Exhibit 10.1

 

EXECUTION VERSION

 

TERM LOAN FRAMEWORK AGREEMENT

 

This Term Loan Framework Agreement (as amended, restated, modified or otherwise
supplemented from time to time, the “Agreement”), dated as of April 26, 2018, is
entered into between The McClatchy Company, a Delaware Corporation (the
“Company”), and Chatham Asset Management, LLC (the “Lender”), for itself and on
behalf of the beneficial owners of the Outstanding Debt Securities listed on
Exhibit A hereto (“Accounts”) for whom the Lender holds contractual and
investment authority (each Account, as well as the Lender if it is exchanging
Outstanding Debt Securities hereunder, a “Holder”).

 

RECITALS

 

WHEREAS, the Holders are certain holders of, among other of the Company’s
securities, the Company’s 2027 Debentures and 2029 Debentures (collectively, the
“Outstanding Debt Securities”).

 

WHEREAS, the Lender and the Borrower Parties desire to enter into the Facilities
for the Loans (including, without limitation, the provision by the Lender of
$50,000,000 of cash in immediately available funds funded to the Borrower under
the Facilities) on the terms and conditions described in the term sheet set
forth in Exhibit B hereto (the “Term Sheet”) and, in connection therewith, to
use a portion of the proceeds from such Loans plus a certain premium specified
in the Term Sheet (the “Premium Amounts”) to repurchase for

cash or exchange (A)(i) $82,083,000 aggregate principal amount of the 2027
Debentures (the “2027 Debentures Amount”); and (ii) $105,417,000 aggregate
principal amount of the 2029 Debentures, in each case, under the Tranche A Term
Loan Facility (the “Tranche A 2029 Debentures Amount”); and (B) $168,476,000
aggregate principal amount of the 2029 Debentures under the Tranche B Term Loan
Facility (the “Tranche B 2029 Debentures Amount”), in each case, held by the
Holders (the “Term Loan Restructuring”).

 

WHEREAS, the effectiveness of the Term Loan Restructuring will be subject to,
among other conditions, the consummation of the 2022 Debt Refinancing.

 

AGREEMENT

 

NOW, THEREFORE, on and subject to the terms and conditions set forth in this
Agreement, the parties hereto agree as follows:

 

Article I: Definitions

 

As used in this Agreement, the following terms have the following meanings
unless otherwise defined herein or in the Term Sheet:

 

“2027 Debentures” shall have the meaning set forth in the Term Sheet.

“2029 Debentures” shall have the meaning set forth in the Term Sheet.

“2027 Debentures Amount” shall have the meaning set forth in the recitals.

“2022 Debt Refinancing” shall mean the incurrence by the Borrower of first lien
debt in an amount no greater than the amount required to redeem, refinance or
otherwise acquire the outstanding amount of the Existing Credit Agreement and
2022 Notes, including any premiums thereon, plus accrued and unpaid interest,
and fees and expenses in connection with such redemption, refinancing or
acquisition (the “New Secured Debt”), the

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proceeds of which, together with the proceeds from the Term Loan Restructuring,
and cash on hand, are applied to redeem, refinance or otherwise acquire 100% of
the Company’s issued and outstanding 2022 Notes.

“2022 Notes” shall have the meaning set forth in the Term Sheet.

“Accounts” shall have the meaning set forth in the preamble hereto.

“Agreement” shall have the meaning set forth in the preamble hereto.

“Borrower” shall have the meaning set forth in the Term Sheet.

“Borrower Parties” shall mean the Company, the Borrower and the other
Guarantors.

“Cash Amount” shall mean the amounts provided to the Borrower from the
Facilities plus the Premium Amounts.

“Closing” has the meaning set forth in Article II.  

“Closing Date” has the meaning set forth in Article II.  

“Commission” has the meaning set forth in Section 5.1.

“Common Stock” shall mean the Class A common stock, par value $0.01 per share,
of the Company.

“Company” shall have the meaning set forth in the preamble hereto. “Credit
Documentation” has the meaning set forth in the term sheet. “DTC” means The
Depository Trust Company.

“Enforceability Exceptions” shall mean (a) bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium or other similar laws affecting or relating
to enforcement of creditors’ rights generally, and (b) the general principles of
equity, whether such enforceability is considered in a proceeding at law or in
equity.

“Exchange” has the meaning set forth in Section 5.1.

 “Existing Credit Agreement” has the meaning set forth in Section 5.1(h).

“Guarantors” has the meaning set forth in the Term Sheet.

“Guaranty and Security Agreement” has the meaning set forth in Section 5.1(n).

“Holder” shall have the meaning set forth in the preamble hereto.

“Liens” shall mean any mortgage, lien, pledge, charge, security interest,
encumbrance, title retention agreement, option, equity or other adverse claim
thereto.

“Materials” has the meaning set forth in Section 3.6.

“Outstanding Debt Securities” shall have the meaning set forth in the recitals.

“Outstanding Debt Securities Indenture” means the Indenture, dated November 4,
1997, between the Company (as successor in interest to Knight-Ridder, Inc.) and
The Bank of New York Mellon Trust Company, N.A. (as successor in interest to The
Chase Manhattan Bank), as amended and supplemented from time to time.

“Premium Amounts” has the meaning specified in the recitals.

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“Public Filings” has the meaning set forth in Section 3.6.

“Related Party” has the meaning set forth in Section 3.5.

“SEC” shall mean the Securities and Exchange Commission.

“Securities Act” shall mean the Securities Act of 1933, as amended.

