10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

R QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2013

or

£ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________ to _________

Commission file number: 333-133253

HARLAND CLARKE HOLDINGS CORP.

(Exact name of registrant as specified in its charter)

Delaware	84-1696500
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
10931 Laureate Drive, San Antonio, TX	78249
(Address of principal executive offices)	(Zip code)

(210) 697-8888

(Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes R No £ *

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes þ    No £

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer  £	Accelerated filer  £	Non-accelerated filer  R	Smaller reporting company £
	(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes  £    No  R

As of July 31, 2013, there were 100 shares of the registrant's common stock outstanding, with a par value of $0.01 per share. All outstanding shares are owned by a subsidiary of M & F Worldwide Corp.

* The registrant is not required to file this Quarterly Report on Form 10-Q or other reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934, but has filed all reports during the preceding 12 months that would have been required pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. The filing is required, however, pursuant to the terms of the indenture governing Harland Clarke Holdings Corp.'s senior notes due 2015.

HARLAND CLARKE HOLDINGS CORP.

INDEX TO QUARTERLY REPORT ON FORM 10-Q

For the Quarter Ended June 30, 2013

PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements	1
	Consolidated Balance Sheets	1
	Consolidated Statements of Operations	2
	Consolidated Statements of Comprehensive Income (Loss)	3
	Consolidated Statements of Cash Flows	4
	Notes to Consolidated Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	41
Item 4.	Controls and Procedures	41
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	42
Item 1A.	Risk Factors	42
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	42
Item 3.	Defaults Upon Senior Securities	42
Item 4.	Mine Safety Disclosures	42
Item 5.	Other Information	42
Item 6.	Exhibits	43
Signatures		44
Exhibit Index		45

i

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Harland Clarke Holdings Corp. and Subsidiaries

Consolidated Balance Sheets

(in millions, except share and per share data)

	June 30,  2013			December 31, 2012
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	84.6		$	102.0
Accounts receivable (net of allowances of $1.4 and $1.5)	150.5			132.1
Inventories	36.4			29.0
Income taxes receivable	23.2			23.7
Notes receivable - related party	30.0			30.0
Deferred tax assets	45.1			45.1
Prepaid expenses and other current assets	67.6			56.7
Total current assets	437.4			418.6
Property, plant and equipment	297.8			269.5
Less accumulated depreciation	(114.3		)	(79.5		)
Property, plant and equipment, net	183.5			190.0
Goodwill	765.6			761.6
Other intangible assets, net	1,501.9			1,535.6
Contract acquisition payments, net	22.5			17.6
Other assets	87.9			63.0
Total assets	$	2,998.8		$	2,986.4
LIABILITIES AND STOCKHOLDER'S EQUITY / DEFICIT
Current liabilities:
Accounts payable	$	47.7		$	44.5
Deferred revenues	135.5			133.9
Current maturities of long-term debt	89.9			78.5
Accrued liabilities:
Salaries, wages and employee benefits	57.7			55.9
Income and other taxes payable	12.1			11.9
Customer incentives	53.2			52.0
Payable to parent	0.3			0.1
Other current liabilities	53.1			42.1
Total current liabilities	449.5			418.9
Long-term debt	1,847.7			1,769.3
Deferred tax liabilities	578.0			622.7
Deferred revenues	56.3			54.2
Other liabilities	68.0			86.1
Commitments and contingencies
Stockholder's equity / deficit:
Common stock — 200 shares authorized; par value $0.01; 100 shares issued and outstanding at June 30, 2013 and December 31, 2012	—			—
Additional paid-in capital	49.9			76.1
Accumulated deficit	(49.4		)	(40.6		)
Accumulated other comprehensive (loss) income:
Foreign currency translation adjustments	(0.5		)	0.4
Unrecognized amounts included in postretirement obligations, net of taxes	(0.7		)	(0.7		)
Total accumulated other comprehensive loss, net of taxes	(1.2		)	(0.3		)
Total stockholder's equity / deficit	(0.7		)	35.2
Total liabilities and stockholder's equity / deficit	$	2,998.8		$	2,986.4

See Notes to Consolidated Financial Statements

1

Harland Clarke Holdings Corp. and Subsidiaries

Consolidated Statements of Operations

(in millions)

(unaudited)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2013			2012			2013			2012
Product revenues, net	$	326.5		$	311.6		$	647.9		$	642.8
Service revenues, net	110.8			94.3			218.9			176.9
Total net revenues	437.3			405.9			866.8			819.7
Cost of products sold	189.3			197.1			374.1			415.8
Cost of services provided	65.2			65.5			130.5			130.9
Total cost of revenues	254.5			262.6			504.6			546.7
Gross profit	182.8			143.3			362.2			273.0
Selling, general and administrative expenses	97.3			101.5			191.2			207.0
Revaluation of contingent consideration	—			—			—			(0.5		)
Asset impairment charges	—			—			0.9			—
Restructuring costs	6.7			3.7			13.3			5.0
Operating income	78.8			38.1			156.8			61.5
Interest income	0.2			0.2			0.4			0.5
Interest expense	(55.8		)	(51.2		)	(111.8		)	(109.7		)
Loss on early extinguishment of debt	(61.0		)	—			(61.0		)	—
Loss from equity method investment	(0.2		)	—			(0.4		)	—
Other expense, net	—			—			—			(0.2		)
Loss before income taxes	(38.0		)	(12.9		)	(16.0		)	(47.9		)
Benefit for income taxes	(15.5		)	(5.2		)	(7.2		)	(17.3		)
Net loss	$	(22.5	)	$	(7.7	)	$	(8.8	)	$	(30.6	)

See Notes to Consolidated Financial Statements

2

Harland Clarke Holdings Corp. and Subsidiaries

Consolidated Statements of Comprehensive Income (Loss)

(in millions)

(unaudited)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2013			2012			2013			2012
Net loss	$	(22.5	)	$	(7.7	)	$	(8.8	)	$	(30.6	)
Other comprehensive (loss) income, net of tax:
Foreign currency translation adjustments	(0.4		)	(0.9		)	(0.9		)	(0.4		)
Reclassification adjustments for loss on derivative instruments included in net loss	—			—			—			0.1
Unrealized losses on investments:
Unrealized losses on investments during period	—			—			—			(0.2		)
Less reclassification adjustment for amounts included in net loss	—			—			—			0.1
Net change in unrealized losses on investments	—			—			—			(0.1		)
Total other comprehensive loss, net of tax	(0.4		)	(0.9		)	(0.9		)	(0.4		)
Comprehensive loss	$	(22.9	)	$	(8.6	)	$	(9.7	)	$	(31.0	)
Tax Expense of Other Comprehensive Loss Included in Above Amounts:
Less reclassification adjustment for amounts included in net loss	$	—		$	—		$	—		$	(0.1	)
Total net tax expense included in other comprehensive loss	$	—		$	—		$	—		$	(0.1	)

See Notes to Consolidated Financial Statements

3

Harland Clarke Holdings Corp. and Subsidiaries

Consolidated Statements of Cash Flows

(in millions)

(unaudited)

	Six Months Ended
	June 30,
	2013			2012
Operating activities
Net loss	$	(8.8	)	$	(30.6	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation	30.4			37.6
Amortization of intangible assets	64.5			68.2
Amortization of debt fair value adjustments, original issue discount, original issue premium and deferred financing fees	46.5			64.1
Loss on early extinguishment of debt	61.0			—
Revaluation of contingent consideration	—			(0.5		)
Loss on sale of marketable securities	—			0.2
Deferred income taxes	(43.8		)	(71.5		)
Asset impairments	0.9			—
Changes in operating assets and liabilities, net of effect of businesses acquired:
Accounts receivable	(18.4		)	(13.1		)
Inventories	(3.8		)	12.8
Prepaid expenses and other assets	(1.7		)	(8.9		)
Contract acquisition payments, net	(4.9		)	(9.3		)
Accounts payable and accrued liabilities	(5.7		)	(12.2		)
Deferred revenues	(1.3		)	51.0
Income and other taxes	(14.0		)	(5.5		)
Payable to parent	0.2			(0.2		)
Other, net	6.2			1.5
Net cash provided by operating activities	107.3			83.6
Investing activities
Purchase of businesses, net of cash acquired	(34.8		)	(36.2		)
Proceeds from sale of property, plant and equipment	0.9			0.1
Proceeds from sale of marketable securities	—			56.3
Capital expenditures	(23.6		)	(30.2		)
Capitalized interest	(0.3		)	(0.2		)
Computer software development	(6.5		)	(6.5		)
Net cash used in investing activities	(64.3		)	(16.7		)
Financing activities
Dividends paid to parent	(26.2		)	(25.8		)
Acquisition of business from parent	—			(33.8		)
Payments for derivative instruments	(1.3		)	(7.0		)
Issuance of notes	54.5			—
Redemption of notes	(50.0		)	—
Borrowings on credit agreements	742.5			25.0
Repayments of credit agreements and other borrowings	(764.0		)	(43.3		)
Debt issuance costs	(15.9		)	(0.4		)
Net cash used in financing activities	(60.4		)	(85.3		)
Net decrease in cash and cash equivalents	(17.4		)	(18.4		)
Cash and cash equivalents at beginning of period	102.0			101.8
Cash and cash equivalents at end of period	$	84.6		$	83.4
Supplemental disclosure of cash paid for:
Interest, net of amounts capitalized	$	54.2		$	43.8
Income taxes, net of refunds	50.7			58.3
Non cash financing activities:
Extinguishment of Faneuil debt to parent	$	—		$	25.4

See Notes to Consolidated Financial Statements

4

Harland Clarke Holdings Corp. and Subsidiaries

Notes to Consolidated Financial Statements

(dollars in millions)

(unaudited)

1. Description of the Business and Basis of Presentation

Harland Clarke Holdings Corp. ("Harland Clarke Holdings" and, together with its subsidiaries, the "Company") is a holding company that conducts its operations through its direct and indirect, wholly owned operating subsidiaries and was incorporated in Delaware on October 19, 2005. The Company is an indirect, wholly owned subsidiary of M & F Worldwide Corp. ("M & F Worldwide"), which is, as of December 21, 2011, an indirect, wholly owned subsidiary of MacAndrews & Forbes Holdings Inc. ("MacAndrews"). MacAndrews is wholly owned by Ronald O. Perelman. On September 12, 2011, M & F Worldwide agreed, subject to various closing conditions, to merge with an indirect wholly owned subsidiary of MacAndrews, and, following a vote of stockholders of M & F Worldwide and the satisfaction or waiver of all other closing conditions, that merger was effected on December 21, 2011 (hereafter referred to as the "MacAndrews Acquisition").

As a result of the MacAndrews Acquisition, which resulted in a change in ownership of M & F Worldwide, the Company was required to use the acquisition method of accounting to revalue its assets and liabilities as of the date of the MacAndrews Acquisition. Such accounting results in a number of changes, including, but not limited to, decreased revenues as a result of fair value adjustments to deferred revenues, increased depreciation and amortization as a result of the revaluation of assets and increased non-cash interest expense that results from adjusting the Company's long-term debt to fair value as of the date of the MacAndrews Acquisition.

On May 31, 2013, the Company acquired NCP Solutions, LLC ("NCP Solutions") (see Note 3). NCP Solutions is a leading end-to-end communications solutions provider to consumer finance companies, banks, mortgage lenders, mortgage subservicers, credit unions, auto and equipment finance companies, auto service contract providers, direct marketing companies, healthcare and health insurance companies, check producers and various other customers. The NCP Solutions business is included in the Harland Clarke segment for financial reporting purposes.

On March 19, 2012, the Company purchased Faneuil, Inc. ("Faneuil") from affiliates of MacAndrews (see Note 3). Under accounting guidance for transactions among entities under common control, the Company has accounted for the purchase at historical cost and has retrospectively recasted prior periods under common control to include Faneuil operations. The Company and Faneuil came under common control on December 21, 2011, the date of the MacAndrews Acquisition. Faneuil is a separate business segment for financial reporting purposes.

The Company has organized its business and corporate structure along the following four business segments: Harland Clarke, Harland Financial Solutions, Scantron and Faneuil.

During the second quarter of 2012, the Company transferred certain product and service lines from the Scantron segment to other segments to better align complementary products and services. The Harland Technology Services and Medical Device Tracking businesses were transferred to the Faneuil segment and the Survey Services business was transferred to the Harland Clarke segment. Prior period segment information has been reclassified to reflect this change.

The Harland Clarke segment offers checks and related products, forms and treasury supplies, and related delivery and fraud prevention products as well as transactional document printing, including statements, compliance documents and communications, to financial and commercial institutions. It also provides direct marketing services to their clients including direct marketing campaigns, direct mail, database marketing, telemarketing and digital marketing. In addition to these products and services, the Harland Clarke segment offers stationery, business cards, survey services and other business and home office products to consumers and businesses.

The Harland Financial Solutions segment provides technology products and related services to financial institutions worldwide including lending and mortgage compliance and origination applications, risk management solutions, business intelligence solutions, Internet and mobile banking applications, branch automation solutions, self-service solutions, electronic payment solutions and core processing systems.

The Scantron segment provides data management and decision support solutions and related services to educational, commercial and governmental entities worldwide. Scantron products and services provide solutions for testing and assessment, instruction and performance management and business operational data collection. Scantron's solutions combine a variety of data collection, analysis, and management tools including web-based solutions, software, scanning equipment and forms.

The Faneuil segment provides business process outsourcing services including call center operations, back office operations, staffing services and toll collection services to government and regulated commercial clients. The Faneuil segment also provides patient information collection and tracking services, managed technical services and related field maintenance services to education, commercial, healthcare and governmental entities.

5

Harland Clarke Holdings Corp. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(dollars in millions)

(unaudited)

The consolidated financial statements include the accounts of the Company and its majority-owned subsidiaries after the elimination of all material intercompany accounts and transactions. The Company has consolidated the results of operations and accounts of businesses acquired from the date of acquisition except for Faneuil as discussed above.

The Company and each of its existing domestic subsidiaries, other than unrestricted subsidiaries (of which there were none at June 30, 2013) and certain immaterial subsidiaries, are guarantors and in some instances may also be co-borrowers under the Term Loan and co-issuers under the 2015 Senior Notes and 2018 Senior Secured Notes (as defined hereinafter) (see Note 11). Harland Clarke Holdings is a holding company and has no significant assets at June 30, 2013 and no operations. The guarantees and the obligations of the subsidiaries of the Company are full and unconditional and joint and several, and any subsidiaries of the Company other than the subsidiary guarantors and obligors are not significant.

See Note 3 for information regarding recent acquisitions.

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions for Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. The results of operations for interim periods are not necessarily indicative of the results that may be expected for the full fiscal year. These consolidated financial statements should be read in conjunction with the consolidated financial statements and accompanying notes included in the Company's Annual Report on Form 10-K for the year ended December 31, 2012.

All terms used but not defined elsewhere herein have the meaning ascribed to them in the Company's 2012 Annual Report on Form 10-K.

2. Summary of Significant Accounting Policies

Reference is made to the significant accounting policies of the Company described in the notes to the consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2012.

Use of Estimates

The preparation of the financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

Reclassifications

Prior period amounts have been reclassified in Note 7 in accordance with applicable accounting guidance to reflect the business segment changes described in Note 1 above.

Recently Adopted Accounting Guidance

Effective January 1, 2013, the Company adopted amended guidance related to disclosures about offsetting assets and liabilities. The amendment enhances disclosures regarding assets and liabilities that are presented net or gross in the statement of financial position when the right of offset exists, or that are subject to an enforceable master netting arrangement. This amendment affects disclosures only, and therefore adoption did not affect the Company's consolidated financial position, results of operations or cash flows.

Effective January 1, 2013, the Company adopted amended guidance related to the presentation of amounts reclassified out of accumulated other comprehensive income by component. The amendment requires companies to present, either on the face of the statement where net income is presented or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income if the amount reclassified is required under United States generally accepted accounting principles ("US GAAP") to be reclassified to net income in its entirety in the same reporting period. For other amounts that are not required under US GAAP to be reclassified in their entirety to net income, companies are required to cross-reference to other disclosures required under US GAAP that provide additional detail about those amounts. This amendment affects presentation only, and therefore adoption did not affect the Company's consolidated financial position, results of operations or cash flows.

6

Harland Clarke Holdings Corp. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(dollars in millions)

(unaudited)

Effective January 1, 2013, the Company adopted amended guidance related to the testing of indefinite-lived intangible assets for impairment. Under the amendment, entities testing indefinite-lived intangible assets for impairment have the option to perform a qualitative assessment to determine whether further impairment testing is necessary. If an entity determines, on the basis of qualitative factors, that the fair value of the indefinite-lived intangible asset is more-likely-than-not less than the carrying amount, a quantitative impairment test is required. Otherwise, no further impairment testing is required. This amendment affects testing steps only, and therefore adoption did not affect the Company's consolidated financial position, results of operations or cash flows.

3. Acquisitions

NCP Solutions Acquisition

On May 31, 2013, the Company acquired 100% of the equity of NCP Solutions for an acquisition-date purchase price of $35.2, net of cash acquired of $0.3, and after giving effect to working capital adjustments of $0.5 (the "NCP Solutions Acquisition"). NCP Solutions is a leading end-to-end communications solutions provider to consumer finance companies, banks, mortgage lenders, mortgage subservicers, credit unions, auto and equipment finance companies, auto service contract providers, direct marketing companies, healthcare and health insurance companies, check producers and various other customers.

NCP Solutions delivers personalized, time-sensitive and confidential print and electronic business communications. These communications include billing, investment, demand deposit and sharedraft statements, event-triggered letters, installment loan and mortgage payment coupon books and direct marketing materials. NCP Solutions' vertically integrated production process and electronic and print competencies enable it to supply customers with a robust outsourced document management solution.

The preliminary allocation of purchase price resulted in identified intangible assets of $25.0, including customer relationships of $20.0, trademarks of $3.0, software of $2.0 and goodwill of $4.2. The remaining $6.3 of purchase price was allocated to tangible assets and liabilities. The goodwill arises because the total consideration for NCP Solutions, which reflects its future earnings and cash flow potential, exceeds the fair value of net assets acquired. The goodwill resulting from the acquisition was assigned to the Harland Clarke segment. Of the goodwill recognized, $2.8 is deductible for income tax purposes. NCP Solutions' results of operations have been included in the Company's operations since the date of its acquisition. The Company financed the acquisition with Harland Clarke Holdings' cash on hand. The pro forma effects of the NCP Solutions Acquisition on the consolidated results of operations were not material.

Faneuil Acquisition

On March 19, 2012, the Company entered into a Stock Purchase Agreement pursuant to which the Company purchased 100% of the issued and outstanding shares of capital stock of New Faneuil, Inc. ("New Faneuil") for $70.0 in cash (the "Faneuil Acquisition") from affiliates of MacAndrews. The Company financed the Faneuil Acquisition with Harland Clarke Holdings' cash on hand. New Faneuil, through its wholly owned subsidiary, Faneuil, provides business process outsourcing services including call center operations, back office operations, staffing services and toll collection services to government and regulated commercial clients across the United States.

Under accounting guidance for transactions among entities under common control, the Company has accounted for the purchase at historical cost and has retrospectively recasted prior periods under common control to include Faneuil operations. The Company and Faneuil came under common control on December 21, 2011, the date of the MacAndrews Acquisition. Cash paid in excess of the carrying amount of the assets and liabilities assumed in the amount of $33.8 is treated as an equity transaction with the parent in accordance with accounting guidance for transactions among entities under common control.

7

Harland Clarke Holdings Corp. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(dollars in millions)

(unaudited)

The following table summarizes the historical cost of assets and liabilities assumed on March 19, 2012, the date of the Faneuil Acquisition:

Cash			$	2.3
Accounts receivable			11.8
Property, plant and equipment			10.3
Goodwill			13.0
Other intangible assets:
Customer relationships	$	0.2
Tradenames	0.8
Software	0.3
Total other intangible assets			1.3
Other assets			7.2
Total assets acquired			45.9
Deferred revenues			1.2
Capital leases			1.0
Other liabilities			7.5
Net assets acquired			$	36.2

The pro forma effects of the Faneuil Acquisition on the consolidated results of operations were not material.

4. Inventories

Inventories consist of the following:

	June 30, 2013		December 31, 2012
Finished goods	$	9.1	$	7.7
Work-in-process	12.2		8.2
Raw materials	15.1		13.1
	$	36.4	$	29.0

5. Assets Held For Sale

Assets held for sale are included in prepaid expenses and other current assets on the accompanying consolidated balance sheets and consist of the following:

	June 30, 2013		December 31, 2012
Land	$	—	$	1.0
Buildings and improvements	—		2.1
	$	—	$	3.1

At December 31, 2012, assets held for sale consisted of the following Harland Clarke segment facilities:

Location	Former Use	Year Closed
Atlanta, GA	Operations Support	2008
Atlanta, GA	Printing	2008
Atlanta, GA	Information Technology	2010

During 2010, the Company closed its information technology facility in Atlanta, GA and relocated those operations into an existing facility. During the first quarter of 2013, the Company sold the information technology facility for $0.8 and realized a loss of $0.1. The other listed Atlanta facilities were closed as part of the Company's plan to exit duplicative facilities related to an acquisition.

8

Harland Clarke Holdings Corp. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(dollars in millions)

(unaudited)

During the first quarter of 2013, the Company announced plans to relocate its Atlanta regional office facilities within the Harland Clarke segment to another facility later in 2013. In conjunction with these plans, the Company made a change to the marketing plan for the other Atlanta facilities included in assets held for sale. The new marketing plan combines the marketing of the Atlanta regional office facilities and facilities formerly classified as held for sale and the Company estimates it will take longer than twelve months to sell the facilities. Accordingly, the facilities formerly classified as assets held for sale were reclassified to property, plant and equipment during the first quarter of 2013.

6. Goodwill and Other Intangible Assets

The change in carrying amount of goodwill by business segment for the six months ended June 30, 2013 is as follows:

	Harland Clarke		Harland Financial Solutions			Scantron			Faneuil		Total
Balance as of December 31, 2012	$	417.0	$	282.7		$	40.2		$	21.7	$	761.6
2013 acquisition	4.2		—			—			—		4.2
Effect of exchange rate changes	—		(0.1		)	(0.1		)	—		(0.2		)
Balance as of June 30, 2013	$	421.2	$	282.6		$	40.1		$	21.7	$	765.6

Useful lives, gross carrying amounts and accumulated amortization for other intangible assets are as follows:

		Gross Carrying Amount				Accumulated Amortization				Net Carrying Amount
	Useful Life (in years)	June 30, 2013		December 31, 2012		June 30, 2013		December 31, 2012		June 30, 2013		December 31, 2012
Amortized intangible assets:
Customer relationships	3 - 19	$	1,547.9	$	1,528.0	$	187.6	$	132.7	$	1,360.3	$	1,395.3
Trademarks and tradenames	15 - 25	104.4		101.4		7.8		5.3		96.6		96.1
Software	3 - 9	64.4		56.5		20.2		13.1		44.2		43.4
		1,716.7		1,685.9		215.6		151.1		1,501.1		1,534.8
Indefinite-lived intangible assets:
Tradename		0.8		0.8		—		—		0.8		0.8
Total other intangible assets		$	1,717.5	$	1,686.7	$	215.6	$	151.1	$	1,501.9	$	1,535.6

Amortization expense was $32.8 and $64.5 for the three and six months endedJune 30, 2013, respectively, and $34.7 and $68.2 for the three and six months endedJune 30, 2012, respectively. Amortization expense includes amortization of software of $3.9 and $7.0 for the three and six months endedJune 30, 2013, respectively, and $3.0 and $5.8 for the three and six months endedJune 30, 2012, respectively.

The weighted average amortization period for all amortizable intangible assets recorded in connection with the NCP Solutions Acquisition was 12.9 years. The weighted average amortization period for each major class of amortizable intangible assets recorded in connection with the NCP Solutions Acquisition was as follows: customer relationships - 15 years, trademarks - 4 years and software - 5 years.

Estimated aggregate amortization expense for intangible assets through December 31, 2017 is as follows:

Six months ending December 31, 2013	$	66.8
Year ending December 31, 2014	125.2
Year ending December 31, 2015	117.3
Year ending December 31, 2016	105.3
Year ending December 31, 2017	98.9

During the six months ended June 30, 2013, the Company recorded a non-cash impairment charge of $0.7 for the Scantron segment related to software that was determined to have no future use. That determination was the result of Scantron's decision to exit certain product lines in the education market (see Note 16). The impairment charge was included in asset impairment charges in the accompanying consolidated statements of operations.

9

Harland Clarke Holdings Corp. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(dollars in millions)

(unaudited)

7. Business Segment Information

The Company has organized its business along four reportable segments together with a corporate group for certain support services. The Company's operations are aligned on the basis of products, services and industry. Management measures and evaluates the reportable segments based on operating income. The current segments and their principal activities consist of the following:

• Harland Clarke segment — Provides checks and related products, transactional document printing, direct marketing services and customized business and home office products to financial and commercial institutions, as well as consumers and other businesses. This segment operates primarily in the United States and Puerto Rico.

• Harland Financial Solutions segment — Provides technology products and related services to financial institutions worldwide. This segment operates primarily in the United States, Israel, Ireland and India.

• Scantron segment — Provides data management and decision support solutions and related services to educational, commercial and governmental entities worldwide. This segment operates primarily in the United States, Canada and India.

• Faneuil segment — Provides call center services, back office operations, staffing services and toll collection services to government and regulated commercial clients and patient information collection and tracking, managed technical services and related field maintenance services to educational, commercial, healthcare and governmental entities. This segment operates primarily in the United States and Canada.

As discussed in Note 1, the Company made business segment changes in the second quarter of 2012. Prior period results in the tables below have been reclassified to conform to these business segment changes.

Selected summarized financial information for the three months ended June 30, 2013 and 2012 is as follows:

	Harland Clarke(1)		Harland Financial Solutions		Scantron			Faneuil(2)		Corporate and Other			Total
Product revenues, net
Three months ended June 30, 2013	$	275.9	$	27.0	$	20.9		$	2.7	$	—		$	326.5
Three months ended June 30, 2012	273.1		15.9		21.3			1.3		—			311.6
Service revenues, net
Three months ended June 30, 2013	$	11.0	$	56.1	$	5.8		$	37.9	$	—		$	110.8
Three months ended June 30, 2012	9.0		42.3		7.0			36.0		—			94.3
Intersegment revenues
Three months ended June 30, 2013	$	0.1	$	—	$	0.5		$	0.2	$	(0.8	)	$	—
Three months ended June 30, 2012	0.1		—		0.4			0.1		(0.6		)	—
Operating income (loss)(3)
Three months ended June 30, 2013	$	63.2	$	22.6	$	(5.2	)	$	4.6	$	(6.4	)	$	78.8
Three months ended June 30, 2012	49.8		1.0		(10.0		)	1.9		(4.6		)	38.1
Depreciation and amortization (excluding amortization of deferred financing fees):
Three months ended June 30, 2013	$	30.8	$	9.3	$	5.4		$	2.5	$	—		$	48.0
Three months ended June 30, 2012	37.2		9.5		4.4			3.1		—			54.2
Capital expenditures (excluding capital leases):
Three months ended June 30, 2013	$	8.8	$	2.4	$	0.3		$	0.9	$	—		$	12.4
Three months ended June 30, 2012	7.2		1.0		1.1			1.2		—			10.5

10

Harland Clarke Holdings Corp. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(dollars in millions)

(unaudited)

Selected summarized financial information for the six months ended June 30, 2013 and 2012 is as follows:

	Harland Clarke(1)		Harland Financial Solutions			Scantron			Faneuil(2)		Corporate and Other			Total
Product revenues, net
Six months ended June 30, 2013	$	548.7	$	48.8		$	45.0		$	5.4	$	—		$	647.9
Six months ended June 30, 2012	562.7		31.6			45.3			3.2		—			642.8
Service revenues, net
Six months ended June 30, 2013	$	22.1	$	111.2		$	11.1		$	74.5	$	—		$	218.9
Six months ended June 30, 2012	16.9		76.9			12.7			70.4		—			176.9
Intersegment revenues
Six months ended June 30, 2013	$	0.1	$	—		$	1.0		$	0.3	$	(1.4	)	$	—
Six months ended June 30, 2012	0.1		—			0.8			0.2		(1.1		)	—
Operating income (loss)(3)
Six months ended June 30, 2013	$	130.2	$	42.2		$	(12.1	)	$	6.9	$	(10.4	)	$	156.8
Six months ended June 30, 2012	95.2		(6.8		)	(20.8		)	2.7		(8.8		)	61.5
Depreciation and amortization (excluding amortization of deferred financing fees):
Six months ended June 30, 2013	$	61.2	$	18.2		$	10.4		$	5.1	$	—		$	94.9
Six months ended June 30, 2012	73.3		18.6			8.8			5.1		—			105.8
Capital expenditures (excluding capital leases):
Six months ended June 30, 2013	$	15.5	$	4.8		$	1.5		$	1.8	$	—		$	23.6
Six months ended June 30, 2012	20.2		3.3			4.6			2.1		—			30.2

___________________

(1) Includes results of the acquired NCP Solutions business from the date of acquisition (see Note 3).

(2) Includes results of the acquired Faneuil business from the date of common control (see Note 3).

(3) Includes gain from revaluation of contingent consideration arrangements of $0.0 and $0.5 for the three and six months endedJune 30, 2012, respectively, restructuring costs of $6.7 and $13.3 for the three and six months endedJune 30, 2013 and $3.7 and $5.0 for three and six months endedJune 30, 2012, respectively, (see Note 16) and non-cash impairment charges of $0.0 and $0.9 for the three and six months endedJune 30, 2013, respectively.

11

Harland Clarke Holdings Corp. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(dollars in millions)

(unaudited)

8. Accumulated Other Comprehensive Loss

The following presents changes in accumulated other comprehensive loss, net of tax, by component, during the six months ended June 30, 2013 and 2012:

	Foreign currency translation adjustments			Unrecognized amounts included in postretirement obligations			Derivative fair-value adjustments			Unrealized gains (losses) on investments, net			Total
Six months ended June 30, 2013:
Beginning balance	$	0.4		$	(0.7	)	$	—		$	—		$	(0.3	)
Net current period other comprehensive loss	(0.9		)	—			—			—			(0.9		)
Ending balance	$	(0.5	)	$	(0.7	)	$	—		$	—		$	(1.2	)
Six months ended June 30, 2012:
Beginning balance	$	—		$	(0.1	)	$	(0.1	)	$	0.1		$	(0.1	)
Other comprehensive loss before reclassifications	(0.4		)	—			—			(0.2		)	(0.6		)
Amounts reclassified from accumulated other comprehensive income	—			—			0.1			0.1			0.2
Net current period other comprehensive (loss) income	(0.4		)	—			0.1			(0.1		)	(0.4		)
Ending balance	$	(0.4	)	$	(0.1	)	$	—		$	—		$	(0.5	)

The following presents amounts reclassified out of accumulated other comprehensive loss, by component, during the six months ended June 30, 2012:

Details about accumulated other comprehensive income components	Affected line in the statement of operations	Six Months Ended June 30, 2012
Derivative fair-value adjustments	Interest expense	$	(0.1	)
	Benefit for income taxes	—
	Net loss	$	(0.1	)
Unrealized gains on investments, net	Other (expense), net	$	(0.2	)
	Benefit for income taxes	(0.1		)
	Net loss	$	(0.1	)

There were no amounts reclassified out of accumulated other comprehensive loss during the three months ended June 30, 2013 and 2012 and the six months ended June 30, 2013.

9. Postretirement Defined Benefit Plans

The Company sponsors two unfunded postretirement defined benefit plans that cover certain former salaried and non-salaried employees. One plan provides healthcare benefits and the other provides life insurance benefits. The medical plan is contributory and contributions are adjusted annually based on actual claims experience. For retirees who retired prior to December 31, 2002 with 20 or more years of service at December 31, 2000, the Company contributes a portion of the cost of the medical plan. For all other retirees, the Company's intent is that the retirees provide the majority of the actual cost of the medical plan. The life insurance plan is noncontributory for those employees that retired by December 31, 2002.

12

Harland Clarke Holdings Corp. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(dollars in millions)

(unaudited)

The components of net periodic postretirement benefit cost for these plans consist of the following:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2013		2012		2013		2012
Interest cost	$	0.1	$	0.1	$	0.2	$	0.2
Net postretirement benefit cost	$	0.1	$	0.1	$	0.2	$	0.2

10. Income Taxes

The Company is subject to taxation in the United States and various state and foreign jurisdictions. The statute of limitations for the federal and state tax returns of the affiliated group of M & F Worldwide or MacAndrews and subsidiaries, as the case may be, including in each case the Company, for the tax years 2009 through 2012 generally remain open. In addition, open tax years related to foreign jurisdictions remain subject to examination but are not considered material. The Company has recently been notified that the Internal Revenue Service has selected to examine the affiliated group of M & F Worldwide and subsidiaries for the tax year ended December 21, 2011.

There are no events that have occurred since December 31, 2012 that had a material impact on amounts accrued for the Company's uncertain tax positions.

11. Long-Term Debt

	June 30, 2013			December 31, 2012
$1,900.0 Senior Secured Credit Facilities:
Extended Term Loans due 2017	$	642.8		$	677.4
Non-Extended Term Loans due 2014	—			728.6
Tranche B-3 Term Loans due 2018	750.0			—
Total $1,900.0 Senior Secured Credit Facilities	1,392.8			1,406.0
9.75% Senior Secured Notes due 2018	285.0			235.0
Senior Floating Rate Notes due 2015	204.3			204.3
9.50% Senior Fixed Rate Notes due 2015	221.3			271.3
Capital lease obligations	3.7			3.1
Unamortized original issue discount, original issue premium and acquisition accounting-related fair value discount	(169.5		)	(271.9		)
	1,937.6			1,847.8
Less: current maturities	(89.9		)	(78.5		)
Long-term debt, net of current maturities	$	1,847.7		$	1,769.3

New Facility Joinder Agreement to Credit Agreement

On April 26, 2013, the Company entered into a new facility joinder agreement to the Credit Agreement (as defined hereinafter) under which the Company borrowed $750.0 (the "Tranche B-3 Term Loans"). Proceeds of the Tranche B-3 Term Loans were used to repay, in full, together with all interest and fees accrued in respect of, the Non-Extended Term Loans plus other fees and expenses in connection with such refinancing.

The Tranche B-3 Term Loans will mature on May 22, 2018 subject (if the Revolving Facility (as defined hereinafter) is terminated and repaid in full) to a springing maturity 90 days prior to the maturity of the 2015 Senior Notes if they have not otherwise been repaid, extended or refinanced. The Company is required to repay the Tranche B-3 Term Loans in equal quarterly installments in aggregate annual amounts equal to 2.50% of the original amount. In addition, aggregate amortization in respect of all of the Tranche B-3 Term Loans and all other debt sharing liens with such loans (with certain exceptions) must be at least $75.0 per year (subject to certain reductions). The weighted average interest rate on the Tranche B-3 Term Loans outstanding was 7.0% at June 30, 2013.

13

Harland Clarke Holdings Corp. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(dollars in millions)

(unaudited)

The Tranche B-3 Term Loans bear, at the Company's option, interest at:

• A rate per annum equal to the higher of (a) the prime rate of Credit Suisse and (b) the Federal Funds rate plus 0.50%, in each case plus an applicable margin of 4.50% per annum, provided that the rate before the applicable margin shall not be less than 2.50% per annum; or

• A rate per annum equal to a reserve adjusted LIBOR rate, plus an applicable margin of 5.50% per annum, provided that the reserve adjusted LIBOR rate shall not be less that 1.50% per annum.

All other terms are substantially the same as the Credit Agreement.

Revolving Credit Facility due 2018

On February 20, 2013, Harland Clarke Holdings terminated the Revolver (as defined hereinafter) and along with certain of its domestic subsidiaries, as co-borrowers, and its direct parent, CA Acquisition Holdings, Inc. and certain of its other domestic subsidiaries as guarantors, entered into a senior secured asset based revolving credit facility (the "Revolving Facility") with Citibank, N.A., as administrative agent and collateral agent. The Revolving Facility provides for a facility equal to the lesser of $80.0 and a calculated borrowing base consisting of:

• 85% of eligible receivables less unearned revenue; plus

• the lesser of (i) 85% of the orderly liquidation value of eligible inventory and (ii) 70% of eligible inventory (in each case, at the lower of book value and market); minus

• eligibility reserves in effect at the time.

The borrowing base at June 30, 2013 was $52.3. The Revolving Facility includes an up to $30.0 subfacility for letters of credit and an up to $10.0 subfacility in the form of short-term swingline loans. As of June 30, 2013, there were no outstanding borrowings under the Revolving Facility and there was $41.9 available for borrowing (giving effect to the issuance of $10.4 of letters of credit).

Borrowings and other obligations under the Revolving Facility are guaranteed by CA Acquisition Holdings, Inc., Harland Clarke Holdings and certain of its domestic subsidiaries and secured by a lien on substantially all of the assets of such loan parties, including inventory, receivables, equipment, intellectual property and real property. The obligations under the Revolving Facility are secured by a first priority lien on inventory, receivables, payment intangibles and other current assets and other assets arising therefrom and proceeds thereof and second priority liens on the remaining collateral, subject to the first priority liens securing the Company's Tranche B-3 Term Loans, Extended Term Loans and 2018 Senior Secured Notes (as defined hereinafter).

The Revolving Facility will terminate on February 20, 2018, with springing maturities 91 days prior to the scheduled maturity date of the Company's Extended Term Loans and 2015 Senior Notes (each as defined hereinafter) all of which mature prior to the termination date of this Revolving Facility.

Borrowings against the Revolving Facility bear, at the Company's option, interest at:

• A LIBOR rate borrowing, bearing interest at a rate per annum equal to a reserve-adjusted LIBOR rate, plus an applicable margin ranging from 1.75% to 2.25% per annum based on the average excess availability for the prior fiscal quarter; or

• An Alternate Base Rate ("ABR") borrowing, bearing interest at a rate per annum equal to the greatest of:

• The prime rate of Citibank;

▪ Federal Funds Effective Rate plus 0.5%; and

▪ LIBOR rate for a one-month interest period plus 1%,

plus an applicable margin ranging from 0.75% to 1.25% per annum based on the average excess availability for the prior fiscal quarter.

The Revolving Facility has a commitment fee of 0.5% per annum if the average utilization of the Revolving Facility for the preceding fiscal quarter is less than 50% of the total commitments and 0.375% per annum if the average utilization for the preceding fiscal quarter is greater than or equal to 50% of the total commitments. The Revolving Facility has a weighted average fee of 2.00% for issued letters of credit.

14

Harland Clarke Holdings Corp. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(dollars in millions)

(unaudited)

The Revolving Facility contains covenants that, among other things, limit the ability of the Company and its subsidiaries to (i) incur or guarantee additional indebtedness or capitalized lease obligations, or issue disqualified or preferred stock; (ii) grant liens on assets; (iii) transfer or sell assets; (iv) pay dividends or make distributions to stockholders; (v) enter into transactions with affiliates; (vi) make investments or acquisitions; (vii) enter into sale/leaseback transactions; (viii) amend certain of the Company's indebtedness; (ix) engage in substantially different lines of business; (x) change the Company's fiscal year; and (xi) engage in speculative hedging transactions. These covenants are subject to important exceptions and qualifications. The Revolving Facility also contains a fixed charge coverage ratio test that may apply if the Company's excess availability falls below specified levels, as well as affirmative covenants and events of default that are customary for such facilities.

$1,900.0 Senior Secured Credit Facilities

Extended Term Loans

On July 24, 2012, an amendment (the "Amendment") entered into on May 10, 2012 by the Company to its credit agreement dated as of April 4, 2007 (the "Credit Agreement") became effective, thereby extending the maturity of $973.0 of term loans under the Credit Agreement (the "Extended Term Loans") from June 2014 to June 2017 (subject to a springing maturity 90 days prior to the maturity date of the Company's 2015 Senior Notes (as defined hereinafter) if such notes have not been repaid, extended or refinanced). The effectiveness of the Amendment was conditioned on, among other customary conditions, the repayment of $280.2 of the Extended Term Loans, which repayment was made with net proceeds from the issuance of the 2018 Senior Secured Notes (as defined hereinafter) and cash on hand. After giving effect to such repayment and the effectiveness of the Amendment, there were $692.8 of Extended Term Loans outstanding and $729.0 of non-extended term loans (the "Non-Extended Term Loans") outstanding. The Company is required to repay the Extended Term Loans in equal quarterly installments in aggregate annual amounts equal to 10% of the original extended amount after giving effect to the $280.2 prepayment thereof required as a condition precedent to the effectiveness of the Amendment. The Amendment also includes several covenants in addition to those covenants in the Credit Agreement. The weighted average interest rate on the principal amount of Extended Term Loans outstanding was 5.4% at June 30, 2013.

The Extended Term Loans bear, at the Company's option, interest at:

• A rate per annum equal to the higher of (a) the prime rate of Credit Suisse and (b) the Federal Funds rate plus 0.50%, in each case plus an applicable margin of 4.25% per annum; or

• A rate per annum equal to a reserve-adjusted LIBOR rate, plus an applicable margin of 5.25% per annum.

Non-Extended Term Loans

On April 4, 2007, the Company and substantially all of its subsidiaries as co-borrowers entered into the Credit Agreement. The Credit Agreement provides for a $1,800.0 senior secured term loan (the "Term Loan"), which was fully drawn at closing on May 1, 2007 and matures on June 30, 2014 with respect to the Non-Extended Term Loans. The Non-Extended Term Loans were repaid on April 26, 2013 with proceeds from the Tranche B-3 Term Loans. The Company was required to repay the Non-Extended Term Loans in equal quarterly installments in aggregate annual amounts equal to 1% of the original principal amount multiplied by the ratio of Non-Extended Term Loans outstanding on the effective date of the Amendment to the total Non-Extended Term Loans and Extended Term Loans outstanding on the effective date of the Amendment prior to giving effect to the prepayment required as a condition precedent to the effectiveness of the Amendment. In addition, the Credit Agreement required that a portion of the Company's excess cash flow be applied to prepay amounts borrowed, as further described below. The Credit Agreement also provided for a $100.0 revolving credit facility (the "Revolver"). The Revolver included an up to $60.0 subfacility in the form of letters of credit and an up to $30.0 subfacility in the form of short-term swing line loans. The Revolver was terminated on February 20, 2013 upon the execution of the new Revolving Facility.

Under certain circumstances, the Company is permitted to incur additional term loan and/or revolving credit facility indebtedness in an aggregate principal amount of up to $250.0. In addition, the terms of the Credit Agreement, the 2015 Senior Notes (as defined hereinafter), and the 2018 Senior Secured Notes (as defined hereinafter) allow the Company to incur substantial additional debt.

The Non-Extended Term Loans bore, at the Company's option, interest at:

• A rate per annum equal to the higher of (a) the prime rate of Credit Suisse and (b) the Federal Funds rate plus 0.50%, in each case plus an applicable margin of 1.50% per annum; or

• A rate per annum equal to a reserve-adjusted LIBOR rate, plus an applicable margin of 2.50% per annum.

The Company and each of its existing and future domestic subsidiaries, other than unrestricted subsidiaries, certain immaterial subsidiaries, subsidiaries that do not guarantee other debt of the Company and subject to certain other exceptions,

15

Harland Clarke Holdings Corp. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(dollars in millions)

(unaudited)

are guarantors and may also be co-borrowers under the Credit Agreement. In addition, the Company's direct parent, CA Acquisition Holdings, Inc., is a guarantor under the Credit Agreement. The senior secured credit facilities are secured by a perfected first priority security interest in substantially all of the Company's, each of the co-borrowers' and the guarantors' tangible and intangible assets and equity interests (other than voting stock in excess of 65.0% of the outstanding voting stock of each direct foreign subsidiary and certain other excluded property).

The Credit Agreement contains customary affirmative and negative covenants including, among other things, restrictions on indebtedness, liens, mergers and consolidations, sales of assets, loans, acquisitions, restricted payments, transactions with affiliates, dividends and other payment restrictions affecting subsidiaries and sale-leaseback transactions. The Company has the right to prepay the term loans at any time without premium or penalty, subject to certain breakage costs. The Company is required to prepay the term loans with 50% of excess cash flow (as defined in the Credit Agreement, with certain reductions set forth in the Credit Agreement, based on achievement and maintenance of leverage ratios) and 100% of the net proceeds of certain issuances, offerings or placements of debt obligations of the Company or any of its subsidiaries (other than permitted debt). Each such prepayment will be applied first to the next eight unpaid quarterly amortization installments on the term loans and second to the remaining amortization installments on the term loans on a pro rata basis. No excess cash flow payment was required in 2013 with respect to 2012. In March 2012, an excess cash flow payment of $12.5 was paid with respect to 2011. Under the terms of the Credit Agreement such excess cash flow payments were applied against other mandatory payments due in the same year of the excess cash flow payment.

The Credit Agreement also contains certain customary affirmative covenants and events of default. Such events of default include, but are not limited to: non-payment of amounts when due; violation of covenants; material inaccuracy of representations and warranties; cross default and cross acceleration with respect to other material debt; bankruptcy and other insolvency events; certain ERISA events; invalidity of guarantees or security documents; and material judgments. Some of these events of default allow for grace periods.

If a change of control (as defined in the Credit Agreement) occurs, the Company will be required to make an offer to prepay all outstanding term loans under the Credit Agreement at 101% of the outstanding principal amount thereof plus accrued and unpaid interest, and lenders holding a majority of the revolving credit commitments may elect to terminate the revolving credit commitments in full. The Company is also required to offer to prepay outstanding term loans at 100% of the principal amount to be prepaid, plus accrued and unpaid interest, with the proceeds of certain asset sales under certain circumstances.

Senior Notes due 2015

On May 1, 2007, the Company issued $305.0 aggregate principal amount of Senior Floating Rate Notes due 2015 (the "Floating Rate Notes") and $310.0 aggregate principal amount of 9.50% Senior Fixed Rate Notes due 2015 (the "Fixed Rate Notes" and, together with the Floating Rate Notes, the "2015 Senior Notes"). The 2015 Senior Notes mature on May 15, 2015. The Fixed Rate Notes bear interest at a rate per annum of 9.50%, payable on May 15 and November 15 of each year. The Floating Rate Notes bear interest at a rate per annum equal to the Applicable LIBOR Rate (as defined in the indenture governing the 2015 Senior Notes (the "2015 Senior Notes Indenture")), subject to a floor of 1.25%, plus 4.75%, payable on February 15, May 15, August 15 and November 15 of each year. The interest rate on the Floating Rate Notes was 6.0% at June 30, 2013. The Senior Notes are unsecured and are therefore effectively subordinated to all of the Company's senior secured indebtedness, including outstanding borrowings under the Credit Agreement and the 2018 Senior Secured Notes. The Company and each of its existing subsidiaries, other than unrestricted subsidiaries and certain immaterial subsidiaries and certain other exceptions, are guarantors and may also be co-issuers under the 2015 Senior Notes.

The 2015 Senior Notes Indenture contains customary restrictive covenants, including, among other things, restrictions on the Company's ability to incur additional debt, pay dividends and make distributions, make certain investments, repurchase stock, incur liens, enter into transactions with affiliates, enter into sale and lease back transactions, merge or consolidate and transfer or sell assets. The Company must offer to repurchase all of the 2015 Senior Notes upon the occurrence of a "change of control," as defined in the 2015 Senior Notes Indenture, at a purchase price equal to 101% of their aggregate principal amount, plus accrued and unpaid interest. The Company must also offer to repurchase the 2015 Senior Notes with the proceeds from certain sales of assets, if it does not apply those proceeds within a specified time period after the sale, at a purchase price equal to 100% of their aggregate principal amount, plus accrued and unpaid interest.

9.75% Senior Secured Notes due 2018

On July 24, 2012, the Company and Harland Clarke Corp., Harland Financial Solutions, Inc., Scantron Corporation and Checks in the Mail, Inc. (together, the "Co-Issuers") issued $235.0 aggregate principal amount of 9.75% Senior Secured Notes due 2018 (the "2018 Senior Secured Notes"). The Company used the net proceeds from the offering, together with cash on hand, to repay $280.2 aggregate principal amount of outstanding Extended Term Loans under its Credit Agreement.

16

Harland Clarke Holdings Corp. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(dollars in millions)

(unaudited)

The 2018 Senior Secured Notes were issued pursuant to an indenture, dated as of July 24, 2012 (the "2018 Senior Secured Notes Indenture"), among the Company, the Co-Issuers, certain of the Company's domestic subsidiaries that guarantee the 2018 Senior Secured Notes (the "Guarantors") and Wells Fargo Bank, National Association, as trustee and collateral agent (the "Trustee"). The Guarantors have guaranteed (the "Guarantees") the Company's and Co-Issuers' obligations under the 2018 Senior Secured Notes and the 2018 Senior Secured Notes Indenture on a senior secured basis. The 2018 Senior Secured Notes and the Guarantees are secured pursuant to a Security Agreement, dated as of July 24, 2012, by and among the Company, the Co-Issuers, the Guarantors and Wells Fargo Bank, National Association, as collateral trustee (the "Collateral Trustee") and a Collateral Trust Agreement, dated as of July 24, 2012, by and among the Company, certain subsidiaries of Harland Clarke Holdings named therein, Credit Suisse AG, Cayman Islands branch, as credit agreement collateral agent, and Wells Fargo Bank, National Association, as trustee and as collateral trustee.

The 2018 Senior Secured Notes mature on August 1, 2018. The 2018 Senior Secured Notes bear interest at a rate of 9.75% per annum, payable on each February 1 and August 1 to holders of record at the close of business on the immediately preceding January 15 and July 15 of each year.

On May 20, 2013, the Company completed an additional offering of $50.0 aggregate principal amount of the 2018 Senior Secured Notes (the "Additional Notes") pursuant to the 2018 Senior Secured Notes Indenture and supplemented on February 20, 2013 (as so supplemented, the "Indenture") under which the Company previously issued $235.0 aggregate principal amount of the 2018 Senior Secured Notes (the "Original Notes", and together with the Additional Notes, the "Notes"). The Additional Notes were sold at a price of 109.00% plus accrued interest from February 1, 2013. The Additional Notes trade as a single series with the Original Notes and are treated substantially the same as the Original Notes under the Indenture. On June 19, 2013, Harland Clarke Holdings used proceeds from the Additional Notes to repay and retire $50.0 of the Fixed Rate Notes.

The 2018 Senior Secured Notes are senior secured obligations of the Company and the Co-Issuers and the Guarantees are senior secured obligations of the Guarantors. The 2018 Senior Secured Notes and the Guarantees rank as follows: (i) secured on a first-priority basis, equally and ratably with all obligations of the Company, the Co-Issuers and the Guarantors that are secured by pari passu liens on the collateral, including their existing senior secured credit facilities; (ii) effectively junior to all of the Company's, Co-Issuers' and the Guarantors' obligations under any future asset-based revolving credit facility to the extent of the value of the current asset collateral held by the Company, the Co-Issuers and the Guarantors; (iii) structurally subordinated to any existing and future indebtedness and other liabilities of any existing and future subsidiaries of the Company that are not Guarantors; (iv) pari passu in right of payment with all of the existing and future senior indebtedness of the Company, the Co-Issuers and the Guarantors and effectively senior to the extent of the value of the collateral to any future unsecured indebtedness of the Company, the Co-Issuers and the Guarantors that is secured by liens on the collateral that are junior to the liens securing the Senior Secured Notes and the Guarantees or that is unsecured; and (v) senior in right of payment to any existing and future subordinated indebtedness of the Company, the Co-Issuers and the Guarantors.

The 2018 Senior Secured Notes and the Guarantees are secured on a first-priority basis, equally and ratably with the indebtedness under the Credit Agreement, by substantially all of the Company's, the Co-Issuers' and the Guarantors' assets, subject to certain exceptions and permitted liens.

Beginning with the fiscal year ending December 31, 2013, if the Company's secured leverage ratio exceeds certain levels, the Company will be required to offer to purchase an amount of the 2018 Senior Secured Notes equal to the greater of (1) $15.0 and (2) 50% of its excess cash flow for the applicable period, less any voluntary prepayments of 2018 Senior Secured Notes or credit facility indebtedness and certain mandatory prepayments made during the applicable period and subject to certain other exceptions, at a purchase price equal to 100% of the principal amount of the 2018 Senior Secured Notes, plus accrued and unpaid interest and additional interest. Upon the occurrence of a change of control or if the Company sells certain assets, the Company may be required to make an offer to purchase the 2018 Senior Secured Notes at certain specified prices.

The 2018 Senior Secured Notes Indenture contains covenants that, among other things, limit the Company's, the Co-Issuers' and the Guarantors' ability to (i) incur or guarantee additional indebtedness or issue preferred stock; (ii) grant liens on assets; (iii) pay dividends or make distributions to stockholders; (iv) repurchase or redeem capital stock or subordinated indebtedness; (v) make investments or acquisitions; (vi) enter into sale/leaseback transactions; (vii) incur restrictions on the ability of the Company's subsidiaries to pay dividends or to make other payments to the Company; (viii) enter into transactions with the Company's affiliates; (ix) merge or consolidate with other companies or transfer all or substantially all assets; and (x) transfer or sell assets. These covenants are subject to important exceptions and qualifications. The 2018 Senior Secured Notes Indenture contains affirmative covenants and events of default that are customary for indentures governing high-yield debt securities.

