10-Q

Use these links to rapidly review the document
TABLE OF CONTENTS

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

ý	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2003
or
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                  to

Commission file number: 000-49728

JETBLUE AIRWAYS CORPORATION
(Exact name of registrant as specified in its charter)

Delaware (State or other jurisdiction of incorporation or organization)	87-0617894 (I.R.S. Employer Identification No.)
118-29 Queens Boulevard, Forest Hills, New York (Address of principal executive offices)	11375 (Zip Code)

(718) 709-3026
(Registrant's telephone number, including area code)

(Former name, former address and former fiscal year,
if changed since last report)

        Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý    No o

        Indicate by check mark whether the Registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes o    No ý

        As of June 30, 2003, there were 64,353,818 shares of the registrant's common stock, par value $0.01, outstanding.

JetBlue Airways Corporation

FORM 10-Q

INDEX

PART I.    FINANCIAL INFORMATION
Item 1.	Financial Statements
	Condensed Consolidated Balance Sheets—June 30, 2003 and December 31, 2002
	Consolidated Statements of Income—Three and Six Months Ended June 30, 2003 and 2002
	Condensed Consolidated Statements of Cash Flows—Six Months Ended June 30, 2003 and 2002
	Notes to Condensed Consolidated Financial Statements
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations.
Item 3.	Quantitative and Qualitative Disclosures About Market Risk.
Item 4.	Controls and Procedures.
PART II.    OTHER INFORMATION
Item 1.	Legal Proceedings
Item 2.	Changes in Securities and Use of Proceeds
Item 4.	Submission of Matters to a Vote of Security Holders
Item 5.	Other Information
Item 6.	Exhibits and Reports on Form 8-K
SIGNATURE
EXHIBIT INDEX

2

PART I.    FINANCIAL INFORMATION

Item 1.  Financial Statements

JETBLUE AIRWAYS CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

			June 30, 2003			December 31, 2002
			(unaudited)
ASSETS
CURRENT ASSETS
	Cash and cash equivalents		$	253,525		$	246,752
	Short-term investments			14,455			11,101
	Receivables, less allowance			20,036			11,931
	Prepaid expenses and other			20,921			13,275
		Total current assets		308,937			283,059
PROPERTY AND EQUIPMENT
	Flight equipment			966,719			869,101
	Predelivery deposits for flight equipment			169,405			112,934
				1,136,124			982,035
	Less accumulated depreciation			42,788			28,203
				1,093,336			953,832
	Other property and equipment			71,632			53,098
	Less accumulated depreciation			14,007			9,769
				57,625			43,329
		Total property and equipment		1,150,961			997,161
OTHER ASSETS
	Purchased technology, net			65,893			68,278
	Other			39,531			30,425
		Total other assets		105,424			98,703
TOTAL ASSETS			$	1,565,322		$	1,378,923
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
	Accounts payable		$	32,481		$	46,042
	Air traffic liability			130,192			97,534
	Accrued salaries, wages and benefits			40,564			37,140
	Other accrued liabilities			22,113			16,515
	Short-term borrowings			26,580			21,679
	Current maturities of long-term debt			54,647			50,754
		Total current liabilities		306,577			269,664
LONG-TERM DEBT				677,093			639,498
DEFERRED CREDITS AND OTHER LIABILITIES				101,058			55,088
STOCKHOLDERS' EQUITY
	Common stock, 64,353,818 and 63,758,412 shares issued and outstanding in 2003 and 2002, respectively			644			638
	Additional paid-in capital			415,675			407,471
	Retained earnings			71,106			15,791
	Unearned compensation			(8,464	)		(9,414	)
	Accumulated other comprehensive income			1,633			187
		Total stockholders' equity		480,594			414,673
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY			$	1,565,322		$	1,378,923

See accompanying notes to condensed consolidated financial statements.

3

JETBLUE AIRWAYS CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

(unaudited, in thousands, except per share amounts)

			Three Months Ended June 30,						Six Months Ended June 30,
			2003			2002			2003			2002
OPERATING REVENUES
	Passenger		$	237,037		$	144,295		$	446,940		$	273,386
	Other			7,664			5,008			14,891			9,286
		Total operating revenues		244,701			149,303			461,831			282,672
OPERATING EXPENSES
	Salaries, wages and benefits			67,827			37,622			124,728			71,183
	Aircraft fuel			32,457			16,983			68,423			29,967
	Sales and marketing			14,541			11,785			25,968			21,635
	Landing fees and other rents			16,309			9,681			32,597			19,620
	Aircraft rent			14,907			10,298			27,986			19,789
	Depreciation and amortization			11,471			5,695			21,793			10,407
	Maintenance materials and repairs			5,366			1,506			8,698			3,411
	Other operating expenses			36,279			28,026			71,641			55,575
		Total operating expenses		199,157			121,596			381,834			231,587
OPERATING INCOME				45,544			27,707			79,997			51,085
OTHER INCOME (EXPENSE)
	Interest expense			(6,023	)		(4,725	)		(12,217	)		(8,912	)
	Capitalized interest			1,221			1,435			2,242			2,732
	Interest income and other			1,948			617			2,720			2,419
	Emergency War Time compensation			22,761			—			22,761			—
		Total other income (expense)		19,907			(2,673	)		15,506			(3,761	)
INCOME BEFORE INCOME TAXES				65,451			25,034			95,503			47,324
	Income tax expense			27,494			10,448			40,188			19,734
NET INCOME				37,957			14,586			55,315			27,590
	Preferred stock dividends			—			(944	)		—			(5,955	)
NET INCOME APPLICABLE TO COMMON STOCKHOLDERS			$	37,957		$	13,642		$	55,315		$	21,635
EARNINGS PER COMMON SHARE:
	Basic		$	0.60		$	0.27		$	0.88		$	0.78
	Diluted		$	0.55		$	0.22		$	0.80		$	0.44

See accompanying notes to condensed consolidated financial statements.

4

JETBLUE AIRWAYS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited, in thousands)

				Six Months Ended June 30,
				2003			2002
CASH FLOWS FROM OPERATING ACTIVITIES
	Net income			$	55,315		$	27,590
	Adjustments to reconcile net income to net cash provided by operating activities:
		Deferred income taxes			39,287			19,734
		Depreciation			19,057			9,786
		Amortization			2,903			621
		Changes in certain operating assets and liabilities			12,254			22,653
		Other, net			909			5,367
			Net cash provided by operating activities		129,725			85,751
CASH FLOWS FROM INVESTING ACTIVITIES
	Capital expenditures				(261,804	)		(200,391	)
	Predelivery deposits for flight equipment, net				(99,384	)		(64,635	)
	Purchase of short-term investments				(10,013	)		(11,362	)
	Proceeds from maturities of short-term investments				9,185			—
	Other, net				75			(2,636	)
			Net cash used in investing activities		(361,941	)		(279,024	)
CASH FLOWS FROM FINANCING ACTIVITIES
	Proceeds from issuance of common stock				5,325			167,989
	Proceeds from issuance of long-term debt				68,000			178,000
	Proceeds from aircraft sale and leaseback transactions				189,300			38,500
	Proceeds from short-term borrowings				13,031			10,840
	Repayment of long-term debt				(26,512	)		(34,519	)
	Repayment of short-term borrowings				(8,130	)		(15,699	)
	Other, net				(2,025	)		(35	)
			Net cash provided by financing activities		238,989			345,076
INCREASE IN CASH AND CASH EQUIVALENTS					6,773			151,803
Cash and cash equivalents at beginning of period					246,752			117,522
Cash and cash equivalents at end of period				$	253,525		$	269,325

See accompanying notes to condensed consolidated financial statements.

5

JETBLUE AIRWAYS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2003

Note 1—Summary of Significant Accounting Policies

Basis of Presentation:  Our condensed consolidated financial statements include the accounts of JetBlue Airways Corporation ("JetBlue") and our wholly owned subsidiary, LiveTV, LLC ("LiveTV"), collectively "we" or the "Company". LiveTV's results of operations from the date of acquisition in September 2002 have been included and all intercompany transactions and balances have been eliminated. These condensed consolidated financial statements and related notes should be read in conjunction with our 2002 audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2002 (our "2002 Form 10-K").

        These condensed consolidated financial statements are unaudited and have been prepared by us following the rules and regulations of the United States Securities and Exchange Commission and, in our opinion, reflect all adjustments consisting of normal recurring items which are necessary to present fairly the results for interim periods. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted as permitted by such rules and regulations; however, we believe that the disclosures are adequate to make the information presented not misleading. Operating results for the periods presented herein are not necessarily indicative of the results that may be expected for the entire year.

LiveTV Revenue and Expenses:  We account for LiveTV's revenues and expenses related to the sale of hardware, maintenance of hardware, and programming services provided, as a single unit in accordance with Emerging Issues Task Force Issue No. 00-21, Accounting for Revenue Arrangements with Multiple Deliverables. Revenue and expenses related to these components are recognized ratably over the service period.

Stock-Based Compensation:  We account for stock-based compensation in accordance with Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees, and related interpretations. Compensation expense for a stock option grant is recognized if the exercise price is less than the fair value of our common stock on the grant date. The following table illustrates the effect on net income and earnings per common share if we had applied the fair value method to measure stock-

6

based compensation, as required under the disclosure provisions of SFAS No 123, Accounting for Stock-Based Compensation, as amended (in thousands, except per share amounts):

			Three Months Ended June 30,						Six Months Ended June 30,
			2003			2002			2003			2002
Net income, as reported			$	37,957		$	14,586		$	55,315		$	27,590
Add: Stock-based compensation expense included in reported net income, net of tax				257			270			509			489
Deduct: Stock-based compensation expense determined under the fair value method, net of tax
		Crewmember stock purchase plan		(145	)		(987	)		(999	)		(987	)
		Employee stock options		(1,657	)		(545	)		(3,074	)		(815	)
Proforma net income			$	36,412		$	13,324		$	51,751		$	26,277
Earnings per common share:
	Basic—as reported		$	0.60		$	0.27		$	0.88		$	0.78
	Basic—proforma		$	0.58		$	0.24		$	0.82		$	0.74
	Diluted—as reported		$	0.55		$	0.22		$	0.80		$	0.44
	Diluted—proforma		$	0.52		$	0.20		$	0.75		$	0.42

Note 2—Long-term Debt

        At June 30, 2003, the weighted average interest rate of our long-term debt was 3.15%, and maturities were $26.3 million for the remainder of 2003, $54.3 million in 2004, $56.6 million in 2005, $56.2 million in 2006, $56.4 million in 2007, $58.1 million in 2008, and $423.8 million thereafter. These maturities do not reflect repayment of the $175 million of 3¹/2% convertible notes due in 2033 which were sold on July 15, 2003. See Note 11 for more information.

Note 3—Comprehensive Income

        Comprehensive income included changes in the fair value of our crude oil financial derivative instruments which qualify for hedge accounting in accordance with SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities. Comprehensive income for the three months ended June 30, 2003 totaled $40.1 million, which included our net income of $37.9 million and unrealized gains of $2.2 million related to our derivatives contracts. Comprehensive income for the six months ended June 30, 2003 totaled $56.7 million, which included our net income of $55.3 million and unrealized gains of $1.4 million related to our derivatives contracts. For the three and six months ended June 30, 2002, comprehensive income consisted solely of our net income as there were no other comprehensive income (loss) components.

7

Note 4—Earnings Per Share

        The following table shows how we computed basic and diluted earnings per common share (in thousands, except share information):

		Three Months Ended June 30,				Six Months Ended June 30,
		2003		2002		2003		2002
Numerator:
Net income applicable to common stockholders for basic earnings per share		$	37,957	$	13,642	$	55,315	$	21,635
Effect of dilutive securities:
	Preferred stock dividends		—		944		—		5,955
Net income applicable to common stockholders after assumed conversions for diluted earnings per share		$	37,957	$	14,586	$	55,315	$	27,590
Denominator:
Weighted-average shares outstanding for basic earnings per share			62,985,413		50,681,921		62,807,051		27,577,643
Effect of dilutive securities:
	Convertible preferred stock		—		8,094,663		—		26,961,711
	Unvested common stock		1,186,045		2,362,079		1,191,601		2,358,708
	Employee stock options		5,350,612		5,365,221		5,026,647		5,118,167
Adjusted weighted-average shares outstanding and assumed conversions for diluted earnings per share			69,522,070		66,503,884		69,025,299		62,016,229

        See Note 11 for information regarding shares of our securities issued subsequent to June 30, 2003.

Note 5—Income Taxes

        Income tax expense is based on estimated annual effective tax rates, which differ from the federal statutory rate of 35% primarily due to state and local income taxes, nondeductible expenses and stock option compensation.

Note 6—Employee Retirement Plan

        The Company sponsors a retirement profit sharing and 401(k) defined contribution plan, or the Plan. Company contributions expensed for the Plan for the three months ended June 30, 2003 and 2002 were $12.6 million and $5.0 million, respectively, and contributions expensed for the Plan for the six months ended June 30, 2003 and 2002, were $18.9 million and $9.4 million, respectively.

Note 7—Commitments

        At June 30, 2003, our firm aircraft orders consisted of 107 Airbus A320 aircraft and 100 EMBRAER 190 aircraft scheduled for delivery through 2011. Committed expenditures for these aircraft

8

and related equipment, including estimated amounts for contractual price escalations and predelivery deposits, will be approximately $305 million for the remainder of 2003, $555 million in 2004, $800 million in 2005, $1.0 billion in 2006, $1.1 billion in 2007, $1.0 billion in 2008 and $2.1 billion thereafter. We have options to purchase 50 A320 aircraft and related equipment scheduled for delivery from 2006 through 2012, and we also have options to purchase 100 EMBRAER 190 aircraft and related equipment scheduled for delivery from 2011 through 2016. Debt financing has been arranged for five of the remaining eight deliveries scheduled for 2003. Additionally, lease financing has been arranged for the first 30 EMBRAER 190 aircraft deliveries, scheduled for delivery through March 2007.

        During 2003, we entered into non-cancelable operating leases for six additional aircraft in addition to leases for certain other facilities and equipment. Future minimum lease payments associated with these arrangements are $14.4 million for the remainder of 2003, $17.6 million in 2004, $19.3 million in 2005, $21.6 million in 2006, $20.9 million in 2007, $19.2 million in 2008 and $178.8 million thereafter. These amounts are in addition to the minimum lease payments described in Note 4 to our 2002 audited financial statements included in our 2002 Form 10-K. Additionally, we have committed to lease one aircraft in 2004 under a 12 year operating lease, with total minimum lease payments estimated to aggregate $33 million.

Note 8—Financial Instruments and Risk Management

        We reflect the fair market value of our financial derivative instruments, which include crude oil option and swap contracts, on our balance sheet as a component of short-term investments. For accounting purposes, we have designated these contracts as cash flow hedges which offset our exposure to the price of jet fuel. As of June 30, 2003, using these instruments with original terms of up to 22 months, we had hedged approximately 80% of our remaining 2003 fuel requirements with 1.8 million barrels and approximately 30% of our projected 2004 fuel requirements with 1.6 million barrels. For the three months ended June 30, 2003, we recognized $0.5 million in settlement losses as an increase to fuel expense which represents the hedge effectiveness. We also recognized a gain of $0.9 million related to hedge ineffectiveness in interest income and other. For the six months ended June 30, 2003 settlement gains totaled $0.5 million and ineffectiveness gains totaled $0.7 million.

Note 9—Contingencies

        On February 21, 2003, we received approval from the Federal Aviation Administration and the Department of Transportation to increase the number of aircraft we are allowed to operate to up to 70 aircraft through March 2005. As the size of our fleet increases, we anticipate the submission of another application to the DOT requesting authorization to operate additional aircraft.

Note 10—Emergency War Time Supplemental Appropriations Act of 2003

        On April 16, 2003, the President signed into law the Emergency War Time Supplemental Appropriations Act of 2003, which provides for compensation to domestic air carriers based on their proportional share of passenger security and air carrier infrastructure security fees paid by those carriers through the date of enactment of the legislation. On May 15, 2003, we received $22.8 million in compensation pursuant to this legislation, which is recorded in other income (expense). This legislation also provides for (i) the suspension of passenger security fees and air carrier infrastructure security fees from June 1, 2003 through September 30, 2003, (ii) $100 million in additional reimbursement to all

9

carriers for the direct costs associated with installing strengthened flight deck doors. Our portion of which, once determined and received by us, will be recorded as a reduction to the capitalized cost of flight equipment, and (iii) potential extension of the aviation war risk insurance provided by the government for one year to August 2004.

Note 11—Subsequent Events

        On July 15, 2003, we completed a public offering of 2,990,000 shares of our common stock at $42.50 per share, raising net proceeds of approximately $122.4 million, after deducting discounts and commissions paid to the underwriters and other expenses incurred in connection with the offering. Also on the same day, we completed a separate private offering of $175 million aggregate principal amount of 3¹/2% convertible notes due 2033, which were resold by the initial purchasers to qualified institutional buyers pursuant to Rule 144A of the Securities Act of 1933. Net proceeds from this offering were approximately $170.7 million. The notes bear interest at 3¹/2% payable semi-annually on January 15 and July 15. The first interest payment on the notes is due January 15, 2004. The notes are senior unsecured debt and rank equal in right of payment with all of our other existing and future senior unsecured debt. The notes rank junior in right of payment to our secured debt to the extent of the value of the assets securing such debt. In addition, the notes rank junior in right of payment to the existing and future liabilities of our subsidiaries.

        The notes are convertible into shares of our common stock at a conversion rate of 15.6863 shares per $1,000 in principal amount of the notes which equals an initial conversion price of approximately $63.75 per share. The conversion rate is subject to adjustment in certain circumstances. Holders of the notes may convert their notes under the following circumstances: (1)  during any fiscal quarter commencing after September 30, 2003, if the closing sale price of our common stock exceeds 120% of the conversion price for at least 20 trading days in the 30 consecutive trading days ending on the last trading day of the preceding fiscal quarter; (2) during the five business day period after any five consecutive trading day period in which the trading price per note for each day of that period was less than 95% of the product of the closing sale price of our common stock and the conversion rate; (3) if the notes have been called for redemption; or (4) upon the occurrence of certain corporate transactions.

        We may redeem any of the notes in whole or in part beginning on July 18, 2006 at a redemption price equal to the principal amount of the notes plus accrued and unpaid interest, if the closing price of our common stock on the Nasdaq National Market has exceeded 150% of the conversion price for at least 20 trading days in any period of 30 consecutive trading days. In addition, beginning July 18, 2008, we may redeem any of the notes at any time at a redemption price equal to the principal amount of the notes, plus accrued but unpaid interest. Holders may require us to repurchase the notes on July 15 of 2008, 2013, 2018, 2023 and 2028 or upon the occurrence of certain designated events at a repurchase price equal to the principal amount of the notes, plus accrued and unpaid interest. We have agreed to file a shelf registration statement with the Securities and Exchange Commission covering the resale of the notes and the common stock issuable upon the conversion of the notes.

10

Item 2.    Management's Discussion and Analysis of Financial Condition and Results of Operations.

Results of Operations

Three Months Ended June 30, 2003 and 2002

        Despite challenging industry conditions due to the impact of the war in Iraq and the outbreak of Severe Acute Respiratory Syndrome, we recorded our highest ever quarterly load factor and quarterly operating margin during the three months ended June 30, 2003. We had operating income of $45.6 million for the second quarter of 2003 compared to operating income of $27.7 million in 2002. Our operating margin for the three months ended June 30, 2003 was 18.6%. Higher seasonal traffic, aided by Easter and Passover falling in the second quarter in 2003, contributed to our record quarterly load factor of 85.3%.

        Our net income for the three months ended June 30, 2003 increased to $37.9 million from $14.6 million for the three months ended June 30, 2002 and was our 10^th consecutive profitable quarter. Diluted earnings per share was $0.55 for the second quarter of 2003 compared with $0.22 for the same period in 2002. Our results for 2003 included $22.8 million in compensation related to the Emergency War Time Supplemental Appropriations Act of 2003, which net of income taxes and profit sharing, amounted to $11.5 million, or $0.17 per diluted share.

        Operating Revenues.    Operating revenues increased 63.9%, or $95.4 million, primarily due to an increase in passenger revenues. Increased passengers resulting from a 59.9% increase in departures and a 1.2 percentage point increase in load factor, or $103.0 million, partially offset by a 4.5% decrease in yield, or $10.3 million, drove the increase in passenger revenue of $92.7 million for the three months ended June 30, 2003. The decrease in yield was primarily the result of our average stage length increasing by 6.0% in 2003 compared to 2002. Other revenue increased 53.0%, or $2.7 million, primarily due to increased change fees of $1.5 million resulting from more passengers.

        Operating Expenses.    Operating expenses increased 63.8%, or $77.5 million, due to an average of 17.0 additional aircraft in service in 2003. Operating capacity increased 69.5% to 3.27 billion available seat miles and an increase in transcontinental flights over 2002 contributed to a 6.0% increase in average stage length. Operating expenses per available seat mile decreased 3.5% to 6.07 cents for the three months ended June 30, 2003. In detail, operating costs per available seat mile were:

			Three Months Ended June 30,
					Percent Change
			2003	2002
Operating expenses:
	Salaries, wages and benefits		2.07	1.95	(6.2	)%
	Aircraft fuel		.99	.88	(12.5	)
	Sales and marketing		.44	.61	27.9
	Landing fees and other rents		.50	.50	—
	Aircraft rent		.46	.53	13.2
	Depreciation and amortization		.35	.29	(20.7	)
	Maintenance materials and repairs		.16	.08	(100.0	)
	Other operating expenses		1.10	1.45	24.1
		Total operating expenses	6.07	6.29	3.5	%

        On a sequential basis, cost per available seat mile decreased .18 cents, or 2.9%, over the first quarter of 2003 due primarily to a 19.1% decline in the average fuel cost per gallon, improved weather conditions and better bad debt experience, partially offset by a higher provision for profit sharing.

11

        Salaries, wages and benefits increased 80.3%, or $30.2 million, due to an increase in average full-time equivalent employees of 68.4%, higher wage rates and a $7.1 million higher provision for our profit sharing plan in 2003 compared to 2002, of which $3.4 million is attributable to the Emergency War Time compensation. Cost per available seat mile increased 6.2% primarily as a result of higher profit sharing.

        Aircraft fuel expense increased 91.1%, or $15.4 million, due to 16.5 million more gallons of aircraft fuel consumed resulting in $11.3 million of additional fuel expense and, after the impact of fuel hedging, a 14.6% increase in average fuel cost per gallon, or $4.1 million. Cost per available seat mile increased 12.5% primarily due to the increase in average fuel cost per gallon.

        Sales and marketing expense increased 23.4%, or $2.7 million, due to higher credit card fees resulting from increased passenger revenues. On a cost per available seat mile basis, sales and marketing expense decreased 27.9%. We booked the majority of our reservations through a combination of our website (72.5% in 2003) and our own reservation agents (25.1% in 2003).

        Landing fees and other rents increased 68.5%, or $6.6 million, due to a 59.9% increase in departures and higher rates at our terminal at JFK. Cost per available seat mile remained unchanged.

        Aircraft rent increased 44.8%, or $4.6 million, due to having 7.8 more average aircraft under operating leases during the three months ended June 30, 2003 compared to 2002. Cost per available seat mile decreased 13.2% due to a lower percentage of the aircraft fleet being leased.

        Depreciation and amortization increased 101%, or $5.8 million, due to having 9.2 more average owned aircraft during the three months ended June 30, 2003 compared to the same period in 2002 and amortization of the technology purchased in the September 2002 LiveTV acquisition. Cost per available seat mile increased 20.7% primarily due to a higher percentage of the aircraft fleet being owned versus leased.

        Maintenance materials and repairs increased 256%, or $3.9 million, due to 17.0 more average operating aircraft in 2003 compared to 2002. Beginning in August 2003, all of our maintenance checks will be performed by Air Canada. The cost per available seat mile increased 100% due to higher capacity and the completion of eight airframe checks in 2003 compared to three in 2002.

        Other operating expenses increased 29.4%, or $8.3 million. Higher variable costs associated with increased capacity and number of passengers served, along with higher fuel taxes were the primary reasons for the increase, partially offset by lower bad debts. Cost per available seat mile decreased 24.1% as a result of lower bad debts and the consolidation of LiveTV's operations in 2003.

        Other Income (Expense).    Interest expense increased 27.5%, or $1.3 million, due to the debt financing of nine additional aircraft resulting in $2.1 million of additional interest expense, offset by lower interest rates resulting in $0.8 million less interest expense. Capitalized interest decreased 14.9%, or $0.2 million, primarily due to lower interest rates. Interest income remained constant at $1.0 million. Gains on hedging activities were $0.9 million for the three months ended June 30, 2003 compared to losses of $0.4 million for the same period in 2002.

Six Months Ended June 30, 2003 and 2002

        Our net income for the six months ended June 30, 2003 increased to $55.3 million from $27.6 million for the six months ended June 30, 2002. Our results for 2003 included $22.8 million in Emergency War Time compensation, which net of income taxes and profit sharing, amounted to $11.5 million, or $0.17 per diluted share.We had operating income of $80.0 million and an operating margin of 17.3% for the six months ended June 30, 2003 compared to operating income of $51.1 million and an operating margin of 18.1% in 2002. Diluted earnings per share was $0.80 for the six months ended June 30, 2003 compared with $0.44 for the same period in 2002.

12

        Operating Revenues.    Operating revenues increased 63.4%, or $179.1 million, primarily due to an increase in passenger revenues. Increased passengers resulting from a 61.5% increase in departures and a 0.9 percentage point increase in load factor, or $209.0 million, partially offset by a 7.4% decrease in yield, or $35.5 million, drove the increase in passenger revenue of $173.5 million for the six months ended June 30, 2003. The decrease in yield was primarily the result of our average stage length increasing by 8.1% in 2003 compared to 2002. Other revenue increased 60.4%, or $5.6 million, primarily due to increased change fees of $3.2 million resulting from more passengers.

        Operating Expenses.    Operating expenses increased 64.9%, or $150.2 million, due to an average of 16.8 additional aircraft in service in 2003. Operating capacity increased 74.6% to 6.19 billion available seat miles and an increase in transcontinental flights over 2002 contributed to an 8.1% increase in average stage length. Operating expenses per available seat mile decreased 5.7% to 6.16 cents for the six months ended June 30, 2003. In detail, operating costs per available seat mile were:

			Six Months Ended June 30,
					Percent Change
			2003	2002
Operating expenses:
	Salaries, wages and benefits		2.01	2.01	—
	Aircraft fuel		1.10	.84	(31.0	)%
	Sales and marketing		.42	.61	31.1
	Landing fees and other rents		.53	.55	3.6
	Aircraft rent		.45	.56	19.6
	Depreciation and amortization		.35	.29	(20.7	)
	Maintenance materials and repairs		.14	.10	(40.0	)
	Other operating expenses		1.16	1.57	26.1
		Total operating expenses	6.16	6.53	5.7	%

        Salaries, wages and benefits increased 75.2%, or $53.5 million, due to an increase in average full-time equivalent employees of 70.5%, higher wage rates and an $8.5 million higher provision for our profit sharing plan in 2003 compared to 2002, of which $3.4 million is attributable to the Emergency War Time compensation. Cost per available seat mile remained constant year over year with decreases due to higher capacity being offset by higher profit sharing.

        Aircraft fuel expense increased 128%, or $38.4 million, due to 32.4 million more gallons of aircraft fuel consumed resulting in $21.2 million of additional fuel expense and, after the impact of fuel hedging, a 33.5% increase in average fuel cost per gallon, or $17.2 million. Cost per available seat mile increased 31.0% primarily due to the increase in average fuel cost per gallon.

        Sales and marketing expense increased 20.0%, or $4.3 million, due to higher credit card fees resulting from increased passenger revenues offset by lower travel agent commissions following their elimination in April 2002. On a cost per available seat mile basis, sales and marketing expense decreased 31.1% due to the increase in available seat miles and lower commissions. We booked the majority of our reservations through a combination of our website (71.7% in 2003) and our own reservation agents (25.6% in 2003).

        Landing fees and other rents increased 66.1%, or $13.0 million, due to a 61.5% increase in departures and higher rates at our terminal at JFK. Cost per available seat mile decreased 3.6% due to higher capacity and an increase in average stage length.

13

        Aircraft rent increased 41.4%, or $8.2 million, due to having 6.8 more average aircraft under operating leases during the six months ended June 30, 2003 compared to 2002. Cost per available seat mile decreased 19.6% due to a lower percentage of the aircraft fleet being leased.

        Depreciation and amortization increased 109%, or $11.4 million, due to having 10.0 more average owned aircraft during the six months ended June 30, 2003 compared to June 2002 and amortization of the technology purchased in the September 2002 LiveTV acquisition. Cost per available seat mile increased 20.7% primarily due to a higher percentage of the aircraft fleet being owned versus leased.

        Maintenance materials and repairs increased 155%, or $5.3 million, due to 16.8 more average operating aircraft in 2003 compared to 2002. The cost per available seat mile increased 40.0% due to higher capacity and the completion of 14 airframe checks in 2003 compared to six in 2002.

        Other operating expenses increased 28.9%, or $16.1 million. Higher variable costs associated with increased capacity and number of passengers served, along with higher fuel taxes and higher costs associated with the unfavorable weather conditions experienced during 2003, were the primary reasons for the increase, partially offset by lower bad debts. Cost per available seat mile decreased 26.1% as a result of lower bad debts and the consolidation of LiveTV's operations in 2003.

        Other Income (Expense).    Interest expense increased 37.1%, or $3.3 million, due to the debt financing of nine additional aircraft resulting in $4.8 million of additional interest expense, offset by lower interest rates resulting in $1.5 million less interest expense. Capitalized interest decreased 17.9%, or $0.5 million, primarily due to lower average predelivery deposit balances and lower interest rates. Interest income increased $0.5 million primarily due to higher cash and investment balances in 2003. Gains on hedging activities were $0.7 million and $0.9 million for the six months ended June 30, 2003 and 2002, respectively.

        The following table sets forth our operating statistics for the three and six months ended June 30, 2003 and 2002:

	Three Months Ended June 30,								Six Months Ended June 30,
							Percent Change								Percent Change
	2003			2002					2003			2002
Revenue passengers		2,209,920			1,332,906		65.8			4,220,537			2,513,823		67.9
Revenue passenger miles (000)		2,795,016			1,625,536		71.9			5,169,862			2,929,811		76.5
Available seat miles (000)		3,275,219			1,932,113		69.5			6,193,290			3,546,783		74.6
Load factor		85.3	%		84.1	%	1.2	pts.		83.5	%		82.6	%	0.9	pts.
Breakeven load factor		71.6	%		70.9	%	0.7	pts.		71.2	%		70.0	%	1.2	pts.
Aircraft utilization (hours per day)		12.9			13.3		(2.6	)		13.0			13.0		—
Average fare	$	107.26		$	108.26		(0.9	)	$	105.90		$	108.75		(2.6	)
Yield per passenger mile (cents)		8.48			8.88		(4.5	)		8.65			9.33		(7.4	)
Passenger revenue per available seat mile (cents)		7.24			7.47		(3.1	)		7.22			7.71		(6.4	)
Operating revenue per available seat mile (cents)		7.47			7.73		(3.3	)		7.46			7.97		(6.4	)
Operating expense per available seat mile (cents)(1)		6.07			6.29		(3.5	)		6.16			6.53		(5.7	)
Departures		16,133			10,090		59.9			31,544			19,529		61.5
Average stage length (miles)		1,253			1,182		6.0			1,212			1,121		8.1
Average number of operating aircraft during period		41.6			24.6		69.2			40.2			23.4		71.6
Average fuel cost per gallon (cents)		79.01			68.92		14.6			87.80			65.75		33.5
Fuel gallons consumed (000)		41,080			24,641		66.7			77,927			45,575		71.0
Percent of sales through jetBlue.com during period		72.5	%		61.3	%	11.2	pts.		71.7	%		58.3	%	13.4	pts.
Full-time equivalent employees at period end										4,475			2,642		69.4

(1)

Excludes direct costs associated with LiveTV third party sales of $268,000 and $499,000 for the three and six months ended June 30, 2003, respectively, which are unrelated to our airline operations.

14

Liquidity and Capital Resources

        At June 30, 2003, we had cash and cash equivalents of $253.5 million, compared to $246.8 million at December 31, 2002. Cash flows from operating activities were $129.7 million for the six months ended June 30, 2003 compared to $85.8 million for the six months ended June 30, 2002. The increase in operating cash flows was primarily due to the growth of our business and the receipt of $22.8 million in Emergency War Time compensation. We rely primarily on operating cash flows to provide working capital. We presently have no lines of credit other than a short-term borrowing facility for certain aircraft predelivery deposits.

        Investing Activities.    During the six months ended June 30, 2003, capital expenditures related to our purchase of flight equipment included expenditures of $232.9 million for seven Airbus aircraft and one spare engine and $9.7 million for spare part purchases. Capital expenditures for other property and equipment, including ground equipment purchases and facilities improvements, were $19.2 million.

        During the six months ended June 30, 2002, capital expenditures related to our purchase of flight equipment included expenditures of $179.2 million for six Airbus aircraft and one spare engine and $11.7 million for spare part purchases. Capital expenditures for other property and equipment, including ground equipment purchases and facilities improvements, were $9.5 million.

        Financing Activities.    Financing activities for the six months ended June 30, 2003 consisted primarily of the sale and leaseback over 20 years of five aircraft for $189.3 million with a U.S. leasing institution, the incurrence of $68.0 million of 10-year floating rate equipment notes issued to various European banks secured by two aircraft and the repayment of $26.5 million of long-term debt.

        On July 15, 2003, we completed a public offering of 2,990,000 shares of our common stock at $42.50 per share, raising net proceeds of approximately $122.4 million. Concurrent with this offering, we completed a separate private offering of $175 million aggregate principal amount of 3¹/2% convertible senior notes due 2033. Net proceeds from this offering were approximately $170.7 million. We will use the net proceeds of these offerings to fund working capital and capital expenditures, including capital expenditures related to the purchase of aircraft and construction of facilities on or near airports.

        Financing activities for the six months ended June 30, 2002 consisted of (1) the completion on April 17, 2002, of our initial public offering of 10,120,000 (as adjusted for the December 2002 3-for-2 stock split) shares of our common stock for net proceeds of $167.4 million (2) the incurrence of $178 million of 10- to 12-year floating rate equipment notes issued to various European banks secured by five aircraft and a 5-year floating rate equipment note secured by a spare engine, (3) the sale and leaseback over 18 years of one aircraft for $38.5 million financed by a Japanese institution and (4) the repayment of $34.5 million of long-term debt.

        Commitments.    Our contractual obligations for agreements entered into with an initial term of more than one year at June 30, 2003, include the following (in millions):

	Payments due in
	2003		2004		2005		2006		2007		Thereafter		Total
Long-term debt	$	26	$	54	$	57	$	56	$	57	$	482	$	732
Operating leases		48		75		78		80		79		572		932
Aircraft purchase obligations		305		555		800		1,025		1,040		3,040		6,765
Short-term borrowings		17		10		—		—		—		—		27
Other		9		16		11		5		4		—		45
Total	$	405	$	710	$	946	$	1,166	$	1,180	$	4,094	$	8,501

15

        There has been no material change in the terms of our debt instruments or financial covenants from the information provided in Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations included in our 2002 Form 10-K. At June 30, 2003, we were in compliance with the covenants of all of our debt and lease agreements. The maturities in the table above do not reflect repayment of the $175 million of 3¹/2% convertible notes issued on July 15, 2003. See Note 11 to our unaudited condensed consolidated financial statements included elsewhere in this report for additional information.

        During 2003, we entered into non-cancelable operating leases for six aircraft, five of which have terms of 20 years and one of which has a 12 year term. The table above reflects these commitments. Additionally, we have committed to lease one aircraft in 2004 under a 12 year operating lease, with total minimum lease payments estimated to aggregate $33 million which is not reflected in the table above. We have $13.0 million of restricted cash pledged under standby letters of credit related to certain of our leases which expire at the end of the related lease terms. These balances are classified under other long-term assets in our condensed consolidated balance sheets.

        We operated a fleet of 44 Airbus A320 aircraft, of which 22 were owned and 22 were leased under operating leases as of June 30, 2003. We also took delivery of one owned aircraft in June that began scheduled service in July 2003. The average age of our fleet was 18.5 months at June 30, 2003.

        On June 9, 2003, we placed an order for 100 new EMBRAER 190 jet aircraft, with options for an additional 100 new aircraft, with Empresa Brasileira de Aeronautica S.A., or Embraer. This new order is intended to supplement our existing fleet of Airbus A320 aircraft, which in April 2003 we agreed to expand through our order for 65 additional A320 aircraft with AVSA, S.A.R.L., an affiliate of Airbus Industrie, or Airbus.

        As of June 30, 2003, we had on order 107 Airbus A320 aircraft and 100 EMBRAER 190 aircraft with options to acquire 50 additional Airbus A320 aircraft and 100 additional EMBRAER 190 aircraft, which are scheduled for delivery through 2016 (on a relatively even basis during each year) as follows:

	Firm			Option
Year	A320	EMBRAER 190	Total	A320	EMBRAER 190	End of Year Cumulative Total Fleet(1)
Remainder of 2003	8	—	8	—	—	53
2004	14	—	14	—	—	68
2005	16	7	23	—	—	91
2006	15	18	33	2	—	126
2007	15	18	33	2	—	161
2008	13	18	31	4	—	196
2009	10	18	28	8	—	232
2010	10	18	28	8	—	268
2011	6	3	9	13	15	305
2012	—	—	—	13	18	336
2013	—	—	—	—	18	354
2014	—	—	—	—	18	372
2015	—	—	—	—	18	390
2016	—	—	—	—	13	403
	107	100	207	50	100

(1)

Assumes all options are exercised and includes one aircraft we have committed to lease in January 2004.

16

        Committed expenditures for our 207 firm aircraft and 33 spare engines include estimated amounts for contractual price escalations and predelivery deposits. Debt financing has been arranged for five of our remaining 2003 deliveries, and lease financing has been arranged for the first 30 EMBRAER 190 aircraft deliveries. Although we believe that debt and/or lease financing should be available for our remaining aircraft deliveries, we cannot assure you that we will be able to secure financing on terms attractive to us, if at all, which may require us to modify our aircraft acquisition plans. Other capital expenditures for spare parts, ground purchases and facility improvements for the remainder of 2003 are projected to be approximately $50 million in the aggregate.

        In July 2003, we signed a non-binding letter of intent to purchase six full-flight simulators from CAE, Inc. to be delivered and installed in 2004 and 2005, with options to purchase seven additional simulators. The four Airbus A320 simulators and two EMBRAER 190 simulators have an estimated list price of $61 million. Since a final contract has not been executed, this potential commitment has not been reflected in the commitments table above. The simulators will be installed at an anticipated new training facility, the location of which is to be determined.

        In February 2003, we received approval from the Federal Aviation Administration, or the FAA, and the Department of Transportation, or the DOT, to increase the number of aircraft we are allowed to operate to up to 70 aircraft through March 2005. As the size of our fleet increases, we anticipate the submission of another application to the FAA and the DOT requesting authorization to operate additional aircraft.

        Working Capital.    Our working capital was $2.4 million as of June 30, 2003. We expect to continue generating positive working capital through our operations. However, we cannot predict whether current trends and conditions will continue, or how the effects of competition or other factors that are beyond our control will affect us, such as increased fuel prices, the impact to the aircraft finance market and the magnitude of financing we could arrange if any of the airlines in bankruptcy were to liquidate, the effect of continued adverse financial results in the airline industry or continued U.S. military involvement in Iraq, the Middle East or other regions. We still need to obtain financing for all but 35 of our ordered aircraft, as our anticipated cash flows from operations are not expected to be adequate to cover the acquisition cost of these aircraft. Assuming that we obtain this financing and utilize the predelivery short-term borrowing facility available to us, we believe the working capital available to us, including the proceeds from our recently completed common stock and convertible notes offerings, will be sufficient to meet our cash requirements for at least the next 12 months.

Critical Accounting Policies and Estimates

        There have been no material changes to our critical accounting policies and estimates from the information provided in Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations included in our 2002 Form 10-K.

New Accounting Standard

        In January 2003, the FASB issued Interpretation No. 46, or FIN 46, Consolidation of Variable Interest Entities, which requires the consolidation of variable interest entities. FIN 46 is applicable to variable interest entities created after January 31, 2003. Variable interest entities created prior to February 1, 2003 must be consolidated effective July 1, 2003. Of our 22 aircraft leases, 13 contain fixed-price purchase options, which may require consolidation under this interpretation; however we generally are not at risk for losses. As a result, we do not currently believe that we will need to consolidate any of the lessors under these agreements or any others as a result of applying FIN 46. We will continue to evaluate the impact of this complex interpretation as additional guidance becomes available.

17

Other Information

        Long Beach Update.    On April 30, 2003, the FAA approved the slot settlement previously agreed to by the City of Long Beach, American Airlines, Alaska Airlines and JetBlue. The settlement resulted in us returning five of the original 27 air carrier slots originally granted to us in May 2001 by the City of Long Beach, of which two were given to American and three to Alaska. Subject to a 90-day call, which must be made by October 1, 2003, both JetBlue and American are temporarily using one slot each of Alaska's allocated slots. The agreement also provides for a priority allocation procedure should supplemental slots above the 41 current slots become available.

        On May 30, 2003, we reached a settlement for violations of the noise curfew at Long Beach Municipal Airport. The agreement provides for a $90,000 payment to the Long Beach Public Library Foundation, or the Foundation, for all violations which occurred prior to the settlement date. We have also agreed to a payment structure for future violations, which will be paid quarterly to the Foundation and will be based on the number of infractions in the preceding quarter.

        Improved Customer Product.    As part of our continuing effort to improve our customers' flying experience, beginning in September 2003 we will provide more room for customers by removing one row of seats on our A320 aircraft. We will offer more legroom with 34 inches between seats throughout the aircraft except for nine rows in the front of the aircraft, which will remain at the current 32 inches. The reduction to 156 seats will result in 3.7% fewer available seat miles, which will increase our operating expense per available seat mile but not our total operating expenses, other than the initial conversion cost which is expected to be approximately $15,000 per aircraft. We believe that this improvement to our product offering will further enhance the JetBlue brand and, together with yield management, will strengthen our ability to offset any potential decline in our operating revenues resulting from this reduction in seat capacity. This modification to our aircraft is planned to be completed during the fourth quarter in conjunction with previously scheduled routine maintenance.

        LiveTV.    On July 7, 2003, our subsidiary, LiveTV, LLC, entered into an agreement for the sale of certain hardware and installation, programming and maintenance of LiveTV's live in-seat satellite television with WestJet Airlines on its Boeing 737-700 aircraft. The order is to equip 40 firm aircraft with an option by WestJet to install the system on future aircraft deliveries. The obligations of the parties under the agreement are subject to the satisfaction of specified conditions and, accordingly, we cannot assure you that this transaction will be completed.

        Outlook.    With the addition of 16 new aircraft during 2003, we expect our full-year operating capacity to increase by approximately 60-65% over 2002. Our average stage length is expected to increase to approximately 1,300 miles which will result in lower passenger revenues per available seat mile. Assuming fuel prices remain unchanged, unit costs for the year are expected to approximate the unit costs of the second quarter. Advance bookings for July and August are strong, although we do not expect this trend to continue through September when vacation travel has historically slowed. Additionally, we will enhance our existing route structure in September with new daily nonstop service between Atlanta, GA, and Oakland, CA.

        Additional or Revised Risk Factors Following Our EMBRAER 190 Aircraft Order.    Additional risk factors or significant revisions to those risk factors contained in our 2002 Annual Report on Form 10-K following our EMBRAER 190 aircraft order are as follows:

18

Our failure to successfully take delivery of, place into service and integrate into our operations the new EMBRAER 190 aircraft we agreed to purchase could harm our business.

