Item 1.01. Entry into a Material Definitive Agreement.
As previously disclosed on a Current Report on Form 8-K filed on May 17, 2019 (the “May 17, 2019 Form 8-K”) with the Securities and Exchange Commission (the “SEC”), on May 17, 2019, The Dallas Morning News, Inc. (“TDMN”), a wholly-owned subsidiary of DallasNews Corporation, entered into and consummated a Purchase and Sale Agreement (the “Agreement”) with Charter DMN Holdings, LP (“Purchaser”) relating to the property located at 508 Young Street, Dallas, Texas (the “Property”). Pursuant to the Agreement, TDMN sold to Purchaser the Property, together with any and all improvements, appurtenances, rights, privileges and easements benefiting, belonging or pertaining thereto and all of TDMN’s right, title, and interest in and to certain leases, licenses, easements and agreements relating thereto for a purchase price of $28 million, comprising $5.6 million in cash paid at the closing and a Promissory Note (the “Note”) in the original principal amount of $22.4 million with interest payable quarterly commencing on July 1, 2019 with a final installment of all principal and accrued interest due and payable on June 30, 2021. The Note is secured by a first priority lien on the Property. The Agreement and form of Note were previously filed as Exhibit 10.1 to the May 17, 2019 Form 8-K.
Subsequently, as disclosed on a Current Report on Form 8-K filed on June 30, 2021 (the “June 30, 2021 Form 8-K”), Purchaser and TDMN entered into an extension of the maturity date of the Note to June 30, 2022 (the “Second Modification Agreement”). The unpaid, original principal balance of the Note continued to bear interest at the rate of 4.5%, with interest payable quarterly through June 30, 2022. The Second Modification Agreement was previously filed as Exhibit 10.1 to the June 30, 2021 Form 8-K.
Effective June 30, 2022, Purchaser and TDMN entered into an agreement (the “Third Modification Agreement”) extending the maturity date of the Note to July 29, 2022. The unpaid, original principal balance of the Note will bear interest at the rate of 6.5%, due on July 29, 2022. The Note will continue to be secured by a first priority lien on the Property. The foregoing summary of the Third Modification Agreement is not complete and is qualified in its entirety by reference to the Third Modification Agreement, a copy of which is filed as Exhibit 10.1 hereto and which is incorporated herein by reference.