SUPPORT AGREEMENT

(a)  

Until the Termination Date (as defined below), the Parties, severally and not jointly, agree (i) to support and consummate the transactions contemplated by the term sheet annexed hereto as Exhibit A (including the Exhibits and Annexes thereto and any supplements thereto, the “Term Sheet”) and (ii) that if Lenders holding less than 95% of the aggregate of the (x) outstanding principal amount of Term Loans and Revolving Loans and (y) Letter of Credit Outstandings execute and deliver this Support Agreement and the Company elects, at its option, and delivers on behalf of itself and the other Company Parties a written notice to the Administrative Agent (which notice, for the avoidance of doubt, may be delivered by the Company no earlier than the date 20 days after the Effective Date (defined below) subject to the terms hereof and only if Lenders holding less than 95% of the aggregate of the (x) outstanding principal amount of Term Loans and Revolving Loans and (y) Letter of Credit Outstandings have executed this Support Agreement), then the Company Parties shall take all actions necessary to obtain requisite corporate approvals, prepare for and commence the Chapter 11

(b)  

Until the Termination Date, the Company Parties, jointly and severally, agree to: (i) to take any and all necessary and appropriate actions in furtherance of all of the transactions contemplated under this Support Agreement and the Term Sheet, (ii) use commercially  reasonable efforts to cause Lenders holding 95% of the aggregate of the (x) outstanding principal amount of the Term Loans and the Revolving Loans and (y) Letter of Credit Outstandings to execute this Support Agreement, and (iii) that in the event the Company Parties elect to effectuate the transactions contemplated under this Support Agreement and the Term Sheet pursuant to the Prepackaged Alternative (A) in conjunction with distribution of a Disclosure Statement (as defined below) solicit votes from Lenders to accept or reject a prepackaged Chapter 11 plan of reorganization that effectuates the terms of the Term Sheet, is materially consistent with the terms of the Term Sheet, and is otherwise in form and substance reasonably satisfactory to the Administrative Agent and the Initial Backstop Lenders (as defined below) (the “Plan”), (B) commence reorganization cases (the “Chapter 11 Cases”) for each of the Company Parties (provided that the Company Parties may elect to exclude Pulitzer Inc. and its subsidiaries from such reorganization cases if prior to the commencement of the Chapter 11 Cases for the other Company Parties the “Required Holders” under the St. Louis Post-Dispatch LLC Note Agreement dated as of May 1, 2000 (the “Required Holders”) have agreed to the terms of a forbearance agreement that is reasonably acceptable to the Company Parties, the Administrative Agent and the Initial Backstop Lenders (the “Pulitzer Forbearance Agreement”)) by filing voluntary petitions (the date of their filing, the “Petition Date”) under chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”), (C) file and seek approval on an interim and final (to the extent applicable) basis of “first-day” motions, including, without limitation, a motion seeking approval of debtor in possession financing and/or consensual use of cash collateral of the “Secured Creditors” under and as defined in the Credit Agreement (collectively, the “Secured Creditors”) and providing adequate protection to such Secured Creditors, including current pay cash interest at the non-default rate specified in the Credit Agreement for accrued and unpaid interest as of the Petition Date and for interest accruing after the Petition Date, adequate protection liens, superpriority administrative claims and payment of reasonable professional fees and expenses (including, without limitation, reasonable legal counsel fees and financial advisor fees) of the Administrative Agent and the Initial Backstop Lenders (“Adequate Protection”) (all of which motions and related orders shall be in form and substance reasonably satisfactory to the Administrative Agent, collectively, the “First Day Motions”), (D) request, file and seek approval of a motion (the “Backstop Lender Reimbursement Motion”) requesting authority to pay the reasonable professional fees and expenses of the Initial Backstop Lenders (which motion and related order shall be in form and substance reasonably satisfactory to the Administrative Agent and the Initial Backstop Lenders), (E) file the Plan and Disclosure Statement with the Bankruptcy Court on the Petition Date and seek approval of the Disclosure Statement and confirmation of the Plan, and (F) take any and all necessary and

(c)  

Until the Termination Date, each Consenting Lender, severally and not jointly, hereby agrees (i) to take any and all necessary and appropriate actions in furtherance of all of the restructuring transactions contemplated under this Support Agreement and the Term Sheet and (ii) that in the event the Company Parties elect to effectuate the restructuring transactions contemplated under this Support Agreement and the Term Sheet pursuant to the Prepackaged Alternative (A) subject to receipt of the Disclosure Statement and proper solicitation thereunder, timely vote its claims (as defined in section 101(5) of the Bankruptcy Code) against the applicable Company Parties as set forth on Schedule 2 in annexed hereto and as may be acquired after the date hereof pursuant to Section 7.1(a) of this Support Agreement from another Consenting Lender hereto (the “Claims”, provided that as used herein, “Claims” shall not include any claim held by a Consenting Lender to the extent excluded by 7.7(c) of this Support Agreement), now or hereafter beneficially owned by such Consenting Lender or for which the Consenting Lender now or hereafter serves as the nominee, investment manager or advisor for beneficial holders, and, in such capacity, cause its affiliates and funds (solely to the extent such Consenting Lender has voting control of such affiliates or funds and solely with respect to such Claims) (x) vote to accept the Plan, (y) not change or withdraw (or cause to be changed or withdrawn) such vote unless the Plan is modified in a manner materially inconsistent with the Term Sheet or, in relation to the Backstop Lenders, the Backstop Commitment Letter (as defined in Section 3(e) below), and (z) to the extent such election is available, not elect on its ballot to preserve any claims that may be affected by any releases provided for under the Plan (provided that such Consenting Lender is similarly granted a release under the Plan), (B) exchange a ratable portion (or ratable or greater portion in the case of each Backstop Lender) of the principal amount of its outstanding Loans under the Credit Agreement for Second Lien Term Loans (as defined in Exhibit B to the Term Sheet) in a manner consistent with and subject to the terms of the Term Sheet and any Backstop Commitment Letter, and in the amounts set forth in, Schedule 2 hereto or the schedule to such Consenting Lender’s Lender Joinder (as applicable), (C) support confirmation of the Plan (and not object to, or support any other person’s efforts to oppose or object to, confirmation of the Plan), unless the Plan is modified in a manner materially inconsistent with the Term Sheet or, in relation to the Backstop Lenders, the Backstop Commitment Letter, including seeking the entry of a confirmation order in form and substance reasonably satisfactory to the Administrative Agent and the Initial Backstop Lenders (the “Confirmation Order”), (D) support (and not object to) the First Day Motions and the Backstop Lender Reimbursement Motion, (E) refrain from taking any action not required by law which is inconsistent with, or that would materially delay or impede approval, confirmation or consummation of the Plan or that is otherwise inconsistent with the express terms of this Support Agreement or the Term Sheet (unless such action is taken in response to an action taken by a Company Party or other entity not a party hereto that is inconsistent with the terms of this Support Agreement or, in relation to the Backstop Lenders, the Backstop Commitment Letter (as defined in Section 3(e) below)), and (F) not, directly or indirectly, propose, support, solicit, encourage, or participate in the formulation of any plan of reorganization or liquidation in the Chapter 11 Cases other than the Plan.  

