Exhibit 10.1

 

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March 9, 2006

The McClatchy Company

2100 Q Street

Sacramento, California 95816-6899

Attention: Mr. Patrick J. Talamantes

 

  Re: $3.75 Billion Senior Credit Facility

Dear Mr. Talamantes:

You have advised Bank of America, N.A. (“Bank of America”), Banc of America
Securities LLC (“BAS”), JPMorgan Chase Bank, N.A. (“JPMCB”) and J. P. Morgan
Securities Inc. (“JPMorgan Securities”) that you intend to acquire (the
“Acquisition”) Knight-Ridder, Inc., a Florida corporation (the “Company”), for
not more than $3.75 billion in cash by way of a forward merger of the Company
with and into you, with you being the surviving entity. You have also advised
Bank of America, BAS, JPMCB and JPMorgan Securities that you intend to finance a
portion of the Acquisition, costs and expenses related thereto and the ongoing
working capital and other general corporate purposes of The McClatchy Company
(the “Borrower”) and its subsidiaries from a $3.75 billion senior credit
facility.

Bank of America is pleased to offer to be the sole and exclusive administrative
agent (in such capacity, the “Administrative Agent”) and JPMCB is pleased to
offer to be the sole and exclusive syndication agent (in such capacity, the
“Syndication Agent”) for a $3.75 Billion Senior Credit Facility (the “Senior
Credit Facility”) to the Borrower, comprised of (i) a term loan A facility of up
to $2.2 billion, (ii) a bridge facility of up to $550 million and (iii) a
revolving credit facility of up to $1.0 billion, and Bank of America and JPMCB
are pleased to offer their respective commitments to each provide 50% of the
Senior Credit Facility, upon and subject to the terms and conditions of this
letter and the Summary of Terms and Conditions attached hereto (the “Summary of
Terms”). Furthermore, BAS and JPMorgan Securities are pleased to advise you of
their willingness in connection with the foregoing commitments, as joint lead
arrangers and joint and exclusive book runners (in such capacities, the “Lead
Arrangers”) for the Senior Credit Facility, to form a syndicate of financial
institutions (the “Lenders”) acceptable to you for the Senior Credit Facility.

Bank of America will act as sole and exclusive Administrative Agent and JPMCB
will act as sole and exclusive Syndication Agent for the Senior Credit Facility
and BAS and JPMorgan Securities will act as joint and exclusive Lead Arrangers
for the Senior Credit Facility. No additional agents, co-agents or arrangers
will be appointed and no other titles will be awarded without our prior approval
or without consultation with you. It is understood that such titles shall be in
name only and the Senior Credit Facility shall be arranged by the Lead Arrangers
only. You hereby agree that, effective upon your acceptance of this Commitment
Letter and continuing through December 31, 2006, you shall not enter into any
agreement with any other bank, investment bank, financial institution, person or
entity to provide, structure, arrange or syndicate the Senior Credit Facility or
any other senior financing similar to or as a replacement of the Senior Credit
Facility; provided, however, that such prohibition shall not apply in the event
Bank of America and JPMCB fail to perform their duties hereunder in any material
respect or terminate their commitments hereunder (other than for failure of any
condition to such commitment).

The commitments of Bank of America and JPMCB hereunder and the undertaking of
BAS and JPMorgan Securities to provide the services described herein are subject
to the satisfactions of each of the following conditions precedent in a manner
acceptable to Bank of America, BAS, JPMCB and JPMorgan Securities:
(a) [intentionally omitted]; (b) the accuracy and completeness in all material
respects of all

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The McClatchy Company

March 9, 2006

Page 2

representations that you and your affiliates make to Bank of America, BAS, JPMCB
and JPMorgan Securities and your compliance with the terms of this Commitment
Letter (including the Summary of Terms) and the Fee Letter as hereinafter
defined; (c) prior to and during the syndication of the Senior Credit Facility,
but limited to December 31, 2006, there shall be no competing offering,
placement or arrangement of any debt securities or bank financing by or on
behalf of the Borrower or any of its subsidiaries; (d) the negotiation,
execution and delivery of definitive documentation for the Senior Credit
Facility consistent with the Summary of Terms and otherwise satisfactory to Bank
of America, BAS, JPMCB and JPMorgan Securities; and (e) no Company Material
Adverse Effect (as defined in the Acquisition Agreement) shall have occurred.

BAS and JPMorgan Securities intend to commence syndication efforts promptly upon
your acceptance of this Commitment Letter and the Fee Letter and the aggregate
commitments of Bank of America and JPMCB hereunder shall be reduced
dollar-for-dollar as and when corresponding commitments are received from the
Lenders. You agree to make commercially reasonable efforts to actively assist
BAS and JPMorgan Securities in achieving a syndication of the Senior Credit
Facility that is satisfactory to them. Such assistance shall include (a) using
commercially reasonable efforts to provide and cause your advisors to provide
Bank of America, BAS, JPMCB and JPMorgan Securities and the other Lenders upon
request with all information reasonably deemed necessary by Bank of America,
BAS, JPMCB and JPMorgan Securities to complete syndication; (b) your assistance
in the preparation of an Information Memorandum to be used in connection with
the syndication of the Senior Credit Facility; (c) using commercially reasonable
efforts to ensure that the syndication efforts of BAS and JPMorgan Securities
benefit materially from your existing banking relationships; and (d) otherwise
assisting Bank of America, BAS, JPMCB and JPMorgan Securities in their
syndication efforts, including using commercially reasonable efforts to make
your senior management and advisors reasonably available from time to time to
attend and make presentations regarding the business and prospects of the
Borrower and its subsidiaries, as appropriate, at one or more meetings of
prospective Lenders. It is understood and agreed that you shall not access the
Increase Option described in the Summary of Terms until the commitments of each
of Bank of America and JPMCB have been reduced to the target hold level
specified in paragraph 5 of the hereinafter-described Fee Letter.

