Document:

Exhibit 10.1

 

 

McCLATCHY ANNOUNCES AGREEMENTS TO SELL
AND LEASE BACK REAL PROPERTY IN SACRAMENTO, CALIFORNIA AND COLUMBIA, SOUTH CAROLINA 

 

Amended Bank Credit Agreement Relaxing
Requirements for Use of Proceeds from Sale-Leasebacks of Properties

 

SACRAMENTO,
Calif., Jan.11, 2017 - McClatchy (NYSE: MNI) (“McClatchy” or “the company”) announced that it has entered
into separate agreements to sell and lease back real property owned by The Sacramento Bee in Sacramento, California and
The State Media Company in Columbia, South Carolina for total gross proceeds of $67.8 million.

 

The Sacramento Bee entered into a
transaction with Shopoff Advisors, L.P. (“Shopoff”), to sell its real property which includes The Sacramento Bee
building and surrounding land and buildings. Simultaneously with the closing of the sale, McClatchy will enter into a 15-year lease
with Shopoff to leaseback the real property with initial annual lease payments of approximately $4.6 million.

 

This transaction excludes a parking garage
formerly owned by The Sacramento Bee, which was sold for $5.75 million in a transaction that closed in December 2016.

 

In a separate but similar transaction, The
State Media Company contracted with a subsidiary of Twenty Lake Holdings, (“Twenty Lake”) to sell its real property
including The State building and surrounding land. McClatchy will enter into a 15-year lease with Twenty Lake with initial
annual lease payments of approximately $1.6 million.

 

These transactions are subject to customary
closing conditions and are expected to close in the second quarter of 2017.

 

Elaine Lintecum, McClatchy’s chief
financial officer said, “We are pleased that in less than one year of marketing these properties, we were able to collaborate
with two strong investors like Shopoff and Twenty Lake to sell the properties at or near our asking prices and lease them back
for our operations.

 

“These sale-leaseback transactions
are one more step in moving forward with our real estate monetization efforts to redeploy our capital for better uses for the benefit
of our shareholders and bondholders. We generally expect to reduce debt with the proceeds of these transactions.”

 

    1 

     

    

 

A repurchase clause included in both of
the lease agreements to be entered into at the closing of the transactions will offer an option for the company to repurchase the
real property at the end of the 15-year lease term. As a result, the leases are expected to be accounted for under GAAP as financing
leases. Lease payments will reduce the related lease obligation on the balance sheet and include interest expense associated with
the obligation.

 

Upon closing of the transactions, the company
is required to first offer the after-tax proceeds from the sales at par to the secured bondholders in accordance with the indenture
for its secured 9.0% bonds maturing in 2022. Under the indenture for its unsecured bonds, the company has 90 calendar days to reduce
debt equal to approximately $48.0 million (subject to change based on market rates at the closing of the transactions), which reflects
the attributable debt associated with the leases. Should the secured bondholders choose not to participate in the par offer, the
company may alternatively seek to reduce some of its unsecured bonds with the after-tax proceeds in order to meet its 90-calendar-day
requirement for debt reduction.

 

In connection with these sale and leaseback
transactions, and certain similar transactions under consideration, McClatchy executed a fourth amendment to its credit agreement.
The fourth amendment allows the after-tax proceeds from these sales and leaseback transactions that are not claimed by secured
bondholders prior to expiration of a par offer to be used to repurchase any of its unsecured bonds in the open market to meet the
debt reduction requirements noted above. The company could also decide to hold cash in excess of required debt reduction amounts
on its balance sheet or use the cash for other corporate purposes.

 

Lintecum added, “Our goal remains
to strengthen the company’s financial position, which means doing what makes the most economic sense for the company as it
pertains to repurchasing debt in the open market. While we would prefer to reduce secured debt, we must adhere to our 90-day debt
reduction requirement and are unwilling to pay uneconomic prices in the open market for secured debt.”

 

McClatchy noted that its 9.0% secured debt
becomes callable in whole or in part as of December 15, 2017, at a price of 104.5%.

