Item 1.01 Entry into a Material Definitive Agreement
In connection with the Merger (as defined below), R. R. Donnelley & Sons Company
(the "Company") solicited waivers and consents (the "Consent Solicitation") from
holders of its 6.500% Notes due 2023 (the "Notes") to waive certain provisions
in and adopt certain proposed amendments to the Indenture (as defined below),
including with respect to (i) declaring that the Merger does not constitute a
Change of Control (as defined in the Indenture) under the Indenture and waiving
any obligation of the Company to make a change of control offer in connection
with the Merger, (ii) amending the defined term "Change of Control" in the
Indenture to include a carve-out for certain "Permitted Holders," (iii) adding
to, amending, supplementing or changing certain other defined terms contained in
the Indenture related to the foregoing and (iv) amending the reporting covenant
in the Indenture, collectively the "Proposed Amendments." The Company received
the requisite consents from holders of the Notes.
On February 9, 2022, the Company entered into a Thirteenth Supplemental
Indenture, dated as of February 9, 2022 (the "Thirteenth Supplemental
Indenture"), to the Indenture, dated as of January 3, 2007 (the "Base
Indenture"), between the Company and Wells Fargo Bank, National Association (as
successor to LaSalle Bank National Association), as trustee (the "Trustee"), as
supplemented by the Ninth Supplemental Indenture, dated as of November 12, 2013
(the "Ninth Supplemental Indenture"), between the Company and the Trustee, and
as further supplemented by the Eleventh Supplemental Indenture, dated as of
June 18, 2020 (collectively with the Base Indenture and the Ninth Supplemental
Indenture, the "Indenture"), by and between the Company and the Trustee,
governing the Notes, giving effect to the Proposed Amendments.
The Thirteenth Supplemental Indenture is effective and constitutes a binding
agreement between the Company and the Trustee. However, the Proposed Amendments
will not become operative until immediately prior to the consummation of the
Merger and will cease to be operative if the Merger is not consummated or the
consent consideration is not paid to the holders thereof that validly delivered
and did not revoke such consents.
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In connection with the Merger, on February 7, 2022, the Company and certain of
its domestic subsidiaries (the "Guarantors") entered into Amendment No. 1 to
Credit Agreement (the "TLB Amendment"), with the lenders party thereto, Bank of
America, N.A., as existing administrative agent (in such capacity, the "Existing
TLB Agent"), and Jefferies Finance LLC, as successor administrative agent (in
such capacity, the "Successor TLB Agent"), which amended that certain Credit
Agreement, dated as of October 15, 2018 (the "Existing TLB Credit Agreement"
and, as amended by the TLB Amendment, the "Amended TLB Credit Agreement"), by
and among the Company, as borrower, the Guarantors, as guarantors, the lenders
party thereto and the Existing TLB Agent.
The TLB Amendment amends the Existing TLB Credit Agreement to: (i) waive any
potential change of control in connection with the transactions contemplated by
the Merger Agreement; (ii) provide for a tranche of replacement term loans to
refinance the $150,000,000 of existing term loans; (iii) provide for a tranche
of incremental term loans in an aggregate principal amount not to exceed
$600,000,000, which shall be fungible with the replacement term loans,
(iv) extend the maturity date of all term loans to November 1, 2026; (v) modify
the pricing and change the reference rate to be based on the secured overnight
financing rate ("SOFR"); (vi) replace Bank of America, N.A. with Jefferies
Finance LLC as administrative agent; (vii) provide for certain other
modifications and waivers to the Existing TLB Credit Agreement, including
modifications to certain restrictive covenants; and (viii) expressly permit the
Merger and the other transactions contemplated by the Merger Agreement;
provided, however, the effectiveness of the TLB Amendment is contingent on the
occurrence of the effective time of the Merger contemplated by the Merger
Agreement.