It is understood and agreed that BAS and JPMorgan Securities will manage and
control all aspects of the syndication in consultation with you, including
decisions as to the selection of prospective Lenders and any titles offered to
proposed Lenders, when commitments will be accepted and the final allocations of
the commitments among the Lenders. It is understood that no Lender, other than
Bank of America and JPMCB participating in the Senior Credit Facility will
receive compensation from you in order to obtain its commitment, except on the
terms contained herein, in the Summary of Terms and in the Fee Letter. It is
also understood and agreed that the amount and distribution of the fees among
the Lenders will be at the sole discretion of Bank of America, BAS, JPMCB and
JPMorgan Securities.

You hereby represent, warrant and covenant that (a) all information, other than
Projections (defined below), which has been or is hereafter made available to
Bank of America, BAS, JPMCB, JPMorgan Securities or the Lenders by you or any of
your representatives (or on your or their behalf) in connection with the
transactions contemplated hereby (when taken together with your and the
Company’s filings with the SEC) (the “Information”) is and will be complete and
correct in all material respects and does not and will not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements contained therein not misleading, and (b) all financial
projections concerning the Borrower and its subsidiaries that have been or are
hereafter made available to Bank of America, BAS, JPMCB, JPMorgan Securities or
the Lenders by you or any of your representatives (the “Projections”) have been
or will be prepared in good faith based upon assumptions that were reasonable at
the date of preparation. You agree to furnish us with such Information and
Projections as we may reasonably request and to supplement the Information and
the Projections from time to time until the closing date for the Senior Credit
Facility (the “Closing Date”) so that the representation, warranty and covenant
in the preceding sentence is correct on the Closing Date. In issuing this
commitment and in arranging and syndicating the Senior Credit Facility, Bank of
America, BAS, JPMCB and JPMorgan Securities are and will be using and relying on
the Information and the Projections (collectively, the “Pre-Commitment
Information”) without independent verification thereof.

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The McClatchy Company

March 9, 2006

Page 3

You hereby acknowledge that (a) BAS, Bank of America, JPMCB and/or JPMorgan
Securities will make available Information and Projections (collectively,
“Borrower Materials”) to the proposed syndicate of Lenders by posting the
Borrower Materials on IntraLinks or another similar electronic system (the
“Platform”) and (b) certain of the proposed Lenders may be “public-side” Lenders
(i.e., Lenders that do not wish to receive material non-public information with
respect to the Borrower or its securities or the Company or its securities)
(each, a “Public Lender”). You hereby agree that, (w) all Borrower Materials
that are to be made available to Public Lenders shall be clearly and
conspicuously marked “PUBLIC” which, at a minimum, shall mean that the word
“PUBLIC” shall appear prominently on the first page thereof; (x) by marking
Borrower Materials “PUBLIC,” you shall be deemed to have authorized BAS, Bank of
America, JPMCB, JPMorgan Securities and the proposed Lenders to treat such
Borrower Materials as not containing any material non-public information with
respect to the Borrower or its securities or the Company or its securities for
purposes of United States federal and state securities laws, it being understood
that certain of such Borrower Materials may be subject to the confidentiality
requirements of the definitive credit documentation; (y) all Borrower Materials
marked “PUBLIC” are permitted to be made available through a portion of the
Platform designated “Public Investor;” and (z) BAS, Bank of America, JPMCB,
JPMorgan Securities shall be entitled to treat any Borrower Materials that are
not marked “PUBLIC” as being suitable only for posting on a portion of the
Platform not designated “Public Investor.” Notwithstanding the foregoing, you
shall be under no obligation to mark any Borrower Materials “PUBLIC.”

By executing this Commitment Letter, you agree to reimburse Bank of America,
BAS, JPMCB and JPMorgan Securities from time to time on demand for all
reasonable out-of-pocket fees and expenses (including, but not limited to,
(a) the reasonable fees, disbursements and other charges, of (i) one counsel to
the Lead Arrangers, the Administrative Agent and the Syndication Agent, unless
the interests of the Lead Arrangers, the Administrative Agent and the
Syndication Agent are sufficiently divergent, in which case one additional
counsel may be appointed for each such person or group of persons with such
sufficiently divergent interests, and (ii) such local or special legal counsel
as may be retained by the Administrative Agent in connection with the Senior
Credit Facility, (b) due diligence expenses and (c) all CUSIP fees for
registration with the Standard & Poor’s CUSIP Service Bureau) incurred in
connection with the Senior Credit Facility, the syndication thereof, the
preparation of the definitive documentation thereof and the other transactions
contemplated hereby.