 

About McClatchy 

 

McClatchy is a 21st century
news and information leader, publisher of iconic brands such as the Miami Herald, The Kansas City Star,
The Sacramento Bee, The Charlotte Observer, The (Raleigh) News and Observer, and the (Fort Worth) Star-Telegram.
McClatchy operates media companies in 29 U.S. markets in 14 states, providing each of its communities with high-quality news and
advertising services in a wide array of digital and print formats. McClatchy is headquartered in Sacramento, Calif., and listed
on the New York Stock Exchange under the symbol MNI.

 

    2 

     

    

 

Additional Information

 

Statements in this press release regarding
future financial and operating results, including our strategies for success and their effects, our real estate monetization efforts,
the future of our investment in CareerBuilder, revenues, and management’s efforts with respect to cost reduction efforts
and efficiencies, cash expenses, revenues, adjusted EBITDA, debt levels, interest costs and creation of shareholder value as well
as future opportunities for the company and any other statements about management’s future expectations, beliefs, goals,
plans or prospects constitute forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Any
statements that are not statements of historical fact (including statements containing the words “believes,” “plans,”
“anticipates,” “expects,” “estimates” and similar expressions) should also be considered to
be forward-looking statements. There are a number of important risks and uncertainties that could cause actual results or
events to differ materially from those indicated by such forward-looking statements, including: McClatchy may not generate
cash from operations, or otherwise, necessary to reduce debt or meet debt covenants as expected; we may not be successful in the
reducing debt whether through tenders offers, open market repurchase programs or other negotiated transactions; transactions, including
sales of real estate properties or transactions related to strategic alternatives for its investments, may not close as anticipated
or result in cash distributions in the amount or timing anticipated; McClatchy may not successfully implement audience strategies
designed to increase audience revenues and may experience decreased audience volumes or subscriptions; McClatchy may experience
diminished revenues from retail, classified, national and direct marketing advertising; McClatchy may not achieve its expense reduction
targets including efforts related to legacy expense initiatives or may do harm to its operations in attempting to achieve such
targets; McClatchy’s operations have been, and will likely continue to be, adversely affected by competition, including competition
from internet publishing and advertising platforms; increases in the cost of newsprint; bankruptcies or financial strain of its
major advertising customers; litigation or any potential litigation; geo-political uncertainties including the risk of war; changes
in printing and distribution costs from anticipated levels, including changes in postal rates or agreements; changes in interest
rates; changes in pension assets and liabilities; changes in factors that impact pension contribution requirements, including,
without limitation, the value of the company-owned real property that McClatchy has contributed to its pension plan; increased
consolidation among major retailers in our markets or other events depressing the level of advertising; our inability to negotiate
and obtain favorable terms under collective bargaining agreements with unions; competitive action by other companies; an inability
to fully implement and execute its share repurchase plan; and other factors, many of which are beyond our control; as well as the
other risks detailed from time to time in the company’s publicly filed documents, including the company’s Annual Report
on Form 10-K for the year ended Dec. 27, 2015, filed with the U.S. Securities and Exchange Commission. McClatchy disclaims any
intention and assumes no obligation to update the forward-looking information contained in this release.

 

#########

 

	Contact:	
        Stephanie Zarate

        Investor Relations Manager

        (916) 321-1931

        szarate@mcclatchy.com
	
         

         

 

 

    3Exhibit 10.2

 

AMENDMENT NO. 4 TO THE THIRD AMENDED

AND RESTATED CREDIT AGREEMENT

 

This Amendment No.
4 (this “Amendment”) is entered into as of January 10, 2017 with reference to the Third Amended and Restated
Credit Agreement dated as of December 18, 2012, among The McClatchy Company, as the Borrower, Bank of America, N.A., as Administrative
Agent and L/C Issuer, JPMorgan Chase Bank, N.A., as Syndication Agent, and the other Lenders party thereto, as amended by Amendment
No. 1 to Third Amended and Restated Credit Agreement and Amendment No. 1 to the Security Agreement, dated as of October 21, 2014,
Amendment No. 2 to the Third Amended and Restated Credit Agreement dated as of November 17, 2015, and Amendment No. 3 to Third
Amended and Restated Credit Agreement dated as of March 29, 2016 (as amended, the “Credit Agreement”). Capitalized
terms used in this Amendment and not otherwise defined herein are used with the meanings set forth for those terms in the Credit
Agreement.

