AMENDMENT NO. 5 TO CREDIT AGREEMENT
AMENDMENT
NO. 5 TO CREDIT AGREEMENT
This
Amendment No. 5 to Credit Agreement dated as of May 20, 2009 (this “Amendment”)
is entered into with reference to the Credit Agreement dated as of June 27,
2006, as amended by that certain Amendment No. 1 to Credit Agreement dated as of
March 28, 2007, that certain Amendment No. 2 to Credit Agreement dated as of
July 19, 2007, that certain Amendment No. 3 to Credit Agreement dated as of
March 28, 2008, and that certain No. 4 to Credit Agreement dated as of September
26, 2008, among The McClatchy Company, as the Borrower, Bank of America, N.A.,
as Administrative Agent, Swing Line Lender and L/C Issuer, JPMorgan Chase Bank,
N.A., as Syndication Agent and the other Lenders party thereto (as so 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. The
Borrower and the Administrative Agent (acting with the consent of the Required
Lenders) hereby agree to amend the Credit Agreement as follows:
(a) Section
1.01 of the Credit Agreement is hereby amended by adding the following
definitions thereto in appropriate alphabetical sequence:
““Amendment No. 5”
means Amendment No. 5 to this Agreement, dated as of May 20, 2009.
“Exchange” means (i)
an offer to exchange, redeem, refinance or repurchase and the exchange,
redemption, refinancing or repurchasing with cash and/or notes of the Borrower
for all or a portion of the Public Indebtedness, and (ii) any subsequent use of
cash for the Early Retirement of Public Indebtedness, which cash was available
for use in a transaction under clause (i) and was not utilized in such
transaction.
“Exchange Transaction
Expenses” means all fees, costs and expenses associated with the Exchange
(whether or not consummated) and paid, payable or reimbursable by the Borrower
or its Subsidiaries, including (i) fees and expenses, including amendment fees,
related to the negotiation, execution and delivery of Amendment No.
5, (ii) fees and expenses payable to the Financial Advisors, (iii) fees and
expenses payable to the dealer manager, the information agent and the exchange
agent, and (iv) fees and expenses of legal counsel and accountants.
“Financial Advisors”
means Xxxxxxx & Marsal North America, LLC, or any other financial advisor
agreed to by the Administrative Agent in writing from time to time.
“Sale-Leaseback Asset”
means any real or personal property that is initially owned by the Borrower or
one of its Subsidiaries and is subject or is made subject to an arrangement
providing for the Borrower or one of its Subsidiaries to lease such real or
personal property from a Person subsequent to selling or otherwise transferring
such property, directly or indirectly, to such Person.
“Senior Secured Debt
Amount” means the sum of (i) a principal amount (including any unfunded
commitments) equal to $1,150,000,000, less the aggregate amounts of actual
prepayments that occur with respect to the Term A Facility and reductions in
Commitments that occur with respect to the Revolving Credit Facility, plus (ii) interest
and fees accrued on the amounts specified in clause (i), plus (iii) fees,
expenses and other amounts secured under this Agreement and the other Loan
Documents or under the documents or instruments governing any financing
arrangements that refinance, refund, renew, extend or otherwise replace this
Agreement (or any subsequent refinancings, refundings, renewals, extensions or
replacements of any such arrangements).
“Stated Maturity”
means the date on which the principal amount of any Indebtedness is stated to be
due and payable in the instrument governing such Indebtedness; provided that any
right of the holder of such Indebtedness to require the issuer of such
Indebtedness to redeem, repurchase or prepay such Indebtedness upon the
occurrence of a change of control or asset sale will not be deemed to cause an
earlier maturity date with respect to such Indebtedness.”
(b) The
definition of the term “Applicable Rate” in Section 1.01 of the Credit Agreement
is hereby amended and restated to read in its entirety as follows:
““Applicable Rate”
means, from time to time, the following rates per annum (expressed in basis
points), determined by reference to the statement of Consolidated Total Leverage
Ratio as set forth in the most recent Compliance Certificate received by the
Administrative Agent pursuant to Section
6.02(a):
Consolidated
Total
Leverage
Ratio
|
Commitment
Fee
|
Eurodollar
Rate + Letters of Credit
|
Base
Rate
|
<
5.0 to 1.00
|
50.0
|
325.0
|
225.0
|
≥
5.00 to 1.00 but < 6.00 to 1.00
|
62.5
|
400.0
|
300.0
|
≥
6.00 to 1.00
|
75.0
|
475.0
|
375.0
|
; provided, however, that upon
completion of the sale of the Miami Property, each of the Eurodollar Rates,
Letter of Credit margins and Base Rates set forth above shall be reduced by 25.0
(illustratively, the Base Rate when the Consolidated Total Leverage Ratio was
less than 5.00 to 1.00 would be 200.0).