You agree to indemnify and hold harmless Bank of America, BAS, JPMCB and
JPMorgan Securities and each of their affiliates and their respective officers,
directors, employees, agents, advisors and other representatives (each, an
“Indemnified Party”) from and against (and will reimburse each Indemnified Party
as the same are incurred for) any and all claims, damages, losses, liabilities
and expenses (including, without limitation, the reasonable fees, disbursements
and other charges of counsel) that may be incurred by or asserted or awarded
against any Indemnified Party (but excluding a breach of contract action between
you and an Indemnified Party brought by you where you are the prevailing party
in a final, non-appealable judgment by a competent court), in each case arising
out of or in connection with or by reason of (including, without limitation, in
connection with any investigation, litigation or proceeding or preparation of a
defense in connection therewith) (a) any matters contemplated by this Commitment
Letter or any related transaction or (b) the Senior Credit Facility and any
other financings or any use made or proposed to be made with the proceeds
thereof except to the extent such claim, damage, loss, liability or expense is
found in a final, nonappealable judgment by a court of competent jurisdiction to
have resulted from such Indemnified Party’s gross negligence or willful
misconduct. In the case of an investigation, litigation or proceeding to which
the indemnity in this paragraph applies, such indemnity shall be effective
whether or not such investigation, litigation or proceeding is brought by you
(other than a breach of contract action where you are the prevailing party in a
final, non-appealable judgment by a competent court), your equity holders or
creditors or an Indemnified Party, whether or not an Indemnified Party is
otherwise a party thereto and whether or not the transactions contemplated
hereby are

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The McClatchy Company

March 9, 2006

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consummated. You also agree that no Indemnified Party shall have any liability
(whether direct or indirect, in contract or tort or otherwise) to you or your
subsidiaries or affiliates or to your or their respective equity holders or
creditors for any special, indirect, consequential or punitive damages in
connection with its activities related to the Senior Credit Facility. It is
further agreed that Bank of America and JPMCB shall only have liability to you
(as opposed to any other person), that each of Bank of America and JPMCB shall
be liable solely in respect of its own commitment to the Senior Credit Facility
on a several, and not joint, basis with any other Lender, and that such
liability shall only arise to the extent damages have been caused by a breach of
Bank of America’s or JPMCB’s obligations hereunder to negotiate in good faith
definitive documentation for the Senior Credit Facility on the terms set forth
herein as determined in a final non-appealable judgment by a court of competent
jurisdiction. Notwithstanding any other provision of this Commitment Letter, no
Indemnified Party shall be liable for any damages arising from the use by others
of information or other materials obtained through electronic telecommunications
or other information transmission systems, unless such damages are found in a
final, non-appealable judgment by a court of competent jurisdiction to have
resulted from such Indemnified Party’s gross negligence or willful misconduct.

Promptly after receipt by an Indemnified Party under this paragraph of notice of
its involvement in any action arising out of this Commitment Letter, if a claim
for indemnification in respect thereof is to be made against you under this
paragraph, such Indemnified Party shall notify you in writing of such
involvement. Failure by such Indemnified Party to so notify you shall not
relieve you from the obligation to indemnify the Indemnified Party in accordance
with this paragraph. If any Indemnified Party is entitled to indemnification
under this paragraph with respect to any action or proceeding relating to this
Commitment Letter brought by a third party that is also brought against you, you
shall be entitled to assume the defense of such action or proceeding with
counsel reasonably satisfactory to the Indemnified Party. Upon assumption by you
of the defense of any such action or proceeding, the Indemnified Party shall
have the right to participate in such action or proceeding and to retain its own
counsel but you shall not be liable for any legal expenses of such other counsel
subsequently incurred by such Indemnified Party in connection with the defense
thereof unless (a) you have agreed to pay such fees and expenses, (b) you shall
have failed to employ counsel reasonably satisfactory to the Indemnified Party
in a timely manner, or (c) the Indemnified Party shall have been advised by
counsel that there are actual or potential conflicting interests between you and
the Indemnified Party, including situations in which there are one or more legal
defenses available to the Indemnified Party that are different from or
additional to those available to you. You will not, without the Indemnified
Party’s written consent, settle, compromise, consent to the entry of any
judgment in or otherwise seek to terminate any claim, action or proceeding in
respect of which indemnity may be sought hereunder, whether or not any
Indemnified Party is an actual or potential party thereto, unless such
settlement, compromise, consent or termination includes an unconditional release
of each Indemnified Party from any liabilities arising out of such claim, action
or proceeding.

This Commitment Letter and the fee letter among you, Bank of America, BAS, JPMCB
and JPMorgan Securities (the “Fee Letter”) and the contents hereof and thereof
are confidential and, except for disclosure hereof or thereof on a confidential
basis to your accountants, attorneys and other professional advisors retained by
you in connection with the Senior Credit Facility or as otherwise required by
law, may not be disclosed in whole or in part to any person or entity without
our prior written consent; provided, however, it is understood and agreed that
you may disclose this Commitment Letter (including the Summary of Terms) but not
the Fee Letter after your acceptance of this Commitment Letter and the Fee
Letter, in filings with the Securities and Exchange Commission and other
applicable regulatory authorities and stock exchanges. Bank of America, BAS,
JPMCB and JPMorgan Securities hereby notify you that pursuant to the
requirements of the USA Patriot Act, Title III of Pub. L. 107-56 (signed into
law October 26, 2001) (the “Act”), each of them is required to obtain, verify
and record information that identifies you, which information includes your name
and address and other information that will allow Bank of America, BAS, JPMCB or
JPMorgan Securities as applicable, to identify you in accordance with the Act.