“Term Loan Restructuring” shall have the meaning set forth in the recitals.

“Term Sheet” shall have the meaning set forth in the recitals.

“Tranche A 2029 Debentures Amount” shall have the meaning set forth in the
recitals.

“Tranche B 2029 Debentures Amount” shall have the meaning set forth in the
recitals.

“Voting Party” has the meaning set forth in Section 3.5.

Article II: The Term Loan Restructuring

 

At the Closing, the Lender hereby agrees to cause the Holders to fund the Loans
to the Borrower pursuant to the terms of this Agreement and the Term Sheet and
will deliver to the Borrower the Premium Amounts in immediately available funds,
and the Borrower shall use the Cash Amount to repurchase or exchange the
Holders’ respective beneficial interests in the Outstanding Debt Securities set
forth on Exhibit A hereto in accordance with the DTC’s applicable procedures and
the Outstanding Debt Securities Indenture. Pursuant to the terms of the Term
Loan Restructuring, and in connection with the Term Loan Restructuring, the
Borrower Parties and the Lender hereby agree to execute and deliver the Credit
Documentation in accordance with the terms of this Agreement and the Term Sheet.

 

The closing of the Term Loan Restructuring (the “Closing”) shall be conducted,
subject to the satisfaction of the closing conditions set forth in Article V, on
the date of the closing of the 2022 Debt Refinancing (the “Closing Date”) and at
a mutually agreeable location or by the exchange of electronic documentation. At
the Closing, (a) each Holder shall deliver or cause to be delivered to the
Company all right, title and interest in and to its Outstanding Debt Securities
free and clear of any Liens, together with any documents of conveyance or
transfer required by the Company to evidence such transfer and to confirm all
right, title and interest in and to the Outstanding Debt Securities free and
clear of any Liens, (b) the Lender shall fund, or shall cause the Holders to
fund, the Cash Amount by wire transfer of immediately available funds to the
Borrower, (c) the Borrower and the Lender shall enter into the Loans and (d) the
Borrower shall repurchase or exchange the Holders’ respective beneficial
interests in the Outstanding Debt Securities set forth on Exhibit A hereto. The
parties will mutually agree whether the Holders’ beneficial interest in the
Outstanding Debt Securities shall be repurchased or exchanged.

 

Article III: Covenants, Representations and Warranties of the Holders

 

Each Holder (unless limited below to the Lender) hereby covenants (solely as to
itself), as follows, and makes the following representations and warranties
(solely as to itself), and all such covenants, representations and warranties
shall survive the Closing:

 

Section 3.1Power and Authorization. The Holder is duly organized, validly
existing and in good standing, and has the power, authority and capacity to
execute and deliver this Agreement, to perform its obligations hereunder, and to
consummate the Term Loan Restructuring contemplated hereby. If the Lender is
executing this Agreement on behalf of Accounts, (a) the Lender has all requisite
discretionary and contractual authority to enter into this Agreement on behalf
of, and bind, each Account, and (b) Exhibit A hereto is a true, 

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correct and complete list of (i) the name of each Account, and (ii) the
aggregate principal amount of Outstanding Debt Securities held by the Accounts.

 

Section 3.2Valid and Enforceable Agreement; No Violations. This Agreement has
been duly executed and delivered by the Lender and the Holder and constitutes a
legal, valid and binding obligation of the Lender and the Holder, enforceable
against the Lender and the Holder in accordance with its terms, except that such
enforcement may be subject to the Enforceability Exceptions. This Agreement and
consummation of the Term Loan Restructuring will not violate, conflict with or
result in a breach of or default under (i) the Lender’s or the Holder’s
organizational documents, (ii) any agreement or instrument to which the Lender
or the Holder is a party or by which the Lender or the Holder or any of their
respective assets are bound, or (iii) any laws, regulations or governmental or
judicial decrees, injunctions or orders applicable to the Lender or the Holder,
except for such violations, conflicts or breaches under clause (iii) above that
would not, individually or in the aggregate, reasonably be likely to prevent,
materially delay or materially impair the consummation of the Term
Loan Restructuring.

 

Section 3.3Title to the Outstanding Debt Securities.    The Holders are the sole
legal and beneficial owners of the aggregate principal amount of Outstanding
Debt Securities set forth on Exhibit A hereto (or, if there are no Accounts, the
Lender is the sole legal and beneficial owner of all of the Outstanding Debt
Securities). The Holder has good and valid title to its Outstanding Debt
Securities, free and clear of any Liens (other than (i) pledges or security
interests that such Holder may have created in favor of a prime broker under and
in accordance with its prime brokerage agreement with such broker and (ii) Liens
that would not, individually or in the aggregate, reasonably be likely to
prevent, materially delay or materially impair the consummation of the Term Loan
Restructuring). Upon the Holder’s delivery of its Outstanding Debt Securities to
the Company pursuant to the Term Loan Restructuring, such Outstanding Debt
Securities shall be free and clear of all Liens created by the Holder, other
than Liens that would not, individually or in the aggregate, reasonably be
likely to prevent, materially delay or materially impair the consummation of the
Term Loan Restructuring.

 

Section 3.4Institutional Accredited Investor or Qualified Institutional Buyer.
The Holder is either (i) an institutional “accredited investor” within the
meaning of Rule 501(a)(1), (2), (3) or (7) of Regulation D promulgated under the
Securities Act, or (ii) a “qualified institutional buyer” within the meaning of
Rule 144A promulgated under the Securities Act.

