AMENDMENT NO. 3 TO CREDIT AGREEMENT
Exhibit
10.1
AMENDMENT
NO. 3 TO CREDIT AGREEMENT
This
Amendment No. 3 to Credit Agreement dated as of March 28, 2008 (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 and that certain Amendment No. 2 to Credit
Agreement dated as of July 19, 2007, 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:
“Early Maturity Public
Indebtedness” means the Borrower’s 9.875% Debentures due April 15, 2009
and 7.125% Notes due June 1, 2011.
“Early Retirement”
means, with respect to all or a portion of any series of Borrower’s Public
Indebtedness, any prepayment, purchase, repurchase, redemption, retirement,
defeasance, acquisition or cancellation of such Public Indebtedness, or making
any sinking fund or similar deposit with respect thereto, prior to the stated
maturity date of such Public Indebtedness.
“Equity Interests”
means, with respect to any Person, all of the shares of capital stock of (or
other ownership or profit interests in) such Person, all of the warrants,
options or other rights for the purchase or acquisition from such Person of
shares of capital stock of (or other ownership or profit interests in) such
Person, all of the securities convertible into or exchangeable for shares of
capital stock of (or other ownership or profit interests in) such Person or
warrants, rights or options for the purchase or acquisition from such Person of
such shares (or such other interests), and all of the other ownership or profit
interests in such Person (including partnership, member or trust interests
therein), whether voting or nonvoting, and whether or not such shares, warrants,
options, rights or other interests are outstanding on any date of
determination. For the avoidance of doubt, debt securities that are
convertible into shares of capital stock (or other ownership or profit
interests) shall not be considered Equity Interests.
“Later Maturity Public
Indebtedness” means the Borrower’s 4.625% Notes due November 1, 2014,
5.750% Notes due September 1, 2017, 7.15% Debentures due November 1, 2027 and
6.875% Debentures due March 15, 2029.
“Miami Property” means
the real property described in that certain Contract for Purchase and Sale of
Real Property effective as of March 3, 2005, as amended by that certain First
Amendment to Contract for Purchase And Sale Of Real Property, dated as of August
10, 2007, listed as Exhibits 10.23 and 10.24, respectively, in Borrower’s Form
10-Q filed with the Securities and Exchange Commission on August 10,
2007.
“Public Indebtedness”
means the Borrower’s 9.875% Debentures due April 15, 2009, 7.125% Notes due June
1, 2011, 4.625% Notes due November 1, 2014, 5.750% Notes due September 1, 2017,
7.15% Debentures due November 1, 2027 and 6.875% Debentures due March 15,
2029.
“Restricted Payment”
means (a) any dividend or other distribution (whether in cash, securities or
other property) with respect to any capital stock or other Equity Interest of
any Person or any of its Subsidiaries, or any payment (whether in cash,
securities or other property), including any sinking fund or similar deposit, on
account of the purchase, redemption, retirement, defeasance, acquisition,
cancellation or termination of any such capital stock or other Equity Interest,
or on account of any return of capital to any Person’s stockholders, partners or
members (or the equivalent of any thereof), or any option, warrant or other
right to acquire any such dividend or other distribution or payment and (b) any
payment constituting an Early Retirement of any outstanding Public Indebtedness
of such Person.
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(b) The
definition of the term “Applicable Rate” in Section 1.01 of the Credit
Agreement is hereby amended by adding the following paragraph immediately prior
to the end
thereof:
Notwithstanding
the foregoing, at all times when the Consolidated Total Leverage Ratio as set
forth in the most recent Compliance Certificate received by the Administrative
Agent pursuant to Section 6.02(a) is 4.00 to 1.00 or greater, the
Applicable Rate shall mean the following rates per annum (expressed in basis
points), determined by reference to such Consolidated Total Leverage
Ratio:
|
Consolidated
Total Leverage Ratio
|
Commitment
Fee
|
Eurodollar
Rate + Letters of Credit
|
Base
Rate
|
|
> 4.00 to 1.00 but < 4.50 to
1.00
|
37.5
|
175.0
|
75.0
|
|
> 4.50 to 1.00
|
50.0
|
200.0
|
100.0
|
(c) Section
2.05(b) of the Credit Agreement is hereby amended and restated to read in its
entirety as follows:
(b) Mandatory.
(i) Promptly
upon receipt by the Borrower or any of its Subsidiaries of:
(A) the
Net Cash Proceeds received from the sale of the Miami Property, the Borrower
shall prepay an aggregate principal amount of Revolving Credit Loans equal to
the lesser of (1) 100% of all such Net Cash Proceeds and (2) the difference
between the outstanding principal amount of Revolving Credit Loans on the date
of such prepayment, and $500,000,000; and
(B) any
tax refund attributable to the sale of the Star Tribune Company that is received
in the second fiscal quarter of fiscal 2008 or thereafter, the Borrower shall
prepay an aggregate principal amount of Revolving Credit Loans equal to the
lesser of (1) an aggregate principal amount of Revolving Credit Loans equal to
100% of such tax refund, and (2) the difference between the outstanding
principal amount of Revolving Credit Loans on the date of such prepayment, and
$500,000,000.