17

Harland Clarke Holdings Corp. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(dollars in millions)

(unaudited)

Faneuil Revolving Credit Facilities

Faneuil had a $35.5 revolving credit facility (the "Revolving Credit Agreement"), which was to mature on June 1, 2012 and was paid in full on January 25, 2012. The Revolving Credit Agreement allowed Faneuil to choose from two different interest rate options. The first option was LIBOR plus 2.5% per annum and the second option was Prime Rate minus 1.25%. The Revolving Credit Agreement contained certain covenants and restrictions including covenants and restrictions related to change of control, mergers, dissolution, accounting methodology, indebtedness, dividends and distributions. The Revolving Credit Agreement was collateralized by substantially all of the assets of Faneuil, and was secured by a pledge of the shares of Faneuil's parent.

On January 25, 2012, Faneuil entered into a new $25.0, two-year, revolving credit agreement with MacAndrews & Forbes Group LLC, which is an indirect wholly owned subsidiary of MacAndrews. This revolver was drawn in full on January 25, 2012 and the proceeds, along with cash on hand, were used to pay in full the outstanding balance of $25.6 plus all accrued interest under the Revolving Credit Agreement. Faneuil terminated the Revolving Credit Agreement and it is no longer available for borrowing.

On March 19, 2012, in connection with the Faneuil Acquisition, Faneuil's $25.0 revolving credit facility with MacAndrews & Forbes Group LLC was extinguished and Faneuil no longer has any loans outstanding.

Loss on Early Extinguishment of Debt

In connection with the repayment of $726.6 of the Non-Extended Term Loans and $50.0 of Fixed Rate Notes in the second quarter of 2013, the Company recorded a non-cash loss on early extinguishment of debt of $61.0 resulting from the write-off of unamortized acquisition accounting-related fair value discount, which was attributable to the MacAndrews Acquisition.

Capital Lease Obligations

The Company has outstanding capital lease obligations with principal balances totaling $3.7 and $3.1 at June 30, 2013 and December 31, 2012, respectively. These obligations have imputed interest rates ranging from 0.0% to 9.6% and have required payments of $1.0 remaining in 2013, $1.8 in 2014, $0.5 in 2015 and $0.4 in 2016.

12. Derivative Financial Instruments

Interest Rate Hedges

The Company uses hedge transactions, which are accounted for as cash flow hedges, to limit the Company's risk on a portion of its variable-rate debt.

During June 2009, the Company entered into an interest rate derivative transaction in the form of a three-year interest rate swap with a notional amount of $350.0, which became effective on June 30, 2009 and expired on June 30, 2012. This hedge swapped the underlying variable rate for a fixed rate of 2.353%. During September 2009, the Company entered into an additional interest rate derivative transaction in the form of a three-year interest rate swap with a notional amount of $250.0, which became effective on September 30, 2009 and expired on September 30, 2012. This hedge swapped the underlying variable rate for a fixed rate of 2.140%.

During June 2010, the Company entered into an interest rate derivative transaction in the form of a three-year interest rate swap with a notional amount of $255.0, which became effective on June 30, 2010 and expired on June 30, 2013. This hedge swapped the underlying variable rate for a fixed rate of 1.264%.

The following presents the fair values of these derivative instruments and the classification in the consolidated balance sheets.

Derivatives Designated as Cash Flow Hedging Instruments:	Balance Sheet Classification	June 30, 2013		December 31, 2012
Interest rate swaps	Other current liabilities	$	—	$	1.3

Fair value of interest rate swaps is based on forward-looking interest rate curves as provided by the counterparty, adjusted for the Company's credit risk.

18

Harland Clarke Holdings Corp. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(dollars in millions)

(unaudited)

These derivative instruments were ineffective during the three and six months endedJune 30, 2013 and 2012. The following presents the effect of these derivative instruments (effective and ineffective portion) on other comprehensive loss and amounts reclassified from accumulated other comprehensive loss into interest expense.

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2013		2012		2013		2012
Interest Rate Swaps:
Loss reclassified from other comprehensive income into interest expense (effective portion)	$	—	$	—	$	—	$	0.1
Loss recognized in interest expense (ineffective portion)	—		0.2		—		1.5

The following presents the balances and net changes in the accumulated other comprehensive loss related to these derivative instruments, net of income taxes.

	Six Months Ended
	June 30,
Balances and Net Changes:	2012
Balance at beginning of period	$	0.1
Loss reclassified from accumulated other comprehensive loss into interest expense, net of taxes of $0.0	(0.1		)
Balance at end of period	$	—

There were no balances related to these derivative instruments in accumulated other comprehensive loss in the six months period ended June 30, 2013.

13. Fair Value Measurements

Nonrecurring Fair Value Measurements

During the six months endedJune 30, 2013, the Company recorded non-cash impairment charges of $0.2 for the Harland Clarke segment related to assets that were determined to have no future use and $0.7 for the Scantron segment related to software that was determined to have no future use (see Note 6).

Recurring Fair Value Measurements

Fair values of financial instruments subject to recurring fair value measurements as of June 30, 2013 and December 31, 2012 are as follows:

	Balance at
	June 30,  2013		(Level 1)		(Level 2)		(Level 3)
Corporate equity securities	$	0.1	$	0.1	$	—	$	—

	Balance at
	December 31, 2012		(Level 1)		(Level 2)		(Level 3)
Corporate equity securities	$	0.1	$	0.1	$	—	$	—
Liability for interest rate swaps	1.3		—		1.3		—

Fair value of interest rate swaps is based on forward-looking interest rate curves as provided by the counterparty, adjusted for the Company's credit risk. Fair value of corporate equity securities is based on quoted market prices.

19

Harland Clarke Holdings Corp. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(dollars in millions)

(unaudited)

The following table presents the Company's liability for contingent consideration related to business combinations measured at fair value on a recurring basis using significant unobservable inputs (Level 3):

	Three Months Ended		Six  Months Ended
	June 30,		June 30,
	2012		2012
Balance at beginning of period	$	0.1	$	0.6
Net changes in fair value	—		(0.5		)
Balance at end of period	$	0.1	$	0.1

There was no liability for contingent consideration related to business combinations in the six months period ended June 30, 2013. Fair value of the liability for contingent consideration related to business combinations is estimated utilizing a discounted cash flow analysis. The analysis considers, among other things, estimates of future revenues and the timing of expected future contingent consideration payments.

Fair Value of Financial Instruments

Most of the Company's clients are in the financial services and educational industries. The Company performs ongoing credit evaluations of its clients and maintains allowances for potential credit losses. The Company does not generally require collateral. Actual losses and allowances have been within management's expectations.

The carrying amounts for cash and cash equivalents, trade accounts receivable, accounts payable and accrued liabilities approximate fair value. The estimated fair value of long-term debt is determined by Level 2 inputs and is based primarily on quoted market prices for the same or similar issues as of the measurement date. The estimated fair value of long-term debt at June 30, 2013 and December 31, 2012 was approximately $2,053.3 and $1,984.4, respectively. The carrying value of long-term debt at June 30, 2013 and December 31, 2012 was $1,937.6 and $1,847.8 respectively. As described in Note 1, the carrying value of the Company's long-term debt was adjusted to fair value as of the date of the MacAndrews Acquisition.

14. Investments

Equity Method Investment

During 2012, the Company purchased certain equity securities of Transactis, Inc. ("Transactis"), a privately held company, representing a 15.5% ownership interest for $7.0 in cash. The Company accounts for this investment using the equity method due to its ability to influence operating and financial matters of Transactis through its representation on the Transactis board of directors and certain rights under the terms of the stock purchase agreement. The assets, liabilities and results of operations are not significant to the Company's financial position or results of operations. The carrying value of this investment at June 30, 2013 and December 31, 2012 was $6.5 and $6.9, respectively, and is included in other assets in the accompanying consolidated balance sheets.

Marketable Securities

The Company's marketable securities are classified as available-for-sale and are reported at their fair values, which are as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Balance at June 30, 2013:
Corporate equity securities	$	0.1	$	—	$	—	$	0.1
Balance at December 31, 2012:
Corporate equity securities	$	0.1	$	—	$	—	$	0.1

During the six months ended June 30, 2012, the Company sold its United States treasury securities, which were to mature in 2014, for $56.3 in cash and recognized a loss of $0.2, which is included in other expense, net in the accompanying consolidated statements of operations.

20

Harland Clarke Holdings Corp. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(dollars in millions)

(unaudited)

15. Commitments and Contingencies

Various legal proceedings, claims and investigations are pending against the Company, including those relating to commercial transactions, intellectual property matters, environmental matters and other matters. Certain of these matters are covered by insurance, subject to deductibles and maximum limits. In the opinion of management based upon the information available at this time, the outcome of the matters referred to above will not have a material adverse effect on the Company's consolidated financial position or results of operations.

16. Restructuring

Harland Clarke and Corporate

The Company adopted plans during 2011, 2012 and 2013 to realize cost savings in the Harland Clarke segment and Corporate by consolidating printing plants, contact centers and selling, general and administrative functions.

The following table details the components of the Company's restructuring accruals under its plans related to the Harland Clarke segment and Corporate for the six months ended June 30, 2013 and 2012:

	Beginning Balance		Expensed		Paid in Cash			Non-Cash Utilization			Ending Balance
Six months ended June 30, 2013:
Severance and severance-related	$	6.4	$	1.1	$	(3.1	)	$	—		$	4.4
Facilities closures and other costs	2.4		4.9		(1.0		)	(3.4		)	2.9
Total	$	8.8	$	6.0	$	(4.1	)	$	(3.4	)	$	7.3
Six months ended June 30, 2012:
Severance and severance-related	$	4.5	$	1.6	$	(0.4	)	$	—		$	5.7
Facilities closures and other costs	3.0		1.1		(0.9		)	(0.5		)	2.7
Total	$	7.5	$	2.7	$	(1.3	)	$	(0.5	)	$	8.4

The non-cash utilization of $3.4 and $0.5 in 2013 and 2012, respectively, in the table above includes adjustments to the carrying value of other property, plant and equipment. The Company expects to incur in future periods an additional $2.5 for costs related to these plans. The Company expects to make payments for severance and severance-related costs through 2014. Ongoing lease commitments related to these plans continue through 2017.

Harland Financial Solutions

During 2012, the Company adopted a plan to realize additional cost savings in the Harland Financial Solutions segment by eliminating certain selling, general and administrative expenses.

The following table details the components of the Company's restructuring accruals related to the Harland Financial Solutions segment for the six months ended June 30, 2013 and 2012:

	Beginning Balance		Expensed			Paid in Cash			Non-Cash Utilization		Ending Balance
Six months ended June 30, 2013:
Severance and severance-related	$	0.1	$	0.2		$	—		$	—	$	0.3
Facilities and other costs	1.3		(0.2		)	(0.2		)	0.2		1.1
Total	$	1.4	$	—		$	(0.2	)	$	0.2	$	1.4
Six months ended June 30, 2012:
Severance and severance-related	$	—	$	0.4		$	(0.3	)	$	—	$	0.1
Facilities and other costs	1.5		—			(0.1		)	—		1.4
Total	$	1.5	$	0.4		$	(0.4	)	$	—	$	1.5

21

Harland Clarke Holdings Corp. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(dollars in millions)

(unaudited)

Scantron

During the six months ended June 30, 2013, the Company adopted a plan in the Scantron segment to exit certain product lines in the education market. The plan resulted in the closure of four leased facilities and the elimination of operations and selling, general and administrative expenses associated with those product lines, largely occurring in the second quarter of 2013.

The Company previously adopted plans during 2011 and 2012 to realize cost savings in the Scantron segment by consolidating certain operations and eliminating certain selling, general and administrative expenses.

The following table details the components of the Company's restructuring accruals related to the Scantron segment for the six months ended June 30, 2013 and 2012:

	Beginning Balance		Expensed		Paid in Cash			Non-Cash Utilization			Ending Balance
Six months ended June 30, 2013:
Severance and severance-related	$	3.2	$	3.8	$	(4.1	)	$	—		$	2.9
Facilities and other costs	0.9		3.1		(0.8		)	(0.8		)	2.4
Total	$	4.1	$	6.9	$	(4.9	)	$	(0.8	)	$	5.3
Six months ended June 30, 2012:
Severance and severance-related	$	2.0	$	1.3	$	(1.4	)	$	—		$	1.9
Facilities and other costs	1.4		0.3		(0.9		)	—			0.8
Total	$	3.4	$	1.6	$	(2.3	)	$	—		$	2.7

The non-cash utilization in the table above includes adjustments to the carrying value of other property, plant and equipment. Ongoing lease commitments related to these plans continue to 2018. The Company expects to make payments for severance and severance-related costs through 2014.

Faneuil

The Company adopted a plan in 2012 to realize cost savings in the Faneuil segment by consolidating certain operations and eliminating certain selling, general and administrative expenses. The following table details the components of the Company's restructuring accruals related to the Faneuil segment for the six months ended June 30, 2013 and 2012:

	Beginning Balance		Expensed		Paid in Cash			Ending Balance
Six months ended June 30, 2013:
Severance and severance-related	$	0.6	$	0.4	$	(0.7	)	$	0.3
Facilities and other costs	0.2		—		—			0.2
Total	$	0.8	$	0.4	$	(0.7	)	$	0.5
Six months ended June 30, 2012:
Facilities and other costs	$	—	$	0.3	$	(0.3	)	$	—
Total	$	—	$	0.3	$	(0.3	)	$	—

Restructuring accruals for all of the segments' plans are reflected in other current liabilities and other liabilities in the accompanying consolidated balance sheets. The Company expects to pay the remaining severance, facilities and other costs related to the segments’ restructuring plans through 2018.

17. Transactions with Related Parties

The Company participates in MacAndrews' directors and officers insurance program, which covers the Company as well as MacAndrews and MacAndrews' other affiliates. The limits of coverage are available on aggregate losses to any or all of the participating companies and their respective directors and officers. The Company reimburses MacAndrews for its allocable portion of the premiums for such coverage, which the Company believes is more favorable than premiums the Company could secure were it to secure its own coverage. At June 30, 2013, the Company recorded prepaid expenses and other assets of $0.8

22

Harland Clarke Holdings Corp. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(dollars in millions)

(unaudited)

and $1.3, respectively, relating to the directors and officers insurance program. At December 31, 2012, the Company recorded prepaid expenses and other assets of $0.7 and $1.0, respectively, related to the directors and officers insurance program. The Company paid $1.0 and $1.9 to MacAndrews during the six months endedJune 30, 2013 and 2012, respectively, under the directors and officers insurance program. The Company also participates in certain other insurance programs with MacAndrews under which it pays premiums directly to the insurance broker.

Notes Receivable

On December 27, 2011, the Company entered into a revolving credit agreement with its indirect parent, MacAndrews, whereby MacAndrews could borrow an amount not exceeding $30.0. The facility is unsecured, bears interest at LIBOR plus 2% and matures in December 2013. The facility was drawn in full by MacAndrews on December 27, 2011 and remained outstanding at June 30, 2013. Interest income of $0.1 and $0.3 was recorded and related payments were received during the three and six months endedJune 30, 2013, respectively. Interest income of $0.2 and $0.4 was recorded and related payments were received during the three and six months endedJune 30, 2012, respectively.

Other

The Company expensed $0.7 and $1.4 during the three and six months endedJune 30, 2013, respectively, and $0.7 and $1.4 during the three and six months endedJune 30, 2012, respectively, for services provided to the Company by M & F Worldwide. This amount is reflected in selling, general and administrative expenses.

During the six months endedJune 30, 2013 and 2012, the Company paid cash dividends of $26.2 and $25.8, respectively, to M & F Worldwide as permitted by restricted payment baskets within the Company's debt agreements.

On March 19, 2012, the Company completed the Faneuil Acquisition from affiliates of MacAndrews, its indirect parent (see Note 3). In connection with the Faneuil Acquisition, Faneuil's revolving credit facility with an affiliate of MacAndrews, which was entered into on January 25, 2012, was extinguished (see Note 11).

18. Subsequent Event

On July 23, 2013, the Company entered into a Stock Purchase Agreement (the "Stock Purchase Agreement") with Davis + Henderson Corporation ("D+H"), Spoke Acquisition, Inc. ("Acquirer I"), D+H Ltd. ("Acquirer II", collectively with Acquirer I, the "Buyer"), and MacAndrews. Pursuant to the terms of the Stock Purchase Agreement, the Buyer agreed to acquire all of the outstanding shares of capital stock of each of Harland Financial Solutions, Inc., Harland Financial Solutions Worldwide Limited and Harland Israel Ltd. (collectively, "HFS") from the Company (the "Transaction") for a purchase price of $1.2 billion in cash, which amount is subject to both a pre-closing and post-closing adjustment for working capital in accordance with the terms and conditions of the Stock Purchase Agreement.

The Transaction is subject to customary closing conditions, including the absence of a legal impediment to the Transaction and the expiration or termination of applicable waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Condition"). The obligations of the Company and Buyer to close the Transaction are also subject to, among others, (a) the accuracy of representations and warranties of the other party as set forth in the Stock Purchase Agreement (in each case subject to material adverse effect qualifications), (b) the other party having performed in all material respects its obligations under the Stock Purchase Agreement and (c) in the case of the Buyer's obligations to close, HFS not having suffered a material adverse effect and all third party debt of HFS having been released. The Transaction is not subject to a financing condition. The Company expects the Transaction to close in the third quarter of 2013.

The Stock Purchase Agreement includes representations and warranties customary for an arm's length acquisition agreement. The Stock Purchase Agreement contains customary covenants of the Company and the Buyer, including with respect to the conduct of the HFS business during the interim period between the execution of the Stock Purchase Agreement and the earlier to occur of the closing of the Transaction and the termination of the Stock Purchase Agreement.

The Stock Purchase Agreement may be terminated at any time prior to the Closing: (a) by mutual written consent of the parties; (b) by either of the parties, if any governmental authority has issued a final and non-appealable order, decree or ruling prohibiting the Transaction; (c) by the Company, if there has been a breach by the Buyer of any representation or warranty or any covenant or agreement contained in the Stock Purchase Agreement that would result in a failure of a closing condition and which breach cannot be cured or has not been cured (to the extent necessary to avoid a failure of such condition) within fifteen (15) days after the giving of written notice to the Buyer; (d) by the Buyer, if there has been a breach by the Company of any representation or warranty or any covenant or agreement contained in the Stock Purchase Agreement that would result in a failure of a closing condition and which breach cannot be cured or has not been cured (to the extent necessary to avoid a failure of such condition) within fifteen (15) days after the giving of written notice to the Company; or (e) by either the Company or

23

Harland Clarke Holdings Corp. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(dollars in millions)

(unaudited)

the Buyer, if the Closing does not occur by the close of business on September 30, 2013, which date may be extended by either such party to February 28, 2014 if the HSR Condition remains unsatisfied as of three business days prior to September 30, 2013.

The Stock Purchase Agreement contains customary indemnification obligations of each party with respect to breaches of their respective representations, warranties, covenants and obligations, and certain other designated matters. D+H agreed to guarantee the performance of the Buyer, and guaranteed that the Buyer will fully, completely and timely pay and perform all its obligations and assume all its liabilities under the Stock Purchase Agreement.

The Stock Purchase Agreement provides that, at the Closing, the Company, the Buyer and D+H will enter into an ancillary agreement providing for certain transitional services to the Buyer following the Closing on terms customary for a transaction of this type.

24

Harland Clarke Holdings Corp. and Subsidiaries

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion regarding our financial condition and results of operations for the six months ended June 30, 2013 and 2012 should be read in conjunction with the more detailed financial information contained in our consolidated financial statements and their notes included elsewhere in this Quarterly Report on Form 10-Q.

Overview of Business

Harland Clarke Holdings Corp. ("Harland Clarke Holdings" and, together with its subsidiaries, the "Company") is a holding company that conducts its operations through its direct and indirect, wholly owned operating subsidiaries and was incorporated in Delaware on October 19, 2005. The Company is an indirect, wholly owned subsidiary of M & F Worldwide Corp. ("M & F Worldwide"), which is, as of December 21, 2011, an indirect, wholly owned subsidiary of MacAndrews & Forbes Holdings Inc. ("MacAndrews"). MacAndrews is wholly owned by Ronald O. Perelman. On September 12, 2011, M & F Worldwide agreed to merge with an indirect, wholly owned subsidiary of MacAndrews, and, following a vote of stockholders of M & F Worldwide and the satisfaction or waiver of closing conditions, that merger was effected on December 21, 2011 (the "MacAndrews Acquisition").

As a result of the MacAndrews Acquisition, which resulted in a change in ownership of M & F Worldwide, the Company was required to use the acquisition method of accounting to revalue its assets and liabilities as of the date of the MacAndrews Acquisition. Such accounting results in a number of changes, including, but not limited to, decreased revenues as a result of fair value adjustments to deferred revenues, increased depreciation and amortization as a result of the revaluation of assets and increased non-cash interest expense that results from adjusting the Company's long-term debt to fair value as of the date of the MacAndrews Acquisition.

On March 19, 2012, the Company purchased Faneuil, Inc. ("Faneuil") from affiliates of MacAndrews (see Note 3 to the accompanying consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q). Under accounting guidance for transactions among entities under common control, the Company has accounted for the purchase at historical cost and has retrospectively recasted prior periods under common control to include Faneuil operations. The Company and Faneuil came under common control on December 21, 2011, the date of the MacAndrews Acquisition. Faneuil is a separate business segment for financial reporting purposes.

During the second quarter of 2012, the Company transferred certain product and service lines from the Scantron segment to other segments to better align complementary products and services. The Harland Technology Services ("HTS") and Medical Device Tracking ("MDT") businesses were transferred to the Faneuil segment and the Survey Services business was transferred to the Harland Clarke Segment. Prior period segment information has been reclassified to reflect this change.

The Harland Clarke segment offers checks and related products, forms and treasury supplies, and related delivery and fraud prevention products as well as transactional document printing, including statements, compliance documents and communications, to financial and commercial institutions. It also provides direct marketing services to their clients including direct marketing campaigns, direct mail, database marketing, telemarketing and digital marketing. In addition to these products and services, the Harland Clarke segment offers stationery, business cards, survey services and other business and home office products to consumers and businesses.

The Harland Financial Solutions segment provides technology products and related services to financial institutions worldwide including lending and mortgage compliance and origination applications, risk management solutions, business intelligence solutions, Internet and mobile banking applications, branch automation solutions, self-service solutions, electronic payment solutions and core processing systems.

The Scantron segment provides data management and decision support solutions and related services to educational, commercial and governmental entities worldwide. Scantron products and services provide solutions for testing and assessment, instruction and performance management and business operational data collection. Scantron's solutions combine a variety of data collection, analysis, and management tools including web-based solutions, software, scanning equipment and forms.

The Faneuil segment provides business process outsourcing services including call center operations, back office operations, staffing services and toll collection services to government and regulated commercial clients. The Faneuil segment also provides patient information collection and tracking services, managed technical services and related field maintenance services to educational, commercial, healthcare and governmental entities.

25

Harland Clarke Holdings Corp. and Subsidiaries

Refinancing Transactions

On May 20, 2013, the Company completed the issuance of additional 2018 Senior Secured Notes. Proceeds from the issuance were used to repay and retire $50.0 million principal amount of fixed rate 2015 Senior Notes. On April 26, 2013, the Company completed a transaction to refinance its non-extended term loans that were to mature in June 2014. On February 20, 2013, the Company completed certain refinancing transactions with respect to its revolving credit facility dated as of April 4, 2007. On July 24, 2012, the Company completed certain refinancing transactions with respect to its credit agreement dated as of April 4, 2007, as amended on May 10, 2012. See Note 11 to the accompanying consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

NCP Solutions Acquisition

On May 31, 2013, the Company acquired 100% of the equity of NCP Solutions, LLC ("NCP Solutions") for $35.5 million, after giving effect to working capital adjustments of $0.5 million (the "NCP Solutions Acquisition"). NCP Solutions is a leading end-to-end communications solutions provider to consumer finance companies, banks, mortgage lenders, mortgage subservicers, credit unions, auto and equipment finance companies, auto service contract providers, direct marketing companies, healthcare and health insurance companies, check producers and various other customers. The NCP Solutions business is included in the Harland Clarke segment for financial reporting purposes.

The Faneuil Acquisition

On March 19, 2012, the Company entered into a Stock Purchase Agreement pursuant to which the Company purchased 100% of the issued and outstanding shares of capital stock of New Faneuil, Inc. ("New Faneuil") for $70.0 million in cash (the "Faneuil Acquisition") from affiliates of MacAndrews. The Company financed the Faneuil Acquisition with Harland Clarke Holdings' cash on hand. New Faneuil, through its wholly owned subsidiary, Faneuil, provides business process outsourcing services including call center operations, back office operations, staffing services and toll collection services to government and regulated commercial clients across the United States.

Economic and Other Factors Affecting the Businesses of the Company

Harland Clarke

While total non-cash payments - including checks, credit cards, debit cards and other electronic forms of payment - are growing, the number of checks written has declined and is expected to continue to decline. Harland Clarke believes the number of checks printed is driven by the number of checks written, the number of new checking accounts opened and reorders reflecting changes in consumers' personal situations, such as name or address changes. In recent years, Harland Clarke has experienced check unit declines at a higher rate than in the past, as evidenced by recent period-over-period declines in Harland Clarke revenue which are discussed in more detail elsewhere in this report and other recently filed reports on Form 10-K and Form 10-Q. Harland Clarke believes these higher rates of decline are attributable at least in part to changing business strategies of certain of our financial institution clients and an increase in the use of alternative non-cash payments in addition to other factors. Harland Clarke is unable to determine the extent to which other factors such as economic and financial market difficulties, the depth and length of the economic downturn, higher unemployment, decreased openings of checking accounts and decreased consumer spending have also contributed to the higher rates of decline. Beginning in 2011, this trend of higher check unit declines improved slightly from that experienced in recent years; however, Harland Clarke is unable to determine at this time if this improvement to the trend will continue. Harland Clarke still expects that check unit volume will continue to decline, resulting in a corresponding decrease in check revenues and depending on the nature and relative magnitude of the causes for the decreases, such decreases may not be mitigated as and when overall economic conditions improve. Harland Clarke is focused on growing its non-check related products and services, optimizing its existing catalog of offerings and developing or acquiring new or expanded offerings, in each case to better serve its clients, as well as managing its costs, overhead and facilities to reflect the decline in check unit volumes. Harland Clarke does not believe that revenues from non-check related products and services will fully offset revenue declines from declining check unit volumes. In the future, Harland Clarke may not be able to mitigate the revenue declines from declining check unit volumes through cost management, which could negatively affect Harland Clarke's margins.

Harland Clarke's primary competition comes from alternative payment methods such as debit cards, credit cards, ACH, and other electronic and online payment options. Harland Clarke also competes with large providers that offer a wide variety of products and services including Deluxe Corporation, Harte-Hanks, Inc., and R.R. Donnelley & Sons Company. There are also many other competitors that specialize in providing one or more of the products and services Harland Clarke offers to its clients. Harland Clarke competes on the basis of service, convenience, quality, product range and price.

The Harland Clarke segment's operating results are also affected by consumer confidence and employment. Consumer confidence directly correlates with consumer spending, while employment also affects revenues through the number of new checking accounts being opened. The Harland Clarke segment's operating results may be negatively affected by slow or

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Harland Clarke Holdings Corp. and Subsidiaries

negative growth of, or downturns in, the United States economy. Business confidence affects a portion of the Harland Clarke segment. In addition, if Harland Clarke's financial institution customers fail or merge with other financial institutions, Harland Clarke may lose any or all revenue from such financial institutions and/or experience further pricing pressure, which would negatively affect Harland Clarke's operating results.

Harland Financial Solutions

Harland Financial Solutions' operating results are affected by the overall demand for our products, software and related services, which is based upon the technology budgets of our clients and prospects. Economic downturns in one or more of the countries in which we do business and enhanced regulatory burdens, including through increased fees and assessments charged to financial institutions by the Federal Deposit Insurance Corporation and National Credit Union Association or due to federal legislation for additional taxes on certain financial institutions, could result in reductions in the information technology budgets for some portion of our clients and potentially longer lead-times for acquiring Harland Financial Solutions products and services. In addition, if Harland Financial Solutions' financial institution customers fail or merge with other financial institutions, Harland Financial Solutions may lose any or all revenue from such financial institutions and/or experience further pricing pressure, which would negatively affect Harland Financial Solutions' operating results.

Harland Financial Solutions' business is affected by technological change, evolving industry standards, regulatory changes in client requirements and frequent new product introductions and enhancements. The business of providing technological solutions to financial institutions and other enterprises requires that we continually improve our existing products and create new products while at the same time controlling our costs to remain price competitive.

Providing technological solutions to financial institutions is highly competitive and fragmented. Harland Financial Solutions competes with several large and diversified financial technology providers, including, among others, Fidelity National Information Services, Inc., Fiserv, Inc., Jack Henry & Associates, Inc., Computer Services Inc. and many regional providers. Many multi-national and international providers of technological solutions to financial institutions also compete with Harland Financial Solutions both domestically and internationally, including Temenos Group AG, Misys plc, Infosys Technologies Limited, Tata Consultancy and Oracle Financial Services. There are also many other competitors that offer one or more specialized products or services that compete with products and services offered by Harland Financial Solutions. Management believes that competitive factors influencing buying decisions include product features and functionality, client support, price and vendor financial stability.

Scantron

While the number of tests given annually in K-12 and higher education continues to grow, the demand for optical mark reader paper-based testing has declined and is expected to continue to decline. Changes in educational funding can affect the rate at which schools adopt new technology thus slowing the decline for paper-based testing but also slowing the demand for Scantron's on-line testing products. Educational funding changes may also reduce the rate of consumption of Scantron's forms and purchase of additional hardware to process these forms. Scantron's education-based customers may turn to lower cost solutions for paper-based forms and hardware in furtherance of addressing their budget needs. A weak economy in the United States may negatively affect education budgets and spending, which would have an adverse effect on Scantron's operating results. Scantron's recent exit from certain product lines in the education market may also have an adverse effect on its ongoing business and business prospects. Scantron is subject to federal and state educational budget allotments. In the current economic and political landscapes, these budget allotments may come under pressure and could be reduced, thus affecting customer willingness to invest in Scantron products.

Data collection is also experiencing a conversion to non-paper based methods of collection. Scantron believes this trend will also continue as the availability of these alternative technologies becomes more widespread. While Scantron's non-paper data collection business could benefit from this trend, Scantron's paper-based data collection business could be negatively affected by this trend. Changes in the overall economy can affect the demand for data collection to the extent that Scantron's customers adjust their research or testing expenditures.

Scantron must successfully develop new products and solutions to respond to the significant changes in the educational testing and data collection industry due to customer requirements, technological and regulatory changes. Scantron must continue to keep pace with changes in testing and data collection technology and the needs of its clients. The development of new education-related technologies depends on the timing and costs of the development effort, product performance, functionality, customer acceptance, adoption rates and competition, all of which could have a negative effect on our business. If Scantron is not able to adopt new electronic data collection and other education technology-related solutions at a rate that keeps pace with other technological advances, or in a manner that results in meaningful customer adoption, the business, business prospects, results of operations and financial condition of Scantron could be materially and adversely affected. In addition, Scantron may from time to time, depending on the foregoing and other factors, determine to limit investment in, restrict marketing efforts for or discontinue certain of its products which are not part of Scantron's evolving strategic plans.

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Harland Clarke Holdings Corp. and Subsidiaries

Scantron enters into contracts with customers that provide for multiple products and services or "elements," such as software, implementation, configuration, training and maintenance (referred to as "multiple-element contracts"). In order to recognize revenue for each element of the contract separately as earned, the relevant accounting guidance requires that the Company have "vendor-specific objective evidence", or "VSOE", of fair value of each element. VSOE of fair value of each element is typically based on the price charged when sold separately. The Company does not yet have sufficient history with sales of products and services associated with acquisitions completed in 2010 and 2011 to establish VSOE for elements within their contracts. As a result, for such contracts, the entire contract is bundled as a single unit for accounting purposes with revenue being recognized ratably over the initial term of the contract commencing with the delivery of the software or the completion of implementation services if such services are essential to the functionality of the software. This methodology results in substantial deferral of revenue into future periods, while the related costs, with the exception of direct implementation costs, are expensed as incurred rather than deferred. In addition, revenue from contracts that are subject to substantive customer acceptance provisions is deferred until the acceptance provisions have been met. As a result of these factors that cause deferral of significant revenue into future periods for amounts that are billed and collected, the Company recorded operating losses in 2012 and 2013 for the operations associated with the acquisitions completed in 2010 and 2011.

See "Management's Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies and Estimates" in the Company's Annual Report on Form 10-K for the year ended December 31, 2012 for additional information regarding revenue recognition policies.

Faneuil

The Faneuil segment provides outsourcing solutions and information technology solutions to customers throughout the United States.

Faneuil is an outsourcer for government services and highly regulated industries with a focus on industries that remain robust under normal economic conditions, e.g., transportation, utilities, state agencies, municipal governments and healthcare. During economic downturns, the ability of both private and governmental entities to make expenditures may decline. Faneuil cannot be certain that economic or political conditions will be generally favorable or that there will not be significant fluctuations which adversely affect Faneuil's industry as a whole or key markets targeted by Faneuil. As Faneuil's operations are, in part, dependent upon government funding, significant decreases in the level of government funding could have an unfavorable effect on Faneuil's operating results.

Faneuil's business is subject to a variety of program related risks, including changes in political and other circumstances, particularly since contracts for major programs are performed over extended periods of time. These risks include the failure of applicable governing authorities to take necessary actions, opposition by third parties to specific programs and the failure by customers to obtain adequate financing for particular programs. Due to these factors, losses on a select contract or contracts could occur, and Faneuil could experience significant changes in operating results.

Faneuil's primary competition comes from other large providers of toll services such as Affiliated Computer Services, Inc. ("ACS") and TransCore, Inc., and providers of customer contact center services such as ACS and Convergys Corporation. If Faneuil cannot compete effectively, it will negatively affect its operating results. To remain competitive, Faneuil must continuously implement new technologies, expand its portfolio of outsourced services and may have to make occasional strategic adjustments to its pricing for its services.

Faneuil's operations are positively affected by the growing trend in government agencies to outsource their internal operations to address shrinking budgets and eliminate the historically higher costs associated with staffing government programs. Tolling operations are expected to increase across the country in an effort to provide new funding for government agencies realizing budgetary cutbacks as a result of the prevailing economic climate. Similarly, governments and other highly regulated businesses are seeking economic efficiencies by outsourcing their customer contact centers. While Faneuil will look to take advantage of these opportunities, some of these opportunities require performance bonds, and there can be no assurance that bonds will be available on reasonable terms.

Faneuil's HTS business is a nationwide information technology solutions and services provider offering installation, implementation, maintenance and repair, managed services and managed print services for computers, networks, printers, Scantron's data collection devices and a variety of other technology equipment. HTS provides these services to customers of all sizes nationwide in a variety of industries, e.g., banking, education, government, commercial businesses and healthcare. HTS competes with other hardware manufacturers that have a significant market-share in a highly fragmented environment. Falling technology prices and better hardware reliability pose a threat to the business, and HTS has expanded its focus to increase its sales of managed services solutions in response to these market trends.

Restructuring

The Company has taken restructuring actions in the past in an effort to achieve manufacturing and contact center efficiencies and other cost savings. Past restructuring actions have related to both acquisitions and ongoing cost reduction

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Harland Clarke Holdings Corp. and Subsidiaries

initiatives and have included manufacturing plant closures, contact center closures and workforce rationalization. The Company anticipates future restructuring actions, where appropriate, to realize process efficiencies, to continue to align its cost structure with business needs and remain competitive in the marketplace. The Company expects to incur severance and severance-related costs, facilities closures costs and other costs such as inventory write-offs, training, hiring and travel in connection with future restructuring actions.

Consolidated Operating Results

The Company has organized its businesses along four reportable segments together with a corporate group for certain support services. The Company's operations are aligned on the basis of products, services and industry. Management measures and evaluates the reportable segments based on operating income. During the second quarter of 2012, the Company transferred certain product and service lines from the Scantron segment to other segments to better align complementary products and services. The HTS and MDT businesses were transferred to the Faneuil segment and the Survey Services business was transferred to the Harland Clarke segment. Prior period results in the tables below have been reclassified to reflect these business segment changes.

In the tables below, dollars are in millions.

Three Months Ended June 30, 2013 Compared to Three Months Ended June 30, 2012

The operating results for the three months ended June 30, 2013 and 2012, as reflected in the accompanying consolidated statements of operations and described below, include the operating results of the acquired Faneuil business for the full period since Faneuil and the Company were under common control during each of the periods. They include the operating results of the acquired NCP Solutions business from May 31, 2013, the date of the acquisition. They also include reclassifications related to the business segment changes discussed in the Consolidated Operating Results section above.

Net Revenues:

	Three Months Ended
	June 30,
	2013			2012
Consolidated Net Revenues:
Harland Clarke segment	$	287.0		$	282.2
Harland Financial Solutions segment	83.1			58.2
Scantron segment	27.2			28.7
Faneuil segment	40.8			37.4
Eliminations	(0.8		)	(0.6		)
Total	$	437.3		$	405.9

Net revenues increased by $31.4 million, or 7.7%, to $437.3 million in the 2013 period from $405.9 million in the 2012 period.

Net revenues for the Harland Clarke segment increased by $4.8 million, or 1.7%, to $287.0 million in the 2013 period from $282.2 million in the 2012 period primarily due to the NCP Solutions Acquisition that increased net revenues by $8.0 million, an increase in revenues per unit that increased net revenues by $4.1 million and an increase in non-check revenues of $0.4 million. These increases were partially offset by volume declines, net of conversions and client additions and losses, that reduced net revenues by $7.5 million and a decrease in net benefits of $0.5 million for non-cash fair value acquisition accounting adjustments related to the MacAndrews Acquisition. Non-cash fair value acquisition adjustments to deferred revenues and client incentives were a net benefit of $8.3 million in the 2013 period compared to a net benefit of $8.8 million in the 2012 period.

Net revenues for the Harland Financial Solutions segment increased by $24.9 million, or 42.8%, to $83.1 million in the 2013 period from $58.2 million in the 2012 period primarily due to a $12.1 million net increase in software license revenues as a result of meeting revenue recognition criteria for certain product lines and organic growth, a $10.8 million decrease in charges from non-cash fair value acquisition accounting adjustments related to the MacAndrews Acquisition as well as a $1.3 million increase in maintenance revenues and a $1.0 million increase in services revenues, each of which was due to increased implementations of credit management solutions. These increases were partially offset by a $0.6 million decrease in early termination fees. Charges for non-cash fair value acquisition accounting adjustments to deferred revenues were $0.5 million in the 2013 period compared to $11.3 million in the 2012 period.

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Harland Clarke Holdings Corp. and Subsidiaries

Net revenues for the Scantron segment decreased by $1.5 million, or 5.2%, to $27.2 million in the 2013 period from $28.7 million in the 2012 period primarily due to volume declines in scanners and forms that reduced net revenues by $2.4 million and a $0.9 million increase in charges for non-cash fair value acquisition accounting adjustments related to the MacAndrews Acquisition, partially offset by a $1.9 million increase in net revenues for the web-based products. Charges for non-cash fair value acquisition accounting adjustments to deferred revenues were $1.9 million in the 2013 period compared to $1.0 million in the 2012 period.

Net revenues for the Faneuil segment increased by $3.4 million, or 9.1%, to $40.8 million in the 2013 period from $37.4 million in the 2012 period primarily due to a $2.4 million increase from new business contracts and a $2.0 million decrease in charges for non-cash fair value acquisition accounting adjustments related to the MacAndrews Acquisition, partially offset by a $1.0 million decrease resulting from a contract price decrease. Charges for non-cash fair value acquisition accounting adjustments to deferred revenues were $2.0 million in the 2012 period.

Elimination of net revenues increased to $0.8 million in the 2013 period from $0.6 million in the 2012 period primarily due to intersegment sales of information technology services from the Scantron segment to the Harland Clarke segment.

Cost of Revenues:

	Three Months Ended
	June 30,
	2013			2012
Consolidated Cost of Revenues:
Harland Clarke segment	$	175.6		$	184.0
Harland Financial Solutions segment	32.4			30.9
Scantron segment	16.2			18.6
Faneuil segment	31.1			29.7
Eliminations	(0.8		)	(0.6		)
Total	$	254.5		$	262.6

Cost of revenues decreased by $8.1 million, or 3.1%, to $254.5 million in the 2013 period from $262.6 million in the 2012 period.

Cost of revenues for the Harland Clarke segment decreased by $8.4 million, or 4.6%, to $175.6 million in the 2013 period from $184.0 million in the 2012 period primarily due to $7.8 million of cost reductions resulting from technology enabled efficiencies and other cost reduction and restructuring initiatives, a $4.8 million decrease in non-cash fair value acquisition accounting adjustments related to the MacAndrews Acquisition, a $3.0 million decrease in variable expenses related to volume declines and a $0.9 million decrease in depreciation and amortization not related to purchase accounting. These decreases were partially offset by the NCP Solutions Acquisition that increased cost of revenues by $6.9 million and a $1.2 million increase in professional fees. Non-cash fair value acquisition accounting adjustments related to the MacAndrews Acquisition were $9.0 million in the 2013 period, including $9.1 million in depreciation and amortization and a benefit of $0.1 million in other non-cash adjustments, compared to $13.8 million in the 2012 period, including $14.0 million in depreciation and amortization and a benefit of $0.2 million in other non-cash adjustments. Cost of revenues as a percentage of revenues for the Harland Clarke segment decreased to 61.2% in the 2013 period from 65.2% in the 2012 period primarily due to technology enabled efficiencies and other cost reduction and restructuring initiatives and a decrease in non-cash fair value acquisition accounting adjustments related to the MacAndrews Acquisition.

Cost of revenues for the Harland Financial Solutions segment increased by $1.5 million, or 4.9%, to $32.4 million in the 2013 period from $30.9 million in the 2012 period primarily due to a $0.7 million increase resulting from revenue growth, a $0.5 million increase in labor expense due to increased headcount and a $0.3 million increase in internal software expense. Net charges for non-cash fair value acquisition accounting adjustments related to the MacAndrews Acquisition were $1.7 million in the 2013 period, including $2.1 million in depreciation and amortization and a $0.4 million benefit in other non-cash adjustments, compared to $1.9 million in the 2012 period, including $2.5 million in depreciation and amortization and a $0.6 million benefit in other non-cash adjustments. Cost of revenues as a percentage of revenues for the Harland Financial Solutions segment decreased to 39.0% in the 2013 period from 53.1% in the 2012 period primarily due to increased revenues in the 2013 period as discussed above.

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Cost of revenues for the Scantron segment decreased by $2.4 million, or 12.9%, to $16.2 million in the 2013 period from $18.6 million in the 2012 period primarily due to a decrease of $3.7 million resulting from volume declines and cost reduction and restructuring initiatives, partially offset by a $1.0 million increase resulting from lower cost deferrals in the 2013 period related to implementation services for revenues that have not yet been recognized and a $0.4 million decrease in net benefits for non-cash fair value acquisition accounting adjustments related to the MacAndrews Acquisition. Net benefits for non-cash fair value acquisition accounting adjustments related to the MacAndrews Acquisition were $5.7 million in the 2013 period, including a $5.2 million benefit in depreciation and amortization and a $0.5 million benefit in other non-cash adjustments, compared to $6.1 million in the 2012 period, including a $5.7 million benefit in depreciation and amortization and a $0.4 million benefit in other non-cash adjustments. Cost of revenues as a percentage of revenues for the Scantron segment decreased to 59.6% in the 2013 period from 64.8% in the 2012 period primarily due to cost reduction and restructuring initiatives.

Cost of revenues for the Faneuil segment increased by $1.4 million, or 4.7%, to $31.1 million in the 2013 period from $29.7 million in the 2012 period primarily due to a $0.8 million decrease in net benefits for non-cash fair value acquisition accounting adjustments related to the MacAndrews Acquisition and a $0.6 million increase in implementation costs related to new contracts and operational costs associated with the new business. Net benefits for non-cash fair value acquisition accounting adjustments related to the MacAndrews Acquisition were $0.2 million in the 2013 period, all of which was in depreciation and amortization, compared to $1.0 million in the 2012 period, including a $1.3 million benefit in depreciation and amortization and a $0.3 million charge in other non-cash adjustments. Cost of revenues as a percentage of revenues for the Faneuil segment decreased to 76.2% in the 2013 period from 79.4% in the 2012 period due to the change in business mix.

Elimination of cost of revenues increased to $0.8 million in the 2013 period from $0.6 million in the 2012 period primarily due to intersegment sales of information technology services from the Scantron segment to the Harland Clarke segment.

Selling, General and Administrative Expenses:

	Three Months Ended
	June 30,
	2013		2012
Consolidated Selling, General and Administrative Expenses:
Harland Clarke segment	$	44.3	$	46.4
Harland Financial Solutions segment	28.1		25.9
Scantron segment	13.4		18.9
Faneuil segment	5.1		5.7
Corporate	6.4		4.6
Total	$	97.3	$	101.5

Selling, general and administrative expenses decreased by $4.2 million, or 4.1%, to $97.3 million in the 2013 period from $101.5 million in the 2012 period.

Selling, general and administrative expenses for the Harland Clarke segment decreased by $2.1 million, or 4.5%, to $44.3 million in the 2013 period from $46.4 million in the 2012 period primarily due to a $2.7 million decrease resulting from cost reduction and restructuring initiatives consisting largely of labor expense reductions and a $1.4 million decrease in advertising expenses, partially offset by the NCP Solutions Acquisition that increased selling, general and administrative expenses by $0.8 million, a $0.5 million increase in equipment lease and maintenance expenses, a $0.4 million decrease in net benefits for non-cash fair value acquisition accounting adjustments related to the MacAndrews Acquisition and a $0.2 million increase in travel expenses. Non-cash fair value acquisition accounting adjustments related to the MacAndrews acquisition were a net benefit of $0.3 million for the 2013 period, all of which was in depreciation and amortization, compared to a net benefit of $0.7 million in the 2012 period, including a $1.2 million benefit in other non-cash adjustments and a $0.5 million increase in depreciation and amortization. Selling, general and administrative expenses as a percentage of revenues for the Harland Clarke segment decreased to 15.4% in the 2013 period from 16.4% in the 2012 period primarily due to cost reduction and restructuring initiatives.

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Selling, general and administrative expenses for the Harland Financial Solutions segment increased by $2.2 million, or 8.5%, to $28.1 million in the 2013 period from $25.9 million in the 2012 period primarily due to a $1.0 million increase in commission expense resulting from revenue growth, a $0.5 million decrease in net benefits for non-cash fair value acquisition accounting adjustments related to the MacAndrews Acquisition, a $0.5 million increase in travel expense, a $0.5 million increase in depreciation and amortization unrelated to purchase accounting and a $0.4 million increase in labor expense due to increased headcount. These increases were partially offset by a $0.7 million decrease resulting from an increase in capitalization of software development costs. Net benefits for non-cash fair value acquisition adjustments related to the MacAndrews Acquisition were $0.8 million in the 2013 period, all of which was in other non-cash adjustments, compared to $1.3 million in the 2012 period, including a $1.6 million benefit in other non-cash adjustments and a $0.3 million increase in depreciation and amortization. Selling, general and administrative expenses as a percentage of revenues for the Harland Financial Solutions segment decreased to 33.8% in the 2013 period from 44.5% in the 2012 period primarily due to increased revenues in the 2013 period as discussed above.

Selling, general and administrative expenses for the Scantron segment decreased $5.5 million, or 29.1%, to $13.4 million in the 2013 period from $18.9 million in the 2012 period primarily due to a decrease of $6.5 million resulting from cost reduction and restructuring initiatives and a $1.0 million decrease in costs related to projects to increase efficiencies, partially offset by an increase of $2.1 million primarily due to higher depreciation unrelated to purchase accounting, a decrease in capitalization of software development costs and a decrease in cost deferrals related to implementation services for revenues that have not yet been recognized. Non-cash fair value acquisition accounting adjustments related to the MacAndrews Acquisition were $0.3 million in both the 2013 and 2012 periods, with each period including $0.2 million in depreciation and amortization and a $0.1 million charge in other non-cash adjustments. Selling, general and administrative expenses as a percentage of revenues for the Scantron segment decreased to 49.3% in the 2013 period from 65.9% in the 2012 period primarily due to cost reduction and restructuring initiatives.

Selling, general and administrative expenses for the Faneuil segment decreased by $0.6 million, or 10.5%, to $5.1 million in the 2013 period from $5.7 million in the 2012 period primarily due to cost reductions of $0.7 million, partially offset by a $0.1 million increase in operational costs associated with new business. Selling, general and administrative expenses as a percentage of revenues for the Faneuil segment decreased to 12.5% in the 2013 period from 15.2% in the 2012 period primarily due to cost reductions and a change in business mix.

Corporate selling, general and administrative expenses increased by $1.8 million, or 39.1%, to $6.4 million in the 2013 period from $4.6 million in the 2012 period primarily due to corporate development activities.

Restructuring Costs

The Company has adopted plans to strengthen operating margins and leverage incremental synergies within the printing plants, contact centers and selling, general and administrative areas by relying on the Company's shared services capabilities and reorganizing certain operations and sales and support functions. During the first quarter of 2013, the Company adopted a plan in the Scantron segment to exit certain product lines in the education market, which resulted in the closure of leased facilities and the elimination of operations and selling, general and administrative expenses associated with those product lines.

In the 2013 period, the Company recorded restructuring costs of $3.9 million for the Harland Clarke segment and $2.8 million for the Scantron segment related to these plans. In the 2012 period, the Company recorded restructuring costs of $2.0 million for the Harland Clarke segment, $0.4 million for the Harland Financial Solutions segment, $1.2 million for the Scantron segment and $0.1 million for the Faneuil segment related to these plans.

Interest Expense

Interest expense was $55.8 million in the 2013 period compared to $51.2 million in the 2012 period. The increase in interest expense was primarily due to the refinancing of a portion of outstanding debt at higher interest rates and an increase in amortization of deferred financing fees and issuance discounts, partially offset by fair value acquisition accounting adjustments to the principal amount of debt outstanding at the time of the MacAndrews Acquisition that resulted in an $11.0 million decrease in non-cash interest expense. In addition, other fair value acquisition accounting adjustments to deferred financing costs and interest rate swaps resulted in a $1.6 million decrease in non-cash interest expense.

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Loss on Early Extinguishment of Debt

The non-cash loss on early extinguishment of debt of $61.0 million in the 2013 period, which was attributable to refinancing transactions, resulted from the write-off of unamortized acquisition accounting-related fair value discount related to the MacAndrews Acquisition (see Note 1 to the accompanying consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q).

Provision for Income Taxes

The Company's effective tax rate was a benefit of 40.8% in the 2013 period and a benefit 40.3% in the 2012 period. The benefit for the 2013 period is higher than the statutory rate primarily due to foreign income for which no provision was recorded. The benefit for the 2012 period is higher than the statutory rate primarily due to tax credits not previously recorded and certain foreign income not subject to tax.

Six Months Ended June 30, 2013 Compared to Six Months Ended June 30, 2012

The operating results for the six months ended June 30, 2013 and 2012, as reflected in the accompanying consolidated statements of operations and described below, include the operating results of the acquired Faneuil business for the full period since Faneuil and the Company were under common control during each of the periods. They include the operating results of the acquired NCP Solutions business from May 31, 2013, the date of the acquisition. They also include reclassifications related to the business segment changes discussed in the Consolidated Operating Results section above.

Net Revenues:

	Six Months Ended
	June 30,
	2013			2012
Consolidated Net Revenues:
Harland Clarke segment	$	570.9		$	579.7
Harland Financial Solutions segment	160.0			108.5
Scantron segment	57.1			58.8
Faneuil segment	80.2			73.8
Eliminations	(1.4		)	(1.1		)
Total	$	866.8		$	819.7

Net revenues increased by $47.1 million, or 5.7%, to $866.8 million in the 2013 period from $819.7 million in the 2012 period.

Net revenues for the Harland Clarke segment decreased by $8.8 million, or 1.5%, to $570.9 million in the 2013 period from $579.7 million in the 2012 period primarily due to volume declines, net of conversions and client additions and losses, that reduced net revenues by $15.7 million, one less production day in the 2013 period and a $0.3 million decrease in net benefits for non-cash fair value acquisition accounting adjustments related to the MacAndrews Acquisition, partially offset by the NCP Solutions Acquisition that increased net revenues by $8.0 million, an increase in revenues per unit that increased net revenues by $1.8 million and an increase in non-check revenues of $0.9 million. Non-cash fair value acquisition adjustments to deferred revenues and client incentives were a net benefit of $16.5 million in the 2013 period compared to a net benefit of $16.8 million in the 2012 period.

Net revenues for the Harland Financial Solutions segment increased by $51.5 million, or 47.5%, to $160.0 million in the 2013 period from $108.5 million in the 2012 period primarily due to a $29.5 million decrease in charges from non-cash fair value acquisition accounting adjustments related to the MacAndrews Acquisition, an $18.0 million net increase in software license revenues as a result of meeting revenue recognition criteria for certain product lines and organic growth as well as a $2.0 million increase in maintenance revenues and a $2.0 million increase in services revenues, each of which was due to increased implementations of credit management solutions. Charges for non-cash fair value acquisition accounting adjustments to deferred revenues related to the MacAndrews Acquisition were $1.2 million in the 2013 period compared to $30.7 million in the 2012 period.