 

Section 3.5Adequate Information; No Reliance.  The Holder acknowledges and
agrees that(a) the Holder has been furnished with all materials it considers
relevant to making an investment decision to enter into the Term Loan
Restructuring and has had the opportunity to review (and has carefully
reviewed)the Company’s filings and submissions with the SEC, including, without
limitation, all information filed or furnished pursuant to the Securities
Exchange Act of 1934, as amended (collectively, the “Public Filings”), and this
Agreement (including the exhibits hereto) (the “Materials”), (b) the Holder has
had a full opportunity to ask questions of the Company concerning the Company,
its business, operations, financial performance, financial condition and
prospects, and the terms and conditions of the Term Loan Restructuring, and to
obtain from the Company any information that it considers necessary in making an
informed investment decision and to verify the accuracy of the information set
forth in the Public Filings and the Materials, (c) the Holder has had the
opportunity to consult with its accounting, tax, financial and legal advisors to
be able to evaluate the risks involved in the Term Loan Restructuring and to
make an informed investment decision with respect to such Term Loan
Restructuring, (d) the Holder is not relying, and has not relied, upon any
statement, advice (whether accounting, tax, financial, legal or other),
representation or warranty made by the Company or any of its affiliates or
representatives or any other entity or person, (e) no statement or written
material contrary to the Public Filings or the Materials has been made or given
to the Holder by or on behalf of the Company, (f ) the Holder is able to fend
for itself in the Term Loan Restructuring, and (g) the Holder is not relying on
any information or statements provided by Agent in connection with the Term Loan
Restructuring.

 

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Section 3.6Further Action. The Holder agrees that it will, upon request, execute
and deliver any additional documents deemed by the Company or the trustee of the
applicable series of Outstanding Debt Securities to be necessary to complete the
Term Loan Restructuring.

 

Section 3.7Credit Documentation. Subject to Section 5.1, the Lender shall enter
into the Credit Documentation for the Loans in accordance with the terms of this
Agreement and the Term Sheet on the Closing Date.

 

Section 3.8Term Loan Restructuring. The terms of the Term Loan Restructuring are
the result of bilateral negotiations between the parties.

 

Article IV: Covenants, Representations and Warranties of the Borrower Parties

 

Each Borrower Party hereby covenants as follows, and makes the following
representations and warranties, to the Lender and the Holders, and all such
covenants, representations and warranties shall survive the Closing:

 

Section 4.1Power and Authorization. Each Borrower Party is duly incorporated,
validly existing and in good standing under the laws of its state of
incorporation, and has the power, authority and capacity to execute and deliver
this Agreement, to perform its obligations hereunder and thereunder, and to
consummate the Term Loan Restructuring contemplated hereby.

 

Section 4.2Valid and Enforceable Agreements; No Violations. This Agreement has
been duly executed and delivered by each Borrower Party and constitutes a legal,
valid and binding obligation of such Borrower Party, enforceable against such
Borrower Party in accordance with its terms, except that such enforcement may be
subject to the Enforceability Exceptions. This Agreement and consummation of the
Term Loan Restructuring will not violate, conflict with or result in a breach of
or default under (i) the charter, bylaws or other organizational documents of
such Borrower Party, (ii) any material agreement or instrument to which such
Borrower Party is a party or by which the Borrower Party or any of its assets
are bound (other than the Existing Credit Agreement, the 2022 Notes, the 2027
Debentures, the 2029 Debentures and, in each case, related documentation), or
(iii) any laws, regulations or governmental or judicial decrees, injunctions or
orders applicable to such Borrower Party, except for such violations, conflicts
or breaches under clause (iii) above that would not, individually or in the
aggregate, have a material adverse effect on the business, financial position,
results of operations or prospects of such Borrower Party and its subsidiaries
taken as a whole or on its performance of its obligations under this Agreement
or on the consummation of the transactions contemplated thereby.

 

Section 4.3Use of Proceeds. The Borrower shall use the proceeds from the
Facilities in the manner set forth in the Term Sheet.

 

Section 4.4Further Action. Each Borrower Party agrees that it will, upon
request, execute and deliver any additional documents deemed by the Holders to
be necessary to complete the Term Loan Restructuring.

 

Section 4.5Credit Documentation. Subject to Section 5.2, each Borrower Party
shall enter into the Credit Documentation for the Loans in accordance with the
terms of this Agreement and the Term Sheet on the Closing Date.

 

Section 4.6Term Loan Restructuring. The terms of the Term Loan Restructuring are
the result of bilateral negotiations between the parties.

 

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Article V: Closing Conditions

 

Section 5.1Closing Conditions of the Lender. The obligations of the Lender to
participate in the Term Loan Restructuring is subject to the fulfillment, on or
prior to the Closing Date, of all of the following conditions, any of which may
be waived in whole or in part by the Lender:

 

(a)       Representations and Warranties. The representations and warranties
made by the Borrower Parties in Article III hereof and in the Credit
Documentation shall be true and correct on the date hereof and on the
Closing Date.

 

(b)       Authorization. At the Closing, the Lender shall have obtained all
requisite corporate authorizations to enter into the Term Loan Restructuring and
the related Credit Documentation.

 

(c)       Legal Requirements. At the Closing, the Term Loan Restructuring shall
be legally permitted by all laws and regulations to which the parties hereto
are subject.

 

(d)       Transaction Documents. The Company and the other Borrower Parties
shall have duly executed and delivered to the Lender the Credit Documentation.

 

(e)       Satisfactory Credit Documentation. The Credit Documentation shall be
in form and substance reasonably satisfactory to the Lender.

