Document:

ssti-ex101_113.htm

 

Exhibit 10.1

 

March 2, 2018

 

Sam Klepper

 

 

 

Dear Sam:

On behalf of ShotSpotter, Inc. (the “Company”), I am pleased to offer you the position of Senior Vice President of Marketing & Product Management, reporting to Ralph Clark, President & Chief Executive Officer, with duties and responsibilities customarily associated with such position, including, but not limited to, those duties and responsibilities that the Company’s Board of Directors (the “Board”) may determine from time to time. You will devote your full business efforts and time to the Company. Further, you agree not to actively engage in any other employment, occupation, or consulting activity related to the business of the Company for any direct or indirect remuneration during your employment with the Company without the prior written approval of the Board.  Based on the duties you will perform for the Company, your position will be classified as exempt. Your principal place of business for the performance of your duties and responsibilities will be the Company’s corporate headquarters in Newark, California, provided, however, that the Company may from time to time require you to travel temporarily to other locations (domestic and international) in connection with the Company’s business. This Letter Agreement (the “Letter Agreement”) sets out the terms of your employment with the Company, and it shall take effect as of your start date.

You will receive an annual salary of $250,000.00 which calculates to $10,416.66 per semi-monthly pay period, less any and all applicable taxes and other withholdings, to be paid in accordance with the Company’s normal payroll practices.  Your base salary will be subject to annual review by the Board or its Compensation Committee, and any adjustments will be made based upon the Company’s normal performance review practices.

You will be eligible to earn an annual performance bonus with a target amount of $100,000.00 (the “Target Amount”) for each full fiscal year that you are employed by the Company, which will be pro-rated based on a partial year of service in 2018.  The Target Amount is subject to review and adjustment by the Board or its Compensation Committee in its sole discretion.  Any annual performance bonus shall be awarded based on objective or subjective performance criteria determined by the Board or its Compensation Committee in its sole discretion after consultation with you.  The Board or its Compensation Committee will determine in its sole discretion the extent to which you and the Company have achieved the performance criteria upon which the bonus is based and the amount of the bonus, which could be below the Target Amount (and may be $0).  Any annual performance bonus awarded for any given fiscal year will be paid 

 

 

 

to you on the date on which annual performance bonuses are paid to all other senior executives of the Company, but in no event later than the date that is two and one-half months following the end of the fiscal year for which the bonus is earned and no longer subject to a substantial risk of forfeiture.  You must be employed on the date any bonus is paid in order to earn the bonus.  Thus, if your employment ends for any reason prior to the payment date, you will not be eligible for, and will not receive, any bonus.

Furthermore, you shall also be eligible for a one time signing bonus of $35,000.00, less any and all applicable taxes and other withholdings. This bonus will be paid in one lump sum on the first pay date after you start employment with the Company. In the event that you resign from the Company for any reason within 12 months after your date of hire, you will be responsible for reimbursing the Company for the entire $35,000.00 signing bonus. By your signature on this Letter Agreement, you authorize the Company to withhold $35,000.00 from any severance and other final pay you receive upon termination of employment.

	

	
You will be entitled to participate in all employee benefit plans and arrangements and fringe benefits and programs that may be provided to senior executives of the Company from time to time while you are employed by the Company, subject to plan terms and generally applicable Company policies.  The Company may provide benefits, payroll, and other human resource management services through a professional employer organization, in which case such professional employer organization will be considered your employer of record for these benefits and payroll purposes. (The term for this relationship is “co-employment.”)

Subject to approval by the Board, the Company will grant you (a) an option to purchase 50,016 shares of the Company’s common stock, at an exercise price equal to the fair market value of one share of Common Stock on the grant date and (b) restricted stock units for that number of shares equal to $250,000.00 divided by the fair market value of one share of Common Stock on the grant date.  The option and restricted stock units will be governed by the terms of the Company’s 2017 Equity Incentive Plan (the “Plan”) and the associated option and restricted stock unit grant documentation. 

The option will vest as to 25% of the shares subject to the option on the first anniversary of your first day of employment and as to 1/36 of the remaining shares each month thereafter, subject to your continuing employment with the Company.  The restricted stock unit will vest as to 35% of the shares on the first anniversary of your first date of employment and as to 1/3 of the remaining shares each anniversary thereafter, subject to your continuing employment with the Company.  Notwithstanding the foregoing, in the event that you are terminated by the Company without Cause (as defined below), or due to your death or disability, and such termination occurs prior to a Change in Control (as defined in the Plan) or more than 12 months following a Change in Control, then if you sign and do not revoke a standard release of claims in a form acceptable to the Company or its successor entity (a “Release”), and such Release becomes effective in accordance with its terms within 60 days following the effective date of termination (such date that the Release becomes effective is referred to as the “Release Effective Date”), then you shall receive the following:

	
 
	
1.
	