Net revenues for the Scantron segment decreased by $1.7 million, or 2.9%, to $57.1 million in the 2013 period from $58.8 million in the 2012 period primarily due to volume declines in scanners and forms that reduced net revenues by $4.5 million, partially offset by a $1.0 million increase in net revenues for web-based products and a $2.1 million decrease in charges for non-cash fair value acquisition accounting adjustments related to the MacAndrews Acquisition. Charges for non-cash fair value acquisition accounting adjustments to deferred revenues were $3.4 million in the 2013 period compared to $5.5 million in the 2012 period.

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Harland Clarke Holdings Corp. and Subsidiaries

Net revenues for the Faneuil segment increased by $6.4 million, or 8.7%, to $80.2 million in the 2013 period from $73.8 million in the 2012 period primarily due to a $4.4 million increase from new business contracts and a $4.1 million decrease in charges for non-cash fair value acquisition accounting adjustments related to the MacAndrews Acquisition, partially offset by a $2.1 million decrease resulting from a contract price decrease. Charges for non-cash fair value acquisition accounting adjustments to deferred revenues were $0.1 million in the 2013 period compared to $4.2 million in the 2012 period.

Elimination of net revenues increased to $1.4 million in the 2013 period from $1.1 million in the 2012 period primarily due to intersegment sales of information technology services from the Scantron segment to the Harland Clarke segment.

Cost of Revenues:

	Six Months Ended
	June 30,
	2013			2012
Consolidated Cost of Revenues:
Harland Clarke segment	$	346.6		$	388.4
Harland Financial Solutions segment	63.8			61.7
Scantron segment	33.2			38.4
Faneuil segment	62.4			59.3
Eliminations	(1.4		)	(1.1		)
Total	$	504.6		$	546.7

Cost of revenues decreased by $42.1 million, or 7.7%, to $504.6 million in the 2013 period from $546.7 million in the 2012 period.

Cost of revenues for the Harland Clarke segment decreased by $41.8 million, or 10.8%, to $346.6 million in the 2013 period from $388.4 million in the 2012 period primarily due to a decrease in non-cash fair value acquisition accounting adjustments related to the MacAndrews Acquisition of $22.5 million, including decreases in inventory adjustments of $12.7 million and depreciation and amortization of $9.8 million. The decrease was also due to $18.5 million of cost reductions resulting from technology enabled efficiencies and other cost reduction and restructuring initiatives, a $7.2 million decrease in variable expenses related to volume declines and a $1.3 million decrease in depreciation and amortization not related to acquisition accounting. These decreases were partially offset by the NCP Solutions Acquisition that increased cost of revenues by $6.9 million and a $2.4 million increase in professional fees. Non-cash fair value acquisition accounting adjustments related to the MacAndrews Acquisition were $18.5 million in the 2013 period, including $18.7 million in depreciation and amortization and a $0.2 million benefit in other non-cash adjustments, compared to $41.0 million in the 2012 period, including $28.5 million in depreciation and amortization and $12.5 million in other non-cash adjustments. Cost of revenues as a percentage of revenues for the Harland Clarke segment decreased to 60.7% in the 2013 period from 67.0% in the 2012 period primarily due to technology enabled efficiencies and other cost reduction and restructuring initiatives and a decrease in non-cash fair value acquisition accounting adjustments related to the MacAndrews Acquisition.

Cost of revenues for the Harland Financial Solutions segment increased by $2.1 million, or 3.4%, to $63.8 million in the 2013 period from $61.7 million in the 2012 period primarily due to a $1.0 million increase resulting from revenue growth, a $0.6 million increase in labor expense due to increased headcount and a $0.5 million increase in internal software expense. Net charges for non-cash fair value acquisition accounting adjustments related to the MacAndrews Acquisition were $3.5 million in the 2013 period, including $4.3 million in depreciation and amortization and a $0.8 million benefit in other non-cash adjustments, compared to $3.3 million in the 2012 period, including $4.9 million in depreciation and amortization and a $1.6 million benefit in other non-cash adjustments. Cost of revenues as a percentage of revenues for the Harland Financial Solutions segment decreased to 39.9% in the 2013 period from 56.9% in the 2012 period primarily due to increased revenues in the 2013 period as discussed above.

Cost of revenues for the Scantron segment decreased by $5.2 million, or 13.5%, to $33.2 million in the 2013 period from $38.4 million in the 2012 period primarily due to a decrease of $5.7 million resulting from volume declines and cost reduction and restructuring initiatives and a $0.6 million increase in net benefits for non-cash fair value acquisition accounting adjustments related to the MacAndrews Acquisition, partially offset by a $1.4 million increase resulting from lower cost deferrals in the 2013 period related to implementation services for revenues that have not yet been recognized. Net benefits for non-cash fair value acquisition accounting adjustments related to the MacAndrews Acquisition were $11.8 million in the 2013 period, including a $10.9 million benefit in depreciation and amortization and a benefit of $0.9 million in other non-cash adjustments, compared to $11.2 million in the 2012 period, including an $11.3 million benefit in depreciation and amortization and a $0.1 million charge in other non-cash adjustments. Cost of revenues as a percentage of revenues for the Scantron segment decreased to 58.1% in the 2013 period from 65.3% in the 2012 period primarily due to cost reduction and restructuring initiatives.

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Harland Clarke Holdings Corp. and Subsidiaries

Cost of revenues for the Faneuil segment increased by $3.1 million, or 5.2%, to $62.4 million in the 2013 period from $59.3 million in the 2012 period primarily due to a $2.3 million increase in implementation costs related to new contracts and operational costs associated with the new business and a $0.8 million decrease in net benefits for non-cash fair value acquisition accounting adjustments related to the MacAndrews Acquisition. Net benefits for non-cash fair value acquisition accounting adjustments related to the MacAndrews Acquisition were $0.5 million in the 2013 period, all of which was in depreciation and amortization, compared to $1.3 million in the 2012 period, including a $2.0 million benefit in depreciation and amortization and a $0.7 million charge in other non-cash adjustments. Cost of revenues as a percentage of revenues for the Faneuil segment decreased to 77.8% in the 2013 period from 80.4% in the 2012 period due to the change in business mix.

Elimination of cost of revenues increased to $1.4 million in the 2013 period from $1.1 million in the 2012 period primarily due to intersegment sales of information technology services from the Scantron segment to the Harland Clarke segment.

Selling, General and Administrative Expenses:

	Six Months Ended
	June 30,
	2013		2012
Consolidated Selling, General and Administrative Expenses:
Harland Clarke segment	$	87.9	$	93.4
Harland Financial Solutions segment	54.0		53.7
Scantron segment	28.4		39.6
Faneuil segment	10.5		11.5
Corporate	10.4		8.8
Total	$	191.2	$	207.0

Selling, general and administrative expenses decreased by $15.8 million, or 7.6%, to $191.2 million in the 2013 period from $207.0 million in the 2012 period.

Selling, general and administrative expenses for the Harland Clarke segment decreased by $5.5 million, or 5.9%, to $87.9 million in the 2013 period from $93.4 million in the 2012 period primarily due to a $5.7 million decrease resulting from cost reduction and restructuring initiatives largely of labor and general overhead expense reductions and a $2.7 million decrease in advertising expenses, partially offset by a $2.1 million decrease in net benefits for non-cash fair value acquisition accounting adjustments related to the MacAndrews Acquisition and the NCP Solutions Acquisition that increased selling, general and administrative expenses by $0.8 million. Non-cash fair value acquisition accounting adjustments related to the MacAndrews acquisition were a net benefit of $0.6 million for the 2013 period, including a $0.4 million benefit in depreciation and amortization and a $0.2 million benefit in other non-cash adjustments, compared to a net benefit of $2.7 million in the 2012 period, including a $3.4 million benefit in other non-cash adjustments and a $0.7 million increase in depreciation and amortization. Selling, general and administrative expenses as a percentage of revenues for the Harland Clarke segment decreased to 15.4% in the 2013 period from 16.1% in the 2012 period primarily due to cost reduction and restructuring initiatives.

Selling, general and administrative expenses for the Harland Financial Solutions segment increased by $0.3 million, or 0.6%, to $54.0 million in the 2013 period from $53.7 million in the 2012 period primarily due to a $1.5 million increase in commission expense resulting from revenue growth, a $0.9 million increase in depreciation and amortization unrelated to purchase accounting, a $0.4 million decrease in net benefits for non-cash fair value acquisition accounting adjustments related to the MacAndrews Acquisition, a $0.3 million increase in travel expense and a $0.3 million increase in occupancy cost. These increases were partially offset by a $2.1 million decrease resulting from an increase in capitalization of software development costs, a $0.7 million decrease in internal software expense and a $0.3 million decrease in labor expense due to lower benefits expense. Net benefits for non-cash fair value acquisition adjustments related to the MacAndrews Acquisition were $2.0 million in the 2013 period, including a $2.1 million benefit in other non-cash adjustments and a $0.1 million increase in depreciation and amortization, compared to $2.4 million in the 2012 period, including a $3.0 million benefit in other non-cash adjustments and a $0.6 million increase in depreciation and amortization. Selling, general and administrative expenses as a percentage of revenues for the Harland Financial Solutions segment decreased to 33.8% in the 2013 period from 49.5% in the 2012 period primarily due to increased revenues in the 2013 period as discussed above.

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Harland Clarke Holdings Corp. and Subsidiaries

Selling, general and administrative expenses for the Scantron segment decreased $11.2 million, or 28.3%, to $28.4 million in the 2013 period from $39.6 million in the 2012 period primarily due to a decrease of $12.0 million resulting from cost reduction and restructuring initiatives and a $2.1 million decrease in costs related to projects to increase efficiencies, partially offset by an increase of $3.1 million primarily due to higher depreciation unrelated to purchase accounting, a decrease in capitalization of software development costs and a decrease in cost deferrals related to implementation services for revenues that have not yet been recognized. Charges for non-cash fair value acquisition accounting adjustments related to the MacAndrews Acquisition were $0.6 million in both the 2013 and 2012 periods, with each period including $0.4 million in depreciation and amortization and $0.2 million in other non-cash adjustments. Selling, general and administrative expenses as a percentage of revenues for the Scantron segment decreased to 49.7% in the 2013 period from 67.3% in the 2012 period primarily due to cost reduction and restructuring initiatives.

Selling, general and administrative expenses for the Faneuil segment decreased by $1.0 million, or 8.7%, to $10.5 million in the 2013 period from $11.5 million in the 2012 period primarily due to cost reductions of $1.4 million, partially offset by a $0.4 million increase in operational costs associated with new business. Selling, general and administrative expenses as a percentage of revenues for the Faneuil segment decreased to 13.1% in the 2013 period from 15.6% in the 2012 period primarily due to cost reductions and a change in business mix.

Corporate selling, general and administrative expenses increased by $1.6 million, or 18.2%, to $10.4 million in the 2013 period from $8.8 million in the 2012 period primarily due to corporate development activities, partially offset by a reduction in expenses related to the MacAndrews Acquisition that occurred in the first quarter of 2012.

Revaluation of Contingent Consideration

Operating expenses decreased by $0.5 million in the 2012 period due to a net decrease in the fair value of accrued contingent consideration primarily related to acquisitions in 2010, which resulted from a decrease in revenue projections that would trigger a payment. There was no revaluation of accrued contingent consideration in the 2013 period.

Asset Impairment Charges

During the 2013 period, the Company recorded non-cash impairment charges of $0.2 million for the Harland Clarke segment related to assets that were determined to have no future use and $0.7 million for the Scantron segment related to software that was determined to have no future use. There were no asset impairment charges during the 2012 period.

Restructuring Costs

The Company has adopted plans to strengthen operating margins and leverage incremental synergies within the printing plants, contact centers and selling, general and administrative areas by relying on the Company's shared services capabilities and reorganizing certain operations and sales and support functions. During the first quarter of 2013, the Company adopted a plan in the Scantron segment to exit certain product lines in the education market, which resulted in the closure of leased facilities and the elimination of operations and selling, general and administrative expenses associated with those product lines.

In the 2013 period, the Company recorded restructuring costs of $6.0 million for the Harland Clarke segment, $6.9 million for the Scantron segment and $0.4 million for the Faneuil segment related to these plans. In the 2012 period, the Company recorded restructuring costs of $2.7 million for the Harland Clarke segment, $0.4 million for the Harland Financial Solutions segment, $1.6 million for the Scantron segment and $0.3 million for the Faneuil segment related to these plans.

Interest Income

Interest income was $0.4 million in the 2013 period compared to $0.5 million in the 2012 period. The decrease in interest income was primarily due to interest received on United States treasury securities in the 2012 period. The United States treasury securities were sold in the first quarter of 2012.

Interest Expense

Interest expense was $111.8 million in the 2013 period compared to $109.7 million in the 2012 period. The increase in interest expense was primarily due to the refinancing of a portion of outstanding debt at higher interest rates and an increase in amortization of deferred financing fees and issuance discounts, partially offset by fair value acquisition accounting adjustments to the principal amount of debt outstanding at the time of the MacAndrews Acquisition that resulted in a $20.3 million decrease in non-cash interest expense. In addition, other fair value acquisition accounting adjustments to deferred financing costs and interest rate swaps resulted in a $0.1 million decrease in non-cash interest expense.

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Harland Clarke Holdings Corp. and Subsidiaries

Loss on Early Extinguishment of Debt

The non-cash loss on early extinguishment of debt of $61.0 million in the 2013 period, which was attributable to refinancing transactions, resulted from the write-off of unamortized acquisition accounting-related fair value discount related to the MacAndrews Acquisition (see Note 1 to the accompanying consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q).

Other Expense, net

Other expense, net was $0.2 million in the 2012 period due to a loss on the sale of marketable securities.

Provision for Income Taxes

The Company's effective tax rate was a benefit of 45.0% in the 2013 period and a benefit of 36.1% in the 2012 period. The benefit for the 2013 period is higher than the statutory rate primarily due to foreign income for which no provision was recorded. The benefit for the 2012 period is lower than the statutory rate primarily due to tax credits not previously recorded and certain foreign income not subject to tax, partially offset by foreign losses for which no benefit recorded.

Liquidity and Capital Resources

Cash Flow Analysis

The following table summarizes the Company's historical cash flows:

	Six Months Ended
	June 30,
(In millions)	2013			2012
Cash Provided By (Used In):
Operating activities	$	107.3		$	83.6
Investing activities	(64.3		)	(16.7		)
Financing activities	(60.4		)	(85.3		)

The Company's net cash provided by operating activities during the six months ended June 30, 2013 was $107.3 million compared to $83.6 million during the six months ended June 30, 2012. The increase in net cash provided by operating activities of $23.7 million was due to a $83.2 million increase in cash flows from operations, partially offset by a $59.5 million decrease in cash flows from changes in operating assets and liabilities. The $83.2 million increase in cash flow from operations was due to an increase in net income after adjusting for the effects of financing and investing activities and non-cash operating items including depreciation and amortization and deferred income taxes. The decrease in cash flows from changes in operating assets and liabilities was primarily due to changes in deferred revenues, inventories, contract acquisition payments and prepaid expenses and other assets totaling $57.3 million largely the result of fair value acquisition accounting adjustments related to the MacAndrews Acquisition.

The Company's net cash used in investing activities was $64.3 million during the six months ended June 30, 2013 compared to $16.7 million during the six months ended June 30, 2012. The increase in cash used in investing activities was primarily due to proceeds of $56.3 million from the sale of marketable securities that occurred during the six months ended June 30, 2012, partially offset by a decrease of $6.6 million in capital expenditures during the six months ended June 30, 2013 compared to the six months ended June 30, 2012 and a decrease of $1.4 million in cash expended on acquisitions during the six months ended June 30, 2013 compared to the six months ended June 30, 2012.

The Company's net cash used in financing activities was $60.4 million during the six months ended June 30, 2013 compared to $85.3 million during the six months ended June 30, 2012. The decrease in net cash used in financing activities was primarily due to a $33.8 million decrease in payments to parent for the Faneuil Acquisition, and a $5.7 million decrease in payments related to derivative instruments, partially offset by a $15.5 million increase in debt issuance costs related to refinancing activities. Aggregate cash inflows and outflows from refinancing activities did not have a significant effect on net cash used in financing activities.

Accounting guidance for acquisitions among entities under common control requires the $33.8 million of cash paid in excess of the carrying amount of the assets and liabilities assumed for the Faneuil Acquisition to be treated as an equity transaction with the parent in financing activities. The $36.2 million remaining balance of the $70.0 million purchase price is treated as consideration paid to purchase the affiliate in investing activities.

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Harland Clarke Holdings Corp. and Subsidiaries

The Company's Consolidated Contractual Obligations and Commitments

There were no material changes to the Company's contractual obligations and commitments as disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2012 during the six months ended June 30, 2013 except for certain refinancing transactions. On February 20, 2013, the Company terminated its revolving credit facility and entered into a new senior secured asset based revolving credit facility. On April 26, 2013, the Company completed a transaction to refinance its non-extended term loans that were to mature in June 2014. On May 20, 2013, the Company issued $50.0 million principal amount of its 2018 Senior Secured Notes. Proceeds from this transaction were used to repay and retire $50.0 million of fixed rate 2015 Senior Notes. See Note 11 - Long-Term Debt to the accompanying consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q. At June 30, 2013, contractual obligations related to outstanding debt were as follows:

	Payments Due by Period
(In millions)	Total		Less than 1 year		1-3 years		4-5 years		After 5 years
Revolving credit facilities(1)(6)	$	—	$	—	$	—	$	—	$	—
Senior secured term loans(2)(6)	1,392.8		88.0		176.1		1,128.7		—
Senior notes(3)(6)	425.6		—		425.6		—		—
Senior secured notes(4)(6)	285.0		—		—		—		285.0
Interest on long-term debt(5)(6)	587.7		157.4		247.3		169.1		13.9
Total	$	2,691.1	$	245.4	$	849.0	$	1,297.8	$	298.9

_______________________

⁽¹⁾  Consists of our senior secured asset based revolving credit facility, which will mature on February, 20, 2018. See to the accompanying consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

⁽²⁾  The senior secured term loans will mature on June 30, 2017 and May 22, 2018, and the Company is required to make payments of principal in quarterly installments. See to the accompanying consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

⁽³⁾  The senior notes will mature in 2015 and include $221.3 million of fixed rate notes and $204.3 million of floating rate notes. See to the accompanying consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

⁽⁴⁾  The senior secured notes will mature on August 1, 2018. See to the accompanying consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

⁽⁵⁾  Interest on long-term debt assumes that all floating rates of interest remain the same as those in effect at June 30, 2013. The payments noted above also assume that the level of borrowing under the revolving credit facility remains at zero, as it was on June 30, 2103, and all mandatory payments are made.

⁽⁶⁾  The credit facilities, senior notes and senior secured notes include early repayment provisions if certain events occur, including excess cash flow payments with respect to the senior secured credit facilities. See to the accompanying consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q. Payments in the table above assume that only mandatory principal payments will be made and that there will be no prepayments.

Liquidity Assessment

The Company believes that its cash and cash equivalents, borrowings available under its credit agreement (as further discussed in Note 11 to the accompanying consolidated financial statements included in this Quarterly Report on Form 10-Q) and anticipated cash flow from operating activities will be sufficient to meet the Company's expected operating needs, investment and capital spending requirements and debt service requirements for the foreseeable future.

In addition to normal operating cash, working capital requirements and service of indebtedness, the Company also requires cash to fund capital expenditures, make contract acquisition payments to financial institution clients and enable cost reductions through restructuring projects as follows:

• Capital Expenditures. The Company's capital expenditures are primarily related to infrastructure investments, internally developed software, cost reduction programs, marketing initiatives and other projects that support future revenue growth. During the six months ended June 30, 2013 and 2012, the Company incurred $23.6 million and $30.2 million of capital expenditures and $0.3 million and $0.2 million of capitalized interest, respectively. The Company's capital expenditures are estimated to be in the range of $50.0 million to $60.0 million for the fiscal year ending December 31, 2013.

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Harland Clarke Holdings Corp. and Subsidiaries

• Contract Acquisition Payments. During the six months ended June 30, 2013 and 2012, the Company made $14.2 million and $20.6 million of contract acquisition payments to its clients, respectively.

• Restructuring/Cost Reductions. Restructuring accruals have been established for anticipated severance payments, costs related to facilities closures and other expenses related to the planned restructuring or consolidation of some of the Company's operations. During the six months ended June 30, 2013 and 2012, the Company made $9.9 million and $4.3 million of payments for restructuring, respectively.

The Company may also, from time to time, seek to use its cash to make acquisitions or investments, and also to retire or purchase its outstanding debt in open market purchases, in privately negotiated transactions, or otherwise. Such retirement or purchase of debt may be funded from the operating cash flows of the business or other sources and will depend upon prevailing market conditions, liquidity requirements, contractual restrictions and other factors, and the amounts involved may be material. The Company used cash on hand to fund the acquisition of NCP Solutions that was consummated on May 31, 2013. The Company used proceeds from the issuance of senior secured term loans and senior secured notes to fund the repayment of $726.6 million of non-extended term loans in April 2013 and $50.0 million of fixed rate senior notes in June 2013.

Cash Flow Risks

The Company's ability to meet its debt service obligations and reduce its total debt will depend upon its ability to generate cash in the future which, in turn, will be subject to general economic, financial, business, competitive, legislative, regulatory and other conditions, many of which are beyond the Company's control. The Company may not be able to generate sufficient cash flow from operations or borrow under its credit facility in an amount sufficient to repay its debt or to fund other liquidity needs. As of June 30, 2013, the Company had $41.9 million of availability under its senior secured asset based revolving credit facility (after giving effect to the issuance of $10.4 million of letters of credit). The Company may also use its senior secured asset based revolving credit facility to fund potential future acquisitions or investments. If future cash flow from operations and other capital resources are insufficient to pay the Company's obligations as they mature or to fund its liquidity needs, the Company may be forced to reduce or delay business activities and capital expenditures, sell assets, obtain additional debt or equity capital or restructure or refinance all or a portion of its debt on or before maturity. The Company may not be able to accomplish any of these alternatives on a timely basis or on satisfactory terms, if at all. In addition, the terms of the Company's existing and future indebtedness may limit its ability to pursue any of these alternatives.

Critical Accounting Policies and Estimates

There were no material changes to the Company's Critical Accounting Policies and Estimates included in the Company's Annual Report on Form 10-K for the year ended December 31, 2012 as filed on February 25, 2013 with the United States Securities and Exchange Commission ("SEC"), which is available on the SEC's website at www.sec.gov.

Forward-Looking Statements

This Quarterly Report on Form 10-Q for the quarter ended June 30, 2013, as well as certain of the Company's other public documents and statements and oral statements, contains forward-looking statements that reflect management's current assumptions and estimates of future performance and economic conditions. When used in this Quarterly Report on Form 10-Q, the words "believes," "anticipates," "plans," "expects," "intends," "estimates" or similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. All forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q. Although the Company believes that its plans, intentions and expectations reflected in or suggested by the forward-looking statements are reasonable, such plans, intentions or expectations may not be achieved. Such forward-looking statements are made in reliance upon the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The Company cautions investors that any forward-looking statements are subject to risks and uncertainties that may cause actual results and future trends to differ materially from those projected, stated or implied by the forward-looking statements. In addition, the Company encourages investors to read the summary of the Company's critical accounting policies and estimates included in the Company's Annual Report on Form 10-K for the year ended December 31, 2012 under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies and Estimates."

In addition to factors described in the Company's SEC filings and others, the following factors could cause the Company's actual results to differ materially from those expressed in any forward-looking statements made by the Company:

• our substantial indebtedness;

• further adverse changes in or worsening of general economic and industry conditions, including the depth and length of the economic downturn and higher unemployment, which could result in more rapid declines in product sales and/or pricing pressure and reductions in information technology budgets which could result in adverse effects on our businesses;

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Harland Clarke Holdings Corp. and Subsidiaries

• weak economic conditions and declines in the financial performance of our business that may result in material impairment charges, which could have a negative effect on the Company's earnings, total assets and market prices of the Company's outstanding securities;

• our ability to generate sufficient cash in the future that affects our ability to make payments on our indebtedness;

• our ability to incur substantially more debt that could exacerbate the risks associated with our substantial leverage;

• covenant restrictions under our indebtedness that may limit our ability to operate our businesses and react to market changes;

• increases in interest rates;

• the maturity of the paper check industry, including a faster than anticipated decline in check usage due to increasing use of alternative payment methods, decreased consumer spending and other factors and our ability to grow non-check related product lines;

• consolidation among financial institutions;

• adverse changes or failures or consolidation of the large financial institution clients on which we depend, resulting in decreased revenues and/or pricing pressure;

• intense competition in all areas of our businesses;

• our ability to successfully integrate and manage recent acquisitions as well as future acquisitions;

• our ability to implement any or all components of our business strategy;

• interruptions or adverse changes in our vendor or supplier relationships;

• increased production and delivery costs;

• fluctuations in the costs of raw materials and other supplies;

• our ability to attract, hire and retain qualified personnel;

• technological improvements that may reduce any advantage over other providers in our respective industries;

• our ability to protect customer or consumer data against data security breaches;

• changes in legislation relating to consumer privacy protection that could increase our costs or limit our future business opportunities;

• contracts with our clients relating to consumer privacy protection that could restrict our business;

• our ability to protect our intellectual property rights;

• our reliance on third-party providers for certain significant information technology needs;

• software defects or cyber-attacks that could harm our businesses and reputation;

• sales and other taxes that could have adverse effects on our businesses;

• the ability of our Harland Financial Solutions segment to achieve organic growth;

• regulations governing the Harland Financial Solutions segment;

• our ability to develop new products for our Scantron segment and to grow Scantron's web-based education business;

• determinations made to limit investments in, restrict marketing efforts for or discontinue certain products which are not part of the Company's strategic plans;

• our ability to achieve VSOE of fair value for multiple-element arrangements for software businesses we have acquired or will acquire, which could affect the timing of recognition of revenue;

• future warranty or product liability claims which could be costly to resolve and result in negative publicity;

• government and school clients' budget deficits, which could have an adverse impact on our Scantron and Faneuil segments;

• softness in direct mail response rates;

• lower than expected cash flow from operations;

• unfavorable foreign currency fluctuations;

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Harland Clarke Holdings Corp. and Subsidiaries

• the loss of one of our significant customers;

• work stoppages and other labor disturbances;

• should the sale of our Harland Financial Solutions business not close, it may have an adverse effect on our business; and

• unanticipated internal control deficiencies or weaknesses.

The Company encourages investors to read carefully the risk factors described in the Company's Annual Report on Form 10-K for the year ended December 31, 2012 in the section entitled "Risk Factors" for a description of certain risks that could, among other things, cause actual results to differ from these forward-looking statements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

The Company has exposure to market risk from changes in interest rates and foreign currency exchange rates, which could affect its business, results of operations and financial condition. The Company manages its exposure to these market risks through its regular operating and financing activities.

At June 30, 2013, the Company had $1,392.8 million of term loans outstanding under its credit agreement, $10.4 million of letters of credit outstanding under its senior secured asset based revolving credit facility, $204.3 million of floating rate senior notes, $221.3 million of 9.50% fixed rate senior notes and $285.0 million of 9.75% senior secured notes. All of these outstanding loans bear interest at variable rates, with the exception of $221.3 million of fixed rate senior notes and $285.0 million of senior secured notes. Accordingly, the Company is subject to risk due to changes in interest rates. The Company believes that a hypothetical increase of 1 percentage point in the variable component of interest rates applicable to its floating rate debt outstanding at June 30, 2013 would have resulted in an increase in its interest expense for the six months ended June 30, 2013 of approximately $3.2 million.

Item 7A of the Company's Annual Report on Form 10-K for the year ended December 31, 2012 presents additional quantitative and qualitative disclosures about exposure to risk in foreign currency exchange rates. There have been no material changes to the disclosures regarding foreign currency exchange rates as of June 30, 2013.

Item 4. Controls and Procedures

(a)    Disclosure Controls and Procedures. The Company's management, with the participation of the Company's Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company's disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) as of the end of the period covered by this report. Based on such evaluation, the Company's Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, the Company's disclosure controls and procedures are effective.

(b)    Internal Control Over Financial Reporting. There have not been any changes in the Company's internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended June 30, 2013 that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

41

Harland Clarke Holdings Corp. and Subsidiaries

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

Various legal proceedings, claims and investigations are pending against the Company, including those relating to commercial transactions, intellectual property matters, environmental matters and other matters. Certain of these matters are covered by insurance, subject to deductibles and maximum limits. In the opinion of management based upon the information available at this time, the outcome of the matters referred to above will not have a material adverse effect on the Company's consolidated financial position or results of operations.

Item 1A. Risk Factors

There was no material change to the Company's risk factors as disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2012 during the three months ended June 30, 2013 other than the risk set forth below.

Risks associated with the sale of the Harland Financial Solutions business

We have entered into an agreement to sell the HFS business for $1.2 billion in cash proceeds (subject to adjustment pursuant to the terms and conditions set forth in the stock purchase agreement related thereto). Should the sale transaction not close, it may have an adverse effect on our business. The transaction is expected to close in the third quarter of 2013 but remains subject to certain closing conditions customary for transactions of this nature.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

There was no event of default upon senior securities during the three months ended June 30, 2013.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

No additional information need be presented.

42

Harland Clarke Holdings Corp. and Subsidiaries

Item 6. Exhibits

Exhibit Number	Description
4.22	Credit Agreement, dated as of April 26, 2013, by and among the Lenders thereto, Credit Suisse AG, Cayman Islands Branch, as Administrative Agent and Collateral Agent, Harland Clarke Holdings Corp. as Borrower and subsidiaries of Harland Clarke Holdings Corp. party thereto, as subsidiary Co-Borrowers.
4.23	Purchase Agreement, dated as of May 15, 2013, by and among Harland Clarke Holdings Corp., as Issuer, and certain Co-Issuers named therein and Credit Suisse Securities (USA) LLC
31.1	Certification of Charles T. Dawson, Chief Executive Officer, dated August 2, 2013.
31.2	Certification of Peter A. Fera, Jr., Chief Financial Officer, dated August 2, 2013.
101.INS	XBRL Instance Document.
101.SCH	XBRL Taxonomy Extension Schema.
101.CAL	XBRL Taxonomy Extension Calculation Linkbase.
101.DEF	XBRL Taxonomy Definition Linkbase.
101.LAB	XBRL Taxonomy Extension Labels Linkbase.
101.PRE	XBRL Taxonomy Extension Presentation Linkbase.

43

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

HARLAND CLARKE HOLDINGS CORP.

Date:	August 2, 2013	By:	/s/ Peter A. Fera, Jr.
			Peter A. Fera, Jr.
			Executive Vice President and Chief Financial Officer (Principal Financial Officer)
Date:	August 2, 2013	By:	/s/ J. Michael Riley
			J. Michael Riley
			Vice President and Controller (Principal Accounting Officer)

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EXHIBIT INDEX

Exhibit Number	Description
4.22	Credit Agreement, dated as of April 26, 2013, by and among the Lenders thereto, Credit Suisse AG, Cayman Islands Branch, as Administrative Agent and Collateral Agent, Harland Clarke Holdings Corp. as Borrower and subsidiaries of Harland Clarke Holdings Corp. party thereto, as subsidiary Co-Borrowers.
4.23	Purchase Agreement, dated as of May 15, 2013, by and among Harland Clarke Holdings Corp., as Issuer, and certain Co-Issuers named therein and Credit Suisse Securities (USA) LLC
31.1	Certification of Charles T. Dawson, Chief Executive Officer, dated August 2, 2013.
31.2	Certification of Peter A. Fera, Jr., Chief Financial Officer, dated August 2, 2013.
101.INS	XBRL Instance Document.
101.SCH	XBRL Taxonomy Extension Schema.
101.CAL	XBRL Taxonomy Extension Calculation Linkbase.
101.DEF	XBRL Taxonomy Definition Linkbase.
101.LAB	XBRL Taxonomy Extension Labels Linkbase.
101.PRE	XBRL Taxonomy Extension Presentation Linkbase.

45

EX-4.22

EXHIBIT 4.22

NEW FACILITY JOINDER AGREEMENT – TRANCHE B-3 TERM LOANS

This NEW FACILITY JOINDER AGREEMENT, dated as of April 26, 2013 (this "Agreement"), is by and among CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH ("CS"), as the Initial Tranche B-3 Lender (as defined below), HARLAND CLARKE HOLDINGS CORP., a Delaware corporation (the "Borrower"), the other Loan Parties, and CS, as administrative agent and collateral agent (the "Agent").

RECITALS:

WHEREAS, reference is made to that certain Credit Agreement, dated as of April 4, 2007 (as amended as of May 4, 2007, as further amended by that Amendment Agreement dated as of May 10, 2012 and as further amended, supplemented or otherwise modified through the date hereof, the "Credit Agreement"), among the Borrower, each Subsidiary Guarantor of the Borrower from time to time party thereto (each a "Subsidiary Co-Borrower" and, together with the Borrower, the "Co-Borrowers"), the Lenders from time to time party thereto and CS, as administrative agent and collateral agent (capitalized terms used but not defined herein have the meanings given to such terms in the Credit Agreement);

WHEREAS, on the terms and subject to the conditions of the Credit Agreement, the Borrower may request the establishment of Tranche B-3 Term Loan Commitments pursuant to a New Facility Joinder Agreement;

WHEREAS, on the terms and subject to the conditions contained herein, CS has agreed to be the initial Lender of all of the Tranche B-3 Term Loans hereunder (the "Initial Tranche B-3 Lender"); and

WHEREAS, each Tranche B-1 Term Loan Lender that will be a Tranche B-3 Term Loan Lender (each, a "Rolling Lender" and, together with the Initial Tranche B-3 Lender, the "Tranche B-3 Term Loan Lenders") shall execute and deliver a counterpart to the Tranche B-3 Lender Consent in the form attached hereto as Annex I (the "Consent").

AGREEMENT:

NOW, THEREFORE, in consideration of the premises and the agreements, provisions and covenants herein contained, the parties hereto agree as follows:

This Agreement is in respect of Tranche B-3 Term Loan Commitments in an aggregate principal amount of $750,000,000.00. The Tranche B-3 Term Loan Commitments evidenced by this Agreement constitute Indebtedness permitted to be incurred pursuant to Section 6.01(b)(ii) of the Credit Agreement.

The Initial Tranche B-3 Lender hereby agrees to provide its Tranche B-3 Term Loan Commitments and to make a Tranche B-3 Term Loan in respect thereof to the Borrower in an aggregate principal amount equal to $750,000,000.00 on the New Effective Date on the terms and subject to the conditions set forth below; provided that the cash portion of the Tranche B-3 Term Loan funded by the Initial Tranche B-3 Lender shall be reduced by the combined aggregate principal amount of the

outstanding Tranche B-1 Term Loans of each Rolling Lender that elected the "Cashless Settlement Option" in its Consent (or the Lesser Specified Amount (as defined below) of such Rolling Lender).

The Initial Tranche B-3 Lender (a) confirms that it has received a copy of the Credit Agreement, the other Loan Documents, the Collateral Trust Agreement (as defined below) and the ABL Intercreditor Agreement (as defined below), together with copies of the financial statements most recently required to be delivered pursuant to Section 5.01 of the Credit Agreement and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Agreement; (b) agrees that it will, independently and without reliance upon the Agent or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Credit Agreement; (c) appoints and authorizes the Agent to take such action as agent on its behalf and to exercise such powers under the Credit Agreement, the other Loan Documents, the Collateral Trust Agreement and the ABL Intercreditor Agreement as are delegated to the Agent by the terms thereof, together with such powers as are reasonably incidental thereto; and (d) agrees that it will perform in accordance with their terms all of the obligations which by the terms of the Credit Agreement are required to be performed by it as a Lender.

"ABL Credit Agreement" shall mean the Credit Agreement dated as of February 20, 2013 (as amended, restated, supplemented or otherwise modified from time to time) among the Borrower, Holdings, the subsidiary co-borrowers party thereto, and Citibank, N.A., as administrative agent and collateral agent.

"ABL Intercreditor Agreement" shall mean the Intercreditor Agreement dated as of February 20, 2013 (as amended, restated, supplemented or otherwise modified from time to time) among the Borrower, Holdings, the other grantors party thereto, Citibank, N.A., as collateral agent for the lenders under the ABL Credit Agreement, CS, in its capacity as collateral agent under the Credit Agreement, and Wells Fargo Bank, National Association ("Wells Fargo"), in its capacity as collateral trustee for holders of the Pari Passu Notes (as defined below).

"Collateral Trust Agreement" shall mean the Collateral Trust Agreement dated as of July 24, 2012 (as amended, restated, supplemented or otherwise modified from time to time) among the Borrower, the guarantors from time to time party thereto, CS, in its capacity as collateral agent under the Credit Agreement, Wells Fargo, in its capacity as indenture trustee under the notes indenture for the Pari Passu Notes, and Wells Fargo, in its capacity as collateral trustee for the holders of the Pari Passu Notes.

"Pari Passu Notes" shall mean the Borrower’s 9.750% senior secured notes due 2018 issued under that certain indenture dated as of July 24, 2012 among the Borrower, each of the co-issuers and guarantors party thereto, and Wells Fargo, as indenture trustee.

Each Rolling Lender, by executing and delivering its Consent, agrees either that on the New Effective Date (i) its existing Tranche B-1 Term Loans shall be exchanged for Tranche B-3 Term Loans in accordance with the terms of the "Cashless Settlement Option" set forth in such Rolling Lender’s Consent in accordance with the provisions thereof or (ii) it shall purchase Tranche B-3 Term Loans from the Initial Tranche B-3 Lender in accordance with the terms of the Assignment Settlement Option set forth in such Rolling Lender’s Consent, in the case of either clause (i) or clause (ii) of this paragraph, in the amount set forth in the Consent of such Rolling Lender (or such lesser amount specified by the Agent (the "Lesser Specified Amount")), and such Rolling Lender acknowledges that the Tranche B-3 Term Loans will have the terms set forth herein and in the Credit Agreement.

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The Initial Tranche B-3 Lender hereby agrees to provide its Tranche B-3 Term Loan Commitments on the following terms and conditions:

1. New Effective Date. The New Effective Date for the Tranche B-3 Term Loan Commitments shall be the date on which the conditions set forth in Section 11 hereof are first satisfied or waived, which date is April 26, 2013.

2. Applicable Rates. The Applicable Rate for the Tranche B-3 Term Loans shall be, with respect to such Loans that are (a) LIBOR Rate Loans, 5.50% per annum and (b) ABR Loans, 4.50% per annum; provided that (x) the Adjusted LIBOR Rate with respect to Tranche B-3 Term Loans shall not be less than 1.50% per annum and (y) the Alternate Base Rate with respect to Tranche B-3 Term Loans shall not be less than 2.50% per annum.

3. Maturity Date; Principal Payments. The Tranche B-3 Maturity Date for the Tranche B-3 Term Loans shall be May 22, 2018; provided that if the commitments under the ABL Credit Agreement have been terminated and all obligations (other than contingent obligations as to which no claim has been asserted) thereunder have been repaid in full, the Tranche B-3 Maturity Date shall instead be February 15, 2015 unless, on or prior to February 15, 2015, (i) the Senior Notes shall have been repaid, redeemed, defeased, or otherwise satisfied in full, provided,that if such repayment, redemption, defeasance or other satisfaction shall have been financed, in whole or in part, with the proceeds of Indebtedness, such Indebtedness shall have a maturity date that is on or after May 22, 2018, or (ii) the final maturity date for any then outstanding Senior Notes shall have been extended to a date on or after May 22, 2018 pursuant to an amendment that does not provide for greater amortization with respect thereto prior to May 22, 2018 than that in effect on the New Effective Date. The principal amount of the Tranche B-3 Term Loans shall be paid in Installments on each Installment Date, commencing September 30, 2013, in an amount (the "Tranche B-3 Quarterly Amount") equal to 0.625% of the aggregate principal amount of the Tranche B-3 Term Loans outstanding on the New Effective Date (after giving effect to the making of Tranche B-3 Term Loans on the New Effective Date).

4. Fees. The Co-Borrowers shall pay on the New Effective Date to the Initial Tranche B-3 Lender, for the benefit of the Initial Tranche B-3 Lender and the Rolling Lenders pursuant to the "Cashless Settlement Option", as fee compensation for the funding (or cashless settlement) of the Tranche B-3 Term Loans, an up-front fee (the "Up-Front Fee") in an amount equal to 1.00% of the stated principal amount of the Tranche B-3 Term Loans, such Up-Front Fee to be payable from the proceeds of the Tranche B-3 Term Loans as and when funded on the New Effective Date.

5. Other Terms and Section 9.02(h) Amendments.

a. Notwithstanding anything to the contrary contained herein or in the Credit Agreement, the following additional terms shall apply to the Tranche B-3 Term Loans:

(i). In the event all or any portion of the Tranche B-3 Term Loans are (i) prepaid pursuant to Section 2.08(a) of the Credit Agreement (other than pursuant to the requirements of Section 2.15 or Section 2.20 of the Credit Agreement or Section 5.a.(ii) of this Agreement) or Section 2.09(b)(ii) of the Credit Agreement or (ii) subject to an amendment the effectiveness of which reduces the All-In Initial Yield applicable to the Tranche B-3 Term Loans, then (a) if such prepayment or amendment occurs prior to the first anniversary of the New Effective Date, the Borrower shall pay to the Lenders of Tranche B-3 Term Loans at such time a fee

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equal to 2.00% of the aggregate principal amount of Tranche B-3 Term Loans then outstanding that are subject to such prepayment or amendment and (b) if such prepayment or amendment occurs on or after the first anniversary of the New Effective Date and prior to the second anniversary of the New Effective Date, then the Borrower shall pay to the Lenders of Tranche B-3 Term Loans at such time a fee equal to 1.00% of the aggregate principal amount of Tranche B-3 Term Loans then outstanding that are subject to such prepayment or amendment.

(ii). Notwithstanding anything herein or in the Credit Agreement to the contrary, unless consented to by the holders of a majority in principal amount of Tranche B-3 Term Loans, commencing September 30, 2013 and so long as any Tranche B-3 Term Loans are outstanding, to the extent that the Installment Amount for any Installment Date is less than the Minimum Amortization Amount for such Installment Date, the Borrower shall make a voluntary prepayment of Term Loans pursuant to Section 2.08 of the Credit Agreement on such Installment Date in an aggregate amount equal to such difference. For purposes of the foregoing:

"Minimum Amortization Amount" means, with respect to any Installment Date, an amount equal to the lesser of:

(a) the product of (i) 1.25% and (ii) the aggregate outstanding principal amount on such Installment Date (after giving effect to all prepayments (other than any Installments due and payable on such Installment Date)) of Indebtedness of the Borrower and its Restricted Subsidiaries secured by Permitted Collateral Sharing Liens (other than any Secured Hedging and Cash Management Obligations), and

(b) $18,750,000.

"Installment Amount" means, with respect to any Installment Date, an amount equal to the sum of (a) the aggregate principal amount of all Series of Term Loans actually required to be repaid on such Installment Date pursuant to Section 2.07 of the Credit Agreement plus (b) the Installment Credit for such Installment Date.

"Installment Credit" means, with respect to any Installment Date, the aggregate amount by which the Installments for such Installment Date have been decreased pursuant to the proviso to Section 2.07(b) of the Credit Agreement.

b. Pursuant to the proviso to Section 9.02(b)(i)(x) and Section 9.02(h) of the Credit Agreement, the Credit Agreement is hereby amended by:

(i). adding the following defined terms in alphabetical order:

1. "All-In Initial Yield" means with respect to any Series of Term Loans or tranche of other term loan financing referred to in the last sentence of Section 2.24(e), the initial yield on such Series or tranche as determined by the Agent to be equal to the sum of (x) the margin above the LIBOR Rate on such Series or tranche, (y) the amount of any OID (as defined in Section 2.24(e)) with respect to such Series or tranche divided by the average life to maturity

4

of such Series or tranche and (z) if such Series or tranche contains an interest rate "floor" with respect to the LIBOR Rate, as adjusted for statutory reserves (a "LIBOR Rate floor") the amount, if any, by which (1) such LIBOR Rate floor exceeds (2) the Adjusted LIBOR Rate for Tranche B-3 Term Loans that would be in effect for a 3-month Interest Period commencing on the date such Series or tranche is established (or, in the case of an amendment referred to in clause (ii) of Section 5.a.(i) of the New Facility Joinder Agreement (Tranche B-3 Term Loans), at the time of effectiveness of the amendment referred to therein).

2. "Consent" has the meaning assigned to such term in the New Facility Joinder Agreement (Tranche B-3 Term Loans).

3. "Initial Tranche B-3 Lender" has the meaning assigned to such term in the New Facility Joinder Agreement (Tranche B-3 Term Loans).

4. "LIBOR Rate floor" has the meaning assigned to such term in the definition of "All-In Initial Yield".

5. "New Facility Joinder Agreement (Tranche B-3 Term Loans)" means that certain New Facility Joinder Agreement dated as of April 26, 2013 by and among the Initial Tranche B-3 Lender, the Borrower the other Loan Parties and the Agent.

6. "Rolling Lender", with respect to the Tranche B-3 Term Loans only, has the meaning assigned to such term in the New Facility Joinder Agreement (Tranche B-3 Term Loans).

7. "Tranche B-3 Effective Date" has the meaning assigned to the term "New Effective Date" in the New Facility Joinder Agreement (Tranche B-3 Term Loans).

8. "Tranche B-3 Yield Differential" has the meaning assigned to such term in Section 2.24(e).

(ii). adding the following sentence at the end of Section 2.24(e) of the Credit Agreement:

In addition, with respect to Term Loans of any new Series incurred pursuant to Section 2.24(a) only, (i) unless consented to by the holders of a majority of Tranche B-3 Term Loans, so long as any Tranche B-3 Term Loans are outstanding the Weighted Average Life to Maturity of all Term Loans of such new Series of Term Loans shall be no shorter than the Weighted Average Life to Maturity of the Tranche B-3 Term Loans and the final maturity date of such new Series of Term Loans shall be no earlier than the Tranche B-3 Maturity Date, and (ii) if the All-In Initial Yield on such new Series of Term Loans exceeds by more than 50 basis points the All-In Initial Yield on the Tranche B-3 Term Loans (the amount of such excess, if any, above 50 basis points being referred to herein as the "Tranche B-3 Yield Differential"), then the interest rate margin (and, as provided in the following proviso, the LIBOR Rate floor) then in effect for the Tranche B-3 Term Loans shall be increased to eliminate such Tranche B-3 Yield Differential; provided that, to the extent any portion of the Tranche B-3 Yield Differential is attributable to the LIBOR Rate floor applicable to such new Series of Term Loans exceeding the Adjusted LIBOR Rate in effect at such time for a 3-month Interest Period, the LIBOR Rate floor applicable to the outstanding Tranche B-3 Term Loans shall first be increased to eliminate such Tranche B-3 Yield Differential to an amount not to exceed the LIBOR Rate floor applicable to such new Series of

5

Term Loans prior to any increase in the interest rate margin applicable to such Tranche B-3 Term Loans then outstanding.

(iii). replacing the Commitment Schedule attached to the Credit Agreement with the Commitment Schedule attached hereto as Schedule I.

6. Proposed Borrowing. This Agreement represents the Borrower’s request to borrow Tranche B-3 Term Loans as follows (the "Proposed Borrowing"):

a. Business Day of Proposed Borrowing: April 26, 2013

b. Amount of Proposed Borrowing: $750,000,000.00

c. Interest rate option: $750,000,000.00 of LIBOR Rate Loans with an initial Interest Period of 3 months.

d. Account Number and Location.

Bank Name:

Bank Address:

Account Name:

ABA Number:

Account Number:

Swift Number:

Non US Dollar:

7. Status as a Lender. The Initial Tranche B-3 Lender acknowledges and agrees that, upon its execution of this Agreement and upon the New Effective Date, subject to the terms and conditions contained herein the Initial Tranche B-3 Lender shall become a "Lender" under, and for all purposes of, the Credit Agreement and the other Loan Documents, and shall be subject to and bound by the terms thereof, and shall perform all the obligations of and shall have all rights of a Lender thereunder.

8. Credit Agreement Governs. Except as otherwise expressly set forth in this Agreement, the Tranche B-3 Term Loan Commitments and the Tranche B-3 Term Loans shall be subject to the provisions of the Credit Agreement and the other Loan Documents.

9. Borrower Certifications. By its execution of this Agreement, the Borrower hereby certifies that on the date specified in Section 1:

a. each of the conditions set forth in Section 4.01(b) and (c) of the Credit Agreement shall have been satisfied; and

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b. no Default or Event of Default shall exist on such New Effective Date before or after giving effect to Tranche B-3 Term Loan Commitments and the funding of the Tranche B-3 Term Loans thereunder.

10. Borrower Covenants. By its execution of this Agreement, the Borrower hereby covenants that the Borrower shall make any payments required pursuant to Section 2.14 of the Credit Agreement in connection with the Tranche B-3 Term Loan Commitments.

11. Conditions to New Effective Date. The effectiveness of this Agreement shall be subject to the satisfaction (or waiver by the Initial Tranche B-3 Lender) of the following conditions precedent (the date on which such conditions are first satisfied or waived, the "New Effective Date"):

a. Counterparts of (i) this Agreement, duly executed by the Agent, the Loan Parties and the Initial Tranche B-3 Lender and (ii) Consents duly executed by each of the Rolling Lenders shall have been delivered to the Agent.

b. The Agent shall have received duly executed legal opinions from (i) Paul, Weiss, Rifkind, Wharton & Garrison LLP, counsel to the Co-Borrowers and Holdings, (ii) Troutman Sanders LLP, local Georgia counsel, and (iii) Schwabe Williamson & Wyatt, local Oregon counsel, in each case as to such matters as are reasonably required by the Agent (but excluding opinions relating to Mortgaged Properties), which opinions shall be reasonably satisfactory to the Agent.

c. The Agent shall have received with respect to each Loan Party: (i) Organizational Documents certified to be true and complete as of a recent date by the appropriate Governmental Authority of the state or jurisdiction of its incorporation or organization, where applicable, and certified by a secretary or assistant secretary of such Loan Party to be true and complete as of the New Effective Date or a certification that such Organizational Documents have not changed since the Second Amendment Effective Date; (ii) resolutions or other action duly adopted by the board of directors (or other governing body) of such Loan Party authorizing and approving the transactions contemplated by this Agreement and the execution, delivery and performance of this Agreement and the other Loan Documents to which it is a party; (iii) incumbency certificates and/or other certificates of Responsible Officers as the Agent may reasonably require providing evidence as to the identity, authority and capacity of each such Responsible Officer thereof authorized to act in connection with this Agreement and the other Loan Documents to which such Loan Party is a party; and (iv) such certificates of good standing or the equivalent from such Loan Party’s jurisdiction of organization or formation, as applicable, relating to the existence of each Loan Party, all in form and substance reasonably satisfactory to the Agent and its counsel.

d. The Agent shall have received (i) the fees payable to Credit Suisse Securities (USA) LLC ("CS Securities") pursuant to that certain Engagement Letter dated as of April 9, 2013 (the "Engagement Letter") between the Borrower and CS Securities and (ii) to the extent invoiced before the New Effective Date, reimbursement or other payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrower hereunder or under any other Loan Document (including all reasonable fees, charges and disbursements of

7

Latham & Watkins LLP, counsel to the Agent), incurred in connection with this Agreement and the other transactions contemplated by the Engagement Letter.

e. Substantially simultaneously with the making of the Tranche B-3 Term Loans, the Borrower shall use the proceeds thereof to prepay the outstanding Tranche B-1 Term Loans in full pursuant to Section 2.08 of the Credit Agreement, and to pay fees and expenses in connection therewith, and shall have paid all accrued and unpaid interest and premiums (if any) on the aggregate principal amount of the Tranche B-1 Term Loans.

12. Post-Effective Date Covenants. The Loan Parties shall deliver, or cause to be delivered, to the Agent no later than the date occurring ninety (90) days after the New Effective Date (or such later date as may be acceptable to the Agent in its reasonable discretion), to the extent determined by the Agent to be reasonably necessary, each of the following items:

a. to the extent necessary, fully executed and notarized mortgage modifications (each, a "Mortgage Modification"), in proper form for recording in all appropriate places in all applicable jurisdictions, encumbering each applicable Mortgaged Property;

b. an opinion of counsel (which counsel shall be reasonably satisfactory to the Agent) in each state in which a Mortgaged Property for which a Mortgage Modification is required, is located with respect to the enforceability of such Mortgage as modified by the form of Mortgage Modification to be recorded in such state with respect to the Mortgaged Properties located therein and such other matters as the Agent may reasonably request, in each case in form and substance reasonably satisfactory to the Agent; and

c. with respect to the lender’s title insurance policy insuring each Mortgaged Property for which a Mortgage Modification is required, a mortgage modification endorsement with respect to such Mortgaged Property, executed by a title company reasonably satisfactory to the Agent, in form and substance reasonably satisfactory to the Agent, insuring that the validity, enforceability and priority of the applicable mortgage, and the effectiveness of such title policy, shall remain unchanged following recordation of the related Mortgage Modification.

13. Consent to Assignments. For purposes of Section 9.04(b) of the Credit Agreement, the Borrower hereby consents to any assignment by the Initial Tranche B-3 Lender or any of its Affiliates of all or any portion of the Tranche B-3 Term Loans during the initial syndication of the Tranche B-3 Term Loans to any assignee disclosed by CS Securities to the Borrower in writing prior to the New Effective Date.