 

(f)       Facilities Proceeds. Substantially concurrent with the Closing and on
the Closing Date, the Company shall have used the Cash Amount to repurchase or
exchange, as applicable, the Holders’ respective beneficial interests in the
Outstanding Debt Securities set forth on Exhibit A hereto.

 

(g)       Refinancing of the 2022 Notes. Substantially concurrent with the Term
Loan Restructuring, the Company shall have effected the 2022 Debt Refinancing.

 

(h)       Credit Agreement. The Company shall have obtained effective amendments
to (or amendment and restatement of), or refinanced, its Third Amended and
Restated Credit Agreement, dated as of December 12, 2012, among the Company, the
lenders party thereto and Bank of America, N.A., as Administrative Agent, Swing
Line Lender and L/C Issuer (as amended, restated, modified or otherwise
supplemented from time to time, the “Existing Credit Agreement”) and related
loan documents in order to permit the 2022 Debt Refinancing and the transactions
contemplated by this Agreement, and all other documentation required by the
agent and lenders thereunder in order to permit the New First Lien Debt and the
transactions contemplated by this Agreement.

 

(i)       Intercreditor Agreement(s). The administrative agent, on behalf of the
lenders party to the Existing Credit Agreement (or any refinancing or
replacement thereof), the collateral agent for the New First Lien Debt and the
Administrative Agent shall have entered into one or more intercreditor
agreements on terms and conditions reasonably satisfactory to the Company and
the Lender.

 

(j)       Supplemental Indentures. Supplemental Indentures shall have become
effective with respect to the 2027 Debentures and the 2029 Debentures
eliminating the restrictions with respect to the granting of liens and
sale-and-leaseback transactions, on terms and conditions reasonably satisfactory
to the Company and the Lender.

 

(k)       Legal Opinions. The Lender shall have received duly executed favorable
opinions of counsel to the Borrower Parties addressed to the Administrative
Agent and the Lender and addressing such matters as the Lender may
reasonably request.

 

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(l)       Financial Officer’s Certificate. The Lender shall have received a
certificate of a financial officer of the Company to the effect that (A) each
condition set forth in Section 5.1(a) has been satisfied, (B) no default or
event of default under the Credit Documentation shall have occurred and be
continuing and (C) both the Borrower Parties taken as a whole and the Borrower
are solvent after giving effect to the Loans, the consummation of the Term Loan
Restructuring, the application of the proceeds thereof in accordance with the
Term Sheet and the payment of all estimated legal, accounting and other fees and
expenses related hereto and thereto.

 

(m)       Secretary’s Certificate. The Lender shall have received a certificate
from the Company attaching thereto and certifying such documents and
certificates as the Lender may reasonably request relating to the organization,
existence and good standing of the Borrower Parties, the authorization of the
transactions contemplated by this Agreement, the Term Sheet and the Term Loan
Restructuring and any other legal matters relating to each Borrower Party, this
Agreement or the transactions contemplated hereby, all in form and substance
reasonably satisfactory to the Lender.

 

(n)       Guaranty and Security Documentation. The Lender shall have received a
guaranty and security agreement (the “Guaranty and Security Agreement”), duly
executed by each Borrower Party, in form and substance reasonably satisfactory
to the Lender, covering all of such Borrower Party’s Collateral, together with
the following, each in form and substance reasonably satisfactory to the Lender:

 

a.    financing statements (Form UCC-1) in proper form for filing under the UCC
in the jurisdiction of incorporation or formation, as applicable, of the
applicable Borrower Party as may be necessary or, in the reasonable opinion of
the Lender, desirable, to perfect the security interests purported to be created
by the Guaranty and Security Agreement to the extent they can be perfected by
such filings;

b.    results of searches, certified copies of requests for information or other
evidence or copies, or equivalent reports as of a recent date in the
jurisdiction of incorporation or formation, as applicable, of the applicable
Borrower Party, listing all effective financing statements that name any
Borrower Party as debtor and that are filed in the in which Collateral is
located on the Closing Date, together with copies of the financing statements
that are identified in such search results (none of which shall cover any of the
Collateral except (x) to the extent evidencing permitted liens (to be agreed in
the Credit Documentation) or (y) those in respect of which the Lender shall have
received termination statements (Form UCC-3) fully executed for filing;

c.    evidence of the completion of recordings and filings of any intellectual
property security agreement in the United States Patent and Trademark Office or
in the United States Copyright Office, as the case may be, as may be necessary
or, in the reasonable opinion of the Lender, desirable, to perfect the security
interests purported to be created by the Guaranty and Security Agreement; and

d.    subject to the terms of the applicable intercreditor agreement, (x) all
certificates representing the equity interests required to be pledged pursuant
to the Guaranty and Security Agreement together with undated endorsements for
transfer executed in blank and (y) promissory notes required to be pledged
pursuant to the Guaranty and Security Agreement together with undated
endorsements for transfer executed in blank, in each case, in form and substance
reasonably satisfactory to the Lender.

 

(o)       Material Adverse Effect. From December 31, 2017 to the Closing Date,
there has not occurred any fact, circumstance, effect, change, event or
development that, individually or in the aggregate, has a material adverse
effect on the business, financial position, results of operations or prospects
of the Borrower Parties taken as a whole or on their performance of their
obligations under this Agreement or on the consummation of the

 

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Term Loan Restructuring and the transactions contemplated thereby, in each case,
except as disclosed in a document filed by the Company with the Securities and
Exchange Commission (the “Commission”) pursuant to the Securities Exchange Act
of 1934, as amended (the “Exchange Act”), prior to the date hereof.