        On June 9, 2003, we placed an order for 100 new EMBRAER 190 jet aircraft, with options for an additional 100 new aircraft. Acquisition of an all-new type of aircraft, such as the EMBRAER 190, involves a variety of risks relating to its ability to be successfully placed into service, including:

•

difficulties or delays in obtaining the necessary certification from the Brazilian aviation regulatory authority and validation from the FAA as to the aircraft's airworthiness;



•

delays in meeting the agreed upon aircraft delivery schedule;



•

difficulties in obtaining financing on acceptable terms to complete our purchase of all of the firmly ordered aircraft;



•

inability of the aircraft and all of its components to comply with agreed upon specifications and performance standards; and



•

difficulties in outfitting the aircraft with LiveTV.

        In addition, we also face risks in integrating a second type of aircraft into our existing infrastructure and operations, including, among other things, the additional costs, resources and time needed to hire and train new pilots, technicians and other skilled support personnel. Our failure to successfully take delivery of, place into service and integrate into our operations the new EMBRAER 190 aircraft could harm our business.

We rely on maintaining a high daily aircraft utilization rate to keep our costs low, which makes us especially vulnerable to delays.

        One of the key elements of our business strategy is to maintain a high daily aircraft utilization rate, which is the amount of time that our aircraft spend in the air carrying passengers. High daily aircraft utilization allows us to generate more revenue from our aircraft and is achieved in part by reducing turnaround times at airports so we can fly more hours on average in a day. The expansion of our business to include new destinations and more frequent flights on current routes could increase the risk of delays. Aircraft utilization is reduced by delays from various factors, many of which are beyond our control, including, among others, adverse weather conditions, security requirements and unscheduled maintenance. These delays may limit our ability to achieve and maintain profitability as well as damage our reputation.

        Furthermore, high aircraft utilization increases the risk that once an aircraft falls behind schedule during the day, it could remain behind schedule during the remainder of that day and potentially into the next day, which can result in disruption in operating performance leading to passenger dissatisfaction related to delayed or cancelled flights and missed connections.

We are subject to the risks of having a limited number of suppliers for our aircraft, engines and a key component of our in-flight entertainment system.

        To date, one of the elements of our business has been to operate only one type of aircraft equipped with one type of engine. We chose the Airbus A320 because of its reliability, advanced technology and wide cabin space and the IAE International Aero Engines V2527-A5 engine for its reliability and fuel efficiency. Our current dependence on a single type of aircraft and engine for all of our flights makes us particularly vulnerable to any problems associated with the Airbus A320 or the IAE V2527-A5 engine, including design defects, mechanical problems or adverse perception by the public that would result in customer avoidance or an inability to operate our aircraft. In addition, while our recent decision to acquire a new fleet of EMBRAER 190 aircraft may lessen our exposure to this risk, we will likely also become subject to similar sets of risks associated with that type of aircraft after we begin to take delivery of these aircraft in 2005.

19

        If either of Airbus or IAE were unable to perform its contractual obligations, we would have to find another supplier for a similar type of aircraft or engines. Boeing is the only other manufacturer from whom we could purchase alternate aircraft of the size of the Airbus A320. If we had to purchase aircraft from Boeing, we could lose the benefits described above and we cannot assure you that any replacement aircraft would have the same operating advantages as the Airbus A320. In addition, we cannot assure you that we could purchase engines that would be as reliable and efficient as the V2527-A5, or that we could purchase aircraft or engines in the same time frame as currently expected or at comparable prices. We would incur substantial transition costs, including costs associated with retraining our employees and replacing our manuals. Our operations could also be harmed by the failure or inability of Airbus, IAE or, after we begin taking delivery of their aircraft, Embraer, to provide sufficient parts or related support services on a timely basis.

        One of the unique features of our fleet is that every seat in each of our aircraft is equipped with free LiveTV. An integral component of the system is the antenna, which is supplied to us by EMS Technologies, Inc. We do not know of any other company that could provide us with this equipment and if EMS were to stop supplying us with its antennas for any reason, we could lose one of the unique services that differentiates us from our competitors, and we might have to incur significant costs to procure an alternate supplier.

We rely heavily on automated systems to operate our business and any failure of these systems could harm our business.

        We depend on automated systems to operate our business, including our computerized airline reservation system, our telecommunication systems and our website. Unlike most other airlines, which issue traditional paper tickets to some or all of their passengers, we issue only electronic tickets. Our website and reservation system must be able to accommodate a high volume of traffic and deliver important flight information. Substantial or repeated website, reservations system or telecommunication systems failures could reduce the attractiveness of our services and could cause our customers to purchase tickets from another airline. Any disruption in these systems could result in the loss of important data, increase our expenses and generally harm our business.

        Forward-Looking Information.    This report contains forward-looking statements relating to future events and our future performance including, without limitation, statements regarding financial forecasts or projections, our expectations, beliefs, intentions or future strategies that are signified by the words "expects", "anticipates", "intends", "believes" or similar language. These forward-looking statements are subject to risks, uncertainties, and assumptions that could cause our actual results and the timing of certain events to differ materially from those expressed in the forward-looking statements. All forward-looking statements included in this report are based on information available to us on the date of this report. It is routine for our internal projections and expectations to change as the year or each quarter in the year progress, and therefore it should be clearly understood that the internal projections and beliefs upon which we base our expectations may change prior to the end of each quarter or the year. Although these expectations may change, we may not inform you if they do. Our policy is generally to provide our expectations only once per quarter, and not to update that information until the next quarter.

        You should understand that many important factors, in addition to those discussed in this report, could cause our results to differ materially from those expressed in the forward-looking statements. These factors include, without limitation, potential hostilities in the Middle East or other regions, our ability to implement our growth strategy and our dependence on the New York market, our fixed obligations and our limited operating history, seasonal fluctuations in our operating results, increases in maintenance costs, fuel prices and interest rates, our competitive environment, our reliance on sole suppliers, government regulation, our failure to properly integrate LiveTV or enforce its patents, our ability to hire qualified personnel, the loss of key personnel and potential problems with our workforce

20

including work stoppages, and continuing changes in the airline industry following the September 11th terrorist attacks and the increased risk of future attacks, as well as potential risks with the delivery, placement into service, and integration into our operations of the EMBRAER 190 aircraft. In light of these risks and uncertainties, the forward-looking statements discussed in this report might not occur.

        Additional information concerning these and other factors is contained in our Securities and Exchange Commission filings, including but not limited to, our 2002 Form 10-K.

Item 3.    Quantitative and Qualitative Disclosures About Market Risk.

        There have been no material changes in market risks from the information provided in Item 7A. Quantitative and Qualitative Disclosures About Market Risk in Management's Discussion and Analysis of Financial Condition and Results of Operations included in our 2002 Form 10-K, except as follows:

        During 2003, we supplemented our existing crude oil options with crude oil swaps, effectively locking in our prices. These swaps provide protection against price increases, but unlike our options, do not provide for any benefit to us should actual prices settle below the swap price. As of June 30, 2003, we had hedged approximately 80% of our expected remaining 2003 fuel requirements, 40% using options at an average of $26.56 per barrel and 40% using swaps at an average of $29.42 per barrel. We also had hedged approximately 30% of our expected 2004 fuel requirements, 5% using options at an average of $25.75 per barrel and 25% using swaps at an average of $24.83 per barrel. Our results of operations are affected by changes in the price and availability of aircraft fuel. Market risk is estimated as a hypothetical 10% increase in the June 30, 2003 cost per gallon of fuel, including the effects of our fuel hedges. Based on our projected twelve month fuel consumption, such an increase would result in an increase to aircraft fuel expense of approximately $6.0 million, compared to an estimated $4.0 million for 2002 measured as of June 30, 2002.

        See Note 8 to our unaudited condensed consolidated financial statements included elsewhere in this report for additional information.

Item 4.    Controls and Procedures.

        An evaluation was performed under the supervision and with the participation of the Company's management, including our Chief Executive Officer, or CEO, and Chief Financial Officer, or CFO, of the effectiveness of our disclosure controls and procedures as of June 30, 2003. Based on that evaluation, the Company's management, including the CEO and CFO, concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in reports that we file or submit under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported as specified in the SEC's rules and forms. There have been no significant changes in our internal controls or in other factors that could significantly affect internal controls subsequent to their evaluation.

21

PART II.    OTHER INFORMATION

Item 1. Legal Proceedings.

        In the ordinary course of our business, we are party to various legal actions, which we believe are incidental to the operation of our business. We believe that the outcome of the proceedings to which we are currently a party will not have a material adverse effect on our financial position, results of operations or cash flows.

Item 2. Changes in Securities and Use of Proceeds.

        On July 15, 2003, we completed a public offering of 2,990,000 shares of our common stock at $42.50 per share, raising net proceeds of approximately $122.4 million, after deducting discounts and commissions paid to the underwriters and other expenses incurred in connection with the offering. Also on the same day, we completed a separate private placement exempt under Section 4(2) of the Securities Act of 1933 of $175 million aggregate principal amount of 3¹/2% convertible notes due 2033, sold to Morgan Stanley & Co. Incorporated, Raymond James & Associates, Inc. and Blaylock & Partners, L.P. at a discount to their principal face amount of 2.25% which were subsequently sold by them to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933 at 100% of their principal face amount. Net proceeds from this offering were $170.7 million. The notes bear interest at 3¹/2% payable semi-annually on January 15 and July 15. The first interest payment on the notes is due January 15, 2004. The notes are our senior unsecured debt and rank equal in right of payment with all of our other existing and future senior unsecured debt. The notes rank junior in right of payment to our secured debt to the extent of the value of the assets securing such debt. In addition, the notes rank junior in right of payment to the existing and future liabilities of our subsidiaries. The net proceeds of the concurrent offerings will be used to fund working capital and capital expenditures, including capital expenditures related to the purchase of aircraft and construction of facilities on or near airports.

        The notes are convertible into shares of our common stock at a conversion rate of 15.6863 shares per $1,000 principal amount of the notes, which equals an initial conversion price of approximately $63.75 per share. The conversion rate is subject to adjustment in certain circumstances. Holders of the notes may convert their notes under the following circumstances: (1) during any fiscal quarter commencing after September 30, 2003, if the closing sale price of our common stock exceeds 120% of the conversion price for at least 20 trading days in the 30 consecutive trading days ending on the last trading day of the preceding fiscal quarter; (2) during the five business day period after any five consecutive trading day period in which the trading price per note for each day of that period was less than 95% of the product of the closing sale price of our common stock and the conversion rate; (3) if the notes have been called for redemption; or (4) upon the occurrence of certain corporate transactions.

        We may redeem any of the notes in whole or in part beginning on July 18, 2006 at a redemption price equal to the principal amount of the notes, plus accrued and unpaid interest, if the closing price of our common stock on the Nasdaq National Market has exceeded 150% of the conversion price for at least 20 trading days in any period of 30 consecutive trading days. In addition, beginning July 18, 2008, we may redeem any of the notes at any time at a redemption price equal to the principal amount of the notes, plus accrued but unpaid interest. Holders may require us to repurchase the notes on July 15 of 2008, 2013, 2018, 2023 and 2028 or upon the occurrence of certain designated events at a repurchase price equal to the principal amount of the notes, plus accrued and unpaid interest. We have agreed to file a shelf registration statement with the Securities and Exchange Commission covering the resale of the notes and the common stock issuable upon the conversion of the notes.

        On April 17, 2002, we consummated the initial public offering of 10,120,000 (as adjusted for our December 2002 3-for-2 stock split) shares of our common stock, $0.01 par value. The shares of

22

common stock sold in the offering were registered under the Securities Act of 1933, on a Registration Statement (Registration No. 333-82576) that was declared effective by the Securities and Exchange Commission on April 11, 2002. The net proceeds to us from the offering were $167.4 million after deducting discounts and commissions paid to the underwriters and other expenses incurred in connection with the offering. As of June 30, 2003, we had used $80.3 million of the net proceeds from this offering to acquire LiveTV on September 27, 2002 with the remainder of the net proceeds used for 2003 capital expenditures, including predelivery deposits for flight equipment (with $38.4 million for our recent Airbus and Embraer aircraft orders) and purchases of one spare engine, spare parts, and other non-financed property and equipment.

Item 4. Submission of Matters to a Vote of Security Holders.

        At our annual meeting of stockholders held on May 21, 2003, our stockholders approved the election of the persons named below to our Board of Directors for a three-year term by the vote indicated:

	For	Withheld
Kim Clark	56,159,465	761,300
Joy Covey	56,158,624	762,141
Joel Peterson	56,158,624	762,141
Ann Rhoades	51,533,500	5,387,265

        There were no broker non-votes on this matter. Following the meeting, the terms of David Barger, David Checketts, Neal Moszkowski, Thomas Patterson, Michael Lazarus, David Neeleman and Frank Sica as directors continued.

Item 5.    Other Information

EMBRAER 190 Aircraft Order

        On June 9, 2003, we placed an order for 100 new EMBRAER 190 jet aircraft with options for an additional 100 new aircraft, with Embraer. Delivery of the first seven of these aircraft is scheduled for 2005, with the remainder to be delivered through 2011 at a rate of 18 aircraft per year. Options for the additional aircraft begin in 2011. The EMBRAER 190 is expected to feature 100 leather seats in an all-coach, two-by-two seating configuration with free LiveTV and 32 inches between rows of seats. JetBlue is the launch customer of the all-new 100-seat EMBRAER 190 aircraft, which incorporates advanced design features such as integrated avionics, fly-by-wire flight controls and the efficient GE Aircraft Engine's CF34-10 engines. It will be able to fly a wide range of markets from short-haul to certain long-haul markets as it is expected to have a range of approximately 2,100 nautical miles.

        We view the EMBRAER 190 order as an opportunity to augment our growth strategy by penetrating the mid-sized market segment, which we define as those markets with between 100 and 600 local passengers per day each way, and which is a significant segment of the U.S. domestic market. We believe that many mid-sized markets are underserved and/or have high average fares. We plan to use this aircraft to stimulate demand in these markets by offering our low fare, point-to-point service, as well as to increase frequency on our existing routes and between existing destinations. With the EMBRAER 190 aircraft, we also expect to be able to offer sufficient frequency in new markets with the ability to upgrade to the larger Airbus A320 aircraft as demand grows. With a capacity of 100 seats, which is larger than other airlines' regional jets, this new aircraft should enable us to continue to achieve low operating costs per available seat mile without sacrificing any of the cabin amenities or high quality customer service that are characteristic of the brand for which JetBlue is renown.

23

Director Resignation

        On July 23, 2003, Thomas Patterson resigned from our Board of Directors. Mr. Patterson's resignation was not due to any disagreement with us on any matter relating to our operations, policies or practices. Michael Lazarus will replace Mr. Patterson on the compensation committee.

Item 6.    Exhibits and Reports on Form 8-K

(a)

Exhibits

Exhibit Number	Description
4.1	Indenture, dated as of July 15, 2003, between the Company and Wilmington Trust Company, as Trustee, relating to the Company's 31/2% Convertible Notes due 2033.
4.2	Registration Rights Agreement, dated as of July 15, 2003, among the Company and Morgan Stanley & Co. Incorporated, Raymond James & Associates, Inc. and Blaylock & Partners, L.P.
99.1	Certifications Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
99.2	Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
99.3	Revised Calculation of Full-Time Equivalent Employees to be Based on Actual Paid Hours.

(b)

Reports on Form 8-K



•

Current Report dated April 24, 2003, reporting under Item 12. "Results of Operations and Financial Condition" announcing the financial results for first quarter ended March 31, 2003.



•

Current Report dated June 10, 2003, reporting under Item 5. "Other Events and Regulation FD Disclosure" announcing the order of 100 EMBAER 190 aircraft along with options to acquire an additional 100 aircraft.



•

Current Report dated June 30, 2003, reporting under Item 5. "Other Events and Regulation FD Disclosure" filing certain material contracts.

24

SIGNATURE

        Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	JETBLUE AIRWAYS CORPORATION
	(Registrant)
Date: July 28, 2003	By:	/s/  HOLLY L. NELSONVice President and Controller (principal accounting officer)

25

EXHIBIT INDEX

Exhibit Number	Exhibit
4.1	Indenture, dated as of July 15, 2003, between the Company and Wilmington Trust Company, as Trustee, relating to the Company's 31/2% Convertible Notes due 2033.
4.2	Registration Rights Agreement, dated as of July 15, 2003, among the Company and Morgan Stanley & Co. Incorporated, Raymond James & Associates, Inc. and Blaylock & Partners, L.P.
99.1	Certifications Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
99.2	Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
99.3	Revised Calculation of Full-Time Equivalent Employees to be Based on Actual Paid Hours.

EX-4.1

                                                                     EXHIBIT 4.1

                                                                  EXECUTION COPY

- --------------------------------------------------------------------------------

                          JETBLUE AIRWAYS CORPORATION,
                                   as Issuer,

                                       and

                            WILMINGTON TRUST COMPANY,
                                   as Trustee

               ---------------------------------------------------

                                    INDENTURE

                                   Dated as of

                                  July 15, 2003

               ---------------------------------------------------

                        3 1/2% CONVERTIBLE NOTES DUE 2033

- --------------------------------------------------------------------------------



                                TABLE OF CONTENTS



                                                                                               Page
                                                                                               ----
                                                                                              
                                         ARTICLE I
                                        Definitions

     SECTION 1.01. DEFINITIONS....................................................................1

                                        ARTICLE II
             Issue, Description, Execution, Registration and Exchange of Notes

     SECTION 2.01. DESIGNATION AMOUNT AND ISSUE OF NOTES..........................................8
     SECTION 2.02. FORM OF NOTES..................................................................8
     SECTION 2.03. DATE AND DENOMINATION OF NOTES; PAYMENTS OF INTEREST...........................9
     SECTION 2.04. EXECUTION OF NOTES............................................................10
     SECTION 2.05. EXCHANGE AND REGISTRATION OF TRANSFER OF NOTES; RESTRICTIONS ON
                     TRANSFER....................................................................11
     SECTION 2.06. MUTILATED, DESTROYED, LOST OR STOLEN NOTES....................................16
     SECTION 2.07. TEMPORARY NOTES...............................................................17
     SECTION 2.08. CANCELLATION OF NOTES.........................................................18
     SECTION 2.09. CUSIP NUMBERS.................................................................18

                                        ARTICLE III
                            Redemption and Repurchase of Notes

     SECTION 3.01. REDEMPTION OF NOTES AT THE OPTION OF THE COMPANY..............................18
     SECTION 3.02. NOTICE OF OPTIONAL REDEMPTION; SELECTION OF NOTES.............................19
     SECTION 3.03. PAYMENT OF NOTES CALLED FOR REDEMPTION BY THE COMPANY.........................20
     SECTION 3.04. CONVERSION ARRANGEMENT ON CALL FOR REDEMPTION.................................21
     SECTION 3.05. REDEMPTION AT OPTION OF HOLDERS UPON A DESIGNATED EVENT.......................21
     SECTION 3.06. REPURCHASE OF NOTES BY THE COMPANY AT OPTION OF THE HOLDER....................24
     SECTION 3.07. PROCEDURES FOR THE REPURCHASE OF NOTES........................................24
     SECTION 3.08. EFFECT OF REPURCHASE NOTICE...................................................25
     SECTION 3.09. DEPOSIT OF PURCHASE PRICE.....................................................26
     SECTION 3.10. NOTES REPURCHASED IN PART.....................................................26
     SECTION 3.11. REPAYMENT TO THE COMPANY......................................................27

                                        ARTICLE IV
                            Particular Covenants of the Company

     SECTION 4.01. PAYMENT OF PRINCIPAL AND INTEREST.............................................27
     SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY...............................................27
     SECTION 4.03. APPOINTMENTS TO FILL VACANCIES IN TRUSTEE'S OFFICE............................27
     SECTION 4.04. PROVISIONS AS TO PAYING AGENT.................................................27
     SECTION 4.05. RULE 144A INFORMATION REQUIREMENT.............................................28
     SECTION 4.06. COMPLIANCE CERTIFICATE........................................................29




                                                                                         
     SECTION 4.07. LIQUIDATED DAMAGES NOTICE.....................................................29

                                         ARTICLE V
               Noteholders' Lists and Reports by the Company and the Trustee

     SECTION 5.01. COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF NOTEHOLDERS.................30
     SECTION 5.02. PRESERVATION AND DISCLOSURE OF LISTS..........................................30
     SECTION 5.03. REPORTS BY TRUSTEE............................................................30
     SECTION 5.04. REPORTS BY COMPANY............................................................30

                                        ARTICLE VI
              Remedies of the Trustee and Noteholders on an Event of Default

     SECTION 6.01. EVENTS OF DEFAULT; ACCELERATION...............................................31
     SECTION 6.02. PAYMENTS OF NOTES ON DEFAULT; SUIT THEREFOR...................................33
     SECTION 6.03. APPLICATION OF MONIES COLLECTED BY TRUSTEE....................................34
     SECTION 6.04. PROCEEDINGS BY NOTEHOLDER.....................................................35
     SECTION 6.05. PROCEEDINGS BY TRUSTEE........................................................35
     SECTION 6.06. REMEDIES CUMULATIVE AND CONTINUING............................................36
     SECTION 6.07. DIRECTION OF PROCEEDINGS AND WAIVER OF DEFAULTS BY MAJORITY OF
                     NOTEHOLDERS.................................................................36
     SECTION 6.08. UNDERTAKING TO PAY COSTS......................................................36

                                        ARTICLE VII
                                        The Trustee

     SECTION 7.01. CERTAIN DUTIES AND RESPONSIBILITIES...........................................37
     SECTION 7.02. NOTICE OF DEFAULTS............................................................37
     SECTION 7.03. CERTAIN RIGHTS OF THE TRUSTEE.................................................37
     SECTION 7.04. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF NOTES.............................39
     SECTION 7.05. MAY HOLD NOTES................................................................39
     SECTION 7.06. MONIES TO BE HELD IN TRUST....................................................39
     SECTION 7.07. COMPENSATION AND REIMBURSEMENT................................................39
     SECTION 7.08. DISQUALIFICATION; CONFLICTING INTERESTS.......................................40
     SECTION 7.09. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.......................................40
     SECTION 7.10. RESIGNATION AND REMOVAL OF TRUSTEE; APPOINTMENT OF SUCCESSOR..................40
     SECTION 7.11. ACCEPTANCE OF APPOINTMENT OF SUCCESSOR........................................41
     SECTION 7.12. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS...................42
     SECTION 7.13. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.............................42

                                       ARTICLE VIII
                                      The Noteholders

     SECTION 8.01. ACTION BY NOTEHOLDERS.........................................................42
     SECTION 8.02. PROOF OF EXECUTION BY NOTEHOLDERS.............................................42
     SECTION 8.03. WHO ARE DEEMED ABSOLUTE OWNERS................................................43
     SECTION 8.04. COMPANY-OWNED NOTES DISREGARDED...............................................43
     SECTION 8.05. REVOCATION OF CONSENTS, FUTURE HOLDERS BOUND..................................43

     

                                       ii


                                                                                         
                                        ARTICLE IX
                                  Meetings of Noteholders

     SECTION 9.01. PURPOSE OF MEETINGS...........................................................44
     SECTION 9.02. CALL OF MEETINGS BY TRUSTEE...................................................44
     SECTION 9.03. CALL OF MEETINGS BY COMPANY OR NOTEHOLDERS....................................44
     SECTION 9.04. QUALIFICATIONS FOR VOTING.....................................................45
     SECTION 9.05. REGULATIONS...................................................................45
     SECTION 9.06. VOTING........................................................................45
     SECTION 9.07. NO DELAY OF RIGHTS BY MEETING.................................................46

                                         ARTICLE X
                                  Supplemental Indentures

     SECTION 10.01. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF NOTEHOLDERS.......................46
     SECTION 10.02. SUPPLEMENTAL INDENTURE WITH CONSENT OF NOTEHOLDERS...........................47
     SECTION 10.03. EFFECT OF SUPPLEMENTAL INDENTURE.............................................48
     SECTION 10.04. NOTATION ON NOTES............................................................48
     SECTION 10.05. EVIDENCE OF COMPLIANCE OF SUPPLEMENTAL INDENTURE TO BE FURNISHED TO
                      TRUSTEE....................................................................48

                                        ARTICLE XI
                                Merger, Consolidation, etc.

     SECTION 11.01. MERGERS, CONSOLIDATIONS AND CERTAIN TRANSFERS, LEASES AND
                    ACQUISITIONS OF ASSETS.......................................................48
     SECTION 11.02. SUCCESSOR TO BE SUBSTITUTED..................................................49
     SECTION 11.03. OPINION OF COUNSEL TO BE GIVEN TRUSTEE.......................................49

                                        ARTICLE XII
                          Satisfaction and Discharge of Indenture

     SECTION 12.01. DISCHARGE OF INDENTURE.......................................................49
     SECTION 12.02. DEPOSITED MONIES TO BE HELD IN TRUST BY TRUSTEE..............................50
     SECTION 12.03. PAYING AGENT TO REPAY MONIES HELD............................................50
     SECTION 12.04. RETURN OF UNCLAIMED MONIES...................................................50
     SECTION 12.05. REINSTATEMENT................................................................50

                                       ARTICLE XIII
              Immunity of Incorporators, Stockholders, Officers and Directors

     SECTION 13.01. INDENTURE AND NOTES SOLELY CORPORATE OBLIGATIONS.............................51

                                        ARTICLE XIV
                                    Conversion of Notes

     SECTION 14.01. RIGHT TO CONVERT.............................................................51
     SECTION 14.02. CONVERSION PROCEDURES........................................................53

     

                                       iii


                                                                                         
     SECTION 14.03. CASH PAYMENTS IN LIEU OF FRACTIONAL SHARES...................................55
     SECTION 14.04. CONVERSION RATE..............................................................55
     SECTION 14.05. ADJUSTMENT OF CONVERSION RATE................................................55
     SECTION 14.06. EFFECT OF RECLASSIFICATION, CONSOLIDATION, MERGER OR SALE....................64
     SECTION 14.07. TAXES ON SHARES ISSUED.......................................................65
     SECTION 14.08. RESERVATION OF SHARES, SHARES TO BE FULLY PAID; COMPLIANCE WITH
                      GOVERNMENTAL REQUIREMENTS; LISTING OF COMMON STOCK.........................65
     SECTION 14.09. RESPONSIBILITY OF TRUSTEE....................................................66
     SECTION 14.10. NOTICE TO HOLDERS PRIOR TO CERTAIN ACTIONS...................................66
     SECTION 14.11. RIGHTS ISSUED IN RESPECT OF COMMON STOCK ISSUED UPON CONVERSION..............67

                                        ARTICLE XV
                                 Miscellaneous Provisions

     SECTION 15.01. PROVISIONS BINDING ON COMPANY'S SUCCESSORS...................................67
     SECTION 15.02. OFFICIAL ACTS BY SUCCESSOR CORPORATION.......................................67
     SECTION 15.03. ADDRESSES FOR NOTICES, ETC...................................................67
     SECTION 15.04. GOVERNING LAW................................................................68
     SECTION 15.05. EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT, CERTIFICATES TO
                      TRUSTEE....................................................................68
     SECTION 15.06. LEGAL HOLIDAYS...............................................................68
     SECTION 15.07. TRUST INDENTURE ACT..........................................................68
     SECTION 15.08. NO SECURITY INTEREST CREATED.................................................69
     SECTION 15.09. BENEFITS OF INDENTURE........................................................69
     SECTION 15.10. TABLE OF CONTENTS, HEADINGS, ETC.............................................69
     SECTION 15.11. AUTHENTICATING AGENT.........................................................69
     SECTION 15.12. EXECUTION IN COUNTERPARTS....................................................70
     SECTION 15.13. SEVERABILITY.................................................................70

Exhibit A  Form of Note.........................................................................A-1

     

                                       iv


                                    INDENTURE

          INDENTURE dated as of July 15, 2003 between JetBlue Airways
Corporation, a Delaware corporation (hereinafter called the "COMPANY"), and
Wilmington Trust Company, a Delaware banking corporation, as trustee hereunder
(hereinafter called the "TRUSTEE").

                                   WITNESSETH:

          WHEREAS, for its lawful corporate purposes, the Company has duly
authorized the issue of its 3 1/2% Convertible Notes due 2033 (hereinafter
called the "NOTES"), in an aggregate principal amount not to exceed $175,000,000
and, to provide the terms and conditions upon which the Notes are to be
authenticated, issued and delivered, the Company has duly authorized the
execution and delivery of this Indenture;

          WHEREAS, the Notes, the certificate of authentication to be borne by
the Notes, a form of assignment, a form of option to elect redemption upon a
designated event, a form of purchase notice, and a form of conversion notice to
be borne by the Notes are to be substantially in the forms hereinafter provided
for;

          WHEREAS, all acts and things necessary to duly authorize the issuance
of the Common Stock issuable upon the conversion of the Notes, and to duly
reserve for issuance the number of shares of Common Stock issuable upon such
conversion, have been done and performed; and

          WHEREAS, all acts and things necessary to make the Notes, when
executed by the Company and authenticated and delivered by the Trustee or a duly
authorized authenticating agent, as in this Indenture provided, the valid,
binding and legal obligations of the Company, and to constitute this Indenture a
valid agreement according to its terms, have been done and performed, and the
execution of this Indenture and the issue hereunder of the Notes have in all
respects been duly authorized.

          NOW, THEREFORE, THIS INDENTURE WITNESSETH:

          That in order to declare the terms and conditions upon which the Notes
are, and are to be, authenticated, issued and delivered, and in consideration of
the premises and of the purchase and acceptance of the Notes by the holders
thereof, the Company covenants and agrees with the Trustee for the equal and
proportionate benefit of the respective holders from time to time of the Notes
(except as otherwise provided below), as follows:

                                    ARTICLE I
                                   DEFINITIONS

          SECTION 1.01.   DEFINITIONS. The terms defined in this Section 1.01.
(except as herein otherwise expressly provided or unless the context otherwise
requires) for all purposes of this Indenture and of any indenture supplemental
hereto shall have the respective meanings specified in this Section 1.01. All
other terms used in this Indenture that are defined in the Trust Indenture Act
or which are by reference therein defined in the Securities Act (except as
herein otherwise expressly provided or unless the context otherwise requires)
shall have the meanings



assigned to such terms in the Trust Indenture Act and in the Securities Act as
in force at the date of the execution of this Indenture. The words "herein",
"hereof", "hereunder" and words of similar import refer to this Indenture as a
whole and not to any particular Article, Section or other Subdivision. The terms
defined in this Article include the plural as well as the singular.

          "ACCEPTED PURCHASED SHARES" has the meaning specified in Section
14.05(e)(B).

          "ADJUSTMENT EVENT" has the meaning specified in Section 14.05(j).

          "AFFILIATE" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"CONTROL", when used with respect to any specified Person means the power to
direct or cause the direction of the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise, and the terms "CONTROLLING" and "CONTROLLED" have
meanings correlative to the foregoing.

          "AGENT MEMBERS" has the meaning specified in Section 2.05(b).

          "AVERAGE MARKET PRICE" has the meaning specified in Section 14.05(f).

          "BOARD OF DIRECTORS" means the Board of Directors of the Company or a
committee of such Board of Directors duly authorized to act for it hereunder.

          "BUSINESS DAY" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which the banking institutions in The City of New
York or the city in which the Corporate Trust Office is located are authorized
or obligated by law or executive order to close or be closed.

          "CLOSING SALE PRICE" means, as of any date, the closing sale price per
share of Common Stock (or, if no closing sale price is reported, the average of
the closing bid and ask prices or, if more than one in either case, the average
of the average closing bid and the average closing ask prices) on such date as
reported in composite transactions for the New York Stock Exchange or such other
principal United States securities exchange on which shares of Common Stock may
be traded or, if the shares of Common Stock are not listed on a United States
national or regional securities exchange, as reported by the Nasdaq system or by
the National Quotation Bureau Incorporated. In the absence of such quotations,
the Company shall be entitled to determine the Closing Sale Price on the basis
of such quotations as it considers appropriate. Closing Sale Price shall be
determined without reference to extended or after hours trading.

          "COMMISSION" means the Securities and Exchange Commission, as from
time to time constituted, created under the Exchange Act, or, if at any time
after the execution of this Indenture such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, then the
body performing such duties at such time.

          "COMMON STOCK" means any stock of any class of the Company which has
no preference in respect of dividends or of amounts payable in the event of any
voluntary or involuntary liquidation, dissolution or winding up of the Company
and which is not subject to

                                        2


redemption by the Company. Subject to the provisions of Section 14.06, however,
shares issuable on conversion of Notes shall include only shares of the class
designated as common stock of the Company at the date of this Indenture,
including any Rights attached thereto, (namely, the Common Stock, par value
$0.01) or shares of any class or classes resulting from any reclassification or
reclassifications thereof and which have no preference in respect of dividends
or of amounts payable in the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Company and which are not subject to redemption
by the Company; PROVIDED that if at any time there shall be more than one such
resulting class, the shares of each such class then so issuable on conversion
shall be substantially in the proportion which the total number of shares of
such class resulting from all such reclassifications bears to the total number
of shares of all such classes resulting from all such reclassifications.

          "COMPANY" means the corporation named as the "Company" in the first
paragraph of this Indenture, and, subject to the provisions of Article 11 and
Section 14.06, shall include its successors and assigns.

          "COMPANY REPURCHASE NOTICE" has the meaning specified in Section
3.07(c).

          "COMPANY REPURCHASE NOTICE DATE" has the meaning specified in Section
3.07(b).

          "CONVERSION DATE" has the meaning specified in Section 14.02.

          "CONVERSION NOTICE" has the meaning specified in Section 14.02.

          "CONVERSION PRICE" as of any date will equal $1,000 divided by the
Conversion Rate as of such date.

          "CONVERSION RATE" has the meaning specified in Section 14.04.

          "CORPORATE TRUST OFFICE" or other similar term, means the designated
office of the Trustee at which at any particular time its corporate trust
business as it relates to this Indenture shall be administered, which office is
at the date hereof located Wilmington Trust Company, Rodney Square North, 1100
North Morlut Street, Wilmington, Delaware 11890-0001, Attention : Corporate
Trust Administration; provided that, with respect to the payment of interest of
the Notes, the designated office of the Trustee shall be Wilmington Trust
Company, 520 Madison Avenue, 33rd Floor, New York, New York 10022.

          "CUSTODIAN" means Wilmington Trust Company, a Delaware banking
corporation, as custodian with respect to the Notes in global form, or any
successor entity thereto.

          "DEFAULT" means any event that is, or after notice or passage of time,
or both, would be, an Event of Default.

          "DEFAULTED INTEREST" has the meaning specified in Section 2.03.

                                        3


          "DEPOSITARY" means, the clearing agency registered under the Exchange
Act that is designated to act as the Depositary for the Global Notes. The
Depository Trust Company shall be the initial Depositary, until a successor
shall have been appointed and become such pursuant to the applicable provisions
of this Indenture, and thereafter, "Depositary" shall mean or include such
successor.

          A "DESIGNATED EVENT" will be deemed to have occurred upon a
Fundamental Change or a Termination of Trading.

          "DESIGNATED EVENT EXPIRATION TIME" has the meaning specified in
Section 3.05(b).

          "DESIGNATED EVENT NOTICE" has the meaning specified in Section
3.05(b).

          "DESIGNATED EVENT REDEMPTION DATE" has the meaning specified in
Section 3.05(a).

          "DETERMINATION DATE" has the meaning specified in Section 14.05(j).

          "DISTRIBUTION" has the meaning specified in Section 14.05(d).

          "EVENT OF DEFAULT" means any event specified in Section 6.01(a) as an
Event of Default.

          "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder, as in effect from time to
time.

          "EX-DIVIDEND TIME" has the meaning specified in Section 14.01(b).

          "EXPIRATION TIME" has the meaning specified in Section 14.05(e)(A).

          "FAIR MARKET VALUE" has the meaning specified in Section 14.05(f).

          "FUNDAMENTAL CHANGE" means the occurrence of any transaction or event
(whether by means of an exchange offer, liquidation, tender offer,
consolidation, merger, binding share exchange, combination, reclassification,
recapitalization or otherwise) in connection with which all or substantially all
of the Common Stock shall be exchanged for, converted into, acquired for or
constitute solely the right to receive consideration which is not all or
substantially all common stock that is (or, upon consummation of or immediately
following such transaction or event, which will be) listed on a United States
national securities exchange or approved (or, upon consummation of or
immediately following such transaction or event, which will be approved) for
quotation on the Nasdaq National Market or any similar United States system of
automated dissemination of quotations of securities prices.

          "GAAP" means United States generally accepted accounting principles.

          "GLOBAL NOTE" has the meaning specified in Section 2.02.

                                        4


          "INDENTURE" means this instrument as originally executed or, if
amended or supplemented as herein provided, as so amended or supplemented.

          "INITIAL PURCHASERS" means Morgan Stanley & Co. Incorporated, Raymond
James & Associates, Inc. and Blaylock & Partners, L.P.

          "INTEREST" means, when used with reference to the Notes, any interest
payable under the terms of the Notes and Liquidated Damages, if any, payable
under the terms of the Registration Rights Agreement.

          "LIQUIDATED DAMAGES" has the meaning specified for "Liquidated Damages
Amount" in Section 2(e) of the Registration Rights Agreement.

          "LIQUIDATED DAMAGES NOTICE" has the meaning specified in Section 4.11.

          "NOTE" or "NOTES" means any Note or Notes, as the case may be,
authenticated and delivered under this Indenture, including any Global Note.

          "NOTE REGISTER" has the meaning specified in Section 2.05(a).

          "NOTE REGISTRAR" has the meaning specified in Section 2.05(a).

          "NOTEHOLDER" or "HOLDER" as applied to any Note, or other similar
terms (but excluding the term "beneficial holder"), means any Person in whose
name at the time a particular Note is registered on the Note registrar's books.

          "NONELECTING SHARE" has the meaning specified in Section 14.06.

          "OFFICERS' CERTIFICATE" of the Company means a certificate signed by
the Chairman of the Board of Directors, a Vice Chairman of the Board of
Directors, the Chief Executive Officer, the President or a Vice President or the
Chief Financial Officer, and by the Treasurer, an Assistant Treasurer, the
Secretary or an Assistant Secretary of the Company, as the case may be, and
delivered to the Trustee. One of the officers signing an Officers' Certificate
given pursuant to Section 4.10 shall be the principal executive, financial or
accounting officer of the Company or the chief operating officer of the Company.
Unless the context otherwise requires, each reference herein to an "Officers'
Certificate" shall mean an Officers' Certificate of the Company. References
herein, or in any Note, to any officer of a Person that is a partnership shall
mean such officer of the partnership or, if none, of a general partner of the
partnership authorized thereby to act on its behalf.

          "OFFER EXPIRATION TIME" has the meaning specified in Section
14.05(e)(B).

          "OPINION OF COUNSEL" means an opinion in writing signed by legal
counsel, who may be an employee of or counsel to the Company, or other counsel
reasonably acceptable to the Trustee.

          "OPTIONAL REDEMPTION" has the meaning specified in Section 3.01.

                                        5


          "OUTSTANDING", when used with reference to Notes and subject to the
provisions of Section 8.04, means, as of any particular time, all Notes
authenticated and delivered by the Trustee under this Indenture, except:

          (a)     Notes theretofore canceled by the Trustee or delivered to the
     Trustee for cancellation;

          (b)     Notes, or portions thereof, (i) for the redemption of which
     monies in the necessary amount shall have been deposited in trust with the
     Trustee or with any paying agent (other than the Company) or (ii) which
     shall have been otherwise discharged in accordance with Article 12;

          (c)     Notes in lieu of which, or in substitution for which, other
     Notes shall have been authenticated and delivered pursuant to the terms of
     Section 2.06; and

          (d)     Notes converted into Common Stock pursuant to Article 14 and
     Notes deemed not outstanding pursuant to Article 3.

          "PERSON" means any individual, partnership, joint venture, firm,
corporation, limited liability company, association, trust or other enterprise
or any government or political subdivision or any agency, department or
instrumentality thereof.

          "PORTAL MARKET" means the Private Offerings, Resales and Trading
through Automated Linkages system operated by the National Association of
Securities Dealers, Inc. or any successor thereto.

          "PREDECESSOR NOTE" of any particular Note means every previous Note
evidencing all or a portion of the same debt as that evidenced by such
particular Note, and, for the purposes of this definition, any Note
authenticated and delivered under Section 2.06 in lieu of a lost, destroyed or
stolen Note shall be deemed to evidence the same debt as the lost, destroyed or
stolen Note that it replaces.

          "PURCHASED SHARES" has the meaning specified in Section 14.05(e)(A).

          "RECORD DATE" has the meaning specified in Section 2.03 with respect
to any interest payment date, and for any other purpose means the record date
established by the Company for a specified purpose.

          "RECORD DATE" has the meaning specified in Section 14.05(f).

          "REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement, dated as of July 15, 2003, between the Company and the Initial
Purchasers, as amended from time to time in accordance with its terms.

          "REPURCHASE DATE" has the meaning specified in Section 3.06.

          "REPURCHASE NOTICE" has the meaning specified in Section 3.06.

                                        6


          "RESPONSIBLE OFFICER", when used with respect to the Trustee, means an
officer of the Trustee in the Corporate Trust Office assigned and duly
authorized by the Trustee to administer this Indenture.

          "RESTRICTED SECURITIES" has the meaning specified in Section 2.05(c).

          "RIGHTS" has the meaning specified in Section 14.11.

          "RIGHTS AGREEMENT" has the meaning specified in Section 14.11.

          "RULE 144A" means Rule 144A as promulgated under the Securities Act.

          "SECURITIES ACT" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder, as in effect from time to time.

          "SPINOFF VALUATION PERIOD" has the meaning specified in Section
14.05(d).

          "SUBSIDIARY" of any Person means (i) any corporation more than 50% of
whose stock of any class or classes having by the terms of such stock ordinary
voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person and/or by one
or more Subsidiaries of such Person or by such Person and one or more
Subsidiaries of such Person and (ii) any partnership, association, limited
liability company, joint venture or other entity in which such Person and/or one
or more Subsidiaries of such Person or such Person and one or more Subsidiaries
of such Person has more than a 50% equity interest at the time.

          A "TERMINATION OF TRADING" will be deemed to have occurred if the
Common Stock (or other common stock into which the Notes are then convertible)
is neither listed for trading on a United States national securities exchange
nor approved for trading on the Nasdaq National Market.

          "TRADING DAY" means (x) if the applicable security is quoted on the
Nasdaq National Market, a day on which trades may be made thereon or (y) if the
applicable security is listed or admitted for trading on the New York Stock
Exchange or such other national securities exchange, a day on which the New York
Stock Exchange or another national securities exchange is open for business or
(z) if the applicable security is not so listed, admitted for trading or quoted,
any day other than a Saturday or Sunday or a day on which banking institutions
in the State of New York are authorized or obligated by law or executive order
to close.

          "TRADING PRICE" means, on any date, the average of the secondary
market bid quotations for the Notes obtained by the Trustee for $10,000,000
principal amount of Notes at approximately 3:30 p.m., New York City time, on
such date from three independent nationally recognized securities dealers
selected by the Company; PROVIDED that if at least three such bids cannot
reasonably be obtained by the Trustee, but two bids are obtained, then the
average of the two bids shall be used, and if only one such bid can reasonably
be obtained by the Trustee, one bid shall be used; and PROVIDED FURTHER that if
the Trustee cannot reasonably obtain at least one bid for $10,000,000 principal
amount of Notes from a nationally recognized securities dealer or,

                                        7


in the Company's reasonable judgment, the bid quotations are not indicative of
the secondary market value of the Notes, then the Trading Price per $1,000
principal amount of Notes shall be deemed to be less than 95% of the product of
the Closing Sale Price and the Conversion Rate.

          "TRIGGER EVENT" has the meaning specified in Section 14.05(d).

          "TRUST INDENTURE ACT" means the Trust Indenture Act of 1939, as
amended, as it was in force at the date of this Indenture; PROVIDED that if the
Trust Indenture Act of 1939 is amended after the date hereof, the term "Trust
Indenture Act" shall mean, to the extent required by such amendment, the Trust
Indenture Act of 1939 as so amended.