14. Eligible Assignee. By its execution of this Agreement, the Initial Tranche B-3 Lender represents and warrants that it meets all the requirements to be an assignee under Section 9.04(b) of the Credit Agreement (subject to such consents, if any, as may be required thereunder).

15. Notice. For purposes of the Credit Agreement, the initial notice address of the Initial Tranche B-3 Lender shall be as set forth below its signature below.

16. Non‑U.S. Lenders. If the Initial Tranche B-3 Lender is a Foreign Lender, delivered herewith to the Borrower and the Agent are such forms, certificates or other evidence with respect to United States federal income tax withholding matters as may be required to deliver to the Borrower and the Agent pursuant to Section 2.15(e) of the Credit Agreement.

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17. Recordation of the Commitments. Upon execution and delivery hereof and the occurrence of the New Effective Date, the Agent will record the Tranche B-3 Term Loan Commitment of the Initial Tranche B-3 Lender and each Rolling Lender in the Register.

18. Amendment, Modification and Waiver. This Agreement may not be amended, modified or waived except by an instrument or instruments in writing signed and delivered on behalf of each of the parties hereto; provided, however, that from and after the New Effective Date, any amendments, modifications or waivers hereto shall be governed by the terms of Section 9.02 of the Credit Agreement.

19. Entire Agreement. This Agreement, the Credit Agreement and the other Loan Documents constitute the entire agreement among the parties with respect to the subject matter hereof and thereof and supersede all other prior agreements and understandings, both written and verbal, among the parties or any of them with respect to the subject matter hereof.

20. Acknowledgment and Consent. Holdings and each Subsidiary Guarantor hereby acknowledges that it has reviewed the terms and provisions of the Credit Agreement and the Guarantee and Collateral Agreement and this Agreement and consents to the amendment of the Credit Agreement effected pursuant to this Agreement. Holdings, the Borrower and each Subsidiary Guarantor hereby confirms that each Loan Document to which it is a party or otherwise bound and all Collateral encumbered thereby will continue to guarantee or secure, as the case may be, in accordance with the Loan Documents,as amended by this Agreement, the payment and performance of all "Obligations" under each of the Loan Documents to which is a party (as each such term is defined in the applicable Loan Document). Holdings, the Borrower and each Subsidiary Guarantor acknowledges and agrees that each of the Loan Documents to which it is a party or otherwise bound shall continue in full force and effect and that all of its obligations thereunder shall be valid and enforceable and shall not be impaired or limited by the execution or effectiveness of this Agreement. Holdings and each Subsidiary Guarantor acknowledges and agrees that (i) notwithstanding the conditions to effectiveness set forth in this Agreement, the consent of Holdings and the Subsidiary Guarantors are not required by the terms of the Credit Agreement or any other Loan Document for the amendments to the Credit Agreement effected pursuant to this Agreement and (ii) nothing in the Credit Agreement, this Agreement or any other Loan Document shall be deemed to require the consent of Holdings or such Subsidiary Guarantor, as the case may be, to any future amendments to the Credit Agreement or any other Loan Document.

21. Notice pursuant to Section 2.24(a) of the Credit Agreement. The execution and delivery of this Agreement shall satisfy the notice requirements pursuant to Section 2.24(a) of the Credit Agreement in respect of the Borrower’s request to establish the Tranche B-3 Term Loan Commitments.

22. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

23. Severability. Any term or provision of this Agreement which is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms and provisions

9

of this Agreement or affecting the validity or enforceability of any of the terms or provisions of this Agreement in any other jurisdiction. If any provision of this Agreement is so broad as to be unenforceable, the provision shall be interpreted to be only so broad as would be enforceable.

24. Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed to be an original, but all of which shall constitute one and the same agreement.

25. Loan Document. This Agreement is a Loan Document.

[signature pages follow]

10

IN WITNESS WHEREOF, each of the undersigned has caused its duly authorized officer to execute and deliver this New Facility Joinder Agreement as of the day and year first above written.

CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH, as Initial Tranche B-3 Lender

By:    /s/ Robert Hetu

_____________________________

Name:    Robert Hetu

Title:    Authorized Signatory

By:    /s/ Patrick Freytag

_____________________________

Name:    Patrick Freytag

Title:    Authorized Signatory

Notice Address:

Attention:    Patrick Freytag

Telephone:    

Facsimile:    

HARLAND CLARKE HOLDINGS CORP.

By:    /s/ Peter A. Fera, Jr.

_____________________________

Name:    Peter A. Fera, Jr.

Title:    Executive Vice President and

Chief Financial Officer

[Signature Page to New Facility Joinder Agreement]

Consented to by:

CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH,

as Agent

By:    /s/ Robert Hetu

_____________________________

Name:    Robert Hetu

Title:    Authorized Signatory

By:    /s/ Patrick Freytag

_____________________________

Name:    Patrick Freytag

Title:    Authorized Signatory

[Signature Page to New Facility Joinder Agreement]

Acknowledged and agreed by:

CA ACQUISITION HOLDINGS, INC.

By:    /s/ Paul G. Savas

_____________________________

Name:    Paul G. Savas

Title:    Executive Vice President and Chief Financial Officer

FANEUIL, INC.

FANEUIL TOLL OPERATIONS LLC

By:    /s/ Sam Rehm

_____________________________

Name:    Sam Rehm

Title:    Chief Financial Officer

HARLAND FINANCIAL SOLUTIONS, INC.

HARLAND FINANCIAL SOLUTIONS INDIA, LLC

HFS RESEARCH & DEVELOPMENT, INC.

By:    /s/ John Eric Cummins

_____________________________

Name:    John (Eric) Cummins

Title:    Executive Vice President and Chief Financial Officer

CHECKS IN THE MAIL, INC.

GLOBALSCHOLAR, INC.

GLOBALSCHOLAR SUB I LLC

GLOBALSCHOLAR SUB II LLC

HARLAND CLARKE CORP.

HFS SCANTRON HOLDINGS CORP.

JOHN H. HARLAND COMPANY OF PUERTO RICO

SCANTRON CORPORATION

SPECTRUM K12 SCHOOL SOLUTIONS, INC.

By:    /s/ Peter A. Fera, Jr.

_____________________________

Name:    Peter A. Fera, Jr.

Title:    Executive Vice President and Chief Financial Officer

[Signature Page to New Facility Joinder Agreement]

TRANCHE B-3 LENDER CONSENT

April 26, 2013

This Tranche B-3 Lender Consent (this "Consent") is in respect of the New Facility Joinder Agreement, to be dated on or around April 26, 2013 (the "New Facility Joinder Agreement"), which relates to that certain Credit Agreement, dated as of April 4, 2007 (as amended as of May 4, 2007, as further amended by that Amendment Agreement dated as of May 10, 2012 and as further amended, supplemented or otherwise modified through the date hereof, the "Credit Agreement"), among Harland Clarke Holdings Corp., a Delaware corporation (the "Borrower"), each Subsidiary Guarantor of the Borrower from time to time party thereto (each a "Subsidiary Co-Borrower" and, together with the Borrower, the "Co-Borrowers"), the Lenders from time to time party thereto and Credit Suisse AG, Cayman Islands Branch, as administrative agent and collateral agent. Capitalized terms used and not otherwise defined herein or in the Election Notice Memorandum to which this Consent is attached shall have the respective meanings given to such terms in the New Facility Joinder Agreement or the Credit Agreement, as applicable.

FOR ROLLING LENDERS¹ 

[Check ONLY ONE of the first two boxes below]

CASHLESS SETTLEMENT OPTION

£    Each undersigned Tranche B-1 Term Loan Lender hereby commits an amount equal to 100% of the outstanding principal amount of the Tranche B-1 Term Loans held by such Tranche B-1 Term Loan Lender (as set forth below) to the Tranche B-3 Term Loans and irrevocably agrees to exchange (on a cashless basis) on the New Effective Date 100% of the outstanding principal amount of the Tranche B-1 Term Loans held by such Tranche B-1 Term Loan Lender (as set forth below) for Tranche B-3 Term Loans in an equal principal amount. By choosing this option each undersigned Tranche B-1 Term Loan Lender hereby acknowledges and agrees that (i) the Administrative Agent may, in its sole discretion, elect to exchange (on a cashless basis) less than 100% of the principal amount of such Lender’s Tranche B-1 Term Loans for Tranche B-3 Term Loans, in which case the difference between the current amount and the allocated amount will be prepaid on the Tranche B-1 Term Loans of such Lender on the New Effective Date and (ii) by selecting the Cashless Settlement Option, each undersigned Tranche B-1 Term Loan Lender hereby agrees to the terms of the Cashless Roll Letter posted on or around the date hereof to each lender that is a Tranche B-1 Term Loan Lender under and as defined in the Credit Agreement on the date hereof, among the Borrower, the Initial Tranche B-3 Lender and Credit Suisse AG, Cayman Islands Branch, and shall be a party to such Cashless Roll Letter, and be bound thereby, for all purposes hereof and thereof.

Tranche B-1 Term Loan Lender	Tranche B-1 Term Loans
Total

___________________

¹In the event of a de minimis discrepancy between the holding amount provided in the Consent and the holding amount recorded on the Administrative Agent's Register, the holding amount recorded on the Administrative Agent's Register shall prevail.

ASSIGNMENT SETTLEMENT OPTION

£    Each undersigned Tranche B-1 Term Loan Lender hereby agrees to have an amount equal to 100% of the outstanding principal amount of the Tranche B-1 Term Loans held by such Lender (as set forth below) prepaid on the New Effective Date and to purchase by assignment Tranche B-3 Term Loans under the Credit Agreement, in an equal principal amount (or such lesser amount as is allocated to such Lender by the Administrative Agent).

Tranche B-1 Term Loan Lender	Tranche B-1 Term Loans
Total

[Signature Page Follows]

IN WITNESS WHEREOF, the undersigned has caused this Consent to be duly executed and delivered by its proper and duly authorized officer(s).

[NAME OF INSTITUTION]

By: ______________________________________

Name:

Title:

If a second signature is necessary:

By: ______________________________________

Name:

Title:

Name of Fund Manager (if any): _______________________

EX-4.23

EXHIBIT 4.23

$50,000,000

HARLAND CLARKE HOLDINGS CORP.

9.750% Senior Secured Notes due 2018

PURCHASE AGREEMENT

May 15, 2013

CREDIT SUISSE SECURITIES (USA) LLC Eleven Madison Avenue

New York, N.Y. 10010-3629

Dear Sirs and Madams:

1. Introductory. Harland Clarke Holdings Corp., a Delaware corporation (the "Company") and each other entity listed on Annex I hereto (the "Co-Issuers"), agrees with Credit Suisse Securities (USA) LLC (the "Purchaser") subject to the terms and conditions stated herein, to issue and sell to the Purchaser $50,000,000 in aggregate principal amount of its 9.750% Senior Secured Notes due 2018 (the "Offered Securities") to be issued under that certain indenture, dated July 24, 2012 (as so amended, supplemented, waived or otherwise modified as of the Closing Date, the "Indenture"), among the Company, the Co-Issuers, the Guarantors (as defined below) and Wells Fargo Bank, National Association, as Trustee. The Offered Securities will be issued, jointly and severally, by the Company and each Co-Issuer and guaranteed, jointly and severally and fully and unconditionally, by each Guarantor listed on Annex II hereto (the "Guarantors" and such guarantees, the "Guarantees"). Capitalized terms that are not defined herein shall have the meanings set forth in the General Disclosure Package (as defined below).

The Company has previously issued $235,000,000 in aggregate principal amount of 9.750% Senior Secured Notes due 2018 (the "Existing Securities") under the Indenture. The Offered Securities constitute "Additional Notes" (as such term is defined in the Indenture). Except as disclosed in the General Disclosure Package and the Final Offering Circular, the Offered Securities will have terms identical to the Existing Securities and will be treated as a single series of debt securities for all purposes under the Indenture.

The Company, the Co-Issuers and the Guarantors have agreed to secure their obligations under the Offered Securities and the Guarantees by granting liens on substantially all of their assets other than certain excluded assets described in the General Disclosure Package (the "Collateral"), pursuant to (i) that certain Pledge and Security Agreement dated as of July 24, 2012, as modified by a Supplement to Schedule 3(k)(i) dated January 22, 2013 and an Assumption Agreement dated as of February 20, 2013 (as so amended, the "Security Agreement"), entered into among the Company, the Guarantors and Wells Fargo Bank, National Association, as the collateral trustee (the "Collateral Trustee"), (ii) those certain patent, copyright and trademark security agreements, each dated as of July 24, 2012 (as so amended,

1

supplemented, waived or otherwise modified as of the date hereof, the "IP Security Agreements"), each of which were entered into among the Company, certain of the Guarantors and the Collateral Trustee, (iii) that certain collateral trust agreement, dated as of July 24, 2012, and as amended as of February 20, 2013 (the "Collateral Trust Agreement"), entered into among the Company, the Collateral Trustee and the Credit Agreement Collateral Agent, and (iv) a reaffirmation agreement, to be dated as of the Closing Date (the "Reaffirmation Agreement") substantially in the form of Exhibit 1 to Exhibit A to the Collateral Trust Agreement, that will be entered into by the Company and each Guarantor (the foregoing, collectively, the "Collateral Documents"), reaffirming the Company's and each Guarantor's respective grants of security interests in favor of the Collateral Trustee, in its capacity as collateral trustee, under the Collateral Documents and confirming that such grants continue to be in full force and effect. On the Closing Date, the Company will enter into an Additional Secured Debt Designation (as such term is defined in the Collateral Trust Agreement) substantially in the form of Exhibit A to the Collateral Trust Agreement. On the Closing Date, a joinder to the Collateral Trust Agreement (the "Joinder") substantially in the form of Exhibit B to the Collateral Trust Agreement, will be executed by Wells Fargo Bank, National Association, as Trustee under the Indenture (as defined therein). This Agreement, the Offered Securities, the Guarantees, the Indenture, the Collateral Documents, the Additional Secured Debt Designation, and the Joinder are hereinafter referred to collectively as the "Operative Documents" and the transactions contemplated hereby and thereby are collectively referred to herein as the "Transactions."

Each of the Company, the Co-Issuers and the Guarantors hereby agrees with the

Purchaser as follows:

2. Representations and Warranties of the Company, the Co-Issuers and the Guarantors. As of the date hereof and as of the Closing Date, each of the Company and each Guarantor, jointly and severally, represents and warrants to, and agrees with the Purchaser that:

(a)Offering Circulars; Certain Defined Terms.The Company has prepared or will prepare a Preliminary Offering Circular and a Final Offering Circular.

For purposes of this Agreement:

"Applicable Time" means 1:00 P.M. (New York City time) on the date of this Agreement.

"Closing Date" has the meaning set forth in Section 3 hereof.

"Commission" means the Securities and Exchange Commission.

"Exchange Act" means the United States Securities Exchange Act of 1934, as amended.

"Final Offering Circular" means the final offering circular relating to the

Offered Securities to be offered by the Purchaser that discloses the offering price and other final terms of the Offered Securities and is dated as of the date of this Agreement (even if finalized and issued subsequent to the date of this Agreement).

"Free Writing Communication" means a written communication (as such term is defined in Rule 405 of Regulation C under the Securities Act) that constitutes an offer to sell or a solicitation of an offer to buy the Offered Securities and is made by means other than the Preliminary Offering Circular or the Final Offering Circular.

"General Disclosure Package" means the Preliminary Offering Circular together with any

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Issuer Free Writing Communication existing at the Applicable Time and the other information which is intended for general distribution to prospective investors, as evidenced by its being specified in Schedule B hereto.

"Issuer Free Writing Communication" means a Free Writing Communication prepared by or on behalf of the Company, used or referred to by the Company or containing a description of the final terms of the Offered Securities or of their offering, in the form retained in the Company's records.

"Preliminary Offering Circular" means the preliminary offering circular, dated

May 15, 2013, relating to the Offered Securities to be offered by the Purchaser.

"Rules and Regulations" means the rules and regulations of the Commission.

"Securities Act" means the United States Securities Act of 1933, as amended and

the rules and regulations of the Commission.

"Securities Laws" means, collectively, the Sarbanes-Oxley Act of 2002 ("Sarbanes-Oxley"), the Securities Act, the Exchange Act, the Rules and Regulations, the auditing principles, rules, standards and practices applicable to auditors of "issuers" (as defined in Sarbanes-Oxley) promulgated or approved by the Public Company Accounting Oversight Board and, as applicable, the rules of the New York Stock Exchange and the NASDAQ Global Market ("Exchange Rules").

"Supplemental Marketing Material" means any Issuer Free Writing Communication other than any Issuer Free Writing Communication specified in Schedule B hereto. Supplemental Marketing Materials include, but are not limited to, any electronic Bloomberg roadshow slides and any accompanying audio recording.

References herein to "Preliminary Offering Circular" and "Final Offering

Circular" include the documents incorporated therein by reference.

Unless otherwise specified, a reference to a "rule" is to the indicated rule under the Securities Act.

(b) Disclosure. As of the date of this Agreement, the Final Offering Circular does not, and as of the Closing Date, the Final Offering Circular will not include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. At the Applicable Time, and as of the Closing Date, neither (i) the General Disclosure Package, nor (ii) any individual Supplemental Marketing Material, when considered together with the General Disclosure Package, included, or will include, any untrue statement of a material fact or omitted, or will omit, to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The preceding two sentences do not apply to statements in or omissions from the Preliminary or Final Offering Circular, the General Disclosure Package or any Supplemental Marketing Material based upon written information furnished to the Company by the Purchaser specifically for use therein, it being understood and agreed that the only such information is that described as such in Section 8(b) hereof. On the date of this Agreement, the Company's Annual Report on Form 10-K most recently filed with the Commission and all reports for subsequent periods (collectively, the "Exchange Act Reports") which have been filed by the Company with the Commission or sent to stockholders pursuant to the Exchange Act, when considered together with the General Disclosure Package, do not include any untrue statement of

3

a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. Such documents, when they were filed with the Commission, conformed in all material respects to the requirements of the Exchange Act and the Rules and Regulations.

(c) Good Standing of the Company, the Co-Issuers and the Guarantors. Each of the Company, the Co-Issuers and the Guarantors has been duly incorporated or formed and is validly existing as a corporation or other entity in good standing under the laws of its jurisdiction of incorporation or formation, with all requisite corporate or other power and authority to carry on its business as it is currently being conducted and as described in the General Disclosure Package and the Final Offering Circular and to own, lease and operate its properties, as described in the General Disclosure Package and the Final Offering Circular; and the Company and each Guarantor is duly qualified and is in good standing as a foreign corporation or other entity authorized to do business in each jurisdiction in which the nature of its business or its ownership or leasing of property requires such qualification, except where the failure to be so qualified would not reasonably be expected to (1) result, individually or in the aggregate, in a material adverse effect on the properties, business, results of operations, condition (financial or otherwise), or affairs of the Company, the Co-Issuers and the Guarantors, taken as a whole, or (2) in any manner draw into question the validity of this Agreement or any other Operative Document or the transactions described in the General Disclosure Package and the Offering Circular under the caption "Use of Proceeds" (any of the events set forth in clauses (1) or (2), a "Material Adverse Effect").

(d) Subsidiaries. Each subsidiary of the Company and each subsidiary of the Guarantors has been duly incorporated or formed and is validly existing as a corporation or other entity in good standing under the laws of its jurisdiction of incorporation or formation, with all requisite corporate or other power and authority to carry on its business as it is currently being conducted and as described in the General Disclosure Package and the Final Offering Circular and to own, lease and operate its properties, as described in the General Disclosure Package and the Final Offering Circular; and each subsidiary of the Company and each subsidiary of the Guarantors is duly qualified and is in good standing as a foreign corporation or other entity authorized to do business in each jurisdiction in which the nature of its business or its ownership or leasing of property requires such qualification, except where the failure to be so qualified would not reasonably be expected to result in a Material Adverse Effect; all of the outstanding shares of capital stock of each subsidiary of the Company and each Guarantor are owned, directly or indirectly, by the Company or respective Guarantor, free and clear of any security interest, claim, defect, lien, limitation on voting rights or encumbrance (other than transfer restrictions imposed by the Credit Facility, the Securities Act and the securities or Blue Sky laws of certain jurisdictions); and all such securities have been duly authorized, validly issued and are fully paid and nonassessable and were not issued in violation of any preemptive or similar rights.

(e) Corporate Power and Authority. Each of the Company, the Co- Issuers and the Guarantors has all requisite corporate or other power and authority to execute, deliver and perform its obligations under this Agreement and each other Operative Document to which it is a party and to consummate the Transactions, including, without limitation, the corporate or other power and authority to issue, sell and deliver the Offered Securities as provided herein and therein.

(f) Corporate Structure. The entities listed on Annex III hereto are the only subsidiaries, direct or indirect, of the Company as of the date hereof.

(g) Indenture; Offered Securities. The Indenture has been duly and validly

4

authorized by the Company, the Co-Issuers and the Guarantors, and constitutes a valid and legally binding agreement of each of the Company, the Co-Issuers and the Guarantors enforceable against each of them in accordance with its terms, subject to bankruptcy, insolvency, fraudulent conveyance or transfer, reorganization, moratorium or similar laws affecting creditors' rights generally and subject to general principles of equity (regardless of whether enforceability is considered in a proceeding in equity or at law); the Offered Securities have been duly authorized by the Company and each Co- Issuer, and when the Offered Securities are delivered and paid for pursuant to this Agreement on the Closing Date, such Offered Securities will have been duly executed, authenticated, issued and delivered by the Company and each Co-Issuer, will be the valid and legally binding agreement of each of the Company and the Co-Issuers, enforceable against them in accordance with their terms, subject to bankruptcy, insolvency, fraudulent conveyance or transfer, reorganization, moratorium or similar laws affecting creditors' rights generally and subject to general principles of equity (regardless of whether enforceability is considered in a proceeding in equity or at law) and entitled to the benefits and security provided by the Indenture; the General Disclosure Package and the Offering Circular each contain a summary of the terms of the Indenture and the Offered Securities, which summary is accurate in all material respects.

(h) Guarantee. The Guarantee of each Guarantor has been duly and validly authorized by such Guarantor; and, when the Offered Securities are delivered and paid for pursuant to this Agreement on the Closing Date and issued, executed and authenticated in accordance with the terms of the Indenture and the Guarantee of each Guarantor endorsed thereon will have been duly executed and delivered by each such Guarantor, will conform to the description thereof contained in the General Disclosure Package and the Final Offering Circular and will constitute valid and legally binding obligations of such Guarantor, enforceable in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles.

(i) Purchase Agreement. This Agreement has been duly and validly authorized, executed and delivered by the Company, each Co-Issuer and each Guarantor.

(j) Collateral Documents. Each (1) Collateral Document, other than the Reaffirmation Agreement, has been duly authorized by the Company, each Co-Issuer and each Guarantor that is a party thereto and has been duly executed and delivered by the Company, each Co-Issuer and each Guarantor that is a party thereto, and constitutes a valid and legally binding agreement of the Company, each Co-Issuer and each Guarantor that is a party thereto enforceable against the Company, each Co-Issuer and each Guarantor that is a party thereto in accordance with its terms and the liens created by such Collateral Documents continue to be valid and continuing security interests in the Collateral in favor of the Collateral Trustee, and (2) of the Reaffirmation Agreement and the Additional Secured Debt Designation have been duly and validly authorized by the Company and the Guarantors party thereto and, when executed and delivered by the Company and the Guarantors party thereto, will constitute legal, valid and binding obligations of each of the Company and the Guarantors party thereto, enforceable against each of the Company and the Guarantors party thereto in accordance with their respective terms except that, in the cases of clauses (1) and (2), subject to bankruptcy, insolvency, fraudulent conveyance or transfer, reorganization, moratorium or similar laws affecting creditors' rights generally and subject to general principles of equity (regardless of whether enforceability is considered in a proceeding in equity or at law) and have created valid security interests in the Collateral covered thereby.

(k) Collateral. The security interests of the Collateral Trustee in all Collateral

5

that can be perfected by the filing of a Uniform Commercial Code ("UCC") financing statement under the UCC as in effect in any relevant jurisdiction continue to constitute a valid and perfected first priority security in all Collateral, securing the obligations of the Company, the Co-Issuers and the Guarantors with respect to the Offered Securities and the Guarantees, subject to the intercreditor provisions set forth in the Collateral Trust Agreement and the Indenture and other Permitted Liens. To the extent that perfection or priority of the security interest in such UCC financing statements is not subject to Article 9 of the UCC, the security interests granted to the Collateral Trustee in the property described in the IP Security Agreements continue to constitute valid, perfected first priority security interests, subject to the intercreditor provisions set forth in the Collateral Trust Agreement and the Indenture and other Permitted Liens. As contemplated by the Collateral Trust Agreement and the Credit Agreement, the Credit Agreement Collateral Agent shall have possession and control of all Collateral comprising certificated securities for which the Collateral Documents require such possession or control.

(l) No Finder's Fee. Except as disclosed in the General Disclosure Package, and each between the Company and the Purchaser or affiliates of the Purchaser, there are no contracts, agreements or understandings among the Company and any other person that would give rise to a valid claim against the Company, its subsidiaries or the Purchaser for a brokerage commission, finder's fee or like payment in connection with the issuance, purchase and sale of the Offered Securities.

(m) No Registration Rights. There are no holders of securities of the Company or its subsidiaries who, by reason of the execution of this Agreement or any other Operative Document, or the consummation by the Company or the Guarantors of the transactions contemplated hereby, have the right to request or demand that the Company or its subsidiaries register under the Securities Act or analogous foreign laws and regulations securities held by them; except as described in the General Disclosure Package and the Final Offering Circular, there are not currently any outstanding subscriptions, rights, warrants, calls, commitments of sale or options to acquire, or instruments convertible into or exchangeable for, any capital stock or other equity interests of the Company and its subsidiaries.

(n) Absence of Further Requirements, Consents, Approvals or Authorizations. Assuming the accuracy of the Purchaser's representations and warranties in Section 4 of this Agreement, no consent, approval, authorization, or order of, or, except for any filings required in order to perfect the security interest relating to the Offered Securities, filing or registration with, any person (including any governmental agency or body or any court) is required for the consummation of the Transactions and the execution, delivery and performance of the Operative Documents or the offering, issuance and sale of the Offered Securities by the Company and the Co-Issuers and the issuance of the Guarantees by the Guarantors except (1) such consents as have been or will be obtained or made on or prior to the Closing Date and (2) where the failure to obtain such consents, approvals, authorizations or orders, filings, registrations, qualifications, licenses or permits would not be reasonably expected to result in a Material Adverse Effect.

(o) Title to Property. Except as disclosed in the General Disclosure Package and the Final Offering Circular, the Company, the Co-Issuers and the Guarantors and their respective subsidiaries have good and marketable title to all real properties and all other properties and assets owned by them, in each case free from liens that would materially affect the value thereof or materially interfere with the use made or to be made thereof by them; and each of the Company, the Guarantors and their respective subsidiaries, has peaceful and undisturbed possession under all material leases

6

to which any of them is a party as lessee and each of which lease is valid and binding and no default exists thereunder, except in each case as would not reasonably be expected to have a Material Adverse Effect.

(p) Absence of Defaults and Conflicts Arising From Transactions. Assuming the accuracy of the Purchaser's representations and warranties in Section 4 of this Agreement, none of (i) the execution, delivery, assumption or performance by the Company, any Co-Issuer or any Guarantor, of this Agreement, or any of the other Operative Documents to which it is a party, (ii) the issuance and sale of the Offered Securities by the Company and the Co-Issuers and the issuance of the Guarantees by the Guarantors, (iii) the compliance by the Company, the Co-Issuers and the Guarantors in all material respects with the terms and provisions of this Agreement, or any of the other Operative Documents to which it is a party, or (iv) the consummation by the Company, the Co-Issuers or the Guarantors of the transactions described in the Preliminary Offering Circular and the Final Offering Circular under the caption "Use of Proceeds," violates, conflicts with or constitutes a breach of any of the terms or provisions of, or will violate, conflict with or constitute a breach of any of the terms or provisions of, or a default under (or an event that with notice or the lapse of time, or both, would constitute a default under), or require consent under, or result in the imposition of a lien or encumbrance on any properties of the Company or its subsidiaries, or an acceleration of any indebtedness of the Company or its subsidiaries pursuant to, (A) the charter or bylaws or other organizational documents of the Company, any Co-Issuer, any Guarantor or their respective subsidiaries, (B) any bond, debenture, note, indenture, mortgage, deed of trust or other agreement or instrument to which the Company, any Co-Issuer, any Guarantor or their respective subsidiaries is a party or by which any of them is bound or to which any of their properties are subject, (C) any statute, rule or regulation applicable to the Company, any Co-Issuer, any Guarantor or their respective subsidiaries or any of their assets or properties or (D) any judgment, order or decree of any court or governmental agency, body or authority or administrative agency, domestic or foreign, having jurisdiction over the Company, any Co-Issuer, any Guarantor or their respective subsidiaries or any of their assets or properties except, with respect to clauses (B) through (D) as would not reasonably be expected to result in a Material Adverse Effect.

(q) No Consents, Approvals or Authorizations. Assuming the accuracy of the Purchaser's representations and warranties in Section 4 of this Agreement, no consent, approval, authorization or order of, or, except for any filings required in order to perfect the security interest relating to the Offered Securities, filing, registration, qualification, license or permit of or with, (i) any court or governmental agency, body or authority or administrative agency or (ii) any other person is required for (A) the execution, delivery and performance by the Company or the Guarantors of this Agreement or any of the other Operative Documents to which it is a party, or (B) the issuance and sale of the Offered Securities, the issuance of the Guarantees and the Transactions, except (x) such consents as have been or will be obtained or made on or prior to the Closing Date and (y) where the failure to obtain such consents, approvals, authorizations or orders, filings, registrations, qualifications, licenses or permits would not be reasonably expected to result in a Material Adverse Effect.

(r) Absence of Existing Defaults and Conflicts. Each of the Company, each Guarantor and their respective subsidiaries, is not (i) in violation of its charter or bylaws or other organizational documents, (ii) (except as set forth in the General Disclosure Package and the Final Offering Circular) in default (or with the giving of notice or lapse of time would be in default) under any existing obligation, agreement, covenant or condition contained in any bond, debenture, note, indenture, mortgage, deed of trust or other agreement or instrument to which it is a party or by which it is bound or to which any of its properties is subject that, individually or in the aggregate,

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would reasonably be expected to have a Material Adverse Effect or (iii) except as disclosed in the Preliminary Offering Circular and the Final Offering Circular, in violation of any local, state, federal or foreign law, statute, ordinance, rule, regulation, requirement, judgment or court decree (including, without limitation, environmental laws, statutes, ordinances, rules, regulations, requirements, judgments or court decrees) applicable to it or any of its assets or properties (whether owned or leased) that, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect. To the knowledge of the Company, there exists no condition (with respect to clauses (ii) and (iii) above) that, with notice, the passage of time or otherwise, would constitute a default under any such document or instrument except for any such default which would not be reasonably expected to result in a Material Adverse Effect.

(s) Possession of Licenses and Permits. Each of the Company, the Guarantors and their respective subsidiaries possess, and are in compliance with the terms of, all adequate certificates, permits, licenses, franchises and authorizations of governmental or regulatory authorities ("Licenses"), including, without limitation, under any applicable Environmental Laws, as are necessary or material to lease and operate its respective properties and to conduct its businesses as proposed in the General Disclosure Package and the Final Offering Circular, except where the failure to have such Licenses would not reasonably be expected to have a Material Adverse Effect; each of the Company, the Guarantors and their respective subsidiaries has fulfilled and performed all of its obligations with respect to such Licenses and have not received any notice of proceedings relating to, and no event has occurred that allows, or after notice or lapse of time would allow, revocation, termination or modification thereof in either case, except where such failure to perform, or occurrence of such event would not reasonably be expected to have a Material Adverse Effect.

(t) Absence of Labor Dispute. There is (i) no significant unfair labor practice complaint pending against the Company, the Guarantors or any of their respective subsidiaries, nor, to the knowledge of the Company, threatened against any of them, before the National Labor Relations Board, any state or local labor relations board or any foreign labor relations board, and no significant grievance or significant arbitration proceeding arising out of or under any collective bargaining agreement is so pending against the Company, the Guarantors or any of their respective subsidiaries, or, to the knowledge of the Company, threatened against any of them, (ii) no significant strike, labor dispute, slowdown or stoppage pending against the Company, the Guarantors or any of their subsidiaries, or to the knowledge the Company, threatened against any of them and (iii) to the knowledge of the Company, there is no union representation question existing with respect to the employees of the Company, the Guarantors or any of their respective subsidiaries, except for any union representation question that would not reasonably be expected to have a Material Adverse Effect. To the knowledge of the Company, no material collective bargaining organizing activities are taking place with respect to the Company, the Guarantors or any of their respective subsidiaries. Neither the Company, the Guarantors or any of their respective subsidiaries has violated (i) any federal, state or local law or foreign law relating to discrimination in hiring, promotion or pay of employees, (ii) any applicable wage or hour laws or (iii) any provision of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or the rules and regulations thereunder, except those violations that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

(u) Possession of Intellectual Property. Each of the Company, the Guarantors and their respective subsidiaries owns, possesses, can acquire on reasonable terms or has the right to employ all patents, patent rights, licenses, inventions, copyrights, know-how (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information, software,

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systems or procedures), trademarks, service marks and trade names, computer programs, technical data and information (collectively, the "Intellectual Property") presently employed by it in connection with the businesses now operated by it free and clear of and without violating any right, claimed right, charge, encumbrance, pledge, security interest, restriction or lien of any kind of any other person, and the Company has not received any written notice of infringement of or conflict with asserted rights of others with respect to any of the foregoing, except such infringements as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. The use of the Intellectual Property in connection with the business and operations of the Company, the Guarantors and their respective subsidiaries does not infringe on the rights of any person, except such infringements as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

(v) Environmental Laws. Except as set forth in the General Disclosure Package and the Final Offering Circular, neither the Company, the Guarantors nor any of their respective subsidiaries, has violated, or is in violation of, any foreign, federal, state or local law or regulation, or decision or order of any governmental agency or body or any court relating to the protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants (collectively, "Environmental Laws"), which violations would, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. There is no alleged liability, or to the knowledge of the Company, potential liability (including, without limitation, alleged or potential liability or investigatory costs, cleanup costs, governmental response costs, natural resource damages, property damages, personal injuries or penalties) of the Company, the Guarantors or any of their respective subsidiaries, arising out of, based on or resulting from either (i) the presence or release into the environment of any Hazardous Material (as defined) at any location of the Company, the Guarantors or any such subsidiary, as the case may be, or (ii) any violation or alleged violation of any Environmental Law, which alleged or potential liability is required to be disclosed in the Preliminary Offering Circular and the Final Offering Circular, in either case, other than as disclosed therein, or would not reasonably be expected to have a Material Adverse Effect. The term "Hazardous Material" means (A) any "hazardous substance" as defined by the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, (B) any "hazardous waste" as defined by the Resource Conservation and Recovery Act of 1976, as amended, (C) any petroleum or petroleum product, (D) any polychlorinated biphenyl and (E) any pollutant or contaminant or hazardous, dangerous or toxic chemical, material, waste or substance regulated under or within the meaning of any other law relating to protection of human health or the environment or imposing liability or standards of conduct concerning any such chemical material, waste or substance.

(w) Absence of Manipulation. Neither the Company, nor the Guarantors nor their respective subsidiaries has taken, directly or indirectly, any action designed to, or that might reasonably be expected to, cause or result in stabilization or manipulation of the price of any security of the Company, the Guarantors or their respective subsidiaries to facilitate the sale or resale of the Offered Securities.

(x) Statistical and Market-Related Data. The statistical, industry and market-related data included in the Preliminary Offering Circular, the Final Offering Circular, any Issuer Free Writing Communication or any Supplemental Marketing Material are based on or derived from management estimates and third-party sources, and the Company, the Co-Issuers and the Guarantors believe such estimates and sources are reasonable, reliable and accurate in all material respects.

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(y) Internal Controls and Compliance with the Sarbanes-Oxley Act. The Company maintains a system of internal accounting controls, including, but not limited to, disclosure controls and procedures and internal controls over accounting matters and financial reporting (collectively, "Internal Controls"), that are sufficient to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the issuer, (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the issuer are being made only in accordance with authorizations of management and directors of the issuer, and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the issuer's assets that would have a material effect on the financial statements.

(z) Tax Matters. All federal, state and foreign income and franchise tax returns required to be filed by the Company, the Guarantors or their respective subsidiaries in all jurisdictions have been so filed and are accurate in all material respects. All taxes, including withholding taxes, penalties and interest, assessments, fees and other charges due or claimed to be due from such entities or that are due and payable have been paid, other than those being contested in good faith and for which adequate reserves have been provided in accordance with generally accepted accounting principles or those currently payable without penalty or interest and except where the failure to make such required filings or payments would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect. To the knowledge of the Company there are no material proposed additional tax assessments against the Company, the Guarantors or their respective subsidiaries or the assets or property of the Company, the Guarantors or their respective subsidiaries, except those tax assessments for which adequate reserves have been established or those tax assessments that would not reasonably be expected to result in a Material Adverse Effect.

(aa) Insurance. Each of the Company, the Guarantors and their respective subsidiaries, maintains insurance covering its properties, operations, personnel and businesses, insuring against such losses and risks as are consistent with industry practice, except where failure to maintain such insurance would not reasonably be expected to have a Material Adverse Effect. Neither the Company nor the Guarantors has received written notice from any insurer or agent of such insurer that substantial capital improvements or other expenditures will have to be made in order to continue such insurance. Neither the Company, the Guarantors or any of their respective subsidiaries has been refused any insurance coverage sought or applied for; and neither the Company nor any such subsidiary has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not have a Material Adverse Effect..

(bb) Certain Relationships. Except as described in the General Disclosure Package and the Final Offering Circular, no relationship, direct or indirect, exists between or among the Company, the Guarantors or their respective subsidiaries on the one hand, and the directors, officers, stockholders, customers or suppliers of the Company, the Guarantors or their respective subsidiaries on the other hand, that would be required by the Securities Act to be described in the Final Offering Circular if the Final Offering Circular were a prospectus included in a registration statement on Form S-1 filed with the Commission.

(cc) Absence of Legal and Other Proceedings There is (i) no action, suit,

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investigation or proceeding before or by any court, arbitrator or governmental agency, body or authority or administrative agency, domestic or foreign, now pending, or, to the knowledge of each of the Company, threatened or contemplated, to which the Company, the Guarantors or any of their respective subsidiaries is or may be a party or to which the assets or property of the Company, the Guarantors or any of their respective subsidiaries is or may be subject, (ii) no statute, rule, regulation or order that has been enacted, adopted or issued by any governmental agency, body or authority or administrative agency or that has been proposed by any governmental agency, body or authority or administrative agency and (iii) no injunction, restraining order or order of any nature by a federal or state court or foreign court of competent jurisdiction to which the Company, the Guarantors or any of their respective subsidiaries is or may be subject or to which the business, assets or property of the Company, the Guarantors or any of their respective subsidiaries is or may be subject, that, in the case of clauses (i), (ii) and (iii) above, (A) is required to be disclosed in the General Disclosure Package and the Final Offering Circular and that is not so disclosed or (B) would, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect or (C) which are otherwise material in the context of the sale of the Offered Securities. No action has been taken and no statute, rule, regulation or order has been enacted, adopted or issued by any governmental agency that prevents the issuance of the Offered Securities or Guarantees or prevents or suspends the use of the Final Offering Circular; no injunction, restraining order or order of any nature by a federal or state court of competent jurisdiction has been issued that prevents the issuance of the Offered Securities or Guarantees or prevents or suspends the sale of the Offered Securities in any jurisdiction referred to in Section 2(c) hereof; and every request of any securities authority or agency of any jurisdiction for additional information in connection with the offering of Offered Securities has been complied with in all material respects.

(dd) Financial Statements. The accountants who have certified or will certify the historical financial statements included or to be included as part of the Preliminary Offering Circular and the Final Offering Circular are independent registered public accountants as required by the Securities Act. Except as described in the Preliminary Offering Circular and the Final Offering Circular, and except that separate financials statements that may be required under Rule 3-16 of Regulation S-X have not been included, the historical consolidated financial statements, together with related schedules and notes thereto, included in the Preliminary Offering Circular and the Final Offering Circular comply as to form in all material respects with the requirements applicable to financial statements required in registration statements on Form S-1 under the Securities Act and present fairly in all material respects the financial position and results of operations at the dates and for the periods indicated. All such financial statements have been prepared in accordance with generally accepted accounting principles in the United States applied on a consistent basis throughout the periods presented, except as disclosed therein. The other financial and statistical information and data included in the Preliminary Offering Circular and the Final Offering Circular derived from the historical consolidated financial statements are fairly presented in all material respects and prepared on a basis consistent with the historical consolidated financial statements included in the Preliminary Offering Circular and the Final Offering Circular and the books and records as applicable.

(ee) No Material Adverse Change in Business. Since the respective dates as of which information is given in the Preliminary Offering Circular, there has been no change, nor any development or event involving a prospective change, in the condition (financial or otherwise), results of operations, or business, properties of the Company, the Guarantors and their respective subsidiaries, taken as a whole, that is material and adverse, (i) there has not been any material adverse change, nor any development that is reasonably likely to result in a material adverse change, in the capital stock or the long-term debt or net current assets, or material increase in the

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short-term debt, of the Company, the Guarantors or their respective subsidiaries from that set forth in the General Disclosure Package and the Final Offering Circular, (ii) no dividend or distribution of any kind has been declared, paid or made by the Company, the Guarantors or their subsidiaries on any class of its stock, and (iii) neither the Company, nor the Guarantors nor any of their respective subsidiaries has incurred any liabilities or obligations, direct or contingent, that are material, individually or in the aggregate, to the Company, the Guarantors or their respective subsidiaries taken as a whole, and that are required to be disclosed on a balance sheet or notes thereto in accordance with generally accepted accounting principles in the United States and are not disclosed on the latest balance sheet or notes thereto included in the Final Offering Circular, nor entered into any transaction not in the ordinary course of business. Since the date hereof and since the dates as of which information is given in the Final Offering Circular, there has not occurred any change, or any development that is reasonably likely to result in a Material Adverse Effect.

(ff) Investment Company Act. Neither the Company, nor the Guarantors nor their respective subsidiaries is, or after giving effect to the Transactions and applying the net proceeds as described in the General Disclosure Package or the Final Offering Circular under the caption "Use of Proceeds" will be an "investment company" required to be registered under the Investment Company Act of 1940, as amended (the "Investment Company Act").

(gg) Regulations T, U, X. None of the execution, delivery and performance of this Agreement, the issuance and sale of the Offered Securities, the application of the proceeds from the issuance and sale of the Offered Securities and the consummation of the transactions contemplated thereby as set forth in the Preliminary Offering Circular and the Final Offering Circular, will violate Regulations T, U or X promulgated by the Board of Governors of the Federal Reserve System or analogous foreign laws and regulations. Neither the Company nor the Guarantors nor any of their respective subsidiaries nor any agent thereof acting on their behalf has taken, and none of them will take, any action that might cause this Agreement or the issuance or sale of the Offered Securities to violate Regulation T, Regulation U or Regulation X of the Board of Governors of the Federal Reserve System.

(hh) Accurate Disclosure. The statements in the General Disclosure Package and the Final Offering Circular under the heading "Certain United States Federal Income Tax Considerations", "Description of Other Indebtedness" and "Description of Notes" insofar as such statements summarize legal matters, agreements, documents or proceedings discussed therein, are accurate and fair summaries of such legal matters, agreements, documents or proceedings and present the information required to be shown in all material respects.

(ii) Compliance with Securities Act Rule 144A. Each of the Preliminary Offering Circular and the Final Offering Circular, as of its date, and each amendment or supplement thereto, as of its date, contains the information specified in, and meets the requirements of, Rule 144A(d)(4) under the Securities Act.

(jj) Class of Securities Not Listed. When the Offered Securities are issued and delivered pursuant to this Agreement, no Offered Security will be of the same class (within the meaning of Rule 144A under the Securities Act) as securities of the Company that are listed on a national securities exchange registered under Section 6 of the Exchange Act or quoted in a United States automated interdealer quotation system.

(kk) No Registration. The offer and sale of the Offered Securities and the Guarantees

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in the manner contemplated by this Agreement will be exempt from the registration requirements of the Securities Act by reason of Section 4(a)(2) thereof and Regulation S thereunder assuming (A) that the purchasers who buy the Offered Securities in the Exempt Resales are Eligible Purchasers and (B) the accuracy of the Purchaser's representations contained herein, it is not necessary to qualify an indenture in respect of the Offered Securities or the Guarantees under the Trust Indenture Act.

(ll) No General Solicitation; No Directed Selling Efforts. None of the Company or the Guarantors or any of their affiliates, or any person acting on their behalf (it being understood that no representation or warranty is made regarding the Purchaser) (i) has, within the six month period prior to the date hereof, offered or sold in the United States or to a U.S. Person (as such terms are defined in Regulation S under the Securities Act ("Regulation S")), the Offered Securities or any security of the same class or series as the Offered Securities or (ii) has offered or will offer or sell the Offered Securities (A) in the United States or to any U.S. Person by means of any form of general solicitation or general advertising within the meaning of Rule 502(c) under the Securities Act or (B) with respect to any such securities sold in reliance on Rule 903 of Regulation S under the Securities Act, by means of any directed selling efforts within the meaning of Rule

902(c) of Regulation S. The Company, the Guarantors and their respective affiliates and all persons acting on their behalf (other than the Purchaser, as to whom no representation or warranty is made) have complied with and will comply with the offering restrictions requirements of Regulation S in connection with the offering of the Offered Securities outside the United States (assuming that the purchasers who buy the Offered Securities in the Exempt Resales to Reg S Investors are Reg S Investors) and, in connection therewith, the Preliminary Offering Circular and the Final Offering Circular contain or will contain the disclosure required by Rule 902(g)(2) under the Securities Act. The Offered Securities offered and sold in reliance on Regulation S have been and will be offered and sold only in offshore transactions (assuming that the purchasers who buy the Offered Securities in the Exempt Resales to Reg S Investors are Reg S Investors). The sale of the Offered Securities pursuant to Regulation S is not part of a plan or scheme to evade the registration provisions of the Securities Act.

(mm) Foreign Corrupt Practices Act and Anti-Money Laundering. The Company, the Co-Issuers, the Guarantors and their respective subsidiaries have instituted and maintain policies designed to ensure continued compliance with each of the laws listed below; in addition, the Company, the Co-Issuers, the Guarantors and their respective subsidiaries, and to their knowledge, each of their officers, directors, affiliates, managers, agents, employees and representatives, have not violated (and will not violate as the result of this offering) the following laws: (a) anti-bribery laws, including but not limited to, any applicable law, rule, or regulation of any locality, including but not limited to any law, rule, or regulation promulgated to implement the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, signed December 17, 1997, including the U.S. Foreign Corrupt Practices Act of 1977 or any other law, rule or regulation of similar purpose and scope, (b) anti-money laundering laws, including but not limited to, applicable federal, state, international, foreign or other laws, regulations or government guidance regarding anti-money laundering, including, without limitation, Title 18 U.S. Code section 1956 and 1957, the Patriot Act, the Bank Secrecy Act, and international anti-money laundering principals or procedures by an intergovernmental group or organization, such as the Financial Action Task Force on Money Laundering, of which the United States is a member and with which designation the United States representative to the group or organization continues to concur, all as amended, and any Executive order, directive, or regulation pursuant to the authority of any of the foregoing, or any orders or licenses issued thereunder or (c) laws and regulations imposing U.S. economic sanctions measures, including, but not limited to, the International Emergency Economic Powers

13

Act, the Trading with the Enemy Act, the United Nations Participation Act, and the Syria Accountability and Lebanese Sovereignty Act, all as amended, and any Executive Order, directive, or regulation pursuant to the authority of any of the foregoing, including the regulations of the United States Treasury Department set forth under 31 CFR, Subtitle B, Chapter V, as amended, or any orders or licenses issued thereunder.

(nn) OFAC. None of the Company, the Co-Issuers, the Guarantors or, if applicable, their respective affiliates or any of their subsidiaries, directors, officers or employees derives more than 10% of their revenue in the aggregate with the governments of or any person or entity in or is organized under the laws of, or directly or indirectly owned or controlled by the governments of or a person in or organized under the laws of Cuba, Iran, Myanmar (Burma), North Korea, Sudan, Libya or Syria; none of the Company, the Co-Issuers, the Guarantors or, if applicable, their respective affiliates, subsidiaries, directors, officers, employees or agents, is, directly or indirectly, controlled by a person subject to any of the economic sanctions administered by the Swiss State Secretariat for Economic Affairs, the United States Department of Treasury's Office of Foreign Assets Control ("OFAC"), the United Nations, the European Union, HM Treasury and the Foreign and Commonwealth Office of the United Kingdom, the Monetary Authority of Singapore and/or the Hong Kong Monetary Authority (all such countries, persons and entities under the preceding clauses (other than the Company, the Co-Issuers, the Guarantors, their respective affiliates and any of their subsidiaries, directors, officers, employees or agents) collectively referred to as "Restricted Parties"). The Company and the Co-Issuers will not use any proceeds received from the sale of the Offered Securities to fund any sales to, purchases from, operations or investments in, or any payments to or in favor of Restricted Parties.

(oo) Distribution of Material. The Company and the Co-Issuers have not distributed or, prior to the later to occur of (i) the Closing Date and (ii) completion of the distribution of the Offered Securities, will distribute any material in connection with the offering and sale of the Offered Securities other than the Preliminary Offering Circular, the Final Offering Circular or other material, if any, not prohibited by the Securities Act and the Financial Services and Markets Act 2000 of the United Kingdom ("FSMA") (or regulations promulgated to the Securities Act or the FSMA) and approved by the Purchaser, such approval not to be unreasonably withheld or delayed.

Each of the Company, the Co-Issuers and the Guarantors acknowledge that the Purchaser and, for purposes of the opinions to be delivered to the Purchaser pursuant to Section 7 hereof, counsel for the Company, the Co-Issuers and the Guarantors and counsel for the Purchaser, will rely upon the accuracy and truth of the foregoing representations and hereby consent to such reliance.

3. Purchase, Sale and Delivery of Offered Securities. On the basis of the representations, warranties and agreements and subject to the terms and conditions set forth herein, the Company and the Co-Issuers, jointly and severally, agree to issue to the Purchaser, and the Designated Issuers (as defined below) agree to sell to the Purchaser, and the Purchaser agrees to purchase from the respective Designated Issuer (or the Company or one or more of the Co-Issuers pursuant to the last paragraph of this Section 3), at a purchase price of 108.000% of the principal amount thereof plus accrued interest from February 1, 2013 to the Closing Date (as hereinafter defined), the respective principal amounts of the Offered Securities set forth opposite the name of the Purchaser in Schedule A hereto. The Purchaser agrees that the Company may designate the principal amount of Offered Securities to be sold by the Company and/or one or more of the Co-Issuers (each, a "Designated Issuer") to the Purchaser at the Company's sole discretion.

The Designated Issuers will deliver against payment of the purchase price the Offered

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Securities to be offered and sold by the Purchaser in reliance on Regulation S (the "Regulation S Securities") in the form of one or more permanent global securities in registered form without interest coupons (the "Regulation S Global Securities") which will be deposited with the Trustee as custodian for The Depository Trust Company ("DTC") for the respective accounts of the DTC participants for the operator of the Euroclear System ("Euroclear"), and Clearstream Banking, société anonyme ("Clearstream, Luxembourg") and registered in the name of Cede & Co., as nominee for DTC. The Designated Issuers will deliver against payment of the purchase price the Offered Securities to be purchased by the Purchaser hereunder and to be offered and sold by the Purchaser in reliance on Rule 144A (the "144A Securities") in the form of one permanent global security in definitive form without interest coupons (the "Restricted Global Securities") deposited with the Trustee as custodian for DTC and registered in the name of Cede & Co., as nominee for DTC. The Regulation S Global Securities and the Restricted Global Securities shall be assigned separate CUSIP numbers. The Restricted Global Securities shall include the legend regarding restrictions on transfer set forth under "Transfer Restrictions" in the Final Offering Circular. Until the termination of the distribution compliance period (as defined in Regulation S) with respect to the offering of the Offered Securities, interests in the Regulation S Global Securities may only be held by the DTC participants for Euroclear and Clearstream, Luxembourg. Interests in any permanent global securities will be held only in book- entry form through Euroclear, Clearstream, Luxembourg or DTC, as the case may be, except in the limited circumstances described in the Final Offering Circular.

Payment for the Regulation S Securities and the 144A Securities shall be made by the Purchaser in Federal (same day) funds by wire transfer to an account specified by the Company on behalf of the Designated Issuers at a bank acceptable to the Purchaser at the office of Paul, Weiss, Rifkind, Wharton & Garrison LLP, 1285 Avenue of the Americas, New York, New York, at 9:00 A.M., New York time, on May 20, 2013 , or at such other time not later than seven full business days thereafter as the Purchaser and the Company determine, such time being herein referred to as the "Closing Date", against delivery to the Trustee as custodian for DTC of (i) the Regulation S Global Securities representing all of the Regulation S Securities for the respective accounts of the DTC participants for Euroclear and Clearstream, Luxembourg and (ii) the Restricted Global Securities representing all of the Offered 144A Securities. The Regulation S Global Securities and the Restricted Global Securities will be made available for checking at the above office of Latham & Watkins at least 24 hours prior to the Closing Date.

