Item 1.01. Entry into a Material Definitive Agreement.
On October 18, 2022, RXO, Inc. (“RXO”),
a wholly owned subsidiary of XPO Logistics, Inc. (the “company”), entered into (i) a revolving Credit Agreement with the guarantors
from time to time party thereto, the lenders and other parties from time to time party thereto and Citibank, N.A., as administrative agent
and an issuing lender (the “Revolving Credit Agreement”) and (ii) a Term Loan Credit Agreement with the guarantors from time
to time party thereto, the lenders and other parties from time to time party thereto and Citibank, N.A., as administrative agent (the
“Term Loan Credit Agreement”). RXO is expected to become a separate publicly traded company through its previously announced
spin-off (the “spin-off”).
Revolving Credit Agreement
The Revolving Credit Agreement provides
for a five-year unsecured, multicurrency revolving credit facility. Initially, the aggregate commitments of all lenders under the Revolving
Credit Agreement equals $500 million, of which $50 million will be available for the issuance of letters of credit. The initial availability
of revolving loans and letters of credit under the Revolving Credit Agreement is subject to the satisfaction (or waiver) of certain conditions
set forth therein, including the consummation of the spin-off on or prior to the date set forth in the Revolving Credit Agreement (or
a later date as agreed by the requisite lenders pursuant to the Revolving Credit Agreement). The date on which such conditions are satisfied
(or waived) is the “Revolving Closing Date.”
On and following the Revolving Closing
Date, RXO may, subject to the satisfaction (or waiver) of certain conditions set forth in the Revolving Credit Agreement, borrow, repay
and reborrow revolving loans at any time prior to the earlier of (a) the fifth anniversary of the Revolving Closing Date, or any later
date to which such date may be extended pursuant to the Revolving Credit Agreement and (b) the date of termination in whole of the lenders’
commitments under the Revolving Credit Agreement in accordance with the terms thereof. Revolving loans and letters of credit will be available,
at the option of RXO, in U.S. dollars, Canadian dollars or any other currency approved in accordance with the terms of the Revolving Credit
Agreement.
The proceeds of borrowings under the Revolving Credit Agreement may
be used for general corporate purposes (which may include, without limitation, financing the consideration for and fees, costs and
expenses related to any acquisition).
Loans under the Revolving Credit
Agreement will bear interest at a fluctuating rate per annum equal to (a) with respect to borrowings in U.S. dollars, at RXO’s
option, the alternate base rate or a rate referencing the Secured Overnight Funding Rate and (b) with respect to borrowings in Canadian
Dollars, the reserve adjusted CDOR rate, in each case, plus an applicable margin calculated based on RXO’s credit ratings.
From and after the Revolving Closing Date, the obligations under the Revolving
Credit Agreement are and will be, as applicable, guaranteed by RXO’s existing and future wholly-owned domestic subsidiaries, subject
to certain exceptions. If RXO achieves certain credit ratings, and certain other conditions are satisfied, the guarantees will be released.
The Revolving Credit Agreement contains
representations and warranties, affirmative and negative covenants and events of default customary for unsecured financings of this type,
including negative covenants that, among other things, after the spin-off, will limit the ability of RXO and its subsidiaries to incur
liens, limit the ability of RXO to make certain fundamental changes and limit the ability of certain of RXO’s subsidiaries to incur
indebtedness, in each case subject to a number of important exceptions and qualifications. In addition, the Revolving Credit Agreement
requires, after the spin-off, RXO to maintain a maximum consolidated leverage ratio and a minimum interest coverage ratio.
Term Loan Credit Agreement
The Term Loan Credit Agreement provides for a five-year $100 million
unsecured term loan facility that may be borrowed by RXO in a single draw following (or within one business day prior to) consummation
of the spin-off, subject to the satisfaction (or waiver) of certain conditions set forth therein. The date on which such conditions are
satisfied (or waived) is the “Term Loan Closing Date”.
The proceeds of borrowings under the Term Loan Credit Agreement may
be used to fund a distribution to the company and for general corporate purposes (which may include, without limitation, financing
the consideration for and fees, costs and expenses related to any acquisition).
Beginning with the fiscal quarter ending March 31, 2025, the Term Loan
Credit Agreement will amortize on a quarterly basis in an amount equal to (i) 5% per annum for the first eight fiscal quarters ending
on or after such date and (ii) 10% per annum for each fiscal quarter ending thereafter.
Loans under the Term Loan Credit Agreement will bear interest at a
fluctuating rate per annum equal to, at RXO’s option, the alternate base rate or a rate referencing the Secured Overnight Funding
Rate, in each case, plus an applicable margin calculated based on RXO’s credit ratings.
From and after the Term Loan Closing Date, the obligations under the Term Loan
Credit Agreement are and will be, as applicable, guaranteed by RXO’s existing and future wholly-owned domestic subsidiaries, subject
to certain exceptions. If RXO achieves certain credit ratings, and certain other conditions are satisfied, the guarantees will be released.
The Term Loan Credit Agreement contains representations and warranties,
affirmative and negative covenants and events of default customary for unsecured financings of this type, including negative covenants
that, among other things, after the spin-off, will limit the ability of RXO and its subsidiaries to incur liens, limit the ability of
RXO to make certain fundamental changes and limit the ability of certain of RXO’s subsidiaries to incur indebtedness, in each case
subject to a number of important exceptions and qualifications. In addition, the Term Loan Credit Agreement requires, after the spin-off,
RXO to maintain a maximum consolidated leverage ratio and a minimum interest coverage ratio.
Copies of the Revolving Credit Agreement
and Term Loan Credit Agreement are included herein as Exhibits 10.1 and 10.2, respectively, and are incorporated herein by reference.
The foregoing descriptions of the Revolving Credit Agreement and Term Loan Credit Agreement are qualified in their entirety by reference
to the full text of the Revolving Credit Agreement and the Term Loan Credit Agreement, respectively.
Many of the lenders under the Revolving Credit Agreement and Term Loan
Credit Agreement and/or their affiliates have in the past performed, and may in the future from time to time perform, investment banking,
financial advisory, lending and/or commercial banking services, or other services for the company and its subsidiaries, for which they
have received, and may in the future receive, customary compensation and expense reimbursement.