          "TRUSTEE" means Wilmington Trust Company, a Delaware banking
corporation, and its successors and any corporation resulting from or surviving
any consolidation or merger to which it or its successors may be a party and any
successor trustee at the time serving as successor trustee hereunder.

                                   ARTICLE II
        ISSUE, DESCRIPTION, EXECUTION, REGISTRATION AND EXCHANGE OF NOTES

          SECTION 2.01.   DESIGNATION AMOUNT AND ISSUE OF NOTES. The Notes shall
be designated as "3 1/2% Convertible Notes Due 2033". Notes not to exceed the
aggregate principal amount of $175,000,000 (except pursuant to Sections 2.05,
2.06, 3.03, 3.05 and 14.02 hereof) upon the execution of this Indenture, or from
time to time thereafter, may be executed by the Company and delivered to the
Trustee for authentication, and the Trustee shall thereupon authenticate and
deliver said Notes to or upon the written order of the Company, signed by (a)
its Chairman of the Board of Directors, Vice Chairman of the Board of Directors,
Chief Executive Officer, President, Chief Financial Officer or any Vice
President and (b) its Treasurer or any Assistant Treasurer, or its Secretary or
any Assistant Secretary, without any further action by the Company hereunder.

          SECTION 2.02.   FORM OF NOTES. The Notes and the Trustee's certificate
of authentication to be borne by such Notes shall be substantially in the form
set forth in Exhibit A. The terms and provisions contained in the form of Note
attached as Exhibit A hereto shall constitute, and are hereby expressly made, a
part of this Indenture and, to the extent applicable, the Company and the
Trustee, by their execution and delivery of this Indenture, expressly agree to
such terms and provisions and to be bound thereby.

          Any of the Notes may have such letters, numbers or other marks of
identification and such notations, legends, endorsements or changes as the
officers executing the same may approve (execution thereof to be conclusive
evidence of such approval) and as are not inconsistent with the provisions of
this Indenture, or as may be required by the Custodian, the Depositary or by the
National Association of Securities Dealers, Inc. in order for the Notes to be
tradeable on the Portal Market or as may be required for the Notes to be
tradeable on any other market developed for trading of securities pursuant to
Rule 144A or as may be required to comply with any applicable law or with any
rule or regulation made pursuant thereto or with any rule or regulation of any
securities exchange or automated quotation system on which the Notes

                                        8


may be listed, or to conform to usage, or to indicate any special limitations or
restrictions to which any particular Notes are subject.

          So long as the Notes are eligible for book-entry settlement with the
Depositary, or unless otherwise required by law, or otherwise contemplated by
Section 2.05(b), all of the Notes will be represented by one or more Notes in
global form registered in the name of the Depositary or the nominee of the
Depositary (a "GLOBAL NOTE"). The transfer and exchange of beneficial interests
in any such Global Note shall be effected through the Depositary in accordance
with this Indenture and the applicable procedures of the Depositary. Except as
provided in Section 2.05(b), beneficial owners of a Global Note shall not be
entitled to have certificates registered in their names, will not receive or be
entitled to receive physical delivery of certificates in definitive form and
will not be considered holders of such Global Note.

          Any Global Note shall represent such of the outstanding Notes as shall
be specified therein and shall provide that it shall represent the aggregate
amount of outstanding Notes from time to time endorsed thereon and that the
aggregate amount of outstanding Notes represented thereby may from time to time
be increased or reduced to reflect redemptions, repurchases, conversions,
transfers or exchanges permitted hereby. Any endorsement of a Global Note to
reflect the amount of any increase or decrease in the amount of outstanding
Notes represented thereby shall be made by the Trustee or the Custodian, at the
direction of the Trustee, in such manner and upon instructions given by the
holder of such Notes in accordance with this Indenture. Payment of principal of
and interest on any Global Note shall be made to the holder of such Global Note.

          SECTION 2.03.   DATE AND DENOMINATION OF NOTES; PAYMENTS OF INTEREST.
Subject to Section 2.02, the Notes shall be issuable in registered form without
coupons in denominations of $1,000 principal amount and multiples thereof. Each
Note shall be dated the date of its authentication and shall bear interest from
the date specified on the face of the form of Note attached as Exhibit A hereto.
Interest on the Notes shall be computed on the basis of a 360-day year comprised
of twelve 30-day months.

          The Person in whose name any Note (or its Predecessor Note) is
registered on the Note register at the close of business on any record date with
respect to any interest payment date shall be entitled to receive the interest
payable on such interest payment date, except that the interest payable upon
redemption or repurchase will be payable to the Person to whom principal is
payable pursuant to such redemption or repurchase (unless the redemption date or
the Repurchase Date, as the case may be, is an interest payment date, in which
case the semi-annual payment of interest becoming due on such date shall be
payable to the holders of such Notes registered as such on the applicable record
date). Interest shall be payable at the office of the Company maintained by the
Company for such purposes in the Borough of Manhattan, The City of New York,
which shall initially be the Corporate Trust Office of the Trustee and may, as
the Company shall specify to the paying agent in writing by each record date, be
paid either (i) by check mailed to the address of the Person entitled thereto as
it appears in the Note register (PROVIDED that any holder of Notes with an
aggregate principal amount in excess of $2,000,000 shall, at the written
election of such holder (such election to be made prior to the relevant record
date and to contain appropriate wire transfer information), be paid by wire
transfer in immediately available funds) or (ii) by transfer to an account
maintained by such Person located

                                        9


in the United States; PROVIDED that payments to the Depositary will be made by
wire transfer of immediately available funds to the account of the Depositary or
its nominee. The term "RECORD DATE" with respect to any interest payment date
shall mean the January 1 or July 1 preceding the applicable January 15 or July
15 interest payment date, respectively.

          Any interest on any Note which is payable, but is not punctually paid
or duly provided for, on any January 1 or July 1 (herein called "DEFAULTED
INTEREST") shall forthwith cease to be payable to the Noteholder on the relevant
record date by virtue of his having been such Noteholder, and such Defaulted
Interest shall be paid by the Company, at its election in each case, as provided
in clause (1) or (2) below:

The Company may elect to make payment of any Defaulted Interest to the Persons
in whose names the Notes (or their respective Predecessor Notes) are registered
at the close of business on a special record date for the payment of such
Defaulted Interest, which shall be fixed in the following manner. The Company
shall notify the Trustee in writing of the amount of Defaulted Interest proposed
to be paid on each Note and the date of the proposed payment (which shall be not
less than twenty-five (25) days after the receipt by the Trustee of such notice,
unless the Trustee shall consent to an earlier date), and at the same time the
Company shall deposit with the Trustee an amount of money equal to the aggregate
amount to be paid in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Trustee for such deposit on or prior to the
date of the proposed payment, such money when deposited to be held in trust for
the benefit of the Persons entitled to such Defaulted Interest as in this clause
provided. Thereupon the Trustee shall fix a special record date for the payment
of such Defaulted Interest which shall be not more than fifteen (15) days and
not less than ten (10) days prior to the date of the proposed payment, and not
less than ten (10) days after the receipt by the Trustee of the notice of the
proposed payment. The Trustee shall promptly notify the Company of such special
record date and, in the name and at the expense of the Company, shall cause
notice of the proposed payment of such Defaulted Interest and the special record
date therefor to be mailed, first-class postage prepaid, to each holder at his
address as it appears in the Note register, not less than ten (10) days prior to
such special record date. Notice of the proposed payment of such Defaulted
Interest and the special record date therefor having been so mailed, such
Defaulted Interest shall be paid to the Persons in whose names the Notes (or
their respective Predecessor Notes) are registered at the close of business on
such special record date and shall no longer be payable pursuant to the
following clause (2) of this Section 2.03.

The Company may make payment of any Defaulted Interest in any other lawful
manner not inconsistent with the requirements of any securities exchange or
automated quotation system on which the Notes may be listed or designated for
issuance, and upon such notice as may be required by such exchange or automated
quotation system, if, after notice given by the Company to the Trustee of the
proposed payment pursuant to this clause, such manner of payment shall be deemed
practicable by the Trustee.

          SECTION 2.04.   EXECUTION OF NOTES. The Notes shall be signed in the
name and on behalf of the Company by the manual or facsimile signature of its
Chairman of the Board of Directors, Chief Executive Officer, President or any
Vice President and attested by its Secretary or any of its Assistant
Secretaries. The signature of any of these officers or the Company's seal on the
Notes may be manual or facsimile. Only such Notes as shall bear thereon a
certificate of

                                       10


authentication substantially in the form set forth on the form of Note attached
as Exhibit A hereto, manually executed by the Trustee (or an authenticating
agent appointed by the Trustee as provided by Section 15.11), shall be entitled
to the benefits of this Indenture or be valid or obligatory for any purpose.
Such certificate by the Trustee (or such an authenticating agent) upon any Note
executed by the Company shall be conclusive evidence that the Note so
authenticated has been duly authenticated and delivered hereunder and that the
holder is entitled to the benefits of this Indenture.

          In case any officer of the Company who shall have signed any of the
Notes shall cease to be such officer before the Notes so signed shall have been
authenticated and delivered by the Trustee, or disposed of by the Company, such
Notes nevertheless may be authenticated and delivered or disposed of as though
the person who signed such Notes had not ceased to be such officer of the
Company, and any Note may be signed on behalf of the Company by such persons as,
at the actual date of the execution of such Note, shall be the proper officers
of the Company, although at the date of the execution of this Indenture any such
person was not such an officer.

          SECTION 2.05.   EXCHANGE AND REGISTRATION OF TRANSFER OF NOTES;
RESTRICTIONS ON TRANSFER. (a) The Company shall cause to be kept at the
Corporate Trust Office a register (the register maintained in such office and in
any other office or agency of the Company designated pursuant to Section 4.02
being herein sometimes collectively referred to as the "NOTE REGISTER") in
which, subject to such reasonable regulations as it may prescribe, the Company
shall provide for the registration of Notes and of transfers of Notes. The Note
register shall be in written form or in any form capable of being converted into
written form within a reasonably prompt period of time. The Trustee is hereby
appointed "NOTE REGISTRAR" for the purpose of registering Notes and transfers of
Notes as herein provided. The Company may appoint one or more co-registrars in
accordance with Section 4.02.

          Upon surrender for registration of transfer of any Note to the Note
registrar or any co-registrar, and satisfaction of the requirements for such
transfer set forth in this Section 2.05, the Company shall execute, and the
Trustee shall authenticate and deliver, in the name of the designated transferee
or transferees, one or more new Notes of any authorized denominations and of a
like aggregate principal amount and bearing such restrictive legends as may be
required by this Indenture.

          Notes may be exchanged for other Notes of any authorized denominations
and of a like aggregate principal amount, upon surrender of the Notes to be
exchanged at any such office or agency maintained by the Company pursuant to
Section 4.02. Whenever any Notes are so surrendered for exchange, the Company
shall execute, and the Trustee shall authenticate and deliver, the Notes which
the Noteholder making the exchange is entitled to receive bearing registration
numbers not contemporaneously outstanding.

          All Notes issued upon any registration of transfer or exchange of
Notes shall be the valid obligations of the Company, evidencing the same debt,
and entitled to the same benefits under this Indenture, as the Notes surrendered
upon such registration of transfer or exchange.

                                       11


          All Notes presented or surrendered for registration of transfer or for
exchange, redemption, repurchase or conversion shall (if so required by the
Company or the Note registrar) be duly endorsed, or be accompanied by a written
instrument or instruments of transfer in form satisfactory to the Company, and
the Notes shall be duly executed by the Noteholder thereof or his attorney duly
authorized in writing.

          No service charge shall be made to any holder for any registration of
transfer or exchange of Notes, but either the Company, the Trustee or both may
require payment by the holder of a sum sufficient to cover any tax, assessment
or other governmental charge that may be imposed in connection with any
registration of transfer or exchange of Notes.

          Neither the Company nor the Trustee nor any Note registrar shall be
required to exchange or register a transfer of (a) any Notes for a period of
fifteen (15) days next preceding any selection of Notes to be redeemed, (b) any
Notes or portions thereof called for redemption pursuant to Section 3.02, (c)
any Notes or portions thereof surrendered for conversion pursuant to Article 14,
(d) any Notes or portions thereof tendered for redemption (and not withdrawn)
pursuant to Section 3.05 or (e) any Notes or portions thereof tendered for
repurchase (and not withdrawn) pursuant to Section 3.06.

          (b)     The following provisions shall apply only to Global Notes:

                  (i)     Each Global Note authenticated under this Indenture
          shall be registered in the name of the Depositary or a nominee thereof
          and delivered to such Depositary or a nominee thereof or Custodian
          therefor, and each such Global Note shall constitute a single Note for
          all purposes of this Indenture.

                  (ii)    Notwithstanding any other provision in this Indenture,
          no Global Note may be exchanged in whole or in part for Notes
          registered, and no transfer of a Global Note in whole or in part may
          be registered, in the name of any Person other than the Depositary or
          a nominee thereof unless (A) the Depositary (i) has notified the
          Company that it is unwilling or unable to continue as Depositary for
          such Global Note or (ii) has ceased to be a clearing agency registered
          under the Exchange Act and a successor Depositary is not appointed by
          the Company within 90 days, (B) an Event of Default has occurred and
          is continuing and the maturity of the Notes shall have been
          accelerated in accordance with the terms of the Notes and any holder
          shall have requested in writing the issuance of definitive
          certificated securities, or (C) the Company, in its sole discretion,
          notifies the Trustee in writing that it no longer wishes to have all
          the Notes represented by Global Notes. Any Global Note exchanged
          pursuant to clause (A) or (B) above shall be so exchanged in whole and
          not in part and any Global Note exchanged pursuant to clause (C) above
          may be exchanged in whole or from time to time in part as directed by
          the Company. Any Note issued in exchange for a Global Note or any
          portion thereof shall be a Global Note; PROVIDED that any such Note so
          issued that is registered in the name of a Person other than the
          Depositary or a nominee thereof shall not be a Global Note.

                                       12


                  (iii)   Notes issued in exchange for a Global Note or any
          portion thereof pursuant to clause (ii) above and which is not a
          Global Note shall be issued in definitive, fully registered form,
          without interest coupons, shall have an aggregate principal amount
          equal to that of such Global Note or portion thereof to be so
          exchanged, shall be registered in such names and be in such authorized
          denominations as the Depositary shall designate and shall bear any
          legends required hereunder. Any Global Note to be exchanged in whole
          shall be surrendered by the Depositary to the Trustee, as Note
          registrar. With regard to any Global Note to be exchanged in part,
          either such Global Note shall be so surrendered for exchange or, if
          the Trustee is acting as Custodian for the Depositary or its nominee
          with respect to such Global Note, the principal amount thereof shall
          be reduced, by an amount equal to the portion thereof to be so
          exchanged, by means of an appropriate adjustment made on the records
          of the Trustee. Upon any such surrender or adjustment, the Trustee
          shall authenticate and make available for delivery the Note issuable
          on such exchange to or upon the written order of the Depositary or an
          authorized representative thereof.

                  (iv)    In the event of the occurrence of any of the events
          specified in clause (ii) above, the Company will promptly make
          available to the Trustee a reasonable supply of certificated Notes in
          definitive, fully registered form, without interest coupons.

                  (v)     Neither any members of, or participants in, the
          Depositary ("AGENT MEMBERS") nor any other Persons on whose behalf
          Agent Members may act shall have any rights under this Indenture with
          respect to any Global Note registered in the name of the Depositary or
          any nominee thereof, and the Depositary or such nominee, as the case
          may be, may be treated by the Company, the Trustee and any agent of
          the Company or the Trustee as the absolute owner and holder of such
          Global Note for all purposes whatsoever. Notwithstanding the
          foregoing, nothing herein shall prevent the Company, the Trustee or
          any agent of the Company or the Trustee from giving effect to any
          written certification, proxy or other authorization furnished by the
          Depositary or such nominee, as the case may be, or impair, as between
          the Depositary, its Agent Members and any other Person on whose behalf
          an Agent Member may act, the operation of customary practices of such
          Persons governing the exercise of the rights of a holder of any Note.

                  (vi)    At such time as all interests in a Global Note have
          been redeemed, repurchased, converted, canceled or exchanged for Notes
          in certificated form, such Global Note shall, upon receipt thereof, be
          canceled by the Trustee in accordance with standing procedures and
          instructions existing between the Depositary and the Custodian. At any
          time prior to such cancellation, if any interest in a Global Note is
          redeemed, repurchased, converted, canceled or exchanged for Notes in
          certificated form, the principal amount of such Global Note shall, in
          accordance with the standing procedures and instructions existing
          between the Depositary and the Custodian, be appropriately reduced,
          and an endorsement shall be made on such Global Note, by the Trustee
          or the Custodian, at the direction of the Trustee, to reflect such
          reduction.

                                       13


          (c)     Every Note that bears or is required under this Section
2.05(c) to bear the legend set forth in this Section 2.05(c) (together with any
Common Stock issued upon conversion of the Notes and required to bear the legend
set forth in Section 2.05(d), collectively, the "RESTRICTED SECURITIES") shall
be subject to the restrictions on transfer set forth in this Section 2.05(c)
(including those set forth in the legend below) unless such restrictions on
transfer shall be waived by written consent of the Company, and the holder of
each such Restricted Security, by such Noteholder's acceptance thereof, agrees
to be bound by all such restrictions on transfer. As used in Sections 2.05(c)
and 2.05(d), the term "TRANSFER" encompasses any sale, pledge, loan, transfer,
assignment, conveyance or other disposition whatsoever of any Restricted
Security or any interest therein.

          Until the expiration of the holding period applicable to sales thereof
under Rule 144(k) under the Securities Act (or any successor provision), any
certificate evidencing such Note (and all securities issued in exchange therefor
or substitution thereof, other than Common Stock, if any, issued upon conversion
thereof, which shall bear the legend set forth in Section 2.05(d), if
applicable) shall bear a legend in substantially the following form, unless such
Note has been sold pursuant to a registration statement that has been declared
effective under the Securities Act (and which continues to be effective at the
time of such transfer), or unless otherwise agreed by the Company in writing,
with written notice thereof to the Trustee:

          THE NOTE EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE UNITED
          STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR
          ANY STATE SECURITIES LAWS AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
          EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION
          HEREOF, THE HOLDER (1) REPRESENTS THAT IT IS A "QUALIFIED
          INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES
          ACT); (2) AGREES THAT IT WILL NOT, PRIOR TO EXPIRATION OF THE HOLDING
          PERIOD APPLICABLE TO SALES OF THIS NOTE UNDER RULE 144(k) UNDER THE
          SECURITIES ACT (OR ANY SUCCESSOR PROVISION), RESELL OR OTHERWISE
          TRANSFER THIS NOTE OR THE COMMON STOCK ISSUABLE UPON CONVERSION OF
          THIS NOTE EXCEPT (A) TO JETBLUE AIRWAYS CORPORATION OR ANY SUBSIDIARY
          THEREOF, (B) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH
          RULE 144A UNDER THE SECURITIES ACT, (C) PURSUANT TO THE EXEMPTION FROM
          REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF
          AVAILABLE) OR (D) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN
          DECLARED EFFECTIVE UNDER THE SECURITIES ACT (AND WHICH CONTINUES TO BE
          EFFECTIVE AT THE TIME OF SUCH TRANSFER); (3) PRIOR TO SUCH TRANSFER
          (OTHER THAN A TRANSFER PURSUANT TO CLAUSE (2)(D) ABOVE), IT WILL
          FURNISH TO WILMINGTON TRUST COMPANY, AS TRUSTEE (OR A SUCCESSOR
          TRUSTEE, AS APPLICABLE) AND UPON THE COMPANY'S REQUEST, TO THE
          COMPANY, SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS
          THE TRUSTEE AND THE COMPANY MAY REASONABLY REQUIRE TO CONFIRM THAT
          SUCH TRANSFER IS

                                       14


          BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT
          SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT; AND
          (4) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE IS
          TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. THIS
          LEGEND WILL BE REMOVED UPON THE EARLIER OF THE TRANSFER OF THIS NOTE
          PURSUANT TO CLAUSE (2)(D) ABOVE OR UPON ANY TRANSFER OF THIS NOTE
          UNDER RULE 144(k) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR
          PROVISION). THE INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE
          TO REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE
          FOREGOING RESTRICTION.

          Any Note (or security issued in exchange or substitution therefor) as
to which such restrictions on transfer shall have expired in accordance with
their terms or as to conditions for removal of the foregoing legend set forth
therein have been satisfied may, upon surrender of such Note for exchange to the
Note registrar in accordance with the provisions of this Section 2.05, be
exchanged for a new Note or Notes, of like tenor and aggregate principal amount,
which shall not bear the restrictive legend required by this Section 2.05(c). If
the Restricted Security surrendered for exchange is represented by a Global Note
bearing the legend set forth in this Section 2.05(c), the principal amount of
the legended Global Note shall be reduced by the appropriate principal amount
and the principal amount of a Global Note without the legend set forth in this
Section 2.05(c) shall be increased by an equal principal amount. If a Global
Note without the legend set forth in this Section 2.05(c) is not then
outstanding, the Company shall execute and the Trustee shall authenticate and
deliver an unlegended Global Note to the Depositary.

          (d)     Until the expiration of the holding period applicable to sales
thereof under Rule 144(k) under the Securities Act (or any successor provision),
any stock certificate representing Common Stock issued upon conversion of any
Note shall bear a legend in substantially the following form, unless such Common
Stock has been sold pursuant to a registration statement that has been declared
effective under the Securities Act (and which continues to be effective at the
time of such transfer) or such Common Stock has been issued upon conversion of
Notes that have been transferred pursuant to a registration statement that has
been declared effective under the Securities Act, or unless otherwise agreed by
the Company in writing with written notice thereof to the transfer agent:

          THE COMMON STOCK EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE
          UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
          ACT"), OR ANY STATE SECURITIES LAWS AND, ACCORDINGLY, MAY NOT BE
          OFFERED OR SOLD EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. THE
          HOLDER HEREOF AGREES THAT, UNTIL THE EXPIRATION OF THE HOLDING PERIOD
          APPLICABLE TO SALES OF THE COMMON STOCK EVIDENCED HEREBY, UNDER RULE
          144(k) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION), (1) IT
          WILL NOT RESELL OR OTHERWISE TRANSFER THE COMMON STOCK EVIDENCED
          HEREBY EXCEPT (A)

                                       15


          TO JETBLUE AIRWAYS CORPORATION OR ANY SUBSIDIARY THEREOF, (B) TO A
          "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
          SECURITIES ACT) IN COMPLIANCE WITH RULE 144A, (C) PURSUANT TO THE
          EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES
          ACT (IF AVAILABLE) OR (D) PURSUANT TO A REGISTRATION STATEMENT WHICH
          HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT (AND WHICH
          CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH TRANSFER); (2) PRIOR TO
          SUCH TRANSFER (OTHER THAN A TRANSFER PURSUANT TO CLAUSE (1)(D) ABOVE),
          IT WILL FURNISH TO EQUISERVE TRUST COMPANY, N.A., AS TRANSFER AGENT
          (OR A SUCCESSOR TRANSFER AGENT, AS APPLICABLE), SUCH CERTIFICATIONS,
          LEGAL OPINIONS OR OTHER INFORMATION AS SUCH TRANSFER AGENT MAY
          REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE
          PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
          REGISTRATION REQUIREMENTS OF THE SECURITIES ACT; AND (3) IT WILL
          DELIVER TO EACH PERSON TO WHOM THE COMMON STOCK EVIDENCED HEREBY IS
          TRANSFERRED (OTHER THAN A TRANSFER PURSUANT TO CLAUSE (1)(D) ABOVE) A
          NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. THIS LEGEND WILL BE
          REMOVED UPON THE EARLIER OF THE TRANSFER OF THE COMMON STOCK EVIDENCED
          HEREBY PURSUANT TO CLAUSE (1)(D) ABOVE OR UPON ANY TRANSFER OF THE
          COMMON STOCK EVIDENCED HEREBY AFTER THE EXPIRATION OF THE HOLDING
          PERIOD APPLICABLE TO SALES OF THE SECURITY EVIDENCED HEREBY UNDER RULE
          144(k) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION).

          Any such Common Stock as to which such restrictions on transfer shall
have expired in accordance with their terms or as to which the conditions for
removal of the foregoing legend set forth therein have been satisfied may, upon
surrender of the certificates representing such shares of Common Stock for
exchange in accordance with the procedures of the transfer agent for the Common
Stock, be exchanged for a new certificate or certificates for a like number of
shares of Common Stock, which shall not bear the restrictive legend required by
this Section 2.05(d).

          (e)     Any Note or Common Stock issued upon the conversion of a Note
that, prior to the expiration of the holding period applicable to sales thereof
under Rule 144(k) under the Securities Act (or any successor provision), is
purchased or owned by the Company or any Affiliate thereof may not be resold by
the Company or such Affiliate unless registered under the Securities Act or
resold pursuant to an exemption from the registration requirements of the
Securities Act in a transaction which results in such Notes or Common Stock, as
the case may be, no longer being "RESTRICTED SECURITIES" (as defined under Rule
144 under the Securities Act).

          SECTION 2.06.   MUTILATED, DESTROYED, LOST OR STOLEN NOTES. In case
any Note shall become mutilated or be destroyed, lost or stolen, the Company in
its discretion may execute, and

                                       16


upon its written request the Trustee or an authenticating agent appointed by the
Trustee shall authenticate and make available for delivery, a new Note, bearing
a number not contemporaneously outstanding, in exchange and substitution for the
mutilated Note, or in lieu of and in substitution for the Note so destroyed,
lost or stolen. In every case, the applicant for a substituted Note shall
furnish to the Company, to the Trustee and, if applicable, to such
authenticating agent such security or indemnity as may be required by them to
save each of them harmless for any loss, liability, cost or expense caused by or
connected with such substitution, and, in every case of destruction, loss or
theft, the applicant shall also furnish to the Company, to the Trustee and, if
applicable, to such authenticating agent evidence to their satisfaction of the
destruction, loss or theft of such Note and of the ownership thereof.

          Following receipt by the Trustee or such authenticating agent, as the
case may be, of satisfactory security or indemnity and evidence, as described in
the preceding paragraph, the Trustee or such authenticating agent may
authenticate any such substituted Note and make available for delivery such
Note. Upon the issuance of any substituted Note, either the Company, the Trustee
or both may require the payment by the holder of a sum sufficient to cover any
tax, assessment or other governmental charge that may be imposed in relation
thereto and any other expenses connected therewith. In case any Note which has
matured or is about to mature or has been called for redemption or has been
tendered for redemption upon a Designated Event (and not withdrawn) or has been
surrendered for repurchase on a Repurchase Date (and not withdrawn) or is to be
converted into Common Stock shall become mutilated or be destroyed, lost or
stolen, the Company may, instead of issuing a substitute Note, pay or authorize
the payment of or convert or authorize the conversion of the same (without
surrender thereof except in the case of a mutilated Note), as the case may be,
if the applicant for such payment or conversion shall furnish to the Company, to
the Trustee and, if applicable, to such authenticating agent such security or
indemnity as may be required by them to save each of them harmless for any loss,
liability, cost or expense caused by or in connection with such substitution,
and, in every case of destruction, loss or theft, the applicant shall also
furnish to the Company, the Trustee and, if applicable, any paying agent or
conversion agent evidence to their satisfaction of the destruction, loss or
theft of such Note and of the ownership thereof.

          Every substitute Note issued pursuant to the provisions of this
Section 2.06 by virtue of the fact that any Note is destroyed, lost or stolen
shall constitute an additional contractual obligation of the Company, whether or
not the destroyed, lost or stolen Note shall be found at any time, and shall be
entitled to all the benefits of (but shall be subject to all the limitations set
forth in) this Indenture equally and proportionately with any and all other
Notes duly issued hereunder. To the extent permitted by law, all Notes shall be
held and owned upon the express condition that the foregoing provisions are
exclusive with respect to the replacement or payment or conversion or redemption
or repurchase of mutilated, destroyed, lost or stolen Notes and shall preclude
any and all other rights or remedies notwithstanding any law or statute existing
or hereafter enacted to the contrary with respect to the replacement or payment
or conversion or redemption or repurchase of negotiable instruments or other
securities without their surrender.

          SECTION 2.07.   TEMPORARY NOTES. Pending the preparation of Notes in
certificated form, the Company may execute and the Trustee or an authenticating
agent appointed by the Trustee shall, upon the written request of the Company,
authenticate and deliver temporary

                                       17


Notes (printed or lithographed). Temporary Notes shall be issuable in any
authorized denomination, and substantially in the form of the Notes in
certificated form, but with such omissions, insertions and variations as may be
appropriate for temporary Notes, all as may be determined by the Company. Every
such temporary Note shall be executed by the Company and authenticated by the
Trustee or such authenticating agent upon the same conditions and in
substantially the same manner, and with the same effect, as the Notes in
certificated form. Without unreasonable delay, the Company will execute and
deliver to the Trustee or such authenticating agent Notes in certificated form
and thereupon any or all temporary Notes may be surrendered in exchange
therefor, at each office or agency maintained by the Company pursuant to Section
4.02 and the Trustee or such authenticating agent shall authenticate and make
available for delivery in exchange for such temporary Notes an equal aggregate
principal amount of Notes in certificated form. Such exchange shall be made by
the Company at its own expense and without any charge therefor. Until so
exchanged, the temporary Notes shall in all respects be entitled to the same
benefits and subject to the same limitations under this Indenture as Notes in
certificated form authenticated and delivered hereunder.

          SECTION 2.08.   CANCELLATION OF NOTES. If the Company shall acquire
any of the Notes, such acquisition shall not operate as a redemption, repurchase
or satisfaction of the indebtedness represented by such Notes unless and until
the same are delivered to the Trustee for cancellation. All Notes surrendered
for the purpose of payment, redemption, repurchase, conversion, exchange or
registration of transfer shall, if surrendered to the Company or any paying
agent or any Note registrar or any conversion agent, be surrendered to the
Trustee and promptly canceled by it, or, if surrendered to the Trustee, shall be
promptly canceled by it, and no Notes shall be issued in lieu thereof except as
expressly permitted by any of the provisions of this Indenture. The Trustee
shall dispose of such canceled Notes in accordance with its customary
procedures.

          SECTION 2.09.   CUSIP NUMBERS. The Company in issuing the Notes may
use "CUSIP" numbers (if then generally in use), and, if so, the Trustee shall
use "CUSIP" numbers in notices of redemption as a convenience to Noteholders;
PROVIDED that any such notice may state that no representation is made as to the
correctness of such numbers either as printed on the Notes or as contained in
any notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Notes, and any such redemption shall not
be affected by any defect in or omission of such numbers. The Company will
promptly notify the Trustee of any change in the "CUSIP" numbers.

                                   ARTICLE III
                       REDEMPTION AND REPURCHASE OF NOTES

          SECTION 3.01.   REDEMPTION OF NOTES AT THE OPTION OF THE COMPANY.
Except as otherwise provided in Section 3.05, the Company may not redeem any
Notes prior to July 18, 2006. At any time on or after July 18, 2006, the Company
may redeem any of the Notes at a redemption price of 100% of the principal
amount of the Notes being redeemed, plus accrued and unpaid interest, if the
Closing Sale Price on the Nasdaq National Market excees 150% of the Conversion
Price for at least 20 Trading Days in any period of 30 consecutive Trading Days
ending as of the date the Company gives notice of such redemption or within two
Business Days prior to giving such notice. At any time on or after July 18, 2006
and prior to maturity, the Notes

                                       18


may be redeemed at the option of the Company (an "OPTIONAL REDEMPTION"), in
whole or in part, upon notice as set forth in Section 3.02, at 100% of the
principal amount of the Notes to be redeemed, together with accrued and unpaid
interest, if any, to, but excluding the date fixed for redemption.

          SECTION 3.02.    NOTICE OF OPTIONAL REDEMPTION; SELECTION OF NOTES. In
case the Company shall desire to exercise the right to redeem all or, as the
case may be, any part of the Notes pursuant to Section 3.01, it shall fix a date
for redemption and it or, at its written request received by the Trustee not
fewer than forty-five (45) days prior (or such shorter period of time as may be
acceptable to the Trustee) to the date fixed for redemption, the Trustee in the
name of and at the expense of the Company, shall mail or cause to be mailed a
notice of such redemption not fewer than thirty (30) nor more than sixty (60)
days prior to the redemption date to each holder of Notes so to be redeemed as a
whole or in part at its last address as the same appears on the Note register;
PROVIDED that if the Company shall give such notice, it shall also give written
notice of the redemption date to the Trustee. Such mailing shall be by first
class mail. The notice, if mailed in the manner herein provided, shall be
conclusively presumed to have been duly given, whether or not the holder
receives such notice. In any case, failure to give such notice by mail or any
defect in the notice to the holder of any Note designated for redemption as a
whole or in part shall not affect the validity of the proceedings for the
redemption of any other Note. Concurrently with the mailing of any such notice
of redemption, the Company shall issue a press release announcing such
redemption, the form and content of which press release shall be determined by
the Company in its sole discretion. The failure to issue any such press release
or any defect therein shall not affect the validity of the redemption notice or
any of the proceedings for the redemption of any Note called for redemption.

          Each such notice of redemption shall specify the aggregate principal
amount of Notes to be redeemed, the CUSIP number or numbers of the Notes being
redeemed, the date fixed for redemption (which shall be a Business Day), the
redemption price at which Notes are to be redeemed, the place or places of
payment, that payment will be made upon presentation and surrender of such
Notes, that interest accrued to the date fixed for redemption will be paid as
specified in said notice, and that on and after said date interest thereon or on
the portion thereof to be redeemed will cease to accrue. Such notice shall also
state the current Conversion Rate and the date on which the right to convert
such Notes or portions thereof into Common Stock will expire. If fewer than all
the Notes are to be redeemed, the notice of redemption shall identify the Notes
to be redeemed (including CUSIP numbers, if any). In case any Note is to be
redeemed in part only, the notice of redemption shall state the portion of the
principal amount thereof to be redeemed and shall state that, on and after the
redemption date, upon surrender of such Note, a new Note or Notes in principal
amount equal to the unredeemed portion thereof will be issued.

          On or prior to the redemption date specified in the notice of
redemption given as provided in this Section 3.02, the Company will deposit with
the Trustee or with one or more paying agents (or, if the Company is acting as
the paying agent, set aside, segregate and hold in trust as provided in Section
4.04) an amount of money in immediately available funds sufficient to redeem on
the redemption date all the Notes (or portions thereof) so called for redemption
(other than those theretofore surrendered for conversion into Common Stock) at
the appropriate redemption price, together with accrued interest to, but
excluding, the redemption date; PROVIDED that if such payment is made on the
redemption date it must be received by the Trustee or paying

                                       19


agent, as the case may be, by 10:00 a.m. New York City time on such date. The
Company shall be entitled to retain any interest, yield or gain on amounts
deposited with the Trustee or any paying agent pursuant to this Section 3.02 in
excess of amounts required hereunder to pay the redemption price and accrued
interest to, but excluding, the redemption date. If any Note called for
redemption is converted pursuant hereto prior to such redemption date, any money
deposited with the Trustee or any paying agent or so segregated and held in
trust for the redemption of such Note shall be paid to the Company upon its
written request, or, if then held by the Company, shall be discharged from such
trust. Whenever any Notes are to be redeemed pursuant to Section 3.01, the
Company will give the Trustee written notice in the form of an Officers'
Certificate not fewer than forty-five (45) days (or such shorter period of time
as may be acceptable to the Trustee) prior to the redemption date as to the
aggregate principal amount of Notes to be redeemed.

          If less than all of the outstanding Notes are to be redeemed, the
Trustee shall select the Notes or portions thereof of the Global Note or the
Notes in certificated form to be redeemed (in principal amounts of $1,000 or
multiples thereof) by lot, on a pro rata basis or by another method the Trustee
deems fair and appropriate. If any Note selected for partial redemption is
submitted for conversion in part after such selection, the portion of such Note
submitted for conversion shall be deemed (so far as may be possible) to be the
portion to be selected for redemption. The Notes (or portions thereof) so
selected shall be deemed duly selected for redemption for all purposes hereof,
notwithstanding that any such Note is submitted for conversion in part before
the mailing of the notice of redemption.

          Upon any redemption of less than all of the outstanding Notes, the
Company and the Trustee may (but need not), solely for purposes of determining
the pro rata allocation among such Notes as are unconverted and outstanding at
the time of redemption, treat as outstanding any Notes surrendered for
conversion during the period of fifteen (15) days next preceding the mailing of
a notice of redemption and may (but need not) treat as outstanding any Note
authenticated and delivered during such period in exchange for the unconverted
portion of any Note converted in part during such period.

          SECTION 3.03.   PAYMENT OF NOTES CALLED FOR REDEMPTION BY THE COMPANY.
If notice of redemption has been given as provided in Section 3.02, the Notes or
portion of Notes with respect to which such notice has been given shall, unless
converted into Common Stock pursuant to the terms hereof, become due and payable
on the date fixed for redemption and at the place or places stated in such
notice at the applicable redemption price, together with interest accrued to
(but excluding) the redemption date, and on and after said date (unless the
Company shall default in the payment of such Notes at the redemption price,
together with interest accrued to said date) interest on the Notes or portion of
Notes so called for redemption shall cease to accrue and, after the close of
business on the Business Day immediately preceding the redemption date, such
Notes shall cease to be convertible into Common Stock and, except as provided in
Sections 7.06 and 12.04, to be entitled to any benefit or security under this
Indenture, and the holders thereof shall have no right in respect of such Notes
except the right to receive the redemption price thereof and unpaid interest to
(but excluding) the redemption date. On presentation and surrender of such Notes
at a place of payment in said notice specified, the said Notes or the specified
portions thereof shall be paid and redeemed by the Company at the applicable
redemption price, together with interest accrued thereon to, but excluding, the

                                       20


redemption date; PROVIDED that if the applicable redemption date is an interest
payment date, the interest payable on such interest payment date shall be
payable to the holders of record of such Notes on the applicable record date
instead of the holders surrendering such Notes for redemption on such date.

          Upon presentation of any Note redeemed in part only, the Company shall
execute and the Trustee shall authenticate and make available for delivery to
the holder thereof, at the expense of the Company, a new Note or Notes, of
authorized denominations, in principal amount equal to the unredeemed portion of
the Notes so presented.

          Notwithstanding the foregoing, the Trustee shall not redeem any Notes
or mail any notice of redemption during the continuance of a default in payment
of interest on the Notes. If any Note called for redemption shall not be so paid
upon surrender thereof for redemption, the principal shall, until paid or duly
provided for, bear interest from the redemption date at a rate equal to 1% per
annum plus the rate borne by the Note (without duplication of the 1% increase
provided for under Section 6.02) and such Note shall remain convertible into
Common Stock until the principal and interest shall have been paid or duly
provided for.

          SECTION 3.04.   CONVERSION ARRANGEMENT ON CALL FOR REDEMPTION. In
connection with any redemption of Notes, the Company may arrange for the
purchase and conversion of any Notes by an agreement with one or more investment
banks or other purchasers to purchase such Notes by paying to the Trustee in
trust for the Noteholders, on or before the date fixed for redemption, an amount
not less than the applicable redemption price, together with interest accrued
to, but excluding, the date fixed for redemption, of such Notes. Notwithstanding
anything to the contrary contained in this Article 3, the obligation of the
Company to pay the redemption price of such Notes, together with interest
accrued to, but excluding, the date fixed for redemption, shall be deemed to be
satisfied and discharged to the extent such amount is so paid by such
purchasers. If such an agreement is entered into, a copy of which will be filed
with the Trustee prior to the date fixed for redemption, any Notes not duly
surrendered for conversion by the holders thereof may, at the option of the
Company, be deemed, to the fullest extent permitted by law, acquired by such
purchasers from such holders and (notwithstanding anything to the contrary
contained in Article 14) surrendered by such purchasers for conversion, all as
of immediately prior to the close of business on the date fixed for redemption
(and the right to convert any such Notes shall be extended through such time),
subject to payment of the above amount as aforesaid. At the direction of the
Company, the Trustee shall hold and dispose of any such amount paid to it in the
same manner as it would monies deposited with it by the Company for the
redemption of Notes. Without the Trustee's prior written consent, no arrangement
between the Company and such purchasers for the purchase and conversion of any
Notes shall increase or otherwise affect any of the powers, duties,
responsibilities or obligations of the Trustee as set forth in this Indenture.

          SECTION 3.05.   REDEMPTION AT OPTION OF HOLDERS UPON A DESIGNATED
EVENT. (a) If there shall occur a Designated Event at any time prior to
maturity of the Notes, then each Noteholder shall have the right, at such
holder's option, to require the Company to redeem all of such holder's Notes, or
any portion thereof that is a multiple of $1,000 principal amount, on the date
(the "DESIGNATED EVENT REDEMPTION DATE") that is thirty (30) days after the date
of the Designated Event Notice (as defined in Section 3.05(b)) of such
Designated Event (or, if such

                                       21


30th day is not a Business Day, the next succeeding Business Day) at a
redemption price equal to 100% of the principal amount thereof, together with
accrued interest to, but excluding, the Designated Event Redemption Date;
PROVIDED that if such Designated Event Redemption Date is an interest payment
date, then the interest payable on such interest payment date shall be paid to
the holders of record of the Notes on the applicable record date instead of the
holders surrendering the Notes for redemption on such date.

          Upon presentation of any Note redeemed in part only, the Company shall
execute and, upon the Company's written direction to the Trustee, the Trustee
shall authenticate and make available for delivery to the holder thereof, at the
expense of the Company, a new Note or Notes, of authorized denominations, in
aggregate principal amount equal to the unredeemed portion of the Notes
presented.

          (b)     On or before the tenth day after the occurrence of a
Designated Event, the Company or at its written request (which must be received
by the Trustee at least five (5) Business Days prior to the date the Trustee is
requested to give notice as described below, unless the Trustee shall agree in
writing to a shorter period), the Trustee, in the name of and at the expense of
the Company, shall mail or cause to be mailed to all holders of record on the
date of the Designated Event a notice (the "DESIGNATED EVENT NOTICE") of the
occurrence of such Designated Event and of the redemption right at the option of
the holders arising as a result thereof. Such notice shall be mailed in the
manner and with the effect set forth in the first paragraph of Section 3.02
(without regard for the time limits set forth therein). If the Company shall
give such notice, the Company shall also deliver a copy of the Designated Event
Notice to the Trustee at such time as it is mailed to Noteholders. Concurrently
with the mailing of any Designated Event Notice, the Company shall issue a press
release announcing such Designated Event referred to in the Designated Event
Notice, the form and content of which press release shall be determined by the
Company in its sole discretion. The failure to issue any such press release or
any defect therein shall not affect the validity of the Designated Event Notice
or any proceedings for the redemption of any Note which any Noteholder may elect
to have the Company redeem as provided in this Section 3.05.

          Each Designated Event Notice shall specify the circumstances
constituting the Designated Event, the Designated Event Redemption Date, the
price at which the Company shall be obligated to redeem Notes, that the holder
must exercise the redemption right on or prior to the close of business on the
Designated Event Redemption Date (the "DESIGNATED EVENT EXPIRATION TIME"), that
the holder shall have the right to withdraw any Notes surrendered prior to the
Designated Event Expiration Time, a description of the procedure which a
Noteholder must follow to exercise such redemption right and to withdraw any
surrendered Notes, the place or places where the holder is to surrender such
holder's Notes, the amount of interest accrued on each Note to (but excluding)
the Designated Event Redemption Date and the CUSIP number or numbers of the
Notes (if then generally in use).

          No failure of the Company to give the foregoing notices and no defect
therein shall limit the Noteholders' redemption rights or affect the validity of
the proceedings for the redemption of the Notes pursuant to this Section 3.05.