To the extent any Designated Issuer fails to sell or deliver any Offered Securities to the Purchaser and perform the other obligations as required under this Agreement, each of the Company and the Co-Issuers agrees, jointly and severally, to sell and deliver the Offered Securities to the Purchaser and perform the other obligations of such Designated Issuer in fulfillment of such Designated Issuer's obligations under this Agreement. The Company may make determinations, notifications and deliveries under this Section 3 on behalf of the Designated Issuers.

4. Representations by Purchaser; Resale by Purchaser. The Purchaser represents, warrants and covenants to the Company, the Co-Issuers and the Guarantors as of the date hereof that:

(a) the Purchaser is an institutional "accredited investor" (as defined in Regulation D under the Securities Act) with such knowledge and experience in financial and business matters as are necessary in order to evaluate the merits and risks of an investment in the Offered Securities.

(b) (i) in connection with the offering of the Offered Securities, it will solicit offers to buy the Offered Securities only from, and will offer to sell the Offered Securities (the "Exempt Resales") only to persons whom the Purchaser reasonably believes to be "qualified institutional buyers" ("QIBs"), as defined in Rule 144A under the Securities Act and non-U.S. persons outside the United States in reliance upon Regulation S the Securities Act (each, a "Reg S

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Investor," and, collectively with the QIBs, the "Eligible Purchasers") and (ii) in the case of such Eligible Purchasers, such Offered Securities will not have been registered under the Securities Act and may be resold, pledged or otherwise transferred only (x)(I) to a person whom the seller reasonably believes is a QIB purchasing for its own account or for the account of a QIB for which such person is acting as fiduciary or agent, in a transaction meeting the requirements of Rule 144A under the Securities Act, (II) in an offshore transaction (as defined in Rule 902 under the Securities Act) meeting the requirements of Rule 904 under the Securities Act, (III) in a transaction meeting the requirements of Rule 144 under the Securities Act, (IV) to an institutional accredited investor that, prior to such transfer, furnishes the Trustee a signed letter containing certain representations and agreements relating to the registration of transfer of such Offered Securities (the form of which can be obtained from the Trustee) and, if such transfer is in respect of an aggregate principal amount of Offered Securities in excess of $250,000, an opinion of counsel acceptable to the Company that such transfer is in compliance with the Securities Act or (V) in accordance with another exemption from the registration requirements of the Securities Act (and based upon an opinion of counsel if the Company so requests), (y) to the Company or any of its subsidiaries, (z) pursuant to an effective registration statement under the Securities Act and, in each case, in accordance with any applicable securities laws of any state of the United States or any other applicable jurisdiction and (iii) acknowledges that they will, and each subsequent holder is required to, notify any purchaser of the security evidenced thereby of the resale restrictions set forth in (ii) above.

(c) the Purchaser is not acquiring the Offered Securities with a view to any distribution thereof that would violate the Securities Act or the securities laws of any state of the United States or any other applicable jurisdiction.

(d) at or prior to confirmation of a sale of Offered Securities by it to any distributor, dealer or person receiving a selling concession, fee or other remuneration during the 40-day distribution compliance period referred to in Rule 903(b)(2) under the Securities Act, it will send to such distributor, dealer or person receiving a selling concession, fee or other remuneration a confirmation or notice to substantially the following effect:

"THE SECURITIES COVERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE OFFERED AND SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS (I) AS PART OF YOUR DISTRIBUTION AT ANY TIME OR (II) OTHERWISE UNTIL 40 DAYS AFTER THE LATER OF THE COMMENCEMENT OF THE OFFERING OF THE SECURITIES AND THE CLOSING OF THE OFFERING, EXCEPT IN EITHER CASE IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT (OR RULE 144A OR TO ACCREDITED INSTITUTIONS IN TRANSACTIONS THAT ARE EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT), AND IN CONNECTION WITH ANY SUBSEQUENT SALE BY YOU OF THE INITIAL NOTES COVERED HEREBY IN RELIANCE ON REGULATION S DURING THE PERIOD REFERRED TO ABOVE TO ANY DISTRIBUTOR, DEALER OR PERSON RECEIVING A SELLING CONCESSION, FEE OR OTHER REMUNERATION, YOU MUST DELIVER A NOTICE TO SUBSTANTIALLY THE FOREGOING EFFECT. TERMS USED ABOVE HAVE THE MEANINGS ASSIGNED TO THEM IN REGULATION S."

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(e) the Offered Securities offered and sold by such Purchaser pursuant hereto in reliance on Regulation S have been and will be offered and sold only in offshore transactions (assuming that the purchasers who buy the Offered Securities in the Exempt Resales to Reg S Investors are Reg S Investors).

(f) the Purchaser and its affiliates or any person acting on its or their behalf has not engaged or will not engage in any directed selling efforts within the meaning of Regulation S with respect to the Offered Securities thereof.

(g) the sale of Offered Securities offered and sold by the Purchaser pursuant hereto in reliance on Regulation S is not part of a plan or scheme to evade the registration provisions of the Securities Act.

(h) the Purchaser has not distributed nor, prior to the later to occur of (i) the Closing Date and (ii) completion of the distribution of the Offered Securities, will distribute any material in connection with the offering and sale of the Offered Securities other than the General Disclosure Package, the Final Offering Circular or other material, if any, not prohibited by the Securities Act and the FSMA (or regulations promulgated to the Securities Act or the FSMA).

(i) no form of general solicitation or general advertising (within the meaning of Regulation D under the Securities Act) has been or will be used by the Purchaser or any of its representatives in connection with the offer and sale of any of the Offered Securities, including, but not limited to, (i) any advertisement, articles, notices or other communications published in any newspaper, magazine or similar medium or broadcast over television or radio, (ii) or any seminar or meeting whose attendees have been invited by any general solicitation or general advertising. The Purchaser agrees, with respect to resales made in reliance on Rule 144A of any of the Offered Securities, to deliver either with the confirmation of such resale or otherwise prior to settlement of such resale a notice to the effect that the resale of such Offered Securities has been made in reliance upon the exemption from the registration requirements of the Securities Act provided by Rule 144A.

(j) in relation to each Member State of the European Economic Area that has implemented the Prospectus Directive (each, a "Relevant Member State"), the Purchaser represents and agrees that with effect from and including the date on which the Prospectus Directive is implemented in that Relevant Member State (the "Relevant Implementation Date"), it has not made and will not make an offer of the Offered Securities to the public in that Relevant Member State other than:

(i)to any legal entity which is a qualified investor as defined in the

Prospectus Directive;

(ii) to fewer than 100 or, if the Relevant Member State has implemented the relevant provision of the 2010 PD Amending Directive, 150, natural or legal persons (other than qualified investors as defined in the Prospectus Directive), as permitted under the Prospective Directive, subject to obtaining the prior consent of the Purchaser; or

(iii)in any other circumstances falling within Article 3(2) of the

Prospectus Directive,

provided that no such offer of Offered Securities shall require the Company or the Purchaser to publish a prospectus pursuant to Article 3 of the Prospectus Directive.

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For the purposes of this representation, the expression an "offer of Offered Securities to the public" in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and the Offered Securities to be offered so as to enable an investor to decide to purchase or subscribe to the Offered Securities, as the same may be varied in that Relevant Member State by any measure implementing the Prospectus Directive in that Relevant Member State and the expression "Prospectus Directive" means Directive 2003/71/EC and includes any relevant implementing measure in each Relevant Member State.

(iv) (A) it has only communicated or caused to be communicated and will only communicate or cause to be communicated an invitation or inducement to engage in investment activity (within the meaning of Section 21 of the FSMA) received by it in connection with the issue or sale of the Offered Securities in circumstances in which Section 21(1) of the FSMA does not apply to the Company or the Guarantors; and

(B) it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the Offered Securities in, from or otherwise involving the United Kingdom.

The Purchaser acknowledges that the Company, the Co-Issuers and the Guarantors, for purposes of the opinions to be delivered to the Purchaser pursuant to Section 7 hereof, counsel for the Company, the Co-Issuers and the Guarantors and counsel for the Purchaser will rely upon the accuracy and truth of the foregoing representations and hereby consent to such reliance.

5. Certain Agreements of the Company and each Guarantor. As of the date hereof, the Company, the Co-Issuers and the Guarantors, jointly and severally, covenants and agrees with the Purchaser as follows:

(a) Amendments and Supplements to Offering Circulars. The Company, the Co-Issuers and the Guarantors will promptly advise the Purchaser of any proposal to amend or supplement the Preliminary Offering Circular or Final Offering Circular and will not effect such amendment or supplementation at any time prior to the completion of the resale of the Offered Securities by the Purchaser (as determined by the Purchaser) without the Purchaser's consent. If, at any time prior to the completion of the resale of the Offered Securities by the Purchaser, there occurs an event or development as a result of which, in the reasonable judgment of the Company or the Purchaser or in the reasonable judgment of counsel for the Company or counsel for the Purchaser, any document included in the Preliminary Offering Circular or Final Offering Circular, the General Disclosure Package or any Supplemental Marketing Material, if republished immediately following such event or development, included or would include an untrue statement of a material fact or omitted or would omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, or if it is necessary or advisable, in the reasonable judgment of the Company or the Purchaser or in the reasonable judgment of counsel for the Company or counsel for the Purchaser, to amend or supplement the Preliminary Offering Circular, the General Disclosure Package or the Final Offering Circular to comply with applicable law, the Company, the Co-Issuers and the Guarantors promptly will notify the Purchaser of such event and use their commercially reasonable efforts to promptly prepare and furnish, at its own expense, to the Purchaser and the dealers and to any other dealers at the reasonable request of the Purchaser, an amendment or supplement which will correct such

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statement or omission, or reasonably assure that correct the Preliminary Offering Circular, the General Disclosure Package or the Final Offering Circular will comply with applicable law. Neither the Purchaser's consent to, nor the Purchaser's delivery to offerees or investors of, any such amendment or supplement shall constitute a waiver of any of the conditions set forth in Section 7.

(b) Furnishing of Offering Circulars. The Company, the Co-Issuers and the Guarantors will furnish the Purchaser and those persons identified by the Purchaser to the Company, without charge, as many copies of the Preliminary Offering Circular, each other document comprising a part of the General Disclosure Package, the Final Offering Circular, any amendments and supplements to such documents and each item of Supplemental Marketing Material, in each case as soon as available and in such quantities as the Purchaser may reasonably request. To the extent such materials are required to be provided to holders under the Indenture, at any time when the Company is not subject to Section 13 or 15(d) under the Exchange Act, the Company, the Co-Issuers and the Guarantors will promptly furnish or cause to be furnished to the Purchaser and, upon request of holders and prospective purchasers of the Offered Securities, to such holders and purchasers, copies of the information required to be delivered to holders and prospective purchasers of the Offered Securities pursuant to Rule 144A(d)(4) (or any successor provision thereto) in order to permit compliance with Rule 144A in connection with resales by such holders of the Offered Securities. The Company will pay the reasonable expenses of printing and distributing to the Purchaser all such documents. The Company, the Co-Issuers and the Guarantors consent to the use of the Preliminary Offering Circular, the General Disclosure Package and the Final Offering Circular, and any amendments and supplements thereto required pursuant hereto, by the Purchaser in connection with Exempt Resales.

(c) Blue Sky Qualifications. The Company, the Co-Issuers and the Guarantors will use commercially reasonable efforts to cooperate with the Purchaser and counsel for the Purchaser in connection with the qualification or registration of the Offered Securities under the securities or Blue Sky laws of such jurisdictions as the Purchaser may reasonably request and to continue such qualification in effect so long as required for the Exempt Resales; provided, however, that neither the Company nor the Guarantors shall be required in connection therewith to register or qualify as a foreign corporation where it is not now so qualified or to take any action that would subject it to service of process in suits or taxation, in any jurisdiction where it is not now so subject.

(d) Reporting Requirements. To the extent such materials are required to be provided to holders under the Indenture, during a period of three years following the Closing Date, for so long as any Offered Securities remain outstanding, if not otherwise available on the Commission's Electronic Data Gathering, Analysis and Retrieval system ("EDGAR"), the Company will furnish to the Purchaser (i) all publicly available reports or other information that the Company or the Guarantors mail or otherwise make available to their stockholders, (ii) all reports, financial statements and proxy or information statements filed by the Company with the Commission or any national securities exchange and (iii) from time to time, such other information concerning the Company, the Co-Issuers and the Guarantors as the Purchaser may reasonably request.

(e) Transfer Restrictions. During the period of one year after the Closing Date, the Company will, upon request, furnish to the Purchaser and any holder of Offered Securities a copy of the restrictions on transfer applicable to the Offered Securities.

(f) Resales by Affiliates. During the period of one year after the Closing Date, unless permitted under Rule 144, the Company will not, and will not permit any of its affiliates (as defined in Rule 144) to, resell any of the Offered Securities that have been reacquired by any of

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them, except in a tender offer by the Company the result of which is the cancellation of the Offered Securities so tendered.

(g) Investment Company. During the period of two years after the Closing Date, neither the Company nor any Guarantor will be or become, an open-end investment company, unit investment trust or face-amount certificate company that is or is required to be registered under Section 8 of the Investment Company Act.

(h) Payment of Expenses. The Company, the Co-Issuers and the Guarantors will pay all reasonable costs, expenses, fees and taxes incidental to the performance of their respective obligations under this Agreement and the Indenture, including but not limited to (i) the reasonable fees and expenses of the Trustee and its professional advisers and all collateral agents; (ii) the reasonable expenses in connection with the execution, issue, authentication, packaging and initial delivery of the Offered Securities and, as applicable, the preparation and printing of this Agreement, the Offered Securities, the Indenture, the Preliminary Offering Circular, any other documents comprising any part of the General Disclosure Package, the Final Offering Circular, all amendments and supplements thereto, each item of Supplemental Marketing Material and any other document relating to the issuance, offer, sale and delivery of the Offered Securities; (iii) the cost of any advertising approved by the Company in connection with the issue of the Offered Securities; (iv) any expenses (including reasonable fees and disbursements of counsel to the Purchaser) incurred in connection with qualification of the Offered Securities for sale under the laws of such jurisdictions in the United States and Canada as the Purchaser designates and the preparation and printing of memoranda relating thereto; (v) any fees charged by investment rating agencies for the rating of the Offered Securities; (vi) expenses incurred in distributing the Preliminary Offering Circular, any other documents comprising any part of the General Disclosure Package, the Final Offering Circular (including any amendments and supplements thereto) and any Supplemental Marketing Material to the Purchaser; (vii) the filing fees and expenses associated with the assignment, creation and perfection of security interests, including, without limitation, pursuant to the Collateral Documents and the related UCC financing statements; (viii) the documented fees and expenses of Latham & Watkins LLP not to exceed $150,000; and (ix) the fees and expenses of the Collateral Trustee and any agent thereof in connection with the Collateral Documents, the financing statements and the Collateral securing the Offered Securities. The Company, the Co-Issuers and the Guarantors, on the one hand, and the Purchaser on the other hand, will pay its own respective costs and expenses relating to investor presentations on any "road show" in connection with the offering and sale of the Offered Securities.

(i) Use of Proceeds. The Company will use the net proceeds from the sale of the Offered Securities substantially in the manner described in the Final Offering Circular and General Disclosure Package under the caption "Use of Proceeds" and, except as disclosed in the General Disclosure Package and the Final Offering Circular, the Company does not intend to use any of the proceeds from the sale of the Offered Securities hereunder to repay any outstanding debt owed to any affiliate of any Purchaser.

(j) Absence of Manipulation. Until the Purchaser shall have notified the Company of the completion of the resale of the Offered Securities, such notification not to be unreasonably delayed, neither the Company, the Guarantors nor any of their affiliates will take, directly or indirectly, any action designed to, or that might reasonably be expected to, cause or result in stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Offered Securities. Except as permitted in writing by the Purchaser, none of the Company

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nor any Guarantor will distribute any (i) preliminary offering circular, including, without limitation, the Preliminary Offering Circular, (ii) offering circular, including, without limitation, the Final Offering Circular, or (iii) other offering material in connection with the offering and sale of the Offered Securities.

(k) Conditions Precedent. The Company and each Guarantor will use commercially reasonable efforts to do and perform all things required or necessary to be done and performed under this Agreement prior to or after the Closing Date and to satisfy all conditions precedent on its part to the delivery of the Offered Securities.

(l) Restriction on Sale of Securities. For a period of 60 days after the date hereof, neither the Company nor any Guarantor will, directly or indirectly, take any of the following actions with respect to any United States dollar-denominated secured debt securities issued or guaranteed by the Company or such Guarantor and having a maturity of more than one year from the date of issue or any securities convertible into or exchangeable or exercisable for any of its securities ("Lock-Up Securities"): (i) offer, sell, issue, contract to sell, pledge or otherwise dispose of Lock-Up Securities, (ii) offer, sell, issue, contract to sell, contract to purchase or grant any option, right or warrant to purchase Lock-Up Securities, (iii) enter into any swap, hedge or any other agreement that transfers, in whole or in part, the economic consequences of ownership of Lock-Up Securities, (iv) establish or increase a put equivalent position or liquidate or decrease a call equivalent position in Lock-Up Securities within the meaning of Section 16 of the Exchange Act or (v) file with the Commission a registration statement under the Securities Act relating to Lock-Up Securities or publicly disclose the intention to take any such action, without the prior written consent of the Purchaser except issuances of Lock-Up Securities pursuant to the exercise of warrants or options, in each case outstanding on the date hereof, grants of employee stock options pursuant to the terms of a plan in effect on the date hereof, issuances of Lock-Up Securities pursuant to the exercise of such options or issuances of Lock-Up Securities pursuant to the Company's or such Guarantor's dividend reinvestment plan. Neither the Company nor any Guarantor will at any time directly or indirectly, take any action referred to in clauses (i) through (v) above with respect to any securities under circumstances where such offer, sale, pledge, contract or disposition would cause the exemption afforded by Section 4(a)(2) of the Securities Act or the safe harbor of Regulation S thereunder to cease to be applicable to the offer and sale of the Offered Securities.

The Purchaser may, in its sole discretion, waive in writing the performance by the Company, the Co-Issuers or the Guarantors of any one or more of the foregoing covenants or extend the time for their performance.

6. Free Writing Communications. Issuer Free Writing Communications. The Company and each Guarantor each represent and agree that, unless it obtains the prior consent of the Purchaser, and the Purchaser represents and agrees that, unless it obtains the prior consent of the Company, it has not made and will not make any offer relating to the Offered Securities that would constitute an Issuer Free Writing Communication.

(b) Term Sheets. The Company consents to the use by the Purchaser of a Free Writing Communication that (i) contains only (A) information describing the preliminary terms of the Offered Securities or their offering or (B) information that describes the final terms of the Offered Securities or their offering and that is included in or is subsequently included in the Final Offering Circular, including by means of a pricing term sheet in the form of Schedule B hereto, or (ii) does not contain any material information about the Company or any Guarantor or their securities that was provided by or on behalf of the Company or any Guarantor, it being understood and agreed

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that the Company and each Guarantor shall not be responsible to the Purchaser for liability arising from any inaccuracy in such Free Writing Communications referred to in clause (i) or (ii) as compared with the information in the Preliminary Offering Circular, the Final Offering Circular or the General Disclosure Package.

7. Conditions of the Obligations of the Purchaser. The obligation of the Purchaser to purchase and pay for the Offered Securities, as provided herein, shall be subject to the satisfaction of the following conditions:

(a) Representations and Warranties. All of the representations and warranties of the Company, the Co-Issuers and the Guarantors contained in this Agreement shall be true and correct on the date hereof and on the Closing Date, as applicable, with the same force and effect as if made on and as of the date hereof and the Closing Date, as applicable. The Company, the Co-Issuers and the Guarantors shall have performed or complied in all material respects with all of the agreements contained herein and required to be performed or complied with by it on or prior to the Closing Date.

(b) Final Offering Circular. The Final Offering Circular shall have been printed and copies distributed to the Purchaser not later than 10:00 A.M., New York City time, on the day that is two business days following the date of this Agreement or at such later date and time as to which the Purchaser may agree.

(c) Stop Orders. No stop order suspending the qualification or exemption from qualification of the Offered Securities in any jurisdiction referred to in Section 2(c) shall have been issued and no proceeding for that purpose shall have been commenced or shall be pending or threatened.

(d) Litigation; Conflicting Law. No action shall have been taken and no statute, rule, regulation or order shall have been enacted, adopted or issued by any governmental agency that would, as of the Closing Date, prevent the issuance of either series of the Offered Securities or the Guarantees; no action, suit, investigation or proceeding shall have been commenced and be pending against or affecting or, to the knowledge of the Company, threatened against, the Company, the Guarantors or any of their respective subsidiaries, before any court or arbitrator or any governmental body, agency or authority or administrative agency that, if adversely determined, would reasonably be expected to result in a Material Adverse Effect; and no stop order shall have been issued preventing the use of the Preliminary Offering Circular, the General Disclosure Package, any Free Writing Communication, the Final Offering Circular or any amendment or supplement thereto, or that would reasonably be expected to have a Material Adverse Effect.

(e) No Material Adverse Change. Since the respective dates as of which information is given in the General Disclosure Package, (i) there shall not have occurred any change, or any development or event involving a prospective change, in the condition (financial or otherwise), results of operations, business or properties of the Company, the Guarantors and their respective subsidiaries taken as a whole which, in the judgment of the Purchaser, is material and adverse and makes it impractical or inadvisable to market the Offered Securities, (ii) there shall not have been any material adverse change, or any development that is reasonably likely to result in a material adverse change, in the capital stock or the long-term debt of the Company, or material increase in the short-term debt of the Company, or any downgrading in the rating of any debt securities of the Company by any "nationally recognized statistical rating organization" (as defined for purposes of

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Rule 436(g)), or any public announcement that any such organization has under surveillance or review its rating of any debt securities of the Company (other than an announcement with positive implications of a possible upgrading, and no implication of a possible downgrading, of such rating), or any announcement of placement on negative outlook, of the Company from that set forth in the General Disclosure Package and the Final Offering Circular, (iii) no dividend or distribution of any kind shall have been declared, paid or made by the Company or any of its subsidiaries on any class of their respective capital stock or membership interests, (iv) no change in U.S. or international financial, political or economic conditions or currency exchange rates or exchange controls the effect of which is such as to make it, in the judgment of the Purchaser, impractical to market or to enforce contracts for the sale of the Offered Securities, whether in the primary market or in respect of dealings in the secondary market, (v) there shall not have occurred any suspension or material limitation of trading in securities generally on the New York Stock Exchange, or any setting of minimum or maximum prices for trading on such exchange nor any suspension of trading of any securities of the Company or any Guarantor on any exchange or in the over-the- counter market, nor any banking moratorium declared by any U.S. federal or New York authorities, (vi) there shall not have occurred any major disruption of settlements of securities, payment, or clearance services in the United States or any other country where such securities are listed, (vii) there shall not have occurred any attack on, outbreak or escalation of hostilities or act of terrorism involving the United States, any declaration of war by Congress or any other national or international calamity or emergency if, in the judgment of the Purchaser, the effect of any such attack, outbreak, escalation, act, declaration, calamity or emergency is such as to make it in the judgment of the Purchaser impractical or inadvisable to market the Offered Securities or to enforce contracts for the sale of the Offered Securities and (viii) neither the Company, the Guarantors nor any of their respective subsidiaries, shall have incurred any liabilities or obligations, direct or contingent, that are material, individually or in the aggregate, to the Company and its subsidiaries taken as a whole, and that are required to be disclosed on a balance sheet or notes thereto in accordance with generally accepted accounting principles in the United States and are not disclosed on the latest balance sheet or notes thereto included in the General Disclosure Package and Final Offering Circular, nor entered into any transaction not in the ordinary course of business, in each case, other than as provided under the Operative Documents and as disclosed in the General Disclosure Package and the Final Offering Circular. Since the date hereof and since the dates as of which information is given in the Preliminary Offering Circular, there has not occurred any Material Adverse Effect, or any development that is reasonably likely to result in a Material Adverse Effect.

(f) Officers' Certificate. The Purchaser shall have received officers' certificates, dated the Closing Date, signed on behalf of the Company and each Guarantor, by an executive officer and a principal financial or accounting officer thereof, in form and substance reasonably satisfactory to the Purchaser and counsel for the Purchaser, confirming, as of the Closing Date, and that the matters set forth in paragraphs (a), (c), (d) and (e) of this Section 7 and that, as of the Closing Date, the obligations of the Company and each Guarantor to be performed hereunder on or prior thereto have been duly performed in all material respects.

(g) Opinion of Counsel for Company. The Purchaser shall have received on the Closing Date an opinion and negative assurance letter, each dated the Closing Date and each in form and substance reasonably satisfactory to the Purchaser and counsel for the Purchaser, of Paul, Weiss, Rifkind, Wharton & Garrison, LLP counsel for the Company, substantially to the effect set forth in Exhibit A and Exhibit B hereto.

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(h) Opinion of Local Counsel. The Purchaser shall have received on the Closing Date an opinion, dated the Closing Date, in form and substance reasonably satisfactory to the Purchaser and counsel for the Purchaser, of (i) Troutman Sanders LLP, Georgia counsel for the Company, and (ii) Schwabe, Williamson & Wyatt, P.C., Oregon counsel for the Company, substantially to the effect set forth in Exhibit C1 and Exhibit C2 hereto.

(i) Opinion of General Counsel for Company. The Purchaser shall have received on the Closing Date an opinion, dated the Closing Date, in form and substance reasonably satisfactory to the Purchaser and counsel for the Purchaser, of the General Counsel of the Company, substantially to the effect set forth in Exhibit D hereto.

(j) Accountants' Comfort Letter for Company. At the time this Agreement is executed and at the Closing Date, the Purchaser shall have received from Ernst & Young LLP, independent auditors with respect to the Company, dated as of the date of this Agreement and as of the Closing Date, customary comfort letters addressed to the Purchaser and in form and substance reasonably satisfactory to the Purchaser and counsel for the Purchaser with respect to the financial statements and certain financial information contained in the Preliminary Offering Circular and the Final Offering Circular.

(k) Opinion of Counsel for Purchaser. The Purchaser shall have received, on the Closing Date, an opinion, dated the Closing Date, in form and substance reasonably satisfactory to the Purchaser, of Latham & Watkins LLP, counsel for the Purchaser, covering such matters as are customarily covered in such opinions.

(l) Collateral. The Collateral Trustee shall have received (with a copy for the Purchaser) on the Closing Date:

(i) appropriately completed copies, which have been duly authorized for filing by the appropriate person, of UCC-1 financing statements or equivalent filings naming the Company and each Guarantor as a debtor and the Collateral Trustee as the secured party, or other similar instruments or documents to be filed under the UCC of all jurisdictions as may be necessary or, in the reasonable opinion of the Collateral Trustee and its counsel, desirable to perfect the security interests of the Collateral Trustee in any Collateral held by the Company or the Guarantors that can be perfected by filing of UCC-1 financing statements (other than fixture filings);

(ii) appropriately completed copies, which have been duly authorized for filing by the appropriate person, of Form UCC-3 termination statements or equivalent filings, if any, necessary to release all liens (other than the Permitted Liens, as defined in the Final Offering Circular under the caption "Description of Notes") of any person in any Collateral held by the Company or the Guarantors;

(iii) certified copies of UCC Requests for Information or Copies (Form UCC-11), or a similar search report certified by a party acceptable to the Trustee, dated a date reasonably near to the Closing Date, listing all effective financing statements which name the Company or any Guarantor (under its present name and any previous names) as the debtor, together with copies of such financing statements (none of which shall cover any collateral described in any Collateral Document, other than such financing statements that evidence Permitted Liens);

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(iv) fully executed IP Security Agreements, in proper form for filing or recording the U.S. Patent and Trademark Office and the U.S. Copyright Office, as applicable;

(v)the executed (a) Reaffirmation Agreement, (b) Joinder and

(c) Additional Secured Debt Designation; and

(vi) such other approvals, opinions, or documents with respect to any Collateral held by the Company or any of the Guarantors as the Collateral Trustee may reasonably request in form and substance reasonably satisfactory to the Collateral Trustee.

The Company, the Co-Issuers and the Guarantors will furnish the Purchaser with such conformed copies of such opinions, certificates, letters and documents as the Purchaser reasonably requests.

8. Indemnification and Contribution.

(a) Indemnification of Purchaser. The Company, the Co-Issuers and the Guarantors (as of the Closing Date) will, jointly and severally, indemnify and hold harmless the Purchaser, its officers, employees, agents, partners, members, directors and its affiliates and each person, if any, who controls the Purchaser within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act (each, an "Indemnified Party"), against any and all losses, claims, damages or liabilities, joint or several, to which such Indemnified Party may become subject, under the Securities Act, the Exchange Act, other Federal or state statutory law or regulation or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the Preliminary Offering Circular or the Final Offering Circular, in each case as amended or supplemented, or any Issuer Free Writing Communication (including without limitation any Supplemental Marketing Material), the General Disclosure Package or the Exchange Act Reports (with respect to the portions of such Exchange Act Reports that are incorporated by reference into the Preliminary Offering Circular or the Final Offering Circular or any Supplemental Marketing Material), or arise out of or are based upon the omission or alleged omission of a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading and will reimburse each Indemnified Party for any reasonable and documented legal or other expenses reasonably incurred by such Indemnified Party in connection with investigating, preparing or defending against any loss, claim, damage, liability, action, litigation, investigation or proceeding whatsoever (whether or not such Indemnified Party is a party thereto) whether threatened or commenced and in connection with the enforcement of this provision with respect to any of the above as such expenses are incurred; provided, however, that the Company, the Co-Issuers and the Guarantors will not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement in or omission or alleged omission from any of such documents in reliance upon and in conformity with written information furnished to the Company by the Purchaser specifically for use therein, it being understood and agreed that the only such information consists of the information described as such in subsection (b) below.

(b) Indemnification of Company. The Purchaser will indemnify and hold harmless each of the Company, the Co-Issuers and the Guarantors (as of the Closing Date), each of their respective directors and each of their respective officers and each person, if any, who controls the Company, such Co-Issuer or such Guarantor within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act (each, a "Purchaser Indemnified Party"), against any losses, claims, damages or liabilities to which such Purchaser Indemnified Party may become subject, under

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the Securities Act, the Exchange Act, other Federal or state statutory law or regulation or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the Preliminary Offering Circular or the Final Offering Circular, in each case as amended or supplemented, any Issuer Free Writing Communication (including without limitation any Supplemental Marketing Material) or the General Disclosure Package or arise out of or are based upon the omission or the alleged omission of a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in reliance upon and in conformity with written information furnished to the Company by the Purchaser specifically for use therein, and will reimburse any reasonable and documented legal or other expenses reasonably incurred by such Purchaser Indemnified Party in connection with investigating, preparing or defending against any such loss, claim, damage, liability, action, litigation, investigation or proceeding whatsoever (whether or not such Purchaser Indemnified Party is a party thereto) whether threatened or commenced based upon any such untrue statement or omission, or any such alleged untrue statement or omission as such expenses are incurred, it being understood and agreed that the only such information furnished by the Purchaser consists of the following information in the Preliminary and Final Offering Circular furnished on behalf of the Purchaser under the caption "Plan of Distribution", the second sentence of paragraph 16, provided, however, that the Purchaser shall not be liable for any losses, claims, damages or liabilities arising out of or based upon the Company's, any Co-Issuer's or any Guarantor's failure to perform its obligations under Section 5(a) of this Agreement.

(c) Actions against Parties; Notification. Promptly after receipt by an indemnified party under this Section of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under subsection (a) or (b) above, notify the indemnifying party of the commencement thereof; but the failure to notify the indemnifying party shall not relieve it from any liability that it may have under subsection (a) or (b) above except to the extent that it has been materially prejudiced by such failure; and provided further that the failure to notify the indemnifying party shall not relieve it from any liability that it may have to an indemnified party otherwise than under subsection (a) or (b) above. In case any such action is brought against any indemnified party and it notifies the indemnifying party of the commencement thereof, the indemnifying party will be entitled to participate therein and, to the extent that it may wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel reasonably satisfactory to such indemnified party, and after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party will not be liable to such indemnified party under this Section for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened action in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party unless such settlement includes (i) an unconditional release of such indemnified party from all liability on any claims that are the subject matter of such action and (ii) does not include a statement as to or an admission of fault, culpability or failure to act by or on behalf of any indemnified party. If at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses of counsel in accordance with the provisions hereof, such indemnifying party shall be liable for any settlement of the nature contemplated by Section 8(a) effected without its written

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consent only if (i) such settlement is entered into in good faith by the indemnified party more than 45 days after receipt by such indemnifying party of the aforesaid request, (ii) such indemnifying party shall have received notice of the terms of such settlement at least 30 days prior to such settlement being entered into and (iii) such indemnifying party shall not have reimbursed such indemnified party in accordance with such request prior to the date of such settlement.

(d) Contribution. If the indemnification provided for in this Section is unavailable or insufficient to hold harmless an indemnified party under subsection (a) or (b) above, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of the losses, claims, damages or liabilities referred to in subsection (a) or (b) above (i) in such proportion as is appropriate to reflect the relative benefits received by the Company, the Co-Issuers and the Guarantors on the one hand and the Purchaser on the other from the offering of the Offered Securities, or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company, the Co-Issuers and the Guarantors on the one hand and the Purchaser on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities as well as any other relevant equitable considerations. The relative benefits received by the Company, the Co-Issuers and the Guarantors on the one hand and the Purchaser on the other shall be deemed to be in the same proportion as the total net proceeds from the offering of the Offered Securities (before deducting expenses) received by the Company bear to the total discounts and commissions with respect to the Offered Securities received by the Purchaser from the Company under this Agreement. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company, the Co-Issuers and the Guarantors or the Purchaser and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such untrue statement or omission. The amount paid by an indemnified party as a result of the losses, claims, damages or liabilities referred to in the first sentence of this subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any action or claim which is the subject of this subsection (d). Notwithstanding the provisions of this subsection (d), the Purchaser shall not be required to contribute any amount in excess of the amount by which the total price at which the Offered Securities purchased by it were resold exceeds the amount of any damages which the Purchaser has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission.

9. Survival of Certain Representations and Obligations. The respective indemnities, agreements, representations, warranties and other statements of the Company, the Guarantors or their respective officers and of the Purchaser set forth in or made pursuant to this Agreement will remain in full force and effect, regardless of any investigation, or statement as to the results thereof, made by or on behalf of any Purchaser, the Company, the Guarantors or any of their respective purchasers, officers or directors or any controlling person, and will survive delivery of and payment for the Offered Securities. If for any reason the purchase of any series of the Offered Securities by the Purchaser is not consummated, the Company, the Co-Issuers and the Guarantors shall remain responsible for the expenses to be paid or reimbursed by it pursuant to Section 5 and the respective obligations of the Company, the Guarantors and the Purchaser pursuant to Section 8 shall remain in effect. If the purchase of the Offered Securities by the Purchaser is not consummated for any reason other than the occurrence of any event specified in clause (iv), (v) (other than a halt in trading of any securities of the Company) or (vii) of Section 7(e), the Company and the Guarantors will reimburse the Purchaser for all reasonable and documented out-of-pocket expenses (including fees and disbursements of counsel) reasonably incurred by them in connection with the

27

offering of the Offered Securities.

10. Notices. All communications hereunder will be in writing and, if sent to the Purchaser will be mailed, delivered or telegraphed and confirmed to Credit Suisse Securities (USA) LLC, Eleven Madison Avenue, New York, N.Y. 10010-3629, Attention: LCD-IBD, with a copy to Latham & Watkins LLP, 885 Third Avenue, New York, New York 10022, Attention: Peter Labonski, or, if sent to the Company or the Guarantors, will be mailed, delivered or telegraphed and confirmed to it at Harland Clarke Holdings Corp., 10931 Laureate Drive, San Antonio, Texas 78249, Attention: Chief Financial Officer; with a copy to Paul, Weiss, Rifkind, Wharton & Garrison LLP, 1285 Avenue of the Americas, New York, New York 10019, Attention: Lawrence G. Wee, provided, however, that any notice to a Purchaser pursuant to Section 8 will be mailed, delivered or telegraphed and confirmed to the Purchaser.

11. Successors. This Agreement will inure to the benefit of and be binding upon the parties hereto and their respective successors and the controlling persons referred to in Section 8, and no other person will have any right or obligation hereunder, except that holders of Offered Securities shall be entitled to enforce the agreements for their benefit contained in Section 5(b) hereof against the Company as if such holders were parties thereto.

12. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all such counterparts shall together constitute one and the same Agreement.

13.Absence of Fiduciary Relationship. The Company, the Co-Issuers and the

Guarantors acknowledge and agree that:

(a) No Other Relationship. The Purchaser has been retained solely to act as initial purchaser in connection with the initial purchase, offering and resale of the Offered Securities and that no fiduciary, advisory or agency relationship between the Company or the Guarantors and the Purchaser has been created in respect of any of the transactions contemplated by this Agreement or the Preliminary Offering Circular or Final Offering Circular, irrespective of whether the Purchaser has advised or is advising the Company or the Guarantors on other matters;

(b) Arm's-Length Negotiations. The purchase price of the Offered Securities set forth in this Agreement was established by the Company, the Co-Issuers and the Guarantors following discussions and arms-length negotiations with the Purchaser and the Company, the Co-Issuers and the Guarantors are capable of evaluating and understanding and understand and accept the terms, risks and conditions of the transactions contemplated by this Agreement;

(c) Absence of Obligation to Disclose. The Company has been and the Guarantors have been advised that the Purchaser and its affiliates are engaged in a broad range of transactions which may involve interests that differ from those of the Company or the Guarantors and that the Purchaser has no obligation to disclose such interests and transactions to Company or the Guarantors by virtue of any fiduciary, advisory or agency relationship; and

(d) Waiver. The Company, the Co-Issuers and the Guarantors waive, to the fullest extent permitted by law, any claims it may have against the Purchaser for breach of fiduciary duty or alleged breach of fiduciary duty and agree that the Purchaser shall have no liability (whether direct or indirect) to the Company or the Guarantors in respect of such a fiduciary duty claim or to any person asserting a fiduciary duty claim on behalf of or in right of the Company, including stockholders, employees or creditors of the Company or the Guarantors.

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14. Applicable Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York.

The Company, the Co-Issuers and the Guarantors hereby submit to the non- exclusive jurisdiction of the Federal and state courts in the Borough of Manhattan in The City of New York in any suit or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby. The Company, the Co-Issuers and the Guarantors irrevocably and unconditionally waive any objection to the laying of venue of any suit or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby in Federal and state courts in the Borough of Manhattan in The City of New York and irrevocably and unconditionally waive and agree not to plead or claim in any such court that any such suit or proceeding in any such court has been brought in an inconvenient forum.

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If the foregoing is in accordance with the Purchaser's understanding of our agreement, kindly sign and return to us one of the counterparts hereof, whereupon it will become a binding agreement among the Company, the Co-Issuers and the Guarantors and the Purchaser in accordance with its terms.

[Signature Page Follows]

30

Very truly yours,

HARLAND CLARKE HOLDINGS CORP., as Issuer

By:          /s/ Peter A. Fera, Jr.

___________________________

Name:     Peter A. Fera, Jr.

Title: Executive Vice President and

Chief Financial Officer

HARLAND CLARKE CORP., as Issuer and Guarantor

By:          /s/ Peter A. Fera, Jr.

___________________________

Name:     Peter A. Fera, Jr.

Title: Executive Vice President and

Chief Financial Officer

HARLAND FINANCIAL SOLUTIONS, INC., as Co-Issuer and Guarantor

By:          /s/ Peter A. Fera, Jr.

___________________________

Name:     Peter A. Fera, Jr.

Title: Executive Vice President

SCANTRON CORPORATION, as Co-Issuer and Guarantor

By:          /s/ Peter A. Fera, Jr.

___________________________

Name:     Peter A. Fera, Jr.

Title: Executive Vice President and

Chief Financial Officer

CHECKS IN THE MAIL, INC. , as Co-Issuer and Guarantor

By:          /s/ Peter A. Fera, Jr.

___________________________

Name:     Peter A. Fera, Jr.

Title: Executive Vice President and

Chief Financial Officer

FANEUIL, INC., as Guarantor

By:          /s/ Peter A. Fera, Jr.

___________________________

Name:     Peter A. Fera, Jr.

Title:         Assistant Treasurer

FANEUIL TOLL OPERATIONS LLC., as Guarantor

By:          /s/ Peter A. Fera, Jr.

___________________________

Name:     Peter A. Fera, Jr.

Title:         Assistant Treasurer

HARLAND FINANCIAL SOLUTIONS INDIA, LLC, as Guarantor

By:          /s/ Peter A. Fera, Jr.

___________________________

Name:     Peter A. Fera, Jr.

Title: Executive Vice President

HFS RESEARCH & DEVELOPMENT, INC., as Guarantor

By:          /s/ Peter A. Fera, Jr.

___________________________

Name:     Peter A. Fera, Jr.

Title: Executive Vice President

HFS SCANTRON HOLDINGS CORP, as Guarantor

By:          /s/ Peter A. Fera, Jr.

___________________________

Name:     Peter A. Fera, Jr.

Title: Executive Vice President and

Chief Financial Officer

JOHN H. HARLAND COMPANY OF PUERTO RICO, as Guarantor

By:          /s/ Peter A. Fera, Jr.

___________________________

Name:     Peter A. Fera, Jr.

Title: Executive Vice President and

Chief Financial Officer

GLOBALSCHOLAR, INC., as Guarantor

By:          /s/ Peter A. Fera, Jr.

___________________________

Name:     Peter A. Fera, Jr.

Title: Executive Vice President and

Chief Financial Officer

GLOBALSCHOLAR SUB I LLC, as Guarantor

By:          /s/ Peter A. Fera, Jr.

___________________________

Name:     Peter A. Fera, Jr.

Title: Executive Vice President and

Chief Financial Officer

GLOBALSCHOLAR SUB II LLC, as Guarantor

By:          /s/ Peter A. Fera, Jr.

___________________________

Name:     Peter A. Fera, Jr.

Title: Executive Vice President and

Chief Financial Officer

SPECTRUM K12 SCHOOL SOLUTIONS, INC., as Guarantor

By:          /s/ Peter A. Fera, Jr.

___________________________

Name:     Peter A. Fera, Jr.

Title: Executive Vice President and

Chief Financial Officer

The foregoing Purchase Agreement is hereby confirmed and accepted as of the date first above written.

CREDIT SUISSE SECURlTIES (USA) LLC

By:    /s/ Jason Chang

_________________________

Name:    Jason Chang

Title:    Vice President

Annex I

Co-Issuers

Harland Clarke Corp.

Harland Financial Solutions, Inc. Scantron Corporation

Checks in the Mail, Inc.

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Annex II

Guarantors

Checks in the Mail, Inc.

Faneuil, Inc.

Faneuil Toll Operations LLC

Harland Clarke Corp.

Harland Financial Solutions, Inc.

Harland Financial Solutions India, LLC

HFS Research & Development, Inc.

HFS Scantron Holdings Corp.

John H. Harland Company of Puerto Rico

Scantron Corporation

Global Scholar, Inc.

Global Scholar Sub I LLC

Global Scholar Sub II LLC

Spectrum K12 School Solutions, Inc.

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Annex III

Subsidiaries

Harland Clarke Corp.

Checks In the Mail, Inc.

HFS Scantron Holdings Corp.

Scantron Corporation

Harland Financial Solutions, Inc.

HFS Research & Development, Inc.

John H. Harland Company of Puerto Rico

Harland Financial Solutions India, LLC

Spectrum K12 School Solutions, Inc.

Global Scholar, Inc.

Global Scholar Sub I LLC

Global Scholar Sub II LLC

Harland Financial Solutions Worldwide Limited

Harland Israel Limited

Scantron Canada, Ltd.

HFS Software India Private Ltd.

Harland Clarke Holding Software India Private Limited

Faneuil, Inc.

Faneuil Canada, Inc.

Faneuil Toll Operations LLC

36

SCHEDULE A

Principal Amount of

PurchaserOffered Securities

Credit Suisse Securities (USA) LLC .......................................        $50,000,000

Total .........................................................$50,000,000

37

SCHEDULE B

Issuer Free Writing Communications (included in the General Disclosure Package)

Final term sheet, dated May 15, 2013, a copy of which is attached hereto as Schedule B-1.

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Schedule B-1

HARLAND CLARKE HOLDINGS CORP.

9.750% SENIOR SECURED NOTES DUE 2018

PRICING TERM SHEET

This summary pricing term sheet relates only to the securities described below and should only be read together with the preliminary offering circular, subject to completion, dated May 15,

2013 (the "Preliminary Offering Circular"), relating to these securities and supersedes the

information in the Preliminary Offering Circular to the extent inconsistent with the information in the Preliminary Offering Circular. This pricing term sheet is qualified in its entirety by reference to the Preliminary Offering Circular.

Issuer:	Harland Clarke Holdings Corp.
Co-Issuers:	Harland Clarke Corp.
	Harland Financial Solutions, Inc.
	Scantron Corporation
	Checks in the Mail, Inc.
Security Description:	Senior Secured Notes
Face Amount:	$50
Gross Proceeds:	$54.5
Maturity Date:	August 1, 2018
Coupon:	9.75%
Offering Price:	109.000% plus accrued interest from February 1, 2013
Yield to Maturity:	7.22%
Spread to Treasury:	656 basis points
Benchmark Treasury:	UST 2.375% due July 31, 2017
Ratings:	B1 (Moody's) / B+ (S&P) (1)
Interest Payment Dates:	February 1 and August 1
Equity Clawback:	Redeem until August 1, 2015 at 109.750% for up to 35.0%
Make-Whole Redemption:	Make-whole redemption at Treasury Rate + 50 basis points prior to August 1, 2015
Optional Redemption:	Callable, on or after the following dates, and at the following prices: Date Price August 1, 2015 104.875% August 1, 2016 102.438% August 1, 2017 and thereafter 100.000%
CUSIP/ISIN:	144A: 412690AC3 144A ISIN: US412690AC32 Reg S: U24645AB6 Reg S ISIN: USU24645AB68
Sole Book-Runner:	Credit Suisse Securities (USA) LLC

Trade Date:	May 15, 2013
Settlement Date:	May 20, 2013 (T+3)

_____________________________

(1) Neither of these ratings is a recommendation to buy, sell or hold these securities. Each rating may be subject to revision or withdrawal at any time, and should be evaluated independently of any other rating.

* * *

The communication is for informational purposes only and does not constitute an offer to sell, or a solicitation of an offer to buy any security. No offer to buy securities described herein can be accepted, and no part of the purchase price thereof can be received, unless the person making such investment decision has received and reviewed the information contained in the relevant prospectus or offering circular in making their investment decisions. This communication is not intended to be a confirmation as required under Rule 10b-10 of the Securities Exchange Act of 1934, as amended. A formal confirmation will be delivered to you separately. This notice shall not constitute an offer to sell or a solicitation of an offer to buy, nor shall there be any sale of the

notes in any state or jurisdiction in which such offer, solicitation or sale would be unlawful. The notes will be offered and sold to qualified institutional buyers in the United States in reliance on Rule 144A under the Securities Act of 1933, as amended (the "Act"), and to persons in offshore transactions in reliance on Regulation S under the Act. The notes have not been registered under the Act or any state securities laws, and may not be offered or sold in the United States or to U.S. persons absent registration or an applicable exemption from the registration requirements.

EXHIBIT A

FORM OF OPINION OF PAUL WEISS, RIFKIND, WHARTON & GARRISON LLP

, 2013

Credit Suisse Securities (USA) LLC Eleven Madison Avenue

New York, N.Y. 10010-3629

Ladies and Gentlemen:

We have acted as special counsel to Harland Clarke Holdings Corp., a Delaware corporation (the "Company"), and Guarantors referred to below in connection with the Purchase Agreement (the "Purchase Agreement"), dated as of May 15, 2013, among the Initial Purchaser named on Schedule A thereof (the "Initial Purchaser"), the guarantors who have signed the Purchase Agreement (the "Guarantors"), the co-issuers who have signed the Purchase Agreement (the "Co-Issuers") and the Company, relating to the purchase today by the Initial Purchaser of $50,000,000 aggregate principal amount of 9.750% Senior Secured Notes due 2018 (the "Notes"). The Notes are to be issued under the Indenture, dated as of July 24, 2012, as amended on February 20, 2013 (as so amended, the "Indenture"), among the Company, the Co-Issuers, the Guarantors and Wells Fargo Bank, National Association, as Trustee (the "Trustee"). This opinion is being furnished at the request of the Company as contemplated by Section 7(g) of the Purchase Agreement. Capitalized terms used and not otherwise defined in this letter have the respective meanings given those terms in the Purchase Agreement.

In connection with the furnishing of this opinion, we have examined originals, or copies certified or otherwise identified to our satisfaction, of the following documents:

1. the Purchase Agreement;

2. the Indenture;

3. the Notes issued on the date of this letter (including the guarantees

endorsed thereon (the "Guarantees"));

4. the Preliminary Offering Circular regarding the Notes, dated May

15, 2013, together with the information set forth in the Issuer Free Writing Communication, dated May 15, 2013, setting forth the final terms of the Notes

attached as Schedule B to the Purchase Agreement (the "General Disclosure Package");

5. the Offering Circular regarding the Notes, dated May 20, 2013 (the

"Final Offering Circular");

6. the Collateral Trust Agreement, dated as of July 24, 2012, and as amended as of February 20, 2013 and by the Joinder (as defined below) (as so amended, the "Collateral Trust Agreement"), by and among the Company, the Co-Issuers, the Guarantors, Wells Fargo Bank, National Association, as the collateral trustee (the "Collateral Trustee") and Credit Suisse AG, Cayman Islands

Branch ("CS") as agent for the lenders under the Credit Agreement

(as defined on Schedule I);

7. the Security Agreement, dated July 24, 2012, by and among the Company, the Co-Issuers, the Guarantors and the Collateral Trustee (the "Security Agreement", and together with the Collateral Trust Agreement, the "Collateral Documents");

8. the reaffirmation agreement, dated as of the date of this letter, entered into by the Company and each Guarantor (the "Reaffirmation Agreement");

9. the joinder to the Collateral Trust Agreement, dated as of the date of this letter, entered into by the Collateral Trustee (the "Joinder"); and

10. the Additional Secured Debt Designation (as such term is defined in the Collateral Trust Agreement), dated as of the date of this letter, by and among the Company and the Collateral Trustee.

Together, we refer to the Purchase Agreement, the Indenture, the Notes, the Guarantees, the Security Agreement, the Collateral Trust Agreement, the Reaffirmation Agreement, the Joinder and the Additional Secured Debt Designation as the "Transaction Documents." In addition, we have examined: (i) such organizational records of the Company, each Co-Issuer organized in the State of Delaware (collectively, the "Covered Co-Issuers") and each Guarantor organized in the State of Delaware or the State of New York (collectively, the "Covered Guarantors,") that we have considered appropriate, including, as applicable, a copy of the articles of incorporation, by-laws, certificate of formation and limited liability company agreement, in each case, as amended, of the Company, each Covered Co-Issuer and of each Covered Guarantor, certified by the Company, each Covered Co-Issuer or each Covered Guarantor as in effect on the date hereof (collectively, the "Charter Documents") and copies of resolutions of the board of directors of the Company, each Covered Co-Issuer and of each Covered Guarantor or of the member or members, the board of managers or other governing body of each Co- Issuer and each Covered Guarantor relating to the issuance of the Notes and the Guarantees, each certified by the Company, each Covered Co-Issuer and the Covered Guarantors, as applicable; (ii) filed copies of UCC-1 financing statements, copies of which are attached as Schedule III to this letter (the "Delaware Financing Statements"), naming the Company and each Co-Issuer and Guarantor organized under the laws of Delaware (each a "Delaware Party") as debtor and the Collateral Trustee as secured party, which we understand has been filed with the Secretary of State of the State of Delaware (the "Delaware Filing Office"); (iii) the filed copy of the UCC-1 financing statement, a copy of which is attached as Schedule IV to this letter (the "New York Financing Statement"), naming the Guarantor organized under the laws of New York (the "New York Party") as debtor and the Collateral Trustee as

secured party, which we understand has been filed with the Secretary of State of the State of New York (the "New York Filing Office"); and (iv) such other certificates, agreements and documents as we deemed relevant and necessary as a basis for the opinions and beliefs expressed below. We have also relied upon oral and written statements of officers and representatives of the Company, the Co-Issuers and the Guarantors, the factual matters contained in the representations and warranties of the Company, the Co-Issuers, the Guarantors and the Initial Purchaser made in the Transaction Documents and upon certificates of public officials and the officers of the Company, the Co-Issuers and the Guarantors.