You acknowledge that Bank of America, BAS, JPMCB and JPMorgan Securities or
their affiliates may be providing financing or other services to parties whose
interests may conflict with yours. Without limiting

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The McClatchy Company

March 9, 2006

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any of the other confidentiality obligations hereunder, each of Bank of America,
BAS, JPMCB and JPMorgan Securities agrees that it will not furnish the
Information (as defined below) to any of their other customers. Each of Bank of
America, BAS, JPMCB and JPMorgan Securities agrees to use the Information solely
in connection with the extensions of its commitment under, and its syndication
of, the Senior Credit Facility. Each of Bank of America, BAS, JMPCB and JPMorgan
Securities further agrees to maintain the confidentiality of all Information
with the same degree of care as it reasonably would be expected to exercise with
respect to its own confidential information, except that Information may be
disclosed by any such party (a) to its affiliates and to its affiliates’
directors, officers, employees and agents, including accountants, legal counsel
and other advisors (provided each such person to whom such disclosure is made is
informed of the confidential nature of such Information and instructed to keep
such Information confidential), (b) to the extent requested by any regulatory
agency having authority over such person, (c) to the extent required by
applicable laws or regulations or by any subpoena or similar legal process,
(d) to any prospective Lender that has agreed to keep the Information
confidential and to use the Information only for the purpose of evaluating its
participation in the Senior Credit Facility, (e) in connection with any action
or proceeding relating to this Commitment Letter, the Fee Letter or the Senior
Credit Facility or the enforcement of rights hereunder or thereunder, (f) with
the prior written consent of the Borrower or (g) to the extent such Information
(x) becomes publicly available other than as a result of a breach of this
paragraph or (y) becomes available to such person on a nonconfidential basis
from a source other than the Borrower. The Borrower further agrees that pursuant
to clause (f) of the preceding sentence Bank of America, BAS, JPMCB and JPMorgan
Securities may use any public information in marketing materials, press releases
or other transactional announcements or updates provided to investor or trade
publications, provided that the content and final form of any such intended use
are furnished to the Borrower reasonably in advance of the date of proposed use
and such content and final form are acceptable to the Borrower. For purposes of
this paragraph “Information” means all information received in connection with
this Commitment Letter or the Senior Credit Facility relating to the Borrower or
its business, other than any such information that is available on a
non-confidential basis prior to such receipt. Bank of America, BAS, JPMCB and
JPMorgan Securities further advise you that they will not make available to you
confidential information that they have obtained or may obtain from any other
customer. The confidentiality provisions set forth in this paragraph shall
terminate on the earlier of (i) December 31, 2007, (ii) the date of execution of
definitive documentation for the Senior Credit Facility or (iii) termination of
the planned Acquisition.

In connection with all aspects of each transaction contemplated by this letter,
you acknowledge and agree that: (i) the Senior Credit Facility and any related
arranging or other services described in this letter is an arm’s-length
commercial transaction between you and your affiliates, on the one hand, and
Bank of America, BAS, JPMCB and JPMorgan Securities and any other Lead Arranger,
on the other hand, and you are capable of evaluating and understanding and
understand and accept the terms, risks and conditions of the transactions
contemplated by this letter; (ii) in connection with the process leading to the
Senior Credit Facility, Bank of America, BAS, JPMCB and JPMorgan Securities and
any other Lead Arranger, each is and has been acting solely as a principal and
is not the financial advisor, agent or fiduciary, for you or any of your
affiliates, stockholders, creditors or employees or any other party;
(iii) neither Bank of America, BAS, JPMCB nor JPMorgan Securities nor any other
Lead Arranger has assumed or will assume by virtue of this Commitment Letter,
the Summary of Terms or the Fee Letter, an advisory, agency or fiduciary
responsibility in your or your affiliates’ favor with respect to any of the
transactions contemplated hereby or the process leading thereto (irrespective of
whether Bank of America, BAS, JPMCB or JPMorgan Securities or any other Lead
Arranger has advised or is currently advising you or your affiliates on other
matters) and neither Bank of America, BAS, JPMCB nor JPMorgan Securities nor any
other Lead Arranger has any obligation to you or your affiliates with respect to
the transactions contemplated hereby except those obligations expressly set
forth in this letter; (iv) Bank of America, BAS, JPMCB and JPMorgan Securities
and any other Lead Arranger, and their respective affiliates may be engaged in a
broad range of transactions that involve interests that differ from yours and
your affiliates and Bank of America, BAS, JPMCB and JPMorgan Securities and any
other Lead Arranger have no obligation to disclose any of such interests by
virtue of any advisory, agency or fiduciary relationship; and (v) Bank of
America, BAS, JPMCB and JPMorgan Securities and any other Lead

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The McClatchy Company

March 9, 2006

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Arranger have not provided any legal, accounting, regulatory or tax advice with
respect to any of the transactions contemplated hereby and you have consulted
your own legal, accounting, regulatory and tax advisors to the extent you have
deemed appropriate. You hereby waive and release, to the fullest extent
permitted by law, any claims that you may have against Bank of America, BAS,
JPMCB and JPMorgan Securities and any other Lead Arranger with respect to any
breach or alleged breach of agency or fiduciary duty.

