
1964, as amended; the Age Discrimination in Employment Act; the Older Worker
Benefit Protection Act; the Americans with Disabilities Act; the Equal Pay Act;
the Fair Labor Standards Act; the Executive Retirement Income Security Act; the
Minnesota Human Rights Act; the Minneapolis Code of Ordinances; the N.Y.
Executive Law, or any other federal, state or local statute, ordinance or
law.  Executive also understands that he
is giving up any and all other claims, agreements, obligations, losses,
damages, injuries, demands and causes of action, known or unknown, suspected or
unsuspected, including but not limited to those grounded in contract (including
but not limited to any claims under the Employment Agreement or any assignment
thereto) or tort theories, including but not limited to:  wrongful discharge; breach of contract;
tortious interference with contractual relations; promissory estoppel; breach
of the implied covenant of good faith and fair dealing; breach of express or
implied promise; breach of manuals or other policies; assault; battery; fraud;
sexual harassment; false imprisonment; invasion of privacy; intentional or
negligent misrepresentation; defamation, including libel, slander, discharge
defamation and self-publication defamation; discharge in violation of public
policy; whistleblower; intentional or negligent infliction of emotional
distress; claims for unpaid compensation (including, but not limited to any
claim for severance) or any other theory, whether legal or equitable.

 

Executive further
understands that he is releasing, and does hereby release, any claims for 

 

1

 

damages, by charge or otherwise, whether brought by him or on his
behalf by any other party, governmental or otherwise, and agrees not to
institute any claims for damages via administrative or legal proceedings
against any of the Releasees.  Executive
also waives and releases any and all rights to money damages or other legal
relief awarded by any governmental agency related to any charge or other claim
against any of the Releasees.

 

This General
Release does not apply to any claims arising from the Company’s prospective
obligations under the Transition Agreement, under any Stock Option Award
Agreements, any Restricted Stock Agreement or under any employee benefit plans
or programs in which Executive participates under Section 3.2, if applicable,
following the date on which Executive signs this General Release.

 

2.             Paragraph 1542.  The Company and Executive each waive each
other from and relinquish all rights and benefits afforded by Paragraph 1542 of
the Civil Code of California, and do so understanding and acknowledging the
significance and consequences of such waiver of Paragraph 1542, except that the
Company does not waive Executive from any claims by third-parties, whenever and
wherever such claims may arise and regardless of whether such claims were known
or unknown, suspected or unsuspected, revealed or hidden, or developed or
undeveloped through the date on which the Company signs this General Release.  Paragraph 1542 of the Civil Code of
California states as follows:

 

A GENERAL RELEASE DOES
NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OF OR SUSPECT TO EXIST IN
HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE
MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.

 

Thus,
notwithstanding the provisions of Paragraph 1542, and for the purpose of
implementing a full and complete release and discharge of Releasees, the
Company and Executive each expressly acknowledge that this General Release is
also intended to include in its scope, without limitation, all claims that the
Company and Executive does not know of or expect in its or his favor at the
time either party signs this General Release except that the Company does not
waive Executive from any claims by third-parties, whenever and wherever such
claims may arise and regardless of whether such claims were known or unknown,
suspected or unsuspected, revealed or hidden, or developed or undeveloped
through the date on which the Company signs this General Release and that this
General Release contemplates the extinguishment of any such claim or claims
except as expressly provided herein.

 

Notwithstanding
the inclusion of this language, Executive and the Company agree that New York
law shall govern this General Release which has been negotiated by the parties
who have been represented by counsel. 
Nothing in this General Release shall be interpreted to mean that New
York law shall not govern and control the interpretation of this General
Release.

 

3.             Representation by Executive.  Executive represents and warrants that, to
the best of his knowledge, he has not engaged in any activities during his
employment which would constitute wrongful conduct including, but not limited
to, fraud, misrepresentation, violation of any federal, state or local law, or
any conduct contrary to company policy. 
In executing this 

 

2

 

General Release, the Company has relied on the representations by
Executive in this Section 3 which representations are a material term of this
General Release.

 

4.             Release by Company.  Except for those prospective obligations
created by or arising out of the Transition Agreement or, as set forth herein,
any claims by third-parties, whenever and wherever such claims may arise and
regardless of whether such claims were known or unknown, suspected or
unsuspected, revealed or hidden, or developed or undeveloped through the date
on which he Company signs this General Release, the Company (which for purposes
of this Section 4 shall include the Company and its affiliates, subsidiaries,
and related entities) releases and discharges, and covenants not to sue,
Executive from and with respect to any and all claims, agreements, obligations,
losses, damages, injuries, demands and causes of action, known or unknown,
suspected or unsuspected, arising out of or in any way connected with Executive’s
employment or services as a director with the Company or any other occurrences,
actions, omissions or claims whatsoever, known or unknown, suspected or
unsuspected, which the Company now owns or holds or has at any time heretofore
owned or held as against Executive up through the date on which it signs this
General Release.

 

Neither this
Mutual General Release nor the Transition Agreement shall modify, expand or
reduce any obligation of the Company, if such obligation exists, to indemnify
Executive from any claims arising out of the performance of his services as an
employee, officer or director of the Company (including any of its affiliates,
subsidiaries and related entities), as provided by applicable law and in
accordance with the Company’s by-laws.

 

5.             Rescission.  Executive has been informed of his right to
rescind this General Release by written notice to the Company within fifteen
(15) calendar days after the execution of this General Release.  Executive has been informed and understands
that any such rescission must be in writing and delivered to the Company by
hand, or sent by mail within the 15-day time period.  If delivered by mail, the rescission must
be:  (1) postmarked within the applicable
period and (2) sent by certified mail, return receipt requested, to Curative
Health Services, Inc. 150 Motor Parkway, Hauppauge, New York 11788, Attention:
Nancy F. Lanis, Esq.

 

6.             Acceptance Period; Advice of
Counsel.  The terms
of this General Release will be open for acceptance by Executive for a period
of 21 days, during which time Executive may consider whether or not to accept
this General Release.  Executive agrees
that changes to this General Release, whether material or immaterial, will not
restart this acceptance period. 
Executive is hereby advised to seek the advice of an attorney regarding
this General Release, which he has done.

 

7.             Binding Agreement.  This General Release shall
be binding upon, and inure to the benefit of, Executive and the Company and
their respective successors and permitted assigns.

 

8.             Representation.  Executive hereby
acknowledges and states that he has read this General Release.  Executive further represents that this
General Release is written in language which is understandable to him, that he
fully appreciates the meaning of its terms, and that he enters into this
General Release freely and voluntarily.

 

9.             Governing Law.  The
Executive and the Company agree that New York law shall 

 

3

 

govern the construction and interpretation of this General Release
which has been negotiated by the parties who have been represented by
counsel.  Nothing in this General Release
shall be interpreted to mean that New York law shall not govern and control the
construction and interpretation of this General Release.

 

IN
WITNESS WHEREOF, the Parties, after due consideration,
have authorized, executed, and delivered this General Release.

 

	
   

  	
  CURATIVE HEALTH SERVICES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
  Dated:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  EXECUTIVE

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Joseph L. Feshbach

  
	
   

  	
  Dated:

  	
   

  
					

 

4

 

Exhibit C

 

RESTRICTED STOCK AWARD AGREEMENT

 

 

 

 

 

 

 

 

 

 

[Please see
exhibit 10.2]

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