  

Notwithstanding anything herein to the contrary, (x) except with respect to the Backstop Lenders, each Consenting Lender may, in its sole discretion, elect at the time of such Lender’s execution and delivery of this Support Agreement or Lender Joinder to exchange a portion of its Loans to Second Lien Term Loans in the amount set forth on Schedule 2 hereto or the schedule to such Consenting Lender's Lender Joinder, in each case, such Consenting Lender's percentage interest in the Second Lien Term Loans shall not exceed such Consenting Lender's percentage interest, determined as of the date of its election, in the aggregate outstanding Loans under the Credit Agreement (with respect to each Consenting Lender, its “Maximum Exchange Percentage”, and the aggregate of all Consenting Lender Maximum Exchange Percentages (other than those of the Backstop Lenders) being the “Consenting Lender Second Lien Allocation”), (y) the Initial Backstop Lenders may satisfy, in part, their commitments to exchange their Claims into Second Lien Term Loans hereunder by acquiring Claims of other Lenders in accordance with Section 7.1 hereof and exchanging such acquired Claims in accordance herewith or in an aggregate amount of up to $10,000,000 in cash, which cash proceeds shall be applied as set forth in Exhibit B to the Term Sheet, and (z) the Company Parties agree that as of the closing date of the transactions contemplated hereby the Backstop Lenders’ actual aggregate allocation of Second Lien Term Loans shall be no less than 100% minus the Consenting Lender Second Lien Allocation except to the extent such amount would be in excess of the aggregate Backstop Lender commitments  (provided that any such commitments shall be set forth solely in the Backstop Commitment Letter addressed to the Company referenced in Section 3(e) and nothing in this Support Agreement or the Schedules, Exhibits, or Annexes hereto shall constitute an express (or implied) commitment by any Backstop Lenders to exchange any loans or otherwise provide any financing to the Company Parties).

(a)  

(i) If no Prepackaged Alternative Notice has been delivered, and the transactions contemplated by this Support Agreement, the Term Sheet and the Definitive Documentation are not consummated and effective on or prior to 11:59 p.m. (EST), the 120th day after the Effective Date; or (ii) if no Prepackaged Alternative Notice has been delivered, the 60th day after the Effective Date if, based on the Administrative Agent’s Register as of such date, the Consenting Lenders hold less than 95% of the aggregate of the (x) outstanding principal

(b)  

Whether or not the Chapter 11 Cases are commenced:

(i)  

the date on which each of the transactions contemplated by this Support Agreement, the Term Sheet and the Definitive Documentation has been consummated, each in accordance with its terms (which, if the transactions contemplated by this Support Agreement and the Term Sheet are effectuated by means of the Plan, shall be the date on which the Plan is substantially consummated);

(ii)  

the date on which any court of competent jurisdiction or other competent governmental or regulatory authority issues an order making illegal or otherwise restricting, preventing or prohibiting the consummation of the transactions contemplated by this Support Agreement, the Term Sheet or any of the Definitive Documentation;

(iii)  

the occurrence of any material breach of this Support Agreement by any of the Parties (to the extent not otherwise cured or waived in accordance with the terms hereof); provided, that if any Consenting Lender shall breach its obligations pursuant to this Support Agreement, the Termination Event arising as a result of such act or omission shall apply only to such Consenting Lender (and any allocation of Second Lien Term Loans elected by such breaching Consenting Lender shall first be offered ratably to the Backstop Lenders) and this Support Agreement shall otherwise remain in full force and effect with respect to the Company Parties and all such other Consenting Lenders; provided, further that the Company Parties’ obligations under Sections 1.1 and 4.6 shall be deemed material in all events.

(c)  

If the Company delivers the Prepackaged Alternative Notice to the Administrative Agent:

(i)  

the failure of the Company Parties to commence solicitation of acceptances for the Plan on the date the Company delivers the Prepackaged Alternative Notice;

(ii)  

the failure of the Company Parties to commence the Chapter 11 Cases on or before the earlier of (A) the first Business Day that is 35 days after the date of delivery of the Prepackaged Alternative Notice to the Administrative Agent or (B) the first Business Day that is 95 days after the Effective Date; provided that if prior to the commencement of the Chapter 11 Cases the Company provides written notice to the Administrative Agent that Lenders holding 95% or more of the (x) outstanding principal amount of Term Loans and Revolving Loans and (y) Letter of Credit Outstandings have executed and delivered this

(iii)  

any of the Chapter 11 Cases shall be dismissed or converted to a chapter 7 case, or a chapter 11 trustee with plenary powers, a responsible officer, or an examiner with enlarged powers relating to the operation of the businesses of any of the Company Parties (powers beyond those set forth in Section 1106(a)(3) and (4) of the Bankruptcy Code) shall be appointed in any of the Chapter 11 Cases or any of the Company Parties shall file a motion or other request for such relief;

(iv)  

the entry of any order in the Chapter 11 Cases terminating the Company Parties’ exclusive right to file a plan or plans of reorganization pursuant to Section 1121 of the Bankruptcy Code;