If a
Compliance Certificate setting forth the Consolidated Total Leverage Ratio shall
not have been delivered to the Administrative Agent as required by Section 6.02(a), the
“Applicable Rate” shall be the highest rate set forth in the foregoing grid
until such Compliance Certificate is so delivered.
Notwithstanding
anything to the contrary contained in this definition, the determination of the
Applicable Rate for any period shall be subject to the provisions of Section
2.10(b).”
(c) The
definition of the term “Consolidated EBITDA” in Section 1.01 of the Credit
Agreement is hereby amended and restated to read in its entirety as
follows:
““Consolidated EBITDA”
means, for any period, for the Borrower and its Subsidiaries on a consolidated
basis, an amount equal to Consolidated Net Income for such period plus (a) the
following to the extent deducted in calculating such Consolidated Net Income:
(i) Consolidated Interest Charges for such period, (ii) the provision for
federal, state, local and foreign income taxes payable by the Borrower and its
Subsidiaries for such period, (iii) the amount of depreciation and amortization
expense deducted in determining such Consolidated Net Income, (iv) the amount of
equity-based compensation expense deducted in determining such Consolidated Net
Income, (v) all non-cash restructuring charges for such period, (vi) all cash
restructuring charges for such period, up to an aggregate amount of $100,000,000
for all periods (of which $25,408,000 may be incurred in the first two fiscal
quarters of 2008, and the remaining $74,592,000 will be available for incurrence
beginning with the third fiscal quarter of 2008), (vii) other non-recurring or
non-cash charges or non-cash losses (as determined in the reasonable discretion
of the Administrative Agent in consultation with the Borrower) of the Borrower
and its Subsidiaries reducing Consolidated Net Income for such period, (viii)
all charges and losses in connection with the extinguishment of debt, and (ix)
all Exchange Transaction Expenses and minus (b) the following to the extent
increasing Consolidated Net Income for such period: (i) all non-recurring or
non-cash gains or other non-recurring or non-cash items (as determined in the
reasonable discretion of the Administrative Agent in consultation with the
Borrower), and (ii) all gains associated with the extinguishment of
debt. Upon the Disposition of a Business Unit, Consolidated EBITDA
for the four fiscal quarter period during which the Disposition occurred shall
be reduced by the Consolidated EBITDA for such four fiscal quarter period (if
positive), or increased by the Consolidated EBITDA for such four fiscal quarter
period (if negative), directly attributable to the Business Unit that was the
subject of such Disposition using the same methodology as set forth in such
Schedule 1.01
(as determined in the reasonable discretion of the Administrative Agent in
consultation with Borrower).”
(d) The
definition of the term “Excluded Asset” in Section 1.01 of the Credit Agreement
is hereby amended and restated to read in its entirety as follows:
““Excluded Asset” means
(i) a Sale-Leaseback Asset, (ii) excess real property that is leased or
subleased, and (iii) any other assets Disposed of pursuant to Section 7.03 to
the extent that the Net Cash Proceeds of all Dispositions of such assets in the
fiscal year in which such Disposition occurs shall be less than
$5,000,000.”
(e) Sections
2.05(b)(ii) and 2.05(b)(iii) of the Credit Agreement are hereby amended and
restated to read in their entirety as follows:
“(ii) Within
five (5) Business Days after financial statements have been delivered pursuant
to Section
6.01(a) and the related Compliance Certificate has been delivered
pursuant to Section 6.02(b), the Borrower
shall prepay an aggregate principal amount of Loans in an amount equal to (A)
75% of Excess Cash Flow for the fiscal year covered by such financial statements
(such prepayment to be applied as set forth below), less (B) for the prepayment
related to fiscal year 2009, $15,000,000, and for the prepayment related to
fiscal year 2010, $10,000,000; provided, however, that
the amount of such
prepayment shall not
be less than an amount equal to 50% of Excess Cash Flow for the fiscal year
covered by such financial statements.
(iii) On
the dates specified in clauses (B) through (F) of Section 2.06(b)(i),
the Borrower shall prepay an amount sufficient to cause the Total Revolving
Credit Outstandings to be less than or equal to the Revolving Credit Facility as
reduced in accordance therewith.”