 

(p)       No Litigation. No court or other governmental entity of competent
jurisdiction shall have enacted, issued, promulgated, enforced or entered any
federal, state, local or foreign law, statute or ordinance, common law, or any
rule, regulation, standard, judgment, order, writ, injunction, decree,
arbitration award or agency requirement (whether temporary, preliminary or
permanent) that is in effect and restrains, enjoins or otherwise prohibits
consummation of the Term Loan Restructuring or the other transactions
contemplated by this Agreement.

 

(q)       KYC. The Lender shall have received at least three business days prior
to the Closing Date all documentation and other information about the Borrower
Parties as has been reasonably requested at least five business days prior to
the Closing Date that it reasonably determines is required by regulatory
authorities under applicable “know your customer” and anti-money laundering
rules and regulations, including a duly executed W-9 tax form (or such other
applicable IRS tax form) of the Borrower.

 

(r)       Other Documents. The Lender shall have received such other documents
and information as it may reasonably request and is customary for a transaction
of this type.

 

Section 5.2Closing Conditions of the Borrower Parties. The obligations of the
Borrower Parties to participate in the Term Loan Restructuring is subject to the
fulfillment, on or prior to the Closing Date, of all of the following
conditions, any of which may be waived in whole or in part by the Company:

 

(a) Representations and Warranties. The representations and warranties made by
the Lender in Article II hereof and in the Credit Documentation shall be true
and correct on the date hereof and on the Closing Date.

 

(b) Authorization. At the Closing, the Borrowing Parties shall have obtained all
requisite corporate authorizations to enter into the Term Loan Restructuring and
the related Credit Documentation.

 

(c) Legal Requirements. At the Closing, the Term Loan Restructuring shall be
legally permitted by all laws and regulations to which the parties hereto
are subject.

 

(d) Transaction Documents. The Lender shall have duly executed and delivered to
the Borrower Parties the Credit Documentation.

 

(e) Satisfactory Credit Documentation; Delivery of Outstanding Debt Securities;
Provision of the Loans. The Credit Documentation shall be in form and substance
reasonably satisfactory to the Company and the Borrower, including, without
limitation, the provision by Lender to the Borrowing Entities of Loans in a
total aggregate amount equal to the 2027 Debentures Amount, the Tranche A 2029
Debentures Amount, the Tranche B 2029 Debentures Amount and the Cash Borrowing
Amount. The Lender and any other Holders shall have delivered the Outstanding
Debt Securities set forth on Exhibit A to the Company.

 

(f) Facilities Proceeds. The Lender shall have funded the Cash Amount to the
Borrower by wire transfer of immediately funds.

 

(g) Refinancing of the 2022 Notes. Substantially concurrent with the Term Loan
Restructuring, the Company shall have effected the 2022 Debt Refinancing.

 

(h) Credit Agreement. The Company shall have obtained effective amendments to
(or amendment and restatement of), or refinanced, the Existing Credit Agreement
and related loan documents in order to permit the 2022 Debt Refinancing and the
transactions contemplated by this Agreement, and all other documentation

 

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required by the agent and lenders thereunder in order to permit the New First
Lien Debt and the transactions contemplated by this Agreement.

 

(i) Intercreditor Agreement(s). The administrative agent, on behalf of the
lenders party to the Existing Credit Agreement (or any refinancing or
replacement thereof), the collateral agent for the New First Lien Debt and the
Administrative Agent shall have entered into one or more intercreditor
agreements on terms and conditions reasonably acceptable to the Company and
the Lender.

 

(j) Supplemental Indentures. Supplemental Indentures shall have become effective
with respect to the 2027 Debentures and the 2029 Debentures eliminating the
restrictions with respect to the granting of liens and sale-and-leaseback
transactions on terms and conditions reasonably acceptable to the Company and
the Lender.

 

Article VI: Miscellaneous

 

Section 6.1Entire Agreement. This Agreement and any documents and agreements
executed in connection with the Term Loan Restructuring embody the entire
agreement and understanding of the parties hereto with respect to the subject
matter hereof and supersede all prior and contemporaneous oral or written
agreements, representations, warranties, contracts, correspondence,
conversations, memoranda and understandings between or among the parties or any
of their agents, representatives or affiliates relative to such subject matter,
including, without limitation, any term sheets, emails or draft documents.

 

Section 6.2Construction. References in the singular shall include the plural,
and vice versa, unless the context otherwise requires. References in the
masculine shall include the feminine and neuter, and vice versa, unless the
context otherwise requires. Headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the meanings of the
provisions hereof. Neither party, nor its respective counsel, shall be deemed
the drafter of this Agreement for purposes of construing the provisions of this
Agreement, and all language in all parts of this Agreement shall be construed in
accordance with its fair meaning, and not strictly for or against either party.

 

Section 6.3Governing Law. This Agreement shall in all respects be construed in
accordance with and governed by the substantive laws of the State of New York,
without reference to its choice of law rules.

 

Section 6.4Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original, but all of which taken together shall
constitute one and the same instrument. Any counterpart or other signature
hereon delivered by facsimile shall be deemed for all purposes as constituting
good and valid execution and delivery of this Agreement by such party.

 

Section 6.5Termination. This Agreement will terminate upon the earlier of (1)
the date (x) the Board of Directors of the Company (or any authorized committee
thereto) or (y) the Lender determines in its good faith judgment that it would
be inadvisable for the Company or the Lender, as applicable, to consummate the
Term Loan Restructuring and/or the 2022 Debt Refinancing or (2) the date that is
one hundred eighty days (180) days following the date of this Agreement, or such
later or earlier date agreed to in writing by the parties.