Effective as of your termination date, additional monthly vesting of the unvested shares subject to the option and restricted stock units that would have vested 

 

 

 

	
 
		
pursuant to the vesting schedule set forth above during the six months following your termination date if you had remained employed through such period; and

	
 
	
2.
	
Payment to you of your monthly base salary for a period of 6 months following your termination date, to be paid periodically in accordance with the Company’s normal payroll policies, commencing on the Company’s first regularly scheduled payroll date occurring after the Release Effective Date.

In addition, notwithstanding the foregoing, in the event that, within 12 months following a Change in Control, your employment is terminated by the Company without Cause (as defined below), or due to your death or disability, or you resign your position with the Company for Good Reason (as defined below), then if you sign and do not revoke a Release, and such Release becomes effective in accordance with its terms within 60 days following the effective date of termination, then you shall receive the following:

	
 
	
1.
	
Effective as of your termination date, 100% of the unvested shares subject to the option and restricted stock units will immediately vest; and

	
 
	
2.
	
Payment to you of your monthly base salary for a period of 6 months following your termination date, to be paid periodically in accordance with the Company’s normal payroll policies, commencing on the Company’s first regularly scheduled payroll date occurring after the Release Effective Date.

You should be aware that your employment with the Company constitutes “at-will” employment. This means that your employment relationship with the Company may be terminated at any time with or without notice, with or without good cause or for any or no cause, at either party’s option. You understand and agree that neither your job performance nor promotions, commendations, bonuses or the like from the Company give rise to or in any way serve as the basis for modification, amendment, or extension, by implication or otherwise, of your employment with the Company.

You will be entitled to paid vacation in accordance with the Company’s vacation policy as applicable to the Company’s executive officers, with the timing and duration of specific vacations mutually and reasonably agreed to by you and the Company.

For these purposes, “Cause” means: (1) your failure to perform the duties of your position (as they may exist from time to time) to the reasonable satisfaction of the Board where such failure causes or is reasonably likely to cause a material adverse consequence on the business, properties, assets, results of operations, or condition (financial or otherwise) of the Company, after receipt of a written warning and your continued failure to cure such default to the reasonable satisfaction of the Board within 10 days following receipt of such written warning; (2) any act of dishonesty, fraud or misrepresentation taken by you in connection with your responsibilities as an employee that is intended to result in your personal enrichment; (3) your conviction or plea of no contest to felony or a crime involving moral turpitude; (4) willful misconduct by you that is injurious to the Company’s reputation or business; or (5) your material breach of any covenant or condition of this Letter Agreement, the NDA Agreement (as defined below) or any other agreement between you and the Company. For purposes of this definition, an act or failure to act will be deemed “willful” 

 

 

 

if undertaken not in good faith or without reasonable belief that such action or failure to act was in the best interests of the Company.

For these purposes, “Good Reason” means your voluntary resignation of your employment following any one or more of the following events that occur without your consent: (1) a material reduction of your duties, position or responsibilities, or your removal from such position and responsibilities, unless you are provided with a comparable position (i.e., a position of equal or greater organizational level, duties, authority, compensation and status); provided, however, that a reduction in duties, position or responsibilities solely by virtue of the Company being acquired and made part of a larger entity (as, for example, when the Chief Executive Officer of the Company remains as such following a Change in Control but is not made the Chief Executive Officer of the acquiring corporation) shall not constitute “Good Reason;” (2) your principal work location is moved more than 50 miles from its current location; (3) the Company or its successor materially reduces your aggregate base salary (other than a similar reduction applicable to executives generally); or (4) the Company’s material breach of any covenant of this Letter Agreement; provided, however, that, any such resignation by you shall only be deemed for Good Reason pursuant to this definition if: (1) you give the Company written notice of your intent to terminate for Good Reason within 30 days following the first occurrence of the condition(s) that you believe constitute(s) Good Reason, which notice shall describe such condition(s); (2) the Company fails to remedy such condition(s) within 30 days following receipt of the written notice (the “Cure Period”); and (3) you voluntarily terminate your employment within 30 days following the end of the Cure Period.