In our examination of the documents referred to above, we have assumed, without independent investigation, the genuineness of all signatures, the legal capacity of all individuals who have executed any of the documents reviewed by us, the authenticity of all documents submitted to us as originals, the conformity to the originals of all documents submitted to us as certified, photostatic, reproduced or conformed copies of valid existing agreements or other documents, the authenticity of the latter documents and that the statements regarding matters of fact in the certificates, records, agreements, instruments and documents that we have examined are accurate and complete. We have also assumed, without independent investigation, (i) that each Co-Issuer and Guarantor (other than the Covered Co-Issuers and the Covered Guarantors) (each a "Non-Covered Party") is validly existing and in good standing under the laws of its jurisdiction of organization, (ii) that each Non-Covered Party has all necessary corporate or limited liability power and authority to execute, deliver and perform its obligations under the Transaction Documents, (iii) the execution, delivery and performance of the Transaction Documents have been duly authorized by all necessary corporate or limited liability company action by each Non-Covered Party (to the extent a party thereto) and do not violate the organizational documents of such Non-Covered Party or the laws of such Non-Covered Party's jurisdiction of organization and (iv) the due execution and delivery of the Transaction Documents by the Non-Covered Parties under the laws of their respective jurisdictions of organization. We have also assumed that each Transaction Document has been duly authorized and executed by, and constitutes the legal, valid and binding obligations of, the parties thereto (other than the Company, the Co-Issuers and the Guarantors).

Based upon the above, and subject to the stated assumptions, exceptions and qualifications, we are of the opinion that:

1.Each of the Company, the Covered Co-Issuers and the Covered Guarantors incorporated or formed in Delaware are validly existing and in good standing under the laws of the State of Delaware. The Covered Guarantor incorporated in New York is a subsisting corporation in good standing under the laws of the State of New York.

2. Each of the Company, the Covered Co-Issuers and the Covered Guarantors has all necessary corporate or limited liability company power to execute, deliver and perform its obligations under each Transaction Document to which it is a party and to own and hold its properties and conduct its business as described in the General Disclosure Package and the Final Offering Circular.

3.The Notes have been duly authorized by the Company and each Covered Co-Issuer. The Notes, when duly issued and delivered by the Company and the Co-Issuers against payment as provided in the Purchase Agreement, will constitute the legal, valid and binding obligations of the Company and each of the Co-Issuers entitled to the benefits of the Indenture and enforceable against the Company and each of the Co- Issuers in accordance with their terms, except that the enforceability of the Notes may be subject to bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer, moratorium and similar laws affecting creditors' rights generally and subject to general principles of

equity (regardless of whether enforceability is considered in a proceeding in equity or at law); and the Notes, when issued and delivered, will conform in all material respects to the description contained in the General Disclosure Package and the Final Offering Circular under the caption "Description of Notes."

4.The Indenture has been duly authorized, executed and delivered by the Company, each Covered Co-Issuer and each Covered Guarantor. The Indenture constitutes the legal, valid and binding obligation of the Company, each Co-Issuer and each Guarantor, enforceable against the Company, each Co-Issuer and each Guarantor in accordance with its terms, except that the enforceability of the Indenture may be subject to bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer, moratorium and similar laws affecting creditors' rights generally and subject to general principles of equity (regardless of whether enforceability is considered in a proceeding in equity or at law); and the Indenture conforms in all material respects to its description contained in the General Disclosure Package and the Final Offering Circular under the caption "Description of Notes."

5.The Purchase Agreement has been duly authorized, executed and delivered by the Company, each Covered Co-Issuer and each Covered Guarantor.

6.Each Covered Guarantor has duly authorized its Guarantee. When the Notes are duly issued and delivered by the Company and each Co-Issuer against payment as provided in the Purchase Agreement, the Guarantee of each Guarantor will constitute the legal, valid and binding obligation of each such Guarantor, enforceable against each such Guarantor in accordance with its terms, except that the enforceability of the Guarantee may be subject to bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer, moratorium and similar laws affecting creditors' rights generally and subject to general principles of equity (regardless of whether enforceability is considered in a proceeding in equity or at law). The Guarantees conform in all material respects to their description contained in the General Disclosure Package and the Final Offering Circular under the caption "Description of Notes."

7.Each of the Reaffirmation Agreement and the Additional Secured Debt Designation has been duly authorized, executed and delivered by the Company and each Covered Co-Issuer and each Covered Guarantor that are party thereto, as applicable. Each of the Reaffirmation Agreement and the Additional Secured Debt Designation constitutes the legal, valid and binding obligation of the Company, each Co-Issuer and each Guarantor party thereto, enforceable against the Company, each Co-Issuer and each Guarantor in accordance with its terms, except that the enforceability of such document may be subject to bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer, moratorium and similar laws affecting creditors' rights generally and subject to general principles of equity (regardless of whether enforceability is considered in a proceeding in equity or at law).

8.The statements in the General Disclosure Package and the Final Offering Circular under the heading "Certain United States Federal Income Tax Considerations," to the extent that they constitute summaries of United States federal law or regulation or legal conclusions, have been reviewed by us and fairly summarize the matters described under that heading in all material respects.

9.Based upon the representations, warranties and agreements of the Company, the Co-Issuers and the Guarantors in the Purchase Agreement and of the Initial Purchaser in the Purchase Agreement, it is not necessary in connection with the offer, sale and delivery of the Notes (including the Guarantees) to the Initial Purchaser under the Purchase Agreement or in connection with the initial resale of the Notes (including the Guarantees) by the Initial Purchaser in accordance with the Purchase

Agreement to register the Notes or the Guarantees under the Act or to qualify the Indenture under the Trust Indenture Act of 1939, as amended, it being understood that we express no opinion as to any subsequent resale of the Notes.

10.The issuance and sale of the Notes by the Company and the Co- Issuers, the issuance of the Guarantees by the Guarantors, the execution and delivery by the Company, each Co-Issuer and each Guarantor of each Transaction Document to which it is a party and the performance of their obligations thereunder will not (i) result in a violation of the Charter Documents, (ii) breach or result in a default under any agreement, indenture or instrument listed on Schedule I to this opinion or (iii) violate Applicable Law or any judgment, order or decree of any court or arbitrator listed on Schedule II to this opinion, except in the case of clause (ii) above, we express no opinion with respect to any provision of any agreement, indenture or instrument listed on Schedule I to the extent that an opinion with respect to such provision would require making any financial, accounting or mathematical calculation or determination, and in the case of clauses (ii) and (iii) above, where the breach, default or violation could not reasonably be expected to have a material adverse effect on the Company and its subsidiaries, taken as a whole. For purposes of this letter, the term "Applicable Law" means the General Corporation Law of the State of Delaware (the "GCL"), the Delaware Limited Liability Company Act (the "DLLCA") and those laws, rules and regulations of the United States of America and the State of New York, in each case which in our experience are normally applicable to the transactions of the type contemplated by the Purchase Agreement (other than the United States federal securities laws, any state securities or Blue Sky laws of the various states, anti-fraud laws, the rules and regulations of the Financial Industry Regulatory Authority, Inc. and any law, rule or regulation that is applicable to the Company, the Transaction Documents or the transactions contemplated thereby solely because such law, rule or regulation is part of a regulatory regime applicable to any party to the Purchase Agreement or the Indenture or any of its affiliates due to the specific assets or business of such party or such affiliate), but without us having made any special investigation as to applicability of any specific rule or regulation.

11.No consent, approval, authorization or order of, or filing, registration or qualification with, any Governmental Authority, which has not been obtained, taken or made is required by the Company, the Co-Issuers or Guarantors under any Applicable Law for the issuance or sale of the Notes or the performance by the Company, the Co-Issuers and Guarantors of their obligations under the Transaction Documents to which they are parties other than filings which are necessary to perfect the security interests referred to therein. For purposes of this opinion, the term "Governmental Authority" means any executive, legislative, judicial, administrative or regulatory body of the State of New York, the State of Delaware or the United States of America.

12. The Company, the Co-Issuers and the Guarantors are not and, after giving effect to the offering and sale of the Notes, will not be required to be registered as an investment company under the Investment Company Act of 1940, as amended, and the rules and regulations of the Commission promulgated thereunder.

13.Each of the Collateral Documents has been duly authorized, executed and delivered by the Company, each Covered Co-Issuer and each Covered Guarantor party thereto. Each of the Collateral Documents constitutes the legal, valid and binding obligation of the Company, each Co-Issuer and each Guarantor party thereto, enforceable against the Company, each Co-Issuer and each Guarantor party thereto in accordance with their respective terms, except that enforceability of the Collateral Documents may be (i) subject to bankruptcy, insolvency,

reorganization, fraudulent conveyance or transfer, moratorium and similar laws affecting creditors' rights generally, (ii) subject to general principles of equity (regardless of whether enforceability is considered in a proceeding in equity or at law) and (iii) subject to the qualification that certain remedial provisions of the Security Agreement are or may be unenforceable in whole or in part under the laws of the State of New York, but the inclusion of such provisions does not make the remedies afforded by the Security Agreement inadequate for the practical realization of the rights and benefits purported to be provided by the Security Agreement except for the economic consequences resulting from any delay imposed by, or any procedure required by, applicable New York laws, rules, regulations and court decisions and by constitutional requirements in and of the State of New York.

14.The Security Agreement is effective to create a valid security interest in favor of the Collateral Trustee, for the benefit of the Secured Parties (as defined in the Security Agreement), to secure the Obligations (as defined in the Security Agreement), in the Collateral (as defined in the Security Agreement) in which the Company, the Co-Issuers and the Guarantors (collectively, the "Debtors") have an interest to the extent that a security interest in that Collateral may be created under Article 9 of the Uniform Commercial Code of the State of New York (the "NY-UCC") (such security interest, the "Security Interest"). For the New York Party, the New York Filing Office is the office in the State of New York in which filings are required to perfect the Security Interest to the extent that it can be perfected by filing under the NY-UCC. For each Delaware Party, the Delaware Filing Office is the office in the State of Delaware in which filings are required to perfect the Security Interest to the extent that it can be perfected by filing under the Uniform Commercial Code of the State of Delaware (the "DE-UCC"). Assuming that (a) the New York Financing Statements were filed in the New York Filing Office and the Delaware Financing Statements were filed in the Delaware Filing Office, in each case with the appropriate filing fees paid, and (b) the New York Financing Statements and the Delaware Financing Statements have not been modified or terminated in any respect, the Security Interest granted by such New York Parties and Delaware Parties is perfected to the extent that a security interest in the Collateral may be perfected by filing under the NY-UCC or the DE-UCC, respectively.

15.Assuming that the Collateral Trustee continues to have possession of the certificates representing the equity interests of the subsidiaries of the Company pledged pursuant to the Security Agreement that are listed on Schedule 3(k)(i) to that agreement (the "Pledged Stock"), together with related stock powers which have been duly executed in blank by the Debtors that are the registered owners of the Pledged Stock in the State of New York, the Collateral Trustee continues to have a valid and perfected security interest, for the benefit of the Secured Parties (as defined in the Security Agreement), to secure the Obligations (as defined in the Security Agreement), in all right, title and interest of those Debtors in and to the Pledged Stock.

This opinion is subject to the following assumptions, exceptions and qualifications:

(a)We express no opinion as to the enforceability of any provisions in the Transaction Documents that: (i) purport to establish (or may be construed to establish) evidentiary standards; (ii) constitute waivers which are prohibited under Section 9-602 of the NY-UCC; (iii) constitute forum selection clauses in the federal courts or the courts of any state other than New York state courts; (iv) provide for indemnification against, or release or exculpation of, criminal violations, intentional harm, violations of securities laws or acts of gross negligence or willful misconduct to the extent the enforcement of those provisions is contrary to public policy; or (v) impose penalties or liquidated damages under certain circumstances.

(b)With respect to paragraphs 14 and 15 above, we have assumed, without independent investigation, that value has been given within the meaning of Section 9-203(b)(1) of the NY-UCC, and we express no opinion as to: (i) any Debtor's right, title or interest in or to any Collateral; (ii) the perfection and effect of perfection or non-perfection of a security interest in the Collateral to the extent subject to any laws other than the laws of the State of New York and, in the case of paragraph 13 above, the DE-UCC; (iii) the perfection of security interests in fixtures, as-extracted collateral, timber to be cut, consumer goods, commercial tort claims and ownership interests in real property cooperative organizations; or (iv) the creation, validity, perfection, priority or enforceability of any security interest sought to be created in any items of property to the extent that a security interest in them is excluded from the coverage of Article 9 of the NY-UCC or the DE-UCC. In addition, (x) except as specifically set forth in paragraphs 14 and 15 above, we express no opinion as to the perfection of any security interest and (y) we express no opinion as to the priority of any security interest. We wish to point out, however, that the security interests referred to above are subject to the intercreditor terms of the Collateral Trust Agreement.

(c)We wish to point out that in the case of proceeds (as defined in Article 9 of the NY-UCC or the DE-UCC, as applicable), the continuation of perfection of any security interest in them is limited to the extent set forth in Section 9-315 of the NY-UCC or the DE-UCC, as applicable.

(d)We call to your attention the fact that (i) Article 9 of the NY-UCC and the DE-UCC require the filing of continuation statements within the period of six months prior to the expiration of each five year period from the date of the original filing of financing statements in order to maintain the effectiveness of the filings referred to in this opinion; and (ii) additional filings may be necessary if any Debtor changes its name, identity or corporate structure or the jurisdiction in which it is organized.

(e)For purposes of paragraph 14 above, we note that agreements constituting or relating to Collateral may contain provisions purportedly restricting the assignability thereof or the granting of a security interest with respect thereto.

(f)For purposes of paragraph 15 above, we have also assumed, without independent investigation, that each share of Pledged Stock (i) is a "certificated security" in "registered form" within the meaning of Section 8-102 of the NY-UCC and is registered on the books of the issuer in the name of the applicable Debtor and (ii) is either (x) stock issued by a corporation or (y) an equity interest in a limited partnership or limited liability company the terms of which expressly provide that it is a security governed by Article 8 of the NY-UCC. Insofar as this opinion relates to any security interest in any Pledged Stock issued by a corporation not organized under the laws of a state of the United States of America, or the enforceability of the Security Agreement with respect to the Pledged Stock, we express no opinion as to any steps which may be required under the relevant local law or organizational documents with respect to the Pledged Stock, and our opinion is given only to the extent that New York law is applicable.

The opinions expressed above are limited to the laws of the State of New York, the GCL, the DLLCA, the Uniform Commercial Code of the State of Delaware and the federal laws of the United States of America. Our opinions are rendered only with respect to the laws, and the rules, regulations and orders under those laws, that are currently in effect.

This letter is furnished by us solely for your benefit in connection with the transactions

referred to in the Purchase Agreement and may not be circulated to, or relied upon by, any other person without our prior written consent.

Very truly yours,

PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP

Schedule I

Agreements, Indentures and Other Instruments

1. Indenture dated as of May 1, 2007 among Harland Clarke Holdings Corp., the co-issuers and guarantors party thereto and Wells Fargo Bank, N.A., as trustee.

2. Indenture dated as of July 24, 2012, as amended on February 20, 2013, among Harland Clarke Holdings Corp., the co-issuers and guarantors party thereto and Wells Fargo Bank, National Association, as trustee.

3. Credit Agreement dated as of April 4, 2007 among Harland Clarke Holdings Corp., the subsidiaries thereof party thereto as Subsidiary Borrowers, CA Acquisition Holdings, Inc., the lenders party thereto and Credit Suisse AG, Cayman Islands Branch, as administrative agent, as amended by the First Amendment and the Amendment Agreement referred to below, as amended by the First Amendment thereto dated as of May 4, 2007, the Amendment Agreement dated as of May 10, 2012, the Assumption Agreement dated as of February 20, 2013, and the New Facility Joinder Agreement dated as of April 26, 2013.

4. Credit Agreement dated as of February 20, 2013 among Harland Clarke Holdings Corp., the subsidiaries thereof party thereto as Subsidiary Co- Borrowers, CA Acquisition Holdings, Inc., the lenders party thereto and Citibank, N.A., as administrative agent and collateral agent.

Schedule II

Judgments, Orders or Decrees of Any Court

None.

Schedule III

Delaware Financing Statements

(to be attached)

Schedule IV

New York Financing Statement

(to be attached)

EXHIBIT B

FORM OF NEGATIVE ASSURANCE LETTER

, 2013

Credit Suisse Securities (USA) LLC Eleven Madison Avenue

New York, N.Y. 10010-3629

Ladies and Gentlemen:

We have acted as special counsel to Harland Clarke Holdings Corp. (the "Company") and the Co-Issuers and Guarantors referred to below in connection with the Purchase Agreement (the "Purchase Agreement"), dated as of May 15, 2013, among the Initial Purchaser named on Schedule A thereof (the "Initial Purchaser"), the guarantors who have signed the Purchase Agreement (the "Guarantors"), and the Company, relating to the purchase today by the Initial Purchaser of $50,000,000 aggregate principal amount of 9.750% Senior Secured Notes due 2018 (the "Notes") of the Company, as issuer, and Harland Clarke Corp., Scantron Corporation, Harland Financial Solutions, Inc. and Checks in the Mail, Inc., as co- issuers (collectively, the "Co-Issuers"). This letter is being furnished at the request of the Company in connection with the delivery of our opinion to you of even date herewith (the "Opinion") under the Purchase Agreement. Capitalized terms used and not otherwise defined in this letter have the respective meanings given those terms in the Purchase Agreement.

B-1

The primary purpose of our professional engagement was not to establish factual matters or financial, accounting or statistical information. In addition, many determinations involved in the preparation of the Preliminary Offering Circular regarding the Notes, dated May15, 2013 (the "Preliminary Offering Circular"), and the Offering Circular regarding the Notes, dated May 20, 2013 (together with the documents incorporated by reference therein, the "Final Offering Circular") are of a wholly or partially non-legal character or relate to legal matters outside the scope of this letter. Furthermore, the limitations inherent in the independent verification of factual matters and in the role of outside counsel are such that we have not undertaken to independently verify, and cannot and do not assume responsibility for the accuracy, completeness or fairness of, the statements contained in the Preliminary Offering Circular, the Final Offering Circular or the documents incorporated by reference therein (other than as explicitly stated in paragraphs 2, 3, 4, 6 and 8 of the Opinion).

In the course of acting as counsel to the Company in connection with the offering of the Notes, we have participated in conferences and telephone conversations with officers and other representatives of the Company and the independent registered public accountants for the Company during which conferences and conversations the contents of the Preliminary Offering Circular, the Final Offering Circular and related matters were discussed. Based upon such participation (and relying as to factual matters on officers, employees and other representatives of the Company and its subsidiaries), our understanding of the U.S. federal securities laws and the experience we have gained in our practice thereunder, we hereby advise you that our work in connection with this matter did not disclose any information that caused us to believe that (i) as of the Applicable Time, the Preliminary Offering Circular, when taken together with the Pricing Information (as defined below) (except for the financial statements, financial statement schedules and other financial data included therein or omitted therefrom or included in or omitted from the Pricing Information, in each case, as to which we express no such belief), included an untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not

B-2

misleading; or (ii) at the time the Final Offering Circular was issued or at the Time of Delivery, the Final Offering Circular (except for the financial statements, financial statement schedules and other financial data included or incorporated by reference therein or omitted therefrom or from those documents incorporated by reference, as to which we express no such belief) included an untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. For purposes of this letter, the term "Pricing Information" means the information set forth in the final term sheet attached as Schedule B-1 to the Purchase Agreement.

This letter is furnished by us solely for your benefit in connection with the transactions referred to in the Purchase Agreement and may not be circulated to, or relied upon by, any other person without our prior written consent.

Very truly yours,

PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP

B-3

EXHIBIT C-1

FORM OF OPINION OF GEORGIA COUNSEL

1.The Company (a) is a corporation validly existing under the laws of the State of Georgia; and (b) has all requisite corporate power to execute, deliver and perform its obligations under the Note Documents to which it is a party.

2.The execution, delivery and performance by the Company of its obligations under the Note Documents to which it is a party have been duly authorized by all necessary corporate action on the part of the Company. The Note Documents to which it is a party have been duly executed and delivered by the Company.

3.The execution, delivery, and performance by the Company of its obligations under the Note Documents do not (a) contravene the Company's Constituent Documents; or (b) violate any applicable Georgia statute, rule, or regulation.

4.No authorization or approval or other action by, and no notice to or filing with, any Governmental Authority of the State of Georgia is required of the Company as a condition to the due execution, delivery and performance by the Company of the Note Documents to which it is a party, other than filings necessary to perfect liens arising pursuant to the Note Documents.

5.Assuming that the Financing Statement was properly filed in the office of the Clerk of the Superior Court in a County in the State of Georgia (each, a "Filing Office") and has not been terminated or amended, the security interest of the Collateral Agent in that portion of the "Collateral", as such term is defined in the Security Agreement, in which a security interest may be perfected by filing a financing statement under the Article 9 of the Uniform Commercial Code as in effect in the State of Georgia is perfected.

C-1-1

EXHIBIT C-2

FORM OF OPINION OF OREGON COUNSEL

1.The Company is a corporation duly incorporated and validly existing under the laws of the State of Oregon.

2.The Company has all necessary corporate power and authority to (a) execute, deliver and perform its obligations under the Transaction Documents and (b) own and hold its properties

and conduct its business as described in the General Disclosure Package and the Final Offering

Circular.

3.Each of the Transaction Documents has been duly authorized, executed and delivered by the Company.

4.The execution and delivery by the Company of the Transaction Documents to which it is a party, and consummation of the closing of the transactions contemplated by each of the Transaction Documents do not:

(a)violate the Company's Charter Documents;

(b) violate any Oregon statute or regulation, which, in our experience, are normally applicable to the transactions contemplated by the Transaction Documents; or

5.The Reaffirmation Agreement does not, of itself, adversely affect the perfection

of the security interest that the Trustee may have under the Oregon Uniform Commercial Code - Secured Transactions (the "Oregon Code") in the Oregon Article 9 Collateral (defined below), immediately prior to the effectiveness of the Reaffirmation Agreement, which was perfected solely by virtue of the filing of the Financing Statement (the "Filing Collateral"). After giving effect to the Reaffirmation Agreement, any security interest of the Trustee in such Filing Collateral will be a perfected security interest under the Oregon Code to the same extent that it was a perfected security interest immediately prior to the effectiveness of the Reaffirmation Agreement. For purposes of this opinion, "Oregon Article 9 Collateral" means that portion of the Collateral off the Company in which a security interest in such Collateral may be perfected by filing a financing statement under the Oregon Code, but excluding Collateral consisting of (a) personal property affixed to real property in such a manner as to become a fixture, (b) as- extracted collateral or (c) timber to be cut, and we call your attention to the fact that the security interest in certain of such Collateral may not be perfected by filing financing statements under Article 9 of the Oregon Code.

C-2-1

EXHIBIT D

FORM OF OPINION OF GENERAL COUNSEL

1.Each of Company and its subsidiaries is not and as a result of the consummation of the Transactions will not be, (a) in violation of its charter or bylaws or other organizational documents, (b) in default in the performance of any bond, debenture, note, indenture, mortgage, deed of trust or other agreement or instrument to which it is a party or by which it is bound or to which any of its properties is subject or (c) in violation of any local, state, federal or foreign law, statute, ordinance, rule, regulation, requirement, judgment or court decree (including, without limitation, environmental laws, statutes, ordinances, rules, regulations, requirements, judgments or court decrees) applicable to it or any of its assets or properties (whether owned or leased), that, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect.

2.There is (a) no action, suit, investigation or proceeding before or by any court, arbitrator or governmental agency, body or authority or administrative agency, domestic or foreign, now pending or, to my knowledge, threatened or contemplated, to which the Company and its subsidiaries is or may be a party or to which the business or property of the Company and its subsidiaries is or may be subject, (b) no statute, rule, regulation or order that has been enacted, adopted or issued by any governmental agency or that to my knowledge has been proposed by any governmental agency, body or authority or administrative agency, and (c) no injunction, restraining order or order of any nature by a federal or state court or foreign court of competent jurisdiction to which the Company and its subsidiaries is or may be subject or to which the business, assets, or property of the Company and its subsidiaries is or may be subject, that, in the case of clauses (a), (b) and (c) above, (1) is required to be disclosed in the Final Offering Circular and that is not disclosed, or (2) would reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.

3.Except as described in the General Disclosure Package and the Final Offering Circular, all of the outstanding shares of capital stock of each subsidiary of the Company are owned, directly or indirectly, by the Company, free and clear of any security interest, claim, lien, limitation on voting rights or encumbrance; and all such securities have been duly authorized, validly issued and are fully paid and nonassessable and were not issued in violation of any preemptive or similar rights.

4.There are not currently any outstanding subscriptions, rights, warrants, calls, commitments of sale or options to acquire, or instruments convertible into or exchangeable for, any capital stock, membership interests or other equity interests of the Company or its subsidiaries.

5.There are no holders of securities of the Company or its subsidiaries who, by reason of the execution by the Company, the Co-Issuers and the Guarantors of the Purchase Agreement or any other Operative Document to which it is a party or the consummation by the Company or any of the Guarantors of the transactions contemplated thereby, have the right to request or demand that the Company or any of its subsidiaries register under the Securities Act or analogous foreign laws and regulations securities held by them.

D-1

EX-31.1

Exhibit 31.1

Harland Clarke Holdings Corp. and Subsidiaries

Certification of Principal Executive Officer

Pursuant to Exchange Act Rule 13a-14(a) or 15d-14(a)

I, Charles T. Dawson, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Harland Clarke Holdings Corp.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a. all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b. any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:	August 2, 2013		/s/ Charles T. Dawson
		Name:	Charles T. Dawson
		Title:	Chief Executive Officer (Principal Executive Officer)

EX-31.2

Exhibit 31.2

Harland Clarke Holdings Corp. and Subsidiaries

Certification of Principal Financial Officer

Pursuant to Exchange Act Rule 13a-14(a) or 15d-14(a)

I, Peter A. Fera, Jr., certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Harland Clarke Holdings Corp.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a. all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b. any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:	August 2, 2013		/s/ Peter A. Fera, Jr.
		Name:	Peter A. Fera, Jr.
		Title:	Chief Financial Officer (Principal Financial Officer)

XML

Long-Term Debt

6 Months Ended

Jun. 30, 2013

Long-term Debt, Unclassified [Abstract]

Long-Term Debt

Long-Term Debt

	June 30, 2013			December 31, 2012
$1,900.0 Senior Secured Credit Facilities:
Extended Term Loans due 2017	$	642.8		$	677.4
Non-Extended Term Loans due 2014	—			728.6
Tranche B-3 Term Loans due 2018	750.0			—
Total $1,900.0 Senior Secured Credit Facilities	1,392.8			1,406.0
9.75% Senior Secured Notes due 2018	285.0			235.0
Senior Floating Rate Notes due 2015	204.3			204.3
9.50% Senior Fixed Rate Notes due 2015	221.3			271.3
Capital lease obligations	3.7			3.1
Unamortized original issue discount, original issue premium and acquisition accounting-related fair value discount	(169.5		)	(271.9		)
	1,937.6			1,847.8
Less: current maturities	(89.9		)	(78.5		)
Long-term debt, net of current maturities	$	1,847.7		$	1,769.3

New Facility Joinder Agreement to Credit Agreement

On April 26, 2013, the Company entered into a new facility joinder agreement to the Credit Agreement (as defined hereinafter) under which the Company borrowed $750.0 (the "Tranche B-3 Term Loans"). Proceeds of the Tranche B-3 Term Loans were used to repay, in full, together with all interest and fees accrued in respect of, the Non-Extended Term Loans plus other fees and expenses in connection with such refinancing.

The Tranche B-3 Term Loans will mature on May 22, 2018 subject (if the Revolving Facility (as defined hereinafter) is terminated and repaid in full) to a springing maturity 90 days prior to the maturity of the 2015 Senior Notes if they have not otherwise been repaid, extended or refinanced. The Company is required to repay the Tranche B-3 Term Loans in equal quarterly installments in aggregate annual amounts equal to 2.50% of the original amount. In addition, aggregate amortization in respect of all of the Tranche B-3 Term Loans and all other debt sharing liens with such loans (with certain exceptions) must be at least $75.0 per year (subject to certain reductions). The weighted average interest rate on the Tranche B-3 Term Loans outstanding was 7.0% at June 30, 2013.

The Tranche B-3 Term Loans bear, at the Company's option, interest at:

• A rate per annum equal to the higher of (a) the prime rate of Credit Suisse and (b) the Federal Funds rate plus 0.50%, in each case plus an applicable margin of 4.50% per annum, provided that the rate before the applicable margin shall not be less than 2.50% per annum; or

• A rate per annum equal to a reserve adjusted LIBOR rate, plus an applicable margin of 5.50% per annum, provided that the reserve adjusted LIBOR rate shall not be less that 1.50% per annum.

All other terms are substantially the same as the Credit Agreement.

Revolving Credit Facility due 2018

On February 20, 2013, Harland Clarke Holdings terminated the Revolver (as defined hereinafter) and along with certain of its domestic subsidiaries, as co-borrowers, and its direct parent, CA Acquisition Holdings, Inc. and certain of its other domestic subsidiaries as guarantors, entered into a senior secured asset based revolving credit facility (the "Revolving Facility") with Citibank, N.A., as administrative agent and collateral agent. The Revolving Facility provides for a facility equal to the lesser of $80.0 and a calculated borrowing base consisting of:

• 85% of eligible receivables less unearned revenue; plus

• the lesser of (i) 85% of the orderly liquidation value of eligible inventory and (ii) 70% of eligible inventory (in each case, at the lower of book value and market); minus

• eligibility reserves in effect at the time.

The borrowing base at June 30, 2013 was $52.3. The Revolving Facility includes an up to $30.0 subfacility for letters of credit and an up to $10.0 subfacility in the form of short-term swingline loans. As of June 30, 2013, there were no outstanding borrowings under the Revolving Facility and there was $41.9 available for borrowing (giving effect to the issuance of $10.4 of letters of credit).

Borrowings and other obligations under the Revolving Facility are guaranteed by CA Acquisition Holdings, Inc., Harland Clarke Holdings and certain of its domestic subsidiaries and secured by a lien on substantially all of the assets of such loan parties, including inventory, receivables, equipment, intellectual property and real property. The obligations under the Revolving Facility are secured by a first priority lien on inventory, receivables, payment intangibles and other current assets and other assets arising therefrom and proceeds thereof and second priority liens on the remaining collateral, subject to the first priority liens securing the Company's Tranche B-3 Term Loans, Extended Term Loans and 2018 Senior Secured Notes (as defined hereinafter).

The Revolving Facility will terminate on February 20, 2018, with springing maturities 91 days prior to the scheduled maturity date of the Company's Extended Term Loans and 2015 Senior Notes (each as defined hereinafter) all of which mature prior to the termination date of this Revolving Facility.

Borrowings against the Revolving Facility bear, at the Company's option, interest at:

• A LIBOR rate borrowing, bearing interest at a rate per annum equal to a reserve-adjusted LIBOR rate, plus an applicable margin ranging from 1.75% to 2.25% per annum based on the average excess availability for the prior fiscal quarter; or

• An Alternate Base Rate ("ABR") borrowing, bearing interest at a rate per annum equal to the greatest of:

• The prime rate of Citibank;

▪ Federal Funds Effective Rate plus 0.5%; and

▪ LIBOR rate for a one-month interest period plus 1%,

plus an applicable margin ranging from 0.75% to 1.25% per annum based on the average excess availability for the prior fiscal quarter.

The Revolving Facility has a commitment fee of 0.5% per annum if the average utilization of the Revolving Facility for the preceding fiscal quarter is less than 50% of the total commitments and 0.375% per annum if the average utilization for the preceding fiscal quarter is greater than or equal to 50% of the total commitments. The Revolving Facility has a weighted average fee of 2.00% for issued letters of credit.

The Revolving Facility contains covenants that, among other things, limit the ability of the Company and its subsidiaries to (i) incur or guarantee additional indebtedness or capitalized lease obligations, or issue disqualified or preferred stock; (ii) grant liens on assets; (iii) transfer or sell assets; (iv) pay dividends or make distributions to stockholders; (v) enter into transactions with affiliates; (vi) make investments or acquisitions; (vii) enter into sale/leaseback transactions; (viii) amend certain of the Company's indebtedness; (ix) engage in substantially different lines of business; (x) change the Company's fiscal year; and (xi) engage in speculative hedging transactions. These covenants are subject to important exceptions and qualifications. The Revolving Facility also contains a fixed charge coverage ratio test that may apply if the Company's excess availability falls below specified levels, as well as affirmative covenants and events of default that are customary for such facilities.

$1,900.0 Senior Secured Credit Facilities

Extended Term Loans

On July 24, 2012, an amendment (the "Amendment") entered into on May 10, 2012 by the Company to its credit agreement dated as of April 4, 2007 (the "Credit Agreement") became effective, thereby extending the maturity of $973.0 of term loans under the Credit Agreement (the "Extended Term Loans") from June 2014 to June 2017 (subject to a springing maturity 90 days prior to the maturity date of the Company's 2015 Senior Notes (as defined hereinafter) if such notes have not been repaid, extended or refinanced). The effectiveness of the Amendment was conditioned on, among other customary conditions, the repayment of $280.2 of the Extended Term Loans, which repayment was made with net proceeds from the issuance of the 2018 Senior Secured Notes (as defined hereinafter) and cash on hand. After giving effect to such repayment and the effectiveness of the Amendment, there were $692.8 of Extended Term Loans outstanding and $729.0 of non-extended term loans (the "Non-Extended Term Loans") outstanding. The Company is required to repay the Extended Term Loans in equal quarterly installments in aggregate annual amounts equal to 10% of the original extended amount after giving effect to the $280.2 prepayment thereof required as a condition precedent to the effectiveness of the Amendment. The Amendment also includes several covenants in addition to those covenants in the Credit Agreement. The weighted average interest rate on the principal amount of Extended Term Loans outstanding was 5.4% at June 30, 2013.

The Extended Term Loans bear, at the Company's option, interest at:

• A rate per annum equal to the higher of (a) the prime rate of Credit Suisse and (b) the Federal Funds rate plus 0.50%, in each case plus an applicable margin of 4.25% per annum; or

• A rate per annum equal to a reserve-adjusted LIBOR rate, plus an applicable margin of 5.25% per annum.

Non-Extended Term Loans

On April 4, 2007, the Company and substantially all of its subsidiaries as co-borrowers entered into the Credit Agreement. The Credit Agreement provides for a $1,800.0 senior secured term loan (the "Term Loan"), which was fully drawn at closing on May 1, 2007 and matures on June 30, 2014 with respect to the Non-Extended Term Loans. The Non-Extended Term Loans were repaid on April 26, 2013 with proceeds from the Tranche B-3 Term Loans. The Company was required to repay the Non-Extended Term Loans in equal quarterly installments in aggregate annual amounts equal to 1% of the original principal amount multiplied by the ratio of Non-Extended Term Loans outstanding on the effective date of the Amendment to the total Non-Extended Term Loans and Extended Term Loans outstanding on the effective date of the Amendment prior to giving effect to the prepayment required as a condition precedent to the effectiveness of the Amendment. In addition, the Credit Agreement required that a portion of the Company's excess cash flow be applied to prepay amounts borrowed, as further described below. The Credit Agreement also provided for a $100.0 revolving credit facility (the "Revolver"). The Revolver included an up to $60.0 subfacility in the form of letters of credit and an up to $30.0 subfacility in the form of short-term swing line loans. The Revolver was terminated on February 20, 2013 upon the execution of the new Revolving Facility.

Under certain circumstances, the Company is permitted to incur additional term loan and/or revolving credit facility indebtedness in an aggregate principal amount of up to $250.0. In addition, the terms of the Credit Agreement, the 2015 Senior Notes (as defined hereinafter), and the 2018 Senior Secured Notes (as defined hereinafter) allow the Company to incur substantial additional debt.

The Non-Extended Term Loans bore, at the Company's option, interest at:

• A rate per annum equal to the higher of (a) the prime rate of Credit Suisse and (b) the Federal Funds rate plus 0.50%, in each case plus an applicable margin of 1.50% per annum; or

• A rate per annum equal to a reserve-adjusted LIBOR rate, plus an applicable margin of 2.50% per annum.

The Company and each of its existing and future domestic subsidiaries, other than unrestricted subsidiaries, certain immaterial subsidiaries, subsidiaries that do not guarantee other debt of the Company and subject to certain other exceptions, are guarantors and may also be co-borrowers under the Credit Agreement. In addition, the Company's direct parent, CA Acquisition Holdings, Inc., is a guarantor under the Credit Agreement. The senior secured credit facilities are secured by a perfected first priority security interest in substantially all of the Company's, each of the co-borrowers' and the guarantors' tangible and intangible assets and equity interests (other than voting stock in excess of 65.0% of the outstanding voting stock of each direct foreign subsidiary and certain other excluded property).

The Credit Agreement contains customary affirmative and negative covenants including, among other things, restrictions on indebtedness, liens, mergers and consolidations, sales of assets, loans, acquisitions, restricted payments, transactions with affiliates, dividends and other payment restrictions affecting subsidiaries and sale-leaseback transactions. The Company has the right to prepay the term loans at any time without premium or penalty, subject to certain breakage costs. The Company is required to prepay the term loans with 50% of excess cash flow (as defined in the Credit Agreement, with certain reductions set forth in the Credit Agreement, based on achievement and maintenance of leverage ratios) and 100% of the net proceeds of certain issuances, offerings or placements of debt obligations of the Company or any of its subsidiaries (other than permitted debt). Each such prepayment will be applied first to the next eight unpaid quarterly amortization installments on the term loans and second to the remaining amortization installments on the term loans on a pro rata basis. No excess cash flow payment was required in 2013 with respect to 2012. In March 2012, an excess cash flow payment of $12.5 was paid with respect to 2011. Under the terms of the Credit Agreement such excess cash flow payments were applied against other mandatory payments due in the same year of the excess cash flow payment.

The Credit Agreement also contains certain customary affirmative covenants and events of default. Such events of default include, but are not limited to: non-payment of amounts when due; violation of covenants; material inaccuracy of representations and warranties; cross default and cross acceleration with respect to other material debt; bankruptcy and other insolvency events; certain ERISA events; invalidity of guarantees or security documents; and material judgments. Some of these events of default allow for grace periods.

If a change of control (as defined in the Credit Agreement) occurs, the Company will be required to make an offer to prepay all outstanding term loans under the Credit Agreement at 101% of the outstanding principal amount thereof plus accrued and unpaid interest, and lenders holding a majority of the revolving credit commitments may elect to terminate the revolving credit commitments in full. The Company is also required to offer to prepay outstanding term loans at 100% of the principal amount to be prepaid, plus accrued and unpaid interest, with the proceeds of certain asset sales under certain circumstances.

Senior Notes due 2015

On May 1, 2007, the Company issued $305.0 aggregate principal amount of Senior Floating Rate Notes due 2015 (the "Floating Rate Notes") and $310.0 aggregate principal amount of 9.50% Senior Fixed Rate Notes due 2015 (the "Fixed Rate Notes" and, together with the Floating Rate Notes, the "2015 Senior Notes"). The 2015 Senior Notes mature on May 15, 2015. The Fixed Rate Notes bear interest at a rate per annum of 9.50%, payable on May 15 and November 15 of each year. The Floating Rate Notes bear interest at a rate per annum equal to the Applicable LIBOR Rate (as defined in the indenture governing the 2015 Senior Notes (the "2015 Senior Notes Indenture")), subject to a floor of 1.25%, plus 4.75%, payable on February 15, May 15, August 15 and November 15 of each year. The interest rate on the Floating Rate Notes was 6.0% at June 30, 2013. The Senior Notes are unsecured and are therefore effectively subordinated to all of the Company's senior secured indebtedness, including outstanding borrowings under the Credit Agreement and the 2018 Senior Secured Notes. The Company and each of its existing subsidiaries, other than unrestricted subsidiaries and certain immaterial subsidiaries and certain other exceptions, are guarantors and may also be co-issuers under the 2015 Senior Notes.

The 2015 Senior Notes Indenture contains customary restrictive covenants, including, among other things, restrictions on the Company's ability to incur additional debt, pay dividends and make distributions, make certain investments, repurchase stock, incur liens, enter into transactions with affiliates, enter into sale and lease back transactions, merge or consolidate and transfer or sell assets. The Company must offer to repurchase all of the 2015 Senior Notes upon the occurrence of a "change of control," as defined in the 2015 Senior Notes Indenture, at a purchase price equal to 101% of their aggregate principal amount, plus accrued and unpaid interest. The Company must also offer to repurchase the 2015 Senior Notes with the proceeds from certain sales of assets, if it does not apply those proceeds within a specified time period after the sale, at a purchase price equal to 100% of their aggregate principal amount, plus accrued and unpaid interest.

9.75% Senior Secured Notes due 2018

On July 24, 2012, the Company and Harland Clarke Corp., Harland Financial Solutions, Inc., Scantron Corporation and Checks in the Mail, Inc. (together, the "Co-Issuers") issued $235.0 aggregate principal amount of 9.75% Senior Secured Notes due 2018 (the "2018 Senior Secured Notes"). The Company used the net proceeds from the offering, together with cash on hand, to repay $280.2 aggregate principal amount of outstanding Extended Term Loans under its Credit Agreement.

The 2018 Senior Secured Notes were issued pursuant to an indenture, dated as of July 24, 2012 (the "2018 Senior Secured Notes Indenture"), among the Company, the Co-Issuers, certain of the Company's domestic subsidiaries that guarantee the 2018 Senior Secured Notes (the "Guarantors") and Wells Fargo Bank, National Association, as trustee and collateral agent (the "Trustee"). The Guarantors have guaranteed (the "Guarantees") the Company's and Co-Issuers' obligations under the 2018 Senior Secured Notes and the 2018 Senior Secured Notes Indenture on a senior secured basis. The 2018 Senior Secured Notes and the Guarantees are secured pursuant to a Security Agreement, dated as of July 24, 2012, by and among the Company, the Co-Issuers, the Guarantors and Wells Fargo Bank, National Association, as collateral trustee (the "Collateral Trustee") and a Collateral Trust Agreement, dated as of July 24, 2012, by and among the Company, certain subsidiaries of Harland Clarke Holdings named therein, Credit Suisse AG, Cayman Islands branch, as credit agreement collateral agent, and Wells Fargo Bank, National Association, as trustee and as collateral trustee.

The 2018 Senior Secured Notes mature on August 1, 2018. The 2018 Senior Secured Notes bear interest at a rate of 9.75% per annum, payable on each February 1 and August 1 to holders of record at the close of business on the immediately preceding January 15 and July 15 of each year.

On May 20, 2013, the Company completed an additional offering of $50.0 aggregate principal amount of the 2018 Senior Secured Notes (the "Additional Notes") pursuant to the 2018 Senior Secured Notes Indenture and supplemented on February 20, 2013 (as so supplemented, the "Indenture") under which the Company previously issued $235.0 aggregate principal amount of the 2018 Senior Secured Notes (the "Original Notes", and together with the Additional Notes, the "Notes"). The Additional Notes were sold at a price of 109.00% plus accrued interest from February 1, 2013. The Additional Notes trade as a single series with the Original Notes and are treated substantially the same as the Original Notes under the Indenture. On June 19, 2013, Harland Clarke Holdings used proceeds from the Additional Notes to repay and retire $50.0 of the Fixed Rate Notes.

The 2018 Senior Secured Notes are senior secured obligations of the Company and the Co-Issuers and the Guarantees are senior secured obligations of the Guarantors. The 2018 Senior Secured Notes and the Guarantees rank as follows: (i) secured on a first-priority basis, equally and ratably with all obligations of the Company, the Co-Issuers and the Guarantors that are secured by pari passu liens on the collateral, including their existing senior secured credit facilities; (ii) effectively junior to all of the Company's, Co-Issuers' and the Guarantors' obligations under any future asset-based revolving credit facility to the extent of the value of the current asset collateral held by the Company, the Co-Issuers and the Guarantors; (iii) structurally subordinated to any existing and future indebtedness and other liabilities of any existing and future subsidiaries of the Company that are not Guarantors; (iv) pari passu in right of payment with all of the existing and future senior indebtedness of the Company, the Co-Issuers and the Guarantors and effectively senior to the extent of the value of the collateral to any future unsecured indebtedness of the Company, the Co-Issuers and the Guarantors that is secured by liens on the collateral that are junior to the liens securing the Senior Secured Notes and the Guarantees or that is unsecured; and (v) senior in right of payment to any existing and future subordinated indebtedness of the Company, the Co-Issuers and the Guarantors.

The 2018 Senior Secured Notes and the Guarantees are secured on a first-priority basis, equally and ratably with the indebtedness under the Credit Agreement, by substantially all of the Company's, the Co-Issuers' and the Guarantors' assets, subject to certain exceptions and permitted liens.

Beginning with the fiscal year ending December 31, 2013, if the Company's secured leverage ratio exceeds certain levels, the Company will be required to offer to purchase an amount of the 2018 Senior Secured Notes equal to the greater of (1) $15.0 and (2) 50% of its excess cash flow for the applicable period, less any voluntary prepayments of 2018 Senior Secured Notes or credit facility indebtedness and certain mandatory prepayments made during the applicable period and subject to certain other exceptions, at a purchase price equal to 100% of the principal amount of the 2018 Senior Secured Notes, plus accrued and unpaid interest and additional interest. Upon the occurrence of a change of control or if the Company sells certain assets, the Company may be required to make an offer to purchase the 2018 Senior Secured Notes at certain specified prices.

The 2018 Senior Secured Notes Indenture contains covenants that, among other things, limit the Company's, the Co-Issuers' and the Guarantors' ability to (i) incur or guarantee additional indebtedness or issue preferred stock; (ii) grant liens on assets; (iii) pay dividends or make distributions to stockholders; (iv) repurchase or redeem capital stock or subordinated indebtedness; (v) make investments or acquisitions; (vi) enter into sale/leaseback transactions; (vii) incur restrictions on the ability of the Company's subsidiaries to pay dividends or to make other payments to the Company; (viii) enter into transactions with the Company's affiliates; (ix) merge or consolidate with other companies or transfer all or substantially all assets; and (x) transfer or sell assets. These covenants are subject to important exceptions and qualifications. The 2018 Senior Secured Notes Indenture contains affirmative covenants and events of default that are customary for indentures governing high-yield debt securities.

Faneuil Revolving Credit Facilities

Faneuil had a $35.5 revolving credit facility (the "Revolving Credit Agreement"), which was to mature on June 1, 2012 and was paid in full on January 25, 2012. The Revolving Credit Agreement allowed Faneuil to choose from two different interest rate options. The first option was LIBOR plus 2.5% per annum and the second option was Prime Rate minus 1.25%. The Revolving Credit Agreement contained certain covenants and restrictions including covenants and restrictions related to change of control, mergers, dissolution, accounting methodology, indebtedness, dividends and distributions. The Revolving Credit Agreement was collateralized by substantially all of the assets of Faneuil, and was secured by a pledge of the shares of Faneuil's parent.

On January 25, 2012, Faneuil entered into a new $25.0, two-year, revolving credit agreement with MacAndrews & Forbes Group LLC, which is an indirect wholly owned subsidiary of MacAndrews. This revolver was drawn in full on January 25, 2012 and the proceeds, along with cash on hand, were used to pay in full the outstanding balance of $25.6 plus all accrued interest under the Revolving Credit Agreement. Faneuil terminated the Revolving Credit Agreement and it is no longer available for borrowing.

On March 19, 2012, in connection with the Faneuil Acquisition, Faneuil's $25.0 revolving credit facility with MacAndrews & Forbes Group LLC was extinguished and Faneuil no longer has any loans outstanding.

Loss on Early Extinguishment of Debt

In connection with the repayment of $726.6 of the Non-Extended Term Loans and $50.0 of Fixed Rate Notes in the second quarter of 2013, the Company recorded a non-cash loss on early extinguishment of debt of $61.0 resulting from the write-off of unamortized acquisition accounting-related fair value discount, which was attributable to the MacAndrews Acquisition.

Capital Lease Obligations

The Company has outstanding capital lease obligations with principal balances totaling $3.7 and $3.1 at June 30, 2013 and December 31, 2012, respectively. These obligations have imputed interest rates ranging from 0.0% to 9.6% and have required payments of $1.0 remaining in 2013, $1.8 in 2014, $0.5 in 2015 and $0.4 in 2016.

XML

Long-Term Debt 4 (Details) (USD $) In Millions, unless otherwise specified	6 Months Ended													0 Months Ended	1 Months Ended	0 Months Ended		3 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Apr. 04, 2007	Jun. 30, 2013 1,900.0 Senior Secured Credit Facilities [Member]	Dec. 31, 2012 1,900.0 Senior Secured Credit Facilities [Member]	Jul. 24, 2012 Total Extended Term Loans [Member]	Jun. 30, 2013 Extended Term Loans [Member]	Dec. 31, 2012 Extended Term Loans [Member]	Jul. 24, 2012 Extended Term Loans [Member]	Jun. 30, 2013 Non-Extended Term Loans [Member]	Dec. 31, 2012 Non-Extended Term Loans [Member]	Jul. 24, 2012 Non-Extended Term Loans [Member]	Apr. 04, 2007 Secured Debt [Member] 1,900.0 Senior Secured Credit Facilities [Member]	Apr. 04, 2007 Secured Debt [Member] Term Loan [Member]	Mar. 31, 2012 Secured Debt [Member] Term Loan [Member]	Jul. 24, 2012 Secured Debt [Member] Extended Term Loans [Member]	Jun. 30, 2013 Secured Debt [Member] Extended Term Loans [Member]	Jun. 30, 2013 Secured Debt [Member] Non-Extended Term Loans [Member]	Apr. 04, 2007 Secured Debt [Member] Non-Extended Term Loans [Member]	Apr. 04, 2007 Secured Debt [Member] Revolving Credit Facility [Member]	Apr. 04, 2007 Secured Debt [Member] Letter of Credit [Member]	Apr. 04, 2007 Secured Debt [Member] Revolving Credit Sub-Facility Member [Member]	Jul. 24, 2012 Prime Rate of Credit Suisse [Member] Option 1 Rate Per Annum equal to the higher of [Member] Secured Debt [Member] Extended Term Loans [Member]	Apr. 04, 2007 Prime Rate of Credit Suisse [Member] Option 1 Rate Per Annum equal to the higher of [Member] Secured Debt [Member] Non-Extended Term Loans [Member]	Jul. 24, 2012 Federal Funds Rate Plus 0.5% [Member] Option 1 Rate Per Annum equal to the higher of [Member] Secured Debt [Member] Extended Term Loans [Member]	Apr. 04, 2007 Federal Funds Rate Plus 0.5% [Member] Option 1 Rate Per Annum equal to the higher of [Member] Secured Debt [Member] Non-Extended Term Loans [Member]	Jul. 24, 2012 Reserve Adjusted LIBOR Interest Rate [Member] Option 2 Rate Per Annum equal to [Member] Secured Debt [Member] Extended Term Loans [Member]	Apr. 04, 2007 Reserve Adjusted LIBOR Interest Rate [Member] Option 2 Rate Per Annum equal to [Member] Secured Debt [Member] Non-Extended Term Loans [Member]
Debt Instrument [Line Items]
Secured Debt				$ 1,392.8	$ 1,406.0	$ 973.0	$ 642.8	$ 677.4	$ 692.8	$ 0	$ 728.6	$ 729.0
Springing maturity date expressed in number of days prior to the maturity date of 2015 Senior Notes																90 days
Repayments of Long-term Debt	764.0	43.3														280.2		726.6
Annual Repayment of a Loan Expressed as a Percentage of the Original Principal Amount																10.00%			1.00%
Debt Instrument, Interest Rate at Period End																	5.40%
Fixed Percentage added to Federal Funds Rate prior to Applicable Margin Percentage																									0.50%	0.50%
Debt Instrument, Basis Spread on Variable Rate																							4.25%	1.50%	4.25%	1.50%	5.25%	2.50%
Original Loan Principal Amount														1,800.0
Line of Credit Facility, Maximum Borrowing Capacity																				100.0	60.0	30.0
Aggregate Principal Amount Of Incremental Indebtedness Permitted Under Certain Circumstances													250.0
Percent of Outstanding Voting Stock			65.00%
Percentage Of Excess Cash Flow As Defined In The Credit Agreement														50.00%
Percentage Of The Net Proceeds Of Certain Issuances, Offerings Or Placements Of Debt Obligations														100.00%
Excess Cash Flow Prepayment of Long-Term Debt															$ 12.5
Percentage of Outstanding principal Amount to Prepay if Change of Control Occurs														101.00%
Percentage of Principal Amount to be prepaid with proceeds of certain asset sales														100.00%

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Consolidated Statements of Operations (unaudited) (USD $) In Millions, unless otherwise specified	3 Months Ended				6 Months Ended
	Jun. 30, 2013		Jun. 30, 2012		Jun. 30, 2013		Jun. 30, 2012
Product revenues, net	$ 326.5		$ 311.6		$ 647.9		$ 642.8
Service revenues, net	110.8		94.3		218.9		176.9
Total net revenues	437.3		405.9		866.8		819.7
Cost of products sold	189.3		197.1		374.1		415.8
Cost of services provided	65.2		65.5		130.5		130.9
Total cost of revenues	254.5		262.6		504.6		546.7
Gross profit	182.8		143.3		362.2		273.0
Selling, general and administrative expenses	97.3		101.5		191.2		207.0
Revaluation of contingent consideration	0		0		0		(0.5)
Asset impairment charges	0		0		0.9		0
Restructuring costs	6.7		3.7		13.3		5.0
Operating income	78.8	[1]	38.1	[1]	156.8	[1]	61.5	[1]
Interest income	0.2		0.2		0.4		0.5
Interest expense	(55.8)		(51.2)		(111.8)		(109.7)
Loss on early extinguishment of debt	(61.0)		0		(61.0)		0
Loss from equity method investment	(0.2)		0		(0.4)		0
Other expense, net	0		0		0		(0.2)
Loss before income taxes	(38.0)		(12.9)		(16.0)		(47.9)
Benefit for income taxes	(15.5)		(5.2)		(7.2)		(17.3)
Net loss	$ (22.5)		$ (7.7)		$ (8.8)		$ (30.6)

[1] Includes gain from revaluation of contingent consideration arrangements of $0.0 and $0.5 for the three and six months ended June 30, 2012, respectively, restructuring costs of $6.7 and $13.3 for the three and six months ended June 30, 2013 and $3.7 and $5.0 for three and six months ended June 30, 2012, respectively, (see Note 16) and non-cash impairment charges of $0.0 and $0.9 for the three and six months ended June 30, 2013, respectively.

