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 (the “Company”), 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 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.
As disclosed on a Current Report on Form 8-K filed on April 6, 2020 (the “April 6, 2020 Form 8-K”), Purchaser requested, and the Company’s Board of Directors approved, an amendment to the Note (the “Modification Agreement”) deferring Purchaser’s interest payment of $194,929.28 that was due April 1, 2020 (the “April Interest Payment”) and adding the April Interest Payment to a second promissory note, together with a 2019 real property tax reconciliation payment due and owing by Purchaser under the Agreement in the amount of $179,784.24 (the “Second Promissory Note”). The Second Promissory Note, in the principal amount of $374,713.52, is secured by a second lien deed of trust on the Property and is due June 30, 2021. The Modification Agreement and the Second Promissory Note were previously filed as Exhibits 10.1 and 10.2 to the April 6, 2020 Form 8-K.
Subsequently, Purchaser requested, and on June 29, 2021, the Company’s Board of Directors approved, a further amendment and extension of the maturity date of the Note to June 30, 2022 (the “Second Modification Agreement”), which TDMN entered into effective June 30, 2021. In connection with the Second Modification Agreement, Purchaser has agreed to pay in full the Second Promissory Note. The unpaid, original principal balance of the Note will continue to bear interest at the rate of 4.5%, with interest payable quarterly through June 30, 2022, the maturity date of the Note. The Note will continue to be secured by a first priority lien on the Property. The foregoing summary of the Second Modification Agreement is not complete and is qualified in its entirety by reference to the Second Modification Agreement filed as Exhibit 10.1 hereto and which is incorporated herein by reference.