The Company will be entitled to withhold from any payment due to you hereunder any amounts required to be withheld by applicable tax laws or regulations.

As a condition of your continued employment, you are also required to sign and continue to comply with the Company’s standard form of employee nondisclosure and assignment agreement (“NDA Agreement”), which is hereby incorporated by reference. 

To ensure the rapid and economical resolution of disputes that may arise in connection with your employment with the Company, you and the Company agree that any and all disputes, claims, or causes of action, in law or equity, including but not limited to statutory claims, arising from or relating to the enforcement, breach, performance, or interpretation of this Agreement, your employment with the Company, or the termination of your employment, shall be resolved, to the fullest extent permitted by law, by final, binding and confidential arbitration in San Francisco, California conducted by JAMS or its successor, under JAMS’ rules and procedures for employment disputes (which can be downloaded at http://www.jamsadr.com/rules-employment-arbitration/).   You acknowledge that by agreeing to this arbitration procedure, both you and the Company waive the right to resolve any such dispute through a trial by jury or judge or administrative proceeding.  All claims, disputes or causes of action, by either you or the Company, must be brought in an individual capacity, and shall not be brought as a plaintiff (or claimant) or class member in any purported class or representative proceeding, nor brought in a private attorney general capacity or proceeding, nor joined or consolidated with any claims of any other person or entity.  You will have the right to be represented by legal counsel at any arbitration proceeding.  The arbitrator shall:  (a) have the authority to compel adequate discovery for the resolution of the dispute and to award such relief as would otherwise be permitted by law; and (b) 

 

 

 

issue a written statement signed by the arbitrator regarding the disposition of each claim and the relief, if any, awarded as to each claim, the reasons for the award, and the arbitrator’s essential findings and conclusions on which the award is based.  The arbitrator shall be authorized to award all relief that you or the Company would be entitled to seek in a court of law.  The Company shall pay all JAMS arbitration fees in excess of the administrative fees that you would be required to pay if the dispute were decided in a court of law.  Nothing in this Letter Agreement is intended to prevent either you or the Company from obtaining injunctive relief in court to prevent irreparable harm pending the conclusion of any such arbitration.  

It is intended that all of the cash severance payments payable under this Letter Agreement upon termination of your employment (“Severance Benefits”) satisfy, to the greatest extent possible, the exemptions from the application of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and the regulations and other guidance thereunder and any state law of similar effect (collectively, “Section 409A”) provided under Treasury Regulations Sections 1.409A-1(b)(4) and 1.409A-1(b)(9), and this Letter Agreement will be construed in a manner that complies with such exemptions.  If not so exempt, this Letter Agreement (and any definitions hereunder) will be construed in a manner that complies with Section 409A, and incorporates by reference all required definitions and payment terms.  No severance payments will be made under this Letter Agreement unless your termination of employment constitutes a “separation from service” (as defined under Treasury Regulation Section 1.409A-1(h) without regard to any alternative definition) (a “Separation from Service”).  For purposes of Section 409A (including, without limitation, for purposes of Treasury Regulations Section 1.409A-2(b)(2)(iii)), your right to receive any installment payments under this Letter Agreement (whether severance payments or otherwise) shall be treated as a right to receive a series of separate payments and, accordingly, each installment payment hereunder shall at all times be considered a separate and distinct payment.  If the Company determines that the severance payments provided under this Letter Agreement constitute “deferred compensation” under Section 409A and if you are a “specified employee” of the Company, as such term is defined in Section 409A(a)(2)(B)(i) of the Code, at the time of your Separation from Service, then, solely to the extent necessary to avoid the incurrence of the adverse personal tax consequences under Section 409A, the timing of the Severance Benefits will be delayed as follows:  on the earlier to occur of (a) the date that is six months and one day after your Separation from Service, and (b) the date of your death (such earlier date, the “Delayed Initial Payment Date”), the Company will (i) pay to you a lump sum amount equal to the sum of the Severance Benefits that you would otherwise have received through the Delayed Initial Payment Date if the commencement of the payment of the Severance Benefits had not been delayed pursuant to this paragraph, and (ii) commence paying the balance of the Severance Benefits in accordance with the applicable payment schedule set forth in this Letter Agreement.  No interest shall be due on any amounts deferred pursuant to this paragraph.  To the extent that any Severance Benefits are deferred compensation under Section 409A, and are not otherwise exempt from the application of Section 409A, then, if the period during which you may consider and sign the Release spans two calendar years, the payment of any such Severance Benefit will not be made or begin until the later calendar year.