 

The Company or any other Borrower Party may terminate this Agreement if there
has occurred any breach or withdrawal by the Lender or a Holder of any covenant,
representation or warranty set forth in Article III The Lender or a Holder may
terminate this Agreement if there has occurred any breach or withdrawal by the
Company of any covenant, representation or warranty set forth in Article IV.

 

[Signature Page Follows]

 

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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
executed as of the date first above written.

 

 

THE MCLATCHY COMPANY

 

 

 

/s/R. Elaine Lintecum

Name: R. Elaine Lintecum

Title: VP, CFO and Treasurer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Signature Page to Term Loan Framework Agreement

 

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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
executed as of the date first above written.

 

 

CHATHAM ASSET MANAGEMENT, LLC

 (in its capacities set forth in the preamble hereto)

 

By: /s/Anthony R. Melchiorre

Name: Anthony R. Melchiorre

Title:Managing Member

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Signature Page to Term Loan Framework Agreement

 

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EXHIBIT A

Exchanging Beneficial Owners

 

The following entities will collectively exchange (i) $82,083,000 aggregate
principal amount of 2027 Debentures and (ii) $273,893,000 aggregate principal
amount of 2029 Debentures:

 

·

Chatham Asset High Yield Master Fund, Ltd.

·

Chatham Asset Private Debt and Strategic Capital Fund, LP

·

Chatham Everest Fund, LP

·

Chatham Fund, LP

 

 

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EXHIBIT B

Term Sheet

 

 

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The McClatchy Company Term Loan Facilities

Summary of Terms and Conditions

 

Set forth below is a summary of the terms and conditions of the Facilities (as
defined below) to be entered into by The McClatchy Company, a Delaware
corporation (the “Company”), a wholly-owned subsidiary of the Company designated
by the Company as the borrower, and the Lender (the “Term Sheet”), subject to
the terms and conditions of the Term Loan Framework Agreement (the “Agreement”)
to which this Term Sheet is attached. Capitalized terms used herein and not
otherwise defined herein  have the meanings specified in the Agreement.

 

 

 

Borrower:

A wholly-owned subsidiary of the Company designated by the Company, which shall
be the same borrower as under the New First Lien Debt (as defined below)
(the “Borrower”).

 

 

Guarantors:

Same as the guarantors for the New First Lien Debt, including the Company
(collectively, the “Guarantors”); provided that the guarantees in respect of the
Tranche A Term Loans shall be subordinated in right of payment to the
obligations of the Borrower and the Guarantors in respect of Priority
Indebtedness (as defined below) on customary terms for high yield debt
securities and the guarantees in respect of the Tranche B Term Loans shall be
subordinated in right of payment to the obligations of the Borrower and the
Guarantors in respect of the Tranche A Term Loans and Priority Indebtedness on
customary terms for high yield debt securities.

 

 

Administrative Agent:

A financial institution to be mutually agreed by the Company and Chatham will
act as administrative agent and collateral agent for the Facilities (in such
capacities, the “Administrative Agent”).

 

 

Lead Arranger:

A financial institution, if any, to be selected by the Company (the “Arranger”).

 

 

Lender:

The Lender set forth in the Agreement.

 

 

Facilities:

A term loan facility (the “Tranche A Term Loan Facility”) in an aggregate
principal amount of $250,000,000 (the “Tranche A Term Loans”), which loans will
be extended as follows (it being understood and agreed that the Borrower shall
not be required to pay any amount of principal in excess of $250,000,000 in
respect of the Tranche A Term Loans or any premium at which such Tranche A Term
Loans were extended): the sum of (i) (A) the prevailing market price (as quoted
on the TRACE system) on the Closing Date of $105,417,000 aggregate principal
amount of the Company’s 6.875% Debentures due March 15, 2029 (the “2029
Debentures”), plus (B) accrued and unpaid interest on such 2029 Debentures up
to, but excluding, the Closing Date; (ii) (A) the prevailing market price on the
Closing Date of $82,083,000 aggregate principal amount of the Company’s
7.15% Debentures

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due November 1, 2027 (the “2027 Debentures”), plus (B) accrued and unpaid
interest thereon up to, but excluding, the Closing Date; and (iii) $50,000,000.

 

 

 

A term loan facility (the “Tranche B Term Loan Facility”; and together with the
Tranche A Term Loan Facility, the “Facilities”) in an aggregate amount of
$168,476,000 (the loans thereunder, the “Tranche B Term Loans” and together with
the Tranche A Term Loans, the “Loans”) which Loans will be extended at a premium
equal to the sum of the following (it being understood and agreed that the
Borrower shall not be
required to pay any amount of principal in excess of $168,476,000 in respect of
the Tranche B Term Loans or any premium at which such Tranche B Term Loans were
extended): (i) the prevailing market price on the Closing Date of $168,476,000
aggregate principal amount of the Company’s 2029 Debentures, plus (ii) accrued
and unpaid interest thereon up to, but excluding, the Closing Date.

 

 

 

The Facilities will be documented in the form of a loan agreement containing the
terms and conditions set forth in the Agreement and this Term Sheet and a
security agreement in substantially the same form as the security agreement for
the New First Lien Debt (together with other related loan documentation to be
agreed, the “Credit Documentation”).

 

 

Maturity Dates:

Tranche A Term Loan Facility: July 1, 2030.

