DEBT

March

31,

2014,

we completed a comprehensive refinancing of our debt (the

"2014

Refinancing"), which included the following:

•

$400,000,000

aggregate principal amount of

9.5%

Senior Secured Notes (the “Notes”), pursuant to an Indenture dated as of

March

31,

2014

(the “Indenture”).

•

$250,000,000

first

lien term loan (the

Lien Term Loan") and

$40,000,000

revolving facility (the "Revolving Facility") under a First Lien Credit Agreement dated as of

March

31,

2014

(together the

“1

Lien Credit Facility”).

•

$150,000,000

second

lien term loan under a Second Lien Loan Agreement dated as of

March

31,

2014

(the

“2

Lien Term Loan”).

November 2018,

we repaid, in full, the remaining balance of the

Lien Term Loan.

November

2019,

we amended our

Lien Credit Facility to amend and extend our

$23,120,000

Revolving Facility (the "Amendment") through

December 28, 2020.

Our Revolving Facility was undrawn at the time of the amendment.

Debt is summarized as follows:

							Interest Rates (%)
	September 29			September 30			September 29
(Thousands of Dollars)	2019			2018			2019

Revolving Facility		—			—			6.13
1st Lien Term Loan		—			6,303			8.54
Notes		363,420			385,000			9.50
2nd Lien Term Loan		80,207			93,556			12.00
		443,627			484,859
Unamortized debt issue costs		(11,282	)		(17,055	)
Less current maturities of long-term debt		2,954			7,027
Total long-term debt		429,391			460,777

Our weighted average cost of debt, excluding amortization of debt financing costs at

September 29, 2019

, is

10.0%.

September 29, 2019

, aggregate minimum required maturities of debt excluding amounts required to be paid from future excess cash flow computations total $

2,954,000

2020,

zero

2021,

363,420,000

2022

and $

77,253,000

2023.

Notes

The Notes are senior secured obligations of the Company and mature on

March

15,

2022.

September 29, 2019

, the principal balance of the Notes totaled $

363,420,000

Interest

The Notes require payment of interest semiannually on

March

and

September

of each year, at a fixed annual rate of

9.5%.

Redemption

may

redeem some, or all, of the principal amount of the Notes at any time.

Period Beginning	Percentage of Principal Amount

March 15, 2019		102.38
March 15, 2020		100.00

If we sell certain of our assets or experience specific kinds of changes of control, we must, subject to certain exceptions, offer to purchase the Notes at

101%

of the principal amount. Any redemption of the Notes must also satisfy any accrued and unpaid interest thereon.

may

repurchase Notes in the open market at any time. In the

weeks ended

September 29, 2019

we purchased $

21,580,000

principal amount of Notes in privately negotiated transactions. The transactions resulted in a loss on extinguishment of debt totaling $

333,000

in the

weeks ended

September 29, 2019

which is recorded in Other, net in the Consolidated Statements of Income and Comprehensive Income.

Covenants and Other Matters

The Indenture and the

Lien Credit Facility contain restrictive covenants as discussed more fully below. However, certain of these covenants will cease to apply if the Notes are rated investment grade by either Moody’s Investors Service, Inc. or Standard & Poor’s Ratings Group and there is

default or event of default under the Indenture.

Lien Credit Facility

The

Lien Term Loan was paid in full in

November 2018

and has

outstanding balance as of

September 29, 2019

The

Lien Credit Facility documents the primary terms of the

Lien Term Loan and the Revolving Facility. The $

23,120,000

Revolving Facility matures on

December 28, 2020

and

may

be used for working capital and general corporate purposes (including letters of credit). At

September 29, 2019

, after consideration of letters of credit, we have approximately $

17,644,000

available for future use under the Revolving Facility.

Interest

Interest on the Revolving Facility, which is undrawn at

September 29, 2019

, accrues, at our option, at either (A) LIBOR plus

5.5%,

or (B)

4.5%

plus the higher of (i) the prime rate at the time, (ii) the federal funds rate plus

0.5%,

or (iii)

one

month LIBOR plus

1.0%.

Covenants and Other Matters

The

Lien Credit Facility requires that we comply with certain affirmative and negative covenants customary for financing of this nature, including a maximum total leverage ratio, which is only applicable to the Revolving Facility.

The

Lien Credit Facility restricts us from paying dividends on our Common Stock. This restriction

longer applies if Lee Legacy Leverage is below

3.25x

before and after such payments. Lee Legacy Leverage as defined is

4.19x

September 29, 2019.

Further, the

Lien Credit Facility restricts or limits, among other things, subject to certain exceptions, the ability of the Company and its subsidiaries to: (i) incur indebtedness, (ii) enter into mergers, acquisitions and asset sales, (iii) incur or create liens and (iv) enter into transactions with certain affiliates. The

Lien Credit Facility contains various representations and warranties and

may

be terminated upon occurrence of certain events of default. The

Lien Credit Facility also contains cross-default provisions tied to the terms of each of the Indenture and

Lien Term Loan.

Lien Term Loan

The

Lien Term Loan, which has a balance of $

80,207,000

September 29, 2019

, bears interest at a fixed annual rate of

12.0%,

payable quarterly, and matures in

December

2022.

