Item 1.01 Entry into a Material Definitive Agreement.
On May 17, 2019, The Dallas Morning News, Inc.
(“TDMN”)
, a wholly-owned subsidiary of A. H. Belo 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”).
This property has been actively marketed since February 2018 by the Dallas office of Jones Lang LaSalle, an international commercial real estate firm, and a local real estate consultant.
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, comprised of $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 quarterly installment of all principal and accrued interest due and payable on June 30, 2021 secured by a first priority lien on the Property. If Purchaser (or any individual or entity directly or indirectly controlling, controlled by or under common control with Purchaser) executes a single lease of 200,000 or more square feet for commercial office space on any portion of the Property on or before May 17, 2020, then Purchaser is obligated to pay TDMN a $1 million development premium on the date the lease is executed
, which premium will be paid through an increase in
the outstanding principal amount of the Note by the amount of such premium.
The unpaid principal balance of the Note bears interest at the rate of 3.5% per year from the date of the Note through June 30, 2020 and 4.5% per year from July 1, 2020 through the maturity of the Note.
While no related person has any direct or indirect material interest in this transaction that would require disclosure under Item 404(a) of Regulation S-K, the board was aware of, and considered, certain other relationships between Tyree B. (Ty) Miller, an independent director of the Company, and
Ray W. Washburne, who is both
the president of Purchaser and the sole member and manager of
its
general partner
. Mr. Miller fully recused himself from the board’s discussions, consideration and approval of the transaction. These relationships include
Mr. Miller’s service as sole trustee of a trust for the benefit of members of Mr. Washburne’s immediate family. In addition, trusts for members of Mr. Washburne’s immediate family own 50% of the limited partnership interests in a real estate fund management company and in a registered investment adviser for which Mr. Miller is co-founder and principal. Mr. Miller and Mr. Washburne, or entities controlled by them, are co-investors as limited partners in various real estate investments unrelated to this transaction, including through funds managed and advised by the entities noted above.
The foregoing summary of the Agreement and the Note is not complete and is qualified in its entirety by reference to the Agreement and the Note, which are
filed herewith as Exhibit 10.1 and
incorporated by reference.
A copy of the announcement press release is furnished with this report as Exhibit 99.
1.