                                       22


          (c)     For a Note, other than a Global Note, to be so redeemed at the
option of the holder, the Company must receive at the office or agency of the
Company maintained for that purpose pursuant to Section 4.02, such Note with the
form entitled "Option to Elect Repayment Upon A Designated Event" on the reverse
thereof duly completed, together with such Notes duly endorsed for transfer, on
or before the Designated Event Expiration Time. All questions as to the
validity, eligibility (including time of receipt) and acceptance of any Note for
redemption shall be determined by the Company, whose determination shall be
final and binding absent manifest error.

          (d)     On or prior the Designated Event Redemption Date, the Company
will deposit with the Trustee or with one or more paying agents (or, if the
Company is acting as the paying agent, set aside, segregate and hold in trust as
provided in Section 4.04) an amount of money sufficient to redeem on the
Designated Event Redemption Date all the Notes to be redeemed on such date at
the appropriate redemption price, together with accrued interest to, but
excluding, the Designated Event Redemption Date; PROVIDED that if such payment
is made on the Designated Event Redemption Date it must be received by the
Trustee or paying agent, as the case may be, by 10:00 a.m. New York City time,
on such date. Payment for Notes surrendered for redemption (and not withdrawn)
prior to the Designated Event Expiration Time will be made promptly (but in no
event more than five (5) Business Days) following the Designated Event
Redemption Date by mailing checks for the amount payable to the holders of such
Notes entitled thereto as they shall appear in the Note register.

          (e)     In the case of a reclassification, change, consolidation,
merger, combination, binding share exchange, sale or conveyance to which Section
14.06 applies, in which the Common Stock of the Company is changed or exchanged
as a result into the right to receive stock, securities or other property or
assets (including cash), which includes shares of Common Stock of the Company or
shares of common stock of another Person that are, or upon issuance will be,
traded on a United States national securities exchange or approved for trading
on an established automated over-the-counter trading market in the United States
and such shares constitute at the time such change or exchange becomes effective
in excess of 50% of the aggregate fair market value of such stock, securities or
other property or assets (including cash) (as determined by the Company, which
determination shall be conclusive and binding), then the Person formed by such
consolidation or resulting from such merger or which acquires such assets, as
the case may be, shall execute and deliver to the Trustee a supplemental
indenture (accompanied by an Opinion of Counsel that such supplemental indenture
complies with the Trust Indenture Act as in force at the date of execution of
such supplemental indenture) modifying the provisions of this Indenture relating
to the right of holders of the Notes to cause the Company to repurchase the
Notes following a Designated Event, including without limitation the applicable
provisions of this Section 3.05 and the definitions of Common Stock and
Designated Event, as appropriate, as determined in good faith by the Company
(which determination shall be conclusive and binding), to make such provisions
apply to such other Person if different from the Company and the common stock
issued by such Person (in lieu of the Company and the Common Stock of the
Company).

          (f)     The Company will comply with the provisions of Rule 13e-4 and
any other tender offer rules under the Exchange Act to the extent then
applicable in connection with the redemption rights of the holders of Notes in
the event of a Designated Event.

                                       23


          SECTION 3.06.   REPURCHASE OF NOTES BY THE COMPANY AT OPTION OF THE
HOLDER. Notes shall be purchased by the Company pursuant to the terms of the
Notes at the option of the holder on July 15, 2008, July 15, 2013, July 15,
2018, July 15, 2023 and July 15, 2028 (each, a "REPURCHASE Date"), at a purchase
price of 100% of the principal amount, plus any accrued and unpaid interest, in
each case, to, but excluding, such Repurchase Date, subject to the provisions of
Section 3.07. Repurchases of Notes under this Section 3.06 shall be made, at the
option of the holder thereof, upon:

          (a)     delivery to the Trustee (or other paying agent appointed by
     the Company) by a holder of a duly completed Repurchase Notice (a
     "REPURCHASE NOTICE") in the form set forth on the reverse of the Note
     during the period beginning at any time from the opening of business on the
     date that is 20 Business Days prior to the applicable Repurchase Date until
     the close of business on such Repurchase Date; and

          (b)     delivery or book-entry transfer of the Notes to the Trustee
     (or other paying agent appointed by the Company) at any time after delivery
     of the applicable Repurchase Notice (together with all necessary
     endorsements) at the office of the Trustee (or other paying agent appointed
     by the Company), such delivery being a condition to receipt by the holder
     of the purchase price therefor; PROVIDED that such purchase price shall be
     so paid pursuant to this Section 3.06 only if the Note so delivered to the
     Trustee (or other paying agent appointed by the Company) shall conform in
     all respects to the description thereof in the related Repurchase Notice.

          The Company shall purchase from the holder thereof, pursuant to this
Section 3.06, a portion of a Note, if the principal amount of such portion is
$1,000 or an integral multiple of $1,000. Provisions of this Indenture that
apply to the purchase of all of a Note also apply to the purchase of such
portion of such Note.

          Any purchase by the Company contemplated pursuant to the provisions of
this Section 3.06 shall be consummated by the delivery of the consideration to
be received by the holder promptly following the later of the Repurchase Date
and the time of the book-entry transfer or delivery of the Note.

          Notwithstanding anything herein to the contrary, any holder delivering
to the Trustee (or other paying agent appointed by the Company) the Repurchase
Notice contemplated by this Section 3.06 shall have the right to withdraw such
Repurchase Notice at any time prior to the close of business on the Repurchase
Date by delivery of a written notice of withdrawal to the Trustee (or other
paying agent appointed by the Company) in accordance with Section 3.08.

          The Trustee (or other paying agent appointed by the Company) shall
promptly notify the Company of the receipt by it of any Repurchase Notice or
written notice of withdrawal thereof.

          SECTION 3.07.   PROCEDURES FOR THE REPURCHASE OF NOTES. (a) At least
three Business Days before each Company Repurchase Notice Date, the Company
shall deliver an Officers' Certificate to the Trustee specifying:

                                       24


                  (i)     the information required by Section 3.07(c) in the
          Company Repurchase Notice, and

                  (ii)    whether the Company desires the Trustee to give the
          Company Repurchase Notice required by Section 3.07(c).

          (b)     The Company Repurchase Notice, as provided in Section 3.07(c),
shall be sent to holders not less than 20 Business Days prior to such Repurchase
Date (the "COMPANY REPURCHASE NOTICE DATE").

          (c)     In connection with any repurchase of Notes, the Company shall,
no less than 20 Business Days prior to each Repurchase Date, give notice to
holders (with a copy to the Trustee) setting forth information specified in this
Section 3.07(c) (the "COMPANY REPURCHASE NOTICE").

          Each Company Repurchase Notice shall:

                  (1) state the repurchase price and the Repurchase Date to
          which the Company Repurchase Notice relates;

                  (2) include a form of Repurchase Notice;

                  (3) state the name and address of the Trustee (or other paying
          agent or conversion agent appointed by the Company);

                  (4) state that Notes must be surrendered to the Trustee (or
          other paying agent appointed by the Company) to collect the purchase
          price;

                  (5) if the Notes are then convertible, state that Notes as to
          which a Repurchase Notice has been given may be converted only if the
          Repurchase Notice is withdrawn in accordance with the terms of this
          Indenture; and

                  (6) state the CUSIP number of the Notes.

Company Repurchase Notices may be given by the Company or, at the Company's
request, the Trustee shall give such Company Repurchase Notice in the Company's
name and at the Company's expense.

          (d)     The Company will comply with the provisions of Rule 13e-4 and
any other tender offer rules under the Exchange Act to the extent then
applicable in connection with the repurchase rights of the holders of Notes.

          SECTION 3.08.   EFFECT OF REPURCHASE NOTICE. Upon receipt by the
Trustee (or other paying agent appointed by the Company) of the Repurchase
Notice specified in Section 3.06, the holder of the Note in respect of which
such Repurchase Notice was given shall (unless such Repurchase Notice is validly
withdrawn) thereafter be entitled to receive solely the purchase price with
respect to such Note. Such purchase price shall be paid to such holder, subject
to receipt of funds and/or Notes by the Trustee at its Corporate Trust Office in

                                       25


Wilmington Delaware (or other paying agent appointed by the Company), promptly
following the later of (x) the Repurchase Date with respect to such Note
(provided the holder has satisfied the conditions in Section 3.06) and (y) the
time of delivery of such Note to the Trustee (or other paying agent appointed by
the Company) by the holder thereof in the manner required by Section 3.06. Notes
in respect of which a Repurchase Notice has been given by the holder thereof may
not be converted pursuant to Article 14 hereof on or after the date of the
delivery of such Repurchase Notice unless such Repurchase Notice has first been
validly withdrawn.

          A Repurchase Notice may be withdrawn by means of a written notice of
withdrawal delivered to the Corporate Trust Office of the Trustee in Wilmington,
Delaware (or other paying agent appointed by the Company) in accordance with the
Repurchase Notice at any time prior to the close of business on the Repurchase
Date, specifying:

          (a)     the certificate number, if any, of the Note in respect of
     which such notice of withdrawal is being submitted, or the appropriate
     Depositary information if the Note in respect of which such notice of
     withdrawal is being submitted is represented by a Global Note,

          (b)     the principal amount of the Note with respect to which such
     notice of withdrawal is being submitted, and

          (c)     the principal amount, if any, of such Note which remains
     subject to the original Repurchase Notice and which has been or will be
     delivered for purchase by the Company.

          SECTION 3.09.   DEPOSIT OF PURCHASE PRICE. (a) Prior to 10:00 a.m.
(New York City Time) on the Business Day following the Repurchase Date, the
Company shall deposit with the Trustee (or other paying agent appointed by the
Company; or, if the Company is acting as the paying agent, shall segregate and
hold in trust as provided in Section 4.04) an amount of cash (in immediately
available funds if deposited on such Business Day) sufficient to pay the
aggregate purchase price of all the Notes or portions thereof that are to be
purchased as of the Repurchase Date.

          (b)     If the Trustee or other paying agent appointed by the Company,
or the Company or a subsidiary or affiliate of either of them if such entity is
acting as the paying agent, holds cash sufficient to pay the aggregate purchase
price of all the Notes, or portions thereof that are to purchased as of the
Repurchase Date, on or after the Repurchase Date (i) the Notes will cease to be
outstanding, (ii) interest on the Notes will cease to accrue, and (iii) all
other rights of the holders of such Notes will terminate, whether or not
book-entry transfer of the Notes has been made or the Notes have been delivered
to the Trustee or other paying agent, other than the right to receive the
purchase price upon delivery of the Notes.

          SECTION 3.10.   NOTES REPURCHASED IN PART. Upon presentation of any
Note repurchased only in part, the Company shall execute and the Trustee shall
authenticate and make available for delivery to the holder thereof, at the
expense of the Company, a new Note or Notes, of any authorized denomination, in
aggregate principal amount equal to the unrepurchased portion of the Notes
presented.

                                       26


          SECTION 3.11.   REPAYMENT TO THE COMPANY. The Trustee (or other paying
agent appointed by the Company) shall return to the Company any cash that remain
unclaimed, together with interest, if any, thereon, held by them for the payment
of the purchase price; PROVIDED that to the extent that the aggregate amount of
cash deposited by the Company pursuant to Section 3.09 exceeds the aggregate
purchase price of the Notes or portions thereof which the Company is obligated
to purchase as of the Repurchase Date then, unless otherwise agreed in writing
with the Company, promptly after the Business Day following the Repurchase Date,
the Trustee shall return any such excess to the Company together with interest,
if any, thereon.

                                   ARTICLE IV
                       PARTICULAR COVENANTS OF THE COMPANY

          SECTION 4.01.   PAYMENT OF PRINCIPAL AND INTEREST. The Company
covenants and agrees that it will duly and punctually pay or cause to be paid
the principal of (including the redemption price upon redemption or the purchase
price upon repurchase, in each case pursuant to Article 3), and interest, on
each of the Notes at the places, at the respective times and in the manner
provided herein and in the Notes.

          SECTION 4.02.   MAINTENANCE OF OFFICE OR AGENCY. The Company will
maintain an office or agency in the Borough of Manhattan, City of New York,
where the Notes may be surrendered for registration of transfer or exchange or
for presentation for payment or for conversion, redemption or repurchase and
where notices and demands to or upon the Company in respect of the Notes and
this Indenture may be served. The Company will give prompt written notice to the
Trustee of the location, and any change in the location, of such office or
agency not designated or appointed by the Trustee.

          The Company may also from time to time designate co-registrars and one
or more offices or agencies where the Notes may be presented or surrendered for
any or all such purposes and may from time to time rescind such designations.
The Company will give prompt written notice of any such designation or
rescission and of any change in the location of any such other office or agency.

          The Company hereby initially designates the Trustee as paying agent,
Note registrar, Custodian and conversion agent and the Corporate Trust Office
shall be considered as one such office or agency of the Company for each of the
aforesaid purposes.

          So long as the Trustee is the Note registrar, the Trustee agrees to
mail, or cause to be mailed, the notices set forth in Section 7.10(b) and the
third paragraph of Section 7.11. If co-registrars have been appointed in
accordance with this Section, the Trustee shall mail such notices only to the
Company and the holders of Notes it can identify from its records.

          SECTION 4.03.   APPOINTMENTS TO FILL VACANCIES IN TRUSTEE'S OFFICE.
The Company, whenever necessary to avoid or fill a vacancy in the office of
Trustee, will appoint, in the manner provided in Section 7.10, a Trustee, so
that there shall at all times be a Trustee hereunder.

          SECTION 4.04.   PROVISIONS AS TO PAYING AGENT. (a) If the Company
shall appoint a paying agent other than the Trustee, or if the Trustee shall
appoint such a paying agent, the

                                       27


Company will cause such paying agent to execute and deliver to the Trustee an
instrument in which such agent shall agree with the Trustee, subject to the
provisions of this Section 4.04:

                  (1)     that it will hold all sums held by it as such agent
          for the payment of the principal of, or interest on, the Notes
          (whether such sums have been paid to it by the Company or by any other
          obligor on the Notes) in trust for the benefit of the holders of the
          Notes;

                  (2)     that it will give the Trustee notice of any failure by
          the Company (or by any other obligor on the Notes) to make any payment
          of the principal of, or interest on, the Notes when the same shall be
          due and payable; and

                  (3)     that at any time during the continuance of an Event of
          Default, upon request of the Trustee, it will forthwith pay to the
          Trustee all sums so held in trust.

          The Company shall, on or before each due date of the principal of, or
interest on, the Notes, deposit with the paying agent a sum (in funds which are
immediately available on the due date for such payment) sufficient to pay such
principal or interest, and (unless such paying agent is the Trustee) the Company
will promptly notify the Trustee of any failure to take such action; PROVIDED
that if such deposit is made on the due date, such deposit shall be received by
the paying agent by 10:00 a.m. New York City time, on such date.

          (b)     If the Company shall act as the paying agent, it will, on or
before each due date of the principal of, or interest on, the Notes, set aside,
segregate and hold in trust for the benefit of the holders of the Notes a sum
sufficient to pay such principal or interest so becoming due and will promptly
notify the Trustee of any failure to take such action and of any failure by the
Company (or any other obligor under the Notes) to make any payment of the
principal of, or interest on, the Notes when the same shall become due and
payable.

          (c)     Anything in this Section 4.04 to the contrary notwithstanding,
the Company may, at any time, for the purpose of obtaining a satisfaction and
discharge of this Indenture, or for any other reason, pay or cause to be paid to
the Trustee all sums held in trust by the Company or any paying agent hereunder
as required by this Section 4.04, such sums to be held by the Trustee upon the
trusts herein contained and upon such payment by the Company or any paying agent
to the Trustee, the Company or such paying agent shall be released from all
further liability with respect to such sums.

          (d)     Anything in this Section 4.04 to the contrary notwithstanding,
the agreement to hold sums in trust as provided in this Section 4.04 is subject
to Sections 12.03 and 12.04.

          The Trustee shall not be responsible for the actions of any other
paying agents (including the Company if acting as the paying agent) and shall
have no control of any funds held by such other paying agents.

          SECTION 4.05.   RULE 144A INFORMATION REQUIREMENT. Within the period
prior to the expiration of the holding period applicable to sales thereof under
Rule 144(k) under the

                                       28


Securities Act (or any successor provision), the Company covenants and agrees
that it shall, during any period in which it is not subject to Section 13 or
15(d) under the Exchange Act, make available to any holder or beneficial holder
of Notes or any Common Stock issued upon conversion thereof which continue to be
Restricted Securities in connection with any sale thereof and any prospective
purchaser of Notes or such Common Stock designated by such holder or beneficial
holder, the information required pursuant to Rule 144A(d)(4) under the
Securities Act upon the request of any holder or beneficial holder of the Notes
or such Common Stock and it will take such further action as any holder or
beneficial holder of such Notes or such Common Stock may reasonably request, all
to the extent required from time to time to enable such holder or beneficial
holder to sell its Notes or Common Stock without registration under the
Securities Act within the limitation of the exemption provided by Rule 144A, as
such Rule may be amended from time to time. Upon the request of any holder or
any beneficial holder of the Notes or such Common Stock, the Company will
deliver to such holder a written statement as to whether it has complied with
such requirements.

          SECTION 4.06.   COMPLIANCE CERTIFICATE. The Company shall deliver to
the Trustee, within one hundred twenty (120) days after the end of each fiscal
year of the Company, an Officers' Certificate stating whether or not to the best
knowledge of the signers thereof the Company is in default in the performance
and observance of any of the terms, provisions and conditions of this Indenture
(without regard to any period of grace or requirement of notice provided
hereunder) and, if the Company shall be in default, specifying all such defaults
and the nature and the status thereof of which the signer may have knowledge.

          The Company will deliver to the Trustee, as soon as possible and in
any event within 30 days after the Company becomes aware of any Event of Default
or an event which, with notice or the lapse of time or both, would constitute an
Event of Default, an Officers' Certificate setting forth the details of such
default or Event of Default and the action that the Company has taken, is taking
or proposes to take with respect thereto.

          Any notice required to be given under this Section 4.06 shall be
delivered to a Responsible Officer of the Trustee at its Corporate Trust Office.

          SECTION 4.07.   LIQUIDATED DAMAGES NOTICE. In the event that the
Company is required to pay Liquidated Damages to holders of Notes pursuant to
the Registration Rights Agreement, the Company will provide written notice
("LIQUIDATED DAMAGES NOTICE") to the Trustee of its obligation to pay Liquidated
Damages no later than fifteen (15) days prior to the proposed payment date for
the Liquidated Damages, and the Liquidated Damages Notice shall set forth the
amount of Liquidated Damages to be paid by the Company on such payment date. The
Trustee shall not at any time be under any duty or responsibility to any holder
of Notes to determine the Liquidated Damages, or with respect to the nature,
extent or calculation of the amount of Liquidated Damages when made, or with
respect to the method employed in such calculation of the Liquidated Damages.

                                    ARTICLE V
          NOTEHOLDERS' LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE

                                       29


          SECTION 5.01.   COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF
NOTEHOLDERS. The Company covenants and agrees that it will furnish or cause to
be furnished to the Trustee, semiannually, not more than fifteen (15) days after
each January 1 and July 1 in each year beginning with January 1, 2004, and at
such other times as the Trustee may request in writing, within thirty (30) days
after receipt by the Company of any such request (or such lesser time as the
Trustee may reasonably request in order to enable it to timely provide any
notice to be provided by it hereunder), a list in such form as the Trustee may
reasonably require of the names and addresses of the registered holders of Notes
as of a date not more than fifteen (15) days (or such other date as the Trustee
may reasonably request in order to so provide any such notices) prior to the
time such information is furnished, except that no such list need be furnished
by the Company to the Trustee so long as the Trustee is acting as the sole Note
registrar.

          SECTION 5.02.   PRESERVATION AND DISCLOSURE OF LISTS. (a) The Trustee
shall preserve, in as current a form as is reasonably practicable, all
information as to the names and addresses of the holders of Notes contained in
the most recent list furnished to it as provided in Section 5.01 or maintained
by the Trustee in its capacity as Note registrar or co-registrar in respect of
the Notes, if so acting. The Trustee may destroy any list furnished to it as
provided in Section 5.01 upon receipt of a new list so furnished.

          (b)     The rights of Noteholders to communicate with other holders of
Notes with respect to their rights under this Indenture or under the Notes, and
the corresponding rights and duties of the Trustee, shall be as provided by the
Trust Indenture Act.

          (c)     Every Noteholder, by receiving and holding the same, agrees
with the Company and the Trustee that neither the Company nor the Trustee nor
any agent of either of them shall be held accountable by reason of any
disclosure of information as to names and addresses of holders of Notes made
pursuant to the Trust Indenture Act.

          SECTION 5.03.   REPORTS BY TRUSTEE. (a) Within sixty (60) days after
December 30 of each year commencing with the year 2003, the Trustee shall
transmit to holders of Notes such reports dated as of December 30 of the year in
which such reports are made concerning the Trustee and its actions under this
Indenture as shall be required, if any, pursuant to the Trust Indenture Act at
the times and in the manner provided pursuant thereto.

          (b)     A copy of such report shall, at the time of such transmission
to holders of Notes, be filed by the Trustee with each stock exchange and
automated quotation system upon which the Notes are listed and with the Company.
The Company will promptly notify the Trustee in writing when the Notes are
listed on any stock exchange or automated quotation system or delisted
therefrom.

          SECTION 5.04.   REPORTS BY COMPANY. The Company shall file with the
Trustee and transmit to holders of the Notes, such information, documents and
other reports as it is required to file with the Commission pursuant to Section
13 or 15(d) of the Exchange Act within 15 days after the same is so required to
be filed with the Commission. Delivery of such reports, information and
documents to the Trustee is for informational purposes only and the Trustee's
receipt of such shall not constitute constructive notice of any information
contained therein or determinable from information contained therein, including
the Company's compliance with any

                                       30


of its covenants hereunder (as to which the Trustee is entitled to rely
exclusively on Officers' Certificates).

                                   ARTICLE VI
         REMEDIES OF THE TRUSTEE AND NOTEHOLDERS ON AN EVENT OF DEFAULT

          SECTION 6.01.   EVENTS OF DEFAULT; ACCELERATION. In case one or more
of the following Events of Default (whatever the reason for such Event of
Default and whether it shall be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body) shall
have occurred and be continuing:

          (a)     default in the payment of any installment of interest or
     Liquidated Damages with respect to any of the Notes as and when the same
     shall become due and payable, and continuance of such default for a period
     of thirty (30) days; or

          (b)     default in the payment of the principal of any of the Notes as
     and when the same shall become due and payable either at maturity or in
     connection with any redemption or repurchase, in each case pursuant to
     Article 3, by acceleration or otherwise; or

          (c)     failure on the part of the Company duly to observe or perform
     any other of the covenants or agreements on the part of the Company in the
     Notes or in this Indenture (other than a covenant or agreement a default in
     whose performance or whose breach is elsewhere in this Section 6.01
     specifically dealt with) continued for a period of sixty (60) days after
     the date on which written notice of such failure, requiring the Company to
     remedy the same, shall have been given to the Company by the Trustee, or
     the Company and a Responsible Officer of the Trustee by the holders of at
     least twenty-five percent (25%) in aggregate principal amount of the Notes
     at the time outstanding determined in accordance with Section 8.04; or

          (d)     the entry by a court having jurisdiction in the premises of
     (A) a decree or order for relief in respect of the Company in an
     involuntary case or proceeding under any applicable Federal or State
     bankruptcy, insolvency, reorganization or other similar law or (B) a decree
     or order adjudging the Company a bankrupt or insolvent, or approving as
     properly filed a petition seeking reorganization, arrangement, adjustment
     or composition of or in respect of the Company under any applicable Federal
     or State law, or appointing a custodian, receiver, liquidator, assignee,
     trustee, sequestrator or other similar official of the Company or of any
     substantial part of the property of the Company, or ordering the winding up
     or liquidation of the affairs of the Company, and the continuance of any
     such decree or order for relief or any such other decree or order unstayed
     and in effect for a period of 60 consecutive days; or

          (e)     the commencement by the Company of a voluntary case or
     proceeding under any applicable Federal or State bankruptcy, insolvency,
     reorganization or other similar law or of any other case or proceeding to
     be adjudicated a bankrupt or insolvent, or the consent by the Company to
     the entry of a decree or order for relief in respect of the

                                       31


     Company in an involuntary case or proceeding under any applicable Federal
     or State bankruptcy, insolvency, reorganization or other similar law or to
     the commencement of any bankruptcy or insolvency case or proceeding against
     the Company or the filing by the Company of a petition or answer or consent
     seeking reorganization or relief under any applicable Federal or State law,
     or the consent by the Company to the filing of such a petition or to the
     appointment of or taking possession by a custodian, receiver, liquidator,
     assignee, trustee, sequestrator or similar official of the Company or of
     any substantial part of the property of the Company, or the making by the
     Company of an assignment for the benefit of creditors, or the admission by
     the Company in writing of its inability to pay its debts generally as they
     become due, or the taking of corporate action by the Company in furtherance
     of any such action;

then, and in each and every such case (other than an Event of Default specified
in 6.01(d) or 6.01(e) that occurs with respect to the Company), unless the
principal of all of the Notes shall have already become due and payable, either
the Trustee or the holders of not less than twenty-five percent (25%) in
aggregate principal amount of the Notes then outstanding hereunder determined in
accordance with Section 8.04, by notice in writing to the Company (and to the
Trustee if given by Noteholders) specifying the respective Event of Default and
stating that it is a "notice of acceleration", may declare the principal of all
the Notes and the interest accrued thereon to be due and payable immediately,
and upon receipt of such notice the same shall become and shall be immediately
due and payable. If an Event of Default specified in 6.01(d) or 6.01(e)
involving the Company occurs, the principal of all the Notes and the interest
accrued thereon shall be immediately and automatically due and payable without
necessity of further action. This provision, however, is subject to the
conditions that if, at any time after the principal of the Notes shall have been
so declared due and payable, and before any judgment or decree for the payment
of the monies due shall have been obtained or entered as hereinafter provided,
the Company shall pay or shall deposit with the Trustee a sum sufficient to pay
all matured installments of interest upon all Notes and the principal of any and
all Notes which shall have become due otherwise than by acceleration (with
interest on overdue installments of interest (to the extent that payment of such
interest is enforceable under applicable law) and on such principal at the rate
borne by the Notes plus 1%, to the date of such payment or deposit) and amounts
due to the Trustee pursuant to Section 7.07, and if any and all defaults under
this Indenture, other than the nonpayment of principal of, and accrued interest
on, Notes which shall have become due by acceleration, shall have been cured or
waived pursuant to Section 6.07, then and in every such case the holders of a
majority in aggregate principal amount of the Notes then outstanding, by written
notice to the Company and to the Trustee, may waive all defaults or Events of
Default and rescind and annul such declaration and its consequences; but no such
waiver or rescission and annulment shall extend to or shall affect any
subsequent default or Event of Default, or shall impair any right consequent
thereon. The Company shall notify in writing a Responsible Officer of the
Trustee, promptly upon becoming aware thereof, of any Event of Default.

          In case the Trustee shall have proceeded to enforce any right under
this Indenture and such proceedings shall have been discontinued or abandoned
because of such waiver or rescission and annulment or for any other reason or
shall have been determined adversely to the Trustee, then and in every such case
the Company, the holders of Notes, and the Trustee shall be restored
respectively to their several positions and rights hereunder, and all rights,
remedies and

                                       32


powers of the Company, the holders of Notes, and the Trustee shall continue as
though no such proceeding had been taken.

          SECTION 6.02.   PAYMENTS OF NOTES ON DEFAULT; SUIT THEREFOR. The
Company covenants that (a) in case default shall be made in the payment of any
installment of interest upon any of the Notes as and when the same shall become
due and payable, and such default shall have continued for a period of thirty
(30) days, or (b) in case default shall be made in the payment of the principal
of any of the Notes as and when the same shall have become due and payable,
whether at maturity of the Notes or in connection with any redemption or
repurchase, by or under this Indenture or otherwise, then, upon demand of the
Trustee, the Company will pay to the Trustee, for the benefit of the holders of
the Notes, the whole amount that then shall have become due and payable on all
such Notes for principal or interest, as the case may be, with interest upon the
overdue principal and (to the extent that payment of such interest is
enforceable under applicable law) upon the overdue installments of interest at
the rate borne by the Notes, plus 1% and, in addition thereto, such further
amount as shall be sufficient to cover the costs and expenses of collection,
including reasonable compensation to the Trustee, its agents, attorneys and
counsel, and all other amounts due the Trustee under Section 7.07. Until such
demand by the Trustee, the Company may pay the principal of, and interest on,
the Notes to the registered holders, whether or not the Notes are overdue.

          In case the Company shall fail forthwith to pay such amounts upon such
demand, the Trustee, in its own name and as trustee of an express trust, shall
be entitled and empowered to institute any actions or proceedings at law or in
equity for the collection of the sums so due and unpaid, and may prosecute any
such action or proceeding to judgment or final decree, and may enforce any such
judgment or final decree against the Company or any other obligor on the Notes
and collect in the manner provided by law out of the property of the Company or
any other obligor on the Notes wherever situated the monies adjudged or decreed
to be payable.

          In case there shall be pending proceedings for the bankruptcy or for
the reorganization of the Company or any other obligor on the Notes under Title
11 of the United States Code, or any other applicable law, or in case a
receiver, assignee or trustee in bankruptcy or reorganization, liquidator,
sequestrator or similar official shall have been appointed for or taken
possession of the Company or such other obligor, the property of the Company or
such other obligor, or in the case of any other judicial proceedings relative to
the Company or such other obligor upon the Notes, or to the creditors or
property of the Company or such other obligor, the Trustee, irrespective of
whether the principal of the Notes shall then be due and payable as therein
expressed or by declaration or otherwise and irrespective of whether the Trustee
shall have made any demand pursuant to the provisions of this Section 6.02,
shall be entitled and empowered, by intervention in such proceedings or
otherwise, to file and prove a claim or claims for the whole amount of principal
and interest owing and unpaid in respect of the Notes, and, in case of any
judicial proceedings, to file such proofs of claim and other papers or documents
as may be necessary or advisable in order to have the claims of the Trustee and
of the Noteholders allowed in such judicial proceedings relative to the Company
or any other obligor on the Notes, its or their creditors, or its or their
property, and to collect and receive any monies or other property payable or
deliverable on any such claims, and to distribute the same after the deduction
of any amounts due the Trustee under Section 7.07, and any receiver, assignee or
trustee in bankruptcy or reorganization, liquidator, custodian or similar
official is hereby

                                       33


authorized by each of the Noteholders to make such payments to the Trustee, and,
in the event that the Trustee shall consent to the making of such payments
directly to the Noteholders, to pay to the Trustee any amount due it for
reasonable compensation, expenses, advances and disbursements, including counsel
fees and expenses incurred by it up to the date of such distribution.

          All rights of action and of asserting claims under this Indenture, or
under any of the Notes, may be enforced by the Trustee without the possession of
any of the Notes, or the production thereof at any trial or other proceeding
relative thereto, and any such suit or proceeding instituted by the Trustee
shall be brought in its own name as trustee of an express trust, and any
recovery of judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, be for the ratable benefit of the holders of the Notes.

          In any proceedings brought by the Trustee (and in any proceedings
involving the interpretation of any provision of this Indenture to which the
Trustee shall be a party) the Trustee shall be held to represent all the holders
of the Notes, and it shall not be necessary to make any holders of the Notes
parties to any such proceedings.

          SECTION 6.03.   APPLICATION OF MONIES COLLECTED BY TRUSTEE. Any monies
collected by the Trustee pursuant to this Article 6 shall be applied in the
order following, at the date or dates fixed by the Trustee for the distribution
of such monies, upon presentation of the several Notes, and stamping thereon the
payment, if only partially paid, and upon surrender thereof, if fully paid:

                  FIRST: To the payment of all amounts due the Trustee under
          Section 7.07;

                  SECOND: In case the principal of the outstanding Notes shall
          not have become due and be unpaid, to the payment of interest on the
          Notes in default in the order of the maturity of the installments of
          such interest, with interest (to the extent that such interest has
          been collected by the Trustee) upon the overdue installments of
          interest at the rate borne by the Notes plus 1%, such payments to be
          made ratably to the Persons entitled thereto;

                  THIRD: In case the principal of the outstanding Notes shall
          have become due, by declaration or otherwise, and be unpaid to the
          payment of the whole amount then owing and unpaid upon the Notes for
          principal and interest, with interest on the overdue principal and (to
          the extent that such interest has been collected by the Trustee) upon
          overdue installments of interest at the rate borne by the Notes plus
          1% to the Persons entitled thereto, and in case such monies shall be
          insufficient to pay in full the whole amounts so due and unpaid upon
          the Notes, then to the payment of such principal and interest without
          preference or priority of principal, over interest, or of interest
          over principal, or of any installment of interest over any other
          installment of interest, or of any Note over any other Note, ratably
          to the aggregate of such principal and accrued and unpaid interest;
          and

                                       34


                  FOURTH: To the payment of the remainder, if any, to the
          Company or any other Person lawfully entitled thereto.

          SECTION 6.04.   PROCEEDINGS BY NOTEHOLDER. No holder of any Note
shall have any right by virtue of or by reference to any provision of this
Indenture to institute any suit, action or proceeding in equity or at law upon
or under or with respect to this Indenture, or for the appointment of a
receiver, trustee, liquidator, custodian or other similar official, or for any
other remedy hereunder, unless such holder previously shall have given to the
Trustee written notice of an Event of Default and of the continuance thereof, as
hereinbefore provided, and unless also the holders of not less than twenty-five
percent (25%) in aggregate principal amount of the Notes then outstanding shall
have made written request upon the Trustee to institute such action, suit or
proceeding in its own name as Trustee hereunder and shall have offered to the
Trustee such reasonable indemnity as it may require against the costs, expenses
and liabilities to be incurred therein or thereby, and the Trustee for sixty
(60) days after its receipt of such notice, request and offer of indemnity,
shall have neglected or refused to institute any such action, suit or proceeding
and no direction inconsistent with such written request shall have been given to
the Trustee pursuant to Section 6.07; it being understood and intended, and
being expressly covenanted by the taker and holder of every Note with every
other taker and holder and the Trustee, that no one or more holders of Notes
shall have any right in any manner whatever by virtue of or by reference to any
provision of this Indenture to affect, disturb or prejudice the rights of any
other holder of Notes, or to obtain or seek to obtain priority over or
preference to any other such holder, or to enforce any right under this
Indenture, except in the manner herein provided and for the equal, ratable and
common benefit of all holders of Notes (except as otherwise provided herein).
For the protection and enforcement of this Section 6.04, each and every
Noteholder and the Trustee shall be entitled to such relief as can be given
either at law or in equity.

          Notwithstanding any other provision of this Indenture and any
provision of any Note, the right of any holder of any Note to receive payment of
the principal of (including the redemption or repurchase price upon redemption
or repurchase pursuant to Article 3), and accrued interest on such Note, on or
after the respective due dates expressed in such Note or in the case of a
redemption or repurchase, on the redemption date or Repurchase Date, as the case
may be, or to institute suit for the enforcement of any such payment on or after
such respective dates against the Company shall not be impaired or affected
without the consent of such holder.

          Anything in this Indenture or the Notes to the contrary
notwithstanding, the holder of any Note, without the consent of either the
Trustee or the holder of any other Note, in its own behalf and for its own
benefit, may enforce, and may institute and maintain any proceeding suitable to
enforce, its rights of conversion as provided herein.

          SECTION 6.05.   PROCEEDINGS BY TRUSTEE. In case of an Event of
Default, the Trustee may, in its discretion, but shall not be required to,
proceed to protect and enforce the rights vested in it by this Indenture by such
appropriate judicial proceedings as are necessary to protect and enforce any of
such rights, either by suit in equity or by action at law or by proceeding in
bankruptcy or otherwise, whether for the specific enforcement of any covenant or
agreement contained in this Indenture or in aid of the exercise of any power
granted in this Indenture, or to enforce any other legal or equitable right
vested in the Trustee by this Indenture or by law.

                                       35


          SECTION 6.06.   REMEDIES CUMULATIVE AND CONTINUING. Except as provided
in Section 2.06, all powers and remedies given by this Article 6 to the Trustee
or to the Noteholders shall, to the extent permitted by law, be deemed
cumulative and not exclusive of any thereof or of any other powers and remedies
available to the Trustee or the holders of the Notes, by judicial proceedings or
otherwise, to enforce the performance or observance of the covenants and
agreements contained in this Indenture, and no delay or omission of the Trustee
or of any holder of any of the Notes to exercise any right or power accruing
upon any default or Event of Default occurring and continuing as aforesaid shall
impair any such right or power, or shall be construed to be a waiver of any such
default or any acquiescence therein, and, subject to the provisions of Section
6.04, every power and remedy given by this Article 6 or by law to the Trustee or
to the Noteholders may be exercised from time to time, and as often as shall be
deemed expedient, by the Trustee or by the Noteholders.

          SECTION 6.07.   DIRECTION OF PROCEEDINGS AND WAIVER OF DEFAULTS BY
MAJORITY OF NOTEHOLDERS. The holders of a majority in aggregate principal amount
of the Notes at the time outstanding determined in accordance with Section 8.04
shall have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on the Trustee; PROVIDED that (a) such direction shall not be in
conflict with any rule of law or with this Indenture, (b) the Trustee may take
any other action which is not inconsistent with such direction and (c) the
Trustee may decline to take any action that would benefit some Noteholder to the
detriment of other Noteholders or of the Trustee. The holders of a majority in
aggregate principal amount of the Notes at the time outstanding determined in
accordance with Section 8.04 may, on behalf of the holders of all of the Notes,
waive any past or existing default or Event of Default hereunder and its
consequences except (i) a past or existing default in the payment of interest
on, or the principal of, the Notes (including in connection with an offer to
purchase); PROVIDED however that holders of a majority in aggregate principal
amount of the then outstanding Notes may rescind an acceleration and its
consequences, including any related payment default that resulted from such
acceleration in accordance with Section 6.01, (ii) a failure by the Company to
convert any Notes into Common Stock, (iii) a default in the payment of the
redemption price pursuant to Article 3, (iv) a default in the payment of the
purchase price pursuant to Article 3 or (v) a default in respect of a covenant
or provisions hereof which under Article 10 cannot be modified or amended
without the consent of the holders of each or all Notes then outstanding or
affected thereby. Upon any such waiver, the Company, the Trustee and the holders
of the Notes shall be restored to their former positions and rights hereunder;
but no such waiver shall extend to any subsequent or other default or Event of
Default or impair any right consequent thereon. Whenever any default or Event of
Default hereunder shall have been cured or waived as permitted by this Section
6.07, said default or Event of Default shall for all purposes of the Notes and
this Indenture be deemed to have been cured and to be not continuing for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or Event of Default or impair any right consequent thereon.

          SECTION 6.08.   UNDERTAKING TO PAY COSTS. All parties to this
Indenture agree, and each holder of any Note by his acceptance thereof shall be
deemed to have agreed, that any court may, in its discretion, require, in any
suit for the enforcement of any right or remedy under this Indenture, or in any
suit against the Trustee for any action taken or omitted by it as Trustee, the
filing by any party litigant in such suit of an undertaking to pay the costs of
such suit and that

                                       36


such court may in its discretion assess reasonable costs, including reasonable
attorneys' fees and expenses, against any party litigant in such suit, having
due regard to the merits and good faith of the claims or defenses made by such
party litigant; PROVIDED that the provisions of this Section 6.08 (to the extent
permitted by law) shall not apply to any suit instituted by the Trustee, to any
suit instituted by any Noteholder, or group of Noteholders, holding in the
aggregate more than 10% in principal amount of the Notes at the time outstanding
determined in accordance with Section 8.04, or to any suit instituted by any
Noteholder for the enforcement of the payment of the principal of, or interest
on, any Note on or after the due date expressed in such Note or to any suit for
the enforcement of the right to convert any Note in accordance with the
provisions of Article 14.

                                   ARTICLE VII
                                   THE TRUSTEE

          SECTION 7.01.   CERTAIN DUTIES AND RESPONSIBILITIES. The duties and
responsibilities of the Trustee shall be as provided by the Trust Indenture Act
(as if such Act applied). Notwithstanding the foregoing, no provision of this
Indenture shall require the Trustee to expend or risk its own funds or otherwise
incur any financial liability in the performance of any of its duties hereunder,
or in the exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured to it. Whether or not therein
expressly so provided, every provision of this Indenture relating to the conduct
or affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section 7.01.

          SECTION 7.02.   NOTICE OF DEFAULTS. Subject to the provisions of
Section 7.03(i), the Trustee shall give the Noteholders notice of any default
hereunder as and to the extent provided by the Trust Indenture Act (as if such
Act applied); PROVIDED, HOWEVER, that except in the case of default in the
payment of the principal of, or interest on, any of the Notes, the Trustee shall
be protected in withholding such notice if and so long as a trust committee of
directors and/or Responsible Officers of the Trustee in good faith determines
that the withholding of such notice is in the interests of the Noteholders. For
the purpose of this Section 7.02, the term "default" means any event which is,
or after notice or lapse of time or both would become, an Event of Default.

          SECTION 7.03.   CERTAIN RIGHTS OF THE TRUSTEE. Subject to the
provisions of Section 7.01:

          (a)     the Trustee may conclusively rely and shall be protected in
     acting upon any resolution, certificate, statement, instrument, opinion,
     report, notice, request, consent, order, bond, debenture, note, other
     evidence of indebtedness or other paper or document believed by it in good
     faith to be genuine and to have been signed or presented by the proper
     party or parties;

          (b)     any request or direction of the Company mentioned herein shall
     be sufficiently evidenced by an Officers' Certificate (unless other
     evidence in respect thereof be herein specifically prescribed); and any
     resolution of the Board of Directors

                                       37


     may be evidenced to the Trustee by a copy thereof certified by the
     Secretary or an Assistant Secretary of the Company;

          (c)     whenever in the administration of this Indenture the Trustee
     shall deem it desirable that a matter be proved or established prior to
     taking, suffering or omitting any action hereunder, the Trustee (unless
     other evidence be herein specifically prescribed) may, in the absence of
     bad faith on its part, rely upon an Officers' Certificate;

          (d)     the Trustee may consult with counsel of its selection and any
     advice or Opinion of Counsel shall be full and complete authorization and
     protection in respect of any action taken, suffered or omitted by it
     hereunder in good faith and in reliance thereon;

          (e)     the Trustee shall be under no obligation to exercise any of
     the rights or powers vested in it by this Indenture at the request or
     direction of any of the Noteholders pursuant to the provisions of this
     Indenture, unless such Noteholders shall have offered to the Trustee
     security or indemnity reasonably satisfactory to it against the costs,
     expenses (including reasonable attorney's fees and expenses) and
     liabilities which might be incurred by it in compliance with such request
     or direction;

          (f)     the Trustee shall not be bound to make any investigation into
     the facts or matters stated in any resolution, certificate, statement,
     instrument, opinion, report, notice, request, direction, consent, order,
     bond, debenture note, other evidence of indebtedness or other paper or
     document, but the Trustee, in its discretion, may, but shall not be
     required to, make such further inquiry or investigation into such facts or
     matters as it may see fit, and, if the Trustee shall determine to make such
     further inquiry or investigation, it shall be entitled to examine the
     books, records and premises of the Company, personally or by agent or
     attorney;

          (g)     the Trustee may execute any of the trusts or powers hereunder
     or perform any duties hereunder either directly or by or through agents or
     attorneys and the Trustee shall not be responsible for any misconduct or
     negligence on the part of any agent or attorney appointed by it with due
     care hereunder;

          (h)     the Trustee shall not be liable for any action taken,
     suffered, or omitted to be taken by it in good faith and reasonably
     believed by it to be authorized or within the discretion or rights or
     powers conferred upon it by this Indenture;

          (i)     the Trustee shall not be deemed to have knowledge of any
     default or Event of Default unless a Responsible Officer of the Trustee has
     actual knowledge thereof or unless written notice of any event which is in
     fact such a default is received by the Trustee at the Corporate Trust
     Office of the Trustee, and such notice references the Notes and this
     Indenture; and

          (j)     the rights, privileges, protections, immunities and benefits
     given to the Trustee, including, without limitation, its right to be
     indemnified, are extended to, and shall be enforceable by, the Trustee in
     each of its capacities hereunder, and to each agent, custodian and other
     Person employed to act hereunder.