 

1.                 
Amendments to the Credit Agreement. The Borrower and the Administrative Agent (acting with the consent of the Lenders)
hereby agree to amend the Credit Agreement as follows:

 

(a)               
The following definitions shall be added to Section 1.01 of the Credit Agreement in appropriate alphabetical sequence:

 

“Specified Property” means each of the real
properties owned by the Borrower or one of its Subsidiaries in Sacramento, California (consisting of parcels 007-0324-005, 010-0033-021,
010-0033-020, 007-0321-016, 007-0321-020, 007-0321-019, 007-0323-024, 007-0323-023, and 007-0323-022), Kansas City, Missouri
(consisting of parcels 29-520-02-01-00-000-000, 29-240-36-08-00-0-00-000, and 29-240-19-11-00-0-00-000,) and Columbia, South Carolina
(consisting of parcel R11209-02-12).

 

    “Specified
Property Proceeds” means Net Available Cash from the sale of a Specified Property.

 

(b)              
Subsections (x) and (xvii) of Section 7.10(b) of the Credit Agreement are hereby amended and restated in their entirety
as follows:

 

(x) the purchase,
repurchase, redemption, acquisition or retirement of Existing Unsecured Notes, Subordinated Obligations or Guarantor Subordinated
Obligations with Net Available Cash remaining after application pursuant to Section 7.03(c); provided that if the source of the
consideration for the purchase, repurchase, redemption, defeasance, acquisition or retirement of the Existing Unsecured Notes is
Specified Property Proceeds, then the condition set forth in clause (B) of Section 7.10(b)(xvii) shall also be satisfied;

 

(xvii) the
purchase, repurchase, redemption, defeasance, acquisition or retirement of (A) the Borrower’s 5.750% Notes due September
1, 2017 (the “2017 Notes”), or (B) any of the other Existing Unsecured Notes, so long as in the case of this
clause (B) either:

 

(1)       on
a pro forma basis, the Priority Leverage Ratio would be no greater than 2.75 to 1.00, or

 

 

 

Amendment
No. 4 to Third A&R Credit Agreement

    	 

     

    

 

(2)       if
the source of the consideration for the purchase, repurchase, redemption, defeasance, acquisition or retirement of the Existing
Unsecured Notes is Specified Property Proceeds, at such time (x) no Committed Loans are outstanding, (y) the letter of intent with
respect to the Sale/Leaseback Transaction associated with the Specified Property shall have been executed no later than December
31, 2017, and (z) the aggregate principal amount of Existing Unsecured Notes (other than 2017 Notes) purchased, repurchased, redeemed,
defeased or retired does not exceed the amount of the Attributable Indebtedness (rounded up to the nearest thousand dollars) with
respect to the Sale/Leaseback Transaction associated with the Specified Property less the principal amount of 2017 Notes or Senior
Secured Notes previously purchased, repurchased, redeemed, defeased, acquired or retired with the applicable Specified Property
Proceeds;

 

2.                
Conditions Precedent. The effectiveness of this Amendment shall be conditioned upon the satisfaction of the following
conditions precedent (the date upon which all such conditions precedent shall have been satisfied, the “Amendment Effective
Date”):

 

(a)               
the receipt by the Administrative Agent of:

 

(i)                
counterparts of this Amendment executed by the Borrower;

 

(ii)              
reaffirmations from each Guarantor of their obligations under the Guaranty and the Security Agreement, in a form satisfactory
to the Administrative Agent and the Lenders;

 

(iii)            
written consents hereto executed by the Lenders in substantially the form of Exhibit A attached hereto; and

 

(iv)            
all fees and expenses payable to it and its special counsel in connection with this Amendment.

 

(b)              
there shall not have occurred since June 28, 2015, any event or condition that has had or could be reasonably expected,
either individually or in the aggregate, to have, a Material Adverse Effect; and

 

(c)               
there shall be no action, suit, investigation or proceeding pending or, to the knowledge of the Borrower, threatened in
any court or before any arbitrator or governmental authority that could reasonably be expected to have a Material Adverse Effect.