 

 

 

Tranche B Term Loan Facility: July 1, 2031.

 

 

Amortization:

Tranche A Term Loan Facility: None.

 

 

 

Tranche B Term Loan Facility: None.

 

 

Availability:

Tranche A Term Loan Facility: The full amount of the Tranche A Term Loan
Facility shall be made in a single drawing on the Closing Date (as defined below
under “Conditions to Closing”). Repayments and prepayments of Term Loans may not
be reborrowed.

 

 

 

Tranche B Term Loan Facility: The full amount of the Tranche B Term Loan
Facility shall be made in a single drawing on the Closing Date. Repayments and
prepayments of Term Loans may not be reborrowed.

 

 

Use of Proceeds:

The proceeds of the Tranche A Term Loans shall be used to purchase from Chatham
and/or its affiliates (i) $105,417,000 aggregate principal amount of the
Company’s 2029 Debentures at the prevailing market price on the Closing Date of
such 2029 Debentures plus accrued and unpaid interest thereon up to, but

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excluding the Closing Date, (ii) $82,083,000 aggregate principal amount of the
Company’s 2027 Debentures at the prevailing market price on the Closing Date of
such 2029 Debentures plus accrued and unpaid interest thereon up to, but
excluding, the Closing Date and (iii) for the 2022 Debt Refinancing and the
payment of fees, costs and expenses in connection with the 2022 Debt Refinancing
and the transactions contemplated by this Term Sheet.

 

 

 

The proceeds of the Tranche B Term Loans shall be used to purchase from Chatham
and/or its affiliates $168,476,000 aggregate principal amount of the Company’s
2029 Debentures at the prevailing market price on the Closing Date of such 2029
Debentures plus accrued and unpaid interest thereon up to, but excluding the
Closing Date.

 

 

Interest Rates:

Tranche A Term Loan Facility: 7.372% per annum.

 

 

 

Tranche B Term Loan Facility: 6.875% per annum.

 

 

 

Interest shall be payable semi-annually in arrears and calculated on the basis
of 12 months of 30 days each

 

 

Interest Payment Dates:

January 1 and July 1 of each year, commencing January 1, 2019

 

 

Voluntary Prepayments:

Tranche A Term Loans: At any time and from time to time prior to the third
anniversary of the Closing Date, the Borrower may prepay all or any portion of
the Tranche A Term Loans by payment of an amount equal to the sum of 100% of the
principal amount of Tranche A Term Loans being prepaid, plus accrued and unpaid
interest up to, but excluding the prepayment date, plus a customary (T+50 basis
points) make-whole amount.

 

 

 

On or after the third anniversary of the Closing Date, the Borrower may prepay
all or any portion of the Tranche A Term Loans by payment of an amount equal to
the sum of the specified percentage set forth below times the principal amount
of the Tranche A Term Loans being prepaid, plus accrued and unpaid interest up
to but excluding the prepayment date:

 

 

 

On or after the third anniversary of the Closing Date and prior to the fourth
anniversary of the Closing Date: 107.372%

 

 

 

On or after the fourth anniversary of the Closing Date and prior to the fifth
anniversary of the Closing Date: 105.529%

 

 

 

On or after the fifth anniversary of the closing date and prior to the sixth
anniversary of the Closing Date: 103.686%

 

 

 

On or after the sixth anniversary of the Closing Date and prior to the seventh
anniversary of the Closing Date: 101.843%

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On or after the seventh anniversary of the Closing Date: 100%

 

 

 

Tranche B Term Loans: At any time and from time to time, the Borrower may prepay
all or any portion of the Tranche B Term Loans by payment of an amount equal to
the sum of 100% of the principal amount of Tranche B Term Loans being prepaid,
plus accrued and unpaid interest up to, but excluding the prepayment date, plus
a customary (T+50 basis points) make-whole amount.

 

 

Mandatory Prepayments:

None (including in connection with any change in control of the Company).

 

 

Exchange Rights:

At any time after the occurrence of a change in control of the Company (as
defined in the 2022 Notes Indenture), the Lenders may exchange, solely at such
Lenders’ sole cost and expense, all or any portion of the Tranche A Term Loans
for notes with identical terms to the Tranche A Term Loans and to sell such
notes, subject to the Borrower’s approval of the initial purchaser of such
notes. The Lenders shall reimburse the Borrower for all costs and expenses of
the Borrower in connection with any such exchange, including without limitation
any tax liabilities incurred by the Borrower in connection with such exchange.

 

 

 

At any time after the occurrence of a change in control of the Company (as
defined in the 2022 Notes Indenture), the Lenders may exchange, solely at such
Lenders’ sole cost and expense, all or any portion of the Tranche B Term Loans
for notes with identical terms to the Tranche B Term Loans and to sell such
notes, subject to the Borrower’s approval of the initial purchaser of such
notes. The Lenders shall reimburse the Borrower for all costs and expenses of
the Borrower in connection with any such exchange, including without limitation
any tax liabilities incurred by the Borrower in connection with such exchange.

 

 

Collateral:

Same as the collateral for the New First Lien Debt (collectively,
the “Collateral”).