Except as provided in the last sentence of the second preceding paragraph, the
provisions of the immediately preceding five paragraphs shall remain in full
force and effect regardless of whether any definitive documentation for the
Senior Credit Facility shall be executed and delivered, and notwithstanding the
termination of this letter or any commitment or undertaking hereunder.

This Commitment Letter and the Fee Letter may be executed in counterparts which,
taken together, shall constitute an original. Delivery of an executed
counterpart of this Commitment Letter or the Fee Letter by telecopier or
facsimile shall be effective as delivery of a manually executed counterpart
thereof.

This Commitment Letter and the Fee Letter shall be governed by, and construed in
accordance with, the laws of the State of New York. Each of you, Bank of
America, BAS, JPMCB and JPMorgan Securities hereby irrevocably waives any and
all right to trial by jury in any action, proceeding or counterclaim (whether
based on contract, tort or otherwise) arising out of or relating to this
Commitment Letter (including, without limitation, the Summary of Terms), the Fee
Letter, the transactions contemplated hereby and thereby or the actions of Bank
of America and BAS in the negotiation, performance or enforcement hereof. The
commitments and undertakings of Bank of America, BAS, JPMCB and JPMorgan
Securities may be terminated by us, if you fail to perform your obligations
under this Commitment Letter or the Fee Letter on a timely basis.

This Commitment Letter, together with the Summary of Terms and the Fee Letter,
embodies the entire agreement and understanding among Bank of America, BAS,
JPMCB and JPMorgan Securities, you and your affiliates with respect to the
Senior Credit Facility and supercedes all prior agreements and understandings
relating to the specific matters hereof. However, please note that the terms and
conditions of the commitment of Bank of America and JPMCB and the undertaking of
BAS and JPMorgan Securities hereunder are not limited to those set forth herein
or in the Summary of Terms. Those matters that are not covered or made clear
herein or in the Summary of Terms or the Fee Letter are subject to mutual
agreement of the parties. No party has been authorized by Bank of America, BAS,
JPMCB or JPMorgan Securities to make any oral or written statements that are
inconsistent with this Commitment Letter. This Commitment Letter is not
assignable by the Borrower without our prior written consent and is intended to
be solely for the benefit of the parties hereto and the Indemnified Parties.

This offer will expire at 5:00 p.m. Pacific Time on March 20, 2006 unless you
execute this letter and the Fee Letter and return them to us prior to that time
(which may be by facsimile transmission), whereupon this letter and the Fee
Letter (each of which may be signed in one or more counterparts) shall become
binding agreements. Thereafter, this undertaking and commitment will expire on
the End Date (as defined in the Acquisition Agreement) as it may be extended
pursuant to the provisions of Section 7.1(b) of the Acquisition Agreement (but
in no event later than December 31, 2006), unless definitive documentation for
the Senior Credit Facility is executed and delivered prior to such date.

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The McClatchy Company

March 9, 2006

Page 7

We are pleased to have the opportunity to work with you in connection with this
important financing.

Very truly yours,

 

BANK OF AMERICA, N.A.     JPMORGAN CHASE BANK, N.A. By:  

/s/ Robert Munn Jr.

    By:  

/s/ Peter Thauer

Name:   Robert Munn Jr.     Name:   Peter Thauer Title:   Senior Vice President
    Title:   Vice President BANC OF AMERICA SECURITIES LLC     J.P. MORGAN
SECURITIES INC. By:  

/s/ William Bowen Jr.

    By:  

/s/ Richard Gabriel

Name:   William Bowen Jr.     Name:   Richard Gabriel Title:   Managing Director
    Title:   Vice President

Accepted and agreed to

as of the date first above written:

THE MCCLATCHY COMPANY

 

By:  

/s/ Patrick J. Talamantes

Name:   Patrick J. Talamantes Title:   Chief Financial Officer

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SUMMARY OF TERMS AND CONDITIONS

THE MCCLATCHY COMPANY

$3,750,000,000 SENIOR CREDIT FACILITY

 