(v)  

unless the Bankruptcy Court enters (A) (1) within three Business Days after the Petition Date, an interim order and (2) on or prior to the 30th day after the Petition Date, a final order (the “Lee Cash Collateral Order”), each of which orders shall be in the Chapter 11 Cases (excluding those of Pulitzer Inc. and its subsidiaries) under Sections 105, 361, 362, 363, 364, 552 of the Bankruptcy Code and Bankruptcy Rules 2002, 4001 and 9014, and in form and substance reasonably satisfactory to the Administrative Agent and the Initial Backstop Lenders, authorizing the Company Parties (excluding Pulitzer Inc. and its subsidiaries) to incur debtor in possession financing and/or use cash collateral, granting Adequate Protection to the Secured Creditors, and, in the case of the interim order, scheduling a final hearing pursuant to Bankruptcy Rule 4001(B); and (B) either (1) a Pulitzer Forbearance Agreement has been executed by the Required Holders and no reorganization cases are commenced with respect to Pulitzer Inc. and its subsidiaries on the Petition Date, or (2) reorganization cases are commenced with respect to Pulitzer Inc. and its subsidiaries on the Petition Date and  (x) within three Business Days after the Petition Date, an interim order and (y) on or prior to the 30th day after the Petition Date, a final order (the “Pulitzer Cash Collateral Order”), each of which orders shall be in the Chapter 11 Cases of Pulitzer Inc. and its subsidiaries under Sections 105, 361, 362, 363, 364, 552 of the Bankruptcy Code and Bankruptcy Rules 2002, 4001 and 9014 authorizing Pulitzer Inc. and its subsidiaries to use cash collateral, granting Adequate Protection to the secured lenders of Pulitzer Inc. and its subsidiaries, and, in the case of the interim order, scheduling a final hearing pursuant to Bankruptcy Rule 4001(B); provided that the Pulitzer Cash Collateral Order shall in no event (x) grant to any person any claims against, or liens on the assets of, the Company Parties (other Pulitzer Inc. and its

(vi)  

five Business Days following the date on which the Administrative Agent has terminated the Company Parties’ authority to use cash collateral as a result of an event of default under the Lee Cash Collateral Order (including as a result of a cross-default to the Pulitzer Cash Collateral Order or the Pulitzer Forbearance Agreement, as applicable), unless the Bankruptcy Court enters on or before the expiration of such five Business Day period an amendment to the Lee Cash Collateral Order or a new Lee Cash Collateral Order, in each case, which shall be in form and substance reasonably acceptable to the Administrative Agent and the Required Consenting Lenders;

(vii)  

the Company Parties take any of the following actions: (A) withdrawing the Plan, (B) publicly announcing their intention not to support the Plan, (C) filing any plan of reorganization and/or disclosure statement that is not, in the reasonable judgment of the Administrative Agent and the Initial Backstop Lenders, consistent with this Support Agreement and the Term Sheet, or (D) otherwise evincing an intention, in the reasonable judgment of the Administrative Agent, (x) not to proceed with the Plan or (y) to proceed with an alternative plan or form of transaction;

(viii)  

either (1) a filing by any Company Party of any motion, application or adversary proceeding challenging the validity, enforceability, perfection or priority of or seeking avoidance or subordination of the Obligations or the liens securing the Obligations or asserting any other cause of action against and/or with respect to the Obligations, the prepetition liens securing such Obligations, the Administrative Agent or any of the Consenting Lenders (or if any Company Party supports any such motion, application or adversary proceeding commenced by any third party), or (2) the entry of an order of the Bankruptcy Court providing relief against the interests of any Consenting Lender or the Administrative Agent with respect to any of the foregoing causes of action or proceedings;

(ix)  

the amendment, modification of, or the filing of a pleading by any of the Company Parties that seeks to amend or modify the Plan, the Disclosure Statement or any documents related to the Plan, notices, exhibits or appendices, which amendment, modification or filing is, in the reasonable judgment of the Administrative Agent or the Initial Backstop Lenders, materially inconsistent with this Support Agreement and the Term Sheet;

(x)  

the Company Parties’ failure to file the Plan and the Disclosure Statement with the Bankruptcy Court on the Petition Date;

(xi)  

the 45th day after the Petition Date (which date may be extended to the 60th day after the Petition Date with the prior consent of the Administrative Agent and the Initial Backstop Lenders), unless prior thereto the Bankruptcy Court has entered an order, in form and substance satisfactory to the Administrative Agent and the Initial Backstop Lenders, approving the Disclosure Statement and confirming the Plan; or

(xii)  

the 15th day after entry of the Confirmation Order approving the Plan, or, in the event Pulitzer Inc. is at such time actively seeking to offer, place or arrange any debt securities or syndicated bank financing, the 30th day after entry of the Confirmation Order approving the Plan, unless, in either case, prior thereto the Company Parties have substantially consummated the Plan pursuant to its terms.

(a)  

Upon the occurrence of a Termination Event under (i) subsections 2.1(a)(i), 2.1(a)(ii), 2.1(b)(i), 2.1(c)(iii), 2.1(c)(iv), or 2.1(c)(vi), this Support Agreement shall automatically terminate without further action, (ii) each other subsection of Section 2.1 hereof, this Support Agreement shall terminate five  Business Days after a non-breaching Party shall have given written notice of such breach to the breaching Party and such breach shall not have been cured during the five Business Days after receipt of such notice (the date of termination under clause (i) or (ii) hereof being the “Termination Date”); provided that upon the occurrence of a Termination Event under subsections 2.1(b)(ii), 2.1(c)(i), 2.1(c)(ii), 2.1(c)(v), 2.1(c)(x), 2.1(c)(xi), and 2.1(c)(xii) above, the Termination Date may be extended for a maximum period of 45 days in the sole discretion of the Administrative Agent, the Initial Backstop Lenders and the Required Consenting Lenders. For the avoidance of doubt, the automatic stay arising pursuant to Section 362 of the Bankruptcy Code in the event the Chapter 11 Cases are commenced in connection with the Prepackaged Alternative shall be deemed waived or modified for purposes of providing notice or exercising rights hereunder.

