First Data 2011 Annual Report Download - page 95

The notes rank equally and ratably with all of FDC's existing and future senior indebtedness and are senior to any of FDC's
subordinated indebtedness. The notes are guaranteed on a senior secured basis by each domestic subsidiary that guarantees FDC's
senior secured credit facilities.
The notes and guarantees also are secured by first-priority liens, subject to permitted liens, on FDC's and its subsidiary
guarantors' assets, subject to certain exceptions, that will from time to time secure FDC's senior secured credit facilities and other first-
lien indebtedness on a first-priority basis. The notes share equally in the collateral securing FDC's senior secured credit facilities.
8.875% Senior Secured First Lien Notes
FDC's 8.875% senior secured notes due August 15, 2020 require the payment of interest semi-annually on February 15 and
August 15 of each year.
FDC may redeem the notes, in whole or in part, at any time prior to August 15, 2015 at a price equal to 100% of the principal
amount of the notes redeemed plus accrued and unpaid interest to the redemption date and an additional premium as defined.
Thereafter, FDC may redeem the notes, in whole or in part, at established redemption prices, plus accrued and unpaid interest to the
redemption date. In addition, on or prior to August 15, 2013, FDC may redeem up to 35% of the notes with the net cash proceeds from
certain equity offerings at established redemption prices plus accrued and unpaid interest to the redemption date.
The notes are equally and ratably secured on a first-priority basis with all existing and future obligations of FDC under any
existing and future first lien obligations by all of the assets of FDC and its subsidiary guarantors that secure the senior secured credit
facility, subject to permitted liens. The notes rank equal in right of payment with all existing and future senior indebtedness of FDC
but are effectively senior to all of FDC and guarantor subsidiaries unsecured indebtedness to the extent of the value of the collateral
and are senior in right of payment to any subordinated indebtedness of FDC. The notes are effectively subordinated to any obligations
secured by liens permitted under the indenture for the notes and structurally subordinated to any existing and future indebtedness and
liabilities of non-guarantor subsidiaries, including all foreign subsidiaries.
Senior Secured Second Lien Notes
Interest on the 8.25% cash-pay notes is payable in cash, accrues interest at the rate of 8.25% per annum and is payable semi-
annually in arrears on January 15 and July 15. The 8.25% cash-pay notes mature on January 15, 2021.
Cash interest on the PIK toggle notes accrues at a rate of 8.75% per annum and PIK interest accrues at a rate of 10.00% per
annum. The initial interest payment on the PIK toggle notes will be payable in cash. For any interest period thereafter through and
including the interest period ending January 15, 2014, FDC may elect to pay interest on the PIK toggle notes (i) entirely in cash,
(ii) entirely by increasing the aggregate principal amount of the outstanding PIK toggle notes or by issuing PIK notes ("PIK Interest"),
or (iii) on 50% of the outstanding aggregate principal amount of the PIK toggle notes in cash and on 50% of the outstanding aggregate
principal amount of the outstanding PIK toggle notes by increasing the aggregate principal amount of the outstanding PIK toggle notes
or by issuing PIK notes ("Partial PIK Interest"). After January 15, 2014, all interest on the PIK toggle notes will be payable in cash. If
FDC elects to pay PIK Interest or Partial PIK Interest, FDC will increase the principal amount of the PIK toggle notes or issue PIK
toggle notes in an amount equal to the amount of PIK Interest or the portion of Partial PIK Interest payable in PIK toggle notes for the
applicable interest payment period to holders of the PIK toggle notes on the relevant record date. As of December 31, 2011 and 2010,
FDC elected to pay interest on the notes entirely in cash. The PIK toggle notes mature on January 15, 2022.
FDC may redeem the second lien notes, in whole or in part, at any time prior to January 15, 2016, at a price equal to 100% of
the principal amount of the notes plus accrued and unpaid interest to the redemption date and a "make-whole premium." Thereafter,
FDC may redeem the second lien notes, in whole or in part, at established redemption prices. In addition, on or prior to January 15,
2014, FDC may redeem up to 35% of the aggregate principal amount of the notes with the net cash proceeds from certain equity
offerings at established redemption prices.
The second lien notes (i) rank senior in right of payment to any existing and future subordinated indebtedness, (ii) rank equally
in right of payment with all of FDC's existing and future senior indebtedness, (iii) are effectively senior in right of payment to
indebtedness under FDC's existing senior unsecured notes to the extent of the collateral securing the second lien notes, (iv) are
effectively junior in right of payment with indebtedness under FDC's senior secured credit facilities and other first lien obligations to
the extent of the collateral securing such indebtedness and obligations, and (v) are effectively subordinated to all existing and future
indebtedness and other liabilities of FDC's non-guarantor subsidiaries (other than indebtedness and liabilities owed to FDC or one of
FDC's guarantor subsidiaries).
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