BORROWER:    The McClatchy Company (the “Borrower”). GUARANTORS:    If the
ratings on the Senior Credit Facility are lower than BBB- and Baa3, then the
obligations of the Borrower under the Senior Credit Facility will be guaranteed
by each existing and future direct and indirect material domestic and, to the
extent no adverse tax consequences would result, foreign subsidiary of the
Borrower (collectively, the “Guarantors”). All guarantees will be guarantees of
payment and not of collection. ADMINISTRATIVE AGENT:    Bank of America, N.A.
(the “Administrative Agent” or “Bank of America”) will act as sole and exclusive
administrative agent. SYNDICATION AGENT:    JPMorgan Chase Bank, N.A. (the
“Syndication Agent” or “JPMCB”) will act as sole and exclusive syndication
agent. JOINT LEAD ARRANGERS AND    JOINT BOOK RUNNERS:    Banc of America
Securities LLC (“BAS”) and J. P. Morgan Securities Inc. (“JPMorgan Securities”).
LENDERS:    A syndicate of financial institutions (including Bank of America and
JPMCB) arranged by BAS and JPMorgan Securities, which institutions shall be
acceptable to the Borrower, the Administrative Agent and the Syndication Agent
(collectively, the “Lenders”). SENIOR CREDIT FACILITY:    An aggregate principal
amount of up to $3.75 billion will be available through the following
facilities:    Term A Facility: a $2.2 billion term A loan facility (the “Term A
Facility”), all of which will be drawn on the Closing Date.    Bridge Facility:
a $550 million bridge facility (the “Bridge Facility”), all of which will be
drawn on the Closing Date.    Revolving Credit Facility: a $1.0 billion
Revolving Credit Facility (the “Revolving Credit Facility”) which will include a
to-be-determined sublimit for the issuance of standby letters of credit (each a
“Letter of Credit”) and a $60 million sublimit for swingline loans (each a
“Swingline Loan”). Letters of Credit will be issued by Bank of America (in such
capacity, the “Fronting Bank”) and Swingline Loans will be made available by
Bank of America, and each Lender will purchase an irrevocable and unconditional
participation in each Letter of Credit and Swingline Loan. SWINGLINE OPTION:   
Swingline Loans will be made available on a same day basis in an aggregate
amount not exceeding $60 million and in minimum amounts of $500,000. The
Borrower must repay each Swingline Loan in full no later than 7 days after such
loan is made.

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INCREASE OPTION:    Provided there is no Event of Default then existing and
continuing and within four years of Closing, the Borrower may, without the
consent of the Lenders, increase the size of the Revolving Credit Facility by
$500 million. No Lender is in any manner obligated to participate in such
increase by increasing its own commitment amount. Lenders of the additional
amount(s) will be afforded the same rights and protections that are provided to
the Lenders of the original Revolving Credit Facility. Additional Lenders shall
be subject to the same criteria as assignees of Lenders. PURPOSE:    The Senior
Credit Facility shall be used: (i) to finance in part the acquisition (the
“Acquisition”) of Knight-Ridder, Inc. (the “Company”), (ii) to refinance
outstanding amounts under the Borrower’s and the Company’s existing credit
agreements, (iii) for working capital, (iv) to support the Borrower’s commercial
paper program, and (v) for other lawful corporate purposes. MATURITY:    The
Term A Facility shall be due and payable in full 5 years after the Closing Date
with no required amortization prior to that date.    The Bridge Facility shall
be due and payable in full 24 months after the Closing Date.    The Revolving
Credit Facility shall terminate and all amounts outstanding thereunder shall be
due and payable in full 5 years from the Closing Date. CLOSING DATE:    The
execution of definitive loan documentation is currently expected to occur on or
before September 30, 2006; however, this date will be extended if the End Date
(as defined in the Acquisition Agreement) is extended pursuant to the provisions
of Section 7.1(b) of the Acquisition Agreement (but in no event to a date later
than December 31, 2006) (the “Closing Date”). INTEREST RATES:    As set forth in
Addendum I. MANDATORY    PREPAYMENTS:    100% of all net cash proceeds from
sales of property and assets of the Borrower and its subsidiaries (excluding
sales of inventory in the ordinary course and other exceptions to be agreed in
the loan documentation) shall be applied to the repayment of the Bridge
Facility. OPTIONAL PREPAYMENTS AND COMMITMENT    REDUCTIONS:    Prior to the
Closing Date, any voluntary reduction of the commitments shall be applied to
first reduce the Bridge Facility, and once the Bridge Facility has been reduced
to zero thereafter to either the Term A Facility or the Revolving Credit
Facility, as the Borrower may elect. After the Closing Date, the Borrower may
prepay any portion of the Senior Credit Facility in whole or in part at any time
without penalty, subject to reimbursement of the Lenders’ breakage and
redeployment costs in the case of prepayment of LIBOR borrowings. The unutilized
portion of any commitment under the Revolving Credit Facility and Swing Line
Loans may be irrevocably canceled by Borrower in whole or in part.

 

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CONDITIONS PRECEDENT

      TO CLOSING:    The Closing of the Senior Credit Facility will be subject
to satisfaction of the conditions precedent customary for a credit facility of
this type, including, but not limited to, the following:    (i)    The
negotiation, execution and delivery of definitive documentation (including,
without limitation, satisfactory legal opinions and other customary closing
documents) for the Senior Credit Facility satisfactory to BAS, the
Administrative Agent, the Syndication Agent and the Lenders.    (ii)    There
shall not have occurred a Company Material Adverse Effect (as defined in the
Acquisition Agreement).    (iii)    The simultaneous termination of the existing
Credit Agreement dated May 10, 2004 as among the Borrower, various financial
institutions and Bank of America, N.A., as agent, upon repayment (or refinancing
under the Senior Credit Facility) of all outstanding loans, fees and other
amounts accrued or owing thereunder, concurrently with, or prior to, the initial
borrowing under the Senior Credit Facility on the Closing Date.    (iv)   
Receipt of pro forma corporate ratings for the Borrower and ratings on the
Senior Credit Facility from each of Moody’s Investor Service Inc. and Standard &
Poors Ratings Group.    (v)    Receipt of confirmation that all continuing
public indebtedness of the Company and its subsidiaries will, after giving
effect to the Acquisition, be an obligation of the Borrower.    (vi)    Receipt
of confirmation that the Acquisition will be consummated as contemplated in the
Commitment Letter and in accordance with the Acquisition Agreement without any
amendment or modification of any material provision of the Acquisition Agreement
(except with the consent of the Lead Arrangers and except with respect to any
amendment or modification that does not materially and adversely affect the
interests of the Lead Arrangers, the Agents or the Lenders).    (vii)    Receipt
of confirmations that all conditions precedent to the consummation of the
Acquisition have been satisfied or if waived, such waivers do not materially and
adversely affect the interests of the Lead Arrangers, the Agents or the Lenders
or the Lead Arrangers shall have consented to such waivers.