(b)  

Notwithstanding anything herein to the contrary, if any Consenting Lender shall breach its obligations pursuant to this Support Agreement, the Termination Event arising as a result of such act or omission shall apply only to such Consenting Lender (and any allocation of Second Lien Term Loans elected by such breaching Consenting Lender shall first be offered ratably to the Backstop Lenders) and this Support Agreement shall otherwise remain in full force and effect with respect to the Company Parties and all other Consenting Lenders.

(a)  

execution and delivery of signature pages to this Support Agreement by each of the Company Parties;

(b)  

receipt by the Administrative Agent and the Company (x) from each Consenting Lender a duly completed Schedule 2 for such Consenting Lender and (y) of executed signature pages to this Support Agreement by Lenders holding (i) more than 50% in number of funded claims under the Credit Agreement and (ii) no less than 66 2/3% of the outstanding principal amount of the Loans and Letter of Credit Outstandings (each of which determinations shall be mutually agreed by the Administrative Agent and the Company); provided, however, that the Administrative Agent, the Initial Backstop Lenders and the Company shall have the right, by written mutual consent, to waive satisfaction of the foregoing Section 3(b)(i) as a condition precedent to effectiveness of the Support Agreement;

(c)  

receipt by the Administrative Agent of resolutions from each Company Party evidencing the corporate or similar authority of such Company Party to execute, deliver and perform its obligations under this Support Agreement;

(d)  

receipt by the Company and the Administrative Agent of a fully executed commitment letter (the “Backstop Commitment Letter”) addressed to the Company from the parties identified on Annex I to Exhibit B to the Term Sheet (the “Initial Backstop Lenders”) and one or more other Lenders party thereto (collectively with the Initial Backstop Lenders, the “Backstop Lenders”) to exchange at least $166,250,000 in the aggregate of the principal amount of their outstanding Loans under the Credit Agreement for Second Lien Term Loans (as defined in Exhibit B to the Term Sheet) in the aggregate principal amount of $175,000,000 with terms set forth in Exhibit B to the Term Sheet; provided, however, that so long as the Backstop Lenders have entered into a commitment, in form and substance reasonably acceptable to the Company and the Administrative Agent, to acquire, through the exchange of outstanding Loans held by them or cash purchase, at least $157,500,000 of Second Lien Term Loans (the “Backstop Commitment”), the Company shall have the right to waive this Section 3(e) as a condition precedent to the effectiveness of the Support Agreement, provided further that any Consenting Lender Second Lien Allocation (whether as of the date hereof or subsequently received in accordance with the terms hereof) shall first be applied to the principal amount of Second Lien Term Loans in excess of the Backstop Commitment then committed, up to $175,000,000;

(e)  

receipt by the Administrative Agent of the Company Parties’ five year business plan in form and substance reasonably satisfactory to the Administrative Agent;

(f)  

receipt by (i) the Administrative Agent’s and the Initial Backstop Lenders’ counsel and financial advisor of all reasonable fees and expenses (evidenced by a

 

         (h)

each of the definitive agreements and documents referenced in, or reasonably necessary to effectuate the transactions contemplated by, this Support Agreement and the Term Sheet shall be fully negotiated and materially consistent with the terms of the Term Sheet, and shall otherwise be in form and substance satisfactory to the Company Parties, Administrative Agent, the Initial Backstop Lenders and the Required Consenting Lenders.  Such definitive agreements and documents shall include, without limitation, a first-lien credit agreement, a second-lien credit agreement, guaranties, pledge and collateral agreements, intercreditor agreements, a Backstop Commitment, an intercompany subordination agreement and, in the event the Parties must effectuate the restructuring transactions contemplated under this Support Agreement and the Term Sheet pursuant to the Prepackaged Alternative, the Plan and related disclosure statement in form and substance satisfactory to the Administrative Agent (the “Disclosure Statement”) and prepackaged plan scheduling motion (collectively, the “Definitive Documentation”).

(a)  

such Consenting Lender is the legal owner of the Claims set forth on Schedule 2 or on the schedule attached to its Lender Joinder (as applicable), and has and shall maintain the power and authority to bind the legal and beneficial owner(s) of such Claims to the terms of this Support Agreement;

(b)  

such Consenting Lender (a) has and shall maintain full power and authority to vote on and consent to or (b) has received direction from the party having full power and authority to vote on and consent to such matters concerning its  Claims and to exchange, assign and transfer such Claims;

(c)  

other than pursuant to this Support Agreement, such Claims are and shall continue to be free and clear of any pledge, lien, security interest, charge, claim, equity, option, proxy, voting restriction, right of first refusal or other limitation on disposition, or encumbrances of any kind, that would adversely affect in any way such Consenting Lender’s performance of its obligations contained in this Support Agreement at the time such obligations are required to be performed; and

(d)  

such Consenting Lender has made no prior assignment, sale, participation, grant, conveyance, or other transfer of, and has not entered into any other agreement to

(a)  

No later than 60 days after the Effective Date, the Company shall have entered into a commitment letter, in form and substance reasonably satisfactory to the Administrative Agent and the Company, providing for the Revolving Credit Facility (as defined in Exhibit A to the Term Sheet) with the terms set forth in Exhibit A to the Term Sheet (the “Revolver Commitment Letter”); provided that such 60 day period may be extended with the prior written consent of the

(b)  

Notwithstanding anything herein to the contrary (including any notice or cure periods set forth herein), if (i) the Company has not entered into the Commitment Letter in accordance with the immediately preceding paragraph or (ii) if the Company does not execute the Revolver Commitment Letter within three Business Days of its presentment to the Company by the financial institutions party thereto, this Support Agreement shall automatically terminate with respect to each of the Consenting Lenders and the Company Parties without further notice or action.

