CONDUENT INCORPORATED (NYSE:CNDT*) Files An 8-K Entry into a Material Definitive Agreement

Item1.01.

Credit Facility

In connection with the previously announced spin-off (the
Spin-Off) of Conduent Incorporated (the Company) from Xerox
Corporation (Xerox), on December 7, 2016 (the Closing Date), the
Company entered into a credit agreement (the Credit Agreement)
among the Company, its subsidiaries Xerox Business Services, LLC
(XBS), Affiliated Computer Services International B.V. (the Dutch
Borrower and, together with XBS, the Borrowers) and Conduent
Finance, Inc. (CFI), the lenders party thereto and JPMorgan Chase
Bank, N.A., as administrative agent. The Credit Agreement
provides for senior secured credit facilities consisting of (i) a
senior secured term loan A facility in an aggregate principal
amount of up to $700 million with a five-year maturity (the Term
Loan A Facility), of which the equivalent of approximately
$278million was borrowed in Euros by the Dutch Borrower on
December 8, 2016, and the remainder of which is available to be
borrowed by XBS on or prior to the date of completion of the
Spin-Off, (ii) a senior secured term loan B facility in an
aggregate principal amount of $750 million with a seven-year
maturity (the Term Loan B Facility and, together with the Term
Loan A Facility, the Term Loan Facilities), which was borrowed by
XBS on the Closing Date and (iii) a senior secured revolving
credit facility in an aggregate principal amount of $750 million
with a five-year maturity (the Revolving Credit Facility and,
together with the Term Loan Facilities, the Senior Credit
Facilities), which, from and after the date of completion of the
Spin-Off, will be available to be borrowed by the Borrowers, and
of which up to $300 million will be available for the issuance of
letters of credit from time to time.

We expect to use the net proceeds of borrowings under the Term
Loan Facilities to purchase our international subsidiaries from
Xerox, to pay a distribution to Xerox and for working capital and
other general corporate purposes. Future borrowings under the
Senior Credit Facilities will be subject to customary borrowing
conditions.

The Credit Agreement permits the Borrowers to incur incremental
term loan borrowings and/or increase commitments under the
Revolving Credit Facility, subject to certain limitations and the
satisfaction of certain conditions, in an aggregate amount not to
exceed (i) $300 million plus, (ii) if the senior secured net
leverage ratio of XBS and its subsidiaries does not exceed 2.25
to 1.00 on a pro forma basis (without giving effect to any
incurrence under clause (i) that is incurred substantially
simultaneously with amounts incurred under clause (ii)), an
unlimited amount.

All obligations under the Senior Credit Facilities are
unconditionally guaranteed by the Company, XBS, CFI and the
existing and future direct and indirect wholly owned domestic
subsidiaries of XBS (subject to certain exceptions). All
obligations under the Senior Credit Facilities, and the
guarantees of those obligations, are secured, subject to certain
exceptions, by substantially all of the assets of XBS and the
guarantors under the Senior Credit Facilities (other than the
Company and CFI), including a first-priority pledge of all of the
capital stock of XBS and the subsidiaries of XBS directly held by
XBS or the guarantors (other than the Company and CFI) under the
Senior Credit Facilities (which pledge, in the case of any
foreign subsidiary, will be limited to 65% of the capital stock
of any first-tier foreign subsidiary).

Under the Credit Agreement, the applicable Borrower will be
required to make principal payments under the Term Loan A
Facility of 7.5% of the original aggregate principal amount
during the second year following the date of the Spin-Off, 7.5%
of the original aggregate principal amount during the third year
following the date of the Spin-Off, 10.0% of the original
aggregate principal amount during the fourth year following the
date of the Spin-Off and 15.0% of the original aggregate
principal amount during the fifth year following the date of the
Spin-Off, and XBS will be required to make principal payments
under the Term Loan B Facility of 1.0% of the original aggregate
principal amount per year during the term of the facility.

