XEROX CORP 8-K

What Happened

• On February 17, 2026, Xerox Corporation and certain investors (including funds/accounts managed by Angelo, Gordon & Co.) completed a joint venture financing with XRX Brandco Holdings LLC (“IPCo Holdings”). The investors provided $405,000,000 of senior secured term loans and purchased $45,000,000 of Class A Units (total $450,000,000). Proceeds were distributed by IPCo Holdings to Xerox for general corporate purposes, including liquidity, accelerating the company’s reinvention and the Lexmark integration, and potentially addressing Xerox Holdings’ capital structure.
• In connection with the joint venture, Xerox contributed intellectual property and related assets (including Xerox trademarks) to IPCo Holdings and received Class B Units. Xerox also contributed about $4,750,000 in cash to IPCo Holdings’ common equity. IPCo Holdings and its subsidiary XRX Brandco LLC (“IPCo”) borrowed under a Credit Agreement dated February 17, 2026; the Term Loans mature in five years, carry margins of 7.125% (ABR) or 8.125% (SOFR) above the base rate, and amortize at 4.50% per year with quarterly payments starting after the quarter ending September 30, 2026.
• Xerox Holdings, Xerox, IPCo Holdings and IPCo also entered into a Shared Services and License Agreement (SSLA). Under the SSLA IPCo granted license rights in the contributed IP to Xerox and, at Holdings’ election, certain subsidiaries, and the Licensees must pay IPCo a royalty equal to 2.0% of specified consolidated revenue generated from the Contributed IP. The SSLA term is initially ten years with automatic five-year renewals and includes guarantees, covenants and events of default that can limit certain transactions and require specified asset coverage ratios.

Key Details

• Total joint venture financing: $405,000,000 senior secured term loans + $45,000,000 Class A Units = $450,000,000.
• Credit terms: maturity = 5 years; interest = ABR + 7.125% or term SOFR + 8.125%; amortization = 4.50% of original principal per year (quarterly).
• Royalty/license: License grants use of Contributed IP to Xerox and certain subsidiaries; Licensees pay IPCo a royalty of 2.0% of specified consolidated revenue, paid quarterly.
• Security & covenants: Term Loans secured by substantially all assets of IPCo Holdings/IPCo; SSLA contains guarantees and covenants limiting dividends, indebtedness, asset sales and requires certain asset coverage ratios.

Why It Matters

• The transaction provides immediate liquidity to Xerox ($450M) to support operations, the Lexmark integration, and possible debt actions — potentially improving near-term cash flexibility.
• The contributed IP sits in IPCo Holdings and is subject to a licensing and guarantee structure that creates ongoing royalty obligations (2.0% of specified revenue) and contractual covenants that may limit Holdings’ and certain subsidiaries’ financial flexibility.
• The Term Loans carry relatively high margins and scheduled amortization, which will affect IPCo’s cash outflows and are secured by IPCo assets; investors should note the added leverage and contractual restrictions disclosed in the 8-K.

(Press release announcing these transactions was issued Feb 17, 2026 and is filed as Exhibit 99.1 to the 8-K.)