 

3.                
Representations and Warranties. The Borrower represents and warrants to the Administrative Agent and the Lenders
that, as of the date of this Amendment, (i) no Default has occurred and remains continuing, and (ii) the representations and warranties
contained in Article V of the Credit Agreement, as amended hereby, and each other Loan Document are true and correct as if made
on the date hereof, except for representations and warranties which expressly speak as of a particular date, in which case they
shall be true and correct as of such earlier date except that (A) the representations and warranties contained in subsections (a)
and (b) of Section 5.05 of the Credit Agreement shall refer to the most recent statements furnished pursuant to subsections (a)
and (b), respectively, of Section 6.01 of the Credit Agreement, and (B) the representations and warranties contained in subsection
(c) of Section 5.05 of the Credit Agreement shall refer to the most recent statements furnished pursuant to subsection (b) of Section
6.01 of the Credit Agreement.

 

 

 

Amendment
No. 4 to Third A&R Credit Agreement

    	2 

     

    

 

4.                
FATCA. For purposes of determining withholding Taxes imposed under FATCA, from and after the Amendment Effective
Date, the Borrower and the Administrative Agent shall treat (and the Lenders hereby authorize the Administrative Agent to treat)
the Obligations of the Borrower set forth in the Credit Agreement, as modified by this Amendment, as not qualifying as a “grandfathered
obligation” within the meaning of Treasury Regulation Section 1.1471-2(b)(2)(i).

 

5.                
Confirmation. In all other respects, the terms of the Credit Agreement and the other Loan Documents are hereby confirmed.
This Amendment shall be deemed to be a Loan Document.

 

6.                
Counterparts. This Amendment may be executed in any number of counterparts, and all of such counterparts taken together
shall be deemed to constitute one and the same instrument.

 

7.                
Governing Law. This Amendment shall be governed by and construed in accordance with the laws of the State of New
York.

 

 

 

[Signature page follows]

 

 

 

Amendment No.
4 to Third A&R Credit Agreement

    	3 

     

    

 

IN WITNESS WHEREOF,
the Borrower and the Administrative Agent have executed this Amendment as of the date first written above by their duly authorized
representatives.

 

	 	THE McCLATCHY COMPANY
	 	 	 
	 	 	 
	 	By:	 
	 	Name:	R. Elaine Lintecum
	 	Title:	Vice President, Finance, Chief Financial
	 	 	Officer and Treasurer
	 	 	 
	 	 	 
	 	
         

        BANK OF AMERICA, N.A., as Administrative Agent

	 	 	 
	 	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 

 

 

 

Amendment No. 4 to Third A&R Credit
Agreement

    	 

     

    

 

[Exhibit A to Amendment]

 

CONSENT OF LENDER

 

This Consent of Lender
is delivered by the undersigned Lender to Bank of America, N.A., as Administrative Agent, with reference to the Third Amended and
Restated Credit Agreement dated as of December 18, 2012, among The McClatchy Company, as the Borrower, Bank of America, N.A., as
Administrative Agent and L/C Issuer, JPMorgan Chase Bank, N.A., as Syndication Agent, and the other Lenders party thereto, as amended
by Amendment No. 1 to Third Amended and Restated Credit Agreement and Amendment No. 1 to the Security Agreement, dated as of October
21, 2014, Amendment No. 2 to Third Amended and Restated Credit Agreement dated as of November 17, 2015 and Amendment No. 3 to Third
Amended and Restated Credit Agreement dated as of March 29, 2016 (as amended, the “Credit Agreement”).

 

The undersigned is
a party to the Credit Agreement hereby consents to the proposed Amendment No. 4 to the Third Amended and Restated Credit Agreement,
and directs the Administrative Agent to execute and deliver such Amendment in its capacity as Administrative Agent on behalf of
the Lenders, substantially in the form of the draft presented to the undersigned.

 

 

 

	 	 
	[Name of Lender]	 

 

	By:	 	 
	 	 	 
	Title:	 	 

 

 

 

Amendment No.
4 to Third A&R Credit Agreement

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