All remaining outstanding principal and interest under the Term
Loan A Facility and the Term Loan B Facility will be due and
payable on the date that is five years and seven years,
respectively, after the Closing Date. All then outstanding
principal and interest under the Revolving Credit Facility will
be due and payable, and all commitments thereunder will
terminate, on the date that is five years after the Closing Date.

XBS is permitted to prepay amounts outstanding under the Senior
Credit Facilities at any time. The Credit Agreement contains a
soft call prepayment penalty whereby lenders under the Term Loan
B Facility will, subject to customary carve-outs and exceptions,
be entitled to receive a prepayment fee equal to 1% of the
principal repaid if the Term Loan B Facility is voluntarily
refinanced or repriced to certain refinancing transactions within
twelve months of the Closing Date. Subject to certain exceptions,
the Term Loan Facilities will require XBS to prepay certain
amounts outstanding thereunder with the net cash proceeds of
certain asset sales, certain casualty events, certain issuances
of debt and, in the case of the Term Loan B Facility, with excess
cash flow.

Borrowings under the Term Loan A Facility and the Revolving
Credit Facility will bear interest at a rate equal to either the
sum of a base rate plus a margin ranging from 1.00% to 1.50% or
the sum of a eurocurrency rate plus a margin ranging from 2.00%
to 2.50%, with either such margin varying according to the total
net leverage ratio of XBS. The initial margin is 1.25% in the
case of base rate borrowings, or 2.25% in the case of
eurocurrency borrowings.Borrowings under the Term Loan B Facility
will bear interest at a rate equal to either the sum of a base
rate plus 4.50% or the sum of a eurocurrency rate plus
5.50%.Borrowings incurred by the Dutch Borrower under the Term
Loan A Facility and the Revolving Credit Facility are only
available as eurocurrency loans.XBS will be required to pay a
quarterly commitment fee under the Revolving Credit Facility at a
rate ranging from 0.35% to 0.40% per annum, with such rate
varying according to the total net leverage ratio of XBS and the
actual daily unused portion of the commitments during the
applicable quarter. The initial rate is 0.375%. XBS will also be
required to pay a fee equal to the spread over adjusted LIBOR on
the aggregate face amount of outstanding letters of credit under
the Revolving Credit Facility. In addition, the applicable
Borrower will pay a customary issuance fee in respect to letters
of credit issued under our Revolving Credit Facility.

The Credit Agreement contains certain customary affirmative and
negative covenants, restrictions and events of default, in each
case subject to certain exceptions and thresholds.Under the
Credit Agreement, XBS will be required to maintain a total net
leverage ratio not to exceed (i) 4.25 to 1.00 with respect to
each fiscal quarter (commencing with the first full fiscal
quarter ending after the date of consummation of the Spin-Off)
until the fiscal quarter ending September 30, 2018 and (ii) 3.75
to 1.00 with respect to each fiscal quarter thereafter. If the
Borrowers do not comply with the covenants in the Credit
Agreement, the lenders may, subject to customary cure rights,
require the immediate payment of all amounts outstanding under
the Senior Credit Facilities.

The foregoing description of the Senior Credit Facilities does
not purport to be complete and is qualified in its entirety by
reference to the Credit Agreement, which is filed herewith as
Exhibit 10.1 and is incorporated herein by reference.

The Indenture

On December 7, 2016, XBS and CFI (together, the Issuers), each a
wholly owned subsidiary of the Company, issued $510 million
aggregate principal amount of 10.500% senior unsecured notes due
2024 (the Notes).Xerox will not be a guarantor or otherwise
provide credit support for the Notes.

We intend to use the proceeds of the issuance of the Notes to
fund a portion of the previously announced transfer of cash by us
to Xerox in connection with theSpin-Off.

The Notes have not been, and will not be, registered under the
United States Securities Act of 1933, as amended (the Securities
Act), or the securities laws of any state or other jurisdiction
and may not be offered or sold in the United States absent
registration or an applicable exemption from the registration
requirements of the Securities Act and any other applicable
securities laws.The Notes were offered in the United States only
to persons reasonably believed to be qualified institutional
buyers in reliance on the exemption from registration set forth
in Rule 144A under the Securities Act and outside the United
States to non-U.S. persons in reliance on the exemption from
registration set forth in Regulation S under the Securities Act.