(f) Section
2.06(b)(i) of the Credit Agreement is hereby amended and restated to read in its
entirety as follows:
“(i) The
Revolving Credit Facility shall be automatically and permanently reduced as
follows:
(A) upon
the sale of the Miami Property, by $125,000,000 at the close of business on the
date the prepayment required under Section 2.05(b)(i)(A)
is made;
(B) by
$5,000,000 at the close of business on the earlier to occur of the date of
closing of an Exchange or June 30, 2009;
(C) by
$5,000,000 at the close of business on September 30, 2009
(D) by
$30,000,000 at the close of business on December 31, 2009;
(E) by
$5,000,000 by at the close of business on March 31, 2010;
(F) by
$5,000,000 at the close of business on June 30, 2010; and
(G) at
the close of business on the date any prepayment of the Revolving Credit
Facility is required to be made under clauses (i), (ii), (iv), (v) or (vii) of Section 2.05(b), by
the amount of any such required repayment.”
(g) A new
Section 6.14 of the Credit Agreement is hereby added following Section 6.13 of
the Credit Agreement to read in its entirety as follows:
“6.14 Financial
Advisors. The Borrower shall engage the Financial Advisors (i)
to develop a quarterly financial forecast through June 30, 2011 to include a
balance sheet, income statement and statement of cash flows that shall be in a
form reasonably acceptable to the Administrative Agent (the “Forecast”) and (ii)
upon the request of the Administrative Agent, to review and report upon such
other matters as the Administrative Agent may reasonably request. The
Borrower shall deliver the Forecast to the Administrative Agent within 45 days
of the closing of Amendment No. 5; shall deliver to the Administrative Agent a
quarterly report providing an analysis of the variance to the Forecast at the
time of delivery of each Compliance Certificate; shall deliver an updated
Forecast to the Administrative Agent by March 1 of each year thereafter; and
shall, upon the request of the Administrative Agent, make the Financial Advisors
available to answer questions from the Administrative Agent and the Lenders
concerning the Forecast.”
(h) Section
7.03(iv) of the Credit Agreement is hereby amended and restated to read in its
entirety as follows:
“(iv) the
Borrower or any of its Subsidiaries may make Dispositions of inventory and of
obsolete, unneeded or worn out property, whether now owned or hereafter
acquired, may lease or sublease excess real property, and may grant licenses of
intellectual property, in each case in the ordinary course of
business;”
(i) A new
clause (G) is hereby added at the end of Section 7.08(a) of the Credit Agreement
to read in its entirety as follows:
“(G) with
respect to clause (iii) above, to the extent such Contractual Obligation permits
the creation, incurrence, assumption or existence of a Lien on property of the
Borrower or any Subsidiary (x) to secure Obligations (including Loans, L/C
Obligations and amounts that may be funded from time to time as Loans under the
Revolving Credit Commitment) in favor of the Administrative Agent on behalf of
the Lenders under this Agreement and (y) to secure amounts due under one or more
other financing arrangements that refinance, refund, renew, extend or otherwise
replace this Agreement in whole or in part in favor of lenders or other holders
of indebtedness (or an agent on behalf of such lenders or holders) (or any
subsequent refinancings, refundings, renewals, extensions or replacements of any
such arrangements), in an aggregate amount pursuant to clauses (x) and (y) of up
to the Senior Secured Debt Amount and any hedging obligations related to such
Obligations or amounts.”
(j) Sections
7.09(h), 7.09(i) and 7.09(j) of the Credit Agreement hereby amended and restated
to read in their entirety as follows:
“(h) the
Borrower may make any payment at the maturity of, or any payment constituting an
Early Retirement of:
(i) its
7.125% Notes due June 1, 2011 or the 4.625% Notes due November 1, 2014 so long
as such payment is funded solely from: (a) Qualified Bonds, (b) from
Indebtedness permitted under Section 7.02(c), or
(c) in connection with an Exchange, existing cash, proceeds of Revolving Credit
Loans, or proceeds of the Disposition of Sale-Leaseback Assets in an aggregate
amount not to exceed $60,000,000; provided, that (x)
the amount of cash applied to the Early Retirement of 4.625% Notes due November
1, 2014 shall not exceed $25,000,000 and (y) the Indebtedness incurred under
clauses (a) or (b) above shall have a Stated Maturity of no earlier than July 1,
2014; and
(ii) its
Later Maturity Public Indebtedness (excluding the 7.125% Notes due June 1, 2011
and the 4.625% Notes due November 1, 2014), so long as such payment is funded
solely from: (a) Qualified Bonds or (b) from Indebtedness permitted under Section 7.02(c);
provided that
the Indebtedness incurred under clauses (a) or (b) above shall have a Stated
Maturity of no earlier than July 1, 2014;”
(i) the
Borrower may (i) declare and pay cash dividends to its stockholders and (ii)
purchase, redeem or otherwise acquire for cash Equity Interests issued by it, if
after giving effect thereto (A) the aggregate amount of such dividends,
purchases, redemptions or acquisitions paid or made after May 20, 2009 under
clauses (i) and (ii) would be less than $20,000,000, and (B) if such dividend is
declared or such purchase, redemption or acquisition is made at a time when the
amount of Consolidated Indebtedness of the Borrower would not cause the
Consolidated Total Leverage Ratio to equal or exceed 3.00 to 1.00 calculated
using the Consolidated EBITDA of the Borrower as set forth in the most recent
Compliance Certificate received by the Administrative Agent pursuant to Section
6.02(a).