 

 

 

The liens on the Collateral securing the Tranche A Term Loans shall be
subordinated to the obligations of the Borrower and the Guarantors in respect of
(1) the indebtedness issued or incurred to refinance the Company’s 9.0% Senior
Secured Notes due 2022 (the “2022 Notes”) (such indebtedness, the “New First
Lien Debt”) and any refinancing of the New First Lien Debt, and (2) any Debt
Facilities (as defined in the indenture for 2022 Notes (the “2022 Notes
Indenture”)) of the Company or its Subsidiaries in an aggregate principal amount
at any time outstanding not to exceed $200,000,000 (plus an additional amount to
be agreed for DIP financings as set forth in the intercreditor agreements) (the
obligations described in the

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foregoing clauses (1) and (2), collectively, the “Priority Indebtedness”).

 

 

 

The liens on the Collateral securing the Tranche B Term Loans shall be
subordinated to the Priority Indebtedness and the Tranche A Term Loans.

 

 

Conditions to Closing:

The availability of the Facilities on the date of the initial borrowings under
the Facilities (the “Closing Date”) will be subject to only the conditions
specified in Article V of the Agreement to which this Term Sheet is attached,
including without limitation, the consummation of the 2022 Debt Refinancing.

 

 

Representations and Warranties:

Limited to: organization and good standing; power and authority; due
authorization, execution, delivery and enforceability; accuracy of financial
statements; no material adverse change; no violation of or conflicts with
applicable law, organizational documents and material agreements or instruments;
compliance with laws and regulations (including PATRIOT Act, FCPA and OFAC);
inapplicability of the Investment Company Act; accuracy of information; equity
interests and ownership of subsidiaries; ownership of property; taxes; solvency;
use of proceeds; and validity, priority and perfection of security interests in
the Collateral (limited to perfection requirements under the Credit
Documentation), with customary materiality qualifiers, exceptions and
limitations to be mutually agreed upon.

 

 

Affirmative Covenants:

Except as described below, same as the indenture for the 2027 Debentures and
2029 Debentures and limited to: maintenance of corporate existence and material
rights of the Borrower and the Guarantors; maintenance of properties; payment of
taxes and other claims; notice from officers as to default; delivery of audited
annual consolidated financial statements and unaudited quarterly consolidated
financial statements, in each case for the Company and its subsidiaries;
additional guarantors; the Borrower to remain a wholly-owned direct or indirect
subsidiary of the Company; compliance with laws (including PATRIOT Act, FCPA and
OFAC); maintenance of books and records; and further assurances on collateral
matters; with customary materiality qualifiers, exceptions and limitations and
as otherwise agreed (subject, in each case, to such immaterial modifications to
such covenants required to conform such covenants to the terms of the
Credit Documentation).

 

 

Negative Covenants:

Limited to: limitations on liens (which shall limit Priority Indebtedness as
provided in “Collateral” above and shall otherwise be consistent with the
limitations on liens under the New First Lien Debt) and limitations on sale and
leaseback

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transactions (which shall be consistent with the limitations on sale and
leaseback transactions under the New First Lien Debt).

 

 

Successor Borrower Provisions:

Same as the indenture for the 2027 Debentures and 2029 Debentures (Article
Eight).

 

 

Events of Default:

Same as in indenture for the 2027 Debentures and 2029 Debentures, except to
include the following cross payment default and cross acceleration default to
the New First Lien Debt, invalidity of guarantees or security interests in the
Collateral (subject, in each case, to such immaterial modifications to such
events of default required to conform such events of default to the terms of the
Credit Documentation and thresholds, exceptions, limitations, materiality
qualifiers, and grace periods to be agreed).

 

 

Voting:

Amendments and waivers with respect to the Credit Documentation shall require
the approval of Lenders holding more than 50% of the aggregate outstanding
principal amount of the Term Loans voting as a single class (the “Required
Lenders”), except that (a) the consent of each Lender directly affected thereby
shall be required with respect to (i) reductions in the amount of principal or
extensions of the scheduled date of the final maturity of any Loan, (ii)
reductions in the rate of interest or extensions of any due date thereof, (iii)
reductions of principal or interest, (iv) reductions in premiums and (b) the
consent of 100% of the Lenders shall be required with respect to (i)
modifications to any of the voting percentages or the pro rata sharing
provisions, (ii) releases of all or substantially all the Collateral (except to
the extent permitted under the Credit Documentation) and (iii) releases of all
or substantially all of the Guarantors (except to the extent permitted under the
Credit Documentation).

 

 

Assignments and Participations:

The Lenders shall be permitted to assign all or a portion of their Loans (other
than to a natural person and disqualified lenders to be identified by the
Borrower) with the consent of (a) the Borrower, except that Borrower consent is
not required if a payment or bankruptcy event of default has occurred and is
continuing, (b) the Administrative Agent, and (c) Lenders holding, in the
aggregate, at least 10% of the outstanding Loans (measured by principal amount,
and without taking into account any Loans held by the assigning Lender or any of
its affiliates); provided, however, that no consent is required under
clause (a), (b) or (c) in the case of any assignment by a Lender to another
Lender or an affiliate of any Lender. In the case of a partial assignment (other
than to another Lender or an affiliate of a Lender), the minimum assignment
amount shall be $5,000,000, unless otherwise agreed by the Borrower and the
Administrative

 

 

 

Agent. Voting rights of a participant shall be limited to those matters set
forth in clause (a) of the section entitled “Voting” in this Term Sheet with
respect to which the affirmative vote of the Lender from which it purchased its
participation would be required. Promissory notes shall be issued under the
Facilities only upon request.

 

 

Expenses:

Each party will bear its own costs and expenses in connection with the
transactions contemplated by the Agreement and this Term Sheet, except that the
Borrower shall pay the fees and expenses of the Arranger and the
Administrative Agent.

 

 

Governing Law and Exclusive Forum:

New York.

 

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