If any payment or benefit you will or may receive from the Company or otherwise (a “280G Payment”) would (i) constitute a “parachute payment” within the meaning of Section 280G of the Code, and (ii) but for this sentence, be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then any such 280G Payment pursuant to this Letter Agreement or 

 

 

 

otherwise (a “Payment”) shall be equal to the Reduced Amount.  The “Reduced Amount” shall be either (x) the largest portion of the Payment that would result in no portion of the Payment (after reduction) being subject to the Excise Tax or (y) the largest portion, up to and including the total, of the Payment, whichever amount (i.e., the amount determined by clause (x) or by clause (y)), after taking into account all applicable federal, state and local employment taxes, income taxes, and the Excise Tax (all computed at the highest applicable marginal rate), results in your receipt, on an after-tax basis, of the greater economic benefit notwithstanding that all or some portion of the Payment may be subject to the Excise Tax.  If a reduction in a Payment is required pursuant to the preceding sentence and the Reduced Amount is determined pursuant to clause (x) of the preceding sentence, the reduction shall occur in the manner (the “Reduction Method”) that results in the greatest economic benefit for you.  If more than one method of reduction will result in the same economic benefit, the items so reduced will be reduced pro rata (the “Pro Rata Reduction Method”).  Notwithstanding the foregoing, if the Reduction Method or the Pro Rata Reduction Method would result in any portion of the Payment being subject to taxes pursuant to Section 409A that would not otherwise be subject to taxes pursuant to Section 409A, then the Reduction Method and/or the Pro Rata Reduction Method, as the case may be, shall be modified so as to avoid the imposition of taxes pursuant to Section 409A as follows:  (A) as a first priority, the modification shall preserve to the greatest extent possible, the greatest economic benefit for you as determined on an after-tax basis; (B) as a second priority, Payments that are contingent on future events (e.g., being terminated without cause), shall be reduced (or eliminated) before Payments that are not contingent on future events; and (C) as a third priority, Payments that are “deferred compensation” within the meaning of Section 409A shall be reduced (or eliminated) before Payments that are not deferred compensation within the meaning of Section 409A. 

Unless you and the Company agree on an alternative accounting firm, the accounting firm engaged by the Company for general tax compliance purposes as of the day prior to the effective date of the change of control transaction triggering the Payment shall perform the foregoing calculations.  If the accounting firm so engaged by the Company is serving as accountant or auditor for the individual, entity or group effecting the change in control transaction, the Company shall appoint a nationally recognized accounting firm to make the determinations required hereunder.  The Company shall bear all expenses with respect to the determinations by such accounting firm required to be made hereunder.  The Company shall use commercially reasonable efforts to cause the accounting firm engaged to make the determinations hereunder to provide its calculations, together with detailed supporting documentation, to you and the Company within 15 calendar days after the date on which your right to a 280G Payment becomes reasonably likely to occur (if requested at that time by you or the Company) or such other time as requested by you or the Company.  

If you receive a Payment for which the Reduced Amount was determined pursuant to clause (x) of the paragraph above and the Internal Revenue Service determines thereafter that some portion of the Payment is subject to the Excise Tax, you shall promptly return to the Company a sufficient amount of the Payment so that no portion of the remaining Payment is subject to the Excise Tax.  For the avoidance of doubt, if the Reduced Amount was determined pursuant to clause (y) in the paragraph above, you shall have no obligation to return any portion of the Payment pursuant to the preceding sentence.

 

 

 

In order to facilitate your work, and to ensure you are maximally efficient, the Company will provide you with a computer on which to work. We will reimburse your reasonable and documented travel and business expenses, including but not limited to your work-related telephone, and other similar charges or fees. Normal work hours at ShotSpotter are 8:00am to 5:00pm local time, Monday through Friday, although you may be asked to work other hours at other times. As a general rule, the Company makes every effort to accommodate flexibility in work hours, provided you and your direct manager reach agreement, at their sole discretion, on your schedule.  

This Letter Agreement, together with the 2017 Plan, the grant documentation evidencing your options and restricted stock units and the NDA Agreement, represents the entire agreement and understanding between you and the Company concerning your employment relationship with the Company, and supersedes in its entirety any and all prior agreements and understandings concerning your employment relationship with the Company, whether written or oral.

