Item 1.01 Entry into a Material Definitive Agreement.
Payroll Support Program 2
On January 15, 2021, JetBlue Airways Corporation ("JetBlue") entered into a
Payroll Support Program Extension Agreement (the "PSP Extension Agreement") with
the United States Department of the Treasury ("Treasury") governing its
participation in the federal Payroll Support Program for passenger air carriers
under the United States Consolidated Appropriations Act, 2021 (the "Payroll
Support Program 2"). In April 2020 and September 2020, JetBlue previously
received funding under the Payroll Support Program (the "Initial Payroll Support
Payment") pursuant to a separate Payroll Support Program Agreement, warrant
agreement and promissory note, as amended and supplemented, under the United
States Coronavirus Aid, Relief, and Economic Security Act.
Pursuant to the Payroll Support Program 2, on January 15, 2021, Treasury
provided to JetBlue a payment of approximately $252 million (the "Payroll
Support Payment") under the PSP Extension Agreement. The Payroll Support Payment
includes a grant of approximately $206 million and a loan of approximately $46
million, evidenced by a promissory note issued by JetBlue to Treasury (the
"Promissory Note"). In consideration for the Payroll Support Payment, on January
15, 2021, JetBlue also issued to Treasury warrants to purchase 316,583 shares of
JetBlue's common stock, $0.01 par value per share, at an exercise price of
$14.43 per share (the "Warrants"), pursuant to a warrant agreement, dated
January 15, 2021, with Treasury (the "Warrant Agreement"). The Promissory Note
will mature 10 years after issuance and the Warrants will expire five 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 January 15, 2026,
and the Applicable SOFR Rate (as defined in the Promissory Note) plus 2.00%
thereafter until January 15, 2031. Interest is payable in arrears on the last
business day of March and September of each year, beginning on March 31, 2021.
Except as stated above, the terms of the PSP Extension Agreement, Warrant
Agreement, Warrants and Promissory Note are materially identical to those
entered into in connection with the Initial Payroll Support Payment, 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 Initial Payroll
Support Payment, in each case, as further described in JetBlue's Current Reports
on Form 8-K filed with the Securities and Exchange Commission on April 24, 2020
and October 1, 2020. In connection with JetBlue's participation in the Payroll
Support Program 2, JetBlue may also be entitled to receive an additional
disbursement of up to $252 million, including a loan of up to $76 million (with
respect to which JetBlue would issue to Treasury additional warrants to purchase
common stock).
CARES Act Loan Agreement Amendment
As previously disclosed, on September 29, 2020, the Company entered into a Loan
and Guarantee Agreement (the "Loan Agreement") with Treasury, which provided for
a secured term loan facility that permitted the Company to borrow up to $1.14
billion. On September 29, 2020, the Company borrowed an initial amount of $115
million. Subsequently, on November 3, 2020, the Company entered into an
amendment to the Loan Agreement, which increased the borrowing amount to up to
$1.95 billion.
On January 15, 2021, the Company and Treasury entered into a letter agreement
further amending the Loan Agreement providing for an extension of the deadline
pursuant to which the Company may, at its option, borrow additional amounts,
from March 26, 2021 to May 28, 2021.
Item 2.03 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 Promissory Note
and the CARES Act Loan Agreement Amendment are incorporated herein by reference.
--------------------------------------------------------------------------------
© Edgar Online, source Glimpses
JETBLUE AIRWAYS CORPORATION 