The Consent Solicitation and the TBL Amendment were made at the request of
Chatham Delta Parent, Inc. ("Parent") pursuant to the terms of the previously
announced Agreement and Plan of Merger (the "Merger Agreement") entered into on
December 14, 2021, by and among the Company, Parent and Chatham Delta
Acquisition Sub, Inc. ("Acquisition Sub"). Under the terms of the Merger
Agreement, Acquisition Sub will merge with and into the Company (the "Merger"),
with the Company surviving the Merger as a direct or indirect wholly owned
subsidiary of Parent.
Pursuant to the terms of the Merger Agreement, Parent is responsible for
(i) paying all fees and expenses the Company incurs in connection with the
Consent Solicitation and the TLB Amendment and (ii) indemnifying the Company
from and against any and all losses the Company incurs in connection with the
Consent Solicitation and the TLB Amendment.
The foregoing description of the Thirteenth Supplemental Indentures does not
purport to be complete and is qualified in its entirety by reference to such
document. A copy of the Thirteenth Supplemental Indenture is filed as Exhibit
4.1 to this Current Report on Form 8-K and is incorporated herein by reference.
The foregoing description of the Merger Agreement, the TLB Amendment and related
matters does not purport to be complete and is qualified in its entirety by
reference to the full text of the Merger Agreement, a copy of which was included
as Exhibit 2.1 to the Form 8-K filed by the Company with the U.S. Securities and
Exchange Commission on December 17, 2021, and the TLB Amendment, copies of which
are attached as Exhibit 10.1 and Exhibit 10.2 to this Current Report on Form 8-K
and incorporated herein by reference.
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Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The information set forth in Item 1.01 of this Current Report on Form 8-K with
respect to the TLB Amendment is incorporated by reference under this Item 2.03
insofar as it relates to the creation of a direct financial obligation.
Item 8.01. Other Events.
On February 7, 2022, the Company issued a press release announcing (i) the
expiration of the Consent Solicitation with respect to the Notes and (ii) the
extension of the Consent Solicitation with respect to the Company's 6.625%
Debentures due 2029 from 5:00 p.m., New York City time, on February 4, 2022 to
5:00 p.m., New York City time, on February 11, 2022. A copy of the press release
is filed as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated
herein by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit
No. Description of Exhibit
4.1 Thirteenth Supplemental Indenture to the Indenture, dated as of
January 3, 2007, between the Company and Wells Fargo Bank, National
Association (as successor to LaSalle Bank National Association), as
trustee
10.1 Amendment No. 1 to Credit Agreement, dated as of February 7, 2022,
among R. R. Donnelley and Sons Company, the guarantors party thereto,
the lenders party thereto, Bank of America, N.A., as existing
administrative agent, and Jefferies Finance LLC, as successor
administrative agent.
99.1 Press Release issued by the Company on February 7, 2022
104 Cover Page Interactive Data File - the cover page XBRL tags are
embedded within the Inline XBRL document
Use of Forward-Looking Statements
This communication includes certain "forward-looking statements" within the
meaning of, and subject to the safe harbor created by, the federal securities
laws, including statements related to the proposed Merger. These forward-looking
statements are based on the Company's current expectations, estimates and
projections regarding, among other things, the expected date of closing of the
Merger and the potential benefits thereof, its business and industry,
management's beliefs and certain assumptions made by the Company, all of which
are subject to change. Forward-looking statements often contain words such as
"expect," "anticipate," "intend," "aims," "plan," "believe," "could," "seek,"
"see," "will," "may," "would," "might," "considered," "potential," "estimate,"
"continue," "likely," "target" or similar expressions or the negatives of these
words or other comparable terminology that convey uncertainty of future events
or outcomes. By their nature, forward-looking statements address matters that
involve risks and uncertainties because they relate to events and depend upon
future circumstances that may or may not occur, such as the consummation of the
Merger and the anticipated benefits thereof. These and other forward-looking
statements are not guarantees of future results and are subject to risks,
uncertainties and
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assumptions that could cause actual results to differ materially from those
expressed in any forward-looking statements. Important risk factors that may
cause such a difference include (i) impediments to the completion of the Merger