Notwithstanding
the foregoing, if any prepayment required under this Section 2.05(b) would
require the Borrower to prepay Revolving Credit Loans on other than the last day
of an Interest Period and such prepayment would require the Borrower to
compensate the Lenders under Section 3.05 by reason of such prepayment, then the
Borrower may delay making the prepayment until the last day of the applicable
Interest Period.
(ii)
Prepayments of the Revolving Credit Facility made pursuant to this
Section 2.05(b), first, shall be
applied ratably to the L/C Borrowings and the Swing Line Loans, second, shall be
applied ratably to the outstanding Revolving Credit Loans, and, third, shall be used
to Cash Collateralize the remaining L/C Obligations that are in excess of
$500,000,000. Upon the drawing of any Letter of Credit that has been
Cash Collateralized, the funds held as Cash Collateral shall be applied (without
any further action by or notice to or from the Borrower or any other Loan Party)
to reimburse the L/C Issuer or the Revolving Credit Lenders, as
applicable.
(d) Section 2.06
of the Credit Agreement is hereby amended and restated to read in its entirety
as follows:
2.06. Termination or Reduction of
Commitments.
(a) Optional.
(i) From
and after the Closing Date, the Borrower may, upon notice to the Administrative
Agent, terminate the Revolving Credit Facility, or from time to time permanently
reduce the Revolving Credit Facility; provided that (A) any such notice shall be
received by the Administrative Agent not later than 10:00 a.m. five Business
Days prior to the date of termination or reduction; (B) any such partial
reduction shall be in an aggregate amount of $10,000,000 or any whole multiple
of $1,000,000 in excess thereof; (C) the Borrower shall not terminate or reduce
the Revolving Credit Facility if, after giving effect thereto and to any
concurrent prepayments hereunder, the Total Revolving Credit Outstandings would
exceed the Revolving Credit Facility; and (D) if, after giving effect to any
reduction of the Revolving Credit Facility, the Letter of Credit Sublimit or the
Swing Line Sublimit exceeds the amount of the Revolving Credit Facility, such
Sublimit shall be automatically reduced by the amount of such
excess;
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(ii) The
Administrative Agent will promptly notify the Lenders of any such notice of
termination or reduction of any Commitment. Any reduction of any
Commitment shall be applied to the Commitment of each Appropriate Lender
according to its Applicable Percentage. All fees accrued until the
effective date of any termination of any Commitment shall be paid on the
effective date of such termination; and
(iii) The
aggregate Bridge Commitments and Term A Commitments shall be automatically and
permanently reduced to zero on the date of the Bridge Borrowing and Term A
Borrowing.
(b) Mandatory.
(i) The
Revolving Credit Facility shall be automatically and permanently reduced by
$125,000,000 on each of the following dates: (A) the date of the
prepayment required under Section 2.05(b)(i)(A), and (B) the date of prepayment
required under Section 2.05(b)(i)(B); provided, however, in no event
shall the Revolving Credit Facility be reduced, pursuant to this clause (i), to
less than $500,000,000; and provided further that any such permanent reduction
shall not take place with respect to any amount where the prepayment is delayed
pursuant to the last sentence of Section 2.05(b)(i) to the extent of such
delayed prepayment.
(ii) If
after giving effect to any reduction or termination of Revolving Credit
Commitments under this Section 2.06, the Letter of Credit Sublimit or the
Swing Line Sublimit exceeds the Revolving Credit Facility at such time, the
Letter of Credit Sublimit or the Swing Line Sublimit, as the case may be, shall
be automatically reduced by the amount of such excess.
(c) Application of Commitment
Reductions; Payment of Fees. (i) The Administrative Agent will promptly
notify the Lenders of any termination or reduction of the Letter of Credit
Sublimit, Swing Line Sublimit or the Revolving Credit Commitment under this
Section 2.06. Upon any reduction of the Revolving Credit
Commitments, the Revolving Credit Commitment of each Revolving Credit Lender
shall be reduced by such Lender’s Applicable Revolving Credit Percentage of such
reduction amount. All fees in respect of the Revolving Credit
Facility accrued until the effective date of any termination of the Revolving
Credit Facility shall be paid on the effective date of such
termination.
(d) Reduction of Revolving
Credit Commitments. On March 28, 2008, the Revolving
Credit Facility shall be reduced by $250,000,000 to $750,000,000.