(a)  

Each Consenting Lender hereby agrees, severally and not jointly, for so long as this Support Agreement shall remain in effect as to it, not to sell, assign, transfer, hypothecate or otherwise dispose of, or grant, issue or sell any option, right to acquire, voting, participation or other interest in any Claim against the Company Parties, except to a party that (i) is a Consenting Lender; provided that any such Claims shall automatically be deemed to be subject to the terms of this Support Agreement; provided further that any election to exchange or not to exchange Loans made by the Consenting Lender transferor shall be binding upon the transferee, or (ii) executes and delivers a Lender Joinder (as defined in section 7.1(c)) to the Administrative Agent and the Company Parties at least five Business Days prior to the relevant transfer.  With respect to any transfers effectuated in accordance with clause (ii) above, (x) such transferee shall be deemed to be a Consenting Lender for purposes of this Support Agreement, (y) the Company shall be deemed to have acknowledged such transfer and (z) any election to exchange or not to exchange Loans made by the Consenting Lender transferor shall be binding upon the transferee.

(b)  

Any sale, transfer or assignment of any Claim that does not comply with the procedures set forth in subsection 7.1(a) shall be deemed void ab initio.

(c)  

Any person that receives or acquires a portion of the Claims pursuant to a sale, assignment, transfer, hypothecation or other disposition of such Claims by a Consenting Lender hereby agrees to be bound by all of the terms of this Support Agreement (as the same may be hereafter amended, restated or otherwise modified from time to time) (a “Joining Lender Party”) by executing and delivering to counsel for the Company Parties and counsel for the Administrative Agent a joinder in the form of Exhibit B hereto (the “Lender Joinder”).  The Joining Lender Party shall thereafter be deemed to be a “Consenting Lender” and a party for all purposes under this Support Agreement.  Each Joining Lender Party shall indicate, on the appropriate schedule annexed to its Lender Joinder, (i) the number and amount of Loan claims held by such Consenting Lender, and (ii) the amount of its Loans that such Consenting Lender desires to convert into Second Lien Term Loans (except in the case of a Backstop Lender, it being understood that such Consenting Lender’s percentage interest in the Second Lien Term Loans shall not exceed such Consenting Lender’s Maximum Exchange Percentage).

(d)  

With respect to the Claims held by the Joining Lender Party upon consummation of the sale, assignment, transfer, hypothecation or other disposition of such Claims, the Joining Lender Party hereby makes the representations and warranties of the Consenting Lenders set forth in Section 4 of this Support Agreement to the Company Parties.

(e)  

Notwithstanding the foregoing provisions of this Section 7.1, any Consenting Lender may, at any time and without notice to or consent from any other party, pledge or grant a security interest in all or any portion of its rights (including, without limitation, rights to payment of interest and repayment of principal) under the Credit Agreements in order to secure obligations of such Consenting Lender to a Federal Reserve Bank; provided that no such pledge or grant of a security interest shall release such Consenting Lender from any of its obligations

(f)  

This Support Agreement shall in no way be construed to preclude any Consenting Lender from acquiring additional claims; provided that any such claims shall automatically be deemed to be “Claims” subject to the terms of this Support Agreement.

(a)  

Except as expressly provided in this Support Agreement, nothing herein is intended to, does or shall be deemed in any manner to waive, limit, impair or restrict the ability of each of the Consenting Lenders to protect and preserve its rights, remedies and interests, including, but not limited to, all of their rights and remedies under the Credit Agreement, including any such rights and remedies relating to Defaults or other events that may have occurred prior to the execution of this Support Agreement, any and all of its claims and causes of action against any of the Company Parties, any liens or security interests it may have in any assets of any of the Company Parties or any third parties, or its full participation in the Chapter 11 Cases, if commenced. Nothing herein shall be deemed a commitment by any Lender (including, without limitation, Deutsche Bank Trust Company Americas and its affiliates) to provide financing under the Revolving Credit Facility (which commitment will be subject to the terms of the commitment letter related thereto) and nothing herein shall be deemed to limit the syndication efforts in connection therewith.  Notwithstanding anything herein to the contrary, (i) if the Backstop Commitment Letter is terminated in accordance with its terms, or otherwise expires (x) each Backstop Lender may (with respect to itself) at any time thereafter terminate its obligations hereunder without any liability to the Company or any other person by written notice to the Company, the Initial Backstop Lenders and the Administrative Agent and (y) upon the Company’s, the Administrative Agent’s and the Initial Backstop Lenders’ receipt of written notice from the Required Consenting Lenders, this Support Agreement shall terminate with respect to all parties hereto; provided that such notice may not be given if the Backstop Commitment Letter is replaced with another commitment letter or if the failure to have such a commitment is otherwise cured, in each case on terms acceptable to the Administrative Agent and within 30 days of the termination or expiration of the Backstop Commitment Letter, and (ii) if the Revolver Commitment Letter is executed and delivered in connection with the Revolving Credit Facility pursuant to Section 4.7(a), and is thereafter terminated in accordance with its terms or otherwise expires, each Consenting Lender party to the Revolver Commitment Letter may (with respect to itself) at any time after the 21st day after the termination or expiration thereof terminate its obligations hereunder without any liability to the Company or any other person by written notice to the Company, the Initial Backstop Lenders and the Administrative Agent (as applicable) unless prior thereto the Administrative Agent shall have consented to an alternative revolving credit facility, which consent shall be in the Administrative Agent’s sole discretion.

(b)  

Without limiting subsection 7.7(a) in any way, if the transactions contemplated by this Support Agreement and in the Term Sheet are not consummated as provided herein, if a Termination Date occurs, or if this Support Agreement is otherwise terminated for any reason, the Administrative Agent, the Consenting Lenders and the Company Parties each fully reserve any and all of their respective rights, remedies and interests under the Credit Documents, applicable law and in equity; provided, however, that the Administrative Agent and each Consenting Lender agrees that neither the execution of this Support Agreement by the Company Parties nor the implementation of the transactions contemplated hereby shall constitute a Default or Event of Default under the Credit Agreement

(c)  