on anticipated terms and timing, including obtaining required stockholder and
regulatory approvals and the satisfaction of other conditions to the completion
of the Merger; (ii) significant transaction costs associated with the Merger;
(iii) potential litigation relating to the Merger, including the effects of any
outcomes related thereto; (iv) the risk that disruptions from the Merger will
harm the Company's business, including current plans and operations; (v) the
ability of the Company to retain and hire key personnel; (vi) potential adverse
reactions or changes to business relationships resulting from the announcement
or completion of the Merger; (vii) legislative, regulatory and economic
developments affecting the Company's business; (viii) general economic and
market developments and conditions; (ix) the evolving legal, regulatory and tax
regimes under which the Company operates; (x) potential business uncertainty,
including changes to existing business relationships, during the pendency of the
Merger that could affect the Company's financial performance; (xi) certain
restrictions during the pendency of the Merger that may impact the Company's
ability to pursue certain business opportunities or strategic transactions;
(xii) continued availability of capital and financing and rating agency actions;
(xiii) the ability of affiliates of Chatham Asset Management, LLC to obtain the
necessary financing arrangements set forth in the commitment letters received in
connection with the Merger; (xiv) the occurrence of any event, change or other
circumstance that could give rise to the termination of the Merger, including in
circumstances requiring the Company to pay expense reimbursements to affiliates
of Chatham Asset Management, LLC under the Merger Agreement;
(xv) unpredictability and severity of catastrophic events, including acts of
terrorism, outbreak of war or hostilities, civil unrest, adverse climate or
weather events or the COVID-19 pandemic or other public health emergencies, as
well as the Company's response to any of the aforementioned factors;
(xvi) competitive responses to the Merger; (xvii) the risks and uncertainties
pertaining to the Company's business, including those detailed under the heading
"Risk Factors" and elsewhere in the Company's public filings with the U.S.
Securities and Exchange Commission (the "SEC"); and (xviii) the risks and
uncertainties described in the proxy statement filed in connection with the
Merger and available from the sources indicated below (the "Proxy Statement").
These risks, as well as other risks associated with the Merger are more fully
discussed in the Proxy Statement. While the list of factors presented here is,
and the list of factors presented in the Proxy Statement are, considered
representative, no such list should be considered to be a complete statement of
all risks and uncertainties. Unlisted factors may present significant additional
obstacles to the realization of forward-looking statements. Consequences of
material differences in results as compared with those anticipated in the
forward-looking statements could include, among other things, business
disruption, operational problems, financial loss, legal liability to third
parties and similar risks, any of which could have a material impact on the
Company's financial condition, results of operations, credit rating or liquidity
or ability to consummate the Merger. These forward-looking statements speak only
as of the date they are made, and the Company does not undertake to and
disclaims any obligation to publicly release the results of any updates or
revisions to these forward-looking statements that may be made to reflect future
events or circumstances after the date of such statements or to reflect the
occurrence of anticipated or unanticipated events.
Important Additional Information and Where to Find It
In connection with the Merger, the Company has filed with the SEC and mailed to
its stockholders the definitive Proxy Statement and may file certain other
documents regarding the Merger with the SEC. INVESTORS AND STOCKHOLDERS ARE
URGED TO READ THE PROXY STATEMENT (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS
THERETO) AND ANY OTHER RELEVANT DOCUMENTS THAT ARE FILED OR WILL BE FILED WITH
THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY
CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION ABOUT THE MERGER AND RELATED
MATTERS. Investors and stockholders may obtain, free of charge, copies of the
Proxy Statement and
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other relevant documents filed with the SEC by the Company, once such documents
have been filed with the SEC, through the website maintained by the SEC at
www.sec.gov, through the Company's investor relations website at
investor.rrd.com or by contacting the Company's investor relations department at
the following:
Telephone: 630-322-7111
E-mail: investor.info@rrd.com
Attn.: Johan Nystedt
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