The terms of this Letter Agreement may only be amended, canceled or discharged in writing signed by you and the Company. This Letter Agreement will be governed by the laws of the State of California.

In the event that any provision hereof becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable, or void, this Letter Agreement will continue in full force and effect without such provision.

This offer of employment is made contingent upon your accepting the terms of this Letter Agreement, receipt of the accompanying non-disclosure agreement without modification (unless such modification is accepted, in writing, by ShotSpotter in advance of the Expiration Date as hereinafter defined).  And as a condition of your employment, you will be required to provide the Company with documents establishing your identity and right to work in the United States. Those documents must be provided to the Company within three days after your employment start date. 

Furthermore, this offer of employment is also contingent upon your responding in the affirmative by the below response date (the “Expiration Date”), after which the offer is no longer valid, and upon satisfactory completion of the following items and/or documentation:

	
 
	
1.
	
A complete Employment Application, using the company form;

	
 
	
2.
	
A satisfactory reference check; and

	
 
	
3.
	
A satisfactory background check, your approval for which we will require.

We anticipate your start date being on or before March 19, 2018. Should the above terms and conditions meet with your approval, please sign and date this letter on the spaces provided below to acknowledge your acceptance of the terms of this agreement by March 6, 2018 (the “Expiration Date”).

Your employment is subject to the policies and procedures outlined on the company’s internal intranet website, as periodically updated and amended.  You may request a copy of those materials at any time prior to executing this agreement, and they are available for your reference subsequently on that site.

 

 

 

You acknowledge that you have had the opportunity to discuss this matter with and obtain advice from your private attorney, have had sufficient time to, and have carefully read and fully understand all the provisions of this Letter Agreement, and are knowingly and voluntarily entering into this Letter Agreement. 

	
	
Sincerely,

	
/s/ Ralph Clark

	
Ralph Clark

	
President & CEO

	
 

I agree to and accept employment with ShotSpotter, Inc. on the terms and conditions set forth in this agreement.

 

			
	
Date:____3/5/2018_____________
	
/s/ Sam Klepper

	
 
	
Sam Kleppermni_Ex10-1

		

			 

		

		

			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 

		 

 

		

			 

		

		

			

		

		

			 

		

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.
		

		
			

		 

 

		

			 

		

		

			

		

		

			 

		

		

		
			“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, 

		 

 

		

			 

		

		

			

		

		

			 

		

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.
		

		
			 
		

		
			

		 

 

		

			 

		

		

			

		

		

			 

		

		

		
			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.
		

		
			 
		

		
			

		 

 

		

			 

		

		

			

		

		

			 

		

		

		
			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.
		

		
			 
		

		
			

		 

 

		

			 

		

		

			

		

		

			 

		

		

		
			(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
		

		
			 
		

		
			

		 

 

		

			 

		

		

			

		

		

			 

		

		

		
			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

		
			 
		

		
			

		 

 

		

			 

		

		

			

		

		

			 

		

		

		
			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]
		

		
			 
		

		
			

		 

 

		

			 

		

		

			

		

		

			 

		

		

		
			
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			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
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			

		 

 

		

			 

		

		

			

		

		

			 

		

		

		
			Signature Page to Term Loan Framework Agreement
		

		
			 
		

		
			

		 

 

		

			 

		

		

			

		

		

			 

		

		

		
			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
		

		
			 
		

		
			

		 

 

		

			 

		

		

			

		

		

			 

		

		

		
			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

		
			 
		

		
			 
		

		
			

		 

 

		

			 

		

		

			

		

		

			 

		

		

		
			EXHIBIT B
		

		
			Term Sheet
		

		
			 
		

		
			 
		

		
			

		 

 

		

			 

		

		

			

		

		

			 

		

		

		
			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

				

		 

 

		

			 

		

		

			

		

		

			 

		

	
					
						

					
						 

					
					
						 

				
	
					
						 

					
					
						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

				

		 

 

		

			 

		

		

			

		

		

			 

		

	
					
						

					
						 

					
					
						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%

				

		 

 

		

			 

		

		

			

		

		

			 

		

	
					
						

					
						 

					
					
						 

				
	
					
						 

					
					
						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

				

		 

 

		

			 

		

		

			

		

		

			 

		

	
					
						

					
						 

					
					
						 

				
	
					
						 

					
					
						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

				

		 

 

		

			 

		

		

			

		

		

			 

		

	
					
						

					
						 

					
					
						 

				
	
					
						 

					
					
						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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