Notwithstanding anything herein to the contrary, the Parties acknowledge that the support of any Consenting Lender contained in this Support Agreement relates solely to such Consenting Lender’s rights and obligations as a Consenting Lender under the Credit Agreement, and does not bind such Consenting Lender or its affiliates with respect to any other indebtedness owed by the Company or any of its subsidiaries and affiliates to such Consenting Lender or any affiliate of such Consenting Lender (for the avoidance of doubt, if the Consenting Lender is specified on the relevant signature page as a particular group or business within an entity, “Consenting Lender” shall mean such group or business and shall not mean the entity or its affiliates, or any other desk or business thereof, or any third party funds advised thereby).  For purposes of this Support Agreement, (x) Claims of a Consenting Lender that are held by such Consenting Lender in a fiduciary or similar capacity and (y) Claims held by a Consenting Lender in its capacity as a broker, dealer or market maker of Loans under the Credit Agreement or any other claim against or security in the Company Parties (including any Loans or claims held in inventory with respect to such broker, dealer, or market-making activities, provided that the positions with respect to such Loans or claims are separately identified on the internal books and records of such Consenting Lender) shall not, in either case (x) or (y), be bound by or subject to this Support Agreement unless otherwise reflected on Schedule 2 hereto or on the schedule to the applicable Lender joinder.

(a)  

The Parties waive all rights to trial by jury in any jurisdiction in any action, suit, or proceeding brought to resolve any dispute between the Parties, whether sounding in contract, tort or otherwise.

(b)  

This Support Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to any conflicts of law provision which would require the application of the law of any other jurisdiction.  By its execution and delivery of this Support Agreement, each Party hereby irrevocably and unconditionally agrees for itself that, subject to the following sentence, any legal action, suit or proceeding against it with respect to any matter under or arising out of or in connection with this Support Agreement, any letter referenced in Section 3(e), or for recognition or enforcement of any judgment rendered in any such action, suit or proceeding, may be brought in any state or federal court of competent jurisdiction in New York County, State of New York, and by execution and delivery of this Support Agreement, each of the Parties hereby irrevocably accepts and submits itself to the nonexclusive jurisdiction of such court, generally and unconditionally, with respect to any such action, suit or proceedings.

(c)  

Notwithstanding the foregoing, if the Chapter 11 Cases are commenced, nothing in subsections 7.8(a)-(b) shall limit the authority of the Bankruptcy Court to hear any matter related to or arising out of this Support Agreement.

as a Consenting Lender

 

Notice Address:

 

Scott Bynum

Goldman Sachs & Co.

Vice President

Bank Loan Trading

200 West Street,  6th Floor

New York, NY  10282

Tel:   ###-###-####

Fax: (212 ###-###-####

as a Consenting Lender

 

By:  Monarch Alternative Capital LP

        its Advisor

 

 

Notice Address:

 

Michael Gillin

Vice President – Director of Operations

Monarch Alternative Capital LP

535 Madison Avenue

New York, NY  10022

Tel:   ###-###-####

Fax: (866 ###-###-####

 

 

Lee Enterprises, Incorporated

Journal-Star Printing Co.

Accudata, Inc.

INN Partners, L.C.

K. Falls Basin Publishing, Inc.

Lee Consolidated Holdings Co.

Lee Publications, Inc.

Lee Procurement Solutions Co.

Sioux City Newspapers, Inc.

Pulitzer Inc.

Pulitzer Technologies, Inc.

St. Louis Post-Dispatch LLC

Fairgrove LLC

STL Distribution Services LLC

Suburban Journals of Greater St. Louis LLC

Pulitzer Network Systems LLC

Pulitzer Newspapers, Inc.

Flagstaff Publishing Co.

Hanford Sentinel Inc.

HomeChoice, LLC

Kauai Publishing Co.

Napa Valley Publishing Co.

NIPC, Inc. f/k/a Northern Illinois Publishing Co., Inc.

NVPC LLC

Northern Lakes Publishing Co.

NLPC LLC

Pantagraph Publishing Co.

HSTAR LLC

Pulitzer Missouri Newspapers, Inc.

Pulitzer Utah Newspapers, Inc.

Santa Maria Times, Inc.

SHTP LLC

Southwestern Oregon Publishing Co.

SOPC LLC

Ynez Corporation

 

Consenting Lender

Amount of Claim under Credit Agreement*

Consenting Lender Election: Amount of Loans to be Exchanged for Second Lien Term Loans**

$___________

 

$___________

 

Each Subsidiary Guarantor shall be required to provide an unconditional guaranty of all amounts owing under the First Lien Credit Facility (as defined below) (the “Guaranties”).  Such Guaranties shall be in form and substance satisfactory to DBSI and shall also guarantee the Borrower’s and its subsidiaries’ obligations under interest rate swaps/foreign currency swaps or similar agreements or depository or cash management arrangements with a First Lien Lender or its affiliates (the “Other Secured Obligations”).  All Guaranties shall be guarantees of payment and not of collection.

 

First Lien Agent and Collateral Agent:

Deutsche Bank Trust Company Americas (“DBTCA”) shall act as the sole administrative agent and sole collateral agent (in such capacities, the “First Lien Agent”) for the First Lien Lenders (as defined below).

 

Lead Arranger and Bookrunner:

 

Deutsche Bank Securities Inc. (“DBSI”).

 

First Lien Lenders:

 

Certain of the lenders under the Borrower’s Existing Credit Agreement (the “First Lien Lenders”).

 

Type, Amount and Maturity:

First Lien Term Loan Facility.  Loans in an aggregate principal amount up to $689,510,000 (minus the aggregate principal amount of Non-Extended Loans (defined below), if any) under the Existing Credit Facility shall be amended and be outstanding (such loans, the “Extended Loans”) under the First Lien Credit Facility (as defined below).

 

The Extended Loans shall mature on December 31, 2015 (the “Extended Loan Maturity Date”).  The principal amount of the Extended Loans will amortize in quarterly installments in an aggregate annual amount equal to

Purpose:

 

The proceeds of loans under the Revolving Credit Facility will be used (a) to provide working capital from time to time for the Borrower and its subsidiaries and (b) for other general corporate purposes.

 

Interest Rates and Fees:

As set forth on Annex I hereto.