                                       38


          SECTION 7.04.   NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF NOTES. The
recitals contained herein and in the Notes, except in the Trustee's certificate
of authentication, shall be taken as the statements of the Company and the
Trustee assumes no responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Indenture, the Notes.
The Trustee shall not be accountable for the use or application by the Company
of any Notes or the proceeds thereof.

          SECTION 7.05.   MAY HOLD NOTES. The Trustee, any authentication agent,
any paying agent, any conversion agent, any Note registrar or any other agent of
the Company or the Trustee, in its individual or any other capacity, may become
the owner or pledgee of Notes, and, subject to Sections 7.08 and 7.13, may
otherwise deal with the Company and any other obligor upon the Notes with the
same rights it would have if it were not Trustee, authentication agent, paying
agent, conversion agent or Note registrar.

          SECTION 7.06.   MONIES TO BE HELD IN TRUST. Money held by the Trustee
in trust hereunder need not be segregated from other funds except to the extent
required by law. The Trustee shall be under no liability for interest on any
money received by it hereunder except as otherwise agreed in writing with the
Company.

          SECTION 7.07.   COMPENSATION AND REIMBURSEMENT. The Company agrees (1)
to pay to the Trustee from time to time such compensation as shall be agreed in
writing between the Company and the Trustee for all services rendered by it
hereunder (which compensation shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust); (2) except as
otherwise expressly provided herein, to reimburse the Trustee upon its request
for all reasonable expenses, disbursements and advances incurred or made by the
Trustee in accordance with any provision of this Indenture (including the
reasonable compensation and the expenses and disbursements of its agents and
counsel), except any such expense, disbursement or advance as may be
attributable to its gross negligence or bad faith; and (3) to indemnify each of
the Trustee and any predecessor Trustee for, and to hold it harmless against,
any and all loss, liability, damage, claim or expense, including taxes (other
than taxes based on the income of the Trustee) incurred without gross negligence
or bad faith on its part, arising out of or in connection with the acceptance or
administration of this trust, including the costs and expenses, including
reasonable attorney's fees and expenses, of defending itself against any claim
(whether asserted by the Company, a Noteholder or any other Person) or liability
in connection with the exercise or performance of any of its powers or duties
hereunder.

          The Trustee shall have a lien prior to the Notes as to all property
and funds held by it hereunder for any amount owing it or any predecessor
Trustee pursuant to this Section 7.07, except with respect to funds held in
trust for the benefit of the holders of particular Notes.

          When the Trustee incurs expenses or renders services in connection
with an Event of Default specified in Section 6.01(d) or 6.01(e), the expenses
(including the reasonable charges and expenses of its counsel) and the
compensation for the services are intended to constitute expenses of
administration under any applicable Federal or State bankruptcy, insolvency or
other similar law.

                                       39


          SECTION 7.08.   DISQUALIFICATION; CONFLICTING INTERESTS. If the
Trustee has or shall acquire a conflicting interest within the meaning of the
Trust Indenture Act, the Trustee shall either eliminate such interest or resign,
to the extent and in the manner provided by, and subject to the provisions of
and this Indenture.

          SECTION 7.09.   CORPORATE TRUSTEE REQUIRED; ELIGIBILITY. There shall
at all times be a Trustee hereunder which shall be a Person that is eligible
pursuant to the Trust Indenture Act to act as such and has a combined capital
and surplus of at least $50,000,000 and has an office located in the Borough of
Manhattan, The City of New York. If such Person publishes reports of condition
at least annually, pursuant to law or to the requirements of its supervising or
examining authority, then for the purposes of this Section 7.09, the combined
capital and surplus of such Person shall be deemed to be its combined capital
and surplus as set forth in its most recent report of condition so published. If
at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section 7.09, it shall resign immediately in the manner and
with the effect hereinafter specified in this Article 7.

          SECTION 7.10.   RESIGNATION AND REMOVAL OF TRUSTEE; APPOINTMENT OF
SUCCESSOR. (a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article 7 shall become effective until the
acceptance of appointment by the successor Trustee under Section 7.11.

          (b)     The Trustee may resign at any time by giving written notice
thereof to the Company. If an instrument of acceptance by a successor Trustee
shall not have been delivered to the Trustee within 30 days after the giving of
such notice of resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor Trustee.

          (c)     The Trustee may be removed at any time by act of the holders
of a majority in principal amount of the outstanding Notes, delivered to the
Trustee and the Company. If an instrument of acceptance by a successor Trustee
shall not have been delivered to the Trustee within 30 days after the giving of
such notice of removal, the Trustee being removed may petition any court of
competent jurisdiction for the appointment of a successor.

          (d)     If at any time:

                  (i)     the Trustee shall fail to comply with Section 7.08
          after written request therefor by the Company or by any Noteholder who
          has been a bona fide holder of a Note for at least six months, or

                  (ii)    the Trustee shall cease to be eligible under Section
          7.09 and shall fail to resign after written request therefor by the
          Company or by any such Noteholder, or

                  (iii)   the Trustee shall become incapable of acting or shall
          be adjudged a bankrupt or insolvent or a receiver of the Trustee or of
          its property shall be appointed or any public officer shall take
          charge or control of the Trustee or of its property or affairs for the
          purpose of rehabilitation, conservation or liquidation,

                                       40


then, in any such case, the Company may remove the Trustee and appoint a
successor trustee by written instrument, in duplicate, executed by order of the
Board of Directors, one copy of which instrument shall be delivered to the
Trustee so removed and one copy to the successor trustee, or, subject to the
provisions of Section 6.08, any Noteholder who has been a bona fide holder of a
Note or Notes for at least six (6) months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor trustee.

          (e)     If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, the
Company, by a resolution of the Board of Directors, shall promptly appoint a
successor Trustee. If, within one year after such resignation, removal or
incapability, or the occurrence of such vacancy, a successor Trustee shall be
appointed by act of the holders of a majority in principal amount of the
outstanding Notes delivered to the Company and the retiring Trustee, the
successor Trustee so appointed shall, forthwith upon its acceptance of such
appointment, become the successor Trustee and supersede the successor Trustee
appointed by the Company. If no successor Trustee shall have been so appointed
by the Company or the holders and accepted appointment in the manner hereinafter
provided, any Noteholder who has been a bona fide holder of a Note for at least
six months may, on behalf of himself and all others similarly situated, petition
any court of competent jurisdiction for the appointment of a successor Trustee.

          (f)     The Company shall give notice of each resignation and each
removal of the Trustee and each appointment of a successor Trustee to all
holders in the manner provided in Section 15.03. Each notice shall include the
name of the successor Trustee and the address of its Corporate Trust Office.

          SECTION 7.11.   ACCEPTANCE OF APPOINTMENT OF SUCCESSOR. Every
successor Trustee appointed hereunder shall execute, acknowledge and deliver to
the Company and to the retiring Trustee an instrument accepting such
appointment, and thereupon the resignation or removal of the retiring Trustee
shall become effective and such successor Trustee, without any further act, deed
or conveyance, shall become vested with all the rights, powers, trusts and
duties of the retiring Trustee; but, on written request of the Company or the
successor Trustee, such retiring Trustee shall, upon payment of its charges,
execute and deliver an instrument transferring to such successor Trustee all the
rights, powers and trusts of the retiring Trustee and shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder. Upon request of any such successor Trustee, the
Company shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor Trustee all such rights, powers and
trusts.

          No successor trustee shall accept its appointment unless at the time
of such acceptance such successor Trustee shall be qualified and eligible under
this Article 7.

          Upon acceptance of appointment by a successor trustee as provided in
this Section 7.11, the Company (or the former trustee, at the written direction
of the Company) shall mail or cause to be mailed notice of the succession of
such trustee hereunder to the holders of Notes at their addresses as they shall
appear on the Note register. If the Company fails to mail such

                                       41


notice within ten (10) days after acceptance of appointment by the successor
trustee, the successor trustee shall cause such notice to be mailed at the
expense of the Company.

          SECTION 7.12.   MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO
BUSINESS. Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article 7,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Notes shall have been authenticated, but
not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
authentication and deliver the Notes so authenticated with the same effect as if
such successor Trustee had itself authenticated such Notes.

          SECTION 7.13.   PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY. If
and when the Trustee shall be or become a creditor of the Company or any other
obligor upon the Notes, the Trustee shall be subject to the provisions of the
Trust Indenture Act (as if such Act applied) regarding the collection of the
claims against the Company or any such other obligor.

                                  ARTICLE VIII
                                 THE NOTEHOLDERS

          SECTION 8.01.   ACTION BY NOTEHOLDERS. Whenever in this Indenture it
is provided that the holders of a specified percentage in aggregate principal
amount of the Notes may take any action (including the making of any demand or
request, the giving of any notice, consent or waiver or the taking of any other
action), the fact that at the time of taking any such action, the holders of
such specified percentage have joined therein may be evidenced (a) by any
instrument or any number of instruments of similar tenor executed by Noteholders
in person or by agent or proxy appointed in writing, or (b) by the record of the
holders of Notes voting in favor thereof at any meeting of Noteholders duly
called and held in accordance with the provisions of Article 9, or (c) by a
combination of such instrument or instruments and any such record of such a
meeting of Noteholders. Whenever the Company or the Trustee solicits the taking
of any action by the holders of the Notes, the Company or the Trustee may fix in
advance of such solicitation, a date as the record date for determining holders
entitled to take such action. The record date shall be not more than fifteen
(15) days prior to the date of commencement of initial solicitation of such
action without giving effect to any extension or amendment of such action or
solicitation.

          SECTION 8.02.   PROOF OF EXECUTION BY NOTEHOLDERS. Subject to the
provisions of Sections 7.03 and 9.05, proof of the execution of any instrument
by a Noteholder or its agent or proxy shall be sufficient if made in accordance
with such reasonable rules and regulations as may be prescribed by the Trustee
or in such manner as shall be satisfactory to the Trustee. The holding of Notes
shall be proved by the registry of such Notes or by a certificate of the Note
registrar.

          The record of any Noteholders' meeting shall be proved in the manner
provided in Section 9.06.

                                       42


          SECTION 8.03.   WHO ARE DEEMED ABSOLUTE OWNERS. The Company, the
Trustee, any authenticating agent, any paying agent, any conversion agent and
any Note registrar may deem the Person in whose name such Note shall be
registered upon the Note register to be, and may treat it as, the absolute owner
of such Note (whether or not such Note shall be overdue and notwithstanding any
notation of ownership or other writing thereon made by any Person other than the
Company or any Note registrar) for the purpose of receiving payment of or on
account of the principal of, and interest on, such Note, for conversion of such
Note and for all other purposes; and neither the Company nor the Trustee nor any
authenticating agent, any paying agent nor any conversion agent nor any Note
registrar shall be affected by any notice to the contrary. All such payments so
made to any holder for the time being, or upon his order, shall be valid, and,
to the extent of the sum or sums so paid, effectual to satisfy and discharge the
liability for monies payable upon any such Note.

          SECTION 8.04.   COMPANY-OWNED NOTES DISREGARDED. In determining
whether the holders of the requisite aggregate principal amount of Notes have
concurred in any direction, consent, waiver or other action under this
Indenture, Notes which are owned by the Company or any other obligor on the
Notes or any Affiliate of the Company or any other obligor on the Notes shall be
disregarded and deemed not to be outstanding for the purpose of any such
determination; PROVIDED that for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, consent, waiver or other
action, only Notes which a Responsible Officer knows are so owned shall be so
disregarded. Notes so owned which have been pledged in good faith may be
regarded as outstanding for the purposes of this Section 8.04 if the pledgee
shall establish to the satisfaction of the Trustee the pledgee's right to vote
such Notes and that the pledgee is not the Company, any other obligor on the
Notes or any Affiliate of the Company or any such other obligor. In the case of
a dispute as to such right, any good faith decision by the Trustee taken upon
the advice of counsel shall be full protection to the Trustee. Upon request of
the Trustee, the Company shall furnish to the Trustee promptly an Officers'
Certificate listing and identifying all Notes, if any, known by the Company to
be owned or held by or for the account of any of the above described Persons,
and, subject to Section 7.03, the Trustee shall be entitled to accept such
Officers' Certificate as conclusive evidence of the facts therein set forth and
of the fact that all Notes not listed therein are outstanding for the purpose of
any such determination.

          SECTION 8.05.   REVOCATION OF CONSENTS, FUTURE HOLDERS BOUND. At any
time prior to (but not after) the evidencing to the Trustee, as provided in
Section 8.01, of the taking of any action by the holders of the percentage in
aggregate principal amount of the Notes specified in this Indenture in
connection with such action, any holder of a Note which is shown by the evidence
to be included in the Notes the holders of which have consented to such action
may, by filing written notice with the Trustee at its Corporate Trust Office and
upon proof of holding as provided in Section 8.02, revoke such action so far as
concerns such Note. Except as aforesaid, any such action taken by the holder of
any Note shall be a continuing action and conclusive and binding upon such
holder and upon all future holders and owners of such Note and of any Notes
issued in exchange or substitution therefor, irrespective of whether any
notation in regard thereto is made upon such Note or any Note issued in exchange
or substitution therefor. An amendment, supplement or waiver becomes effective
in accordance with its terms and thereafter binds every holder.

                                       43


                                   ARTICLE IX
                             MEETINGS OF NOTEHOLDERS

          SECTION 9.01.   PURPOSE OF MEETINGS. A meeting of Noteholders may be
called at any time and from time to time pursuant to the provisions of this
Article 9 for any of the following purposes:

                  (1)     to give any notice to the Company or to the Trustee or
          to give any directions to the Trustee permitted under this Indenture,
          or to consent to the waiving of any default or Event of Default
          hereunder and its consequences, or to take any other action authorized
          to be taken by Noteholders pursuant to any of the provisions of
          Article 6;

                  (2)     to remove the Trustee and nominate a successor trustee
          pursuant to the provisions of Article 7;

                  (3)     to consent to the execution of an indenture or
          indentures supplemental hereto pursuant to the provisions of Section
          10.02; or

                  (4)     to take any other action authorized to be taken by or
          on behalf of the holders of any specified aggregate principal amount
          of the Notes under any other provision of this Indenture or under
          applicable law.

          SECTION 9.02.   CALL OF MEETINGS BY TRUSTEE. The Trustee may at any
time call a meeting of Noteholders to take any action specified in Section 9.01,
to be held at such time and at such place as the Trustee shall determine. Notice
of every meeting of the Noteholders, setting forth the time and the place of
such meeting and in general terms the action proposed to be taken at such
meeting and the establishment of any record date pursuant to Section 8.01, shall
be mailed to holders of Notes at their addresses as they shall appear on the
Note register. Such notice shall also be mailed to the Company. Such notices
shall be mailed not less than twenty (20) nor more than ninety (90) days prior
to the date fixed for the meeting.

          Any meeting of Noteholders shall be valid without notice if the
holders of all Notes then outstanding are present in person or by proxy or if
notice is waived before or after the meeting by the holders of all Notes
outstanding, and if the Company and the Trustee are either present by duly
authorized representatives or have, before or after the meeting, waived notice.

          SECTION 9.03.   CALL OF MEETINGS BY COMPANY OR NOTEHOLDERS. In case at
any time the Company, pursuant to a resolution of its Board of Directors, or the
holders of at least twenty-five (25%) in aggregate principal amount of the Notes
then outstanding, shall have requested the Trustee to call a meeting of
Noteholders, by written request setting forth in reasonable detail the action
proposed to be taken at the meeting, and the Trustee shall not have mailed the
notice of such meeting within twenty (20) days after receipt of such request,
then the Company or such Noteholders may determine the time and the place for
such meeting and may call such meeting to take any action authorized in Section
9.01, by mailing notice thereof as provided in Section 9.02.

                                       44


          SECTION 9.04.   QUALIFICATIONS FOR VOTING. To be entitled to vote at
any meeting of Noteholders a person shall (a) be a holder of one or more Notes
on the record date pertaining to such meeting or (b) be a person appointed by an
instrument in writing as proxy by a holder of one or more Notes on the record
date pertaining to such meeting. The only persons who shall be entitled to be
present or to speak at any meeting of Noteholders shall be the persons entitled
to vote at such meeting and their counsel and any representatives of the Trustee
and its counsel and any representatives of the Company and its counsel.

          SECTION 9.05.   REGULATIONS. Notwithstanding any other provisions of
this Indenture, the Trustee may make such reasonable regulations as it may deem
advisable for any meeting of Noteholders, in regard to proof of the holding of
Notes and of the appointment of proxies, and in regard to the appointment and
duties of inspectors of votes, the submission and examination of proxies,
certificates and other evidence of the right to vote, and such other matters
concerning the conduct of the meeting as it shall think fit.

          The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Noteholders as provided in Section 9.03, in which case the Company
or the Noteholders calling the meeting, as the case may be, shall in like manner
appoint a temporary chairman. A permanent chairman and a permanent secretary of
the meeting shall be elected by vote of the holders of a majority in principal
amount of the Notes represented at the meeting and entitled to vote at the
meeting except that any meeting called by the Company shall be chaired by a
representative of the Company and any meeting called by the Trustee may, at the
Trustee's election, be chaired by the Trustee.

          Subject to the provisions of Section 8.04, at any meeting each
Noteholder or proxyholder shall be entitled to one vote for each $1,000
principal amount of Notes held or represented by him. If any vote cast or
counted or proposed to be cast or counted is challenged on the ground that such
Note is not outstanding, or does not comply with the provisions of Section 9.04,
the chairman of the meeting shall determine whether the holder of such Note is
authorized to act. The chairman of the meeting shall have no right to vote other
than by virtue of Notes held by him or instruments in writing as aforesaid duly
designating him as the proxy to vote on behalf of other Noteholders. Any meeting
of Noteholders duly called pursuant to the provisions of Section 9.02 or 10.02
may be adjourned from time to time by the holders of a majority of the aggregate
principal amount of Notes represented at the meeting, whether or not
constituting a quorum, and the meeting may be held as so adjourned without
further notice.

          SECTION 9.06.   VOTING. The vote upon any resolution submitted to any
meeting of Noteholders shall be by written ballot on which shall be subscribed
the signatures of the holders of Notes or of their representatives by proxy and
the outstanding principal amount of the Notes held or represented by them. The
permanent chairman of the meeting shall appoint two inspectors of votes who
shall be representatives of the Trustee, and who shall count all votes cast at
the meeting for or against any resolution and who shall make and file with the
secretary of the meeting their verified written reports in duplicate of all
votes cast at the meeting. A record in duplicate of the proceedings of each
meeting of Noteholders shall be prepared by the secretary of the meeting and
there shall be attached to said record the original reports of the inspectors of
votes on any vote by ballot taken thereat and affidavits by one or more persons
having

                                       45


knowledge of the facts setting forth a copy of the notice of the meeting
and showing that said notice was mailed as provided in Section 9.02. The record
shall show the principal amount of the Notes voting in favor of or against any
resolution. The record shall be signed and verified by the affidavits of the
permanent chairman and secretary of the meeting and one of the duplicates shall
be delivered to the Company and the other to the Trustee to be preserved by the
Trustee, the latter to have attached thereto the ballots voted at the meeting.

          Any record so signed and verified shall be conclusive evidence of the
matters therein stated, absent manifest error.

          SECTION 9.07.   NO DELAY OF RIGHTS BY MEETING. Nothing contained in
this Article 9 shall be deemed or construed to authorize or permit, by reason of
any call of a meeting of Noteholders or any rights expressly or impliedly
conferred hereunder to make such call, any hindrance or delay in the exercise of
any right or rights conferred upon or reserved to the Trustee or to the
Noteholders under any of the provisions of this Indenture or of the Notes.

                                    ARTICLE X
                             SUPPLEMENTAL INDENTURES

          SECTION 10.01.  SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF
NOTEHOLDERS. The Company, when authorized by the resolutions of the Board of
Directors, and the Trustee may, from time to time, and at any time enter into an
indenture or indentures supplemental hereto for one or more of the following
purposes:

          (a)     to evidence the succession of another Person to the Company
     and the assumption by any such successor of the covenants of the Company
     pursuant to Article II; or

          (b)     to add to the covenants of the Company for the benefit of the
     Noteholders, or to surrender any right or power herein conferred upon the
     Company; or

          (c)     to evidence or provide for the acceptance of appointment
     hereunder by a successor Trustee with respect to the Notes; or

          (d)     to cure any ambiguity, to correct or supplement any provision
     herein which may be inconsistent with any other provision herein, or to
     make any other provisions with respect to matters or questions arising
     under this Indenture, which shall not be inconsistent with the provisions
     of this Indenture; or

          (e)     to add to, change or eliminate any of the provisions of this
     Indenture to permit or facilitate the issuance of Global Notes and matters
     related thereto, PROVIDED that such action pursuant to this clause (e)
     shall not adversely affect the interests of the Holders in any material
     respect; or

          (f)     make provision with respect to the conversion rights of the
     holders of Notes pursuant to the requirements of Section 14.06 and the
     redemption obligations of the Company pursuant to the requirements of
     Section 3.05(e).

                                       46


          Upon the written request of the Company, accompanied by a copy of the
resolutions of the Board of Directors certified by its Secretary or Assistant
Secretary authorizing the execution of any supplemental indenture, the Trustee
is hereby authorized to join with the Company in the execution of any such
supplemental indenture, to make any further appropriate agreements and
stipulations that may be therein contained and to accept the conveyance,
transfer and assignment of any property thereunder, but the Trustee shall not be
obligated to, but may in its discretion, enter into any supplemental indenture
that affects the Trustee's own rights, duties or immunities under this Indenture
or otherwise.

          Any supplemental indenture authorized by the provisions of this
Section 10.01 may be executed by the Company and the Trustee without the consent
of the holders of any of the Notes at the time outstanding, notwithstanding any
of the provisions of Section 10.02.

          Notwithstanding any other provision of the Indenture or the Notes, the
Registration Rights Agreement and the obligation to pay Liquidated Damages
thereunder may be amended, modified or waived in accordance with the provisions
of the Registration Rights Agreement.

          SECTION 10.02.  SUPPLEMENTAL INDENTURE WITH CONSENT OF NOTEHOLDERS.
With the consent (evidenced as provided in Article 8) of the holders of not less
than a majority in aggregate principal amount of the Notes at the time
outstanding, the Company, when authorized by the resolutions of the Board of
Directors, and the Trustee may, from time to time and at any time, enter into an
indenture or indentures supplemental hereto for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Indenture or any supplemental indenture or of modifying in any manner the
rights of the holders of the Notes; PROVIDED that no such supplemental indenture
shall (i) change the fixed maturity of any Note or reduce the rate or change the
time of payment of interest thereon or reduce the principal amount thereof or
reduce any amount payable on redemption or repurchase thereof or impair the
right of any Noteholder to institute suit for the payment thereof or make the
principal thereof or interest thereon payable in any coin or currency or payable
at any place other than that provided in this Indenture or the Notes, or change
the obligation of the Company to redeem any Note on a redemption date in a
manner adverse to the holders of Notes or change the obligation of the Company
to redeem any Note upon the happening of a Designated Event in a manner adverse
to the holders of Notes or change the obligation of the Company to repurchase
any Note on a Repurchase Date in a manner adverse to the holders of Notes or
reduce the Conversion Rate, otherwise than in accordance with the terms of this
Indenture, or impair the right to convert the Notes into Common Stock subject to
the terms set forth herein, including Section 14.06 or reduce the quorum or the
voting requirements under the Indenture, or modify any of the provisions of this
Section 10.02 or Section 6.07, except to increase any such percentage or to
provide that certain other provisions of this Indenture cannot be modified or
waived without the consent of the holder of each Note so affected, or change any
obligation of the Company to maintain an office or agency in the places and for
the purposes set forth in Section 4.01, in each case, without the consent of the
holder of each Note so affected or (ii) reduce the aforesaid percentage of
Notes, the holders of which are required to consent to any such supplemental
indenture or to waive any past Event of Default, without the consent of the
holders of all Notes affected thereby.

                                       47


          Upon the written request of the Company, accompanied by a copy of the
resolutions of the Board of Directors certified by its Secretary or Assistant
Secretary authorizing the execution of any such supplemental indenture, and upon
the filing with the Trustee of evidence of the consent of Noteholders as
aforesaid, the Trustee shall join with the Company in the execution of such
supplemental indenture unless such supplemental indenture affects the Trustee's
own rights, duties or immunities under this Indenture or otherwise, in which
case the Trustee may in its discretion, but shall not be obligated to, enter
into such supplemental indenture.

          It shall not be necessary for the consent of the Noteholders under
this Section 10.02 to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve the
substance thereof.

          SECTION 10.03.  EFFECT OF SUPPLEMENTAL INDENTURE. Upon the execution
of any supplemental indenture pursuant to the provisions of this Article 10,
this Indenture shall be and be deemed to be modified and amended in accordance
therewith and the respective rights, limitation of rights, obligations, duties
and immunities under this Indenture of the Trustee, the Company and the holders
of Notes shall thereafter be determined, exercised and enforced hereunder,
subject in all respects to such modifications and amendments and all the terms
and conditions of any such supplemental indenture shall be and be deemed to be
part of the terms and conditions of this Indenture for any and all purposes.

          SECTION 10.04.  NOTATION ON NOTES. Notes authenticated and delivered
after the execution of any supplemental indenture pursuant to the provisions of
this Article 10 may bear a notation in form approved by the Trustee as to any
matter provided for in such supplemental indenture. If the Company or the
Trustee shall so determine, new Notes so modified as to conform, in the opinion
of the Trustee and the Company, to any modification of this Indenture contained
in any such supplemental indenture may, at the Company's expense, be prepared
and executed by the Company, authenticated by the Trustee (or an authenticating
agent duly appointed by the Trustee pursuant to Section 15.11) and delivered in
exchange for the Notes then outstanding, upon surrender of such Notes then
outstanding.

          SECTION 10.05.  EVIDENCE OF COMPLIANCE OF SUPPLEMENTAL INDENTURE TO BE
FURNISHED TO TRUSTEE. Prior to entering into any supplemental indenture, the
Trustee may request an Officers' Certificate and an Opinion of Counsel as
conclusive evidence that any supplemental indenture executed pursuant hereto
complies with the requirements of this Article 10.

                                   ARTICLE XI
                           MERGER, CONSOLIDATION, ETC.

          SECTION 11.01.  MERGERS, CONSOLIDATIONS AND CERTAIN TRANSFERS, LEASES
AND ACQUISITIONS OF ASSETS. The Company shall not consolidate with or merge into
any other Person or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, unless:

          (a)     in case the Company shall consolidate with or merge into
     another Person or convey, transfer or lease its properties and assets
     substantially as an entirety to any

                                       48


     Person, the Person formed by such consolidation or into which the Company
     is merged or the Person which acquires by conveyance or transfer, or which
     leases, the properties and assets of the Company substantially as an
     entirety shall be a corporation, partnership or trust, shall be organized
     and validly existing under the laws of the United States of America, any
     State thereof or the District of Columbia and shall expressly assume, by an
     indenture supplemental hereto, executed and delivered to the Trustee, in
     form satisfactory to the Trustee, the due and punctual payment of the
     principal of, and interest on, all the Notes and the performance or
     observance of every covenant and obligation of this Indenture, the Notes
     and the Registration Rights Agreement on the part of the Company to be
     performed or observed; and

          (b)     immediately after giving effect to such transaction, no Event
     of Default, and no event which, after notice or lapse of time or both,
     would become an Event of Default, shall have happened and be continuing.

          SECTION 11.02.  SUCCESSOR TO BE SUBSTITUTED. Upon any consolidation of
the Company with, or merger of the Company into, any other Person or any
conveyance, transfer or lease of the properties and assets of the Company
substantially as an entirety in accordance with Section 11.01, the successor
Person formed by such consolidation or into which the Company is merged or to
which such conveyance, transfer or lease is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Company under
this Indenture with the same effect as if such successor Person had been named
as the Company herein, and thereafter, except in the case of a lease, the
predecessor Person shall be relieved of all obligations and covenants under this
Indenture and the Notes.

          SECTION 11.03.  OPINION OF COUNSEL TO BE GIVEN TRUSTEE. The Trustee
shall receive an Officers' Certificate and an Opinion of Counsel as conclusive
evidence that any such consolidation, merger, sale, conveyance or lease and any
such assumption complies with the provisions of this Article 11.

                                   ARTICLE XII
                     SATISFACTION AND DISCHARGE OF INDENTURE

          SECTION 12.01.  DISCHARGE OF INDENTURE. When (a) the Company shall
deliver to the Trustee for cancellation all Notes theretofore authenticated
(other than any Notes that have been destroyed, lost or stolen and in lieu of or
in substitution for which other Notes shall have been authenticated and
delivered) and not theretofore canceled, or (b) all the Notes not theretofore
canceled or delivered to the Trustee for cancellation shall have become due and
payable, or are by their terms to become due and payable within one year or are
to be called for redemption within one year under arrangements satisfactory to
the Trustee for the giving of notice of redemption, and the Company shall
deposit with the Trustee, in trust, funds sufficient to pay at maturity or upon
redemption or repurchase of all of the Notes (other than any Notes that shall
have been mutilated, destroyed, lost or stolen and in lieu of or in substitution
for which other Notes shall have been authenticated and delivered) not
theretofore canceled or delivered to the Trustee for cancellation, including
principal and interest due or to become due to such date of maturity or
redemption date or Repurchase Date, as the case may be, accompanied by a
verification report, as to the sufficiency of the deposited amount, from an
independent certified

                                       49


accountant or other financial professional satisfactory to the Trustee, and if
the Company shall also pay or cause to be paid all other sums payable hereunder
by the Company, as the case may be, then this Indenture shall cease to be of
further effect (except in the case of clause (b) as to (i) remaining rights of
registration of transfer, substitution and exchange and conversion of Notes and
(ii) rights hereunder of Noteholders to receive payments of principal of, and
interest on, the Notes and the other rights, duties and obligations of
Noteholders, as beneficiaries hereof with respect to the amounts, if any, so
deposited with the Trustee). The rights, obligations and immunities of the
Trustee hereunder shall survive any discharge pursuant to paragraph (a) and (b)
of this Section 12.01. The Trustee, on written demand of the Company accompanied
by an Officers' Certificate and an Opinion of Counsel as required by Section
11.05 and at the cost and expense of the Company, shall execute proper
instruments acknowledging satisfaction of and discharging this Indenture; the
Company, however, hereby agrees to reimburse the Trustee for any costs or
expenses thereafter reasonably and properly incurred by the Trustee and to
compensate the Trustee for any services thereafter reasonably and properly
rendered by the Trustee in connection with this Indenture or the Notes.

          SECTION 12.02.  DEPOSITED MONIES TO BE HELD IN TRUST BY TRUSTEE.
Subject to Section 12.04, all monies deposited with the Trustee pursuant to
Section 12.01, shall be held in trust for the sole benefit of the Noteholders,
and such monies shall be applied by the Trustee to the payment, either directly
or through any paying agent (including the Company if acting as the paying
agent), to the holders of the particular Notes for the payment or redemption of
which such monies have been deposited with the Trustee, of all sums due and to
become due thereon for principal and interest.

          SECTION 12.03.  PAYING AGENT TO REPAY MONIES HELD. Upon the
satisfaction and discharge of this Indenture, all monies then held by any paying
agent of the Notes (other than the Trustee) shall, upon written request of the
Company, be repaid to it or paid to the Trustee, and thereupon such paying agent
shall be released from all further liability with respect to such monies.

          SECTION 12.04.  RETURN OF UNCLAIMED MONIES. Subject to the
requirements of applicable law and this Indenture, any monies deposited with or
paid to the Trustee for payment of the principal of, or interest on, Notes and
not applied but remaining unclaimed by the holders of Notes for two years after
the date upon which the principal of, or interest on, such Notes, as the case
may be, shall have become due and payable, shall be repaid to the Company by the
Trustee on demand and all liability of the Trustee shall thereupon cease with
respect to such monies; and the holder of any of the Notes shall thereafter look
only to the Company for any payment that such holder may be entitled to collect
unless an applicable abandoned property law designates another Person.

          SECTION 12.05.  REINSTATEMENT. If the Trustee or the paying agent is
unable to apply any money in accordance with Section 12.02 by reason of any
order or judgment of any court or governmental authority enjoining, restraining
or otherwise prohibiting such application, the Company's obligations under this
Indenture and the Notes shall be revived and reinstated as though no deposit had
occurred pursuant to Section 12.01 until such time as the Trustee or the paying
agent is permitted to apply all such money in accordance with Section 12.02;
PROVIDED that if the Company makes any payment of interest on or principal of
any Note following the

                                       50


reinstatement of its obligations, the Company shall be subrogated to the rights
of the holders of such Notes to receive such payment from the money held by the
Trustee or paying agent.

                                  ARTICLE XIII
         IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS

          SECTION 13.01.  INDENTURE AND NOTES SOLELY CORPORATE OBLIGATIONS. No
recourse for the payment of the principal of or interest on any Note, or for any
claim based thereon or otherwise in respect thereof, and no recourse under or
upon any obligation, covenant or agreement of the Company in this Indenture or
in any supplemental indenture or in any Note, or because of the creation of any
indebtedness represented thereby, shall be had against any incorporator,
stockholder, employee, agent, officer, director or subsidiary, as such, past,
present or future, of the Company or of any successor corporation, either
directly or through the Company or any successor corporation, whether by virtue
of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise; it being expressly understood that all such
liability is hereby expressly waived and released as a condition of, and as a
consideration for, the execution of this Indenture and the issue of the Notes.

                                   ARTICLE XIV
                               CONVERSION OF NOTES

          SECTION 14.01.  RIGHT TO CONVERT. (a) Subject to and upon compliance
with the provisions of this Indenture, the holder of any Note shall have the
right, at such holder's option, to convert the principal amount of the Note, or
any portion of such principal amount which is a multiple of $1,000, into fully
paid and non-assessable shares of Common Stock (as such shares shall then be
constituted) at the Conversion Rate in effect at such time, by surrender of the
Note so to be converted in whole or in part, together with any required funds
under the circumstances described in this Section 14.01, in the manner provided
in Section 14.02. The Notes shall be convertible only upon the occurrence of one
of the following events:

          (i)     during any fiscal quarter commencing after September 30, 2003,
     if the Closing Sale Price exceeds 120% of the Conversion Price for at least
     20 Trading Days in the 30 consecutive Trading Day period ending on the last
     Trading Day of the immediately preceding fiscal quarter (it being
     understood for purposes of this Section 14.01(a)(i) that the Conversion
     Price in effect at the close of business on each of the 30 consecutive
     Trading Days should be used and such calculation shall give effect to any
     event referred to in Section 14.05 or 14.06 occurring during such 30
     Trading Day period);

          (ii)    during each of the five Business Day period immediately after
     any five consecutive Trading Day period in which the Trading Price per
     $1,000 principal amount of the Notes for each day of such five Trading Day
     period was less than 95% of the product of the Closing Sale Price on the
     applicable date and the Conversion Rate; PROVIDED, however, the Notes shall
     not be convertible pursuant to this Section 14.01(a)(ii) after July 15,
     2028 if on any Trading Day during such five Trading Day period the Closing
     Sale Price was between 100% and 120% of the then current Conversion Price
     (it being understood for purposes of this Section 14.01(a)(ii) that the
     Conversion Rate in effect at the close of business on each of the five
     consecutive Trading Days should be

                                       51


     used and such calculation shall give effect to any event referred to in
     Section 14.05 or 14.06 occurring during such five Trading Day period);

          (iii)   if such Note has been called for redemption, at any time on or
     after the date the notice of redemption has been given until the close of
     business on the Business Day immediately preceding the redemption date; or

          (iv)    as provided in Section (b) of this Section 14.01.

          Upon receipt by the Trustee of a demand for conversion from a
Noteholder pursuant to this Section, the Trustee (or other conversion agent
appointed by the Company) shall, on behalf of the Company, confirm (based on
information provided by the Company) whether the Notes shall be convertible as a
result of the occurrence of an event specified in clause (i) above, but, in any
event, the Company shall be obligated at all times to determine whether the
Notes shall be convertible as a result of the occurrence of an event specified
in clause (i) of this Section, and, if the Notes shall be convertible, the
Trustee (or other conversion agent appointed by the Company) shall promptly
deliver to the Company and the Trustee (if the Trustee is not the conversion
agent) written notice thereof. Whenever the Notes shall become convertible
pursuant to this Section 14.01, the Company or, at the Company's request, the
Trustee in the name and at the expense of the Company, shall notify the holders
of the event triggering such convertibility in the manner provided in Section
15.03, and the Company shall also publicly announce such information and publish
it on the Company's web site. Any notice so given shall be conclusively presumed
to have been duly given, whether or not the holder receives such notice.

          The Trustee (or other conversion agent appointed by the Company) shall
have no obligation to determine the Trading Price under clause (ii) of this
Section 14.01 unless the Company has requested such a determination; and the
Company shall have no obligation to make such request unless a holder provides
it with reasonable evidence that the Trading Price per $1,000 principal amount
of Notes would be less than 95% of the product of the Closing Sale Price and the
number of shares of Common Stock issuable upon conversion of $1,000 principal
amount of Notes. If such evidence is provided, the Company shall instruct the
Trustee (or other conversion agent) to determine the Trading Price of the Notes
beginning on the next Trading Day and on each successive Trading Day until the
Trading Price per $1,000 principal amount of Notes is greater than or equal to
95% of the product of the Closing Sale Price and the number of shares issuable
upon conversion of $1,000 principal amount of the Notes.

          (b)     In addition, if:

                  (i)     (A)     the Company distributes to all holders of its
     Common Stock rights or warrants entitling them (for a period expiring
     within 45 days of the record date for the determination of the stockholders
     entitled to receive such distribution) to subscribe for or purchase shares
     of Common Stock, at a price per share less than the average of the Closing
     Sale Price for the ten Trading Days immediately preceding, but not
     including, the date such distribution is first publicly announced by the
     Company, or

                                       52


                  (B)     the Company distributes to all holders of its Common
          Stock, assets (including cash), debt securities or rights to purchase
          its securities, where the Fair Market Value of such distribution per
          share of Common Stock exceeds 5% of the Closing Sale Price on the
          Trading Day immediately preceding the date such distribution is first
          publicly announced by the Company,

          then, in either case, the Notes may be surrendered for conversion at
          any time on and after the date that the Company gives notice to the
          holders of such distribution, which shall be not less than 20 days
          prior to the Ex-Dividend Time for such distribution, until the earlier
          of the close of business on the Business Day immediately preceding,
          but not including, the Ex-Dividend Time or the date the Company
          publicly announces that such distribution will not take place;
          PROVIDED that no adjustment to the Conversion Rate or the ability of a
          holder of a Note to convert will be made if the holder will otherwise
          participate in such distribution without conversion; or

                  (ii)    the Company consolidates with, or merges with or into,
          another Person or is a party to a binding share exchange or conveys,
          transfers, sells, leases or otherwise disposes of all or substantially
          all of its properties and assets, in each case, pursuant to which our
          common stock would be converted into cash, securities or other
          property, then the Notes may be surrendered for conversion at any time
          from and after the date fifteen (15) days prior to the anticipated
          effective date of the transaction and ending on and including the date
          fifteen (15) days after the consummation of the transaction. The Board
          of Directors shall determine the anticipated effective date of the
          transaction, and such determination shall be conclusive and binding on
          the holders and shall be publicly announced by the Company and posted
          on its web site not later than two Business Day prior to such 15th
          day.

          "EX-DIVIDEND TIME" means, with respect to any distribution on shares
of Common Stock, the first date on which the Common Stock trades, regular way,
on the principal securities market on which the Common Stock are then traded
without the right to receive such distribution.

          (c)     A Note in respect of which a holder is electing to exercise
its option to require redemption upon a Designated Event pursuant to Section
3.05(a) or repurchase pursuant to Section 3.06 may be converted only if such
holder withdraws its election in accordance with Section 3.05(b) or Section
3.08, respectively. A holder of Notes is not entitled to any rights of a holder
of Common Stock until such holder has converted his Notes to Common Stock, and
only to the extent such Notes are deemed to have been converted to Common Stock
under this Article 14.

          SECTION 14.02.  CONVERSION PROCEDURES. To convert a Note, a holder
must (a) complete and manually sign the Conversion Notice or a facsimile of the
Conversion Notice (a "CONVERSION NOTICE") in the form set forth on the reverse
of the Note and deliver such notice to the conversion agent, (b) surrender the
Note to the conversion agent, (c) furnish appropriate endorsements and transfer
documents if required by the Registrar or the conversion agent, (d)

                                       53


pay any transfer or similar tax, if required and (e) if required, pay funds
equal to the interest payable on the next interest payment date. The date,
within the time periods set forth in Section 14.01, on which the holder
satisfies all of those requirements is the "CONVERSION DATE." Except as provided
in Section 14.05(j), the Company shall deliver to the holder through the
conversion agent, no later than the third Business Day following the Conversion
Date, a certificate for the number of whole shares of Common Stock issuable upon
the conversion and, if applicable, cash in lieu of any fractional shares
pursuant to Section 14.03.

          In the case of a Global Note, the Conversion Notice shall be completed
by a Depositary participant on behalf of the beneficial holder. Conversion
Notices may be delivered and such Notes may be surrendered for conversion in
accordance with the applicable procedures of the Depositary as in effect from
time to time. In order to cause a Depositary participant to complete a
Conversion Notice, a beneficial holder must complete, or cause to be completed,
the appropriate instruction form for conversion pursuant to the Depositary's
book-entry conversion program. The Person in whose name the Common Stock
certificate is registered shall be deemed to be a shareholder of record at the
close of business on the applicable Conversion Date; PROVIDED, HOWEVER, that if
any such date is a date when the stock transfer books of the Company are closed,
such Person shall be deemed a shareholder of record as of the next date on which
the stock transfer books of the Company are open.

          No payment or adjustment shall be made for dividends on, or other
distributions with respect to, any Common Stock except as provided in this
Article 14. On conversion of a Note, except for conversion during the period
from the close of business on any record date immediately preceding any interest
payment date to the close of business on the Business Day immediately preceding
such interest payment date, in which case the holder on such record date shall
receive the interest payable on such interest payment date, that portion of
accrued and unpaid interest on the converted Note attributable to the period
from the most recent interest payment date (or, if no interest payment date has
occurred, from the date of original issuance of the Notes) through the
Conversion Date shall not be cancelled, extinguished or forfeited, but rather
shall be deemed to be paid in full to the holder thereof through delivery of the
Common Stock (together with the cash payment, if any, in lieu of fractional
shares) in exchange for the Note being converted pursuant to the provisions
hereof, and the Fair Market Value of such shares of Common Stock (together with
any such cash payment in lieu of fractional shares) shall be treated as issued,
to the extent thereof, first in exchange for accrued and unpaid interest accrued
through the Conversion Date and the balance, if any, of such Fair Market Value
of such Common Stock (and any such cash payment) shall be treated as issued in
exchange for the principal amount of the Note being converted pursuant to the
provisions hereof.

          If a holder converts more than one Note at the same time, the number
of shares of Common Stock issuable upon the conversion shall be based on the
aggregate principal amount of Notes converted.

          Upon surrender of a Note that is converted in part, the Company shall
execute, and the Trustee shall authenticate and deliver to the holder, a new
Note equal in principal amount to the principal amount of the unconverted
portion of the Note surrendered.

                                       54


          Notes or portions thereof surrendered for conversion during the period
from the close of business on any record date immediately preceding any interest
payment date to the close of business on the Business Day immediately preceding
such interest payment date shall be accompanied by payment to the Company or its
order, in immediately available funds or other funds acceptable to the Company,
of an amount equal to the interest payable on such interest payment date with
respect to the principal amount of Notes or portions thereof being surrendered
for conversion; PROVIDED that no such payment need be made if (1) the Company
has specified a redemption date that occurs during the period from the close of
business on a record date to the close of business on the Business Day
immediately preceding the interest payment date to which such record date
relates, (2) the Company has specified a Designated Event Redemption Date during
such period or (3) any overdue interest exists on the Conversion Date with
respect to the Notes converted, but only to the extent of overdue interest.