(j) the
Borrower may make any payment at the maturity of, or any payment constituting an
Early Retirement of, its 7.125% Notes due June 1, 2011, if after giving effect
thereto (A) the aggregate amount of thereof after September 15, 2008 would be
less than $50,000,000, and (B) the amount of Consolidated Indebtedness of the
Borrower would not cause the Consolidated Total Leverage Ratio to equal or
exceed 4.00 to 1.00 calculated using the Consolidated EBITDA of the Borrower as
set forth in the most recent Compliance Certificate received by the
Administrative Agent pursuant to Section 6.02(a).
2. Conditions
Precedent. The effectiveness of this Amendment shall be
conditioned upon the receipt by the Administrative Agent of:
(a) counterparts
of this Amendment executed by the Borrower;
(b) written
consents hereto executed by the Required Lenders in substantially the form of
Exhibit A attached hereto;
(c) receipt
by the Administrative Agent of amendment fees in an amount equal to 0.25% of the
aggregate principal amount of Loans, L/C Obligations and unfunded Commitments
(based, in each case, on a $600,000,000 Revolving Credit Facility) held by
Lenders that shall have executed and returned written consents in substantially
the form of Exhibit A attached hereto to Xxxxx Xxxxx LLP by 8:00 p.m (Eastern
Time) on May 20, 2009 (which fees shall be distributed by the Administrative
Agent ratably among such consenting Lenders);
(d) receipt
by the Administrative Agent of written consents hereto executed by all of the
Guarantors in substantially the form of Exhibit B attached hereto;
and
(e) receipt
by the Administrative Agent of all fees and expenses payable to it and its
special counsel in connection with this Amendment.
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 or which are contained in any document furnished at
any time under or in connection with the Credit Agreement 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 and except that 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
clauses (a) and (b), respectively, of Section 6.01 of the Credit
Agreement.
4. Release. The
Borrower acknowledges that the Administrative Agent and Lenders have complied
with all of their obligations and duties under the Credit Agreement and other
Loan Documents through the date hereof and that, accordingly, as of the date
hereof, the Borrower has no claims or causes of action against the
Administrative Agent or any Lenders in any manner relating
thereto. In furtherance of the foregoing, the Borrower wishes (and
Administrative Agent and the Lenders agree) to eliminate any possibility that
any past conditions, acts, omissions, events or circumstances would impair or
otherwise adversely affect the Administrative Agent's or any Lenders’ rights,
interests, security and/or remedies under the Credit Agreement and the other
Loan Documents. Accordingly, for and in consideration of the
agreements contained in this letter and other good and valuable consideration,
the Borrower (for itself and its Affiliates and its successors, assigns, and
representatives) (collectively, the “Releasors”) does
hereby fully, finally, unconditionally and irrevocably release and forever
discharge the Administrative Agent and each Lender and each of their respective
Affiliates, officers, directors, employees, attorneys, consultants and agents
(collectively, the “Released Parties”)
from any and all debts, claims, obligations, damages, costs, attorneys' fees,
suits, demands, liabilities, actions, proceedings and causes of action, in each
case, whether known or unknown, contingent or fixed, direct or indirect, and of
whatever nature or description, and whether in law or in equity, under contract,
tort, statute or otherwise, which any Releasor has heretofore had or now or
hereafter can, shall or may have against any Released Party by reason of any
act, omission or thing whatsoever done or omitted to be done, arising out of,
connected with or related in any way to the Credit Agreement or any other Loan
Document, or any act, event or transaction related or attendant thereto, or the
agreements of the Administrative Agent or any Lender contained therein, or the
possession, use, operation or control of any of the assets of any Loan Party, or
the making of any Loans or the issuance of any Letters of Credit or other
advances, or the management of such Loans, Letters of Credit or advances or the
Collateral, in each case, to the extent such act, event, or transaction occurred
on or prior to the date hereof.
5. Confirmation. In
all other respects, the terms of the Credit Agreement and the other Loan
Documents are hereby confirmed.