 

Security:

All amounts owing under the First Lien Credit Facility and (if applicable) the Other Secured Obligations (and all obligations under the Guaranties) will continue to be secured by a perfected first-priority security interest in all Lee Collateral subject to exceptions satisfactory to DBTCA (the “First Priority Collateral”); provided, however, proceeds of the First Priority Collateral (and in the case of any distributions pursuant to bankruptcy, insolvency or similar proceedings, whether or not representing the proceeds of the First Priority Collateral), shall be applied in the following order among the first priority tranches: first, to (x) the repayment in full of the obligations (or cash collateralization of Letters of Credit outstanding) under the Revolving Credit Facility and (y) the payment of all obligations owing in respect of interest rate swap agreements (“Hedge Agreements”) to be entered into between the Borrower and Lenders or their affiliates (ratably among the holders of such obligations); second, if the transactions contemplated hereby are implemented out of court, to the repayment in full of the Extended Loans; and third, to the repayment in full of the Non-Extended Loans.

 

All documentation evidencing the security required pursuant to the preceding paragraph shall be in form and substance satisfactory to DBSI (including the “waterfall” and related provisions providing for the “super-priority” status of the obligations under Revolving Credit Facility and the Hedge Agreements), and shall effectively create first-priority security interests in the property purported to be covered thereby, with such exceptions as are reasonably acceptable to DBTCA.

 

Intercreditor Matters:

Mandatory prepayments of the Extended Loans and the Revolving Loans shall be required from (a) 100% of the Net Sale Proceeds from asset sales by the Borrower and its subsidiaries (subject to certain ordinary course and reinvestment exceptions to be mutually agreed upon), (b) 100% of the Net Cash Proceeds from issuances of debt by the Borrower and its subsidiaries (with appropriate exceptions, including proceeds from the issuance of second lien debt or subordinated debt that are to be utilized to reduce the outstanding balance of Second Lien Term Loans (defined below), plus related fees and expenses in connection with such refinancing, to be mutually agreed upon), (c) the Net Cash Proceeds from issuances of common equity by the Borrower and its subsidiaries (with appropriate exceptions to be mutually agreed upon), which shall be applied ratably to reduce the outstanding Extended Loans, Revolving Loans and, subject to the proviso below, the Second Lien Term Loans; 

in Commitments:

Representations and warranties of the type as in the Existing Credit

and Warranties:

Conditions Precedent and Implementation:

Conditions Precedent to Each Borrowing under Revolving Credit Facility:

The making of each extension of credit under the Revolving Credit Facility, shall be conditioned upon the satisfaction of conditions substantially similar to those in Existing Credit Agreement.

Affirmative and Negative Covenants:

Covenants, other than financial covenants (described below), of the type as in the Existing Credit Agreement, with such additions and modifications to provide for the transactions contemplated by these Term Sheets, as described on Annex II hereto and to permit (x) intercompany transactions between the Borrower and its subsidiaries in the ordinary course of business and consistent with historical practice and (y) other ordinary course investments consistent with historical practices, subject to caps to be agreed upon.

 

Financial Covenants:

Events of Default:

Waivers and Amendments:

Customary and appropriate for financings of this type including without limitation, appropriate tranche voting for applications of repayments between the Revolving Loans and the Extended Loans and for any modifications to the “super-priority” status of the Revolving Credit Facility.

 

     Interest Rates

6.25%1

5.25%

5.00%2

4.00%

No Change

No Change

Payable quarterly in arrears in cash.

 

 Letter of Credit Fees:

 

 Consent and Extension Fees:

 

1.  

Permit a single joint venture transaction pursuant to which (x) the Borrower or one or more of its subsidiaries contributes, sells, leases or otherwise transfers assets (including without limitation, Capital Stock) to a joint venture or (y) a subsidiary of the Borrower issues Capital Stock to a person other than the Borrower or its subsidiaries for the purpose of forming a joint venture or similar arrangement; provided that immediately after giving effect to such transaction (a) the aggregate net book value of all such assets and Capital Stock contributed, sold, leased or otherwise transferred and all Capital Stock issued to persons other than the Borrower or a Subsidiary of the Borrower pursuant to such transactions subsequent to the closing date shall not exceed $35,000,000, (b) such joint venture is a subsidiary of the Borrower, (c) cash contributed to such joint venture shall not exceed $250,000 in the aggregate and (d) the equity interests of the Borrower and its subsidiaries in such joint venture shall be pledged to secure the Obligations.

2.  

Permit the following:

a.  

An additional Investments basket that, in the aggregate, does not exceed $2,000,000 in any fiscal year; provided that no such Investments may be used, directly or indirectly, to purchase, repurchase, redeem, defease or otherwise acquire or retire for value any (i) Additional Permitted Indebtedness, (ii) unsecured Indebtedness of the Borrower or a Subsidiary Guarantor, (iii) junior lien obligations of the Borrower or a Subsidiary Guarantor, including without limitation, the Second Lien Term Loans, or (iv) the Pulitzer Notes;

b.  

Investments made in connection with the funding of contributions under any qualified or non-qualified pension, retirement or similar employee compensation plan, including, without limitation, split-dollar insurance policies, in an amount not to exceed the amount of compensation expense recognized by the Borrower and its Subsidiaries in connection with such plans; provided that any such contributions by Lee and its subsidiaries (excluding the Pulitzer Entities) to the Pulitzer Entities for such purposes shall not exceed $2,000,000 in any fiscal year;

c.  

Investments in the Associated Press Digital Rights Agency or any successor thereto or any Affiliate thereof in an aggregate amount not to exceed $1,500,000 at any time outstanding;

d.  

Payments to be made in connection with the redemption (which redemption occurred prior to the closing date) by PD LLC of the interest in PD LLC and DS LLC owned by The Herald Publishing Company, LLC as described in note 19 to the Borrower’s Annual Report on Form 10-K for the fiscal year

e.  

Guarantees:

The Subsidiary Guarantors and Pulitzer and each of its direct and indirect subsidiaries that currently guarantees the obligations under the PD LLC Notes (each, a “Guarantor” and, collectively, the “Guarantors”) shall be required to provide an unconditional guaranty of all amounts owing under the Second Lien Credit Facility (the “Guaranties”).  Such Guaranties shall be in form and substance satisfactory to the Second Lien Agent and the Second Lien Lenders.  All Guaranties shall be guarantees of payment and not of collection.