(e) Section
7.07(a) of the Credit Agreement is hereby amended and restated to read in its
entirety as follows:
(a) Consolidated Interest
Coverage Ratio. The Borrower shall not permit the Consolidated
Interest Coverage Ratio as of the last day of any fiscal quarter of the Borrower
to be less than 3.00 to 1.00 from the Closing Date through July 1, 2007;
and 2.75 to 1.00 from and after September 30, 2007; provided, however, that if the
Ratings assigned by S&P or Xxxxx’x to the Facilities shall at any time be A-
or better or A-3 or better, respectively, then this covenant shall cease to be
operative.
(f) Section 7.07(b)
of the Credit Agreement is hereby amended and restated to read in its entirety
as follows:
“Consolidated Total Leverage
Ratio. The Borrower shall not permit the Consolidated Total
Leverage Ratio as of the last day of any fiscal quarter of the Borrower to be
greater than 5.00 to 1.00 from September 30, 2007 through
September 27, 2009; 4.75 to 1.00 from December 27, 2009 through
December 26, 2010; and 4.50 to 1.00 after December 26,
2010.”
(g) There
shall be added to the Credit Agreement a new Section 7.09 reading in its
entirety as follows:
7.09 Restricted
Payments. The Borrower shall not, nor shall it permit any
Subsidiary to, declare or make, directly or indirectly, any Restricted Payment,
or incur any obligation (contingent or otherwise) to do so, except that, so long
as no Default shall have occurred and be continuing at the time of any action
described below or would result therefrom:
(a) each
Subsidiary may make Restricted Payments to the Borrower, any Subsidiaries of the
Borrower that are Guarantors and any other Person that owns a direct Equity
Interest in such Subsidiary, ratably according to their respective holdings of
the type of Equity Interest in respect of which such Restricted Payment is being
made;
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(b) the
Borrower and each Subsidiary may declare and make dividend payments or other
distributions payable solely in the common stock or other common Equity
Interests of such Person;
(c) the
Borrower may distribute rights pursuant to any existing shareholder rights plan
or redeem such rights in accordance with the terms of any such existing
shareholder rights plan;
(d) the
Borrower and its Subsidiaries may make Restricted Payments in connection with or
pursuant to any of its employee benefits plans or in connection with the
employment, termination or compensation of its employees, officers, directors or
consultants, including any repurchase or retention of Equity Interests in
payment of withholding taxes in connection with equity-based compensation
arrangements;
(e) the
Borrower may make non-cash repurchases of Equity Interests that are deemed to
occur upon exercise of stock options if the proceeds of such repurchases are
deemed to represent a portion of the exercise price of such
options;
(f) the
Borrower may repurchase fractional shares of its Equity Interests arising out of
stock dividends, splits or combinations, business combinations or conversion of
convertible securities;
(g) the
Borrower may make any payment constituting an Early Retirement of any Early
Maturity Public Indebtedness.
(h) the
Borrower may make any payment constituting an Early Retirement of any Later
Maturity Public Indebtedness, so long as such payment is not made out of the
proceeds of Revolving Credit Loans;
(i) the
Borrower may declare or pay cash dividends to its stockholders in an amount
during each fiscal quarter not to exceed $0.18 multiplied by the number of
shares of common stock outstanding on the record date for such dividend;
and
(j) the
Borrower may (i) declare or pay additional cash dividends to its stockholders in
excess of the dividends permitted under Section 7.09(i), (ii) purchase, redeem
or otherwise acquire for cash Equity Interests issued by it and (iii) make any
payment constituting an Early Retirement of Later Maturity Public Indebtedness
that is not otherwise permitted under Section 7.09(h), if after giving effect
thereto (A) the aggregate amount of such dividends, purchases, redemptions,
acquisitions or Early Retirements under clauses (i), (ii) and (iii) paid or made
after December 30, 2007 would be less than $250,000,000 or (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) (it
being understood that the Borrower may allocate any such payments to clause (B)
until the Consolidated Total Leverage Ratio equals 4.00 to 1.00 and thereafter
allocate payments to clause (A) hereof).
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) written consents hereto executed by all of the Guarantors in
substantially the form of Exhibit B attached hereto, (d) 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 $750,000,000 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 12:00 noon
(Eastern Daylight Time) on March 26, 2008 (which fees shall be distributed by
the Administrative Agent ratably among such consenting Lenders) 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 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.
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4. Confirmation. In
all other respects, the terms of the Credit Agreement and the other Loan
Documents are hereby confirmed.
5. 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.
6. Governing
Law. This Amendment shall be governed by and construed in
accordance with the laws of the State of New York.