CONDITIONS PRECEDENT

      TO ALL LOANS:    Usual and customary for transactions of this type, to
include without limitation: (i) all representations and warranties are true and
correct in all material respects as of the date of each loan, and (ii) no event
of default under the Senior Credit Facility or incipient default has occurred
and is continuing, or would result from such loan. REPRESENTATIONS    AND
WARRANTIES:    Usual and customary for transactions of this type subject to
appropriate standards of materiality, to include without limitation:
(i) corporate

 

3

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  existence and status; (ii) corporate power and authority, enforceability;
(iii) no violation of law, contracts or organizational documents; (iv) no
material litigation; (v) accuracy and completeness of specified financial
statements and no material adverse change; (vi) no absence of required
governmental or third party approvals or consents; (vii) use of proceeds and not
engaging in business of purchasing/carrying margin stock; (viii) status under
Investment Company Act; (ix) ERISA matters; (x) environmental matters; (xi) tax
matters; (xii) accuracy of disclosure; (xiii) compliance with laws;
(xiv) subsidiaries; (xv) ownership of property and insurance matters, and
(xvi) no default. COVENANTS:   Usual and customary for transactions of this type
subject to mutually agreeable standards of materiality and customary exceptions,
where applicable, to include without limitation: (i) delivery of financial
statements, SEC filings, compliance certificates and notices of default,
material litigation, material governmental, ERISA and environmental proceedings
and material changes in accounting or financial reporting practices;
(ii) compliance with laws (including environmental laws and ERISA matters) and
material contractual obligations; (iii) payment of obligations;
(iv) preservation of existence; (v) maintenance of books and records, and
inspection rights; (vi) use of proceeds; (vii) maintenance of properties and
insurance; (viii) limitation on liens and sales of all or substantially all of
the assets of the Borrower; (ix) limitation on subsidiary indebtedness;
(x) limitation on transactions with affiliates; and (xi) limitation on
restrictive agreements that could adversely affect the Lenders.   Financial
covenants to include (but not be limited to):   •   Maintenance on a rolling
four quarter basis of a Maximum Total Leverage Ratio (total debt/EBITDA) of
equal to or less than 5.50 to 1.00 as of the Closing Date, with step downs to
4.75 to 1.00 as of December 31, 2006, to 4.25 to 1.00 as of December 31, 2007
and a further step down to 4.00 to 1.00 as of December 31, 2008; and   •  
Maintenance on a rolling four quarter basis of an Interest Coverage Ratio
(EBITDA/interest expense) of at least 3.00 to 1.00; provided, that if the
ratings on the Senior Credit Facility shall at any time be A- and A3 or better,
this covenant shall cease to be operative. EVENTS OF DEFAULT:   Usual and
customary in transactions of this type subject to appropriate grace periods, to
include without limitation: (i) nonpayment of principal, interest, fees or other
amounts; (ii) any representation or warranty proving to have been materially
incorrect when made or confirmed; (iii) failure to perform or observe covenants
set forth in the loan documentation within a specified period of time, where
customary and appropriate, after such failure; (iv) cross-default to other
indebtedness in an amount to be agreed; (v) bankruptcy and insolvency defaults
(with grace period for involuntary proceedings); (vi) monetary judgment defaults
in an amount to be agreed; (vii) actual or asserted invalidity of any loan
documentation; (viii) change of control (defined as a change in ownership of 51%
or more of the voting stock of the Borrower); and (ix) customary ERISA defaults.

 

4

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ASSIGNMENTS AND

   PARTICIPATIONS:    Each Lender will be permitted to make assignments in a
minimum amount of $5 million to other financial institutions approved by the
Administrative Agent and, so long as no Event of Default has occurred and is
continuing, the Borrower, which approval shall not be unreasonably withheld or
delayed; provided, however, that neither the approval of the Borrower nor the
Administrative Agent shall be required in connection with assignments to other
Lenders, to any affiliate or a Lender, or to any Approved Fund (as such term
shall be defined in the definitive loan documentation), but the parties to such
an assignment shall use reasonable efforts to provide the Borrower and
Administrative Agent with five business days prior notice thereof. An assignment
fee of $3,500 may be charged with respect to each assignment (other than
assignments to affiliates). Each Lender will also have the right, without
consent of the Borrower or the Administrative Agent, to assign as security all
or part of its rights under the loan documentation to any Federal Reserve Bank.
Lenders will be permitted to sell participations with voting rights limited to
significant matters such as changes in amount, rate and maturity date. WAIVERS
AND    AMENDMENTS:    Amendments and waivers of the provisions of the loan
agreement and other definitive credit documentation will require the approval of
Lenders holding loans and commitments representing more than 51% of the
aggregate amount of loans and commitments under the Senior Credit Facility,
except that the consent of all the Lenders affected thereby shall be required
with respect to (i) increases in the commitment of such Lenders, (ii) reductions
of principal, interest or fees and (iii) extensions of scheduled maturities or
times for payment. INDEMNIFICATION:    The Borrower will indemnify and hold
harmless the Administrative Agent, BAS, the Syndication Agent, JPMCB and each
Lender and their respective affiliates and their officers, directors, employees,
agents and advisors from and against all losses, liabilities, claims, damages or
expenses arising out of or relating to the Senior Credit Facility, the
Borrower’s use of loan proceeds or the commitments, including, but not limited
to, reasonable attorneys’ fees (including the allocated cost of internal
counsel) and settlement costs. This indemnification shall survive and continue
for the benefit of all such persons or entities, notwithstanding any failure of
the Senior Credit Facility to close. GOVERNING LAW:    State of New York
PRICING / FEES EXPENSES:    As set forth in Addendum I. OTHER:    Each of the
parties shall (i) waive its right to a trial by jury and (ii) submit to New York
jurisdiction. The loan documentation will contain customary increased cost,
withholding tax, capital adequacy and yield protection provisions as covered in
Addendum I.

