First Data 2011 Annual Report Download - page 101

Management Agreement
First Data has a management agreement with affiliates of KKR (the "Management Agreement") pursuant to which KKR
provides management, consulting, financial and other advisory services to the Company. Pursuant to the Management Agreement,
KKR receives an aggregate annual management fee and reimbursement of out-of-pocket expenses incurred in connection with the
provision of services. The Management Agreement has an initial term expiring on December 31, 2019, provided that the term will be
extended annually thereafter unless the Company provides prior written notice of its desire not to automatically extend the term. The
Management Agreement provides that KKR also is entitled to receive a fee equal to a percentage of the gross transaction value in
connection with certain subsequent financing, acquisition, disposition and change of control transactions, as well as a termination fee
based on the net present value of future payment obligations under the Management Agreement in the event of an initial public
offering or under certain other circumstances. The Management Agreement terminates automatically upon the consummation of an
initial public offering and may be terminated at any time by mutual consent of the Company and KKR. The Management Agreement
also contains customary exculpation and indemnification provisions in favor of KKR and its affiliates. During 2011, 2010 and 2009,
the Company incurred $20.0 million, $20.5 million, $21.3 million, respectively, of management fees.
Certain members of the Company's Board of Directors are affiliated with KKR.
Transactions and Balances Involving Company Affiliates
In August 2010, the Company paid KKR Capital Markets LLC ("KCM"), an affiliate of KKR, $5 million for services rendered
in arranging for the amendment of the Company's credit agreement.
On November 17, 2010, the Company entered into a dealer manager agreement and fee letter (collectively the "Dealer Manager
Agreement") with, among others, KCM, pursuant to which KCM agreed to act as a dealer manager for the exchange of certain of the
Company's existing notes for new securities (the "Exchange"). Under the terms of the Dealer Manager Agreement, upon completion of
the Exchange in December 2010, the Company paid $26.1 million to KCM.
On April 12, 2011 the Company entered into an Amended and Restated Engagement Letter with KCM and others, pursuant to
which KCM agreed to assist in arranging and coordinating the Company's request for an extension of the maturity of certain
commitment and loans under its senior secured lending facility. The Company paid KCM $1.25 million in April 2011 for such
services.
On April 13, 2011, the Company entered into a Purchase Agreement with, among others, KCM, in which KCM agreed to serve
as one of the initial purchasers for an offering of secured notes and receive a portion of the underwriting commission for the offering.
Under the terms of the agreement, the Company paid underwriting commissions of $0.5 million to KCM.
During 2011 and 2010 the Company paid $12.0 million and $7.3 million, respectively, of expenses to Capstone Consulting
LLC, a consulting company that works exclusively with KKR's portfolio companies, for consulting, financial and other advisory
services provided to the Company.
Note 11: Commitments and Contingencies
Operating Leases
The Company leases certain of its facilities and equipment under operating lease agreements, substantially all of which contain
renewal options and escalation provisions. The following table presents the amounts associated with total rent expense for operating
leases:
Year ended December 31,
(in millions) Amount
2011 $ 81.3
2010 83.7
2009 80.5
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