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Inventories

6 Months Ended

Jun. 30, 2013

Inventories [Abstract]

Inventories

Inventories

Inventories consist of the following:

	June 30, 2013		December 31, 2012
Finished goods	$	9.1	$	7.7
Work-in-process	12.2		8.2
Raw materials	15.1		13.1
	$	36.4	$	29.0

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Subsequent Event

6 Months Ended

Jun. 30, 2013

Subsequent Event [Line Items]

Subsequent Events [Text Block]

Subsequent Event

On July 23, 2013, the Company entered into a Stock Purchase Agreement (the "Stock Purchase Agreement") with Davis + Henderson Corporation ("D+H"), Spoke Acquisition, Inc. ("Acquirer I"), D+H Ltd. ("Acquirer II", collectively with Acquirer I, the "Buyer"), and MacAndrews. Pursuant to the terms of the Stock Purchase Agreement, the Buyer agreed to acquire all of the outstanding shares of capital stock of each of Harland Financial Solutions, Inc., Harland Financial Solutions Worldwide Limited and Harland Israel Ltd. (collectively, "HFS") from the Company (the "Transaction") for a purchase price of $1.2 billion in cash, which amount is subject to both a pre-closing and post-closing adjustment for working capital in accordance with the terms and conditions of the Stock Purchase Agreement.

The Transaction is subject to customary closing conditions, including the absence of a legal impediment to the Transaction and the expiration or termination of applicable waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Condition"). The obligations of the Company and Buyer to close the Transaction are also subject to, among others, (a) the accuracy of representations and warranties of the other party as set forth in the Stock Purchase Agreement (in each case subject to material adverse effect qualifications), (b) the other party having performed in all material respects its obligations under the Stock Purchase Agreement and (c) in the case of the Buyer's obligations to close, HFS not having suffered a material adverse effect and all third party debt of HFS having been released. The Transaction is not subject to a financing condition. The Company expects the Transaction to close in the third quarter of 2013.

The Stock Purchase Agreement includes representations and warranties customary for an arm's length acquisition agreement. The Stock Purchase Agreement contains customary covenants of the Company and the Buyer, including with respect to the conduct of the HFS business during the interim period between the execution of the Stock Purchase Agreement and the earlier to occur of the closing of the Transaction and the termination of the Stock Purchase Agreement.

The Stock Purchase Agreement may be terminated at any time prior to the Closing: (a) by mutual written consent of the parties; (b) by either of the parties, if any governmental authority has issued a final and non-appealable order, decree or ruling prohibiting the Transaction; (c) by the Company, if there has been a breach by the Buyer of any representation or warranty or any covenant or agreement contained in the Stock Purchase Agreement that would result in a failure of a closing condition and which breach cannot be cured or has not been cured (to the extent necessary to avoid a failure of such condition) within fifteen (15) days after the giving of written notice to the Buyer; (d) by the Buyer, if there has been a breach by the Company of any representation or warranty or any covenant or agreement contained in the Stock Purchase Agreement that would result in a failure of a closing condition and which breach cannot be cured or has not been cured (to the extent necessary to avoid a failure of such condition) within fifteen (15) days after the giving of written notice to the Company; or (e) by either the Company or the Buyer, if the Closing does not occur by the close of business on September 30, 2013, which date may be extended by either such party to February 28, 2014 if the HSR Condition remains unsatisfied as of three business days prior to September 30, 2013.

The Stock Purchase Agreement contains customary indemnification obligations of each party with respect to breaches of their respective representations, warranties, covenants and obligations, and certain other designated matters. D+H agreed to guarantee the performance of the Buyer, and guaranteed that the Buyer will fully, completely and timely pay and perform all its obligations and assume all its liabilities under the Stock Purchase Agreement.

The Stock Purchase Agreement provides that, at the Closing, the Company, the Buyer and D+H will enter into an ancillary agreement providing for certain transitional services to the Buyer following the Closing on terms customary for a transaction of this type.

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Long-Term Debt 7 (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended		0 Months Ended	3 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012	Jun. 19, 2013 9.50% Senior Fixed Rate Notes due 2015 [Member]	Jun. 30, 2013 9.50% Senior Fixed Rate Notes due 2015 [Member]	Jun. 30, 2013 Secured Debt [Member] Non-Extended Term Loans [Member]
Extinguishment of Debt [Line Items]
Repayments of Long-term Debt			$ 764.0	$ 43.3			$ 726.6
Extinguishment of Debt, Amount					50.0	50.0
Loss on early extinguishment of debt	$ 61.0	$ 0	$ 61.0	$ 0

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Derivative Financial Instruments

6 Months Ended

Jun. 30, 2013

Derivative Financial Instruments [Abstract]

Derivative Financial Instruments

Derivative Financial Instruments

Interest Rate Hedges

The Company uses hedge transactions, which are accounted for as cash flow hedges, to limit the Company's risk on a portion of its variable-rate debt.

During June 2009, the Company entered into an interest rate derivative transaction in the form of a three-year interest rate swap with a notional amount of $350.0, which became effective on June 30, 2009 and expired on June 30, 2012. This hedge swapped the underlying variable rate for a fixed rate of 2.353%. During September 2009, the Company entered into an additional interest rate derivative transaction in the form of a three-year interest rate swap with a notional amount of $250.0, which became effective on September 30, 2009 and expired on September 30, 2012. This hedge swapped the underlying variable rate for a fixed rate of 2.140%.

During June 2010, the Company entered into an interest rate derivative transaction in the form of a three-year interest rate swap with a notional amount of $255.0, which became effective on June 30, 2010 and expired on June 30, 2013. This hedge swapped the underlying variable rate for a fixed rate of 1.264%.

The following presents the fair values of these derivative instruments and the classification in the consolidated balance sheets.

Derivatives Designated as Cash Flow Hedging Instruments:	Balance Sheet Classification	June 30, 2013		December 31, 2012
Interest rate swaps	Other current liabilities	$	—	$	1.3

Fair value of interest rate swaps is based on forward-looking interest rate curves as provided by the counterparty, adjusted for the Company's credit risk.

These derivative instruments were ineffective during the three and six months endedJune 30, 2013 and 2012. The following presents the effect of these derivative instruments (effective and ineffective portion) on other comprehensive loss and amounts reclassified from accumulated other comprehensive loss into interest expense.

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2013		2012		2013		2012
Interest Rate Swaps:
Loss reclassified from other comprehensive income into interest expense (effective portion)	$	—	$	—	$	—	$	0.1
Loss recognized in interest expense (ineffective portion)	—		0.2		—		1.5

The following presents the balances and net changes in the accumulated other comprehensive loss related to these derivative instruments, net of income taxes.

	Six Months Ended
	June 30,
Balances and Net Changes:	2012
Balance at beginning of period	$	0.1
Loss reclassified from accumulated other comprehensive loss into interest expense, net of taxes of $0.0	(0.1		)
Balance at end of period	$	—

There were no balances related to these derivative instruments in accumulated other comprehensive loss in the six months period ended June 30, 2013.

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Accumulated Other Comprehensive Loss 2 (Details) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Accumulated Other Comprehensive Income (Loss) [Line Items]
Interest expense	$ (55,800,000)	$ (51,200,000)	$ (111,800,000)	$ (109,700,000)
Benefit for income taxes	(15,500,000)	(5,200,000)	(7,200,000)	(17,300,000)
Net loss	(22,500,000)	(7,700,000)	(8,800,000)	(30,600,000)
Other expense, net	0	0	0	(200,000)
Amounts reclassified from accumulated other comprehensive income	0	0	0	200,000
Derivative fair-value adjustments
Accumulated Other Comprehensive Income (Loss) [Line Items]
Amounts reclassified from accumulated other comprehensive income				100,000
Unrealized gains (losses) on investments, net
Accumulated Other Comprehensive Income (Loss) [Line Items]
Amounts reclassified from accumulated other comprehensive income				100,000
Reclassification out of Accumulated Other Comprehensive Income [Member] | Derivative fair-value adjustments
Accumulated Other Comprehensive Income (Loss) [Line Items]
Interest expense				(100,000)
Benefit for income taxes				0
Net loss				(100,000)
Reclassification out of Accumulated Other Comprehensive Income [Member] | Unrealized gains (losses) on investments, net
Accumulated Other Comprehensive Income (Loss) [Line Items]
Benefit for income taxes				(100,000)
Net loss				(100,000)
Other expense, net				$ (200,000)

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Long-Term Debt 8 (Details) (USD $) In Millions, unless otherwise specified			6 Months Ended
	Jun. 30, 2013	Dec. 31, 2012	Jun. 30, 2013 Capital Lease Obligations [Member]
Capital Lease Obligations [Abstract]
Capital Lease Obligations	$ 3.7	$ 3.1
Debt Instrument, Interest Rate, Effective Percentage Rate Range, Minimum			0.00%
Debt Instrument, Interest Rate, Effective Percentage Rate Range, Maximum			9.60%
Remaining in 2013			1.0
2014			1.8
2015			0.5
2016			$ 0.4

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Description of Business and Basis of Presentation (Details)	6 Months Ended
	Jun. 30, 2013 Business_Segments
Description of Business and Basis of Presentation [Abstract]
Number of Business Segments	4

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Inventories (Tables)

6 Months Ended

Jun. 30, 2013

Inventories [Abstract]

Inventories

Inventories consist of the following:

	June 30, 2013		December 31, 2012
Finished goods	$	9.1	$	7.7
Work-in-process	12.2		8.2
Raw materials	15.1		13.1
	$	36.4	$	29.0

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Acquisitions (Tables) (Faneuil [Member])

6 Months Ended

Jun. 30, 2013

Faneuil [Member]

Business Acquisition [Line Items]

Assets and Liabilities Assumed

The following table summarizes the historical cost of assets and liabilities assumed on March 19, 2012, the date of the Faneuil Acquisition:

Cash			$	2.3
Accounts receivable			11.8
Property, plant and equipment			10.3
Goodwill			13.0
Other intangible assets:
Customer relationships	$	0.2
Tradenames	0.8
Software	0.3
Total other intangible assets			1.3
Other assets			7.2
Total assets acquired			45.9
Deferred revenues			1.2
Capital leases			1.0
Other liabilities			7.5
Net assets acquired			$	36.2

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Business Segment Information (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended				6 Months Ended
	Jun. 30, 2013		Jun. 30, 2012		Jun. 30, 2013 Business_Segments		Jun. 30, 2012
Business Segment Information [Abstract]
Number of Business Segments					4
Segment Reporting [Abstract]
Product revenues, net	$ 326.5		$ 311.6		$ 647.9		$ 642.8
Service revenues, net	110.8		94.3		218.9		176.9
Intersegment revenues	0		0		0		0
Operating income (loss)	78.8	[1]	38.1	[1]	156.8	[1]	61.5	[1]
Depreciation and amortization (excluding amortization of debt fair value adjustments, original issue discount and deferred financing fees)	48.0		54.2		94.9		105.8
Capital expenditures (excluding capital leases)	12.4		10.5		23.6		30.2
Segment Reporting Information, Additional Information [Abstract]
Gains from revaluation of contingent consideration arrangements	0		0		0		0.5
Restructuring costs	6.7		3.7		13.3		5.0
Asset impairment charges	0		0		0.9		0
Harland Clark Segment [Member]
Segment Reporting [Abstract]
Product revenues, net	275.9		273.1		548.7	[2]	562.7	[2]
Service revenues, net	11.0		9.0		22.1	[2]	16.9	[2]
Intersegment revenues	0.1		0.1		0.1	[2]	0.1	[2]
Operating income (loss)	63.2	[1]	49.8	[1]	130.2	[1],[2]	95.2	[1],[2]
Depreciation and amortization (excluding amortization of debt fair value adjustments, original issue discount and deferred financing fees)	30.8		37.2		61.2	[2]	73.3	[2]
Capital expenditures (excluding capital leases)	8.8		7.2		15.5	[2]	20.2	[2]
Harland Financial Solutions Segment [Member]
Segment Reporting [Abstract]
Product revenues, net	27.0		15.9		48.8		31.6
Service revenues, net	56.1		42.3		111.2		76.9
Intersegment revenues	0		0		0		0
Operating income (loss)	22.6	[1]	1.0	[1]	42.2	[1]	(6.8)	[1]
Depreciation and amortization (excluding amortization of debt fair value adjustments, original issue discount and deferred financing fees)	9.3		9.5		18.2		18.6
Capital expenditures (excluding capital leases)	2.4		1.0		4.8		3.3
Segment Reporting Information, Additional Information [Abstract]
Restructuring costs					0		0.4
Scantron Segment [Member]
Segment Reporting [Abstract]
Product revenues, net	20.9		21.3		45.0		45.3
Service revenues, net	5.8		7.0		11.1		12.7
Intersegment revenues	0.5		0.4		1.0		0.8
Operating income (loss)	(5.2)	[1]	(10.0)	[1]	(12.1)	[1]	(20.8)	[1]
Depreciation and amortization (excluding amortization of debt fair value adjustments, original issue discount and deferred financing fees)	5.4		4.4		10.4		8.8
Capital expenditures (excluding capital leases)	0.3		1.1		1.5		4.6
Segment Reporting Information, Additional Information [Abstract]
Restructuring costs					6.9		1.6
Faneuil Segment [Member]
Segment Reporting [Abstract]
Product revenues, net	2.7	[3]	1.3	[3]	5.4	[3]	3.2	[3]
Service revenues, net	37.9	[3]	36.0	[3]	74.5	[3]	70.4	[3]
Intersegment revenues	0.2	[3]	0.1	[3]	0.3	[3]	0.2	[3]
Operating income (loss)	4.6	[1],[3]	1.9	[3]	6.9	[1],[3]	2.7	[3]
Depreciation and amortization (excluding amortization of debt fair value adjustments, original issue discount and deferred financing fees)	2.5	[3]	3.1	[3]	5.1	[3]	5.1	[3]
Capital expenditures (excluding capital leases)	0.9	[3]	1.2	[3]	1.8	[3]	2.1	[3]
Segment Reporting Information, Additional Information [Abstract]
Restructuring costs					0.4		0.3
Corporate [Member]
Segment Reporting [Abstract]
Product revenues, net	0		0		0		0
Service revenues, net	0		0		0		0
Intersegment revenues	(0.8)		(0.6)		(1.4)		(1.1)
Operating income (loss)	(6.4)	[1]	(4.6)	[1]	(10.4)	[1]	(8.8)	[1]
Depreciation and amortization (excluding amortization of debt fair value adjustments, original issue discount and deferred financing fees)	0		0		0		0
Capital expenditures (excluding capital leases)	$ 0		$ 0		$ 0		$ 0

[1] Includes gain from revaluation of contingent consideration arrangements of $0.0 and $0.5 for the three and six months ended June 30, 2012, respectively, restructuring costs of $6.7 and $13.3 for the three and six months ended June 30, 2013 and $3.7 and $5.0 for three and six months ended June 30, 2012, respectively, (see Note 16) and non-cash impairment charges of $0.0 and $0.9 for the three and six months ended June 30, 2013, respectively.

[2] Includes results of the acquired NCP Solutions business from the date of acquisition (see Note 3).

[3] Includes results of the acquired Faneuil business from the date of common control (see Note 3).

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Derivative Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2013

Derivative Financial Instruments [Abstract]

Derivative Financial Instruments

The following presents the fair values of these derivative instruments and the classification in the consolidated balance sheets.

Derivatives Designated as Cash Flow Hedging Instruments:	Balance Sheet Classification	June 30, 2013		December 31, 2012
Interest rate swaps	Other current liabilities	$	—	$	1.3

Derivative Financial Instruments

The following presents the effect of these derivative instruments (effective and ineffective portion) on other comprehensive loss and amounts reclassified from accumulated other comprehensive loss into interest expense.

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2013		2012		2013		2012
Interest Rate Swaps:
Loss reclassified from other comprehensive income into interest expense (effective portion)	$	—	$	—	$	—	$	0.1
Loss recognized in interest expense (ineffective portion)	—		0.2		—		1.5

Derivative Financial Instruments in Other Comprehensive Loss

The following presents the balances and net changes in the accumulated other comprehensive loss related to these derivative instruments, net of income taxes.

	Six Months Ended
	June 30,
Balances and Net Changes:	2012
Balance at beginning of period	$	0.1
Loss reclassified from accumulated other comprehensive loss into interest expense, net of taxes of $0.0	(0.1		)
Balance at end of period	$	—

There were no balances related to these derivative instruments in accumulated other comprehensive loss in the six months period ended June 30, 2013.

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Inventories (Details) (USD $) In Millions, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Inventory, Net, Items Net of Reserve Alternative [Abstract]
Finished goods	$ 9.1	$ 7.7
Work in-process	12.2	8.2
Raw materials	15.1	13.1
Total	$ 36.4	$ 29.0

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Postretirement Defined Benefit Plans (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013 Plans	Jun. 30, 2012
Defined Benefit Plan Disclosure [Line Items]
Number of postretirement defined benefit plans			2
Minimum number of years of service at December 31, 2000 for retirees who retired prior to December 31, 2002 to be eligible to participate in the medical postretirement plan			20 years
Interest cost	$ 0.1	$ 0.1	$ 0.2	$ 0.2
Net postretirement benefit cost	$ 0.1	$ 0.1	$ 0.2	$ 0.2

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Accumulated Other Comprehensive Loss (Tables)

6 Months Ended

Jun. 30, 2013

Accumulated Other Comprehensive Income [Abstract]

Accumulated Other Comprehensive Loss

The following presents changes in accumulated other comprehensive loss, net of tax, by component, during the six months ended June 30, 2013 and 2012:

	Foreign currency translation adjustments			Unrecognized amounts included in postretirement obligations			Derivative fair-value adjustments			Unrealized gains (losses) on investments, net			Total
Six months ended June 30, 2013:
Beginning balance	$	0.4		$	(0.7	)	$	—		$	—		$	(0.3	)
Net current period other comprehensive loss	(0.9		)	—			—			—			(0.9		)
Ending balance	$	(0.5	)	$	(0.7	)	$	—		$	—		$	(1.2	)
Six months ended June 30, 2012:
Beginning balance	$	—		$	(0.1	)	$	(0.1	)	$	0.1		$	(0.1	)
Other comprehensive loss before reclassifications	(0.4		)	—			—			(0.2		)	(0.6		)
Amounts reclassified from accumulated other comprehensive income	—			—			0.1			0.1			0.2
Net current period other comprehensive (loss) income	(0.4		)	—			0.1			(0.1		)	(0.4		)
Ending balance	$	(0.4	)	$	(0.1	)	$	—		$	—		$	(0.5	)

Reclassifications Out of Accumulated Other Comprehensive (Loss) Income

The following presents amounts reclassified out of accumulated other comprehensive loss, by component, during the six months ended June 30, 2012:

Details about accumulated other comprehensive income components	Affected line in the statement of operations	Six Months Ended June 30, 2012
Derivative fair-value adjustments	Interest expense	$	(0.1	)
	Benefit for income taxes	—
	Net loss	$	(0.1	)
Unrealized gains on investments, net	Other (expense), net	$	(0.2	)
	Benefit for income taxes	(0.1		)
	Net loss	$	(0.1	)

There were no amounts reclassified out of accumulated other comprehensive loss during the three months ended June 30, 2013 and 2012 and the six months ended June 30, 2013.

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Transactions with Related Parties (Details) (USD $) In Millions, unless otherwise specified	6 Months Ended			6 Months Ended			3 Months Ended		6 Months Ended			6 Months Ended		3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Dec. 31, 2012	Jun. 30, 2013 MacAndrews [Member] Directors And Officers Insurance Program [Member]	Jun. 30, 2012 MacAndrews [Member] Directors And Officers Insurance Program [Member]	Dec. 31, 2012 MacAndrews [Member] Directors And Officers Insurance Program [Member]	Jun. 30, 2013 MacAndrews [Member] Notes Receivable [Member]	Jun. 30, 2012 MacAndrews [Member] Notes Receivable [Member]	Jun. 30, 2013 MacAndrews [Member] Notes Receivable [Member]	Jun. 30, 2012 MacAndrews [Member] Notes Receivable [Member]	Dec. 27, 2011 MacAndrews [Member] Notes Receivable [Member]	Jun. 30, 2013 M F Worldwide Corp. [Member]	Jun. 30, 2012 M F Worldwide Corp. [Member]	Jun. 30, 2013 M F Worldwide Corp. [Member] Services provided to the Company [Member]	Jun. 30, 2012 M F Worldwide Corp. [Member] Services provided to the Company [Member]	Jun. 30, 2013 M F Worldwide Corp. [Member] Services provided to the Company [Member]	Jun. 30, 2012 M F Worldwide Corp. [Member] Services provided to the Company [Member]
Related Party Transaction [Line Items]
Prepaid expenses and other current assets	$ 67.6		$ 56.7	$ 0.8		$ 0.7
Other assets	87.9		63.0	1.3		1.0
Related Party Transaction, Purchases from Related Party				1.0	1.9
Maximum Lending Amount Per Agreement											30.0
Loans Receivable, Basis Spread on Variable Rate											2.00%
Notes Receivable, Related Parties, Noncurrent											30.0
Notes Receivable, Related Parties, Current	30.0		30.0				30.0		30.0
Related Party Interest Income							0.1	0.2	0.3	0.4
Proceeds from Related Party Interest Received							0	0.2	0.2	0.4
Related Party Transaction, Selling, General and Administrative Expenses from Transactions with Related Party														0.7	0.7	1.4	1.4
Dividend paid to parent	$ 26.2	$ 25.8										$ 26.2	$ 25.8

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Restructuring (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Restructuring Reserve [Roll Forward]
Expensed	$ 6.7	$ 3.7	$ 13.3	$ 5.0
Harland Clarke and Corporate [Member]
Restructuring Reserve [Roll Forward]
Beginning Balance			8.8	7.5
Expensed			6.0	2.7
Paid in Cash			(4.1)	(1.3)
Non-Cash Utilization			(3.4)	(0.5)
Ending Balance	7.3	8.4	7.3	8.4
Restructuring and Related Cost, Expected Cost			2.5
Harland Clarke and Corporate [Member] | Employee Severance [Member]
Restructuring Reserve [Roll Forward]
Beginning Balance			6.4	4.5
Expensed			1.1	1.6
Paid in Cash			(3.1)	(0.4)
Non-Cash Utilization			0	0
Ending Balance	4.4	5.7	4.4	5.7
Harland Clarke and Corporate [Member] | Facilities closure and other costs [Member]
Restructuring Reserve [Roll Forward]
Beginning Balance			2.4	3.0
Expensed			4.9	1.1
Paid in Cash			(1.0)	(0.9)
Non-Cash Utilization			(3.4)	(0.5)
Ending Balance	2.9	2.7	2.9	2.7
Harland Financial Solutions Segment [Member]
Restructuring Reserve [Roll Forward]
Beginning Balance			1.4	1.5
Expensed			0	0.4
Paid in Cash			(0.2)	(0.4)
Non-Cash Utilization			0.2	0
Ending Balance	1.4	1.5	1.4	1.5
Harland Financial Solutions Segment [Member] | Employee Severance [Member]
Restructuring Reserve [Roll Forward]
Beginning Balance			0.1	0
Expensed			0.2	0.4
Paid in Cash			0	(0.3)
Non-Cash Utilization			0	0
Ending Balance	0.3	0.1	0.3	0.1
Harland Financial Solutions Segment [Member] | Facilities closure and other costs [Member]
Restructuring Reserve [Roll Forward]
Beginning Balance			1.3	1.5
Expensed			(0.2)	0
Paid in Cash			(0.2)	(0.1)
Non-Cash Utilization			0.2	0
Ending Balance	1.1	1.4	1.1	1.4
Scantron Segment [Member]
Restructuring Reserve [Roll Forward]
Beginning Balance			4.1	3.4
Expensed			6.9	1.6
Paid in Cash			(4.9)	(2.3)
Non-Cash Utilization			(0.8)	0
Ending Balance	5.3	2.7	5.3	2.7
Number of lease facility closures			4
Scantron Segment [Member] | Employee Severance [Member]
Restructuring Reserve [Roll Forward]
Beginning Balance			3.2	2.0
Expensed			3.8	1.3
Paid in Cash			(4.1)	(1.4)
Non-Cash Utilization			0	0
Ending Balance	2.9	1.9	2.9	1.9
Scantron Segment [Member] | Facilities closure and other costs [Member]
Restructuring Reserve [Roll Forward]
Beginning Balance			0.9	1.4
Expensed			3.1	0.3
Paid in Cash			(0.8)	(0.9)
Non-Cash Utilization			(0.8)	0
Ending Balance	2.4	0.8	2.4	0.8
Faneuil Segment [Member]
Restructuring Reserve [Roll Forward]
Beginning Balance			0.8	0
Expensed			0.4	0.3
Paid in Cash			(0.7)	(0.3)
Ending Balance	0.5	0	0.5	0
Faneuil Segment [Member] | Employee Severance [Member]
Restructuring Reserve [Roll Forward]
Beginning Balance			0.6
Expensed			0.4
Paid in Cash			(0.7)
Ending Balance	0.3		0.3
Faneuil Segment [Member] | Facilities closure and other costs [Member]
Restructuring Reserve [Roll Forward]
Beginning Balance			0.2	0
Expensed			0	0.3
Paid in Cash			0	(0.3)
Ending Balance	$ 0.2	$ 0	$ 0.2	$ 0

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Goodwill and Other Intangible Assets 2 (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012	Dec. 31, 2012
Finite-Lived Intangible Assets, Net [Abstract]
Gross Carrying Amount	$ 1,716.7		$ 1,716.7		$ 1,685.9
Accumulated Amortization	215.6		215.6		151.1
Finite-Lived Intangible Assets, Net	1,501.1		1,501.1		1,534.8
Intangible Assets Excluding Goodwill [Abstract]
Gross Carrying Amount	1,717.5		1,717.5		1,686.7
Intangible Assets, Net (Excluding Goodwill)	1,501.9		1,501.9		1,535.6
Amortization of Intangible Assets	32.8	34.7	64.5	68.2
Trademarks and tradenames [Member]
Indefinite-Lived Intangible Assets (Excluding Goodwill) [Abstract]
Indefinite-lived intangible assets	0.8		0.8		0.8
Customer relationships [Member]
Finite-Lived Intangible Assets, Net [Abstract]
Gross Carrying Amount	1,547.9		1,547.9		1,528.0
Accumulated Amortization	187.6		187.6		132.7
Finite-Lived Intangible Assets, Net	1,360.3		1,360.3		1,395.3
Customer relationships [Member] | Minimum [Member]
Finite-Lived Intangible Assets, Net [Abstract]
Useful Life (in years)			3 years
Customer relationships [Member] | Maximum [Member]
Finite-Lived Intangible Assets, Net [Abstract]
Useful Life (in years)			19 years
Software [Member]
Finite-Lived Intangible Assets, Net [Abstract]
Gross Carrying Amount	64.4		64.4		56.5
Accumulated Amortization	20.2		20.2		13.1
Finite-Lived Intangible Assets, Net	44.2		44.2		43.4
Intangible Assets Excluding Goodwill [Abstract]
Amortization of Intangible Assets	3.9	3.0	7.0	5.8
Software [Member] | Minimum [Member]
Finite-Lived Intangible Assets, Net [Abstract]
Useful Life (in years)			3 years
Software [Member] | Maximum [Member]
Finite-Lived Intangible Assets, Net [Abstract]
Useful Life (in years)			9 years
Trademarks and tradenames [Member]
Finite-Lived Intangible Assets, Net [Abstract]
Gross Carrying Amount	104.4		104.4		101.4
Accumulated Amortization	7.8		7.8		5.3
Finite-Lived Intangible Assets, Net	$ 96.6		$ 96.6		$ 96.1
Trademarks and tradenames [Member] | Minimum [Member]
Finite-Lived Intangible Assets, Net [Abstract]
Useful Life (in years)			15 years
Trademarks and tradenames [Member] | Maximum [Member]
Finite-Lived Intangible Assets, Net [Abstract]
Useful Life (in years)			25 years

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Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2013

Summary of Significant Accounting Policies [Abstract]

Consolidation

The consolidated financial statements include the accounts of the Company and its majority-owned subsidiaries after the elimination of all material intercompany accounts and transactions. The Company has consolidated the results of operations and accounts of businesses acquired from the date of acquisition except for Faneuil as discussed above.

Use of Estimates

Use of Estimates

The preparation of the financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

Reclassifications

Reclassifications

Prior period amounts have been reclassified in Note 7 in accordance with applicable accounting guidance to reflect the business segment changes described in Note 1 above.

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Consolidated Statements of Cash Flows (unaudited) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012
Operating activities
Net loss	$ (8.8)	$ (30.6)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation	30.4	37.6
Amortization of intangible assets	64.5	68.2
Amortization of debt fair value adjustments, original issue discount, original issue premium and deferred financing fees	46.5	64.1
Loss on early extinguishment of debt	(61.0)	0
Revaluation of contingent consideration	0	(0.5)
Loss on sale of marketable securities	0	0.2
Deferred income taxes	(43.8)	(71.5)
Asset impairments	0.9	0
Changes in operating assets and liabilities, net of effect of businesses acquired:
Accounts receivable	(18.4)	(13.1)
Inventories	(3.8)	12.8
Prepaid expenses and other assets	(1.7)	(8.9)
Contract acquisition payments, net	(4.9)	(9.3)
Accounts payable and accrued liabilities	(5.7)	(12.2)
Deferred revenues	(1.3)	51.0
Income and other taxes	(14.0)	(5.5)
Payable to parent	0.2	(0.2)
Other, net	6.2	1.5
Net cash provided by operating activities	107.3	83.6
Investing activities
Purchase of businesses, net of cash acquired	(34.8)	(36.2)
Proceeds from sale of property, plant and equipment	0.9	0.1
Proceeds from sale of marketable securities	0	56.3
Capital expenditures	(23.6)	(30.2)
Capitalized interest	(0.3)	(0.2)
Computer software development	(6.5)	(6.5)
Net cash used in investing activities	(64.3)	(16.7)
Financing activities
Dividend paid to parent	(26.2)	(25.8)
Acquisition of business from parent	0	(33.8)
Payments for derivative instruments	(1.3)	(7.0)
Issuance of notes	54.5	0
Redemption of notes	(50.0)	0
Borrowings on credit agreements	742.5	25.0
Repayments of credit agreements and other borrowings	(764.0)	(43.3)
Debt issuance costs	(15.9)	(0.4)
Net cash used in financing activities	(60.4)	(85.3)
Net decrease in cash and cash equivalents	(17.4)	(18.4)
Cash and cash equivalents at beginning of period	102.0	101.8
Cash and cash equivalents at end of period	84.6	83.4
Supplemental disclosure of cash paid for:
Interest, net of amounts capitalized	54.2	43.8
Income taxes, net of refunds	50.7	58.3
Non cash financing activities:
Extinguishment of Faneuil debt to parent	$ 0	$ 25.4

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Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2013

Summary of Significant Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

Reference is made to the significant accounting policies of the Company described in the notes to the consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2012.

Use of Estimates

The preparation of the financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

Reclassifications

Prior period amounts have been reclassified in Note 7 in accordance with applicable accounting guidance to reflect the business segment changes described in Note 1 above.

Recently Adopted Accounting Guidance

Effective January 1, 2013, the Company adopted amended guidance related to disclosures about offsetting assets and liabilities. The amendment enhances disclosures regarding assets and liabilities that are presented net or gross in the statement of financial position when the right of offset exists, or that are subject to an enforceable master netting arrangement. This amendment affects disclosures only, and therefore adoption did not affect the Company's consolidated financial position, results of operations or cash flows.

Effective January 1, 2013, the Company adopted amended guidance related to the presentation of amounts reclassified out of accumulated other comprehensive income by component. The amendment requires companies to present, either on the face of the statement where net income is presented or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income if the amount reclassified is required under United States generally accepted accounting principles ("US GAAP") to be reclassified to net income in its entirety in the same reporting period. For other amounts that are not required under US GAAP to be reclassified in their entirety to net income, companies are required to cross-reference to other disclosures required under US GAAP that provide additional detail about those amounts. This amendment affects presentation only, and therefore adoption did not affect the Company's consolidated financial position, results of operations or cash flows.

Effective January 1, 2013, the Company adopted amended guidance related to the testing of indefinite-lived intangible assets for impairment. Under the amendment, entities testing indefinite-lived intangible assets for impairment have the option to perform a qualitative assessment to determine whether further impairment testing is necessary. If an entity determines, on the basis of qualitative factors, that the fair value of the indefinite-lived intangible asset is more-likely-than-not less than the carrying amount, a quantitative impairment test is required. Otherwise, no further impairment testing is required. This amendment affects testing steps only, and therefore adoption did not affect the Company's consolidated financial position, results of operations or cash flows.

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Assets Held For Sale

6 Months Ended

Jun. 30, 2013

Assets Held For Sale [Abstract]

Assets Held For Sale

Assets Held For Sale

Assets held for sale are included in prepaid expenses and other current assets on the accompanying consolidated balance sheets and consist of the following:

	June 30, 2013		December 31, 2012
Land	$	—	$	1.0
Buildings and improvements	—		2.1
	$	—	$	3.1

At December 31, 2012, assets held for sale consisted of the following Harland Clarke segment facilities:

Location	Former Use	Year Closed
Atlanta, GA	Operations Support	2008
Atlanta, GA	Printing	2008
Atlanta, GA	Information Technology	2010

During 2010, the Company closed its information technology facility in Atlanta, GA and relocated those operations into an existing facility. During the first quarter of 2013, the Company sold the information technology facility for $0.8 and realized a loss of $0.1. The other listed Atlanta facilities were closed as part of the Company's plan to exit duplicative facilities related to an acquisition.

During the first quarter of 2013, the Company announced plans to relocate its Atlanta regional office facilities within the Harland Clarke segment to another facility later in 2013. In conjunction with these plans, the Company made a change to the marketing plan for the other Atlanta facilities included in assets held for sale. The new marketing plan combines the marketing of the Atlanta regional office facilities and facilities formerly classified as held for sale and the Company estimates it will take longer than twelve months to sell the facilities. Accordingly, the facilities formerly classified as assets held for sale were reclassified to property, plant and equipment during the first quarter of 2013.

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Acquisitions

6 Months Ended

Jun. 30, 2013

Acquisitions [Abstract]

Acquisitions

Acquisitions

NCP Solutions Acquisition

On May 31, 2013, the Company acquired 100% of the equity of NCP Solutions for an acquisition-date purchase price of $35.2, net of cash acquired of $0.3, and after giving effect to working capital adjustments of $0.5 (the "NCP Solutions Acquisition"). NCP Solutions is a leading end-to-end communications solutions provider to consumer finance companies, banks, mortgage lenders, mortgage subservicers, credit unions, auto and equipment finance companies, auto service contract providers, direct marketing companies, healthcare and health insurance companies, check producers and various other customers.

NCP Solutions delivers personalized, time-sensitive and confidential print and electronic business communications. These communications include billing, investment, demand deposit and sharedraft statements, event-triggered letters, installment loan and mortgage payment coupon books and direct marketing materials. NCP Solutions' vertically integrated production process and electronic and print competencies enable it to supply customers with a robust outsourced document management solution.

The preliminary allocation of purchase price resulted in identified intangible assets of $25.0, including customer relationships of $20.0, trademarks of $3.0, software of $2.0 and goodwill of $4.2. The remaining $6.3 of purchase price was allocated to tangible assets and liabilities. The goodwill arises because the total consideration for NCP Solutions, which reflects its future earnings and cash flow potential, exceeds the fair value of net assets acquired. The goodwill resulting from the acquisition was assigned to the Harland Clarke segment. Of the goodwill recognized, $2.8 is deductible for income tax purposes. NCP Solutions' results of operations have been included in the Company's operations since the date of its acquisition. The Company financed the acquisition with Harland Clarke Holdings' cash on hand. The pro forma effects of the NCP Solutions Acquisition on the consolidated results of operations were not material.

Faneuil Acquisition

On March 19, 2012, the Company entered into a Stock Purchase Agreement pursuant to which the Company purchased 100% of the issued and outstanding shares of capital stock of New Faneuil, Inc. ("New Faneuil") for $70.0 in cash (the "Faneuil Acquisition") from affiliates of MacAndrews. The Company financed the Faneuil Acquisition with Harland Clarke Holdings' cash on hand. New Faneuil, through its wholly owned subsidiary, Faneuil, provides business process outsourcing services including call center operations, back office operations, staffing services and toll collection services to government and regulated commercial clients across the United States.

Under accounting guidance for transactions among entities under common control, the Company has accounted for the purchase at historical cost and has retrospectively recasted prior periods under common control to include Faneuil operations. The Company and Faneuil came under common control on December 21, 2011, the date of the MacAndrews Acquisition. Cash paid in excess of the carrying amount of the assets and liabilities assumed in the amount of $33.8 is treated as an equity transaction with the parent in accordance with accounting guidance for transactions among entities under common control.

The following table summarizes the historical cost of assets and liabilities assumed on March 19, 2012, the date of the Faneuil Acquisition:

Cash			$	2.3
Accounts receivable			11.8
Property, plant and equipment			10.3
Goodwill			13.0
Other intangible assets:
Customer relationships	$	0.2
Tradenames	0.8
Software	0.3
Total other intangible assets			1.3
Other assets			7.2
Total assets acquired			45.9
Deferred revenues			1.2
Capital leases			1.0
Other liabilities			7.5
Net assets acquired			$	36.2

The pro forma effects of the Faneuil Acquisition on the consolidated results of operations were not material.

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Assets Held For Sale (Details) (USD $) In Millions, unless otherwise specified	6 Months Ended								3 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013 Other Current Assets [Member]	Dec. 31, 2012 Other Current Assets [Member]	Jun. 30, 2013 Land [Member] Other Current Assets [Member]	Dec. 31, 2012 Land [Member] Other Current Assets [Member]	Jun. 30, 2013 Building and improvements [Member] Other Current Assets [Member]	Dec. 31, 2012 Building and improvements [Member] Other Current Assets [Member]	Mar. 31, 2013 Information Technology Facility [Member]
Assets Held For Sale [Line Items]
Assets held for sale			$ 0	$ 3.1	$ 0	$ 1.0	$ 0	$ 2.1
Proceeds from sale of property, plant and equipment	0.9	0.1							0.8
Loss on sale of property plant equipment									$ 0.1

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Assets Held For Sale (Tables) (Harland Clark Segment [Member])

6 Months Ended

Jun. 30, 2013

Harland Clark Segment [Member]

Assets Held For Sale [Line Items]

Assets Held For Sale

Assets held for sale are included in prepaid expenses and other current assets on the accompanying consolidated balance sheets and consist of the following:

	June 30, 2013		December 31, 2012
Land	$	—	$	1.0
Buildings and improvements	—		2.1
	$	—	$	3.1

At December 31, 2012, assets held for sale consisted of the following Harland Clarke segment facilities:

Location	Former Use	Year Closed
Atlanta, GA	Operations Support	2008
Atlanta, GA	Printing	2008
Atlanta, GA	Information Technology	2010

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Postretirement Defined Benefit Plans (Tables)

6 Months Ended

Jun. 30, 2013

Postretirement Defined Benefit Plans [Abstract]

Net Periodic Postretirement Benefit Costs

The components of net periodic postretirement benefit cost for these plans consist of the following:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2013		2012		2013		2012
Interest cost	$	0.1	$	0.1	$	0.2	$	0.2
Net postretirement benefit cost	$	0.1	$	0.1	$	0.2	$	0.2

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Restructuring (Tables)

6 Months Ended

Jun. 30, 2013

Harland Clarke and Corporate [Member]

Restructuring Cost and Reserve [Line Items]

Components of Restructuring Accruals

The following table details the components of the Company's restructuring accruals under its plans related to the Harland Clarke segment and Corporate for the six months ended June 30, 2013 and 2012:

	Beginning Balance		Expensed		Paid in Cash			Non-Cash Utilization			Ending Balance
Six months ended June 30, 2013:
Severance and severance-related	$	6.4	$	1.1	$	(3.1	)	$	—		$	4.4
Facilities closures and other costs	2.4		4.9		(1.0		)	(3.4		)	2.9
Total	$	8.8	$	6.0	$	(4.1	)	$	(3.4	)	$	7.3
Six months ended June 30, 2012:
Severance and severance-related	$	4.5	$	1.6	$	(0.4	)	$	—		$	5.7
Facilities closures and other costs	3.0		1.1		(0.9		)	(0.5		)	2.7
Total	$	7.5	$	2.7	$	(1.3	)	$	(0.5	)	$	8.4

Harland Financial Solutions Segment [Member]

Restructuring Cost and Reserve [Line Items]

Components of Restructuring Accruals

The following table details the components of the Company's restructuring accruals related to the Harland Financial Solutions segment for the six months ended June 30, 2013 and 2012:

	Beginning Balance		Expensed			Paid in Cash			Non-Cash Utilization		Ending Balance
Six months ended June 30, 2013:
Severance and severance-related	$	0.1	$	0.2		$	—		$	—	$	0.3
Facilities and other costs	1.3		(0.2		)	(0.2		)	0.2		1.1
Total	$	1.4	$	—		$	(0.2	)	$	0.2	$	1.4
Six months ended June 30, 2012:
Severance and severance-related	$	—	$	0.4		$	(0.3	)	$	—	$	0.1
Facilities and other costs	1.5		—			(0.1		)	—		1.4
Total	$	1.5	$	0.4		$	(0.4	)	$	—	$	1.5

Scantron Segment [Member]

Restructuring Cost and Reserve [Line Items]

Components of Restructuring Accruals

The following table details the components of the Company's restructuring accruals related to the Scantron segment for the six months ended June 30, 2013 and 2012:

	Beginning Balance		Expensed		Paid in Cash			Non-Cash Utilization			Ending Balance
Six months ended June 30, 2013:
Severance and severance-related	$	3.2	$	3.8	$	(4.1	)	$	—		$	2.9
Facilities and other costs	0.9		3.1		(0.8		)	(0.8		)	2.4
Total	$	4.1	$	6.9	$	(4.9	)	$	(0.8	)	$	5.3
Six months ended June 30, 2012:
Severance and severance-related	$	2.0	$	1.3	$	(1.4	)	$	—		$	1.9
Facilities and other costs	1.4		0.3		(0.9		)	—			0.8
Total	$	3.4	$	1.6	$	(2.3	)	$	—		$	2.7

Faneuil Segment [Member]

Restructuring Cost and Reserve [Line Items]

Components of Restructuring Accruals

The following table details the components of the Company's restructuring accruals related to the Faneuil segment for the six months ended June 30, 2013 and 2012:

	Beginning Balance		Expensed		Paid in Cash			Ending Balance
Six months ended June 30, 2013:
Severance and severance-related	$	0.6	$	0.4	$	(0.7	)	$	0.3
Facilities and other costs	0.2		—		—			0.2
Total	$	0.8	$	0.4	$	(0.7	)	$	0.5
Six months ended June 30, 2012:
Facilities and other costs	$	—	$	0.3	$	(0.3	)	$	—
Total	$	—	$	0.3	$	(0.3	)	$	—

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Long-Term Debt 6 (Details) (USD $) In Millions, unless otherwise specified	6 Months Ended		0 Months Ended		0 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Mar. 19, 2012 Revolving Credit Agreement With Macandrews & Forbes Group Llc [Member]	Jan. 25, 2012 Revolving Credit Agreement With Macandrews & Forbes Group Llc [Member]	Jan. 25, 2012 Secured Debt [Member] Faneuil Revolving Credit Facility [Member]	Jan. 25, 2012 Faneuil Option 1 Rate Per Annum Equal To [Member] LIBOR [Member] Faneuil Revolving Credit Facility [Member]	Jan. 25, 2012 Faneuil Option 2 Rate Per Annum Equal To [Member] Prime Rate [Member] Faneuil Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity				$ 25.0	$ 35.5
Debt Instrument, Basis Spread on Variable Rate						2.50%	(1.25%)
Repayments of Long-term Debt	764.0	43.3			25.6
Extinguishment of Faneuil debt to parent	$ 0	$ 25.4	$ 25.0

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Long-Term Debt 1 (Details) (USD $) In Millions, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012	Jul. 24, 2012
Debt Instrument [Line Items]
Capital Lease Obligations	$ 3.7	$ 3.1
Unamortized original issue discount, original issue premium and acquisition accounting-related fair value discount	(169.5)	(271.9)
Debt and Capital Lease Obligations	1,937.6	1,847.8
Less current maturities	(89.9)	(78.5)
Long-term Debt, net of current maturities	1,847.7	1,769.3
1,900.0 Senior Secured Credit Facilities [Member]
Debt Instrument [Line Items]
Secured Debt	1,392.8	1,406.0
Total Extended Term Loans [Member]
Debt Instrument [Line Items]
Secured Debt			973.0
Extended Term Loans [Member]
Debt Instrument [Line Items]
Secured Debt	642.8	677.4	692.8
Non-Extended Term Loans [Member]
Debt Instrument [Line Items]
Secured Debt	0	728.6	729.0
Tranche B-3 Term Loans [Member]
Debt Instrument [Line Items]
Secured Debt	750.0	0
9.750% Senior Secured Notes due 2018 [Member]
Debt Instrument [Line Items]
Secured Debt	285.0	235.0
Senior Floating Rate Notes due 2015 [Member]
Debt Instrument [Line Items]
Subordinated Debt	204.3	204.3
9.50% Senior Fixed Rate Notes due 2015 [Member]
Debt Instrument [Line Items]
Subordinated Debt	$ 221.3	$ 271.3

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Goodwill and Other Intangible Assets 4 (Details) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2013
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract]
Six months ending December 31, 2013	$ 66.8
Year ending December 31, 2014	125.2
Year ending December 31, 2015	117.3
Year ending December 31, 2016	105.3
Year ending December 31, 2017	98.9
Asset impairment charges [Member] | Software [Member] | Scantron Segment [Member]
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract]
Impairment of Intangible Assets, Finite-lived	$ 0.7

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Consolidated Balance Sheets Parentheticals (unaudited) (USD $) In Millions, except Share data, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Assets, Current [Abstract]
Allowance for doubtful accounts	$ 1.4	$ 1.5
Stockholders' Equity, Number of Shares, Par Value and Other Disclosures [Abstract]
Common Stock, Par or Stated Value Per Share	$ 0.01	$ 0.01
Common Stock, Shares Authorized	200	200
Common Stock, Shares, Issued	100	100
Common Stock, Shares, Outstanding	100	100

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Accumulated Other Comprehensive Loss

6 Months Ended

Jun. 30, 2013

Accumulated Other Comprehensive Income [Abstract]

Accumulated Other Comprehensive Loss

Accumulated Other Comprehensive Loss

The following presents changes in accumulated other comprehensive loss, net of tax, by component, during the six months ended June 30, 2013 and 2012:

	Foreign currency translation adjustments			Unrecognized amounts included in postretirement obligations			Derivative fair-value adjustments			Unrealized gains (losses) on investments, net			Total
Six months ended June 30, 2013:
Beginning balance	$	0.4		$	(0.7	)	$	—		$	—		$	(0.3	)
Net current period other comprehensive loss	(0.9		)	—			—			—			(0.9		)
Ending balance	$	(0.5	)	$	(0.7	)	$	—		$	—		$	(1.2	)
Six months ended June 30, 2012:
Beginning balance	$	—		$	(0.1	)	$	(0.1	)	$	0.1		$	(0.1	)
Other comprehensive loss before reclassifications	(0.4		)	—			—			(0.2		)	(0.6		)
Amounts reclassified from accumulated other comprehensive income	—			—			0.1			0.1			0.2
Net current period other comprehensive (loss) income	(0.4		)	—			0.1			(0.1		)	(0.4		)
Ending balance	$	(0.4	)	$	(0.1	)	$	—		$	—		$	(0.5	)

The following presents amounts reclassified out of accumulated other comprehensive loss, by component, during the six months ended June 30, 2012:

Details about accumulated other comprehensive income components	Affected line in the statement of operations	Six Months Ended June 30, 2012
Derivative fair-value adjustments	Interest expense	$	(0.1	)
	Benefit for income taxes	—
	Net loss	$	(0.1	)
Unrealized gains on investments, net	Other (expense), net	$	(0.2	)
	Benefit for income taxes	(0.1		)
	Net loss	$	(0.1	)

There were no amounts reclassified out of accumulated other comprehensive loss during the three months ended June 30, 2013 and 2012 and the six months ended June 30, 2013.