 

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Confidential

    The McClatchy Company

ADDENDUM I

PRICING, FEES AND EXPENSES

 

COMMITMENT FEE:    The Borrower will pay a fee (the “Commitment Fee”),
determined in accordance with the Performance Pricing grid set forth below, on
the unused portion of each Lender’s commitments under the Senior Credit
Facility. The Commitment Fee is payable quarterly in arrears commencing upon the
Closing Date. Swing Line Loans will not be deemed to be utilization for purposes
of calculating the Commitment Fee. LETTER OF    CREDIT FEES:    The Borrower
will pay a fee (the “Letter of Credit Fee”), determined in accordance with the
Performance Pricing grid set forth below, in an amount equal to the Applicable
Margin on the aggregate maximum stated amount for each Letter of Credit that is
issued and outstanding. The Letter of Credit Fee is payable quarterly in
arrears, commencing on the Closing Date, and will be shared proportionately by
the Lenders. INTEREST RATES:    At the Borrower’s option, any loan under the
Senior Credit Facility that is made to it will bear interest at a rate equal to
(i) LIBOR plus the Applicable Margin, as determined in accordance with the
Performance Pricing grid set forth below, and (ii) the Alternate Base Rate (to
be defined as the higher of (a) the Bank of America prime rate and (b) the
Federal Funds rate plus .50%); provided, in each case that if during the 180 day
period following the Closing Date, any breakage costs, charges or fees are
incurred on account of the syndication of the Senior Credit Facility, the
Borrower shall immediately reimburse the Administrative Agent for any such
costs, charges or fees; provided that the Administrative Agent and the Borrower
shall use reasonable efforts to coordinate the syndication with the ends of
interest periods. Such right of reimbursement shall be in addition to and not in
limitation of customary cost and yield protections. The Borrower may select
interest periods of 1, 2, 3 or 6 months for LIBOR loans, subject to
availability. Interest shall be payable at the end of the selected interest
period, but no less frequently than quarterly. A default rate shall apply on all
obligations in the event of default under the Senior Credit Facility at a rate
per annum of 2% above the applicable interest rate.

PERFORMANCE

   PRICING:    The Commitment Fee and Applicable Margin for LIBOR Loans shall
be, at any time, the rate per annum set forth in the table below opposite the
rating of the Senior Credit Facility by Standard & Poor’s Ratings Group and
Moody’s Investors Service Inc. (In the case of a split rating when the ratings
are at least BBB- and Baa3, the higher rating will apply; in the case of any
other split rating, the lower rating will apply; and in the case of any multiple
split rating, the rating that is one level higher than the lower rating will
apply).

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Confidential

    The McClatchy Company

 

Level

 

Rating

   Applicable Margin for
LIBOR Loans    Commitment Fee

I

  A- / A3 or better    37.5    10.0

II

  BBB+ / Baa1    50.0    10.0

III

  BBB / Baa2    62.5    12.5

IV

  BBB- / Baa3    75.0    15.0

V

  BBB- or better and Ba1; or BB+ and Baa3 or better    100.0    17.5

VI

  BB+ / Ba1 or below    125.0    20.0

 

CALCULATION OF

INTEREST AND

   FEES:    Other than calculations in respect of interest at the Bank of
America prime rate (which shall be made on the basis of actual number of days
elapsed in a 365/366 day year), all calculations of interest and fees shall be
made on the basis of actual number of days elapsed in a 360-day year.

COST AND YIELD

   PROTECTION:    Customary for transactions and facilities of this type,
including, without limitation, in respect of breakage or redeployment costs
incurred in connection with prepayments, changes in capital adequacy and capital
requirements or their interpretation, illegality, unavailability, reserves and
payments free and clear of withholding or other taxes. EXPENSES:    The Borrower
will pay all reasonable costs and expenses associated with the preparation, due
diligence, administration, syndication and closing of all loan documentation,
including, without limitation, the reasonable legal fees of counsel to the
Administrative Agent and BAS, regardless of whether or not the Senior Credit
Facility is closed. The Borrower will also pay the expenses of the
Administrative Agent, the Syndication Agent and each Lender in connection with
the enforcement of any loan documentation.