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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/ R. Xxxxxx
Xxxxxxxx
Name: R. Xxxxxx
Xxxxxxxx
Title: Treasurer
BANK OF
AMERICA, N.A., as Administrative Agent
By: /s/
Xxx Xxxx
Name: Xxx
Xxxx
Title: Vice
President
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[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. 3 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:
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[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
Guaranty dated as of May 4, 2007 (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. 3 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: /s/
Xxxxxx Xxxxxx-Xxxxxx
Its:
Secretary, Xxxxxx Xxxxxx-Xxxxxx
East
Coast Newspapers, Inc.
By: /s/
Xxxxxx Xxxxxx-Xxxxxx
Its:
Secretary, Xxxxxx Xxxxxx-Xxxxxx
The News
and Observer Publishing Company
By: /s/
Xxxxxx Xxxxxx-Xxxxxx
Its:
Secretary, Xxxxxx Xxxxxx-Xxxxxx
Tacoma
News, Inc.
By: /s/
Xxxxxx Xxxxxx-Xxxxxx
Its:
Secretary, Xxxxxx Xxxxxx-Xxxxxx
San Xxxx
Obispo Tribune, LLC
By: The McClatchy Company,
its Sole
Member
By: /s/
Xxxxxx Xxxxxx-Xxxxxx
Its:
Secretary, Xxxxxx Xxxxxx-Xxxxxx
McClatchy
Management Services, Inc.
By: /s/
Xxxxxx Xxxxxx-Xxxxxx
Its:
Secretary, Xxxxxx Xxxxxx-Xxxxxx
Miami
Herald Media Company
By: /s/
Xxxxxx Xxxxxx-Xxxxxx
Its:
Secretary, Xxxxxx Xxxxxx-Xxxxxx
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Macon
Telegraph Publishing Company
By: /s/
Xxxxxx Xxxxxx-Xxxxxx
Its:
Secretary, Xxxxxx Xxxxxx-Xxxxxx
Columbus
Ledger-Enquirer, Inc.
By: /s/
Xxxxxx Xxxxxx-Xxxxxx
Its:
Secretary, Xxxxxx Xxxxxx-Xxxxxx
Gulf
Publishing Company, Inc.
By: /s/
Xxxxxx Xxxxxx-Xxxxxx
Its:
Secretary, Xxxxxx Xxxxxx-Xxxxxx
The
Bradenton Herald, Inc.
By: /s/
Xxxxxx Xxxxxx-Xxxxxx
Its:
Secretary, Xxxxxx Xxxxxx-Xxxxxx
The Sun
Publishing Company, Inc.
By: /s/
Xxxxxx Xxxxxx-Xxxxxx
Its:
Secretary, Xxxxxx Xxxxxx-Xxxxxx
Nittany
Printing and Publishing Company
By: /s/
Xxxxxx Xxxxxx-Xxxxxx
Its:
Secretary, Xxxxxx Xxxxxx-Xxxxxx
The State
Publishing Company
By: /s/
Xxxxxx Xxxxxx-Xxxxxx
Its:
Secretary, Xxxxxx Xxxxxx-Xxxxxx
The
Charlotte Observer Publishing Company
By: /s/
Xxxxxx Xxxxxx-Xxxxxx
Its:
Secretary, Xxxxxx Xxxxxx-Xxxxxx
Wichita
Eagle and Beacon Publishing Company, Inc.
By: /s/
Xxxxxx Xxxxxx-Xxxxxx
Its:
Secretary, Xxxxxx Xxxxxx-Xxxxxx
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Pacific
Northwest Publishing Company, Inc.
By: /s/
Xxxxxx Xxxxxx-Xxxxxx
Its
Secretary, Xxxxxx Xxxxxx-Xxxxxx
Lexington
H-L Services, Inc.
By: /s/
Xxxxxx Xxxxxx-Xxxxxx
Its:
Secretary, Xxxxxx Xxxxxx-Xxxxxx
Cypress
Media, Inc.
By: /s/
Xxxxxx Xxxxxx-Xxxxxx
Its:
Secretary, Xxxxxx Xxxxxx-Xxxxxx
Cypress
Media, LLC
By: /s/
Xxxxxx Xxxxxx-Xxxxxx
Its:
Secretary, Xxxxxx Xxxxxx-Xxxxxx
Quad
County Publishing, Inc.
By: /s/
Xxxxxx Xxxxxx-Xxxxxx
Its:
Secretary, Xxxxxx Xxxxxx-Xxxxxx
Star-Telegram
Operating, Ltd.
By: Cypress
Media, LLC, its General Partner
By: Cypress Media, Inc., its Sole Member
By: /s/ Xxxxxx
Xxxxxx-Xxxxxx
Its: Secretary, Xxxxxx Xxxxxx-Xxxxxx
McClatchy
U.S.A., Inc.
By: /s/
Xxxxxx Xxxxxx-Xxxxxx
Its:
Secretary, Xxxxxx Xxxxxx-Xxxxxx
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