          SECTION 14.03.  CASH PAYMENTS IN LIEU OF FRACTIONAL SHARES. No
fractional shares of Common Stock or scrip certificates representing fractional
shares shall be issued upon conversion of Notes. If more than one Note shall be
surrendered for conversion at one time by the same holder, the number of full
shares that shall be issuable upon conversion shall be computed on the basis of
the aggregate principal amount of the Notes (or specified portions thereof to
the extent permitted hereby) so surrendered. If any fractional share of stock
would be issuable upon the conversion of any Note or Notes, the Company shall
make an adjustment and payment therefor in cash at the current market price
thereof to the holder of Notes. For purposes of this Section 14.03, the "CURRENT
MARKET PRICE" of a share of Common Stock shall be the Closing Sale Price on the
last Business Day immediately preceding the day on which the Notes (or specified
portions thereof) are deemed to have been converted.

          SECTION 14.04.  CONVERSION RATE. Each $1,000 principal amount of the
Notes shall be convertible into the number of shares of Common Stock specified
in the form of Note (herein called the "CONVERSION RATE") attached as Exhibit A
hereto, subject to adjustment as provided in this Article 14.

          SECTION 14.05.  ADJUSTMENT OF CONVERSION RATE. The Conversion Rate
shall be adjusted from time to time by the Company as follows:

          (a)     In case the Company shall hereafter pay a dividend or make a
     distribution to all holders of the outstanding Common Stock in shares of
     Common Stock, the Conversion Rate shall be increased so that the same shall
     equal the rate determined by multiplying the Conversion Rate in effect at
     the opening of business on the date following the date fixed for the
     determination of stockholders entitled to receive such dividend or other
     distribution by a fraction,

                  (i)     the numerator of which shall be the sum of the number
          of shares of Common Stock outstanding at the close of business on the
          date fixed for the determination of stockholders entitled to receive
          such dividend or other distribution plus the total number of shares of
          Common Stock constituting such dividend or other distribution; and

                                       55


                  (ii)    the denominator of which shall be the number of shares
          of Common Stock outstanding at the close of business on the date fixed
          for such determination,

     such increase to become effective immediately after the opening of business
     on the day following the date fixed for such determination. If any dividend
     or distribution of the type described in this Section 14.05(a) is declared
     but not so paid or made, the Conversion Rate shall again be adjusted to the
     Conversion Rate that would then be in effect if such dividend or
     distribution had not been declared.

          (b)     In case the Company shall issue rights or warrants to all
     holders of its outstanding shares of Common Stock entitling them (for a
     period expiring within forty-five (45) days after the date fixed for
     determination of stockholders entitled to receive such rights or warrants)
     to subscribe for or purchase shares of Common Stock at a price per share
     less than the Average Market Price on the date such issuance is first
     publicly announced by the Company, the Conversion Rate shall be increased
     so that the same shall equal the rate determined by multiplying the
     Conversion Rate in effect immediately prior to the date fixed for
     determination of stockholders entitled to receive such rights or warrants
     by a fraction,

                  (i)     the numerator of which shall be the number of shares
          of Common Stock outstanding at the close of business on the date fixed
          for determination of stockholders entitled to receive such rights or
          warrants plus the total number of additional shares of Common Stock
          offered for subscription or purchase, and

                  (ii)    the denominator of which shall be the sum of the
          number of shares of Common Stock outstanding at the close of business
          on the date fixed for determination of stockholders entitled to
          receive such rights or warrants plus the number of shares that the
          aggregate offering price of the total number of shares so offered
          would purchase at such Average Market Price.

                  Such adjustment shall be successively made whenever any such
     rights or warrants are issued, and shall become effective immediately after
     the opening of business on the day following the date fixed for
     determination of stockholders entitled to receive such rights or warrants.
     To the extent that shares of Common Stock are not delivered after the
     expiration of such rights or warrants, the Conversion Rate shall be
     readjusted to the Conversion Rate that would then be in effect had the
     adjustments made upon the issuance of such rights or warrants been made on
     the basis of delivery of only the number of shares of Common Stock actually
     delivered. If such rights or warrants are not so issued, the Conversion
     Rate shall again be adjusted to be the Conversion Rate that would then be
     in effect if such issuance had not been so declared or made. In determining
     whether any rights or warrants entitle the holders to subscribe for or
     purchase shares of Common Stock at less than such Average Market Price, and
     in determining the aggregate offering price of such shares of Common Stock,
     there shall be taken into account any consideration received by the Company
     for such rights or warrants and any amount payable on exercise or
     conversion thereof, the value of such consideration, if other than cash, to
     be determined by the Board of Directors.

                                       56


          (c)     In case outstanding shares of Common Stock shall be subdivided
     into a greater number of shares of Common Stock, the Conversion Rate in
     effect at the opening of business on the day following the day upon which
     such subdivision becomes effective shall be proportionately increased, and
     conversely, in case outstanding shares of Common Stock shall be combined
     into a smaller number of shares of Common Stock, the Conversion Rate in
     effect at the opening of business on the day following the day upon which
     such combination becomes effective shall be proportionately reduced, such
     increase or reduction, as the case may be, to become effective immediately
     after the opening of business on the day following the day upon which such
     subdivision or combination becomes effective.

          (d)     In case the Company shall, by dividend or otherwise,
     distribute to all holders of its Common Stock shares of any class of
     capital stock of the Company or evidences of its indebtedness or assets
     (including cash and securities, but excluding any rights or warrants
     referred to in Section 14.05(b), and excluding any dividend or distribution
     referred to in Section 14.05(a) (any of the foregoing hereinafter in this
     Section 14.05(d)) called the "DISTRIBUTION")), then, in each such case
     (unless the Company elects to reserve such Distribution for distribution to
     the Noteholders upon the conversion of the Notes so that any such holder
     converting Notes will receive upon such conversion, in addition to the
     shares of Common Stock to which such holder is entitled, the amount and
     kind of such Distribution which such holder would have received if such
     holder had converted its Notes into Common Stock immediately prior to the
     Record Date), the Conversion Rate shall be increased so that the same shall
     be equal to the rate determined by multiplying the Conversion Rate in
     effect at the close of business on the Record Date with respect to such
     distribution by a fraction,

                  (i)     the numerator of which shall be the Average Market
          Price on such Record Date, and

                  (ii)    the denominator of which shall be the Average Market
          Price on such Record Date less (A) in the case of Distributions other
          than cash, the Fair Market Value (as determined by the Board of
          Directors, whose determination shall be conclusive, and described in a
          resolution of the Board of Directors) on the Record Date of the
          portion of such Distributions applicable to one share of Common Stock
          and (B) in the case of Distributions of cash, the amount of such
          Distributions applicable to one share of Common Stock,

     such adjustment to become effective immediately prior to the opening of
     business on the day following such Record Date; PROVIDED that if the then
     Fair Market Value (as so determined) of the portion of the Distribution so
     distributed applicable to one share of Common Stock is equal to or greater
     than the Average Market Price on the Record Date, in lieu of the foregoing
     adjustment, adequate provision shall be made so that each Noteholder shall
     have the right to receive upon conversion the amount of Distribution such
     holder would have received had such holder converted each Note on the
     Record Date. A holder who converts a Note pursuant to Section 14.01(b)
     shall not be entitled to any adjustment to the Conversion Rate with respect
     to such Note so converted. If such dividend or distribution is not so paid
     or made, the Conversion Rate shall again be

                                       57


     adjusted to be the Conversion Rate that would then be in effect if such
     dividend or distribution had not been declared. If the Board of Directors
     determines the Fair Market Value of any distribution for purposes of this
     Section 14.05(d) by reference to the actual or when issued trading market
     for any securities, it must in doing so consider the prices in such market
     over the same period used in computing the Average Market Price on the
     applicable Record Date. Notwithstanding the foregoing, if the Distribution
     distributed by the Company to all holders of its Common Stock consists of
     capital stock of, or similar equity interests in, a Subsidiary or other
     business unit, the Conversion Rate shall be increased so that the same
     shall be equal to the rate determined by multiplying the Conversion Rate in
     effect on the Record Date with respect to such distribution by a fraction:

                  (i)     the numerator of which shall be the sum of (x) the
          average Closing Sale Price over the ten consecutive Trading Day period
          (the "SPINOFF VALUATION PERIOD") commencing on and including the fifth
          Trading Day after the date on which "ex-dividend trading" commences on
          the Common Stock on the New York Stock Exchange or such other national
          or regional exchange or market on which the Common Stock is then
          listed or quoted and (y) the average Fair Market Value (as determined
          by the Board of Directors, whose determination shall be conclusive,
          and described in a resolution of the Board of Directors) over the
          Spinoff Valuation Period of the portion of the Distribution so
          distributed applicable to one share of Common Stock; and

                  (ii)    the denominator of which shall be the average Closing
          Sale Price over the Spinoff Valuation Period,

     such adjustment to become effective immediately prior to the opening of
     business on the day following such Record Date; PROVIDED that the Company
     may in lieu of the foregoing adjustment make adequate provision so that
     each Noteholder shall have the right to receive upon conversion the amount
     of Distribution such holder would have received had such holder converted
     each Note on the Record Date with respect to such distribution.

                  Rights or warrants distributed by the Company to all holders
     of Common Stock entitling the holders thereof to subscribe for or purchase
     shares of the Company's capital stock (either initially or under certain
     circumstances), which rights or warrants, until the occurrence of a
     specified event or events ("TRIGGER EVENT"): (i) are deemed to be
     transferred with such shares of Common Stock; (ii) are not exercisable; and
     (iii) are also issued in respect of future issuances of Common Stock, shall
     be deemed not to have been distributed for purposes of this Section 14.05
     (and no adjustment to the Conversion Rate under this Section 14.05 will be
     required) until the occurrence of the earliest Trigger Event, whereupon
     such rights and warrants shall be deemed to have been distributed and an
     appropriate adjustment (if any is required) to the Conversion Rate shall be
     made under this Section 14.05(d). If any such right or warrant, including
     any such existing rights or warrants distributed prior to the date of this
     Indenture, are subject to events, upon the occurrence of which such rights
     or warrants become exercisable to purchase different securities, evidences
     of indebtedness or other assets, then the date of the occurrence of any and
     each such event shall be deemed to be the date of distribution and record
     date

                                       58


     with respect to new rights or warrants with such rights (and a termination
     or expiration of the existing rights or warrants without exercise by any of
     the holders thereof). In addition, in the event of any distribution (or
     deemed distribution) of rights or warrants, or any Trigger Event or other
     event (of the type described in the preceding sentence) with respect
     thereto that was counted for purposes of calculating a distribution amount
     for which an adjustment to the Conversion Rate under this Section 14.05 was
     made, (1) in the case of any such rights or warrants that shall all have
     been redeemed or repurchased without exercise by any holders thereof, the
     Conversion Rate shall be readjusted upon such final redemption or
     repurchase to give effect to such distribution or Trigger Event, as the
     case may be, as though it were a cash distribution, equal to the per share
     redemption or repurchase price received by a holder or holders of Common
     Stock with respect to such rights or warrants (assuming such holder had
     retained such rights or warrants), made to all holders of Common Stock as
     of the date of such redemption or repurchase, and (2) in the case of such
     rights or warrants that shall have expired or been terminated without
     exercise by any holders thereof, the Conversion Rate shall be readjusted as
     if such rights and warrants had not been issued.

                  No adjustment of the Conversion Rate shall be made pursuant to
     this Section 14.05(d) in respect of rights or warrants distributed or
     deemed distributed on any Trigger Event to the extent that such rights or
     warrants are actually distributed, or reserved by the Company for
     distribution to holders of Notes upon conversion by such holders of Notes
     to Common Stock.

                  For purposes of this Section 14.05(d) and Section 14.05(a) and
     (b), any dividend or distribution to which this Section 14.05(d) is
     applicable that also includes shares of Common Stock, or rights or warrants
     to subscribe for or purchase shares of Common Stock (or both), shall be
     deemed instead to be (1) a dividend or distribution of the evidences of
     indebtedness, assets or shares of capital stock other than such shares of
     Common Stock or rights or warrants (and any Conversion Rate adjustment
     required by this Section 14.05(d) with respect to such dividend or
     distribution shall then be made) immediately followed by (2) a dividend or
     distribution of such shares of Common Stock or such rights or warrants (and
     any further Conversion Rate adjustment required by Sections 14.05(a) and
     (b) with respect to such dividend or distribution shall then be made),
     except

                  (A)     the Record Date of such dividend or distribution shall
          be substituted as "the date fixed for the determination of
          stockholders entitled to receive such dividend or other distribution",
          "the date fixed for the determination of stockholders entitled to
          receive such rights or warrants" and "the date fixed for such
          determination" within the meaning of Section 14.05(a) and (b) and

                  (B)     any shares of Common Stock included in such dividend
          or distribution shall not be deemed "outstanding at the close of
          business on the date fixed for such determination" within the meaning
          of Section 14.05(a).

          (e)     (A) In case a tender or exchange offer made by the Company or
     any Subsidiary for all or any portion of the Common Stock (excluding any
     transactions solely

                                       59


     involving odd lots of shares of Common Stock) shall expire and such tender
     or exchange offer (as amended upon the expiration thereof) shall require
     the payment to stockholders of consideration per share of Common Stock
     having a Fair Market Value (as determined by the Board of Directors, whose
     determination shall be conclusive and described in a resolution of the
     Board of Directors) that as of the last time (the "EXPIRATION TIME")
     tenders or exchanges may be made pursuant to such tender or exchange offer
     (as it may be amended) exceeds the Closing Sale Price on the Trading Day
     next succeeding the Expiration Time, the Conversion Rate shall be increased
     so that the same shall equal the rate determined by multiplying the
     Conversion Rate in effect immediately prior to the Expiration Time by a
     fraction,

                  (i)     the numerator of which shall be the sum of (x) the
          Fair Market Value (determined as aforesaid) of the aggregate
          consideration payable to stockholders based on the acceptance (up to
          any maximum specified in the terms of the tender or exchange offer) of
          all shares validly tendered or exchanged and not withdrawn as of the
          Expiration Time (the shares deemed so accepted up to any such maximum,
          being referred to as the "PURCHASED SHARES") and (y) the product of
          the number of shares of Common Stock outstanding (less any Purchased
          Shares) at the Expiration Time and the Closing Sale Price on the
          Trading Day next succeeding the Expiration Time, and

                  (ii)    the denominator of which shall be the number of shares
          of Common Stock outstanding (including any tendered or exchanged
          shares (including Purchased Shares)) at the Expiration Time multiplied
          by the Closing Sale Price on the Trading Day next succeeding the
          Expiration Time,

     such adjustment to become effective immediately prior to the opening of
     business on the day following the Expiration Time. If the Company is
     obligated to purchase shares pursuant to any such tender or exchange offer,
     but the Company is permanently prevented by applicable law from effecting
     any such purchases or all such purchases are rescinded, the Conversion Rate
     shall again be adjusted to be the Conversion Rate that would then be in
     effect if such tender or exchange offer had not been made.

                  (B)     In case of a tender or exchange offer made by a Person
     other than the Company or any Subsidiary for an amount that increases the
     offeror's ownership of Common Stock to more than 25% of the Common Stock
     outstanding and shall involve the payment by such Person of consideration
     per share of Common Stock having a Fair Market Value (as determined by the
     Board of Directors, whose determination shall be conclusive, and described
     in a resolution of the Board of Directors) that as of the last time (the
     "OFFER EXPIRATION TIME") tenders or exchanges may be made pursuant to such
     tender or exchange offer (as it shall have been amended) exceeds the
     Closing Sale Price of a share of Common Stock on the Trading Day next
     succeeding the Offer Expiration Time, and in which, as of the Offer
     Expiration Time, the Board of Directors is not recommending rejection of
     the offer, the Conversion Rate shall be increased so that the same shall
     equal the rate determined by multiplying the Conversion Rate in effect
     immediately prior to the Offer Expiration Time by a fraction,

                                       60


                  (i)     the numerator of which shall be the sum of (x) the
          Fair Market Value (determined as aforesaid) of the aggregate
          consideration payable to the stockholders based on the acceptance (up
          to any maximum specified in the terms of the tender or exchange offer)
          of all shares validly tendered or exchanged and not withdrawn as of
          the Offer Expiration Time (the shares deemed so accepted, up to any
          such maximum, being referred to as the "ACCEPTED PURCHASED SHARES")
          and (y) the product of the number of shares of Common Stock
          outstanding (less any Accepted Purchased Shares) at the Offer
          Expiration Time and the Closing Sale Price on the Trading Day next
          succeeding the Offer Expiration Time, and

                  (ii)    the denominator of which shall be the number of shares
          of Common Stock outstanding (including any tendered or exchanged
          shares (including Accepted Purchased Shares)) at the Offer Expiration
          Time multiplied by the Closing Sale Price on the Trading Day next
          succeeding the Offer Expiration Time,

     such adjustment to become effective immediately prior to the opening of
     business on the day following the Offer Expiration Time. If such Person is
     obligated to purchase shares pursuant to any such tender or exchange offer,
     but such Person is permanently prevented by applicable law from effecting
     any such purchases or all such purchases are rescinded, the Conversion Rate
     shall again be adjusted to be the Conversion Rate that would then be in
     effect if such tender or exchange offer had not been made. Notwithstanding
     the foregoing, the adjustment described in this Section 14.05(e)(B) shall
     not be made if, as of the Offer Expiration Time, the offering documents
     with respect to such offer disclose a plan or intention to cause the
     Company to engage in any transaction described in Article 11 or a binding
     share exchange.

          (f)     For purposes of this Section 14.05, the following terms shall
     have the meaning indicated:

                  (1)     "AVERAGE MARKET PRICE", as of any date of
          determination, shall mean the average of the daily Closing Sale Prices
          for the ten consecutive Trading Days immediately preceding (A) in the
          case of a determination pursuant to Section 14.05(b), the date such
          issuance or distribution is publicly announced and (B) otherwise, the
          earlier of such date of determination and the day before the "ex" date
          with respect to the issuance, distribution, subdivision or combination
          requiring such computation immediately prior to the date in question.
          For purpose of this paragraph, the term "ex" date, (1) when used with
          respect to any issuance or distribution, means the first date on which
          the Common Stock trades, regular way, on the relevant exchange or in
          the relevant market from which the Closing Sale Price was obtained
          without the right to receive such issuance or distribution, and (2)
          when used with respect to any subdivision or combination of shares of
          Common Stock, means the first date on which the Common Stock trades,
          regular way, on such exchange or in such market after the time at
          which such subdivision or combination becomes effective.

                                       61


                          If another issuance, distribution, subdivision or
          combination to which Section 14.05 applies occurs during the period
          applicable for calculating "Average Market Price" pursuant to the
          definition in the preceding paragraph, "Average Market Price" shall be
          calculated for such period in a manner determined by the Board of
          Directors to reflect the impact of such issuance, distribution,
          subdivision or combination on the Closing Sale Price during such
          period.

                  (2)     "FAIR MARKET VALUE" shall mean the amount that a
          willing buyer would pay a willing seller in an arm's-length
          transaction.

                  (3)     "RECORD DATE" shall mean, with respect to any
          dividend, distribution or other transaction or event in which the
          holders of Common Stock have the right to receive any cash, securities
          or other property or in which the Common Stock (or other applicable
          security) is exchanged for or converted into any combination of cash,
          securities or other property, the date fixed for determination of
          stockholders entitled to receive such cash, securities or other
          property (whether such date is fixed by the Board of Directors or by
          statute, contract or otherwise).

          (g)     The Company may make such increases in the Conversion Rate, in
     addition to those required by Section 14.05(a), (b), (c), (d) or (e) as the
     Board of Directors considers to be advisable to avoid or diminish any
     income tax to any holders of Common Stock or rights to purchase Common
     Stock resulting from any dividend or distribution of stock (or rights to
     acquire stock) or from any event treated as such for income tax purposes.

          To the extent permitted by applicable law, the Company from time to
     time may increase the Conversion Rate by any amount for any period of time
     if the period is at least twenty (20) days, the increase is irrevocable
     during the period and the Board of Directors shall have made a
     determination that such increase would be in the best interests of the
     Company, which determination shall be conclusive. Whenever the Conversion
     Rate is increased pursuant to the preceding sentence, the Company shall
     mail to holders of record of the Notes a notice of the increase at least
     fifteen (15) days prior to the date the increased Conversion Rate takes
     effect, and such notice shall state the increased Conversion Rate and the
     period during which it will be in effect.

          (h)     No adjustment in the Conversion Rate shall be required unless
     such adjustment would require an increase or decrease of at least one
     percent (1%) in such rate; PROVIDED that any adjustments that by reason of
     this Section 14.05(h) are not required to be made shall be carried forward
     and taken into account in any subsequent adjustment. All calculations under
     this Article 14 shall be made by the Company and shall be made to the
     nearest cent or to the nearest one-ten thousandth (1/10,000) of a share, as
     the case may be. No adjustment need be made for rights to purchase Common
     Stock pursuant to a Company plan for reinvestment of dividends or interest
     or for any issuance of Common Stock or convertible or exchangeable
     securities or rights to purchase Common Stock or convertible or
     exchangeable securities.

                                       62


          (i)     Whenever the Conversion Rate is adjusted as herein provided,
     the Company shall promptly file with the Trustee and any conversion agent
     other than the Trustee an Officers' Certificate setting forth the
     Conversion Rate after such adjustment and setting forth a brief statement
     of the facts requiring such adjustment. Unless and until a Responsible
     Officer of the Trustee shall have received such Officers' Certificate, the
     Trustee shall not be deemed to have knowledge of any adjustment of the
     Conversion Rate and may assume that the last Conversion Rate of which it
     has knowledge is still in effect. Promptly after delivery of such
     certificate, the Company shall prepare a notice of such adjustment of the
     Conversion Rate setting forth the adjusted Conversion Rate and the date on
     which each adjustment becomes effective and shall mail such notice of such
     adjustment of the Conversion Rate to the holder of each Note at his last
     address appearing on the Note register provided for in Section 2.05 of this
     Indenture, within twenty (20) days after execution thereof. Failure to
     deliver such notice shall not affect the legality or validity of any such
     adjustment.

          (j)     In any case in which this Section 14.05 provides that an
     adjustment shall become effective immediately after (1) a record date or
     Record Date for an event (including without limitation, any event described
     in Section 14.05(d)), (2) the date fixed for the determination of
     stockholders entitled to receive a dividend or distribution pursuant to
     Section 14.05(a), (3) a date fixed for the determination of stockholders
     entitled to receive rights or warrants pursuant to Section 14.05(b), or (4)
     the Expiration Time for any tender or exchange offer pursuant to Section
     14.05(e), (each a "DETERMINATION DATE"), the Company may elect to defer
     until the occurrence of the applicable Adjustment Event (as hereinafter
     defined) (x) issuing to the holder of any Note converted after such
     Determination Date and before the occurrence of such Adjustment Event, the
     additional shares of Common Stock or other securities issuable upon such
     conversion by reason of the adjustment required by such Adjustment Event
     over and above the Common Stock issuable upon such conversion before giving
     effect to such adjustment and (y) paying to such holder any amount in cash
     in lieu of any fraction pursuant to Section 14.03. For purposes of this
     Section 14.05(j), the term "ADJUSTMENT EVENT" shall mean:

                  (i)     in any case referred to in clause (1) hereof, the
          occurrence of such event,

                  (ii)    in any case referred to in clause (2) hereof, the date
          any such dividend or distribution is paid or made,

                  (iii)   in any case referred to in clause (3) hereof, the date
          of expiration of such rights or warrants, and

                  (iv)    in any case referred to in clause (4) hereof, the date
          a sale or exchange of Common Stock pursuant to such tender or exchange
          offer is consummated and becomes irrevocable.

          (k)     For purposes of this Section 14.05, the number of shares of
     Common Stock at any time outstanding shall not include shares held in the
     treasury of the

                                       63


     Company but shall include shares issuable in respect of scrip certificates
     issued in lieu of fractions of shares of Common Stock. The Company will not
     pay any dividend or make any distribution on shares of Common Stock held in
     the treasury of the Company.

          SECTION 14.06.  EFFECT OF RECLASSIFICATION, CONSOLIDATION, MERGER OR
SALE. If any of the following events occur, namely (i) any reclassification or
change of the outstanding shares of Common Stock (other than a subdivision or
combination to which Section 14.05(c) applies), (ii) any consolidation, merger
or combination of the Company with another Person as a result of which holders
of Common Stock shall be entitled to receive stock, other securities or other
property or assets (including cash) with respect to or in exchange for such
Common Stock, (iii) the Company is a party to a binding share exchange, or (iv)
any sale or conveyance of all or substantially all of the properties and assets
of the Company to any other Person as a result of which holders of Common Stock
shall be entitled to receive stock, other securities or other property or assets
(including cash) with respect to or in exchange for such Common Stock, then the
Company or the successor or purchasing Person, as the case may be, shall execute
with the Trustee a supplemental indenture providing that each Note shall be
convertible into the kind and amount of shares of stock, other securities or
other property or assets (including cash) receivable upon such reclassification,
change, consolidation, merger, combination, binding share exchange, sale or
conveyance by a holder of a number of shares of Common Stock issuable upon
conversion of such Notes (assuming, for such purposes, a sufficient number of
authorized shares of Common Stock are available to convert all such Notes)
immediately prior to such reclassification, change, consolidation, merger,
combination, binding share exchange, sale or conveyance assuming such holder of
Common Stock did not exercise his rights of election, if any, as to the kind or
amount of stock, other securities or other property or assets (including cash)
receivable upon such reclassification, change, consolidation, merger,
combination, binding share exchange, sale or conveyance (PROVIDED that, if the
kind or amount of stock, other securities or other property or assets (including
cash) receivable upon such reclassification, change, consolidation, merger,
combination, binding share exchange, sale or conveyance is not the same for each
share of Common Stock in respect of which such rights of election shall not have
been exercised ("NONELECTING SHARE"), then for the purposes of this Section
14.06 the kind and amount of stock, other securities or other property or assets
(including cash) receivable upon such reclassification, change, consolidation,
merger, combination, binding share exchange, sale or conveyance for each
non-electing share shall be deemed to be the kind and amount so receivable per
share by a plurality of the non-electing shares). Such supplemental indenture
shall provide for adjustments, which shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Article 14.

          The Company shall cause notice of the execution of such supplemental
indenture to be mailed to each holder of Notes, at its address appearing on the
Note register provided for in Section 2.05 of this Indenture, within twenty (20)
days after execution thereof. Failure to deliver such notice shall not affect
the legality or validity of such supplemental indenture.

          The above provisions of this Section shall similarly apply to
successive reclassifications, changes, consolidations, mergers, combinations,
sales and conveyances.

          Interest will not accrue on any cash into which the Notes are
convertible.

                                       64


          If this Section 14.06 applies to any event or occurrence, Section
14.05 shall not apply.

          SECTION 14.07.  TAXES ON SHARES ISSUED. The issue of stock
certificates on conversions of Notes shall be made without charge to the
converting Noteholder for any documentary, stamp or similar issue or transfer
tax in respect of the issue thereof. The Company shall not, however, be required
to pay any such tax which may be payable in respect of any transfer involved in
the issue and delivery of stock in any name other than that of the holder of any
Note converted, and the Company shall not be required to issue or deliver any
such stock certificate unless and until the Person or Persons requesting the
issue thereof shall have paid to the Company the amount of such tax or shall
have established to the satisfaction of the Company that such tax has been paid.

          SECTION 14.08.  RESERVATION OF SHARES, SHARES TO BE FULLY PAID;
COMPLIANCE WITH GOVERNMENTAL REQUIREMENTS; LISTING OF COMMON STOCK. The Company
shall provide, free from preemptive rights, out of its authorized but unissued
shares or shares held in treasury, sufficient shares of Common Stock to provide
for the conversion of the Notes from time to time as such Notes are presented
for conversion.

          Before taking any action which would cause an adjustment increasing
the Conversion Rate to an amount that would cause the Conversion Price to be
reduced below the then par value, if any, of the shares of Common Stock issuable
upon conversion of the Notes, the Company will take all corporate action which
may, in the opinion of its counsel, be necessary in order that the Company may
validly and legally issue shares of such Common Stock at such adjusted
Conversion Rate.

          The Company covenants that all shares of Common Stock which may be
issued upon conversion of Notes will upon issue be fully paid and non-assessable
by the Company and free from all taxes, liens and charges with respect to the
issue by the Company thereof.

          The Company covenants that, if any shares of Common Stock to be
provided for the purpose of conversion of Notes hereunder require registration
with or approval of any governmental authority under any federal or state law
before such shares may be validly issued upon conversion, the Company will in
good faith and as expeditiously as possible, to the extent then permitted by the
rules and interpretations of the Commission (or any successor thereto), endeavor
to secure such registration or approval, as the case may be.

          The Company further covenants that, if at any time the Common Stock
shall be listed on the Nasdaq National Market or any other national securities
exchange or automated quotation system, the Company will, if permitted by the
rules of such exchange or automated quotation system, list and keep listed, so
long as the Common Stock shall be so listed on such exchange or automated
quotation system, all Common Stock issuable upon conversion of the Note;
PROVIDED that if the rules of such exchange or automated quotation system permit
the Company to defer the listing of such Common Stock until the first conversion
of the Notes into Common Stock in accordance with the provisions of this
Indenture, the Company covenants to list such Common Stock issuable upon
conversion of the Notes in accordance with the requirements of such exchange or
automated quotation system at such time.

                                       65


          SECTION 14.09.  RESPONSIBILITY OF TRUSTEE. The Trustee and any other
conversion agent shall not at any time be under any duty or responsibility to
any holder of Notes to determine the Conversion Rate or whether any facts exist
which may require any adjustment of the Conversion Rate, or with respect to the
nature or extent or calculation of any such adjustment when made, or with
respect to the method employed, or herein or in any supplemental indenture
provided to be employed, in making the same. The Trustee and any other
conversion agent shall not be accountable with respect to the validity or value
(or the kind or amount) of any shares of Common Stock, or of any securities or
property, which may at any time be issued or delivered upon the conversion of
any Note; and the Trustee and any other conversion agent make no representations
with respect thereto. Neither the Trustee nor any conversion agent shall be
responsible for any failure of the Company to issue, transfer or deliver any
shares of Common Stock or stock certificates or other securities or property or
cash upon the surrender of any Note for the purpose of conversion or to comply
with any of the duties, responsibilities or covenants of the Company contained
in this Article 14. Without limiting the generality of the foregoing, neither
the Trustee nor any conversion agent shall be under any responsibility to
determine the correctness of any provisions contained in any supplemental
indenture entered into pursuant to Section 14.06 relating either to the kind or
amount of shares of stock or securities or property (including cash) receivable
by Noteholders upon the conversion of their Notes after any event referred to in
such Section 14.06 or to any adjustment to be made with respect thereto, but,
subject to the provisions of Section 7.01, may accept as conclusive evidence of
the correctness of any such provisions, and shall be protected in relying upon,
the Officers' Certificate (which the Company shall be obligated to file with the
Trustee prior to the execution of any such supplemental indenture) with respect
thereto.

          SECTION 14.10.  NOTICE TO HOLDERS PRIOR TO CERTAIN ACTIONS. In case:

          (a)     the Company shall declare a dividend (or any other
     distribution) on its Common Stock that would require an adjustment in the
     Conversion Rate pursuant to Section 15.05; or

          (b)     the Company shall authorize the granting to the holders of all
     or substantially all of its Common Stock of rights or warrants to subscribe
     for or purchase any share of any class or any other rights or warrants; or

          (c)     of any reclassification or reorganization of the Common Stock
     of the Company (other than a subdivision or combination of its outstanding
     Common Stock, or a change in par value, or from par value to no par value,
     or from no par value to par value), or of any consolidation or merger to
     which the Company is a party and for which approval of any stockholders of
     the Company is required, or of the sale or transfer of all or substantially
     all of the assets of the Company; or

          (d)     of the voluntary or involuntary dissolution, liquidation or
     winding up of the Company;

the Company shall cause to be filed with the Trustee and to be mailed to each
holder of Notes at his address appearing on the Note register provided for in
Section 2.05 of this Indenture, as promptly as possible but in any event at
least ten (10) days prior to the applicable date

                                       66


hereinafter specified, a notice stating (x) the date on which a record is to be
taken for the purpose of such dividend, distribution or rights or warrants, or,
if a record is not to be taken, the date as of which the holders of Common Stock
of record to be entitled to such dividend, distribution or rights are to be
determined, or (y) the date on which such reclassification, consolidation,
merger, sale, transfer, dissolution, liquidation or winding up is expected to
become effective or occur, and the date as of which it is expected that holders
of Common Stock of record shall be entitled to exchange their Common Stock for
securities or other property deliverable upon such reclassification,
consolidation, merger, sale, transfer, dissolution, liquidation or winding up.
Failure to give such notice, or any defect therein, shall not affect the
legality or validity of such dividend, distribution, authorization, grant,
reclassification, reorganization, consolidation, merger, sale, transfer,
dissolution, liquidation or winding up.

          SECTION 14.11.  RIGHTS ISSUED IN RESPECT OF COMMON STOCK ISSUED UPON
CONVERSION. Each share of Common Stock issued upon conversion of Notes pursuant
to this Article 14 shall be entitled to receive the appropriate number of common
stock or preferred stock purchase rights, as the case may be (the "RIGHTS"), if
any, that shares of Common Stock are entitled to receive and the certificates
representing the Common Stock issued upon such conversion shall bear such
legends, if any, in each case as may be provided by the terms of any shareholder
rights agreement adopted by the Company, as the same may be amended from time to
time (in each case, a "RIGHTS AGREEMENT"). Provided that such Rights Agreement
requires that each share of Common Stock issued upon conversion of Notes at any
time prior to the distribution of separate certificates representing the Rights
be entitled to receive such Rights, then, notwithstanding anything else to the
contrary in this Article 14 there shall not be any adjustment to the conversion
privilege or Conversion Rate as a result of the issuance of Rights, but an
adjustment to the Conversion Rate shall be made with respect to Notes then
outstanding pursuant to Section 14.05(d) (to the extent required thereby) upon
the separation of the Rights from the Common Stock.

                                   ARTICLE XV
                            MISCELLANEOUS PROVISIONS

          SECTION 15.01.  PROVISIONS BINDING ON COMPANY'S SUCCESSORS. All the
covenants, stipulations, promises and agreements by the Company contained in
this Indenture shall bind its successors and assigns whether so expressed or
not.

          SECTION 15.02.  OFFICIAL ACTS BY SUCCESSOR CORPORATION. Any act or
proceeding by any provision of this Indenture authorized or required to be done
or performed by any board, committee or officer of the Company shall and may be
done and performed with like force and effect by the like board, committee or
officer of any Person that shall at the time be the lawful sole successor of the
Company.

          SECTION 15.03.  ADDRESSES FOR NOTICES, ETC. Any notice or demand which
by any provision of this Indenture is required or permitted to be given or
served by the Trustee or by the holders of Notes on the Company shall be deemed
to have been sufficiently given or made, for all purposes, if given or served by
being deposited postage prepaid by registered or certified mail in a post office
letter box addressed (until another address is filed by the Company with the
Trustee) to JetBlue Airways Corporation, 118-29 Queens Boulevard, Forest Hills,
NY 11375,

                                       67


Attention: General Counsel. Any notice, direction, request or demand hereunder
to or upon the Trustee shall be deemed to have been sufficiently given or made,
for all purposes, if given or served by being deposited, postage prepaid, by
registered or certified mail in a post office letter box addressed to the
Corporate Trust Office.

          The Trustee, by notice to the Company, may designate additional or
different addresses for subsequent notices or communications.

          Any notice or communication mailed to a Noteholder shall be mailed to
him by first class mail, postage prepaid, at his address as it appears on the
Note register and shall be sufficiently given to him if so mailed within the
time prescribed.

          Failure to mail a notice or communication to a Noteholder or any
defect in it shall not affect its sufficiency with respect to other Noteholders.
If a notice or communication is mailed in the manner provided above, it is duly
given, whether or not the addressee receives it.

          SECTION 15.04.  GOVERNING LAW. This Indenture and each Note shall be
deemed to be a contract made under the laws of the State of New York, and for
all purposes shall be construed in accordance with the laws of the State of New
York without reference to its principles of conflict of laws.

          SECTION 15.05.  EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT,
CERTIFICATES TO TRUSTEE. Upon any application or demand by the Company to the
Trustee to take any action under any of the provisions of this Indenture, the
Company shall furnish to the Trustee an Officers' Certificate stating that all
conditions precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with, and an Opinion of Counsel stating that,
in the opinion of such counsel, all such conditions precedent have been complied
with.

          Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or covenant
provided for in this Indenture shall include: (1) a statement that the person
making such certificate or opinion has read such covenant or condition; (2) a
brief statement as to the nature and scope of the examination or investigation
upon which the statement or opinion contained in such certificate or opinion is
based; (3) a statement that, in the opinion of such person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and (4) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with.

          SECTION 15.06.  LEGAL HOLIDAYS. In any case in which the date of
maturity of interest on or principal of the Notes or the redemption date or
Repurchase Date of any Note will not be a Business Day, then payment of such
interest on or principal of the Notes need not be made on such date, but may be
made on the next succeeding Business Day with the same force and effect as if
made on the date of maturity or the redemption date or Repurchase Date, and no
interest shall accrue for the period from and after such date.

          SECTION 15.07.  TRUST INDENTURE ACT. This Indenture is hereby made
subject to, and shall be governed by, the provisions of the Trust Indenture Act
required to be part of and to govern indentures qualified under the Trust
Indenture Act; PROVIDED that unless otherwise

                                       68


required by law, notwithstanding the foregoing, this Indenture and the Notes
issued hereunder shall not be subject to the provisions of subsections (a)(1),
(a)(2), and (a)(3) of Section 314 of the Trust Indenture Act as now in effect or
as hereafter amended or modified; PROVIDED FURTHER that this Section 15.07 shall
not require this Indenture or the Trustee to be qualified under the Trust
Indenture Act prior to the time such qualification is in fact required under the
terms of the Trust Indenture Act, nor shall it constitute any admission or
acknowledgment by any party to the Indenture that any such qualification is
required prior to the time such qualification is in fact required under the
terms of the Trust Indenture Act. If any provision hereof limits, qualifies or
conflicts with another provision hereof which is required to be included in an
indenture qualified under the Trust Indenture Act, such required provision shall
control.

          SECTION 15.08.  NO SECURITY INTEREST CREATED. Nothing in this
Indenture or in the Notes, expressed or implied, shall be construed to
constitute a security interest under the Uniform Commercial Code or similar
legislation, as now or hereafter enacted and in effect, in any jurisdiction in
which property of the Company or its subsidiaries is located.

          SECTION 15.09.  BENEFITS OF INDENTURE. Nothing in this Indenture or in
the Notes, express or implied, shall give to any Person, other than the parties
hereto, any paying agent, any authenticating agent, conversion agent, any Note
registrar and their successors hereunder and the holders of Notes any benefit or
any legal or equitable right, remedy or claim under this Indenture.

          SECTION 15.10.  TABLE OF CONTENTS, HEADINGS, ETC. The table of
contents and the titles and headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not to be
considered a part hereof, and shall in no way modify or restrict any of the
terms or provisions hereof.

          SECTION 15.11.  AUTHENTICATING AGENT. The Trustee may appoint an
authenticating agent that shall be authorized to act on its behalf, and subject
to its direction, in the authentication and delivery of Notes in connection with
the original issuance thereof and transfers and exchanges of Notes hereunder,
including under Sections 2.04, 2.05, 2.06, 2.07, 3.03 and 3.05, as fully to all
intents and purposes as though the authenticating agent had been expressly
authorized by this Indenture and those Sections to authenticate and deliver
Notes. For all purposes of this Indenture, the authentication and delivery of
Notes by the authenticating agent shall be deemed to be authentication and
delivery of such Notes "by the Trustee" and a certificate of authentication
executed on behalf of the Trustee by an authenticating agent shall be deemed to
satisfy any requirement hereunder or in the Notes for the Trustee's certificate
of authentication. Such authenticating agent shall at all times be a Person
eligible to serve as trustee hereunder pursuant to Section 7.09.

          Any corporation into which any authenticating agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, consolidation or conversion to which any authenticating agent
shall be a party, or any corporation succeeding to the corporate trust business
of any authenticating agent, shall be the successor of the authenticating agent
hereunder, if such successor corporation is otherwise eligible under this
Section 15.11, without the execution or filing of any paper or any further act
on the part of the parties hereto or the authenticating agent or such successor
corporation.

                                       69


          Any authenticating agent may at any time resign by giving written
notice of resignation to the Trustee and to the Company. The Trustee may at any
time terminate the agency of any authenticating agent by giving written notice
of termination to such authenticating agent and to the Company. Upon receiving
such a notice of resignation or upon such a termination, or in case at any time
any authenticating agent shall cease to be eligible under this Section, the
Trustee shall either promptly appoint a successor authenticating agent or itself
assume the duties and obligations of the former authenticating agent under this
Indenture and, upon such appointment of a successor authenticating agent, if
made, shall give written notice of such appointment of a successor
authenticating agent to the Company and shall mail notice of such appointment of
a successor authenticating agent to all holders of Notes as the names and
addresses of such holders appear on the Note register.

          The Company agrees to pay to the authenticating agent from time to
time such reasonable compensation for its services as shall be agreed upon in
writing between the Company and the authenticating agent.

          The provisions of Sections 7.03, 7.04, 7.05, 8.03 and this Section
15.11 shall be applicable to any authenticating agent.

          SECTION 15.12.  EXECUTION IN COUNTERPARTS. This Indenture may be
executed in any number of counterparts, each of which shall be an original, but
such counterparts shall together constitute but one and the same instrument.

          SECTION 15.13.  SEVERABILITY. In case any provision in this Indenture
or in the Notes shall be invalid, illegal or unenforceable, then (to the extent
permitted by law) the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.

          Wilmington Trust Company hereby accepts the trusts in this Indenture
declared and provided, upon the terms and conditions herein above set forth.

                                       70


          IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed.

                                          JETBLUE AIRWAYS CORPORATION,
                                             as Issuer


                                          By: /s/ JOHN OWEN
                                              ----------------------------------
                                              Name:  John Owen
                                              Title: Executive Vice President &
                                                     Chief Financial Officer


                                          WILMINGTON TRUST COMPANY, as
                                            Trustee


                                          By: /s/ JOANN A. ROZELL
                                              ----------------------------------
                                              Name:  Joann A. Rozell
                                              Title: Financial Services Officer

                                       71


                                                                       EXHIBIT A

          [Include only for Global Notes:]

[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) (THE
"DEPOSITARY", WHICH TERM INCLUDES ANY SUCCESSOR DEPOSITARY FOR THE CERTIFICATES)
TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY (AND
ANY PAYMENT HEREIN IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY), ANY TRANSFER, PLEDGE, OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH
AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]

[Include only for Notes that are Restricted Securities]

[THE NOTE EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT AS SET FORTH
IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS
THAT IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT); (2) AGREES THAT IT WILL NOT, PRIOR TO EXPIRATION OF THE HOLDING
PERIOD APPLICABLE TO SALES OF THIS NOTE UNDER RULE 144(K) UNDER THE SECURITIES
ACT (OR ANY SUCCESSOR PROVISION), RESELL OR OTHERWISE TRANSFER THIS NOTE OR THE
COMMON STOCK ISSUABLE UPON CONVERSION OF THIS NOTE EXCEPT (A) TO JETBLUE AIRWAYS
CORPORATION OR ANY SUBSIDIARY THEREOF, (B) TO A QUALIFIED INSTITUTIONAL BUYER IN
COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) PURSUANT TO THE
EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF
AVAILABLE) OR (D) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT (AND WHICH CONTINUES TO BE EFFECTIVE AT THE
TIME OF SUCH TRANSFER); (3) PRIOR TO SUCH TRANSFER (OTHER THAN A TRANSFER
PURSUANT TO CLAUSE (2)(D) ABOVE), IT WILL FURNISH TO WILMINGTON TRUST COMPANY,
AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS APPLICABLE) AND UPON THE COMPANY'S
REQUEST, TO THE COMPANY, SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER
INFORMATION AS THE TRUSTEE OR THE COMPANY MAY REASONABLY REQUIRE TO CONFIRM THAT
SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION
NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT; AND (4)
AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE IS TRANSFERRED A
NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. THIS LEGEND WILL BE REMOVED
UPON THE EARLIER OF THE TRANSFER OF THIS NOTE PURSUANT

                                       A-1


TO CLAUSE (2)(D) ABOVE OR UPON ANY TRANSFER OF THIS NOTE UNDER RULE 144(K) UNDER
THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION). THE INDENTURE CONTAINS A
PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE
IN VIOLATION OF THE FOREGOING RESTRICTION.]