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Consolidated Statements of Comprehensive Income (Loss) (unaudited) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Net loss	$ (22.5)	$ (7.7)	$ (8.8)	$ (30.6)
Other comprehensive (loss) income, net of tax:
Foreign currency translation adjustments	(0.4)	(0.9)	(0.9)	(0.4)
Reclassification adjustments for loss on derivative instruments included in net loss	0	0	0	0.1
Unrealized losses on investments:
Unrealized losses on investments during period	0	0	0	(0.2)
Less reclassification adjustment for amounts included in net loss	0	0	0	0.1
Net change in unrealized losses on investments	0	0	0	(0.1)
Total other comprehensive loss, net of tax	(0.4)	(0.9)	(0.9)	(0.4)
Comprehensive loss	(22.9)	(8.6)	(9.7)	(31.0)
Tax Expense of Other Comprehensive Loss Included in Above Amounts:
Less reclassification adjustment for amounts included in net loss	0	0	0	(0.1)
Total net tax expense included in other comprehensive loss	$ 0	$ 0	$ 0	$ (0.1)

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Derivative Financial Instruments (Details) (USD $)	3 Months Ended		6 Months Ended					3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2012 Designated as Hedging Instrument [Member] Interest Rate Swap [Member] June 30, 2009 3-Yr Interest Rate Contract Notional Amount $350 [Member]	Sep. 30, 2012 Designated as Hedging Instrument [Member] Interest Rate Swap [Member] September 30, 2009 3-Yr Interest Rate Contract Notional Amount $250 [Member]	Jun. 30, 2013 Designated as Hedging Instrument [Member] Interest Rate Swap [Member] June 30, 2010 3-Yr Interest Rate Contract Notional Amount $255 [Member]	Jun. 30, 2013 Cash Flow Hedging [Member] Designated as Hedging Instrument [Member] Interest Rate Swap [Member]	Jun. 30, 2012 Cash Flow Hedging [Member] Designated as Hedging Instrument [Member] Interest Rate Swap [Member]	Jun. 30, 2013 Cash Flow Hedging [Member] Designated as Hedging Instrument [Member] Interest Rate Swap [Member]	Jun. 30, 2012 Cash Flow Hedging [Member] Designated as Hedging Instrument [Member] Interest Rate Swap [Member]	Jun. 30, 2013 Cash Flow Hedging [Member] Designated as Hedging Instrument [Member] Interest Rate Swap [Member] Other current liabilities [Member]	Dec. 31, 2012 Cash Flow Hedging [Member] Designated as Hedging Instrument [Member] Interest Rate Swap [Member] Other current liabilities [Member]
Derivative [Line Items]
Derivative, Notional Amount					$ 350,000,000	$ 250,000,000	$ 255,000,000
Derivative, Fixed Interest Rate					2.353%	2.14%	1.264%
Derivative Liabilities, Current												0	1,300,000
Loss reclassified from other comprehensive income into interest expense (effective portion)								0	0	0	100,000
Loss recognized in interest expense (ineffective portion)								0	200,000	0	1,500,000
Balances and net changes in other comprehensive loss (income) related to derivative instruments [Roll Forward]
Balance at beginning of period											100,000
Loss reclassified from accumulated other comprehensive loss into interest expense, net of taxes of $0.0	0	0	0	(100,000)							(100,000)
Balance at end of period								0	0	0	0
Other Comprehensive Income (Loss), Reclassification Adjustment on Derivatives Included in Net Income, Tax											$ 0

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Consolidated Balance Sheets (USD $) In Millions, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Current assets:
Cash and cash equivalents	$ 84.6	$ 102.0
Accounts receivable (net of allowances of $1.4 and $1.5)	150.5	132.1
Inventories	36.4	29.0
Income taxes receivable	23.2	23.7
Notes receivable - related party	30.0	30.0
Deferred tax assets	45.1	45.1
Prepaid expenses and other current assets	67.6	56.7
Total current assets	437.4	418.6
Property, plant and equipment	297.8	269.5
Less accumulated depreciation	(114.3)	(79.5)
Property, plant and equipment, net	183.5	190.0
Goodwill	765.6	761.6
Other intangible assets, net	1,501.9	1,535.6
Contract acquisition payments, net	22.5	17.6
Other assets	87.9	63.0
Total assets	2,998.8	2,986.4
Current liabilities:
Accounts payable	47.7	44.5
Deferred revenues	135.5	133.9
Current maturities of long-term debt	89.9	78.5
Accrued liabilities:
Salaries, wages and employee benefits	57.7	55.9
Income and other taxes payable	12.1	11.9
Customer incentives	53.2	52.0
Payable to parent	0.3	0.1
Other current liabilities	53.1	42.1
Total current liabilities	449.5	418.9
Long-term debt	1,847.7	1,769.3
Deferred tax liabilities	578.0	622.7
Deferred revenues	56.3	54.2
Other liabilities	68.0	86.1
Commitments and contingencies
Stockholder's equity / deficit:
Common stock — 200 shares authorized; par value $0.01; 100 shares issued and outstanding at June 30, 2013 and December 31, 2012	0	0
Additional paid-in capital	49.9	76.1
Accumulated deficit	(49.4)	(40.6)
Accumulated other comprehensive (loss) income:
Foreign currency translation adjustments	(0.5)	0.4
Unrecognized amounts included in postretirement obligations, net of taxes	(0.7)	(0.7)
Total accumulated other comprehensive loss, net of taxes	(1.2)	(0.3)
Total stockholder's equity / deficit	(0.7)	35.2
Total liabilities and stockholder's equity / deficit	$ 2,998.8	$ 2,986.4

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Long-Term Debt 2 (Details) (Tranche B-3 Term Loans [Member], Secured Debt [Member], USD $) In Millions, unless otherwise specified	Jun. 30, 2013	Apr. 26, 2013
Debt Instrument [Line Items]
Original Loan Principal Amount		$ 750.0
Springing maturity date expressed in number of days prior to the maturity date of outstanding debt		90 days
Annual Repayment of a Loan Expressed as a Percentage of the Original Principal Amount		2.50%
Debt Instrument, Interest Rate at Period End	7.00%
Minimum [Member]
Debt Instrument [Line Items]
Minimum annual amount of aggregate amortization of all TrancheB-3 Term Loans and other debt sharing liens		$ 75.0
Option 1 Rate Per Annum equal to the higher of [Member] | Minimum [Member]
Debt Instrument [Line Items]
Floor Interest Rate Percentage Of A Variable Interest Rate Instrument		2.50%
Option 1 Rate Per Annum equal to the higher of [Member] | Prime Rate of Credit Suisse [Member]
Debt Instrument [Line Items]
Debt Instrument, Basis Spread on Variable Rate		4.50%
Option 1 Rate Per Annum equal to the higher of [Member] | Federal Funds Rate Plus 0.5% [Member]
Debt Instrument [Line Items]
Fixed Percentage Added to the Federal Funds Effective Rate		0.50%
Debt Instrument, Basis Spread on Variable Rate		4.50%
Option 2 Rate Per Annum equal to [Member] | Minimum [Member]
Debt Instrument [Line Items]
Floor Interest Rate Percentage Of A Variable Interest Rate Instrument		1.50%
Option 2 Rate Per Annum equal to [Member] | Reserve Adjusted LIBOR Interest Rate [Member]
Debt Instrument [Line Items]
Debt Instrument, Basis Spread on Variable Rate		5.50%

XML

Goodwill and Other Intangible Assets (Tables)

6 Months Ended

Jun. 30, 2013

Goodwill and Other Intangible Assets [Abstract]

Goodwill

The change in carrying amount of goodwill by business segment for the six months ended June 30, 2013 is as follows:

	Harland Clarke		Harland Financial Solutions			Scantron			Faneuil		Total
Balance as of December 31, 2012	$	417.0	$	282.7		$	40.2		$	21.7	$	761.6
2013 acquisition	4.2		—			—			—		4.2
Effect of exchange rate changes	—		(0.1		)	(0.1		)	—		(0.2		)
Balance as of June 30, 2013	$	421.2	$	282.6		$	40.1		$	21.7	$	765.6

Other Intangible Assets

Useful lives, gross carrying amounts and accumulated amortization for other intangible assets are as follows:

		Gross Carrying Amount				Accumulated Amortization				Net Carrying Amount
	Useful Life (in years)	June 30, 2013		December 31, 2012		June 30, 2013		December 31, 2012		June 30, 2013		December 31, 2012
Amortized intangible assets:
Customer relationships	3 - 19	$	1,547.9	$	1,528.0	$	187.6	$	132.7	$	1,360.3	$	1,395.3
Trademarks and tradenames	15 - 25	104.4		101.4		7.8		5.3		96.6		96.1
Software	3 - 9	64.4		56.5		20.2		13.1		44.2		43.4
		1,716.7		1,685.9		215.6		151.1		1,501.1		1,534.8
Indefinite-lived intangible assets:
Tradename		0.8		0.8		—		—		0.8		0.8
Total other intangible assets		$	1,717.5	$	1,686.7	$	215.6	$	151.1	$	1,501.9	$	1,535.6

Estimated Amortization Expense

Estimated aggregate amortization expense for intangible assets through December 31, 2017 is as follows:

Six months ending December 31, 2013	$	66.8
Year ending December 31, 2014	125.2
Year ending December 31, 2015	117.3
Year ending December 31, 2016	105.3
Year ending December 31, 2017	98.9

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Transactions with Related Parties

6 Months Ended

Jun. 30, 2013

Transactions with Related Parties [Abstract]

Transactions with Related Parties

Transactions with Related Parties

The Company participates in MacAndrews' directors and officers insurance program, which covers the Company as well as MacAndrews and MacAndrews' other affiliates. The limits of coverage are available on aggregate losses to any or all of the participating companies and their respective directors and officers. The Company reimburses MacAndrews for its allocable portion of the premiums for such coverage, which the Company believes is more favorable than premiums the Company could secure were it to secure its own coverage. At June 30, 2013, the Company recorded prepaid expenses and other assets of $0.8 and $1.3, respectively, relating to the directors and officers insurance program. At December 31, 2012, the Company recorded prepaid expenses and other assets of $0.7 and $1.0, respectively, related to the directors and officers insurance program. The Company paid $1.0 and $1.9 to MacAndrews during the six months endedJune 30, 2013 and 2012, respectively, under the directors and officers insurance program. The Company also participates in certain other insurance programs with MacAndrews under which it pays premiums directly to the insurance broker.

Notes Receivable

On December 27, 2011, the Company entered into a revolving credit agreement with its indirect parent, MacAndrews, whereby MacAndrews could borrow an amount not exceeding $30.0. The facility is unsecured, bears interest at LIBOR plus 2% and matures in December 2013. The facility was drawn in full by MacAndrews on December 27, 2011 and remained outstanding at June 30, 2013. Interest income of $0.1 and $0.3 was recorded and related payments were received during the three and six months endedJune 30, 2013, respectively. Interest income of $0.2 and $0.4 was recorded and related payments were received during the three and six months endedJune 30, 2012, respectively.

Other

The Company expensed $0.7 and $1.4 during the three and six months endedJune 30, 2013, respectively, and $0.7 and $1.4 during the three and six months endedJune 30, 2012, respectively, for services provided to the Company by M & F Worldwide. This amount is reflected in selling, general and administrative expenses.

During the six months endedJune 30, 2013 and 2012, the Company paid cash dividends of $26.2 and $25.8, respectively, to M & F Worldwide as permitted by restricted payment baskets within the Company's debt agreements.

On March 19, 2012, the Company completed the Faneuil Acquisition from affiliates of MacAndrews, its indirect parent (see Note 3). In connection with the Faneuil Acquisition, Faneuil's revolving credit facility with an affiliate of MacAndrews, which was entered into on January 25, 2012, was extinguished (see Note 11).

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Goodwill and Other Intangible Assets 3 (Details) (NCP [Member])	6 Months Ended
	Jun. 30, 2013
Acquired Finite-Lived Intangible Assets [Line Items]
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life	12 years 10 months 18 days
Customer relationships [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life	15 years
Trademarks [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life	4 years
Software [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life	5 years

XML

Long-Term Debt 5 (Details) (USD $) In Millions, unless otherwise specified	6 Months Ended					0 Months Ended	3 Months Ended				0 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Apr. 04, 2007 Senior Subordinated Notes [Member]	Jun. 30, 2013 Senior Floating Rate Notes due 2015 [Member]	May 01, 2007 Senior Floating Rate Notes due 2015 [Member]	Jun. 19, 2013 9.50% Senior Fixed Rate Notes due 2015 [Member]	Jun. 30, 2013 9.50% Senior Fixed Rate Notes due 2015 [Member]	May 01, 2007 9.50% Senior Fixed Rate Notes due 2015 [Member]	May 20, 2013 Secured Debt [Member] 9.750% Senior Secured Notes due 2018 [Member]	Jul. 24, 2012 Secured Debt [Member] 9.750% Senior Secured Notes due 2018 [Member]	Jul. 24, 2012 Secured Debt [Member] Extended Term Loans [Member]	Jun. 30, 2013 Secured Debt [Member] Extended Term Loans [Member]	May 01, 2007 Applicable LIBOR Rate As Defined in the Indenture [Member] Senior Floating Rate Notes due 2015 [Member]
Debt Instrument [Line Items]
Debt Instrument, Face Amount					$ 305.0			$ 310.0	$ 50.0	$ 235.0
Debt Instrument, Interest Rate, Stated Percentage								9.50%		9.75%
Floor Interest Rate Percentage Of A Variable Interest Rate Instrument													1.25%
Debt Instrument, Basis Spread on Variable Rate													4.75%
Debt Instrument, Interest Rate at Period End				6.00%								5.40%
Percentage of Outstanding principal Amount to Prepay if Change of Control Occurs			101.00%
Percentage of Principal Amount to be prepaid with proceeds of certain asset sales			100.00%
Repayments of Long-term Debt	764.0	43.3									280.2
Bond Issuance Price									109.00%
Extinguishment of Debt, Amount						50.0	50.0
Amt of Notes Required to be Repurchased by Company (If Greater Than 50% of Excess Cash Flows) in the event secured leverage ratio exceeds certain levels										$ 15.0
Percentage of Excess Cash Flows to be used to Repurchase Notes										50.00%
Redemption Price Expressed As a Percentage of Principal Amt										100.00%

XML

Subsequent Event (Details) (Entry Into Stock Purchase Agreement Agreement [Member], HFS Disposal Group [Member], USD $) In Billions, unless otherwise specified	0 Months Ended
	Jul. 23, 2013
Entry Into Stock Purchase Agreement Agreement [Member] | HFS Disposal Group [Member]
Subsequent Event [Line Items]
Subsequent Event, Date	Jul. 23, 2013
Subsequent Event, Amount	$ 1.2
Number Of Days To Cure A Breach After Written Notification	15 days

XML

Acquisitions (Details) (USD $) In Millions, unless otherwise specified	6 Months Ended					6 Months Ended
	Jun. 30, 2013 NCP [Member]	May 31, 2013 NCP [Member]	May 31, 2013 NCP [Member] Customer relationships [Member]	May 31, 2013 NCP [Member] Trademarks [Member]	May 31, 2013 NCP [Member] Software [Member]	Jun. 30, 2013 Faneuil [Member]	Mar. 19, 2012 Faneuil [Member]	Mar. 19, 2012 Faneuil [Member] Trademarks and tradenames [Member]	Mar. 19, 2012 Faneuil [Member] Customer relationships [Member]	Mar. 19, 2012 Faneuil [Member] Software [Member]
Business Acquisition [Line Items]
Date of Acquisition	May 31, 2013					Mar. 19, 2012
Percentage of issued and outstanding shares acquired		100.00%					100.00%
Business Acquisition, Cost of Acquired Entity, Purchase Price		$ 35.2
Business Acquisition, Purchase Price Allocation, Cash Acquired		0.3
Business Acquisition, Cost Of Acquired Entity Cash Paid Portion For Working Capital Adjustments		0.5
Amortizable intangible assets		25.0	20.0	3.0	2.0				0.2	0.3
Goodwill		4.2					13.0
Business Acquisition, Purchase Price Allocation, Net Tangible Assets		6.3
Business Acquisition, Purchase Price Allocation, Goodwill, Expected Tax Deductible Amount		2.8
Cash paid for acquisition							70.0
Paid in excess of the carrying amount of the assets and liabilities assumed							33.8
Business Acquisition, Purchase Price Allocation [Abstract]
Cash							2.3
Accounts receivables							11.8
Property, plant and equipment							10.3
Other intangible assets: [Abstract]
Acquired indefinite-lived intangible asset								0.8
Total other intangible assets							1.3
Other assets							7.2
Total assets acquired							45.9
Deferred revenues							1.2
Capital leases							1.0
Other liabilities							7.5
Net assets acquired							$ 36.2

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Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2013

Fair Value Measurements [Abstract]

Fair Value of Assets and Liabilities Measured On A Recurring Basis

Fair values of financial instruments subject to recurring fair value measurements as of June 30, 2013 and December 31, 2012 are as follows:

	Balance at
	June 30,  2013		(Level 1)		(Level 2)		(Level 3)
Corporate equity securities	$	0.1	$	0.1	$	—	$	—

	Balance at
	December 31, 2012		(Level 1)		(Level 2)		(Level 3)
Corporate equity securities	$	0.1	$	0.1	$	—	$	—
Liability for interest rate swaps	1.3		—		1.3		—

Fair Value of Liabilities Measured On A Recurring Basis

The following table presents the Company's liability for contingent consideration related to business combinations measured at fair value on a recurring basis using significant unobservable inputs (Level 3):

	Three Months Ended		Six  Months Ended
	June 30,		June 30,
	2012		2012
Balance at beginning of period	$	0.1	$	0.6
Net changes in fair value	—		(0.5		)
Balance at end of period	$	0.1	$	0.1

There was no liability for contingent consideration related to business combinations in the six months period ended June 30, 2013.

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Investments (Tables)

6 Months Ended

Jun. 30, 2013

Marketable Securities [Abstract]

Available-for-sale Securities

The Company's marketable securities are classified as available-for-sale and are reported at their fair values, which are as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Balance at June 30, 2013:
Corporate equity securities	$	0.1	$	—	$	—	$	0.1
Balance at December 31, 2012:
Corporate equity securities	$	0.1	$	—	$	—	$	0.1

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Business Segment Information

6 Months Ended

Jun. 30, 2013

Business Segment Information [Abstract]

Business Segment Information

Business Segment Information

The Company has organized its business along four reportable segments together with a corporate group for certain support services. The Company's operations are aligned on the basis of products, services and industry. Management measures and evaluates the reportable segments based on operating income. The current segments and their principal activities consist of the following:

• Harland Clarke segment — Provides checks and related products, transactional document printing, direct marketing services and customized business and home office products to financial and commercial institutions, as well as consumers and other businesses. This segment operates primarily in the United States and Puerto Rico.

• Harland Financial Solutions segment — Provides technology products and related services to financial institutions worldwide. This segment operates primarily in the United States, Israel, Ireland and India.

• Scantron segment — Provides data management and decision support solutions and related services to educational, commercial and governmental entities worldwide. This segment operates primarily in the United States, Canada and India.

• Faneuil segment — Provides call center services, back office operations, staffing services and toll collection services to government and regulated commercial clients and patient information collection and tracking, managed technical services and related field maintenance services to educational, commercial, healthcare and governmental entities. This segment operates primarily in the United States and Canada.

As discussed in Note 1, the Company made business segment changes in the second quarter of 2012. Prior period results in the tables below have been reclassified to conform to these business segment changes.

Selected summarized financial information for the three months ended June 30, 2013 and 2012 is as follows:

	Harland Clarke(1)		Harland Financial Solutions		Scantron			Faneuil(2)		Corporate and Other			Total
Product revenues, net
Three months ended June 30, 2013	$	275.9	$	27.0	$	20.9		$	2.7	$	—		$	326.5
Three months ended June 30, 2012	273.1		15.9		21.3			1.3		—			311.6
Service revenues, net
Three months ended June 30, 2013	$	11.0	$	56.1	$	5.8		$	37.9	$	—		$	110.8
Three months ended June 30, 2012	9.0		42.3		7.0			36.0		—			94.3
Intersegment revenues
Three months ended June 30, 2013	$	0.1	$	—	$	0.5		$	0.2	$	(0.8	)	$	—
Three months ended June 30, 2012	0.1		—		0.4			0.1		(0.6		)	—
Operating income (loss)(3)
Three months ended June 30, 2013	$	63.2	$	22.6	$	(5.2	)	$	4.6	$	(6.4	)	$	78.8
Three months ended June 30, 2012	49.8		1.0		(10.0		)	1.9		(4.6		)	38.1
Depreciation and amortization (excluding amortization of deferred financing fees):
Three months ended June 30, 2013	$	30.8	$	9.3	$	5.4		$	2.5	$	—		$	48.0
Three months ended June 30, 2012	37.2		9.5		4.4			3.1		—			54.2
Capital expenditures (excluding capital leases):
Three months ended June 30, 2013	$	8.8	$	2.4	$	0.3		$	0.9	$	—		$	12.4
Three months ended June 30, 2012	7.2		1.0		1.1			1.2		—			10.5

Selected summarized financial information for the six months ended June 30, 2013 and 2012 is as follows:

	Harland Clarke(1)		Harland Financial Solutions			Scantron			Faneuil(2)		Corporate and Other			Total
Product revenues, net
Six months ended June 30, 2013	$	548.7	$	48.8		$	45.0		$	5.4	$	—		$	647.9
Six months ended June 30, 2012	562.7		31.6			45.3			3.2		—			642.8
Service revenues, net
Six months ended June 30, 2013	$	22.1	$	111.2		$	11.1		$	74.5	$	—		$	218.9
Six months ended June 30, 2012	16.9		76.9			12.7			70.4		—			176.9
Intersegment revenues
Six months ended June 30, 2013	$	0.1	$	—		$	1.0		$	0.3	$	(1.4	)	$	—
Six months ended June 30, 2012	0.1		—			0.8			0.2		(1.1		)	—
Operating income (loss)(3)
Six months ended June 30, 2013	$	130.2	$	42.2		$	(12.1	)	$	6.9	$	(10.4	)	$	156.8
Six months ended June 30, 2012	95.2		(6.8		)	(20.8		)	2.7		(8.8		)	61.5
Depreciation and amortization (excluding amortization of deferred financing fees):
Six months ended June 30, 2013	$	61.2	$	18.2		$	10.4		$	5.1	$	—		$	94.9
Six months ended June 30, 2012	73.3		18.6			8.8			5.1		—			105.8
Capital expenditures (excluding capital leases):
Six months ended June 30, 2013	$	15.5	$	4.8		$	1.5		$	1.8	$	—		$	23.6
Six months ended June 30, 2012	20.2		3.3			4.6			2.1		—			30.2

___________________

(1) Includes results of the acquired NCP Solutions business from the date of acquisition (see Note 3).

(2) Includes results of the acquired Faneuil business from the date of common control (see Note 3).

(3) Includes gain from revaluation of contingent consideration arrangements of $0.0 and $0.5 for the three and six months endedJune 30, 2012, respectively, restructuring costs of $6.7 and $13.3 for the three and six months endedJune 30, 2013 and $3.7 and $5.0 for three and six months endedJune 30, 2012, respectively, (see Note 16) and non-cash impairment charges of $0.0 and $0.9 for the three and six months endedJune 30, 2013, respectively.

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Investments (Details) (USD $) In Millions, unless otherwise specified	6 Months Ended				6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013 Equity Securities [Member]	Dec. 31, 2012 Equity Securities [Member]	Jun. 30, 2012 US Treasury Securities [Member]	Dec. 31, 2012 Transactis, Inc. [Member]	Jun. 30, 2013 Other noncurrent assets [Member]	Dec. 31, 2012 Other noncurrent assets [Member]
Equity Method Investments [Abstract]
Equity Method Investment, Ownership Percentage						15.50%
Equity Method Investment, Aggregate Cost						$ 7.0
Equity Method Investments							6.5	6.9
Marketable Securities [Abstract]
Available-for-sale Securities, Amortized Cost Basis			0.1	0.1
Available-for-sale Securities, Gross Unrealized Gains			0	0
Available-for-sale Securities, Gross Unrealized Losses			0	0
Available-for-sale Securities, Fair Value Disclosure			0.1	0.1
Proceeds from sale of marketable securities	0	56.3			56.3
Available-for-sale Securities, Gross Realized Losses					$ 0.2

XML

Business Segment Information (Tables)

6 Months Ended

Jun. 30, 2013

Business Segment Information [Abstract]

Business Segment Information

Selected summarized financial information for the three months ended June 30, 2013 and 2012 is as follows:

	Harland Clarke(1)		Harland Financial Solutions		Scantron			Faneuil(2)		Corporate and Other			Total
Product revenues, net
Three months ended June 30, 2013	$	275.9	$	27.0	$	20.9		$	2.7	$	—		$	326.5
Three months ended June 30, 2012	273.1		15.9		21.3			1.3		—			311.6
Service revenues, net
Three months ended June 30, 2013	$	11.0	$	56.1	$	5.8		$	37.9	$	—		$	110.8
Three months ended June 30, 2012	9.0		42.3		7.0			36.0		—			94.3
Intersegment revenues
Three months ended June 30, 2013	$	0.1	$	—	$	0.5		$	0.2	$	(0.8	)	$	—
Three months ended June 30, 2012	0.1		—		0.4			0.1		(0.6		)	—
Operating income (loss)(3)
Three months ended June 30, 2013	$	63.2	$	22.6	$	(5.2	)	$	4.6	$	(6.4	)	$	78.8
Three months ended June 30, 2012	49.8		1.0		(10.0		)	1.9		(4.6		)	38.1
Depreciation and amortization (excluding amortization of deferred financing fees):
Three months ended June 30, 2013	$	30.8	$	9.3	$	5.4		$	2.5	$	—		$	48.0
Three months ended June 30, 2012	37.2		9.5		4.4			3.1		—			54.2
Capital expenditures (excluding capital leases):
Three months ended June 30, 2013	$	8.8	$	2.4	$	0.3		$	0.9	$	—		$	12.4
Three months ended June 30, 2012	7.2		1.0		1.1			1.2		—			10.5

Selected summarized financial information for the six months ended June 30, 2013 and 2012 is as follows:

	Harland Clarke(1)		Harland Financial Solutions			Scantron			Faneuil(2)		Corporate and Other			Total
Product revenues, net
Six months ended June 30, 2013	$	548.7	$	48.8		$	45.0		$	5.4	$	—		$	647.9
Six months ended June 30, 2012	562.7		31.6			45.3			3.2		—			642.8
Service revenues, net
Six months ended June 30, 2013	$	22.1	$	111.2		$	11.1		$	74.5	$	—		$	218.9
Six months ended June 30, 2012	16.9		76.9			12.7			70.4		—			176.9
Intersegment revenues
Six months ended June 30, 2013	$	0.1	$	—		$	1.0		$	0.3	$	(1.4	)	$	—
Six months ended June 30, 2012	0.1		—			0.8			0.2		(1.1		)	—
Operating income (loss)(3)
Six months ended June 30, 2013	$	130.2	$	42.2		$	(12.1	)	$	6.9	$	(10.4	)	$	156.8
Six months ended June 30, 2012	95.2		(6.8		)	(20.8		)	2.7		(8.8		)	61.5
Depreciation and amortization (excluding amortization of deferred financing fees):
Six months ended June 30, 2013	$	61.2	$	18.2		$	10.4		$	5.1	$	—		$	94.9
Six months ended June 30, 2012	73.3		18.6			8.8			5.1		—			105.8
Capital expenditures (excluding capital leases):
Six months ended June 30, 2013	$	15.5	$	4.8		$	1.5		$	1.8	$	—		$	23.6
Six months ended June 30, 2012	20.2		3.3			4.6			2.1		—			30.2

___________________

(1) Includes results of the acquired NCP Solutions business from the date of acquisition (see Note 3).

(2) Includes results of the acquired Faneuil business from the date of common control (see Note 3).

(3) Includes gain from revaluation of contingent consideration arrangements of $0.0 and $0.5 for the three and six months endedJune 30, 2012, respectively, restructuring costs of $6.7 and $13.3 for the three and six months endedJune 30, 2013 and $3.7 and $5.0 for three and six months endedJune 30, 2012, respectively, (see Note 16) and non-cash impairment charges of $0.0 and $0.9 for the three and six months endedJune 30, 2013, respectively.

XML

Goodwill and Other Intangible Assets 1 (Details) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2013
Goodwill [Roll Forward]
Balance as of December 31, 2012	$ 761.6
Goodwill, Acquired During Period	4.2
Effect of exchange rate changes	(0.2)
Balance as of June 30, 2013	765.6
Harland Clark Segment [Member]
Goodwill [Roll Forward]
Balance as of December 31, 2012	417.0
Goodwill, Acquired During Period	4.2
Effect of exchange rate changes	0
Balance as of June 30, 2013	421.2
Harland Financial Solutions Segment [Member]
Goodwill [Roll Forward]
Balance as of December 31, 2012	282.7
Goodwill, Acquired During Period	0
Effect of exchange rate changes	(0.1)
Balance as of June 30, 2013	282.6
Scantron Segment [Member]
Goodwill [Roll Forward]
Balance as of December 31, 2012	40.2
Goodwill, Acquired During Period	0
Effect of exchange rate changes	(0.1)
Balance as of June 30, 2013	40.1
Faneuil Segment [Member]
Goodwill [Roll Forward]
Balance as of December 31, 2012	21.7
Goodwill, Acquired During Period	0
Effect of exchange rate changes	0
Balance as of June 30, 2013	$ 21.7

XML

Income Taxes

6 Months Ended

Jun. 30, 2013

Income Taxes [Abstract]

Income Taxes

Income Taxes

The Company is subject to taxation in the United States and various state and foreign jurisdictions. The statute of limitations for the federal and state tax returns of the affiliated group of M & F Worldwide or MacAndrews and subsidiaries, as the case may be, including in each case the Company, for the tax years 2009 through 2012 generally remain open. In addition, open tax years related to foreign jurisdictions remain subject to examination but are not considered material. The Company has recently been notified that the Internal Revenue Service has selected to examine the affiliated group of M & F Worldwide and subsidiaries for the tax year ended December 21, 2011.

There are no events that have occurred since December 31, 2012 that had a material impact on amounts accrued for the Company's uncertain tax positions.

XML

Goodwill and Other Intangible Assets

6 Months Ended

Jun. 30, 2013

Goodwill and Other Intangible Assets [Abstract]

Goodwill and Intangible Assets

Goodwill and Other Intangible Assets

The change in carrying amount of goodwill by business segment for the six months ended June 30, 2013 is as follows:

	Harland Clarke		Harland Financial Solutions			Scantron			Faneuil		Total
Balance as of December 31, 2012	$	417.0	$	282.7		$	40.2		$	21.7	$	761.6
2013 acquisition	4.2		—			—			—		4.2
Effect of exchange rate changes	—		(0.1		)	(0.1		)	—		(0.2		)
Balance as of June 30, 2013	$	421.2	$	282.6		$	40.1		$	21.7	$	765.6

Useful lives, gross carrying amounts and accumulated amortization for other intangible assets are as follows:

		Gross Carrying Amount				Accumulated Amortization				Net Carrying Amount
	Useful Life (in years)	June 30, 2013		December 31, 2012		June 30, 2013		December 31, 2012		June 30, 2013		December 31, 2012
Amortized intangible assets:
Customer relationships	3 - 19	$	1,547.9	$	1,528.0	$	187.6	$	132.7	$	1,360.3	$	1,395.3
Trademarks and tradenames	15 - 25	104.4		101.4		7.8		5.3		96.6		96.1
Software	3 - 9	64.4		56.5		20.2		13.1		44.2		43.4
		1,716.7		1,685.9		215.6		151.1		1,501.1		1,534.8
Indefinite-lived intangible assets:
Tradename		0.8		0.8		—		—		0.8		0.8
Total other intangible assets		$	1,717.5	$	1,686.7	$	215.6	$	151.1	$	1,501.9	$	1,535.6

Amortization expense was $32.8 and $64.5 for the three and six months endedJune 30, 2013, respectively, and $34.7 and $68.2 for the three and six months endedJune 30, 2012, respectively. Amortization expense includes amortization of software of $3.9 and $7.0 for the three and six months endedJune 30, 2013, respectively, and $3.0 and $5.8 for the three and six months endedJune 30, 2012, respectively.

The weighted average amortization period for all amortizable intangible assets recorded in connection with the NCP Solutions Acquisition was 12.9 years. The weighted average amortization period for each major class of amortizable intangible assets recorded in connection with the NCP Solutions Acquisition was as follows: customer relationships - 15 years, trademarks - 4 years and software - 5 years.

Estimated aggregate amortization expense for intangible assets through December 31, 2017 is as follows:

Six months ending December 31, 2013	$	66.8
Year ending December 31, 2014	125.2
Year ending December 31, 2015	117.3
Year ending December 31, 2016	105.3
Year ending December 31, 2017	98.9

During the six months ended June 30, 2013, the Company recorded a non-cash impairment charge of $0.7 for the Scantron segment related to software that was determined to have no future use. That determination was the result of Scantron's decision to exit certain product lines in the education market (see Note 16). The impairment charge was included in asset impairment charges in the accompanying consolidated statements of operations.

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Description of Business and Basis of Presentation

6 Months Ended

Jun. 30, 2013

Description of Business and Basis of Presentation [Abstract]

Organization, Consolidation and Presentation of Financial Statements Disclosure

Description of the Business and Basis of Presentation

Harland Clarke Holdings Corp. ("Harland Clarke Holdings" and, together with its subsidiaries, the "Company") is a holding company that conducts its operations through its direct and indirect, wholly owned operating subsidiaries and was incorporated in Delaware on October 19, 2005. The Company is an indirect, wholly owned subsidiary of M & F Worldwide Corp. ("M & F Worldwide"), which is, as of December 21, 2011, an indirect, wholly owned subsidiary of MacAndrews & Forbes Holdings Inc. ("MacAndrews"). MacAndrews is wholly owned by Ronald O. Perelman. On September 12, 2011, M & F Worldwide agreed, subject to various closing conditions, to merge with an indirect wholly owned subsidiary of MacAndrews, and, following a vote of stockholders of M & F Worldwide and the satisfaction or waiver of all other closing conditions, that merger was effected on December 21, 2011 (hereafter referred to as the "MacAndrews Acquisition").

As a result of the MacAndrews Acquisition, which resulted in a change in ownership of M & F Worldwide, the Company was required to use the acquisition method of accounting to revalue its assets and liabilities as of the date of the MacAndrews Acquisition. Such accounting results in a number of changes, including, but not limited to, decreased revenues as a result of fair value adjustments to deferred revenues, increased depreciation and amortization as a result of the revaluation of assets and increased non-cash interest expense that results from adjusting the Company's long-term debt to fair value as of the date of the MacAndrews Acquisition.

On May 31, 2013, the Company acquired NCP Solutions, LLC ("NCP Solutions") (see Note 3). NCP Solutions is a leading end-to-end communications solutions provider to consumer finance companies, banks, mortgage lenders, mortgage subservicers, credit unions, auto and equipment finance companies, auto service contract providers, direct marketing companies, healthcare and health insurance companies, check producers and various other customers. The NCP Solutions business is included in the Harland Clarke segment for financial reporting purposes.

On March 19, 2012, the Company purchased Faneuil, Inc. ("Faneuil") from affiliates of MacAndrews (see Note 3). Under accounting guidance for transactions among entities under common control, the Company has accounted for the purchase at historical cost and has retrospectively recasted prior periods under common control to include Faneuil operations. The Company and Faneuil came under common control on December 21, 2011, the date of the MacAndrews Acquisition. Faneuil is a separate business segment for financial reporting purposes.

The Company has organized its business and corporate structure along the following four business segments: Harland Clarke, Harland Financial Solutions, Scantron and Faneuil.

During the second quarter of 2012, the Company transferred certain product and service lines from the Scantron segment to other segments to better align complementary products and services. The Harland Technology Services and Medical Device Tracking businesses were transferred to the Faneuil segment and the Survey Services business was transferred to the Harland Clarke segment. Prior period segment information has been reclassified to reflect this change.

The Harland Clarke segment offers checks and related products, forms and treasury supplies, and related delivery and fraud prevention products as well as transactional document printing, including statements, compliance documents and communications, to financial and commercial institutions. It also provides direct marketing services to their clients including direct marketing campaigns, direct mail, database marketing, telemarketing and digital marketing. In addition to these products and services, the Harland Clarke segment offers stationery, business cards, survey services and other business and home office products to consumers and businesses.

The Harland Financial Solutions segment provides technology products and related services to financial institutions worldwide including lending and mortgage compliance and origination applications, risk management solutions, business intelligence solutions, Internet and mobile banking applications, branch automation solutions, self-service solutions, electronic payment solutions and core processing systems.

The Scantron segment provides data management and decision support solutions and related services to educational, commercial and governmental entities worldwide. Scantron products and services provide solutions for testing and assessment, instruction and performance management and business operational data collection. Scantron's solutions combine a variety of data collection, analysis, and management tools including web-based solutions, software, scanning equipment and forms.

The Faneuil segment provides business process outsourcing services including call center operations, back office operations, staffing services and toll collection services to government and regulated commercial clients. The Faneuil segment also provides patient information collection and tracking services, managed technical services and related field maintenance services to education, commercial, healthcare and governmental entities.

The consolidated financial statements include the accounts of the Company and its majority-owned subsidiaries after the elimination of all material intercompany accounts and transactions. The Company has consolidated the results of operations and accounts of businesses acquired from the date of acquisition except for Faneuil as discussed above.

The Company and each of its existing domestic subsidiaries, other than unrestricted subsidiaries (of which there were none at June 30, 2013) and certain immaterial subsidiaries, are guarantors and in some instances may also be co-borrowers under the Term Loan and co-issuers under the 2015 Senior Notes and 2018 Senior Secured Notes (as defined hereinafter) (see Note 11). Harland Clarke Holdings is a holding company and has no significant assets at June 30, 2013 and no operations. The guarantees and the obligations of the subsidiaries of the Company are full and unconditional and joint and several, and any subsidiaries of the Company other than the subsidiary guarantors and obligors are not significant.

See Note 3 for information regarding recent acquisitions.

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions for Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. The results of operations for interim periods are not necessarily indicative of the results that may be expected for the full fiscal year. These consolidated financial statements should be read in conjunction with the consolidated financial statements and accompanying notes included in the Company's Annual Report on Form 10-K for the year ended December 31, 2012.

All terms used but not defined elsewhere herein have the meaning ascribed to them in the Company's 2012 Annual Report on Form 10-K.

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Long-Term Debt 3 (Details) (USD $)		0 Months Ended							6 Months Ended
	Feb. 20, 2013 Revolving Facility [Member]	Feb. 20, 2013 Revolving Facility [Member] Minimum [Member]	Feb. 20, 2013 Revolving Facility [Member] Maximum [Member]	Feb. 20, 2013 Revolving Facility [Member] LIBOR [Member] Minimum [Member]	Feb. 20, 2013 Revolving Facility [Member] LIBOR [Member] Maximum [Member]	Feb. 20, 2013 Revolving Facility [Member] Alternative Base Rate [Member]	Feb. 20, 2013 Revolving Facility [Member] Alternative Base Rate [Member] Minimum [Member]	Feb. 20, 2013 Revolving Facility [Member] Alternative Base Rate [Member] Maximum [Member]	Jun. 30, 2013 Letter of Credit Subfacility [Member]	Jun. 30, 2013 Secured Debt [Member] Revolving Facility [Member]	Feb. 20, 2013 Secured Debt [Member] Revolving Facility [Member]	Jun. 30, 2013 Secured Debt [Member] Letter of Credit Subfacility [Member]	Feb. 20, 2013 Secured Debt [Member] Letter of Credit Subfacility [Member]	Feb. 20, 2013 Secured Debt [Member] Swingline Sub-facility [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity											$ 80,000,000		$ 30,000,000	$ 10,000,000
Percentage multiplier to calculate borrowing base of revolving loan	85.00%
Percentage of liquidation value of eligible inventory to calculate borrowing base	85.00%
Percentage of eligible inventory to calculate borrowing base	70.00%
Line of Credit Facility, Current Borrowing Capacity										52,300,000
Line of Credit Facility, Amount Outstanding										0
Debt Instrument, Unused Borrowing Capacity, Amount										41,900,000
Letters of Credit Outstanding, Amount												$ 10,400,000
Springing maturity date expressed in number of days prior to the maturity date of outstanding debt	91 days
Debt Instrument, Basis Spread on Variable Rate				1.75%	2.25%		0.75%	1.25%
Fixed Percentage Added to the Federal Funds Effective Rate						0.50%
Fixed Percentage Added to one month LIBOR rate						1.00%
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage		0.375%	0.50%
Percentage Applied to Prior Quarter Average Utilization to Determine Commitment Fee Percentage	50.00%
Weighted Average Letter of Credit Fee Percentage									2.00%

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Accumulated Other Comprehensive Loss 1 (Details) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012	Dec. 31, 2012	Dec. 31, 2011
Accumulated Other Comprehensive Income (Loss) [Line Items]
Accumulated Other Comprehensive Income (Loss), Net of Tax	$ (1,200,000)	$ (500,000)	$ (1,200,000)	$ (500,000)	$ (300,000)	$ (100,000)
Other comprehensive loss before reclassifications				(600,000)
Amounts reclassified from accumulated other comprehensive income	0	0	0	200,000
Total other comprehensive loss, net of tax	(400,000)	(900,000)	(900,000)	(400,000)
Foreign currency translation adjustments
Accumulated Other Comprehensive Income (Loss) [Line Items]
Accumulated Other Comprehensive Income (Loss), Net of Tax	(500,000)	(400,000)	(500,000)	(400,000)	400,000	0
Other comprehensive loss before reclassifications				(400,000)
Amounts reclassified from accumulated other comprehensive income				0
Total other comprehensive loss, net of tax			(900,000)	(400,000)
Unrecognized amounts included in postretirement obligations
Accumulated Other Comprehensive Income (Loss) [Line Items]
Accumulated Other Comprehensive Income (Loss), Net of Tax	(700,000)	(100,000)	(700,000)	(100,000)	(700,000)	(100,000)
Other comprehensive loss before reclassifications				0
Amounts reclassified from accumulated other comprehensive income				0
Total other comprehensive loss, net of tax			0	0
Derivative fair-value adjustments
Accumulated Other Comprehensive Income (Loss) [Line Items]
Accumulated Other Comprehensive Income (Loss), Net of Tax	0	0	0	0	0	(100,000)
Other comprehensive loss before reclassifications				0
Amounts reclassified from accumulated other comprehensive income				100,000
Total other comprehensive loss, net of tax			0	100,000
Unrealized gains (losses) on investments, net
Accumulated Other Comprehensive Income (Loss) [Line Items]
Accumulated Other Comprehensive Income (Loss), Net of Tax	0	0	0	0	0	100,000
Other comprehensive loss before reclassifications				(200,000)
Amounts reclassified from accumulated other comprehensive income				100,000
Total other comprehensive loss, net of tax			$ 0	$ (100,000)

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Long-Term Debt (Tables)

6 Months Ended

Jun. 30, 2013

Debt Instruments [Abstract]

Long-Term Debt

	June 30, 2013			December 31, 2012
$1,900.0 Senior Secured Credit Facilities:
Extended Term Loans due 2017	$	642.8		$	677.4
Non-Extended Term Loans due 2014	—			728.6
Tranche B-3 Term Loans due 2018	750.0			—
Total $1,900.0 Senior Secured Credit Facilities	1,392.8			1,406.0
9.75% Senior Secured Notes due 2018	285.0			235.0
Senior Floating Rate Notes due 2015	204.3			204.3
9.50% Senior Fixed Rate Notes due 2015	221.3			271.3
Capital lease obligations	3.7			3.1
Unamortized original issue discount, original issue premium and acquisition accounting-related fair value discount	(169.5		)	(271.9		)
	1,937.6			1,847.8
Less: current maturities	(89.9		)	(78.5		)
Long-term debt, net of current maturities	$	1,847.7		$	1,769.3

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Fair Value Measurements 1 (Details) (USD $) In Millions, unless otherwise specified			6 Months Ended
	Jun. 30, 2013 Equity Securities [Member]	Dec. 31, 2012 Equity Securities [Member]	Jun. 30, 2013 Fair Value, Measurements, Nonrecurring [Member] Harland Clark Segment [Member]	Jun. 30, 2013 Fair Value, Measurements, Nonrecurring [Member] Scantron Segment [Member]	Dec. 31, 2012 Fair Value, Measurements, Recurring [Member] Interest Rate Swap [Member]	Jun. 30, 2013 Fair Value, Measurements, Recurring [Member] Equity Securities [Member]	Dec. 31, 2012 Fair Value, Measurements, Recurring [Member] Equity Securities [Member]	Dec. 31, 2012 Fair Value, Measurements, Recurring [Member] Fair Value, Inputs, Level 1 [Member] Interest Rate Swap [Member]	Jun. 30, 2013 Fair Value, Measurements, Recurring [Member] Fair Value, Inputs, Level 1 [Member] Equity Securities [Member]	Dec. 31, 2012 Fair Value, Measurements, Recurring [Member] Fair Value, Inputs, Level 1 [Member] Equity Securities [Member]	Dec. 31, 2012 Fair Value, Measurements, Recurring [Member] Fair Value, Inputs, Level 2 [Member] Interest Rate Swap [Member]	Jun. 30, 2013 Fair Value, Measurements, Recurring [Member] Fair Value, Inputs, Level 2 [Member] Equity Securities [Member]	Dec. 31, 2012 Fair Value, Measurements, Recurring [Member] Fair Value, Inputs, Level 2 [Member] Equity Securities [Member]	Dec. 31, 2012 Fair Value, Measurements, Recurring [Member] Fair Value, Inputs, Level 3 [Member] Interest Rate Swap [Member]	Jun. 30, 2013 Fair Value, Measurements, Recurring [Member] Fair Value, Inputs, Level 3 [Member] Equity Securities [Member]	Dec. 31, 2012 Fair Value, Measurements, Recurring [Member] Fair Value, Inputs, Level 3 [Member] Equity Securities [Member]
Nonrecurring Fair Value Measurements [Abstract]
Impairment of Long-Lived Assets Held-for-use			$ 0.2
Impairment of Intangible Assets, Finite-lived				0.7
Recurring Fair Value Measurements [Abstract]
Available-for-sale Securities, Fair Value Disclosure	0.1	0.1				0.1	0.1		0.1	0.1		0	0		0	0
Liability for interest rate swaps					$ 1.3			$ 0			$ 1.3			$ 0

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Fair Value Measurements

6 Months Ended

Jun. 30, 2013

Fair Value Measurements [Abstract]

Fair Value Measurements

Fair Value Measurements

Nonrecurring Fair Value Measurements

During the six months endedJune 30, 2013, the Company recorded non-cash impairment charges of $0.2 for the Harland Clarke segment related to assets that were determined to have no future use and $0.7 for the Scantron segment related to software that was determined to have no future use (see Note 6).

Recurring Fair Value Measurements

Fair values of financial instruments subject to recurring fair value measurements as of June 30, 2013 and December 31, 2012 are as follows:

	Balance at
	June 30,  2013		(Level 1)		(Level 2)		(Level 3)
Corporate equity securities	$	0.1	$	0.1	$	—	$	—

	Balance at
	December 31, 2012		(Level 1)		(Level 2)		(Level 3)
Corporate equity securities	$	0.1	$	0.1	$	—	$	—
Liability for interest rate swaps	1.3		—		1.3		—

Fair value of interest rate swaps is based on forward-looking interest rate curves as provided by the counterparty, adjusted for the Company's credit risk. Fair value of corporate equity securities is based on quoted market prices.

The following table presents the Company's liability for contingent consideration related to business combinations measured at fair value on a recurring basis using significant unobservable inputs (Level 3):

	Three Months Ended		Six  Months Ended
	June 30,		June 30,
	2012		2012
Balance at beginning of period	$	0.1	$	0.6
Net changes in fair value	—		(0.5		)
Balance at end of period	$	0.1	$	0.1

There was no liability for contingent consideration related to business combinations in the six months period ended June 30, 2013. Fair value of the liability for contingent consideration related to business combinations is estimated utilizing a discounted cash flow analysis. The analysis considers, among other things, estimates of future revenues and the timing of expected future contingent consideration payments.

Fair Value of Financial Instruments

Most of the Company's clients are in the financial services and educational industries. The Company performs ongoing credit evaluations of its clients and maintains allowances for potential credit losses. The Company does not generally require collateral. Actual losses and allowances have been within management's expectations.

The carrying amounts for cash and cash equivalents, trade accounts receivable, accounts payable and accrued liabilities approximate fair value. The estimated fair value of long-term debt is determined by Level 2 inputs and is based primarily on quoted market prices for the same or similar issues as of the measurement date. The estimated fair value of long-term debt at June 30, 2013 and December 31, 2012 was approximately $2,053.3 and $1,984.4, respectively. The carrying value of long-term debt at June 30, 2013 and December 31, 2012 was $1,937.6 and $1,847.8 respectively. As described in Note 1, the carrying value of the Company's long-term debt was adjusted to fair value as of the date of the MacAndrews Acquisition.

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Postretirement Defined Benefit Plans

6 Months Ended

Jun. 30, 2013

Postretirement Defined Benefit Plans [Abstract]

Postretirement Defined Benefit Plans

Postretirement Defined Benefit Plans

The Company sponsors two unfunded postretirement defined benefit plans that cover certain former salaried and non-salaried employees. One plan provides healthcare benefits and the other provides life insurance benefits. The medical plan is contributory and contributions are adjusted annually based on actual claims experience. For retirees who retired prior to December 31, 2002 with 20 or more years of service at December 31, 2000, the Company contributes a portion of the cost of the medical plan. For all other retirees, the Company's intent is that the retirees provide the majority of the actual cost of the medical plan. The life insurance plan is noncontributory for those employees that retired by December 31, 2002.

The components of net periodic postretirement benefit cost for these plans consist of the following:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2013		2012		2013		2012
Interest cost	$	0.1	$	0.1	$	0.2	$	0.2
Net postretirement benefit cost	$	0.1	$	0.1	$	0.2	$	0.2

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Restructuring

6 Months Ended

Jun. 30, 2013

Restructuring [Abstract]

Restructuring

Restructuring

Harland Clarke and Corporate

The Company adopted plans during 2011, 2012 and 2013 to realize cost savings in the Harland Clarke segment and Corporate by consolidating printing plants, contact centers and selling, general and administrative functions.

The following table details the components of the Company's restructuring accruals under its plans related to the Harland Clarke segment and Corporate for the six months ended June 30, 2013 and 2012:

	Beginning Balance		Expensed		Paid in Cash			Non-Cash Utilization			Ending Balance
Six months ended June 30, 2013:
Severance and severance-related	$	6.4	$	1.1	$	(3.1	)	$	—		$	4.4
Facilities closures and other costs	2.4		4.9		(1.0		)	(3.4		)	2.9
Total	$	8.8	$	6.0	$	(4.1	)	$	(3.4	)	$	7.3
Six months ended June 30, 2012:
Severance and severance-related	$	4.5	$	1.6	$	(0.4	)	$	—		$	5.7
Facilities closures and other costs	3.0		1.1		(0.9		)	(0.5		)	2.7
Total	$	7.5	$	2.7	$	(1.3	)	$	(0.5	)	$	8.4

The non-cash utilization of $3.4 and $0.5 in 2013 and 2012, respectively, in the table above includes adjustments to the carrying value of other property, plant and equipment. The Company expects to incur in future periods an additional $2.5 for costs related to these plans. The Company expects to make payments for severance and severance-related costs through 2014. Ongoing lease commitments related to these plans continue through 2017.

Harland Financial Solutions

During 2012, the Company adopted a plan to realize additional cost savings in the Harland Financial Solutions segment by eliminating certain selling, general and administrative expenses.

The following table details the components of the Company's restructuring accruals related to the Harland Financial Solutions segment for the six months ended June 30, 2013 and 2012:

	Beginning Balance		Expensed			Paid in Cash			Non-Cash Utilization		Ending Balance
Six months ended June 30, 2013:
Severance and severance-related	$	0.1	$	0.2		$	—		$	—	$	0.3
Facilities and other costs	1.3		(0.2		)	(0.2		)	0.2		1.1
Total	$	1.4	$	—		$	(0.2	)	$	0.2	$	1.4
Six months ended June 30, 2012:
Severance and severance-related	$	—	$	0.4		$	(0.3	)	$	—	$	0.1
Facilities and other costs	1.5		—			(0.1		)	—		1.4
Total	$	1.5	$	0.4		$	(0.4	)	$	—	$	1.5

Scantron

During the six months ended June 30, 2013, the Company adopted a plan in the Scantron segment to exit certain product lines in the education market. The plan resulted in the closure of four leased facilities and the elimination of operations and selling, general and administrative expenses associated with those product lines, largely occurring in the second quarter of 2013.

The Company previously adopted plans during 2011 and 2012 to realize cost savings in the Scantron segment by consolidating certain operations and eliminating certain selling, general and administrative expenses.

The following table details the components of the Company's restructuring accruals related to the Scantron segment for the six months ended June 30, 2013 and 2012:

	Beginning Balance		Expensed		Paid in Cash			Non-Cash Utilization			Ending Balance
Six months ended June 30, 2013:
Severance and severance-related	$	3.2	$	3.8	$	(4.1	)	$	—		$	2.9
Facilities and other costs	0.9		3.1		(0.8		)	(0.8		)	2.4
Total	$	4.1	$	6.9	$	(4.9	)	$	(0.8	)	$	5.3
Six months ended June 30, 2012:
Severance and severance-related	$	2.0	$	1.3	$	(1.4	)	$	—		$	1.9
Facilities and other costs	1.4		0.3		(0.9		)	—			0.8
Total	$	3.4	$	1.6	$	(2.3	)	$	—		$	2.7

The non-cash utilization in the table above includes adjustments to the carrying value of other property, plant and equipment. Ongoing lease commitments related to these plans continue to 2018. The Company expects to make payments for severance and severance-related costs through 2014.

Faneuil

The Company adopted a plan in 2012 to realize cost savings in the Faneuil segment by consolidating certain operations and eliminating certain selling, general and administrative expenses. The following table details the components of the Company's restructuring accruals related to the Faneuil segment for the six months ended June 30, 2013 and 2012:

	Beginning Balance		Expensed		Paid in Cash			Ending Balance
Six months ended June 30, 2013:
Severance and severance-related	$	0.6	$	0.4	$	(0.7	)	$	0.3
Facilities and other costs	0.2		—		—			0.2
Total	$	0.8	$	0.4	$	(0.7	)	$	0.5
Six months ended June 30, 2012:
Facilities and other costs	$	—	$	0.3	$	(0.3	)	$	—
Total	$	—	$	0.3	$	(0.3	)	$	—

Restructuring accruals for all of the segments' plans are reflected in other current liabilities and other liabilities in the accompanying consolidated balance sheets. The Company expects to pay the remaining severance, facilities and other costs related to the segments’ restructuring plans through 2018.

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Investments

6 Months Ended

Jun. 30, 2013

Investments, Debt and Equity Securities [Abstract]

Investments

Investments

Equity Method Investment

During 2012, the Company purchased certain equity securities of Transactis, Inc. ("Transactis"), a privately held company, representing a 15.5% ownership interest for $7.0 in cash. The Company accounts for this investment using the equity method due to its ability to influence operating and financial matters of Transactis through its representation on the Transactis board of directors and certain rights under the terms of the stock purchase agreement. The assets, liabilities and results of operations are not significant to the Company's financial position or results of operations. The carrying value of this investment at June 30, 2013 and December 31, 2012 was $6.5 and $6.9, respectively, and is included in other assets in the accompanying consolidated balance sheets.

Marketable Securities

The Company's marketable securities are classified as available-for-sale and are reported at their fair values, which are as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Balance at June 30, 2013:
Corporate equity securities	$	0.1	$	—	$	—	$	0.1
Balance at December 31, 2012:
Corporate equity securities	$	0.1	$	—	$	—	$	0.1

During the six months ended June 30, 2012, the Company sold its United States treasury securities, which were to mature in 2014, for $56.3 in cash and recognized a loss of $0.2, which is included in other expense, net in the accompanying consolidated statements of operations.

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Document and Entity Information	6 Months Ended
	Jun. 30, 2013	Jul. 31, 2013
Document Information [Line Items]
Entity Registrant Name	Harland Clarke Holdings Corp.
Entity Central Index Key	0001354752
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Document Type	10-Q
Document Period End Date	Jun. 30, 2013
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q2
Amendment Flag	false
Entity Common Stock, Shares Outstanding		100

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2013

Commitments and Contingencies [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Various legal proceedings, claims and investigations are pending against the Company, including those relating to commercial transactions, intellectual property matters, environmental matters and other matters. Certain of these matters are covered by insurance, subject to deductibles and maximum limits. In the opinion of management based upon the information available at this time, the outcome of the matters referred to above will not have a material adverse effect on the Company's consolidated financial position or results of operations.

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Fair Value Measurements 3 (Details) (USD $) In Millions, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Fair Value of Financial Instruments [Abstract]
Carrying Value of Long-term Debt	$ 1,937.6	$ 1,847.8
Estimate of Fair Value, Fair Value Disclosure [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value of Financial Instruments [Abstract]
Fair Value of Long-term Debt	2,053.3	1,984.4
Carrying (Reported) Amount, Fair Value Disclosure [Member]
Fair Value of Financial Instruments [Abstract]
Carrying Value of Long-term Debt	$ 1,937.6	$ 1,847.8

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Fair Value Measurements 2 (Details) (Contingent consideration arrangements [Member], USD $)	3 Months Ended	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2012	Jun. 30, 2013
Contingent consideration arrangements [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Balance at beginning of period	$ 100,000	$ 600,000	$ 0
Net changes in fair value	0	(500,000)
Balance at end of period	$ 100,000	$ 100,000	$ 0