Principal Payments

Excluding excess cash flow payments, there are

scheduled mandatory amortization payments required under the

Lien Term Loan.

Quarterly, we are required to prepare a calculation of excess cash flow of the Pulitzer Subsidiaries ("Pulitzer Excess Cash Flow"). Pulitzer Excess Cash Flow is generally determined as the cash earnings of the Pulitzer Subsidiaries including adjustments for changes in working capital, capital spending, pension contributions, debt principal payments and income tax payments. Pulitzer Excess Cash Flow also includes a deduction for interest costs incurred under the

Lien Term Loan.

Pulitzer Excess Cash Flow is used to prepay the

Lien Term Loan, at par, and is required to be paid

days after the end of the quarter.

Payments will also be made on the

Lien Term Loan, at par, with proceeds from asset sales by the Pulitzer Subsidiaries that are

not

reinvested subject to certain other conditions.

For

September 29, 2019

there were

principal payments, and for the year ended

September 30, 2018

we repaid $

4,000,000,

on the

Lien Term Loan, at par, with net proceeds from the sale of Pulitzer assets.

During the

and

weeks ended

September 29, 2019

, payments on the

Lien Term Loan totaled $

3,931,000

and $

13,349,000

respectively. For the

weeks ended

September 29, 2019

, Pulitzer Excess Cash Flow totaled $

2,954,000

, which was used to make a payment on the

Lien Term Loan in

November

2019,

at par.

Voluntary payments under the

Lien Term Loan are

longer subject to call premiums and are payable at par. The Indenture includes certain restrictions on voluntary payments on the

Lien Term Loan.

Prior to

March 31, 2017,

we were required to offer the Pulitzer Excess Cash Flow to the

Lien Lenders to prepay the

Lien Term Loan at par, which payment the

Lien Lenders could accept or reject. After

March 31, 2017,

the

Lien Lenders can

not

reject, and Pulitzer Excess Cash Flow is used to prepay the

Lien Term Loan, at par. Pulitzer Excess Cash Flow payments are required to be paid

days after the end of the quarter.

Pulitzer Excess Cash Flow and the related payments on the

Lien Term Loan for the previous

four

quarters are as follows:

For the Period Ending
(Thousands of Dollars)	Pulitzer Excess Cash Flow Payment		Payment Date

September 30, 2018		724	Q1 2019
December 30, 2018		1,377	Q2 2019
March 31, 2019		7,317	Q3 2019
June 30, 2019		3,931	Q4 2019

Covenants and Other Matters

The

Lien Term Loan requires that we comply with certain affirmative and negative covenants customary for financing of this nature, including the negative covenants under the

Lien Credit Facility discussed above. The

Lien Term Loan contains various representations and warranties and

may

be terminated upon occurrence of certain events of default. The

Lien Term Loan also contains cross-default provisions tied to the terms of the Indenture and

Lien Credit Facility.

In connection with the

Lien Term Loan, we entered into a Warrant Agreement dated as of

March

31,

2014

(the “Warrant Agreement”). Under the Warrant Agreement, certain affiliates or designees of the

Lien Lenders received on

March

31,

2014

their pro rata share of warrants to purchase, in cash, an initial aggregate of

6,000,000

shares of Common Stock, subject to adjustment pursuant to anti-dilution provisions (the “Warrants”). The Warrants represent, when fully exercised, approximately

10.1%

of shares of Common Stock outstanding at

March 30, 2014

on a fully diluted basis. The exercise price of the Warrants is

$4.19

per share.

The Warrant Agreement contains provisions requiring the Warrants to be measured at fair value and included in warrants and other liabilities in our Consolidated Balance Sheets. We re-measure the fair value of the liability each reporting period, with changes reported in other, net non-operating income (expense). The initial fair value of the Warrants was

$16,930,000.

See Note

and Note

12.

In connection with the issuance of the Warrants, we entered into a Registration Rights Agreement dated as of

March

31,

2014

(the “Registration Rights Agreement”). The Registration Rights Agreement requires, among other matters, that we use our commercially reasonable efforts to maintain the effectiveness for certain specified periods of a shelf registration statement related to the shares of Common Stock to be issued upon exercise of the Warrants.

Security

The Notes and the

Lien Credit Facility are fully and unconditionally guaranteed on a joint and several

first

-priority basis by each of the Company's material domestic subsidiaries, excluding MNI, the Pulitzer Subsidiaries and TNI (the "Lee Legacy Assignors"), pursuant to a

first

lien guarantee and collateral agreement dated as of

March 31, 2014 (

the

Lien Guarantee and Collateral Agreement").

The Notes, the

Lien Credit Facility and the subsidiary guarantees are secured, subject to certain exceptions, priorities and limitations, by perfected security interests in all property and assets, including certain real estate, of the Lee Legacy Assignors, other than the capital stock of MNI and any property and assets of MNI (the “Lee Legacy Collateral”), on a

first

-priority basis, equally and ratably with all of the Lee Legacy Assignors' existing and future obligations. The Lee Legacy Collateral includes, among other things, equipment, inventory, accounts receivables, depository accounts, intellectual property and certain of their other tangible and intangible assets.

