JetBlue Airways : Payroll Support Program 3 (Form 8-K)

Payroll Support Program 3

On May 6, 2021, JetBlue Airways Corporation ('JetBlue') entered into a Payroll Support Program 3 Agreement (the 'PSP3 Agreement') with the United States Department of the Treasury ('Treasury') governing its participation in the federal payroll support program for passenger air carriers under Section 7301 of the American Rescue Plan Act of 2021 pursuant to which Treasury will provide financial assistance to be used for the continuation of payment of employee wages, salaries, and benefits (the 'Payroll Support Program 3'). In April 2020 and September 2020, JetBlue received funding under the original payroll support program established pursuant to Division A, Title IV, Subtitle B of the United States Coronavirus Aid, Relief, and Economic Security Act pursuant to a separate payroll support program agreement, warrant agreement and promissory note, as amended and supplemented. Further, in January 2021, March 2021 and April 2021, JetBlue received additional funding under the second payroll support program established pursuant to Subtitle A of Title V of Division N of the Consolidated Appropriations Act, 2021 (the 'Second Payroll Support Payments') pursuant to a separate payroll support program extension agreement, warrant agreement and promissory note, as amended and supplemented.

Pursuant to the Payroll Support Program 3, on May 6, 2021 Treasury provided to JetBlue a payment of approximately $270.6 million (the 'Payroll Support 3 Payment') under the PSP3 Agreement. The Payroll Support 3 Payment includes a grant of approximately $219.4 million and a loan of approximately $51.2 million, evidenced by a promissory note issued by JetBlue to Treasury (the 'Promissory Note'). In consideration for the Payroll Support 3 Payment, on May 6, 2021 JetBlue also issued to Treasury warrants to purchase 257,175 shares of JetBlue's common stock, $0.01 par value per share, at an exercise price of $19.90 per share (the 'Warrants'), pursuant to a warrant agreement, dated May 6, 2021, with Treasury (the 'Warrant Agreement'). The Promissory Note will mature 10 years after the Closing Date (as defined in the Promissory Note), and the Warrants will expire 5 years after issuance. The Promissory Note bears interest on the principal amount outstanding from time to time at an annual rate of 1.00% until the fifth anniversary of the Closing Date, or May 6, 2026, and the Applicable SOFR Rate (as defined in the Promissory Note) plus 2.00% thereafter until May 6, 2031. Interest is payable in arrears on the last business day of March and September of each year, beginning on September 30, 2021.

Except as stated above, the terms of the PSP3 Agreement, Warrant Agreement, Warrants and Promissory Note are materially identical to those which JetBlue entered into in connection with the Second Payroll Support Payments, and the Warrants were issued using the same exemption under the Securities Act of 1933, as amended, as the warrants issued in connection with the Second Payroll Support Payments, in each case, as further described in JetBlue's Current Reports on Form 8-K, filed with the Securities and Exchange Commission (the 'SEC') onJanuary 22, 2021andMarch 9, 2021, and Quarterly Report on Form 10-Q, filed with the SEC onApril 30, 2021. In connection with JetBlue's participation in the Payroll Support Program 3, JetBlue may also be entitled to receive an additional disbursement of up to $270.6 million, including a loan of up to $81.2 million (with respect to which JetBlue would issue to Treasury additional warrants to purchase common stock).

Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information described under Item 1.01 above regarding the amended Promissory Note is incorporated herein by reference.