                                       A-2


                           JETBLUE AIRWAYS CORPORATION

                     3 1/2% CONVERTIBLE SENIOR NOTE DUE 2033

                                                              CUSIP: 477143 AA 9

No.  $ ___

          JetBlue Airways Corporation, a corporation duly organized and validly
existing under the laws of the State of Delaware (herein called the "COMPANY",
which term includes any successor corporation under the Indenture referred to on
the reverse hereof), for value received hereby promises to pay to __________ or
its registered assigns, [the principal sum of            DOLLARS] [the principal
sum set forth on Schedule I hereto](1) on July 15, 2033 at the office or agency
of the Company maintained for that purpose in accordance with the terms of the
Indenture, in such coin or currency of the United States of America as at the
time of payment shall be legal tender for the payment of public and private
debts, and to pay interest, semiannually on January 15 and July 15 of each year,
commencing January 15, 2004, on said principal sum at said office or agency, in
like coin or currency, at the rate per annum of 3 1/2%, from the January 15 or
July 15, as the case may be, next preceding the date of this Note to which
interest has been paid or duLy provided for, unless the date hereof is a date to
which interest has been paid or duly provided for, in which case from the date
of this Note, or unless no interest has been paid or duly provided for on the
Notes, in which case from July 15, 2003 until payment of said principal sum has
been made or duly provided for. Notwithstanding the foregoing, if the date
hereof is after any January 15 or July 15, as the case may be, and before the
following January 15 or July 15, this Note shall bear interest from such January
15 or July 15; PROVIDED that if the Company shall default in the payment of
interest due on such January 15 or July 15, then this Note shall bear interest
from the next preceding January 15 or July 15 to which interest has been paid or
duly provided for or, if no interest has been paid or duly provided for on such
Note, from July 15, 2003. Except as otherwise provided in the Indenture, the
interest payable on the Note pursuant to the Indenture on any January 15 or July
15 will be paid to the Person entitled thereto as it appears in the Note
register at the close of business on the record date, which shall be the January
1 or July 1 (whether or not a Business Day) next preceding such January 15 or
July 15, as provided in the Indenture; PROVIDED that any such interest not
punctually paid or duly provided for shall be payable as provided in the
Indenture. Interest may, at the option of the Company, be paid either (i) by
check mailed to the registered address of such Person (PROVIDED that the holder
of Notes with an aggregate principal amount in excess of $2,000,000 shall, at
the written election (timely made and containing appropriate wire transfer
information) of such holder, be paid by wire transfer of immediately available
funds) or (ii) by transfer to an account maintained by such Person located in
the United States; PROVIDED that payments to the Depositary will be made by wire
transfer of immediately available funds to the account of the Depositary or its
nominee.

          The Company promises to pay interest on overdue principal (to the
extent that payment of such interest is enforceable under applicable law) at the
rate of 4 1/2%, per annum.

- ----------
(1) For Global Notes only.

                                       A-3


          Reference is made to the further provisions of this Note set forth on
the reverse hereof, including, without limitation, provisions giving the holder
of this Note the right to convert this Note into Common Stock of the Company on
the terms and subject to the limitations referred to on the reverse hereof and
as more fully specified in the Indenture. Such further provisions shall for all
purposes have the same effect as though fully set forth at this place.

          This Note shall be deemed to be a contract made under the laws of the
State of New York, and for all purposes shall be construed in accordance with
and governed by the laws of the State of New York without reference to its
principles of conflict of laws.

          This Note shall not be valid or become obligatory for any purpose
until the certificate of authentication hereon shall have been manually signed
by the Trustee or a duly authorized authenticating agent under the Indenture.

                                       A-4


          IN WITNESS WHEREOF, the Company has caused this Note to be duly
executed.

[SEAL]                                    JETBLUE AIRWAYS CORPORATION


                                          By:
                                              --------------------


Attest:

By:
    ----------------------


TRUSTEE'S CERTIFICATE OF AUTHENTICATION

This is one of the Notes described in the within-named Indenture.

WILMINGTON TRUST COMPANY, as Trustee

By:
    ---------------------------
    Authorized Officer


Dated:

                                       A-5


                             FORM OF REVERSE OF NOTE

                           JETBLUE AIRWAYS CORPORATION

                     3 1/2% CONVERTIBLE SENIOR NOTE DUE 2033

          This Note is one of a duly authorized issue of Notes of the Company,
designated as its 3 1/2% Convertible Notes Due 2033 (herein called the "NOTES"),
limited in aggregate principal amount to $175,000,000, issued and to be issued
under and pursuant to an Indenture dated as of July 15, 2003 (herein called the
"INDENTURE"), between the Company and Wilmington Trust Company, as trustee
(herein called the "TRUSTEE"), to which Indenture and all indentures
supplemental thereto reference is hereby made for a description of the rights,
limitations of rights, obligations, duties and immunities thereunder of the
Trustee, the Company and the holders of the Notes.

          In case an Event of Default shall have occurred and be continuing, the
principal of, and accrued interest on, all Notes may be declared by either the
Trustee or the holders of not less than 25% in aggregate principal amount of the
Notes then outstanding, and upon said declaration shall become, due and payable,
in the manner, with the effect and subject to the conditions provided in the
Indenture.

          The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the holders of at least a majority in aggregate
principal amount of the Notes at the time outstanding, to execute supplemental
indentures adding any provisions to or changing in any manner or eliminating any
of the provisions of the Indenture or of any supplemental indenture or modifying
in any manner the rights of the holders of the Notes; PROVIDED that no such
supplemental indenture shall (i) change the fixed maturity of any Note, or
reduce the rate or change the time of payment of interest thereon, or reduce the
principal amount thereof, or reduce any amount payable on redemption or
repurchase thereof, or impair the right of any Noteholder to institute suit for
the payment thereof, or make the principal thereof or interest thereon payable
in any coin or currency or payable at any place other than that provided in the
Indenture or the Notes, or change the obligation of the Company to redeem any
Note on a redemption date in a manner adverse to the holders of Notes, or change
the obligation of the Company to redeem any Note upon the happening of a
Designated Event in a manner adverse to the holders of Notes, or change the
obligation of the Company to repurchase any Note on a Repurchase Date in a
manner adverse to the holders of Notes, or reduce the Conversion Rate otherwise
than in accordance with the terms of the Indenture or otherwise impair the right
to convert the Notes into Common Stock subject to the terms set forth herein,
including Section 14.06, thereof or reduce the quorum or the voting requirements
under the Indenture, or modify any of the provisions of Section 10.02 or Section
6.07, except to increase any such percentage or to provide that certain other
provisions of this Indenture cannot be modified or waived without the consent of
the holder of each Note so affected, or change any obligation of the Company to
maintain an office or agency in the places and for the purposes set forth in
Section 4.01 thereof, in each case, without the consent of the holder of each
Note so affected, or (ii) reduce the aforesaid percentage of Notes, the holders
of which are required to consent to any such supplemental indenture or to waive
any past Event of Default, without the consent of the holders of each Notes
affected thereby. Subject to the provisions of the Indenture, the holders of a
majority in aggregate principal amount of the Notes

                                       A-6


at the time outstanding may on behalf of the holders of all of the Notes waive
any past default or Event of Default under the Indenture and its consequences
except a default in the payment of interest, or the principal of, any of the
Notes, or a failure by the Company to convert any Notes into Common Stock of the
Company, or a default in the payment of the redemption price, or a default in
the payment of the repurchase price on a Repurchase Date, or a default in
respect of a covenant or provisions of the Indenture which under Article 10 of
the Indenture cannot be modified or amended without the consent of the holders
of each or all Notes then outstanding or affected thereby. Any such consent or
waiver by the holder of this Note (unless revoked as provided in the Indenture)
shall be conclusive and binding upon such holder and upon all future holders and
owners of this Note and any Notes which may be issued in exchange or
substitution hereof, irrespective of whether or not any notation thereof is made
upon this Note or such other Notes.

          No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the place, at the respective times, at the rate and in the coin or currency
herein prescribed.

          Interest on the Notes shall be computed on the basis of a 360-day year
of twelve 30-day months.

          The Notes are issuable in fully registered form, without coupons, in
denominations of $1,000 principal amount and any multiple of $1,000. At the
office or agency of the Company referred to on the face hereof, and in the
manner and subject to the limitations provided in the Indenture, without payment
of any service charge but with payment of a sum sufficient to cover any tax,
assessment or other governmental charge that may be imposed in connection with
any registration or exchange of Notes, Notes may be exchanged for a like
aggregate principal amount of Notes of any other authorized denominations.

          At any time on or after July 18, 2006 and prior to July 18, 2008, the
Company may redeem any of the Notes at a redemption price of 100% of the
principal amount of the Notes being redeemed, plus accrued and unpaid interest,
if the Closing Sale Price on the Nasdaq National Market has exceeded 150% of the
Conversion Price for at least 20 Trading Days in any period of 30 consecutive
Trading Days.

          At any time on or after July 18, 2008 and prior to maturity, the Notes
may be redeemed at the option of the Company, in whole or in part, upon mailing
a notice of such redemption not less than 30 days but not more than 60 days
before the redemption date to the holders of Notes at their last registered
addresses, all as provided in the Indenture, at a redemption price equal to 100%
of the principal amount of the Notes to be redeemed, together with accrued and
unpaid interest to, but excluding, the redemption date; PROVIDED that if the
redemption date is on a January 15 or July 15, then the interest payable on such
date shall be paid to the holder of record on the preceding January 1 or July 1,
respectively.

          The Company may not give notice of any redemption of the Notes if a
default in the payment of interest on the Notes has occurred and is continuing.

                                       A-7


          The Notes are not subject to redemption through the operation of any
sinking fund.

          If a Designated Event occurs at any time prior to maturity of the
Notes, this Note will be redeemable on a Designated Event Redemption Date, 30
days after notice thereof, at the option of the holder of this Note at a
redemption price equal to 100% of the principal amount thereof, together with
accrued interest to (but excluding) the redemption date; PROVIDED that if such
Designated Event Redemption Date is a January 15 or July 15, the interest
payable on such date shall be paid to the holder of record of this Note on the
preceding January 1 or July 1, respectively. The Notes will be redeemable in
multiples of $1,000 principal amount. The Company shall mail to all holders of
record of the Notes a notice of the occurrence of a Designated Event and of the
redemption right arising as a result thereof on or before the 10th day after the
occurrence of such Designated Event. For a Note to be so redeemed at the option
of the holder, the Company must receive at the office or agency of the Company
maintained for that purpose in accordance with the terms of the Indenture, such
Note with the form entitled "Option to Elect Repayment Upon a Designated Event"
on the reverse thereof duly completed, together with such Note, duly endorsed
for transfer, on or before the 30th day after the date of such notice of a
Designated Event (or if such 30th day is not a Business Day, the immediately
succeeding Business Day).

          Subject to the terms and conditions of the Indenture, the Company
shall become obligated to purchase, at the option of the holder, all or any
portion of the Notes held by such holder on July 15, 2008, July 15, 2013, July
15, 2018, July 15, 2023 and July 15, 2028, in whole multiples of $1,000 at a
purchase price of 100% of the principal amount, plus any accrued and unpaid
interest, on such Note up to the Repurchase Date. To exercise such right, a
holder shall deliver to the Company such Note with the form entitled "Repurchase
Notice" on the reverse thereof duly completed, together with the Note, duly
endorsed for transfer, at any time from the opening of business on the date that
is 20 Business Days prior to such Repurchase Date until the close of business on
the Repurchase Date, and shall deliver the Notes to the Trustee (or other paying
agent appointed by the Company) as set forth in the Indenture.

          Holders have the right to withdraw any Repurchase Notice by delivering
to the Trustee (or other paying agent appointed by the Company) a written notice
of withdrawal up to the close of business on the Repurchase Date, all as
provided in the Indenture.

          If cash sufficient to pay the purchase price of all Notes or portions
thereof to be purchased as of the Repurchase Date is deposited with the Trustee
(or other paying agent appointed by the Company), on the Business Day following
the Repurchase Date, interest will cease to accrue on such Notes (or portions
thereof) immediately after such Repurchase Date, and the holder thereof shall
have no other rights as such other than the right to receive the purchase price
upon surrender of such Note.

          Subject to the occurrence of certain events and in compliance with the
provisions of the Indenture, the holder hereof has the right, at its option, to
convert each $1,000 principal amount of the Notes into 15.6863 shares of the
Company's Common Stock, subject to adjustment as provided in the Indenture. A
Note in respect of which a holder is exercising its right to require redemption
upon a Designated Event or repurchase on a Repurchase Date may be

                                       A-8


converted only if such holder withdraws its election to exercise either such
right in accordance with the terms of the Indenture. The Conversion Rate for the
Notes on any Conversion Date shall be determined as set forth in the Indenture.
The Company shall deliver cash or a check in lieu of any fractional share of
Common Stock.

          The Company shall deliver to the holder through the conversion agent,
no later than the third Business Day following the Conversion Date, a
certificate for the number of whole shares of Common Stock issuable upon the
conversion and, if applicable, cash in lieu of any fractional shares.

          A holder may convert a portion of a Note if the principal amount of
such portion is $1,000 or an integral multiple of $1,000. No payment or
adjustment shall be made for dividends on the Common Stock except as provided in
the Indenture. On conversion of a Note, except for conversion during the period
from the close of business on any record date immediately preceding any interest
payment date to the close of business on the Business Day immediately preceding
such interest payment date, in which case the holder on such record date shall
receive the interest payable on such interest payment date, that portion of
accrued and unpaid interest on the converted Note attributable to the period
from the most recent interest payment date (or, if no interest payment date has
occurred, from the date of original issuance of the Notes) through the
Conversion Date shall not be cancelled, extinguished or forfeited, but rather
shall be deemed to be paid in full to the holder thereof through delivery of the
Common Stock (together with the cash payment, if any, in lieu of fractional
shares), or cash in lieu thereof, in exchange for the Note being converted
pursuant to the provisions hereof.

          Notes or portions thereof surrendered for conversion during the period
from the close of business on any record date immediately preceding any interest
payment date to the close of business on the Business Day immediately preceding
such interest payment date shall be accompanied by payment to the Company or its
order, in immediately available funds or other funds acceptable to the Company,
of an amount equal to the interest payable on such interest payment date with
respect to the principal amount of Notes or portions thereof being surrendered
for conversion; PROVIDED that no such payment need be made if (1) the Company
has specified a Redemption Date that occurs during the period from the close of
business on a record date to the close of business on the Business Day
immediately preceding the interest payment date to which such record date
relates, (2) the Company has specified a Designated Event Redemption Date during
such period or (3) only to the extent of overdue interest, any overdue interest
exists on the Conversion Date with respect to the Notes converted.

          No fractional shares will be issued upon conversion; in lieu thereof,
an amount will be paid in cash based upon the current market price of the Common
Stock as provided in Section 14.03 of the Indenture.

          To convert a Note, a holder must (a) complete and manually sign the
conversion notice set forth below or a facsimile thereof and deliver such notice
to a conversion agent, (b) surrender the Note to the conversion agent, (c)
furnish appropriate endorsements and transfer documents (including any
certification that may be required under applicable law) if required by the
conversion agent, (d) pay any transfer or similar tax, if required and (e) if
required pay funds equal to the interest payable on the next interest payment
date.

                                       A-9


          The Conversion Rate will be adjusted as set forth in Article 14 of the
Indenture.

          Any Notes called for redemption, unless surrendered for conversion by
the holders thereof on or before the close of business on the Business Day
preceding the redemption date, may be deemed to be redeemed from the holders of
such Notes for an amount equal to the applicable redemption price, together with
accrued but unpaid interest to, but excluding, the date fixed for redemption, by
one or more investment banks or other purchasers who may agree with the Company
(i) to purchase such Notes from the holders thereof and convert them into shares
of the Company's Common Stock and (ii) to make payment for such Notes as
aforesaid to the Trustee in trust for the holders.

          Upon due presentment for registration of transfer of this Note at the
office or agency of the Company maintained for that purpose in accordance with
the terms of the Indenture, a new Note or Notes of authorized denominations for
an equal aggregate principal amount will be issued to the transferee in exchange
thereof, subject to the limitations provided in the Indenture, without charge
except for any tax, assessment or other governmental charge imposed in
connection therewith.

          The Company, the Trustee, any authenticating agent, any paying agent,
any conversion agent and any Note registrar may deem and treat the registered
holder hereof as the absolute owner of this Note (whether or not this Note shall
be overdue and notwithstanding any notation of ownership or other writing hereon
made by anyone other than the Company or any Note registrar) for the purpose of
receiving payment hereof, or on account hereof, for the conversion hereof and
for all other purposes, and neither the Company nor the Trustee nor any other
authenticating agent nor any paying agent nor other conversion agent nor any
Note registrar shall be affected by any notice to the contrary. All payments
made to or upon the order of such registered holder shall, to the extent of the
sum or sums paid, satisfy and discharge liability for monies payable on this
Note.

          No recourse for the payment of the principal of or interest on this
Note, or for any claim based hereon or otherwise in respect hereof, and no
recourse under or upon any obligation, covenant or agreement of the Company in
the Indenture or any supplemental indenture or in any Note, or because of the
creation of any indebtedness represented thereby, shall be had against any
incorporator, stockholder, employee, agent, officer or director or subsidiary,
as such, past, present or future, of the Company or of any successor
corporation, either directly or through the Company or any successor
corporation, whether by virtue of any constitution, statute or rule of law or by
the enforcement of any assessment or penalty or otherwise, all such liability
being, by acceptance hereof and as part of the consideration for the issue
hereof, expressly waived and released.

          Terms used in this Note and defined in the Indenture are used herein
as therein defined.

                                      A-10


                                  ABBREVIATIONS

          The following abbreviations, when used in the inscription of the face
of this Note, shall be construed as though they were written out in full
according to applicable laws or regulations.

                                                     
TEN COM-     as tenants in common                          UNIF GIFT MIN ACT-___ Custodian ___
TEN ENT-     as tenant by the entireties                   (Cust)             (Minor)
JT TEN-      as joint tenants with right of survivorship   under Uniform Gifts to Minors Act
             and not as tenants in common                  _________________________________
                                                                       (State)



          Additional abbreviations may also be used though not in the above
list.

                                       A-1


                                CONVERSION NOTICE

TO:       JETBLUE AIRWAYS CORPORATION
          WILMINGTON TRUST COMPANY

          The undersigned registered owner of this Note hereby irrevocably
exercises the option to convert this Note, or the portion thereof (which is
$1,000 or a multiple thereof) below designated, into shares of Common Stock of
JetBlue Airways Corporation in accordance with the terms of the Indenture
referred to in this Note, and directs that the shares issuable and deliverable
upon such conversion, together with any check in payment for fractional shares
and any Notes representing any unconverted principal amount hereof, be issued
and delivered to the registered holder hereof unless a different name has been
indicated below. Capitalized terms used herein but not defined shall have the
meanings ascribed to such terms in the Indenture. If shares or any portion of
this Note not converted are to be issued in the name of a person other than the
undersigned, the undersigned will provide the appropriate information below and
pay all transfer taxes payable with respect thereto. Any amount required to be
paid by the undersigned on account of interest accompanies this Note.

Dated:________________



                                          --------------------------------
                                          Name of Holder or underlying
                                          participant of Depository


                                          --------------------------------

                                          --------------------------------
                                          Signature(s)

                                          Signature(s) must be guaranteed by an
                                          "eligible guarantor institution"
                                          meeting the requirements of the Note
                                          registrar, which requirements include
                                          membership or participation in the
                                          Security Transfer Agent Medallion
                                          Program ("STAMP") or such other
                                          "signature guarantee program" as may
                                          be determined by the Note registrar in
                                          addition to, or in substitution for,
                                          STAMP, all in accordance with the
                                          Securities Exchange Act of 1934, as
                                          amended.


                                          --------------------------------
                                          Signature Guarantee

          Fill in the registration of shares of Common Stock if to be issued,
and Notes if to be delivered, other than to and in the name of the registered
holder:


- -------------------------------
(Name)

                                       A-2


- -------------------------------
(Street Address)

- -------------------------------
(City, State and Zip Code)


- -------------------------------
Please print name and address

Principal amount to be converted
(if less than all):

$
- -------------------------------

Social Security or Other Taxpayer
 Identification Number:


- -------------------------------

                                       A-3


                           OPTION TO ELECT REDEMPTION
                             UPON A DESIGNATED EVENT

TO:       JETBLUE AIRWAYS CORPORATION
          WILMINGTON TRUST COMPANY

          The undersigned registered owner of this Note hereby irrevocably
acknowledges receipt of a notice from JetBlue Airways Corporation (the
"COMPANY") as to the occurrence of a Designated Event with respect to the
Company and requests and instructs the Company to redeem the entire principal
amount of this Note, or the portion thereof (which is $1,000 or a multiple
thereof) below designated, in accordance with the terms of the Indenture
referred to in this Note at the price of 100% of such entire principal amount or
portion thereof, together with accrued interest to, but excluding, the
Designated Event Redemption Date, to the registered holder hereof. Capitalized
terms used herein but not defined shall have the meanings ascribed to such terms
in the Indenture.

Dated:______________

                                          --------------------------------

                                          --------------------------------
                                          Signature(s)


                                          NOTICE: The above signatures of the
                                          holder(s) hereof must correspond with
                                          the name as written upon the face of
                                          the Note in every particular without
                                          alteration or enlargement or any
                                          change whatever.

                                          Principal amount to be repaid (if less
                                          than all):


                                          --------------------------------

                                          --------------------------------
                                          Social Security or Other Taxpayer
                                          Identification Number

                                       A-4


                                REPURCHASE NOTICE

TO:       JETBLUE AIRWAYS CORPORATION
          WILMINGTON TRUST COMPANY

The undersigned registered owner of this Note hereby irrevocably acknowledges
receipt of a notice from JetBlue Airways Corporation (the "COMPANY") regarding
the right of holders to elect to require the Company to repurchase the Notes and
requests and instructs the Company to repay the entire principal amount of this
Note, or the portion thereof (which is $1,000 or an integral multiple thereof)
below designated, in accordance with the terms of the Indenture at the price of
100% of such entire principal amount or portion thereof, together with accrued
interest to, by excluding, the Repurchase Date, to the registered holder hereof.
Capitalized terms used herein but not defined shall have the meanings ascribed
to such terms in the Indenture. The Notes shall be repurchased by the Company as
of the Repurchase Date pursuant to the terms and conditions specified in the
Indenture.

          Dated:

          Signature(s):

          NOTICE: The above signatures of the holder(s) hereof must correspond
with the name as written upon the face of the Note in every particular without
alteration or enlargement or any change whatever.

          Note Certificate Number (if applicable):

          Principal amount to be repurchased (if less than all):

          Social Security or Other Taxpayer Identification Number:

                                       A-5


                                   ASSIGNMENT

          For value received ______________________________hereby sell(s)
assign(s) and transfer(s) unto ___________________________________ (Please
insert social security or other Taxpayer Identification Number of assignee) the
within Note, and hereby irrevocably constitutes and appoints
______________________________________ attorney to transfer said Note on the
books of the Company, with full power of substitution in the premises.

          In connection with any transfer of the Note prior to the expiration of
the holding period applicable to sales thereof under Rule 144(k) under the
Securities Act of 1933, as amended (or any successor provision) (other than any
transfer pursuant to a registration statement that has been declared effective
under the Securities Act of 1933, as amended), the undersigned confirms that
such Note is being transferred:

     / /  To JetBlue Airways Corporation or a subsidiary thereof; or

     / /  To a "qualified institutional buyer" in compliance with Rule 144A
          under the Securities Act of 1933, as amended; or

     / /  Pursuant to and in compliance with Rule 144 under the Securities Act
          of 1933, as amended; or

     / /  Pursuant to a Registration Statement which has been declared effective
          under the Securities Act of 1933, as amended, and which continues to
          be effective at the time of transfer;

and unless the Note has been transferred to JetBlue Airways Corporation or a
subsidiary thereof, the undersigned confirms that such Note is not being
transferred to an "affiliate" of the Company as defined in Rule 144 under the
Securities Act of 1933, as amended.

          UNLESS ONE OF THE BOXES IS CHECKED, THE TRUSTEE WILL REFUSE TO
REGISTER ANY OF THE NOTES EVIDENCED BY THIS CERTIFICATE IN THE NAME OF ANY
PERSON OTHER THAN THE REGISTERED HOLDER THEREOF.

Dated: ____________


                                          --------------------------------


                                          --------------------------------
                                          Signature(s)

                                          Signature(s) must be guaranteed by an
                                          "eligible guarantor institution"
                                          meeting the requirements of the Note
                                          registrar, which requirements include
                                          membership or participation in the
                                          Security Transfer Agent Medallion
                                          Program ("STAMP") or such other
                                          "signature guarantee program" as may
                                          be determined by the Note registrar in
                                          addition to, or in substitution

                                       A-6


                                          for, STAMP, al in accordance with the
                                          Securities Exchange Act of 1934, as
                                          amended.


                                          --------------------------------
                                          Signature Guarantee

NOTICE: The signature on the Conversion Notice, the Option to Elect Redemption
Upon a Designated Event, the Repurchase Notice or the Assignment must correspond
with the name as written upon the face of the Note in every particular without
alteration or enlargement or any change whatever.

                                       A-7


                                                                      Schedule I

[Include Schedule I only for a Global Note]

                           JETBLUE AIRWAYS CORPORATION
                        3 1/2% Convertible Note Due 2033

No. _______



                                                               Authorized Signature
                              Notation Explaining Principal    of Trustee or
Date      Principal Amount    Amount Recorded                  Custodian
- -----------------------------------------------------------------------------------
                                                      




                                       A-8

EX-4.2

                                                                     EXHIBIT 4.2

                                                                  EXECUTION COPY

                          REGISTRATION RIGHTS AGREEMENT

                                     BETWEEN

                           JETBLUE AIRWAYS CORPORATION

                                   AS ISSUER,

                                       AND

                        MORGAN STANLEY & CO. INCORPORATED

                                       AND

                        RAYMOND JAMES & ASSOCIATES, INC.

                                       AND

                            BLAYLOCK & PARTNERS, L.P.

                              AS INITIAL PURCHASERS


                            DATED AS OF JULY 15, 2003



     REGISTRATION RIGHTS AGREEMENT dated as of July 15, 2003 among JetBlue
Airways Corporation, a Delaware corporation (the "COMPANY"), and Morgan Stanley
& Co. Incorporated, Raymond James & Associates, Inc. and Blaylock & Partners,
L.P. (collectively, the "INITIAL PURCHASERS") pursuant to the Purchase Agreement
dated July 10, 2003 (the "PURCHASE AGREEMENT"), between the Company and the
Initial Purchasers. In order to induce the Initial Purchasers to enter into the
Purchase Agreement, the Company has agreed to provide the registration rights
set forth in this Agreement. The execution of this Agreement is a condition to
the closing under the Purchase Agreement.

     The Company agrees with the Initial Purchasers, (i) for their benefit as
Initial Purchasers and (ii) for the benefit of the beneficial owners (including
the Initial Purchasers) from time to time of the Notes (as defined herein) and
the beneficial owners from time to time of the Underlying Common Stock (as
defined herein) issued upon conversion of the Notes (each of the foregoing a
"HOLDER" and together the "HOLDERS"), as follows:

     SECTION 1. DEFINITIONS. Capitalized terms used herein without definition
shall have their respective meanings set forth in the Purchase Agreement. As
used in this Agreement, the following terms shall have the following meanings:

     "AMENDMENT EFFECTIVENESS DEADLINE DATE" has the meaning set forth in
Section 2(d) hereof.

     "BUSINESS DAY" means each Monday, Tuesday, Wednesday, Thursday and Friday
that is not a day on which banking institutions in The City of New York are
authorized or obligated by law or executive order to close.

     "COMMON STOCK" means the shares of common stock, par value $.01 per share,
of the Company and any other shares of common stock as may constitute "Common
Stock" for purposes of the Indenture, including the Underlying Common Stock.

     "COMPANY" has the meaning set forth in the preamble hereof.

     "CONFIDENTIALITY AGREEMENT" has the meaning set forth in Section 3(i)
hereof.

     "CONVERSION PRICE" has the meaning assigned such term in the Indenture.

     "DAMAGES ACCRUAL PERIOD" has the meaning set forth in Section 2(e) hereof.

     "DAMAGES PAYMENT DATE" means each January 15 and July 15.

     "DEFERRAL NOTICE" has the meaning set forth in Section 3(h) hereof.

     "DEFERRAL PERIOD" has the meaning set forth in Section 3(h) hereof.

     "EFFECTIVENESS DEADLINE DATE" has the meaning set forth in Section 2(a)
hereof.

     "EFFECTIVENESS PERIOD" means the period commencing on the date hereof and
ending on the date that all Registrable Securities have ceased to be Registrable
Securities.

                                        2


     "EVENT" has the meaning set forth in Section 2(e) hereof.

     "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations of the SEC promulgated thereunder.

     "FILING DEADLINE DATE" has the meaning set forth in Section 2(a) hereof.

     "HOLDER" has the meaning set forth in the second paragraph of this
Agreement.

     "INDENTURE" means the Indenture, dated as of July 15, 2003, between the
Company and Wilmington Trust Company, as trustee, pursuant to which the Notes
are being issued.

     "INITIAL PURCHASERS" has the meaning set forth in the preamble hereof.

     "INITIAL SHELF REGISTRATION STATEMENT" has the meaning set forth in Section
2(a) hereof.

     "ISSUE DATE" means July 15, 2003.

     "LIQUIDATED DAMAGES AMOUNT" has the meaning set forth in Section 2(e)
hereof.

     "MATERIAL EVENT" has the meaning set forth in Section 3(h) hereof.

     "NOTES" means the 3 1/2% Convertible Senior Notes Due 2033 of the Company
to be purchased pursuant to the Purchase Agreement.

     "NOTICE AND QUESTIONNAIRE" means a written notice delivered to the Company
containing substantially the information called for by the Selling
Securityholder Notice and Questionnaire attached as Annex A to the Offering
Memorandum of the Company dated July 10, 2003 relating to the Notes.

     "NOTICE HOLDER" means, on any date, any Holder that has delivered a Notice
and Questionnaire to the Company on or prior to such date or, in the case of the
date of effectiveness of the Initial Shelf Registration Statement pursuant to
Section 2(a), on or prior to the tenth Business Day before such date.

     "PURCHASE AGREEMENT" has the meaning set forth in the preamble hereof.

     "PROSPECTUS" means the prospectus included in any Registration Statement
(including, without limitation, a prospectus that discloses information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A promulgated under the Securities Act), as
amended or supplemented by any amendment or prospectus supplement, including
post-effective amendments, and all materials incorporated by reference or
explicitly deemed to be incorporated by reference in such Prospectus.

     "RECORD HOLDER" means with respect to any Damages Payment Date relating to
any Notes or Underlying Common Stock as to which any Liquidated Damages Amount
has accrued, the registered holder of such Note or Underlying Common Stock on
the January 1 immediately

                                        3


preceding a Damages Payment Date occurring on a January 15, and on the July 1
immediately preceding a Damages Payment Date occurring on a July 15.

     "REGISTRABLE SECURITIES" means the Notes until such Notes have been
converted into or exchanged for the Underlying Common Stock and, at all times
subsequent to any such conversion, the Underlying Common Stock and any
securities into or for which such Underlying Common Stock has been converted or
exchanged, and any security issued with respect thereto upon any stock dividend,
split or similar event until, in the case of any such security, (A) the earliest
of (i) its effective registration under the Securities Act and resale in
accordance with the Registration Statement covering it, (ii) expiration of the
holding period that would be applicable thereto, under Rule 144(k) or (iii) its
sale to the public pursuant to Rule 144 (or any similar provision then in force,
but not Rule 144A) under the Securities Act, and (B) as a result of the event or
circumstance described in any of the foregoing clauses (i) through (iii), the
legend with respect to transfer restrictions required under the Indenture is
removed or removable in accordance with the terms of the Indenture or such
legend, as the case may be. Throughout this Agreement, for purposes of
determining the holders of a majority of Registrable Securities, Registrable
Securities shall be the shares of Underlying Common Stock and Holders of Notes
shall be deemed to be the Holders of the number of shares of Underlying Common
Stock into which such Notes are or would be convertible as of the date the
consent is requested.

     "REGISTRATION STATEMENT" means any registration statement of the Company
that covers any of the Registrable Securities pursuant to the provisions of this
Agreement, including the Prospectus, amendments and supplements to such
registration statement, including post-effective amendments, all exhibits and
all materials incorporated by reference or explicitly deemed to be incorporated
by reference in such registration statement.

     "RULE 144" means Rule 144 under the Securities Act, as such Rule may be
amended from time to time, or any similar rule or regulation hereafter adopted
by the SEC.

     "RULE 144A" means Rule 144A under the Securities Act, as such Rule may be
amended from time to time, or any similar rule or regulation hereafter adopted
by the SEC.

     "SEC" means the Securities and Exchange Commission.

     "SECURITIES ACT" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated by the SEC thereunder.

     "SHELF REGISTRATION STATEMENT" has the meaning set forth in Section 2(a)
hereof.

     "SPECIAL COUNSEL" means Shearman & Sterling LLP or one such other successor
counsel as shall be specified by the Holders of a majority of all Registrable
Securities, but which may, with the written consent of the Initial Purchasers
(which shall not be unreasonably withheld), be another nationally recognized law
firm experienced in securities law matters designated by the Company, the
reasonable fees and expenses of which will be paid by the Company pursuant to
Section 5 hereof.

     "SUBSEQUENT SHELF REGISTRATION STATEMENT" has the meaning set forth in
Section 2(b) hereof.

                                        4


     "TRUSTEE" means Wilmington Trust Company, the trustee under the Indenture.

     "UNDERLYING COMMON STOCK" means the Common Stock into which the Notes are
convertible or issued upon any such conversion.

     SECTION 2. SHELF REGISTRATION. (a) The Company shall prepare and file or
cause to be prepared and filed with the SEC, as soon as practicable but in any
event by the date (the "FILING DEADLINE DATE") ninety (90) days after the Issue
Date, a Registration Statement for an offering to be made on a delayed or
continuous basis pursuant to Rule 415 under the Securities Act (a "SHELF
REGISTRATION STATEMENT") registering the resale from time to time by Holders
thereof of all of the Registrable Securities (the "INITIAL SHELF REGISTRATION
STATEMENT"). The Initial Shelf Registration Statement shall be on Form S-3 or
another appropriate form permitting registration of such Registrable Securities
for resale by such Holders in accordance with the methods of distribution
elected by the Holders and set forth in the Initial Shelf Registration
Statement. The Company shall use its reasonable best efforts to cause the
Initial Shelf Registration Statement to be declared effective under the
Securities Act as promptly as is practicable but in any event by the date (the
"EFFECTIVENESS DEADLINE DATE") that is one hundred eighty (180) days after the
Issue Date, and to keep the Initial Shelf Registration Statement (or any
Subsequent Shelf Registration Statement) continuously effective under the
Securities Act until the expiration of the Effectiveness Period. At the time the
Initial Shelf Registration Statement is declared effective, each Holder that
became a Notice Holder on or prior to the date ten (10) Business Days prior to
such time of effectiveness shall be named as a selling securityholder in the
Initial Shelf Registration Statement and the related Prospectus in such a manner
as to permit such Holder to deliver such Prospectus to purchasers of Registrable
Securities in accordance with applicable law. None of the Company's security
holders (other than the Holders of Registrable Securities) shall have the right
to include any of the Company's securities in the Shelf Registration Statement.

     (b)     If the Initial Shelf Registration Statement or any Subsequent Shelf
Registration Statement ceases to be effective for any reason at any time during
the Effectiveness Period (other than because all Registrable Securities
registered thereunder shall have been resold pursuant thereto or shall have
otherwise ceased to be Registrable Securities), the Company shall use its
reasonable best efforts to obtain the prompt withdrawal of any order suspending
the effectiveness thereof, and in any event shall within thirty (30) days of
such cessation of effectiveness amend the Shelf Registration Statement in a
manner reasonably expected to obtain the withdrawal of the order suspending the
effectiveness thereof, or file an additional Shelf Registration Statement (a
"SUBSEQUENT SHELF REGISTRATION STATEMENT") covering all of the securities that
as of the date of such filing are Registrable Securities. If a Subsequent Shelf
Registration Statement is filed, the Company shall use its reasonable best
efforts to cause the Subsequent Shelf Registration Statement to become effective
as promptly as is practicable after such filing and to keep such Registration
Statement (or subsequent Shelf Registration Statement) continuously effective
until the end of the Effectiveness Period.

     (c)     The Company shall supplement and amend the Shelf Registration
Statement if required by the rules, regulations or instructions applicable to
the registration form used by the Company for such Shelf Registration Statement
or as otherwise required by the Securities Act or as necessary to name a Notice
Holder as a selling securityholder pursuant to Section 2(d) below.

                                        5


     (d)     Each Holder agrees that if such Holder wishes to sell Registrable
Securities pursuant to a Shelf Registration Statement and related Prospectus, it
will do so only in accordance with this Section 2(d) and Section 3(h). Following
the date that the Initial Shelf Registration Statement is declared effective,
each Holder wishing to sell Registrable Securities pursuant to a Shelf
Registration Statement and related Prospectus agrees to deliver a Notice and
Questionnaire to the Company at least three (3) Business Days prior to any
intended distribution of Registrable Securities under the Shelf Registration
Statement. Each Holder who elects to sell Registrable Securities pursuant to a
Shelf Registration Statement agrees, by submitting a Notice and Questionnaire to
the Company, it will be bound by the terms and conditions of the Notice and
Questionnaire and this Agreement. From and after the date the Initial Shelf
Registration Statement is declared effective, the Company shall, as promptly as
practicable after the date a Notice and Questionnaire is delivered pursuant to
Section 9(c) hereof, and in any event upon the later of (x) fifteen (15)
Business Days after such date or (y) five (5) Business Days after the expiration
of any Deferral Period in effect when the Notice and Questionnaire is delivered
or that is put into effect within fifteen (15) Business Days of such delivery
date:

             (i)     if required by applicable law, file with the SEC a
     post-effective amendment to the Shelf Registration Statement or prepare
     and, if required by applicable law, file a supplement to the related
     Prospectus or a supplement or amendment to any document incorporated
     therein by reference or file any other required document so that the Holder
     delivering such Notice and Questionnaire is named as a selling
     securityholder in the Shelf Registration Statement and the related
     Prospectus in such a manner as to permit such Holder to deliver such
     Prospectus to purchasers of the Registrable Securities in accordance with
     applicable law and, if the Company shall file a post-effective amendment to
     the Shelf Registration Statement, use its reasonable best efforts to cause
     such post-effective amendment to be declared effective under the Securities
     Act as promptly as is practicable, but in any event by the date (the
     "AMENDMENT EFFECTIVENESS DEADLINE DATE") that is forty-five (45) days after
     the date such post-effective amendment is required by this clause to be
     filed; and

             (ii)    provide such Holder copies of any documents filed pursuant
     to Section 2(d)(i);

PROVIDED, that if such Notice and Questionnaire is delivered during a Deferral
Period, the Company shall so inform the Holder delivering such Notice and
Questionnaire and shall take the actions set forth in clauses (i) and (ii) above
upon expiration of the Deferral Period in accordance with Section 3(h). The
Company shall notify such Holder as promptly as practicable after the
effectiveness under the Securities Act of any post-effective amendment filed
pursuant to Section 2(d)(i). Notwithstanding anything contained herein to the
contrary, (i) the Company shall be under no obligation to name any Holder that
is not a Notice Holder as a selling securityholder in any Registration Statement
or related Prospectus and (ii) the Amendment Effectiveness Deadline Date shall
be extended by up to fifteen (15) Business Days from the expiration of a
Deferral Period (and the Company shall incur no obligation to pay Liquidated
Damages during such extension or during such Deferral Period) if such Deferral
Period shall be in effect on the Amendment Effectiveness Deadline Date.

                                        6


     (e)     The parties hereto agree that the Holders of Registrable Securities
will suffer damages, and that it would not be feasible to ascertain the extent
of such damages with precision, if, other than as permitted hereunder:

             (i)     the Initial Shelf Registration Statement has not been filed
     on or prior to the Filing Deadline Date;

             (ii)    the Initial Shelf Registration Statement has not been
     declared effective under the Securities Act on or prior to the
     Effectiveness Deadline Date;

             (iii)   the Company has failed to perform its obligations set forth
     in Section 2(d)(i) within the time period required therein;

             (iv)    any post-effective amendment to a Shelf Registration
     Statement filed pursuant to Section 2(d)(i) has not become effective under
     the Securities Act on or prior to the Amendment Effectiveness Deadline
     Date; or

             (v)     the aggregate duration of Deferral Periods in any period
     exceeds the number of days permitted in respect of such periods pursuant to
     Section 3(h) hereof.

Each event described in any of the foregoing clauses (i) through (v) is
individually referred to herein as an "EVENT." For purposes of this Agreement,
each Event set forth above shall begin and end on the dates set forth in the
table set forth below:



            Type of
            Event by                  Beginning                              Ending
             Clause                      Date                                 Date
             ------                      ----                                 ----
                                                           
              (i)         Filing Deadline Date                   the date the Initial Shelf
                                                                 Registration Statement is filed

             (ii)         Effectiveness Deadline Date            the date the Initial Shelf
                                                                 Registration Statement becomes
                                                                 effective under the Securities
                                                                 Act

            (iii)         the date by which the Company is       the date the Company performs
                          required to perform its obligations    its obligations set forth in
                          under Section 2(d)                     Section 2(d)


                                        7




            Type of
            Event by                  Beginning                              Ending
             Clause                      Date                                 Date
             ------                      ----                                 ----
                                                           
             (iv)         the Amendment Effectiveness Deadline   the date the applicable
                          Date                                   post-effective amendment to a
                                                                 Shelf Registration Statement
                                                                 becomes effective under the
                                                                 Securities Act

              (v)         the date on which the aggregate        termination of the Deferral
                          duration of Deferral Periods in any    Period that caused the limit on
                          period exceeds the number of days      the aggregate duration of
                          permitted by Section 3(h)              Deferral Periods to be exceeded


For purposes of this Agreement, Events shall begin on the dates set forth in the
table above and shall continue until the ending dates set forth in the table
above.

     Commencing on (and including) any date that an Event has begun and ending
on (but excluding) the next date on which there are no Events that have occurred
and are continuing (a "DAMAGES ACCRUAL PERIOD"), the Company shall pay, as
liquidated damages and not as a penalty, to Record Holders of Registrable
Securities an amount (the "LIQUIDATED DAMAGES AMOUNT") accruing, for each day in
the Damages Accrual Period, (i) in respect of any Note, at a rate per annum
equal to 0.5% of the aggregate principal amount of the Notes outstanding and
(ii) in respect of each share of Underlying Common Stock, at a rate per annum
equal to 0.5% of the Conversion Price on such date, as the case may be; PROVIDED
that in the case of a Damages Accrual Period that is in effect solely as a
result of an Event of the type described in clause (iii) or (iv) of the
preceding paragraph, such Liquidated Damages Amount shall be paid only to the
Holders (as set forth in the succeeding paragraph) that have delivered Notices
and Questionnaires that caused the Company to incur the obligations set forth in
Section 2(d) the non-performance of which is the basis of such Event. In
calculating the Liquidated Damages Amount on any date on which no Notes are
outstanding, the Conversion Price and the Liquidated Damages Amount payable with
respect to shares of Common Stock which are Registrable Securities shall be
calculated as if the Notes were still outstanding. Notwithstanding the
foregoing, no Liquidated Damages Amount shall accrue as to any Registrable
Security from and after the earlier of (x) the date such security is no longer a
Registrable Security or (y) expiration of the Effectiveness Period. The rate of
accrual of the Liquidated Damages Amount with respect to any period shall not
exceed the rate provided for in this paragraph notwithstanding the occurrence of
multiple concurrent Events.