The Notes were issued to an indenture (the Indenture), dated as
of December 7, 2016, among the Issuers, the Guarantors (as
defined below) and U.S. Bank National Association, as trustee
(the Trustee).

The Notes mature on December 15, 2024 and bear interest at a rate
of 10.500% per year.Interest on the Notes is payable on June15
and December15 of each year, beginning on June 15, 2017.

The Notes are jointly and severally guaranteed on a senior
unsecured basis by the Company and each of the existing and
future domestic subsidiaries of CFI or XBS that guarantee the
obligations under the Senior Credit Facilities. The Notes are
unsecured and senior obligations of the Issuers.The guarantees
are unsecured and senior obligations of the guarantors.

If (1) on or prior to the date the Spin-Off is completed, (A) the
Issuers notify the Trustee in writing that Xerox has determined,
in its sole discretion, not to pursue the completion of the
Spin-Off or (B) Xerox, in its sole discretion, publicly announces
that it will not pursue the completion of the Spin-Off or (2) the
Spin-Off is not completed by March 31, 2017, then the Issuers
will be required to redeem the Notes, in whole but not in part,
at a redemption price equal to 50% of the issue price of the
Notes, plus accrued and unpaid interest, if any, to, but
excluding, the redemption date.

At the option of the Issuers, the Notes will be redeemable in
whole or in part, at any time prior to December 15, 2020, at a
price equal to 50% of the aggregate principal amount of the Notes
plus accrued and unpaid interest, if any, to, but excluding, the
redemption date plus a make-whole premium.

The Issuers may also redeem the Notes, in whole or in part, at
any time on or after December 15, 2020, at the redemption prices
specified in the Indenture, plus accrued and unpaid interest, if
any, to (but excluding) the redemption date.

Additionally, at any time prior to December 15, 2019, the Issuers
may redeem up to 35% of the aggregate principal amount of the
Notes with the net cash proceeds from certain equity offerings at
a price equal to 110.500% of the principal amount of the Notes,
plus accrued and unpaid interest, if any, to, but excluding, the
redemption date.

The Indenture includes certain covenants relating to debt
incurrence, liens, restricted payments, assets sales and
transactions with affiliates, changes in control and mergers or
sales of all or substantially all of the Issuers assets.

The Indenture provides for customary events of default (subject,
in certain cases, to customary grace periods), which include
nonpayment on the Notes, breach of covenants in the Indenture,
payment defaults or acceleration of other indebtedness over a
specified threshold, failure to pay certain judgments over a
specified threshold and certain events of bankruptcy and
insolvency.Generally, if an event of default occurs, the Trustee
under the Indenture or holders of at least 25% of the aggregate
principal amount of all then outstanding Notes may declare the
principal of, and accrued but unpaid interest, if any, on, all
the then outstanding Notes to be due and payable immediately.

The foregoing description of the Indenture does not purport to be
complete and is qualified in its entirety by reference to the
Indenture, which is filed herewith as Exhibit 4.1 and is
incorporated herein by reference.

The information set forth in Item 1.01 of this Current Report on
Form 8-K is incorporated into this Item 2.03 by reference.

Item9.01. Financial Statements and Exhibits.

(d) Exhibits.

About CONDUENT INCORPORATED (NYSE:CNDT*)

Conduent Incorporated is a business process services company. The Company provides business process services with expertise in transaction-intensive processing, analytics and automation. The Company is engaged in providing business and government services. The Company offers customers in various areas, which include health solutions, learning services, digital payments, legal and compliance solutions, human resources, finance and accounting, procurement solutions and digital transformation. The Company also serves customers in various areas, such as aerospace and defense, automotive services, banking, chemical, insurance, pharma and life sciences, retail and consumer products, transportation, travel and utilities, among others.