Also, the Notes and the

Lien Credit Facility are secured, subject to certain exceptions, priorities and limitations in the various agreements, by

first

-priority security interests in the capital stock of, and other equity interests owned by the Lee Legacy Assignors (excluding the capital stock of MNI). The Notes and

Lien Credit Facility are subject to a Pari Passu Intercreditor Agreement dated

March 31, 2014.

The Notes, the

Lien Credit Facility and the subsidiary guarantees are also secured, subject to permitted liens, by a

second

-priority security interest in the property and assets of the Pulitzer Subsidiaries that become subsidiary guarantors (the "Pulitzer Assignors") other than assets of or used in the operations or business of TNI (collectively, the “Pulitzer Collateral”). In

June 2015

the Pulitzer Assignors became a party to the

Lien Guarantee and Collateral Agreement on a

second

lien basis.

Also, the Notes and the

Lien Credit Facility are secured, subject to certain exceptions, priorities, and limitations in the various agreements, by

second

-priority security interests in the capital stock of, and other equity interests in, the Pulitzer Assignors and Star Publishing’s interest in TNI.

The

Lien Term Loan is fully and unconditionally guaranteed on a joint and several

first

-priority basis by the Pulitzer Assignors, pursuant to a Second Lien Guarantee and Collateral Agreement dated as of

March

31,

2014

(the

“2

Lien Guarantee and Collateral Agreement”) among the Pulitzer Assignors and the

Lien collateral agent.

Under the

Lien Guarantee and Collateral Agreement, the Pulitzer Assignors have granted (i)

first

-priority security interests, subject to certain priorities and limitations in the various agreements, in the Pulitzer Collateral and (ii) have granted

first

-priority lien mortgages or deeds of trust covering certain real estate, as collateral for the payment and performance of their obligations under the

Lien Term Loan.

Also, under the

Lien Guarantee and Collateral Agreement, the Lee Legacy Assignors have granted (i)

second

-priority security interests, subject to certain priorities and limitations in the various agreements, in the Lee Legacy Collateral, and (ii) have granted

second

-priority lien mortgages or deeds of trust covering certain real estate, as collateral for the payment and performance of their obligations under the

Lien Term Loan. Assets of, or used in the operations or business of, MNI are excluded.

The rights of each of the collateral agents with respect to the Lee Legacy Collateral and the Pulitzer Collateral are subject to customary intercreditor and intercompany agreements.

Other

In connection with the

2014

Refinancing, we capitalized

$37,819,000

of debt financing costs. Amortization of debt financing costs totaled $

5,773,103

, $

4,769,000

and $

4,447,000

2019,

2018

and

2017

, respectively. Amortization of such costs is estimated

to total $

4,105,000

2020,

4,275,000

2021,

2,675,000

2022

and

$227,000

2023

. At

September 29, 2019

, we have $

11,282,000

of unamortized debt financing costs recorded as a reduction of Long-term debt in our Consolidated Balance Sheets.

During the

weeks ended

September 29, 2019,

we identified an adjustment of

$1,309,000

related to debt financing costs that should have been recorded in prior periods. The impact of recording this out of period adjustment was an increase to Debt financing and administrative costs of

$1,309,000

in the Consolidated Statements of Operations and Comprehensive Income for the

weeks ended

September 29, 2019

and an increase to debt of

$1,309,000

on the Consolidated Balance Sheet. We do

not

believe the impact of the adjustment is material to our consolidated financial statements for any previously issued financial statements taken as a whole, or to our net income for the

weeks ended

September 29, 2019

. Further, the impact of the corrections was

not

material to any of our Consolidated Balance Sheets nor our Consolidated Statements of Cash Flows.

Liquidity

September 29, 2019

, after consideration of letters of credit, we have approximately $

17,644,000

available for future use under our Revolving Facility. Including cash, our liquidity at

September 29, 2019

totals $

26,289,000

. This liquidity amount excludes any future cash flows. We expect all interest and principal payments due in the next

twelve

months will be satisfied by existing cash and our cash flows, which will allow us to maintain an adequate level of liquidity. The Warrants, if and when exercised, would provide additional liquidity in an amount u

p to

$25,140,000

sub

ject to a reduction for any amounts the Company

may

elect to use to repay our

Lien Term Loan and/or the Notes.

There are numerous potential consequences under the Notes,

Lien Credit Facility and

Lien Term Loan, if an event of default, as defined, occurs and is

not

remedied. Many of those consequences are beyond our control. The occurrence of

one

or more events of default would give rise to the right of the applicable lender(s) to exercise their remedies under the Notes,

Lien Credit Facility and

Lien Term Loan, respectively, including, without limitation, the right to accelerate all outstanding debt and take actions authorized in such circumstances under applicable collateral security documents.

Our ability to operate as a going concern is dependent on our ability to remain in compliance with debt covenants and to repay, refinance or amend our debt agreements as they become due. The Notes,

Lien Credit Facility and

Lien Term Loan have only limited affirmative covenants with which we are required to maintain compliance. We are in compliance with our debt covenants at

September 29, 2019