     The Liquidated Damages Amount shall accrue from the first day of the
applicable Damages Accrual Period, and shall be payable on each Damages Payment
Date during the Damage Accrual Period (and on the Damages Payment Date next
succeeding the end of the Damages Accrual Period if the Damage Accrual Period
does not end on or prior to a Damages Payment Date) to the Record Holders of the
Registrable Securities entitled thereto; PROVIDED that

                                        8


any Liquidated Damages Amount accrued with respect to any Note or portion
thereof redeemed by the Company on a redemption date or converted into
Underlying Common Stock on a conversion date prior to the Damages Payment Date,
shall, in any such event, be paid instead to the Holder who submitted such Note
or portion thereof for redemption or conversion on the applicable redemption
date or conversion date, as the case may be, on such date (or promptly following
the conversion date, in the case of conversion); and PROVIDED FURTHER that, in
the case of an Event of the type described in clause (iii) or (iv) of the first
paragraph of this Section 2(e), such Liquidated Damages Amount shall be paid
only to the Holders entitled thereto pursuant to such first paragraph by check
mailed to the address set forth in the Notice and Questionnaire delivered by
such Holder. The Trustee shall be entitled, on behalf of registered holders of
Notes or Underlying Common Stock, to seek any available remedy for the
enforcement of this Agreement, including for the payment of such Liquidated
Damages Amount. Notwithstanding the foregoing, the parties agree that the sole
damages payable for a violation of the terms of this Agreement with respect to
which liquidated damages are expressly provided shall be such liquidated
damages. Nothing shall preclude any Holder from pursuing or obtaining specific
performance or other equitable relief with respect to this Agreement in
accordance with applicable law.

     All of the Company's obligations set forth in this Section 2(e) that are
outstanding with respect to any Registrable Security at the time such security
ceases to be a Registrable Security shall survive until such time as all such
obligations with respect to such security have been satisfied in full
(notwithstanding termination of this Agreement pursuant to Section 9(k)).

     The parties hereto agree that the liquidated damages provided for in this
Section 2(e) constitute a reasonable estimate of the damages that may be
incurred by Holders of Registrable Securities by reason of the failure of the
Shelf Registration Statement to be filed or declared effective or available for
effecting resales of Registrable Securities in accordance with the provisions
hereof.

     SECTION 3. REGISTRATION PROCEDURES. In connection with the registration
obligations of the Company under Section 2 hereof, during the Effectiveness
Period, the Company shall:

             (a)     Prepare and file with the SEC a Registration Statement or
     Registration Statements on any appropriate form under the Securities Act
     available for the sale of the Registrable Securities by the Holders thereof
     in accordance with the intended method or methods of distribution thereof,
     and use its reasonable best efforts to cause each such Registration
     Statement to become effective and remain effective as provided herein;
     PROVIDED that before filing any Registration Statement or Prospectus or any
     amendments or supplements thereto with the SEC (but excluding reports filed
     with the SEC under the Exchange Act), furnish to Morgan Stanley & Co.
     Incorporated, on behalf of itself and the other Initial Purchasers, and the
     Special Counsel, if any, copies of all such documents proposed to be filed
     at least three (3) Business Days prior to the filing of such Registration
     Statement or amendment thereto or Prospectus or supplement thereto;
     PROVIDED that, if reasonably requested by the Company, such persons shall
     have executed and delivered to the Company a Confidentiality Agreement with
     respect thereto.

                                        9


             (b)     Subject to Section 3(h), prepare and file with the SEC such
     amendments and post-effective amendments to each Registration Statement as
     may be necessary to keep such Registration Statement continuously effective
     for the applicable period specified in Section 2(a); cause the related
     Prospectus to be supplemented by any required prospectus supplement, and as
     so supplemented to be filed pursuant to Rule 424 (or any similar provisions
     then in force) under the Securities Act; and use its reasonable best
     efforts to comply with the provisions of the Securities Act applicable to
     it with respect to the disposition of all securities covered by such
     Registration Statement during the Effectiveness Period in accordance with
     the intended methods of disposition by the sellers thereof set forth in
     such Registration Statement as so amended or such Prospectus as so
     supplemented.

             (c)     As promptly as practicable give notice to the Notice
     Holders, Morgan Stanley & Co. Incorporated, on behalf of itself and the
     other Initial Purchasers, and the Special Counsel, if any (i) when any
     Prospectus, prospectus supplement, Registration Statement or post-effective
     amendment to a Registration Statement has been filed with the SEC and, with
     respect to a Registration Statement or any post-effective amendment, when
     the same has been declared effective, (ii) of any request, following the
     effectiveness of the Initial Shelf Registration Statement under the
     Securities Act, by the SEC or any other federal or state governmental
     authority for amendments or supplements to any Registration Statement or
     related Prospectus or for additional information relating to the Shelf
     Registration Statement, (iii) of the issuance by the SEC or any other
     federal or state governmental authority of any stop order suspending the
     effectiveness of any Registration Statement or the initiation or
     threatening of any proceedings for that purpose, (iv) of the receipt by the
     Company of any notification with respect to the suspension of the
     qualification or exemption from qualification of any of the Registrable
     Securities for sale in any jurisdiction or the initiation or threatening of
     any proceeding for such purpose, (v) of the occurrence of, but not the
     nature of or details concerning, a Material Event and (vi) of the
     determination by the Company that a post-effective amendment to a
     Registration Statement will be filed with the SEC, which notice may, at the
     discretion of the Company (or as required pursuant to Section 3(h)), state
     that it constitutes a Deferral Notice, in which event the provisions of
     Section 3(h) shall apply; PROVIDED that, in the case of any of the
     foregoing, if reasonably requested by the Company, such persons shall have
     executed and delivered to the Company a Confidentiality Agreement with
     respect thereto.

             (d)     Use its reasonable best efforts to obtain the withdrawal of
     any order suspending the effectiveness of a Registration Statement or the
     lifting of any suspension of the qualification (or exemption from
     qualification) of any of the Registrable Securities for sale in any
     jurisdiction in which they have been qualified for sale, in either case at
     the earliest possible moment, and provide immediate notice to each Notice
     Holder and Morgan Stanley & Co. Incorporated, on behalf of itself and the
     other Initial Purchasers, of the withdrawal of any such order.

             (e)     As promptly as practicable furnish to each Notice Holder,
     the Special Counsel, if any, and the Initial Purchasers, upon request and
     without charge, at least one (1) conformed copy of the Registration
     Statement and any amendment thereto, including

                                       10


     exhibits and if requested, all documents incorporated or deemed to be
     incorporated therein by reference.

             (f)     Deliver to each Notice Holder, the Special Counsel, if any,
     and the Initial Purchasers, in connection with any sale of Registrable
     Securities pursuant to a Registration Statement, without charge, as many
     copies of the Prospectus relating to such Registrable Securities (including
     each preliminary prospectus) and any amendment or supplement thereto as
     such persons may reasonably request; and the Company hereby consents
     (except during such periods that a Deferral Notice is outstanding and has
     not been revoked) to the use of such Prospectus or each amendment or
     supplement thereto by each Notice Holder in connection with any offering
     and sale of the Registrable Securities covered by such Prospectus or any
     amendment or supplement thereto in the manner set forth therein.

             (g)     Prior to any public offering of the Registrable Securities
     pursuant to a Registration Statement, use its reasonable best efforts to
     register or qualify or cooperate with the Notice Holders and the Special
     Counsel, if any, in connection with the registration or qualification (or
     exemption from such registration or qualification) of such Registrable
     Securities for offer and sale under the securities or Blue Sky laws of such
     jurisdictions within the United States as any Notice Holder reasonably
     requests in writing (which request may be included in the Notice and
     Questionnaire); prior to any public offering of the Registrable Securities
     pursuant to the Shelf Registration Statement, use its reasonable best
     efforts to keep each such registration or qualification (or exemption
     therefrom) effective during the Effectiveness Period in connection with
     such Notice Holder's offer and sale of Registrable Securities pursuant to
     such registration or qualification (or exemption therefrom) and do any and
     all other acts or things reasonably necessary or advisable to enable the
     disposition in such jurisdictions of such Registrable Securities in the
     manner set forth in the relevant Registration Statement and the related
     Prospectus; PROVIDED that the Company will not be required to (i) qualify
     as a foreign corporation or as a dealer in securities in any jurisdiction
     where it would not otherwise be required to qualify but for this Agreement
     or (ii) take any action that would subject it to general service of process
     in suits or to taxation in any such jurisdiction where it is not then so
     subject.

             (h)     Upon (A) the issuance by the SEC of a stop order suspending
     the effectiveness of any Registration Statement or the initiation of
     proceedings with respect to any Registration Statement under Section 8(d)
     or 8(e) of the Securities Act, (B) the occurrence of any event or the
     existence of any fact (a "MATERIAL EVENT") as a result of which any
     Registration Statement shall contain any untrue statement of a material
     fact or omit to state any material fact required to be stated therein or
     necessary to make the statements therein not misleading, or any Prospectus
     shall contain any untrue statement of a material fact or omit to state any
     material fact required to be stated therein or necessary to make the
     statements therein, in the light of the circumstances under which they were
     made, not misleading, or (C) the occurrence or existence of any pending
     corporate development that, in the reasonable discretion of the Company,
     makes it appropriate to suspend the availability of any Registration
     Statement and the related Prospectus:

                                       11


                     (i) in the case of clause (B) above, subject to the next
             sentence, as promptly as practicable prepare and file, if necessary
             pursuant to applicable law, a post-effective amendment to such
             Registration Statement or a supplement to the related Prospectus or
             any document incorporated therein by reference or file any other
             required document that would be incorporated by reference into such
             Registration Statement and Prospectus so that such Registration
             Statement does not contain any untrue statement of a material fact
             or omit to state any material fact required to be stated therein or
             necessary to make the statements therein not misleading, and such
             Prospectus does not contain any untrue statement of a material fact
             or omit to state any material fact required to be stated therein or
             necessary to make the statements therein, in the light of the
             circumstances under which they were made, not misleading, as
             thereafter delivered to the purchasers of the Registrable
             Securities being sold thereunder, and, in the case of a
             post-effective amendment to a Registration Statement, subject to
             the next sentence, use its reasonable best efforts to cause it to
             be declared effective as promptly as is practicable, and

                     (ii) give notice to the Notice Holders and the Special
             Counsel, if any, that the availability of the Shelf Registration
             Statement is suspended (a "DEFERRAL NOTICE") and, upon receipt of
             any Deferral Notice, each Notice Holder agrees not to sell any
             Registrable Securities pursuant to the Registration Statement until
             such Notice Holder's receipt of copies of the supplemented or
             amended Prospectus provided for in clause (i) above, or until it is
             advised in writing by the Company that the Prospectus may be used,
             and has received copies of any additional or supplemental filings
             that are incorporated or deemed incorporated by reference in such
             Prospectus.

The Company will use its reasonable best efforts to ensure that the use of the
Prospectus may be resumed (x) in the case of clause (A) above, as promptly as is
practicable, (y) in the case of clause (B) above, as soon as, in the sole
judgment of the Company, public disclosure of such Material Event would not be
prejudicial to or contrary to the interests of the Company or, if necessary to
avoid unreasonable burden or expense, as soon as practicable thereafter, and (z)
in the case of clause (C) above, as soon as, in the reasonable discretion of the
Company, such suspension is no longer appropriate. The Company shall be entitled
to exercise its right under this Section 3(h) to suspend the availability of any
Registration Statement or any Prospectus, without incurring or accruing any
obligation to pay liquidated damages pursuant to Section 2(e) (the "DEFERRAL
PERIOD"); PROVIDED that the aggregate duration of any Deferral Periods shall not
exceed 30 days in any three month period (or 60 days in any three month period
in the event of a Material Event pursuant to which the Company has delivered a
second notice as required below) or 90 days in any twelve (12) month period;
PROVIDED that in the case of a Material Event relating to an acquisition or a
probable acquisition or financing, recapitalization, business combination or
other similar transaction, the Company may, without incurring any obligation to
pay liquidated damages pursuant to Section 2(e), deliver to Notice Holders a
second notice to the effect set forth above, which shall have the effect of
extending the Deferral Period by up to an additional 30 days, or such shorter
period of time as is specified in such second notice.

                                       12


             (i)     If reasonably requested in writing in connection with a
     disposition of Registrable Securities pursuant to a Registration Statement,
     make reasonably available for inspection during normal business hours by a
     representative for the Notice Holders of such Registrable Securities, any
     broker-dealers, underwriters, attorneys and accountants retained by such
     Notice Holders, and any attorneys or other agents retained by a
     broker-dealer or underwriter engaged by such Notice Holders, all relevant
     financial and other records and pertinent corporate documents and
     properties of the Company and its subsidiaries, and cause the appropriate
     officers, directors and employees of the Company and its subsidiaries to
     make reasonably available for inspection during normal business hours on
     reasonable notice all relevant information reasonably requested by such
     representative for the Notice Holders, or any such broker-dealers,
     underwriters, attorneys or accountants in connection with such disposition,
     in each case as is customary for similar "due diligence" examinations;
     PROVIDED that such persons shall first agree in writing with the Company
     that any information that is reasonably designated by the Company as
     confidential at the time of delivery of such information shall be kept
     confidential by such persons and shall be used solely for the purposes of
     exercising rights under this Agreement, unless (i) disclosure of such
     information is required by court or administrative order or is necessary to
     respond to inquiries of regulatory authorities, (ii) disclosure of such
     information is required by law (including any disclosure requirements
     pursuant to federal securities laws in connection with the filing of any
     Registration Statement or the use of any Prospectus referred to in this
     Agreement), (iii) such information becomes generally available to the
     public other than as a result of a disclosure or failure to safeguard by
     any such person or (iv) such information becomes available to any such
     person from a source other than the Company and such source is not bound by
     a confidentiality agreement (any such agreement, a "CONFIDENTIALITY
     AGREEMENT"); and PROVIDED FURTHER that the foregoing inspection and
     information gathering shall, to the greatest extent possible, be
     coordinated on behalf of all the Notice Holders and the other parties
     entitled thereto by Special Counsel, if any, or another representative
     selected by a majority of Registrable Securities being sold by such Holders
     pursuant to such Registration Statement. Any person legally compelled or
     required by administrative or court order or by a regulatory authority to
     disclose any such confidential information made available for inspection
     shall provide the Company with prompt prior written notice of such
     requirement so that the Company may seek a protective order or other
     appropriate remedy.

             (j)     Comply with all applicable rules and regulations of the SEC
     and make generally available to its securityholders earning statements
     (which need not be audited) satisfying the provisions of Section 11(a) of
     the Securities Act and Rule 158 thereunder (or any similar rule promulgated
     under the Securities Act) for a 12-month period commencing on the first day
     of the first fiscal quarter of the Company commencing after the effective
     date of a Registration Statement, which statements shall be made available
     no later than 45 days after the end of the 12-month period or 90 days if
     the 12-month period coincides with the fiscal year of the Company.

             (k)     Cooperate with each Notice Holder to facilitate the timely
     preparation and delivery of certificates representing Registrable
     Securities sold or to be sold pursuant to a Registration Statement, which
     certificates shall not bear any restrictive legends, and

                                       13


     cause such Registrable Securities to be in such denominations as are
     permitted by the Indenture and registered in such names as such Notice
     Holder may request in writing at least two (2) Business Day prior to any
     sale of such Registrable Securities.

             (l)     Provide a CUSIP number for all Registrable Securities
     covered by each Registration Statement not later than the effective date of
     such Registration Statement and, if requested, provide the Trustee and the
     transfer agent for the Common Stock with printed certificates for the
     Registrable Securities that are in a form eligible for deposit with The
     Depository Trust Company.

             (m)     Cooperate and assist in any filings required to be made
     with the National Association of Securities Dealers, Inc.

             (n)     In the case of a Shelf Registration Statement involving an
     underwritten offering, the Company shall enter into such customary
     agreements (including, if requested, an underwriting agreement in
     reasonably customary form) and take all such other action, if any, as
     Holders of a majority of the Registrable Securities being sold or any
     managing underwriters shall reasonably request in order to facilitate any
     disposition of Notes and Underlying Common Stock pursuant to such Shelf
     Registration Statement, including, without limitation, (i) using its
     reasonable efforts to cause its counsel to deliver an opinion or opinions
     in reasonably customary form, (ii) using its reasonable efforts to cause
     its officers to execute and deliver all customary documents and
     certificates and (iii) using its reasonable efforts to cause its
     independent public accountants to provide a comfort letter or letters in
     reasonably customary form.

             (o)     Upon (i) the filing of the Initial Shelf Registration
     Statement and (ii) the effectiveness of the Initial Shelf Registration
     Statement, announce the same, in each case by release to Reuters Economic
     Services and Bloomberg Business News.

                                       14


     SECTION 4. HOLDER'S OBLIGATIONS. Each Holder agrees, by acquisition of the
Registrable Securities, that no Holder shall be entitled to sell any of such
Registrable Securities pursuant to a Registration Statement or to receive a
Prospectus relating thereto unless such Holder has furnished the Company with a
Notice and Questionnaire as required pursuant to Section 2(d) hereof (including
the information required to be included in such Notice and Questionnaire) and
the information set forth in the next sentence. Each Notice Holder agrees
promptly to furnish to the Company all information required to be disclosed in
order to make the information previously furnished to the Company by such Notice
Holder not misleading and any other information regarding such Notice Holder and
the distribution of such Registrable Securities as the Company may from time to
time reasonably request. Any sale of any Registrable Securities by any Holder
shall constitute a representation and warranty by such Holder that the
information relating to such Holder and its plan of distribution is as set forth
in the Prospectus delivered by such Holder in connection with such disposition,
that such Prospectus does not as of the time of such sale contain any untrue
statement of a material fact relating to or provided by such Holder or its plan
of distribution and that such Prospectus does not as of the time of such sale
omit to state any material fact relating to or provided by such Holder or its
plan of distribution necessary to make the statements in such Prospectus, in the
light of the circumstances under which they were made, not misleading.

     SECTION 5. REGISTRATION EXPENSES. The Company shall bear all fees and
expenses incurred in connection with the performance by the Company of its
obligations under Sections 2 and 3 of this Agreement whether or not any
Registration Statement is declared effective. Such fees and expenses shall
include, without limitation, (i) all registration and filing fees (including,
without limitation, fees and expenses (x) with respect to filings required to be
made with the National Association of Securities Dealers, Inc. and (y) of
compliance with federal and state securities or Blue Sky laws (including,
without limitation, reasonable fees and disbursements of the Special Counsel, if
any, in connection with Blue Sky qualifications of the Registrable Securities
under the laws of such jurisdictions as Notice Holders of a majority of the
Registrable Securities being sold pursuant to a Registration Statement may
designate), (ii) printing expenses (including, without limitation, expenses of
printing, if requested, certificates for Registrable Securities in a form
eligible for deposit with The Depository Trust Company), (iii) duplication
expenses relating to copies of any Registration Statement or Prospectus
delivered to any Holders hereunder, (iv) fees and disbursements of counsel for
the Company in connection with any Registration Statement, (v) reasonable fees
and disbursements of the Trustee and its counsel and of the registrar and
transfer agent for the Common Stock and (vi) any Securities Act liability
insurance obtained by the Company in its sole discretion. In addition, the
Company shall pay the internal expenses of the Company (including, without
limitation, all salaries and expenses of officers and employees performing legal
or accounting duties), the expense of any annual audit, the fees and expenses
incurred in connection with the listing by the Company of the Registrable
Securities on any securities exchange on which similar securities of the Company
are then listed and the fees and expenses of any person, including special
experts, retained by the Company. Notwithstanding the provisions of this Section
5, each seller of Registrable Securities shall pay selling expenses, including
any underwriting discount and commissions, all registration expenses to the
extent required by applicable law, and, except as otherwise provided herein,
fees and expenses of counsel to the Holders.

     SECTION 6. INDEMNIFICATION AND CONTRIBUTION.

                                       15


     (a)     INDEMNIFICATION BY THE COMPANY. The Company agrees to indemnify and
hold harmless each Notice Holder, each person, if any, who controls any Notice
Holder within the meaning of either Section 15 of the Securities Act or Section
20 of the Exchange Act, from and against any and all losses, claims, damages and
liabilities (including, without limitation, any legal or other expenses
reasonably incurred in connection with defending or investigating any such
action or claim) caused by any untrue statement or alleged untrue statement of a
material fact contained in any Registration Statement or any amendment thereof,
any preliminary prospectus or the Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto), caused by
any omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages or liabilities are caused by any
such untrue statement or omission or alleged untrue statement or omission based
upon information relating to any Holder furnished to the Company in writing by
such Holder expressly for use therein; PROVIDED that the indemnification
contained in this paragraph shall not inure to the benefit of any Holder (or to
the benefit of any person controlling such Holder) on account of any such
losses, claims, damages or liabilities caused by any untrue statement or alleged
untrue statement or omission or alleged omission made in any preliminary
prospectus if either (A) (i) such Holder failed to send or deliver a copy of the
Prospectus with or prior to the delivery of written confirmation of the sale by
such Holder to the person asserting the claim from which such losses, claims,
damages or liabilities arise and (ii) the Prospectus would have corrected such
untrue statement or alleged untrue statement or such omission or alleged
omission, or (B) (x) such untrue statement or alleged untrue statement, omission
or alleged omission is corrected in an amendment or supplement to the Prospectus
and (y) having previously been furnished by or on behalf of the Company with
copies of the Prospectus as so amended or supplemented, such Holder thereafter
fails to deliver such Prospectus as so amended or supplemented, with or prior to
the delivery of written confirmation of the sale of a Registrable Security to
the person asserting the claim from which such losses, claims, damages or
liabilities arise. In connection with any underwritten offering pursuant to
Section 8, the Company will also indemnify the underwriters, if any, their
officers and directors and each person who controls such underwriters (within
the meaning of the Securities Act and the Exchange Act) to the same extent as
provided herein with respect to the indemnification of the Holders, if requested
in connection with any Registration Statement.

     (b)     INDEMNIFICATION BY HOLDERS. Each Holder agrees severally and not
jointly to indemnify and hold harmless the Company and its directors, its
officers and each person, if any, who controls the Company (within the meaning
of either Section 15 of the Securities Act or Section 20 of the Exchange Act) or
any other Holder, to the same extent as the foregoing indemnity from the Company
to such Holder, but only with reference to information relating to such Holder
furnished to the Company in writing by such Holder expressly for use in such
Registration Statement or Prospectus or amendment or supplement thereto. In no
event shall the liability of any Holder hereunder be greater in amount than the
dollar amount of the proceeds received by such Holder upon the sale of the
Registrable Securities pursuant to the Registration Statement giving rise to
such indemnification obligation. In connection with any underwritten offering
pursuant to Section 8, each Holder will also indemnify the underwriters, if any,
their officers and directors and each person who controls such underwriters
(within the meaning of the Securities Act and the Exchange Act) to the same
extent as provided herein with respect to the indemnification of the Company, if
requested in connection with any Registration Statement.

                                       16


     (c)     CONDUCT OF INDEMNIFICATION PROCEEDINGS. In case any proceeding
(including any governmental investigation) shall be instituted involving any
person in respect of which indemnity may be sought pursuant to Section 6(a) or
6(b) hereof, such person (the "INDEMNIFIED PARTY") shall promptly notify the
person against whom such indemnity may be sought (the "INDEMNIFYING PARTY") in
writing and the indemnifying party, upon request of the indemnified party, shall
retain counsel reasonably satisfactory to the indemnified party to represent the
indemnified party and any others the indemnifying party may designate in such
proceeding and shall pay the reasonable fees and disbursements of such counsel
related to such proceeding. In any such proceeding, any indemnified party shall
have the right to retain its own counsel, but the fees and expenses of such
counsel shall be at the expense of such indemnified party unless (i) the
indemnifying party and the indemnified party shall have mutually agreed to the
retention of such counsel or (ii) the named parties to any such proceeding
(including any impleaded parties) include both the indemnifying party and the
indemnified party and representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between them. It
is understood that the indemnifying party shall not, in respect of the legal
expenses of any indemnified party in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the fees and expenses of
more than one separate firm (in addition to any local counsel) for all such
indemnified parties and that all such fees and expenses shall be reimbursed as
they are incurred. Such firm shall be designated in writing by, in the case of
parties indemnified pursuant to Section 6(a), the Holders of a majority of the
Registrable Securities covered by the Registration Statement held by Holders
that are indemnified parties pursuant to Section 6(a) and, in the case of
parties indemnified pursuant to Section 6(b), the Company. The indemnifying
party shall not be liable for any settlement of any proceeding effected without
its written consent, but if settled with such consent or if there be a final,
non-appealable judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability by reason
of such settlement or judgment. Notwithstanding the foregoing sentence, if at
any time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for reasonable fees and expenses of counsel as
contemplated by the second and third sentences of this paragraph, the
indemnifying party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by such indemnifying party of the
aforesaid request and (ii) such indemnifying party shall not have reimbursed the
indemnified party in accordance with such request prior to the date of such
settlement. No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified party,
unless such settlement includes an unconditional release of such indemnified
party from all liability on claims that are the subject matter of such
proceeding.

     (d)     CONTRIBUTION. To the extent that the indemnification provided for
in Section 6(a) or 6(b) is unavailable to an indemnified party or insufficient
in respect of any losses, claims, damages or liabilities referred to therein,
then each indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the indemnifying party or parties on the one hand and the
indemnified party or parties on the other hand or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion

                                       17


as is appropriate to reflect not only the relative benefits referred to in
clause (i) above but also the relative fault of the indemnifying party or
parties on the one hand and of the indemnified party or parties on the other
hand in connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company shall be deemed to
be equal to the total net proceeds from the initial sale of the Notes pursuant
to the Purchase Agreement (before deducting expenses) of the Registrable
Securities to which such losses, claims, damages or liabilities relate. The
relative benefits received by any Holder shall be deemed to be equal to the
value of receiving Registrable Securities that are registered under the
Securities Act. The relative fault of the Holders on the one hand and the
Company on the other hand shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Holders or by the Company, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Holders' respective obligations to contribute
pursuant to this Section 6 are several in proportion to the respective number of
Registrable Securities they have sold pursuant to a Registration Statement, and
not joint.

     The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 6(d) were determined by PRO RATA
allocation or by any other method of allocation that does not take into account
the equitable considerations referred to in the immediately preceding paragraph.
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such indemnified party
in connection with investigating or defending any such action or claim.
Notwithstanding this Section 6, no indemnifying party that is a selling Holder
shall be required to contribute any amount in excess of the amount by which the
total price at which the Registrable Securities sold by it and distributed to
the public were offered to the public exceeds the amount of any damages that
such indemnifying party has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11 (f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation.

     (e)     The remedies provided for in this Section 6 are not exclusive and
shall not limit any rights or remedies which may otherwise be available to an
indemnified party at law or in equity, hereunder, under the Purchase Agreement
or otherwise.

     (f)     The indemnity and contribution provisions contained in this
Section 6 shall remain operative and in full force and effect regardless of (i)
any termination of this Agreement, (ii) any investigation made by or on behalf
of any Holder, any person controlling any Holder or any affiliate of any Holder
or by or on behalf of the Company, its officers or directors or any person
controlling the Company and (iii) the sale of any Registrable Securities by any
Holder.

     SECTION 7. INFORMATION REQUIREMENTS. The Company covenants that, if at any
time before the end of the Effectiveness Period the Company is not subject to
the reporting requirements of the Exchange Act, it will cooperate with any
Holder and take such further

                                       18


reasonable action as any Holder may reasonably request in writing (including,
without limitation, making such reasonable representations as any such Holder
may reasonably request), all to the extent required from time to time to enable
such Holder to sell Registrable Securities without registration under the
Securities Act within the limitation of the exemptions provided by Rule 144 and
Rule 144A under the Securities Act and customarily taken in connection with
sales pursuant to such exemptions. Upon the written request of any Holder, the
Company shall deliver to such Holder a written statement as to whether it has
complied with such filing requirements, unless such a statement has been
included in the Company's most recent report filed pursuant to Section 13 or
Section 15(d) of Exchange Act. Notwithstanding the foregoing, nothing in this
Section 7 shall be deemed to require the Company to register any of its
securities (other than the Common Stock) under any section of the Exchange Act.

     SECTION 8. UNDERWRITTEN REGISTRATIONS. The Holders of Registrable
Securities covered by a Shelf Registration Statement who desire to do so may
sell such Registrable Securities to an underwriter in an underwritten offering
for reoffering to the public. If any of the Registrable Securities covered by
any Shelf Registration Statement are to be sold in an underwritten offering, the
investment banker or investment bankers and manager or managers that will
administer the offering will be selected by the Holders of a majority of such
Registrable Securities included in such offering, subject to the consent of the
Company (which shall not be unreasonably withheld or delayed), and,
notwithstanding anything contained herein to the contrary, such Holders shall be
responsible for all underwriting commissions and discounts and any transfer
taxes in connection therewith. No person may participate in any underwritten
registration hereunder unless such person (i) agrees to sell such person's
Registrable Securities on the basis reasonably provided in any underwriting
arrangements approved by the persons entitled hereunder to approve such
arrangements and (ii) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements.

     SECTION 9. MISCELLANEOUS.

     (a)     NO CONFLICTING AGREEMENTS. The Company is not, as of the date
hereof, a party to, nor shall it, on or after the date of this Agreement, enter
into, any agreement with respect to its securities that conflicts with the
rights granted to the Holders in this Agreement. The Company represents and
warrants that the rights granted to the Holders hereunder do not in any way
conflict with the rights granted to the holders of the Company's securities
under any other agreements.

     (b)     AMENDMENTS AND WAIVERS. The provisions of this Agreement, including
the provisions of this sentence, may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof may not be
given, unless the Company has obtained the written consent of Holders of a
majority of Registrable Securities. Notwithstanding the foregoing, a waiver or
consent to depart from the provisions hereof with respect to a matter that
relates exclusively to the rights of Holders whose securities are being sold
pursuant to a Registration Statement and that does not directly or indirectly
affect the rights of other Holders may be given by Holders of at least a
majority of the Registrable Securities being sold by such Holders pursuant to
such Registration Statement; PROVIDED that the provisions of this sentence may
not be amended, modified or supplemented except in accordance with the
provisions of the

                                       19


immediately preceding sentence. Notwithstanding the foregoing, this Agreement
may be amended by written agreement signed by the Company and Morgan Stanley &
Co. Incorporated, on behalf of itself and the other Initial Purchasers, without
the consent of the Holders of Registrable Securities, to cure any ambiguity or
to correct or supplement any provision contained herein that may be defective or
inconsistent with any other provision contained herein, or to make such other
provisions in regard to matters or questions arising under this Agreement that
shall not adversely affect the interests of the Holders of Registrable
Securities. Each Holder of Registrable Securities outstanding at the time of any
such amendment, modification, supplement, waiver or consent or thereafter shall
be bound by any such amendment, modification, supplement, waiver or consent
effected pursuant to this Section 9(b), whether or not any notice, writing or
marking indicating such amendment, modification, supplement, waiver or consent
appears on the Registrable Securities or is delivered to such Holder.

     (c)     NOTICES. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand delivery, by telecopier, by
courier guaranteeing overnight delivery or by first-class mail, return receipt
requested, and shall be deemed given (i) when made, if made by hand delivery,
(ii) upon confirmation, if made by telecopier, (iii) one (1) Business Day after
being deposited with such courier, if made by overnight courier or (iv) on the
date indicated on the notice of receipt, if made by first-class mail, to the
parties as follows:

                     (i) if to a Holder, at the most current address given by
             such Holder to the Company in a Notice and Questionnaire or any
             amendment thereto;

                     (ii) if to the Company, to:

                              JetBlue Airways Corporation
                              118-29 Queens Boulevard
                              Forest Hills, New York 11375
                              Attention: General Counsel
                              Telecopy:  (718) 709-3631

                              with a copy to:

                              Nixon Peabody LLP
                              437 Madison Avenue
                              New York, New York 10022
                              Attention: Richard F. Langan, Jr.
                                         and Bruce E. Rosenthal
                              Telecopy:  (212) 940-3111

                     (iii) if to the Initial Purchasers, to:

                              Morgan Stanley & Co. Incorporated
                              1585 Broadway
                              New York, New York  10036
                              Attention:  Equity Capital Markets
                              Telecopy: (212) 761-0538

                                       20


or to such other address as such person may have furnished to the other persons
identified in this Section 9(c) in writing in accordance herewith.

     (d)     APPROVAL OF HOLDERS. Whenever the consent or approval of Holders of
a specified percentage of Registrable Securities is required hereunder,
Registrable Securities held by the Company or its affiliates (as such term is
defined in Rule 405 under the Securities Act) (other than the Initial Purchasers
or subsequent Holders if such subsequent Holders are deemed to be such
affiliates solely by reason of their holdings of such Registrable Securities)
shall not be counted in determining whether such consent or approval was given
by the Holders of such required percentage.

     (e)     SUCCESSORS AND ASSIGNS. Any person who purchases any Registrable
Securities from the Initial Purchasers shall be deemed, for purposes of this
Agreement, to be an assignee of the Initial Purchasers. This Agreement shall
inure to the benefit of and be binding upon the successors and assigns of each
of the parties and shall inure to the benefit of and be binding upon each Holder
of any Registrable Securities, PROVIDED that nothing herein shall be deemed to
permit any assignment, transfer or other disposition of Registrable Securities
in violation of the terms of the Indenture. If any transferee of any Holder
shall acquire Registrable Securities, in any manner, whether by operation of law
or otherwise, such Registrable Securities shall be held subject to all of the
terms of this Agreement, and by taking and holding such Registrable Securities,
such person shall be conclusively deemed to have agreed to be bound by and to
perform all of the terms and provisions of this Agreement and such person shall
be entitled to receive the benefits hereof.

     (f)     COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be original and all of which taken together
shall constitute one and the same agreement.

     (g)     HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.

     (h)     GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

     (i)     SEVERABILITY. If any term provision, covenant or restriction of
this Agreement is held to be invalid, illegal, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions set forth herein
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated thereby, and the parties hereto shall use their reasonable best
efforts to find and employ an alternative means to achieve the same or
substantially the same result as that contemplated by such term, provision,
covenant or restriction, it being intended that all of the rights and privileges
of the parties shall be enforceable to the fullest extent permitted by law.

     (j)     ENTIRE AGREEMENT. This Agreement is intended by the parties as a
final expression of their agreement and is intended to be a complete and
exclusive statement of the agreement and

                                       21


understanding of the parties hereto in respect of the subject matter contained
herein and the registration rights granted by the Company with respect to the
Registrable Securities. Except as provided in the Purchase Agreement, the
Indenture and the Notes, there are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein, with respect to
the registration rights granted by the Company with respect to the Registrable
Securities. This Agreement supersedes all prior agreements and undertakings
among the parties with respect to such registration rights. No party hereto
shall have any rights, duties or obligations other than those specifically set
forth in this Agreement, the Indenture and the Notes.

     (k)     TERMINATION. This Agreement and the obligations of the parties
hereunder shall terminate upon the end of the Effectiveness Period, except for
any liabilities or obligations under Section 4, 5 or 6 hereof and the
obligations to make payments of and provide for liquidated damages under Section
2(e) hereof to the extent such damages accrue prior to the end of the
Effectiveness Period, each of which shall remain in effect in accordance with
its terms.

                                       22


     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.

                                           JETBLUE AIRWAYS CORPORATION


                                           By:         /s/ JOHN OWEN
                                               ---------------------------------
                                               Name:  John Owen
                                               Title: Executive Vice President &
                                                      Chief Financial Officer


Confirmed and accepted as of
the date first above written:

MORGAN STANLEY & CO. INCORPORATED
RAYMOND JAMES & ASSOCIATES, INC.
BLAYLOCK & PARTNERS, L.P.

By: MORGAN STANLEY & CO. INCORPORATED


By:        /s/ KENNETH G. POTT
    --------------------------------
    Name:  Kenneth G. Pott
    Title: Managing Director

                                       23

EX-99.1

                                                                    EXHIBIT 99.1

    CERTIFICATIONS PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, David Neeleman, certify that:

     1.   I have reviewed this quarterly report on Form 10-Q of JetBlue Airways
          Corporation;

     2.   Based on my knowledge, this quarterly report does not contain any
          untrue statement of a material fact or omit to state a material fact
          necessary to make the statements made, in light of the circumstances
          under which such statements were made, not misleading with respect to
          the period covered by this quarterly report;

     3.   Based on my knowledge, the financial statements, and other financial
          information included in this quarterly report, fairly present in all
          material respects the financial condition, results of operations and
          cash flows of the registrant as of, and for, the periods presented in
          this quarterly report;

     4.   The registrant's other certifying officer and I are responsible for
          establishing and maintaining disclosure controls and procedures (as
          defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
          control over financial reporting (as defined in Exchange Act Rules
          13a-15(f) and 15d-15(f)) for the registrant and have:

          a)   Designed such disclosure controls and procedures, or caused such
               disclosure controls and procedures to be designed under our
               supervision, to ensure that material information relating to the
               registrant, including its consolidated subsidiaries, is made
               known to us by others within those entities, particularly during
               the period in which this quarterly report is being prepared;

          b)   Designed such internal control over financial reporting, or
               caused such internal control over financial reporting to be
               designed under our supervision, to provide reasonable assurance
               regarding the reliability of financial reporting and the
               preparation of financial statements for external purposes in
               accordance with generally accepted accounting principles;

          c)   Evaluated the effectiveness of the registrant's disclosure
               controls and procedures and presented in this report our
               conclusions about the effectiveness of the disclosure controls
               and procedures, as of the end of the period covered by this
               report based on such evaluation; and

          d)   Disclosed in this report any change in the registrant's internal
               control over financial reporting that occurred during the
               registrant's most recent fiscal quarter (the registrant's fourth
               fiscal quarter in the case of an annual report) that has
               materially affected, or is reasonably likely to materially
               affect, the registrant's internal control over financial
               reporting; and

     5.   The registrant's other certifying officer and I have disclosed, based
          on our most recent evaluation of internal control over financial
          reporting, to the registrant's auditors and the audit committee of
          registrant's board of directors:

          a)   All significant deficiencies and material weaknesses in the
               design or operation of internal control over financial reporting
               which are reasonably likely to adversely affect the registrant's
               ability to record, process, summarize and report financial
               information; and

          b)   Any fraud, whether or not material, that involves management or
               other employees who have a significant role in the registrant's
               internal control over financial reporting.



Date: July 28, 2003                         By:  /s/ DAVID NEELEMAN
                                                 ----------------------------
                                                     CHIEF EXECUTIVE OFFICER








I, John Owen, certify that:

     1.   I have reviewed this quarterly report on Form 10-Q of JetBlue Airways
          Corporation;

     2.   Based on my knowledge, this quarterly report does not contain any
          untrue statement of a material fact or omit to state a material fact
          necessary to make the statements made, in light of the circumstances
          under which such statements were made, not misleading with respect to
          the period covered by this quarterly report;

     3.   Based on my knowledge, the financial statements, and other financial
          information included in this quarterly report, fairly present in all
          material respects the financial condition, results of operations and
          cash flows of the registrant as of, and for, the periods presented in
          this quarterly report;

     4.   The registrant's other certifying officer and I are responsible for
          establishing and maintaining disclosure controls and procedures (as
          defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
          control over financial reporting (as defined in Exchange Act Rules
          13a-15(f) and 15d-15(f)) for the registrant and have:

          a)   Designed such disclosure controls and procedures, or caused such
               disclosure controls and procedures to be designed under our
               supervision, to ensure that material information relating to the
               registrant, including its consolidated subsidiaries, is made
               known to us by others within those entities, particularly during
               the period in which this quarterly report is being prepared;

          b)   Designed such internal control over financial reporting, or
               caused such internal control over financial reporting to be
               designed under our supervision, to provide reasonable assurance
               regarding the reliability of financial reporting and the
               preparation of financial statements for external purposes in
               accordance with generally accepted accounting principles;

          c)   Evaluated the effectiveness of the registrant's disclosure
               controls and procedures and presented in this report our
               conclusions about the effectiveness of the disclosure controls
               and procedures, as of the end of the period covered by this
               report based on such evaluation; and

          d)   Disclosed in this report any change in the registrant's internal
               control over financial reporting that occurred during the
               registrant's most recent fiscal quarter (the registrant's fourth
               fiscal quarter in the case of an annual report) that has
               materially affected, or is reasonably likely to materially
               affect, the registrant's internal control over financial
               reporting; and

     5.   The registrant's other certifying officer and I have disclosed, based
          on our most recent evaluation of internal control over financial
          reporting, to the registrant's auditors and the audit committee of
          registrant's board of directors:

          a)   All significant deficiencies and material weaknesses in the
               design or operation of internal control over financial reporting
               which are reasonably likely to adversely affect the registrant's
               ability to record, process, summarize and report financial
               information; and

          b)   Any fraud, whether or not material, that involves management or
               other employees who have a significant role in the registrant's
               internal control over financial reporting.




Date: July 28, 2003                       By:    /s/ JOHN OWEN
                                                 -----------------------------
                                                 EXECUTIVE VICE PRESIDENT AND
                                                 CHIEF FINANCIAL OFFICER

EX-99.2

                                                                    EXHIBIT 99.2

                           JETBLUE AIRWAYS CORPORATION
                      CERTIFICATION PURSUANT TO SECTION 906
                        OF THE SARBANES-OXLEY ACT OF 2002

         In connection with the Quarterly Report of JetBlue Airways Corporation
on Form 10-Q for the quarterly period ended June 30, 2003, as filed with the
Securities and Exchange Commission on July 28, 2003 (the "Report"), the
undersigned, in the capacities and on the dates indicated below, each hereby
certify pursuant to 18 U.S.C. section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002, that the Report fully complies with
requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934
(15 U.S.C. 78m or 78o(d)) and the information contained in the Report fairly
presents, in all material respects, the financial condition and results of
operations of JetBlue Airways Corporation.



Date: July 28, 2003                         By:  /s/ DAVID NEELEMAN
                                                 ----------------------------
                                                 CHIEF EXECUTIVE OFFICER


Date: July 28, 2003                         By:  /s/ JOHN OWEN
                                                 -----------------------------
                                                 EXECUTIVE VICE PRESIDENT AND
                                                 CHIEF FINANCIAL OFFICER

EX-99.3

                                                                    EXHIBIT 99.3


      REVISED CALCULATION OF FULL-TIME EQUIVALENT EMPLOYEES TO BE BASED ON
                               ACTUAL PAID HOURS

         In 2003, we revised our method of calculating full-time equivalent
employees, or FTEs. Prior to 2003, we calculated FTEs based upon employment
status. In 2003, the calculation was revised for our hourly crewmembers to be
based on the actual number of hours worked. The following table reflects a
comparison of the number of FTEs calculated under the revised method and the
FTEs as previously reported:


                                  AS ORIGINALLY            REVISED
                AS OF                REPORTED            CALCULATION
              ----------          -------------          -----------

              3/31/2001               1,350                 1,273
              6/30/2001               1,587                 1,466
              9/30/2001               1,876                 1,669
              12/31/2001              2,116                 1,983
              3/31/2002               2,479                 2,290
              6/30/2002               2,864                 2,642
              9/30/2002               3,352                 3,143
              12/31/2002              3,823                 3,572