 

Second Lien Agent and Collateral Agent:

A financial institution to be determined reasonably acceptable to the Second Lien Lenders shall act as the sole administrative agent to the Second Lien Lenders (in such capacity, the “Second Lien Agent”).  A financial institution to be determined shall act as collateral agent for the Second Lien Lenders.  Second Lien Lenders holding a majority in principal amount of the Second Lien Term Loans shall have the right to remove and replace such collateral agent and Second Lien Agent.

 

Second Lien Lenders:

 

In connection with the execution and delivery of the Support Agreement, certain lenders under the Existing Credit Agreement shall have committed to convert their existing loans to fully utilize and subscribe for the Second Lien Term Loan Facility (the “Second Lien Lenders”); provided that each lender under the Existing Credit Agreement will be afforded an opportunity to convert a portion of its existing loans into a ratable share (and unless a Backstop Lender (as defined below), in a maximum amount up to such Lender’s Pro Rata Exchange Percentage) of the Second Lien Term Loan Facility.  Contemporaneous with the execution of the Support Agreement  those lenders listed on Annex I (the “Backstop Lenders”) will each commit pursuant to and on the terms contained in the

Type, Amount and Maturity:

Up to $166,250,000 (but not less than $150,000,000) of aggregate principal amount of loans under the Existing Credit Agreement shall be exchanged for second lien term loans in an aggregate principal amount of up to $175,000,000 (but not less than $157,500,000), including OID (as defined in Annex II hereto) of approximately $8,750,000 under the Second Lien Term Loan Facility (such loans, the “Second Lien Term Loans”).  The Second Lien Term Loans shall have a final maturity date in April of 2017 (“Second Lien Term Loan Maturity Date”).  There shall be no fixed amortization of the principal amount of the Second Lien Term Loans and the aggregate outstanding principal amount thereof shall be paid in full on the Second Lien Term Loan Maturity Date.

 

Interest Rates and Fees:

As set forth on Annex II hereto.

 

Security:

All amounts owing under the Second Lien Term Loan Facility shall be secured by (a) a perfected second-priority security interest in all Lee Collateral securing the Existing Credit Agreement (the “Shared Collateral”) and (b) a perfected second-priority security interest in all collateral securing the PD LLC Notes (the “Pulitzer Collateral”, together with the Shared Collateral, the “Second Priority Collateral”).

 

All documentation evidencing the security required pursuant to the preceding paragraph shall be in form and substance satisfactory to the Second Lien Agent and the Second Lien Lenders, and shall effectively create second-priority security interests in the property purported to be covered thereby.

 

Intercreditor Matters:

Mandatory Prepayments:

 

Voluntary Prepayments:

 

No voluntary prepayments shall be permitted prior to the first anniversary of the closing date.  Thereafter, any voluntary prepayments shall be accompanied by a prepayment premium as described under “Call Protection” below.

 

Call Protection:

Each voluntary prepayment shall be accompanied by a prepayment premium as follows: (1) 2.0% of the principal amount prepaid if such prepayment occurs on or after the first anniversary of the closing date but prior to the second anniversary of the closing date, and (2) 1.0% of the principal amount prepaid if such prepayment occurs on or after the second anniversary of the closing date but prior to the third anniversary of the closing date.

 

and Warranties:

 

Conditions Precedent:

Substantially the same as those described in Exhibit A to the Transaction Term Sheet in respect of the First Lien Credit Facility.

 

Affirmative and Negative Covenants:

Substantially the same as those described in Exhibit A to the Transaction Term Sheet in respect of the First Lien Credit Facility; provided, that any such covenants shall contain baskets and permissions that are less restrictive than those provided under the First Lien Credit Facility by a percentage to be mutually agreed.

 

Financial Covenants:

None.

 

Events of Default:

Waivers and Amendments:

Customary and appropriate for financings of this type and for this transaction in particular, including without limitation, similar applicable voting provisions as in the Existing Credit Agreement.

 

Implementation:

As set forth in “Closing Conditions and Implementation” in the Transaction Term Sheet.

 

15% per annum (the “Interest Rate”), payable quarterly in arrears in cash.

 

Default Rate:

Upon any event of default, the interest rate will be the Interest Rate plus 2.00% per annum.  Default interest shall be payable upon written demand.

 

Fees:

 

 

5% of the aggregate Second Lien Term Loans as original issue discount on the closing date (the “OID”), payable by a dollar for dollar increase in the principal amount of the Second Lien Term Loans.  In addition, each Backstop Lender will receive, at closing, its ratable interest in a 0.5% cash backstop commitment fee.

 

Equity Kicker:

Each Second Lien Lender shall receive its pro rata share of newly issued Lee common stock in an aggregate amount equal to 15.0% of all issued and outstanding shares at the day of closing before giving effect to the closing.1

 

Expenses:

The Borrower will pay from time to time on demand and at closing all reasonable expenses (including the reasonable fees and disbursements of legal counsel) of the Backstop Lenders and, without duplication, the Second Lien Agent incurred in connection with the restructuring contemplated by this Summary of Terms and related transactions.

Lead Arranger and Bookrunner:

 

Deutsche Bank Securities Inc.

Type, Amount and Maturity:

$142,500,000 of aggregate principal amount of notes under the PD LLC Notes shall be refinanced (with Pulitzer as the issuer of new notes) with a final maturity date that is no earlier than the Extended Loan Maturity Date  (the “Maturity Date”).  In the event the PD LLC Notes are refinanced in a principal amount in excess of the current outstanding amount (up to $175,000,000), the excess proceeds will be used (a) first, to fund the costs and expenses incurred by Lee and Pulitzer in connection with the implementation of the First Lien Credit Facility, the Second Lien Term Loans and the Pulitzer Notes, (b) second, to fund the Pulitzer Reserve, (c) third, if the transactions are implemented out of court, to reduce the Non-Extended Loans and (d) fourth, to reduce the Extended Loans.

 

Interest Rate:

TBN.

 

Security:

 

Maximum Amount of Claim to be Exchanged for Second Lien Term Loans