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.
17530939.13 04262717
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: /s/
Xxxxxxx X. Xxxxxxxxxx
Name:
Xxxxxxx X. Xxxxxxxxxx
Title:
Vice President & CFO
BANK OF
AMERICA, N.A., as Administrative Agent
By: /s/
Xxx Xxxx
Name: Xxx
Xxxx
Title:
Vice President
17530939.13 04262717
[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 Credit Agreement dated as
of June 27, 2006 (the “Credit Agreement”), among The McClatchy Company, as the
Borrower, Bank of America, N.A., as Administrative Agent, Swing Line Lender and
L/C Issuer, JPMorgan Chase Bank, N.A., as Syndication Agent and the other
Lenders party thereto (the “Credit Agreement”). Capitalized terms
used herein are used with the meanings set forth for those terms in the Credit
Agreement.
The
undersigned is a party to the Credit Agreement and hereby consents to the
execution and delivery of the proposed Amendment No. 5 to Credit Agreement by
the Administrative Agent on behalf of the Lenders party to the Credit Agreement,
substantially in the form of the draft presented to the
undersigned.
[Name of
Lender]
By:
Title:
17530939.13 04262717
Exhibit A to Amendment
[Exhibit
B to Amendment]
CONSENT
AND REAFFIRMATION OF GUARANTOR
This
Consent and Reaffirmation of Guarantor is delivered by the undersigned Guarantor
to Bank of America, N.A., as Administrative Agent, with reference to the Amended
and Restated Guaranty dated as of September 26, 2008 (the “Guaranty”) delivered
pursuant to the Credit Agreement dated as of June 27, 2006 (the “Credit
Agreement”), among The McClatchy Company, as the Borrower, Bank of America,
N.A., as Administrative Agent, Swing Line Lender and L/C Issuer, JPMorgan Chase
Bank, N.A., as Syndication Agent and the other Lenders party thereto (the
“Credit Agreement”). Capitalized terms used herein are used with the
meanings set forth for those terms in the Credit Agreement.
Each of
the undersigned is a party to the Guaranty and hereby consents to the execution
and delivery of the proposed Amendment No. 5 to Credit Agreement,
substantially in the form of the draft presented to the
undersigned. By its execution hereof, each of the undersigned hereby
(i) acknowledges and reaffirms all of its obligations and undertakings under the
Guaranty and (ii) acknowledges and agrees that the Guaranty is and shall remain
in full force and effect in accordance with the terms thereof.
McClatchy
Newspapers, Inc.
By:
Its:
[Signatures
Continue]
East
Coast Newspapers, Inc.
By:
Its:
[Signatures
Continue]
The News
and Observer Publishing Company
By:
Its:
[Signatures
Continue]
Tacoma
News, Inc.
By:
Its:
[Signatures
Continue]
San Xxxx
Obispo Tribune, LLC
By: The
McClatchy Company,
its Sole Member
By:
Its:
[Signatures
Continue]
McClatchy
Management Services, Inc.
By:
Its:
[Signatures
Continue]
Miami
Herald Media Company
By:
Its:
[Signatures
Continue]
Macon
Telegraph Publishing Company
By:
Its:
[Signatures
Continue]
Columbus
Ledger-Enquirer, Inc.
By:
Its:
[Signatures
Continue]
Gulf
Publishing Company, Inc.
By:
Its:
[Signatures
Continue]
The
Bradenton Herald, Inc.
By:
Its:
[Signatures
Continue]
The Sun
Publishing Company, Inc.
By:
Its:
[Signatures
Continue]
Nittany
Printing and Publishing Company
By:
Its:
[Signatures
Continue]
The State
Publishing Company
By:
Its:
[Signatures
Continue]
The
Charlotte Observer Publishing Company
By:
Its:
[Signatures
Continue]
Wichita
Eagle and Beacon Publishing Company, Inc.
By:
Its:
[Signatures
Continue]
Pacific
Northwest Publishing Company, Inc.
By:
Its:
[Signatures
Continue]
Lexington
H-L Services, Inc.
By:
Its:
[Signatures
Continue]
Cypress
Media, Inc.
By:
Its:
[Signatures
Continue]
Cypress
Media, LLC
By:
Its:
[Signatures
Continue]
Quad
County Publishing, Inc.
By:
Its:
[Signatures
Continue]
Star-Telegram
Operating, Ltd.
By: Cypress
Media, LLC, its General Partner
By: Cypress
Media, Inc., its Sole Member
By:
Its:
[Signatures
Continue]
McClatchy
U.S.A., Inc.
By:
Its:
17530939.13 04262717
Exhibit A to Amendment